What happened

Shares of Zendesk (NYSE:ZEN) were tumbling today as investors were unenthused by the company's second-quarter results. Despite beating Wall Street's consensus earnings and revenue estimates, the cloud-based customer service specialist saw its share price drop by as much as 11.4% today.

As of 12:50 p.m EDT, the stock had rebounded slightly and was down by 9.1%.

So what 

Zendesk's second-quarter earnings per share of $0.14 easily beat analysts' estimate of $0.09 for the quarter. Additionally, the company's $246.7 million in revenue, an increase of 27% year over year, outpaced Wall Street's estimate of $240.6 million.

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Image source: Getty Images.

Despite the earnings and revenue beats, Zendesk investors may be concerned about the company's ability to continue growing during the coronavirus pandemic. The company's second-quarter press release said, "We believe our financial performance will continue to be impacted by uncertain and highly disrupted global economic conditions. Many customers continue to face end-market demand challenges and we are seeing higher levels of contraction compared to historical trends."

Despite today's share price drop, Zendesk's stock is up 19.4% since the beginning of this year.

Now what

The tech company's revenue guidance for the third quarter is between $250 million and $255 million. Even at the low end of guidance, Zendesk's third-quarter 2020 revenue would be an improvement from the company's $210.5 million in third quarter 2019.

But Zendesk may still face an uphill battle in the wake of the economic conditions brought on by the pandemic. The company said that, as its customers modify their invoicing and subscription terms, "These conditions and actions have impacted and will continue to impact our near-term net expansion rate and overall financial performance, and have played a role in impacting our free cash flow generation."