What happened

Shares of Zoom Video Communications (ZM 0.95%) climbed 5.6% on Tuesday after the videoconferencing-leader's earnings results were well received by investors.

So what

Zoom's revenue rose 12% year over year to $1.1 billion in its fiscal 2023 first quarter, which ended on April 30. The gains were fueled by new-customer additions and higher sales to existing clients.

Zoom ended the quarter with roughly 198,900 enterprise customers, representing growth of 24%. And those customers are spending more on Zoom's products and services, as evidenced by the company's trailing-12-month net dollar expansion rate of 123%.

People are using video chat software to speak with their coworkers.

Image source: Getty Images.

With the pandemic moderating and more people returning to traditional work locations, the cloud-communication platform is adjusting its offerings to better meet the changing needs of businesses and their employees.

"In Q1, we launched Zoom Contact Center, Zoom Whiteboard, and Zoom IQ for Sales, demonstrating our continued focus on enhancing the customer experience and promoting hybrid work," founder and CEO Eric Yuan said in a press release. "We believe these innovative solutions will further expand our market opportunity for future growth and expansion with customers."

Zoom is also showing that it can successfully manage its cost structure as its revenue growth decelerates. Its adjusted operating profit was essentially flat year over year at $399.6 million. Adjusted earnings per share came in at $1.03, which was well above Wall Street's estimates of $0.87.

Better still, Zoom's cash-flow generation remained robust. The company produced operating and free cash flow of $526.2 million and $501.1 million, respectively.

Now what

Management expects full-year revenue of approximately $4.5 billion in fiscal 2023, with adjusted operating income of about $1.5 billion. Zoom also boosted its guidance for adjusted per-share profits to between $3.70 and $3.77, up from a prior forecast of $3.45 to $3.51.