Zoom Communications, Inc. (ZM) Earnings
Zoom Communications, Inc. is expected to report next earnings on November 23, 2026 (in NaN days), with a consensus EPS estimate of $1.50. ZM has beaten EPS estimates in 11 of its last 12 reported quarters (average surprise +4.2% over the last four).
| Report date | EPS est | EPS actual | Surprise | Revenue | Rev. surprise |
|---|---|---|---|---|---|
| Aug 25, 2026 | $1.48 | $1.55 | +4.7% | $1.3B | +0.8% |
| May 21, 2026 | $1.42 | $1.55 | +9.2% | $1.2B | +1.2% |
| Feb 25, 2026 | $1.48 | $1.44 | -2.7% | $1.2B | +2.1% |
| Nov 24, 2025 | $1.44 | $1.52 | +5.6% | $1.2B | +1.3% |
| Aug 21, 2025 | $1.38 | $1.53 | +10.9% | $1.2B | +1.6% |
| May 21, 2025 | $1.31 | $1.43 | +9.2% | $1.2B | +0.7% |
| Nov 25, 2024 | $1.31 | $1.38 | +5.1% | $1.2B | +1.2% |
| Aug 21, 2024 | $1.22 | $1.39 | +14.1% | $1.2B | +1.1% |
| May 20, 2024 | $1.19 | $1.35 | +13.1% | $1.1B | +1.3% |
| Feb 26, 2024 | $1.16 | $1.42 | +22.9% | $1.1B | +1.2% |
| Nov 20, 2023 | $1.08 | $1.29 | +19.3% | $1.1B | +0.4% |
| Aug 21, 2023 | $1.05 | $1.34 | +27.7% | $1.1B | +2.0% |
Source: company filings + earnings calendar. For informational purposes only — not investment advice.
Earnings call summary
Q2 FY2027 · August 25, 2026
AI summary of management’s prepared remarks and analyst Q&A. For informational purposes only — not investment advice.
Management highlights
- **AI-First Strategy & Monetization**: Zoom is executing on its vision of an 'AI-first system of action,' embedding AI across Workplace and CX. Licensed MAUs for AI features grew 125% YoY, driven by a shift from reactive summaries to active workflow automation. - **Enterprise Growth Inflection**: Enterprise revenue grew 7.8% YoY, the strongest rate in three years. This was aided by product diversification (Phone, CX), moving upmarket, and channel expansion. Customers contributing >$100k in TTM revenue now represent 33% of total revenue. - **Platform Expansion via Zoom Phone**: Zoom Phone continues to demonstrate teen growth and serves as a key entry point for broader platform adoption. It is increasingly driving upsells into Contact Center and AI products like Zoom Revenue Accelerator (ZRA). - **Customer Experience (CX) Momentum**: Zoom CX ARR grew at a high double-digit rate. Zoom Virtual Agent (ZVA) customer count grew >250% YoY. ZVA is being adopted both as a standalone solution and attached to Contact Center, validating the move from chatbots to resolution agents. - **Strategic Acquisitions & New Products**: Closed the acquisition of Common Room ($250M) to enhance sales intelligence alongside ZRA. Launched ZoomMate for agentic search/workflows and Workvivo HQ for AI-native employee experience. - **Operational Efficiency**: Non-GAAP gross margin was 79.1% (down slightly from 79.8% YoY due to initial AI compute costs, but managed well). Operating cash flow margin was 38.7%, and free cash flow margin was 37%.
Guidance
- **Full-Year FY2027 Revenue**: Raised to $5.085–$5.095 billion (midpoint ~4.5% YoY growth), up from previous guidance of 4.1% growth. This reflects strong enterprise performance and a beat in Q2. - **Full-Year FY2027 EPS**: Raised to $6.08–$6.12 non-GAAP diluted EPS (based on ~301M shares), up from prior estimates. Driven by top-line strength and anti-dilutive buybacks. - **Full-Year FY2027 Free Cash Flow**: Raised to $1.78–$1.82 billion, reflecting strong H1 FCF and a downward revision in CapEx spend (reduced by ~$40M due to extending data center asset life). - **Q3 Deferred Revenue**: Expected to grow 3–4% YoY. - **Online Segment**: Guidance tempered; previously expected slight growth, now adjusted to flat growth due to near-term headwinds in top-of-funnel discovery dynamics, though long-term fundamentals remain stable.
Segment performance
Total revenue grew 4.9% year-over-year to $1.28 billion (4.7% in constant currency), beating the high end of guidance by $7 million. The enterprise business was the primary driver, contributing 62% of total revenue (up 2 points YoY) with revenue growing 7.8% YoY. The online business experienced lower growth compared to the prior quarter, with average monthly churn holding steady at 2.9%. Specific product segments highlighted include Zoom Phone (teen growth, acting as a platform driver), Zoom Contact Center (high double-digit growth, record seven-figure deals), and Workvivo (surpassed $100 million ARR). AI features saw licensed monthly active users grow 125% YoY.
Risks & headwinds
- **Macroeconomic Headwinds**: Potential impact from the broader macroeconomic environment on customer spending and deal cycles. - **Competitive Pressure**: Intense competition in the UCaaS/CCaaS space from traditional vendors and new entrants leveraging AI (e.g., OpenAI presence, CRM vendors entering voice/CX). - **AI Compute Costs**: Rising infrastructure costs associated with scaling AI products, though management states they are managing this through a federated AI approach and optimization. - **White Label Churn**: A specific white-label deal churn represents a known headwind (approx. 40 bps impact) that will continue into the second half of the fiscal year. - **Online Business Discovery**: Near-term challenges in customer acquisition for the online segment due to shifting trends in how SMBs discover software (moving from search to AI-driven discovery).
Analyst Q&A
Q: Analyst asked about drivers behind the strong RPO step-up and if it signals sustained enterprise acceleration or just large one-off deals. /
A: Management attributed the strength to durable enterprise inflection drivers: product diversification (Phone, CX), AI monetization, and moving upmarket. They noted that while some deals are large/longer-term, the trend reflects deeper customer relationships and successful displacement of competitors, supported by channel investments. The NDR improvement to 99% further validates underlying health.
Q: Analyst questioned the composition of record seven-figure deals and how Zoom manages gross margins amid rising AI compute costs. /
A: Michelle Chang stated that deal sizes are expanding due to bundled AI and Contact Center solutions, with many displacing legacy vendors. Regarding margins, she explained that while AI usage spiked expenses temporarily, Zoom’s 'federated AI' approach allows them to select cost-effective models and optimize traffic. They remain confident in maintaining long-term ~80% gross margins through core technology efficiencies.
Q: Analyst asked about the runway for Zoom Phone within the existing install base and whether Contact Center wins are net-new logos or expansions. /
A: Eric Yuan and Michelle Chang noted significant runway exists given the large addressable market of cloud and on-prem seats. Phone acts as both an add-on and an entry point for CX. For Contact Center, wins are mixed: some come from existing Phone customers, but others are net-new logos attracted specifically by AI capabilities (ZVA) and unified platform value, indicating broad market appeal beyond just upselling.
Q: Analyst inquired about the strategic fit of the Common Room acquisition and its impact on guidance relative to other acquisitions like BrightHire. /
A: Eric Yuan described Common Room as a strategic complement to Zoom Revenue Accelerator (ZRA), creating a robust vertical sales AI product. Michelle Chang clarified that while Common Room was Zoom's largest acquisition ($250M), its revenue contribution is de minimis to the $5B base. However, it enhances future growth potential and was folded into the raised guidance, though it carries lower margins initially which will abate over time.