Zoom Communications (ZM) Announces Financial Earnings Results For The Second Quarter Of Fiscal Year 2026

Zoom Video Communications, Inc. (ZM) today announced its financial results for the most recent quarter, revealing a mixed performance. The company reported earnings per share of $1.16, falling short of analysts’ expectations of $1.38, marking a miss of 22 cents. However, Zoom exceeded revenue estimates, generating $1.22 billion, which is $18.6 million above the anticipated $1.19 billion.

Key Highlights

• Total Revenue: $1,217.2 million, up 4.7% year-over-year.
• Enterprise Revenue: $730.7 million, up 7.0% year-over-year.
• GAAP Operating Margin: 26.4%, with a non-GAAP operating margin of 41.3%.
• GAAP EPS: $1.16, up 65.7% year-over-year; non-GAAP EPS: $1.53, up 10.0% year-over-year.
• Share Repurchase: Approximately 6.0 million shares repurchased in Q2, totaling 27.4 million under the current plan.
• Customer Growth: 4,274 customers contributing over $100,000 in revenue, up 8.7% year-over-year.
• Financial Outlook: Full fiscal year 2026 revenue projected between $4.825 billion and $4.835 billion.

Summary

Zoom Communications, Inc. reported strong financial results for the second quarter of fiscal year 2026, with total revenue reaching $1,217.2 million, marking a 4.7% increase year-over-year. The company’s enterprise revenue grew by 7.0% to $730.7 million, contributing significantly to the overall performance. CEO Eric S. Yuan highlighted the transformative impact of AI on their operations, stating, “AI is transforming the way we work together, and Zoom is at the forefront, driving innovation that helps people get more done, reduce costs, and deliver better experiences for customers and employees alike.” The company also achieved its highest year-over-year revenue growth in 11 quarters, alongside a notable expansion in its GAAP operating margin.

Looking ahead, Zoom has raised its full-year outlook for revenue and free cash flow, now expecting free cash flow to be in the range of $1.74 billion to $1.78 billion. The company anticipates third-quarter revenue between $1.210 billion and $1.215 billion, with non-GAAP income from operations projected between $465.0 million and $470.0 million. This positive outlook reflects Zoom’s commitment to leveraging AI and enhancing customer experiences, as evidenced by the growth in its customer base and the increase in high-value clients.

Zoom Video Communications, Inc. (ZM) has experienced a notable fluctuation in its stock price, with a slight decline of 0.32% over the past week and a more significant drop of 13.16% over the last three months. Despite these recent challenges, the company has shown resilience with a remarkable 22.04% increase over the past year, indicating a strong recovery from earlier market pressures. The fundamentals of Zoom remain robust, highlighted by an impressive earnings per share (EPS) growth rate of 118.11% over the last two years, which suggests that the company is effectively capitalizing on its market position. Additionally, a price-to-earnings ratio of 21.74 reflects a reasonable valuation given its growth potential. The revenue growth rate of 3.05% and a free cash flow growth rate of 25.91% further underscore the company’s ability to generate cash and reinvest in its operations. With a net profit margin of 22.29% and a return on invested capital of 10.41%, Zoom demonstrates strong operational efficiency. As the market continues to evolve, investors will be keen to see how Zoom navigates these price changes while leveraging its solid financial metrics to drive future growth.

Zoom Video Communications, Inc. provides unified communications platform in the Americas, the Asia Pacific, Europe, the Middle East, and Africa. The company offers Zoom Meetings that offers HD video, voice, chat, and content sharing through mobile devices, desktops, laptops, telephones, and conference room systems; Zoom Phone, an enterprise cloud phone system; and Zoom Chat enables users to share messages, images, audio files, and content in desktop, laptop, tablet, and mobile devices. It also provides Zoom Rooms, a software-based conference room system; Zoom Hardware-as-a-Service allows users to access video communication technology from third party equipment; Zoom Conference Room Connector, a gateway for SIP/H.323 endpoints to join Zoom meetings; Zoom Events, which enables users to manage and host internal and external virtual events; OnZoom, a prosumer-focused virtual event platform and marketplace for Zoom users to create, host, and monetize online events; and Zoom Webinars to provide video presentations to large audiences from many devices. In addition, the company offers Zoom Developer Platform that enables developers, platform integrators, service providers, and customers to build apps and integrations using Zoom’s video-based communications solutions, as well as integrate Zoom’s technology into their products and services; Zoom App Marketplace, which helps developers to publish their apps, as well as third-party integrations of Zoom; and Zoom Contact Center, an omnichannel contact center solution. It serves individuals; and education, entertainment/media, enterprise infrastructure, finance, government, healthcare, manufacturing, non-profit/not for profit and social impact, retail/consumer products, and software/Internet industries. The company was formerly known as Zoom Communications, Inc. and changed its name to Zoom Video Communications, Inc. in May 2012. The company was incorporated in 2011 and is headquartered in San Jose, California.