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

Zoom Communications, Inc. (ZM) today announced its financial results for the most recent quarter, showcasing a strong performance that exceeded expectations. The company reported earnings per share of $2.01, significantly beating the estimated EPS of $1.44 by $0.57. Additionally, Zoom achieved quarterly revenue of $1.23 billion, surpassing the revenue estimate of $1.21 billion by over $15 million. This positive financial outcome highlights Zoom’s continued growth and resilience in a competitive market.

Key Highlights:

• Total revenue for Q3 FY2026 was $1,229.8 million, a 4.4% increase year-over-year.
• Enterprise revenue reached $741.4 million, up 6.1% year-over-year.
• GAAP operating margin was 25.2%, while non-GAAP operating margin was 41.2%.
• Operating cash flow increased by 30.2% year-over-year to $629.3 million.
• GAAP EPS was $2.01, up 204.5% year-over-year; non-GAAP EPS was $1.52, up 10.1% year-over-year.
• Customer base with over $100,000 in revenue increased by 9.2% year-over-year.
• The company repurchased approximately 5.1 million shares in Q3 and increased stock repurchase authorization by $1.0 billion.

Summary: Zoom Communications, Inc. reported strong financial results for the third quarter of fiscal year 2026, with total revenue of $1,229.8 million, reflecting a 4.4% increase from the previous year. The company highlighted significant growth in its Enterprise segment, which saw a revenue increase of 6.1% year-over-year. CEO Eric S. Yuan emphasized the company’s commitment to an “AI-first platform,” noting the successful adoption of their AI Companion 3.0 and the positive momentum in their AI Customer Experience suite. This focus on AI innovation is seen as a key driver for future growth, contributing to both top-line revenue and profitability.

Looking ahead, Zoom provided guidance for the fourth quarter, expecting total revenue between $1.230 billion and $1.235 billion, and for the full fiscal year 2026, total revenue is projected to be between $4.852 billion and $4.857 billion. The company also reported a robust cash flow, with operating cash flow of $629.3 million, and a free cash flow margin of 50.0%. The ongoing stock repurchase program, which has been expanded, reflects Zoom’s confidence in its financial health and commitment to returning value to shareholders.

Zoom Communications, Inc. (ZM) has experienced a notable fluctuation in its stock price, with a recent decline of 6.64% over the past week, reflecting investor sentiment amid broader market trends. Despite this short-term dip, the stock has shown resilience with a 7.46% increase over the last three months, suggesting a potential recovery phase. The company’s fundamentals remain robust, highlighted by an impressive two-year compound annual growth rate (CAGR) of 188.83% in earnings per share, indicating strong profitability potential. Additionally, Zoom’s revenue CAGR of 3.20% and free cash flow CAGR of 27.55% further underscore its operational efficiency and ability to generate cash. With a price-to-earnings ratio of 20.83, the stock appears reasonably valued, especially considering its net profit margin of 24.95%. However, the return on invested capital at 8.54% suggests there may be room for improvement in capital efficiency. As investors weigh these metrics against recent price movements, Zoom’s long-term growth prospects remain a focal point for those looking to capitalize on its evolving business model.

Zoom Communications, Inc. engages in the provision of a communications and collaboration platform. It operates through the following geographical segments: Americas, Asia Pacific, and Europe, Middle East, and Africa. The company was founded by Eric S. Yuan in 2011 and is headquartered in San Jose, CA.