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Zoom Q1 Earnings and Revenues Top Estimates, Increase Y/Y
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Key Takeaways
Zoom posted fiscal Q1 EPS of $1.55 and revenues of $1.24B, beating guidance and rising Y/Y.
Zoom's enterprise revenues rose 7.2%, with large customers growing 8.2% to 4,534 accounts.
Zoom raised fiscal 2027 outlook and expanded AI push, with AI Companion users up 184% Y/Y.
Zoom Communications (ZM - Free Report) reported first-quarter fiscal 2027 adjusted earnings of $1.55 per share, which beat the Zacks Consensus Estimate by 9.93% and increased 8.4% year over year. The figure also came in 13 cents above the company's guided range of $1.40-$1.42.
Revenues of $1.24 billion beat the consensus mark by 1.26% and increased 5.5% year over year, exceeding the guidance by $14 million. Adjusting for foreign currency impact, revenues in constant currency were $1.23 billion, up 4.6% year over year.
Zoom Communications, Inc. Price, Consensus and EPS Surprise
Enterprise revenues, which account for 61% of total revenues, increased 7.2% year over year to $755.7 million. Online revenues, which represent 39% of total revenues, increased 2.8% year over year to $483.3 million. Customers contributing more than $100,000 in revenues in the trailing 12 months grew 8.2% to 4,534. These customers accounted for 33% of revenues, up one percentage point year over year.
The company reported a trailing 12-month net dollar expansion rate for Enterprise customers of 99%, up from 98% in the year-ago quarter. Online average monthly churn was 3.0% in the first quarter compared with 2.8% in the prior-year period. The percentage of total Online MRR from Online customers with a continued term of service of at least 16 months was 74.4%, up 20 basis points year over year.
ZM's Margin & Operating Details
Non-GAAP gross margin in the fiscal first quarter was 79.9% compared with 79.2% in the year-ago period, expanding 70 basis points. On a GAAP basis, research and development expenses increased 11% year over year to $227.9 million. Sales and marketing expenses declined 4.9% to $330.1 million, and general and administrative expenses fell 5.9% to $96.3 million. Non-GAAP operating income rose 8.9% to $508.7 million year over year, exceeding the high end of guidance by $17 million.
The non-GAAP operating margin was 41.1%, up 130 basis points from 39.8% in the year-ago quarter. GAAP income from operations was $310.5 million, with a GAAP operating margin of 25.1%, up 450 basis points year over year.
ZM's Balance Sheet & Cash Flow
Total cash, cash equivalents and marketable securities, excluding restricted cash, as of April 30, 2026, were $7.7 billion, compared with $7.8 billion as of Jan. 31, 2026. Net cash provided by operating activities was $521.6 million for the fiscal first quarter compared with $489.3 million in the year-ago quarter. Free cash flow was $500.5 million compared with $463.4 million in the prior-year quarter. In the first quarter, Zoom repurchased 4.2 million shares of Class A common stock for $362 million.
ZM's Q1 Developments
During the quarter, Zoom appointed Russell Dicker as chief product officer to lead its AI-first product roadmap. The company advanced its AI strategy with AI Companion 3.0, with paid AI Companion monthly active users growing 184% year over year and the newly launched My Notes reaching 1.5 million monthly active users within four months of launch. Zoom also launched Zoom AI services — including the Scribe API for speech-to-text — and introduced CX Insights and AI Expert Assist 3.0 within Zoom Customer Experience. Alongside the earnings release, Zoom's board authorized an incremental $1.0 billion share repurchase, on top of the $625 million remaining under its prior authorization as of April 30, 2026.
ZM's Q2 & FY27 Guidance
Zoom expects its second-quarter fiscal 2027 revenues to be between $1.265 billion and $1.270 billion. Revenues on a constant-currency basis are expected to be between $1.262 billion and $1.267 billion. Non-GAAP income from operations is expected to be between $508 million and $513 million. Non-GAAP earnings per share are expected to be in the range of $1.45-$1.47, based on approximately 304 million weighted average shares outstanding. For fiscal 2027, Zoom raised its guidance and now expects revenues in the range of $5.08-$5.09 billion. Revenues on a constant-currency basis are expected to be between $5.062 billion and $5.072 billion. Non-GAAP income from operations is expected to be between $2.065 billion and $2.075 billion. Non-GAAP EPS are expected to be in the band of $5.96-$6. The company expects free cash flow between $1.7 billion and $1.74 billion.
Shares of Broadcom have gained 18.8% year to date. The Zacks Consensus Estimate for Broadcom’s 2026 earnings is pegged at $11.47 per share, up by 2 cents over the past seven days, indicating a year-over-year surge of 68.2%.
Shares of Celestica have gained 14.7% year to date. The Zacks Consensus Estimate for Celestica’s 2026 earnings is pegged at $10.16 per share, up 15.1% over the past 30 days, indicating a year-over-year jump of 67.9%.
Amphenol shares have declined 11.7% year to date. The Zacks Consensus Estimate for APH’s 2026 earnings is pegged at $4.76 per share, up 11.4% over the past 30 days, indicating a year-over-year increase of 42.5%.
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Zoom Q1 Earnings and Revenues Top Estimates, Increase Y/Y
Key Takeaways
Zoom Communications (ZM - Free Report) reported first-quarter fiscal 2027 adjusted earnings of $1.55 per share, which beat the Zacks Consensus Estimate by 9.93% and increased 8.4% year over year. The figure also came in 13 cents above the company's guided range of $1.40-$1.42.
Revenues of $1.24 billion beat the consensus mark by 1.26% and increased 5.5% year over year, exceeding the guidance by $14 million. Adjusting for foreign currency impact, revenues in constant currency were $1.23 billion, up 4.6% year over year.
Zoom Communications, Inc. Price, Consensus and EPS Surprise
Zoom Communications, Inc. price-consensus-eps-surprise-chart | Zoom Communications, Inc. Quote
ZM's Q1 Details
Enterprise revenues, which account for 61% of total revenues, increased 7.2% year over year to $755.7 million. Online revenues, which represent 39% of total revenues, increased 2.8% year over year to $483.3 million. Customers contributing more than $100,000 in revenues in the trailing 12 months grew 8.2% to 4,534. These customers accounted for 33% of revenues, up one percentage point year over year.
The company reported a trailing 12-month net dollar expansion rate for Enterprise customers of 99%, up from 98% in the year-ago quarter. Online average monthly churn was 3.0% in the first quarter compared with 2.8% in the prior-year period. The percentage of total Online MRR from Online customers with a continued term of service of at least 16 months was 74.4%, up 20 basis points year over year.
ZM's Margin & Operating Details
Non-GAAP gross margin in the fiscal first quarter was 79.9% compared with 79.2% in the year-ago period, expanding 70 basis points. On a GAAP basis, research and development expenses increased 11% year over year to $227.9 million. Sales and marketing expenses declined 4.9% to $330.1 million, and general and administrative expenses fell 5.9% to $96.3 million. Non-GAAP operating income rose 8.9% to $508.7 million year over year, exceeding the high end of guidance by $17 million.
The non-GAAP operating margin was 41.1%, up 130 basis points from 39.8% in the year-ago quarter. GAAP income from operations was $310.5 million, with a GAAP operating margin of 25.1%, up 450 basis points year over year.
ZM's Balance Sheet & Cash Flow
Total cash, cash equivalents and marketable securities, excluding restricted cash, as of April 30, 2026, were $7.7 billion, compared with $7.8 billion as of Jan. 31, 2026. Net cash provided by operating activities was $521.6 million for the fiscal first quarter compared with $489.3 million in the year-ago quarter. Free cash flow was $500.5 million compared with $463.4 million in the prior-year quarter. In the first quarter, Zoom repurchased 4.2 million shares of Class A common stock for $362 million.
ZM's Q1 Developments
During the quarter, Zoom appointed Russell Dicker as chief product officer to lead its AI-first product roadmap. The company advanced its AI strategy with AI Companion 3.0, with paid AI Companion monthly active users growing 184% year over year and the newly launched My Notes reaching 1.5 million monthly active users within four months of launch. Zoom also launched Zoom AI services — including the Scribe API for speech-to-text — and introduced CX Insights and AI Expert Assist 3.0 within Zoom Customer Experience. Alongside the earnings release, Zoom's board authorized an incremental $1.0 billion share repurchase, on top of the $625 million remaining under its prior authorization as of April 30, 2026.
ZM's Q2 & FY27 Guidance
Zoom expects its second-quarter fiscal 2027 revenues to be between $1.265 billion and $1.270 billion. Revenues on a constant-currency basis are expected to be between $1.262 billion and $1.267 billion. Non-GAAP income from operations is expected to be between $508 million and $513 million. Non-GAAP earnings per share are expected to be in the range of $1.45-$1.47, based on approximately 304 million weighted average shares outstanding. For fiscal 2027, Zoom raised its guidance and now expects revenues in the range of $5.08-$5.09 billion. Revenues on a constant-currency basis are expected to be between $5.062 billion and $5.072 billion. Non-GAAP income from operations is expected to be between $2.065 billion and $2.075 billion. Non-GAAP EPS are expected to be in the band of $5.96-$6. The company expects free cash flow between $1.7 billion and $1.74 billion.
Zacks Rank & Stocks to Consider
Currently, ZM carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Zacks Computer and Technology sector are Broadcom (AVGO - Free Report) , Celestica (CLS - Free Report) and Amphenol (APH - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Shares of Broadcom have gained 18.8% year to date. The Zacks Consensus Estimate for Broadcom’s 2026 earnings is pegged at $11.47 per share, up by 2 cents over the past seven days, indicating a year-over-year surge of 68.2%.
Shares of Celestica have gained 14.7% year to date. The Zacks Consensus Estimate for Celestica’s 2026 earnings is pegged at $10.16 per share, up 15.1% over the past 30 days, indicating a year-over-year jump of 67.9%.
Amphenol shares have declined 11.7% year to date. The Zacks Consensus Estimate for APH’s 2026 earnings is pegged at $4.76 per share, up 11.4% over the past 30 days, indicating a year-over-year increase of 42.5%.