Live: Will Zoom Beat Estimates?
Key Points
- Consensus expects modest growth: Q2 revenue up ~3% YoY, EPS roughly flat vs. last year.
- AI monetization, Contact Center expansion, and Phone integration remain central to the growth narrative.
- Stock reaction to past four earnings has been muted despite consistent EPS beats.
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My take on Zoom's quarter
| Metric | Prior FY26 | Post-Guide FY26 | Shift |
|---|---|---|---|
| Revenue | ~$4.81B | $4.825–4.835B | ✅ Higher |
| EPS | $5.61 | $5.81–5.84 | ✅ Higher |
| FCF | ~$1.7B | $1.74–1.78B | ✅ Higher |
Zoom is proving cost discipline and margin strength, but without a demand re-acceleration story, AI Companion, Contact Center, and Phone growth need to show measurable revenue lift to move the stock.
Key Operating Highlights
| KPI | Q2 Result | YoY | Context |
|---|---|---|---|
| Enterprise Revenue | $731M | +7.0% | Continues to outpace Online |
| Online Revenue | $487M | +1.4% | Flat churn (2.9%), showing stabilization |
| $100K+ Customers | 4,274 | +8.7% | Expansion with large deals intact |
| Net Dollar Expansion (Enterprise) | 98% | – | Below 100% still a drag on growth |
| Operating Margin (Non-GAAP) | 41.3% | +210 bps | Strong leverage, a positive highlight |
Guidance Update
| Metric | Prior FY26 | New FY26 | Direction |
|---|---|---|---|
| Revenue | ~$4.81B | $4.825–4.835B | 📈 Slight Raise |
| EPS (Non-GAAP) | ~$5.61 | $5.81–5.84 | 📈 Raised |
| FCF | ~$1.7B | $1.74–1.78B | 📈 Raised |
Financial Metrics
| Metric | Fiscal Period Ending 2025-07-31 | Previous Year (2024-07-31) | YoY |
|---|---|---|---|
| Revenue | $1.22B | $1.16B | 4.70% |
| Operating Income | $321.70M | $202.37M | 58.97% |
| Net Income | $358.60M | $219.01M | 63.73% |
| Cash And Equivalents | $7.80B | $1.54B | 406.67% |
| Operating Cash Flow | $515.90M | $449.33M | 14.81% |
| Free Cash Flow | $508.00M | N/A | 0.00% |
Management Commentary
“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.” – CEO Eric Yuan
Yuan is leaning on AI adoption to reframe Zoom as a growth story, but with revenue still growing mid-single digits, the Street isn’t fully buying the acceleration yet.
Zoom's numbers are in
After-Hours Stock Move: ZM –0.36%
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Earnings vs. Estimates
| Metric | Reported | Consensus | Beat/Miss |
|---|---|---|---|
| Q2 Revenue | $1.217B | $1.20B | ✅ Beat |
| Q2 EPS (Non-GAAP) | $1.53 | $1.38 | ✅ Beat |
| FY26 Revenue Guide | $4.825–4.835B | $4.81B | ✅ Slight Raise |
| FY26 EPS Guide | $5.81–5.84 | $5.61 | ✅ Raised |
Quick Take: Zoom delivered its strongest YoY revenue growth in 11 quarters (+4.7%), with operating margins expanding to 41.3%. It also raised full-year revenue, EPS, and FCF guidance. Despite the clean print, the muted stock reaction shows investors want more proof that AI and Contact Center can bend the growth curve meaningfully
Earnings up next
Zoom will close the day up 1.10% as earnings numbers drop in about 20 minutes. Stay tuned as we post live updates right here.
Earnings History
ZM has beaten EPS in 4 straight quarters, but price reaction has been three negative, one strong positive—the market wants clearer acceleration in revenue/billings and proof that AI/CCaaS can lift growth.
| Quarter | EPS Surprise | 1‑Day Move | 7‑Day Move | 14‑Day Move |
|---|---|---|---|---|
| Q1 FY2026 (May 21, 2025) | +9.16% | –0.24% | –1.22% | –5.00% |
| Q4 FY2025 (Feb 24, 2025) | +7.63% | –8.48% | –6.78% | –8.51% |
| Q3 FY2025 (Nov 25, 2024) | +5.34% | –6.31% | –6.37% | –5.87% |
| Q2 FY2025 (Aug 21, 2024) | +13.93% | +12.97% | +14.69% | +11.74% |
Zoom (NASDAQ: ZOOM) reports after the close. We’re late‑cycle in a stabilization phase with AI‑led features and CCaaS expanding wallet share while enterprise deal cycles remain elongated.
Estimates Snapshot
- Revenue (Q2 FY26): $1.20B
- EPS (Q2 FY26, Normalized): $1.38
- FY2026 Revenue: $4.81B
- FY2026 EPS: $5.61
These imply ~3% YoY revenue growth and essentially flat EPS vs. FY25.
Key Areas to Watch
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AI Companion Adoption and Monetization
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Users up 40% QoQ; now monetized via custom SKUs with enterprise-grade features.
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Investors will look for signs of revenue contribution beyond the free-tier adoption.
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Zoom Contact Center & Virtual Agent
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Customer count up 65% YoY in Q1; largest upsell deal landed.
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Management emphasized “better together” messaging — bundling comms and CCaaS as a differentiator.
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Zoom Phone Growth & Teams Integration
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Mid-teens revenue growth; strengthened by Microsoft Teams integration and channel sales expansion.
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Seen as a key market share opportunity given 150M+ phone seats still on-prem.
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Workvivo & Employee Experience
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Customer count +106% YoY, with 90% new to Zoom.
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Acts as a new entry funnel into broader platform adoption.
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Enterprise Macro Headwinds
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CFO flagged elongated deal cycles at large U.S. customers.
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Outlook remains cautious, with deferred revenue up 5% YoY but guidance assuming continued pressure.
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