Live: Will Zoom Crush Tonight’s Q2 Earnings After the Bell?
Zoom just dropped its Q2 numbers after the bell, and shares moved in a direction that has investors questioning whether the AI growth story can survive its own rising expectations.
Coverage ended
5 updates · Last at 4:16pm ET
Live: Complete Coverage of Zoom’s Q3 Earnings
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Live Updates
Newest firstGuidance Update
| Guidance Item | New Guidance | Prior Consensus | Direction |
|---|---|---|---|
| Q4 Revenue | $1.230B to $1.235B | ~$1.23B | ⚖️ In line |
| Q4 EPS (Non-GAAP) | $1.48 to $1.49 | ~$1.47 | 📈 Raised |
| FY26 Revenue | $4.852B to $4.857B | $4.83B | 📈 Raised slightly |
| FY26 EPS (Non-GAAP) | $5.95 to $5.97 | $5.87 | 📈 Raised |
EPS is the standout. Full-year non-GAAP EPS is now almost 10 cents above Street expectations, reflecting cost discipline and operating leverage.
| KPI | Q3 FY26 | YoY | Why It Matters |
|---|---|---|---|
| Enterprise Revenue | $741.4M | +6.1 percent | Core engine of growth and a proxy for corporate demand. |
| Customers > $100K TTM | 4,363 | +9.2 percent | Shows continued traction with high-value accounts. |
| Non-GAAP Operating Margin | 41.2 percent | +230 bps | Margin strength continues despite AI usage scaling. |
| Free Cash Flow | $614.3M | +34 percent | 50 percent FCF margin underscores strong cash efficiency. |
| Online Revenue | $488.4M | +2 percent | Stable, but still a drag relative to Enterprise. |
| Net Dollar Expansion (Enterprise) | 98 percent | Flat | Not expanding, but comfortably stable. |
Management Commentary
CEO Eric Yuan:
“Zoom is continuing to build on our vision of an AI first platform… AI Companion adoption [is] growing meaningfully. This was one of our best CX quarters, with broad AI adoption across major deals.”
Interpretation:
The company positioned Q3 as a proof point that AI is becoming a real revenue and pipeline driver. Broad adoption across large CX deals validates the Contact Center growth vector and supports the FY27 monetization narrative.
Zoom Up After Earnings
| Metric | Actual | Estimate | Beat or Miss |
|---|---|---|---|
| Revenue | $1.2298B | $1.21B | ✅ Beat |
| EPS (Non-GAAP) | $1.52 | $1.44 | ✅ Beat |
Zoom posted a clean beat on both revenue and EPS, powered by 6.1 percent Enterprise growth, 41.2 percent non-GAAP operating margin, and a massive $629 million in operating cash flow. AI Companion adoption was a central highlight, with management calling Q3 one of its best Contact Center quarters. With the stock up more than three percent after hours, investors are responding to resilient demand, strong margins, and a material guide raise for FY26 EPS.
What's at Stake
Zoom Video Communications Inc (NASDAQ: ZM) reports Q3 fiscal 2026 earnings after the close today, with Wall Street expecting non-GAAP EPS of $1.44 on revenue of $1.21 billion. The consensus marks a 4.3% earnings increase from $1.38 in Q3 fiscal 2025.
Zoom enters with an eight-quarter beat streak intact—averaging a 17.4% surprise—but faces sequential pressure after Q2’s $1.53 result. Prediction markets assign a 95.3% probability of another beat, though confidence has cooled 4.7% in 24 hours.
Shares traded at $78.74 today, up 0.59%, after hitting an intraday high of $80.27. The stock carries a forward P/E of 13.05 against a trailing 20.69, implying continued earnings growth expectations.
Key metrics to watch: enterprise revenue acceleration (up 5.9% in Q2 versus flat online revenue), AI product adoption rates, and operating margin expansion beyond Q2’s 39.8%. Analysts maintain a $93.04 average target, suggesting 18% upside.
Valuation
At 16x forward EPS and low-single-digit revenue growth, Zoom screens as a profitable, cash-rich communications platform transitioning toward an AI-powered enterprise workflow suite.
The bull case hinges on Contact Center scale and Custom AI Companion monetization inflecting in FY27; the bear case argues that growth remains capped by a mature meetings market and competitive AI pricing from hyperscalers. With consensus modeling stable margins and modest growth, the upcoming print serves as a key checkpoint on Zoom’s ability to convert usage-based AI adoption into revenue acceleration.
Live coverage has ended. The full story is below.
Full Coverage
The story so farZoom (Nasdaq:ZM | ZM Price Prediction) reports fiscal Q3 2026 results after the close, with expectations centered on modest mid-single-digit growth and continued margin stability. The company enters the print with strong momentum from its Q2 beat, revenue +4.7 percent YoY and EPS well above guidance, and a heightened investor focus on AI monetization, Contact Center pipeline velocity, and the durability of Enterprise demand in a dynamic macro.
Estimates Snapshot
- Revenue: $1.21B
- EPS (Normalized): $1.44
- Next Qtr EPS: $0.81
- FY 2026 Revenue: $4.83B
- FY 2026 EPS: $5.87
- FY 2027 Revenue: $5.00B
- FY 2027 EPS: $3.45
The Q3 revenue estimate implies roughly 3 percent YoY growth, consistent with management’s last outlook. FY26 revenue growth is pegged near 3.5 percent, while EPS growth remains above 6 percent YoY, continuing Zoom’s profile as a high-margin, low-growth cash generator.
Key Areas to Watch
AI Companion engagement and pathway to monetization- Management highlighted 4x growth in monthly active AI users and rising usage across pre-meeting prep, post-meeting tasks, Zoom Phone call summaries, and Zoom Docs content generation. Last quarter emphasized that Custom AI Companion and agentic automation will be central to FY27 monetization, with FY26 revenue contribution limited but pipeline expanding.
Contact Center momentum and cloud displacement wins- Zoom Contact Center continues to deliver high double-digit growth, with nine of the top ten recent deals displacing incumbent cloud providers. AI-native capabilities, including Virtual Agent 2.0 and agent-assist workflows, are driving competitive differentiation. Investors will watch whether sequential bookings remain elevated and if new CCaaS innovations (auto-dialer, departmental expansions) broaden deal sizes.
Zoom Phone as a platform gateway- Zoom Phone maintained mid-teens ARR growth and is increasingly serving as an entry point into broader Workplace and Contact Center deployments. CFO commentary pointed to rising AI adoption within Phone and deeper integration with ZVA and Revenue Accelerator, supporting expansion opportunities in SMB and enterprise segments.
Enterprise stabilization vs. Online flatness- Enterprise revenue grew 7 percent YoY last quarter and remains the core driver of FY26 growth. Online is expected to remain flat for the year despite modest benefit from the Pro SKU price increase ($10–$15M of incremental FY26 revenue). Signs of weakening SMB sentiment or slowing Enterprise expansion would be a negative surprise.
Gross margin durability amid AI cost pressure- Non-GAAP gross margin reached 79.8 percent in Q2, benefiting from cloud-to-colo optimization and model-efficiency improvements. Investors will watch whether margin traction persists as AI usage scales and inferencing costs rise, management reiterated long-term targets near 80 percent.
Contact [email protected] for any questions or corrections.
Joel South
Joel South covers large-cap stocks, dividend investing, and major market trends, with a focus on earnings analysis, valuation, and turning complex data into actionable insights for investors.
He brings more than 15 years of experience as an investor and financial journalist, including 12 years at The Motley Fool, where he served as an investment analyst, Bureau Chief, and later led the Fool.com investing news desk. He has also co-hosted an investing podcast and appeared across TV and radio discussing market trends.
