Analysts’ Top 5 Questions for Zoom Ahead of Tonight’s Q2 Earnings

That wraps up our initial coverage of Zoom’s Q2 results. Thank you for stopping by!

Zoom’s AI push is beginning to produce measurable commercial traction. Zoom Virtual Agent’s customer count soared 256% year over year, helping the company’s AI-first Customer Experience portfolio deliver high-double-digit annual recurring revenue growth.

Management is now expanding AI beyond meetings and customer support. New products such as ZoomMate, My Notes, and AI Productivity Suite are being joined by the acquisitions of Common Room and BrightHire, extending Zoom into sales orchestration and recruiting.

The stock’s next major re-rating would likely depend on whether these products can lift companywide growth beyond its current pace.

Zoom’s enterprise business is finally showing signs of meaningful acceleration. Enterprise revenue increased 7.8% year over year to $787.5 million, its strongest growth rate in three years, while the number of customers generating more than $100,000 in annual revenue climbed 8.2% to 4,625.

Customer expansion also moved in the right direction, with Zoom’s enterprise net dollar expansion rate improving to 99% from 98% one year ago.

That still means existing customers are spending slightly less overall, but the gap is closing. If Zoom can push expansion back above 100% while sustaining high-single-digit enterprise growth, the company may finally have a credible path beyond its post-pandemic slowdown.

Zoom just reported Q2 earnings, with shares initially down 3.9% following the report. Here are the key numbers:

• Revenue: $1.28 billion vs. $1.27 billion expected
• Adjusted EPS: $1.55 vs. $1.48 expected
• Operating Margin: 24.6%
• Adjusted Operating Margin: 40.0%

Guidance:

• Revenue: $5.09 billion to $5.10 billion vs. $5.09 billion expected
• Adjusted EPS: $6.08 to $6.12 vs. $6.04 expected
• Free Cash Flow: $1.78 billion to $1.82 billion

Quick Read:

Zoom beat second-quarter estimates and raised its full-year earnings outlook, but the largely in-line revenue forecast left shares down after hours.

Zoom Virtual Agent customers soared 256% year over year, while the Common Room and BrightHire acquisitions expand Zoom’s AI offerings into sales and recruiting.

Bull Case: AI Traction Meets Beat-and-Raise Pattern

• Zoom (NASDAQ:ZM) has delivered four consecutive EPS beats, and Polymarket puts a 0.94 probability on another one tonight.
• AI Companion paid users grew 184% year over year, with MyNotes at 1.5 million monthly active users.
• Q1 non-GAAP operating margin reached 41.1%, and the board added a $1 billion buyback.
• Enterprise revenue rose 7.2%, with NDR improving to 99%.

Bear Case: Elevated Bar, Guidance Step-Down

• Q2 EPS guidance of $1.45 to $1.47 sits below Q1’s $1.55 print.
• Revenue growth remains modest at 5.47%, and Online churn ticked to 3%.
• Shares are up 19.14% in a month, raising the bar.
• Insider net direction is selling, and NDR is still below 100%.

Zoom Communications reports fiscal second-quarter results after the closing bell, with management previously guiding for revenue between $1.265-$1.27 billion.

Polymarket traders assign a 94% probability of an earnings beat, putting most of the pressure on Zoom’s outlook rather than the headline quarterly numbers.

The stock trades at roughly 17x forward earnings, compared with analysts’ average price target of $116.80. Investors will closely examine whether Zoom’s AI-first products and Zoom Customer Experience can accelerate growth before its core enterprise business matures.

A raised fiscal 2027 outlook would validate the company’s expanding platform strategy, while a guidance cut would revive concerns about Zoom’s post-pandemic durability.