Zoom Communications posted second-quarter financial results that exceeded consensus estimates, though forward guidance fell below Street expectations and pressured shares.
The video communications platform reported $1.28 billion in second-quarter revenue, representing 4.9% year-over-year growth. The figure surpassed the consensus estimate of $1.27 billion. Adjusted earnings per share reached $1.55, exceeding the Street’s anticipated $1.48. However, the company’s outlook for the subsequent quarter tempered investor enthusiasm. Management projected third-quarter revenue between $1.275 billion and $1.280 billion with adjusted EPS ranging from $1.46 to $1.48 per share. Analysts had modeled for third-quarter revenue of $1.28 billion and adjusted profit of $1.50 per share, per Reuters.
Enterprise revenue emerged as a source of strength, advancing 7.8% year-over-year to $787.5 million. The company added to its base of large corporate customers, with accounts generating over $100,000 in annual revenue climbing 8.2% to 4,625. The net dollar expansion rate for enterprise customers increased to 99% from 98% a year prior. Online revenue, derived from direct customer subscriptions through Zoom’s website, grew at a slower pace of 0.6% year-over-year to $489.7 million.
GAAP net income for the quarter reached $1.54 billion, or $5.15 per diluted share, substantially higher than $358.6 million, or $1.16 per diluted share, in the comparable prior-year period. The significant increase was attributable to $1.61 billion in net gains from strategic investments. Non-GAAP net income totaled $464.0 million, or $1.55 per diluted share, relative to $471.3 million, or $1.53 per diluted share, a year earlier. Free cash flow declined to $472.4 million from $508.0 million year-over-year. The company held $7.2 billion in total cash and marketable securities as of July 31, 2026.
For full-year fiscal 2027, Zoom guided for total revenue between $5.085 billion and $5.095 billion with adjusted EPS of $6.08 to $6.12. Founder and Chief Executive Eric S. Yuan highlighted enterprise momentum in a statement, noting that total revenue growth was anchored by enterprise revenue expansion described as the strongest rate in three years.
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