Zoom Communications, Inc. (ZM) Announced Q2 2027 Earnings on August 25, 2026, Reporting "total revenue grew 4.9% year-over-year to $1.28 billion"

Zoom Communications, Inc. reported its second quarter fiscal year 2027 financial results, noting that "total revenue grew 4.9% year-over-year to $1.28 billion" or "4.7% in constant currency." The enterprise business led this expansion with "enterprise revenue growing 7.8% year-over-year," which represented 62% of Zoom's total revenue.

Non-GAAP gross margin for the quarter was 79.1%, while non-GAAP income from operations grew 1% year-over-year to $510 million, yielding a non-GAAP operating margin of 40%.

Non-GAAP diluted earnings per share for Q2 was $1.55 on approximately 300 million diluted shares.

Zoom generated Q2 operating cash flow of $495 million and free cash flow of $472 million, ending the period with $7.2 billion in cash, cash equivalents, and marketable securities.

The company also repurchased 3.7 million shares in Q2 for approximately $352 million.

Founder and CEO Eric Yuan highlighted that the "enterprise acceleration was driven by our focused execution against our 3 priorities of elevating workplace with AI, scaling AI first customer experience and driving growth in new AI products." In Workplace, licensed monthly active users of AI features grew 125% year-over-year. In customer experience, "Zoom CX ARR continued to grow at a high double-digit year-over-year rate" and marked "a record for the number of 7-figure ARR deals," with paid AI included in nine of the top ten Zoom CX deals.

Zoom Virtual Agent customer count grew more than 250% year-over-year, and Zoom Phone annual recurring revenue continued to grow in the teens.

Workvivo also reached a significant milestone, surpassing $100 million in ARR.Product developments featured the June release of Zoom Mate, which brings "productivity tools, agentic search and agentic workflows" to users.

Zoom also expanded its sales orchestration offering with the mid-July acquisition of Common Room, which was noted as "Zoom's largest acquisition to date," adding buyer intelligence alongside Zoom Revenue Accelerator, which grew its paid customer count by 41% year-over-year. To optimize cash flow, Chief Financial Officer Michelle Chang explained that the company chose to "simply extend in 1 of our data centers, the useful life of the asset by 2 years," which reduced capital expenditures for the year and supported an upgraded free cash flow outlook.

For the third quarter of fiscal year 2027, Zoom expects revenue in the range of $1.275 billion to $1.28 billion, non-GAAP operating income between $510 million and $515 million, and non-GAAP earnings per share of $1.46 to $1.48.

For the full fiscal year 2027, the company raised its guidance, expecting total revenue in the range of $5.085 billion to $5.095 billion and non-GAAP earnings per share of $6.08 to $6.12.

Full-year non-GAAP operating income is guided to be in the range of $2.065 billion to $2.075 billion, and full-year free cash flow guidance was raised to a range of $1.78 billion to $1.82 billion.