Revenue Beat and Growth
Q1 total revenue $1.24B, up 5.5% year-over-year (4.6% in constant currency), $14M above the high end of guidance; company raised full-year FY27 revenue guidance to $5.08–5.09B (midpoint +4.4% YoY).
Zoom Video Communications
· ZM
May 21st, 2026
Summary
- Earnings Call Date:
- 2026-05-21
- Change Since:
- -11.66%
- Next Earnings Date:
- 2026-08-24
Earnings Call Sentiment
PositiveThe call conveyed solid financial execution (Q1 revenue beat, raised full-year guidance), strong profitability and cash generation, and pronounced early momentum across AI products, contact center/CX and multiproduct enterprise expansion. Operational positives — notable AI adoption (paid MAUs +184%), product wins displacing legacy vendors, margin expansion and healthy cash flow — materially outweigh the modest near-term headwinds (slight online churn uptick, NDR at 99%, FX effects, and deferred revenue timing variability). Management acknowledged areas to address (AI awareness, competitive pressures) and provided a constructive outlook with incremental buyback authorization.
Company Guidance
Zoom guided Q2 revenue of $1.265B–$1.27B (≈4.1% y/y at the midpoint), non‑GAAP operating income of $508M–$513M (40.3% operating margin at the midpoint) and non‑GAAP EPS of $1.45–$1.47 on roughly 304M shares; for FY‑27 it raised full‑year guidance to revenue of $5.08B–$5.09B (≈4.4% y/y at the midpoint), non‑GAAP operating income of $2.065B–$2.075B (40.7% margin at the midpoint), non‑GAAP EPS of $5.96–$6.00 on ~304M shares and free cash flow of $1.7B–$1.74B. Management expects Q2 deferred revenue growth of 2–3% y/y (Q1 deferred revenue was $1.49B, +5% y/y), RPO of ~ $4.3B (+11% y/y) with noncurrent RPO +19%, and noted Q1 results that beat guidance (Q1 revenue $1.24B, +5.5% y/y, $14M above the high end; non‑GAAP operating income $509M, +9% y/y, $17M above the high end; non‑GAAP EPS $1.55 on ~300M shares, $0.13 above the high end). The company finished Q1 with $7.7B cash, repurchased 4.2M shares for $362M in the quarter (40.4M shares / $3.1B total repurchased) and announced an incremental $1B share‑repurchase authorization; future buybacks are not included in the EPS guidance.
Enterprise Strength and Upmarket Momentum
Enterprise revenue grew 7.2% YoY and represented 61% of total revenue (up 1 point YoY); customers >$100k TTM grew 8% YoY and now comprise 33% of revenue (up 1 point).
AI Product Adoption and Monetization
Paid MAUs for AI Companion grew 184% YoY; My Notes reached >1.5M monthly active users within 4 months of launch; early adoption of AI Companion 3.0 and paid AI features are driving expansion and upsell (multiple large customers expanded to custom AI Companion).
Customer Wins & Platform Expansion
Multiple large, strategic enterprise wins and displacements (e.g., government contractor, Baptist Health, Chelsea FC, Caliber Collision, Renza, MongoDB, Raymond James) demonstrating multiproduct expansion across Workplace, Phone, Contact Center and ZVA; many top deals displaced legacy vendors.
Contact Center & CX Momentum
Zoom Customer Experience (ZCX) showed high double-digit growth in Q1 with paid AI in 9 of the top 10 ZCX deals; company highlighted new CX SKUs (CX Insights, AI Expert Assist 3.0, workforce mgmt enhancements) and expanding ZVA use cases.
Strong Profitability and Cash Generation
Non-GAAP gross margin 79.9% (+70 bps YoY); non-GAAP operating income $509M (+9% YoY) with operating margin 41.1% (+130 bps YoY); non-GAAP diluted EPS $1.55 (+$0.12 YoY) and $0.13 above guidance.
Balance Sheet & Cash Flow Strength
Deferred revenue $1.49B (+5% YoY); RPO ~ $4.3B (+11% YoY, noncurrent RPO +19%); operating cash flow $522M (+7% YoY, 42.1% margin); free cash flow $500M (+8% YoY, 40.4% margin); cash and marketable securities $7.7B.
Share Repurchases & Capital Return
Repurchased 4.2M shares for $362M in Q1 (total 40.4M shares for $3.1B to date); Board authorized an incremental $1B share repurchase, reinforcing capital return posture.
Product & Developer Platform Progress
Launched Zoom AI Services in March (including Scribe API), leveraging Zoom’s speech recognition strength with early adopters (e.g., BPO InflexionCX); demonstrating a path to expose core AI tech to customers and developers.
Operator
Hello, and welcome to Zoom's Q1 FY 2027 Earnings Release Webinar. I will now hand things over to Charles Eveslage, Head of Investor Relations. Charles, over to you.
Charles Eveslage
Thank you, Catherine. Hello, everyone, and welcome to Zoom's earnings webinar for the first quarter of fiscal year 2027. I'm joined today by Zoom's Founder and CEO, Eric Yuan; and Zoom's CFO, Michelle Chang. Our earnings release was issued today after the market closed and may be downloaded from the Investor Relations page at investors.zoom.com. Also on this page, you'll be able to find a copy of today's prepared remarks and a slide deck with financial highlights that, along with our earnings release, include a reconciliation of GAAP to non-GAAP financial results. These measures should not be considered in isolation from or as a substitute for financial information prepared in accordance with GAAP. During this call, we will make forward-looking statements, including statements regarding our financial outlook for the second quarter and full fiscal year 2027, our expectations regarding financial and business trends, impacts from the macroeconomic environment, our market position, stock repurchase program, opportunities, go-to-market initiatives, growth strategy and business aspirations and product initiatives, including future product and feature releases and the expected benefits of such initiatives. These statements are only predictions that are based on what we believe today, and actual results may differ materially.
These forward-looking statements are subject to risks and other factors that could affect our p...
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