Can you quantify the impact of competitive takeouts on the Q1 deferred revenue growth guidance, and what are the assumptions for enterprise and online revenue growth within the FY27 revenue guidance?

Michelle Chang clarified that the Q1 deferred revenue guidance reflects a billing dynamic, not a revenue recognition issue, due to grace periods offered for large, longer competitive platform wins. She stated this is the primary driver for the deceleration. For FY27, online is expected to have slight growth, while enterprise will be the main driver, fueled by AI monetization, product diversification, and new routes to market. The FY27 guide also includes a 40 basis point headwind from a single large competitor white labeling churn. “What we saw was a recent trend that's actually great for Zoom's business of wins in large and longer competitive platforms where we're providing a grace period to our customers to help them with that transition. This is good for Zoom. This is intentional.”

What technological or structural barriers prevent AI model providers from disintermediating Zoom by building AI-native collaboration suites, and what is Zoom's competitive moat?

Eric Yuan asserted that replicating Zoom's mission-critical communication platform is extremely difficult due to the paramount importance of reliability, security, and ease of use. He noted that AI coding tools are not yet capable of building scalable systems that leverage native operating systems for complex video collaboration. He emphasized that human-to-human connection and interaction remain crucial, and Zoom's established platform is hard to displace. “I think it's extremely hard to replicate what we built over the past many years because, first of all, a lot of code still sit pass code to open out the video all a lot of things, right? Today, you look at AI according to sits so hard to build a very scalable and the leverage, the native OS over build all kind of code.”

Could management comment on the Anthropic stake, and discuss the sustainability of mid-teens growth in Zoom Phone and high growth in Zoom Contact Center, especially considering the deferred revenue dynamics?

Michelle Chang confirmed Zoom's strategic investment in Anthropic, noting a $532 million pretax gain in Q4 from its valuation change, and highlighted Anthropic as a critical partner for Zoom's federated AI approach. For Zoom Phone, she expects durable mid-teens growth with continued share gains. Zoom Contact Center has shown multiple quarters of high double-digit growth, accelerating in Q4, driven by AI value and large competitive displacements, often bundled with Phone. She reiterated that deferred revenue dynamics are due to grace periods for large competitive wins. “Look, we have a minority stake that Anthropic is a critical partner Zoom has long standing, talked about our federated approach to AI and Anthropic is key to our road map and a great partner in our federated approach.”

Zoom (ZM) Q4 FY26 earnings call: guidance and Q&A

Earnings call· Jan 2026 (Q4 FY26)· Information Technology· Feb 25, 2026

Source: earnings call transcript

Executive summary

Zoom Q4 FY26 — AI-driven Growth and Platform Expansion

Zoom delivered strong Q4 FY26 results, driven by AI innovation and platform expansion, with revenue growth accelerating and profitability remaining robust. The company is strategically investing in AI-first solutions across collaboration, customer experience, and new revenue streams, positioning itself as an AI-powered system of action for modern work. Management is confident in durable growth beyond $5 billion in revenue while maintaining focus on profitability and shareholder returns.

Highlights

Q4 revenue grew 5.3% year-over-year to $1.25 billion, exceeding the high end of guidance by $12 million.
Full year FY26 revenue grew 4.4%, accelerating 130 basis points over FY25.
ZCX ARR continued high double-digit growth, accelerating in Q4, with every top 10 deal including paid AI.
Zoom Phone ARR continues mid-teens growth, securing a Fortune 10 customer with 140,000 seats.
Non-GAAP operating margin for full FY26 was 40.4%, up 100 basis points from the prior year.

Concerns

Q4 non-GAAP diluted EPS included a headwind of approximately $0.11 from higher-than-expected taxes.
Q4 operating cash flow decreased to $355 million from $425 million in the prior year period.
Q4 free cash flow decreased to $338 million from $416 million in the prior year period.
FY27 revenue guidance includes a 40 basis point headwind from a single large competitor white labeling churn.
FY27 free cash flow guidance includes approximately $75 million of incremental CapEx and a $50 million interest income headwind.

Guidance & targets

Category	Target	Timeline	Confidence
Q1 FY27 Revenue	$1.22 billion to $1.225 billion high materiality	Q1 · FY27	High
Q1 FY27 Non-GAAP Operating Income	$487 million to $492 million medium materiality	Q1 · FY27	High
Q1 FY27 Non-GAAP EPS	$1.40 to $1.42 high materiality	Q1 · FY27	High
Q1 FY27 Deferred Revenue Growth	up 1% to 2% medium materiality	Q1 · FY27	High
FY27 Revenue	$5.065 billion to $5.075 billion high materiality	FY27	High
FY27 Non-GAAP Operating Income	$2.05 billion to $2.06 billion high materiality	FY27	High
FY27 Non-GAAP EPS	$5.77 to $5.81 high materiality	FY27	High
FY27 Free Cash Flow	$1.7 billion to $1.74 billion high materiality	FY27	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Enterprise Enterprise business continues to be strong, representing 61% of total revenue, up 1 point year-over-year. TTM NDE held steady. Customers contributing more than $100,000 in TTM revenue: 9% YoY growthCustomers contributing more than $100,000 in TTM revenue as % of total revenue: 33%Trailing 12-month net dollar expansion rate: 98%	$762.5M	7.1%	—	—
Online Online business continues to show signs of stabilizing, with average monthly churn slightly up year-over-year. Average monthly churn: 2.9% (vs 2.8% in Q4 FY25)	$487.5M	2.1%	—	—
Americas Strong growth in the Americas region.	—	6%	—	—
EMEA Solid growth in the EMEA region.	—	5%	—	—
APAC Continued growth in the APAC region.	—	3%	—	—

ZM operating KPIs by quarter

ZM operating KPIs stated on its earnings calls, by fiscal quarter
KPI	This call Jan 2026 Q4 FY26	Apr 2026 Q1 FY27	Jul 2026 Q2 FY27	Change vs prior quarter
Average monthly churn rate Online	—	3% In our online business, Q1 average monthly churn was 3% as compared to 2.8% in Q1 of FY '26. Source: earnings call transcript	2.9% In our online business, Q2 average monthly churn was 2.9%, in line with Q2 of last year. Source: earnings call transcript	-0.1 pt
Remaining performance obligation (RPO)	~$4.2B Looking at both our build and unbilled contracts, our RPO increased over 10% year-over-year to approximately $4.2 billion. Source: earnings call transcript	~$4.3B Looking at both our billed and unbilled contracts, our RPO increased 11% year-over-year to approximately $4.3 billion, driven by noncurrent RPO growth of 19%. Source: earnings call transcript	~$4.5B Looking at both our billed and unbilled contracts, our RPO increased 14% year-over-year to approximately $4.5 billion, driven by noncurrent RPO growth of 25%. Source: earnings call transcript	—

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Orderbook & backlog

Deferred Revenue $1.42 billion Q4 FY26

up 5% YoY

Remaining Performance Obligations (RPO) ~$4.2 billion Q4 FY26

increased over 10% YoY

57% expected to be recognized as revenue over the next 12 months, down 2 points YoY.

Product announcements

Product	Type	Timeline
AI Companion 3.0	launch	Q4 FY26
ZVA 3.0 (Zoom Virtual Agent 3.0)	launch	announced yesterday
Core Zoom Workplace client	update	—

Deals & partnerships

Aeroflow Health Medical device company chose Zoom Contact Center (ZCC Elite and ZVA Voice plus Chat) to replace a leading CCaaS vendor.

Chose Zoom due to its bold AI vision for CX and ability to execute.

MLB and OPENLANE Existing Zoom Contact Center customers expanded to include ZCC Elite and ZVA Voice.

Adopted a combination of ZCC Elite and ZVA Voice to deliver reimagined AI-first human plus virtual agent customer service.

Major Insurance Provider Decided to replace an expensive contact center with Zoom Phone, Zoom Contact Center, and ZVA Voice.

Aimed to automate call triage, reduce agent workload, and increase overall efficiency.

Surrey & Sussex Healthcare NHS Trust Modernized manual fragmented inbound call operations with Zoom Phone, Zoom Contact Center, and ZVA Voice plus Chat.

Enabled AI-powered self-service, improved wait times, reduced missed appointments, and enhanced overall patient outcomes and call operations efficiency.

Leading U.S. Retailer Signed a nearly 7-figure ARR deal leveraging ZVA to handle inbound calls across more than 1,100 locations. nearly 7-figure ARR

ZVA is bringing new customers and acting as a beachhead for potential expansion into large organizations.

Fortune 10 customer Landed on Zoom Phone for 140,000 seats, replacing Cisco Calling.

A large and competitive deal.

Two Major U.S. Financial Institutions Secured on Zoom Workplace and Phone, displacing Teams and Cisco Calling.

Highlights Zoom's ability to meet complex, highly regulated industry needs.

Leading Global Bank Significantly expanded footprint, adding nearly 50,000 Zoom Phone seats in Q4.

Brings their total deployment to an incredible 150,000 seats.

BrightHire Acquisition to bring conversation AI value to recruiting and hiring.

Closed in Q4. Combines BrightHire's domain-specific AI capabilities with Zoom's product breadth and distribution advantages.

Harmonic Added Custom AI Companion wall-to-wall to their Workplace deployment.

Integrated across multiple third-party tools to support knowledge retention, sales enablement, and employee onboarding.

Grand Valley State University Adopted Custom AI Companion wall-to-wall alongside Zoom Work for education, and added ZVA to their existing Zoom Contact Center.

Supporting efforts to streamline help desk and student-facing processes, and provide more responsive omnichannel support.

Risks & headwinds

Higher-than-expected taxes Q4 FY26

approximately $0.11

Changes in bonus structure and AI investments Q4 FY26

Non-GAAP operating margin declined from 39.5% to 39.3%

Single large competitor white labeling churn FY27

40 basis point headwind

Interest income headwind FY27

approximately $50 million

Incremental CapEx FY27

approximately $75 million

Shift from stock-based compensation to cash bonus compensation FY27

70 basis points of pressure

What to watch in Q1 FY27

AI monetization progress

next quarter

Current ZCX ARR growing high double digits, 4 of top 10 CX deals included ZVA

Target Continued acceleration of AI-driven revenue streams, particularly from Custom AI Companion and ZVA

Why it matters

AI monetization is a key driver for future growth and the investment thesis, indicating successful product adoption and revenue generation from new AI features.

we're very optimistic about our AI technology monetization in FY '27, driven by, first of all, and customized AI combined.

Find out whether ZM delivers this. Inve re-checks your case every morning.

Q&A highlights

How does Zoom expect AI monetization, particularly Custom AI Companion and the broader AI portfolio, to progress and contribute to revenue in fiscal 2027?

Eric Yuan expressed strong optimism for FY27 AI monetization, driven by Custom AI Companion for medium and large customers, leveraging AI Companion 3.0 to empower ZVA, Zoom Contact Center, Zoom Phone, and Zoom Revenue Accelerator. He highlighted that 4 of the top 10 CX deals included ZVA, demonstrating early success.

“we're very optimistic about our AI technology monetization in FY '27, driven by, first of all, and customized AI combined.”

asked by Arjun Bhatia · answered by Eric Yuan

3 min read 6 chapters

Detailed narrative

AI-Powered System of Action

Zoom is strategically evolving its platform into an AI-powered system of action, moving beyond traditional systems of record and engagement. This transformation is guided by three priorities: elevating the workplace with AI, driving growth of new AI products, and scaling AI-first customer experience.

The platform aims to unify internal and external workflows, eliminating silos and enabling continuous customer journeys from conversation to completion, leveraging AI to drive measurable outcomes.

Customer Experience (CX) Momentum

Zoom's CX platform is gaining significant traction, differentiated by its integration within the broader system of action rather than being a standalone solution. ZCX ARR continues to grow in high double digits, accelerating in Q4, primarily driven by AI monetization.

Notably, every one of the top 10 CX deals in Q4 included paid AI, and 7 represented competitive displacements. Zoom Virtual Agent (ZVA) Voice, launched only a few quarters ago, was included in 4 of the top 10 CX deals and secured a nearly 7-figure ARR deal with a leading U.S. retailer, demonstrating strong market adoption.

New AI Products and Vertical Workflows

Beyond customer experience, Zoom is expanding its AI revenue streams and extending its system of action to new AI products across various vertical and horizontal workflows. Zoom Revenue Accelerator (ZRA) saw its customer base grow 50% year-over-year. The acquisition of BrightHire in Q4 aims to apply conversation AI to recruiting and hiring.

Custom AI Companion is also making significant progress, with customers like Harmonic and Grand Valley State University adopting it wall-to-wall to integrate third-party tools, support knowledge retention, and streamline student-facing processes.

Zoom Workplace and Core Product Strength

The foundation of Zoom's system of action is Zoom Workplace, which saw a major step forward with the launch of AI Companion 3.0. This innovation is transforming meetings into engines of ongoing work. AI Companion monthly active users (MAUs) more than tripled year-over-year, and MAUs engaging AI through the side panel more than doubled quarter-over-quarter.

Zoom Phone continues to demonstrate strong competitive wins, including a 140,000-seat deal with a Fortune 10 customer displacing Cisco Calling, and a significant expansion with a leading global bank, adding 50,000 seats for a total of 150,000.

Financial Performance and Shareholder Returns

Zoom reported Q4 revenue of $1.25 billion, exceeding guidance. Full FY26 revenue grew 4.4%, accelerating 130 basis points over FY25. The company also improved profitability, with non-GAAP gross margin reaching 79.7% for FY26 (up 80 bps) and non-GAAP operating margin at 40.4% (up 100 bps).

Free cash flow grew 6.4% to $1.9 billion. Zoom repurchased 3.8 million shares for $324 million in Q4, bringing total repurchases under the current plan to 36.3 million shares for $2.7 billion, with an intent to offset dilution annually.

Channel and International Growth

Investments in channel partnerships are proving critical, particularly for Zoom Phone and Contact Center, driving large competitive wins; 9 of the top 10 large Contact Center deals were channel-driven. The channel base continues to grow, with an increasing proportion of new customers originating from channel partners.

Internationally, Americas revenue grew 6%, EMEA 5%, and APAC 3%. The company is focused on further international expansion through product diversification, AI monetization, and channel investments, including local investments like a U.K. data center.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.