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    ZM
    Earnings call· Apr 2026(Q1 FY27)

    Zoom Communications Q1 FY27 earnings call ZM

    May 21, 2026 Source

    Executive summary

    Zoom Q1 FY27 — Strong Enterprise Growth and AI Monetization Momentum

    Zoom delivered a strong Q1 FY27, driven by robust enterprise performance and accelerating AI monetization across its platform. The company exceeded revenue and profitability guidance, showcasing the increasing value of its AI-first system of action for modern work. Strategic investments in AI and product diversification are reinforcing durable growth and expanding customer relationships, particularly in customer experience solutions.

    Highlights

    7

    • Q1 revenue grew 5.5% year-over-year to $1.24 billion, exceeding the high end of guidance.

    • Enterprise revenue grew 7.2% year-over-year, representing 61% of total revenue.

    • Non-GAAP operating margin was 41.1%, up 130 basis points from Q1 last year.

    • Non-GAAP diluted EPS increased to $1.55, $0.13 above the high end of guidance.

    • RPO increased 11% year-over-year to approximately $4.3 billion, driven by 19% noncurrent RPO growth.

    • Free cash flow grew 8% year-over-year to $500 million, representing a 40.4% margin.

    • AI Companion paid MAUs grew 184% year-over-year.

    Concerns

    1

    • Online business average monthly churn was 3% in Q1, compared to 2.8% in Q1 FY26.

    Guidance & targets

    7
    CategoryTargetConfidence
    Q2 FY27 Revenue
    $1.265 billion to $1.27 billion
    high materiality
    High
    Q2 FY27 Non-GAAP Operating Income
    $508 million to $513 million
    medium materiality
    High
    Q2 FY27 Non-GAAP Earnings Per Share
    $1.45 to $1.47
    high materiality
    High
    Full-Year FY27 Revenue
    $5.08 billion to $5.09 billion
    high materiality
    High
    Full-Year FY27 Non-GAAP Operating Income
    $2.065 billion to $2.075 billion
    medium materiality
    High
    Full-Year FY27 Non-GAAP Earnings Per Share
    $5.96 to $6
    high materiality
    High
    Full-Year FY27 Free Cash Flow
    $1.7 billion to $1.74 billion
    high materiality
    High

    Segment performance

    5
    SegmentRevenueYoYQoQMargin
    Enterprise
    Enterprise business continues to be strong, representing 61% of total revenue, up 1 point year-over-year. Growth in customers contributing over $100,000 in TTM revenue.
    Percentage of total revenue: 61%Customers contributing >$100K TTM revenue growth: 8% YoYCustomers contributing >$100K TTM revenue as % of total revenue: 33%
    		$756.4M7.2%——
    Online
    Online business saw a slight uptick in average monthly churn but is considered stabilized. Revenue growth was 2.8% in Q1, with some FX impact and an easier comparable.
    Percentage of total revenue: 39%Average monthly churn: 3% (Q1 FY27) vs 2.8% (Q1 FY26)
    		$483.6M2.8%——
    Americas
    Revenue grew 5% year-over-year.
    		—5%——
    EMEA
    Revenue grew 5% year-over-year, predominantly driven by year-over-year changes in foreign exchange rates.
    		—5%——
    APAC
    Revenue grew 6% year-over-year.
    		—6%——

    Operational metrics

    16
    Non-GAAP Gross Margin
    79.9%up 70 bps YoY
    Q1 FY27

    Primarily due to continued cost optimization efforts aligned with a long-term target of 80%.

    Non-GAAP Income from Operations
    $509Mup 9% YoY
    Q1 FY27

    Exceeded the high end of guidance by $17 million.

    Non-GAAP Operating Margin
    41.1%up 130 bps YoY
    Q1 FY27

    Improvement primarily driven by accounting amortization change and gross margin improvements, partially offset by shift from SBC to cash bonus compensation.

    Non-GAAP Diluted Net Income per Share
    $1.55up $0.12 YoY
    Q1 FY27

    Exceeded the high end of guidance by $0.13. Reflects strong business performance, effective cost management, and anti-dilution efforts.

    Non-GAAP Diluted Weighted Average Shares Outstanding
    300M
    Q1 FY27

    Used for non-GAAP diluted net income per share calculation.

    Deferred Revenue
    $1.49Bup 5% YoY
    end of Q1 FY27

    Above the high end of previously provided range of 1% to 2%. Fewer contracts than expected required grace periods.

    Operating Cash Flow Margin
    42.1%up 50 bps YoY
    Q1 FY27

    Strong cash flow generation.

    Cash and investments balance
    $7.7B
    end of Q1 FY27

    Excluding restricted cash.

    Shares Repurchased
    4.2M shares for $362M
    Q1 FY27

    Part of the pre-existing $3.7 billion share repurchase plan.

    Total Shares Repurchased (Program)
    40.4M shares for $3.1B
    to date

    Cumulative repurchases under the share repurchase plan.

    Incremental Share Repurchase Authorization
    $1B
    authorized

    Authorized by the Board, reinforcing confidence in Zoom and commitment to shareholder value.

    AI Companion Paid MAUs
    184%YoY growth
    Q1 FY27

    Driven by strong early adoption of AI Companion 3.0 capabilities.

    My Notes MAUs
    >1.5M
    Q1 FY27

    Excluding trial users, quickly emerged as a breakout product.

    Zoom Phone ARR Growth
    mid-teens
    Q1 FY27

    Continued to grow ARR, taking share.

    Zoom Customer Experience Growth
    high double-digit growth
    Q1 FY27

    Accelerated in Q1, driven by paid AI in 9 of the top 10 ZCX deals.

    R&D Expense as % of Revenue
    26%
    Q1 FY27

    Percentage of revenue spent on R&D, indicating significant investment in innovation.

    Industry KPIs

    11
    MetricValueDetails
    Revenue growth$1.24BUSD
    Arr net new arrmid-teens%
    Rpo current rpo$4.3BUSD
    Bookings billings$1.49BUSD
    Pricing model mixusage-based
    Customer account count8%%
    Large deal new logo metrics15deals
    Multi product platform attach15deals
    Operating FCF margin rule of 4041.1%%
    Ai product adoption monetization184%%
    Net revenue net dollar retention99%%

    Orderbook & backlog

    2
    Total RPO$4.3Bend of Q1 FY27

    up 11% YoY

    Includes both billed and unbilled contracts.

    Noncurrent RPONot statedend of Q1 FY27

    up 19% YoY

    Strong growth reflects continued success landing larger, longer-term multiproduct platform deals.

    Product announcements

    7
    ProductTypeDetails
    Seer by Workvivolaunch
    CX Insightslaunch
    AI Expert Assist 3.0update
    Customer Workflow Orchestrationupdate
    Advanced Quality Management for Virtual Agentupdate
    New Workforce Management Capabilitiesupdate
    Zoom AI Services (Scribe API)launch

    Deals & partnerships

    10
    Major government contractorDeployment of full suite of Zoom Workplace, Phone, Events, and Webinars7-figure ARR deal

    Displaced Teams and Cisco calling. Customer chose Zoom for stringent government security requirements and to unlock insights from live communications data for broader AI workflows.

    Baptist Health (Jacksonville, Florida)Deployment of Zoom Phone for 16,000 workers7-figure ARR deal

    Selected Zoom Phone to support 16,000 workers across more than 200 points of care due to its reliability, hybrid flexibility, and industry-specific integrations.

    Raymond JamesExpansion to custom AI Companion

    After adopting AI Companion for meeting summaries, expanded to custom AI Companion across approximately 10,000 seats for tailored AI workflows and customized summaries with security and compliance.

    MongoDBUpgrade to Zoom Workplace Enterprise Plus, Zoom Contact Center, and ZVA; chose Custom AI Companion

    Chose Custom AI Companion to translate live conversations into completed actions across IT ticketing, CRM, and other third-party systems.

    InflexionCXEarly adoption of Scribe API (Zoom AI Services)

    Validating the real-world value of Zoom's ASR technology for BPOs.

    FigmaLanded on BrightHire core product

    To help support consistent, objective, and calibrated hiring decisions.

    HubSpotExpanded with BrightHire Screen (AI interviewer)

    Expanded from its core interview intelligence product to support go-to-market hiring.

    Chelsea FCSelected Zoom Phone, ZCC Elite, and ZVA Chat

    To modernize fan engagement across touch points, deliver faster, more personalized experiences, and create a connected data foundation.

    Caliber CollisionDeploy Zoom Phone with ZCC Elite

    To streamline customer experience across more than 1,800 repair centers and their central contact center, eliminate cold call experience, and provide unified CX analytics.

    Renza (Japan)Selected Zoom Virtual Agent, Agentless Dialer, and ZCC Elite

    To modernize high-volume customer interactions, using ZVA for outbound engagement (e.g., pre-confirmation calls for electricity/gas connections) to free teams for higher-value sales activity.

    Risks & headwinds

    2
    Online business churn increaseQ1 FY27

    Average monthly churn was 3% in Q1 FY27, up from 2.8% in Q1 FY26.

    Mitigation: Management views this as a nominal uptick and believes the online business is stabilized, with continued progress on low churn.

    Quarter-to-quarter variability in deferred revenueQ2 FY27 and ongoing

    Deferred revenue guidance for Q2 FY27 is 2% to 3% YoY growth, compared to 5% YoY growth in Q1 FY27.

    Mitigation: Management expects variability based on the timing and structure of larger deals, particularly those with grace periods for competitive takeouts in phone and contact center.

    What to watch in Q2 FY27

    5

    Online Average Monthly Churn

    next quarter
    Current3%
    TargetStabilization or decrease

    Why it matters

    An uptick was noted this quarter; monitoring for stabilization is key for the online business's health.

    In our online business, Q1 average monthly churn was 3% as compared to 2.8% in Q1 of FY '26.

    Q&A highlights

    6

    How are AI solutions driving incremental wallet expansion, particularly in ZCX, and what is the pull-through from these products?

    Eric highlighted that paid AI was involved in 9 out of 10 top ZCX deals, and ZVA in 4 out of 10, indicating AI's significant role. He noted flexible pricing models (usage-based, Autocon-based) and co-innovation with customers as key drivers.

    “So speaking of ZCX, right, if you look at the now out of the top 10 deals. [ Paid AI ] was involved, right? And it's meaning AI has really helped our ZCX.”

    asked by Aleksandr Zukin · answered by Eric Yuan

    2 min read5 chapters

    Detailed Narrative

    01

    AI-First Product Strategy and Adoption

    Zoom is actively pursuing an AI-first roadmap, integrating AI Companion 3.0 capabilities across its platform to connect conversations, workflows, and outcomes. AI Companion usage scaled significantly, with paid MAUs growing 184% year-over-year. My Notes, a personal AI note-taker, has rapidly gained traction with over 1.5 million monthly active users (excluding trial users) within four months of launch, demonstrating strong early adoption of AI-driven productivity tools.

    02

    Enterprise Platform Expansion and Competitive Wins

    The company is seeing significant wins by offering a secure, integrated multiproduct platform, often displacing competitors like Teams and Cisco. Key deals include a 7-figure ARR contract with a major government contractor for the full suite of Zoom Workplace, Phone, Events, and Webinars. Baptist Health also selected Zoom Phone to support 16,000 workers across more than 200 points of care in a 7-figure ARR deal, highlighting the platform's reliability and industry-specific integrations.

    03

    New AI Monetization Streams and Vertical Workflows

    Zoom is expanding its monetization avenues beyond core collaboration with custom AI Companion, ZVA Receptionist, and Seer by Workvivo. Raymond James expanded to custom AI Companion for approximately 10,000 seats, enabling tailored AI workflows. ZVA Receptionist turns Zoom Phone into an AI-powered front door for businesses, qualifying callers and routing requests. Zoom AI Services, including the Scribe API, extends speech recognition technology to customers and developers, with early adoption from BPOs like InflexionCX.

    04

    Scaling AI-First Customer Experience (ZCX)

    ZCX is accelerating with high double-digit growth, driven by paid AI in 9 out of 10 top ZCX deals. Zoom's unique position bridging UC and CX with AI-powered tools like CX Insights, AI Expert Assist 3.0, and advanced quality management is leading to competitive displacements and larger deals. Customers like Chelsea FC, Caliber Collision, and Renza (Japan) are consolidating systems for unified AI workflows and analytics, leveraging Zoom for fan engagement, streamlined customer experience, and outbound engagement with ZVA.

    05

    Strong Financial Performance and Capital Allocation

    Q1 FY27 saw total revenue growth of 5.5% to $1.24 billion and a non-GAAP operating margin of 41.1%, up 130 basis points year-over-year, reflecting effective cost management and gross margin improvements. The company generated $500 million in free cash flow, representing a 40.4% margin. Zoom's Board authorized an incremental $1 billion share repurchase, bringing the total authorized to $4.7 billion, demonstrating confidence in future performance and commitment to shareholder returns.

    AI-generated summary of the company’s earnings call. Not investment advice.