Asked to expand on underlying drivers of the strongest RPO quarter in years, beyond larger/longer duration contracts.

Michelle Chang attributed RPO strength to the overall enterprise business performance, product diversification, AI monetization, moving upmarket, expanding new routes to market with channel, and improving churn, leading to larger, longer AI-related deals. “Look, it's really what we've been telling investors we would work on product diversification, AI monetization moving up market, expanding in new routes to market with channel while working our churn. And look, as we move into these different businesses and we move into that deeper relationship that Eric talked about with our customers, it will come with longer, larger AI-related deals.”

Inquired about the composition of record 7-figure deals (driven by Contact Center, AI attach) and how gross margins are managed with increased compute costs.

Michelle Chang confirmed Contact Center's high double-digit growth and share gains, with record 1M+ deals. Gross margins were held best-in-class despite AI usage spike, with confidence in long-term 80% margins due to federated AI approach and core product optimization. “We had a little bit of a growth in expenses this quarter as we saw AIUs to spike with some of our new products. And look, as is everyone, we will work to optimize that in the second half, and we continue to reiterate our comments about holding to long-term margins.”

Asked about balancing consumption/usage models versus per-seat monetization for ZVA and the price elasticity for online business after recent increases.

Michelle Chang stated Zoom benefits from per-user models but is shifting to more consumptive models for ZVA, employing full consumptive, outcome-based, and hybrid models. For online pricing, she noted the second round of price increases (roughly 6%) did not cause a massive change in churn, indicating stability. “this is our second round of price increase... And to your point, we didn't really see a massive or really any change in our churn. It remains low. And to your point, those customers that have been with us for over 16 months just continues to inflect up.”

Zoom (ZM) Q2 FY27 earnings call: guidance and Q&A

Earnings call· Jul 2026 (Q2 FY27)· Information Technology· Aug 25, 2026

Source: earnings call transcript

Executive summary

Zoom Q2 FY27 — Enterprise Revenue Accelerates, AI Monetization Drives Growth

Zoom delivered a strong Q2 FY27, marked by accelerating enterprise revenue growth and significant progress in AI monetization across its platform. The company's "AI-first system of action" vision is driving adoption of new products like Zoom Mate and expanding existing offerings like Zoom Phone and CX, leading to larger, longer-term deals. While online growth is tempered, management remains focused on profitability, cash flow generation, and shareholder returns, raising full-year guidance.

Highlights

Total revenue grew 4.9% year-over-year to $1.28 billion, exceeding the high end of guidance by $7 million.
Enterprise revenue grew 7.8% year-over-year, its strongest rate in 3 years, now representing 62% of total revenue.
Remaining Performance Obligations (RPO) increased 14% year-over-year to approximately $4.5 billion, driven by 25% non-current RPO growth.
Non-GAAP diluted net income per share increased to $1.55, $0.08 above the high end of guidance.
Workvivo surpassed $100 million in ARR, marking one of its largest ever deals, and launched AI-native Workvivo HQ.

Concerns

Non-GAAP gross margin in Q2 was 79.1%, a decrease from 79.8% in Q2 of last year, partially due to AI usage spike.
Non-GAAP operating margin for Q2 was 40%, down from 41.3% in Q2 of last year.
Full-year revenue outlook assumes flat online growth, tempered from previous expectations, due to top-of-funnel dynamics.

Guidance & targets

Category	Target	Timeline	Confidence
Revenue	$1.275 billion to $1.28 billion high materiality	Q3 · FY27	High
Non-GAAP operating income	$510 million to $515 million medium materiality	Q3 · FY27	High
Non-GAAP earnings per share	$1.46 to $1.48 high materiality	Q3 · FY27	High
Revenue	$5.085 billion to $5.095 billion high materiality	FY27	High
Non-GAAP operating income	$2.065 billion to $2.075 billion medium materiality	FY27	High
Non-GAAP earnings per share	$6.08 and to $6.12 high materiality	FY27	High
Free cash flow	$1.78 billion to $1.82 billion high materiality	FY27	High
Deferred revenue growth	3% to 4% year-over-year medium materiality	Q3 · FY27	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Americas Revenue grew 6% year-over-year.	—	6%	—	—
EMEA Revenue grew 2% year-over-year.	—	2%	—	—
APAC Revenue grew 4% year-over-year.	—	4%	—	—
Enterprise Enterprise revenue grew 7.8% year-over-year, its strongest rate in 3 years, representing 62% of total revenue, up 2 points year-over-year. Percentage of total revenue: 62%	$793.6M	7.8%	—	—
Online Average monthly churn was 2.9%, in line with Q2 of last year. Implied to be 38% of total revenue. Average monthly churn: 2.9%	—	—	—	—

ZM operating KPIs by quarter

ZM operating KPIs stated on its earnings calls, by fiscal quarter
KPI	Jan 2026 Q4 FY26	Apr 2026 Q1 FY27	This call 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

Total RPO (billed and unbilled contracts) $4.5B end of Q2 FY27

increased 14% year-over-year

driven by noncurrent RPO growth of 25%

Deferred revenue $1.56B end of Q2 FY27

grew 6% year-over-year

Product announcements

Product	Type	Timeline	Details
Workvivo HQ	launch	priming Workvivo for the AI era
Zoom Mate	launch	June

Deals & partnerships

Common Room Acquisition of a buyer intelligence platform

Closed in mid-July. Adds buyer intelligence to Zoom Revenue Accelerator (ZRA), creating an end-to-end revenue intelligence and orchestration solution. Okta expanded its contract with Common Room.

One of the largest U.S. tech companies Renewal of Zoom Workplace

Driven by employee appreciation for Zoom Meetings and Rooms experience, AI vision, and ability to integrate and coexist with Google Workspace.

Major U.S. wealth manager Upgrade to Zoom Workplace Enterprise Primer, including Zoom Phone rollout

Included a wall-to-wall rollout of Zoom Phone, replacing multiple vendors.

QXO Adoption of Zoom Phone and Zoom Contact Center

Large North American distributor and installer of building products chose Zoom Phone company-wide for roughly 8,000 employees alongside Zoom Contact Center to unify UCaaS and CCaaS systems, integrate with Microsoft Teams, and automatically drive CRM updates.

Leading U.S. insurer Expansion into Workvivo

Existing Zoom Workplace and Phone user expanded into Workvivo, marking one of Workvivo's largest ever deals.

Global luxury retail brand Selection of Workvivo HQ as employee experience platform

Will deploy Workvivo HQ agent to give thousands of frontline workers faster access to answers from policies and databases.

One of the largest U.S. banks Adoption of ZVA and expansion of ZCC deployment

Chose ZVA while expanding its existing ZCC lead deployment to enable self-service alongside AI-assisted human support, helping them scale to meet surging help desk volume.

Leading enterprise software company Selection of ZVA Voice as an extension to Zoom Phone

Selected ZVA Voice as a natural extension to Zoom Phone as they look to modernize their customer experience.

Major U.S. cybersecurity company Selection of Zoom Contact Center

Selected Zoom Contact Center to replace multiple vendors and securely unify their UCaaS and CCaaS solutions, building on their use of Zoom video in customer interactions.

University of Newcastle in Australia Addition of Zoom Mate

Already a full platform Zoom customer, added Zoom Mate to further enhance its collaboration and communication capabilities.

Okta Expanded Common Room contract

Expanded their Common Room contract as they look to further capture the value that AI-driven buyer intelligence delivers by consolidating customer insights across platforms and surfacing real-time buyer signals.

Capital programs

Data center asset useful life extension decision taken

A decision was made to extend the useful life of a data center asset by 2 years, which benefited free cash flow by about $40 million. This contributed to the downward revision of CapEx spend for the year.

Risks & headwinds

Online Business Top-of-Funnel Dynamics Near-term (Q3 FY27 and beyond)

Full-year online growth tempered to flat from previous slight growth.

Mitigation:Actively working to address changes in customer discovery (e.g., shift from search to AI).

AI Compute Cost Pressure Q2 FY27, ongoing

Non-GAAP gross margin 79.1% in Q2 FY27, down from 79.8% in Q2 FY26, due to AI usage spike.

Mitigation:Optimizing in H2 FY27, federated AI approach (best model for right cost), fluid traffic direction, bringing high volumes to MSM, creating products once in core.

White Label Deal Headwind Q2 FY27, continuing into H2 FY27

40 bps impact to total top line, 60 bps impact to enterprise revenue.

Mitigation:Acknowledged as a factor impacting growth rates, no explicit mitigation strategy stated beyond general growth drivers.

What to watch in Q3 FY27

Online business growth trajectory

Next quarter (Q3 FY27) and beyond

Current Flat growth assumed for FY27, tempered from previous slight growth.

Target Return to slight or positive growth.

Why it matters

Online business stability and growth are crucial for overall revenue diversification and growth.

Our increased revenue outlook assumes enterprise revenue growing faster than expected, partially offset by flat online growth.

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

Q&A highlights

Seeking elaboration on Phone demand, purchasing behavior, and outlook for the rest of the year.

Michelle Chang highlighted strong Phone results, teen growth, and takeout motions (10 of top 10 deals were takeouts). Noted Phone's role as a pathway to other AI monetization (ZRA, Zoom Mate, ZVA) and strong momentum in Teams integration.

“We're seeing it set up a lot of ZRA deals, Zoom make deals, Zoom virtual AI reception as sales. So we're encouraged by that. And we're also seeing strong momentum in our team's integration.”

asked by Matthew Bullock · answered by Michelle Chang

2 min read 7 chapters

Detailed narrative

AI-First System of Action Vision Driving Adoption

Eric Yuan emphasized Zoom's "AI-first system of action" vision, integrating AI across Zoom Workplace and its broader communications platform. This vision aims to help customers reduce costs and create greater business value by turning insights into action and conversations into outcomes. Licensed monthly active users of AI features in Workplace grew 125% YoY, expanding from reactive summaries to active querying and workflow building.

Enterprise Acceleration and Product Diversification

Enterprise revenue growth accelerated to 7.8% YoY, its strongest rate in 3 years, now comprising 62% of total revenue. This was driven by focused execution on AI, customer experience, and new AI products. Zoom Phone continues to show strong value with teen growth, acting as both an add-on to Workplace and a driver for broader platform adoption, including UCaaS and CCaaS unification.

Workvivo's Growth and AI Integration

Workvivo, Zoom's employee experience offering, expanded significantly, marking one of its largest deals and surpassing $100 million in ARR. The launch of Workvivo HQ, an AI-native digital headquarters built on Zoom's AI technology, aims to further enhance employee communication and knowledge access, with a global luxury retail brand selecting it for thousands of frontline workers.

Zoom CX Momentum and AI Monetization

Zoom CX ARR grew at a high double-digit YoY rate, setting a record for 7-figure ARR deals. AI is a key driver, with paid AI featured in 9 of the top 10 Zoom CX deals. Zoom Virtual Agent (ZVA) saw customer count grow over 250% YoY, both as an attachment to Contact Center and as a stand-alone offering, validating the shift from chatbots to resolution agents.

Strategic Acquisitions and Vertical AI

The acquisition of Common Room in mid-July adds buyer intelligence to Zoom Revenue Accelerator (ZRA), creating an end-to-end revenue intelligence and orchestration solution. ZRA itself saw paid customers grow 41% YoY. This strategy aims to deepen Zoom's value as a system of action by applying AI intelligence to vertical workflows like sales.

RPO Strength and Future Growth Drivers

Remaining Performance Obligations (RPO) increased 14% YoY to approximately $4.5 billion, with non-current RPO growing 25%. This strong growth reflects success in landing larger, longer-term multiproduct platform deals, demonstrating increasing demand for Zoom's AI-first platform. Management highlighted product diversification, AI monetization, moving upmarket, and channel building as durable elements for future growth.

Online Business and Pricing Strategy

The online business experienced solid Q2 results with low churn (2.9% average monthly churn, in line with prior year). Despite a mid-single-digit price increase, churn remained stable, particularly for customers with over 16 months tenure. However, the full-year outlook for online growth was tempered to flat due to top-of-funnel dynamics across the industry, with Zoom actively working to address changes in customer discovery.

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