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    ZM
    Earnings call· Jul 2026(Q2 FY27)

    Zoom Communications Q2 FY27 earnings call ZM

    Aug 25, 2026 Source

    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

    5

    • 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

    3

    • 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

    8
    CategoryTargetConfidence
    Revenue
    $1.275 billion to $1.28 billion
    high materiality
    High
    Non-GAAP operating income
    $510 million to $515 million
    medium materiality
    High
    Non-GAAP earnings per share
    $1.46 to $1.48
    high materiality
    High
    Revenue
    $5.085 billion to $5.095 billion
    high materiality
    High
    Non-GAAP operating income
    $2.065 billion to $2.075 billion
    medium materiality
    High
    Non-GAAP earnings per share
    $6.08 and to $6.12
    high materiality
    High
    Free cash flow
    $1.78 billion to $1.82 billion
    high materiality
    High
    Deferred revenue growth
    3% to 4% year-over-year
    medium materiality
    High

    Segment performance

    5
    SegmentRevenueYoYQoQMargin
    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%
    		$793.6M7.8%——
    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%
    		————

    Operational metrics

    13
    Non-GAAP gross margin
    79.1%vs 79.8% in Q2 FY26
    Q2 FY27

    Slightly lower due to AI usage spike, but teams optimizing for scaling customer adoption.

    Non-GAAP operating income
    $510M1% year-over-year growth
    Q2 FY27

    In line with guidance.

    Non-GAAP operating margin
    40%vs 41.3% in Q2 FY26
    Q2 FY27

    Delivering strong operating margins while improving top line growth and investing in AI products.

    Non-GAAP diluted weighted average shares outstanding
    300M
    Q2 FY27

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

    Cash and cash equivalents and marketable securities balance
    $7.2B
    end of Q2 FY27

    Excluding restricted cash.

    Shares repurchased
    3.7M
    Q2 FY27

    For approximately $352 million.

    Amount spent on share repurchases
    $352M
    Q2 FY27

    For 3.7 million shares.

    Total shares repurchased under plan
    44.2M
    to date

    For $3.4 billion across the $4.7 billion share repurchase plan.

    Total amount spent on share repurchases under plan
    $3.4B
    to date

    Out of a $4.7 billion share repurchase plan.

    Enterprise revenue as % of total revenue
    62%up 2 points year-over-year
    Q2 FY27

    Driven by enterprise business outperformance.

    White label deal impact to top line
    40 bps
    Q2 FY27

    Headwind to total top line growth.

    White label deal impact to enterprise revenue
    60 bps
    Q2 FY27

    Headwind to enterprise revenue growth.

    Online price increase
    mid-single digits
    mid-March

    Second round of price increase, applied to monthly and annual subscriptions. Did not significantly impact churn.

    Industry KPIs

    11
    MetricValueDetails
    Capacity CAPEX$70MUSD
    Revenue growth$1.28BUSD
    Arr net new arr>$100MUSD
    Rpo current rpo$4.5BUSD
    Bookings billings$1.56BUSD
    Pricing model mixfull consumptive, outcome-based and the combination of per user with a certain amount of consumptive
    Customer account count8% year-over-year growth%
    Large deal new logo metricsrecord
    Operating FCF margin rule of 4040%%
    Ai product adoption monetization125%%
    Net revenue net dollar retention99%%

    Orderbook & backlog

    2
    Total RPO (billed and unbilled contracts)$4.5Bend of Q2 FY27

    increased 14% year-over-year

    driven by noncurrent RPO growth of 25%

    Deferred revenue$1.56Bend of Q2 FY27

    grew 6% year-over-year

    Product announcements

    2
    ProductTypeDetails
    Workvivo HQlaunch
    Zoom Matelaunch

    Deals & partnerships

    11
    Common RoomAcquisition 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 companiesRenewal 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 managerUpgrade to Zoom Workplace Enterprise Primer, including Zoom Phone rollout

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

    QXOAdoption 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. insurerExpansion into Workvivo

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

    Global luxury retail brandSelection 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. banksAdoption 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 companySelection 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 companySelection 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 AustraliaAddition of Zoom Mate

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

    OktaExpanded 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

    1
    Data center asset useful life extensiondecision 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

    3
    Online Business Top-of-Funnel DynamicsNear-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 PressureQ2 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 HeadwindQ2 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

    5

    Online business growth trajectory

    Next quarter (Q3 FY27) and beyond
    CurrentFlat growth assumed for FY27, tempered from previous slight growth.
    TargetReturn 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.

    Q&A highlights

    6

    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 read7 chapters

    Detailed Narrative

    01

    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.

    02

    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.

    03

    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.

    04

    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 off📎ering, validating the shift from chatbots to resolution agents.

    05

    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.

    06

    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.

    07

    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.

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