Latest quarter
Zoom reported Q2 FY2027 revenue of $1.3 billion, up 4.93% from $1.2 billion a year earlier. Revenue exceeded the consensus by 0.68%, while adjusted earnings per share of $1.55 beat the $1.50 consensus estimate. The filing attributed revenue growth to increases from both Enterprise and Online customers.
Gross margin fell to 77.2% from 77.6%, which Zoom attributed mainly to higher third-party hosting costs as platform usage increased, including AI-related consumption. The company reported an operating margin of 24.6%, compared with 26.4% a year earlier. Its filing said research and development expenses rose as it invested in AI and increased headcount.
Zoom reported diluted earnings per share of $5.15, compared with $1.16 a year earlier. The filing said the increase in net gains on strategic investments was primarily due to a rise in the fair value of its Anthropic investment. Free cash flow declined to $471.9 million from $507.5 million.
| Q2 FY2027 | Q2 FY2026 | Change | |
|---|---|---|---|
| Revenue | $1.3 billion | $1.2 billion | 4.93% |
| Diluted EPS | $5.15 | $1.16 | 344.0% |
| Gross margin | 77.2% | 77.6% | −0.4 percentage points |
| Operating margin | 24.6% | 26.4% | −1.8 percentage points |
| Free cash flow | $471.9 million | $507.5 million | −7.02% |
| Against the consensus | Reported | Consensus | Result |
|---|---|---|---|
| Adjusted EPS | $1.55 | $1.50 | Beat by 3.33% |
| Revenue | $1.3 billion | $1.3 billion | Beat by 0.68% |
Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.
What management said on the call
In its filing, Zoom said slower hiring and reductions in seat counts at existing Enterprise customers had affected expansion. The company said it sees opportunities to grow within that customer base by adding products and incorporating AI, while maintaining platform reliability and developing features that meet enterprise requirements.
Zoom said its AI approach uses multiple third-party and open-source models alongside its own small language models. The company also said it recently introduced ZoomMate, a product connecting conversational context to search, workflow execution, custom agents and content creation.
Guidance
In its results release, Zoom provided outlooks for Q3 FY2027 and the full fiscal year. The company’s outlook covers revenue, non-GAAP operating income and non-GAAP diluted earnings per share for both periods, as well as full-year free cash flow.
| Metric | For | Guide | Previous guide | Change |
|---|---|---|---|---|
| Free cash flow | FY2027 | $1.8 billion–$1.8 billion | — | New |
| EPS, non-GAAP | FY2027 | $6.08–$6.12 | — | New |
| Operating income, non-GAAP | FY2027 | $2.1 billion–$2.1 billion | — | New |
| Revenue, Constant Currency | FY2027 | $5.1 billion–$5.1 billion | — | New |
| Revenue | FY2027 | $5.1 billion–$5.1 billion | — | New |
| EPS, non-GAAP | Q3 FY2027 | $1.46–$1.48 | — | New |
| Operating income, non-GAAP | Q3 FY2027 | $510.0 million–$515.0 million | — | New |
| Revenue, Constant Currency | Q3 FY2027 | $1.3 billion–$1.3 billion | — | New |
| Revenue | Q3 FY2027 | $1.3 billion–$1.3 billion | — | New |