Zoom Communications (ZM) Q2 2027 Financial Results Summary
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Zoom Communications (ZM) Q2 2027: Revenue Growth Continues, Strong Enterprise Performance — Positive Outlook
Zoom Communications, Inc. (NASDAQ: ZM) reported its financial results for the second quarter of fiscal year 2027, revealing a total revenue of $1,277.2 million, which represents an increase of $60.0 million or 4.9% year over year. This growth is primarily driven by a robust performance in the Enterprise segment, which saw revenue rise to $787.5 million, marking a 7.8% increase year over year.
This quarter is a positive outcome for shareholders, as the company not only achieved revenue growth but also demonstrated strong operational metrics. The increase in Enterprise revenue, which is a key focus area for Zoom, indicates solid demand for its services and a successful execution of its growth strategy. The trailing 12-month net dollar expansion rate for Enterprise customers improved to 99%, up from 98% in the same quarter last fiscal year, further underscoring the company's ability to retain and expand its customer base.
Key Financial Metrics:
- Total Revenue: $1,277.2 million, up 4.9% YoY
- Enterprise Revenue: $787.5 million, up 7.8% YoY
- Online Revenue: $489.7 million, up 0.6% YoY
- GAAP Operating Margin: 24.6%
- Non-GAAP Operating Margin: 40.0%
- GAAP Net Income: $1,542.4 million, or $5.15 per share, compared to $358.6 million or $1.16 per share in Q2 FY 2026
- Non-GAAP Net Income: $464.0 million, or $1.55 per share, compared to $471.3 million or $1.53 per share in Q2 FY 2026
- Free Cash Flow: $472.4 million, down from $508.0 million in Q2 FY 2026
Shareholder Returns and Guidance:
During the quarter, Zoom repurchased approximately 3.7 million shares of common stock, bringing the total shares repurchased under the current plan to 44.2 million. This share buyback program is a positive signal to investors, indicating management's confidence in the company's future prospects.
Looking ahead, Zoom has provided guidance for the third quarter of fiscal year 2027, expecting total revenue to be between $1.275 billion and $1.280 billion. Non-GAAP income from operations is projected to be between $510.0 million and $515.0 million, with non-GAAP diluted EPS expected to range from $1.46 to $1.48.
Forward Catalysts:
Investors should keep an eye on the continued adoption of Zoom's AI-driven products, particularly the Zoom Virtual Agent, which has seen a 256% increase in customer count year over year. The company's focus on integrating AI into its offerings could drive further revenue growth and enhance customer retention. Additionally, the upcoming earnings call on August 25, 2026, will provide further insights into management's strategic priorities and operational execution.
In summary, Zoom's Q2 FY 2027 results reflect a solid performance with notable revenue growth, particularly in the Enterprise segment. The company's proactive share repurchase strategy and strong operational metrics position it well for future growth, making this quarter a positive one for shareholders.
Here are the extracted tables from the press release:
Note: All amounts in the following tables are in thousands.
| Zoom Communications, Inc. Condensed Consolidated Balance Sheets | July 31, 2026 | January 31, 2026 |
|---|---|---|
| Assets | ||
| Current assets: | ||
| Cash and cash equivalents | $931,992 | $1,272,877 |
| Marketable securities | 6,317,729 | 6,544,031 |
| Accounts receivable, net | 532,958 | 497,339 |
| Deferred contract acquisition costs, current | 139,034 | 108,856 |
| Prepaid expenses and other current assets | 193,688 | 234,856 |
| Total current assets | 8,115,401 | 8,657,959 |
| Deferred contract acquisition costs, noncurrent | 264,361 | 215,533 |
| Property and equipment, net | 254,705 | 264,525 |
| Operating lease right-of-use assets | 56,402 | 52,423 |
| Strategic investments | 3,785,876 | 1,578,611 |
| Goodwill | 599,181 | 400,392 |
| Deferred tax assets | 328,894 | 646,640 |
| Other assets, noncurrent | 180,576 | 144,333 |
| Total assets | $13,585,396 | $11,960,416 |
| Liabilities and stockholders’ equity | ||
| Current liabilities: | ||
| Accounts payable | $14,364 | $6,268 |
| Accrued expenses and other current liabilities | 557,561 | 581,773 |
| Deferred revenue, current | 1,549,428 | 1,411,149 |
| Total current liabilities | 2,121,353 | 1,999,190 |
| Deferred revenue, noncurrent | 12,735 | 13,195 |
| Operating lease liabilities, noncurrent | 33,340 | 30,710 |
| Other liabilities, noncurrent | 114,357 | 109,063 |
| Total liabilities | 2,281,785 | 2,152,158 |
| Stockholders’ equity: | ||
| Common stock | $292 | $295 |
| Additional paid-in capital | 3,666,536 | 4,099,753 |
| Accumulated other comprehensive income | -31,005 | 8,544 |
| Retained earnings | 7,667,788 | 5,699,666 |
| Total stockholders’ equity | 11,303,611 | 9,808,258 |
| Total liabilities and stockholders’ equity | $13,585,396 | $11,960,416 |
| Zoom Communications, Inc. Condensed Consolidated Statements of Operations | Three Months Ended July 31, 2026 | Three Months Ended July 31, 2025 | Six Months Ended July 31, 2026 | Six Months Ended July 31, 2025 |
|---|---|---|---|---|
| Revenue | $1,277,212 | $1,217,935 | $2,516,025 | $2,391,983 |
| Cost of revenue | 291,722 | 273,165 | 566,009 | 551,567 |
| Gross profit | 985,490 | 944,062 | 1,950,016 | 1,840,416 |
| Operating expenses | ||||
| Research and development | 242,497 | 206,447 | 470,423 | 411,863 |
| Sales and marketing | 330,521 | 338,995 | 660,571 | 685,965 |
| General and administrative | 98,161 | 76,885 | 194,431 | 179,220 |
| Total operating expenses | 671,179 | 622,327 | 1,325,425 | 1,277,048 |
| Income from operations | 314,316 | 321,735 | 624,789 | 563,327 |
| Gains on strategic investments | 1,614 | 45,056 | 1,766 | 31,437 |
| Other income, net | 66,448 | 81,371 | 135,298 | 169,163 |
| Income before provision for income taxes | 1,994,378 | 448,162 | 2,526,353 | 763,927 |
| Provision for income taxes | 452,522 | 89,570 | 558,465 | 150,732 |
| Net income | $1,542,856 | $358,592 | $1,968,888 | $613,195 |
| Net income per share: | ||||
| Basic | $5.27 | $1.19 | $6.70 | $2.02 |
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