Zoom Communications (ZM) ZM Q3 Financial Results Summary
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Zoom Communications (ZM) Q3 2026 Financial Results Summary
On November 24, 2025, Zoom Communications, Inc. (NASDAQ: ZM) released its financial results for the third fiscal quarter ended October 31, 2025. The report highlights promising growth indicators and significant operational metrics, summarized as follows:
Key Financial Metrics
- Total Revenue:
- $1,229.8 million, an increase of 4.4% year over year (YoY).
- Constant Currency: $1,227.4 million, up 4.2% YoY.
- Enterprise Revenue:
- $741.4 million, up 6.1% YoY.
- Online Revenue:
- $488.4 million, up 2.0% YoY.
Profitability Metrics
- GAAP Operating Margin:
- 25.2% compared to 15.5% in Q3 2025 (up 9.7 percentage points).
- Non-GAAP Operating Margin:
- 41.2%, an increase from 38.9% YoY.
- GAAP Earnings Per Share (EPS):
- $2.01, a substantial increase of 204.5% YoY.
- Non-GAAP EPS:
- $1.52, up 10.1% YoY.
Cash Flow Metrics
- Operating Cash Flow:
- $629.3 million, an impressive rise of 30.2% YoY.
- Operating Cash Flow Margin:
- 51.2% compared to 41.0% in Q3 2025.
- Free Cash Flow:
- $614.3 million, up from $457.7 million in Q3 2025.
Customer Metrics
- High-Value Customers:
- 4,363 customers generated over $100,000 in trailing 12 months revenue, up 9.2% YoY.
- Net Dollar Expansion Rate:
- 98% for Enterprise customers.
- Online Average Monthly Churn:
- Remained stable at 2.7% YoY.
- Continual Term Service Duration:
- 74.4% of Online Monthly Recurring Revenue (MRR) from customers with a term duration of at least 16 months (up 30 basis points YoY).
Share Repurchase and Dividend Information
- Share Repurchase:
- Approximately 5.1 million shares of common stock were repurchased during Q3, totaling 32.5 million shares under the current buyback plan.
- The stock repurchase authorization has increased by $1.0 billion, in addition to the $310.4 million remaining authorization as of October 31, 2025.
- Dividends:
- No quarterly dividend has been declared.
Balance Sheet Highlights
- Total Cash, Cash Equivalents, and Marketable Securities:
- $7.9 billion as of October 31, 2025.
Financial Outlook
- Fourth Quarter Fiscal Year 2026 Guidance:
- Expected revenue: $1.230 billion to $1.235 billion.
- Non-GAAP income from operations is projected between $477.0 million and $482.0 million.
- Non-GAAP diluted EPS is expected to be between $1.48 and $1.49.
- Full Fiscal Year 2026 Guidance:
- Expected revenue: $4.852 billion to $4.857 billion.
- Non-GAAP income from operations is projected between $1.955 billion and $1.960 billion.
- Non-GAAP diluted EPS is expected to be between $5.95 and $5.97.
Conference Call Announcement
Zoom will host an investor webinar on November 24, 2025, at 2:00 p.m. Pacific Time / 5:00 p.m. Eastern Time to discuss these results further. Investors can join via Zoom Video Webinar at investors.zoom.com.
This comprehensive report underscores Zoom’s ongoing growth trajectory with significant increases in revenue, profitability, and customer metrics while also emphasizing their strategic stock buyback initiative.
| Three Months Ended October 31, | Nine Months Ended October 31, | |||
|---|---|---|---|---|
| 2025 | 2024 | 2025 | 2024 | |
| Revenue | $ 1,229,835 | $ 1,177,541 | $ 3,621,777 | $ 3,481,295 |
| Cost of revenue | 271,770 | 283,881 | 823,337 | 842,272 |
| Gross profit | 958,065 | 893,660 | 2,798,440 | 2,639,023 |
| Operating expenses: | ||||
| Research and development | 210,097 | 222,980 | 621,960 | 635,294 |
| Sales and marketing | 342,814 | 361,703 | 1,028,779 | 1,068,481 |
| General and administrative | 94,740 | 126,137 | 273,960 | 347,016 |
| Total operating expenses | 647,651 | 710,820 | 1,924,699 | 2,050,791 |
| Income from operations | 310,414 | 182,840 | 873,741 | 588,232 |
| Gains on strategic investments, net | 406,060 | 6,324 | 437,497 | 26,785 |
| Other income, net | 78,235 | 91,248 | 247,398 | 250,248 |
| Income before provision for income taxes | 794,709 | 280,412 | 1,558,636 | 865,265 |
| Provision for income taxes | 181,836 | 73,362 | 332,568 | 222,892 |
| Net income | 612,873 | 207,050 | 1,226,068 | 642,373 |
| Net income per share: | ||||
| Basic | $ 2.05 | $ 0.67 | $ 4.06 | $ 2.08 |
| Diluted | $ 2.01 | $ 0.66 | $ 3.97 | $ 2.04 |
| Weighted-average shares used in computing net income per share: | ||||
| Basic | 298,660,092 | 307,529,696 | 301,807,298 | 308,443,893 |
| Diluted | 305,024,411 | 314,191,269 | 308,702,227 | 314,514,244 |
| Assets | As of October 31, 2025 | As of January 31, 2025 |
|---|---|---|
| -unaudited | ||
| Current assets: | ||
| Cash and cash equivalents | $ 1,215,877 | $ 1,349,380 |
| Marketable securities | 6,727,428 | 6,442,329 |
| Accounts receivable, net | 417,693 | 495,228 |
| Deferred contract acquisition costs, current | 175,047 | 188,358 |
| Prepaid expenses and other current assets | 178,922 | 200,679 |
| Total current assets | 8,714,967 | 8,675,974 |
| Deferred contract acquisition costs, noncurrent | 118,316 | 123,464 |
| Property and equipment, net | 284,851 | 330,475 |
| Operating lease right-of-use assets | 40,870 | 55,900 |
| Strategic investments | 1,052,604 | 591,481 |
| Goodwill | 307,295 | 307,295 |
| Deferred tax assets | 746,400 | 749,759 |
| Other assets, noncurrent | 125,508 | 154,073 |
| Total assets | $ 11,390,811 | $ 10,988,421 |
| Liabilities and stockholders’ equity | ||
| Current liabilities: | ||
| Accounts payable | $ 12,843 | $ 8,345 |
| Accrued expenses and other current liabilities | 514,778 | 558,562 |
| Deferred revenue, current | 1,431,802 | 1,336,387 |
| Total current liabilities | 1,959,423 | 1,903,294 |
| Deferred revenue, noncurrent | 12,682 | 17,274 |
| Operating lease liabilities, noncurrent | 28,072 | 37,406 |
| Other liabilities, noncurrent | 103,794 | 95,363 |
| Total liabilities | $ 2,103,971 | $ 2,053,337 |
| Stockholders’ equity: | ||
| Common stock | 296 | 305 |
| Additional paid-in capital | 4,250,595 | 5,130,271 |
| Accumulated other comprehensive income | 10,363 | 4,990 |
| Retained earnings | 5,025,586 | 3,799,518 |
| Total stockholders’ equity | 9,286,840 | 8,935,084 |
| Total liabilities and stockholders’ equity | 11,390,811 | 10,988,421 |