Financial Data and Key Metrics Changes - Total revenue for Q3 FY2026 grew 4.4% year-over-year to $1.23 billion, exceeding guidance by $15 million [13] - Enterprise revenue increased by 6.1% year-over-year, accounting for 60% of total revenue, up 1 percentage point year-over-year [13] - Non-GAAP gross margin improved to 80%, up 117 basis points from the previous year, driven by cost optimization [14] - Non-GAAP income from operations grew 11% year-over-year to $507 million, exceeding guidance by $37 million [14] - Non-GAAP diluted net income per share increased to $1.52, $0.08 above guidance and $0.14 higher than the previous year [15] - Operating cash flow grew 30% year-over-year to $629 million, representing a margin of 51.2% [16] - Free cash flow margin increased to 50%, up 11 percentage points year-over-year [16] Business Line Data and Key Metrics Changes - AI Companion adoption surged more than four times year-over-year, indicating strong demand for AI-driven solutions [8] - Team Chat monthly active users rose 20% year-over-year, enhancing asynchronous work capabilities [8] - Workvivo logos grew nearly 70% year-over-year to 1,225, indicating strong performance in employee experience offerings [9] - Zoom Phone surpassed 10 million paid seats, marking significant growth in unified communications [9] Market Data and Key Metrics Changes - Americas revenue grew 5% year-over-year, EMEA grew 3%, and APAC grew 4% [14] - The number of enterprise customers contributing over $100,000 in trailing 12-month revenue grew by 9% year-over-year [13] Company Strategy and Development Direction - The company aims to evolve into an AI-first platform for work and customer experience, focusing on three priorities: enhancing core products with AI, driving growth of new AI products, and scaling AI-first customer experience [7] - The acquisition of BrightHire is part of the strategy to enhance collaboration and customer engagement through AI [10] - The company is committed to disciplined growth while investing in AI and maintaining strong profitability [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business's durability and the growing value delivered to customers [7] - The company anticipates continued strength in customer experience and AI differentiation as key growth drivers [11] - Management expects revenue for Q4 FY2026 to be in the range of $1.23 billion to $1.235 billion, representing approximately 4.1% year-over-year growth [17] Other Important Information - Deferred revenue at the end of Q3 grew 5% year-over-year to $1.44 billion [15] - The board authorized an incremental $1 billion share repurchase, reflecting confidence in the company's financial position [18] Q&A Session Summary Question: How should we think about growth heading into next year? - Management indicated that enterprise will continue to be the predominant growth driver, with a focus on stabilization and product diversification [23][24] Question: Can you discuss the pressure on net dollar expansion and seat-based contraction? - Management noted that while there are some seat pressures, overall macro demand remains strong, and net dollar expansion is stabilizing [28] Question: What is the company's approach to M&A going forward? - Management stated that future M&A will be thoughtful and disciplined, focusing on small to medium-sized investments that align with strategic goals [34] Question: Can you elaborate on the growth sustainability of Zoom Phone and customer experience? - Management highlighted strong growth in Zoom Phone and customer experience, driven by AI integration and customer demand [40][41] Question: How is the company integrating with other productivity software? - Management confirmed strong integrations with major ecosystems like Google and Microsoft, and emphasized the importance of customer feedback in driving integration efforts [67] Question: Were there any one-time benefits to free cash flow this quarter? - Management clarified that improvements in the collection process contributed to free cash flow, but these changes are sustainable rather than one-time [73][74] Question: How does the BrightHire acquisition fit into the broader platform expansion strategy? - Management indicated that BrightHire aligns with the strategy to leverage AI in mission-critical business workflows, particularly in HR [83][107]

Financial Data and Key Metrics Changes - Total revenue for Q3 FY2026 grew 4.4% year over year to $1.23 billion, exceeding guidance by $15 million [13] - Enterprise revenue increased by 6.1% year over year, accounting for 60% of total revenue, up 1 percentage point year over year [13] - Average monthly churn was 2.7%, matching last year's Q3 and marking an all-time low [13] - Non-GAAP gross margin improved to 80%, up 117 basis points year over year due to cost optimization [14] - Non-GAAP income from operations grew 11% year over year to $507 million, exceeding guidance by $37 million [14] - Non-GAAP diluted net income per share increased to $1.52, $0.08 above guidance and $0.14 higher than last year [15] - Operating cash flow grew 30% year over year to $629 million, with a margin of 51.2% [16] - Free cash flow margin increased to 50%, up 11 points year over year [16] Business Line Data and Key Metrics Changes - AI Companion adoption surged more than four times year over year, indicating strong demand for AI-driven solutions [8] - Team Chat monthly active users rose 20% year over year, enhancing asynchronous work capabilities [8] - WorkVivo logos grew nearly 70% year over year to 1,225, indicating strong performance in employee experience offerings [9] - Zoom Phone surpassed 10 million paid seats, with consistent ARR growth in the mid-teens [9] Market Data and Key Metrics Changes - Americas revenue grew 5% year over year, EMEA grew 3%, and APAC grew 4% [14] - Customer experience segment saw high double-digit ARR growth, with nine of the top ten CX deals involving paid AI solutions [11] Company Strategy and Development Direction - The company aims to evolve into an AI-first platform for work and customer experience, focusing on three priorities: elevating core products with AI, driving growth of new AI products, and scaling AI-first customer experience [7] - The acquisition of BrightHire is part of the strategy to enhance collaboration and customer engagement through AI [10] - The company is committed to disciplined growth while investing in AI and maintaining strong profitability [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business's durability and the growing value delivered to customers [7] - The outlook for Q4 revenue is projected to be in the range of $1.23-$1.235 billion, representing approximately 4.1% year-over-year growth [17] - The company raised its full-year revenue guidance to $4.852-$4.857 billion, indicating a positive growth trajectory [18] Other Important Information - The board authorized an incremental $1 billion share repurchase, reflecting confidence in the company's financial health [18] - Deferred revenue grew 5% year over year to $1.44 billion, with expectations for continued growth in Q4 [15] Q&A Session Summary Question: Outlook for Q4 and pricing strategy for next year - Management indicated that they are not yet at the planning stage for FY2027 guidance, but enterprise growth will continue to be a key driver [22] Question: Pressure on enterprise net dollar expansion and seat-based contraction - Management noted that net dollar expansion is stabilizing, and while some seat pressures exist, overall macro demand remains strong [28] Question: Future M&A strategy - Management reiterated a disciplined approach to M&A, focusing on small to medium-sized acquisitions that align with strategic goals [33] Question: Sustainability of growth in Zoom Phone and customer experience - Management highlighted strong growth in Zoom Phone and customer experience, driven by AI integration and customer demand [41] Question: Integration with other productivity software - Management confirmed ongoing integrations with major productivity tools like Google and Microsoft, emphasizing the importance of customer feedback [66] Question: Free cash flow performance - Management acknowledged improvements in the collections process contributing to free cash flow, which is expected to remain durable [72] Question: Expansion into HR and other business workflows - Management confirmed that the BrightHire acquisition is part of a broader strategy to expand into mission-critical business workflows [82]

Financial Data and Key Metrics Changes - Total revenue grew 4.4% year over year to $1.23 billion, exceeding guidance by $15 million [12] - Enterprise revenue increased by 6.1% year over year, accounting for 60% of total revenue [12] - Non-GAAP gross margin improved to 80%, up 117 basis points from the previous year [13] - Non-GAAP diluted net income per share rose to $1.52, $0.14 higher than Q3 of last year [14] - Operating cash flow grew 30% year over year to $629 million, with a margin of 51.2% [16] Business Line Data and Key Metrics Changes - AI Companion adoption surged more than four times year over year, indicating strong demand for AI-driven solutions [6] - Team Chat monthly active users increased by 20% year over year [6] - WorkVivo logos grew nearly 70% year over year to 1,225 [7] - Zoom Phone surpassed 10 million paid seats, marking significant growth in unified communications [7] Market Data and Key Metrics Changes - Americas revenue grew 5% year over year, EMEA grew 3%, and APAC grew 4% [13] - The number of enterprise customers contributing over $100,000 in trailing 12-month revenue grew by 9% year over year [12] Company Strategy and Development Direction - The company aims to evolve into an AI-first platform for work and customer experience, focusing on elevating core products with AI and driving growth of new AI products [5] - The acquisition of BrightHire is part of the strategy to enhance collaboration and customer engagement through AI [9] - Customer experience is identified as a fast-growing business segment, with high double-digit ARR growth [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business's durability and the ongoing demand for AI solutions [5] - The company anticipates continued growth in enterprise revenue and a slight increase in online business for the full year [22] - Management highlighted the importance of stabilizing churn and diversifying products as key growth drivers [24] Other Important Information - The board authorized an incremental $1 billion share repurchase, reflecting confidence in the company's financial health [18] - Deferred revenue grew 5% year over year to $1.44 billion, with expectations for continued growth [15] Q&A Session Summary Question: How should we think about growth heading into next year? - Management indicated that they are not yet at the planning stage for FY2027 guidance, but enterprise growth will continue to be a key driver [22] Question: Can you discuss the pressure on net dollar expansion and seat-based contraction? - Management noted that net dollar expansion is stabilizing, and while some seat pressures exist, overall demand remains strong [27] Question: What is the outlook for M&A in the future? - Management reiterated a disciplined approach to M&A, focusing on small to medium-sized acquisitions that align with strategic goals [32] Question: Can you elaborate on the growth sustainability of Zoom Phone and customer experience? - Management highlighted strong growth in Zoom Phone and customer experience, driven by AI integration and customer demand [38] Question: How is the company addressing the demand for integration with other productivity software? - Management confirmed ongoing integration efforts with major ecosystems like Google and Microsoft, while also adapting to AI-driven customer demands [58] Question: Were there any one-time benefits to free cash flow this quarter? - Management clarified that improvements in the collections process contributed to free cash flow, which is expected to be sustainable [61]

Financial Performance - Zoom's total revenue reached $1230 million, a 4% year-over-year increase [22] - Non-GAAP operating income was $506.95 million, resulting in a non-GAAP operating margin of 41.2% [34] - Diluted EPS reached $2.01, a 205% increase, while non-GAAP diluted EPS was $1.52, a 10% increase [22] - Free cash flow was $614 million, representing a free cash flow margin of 50% [27] Customer Growth and Expansion - Customers contributing over $100,000 in TTM revenue increased by 9% year-over-year [21] - The trailing twelve months net dollar expansion rate for enterprise customers was 98% [21] - Workvivo total customers reached 1225, up 70% year-over-year [9] Product and Service Adoption - Zoom Phone reached 10 million paid seats [9] - Zoom Team Chat monthly active users (MAUs) grew 20% year-over-year [9] - Zoom AI Companion 3.0 MAUs continues to grow 4x year-over-year [9] Future Outlook - Zoom anticipates Q4 FY26 revenue between $1230 million and $1235 million [28] - The company projects full fiscal year 2026 revenue between $4852 million and $4857 million [28]

Core Viewpoint - Zoom Communications has raised its annual revenue and profit forecasts, driven by hybrid work trends and AI integration into its products, leading to a 4% increase in shares during premarket trading [1]. Group 1: Financial Performance - Zoom expects fiscal 2026 revenue between $4.85 billion and $4.86 billion, an increase from the previous forecast of $4.83 billion to $4.84 billion [4]. - The company anticipates annual adjusted profit per share between $5.95 and $5.97, up from the prior estimate of $5.81 to $5.84 [4]. - Third-quarter revenue was reported at $1.23 billion, exceeding estimates of $1.21 billion, with adjusted earnings of $1.52 per share compared to estimates of $1.44 [6]. Group 2: Product and Service Development - New products such as Phone, Contact Center, and Virtual Agent are major contributors to Zoom's growth [2]. - The Custom AI Companion and AI-first Customer Experience suite have shown strong momentum, marking one of the best customer experience quarters for the company [2]. Group 3: Market Trends and Strategic Partnerships - There is a growing demand for AI agents as companies seek to automate workflows and improve efficiency [3]. - Zoom's AI companion is included in eligible paid plans, positioning the company for future AI monetization efforts [3]. - The company has partnered with Nvidia to integrate its Nemotron open technologies to support AI Companion 3.0 across various industries, including finance, healthcare, and government [6].

Core Insights - Zoom Communications has raised its annual revenue and profit forecast, indicating positive growth driven by hybrid work trends and the integration of artificial intelligence into its products [1] Company Summary - The company is benefiting from the ongoing shift towards hybrid work environments, which has increased demand for its services [1] - The integration of artificial intelligence into Zoom's offerings is enhancing its product capabilities, contributing to improved financial performance [1] Industry Summary - The hybrid work trend is becoming a significant driver for companies in the communication technology sector, creating opportunities for growth [1] - The adoption of artificial intelligence across various products is a key trend that is likely to shape the future of the industry, providing competitive advantages to companies that effectively implement these technologies [1]

Zoom reported quarterly revenue that topped analysts’ estimates, a sign of strength for the software maker’s expanded suite of business tools https://t.co/T7VrsBrHo6 ...

Group 1 - The Q3 earnings season for S&P 500 companies has started positively, with 95% of companies reporting results as of November 21, and analysts expecting a 13.4% increase in earnings per share for the quarter [2] - This anticipated growth would represent the fourth consecutive quarter of double-digit earnings growth, accelerating from the 12% growth rate reported in Q2 [2] - Initial expectations for Q3 were lower, with analysts predicting only a 7.9% increase in earnings per share as of September 30 [3] Group 2 - Upcoming earnings reports from companies such as Abercrombie & Fitch, Dick's Sporting Goods, and Burlington Stores will provide insights into the impact of consumer sentiment on purchasing decisions [4] - Additional reports from technology and other sectors are expected from companies including Zoom, Dell, Workday, HP Inc., Deere, and Pony AI [4]

Financial Performance - Total revenue for Q3 FY 2026 was $1,229.8 million, representing a 4.4% year-over-year increase[5] - Enterprise revenue reached $741.4 million, up 6.1% year-over-year[5] - GAAP net income for Q3 was $612.9 million, or $2.01 per share, compared to $207.1 million, or $0.66 per share, in the same quarter last year[6] - Non-GAAP diluted EPS for Q3 was $1.52, up 10.1% year-over-year[5] - GAAP revenue for Q3 2025 was $1,229,835, representing a year-over-year growth of 4.4%[34] - GAAP net income for the nine months ended October 31, 2025, was $1,226,068, up from $642,373 in the same period last year, marking a significant increase of 90.7%[34] - The company reported a basic net income per share of $2.05 for the three months ended October 31, 2025, compared to $0.67 for the same period in 2024, an increase of 205.2%[30] Cash Flow and Expenses - Operating cash flow for Q3 was $629.3 million, a 30.2% increase year-over-year[5] - Free cash flow for Q3 was $614.3 million, compared to $457.7 million in Q3 FY 2025[6] - Cash flows from operating activities for the three months ended October 31, 2025, were $629,326, up from $483,217 in the same period of 2024, an increase of 30.3%[32] - Operating expenses decreased to $647,651 for the three months ended October 31, 2025, from $710,820 in the same period of 2024, a reduction of 8.9%[30] - Free cash flow (non-GAAP) for Q3 2025 was $614,317, compared to $457,733 in Q3 2024, indicating a growth of 34.2%[34] Guidance and Projections - Fourth quarter revenue guidance is projected between $1.230 billion and $1.235 billion[14] - Full fiscal year 2026 revenue is expected to be between $4.852 billion and $4.857 billion[14] Customer Metrics - The number of customers contributing over $100,000 in trailing 12 months revenue increased by 9.2% year-over-year, totaling 4,363 customers[14] Assets and Equity - Total assets as of October 31, 2025, were $11,390,811, compared to $10,988,421 as of January 31, 2025, an increase of 3.7%[28] - Total stockholders' equity increased to $9,286,840 as of October 31, 2025, from $8,935,084 as of January 31, 2025, reflecting a growth of 3.9%[28] Strategic Investments - Strategic investments increased to $1,052,604 as of October 31, 2025, from $591,481 as of January 31, 2025, a rise of 77.8%[28] Revenue and Profitability Metrics - Gross profit for the three months ended October 31, 2025, was $958,065, representing a gross margin of approximately 77.9%[30] - Non-GAAP income from operations for Q3 2025 reached $506,950, compared to $457,794 in Q3 2024, reflecting an increase of 10.7%[34] - GAAP operating margin improved to 25.2% in Q3 2025 from 15.5% in Q3 2024[34] - Operating cash flow margin (GAAP) increased to 51.2% in Q3 2025 from 41.0% in Q3 2024[34] - Revenue in constant currency (non-GAAP) for Q3 2025 was $1,227,416, with a year-over-year growth of 4.2%[34] Stock Repurchase - Zoom's Board of Directors authorized an additional $1.0 billion for stock repurchase, increasing the total authorization to $1.310 billion[10]

Core Viewpoint - Zoom Video is facing increased competition from major players like Microsoft and Google, which necessitates a strategic pivot to remain relevant in the market [3][6][12]. Company Analysis - The excitement surrounding Zoom has diminished since its peak during the COVID-19 pandemic, and it is now viewed as a company needing to adapt to survive [2][4]. - The company is currently competing in a saturated market where Microsoft Teams is integrated into many existing systems, making it difficult for Zoom to gain traction [6][12]. - There is a need for Zoom to explore opportunities in AI and workflow automation to differentiate itself from competitors and avoid being seen as a commodity service [4][8][13]. Competitive Landscape - Microsoft and Google dominate the video conferencing space, making it challenging for Zoom to compete directly [3][6]. - The potential for Microsoft to acquire Zoom has likely passed due to the significant increase in Zoom's stock price, which makes it less attractive compared to building similar technology in-house [5][7]. - Zoom may need to carve out a niche in the small and medium enterprise market, but this is complicated by the widespread use of Microsoft products among these businesses [11][12]. Future Outlook - For Zoom to regain investor interest, it must demonstrate a clear strategy for AI adoption and workflow automation that enhances employee productivity beyond just video conferencing [8][13]. - The company’s ability to pivot towards AI-driven solutions could potentially accelerate growth and improve its market valuation [8].