Zoom(ZM) - 2026 Q2 - Quarterly Results

Financial Performance Overview Q2 FY2026 Financial Highlights Zoom reported strong Q2 FY2026 results, with total revenue reaching $1.22 billion (up 4.7% YoY), GAAP operating margin expanding to 26.4%, and GAAP EPS growing 65.7%, leading to an upward revision of its full-year outlook - CEO Eric S. Yuan attributed strong performance to AI-driven innovation, leading to an increased full-year outlook for revenue, non-GAAP operating income, and free cash flow[3] Q2 FY2026 Key Financial Metrics (Year-over-Year) | Metric | Q2 FY2026 (Millions USD) | YoY Growth | | :--- | :--- | :--- | | Total Revenue | $1,217.2 | 4.7% | | Enterprise Revenue | $730.7 | 7.0% | | GAAP Operating Margin | 26.4% | +9.0 p.p. | | Non-GAAP Operating Margin | 41.3% | +2.1 p.p. | | GAAP Diluted EPS | $1.16 | 65.7% | | Non-GAAP Diluted EPS | $1.53 | 10.0% | | Free Cash Flow | $508.0 | 39.1% | - The company repurchased approximately 6.0 million shares of common stock during the second quarter[5] Q2 FY2026 Customer Metrics Zoom's Q2 customer base grew 8.7% in high-value segments (>$100k TTM revenue), while Enterprise net dollar expansion was 98%, and online monthly churn remained stable at 2.9% Key Customer Metrics as of Q2 FY2026 | Metric | Value | YoY Change | | :--- | :--- | :--- | | Customers >$100k TTM Revenue | 4,274 | +8.7% | | TTM Net Dollar Expansion (Enterprise) | 98% | Not specified | | Online Average Monthly Churn | 2.9% | Flat | Financial Outlook Q3 FY2026 Guidance For Q3 FY2026, Zoom projects total revenue between $1.210 billion and $1.215 billion, non-GAAP income from operations between $465.0 million and $470.0 million, and non-GAAP diluted EPS between $1.42 and $1.44 Guidance for Q3 Fiscal Year 2026 | Metric | Expected Range | | :--- | :--- | | Total Revenue | $1.210 B - $1.215 B | | Non-GAAP Income from Operations | $465.0 M - $470.0 M | | Non-GAAP Diluted EPS | $1.42 - $1.44 | Full Year FY2026 Guidance Zoom raised its full-year FY2026 guidance, now expecting total revenue between $4.825 billion and $4.835 billion, non-GAAP income from operations between $1.905 billion and $1.915 billion, non-GAAP diluted EPS between $5.81 and $5.84, and free cash flow between $1.740 billion and $1.780 billion Updated Guidance for Full Fiscal Year 2026 | Metric | Expected Range | | :--- | :--- | | Total Revenue | $4.825 B - $4.835 B | | Non-GAAP Income from Operations | $1.905 B - $1.915 B | | Non-GAAP Diluted EPS | $5.81 - $5.84 | | Free Cash Flow | $1.740 B - $1.780 B | Detailed Financial Statements Condensed Consolidated Balance Sheets As of July 31, 2025, Zoom's balance sheet reported $11.04 billion in total assets, including $7.8 billion in cash and equivalents, with total liabilities at $2.09 billion and stockholders' equity at $8.95 billion Balance Sheet Summary (as of July 31, 2025) | Account | Amount (Billions USD) | | :--- | :--- | | Cash, Cash Equivalents & Marketable Securities | $7.8 | | Total Current Assets | $8.66 | | Total Assets | $11.04 | | Total Current Liabilities | $1.95 | | Total Liabilities | $2.09 | | Total Stockholders' Equity | $8.95 | Condensed Consolidated Statements of Operations For Q2 FY2026, Zoom reported $1.217 billion in revenue, $944.1 million gross profit, $321.7 million income from operations (up from $202.4 million YoY), and $358.6 million net income, or $1.16 diluted EPS Q2 FY2026 vs Q2 FY2025 Income Statement (Millions USD) | Metric | Three Months Ended July 31, 2025 (Millions USD) | Three Months Ended July 31, 2024 (Millions USD) | | :--- | :--- | :--- | | Revenue | $1,217.2 | $1,162.5 | | Gross Profit | $944.1 | $877.4 | | Income from Operations | $321.7 | $202.4 | | Net Income | $358.6 | $219.0 | | Diluted Net Income Per Share | $1.16 | $0.70 | Condensed Consolidated Statements of Cash Flows In Q2 FY2026, Zoom generated $515.9 million in net cash from operating activities (up from $449.3 million YoY), with free cash flow at $508.0 million, and utilized $494.9 million in financing activities, mainly for stock repurchases Q2 FY2026 vs Q2 FY2025 Cash Flow Summary (Millions USD) | Metric | Three Months Ended July 31, 2025 (Millions USD) | Three Months Ended July 31, 2024 (Millions USD) | | :--- | :--- | :--- | | Net cash provided by operating activities | $515.9 | $449.3 | | Net cash used in investing activities | ($60.7) | ($540.9) | | Net cash used in financing activities | ($494.9) | ($256.3) | Reconciliation of GAAP to Non-GAAP Measures This section reconciles GAAP to non-GAAP measures, showing Q2 FY2026 GAAP income from operations of $321.7 million adjusted to $503.2 million non-GAAP, primarily due to $195.8 million in stock-based compensation, and GAAP net income of $358.6 million adjusted to $471.3 million non-GAAP Q2 FY2026 GAAP to Non-GAAP Reconciliation (Millions USD) | Metric | GAAP (Millions USD) | Adjustments (Millions USD) | Non-GAAP (Millions USD) | | :--- | :--- | :--- | :--- | | Income from Operations | $321.7 | $181.5 | $503.2 | | Stock-based compensation | | $195.8 | | | Litigation settlements, net | | ($18.0) | | | Acquisition-related expenses | | $3.7 | | | Net Income | $358.6 | $112.7 | $471.3 | - Free cash flow for Q2 FY2026 was $508.0 million, calculated by subtracting $8.0 million in property and equipment purchases from $515.9 million in net cash from operating activities[32] Supplementary Information Definitions of Non-GAAP Measures and Key Metrics This section defines non-GAAP financial measures, excluding non-cash or non-recurring items for clearer operational performance, and clarifies key business metrics like customer types, net dollar expansion rate, and online average monthly churn Non-GAAP Financial Measures - Non-GAAP Income from Operations excludes stock-based compensation expense, related payroll taxes, acquisition-related expenses, and significant litigation settlements[17] - Non-GAAP Net Income adjusts GAAP net income for the same items as Non-GAAP Income from Operations, plus gains/losses on strategic investments and the tax effects of these adjustments[18] Free Cash Flow and Constant Currency - Free Cash Flow is defined as GAAP net cash provided by operating activities less purchases of property and equipment[19] - Revenue in Constant Currency adjusts GAAP revenue using average exchange rates from the comparative period to exclude foreign currency fluctuation effects[20] Customer Metrics Definitions - Enterprise customers are engaged by direct sales, resellers, or partners, while Online customers subscribe directly via the website[21] - Net dollar expansion rate for Enterprise customers compares Annual Recurring Revenue (ARR) from a customer cohort at the beginning and end of a 12-month period[22] - Online average monthly churn is calculated by dividing Monthly Recurring Revenue (MRR) from canceled or downgraded customers by the starting MRR of that quarter, then dividing by three[23] Forward-Looking Statements This legal disclaimer cautions that forward-looking statements, including financial guidance and strategic initiatives, are subject to risks like macroeconomic conditions and competition, which could cause actual results to differ materially - Statements regarding financial outlook for Q3 and FY2026, market position, growth strategy, and product initiatives are considered forward-looking[14] - Actual results could differ materially due to risks including declines in new customers, competition, macroeconomic conditions, and security issues[14]