Workflow
Zoom Q2 Earnings Surpass Estimates, Revenues Increase Y/Y
ZoomZoom(US:ZM) ZACKSยท2025-08-22 17:40

Core Insights - Zoom Communications reported adjusted earnings of $1.53 per share for Q2 fiscal 2026, exceeding the Zacks Consensus Estimate by 11.68% and reflecting a year-over-year increase of 10.1% [1] - Revenues reached $1.22 billion, surpassing the consensus mark by 1.66% and showing a year-over-year growth of 4.7% [1] - Enterprise revenues, which constitute 60% of total revenues, grew by 7% year over year to $730.7 million, while online revenues increased by 1.4% to $486.6 million [2][9] Revenue Breakdown - Customers generating over $100,000 in revenues over the trailing 12 months increased by 8.7% to 4,274, contributing 32% of total revenues with a 9% year-over-year growth [2][9] - The number of Enterprise customers at the end of Q1 was approximately 184,000, with a net dollar expansion rate for Enterprise customers of 98% [3] Operating Performance - Non-GAAP gross margin for Q2 was 79.8%, up from 78.6% in the previous year, reflecting a 120 basis points expansion [5] - Non-GAAP operating income rose by 10.5% year over year to $503.2 million, with an operating margin of 41.3% compared to 39.2% in the prior year [6] Cash Flow and Balance Sheet - Total cash, cash equivalents, and marketable securities as of July 31, 2025, stood at $7.8 billion, unchanged from the previous quarter [7] - Net cash provided by operating activities was $515.9 million, up from $449.3 million in the year-ago quarter, with free cash flow increasing to $508 million from $365.1 million [7] Future Guidance - For Q3 fiscal 2026, Zoom expects revenues between $1.210 billion and $1.215 billion, with non-GAAP income from operations projected between $465.0 million and $470.0 million [8] - For the full fiscal year 2026, revenues are anticipated to be in the range of $4.825 billion to $4.835 billion, with non-GAAP earnings per share expected between $5.81 and $5.84 [10]