Zoom Communications Q2 FY26 Earnings August 21, 2025 © 2025 Zoom Communications, Inc. Use of non-GAAP financial measures In addition to the financials presented in accordance with U.S. generally accepted accounting principles ("GAAP"), this presentation includes the following non-GAAP metrics: Revenue in Constant Currency, non-GAAP gross profit, non-GAAP gross margin, non-GAAP R&D expense, non-GAAP S&M expense, non-GAAP G&A expense, non-GAAP operating margin, non-GAAP income from operations, non-GAAP net in ...

Core Viewpoint - Zoom Communications, Inc. reported strong financial results for the second fiscal quarter, achieving the highest year-over-year revenue growth in 11 quarters and expanding its GAAP operating margin by 9 percentage points year over year. The company raised its full-year outlook for revenue, non-GAAP operating income, and free cash flow, now expected to be between $1.74 billion and $1.78 billion [2][5]. Financial Highlights - Total revenue for Q2 was $1,217.2 million, reflecting a 4.7% increase year over year, and 4.4% in constant currency [5][6]. - Enterprise revenue reached $730.7 million, up 7.0% year over year, while Online revenue was $486.6 million, up 1.4% year over year [5][6]. - GAAP operating margin was 26.4%, and non-GAAP operating margin was 41.3% [5][6]. - GAAP EPS was $1.16, a 65.7% increase year over year, and non-GAAP EPS was $1.53, up 10.0% year over year [5][6]. Customer Metrics - The number of customers contributing more than $100,000 in trailing 12 months revenue increased by 8.7% year over year, totaling 4,274 customers [4][5]. - The trailing 12-month net dollar expansion rate for Enterprise customers was 98% [13]. - Online average monthly churn was 2.9%, remaining flat year over year [13]. Cash Flow and Securities - Net cash provided by operating activities was $515.9 million for Q2, compared to $449.3 million in the same quarter last year [6][30]. - Free cash flow for the quarter was $508.0 million, up from $365.1 million year over year [6][30]. - Total cash, cash equivalents, and marketable securities as of July 31, 2025, amounted to $7.8 billion [6]. Financial Outlook - For Q3 FY 2026, total revenue is expected to be between $1.210 billion and $1.215 billion, with non-GAAP income from operations projected between $465.0 million and $470.0 million [13]. - For the full fiscal year 2026, total revenue is anticipated to be between $4.825 billion and $4.835 billion, with non-GAAP income from operations expected between $1.905 billion and $1.915 billion [13].

Financial Performance - Total revenue reached $1,175 million, a 3% year-over-year increase[31] - Enterprise revenue grew by 6% year-over-year[26] - The number of customers contributing over $100,000 in TTM (trailing twelve months) revenue increased by 8% year-over-year[30] - TTM net dollar expansion rate for enterprise customers was 98%[30] - Non-GAAP operating income was $467326 thousand, resulting in a non-GAAP operating margin of 398%[31,42] - Free cash flow was $463 million, representing a free cash flow margin of 394%[35] Customer and Product Growth - Revenue Accelerator licenses increased by 72% year-over-year[16] - Workvivo total customers increased by 106% year-over-year[18] - CC (Customer Care) customers increased by 65% year-over-year, with ZVA (Zoom Virtual Agent) achieving its largest deal to date[21] Future Outlook - The company projects Q2 FY26 revenue to be between $1,195 million and $1,200 million and the full fiscal year 2026 revenue to be between $4,800 million and $4,810 million[36] - Non-GAAP EPS is projected to be between $136 and $137 for Q2 FY26 and between $556 and $559 for the full fiscal year 2026[36]

Core Insights - Zoom Communications, Inc. reported strong financial results for the first fiscal quarter ended April 30, 2025, exceeding guidance in both revenue and profitability, driven by AI-first innovation and customer demand for efficiency [2][5]. Financial Highlights - Total revenue for Q1 was $1,174.7 million, representing a year-over-year increase of 2.9% and 3.4% in constant currency [5][6]. - Enterprise revenue reached $704.7 million, up 5.9% year-over-year, while Online revenue was $470.0 million, down 1.2% year-over-year [5][6]. - GAAP operating margin was 20.6%, and non-GAAP operating margin was 39.8% [5][6]. - GAAP EPS was $0.81, an increase of 18.7% year-over-year, while non-GAAP EPS was $1.43, up 6.0% year-over-year [5][6]. Customer Metrics - The number of customers contributing more than $100,000 in trailing 12 months revenue increased by 8.0% year-over-year, totaling 4,192 customers [4][5]. - The trailing 12-month net dollar expansion rate for Enterprise customers was 98% [13]. - Online average monthly churn was 2.8%, down 40 basis points from the same quarter last fiscal year [13]. Cash Flow and Share Repurchase - Net cash provided by operating activities was $489.3 million, compared to $588.2 million in the same quarter last year [6]. - Free cash flow for the quarter was $463.4 million, down from $569.7 million year-over-year [6]. - Approximately 5.6 million shares of common stock were repurchased in Q1, an increase from 4.3 million shares in Q4 [5]. Financial Outlook - For Q2 FY 2026, total revenue is expected to be between $1.195 billion and $1.200 billion, with non-GAAP diluted EPS projected between $1.36 and $1.37 [13]. - For the full fiscal year 2026, total revenue is anticipated to be between $4.800 billion and $4.810 billion, with non-GAAP diluted EPS expected between $5.56 and $5.59 [13].