A month has gone by since the last earnings report for Zoom Communications (ZM) . Shares have added about 1% in that time frame, underperforming the S&P 500.Will the recent positive trend continue leading up to its next earnings release, or is Zoom due for a pullback? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent catalysts for Zoom Communications, Inc. before we dive into how investors and analysts have reacted as of late.Zoom Q3 Earning ...

Core Insights - Zoom Communications reported third-quarter fiscal 2026 adjusted earnings of $1.52 per share, exceeding the Zacks Consensus Estimate by 6.29% and reflecting a year-over-year increase of 10.1% [1] - Revenues reached $1.23 billion, surpassing the consensus mark by 1.4% and showing a year-over-year growth of 4.4% [1] Revenue Breakdown - Enterprise revenues, which constitute 60.3% of total revenues, increased by 6.1% year over year to $741.4 million [2] - Online revenues, accounting for 39.7% of total revenues, rose by 2% year over year to $488.4 million [2] - Customers generating over $100,000 in revenues over the trailing 12 months grew by 9.2% to 4,363, representing 32% of total revenues [2] Customer Metrics - The number of Enterprise customers at the end of the fiscal third quarter was approximately 185,100 [3] - The percentage of total Online Monthly Recurring Revenue (MRR) from Online customers with a service term of at least 16 months was 74.4%, an increase of 30 basis points year over year [3] - The trailing 12-month net dollar expansion rate for Enterprise customers was 98%, while the average monthly churn for Online customers remained flat at 2.7% year over year [3] Operating Performance - Non-GAAP gross margin for the fiscal third quarter was 80%, up from 78.9% in the previous year, reflecting an expansion of 110 basis points [5] - Non-GAAP operating income increased by 10.7% year over year to $507 million, with an operating margin of 41.2%, compared to 38.9% in the year-ago quarter [6] Financial Position - As of October 31, 2025, total cash, cash equivalents, and marketable securities amounted to $7.9 billion, slightly up from $7.8 billion as of July 31, 2025 [7] - Net cash provided by operating activities was $629.3 million for the fiscal third quarter, compared to $515.9 million in the previous quarter, with free cash flow at $614.3 million, up from $508 million [7] Future Guidance - For the fourth quarter of fiscal 2026, Zoom expects revenues to be between $1.230 billion and $1.235 billion, with constant currency revenues projected between $1.224 billion and $1.229 billion [8] - For fiscal 2026, total revenues are anticipated to be in the range of $4.852 billion to $4.857 billion, with non-GAAP earnings per share expected between $5.95 and $5.97 [10]

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 Insights - Zoom Communications is evolving from a pandemic-focused video meeting platform to a diversified collaboration provider, offering solutions like Zoom Phone, Contact Center, Workvivo, and AI-driven Zoom Workplace [1] Financial Performance - In Q2 of fiscal 2026, Zoom reported revenue of $873.97 million from the Americas, a 4.6% year-over-year increase; EMEAC contributed $200 million, up 5.7%; and Asia Pacific generated $148.3 million, growing 4.2% [2] - The Zacks Consensus Estimates for Q3 fiscal 2026 revenues are $870.53 million for the Americas (up 3%), $194.32 million for EMEAC (up 4%), and $149 million for Asia Pacific (up 3.2%) [4] - Zoom shares have appreciated 2.4% year to date, while the Zacks Internet – Software industry and the Zacks Computer and Technology sector have increased 26.5% and 22.4%, respectively [6] Strategic Initiatives - Zoom is expanding its market reach through new distribution channels and strategic partnerships, including collaborations with AWS and PwC, to enhance enterprise penetration globally [3][8] - The company is focusing on AI-driven product enhancements, such as AI Companion 3.0, to resonate with multinational and hybrid workforces [3][8] Competitive Landscape - Competitors like Microsoft and Cisco are also expanding their global reach, with Microsoft leveraging its Office 365 ecosystem and Cisco investing in local data centers for Webex [5] - Zoom differentiates itself through AI-driven innovation and platform flexibility, which is crucial for building global momentum [5] Valuation Metrics - Zoom's stock is currently trading at a forward 12-month Price/Sales ratio of 5.14X, compared to the industry's 6.01X, indicating a relatively favorable valuation [10] - The Zacks Consensus Estimate for Q3 fiscal 2026 earnings is $1.42 per share, reflecting a year-over-year improvement of 2.9% [13]

Core Insights - Zoom Communications' employee experience platform Workvivo is expected to drive enterprise expansion, with a 142% year-over-year increase in customers contributing over $100,000 in Annual Recurring Revenue, reaching 168 in Q2 of fiscal 2026 [1][8] - The acquisition of Workvivo is set to enhance Zoom's presence in employee engagement and internal communications, as enterprises increasingly recognize the importance of integrated employee platforms for hybrid work and retention strategies [2] - Integration with Zoom Workplace is anticipated to facilitate cross-selling opportunities, increasing customer lifetime value, while expansion into mid-market accounts is expected to create new revenue streams [3] Financial Performance - The Zacks Consensus Estimate for enterprise revenues in Q3 of fiscal 2026 is projected at $730.97 million, reflecting a 4.6% increase from the previous year, with enterprise revenues constituting 60% of total revenues [4][8] - Zoom's shares have increased by 2.3% year to date, underperforming the Zacks Internet – Software industry's return of 18.3% and the Zacks Computer and Technology sector's increase of 11.8% [6] Competitive Landscape - Microsoft poses a significant challenge to Zoom with its Viva suite, which is integrated with Microsoft Teams and Office 365, enhancing adoption among enterprises already using Microsoft's ecosystem [5] - Alphabet is also expanding its collaboration and employee engagement offerings through Google Workspace, leveraging cloud and AI capabilities [5] - Zoom's opportunity lies in cross-selling through Workplace and differentiating itself as enterprises seek unified platforms outside of Microsoft and Alphabet's ecosystems [5] Valuation Metrics - Zoom's stock is currently trading at a forward 12-month Price/Sales ratio of 5.15X, compared to the industry's 5.62X, indicating a relative valuation position [10] - The Zacks Consensus Estimate for Q3 fiscal 2026 earnings is $1.42 per share, reflecting a year-over-year improvement of 2.9% [12]

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]

Core Insights - Zoom Communications reported first-quarter fiscal 2026 adjusted earnings of $1.43 per share, exceeding the Zacks Consensus Estimate by 10% and reflecting a year-over-year increase of 5.93% [1] - Revenues for the quarter reached $1.175 billion, surpassing the consensus mark by 0.89% and showing a year-over-year growth of 2.93% [1] Revenue Breakdown - Enterprise revenues, which constitute 60.01% of total revenues, increased by 5.86% year over year to $705 million [2] - The number of customers contributing over $100,000 in revenues over the trailing 12 months grew by 8% to 4,192, accounting for 32% of total revenues [2] Customer Metrics - The total number of Enterprise customers at the end of the fiscal first quarter was approximately 182,600 [3] - The percentage of total Online Monthly Recurring Revenue (MRR) from Online customers with a service term of at least 16 months was 74.2%, an increase of 40 basis points year over year [3] - The trailing 12-month net dollar expansion rate for Enterprise customers was reported at 98% [3] Operating Performance - Non-GAAP gross margin for the quarter was 79.18%, slightly down from 79.31% in the previous year [4] - Non-GAAP operating income rose by 2.35% year over year to $467.33 million, with an operating margin of 49.78%, compared to 40.01% in the year-ago quarter [5] Financial Position - As of April 30, 2025, total cash, cash equivalents, and marketable securities stood at $7.8 billion, unchanged from the previous quarter [6] - Net cash provided by operating activities was $489.3 million, down from $588.2 million in the year-ago quarter, while free cash flow decreased to $463.4 million from $569.7 million [6] Future Guidance - For the second quarter of fiscal 2026, Zoom expects revenues between $1.195 billion and $1.2 billion, with non-GAAP earnings per share projected in the range of $1.36 to $1.37 [7] - For the full fiscal year 2026, revenues are anticipated to be between $4.8 billion and $4.81 billion, with non-GAAP earnings per share expected to be in the band of $5.56 to $5.59 [7]

Core Viewpoint - Zoom Communications is set to report its first-quarter fiscal 2026 results, with expected revenues between $1.162 billion and $1.167 billion, indicating a 2.03% increase year-over-year [1][2] Revenue Expectations - The Zacks Consensus Estimate for Zoom's first-quarter fiscal 2026 revenues is currently at $1.16 billion, reflecting a 2.03% increase from the previous year's figure [1] - The consensus for earnings per share is $1.30, which represents a 3.70% decrease from the year-ago reported figure [2] Growth Drivers - The expansion of Zoom's AI Companion capabilities, particularly with the launch of AI Companion 2.0, is expected to enhance customer engagement and boost top-line performance [3] - The enterprise segment is anticipated to remain the primary growth driver, with a 6% year-over-year revenue increase in the previous quarter, accounting for 60% of total revenues [4] - The number of customers generating over $100,000 in trailing 12-month revenues grew by 7% year-over-year, with record low churn rates [4] Segment Performance - The Online business segment, which includes SMB and individual customers, is expected to remain flat to slightly down, reflecting stabilization trends [5] - Large deal wins, such as deployments to Amazon and Delta Airlines, are expected to reinforce the platform's appeal to larger clients [5] Margin and Cash Flow Insights - Strategic investments in AI are likely to impact gross margins, but efforts in AI infrastructure optimization are expected to keep operating margins stable near 39% [6] - Free cash flow is anticipated to be affected by timing differences, tax conditions, and changes in interest rates [6] Earnings Prediction Model - According to the Zacks model, Zoom currently has an Earnings ESP of -1.68% and a Zacks Rank of 3, indicating lower odds of an earnings beat [7]