Third quarter total revenue of $1,229.8 million, up 4.4% year over year as reported and 4.2% in constant currencyThird quarter Enterprise revenue of $741.4 million, up 6.1% year over yearThird quarter GAAP operating margin of 25.2% and non-GAAP operating margin of 41.2%Third quarter operating cash flow of $629.3 million, up 30.2% year over yearThird quarter operating cash flow margin of 51.2% and free cash flow margin of 50.0%Third quarter GAAP EPS of $2.01, up 204.5% year over year, and non-GAAP EPS of $1. ...

Behind the ROI data, if Liang were to get granular about time saving processes, he says it’s so much more than Otter.ai’s ability to generate meeting notes. While employees can audit and search meeting notes in the review phase, they can skip meetings altogether. “You don't have to sit through a two-hour meeting but still say informed by spending just 10 minutes to get the information you need from a 90-minute meeting,” explains Liang.According to data drawn from Otter.ai's enterprise customers' own ROI cal ...

Core Insights - The article highlights five AI-focused stocks in the Internet Software and Services sector that are expected to perform well in 2026, driven by increased IT spending and the growing demand for web-based infrastructure and applications [2][4]. Company Summaries Palantir Technologies Inc. (PLTR) - Palantir's AI strategy integrates its Foundry and Gotham platforms, promoting AI adoption in government and commercial sectors, with a focus on processing large datasets for real-time insights [5][6]. - The company is aligning its AI initiatives with U.S. defense priorities, showcasing its capabilities in high-profile projects like the Department of Defense's Open DAGIR [6]. - Palantir's AI Platform (AIP) has shown adaptability across various industries, with a strong customer base in government and large corporations [7][8]. - Expected revenue and earnings growth rates for Palantir are 41.1% and 43% respectively for the next year, with a 20.9% improvement in earnings estimates over the past week [9]. Snowflake Inc. (SNOW) - Snowflake is positioned to benefit from the rising demand for cloud-based data platforms, with its AI Data Cloud unifying structured and unstructured data [11]. - The cloud analytics market is projected to grow from $35.39 billion in 2024 to $130.63 billion by 2030, indicating a 25.5% CAGR, which supports Snowflake's growth trajectory [12]. - Snowflake's platform is gaining traction among large enterprises, enhancing their ability to manage data and improve customer experiences [13][14]. - Expected revenue and earnings growth rates for Snowflake are 22.3% and 33.9% respectively for the next year, with a 4% improvement in earnings estimates over the last 60 days [15]. Datadog Inc. (DDOG) - Datadog is experiencing growth due to new customer additions and increased adoption of its cloud-based monitoring platform amid digital transformation [16]. - The company unveiled over 125 new products at DASH 2025, including AI observability tools, which enhance customer engagement and competitive positioning [17][18]. - Datadog's expected revenue and earnings growth rates are 19% and 15.4% respectively for the next year, with a 0.9% improvement in earnings estimates recently [20]. Atlassian Corp. (TEAM) - Atlassian is benefiting from the demand for remote working tools, with significant adoption of its AI-powered features, showing a 25X year-over-year increase in AI interactions [21][22]. - The company's focus on generative AI features is expected to drive long-term revenue growth, particularly through collaborations with OpenAI [23]. - Expected revenue and earnings growth rates for Atlassian are 20.8% and 27.7% respectively for the current year, with a 0.6% improvement in earnings estimates recently [24]. Zoom Communications Inc. (ZM) - Zoom is capitalizing on the hybrid work trend, with AI-driven solutions like Zoom Doc and AI Companion seeing significant user growth [25][26]. - The AI Companion has achieved a fourfold increase in monthly active users year-over-year, enhancing operational efficiencies for customers [26][27]. - Expected revenue and earnings growth rates for Zoom are 3% and 0.1% respectively for the next year, with a 3.9% improvement in earnings estimates over the last 60 days [28].

Industry Overview - The Internet Software and Services sector is experiencing growth due to increased IT spending on hybrid operating environments and mobile device penetration, prompting businesses to invest in web-based infrastructure and security software [1] - The Internet Software industry is ranked in the top 28% of Zacks Industry Rank, indicating expected outperformance in the market over the next three to six months [2] Company Highlights Palantir Technologies Inc. (PLTR) - Palantir's AI strategy integrates its Foundry and Gotham platforms, focusing on AI adoption in government and commercial sectors, with an expected revenue growth rate of 41.1% and earnings growth rate of 43% for next year [6][10] - The company is involved in significant government projects, such as the Department of Defense's Open DAGIR initiative, enhancing military operations through AI [7] - Palantir's AIP boot camps have attracted over 1,000 companies, showcasing its platform's capabilities across various industries [8] Snowflake Inc. (SNOW) - Snowflake is set to benefit from rising demand for cloud-based data platforms, with an expected revenue growth rate of 22.3% and earnings growth rate of 33.9% for next year [11][15] - The cloud analytics market is projected to grow from $35.39 billion in 2024 to $130.63 billion by 2030, with a CAGR of 25.5%, supporting Snowflake's growth trajectory [12] - Snowflake's AI Data Cloud is gaining traction across multiple industries, enhancing enterprise capabilities in data management and analytics [14] Datadog Inc. (DDOG) - Datadog is experiencing growth from new customer acquisitions and increased adoption of its cloud-based monitoring platform, with an expected revenue growth rate of 19% and earnings growth rate of 15.4% for next year [16][20] - The company unveiled over 125 new products at DASH 2025, including AI observability tools, enhancing its competitive position [17][18] - Datadog's solutions are increasingly used to monitor AI-powered applications, driving broader product usage [19] Atlassian Corp. (TEAM) - Atlassian is benefiting from the demand for remote working tools, with a 25X year-over-year increase in AI interactions among over 1 million monthly active users [22] - The company's AI-powered Rovo platform and automation tools are driving growth in premium and enterprise editions [23] - Atlassian's collaboration with OpenAI to enhance its software with generative AI features is expected to boost revenue [24] Zoom Communications Inc. (ZM) - Zoom is capitalizing on the hybrid work trend, with its AI Companion achieving a fourfold increase in monthly active users year-over-year [26][27] - The platform's integration with third-party applications and custom AI functionalities is enhancing operational efficiencies for customers [28] - Zoom has an expected revenue growth rate of 3% and earnings growth rate of 0.1% for next year [29]

Core Points - Zoom Communications, Inc. will release its financial results for Q3 of fiscal year 2026 on November 24, 2025, after market close [1] - A live webinar for the financial results will be accessible at 2:00 pm PT / 5:00 pm ET through Zoom's investor relations website [1] Company Overview - Zoom provides an AI-first, open work platform designed for human connection, facilitating seamless collaboration across various communication methods including meetings, chat, and phone [2] - The company was founded in 2011 and is headquartered in San Jose, CA [2]

Core Insights - Zoom Communications, Inc. is collaborating with NVIDIA to enhance AI capabilities for enterprises, focusing on faster, higher-quality, and customizable AI solutions [1][4] - The partnership aims to integrate NVIDIA's Nemotron open technologies into Zoom's AI framework, enabling a hybrid language model approach that combines Small Language Models (SLMs) and Large Language Models (LLMs) for improved productivity and collaboration [2][3] Group 1: AI Framework and Architecture - Zoom's AI framework utilizes a federated architecture to select the most suitable AI model for specific tasks, optimizing cost and enhancing capabilities [2][3] - The new 49-billion-parameter LLM, developed with NVIDIA NeMo tools, aims to balance speed, cost, and accuracy for enterprise applications [2] - The integration of NVIDIA's technologies allows for real-time transcription, translation, and summarization, enhancing Zoom's AI Companion's performance [3] Group 2: Enterprise Applications and Collaboration - The collaboration enables AI Companion to seamlessly integrate with platforms like Microsoft 365, Google Workspace, and Salesforce, enhancing productivity for enterprise users [4][5] - Zoom is committed to responsible AI practices, ensuring data privacy and security while expanding its AI capabilities across various industries, including finance and healthcare [6] Group 3: Future Developments - The partnership lays the groundwork for future AI deployments, focusing on enhancing decision-making and automating workflows across different enterprise functions [5][6] - Zoom's mission is to create an AI-first work platform that fosters human connection and collaboration, positioning itself as a leader in the AI-driven enterprise solutions market [8]

Core Insights - Zoom Video Communications reported stronger-than-expected annual revenue growth outlook and raised its profit forecast for the fiscal year, indicating successful adoption of its generative AI tools among enterprise clients [1][2] - The company expects total revenue for the fiscal year ending January to be approximately $4.83 billion, with non-GAAP earnings per share projected between $5.81 and $5.84, surpassing Wall Street's average estimates [1][2] - Despite facing competition from Microsoft Teams and a decline in consumer licenses, many enterprise clients continue to retain Zoom's services [1] Financial Performance - In the second quarter of fiscal 2026, Zoom's enterprise business sales grew by 7% year-over-year to $730.7 million, exceeding Wall Street's expectations [2] - The company reported a total revenue increase of 4.7% to $1.22 billion for the third calendar quarter ending July 31, with adjusted earnings per share of $1.53, significantly above average analyst forecasts [2] AI Integration - Zoom has embedded generative AI features into its communication and collaboration product line, including Meetings, Team Chat, Mail, Phone, and Contact Center, enhancing its software platform [3][4] - The AI Companion, a platform-level AI tool, has gained "millions" of monthly active users, quadrupling from the previous year, and is positioned as a key driver for revenue and profit growth [2][3] Product Features - The AI Companion is designed to coordinate and execute multi-step operations, such as automating information organization, drafting communications, and generating project briefs from meeting content [4] - New features like AI Expert Assist and Virtual Agent have been introduced to enhance the Contact Center capabilities, providing real-time knowledge support and natural language processing for customer interactions [5]

Financial Data and Key Metrics Changes - Total revenue grew 4.7% year over year to $1.217 billion, exceeding guidance by $17 million [15][19] - Non-GAAP gross margin increased to 79.8%, up 128 basis points year over year, driven by cost optimization [17] - Non-GAAP operating income grew 10.5% year over year to $503 million, exceeding guidance by over $38 million [18] - Free cash flow increased 39% year over year to $508 million, representing a free cash flow margin of 41.7% [20] Business Line Data and Key Metrics Changes - Enterprise business revenue grew 7% year over year, representing 60% of total revenue, up one point year over year [15][16] - Average monthly churn in the online business remained flat at 2.9% [16] - The number of enterprise customers contributing over $100,000 in trailing twelve-month revenue grew approximately 9% year over year [16] - Zoom Phone sustained mid-teens ARR growth, gaining market share against competitors [11] Market Data and Key Metrics Changes - Revenue growth in the Americas was 5% year over year, EMEA grew 6%, and APAC grew 4% [17] - Deferred revenue grew 5% year over year to $1.48 billion, slightly ahead of the high end of the previously provided range [19] Company Strategy and Development Direction - The company is focused on three key priorities: delivering world-class AI, rapidly innovating Zoom Workplace, and scaling high-growth departmental solutions [5][9] - Zoom aims to strengthen its position as a leader in AI-powered collaboration, with significant growth in AI Companion monthly active users [6][7] - The company is expanding its collaboration with PwC to enhance its contact center and AI opportunities [13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of customer demand and the ability to navigate a dynamic macroeconomic environment [91] - The company raised its full-year revenue guidance to a range of $4.825 to $4.835 billion, representing approximately 3.5% year-over-year growth [22] - Management noted that AI adoption is critical for driving business outcomes and customer engagement [7][11] Other Important Information - The company has been recognized with multiple awards for innovation and leadership in the UCaaS space [9] - The launch of Virtual Agent 2.0 is expected to enhance customer engagement and drive revenue growth [8] Q&A Session Summary Question: What ROI are customers seeing from AI solutions? - Management highlighted that AI adoption has significantly increased, with monthly active users growing four times year over year, indicating positive feedback and productivity improvements [28][30] Question: How are vertical-specific AI companions informing customer needs? - Management noted that early adopters are looking beyond basic functionalities and are interested in customized AI solutions that integrate with their existing systems [34][35] Question: What feedback has been received regarding the price increase for the online segment? - Management reported stable churn rates and positive customer feedback regarding the value proposition, indicating that the price increase has not led to significant pushback [41][42] Question: What is the outlook for the AI Companion add-on? - Management indicated that initial customer feedback has been positive, and there is a strong interest in customizing AI solutions to better meet specific needs [56][62] Question: What is driving the success of the contact center solutions? - Management attributed success to customer dissatisfaction with existing providers, the comprehensive feature set of Zoom's solutions, and the trust in the Zoom brand [99][100]

Financial Data and Key Metrics Changes - Total revenue grew 4.7% year over year to $1.217 billion, exceeding guidance by $17 million [14][19] - Non-GAAP gross margin increased to 79.8%, up 128 basis points year over year, driven by cost optimization [17] - Non-GAAP income from operations rose 10.5% year over year to $503 million, exceeding guidance by over $38 million [18] - Operating cash flow grew 15% year over year to $516 million, with a margin of 42.4% [20] - Free cash flow increased 39% year over year to $508 million, representing a margin of 41.7% [20] Business Line Data and Key Metrics Changes - Enterprise business revenue grew 7% year over year, representing 60% of total revenue, up one point year over year [15] - Average monthly churn in the online business remained flat year over year at 2.9% [16] - The number of enterprise customers contributing over $100,000 in trailing twelve-month revenue grew approximately 9% year over year [16] - The number of Zoom contact center customers with over $100,000 in ARR grew 94% year over year to 229 [10] Market Data and Key Metrics Changes - Revenue growth in the Americas was 5% year over year, EMEA grew 6%, and APAC grew 4% [17] - Deferred revenue at the end of the period grew 5% year over year to $1.48 billion [19] Company Strategy and Development Direction - The company is focusing on three key priorities: delivering world-class AI, rapidly innovating Zoom Workplace, and scaling high-growth departmental solutions [4] - AI adoption is expanding beyond meeting summaries to include meeting preparation, task management, and integration with other services [5][6] - The company aims to maintain a long-term goal of 80% non-GAAP gross margins while balancing investments in AI with cost efficiencies [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of customer demand and the ability to navigate a dynamic macroeconomic environment [90] - The company anticipates continued growth in AI adoption among customers, which is expected to enhance productivity and operational effectiveness [30][31] - Guidance for Q3 revenue is projected to be in the range of $1.21 to $1.215 billion, representing approximately 3% year-over-year growth [21] Other Important Information - The company has accelerated its share buyback program, purchasing 6 million shares for $463 million [20] - Upcoming event Zoomtopia is expected to showcase new product innovations and customer success stories [12] Q&A Session Summary Question: What ROI are customers seeing from AI solutions? - Management noted that AI adoption has led to significant increases in monthly active users, with a fourfold increase year over year [29] Question: How are vertical-specific AI companions informing customer needs? - Management indicated that customers are looking beyond basic functionalities and are interested in customized AI solutions that integrate with their existing systems [36] Question: Feedback on the online segment and price increase impact? - Management confirmed that the price increase is on track to add $10 to $15 million in incremental revenue, with stable churn rates and no significant pushback from customers [42][45] Question: Insights on WorkVivo's growth and market opportunities? - Management highlighted strong growth in WorkVivo, with a focus on ensuring smooth transitions for customers and expanding opportunities in the medium-sized customer segment [51] Question: What is driving success in the contact center business? - Management attributed success to customer dissatisfaction with existing providers, the comprehensive feature set of Zoom's solutions, and a strong focus on customer experience [98][100]

Core Insights - Zoom Communications, Inc. has introduced a new concierge use case for Zoom Virtual Agent, integrated with Zoom Phone, enhancing call handling and support for businesses [1][2] - The company launched Zoom Hub, a centralized content center for organizing and managing Zoom assets, along with enhanced AI features across Zoom Meetings and Team Chat [1][6] Zoom Virtual Agent (ZVA) Concierge - The ZVA concierge offers a 24/7 AI receptionist that provides a personalized experience, handling tasks such as booking appointments and routing calls without long hold times [2][3] - It supports multilingual conversations in several languages including English, Spanish, French, German, Portuguese, and Japanese, ensuring a consistent experience for callers [3][4] Use Cases for ZVA Concierge - In healthcare, the ZVA concierge can quickly connect patients to the right care, answer common questions, and allow appointment bookings after hours [7] - In retail, it assists customers in finding products, checking stock availability, and scheduling pickups without human intervention [7] - In manufacturing, it captures service requests and guides customers through troubleshooting, directing them to the appropriate team [7] - In financial services, it provides personalized service by gathering information and resolving requests efficiently [7] AI Companion Features - The AI Companion enhances meeting scheduling by analyzing calendars and time zones to suggest convenient meeting times, eliminating scheduling friction [8][9] - It automates the coordination process, sending invites and tracking responses in real-time, ensuring quick meeting confirmations [10] Zoom Hub - Zoom Hub serves as a central workspace for users to create, manage, and organize Zoom files, integrating with AI Companion for efficient content creation [11] - It consolidates various Zoom assets, including meeting recordings and documents, to streamline user experience [11] Zoom Team Chat Enhancements - The integration of AI Companion into Zoom Team Chat allows users to draft messages and summarize documents without opening files, improving productivity [12][14] - These updates are included at no additional cost for paid Zoom Workplace plans, reinforcing Zoom's commitment to an AI-first collaboration platform [14]