Financial Results Announcement - Zoom Communications, Inc. will release its financial results for the fourth quarter and full fiscal year 2026 on February 25, 2026, after market close [1] - A live Zoom Webinar for the event will be accessible at 2:00 pm PT / 5:00 pm ET through Zoom's investor relations website [1] - A replay of the event will be available approximately two hours after the conclusion of the live event [1] Company Overview - Zoom provides an AI-first, open work platform designed for human connection, facilitating seamless collaboration and communication across various services including meetings, chat, phone, and events [2] - The company was founded in 2011 and is headquartered in San Jose, California [2] - Zoom's offerings are enhanced by the built-in assistance of Zoom AI Companion, catering to a diverse range of customers from entrepreneurs to global enterprises [2]

Core Viewpoint - Zoom's strategic investment in Anthropic positions it favorably in the AI sector, potentially leading to significant shareholder value as Anthropic's valuation increases [1][2][3] Investment Strategy - Zoom Ventures made a strategic investment in Anthropic in May 2023, which has since become a leading competitor in AI, enhancing Zoom's investment narrative [2][3] - The investment in Anthropic allows Zoom to be viewed as a deep-value holding company rather than just a software utility, providing a backdoor entry into the private AI market [3][5] Financial Position - Zoom holds approximately $7.9 billion in cash and marketable securities, with zero debt, providing a strong financial cushion [6][8] - Analysts are using a sum-of-the-parts valuation method, indicating that Zoom is trading at a discount compared to its software peers [6][7] Valuation Insights - The current market cap of Zoom is around $27 billion, with the core business operations valued at approximately $19.5 billion after accounting for cash and the estimated value of the Anthropic stake [8] - The presence of cash and the AI stake offers a margin of safety, limiting downside risk and justifying a significant portion of the stock price [7][14] Competitive Advantage - The partnership with Anthropic serves as a defensive strategy against competitors like Microsoft, allowing Zoom to leverage AI capabilities without incurring high costs [9][10] - Zoom's federated AI approach enables it to provide premium AI features at no additional cost, enhancing subscription value and reducing customer churn [11][12] Evolving Investment Thesis - The investment thesis for Zoom has shifted from a speculative growth play in 2020 to a value-oriented investment in 2026, reflecting its transformation into a mature platform with diversified assets [13][15] - Despite facing growth headwinds, Zoom's substantial cash reserves and disciplined capital allocation create an attractive risk-reward profile for investors [14][15]

Investment Overview - Zoom's investment in Anthropic in 2023 is estimated to be worth between $2 billion and $4 billion, according to analysts from Baird [1] - The investment is seen as a potential "hidden gem" for Zoom, especially as the company seeks to enhance its revenue growth [3] Partnership Details - In May 2023, Zoom Ventures announced a partnership and investment in Anthropic, although the specific value of the investment was not disclosed [2][4] - A filing with the SEC indicated that Zoom made $51 million in strategic investments during the quarter [2] Valuation and Returns - Baird analysts estimate that most of Zoom's investment went to Anthropic, which is currently valued at $350 billion, suggesting a potential return of 78 times the initial investment [3] - Anthropic is reportedly aiming to raise $10 billion in a funding round that would further solidify its valuation at $350 billion, nearly double its previous valuation [5] Financial Performance - Anthropic's valuation increased significantly from $183 billion in a Series F funding round in September 2025, where it raised $13 billion [6] - The company's run-rate revenue surged from approximately $1 billion at the beginning of 2025 to over $5 billion by August, with its Claude Code tool generating over $500 million in revenue [6] AI Integration - Zoom plans to integrate Anthropic's AI assistant, Claude, into its platform, starting with the Zoom Contact Center [4] - In March, Zoom announced enhancements to its AI Companion, making it more agentic [7]

Core Insights - The event "Zoom Ahead: AI for Tomorrow's Leaders" aims to promote AI literacy among K–12 students, emphasizing responsible and creative use of AI [1][6] - First Lady Melania Trump will deliver opening remarks, highlighting the importance of AI education for American students to lead in the future [2][6] - Zoom's CEO Eric S. Yuan stresses the necessity of equipping the next generation with AI skills to navigate the evolving landscape confidently and responsibly [3] Company Initiatives - Zoom has committed $10 million over three years to expand access to AI education, including a $5 million investment specifically for K–12 AI education [6] - The company has signed the White House "Pledge to America's Youth: Investing in AI Education," reinforcing its dedication to responsible AI development in educational settings [6][7] - The event will feature a diverse group of speakers, including educators and innovators, to provide real-world perspectives on AI applications [4][9] Industry Context - The initiative reflects a broader trend in the industry towards integrating AI education into the curriculum, preparing students for future workforce demands [2][3] - The focus on responsible AI use aligns with growing concerns about ethical implications and the need for integrity in technology [3][6]

Core Message - Zoom has launched a new brand campaign titled "Zoom Ahead," developed in collaboration with Colin Jost's No Notes Productions, which humorously critiques ineffective technology while advocating for user-friendly solutions [1][3]. Group 1: Campaign Details - The "Zoom Ahead" campaign will debut on December 31 during the U.S. College Football Playoffs, featuring a hero spot titled "I Use Zoom!" that emphasizes the desire for technology that works effectively [1]. - The campaign will include high-profile placements, such as a Super Bowl pre-show on February 8, and will be supported by various digital, social, and experiential activations throughout Spring 2026 [1]. Group 2: User Feedback and Recognition - Recent Q3 FY26 NPS data indicates that Zoom's AI-first platform has received over 22,000 responses with an industry-leading score of 58, with more than 70% of users praising its simplicity and 40% citing reliability [2]. - Zoom has been recognized as a Customers' Choice in the Gartner Peer Insights™ "Voice of the Customer" report and is one of only two companies positioned in both the UCaaS and CCaaS Magic Quadrants [2]. Group 3: Brand Positioning - The campaign's messaging resonates with audiences by humorously addressing the frustration with subpar tools, reinforcing that "Zoom" has become synonymous with productivity [3]. - The campaign marks the first official use of "Zoom" as a verb in advertising, highlighting its strong brand recognition compared to competitors [3]. Group 4: Product Evolution - Zoom is evolving beyond a meetings app to an AI-first workplace platform designed for user needs, featuring a comprehensive portfolio that includes communication, collaboration, productivity, customer experience, and sales & marketing tools [5]. - The platform aims to transform business collaboration with powerful, safe, and secure tools that align with modern work practices [5].

Core Insights - Zoom Communications, Inc. reported a total revenue of $1,229.8 million for the third fiscal quarter, reflecting a year-over-year increase of 4.4% as reported and 4.2% in constant currency [4][5] - The company emphasized its commitment to an AI-first platform, highlighting the growth in adoption of its AI Companion 3.0 and Custom AI Companion, contributing to strong customer experience metrics [2][4] - The financial results indicate significant profitability, with GAAP EPS increasing by 204.5% year-over-year to $2.01, and non-GAAP EPS rising by 10.1% to $1.52 [4][5] Financial Performance - Total revenue for Q3 was $1,229.8 million, with Enterprise revenue at $741.4 million, up 6.1% year-over-year, and Online revenue at $488.4 million, up 2.0% [4][5] - GAAP operating margin stood at 25.2%, while non-GAAP operating margin was 41.2% [5][36] - Operating cash flow reached $629.3 million, marking a 30.2% increase year-over-year, with a cash flow margin of 51.2% and free cash flow margin of 50.0% [4][5][37] Shareholder Returns - The company repurchased approximately 5.1 million shares in Q3, totaling 32.5 million shares repurchased under the current plan [4][9] - The Board of Directors authorized an additional $1.0 billion for stock repurchase, increasing the total authorization to $1.310 billion [9][11] Customer Metrics - The number of customers contributing over $100,000 in trailing 12 months revenue increased by 9.2% year-over-year, totaling 4,363 customers [4][13] - The trailing 12-month net dollar expansion rate for Enterprise customers was reported at 98% [13] - Online average monthly churn remained stable at 2.7% year-over-year, with 74.4% of total Online MRR from customers with a continual term of service of at least 16 months [13] Financial Outlook - For Q4 FY 2026, total revenue is expected to be between $1.230 billion and $1.235 billion, with non-GAAP income from operations projected between $477.0 million and $482.0 million [13] - The full fiscal year 2026 revenue guidance is between $4.852 billion and $4.857 billion, with non-GAAP income from operations expected between $1.955 billion and $1.960 billion [13]

Core Insights - Otter.ai provides significant time savings for employees, allowing them to stay informed without attending lengthy meetings, thus enhancing productivity [1][3] - The platform saves the equivalent workload of one full-time employee for every 20 users, translating to substantial cost savings for enterprises [2] - Otter.ai aims to capture the enterprise market with its AI features, focusing on efficiency and tangible ROI amidst increasing scrutiny of enterprise AI investments [3] Company Overview - Founded in 2016 by Sam Liang and Yun Fu, Otter.ai has grown to achieve $100 million in annual recurring revenue and over 25 million users globally [4] - The company has established a strong presence in the enterprise sector, with notable clients including Walgreens, NBC Universal, Grant Thornton, and IBM [3] Market Dynamics - Meetings are identified as the most expensive activity in enterprises, with employees spending an average of 11.3 hours per week in meetings, costing approximately $29,000 per employee annually [7] - Otter.ai competes with larger companies like Microsoft and Zoom by emphasizing its innovative capabilities and platform-agnostic nature, supporting various meeting platforms [8][9] Future Vision - Liang envisions a future where all meetings are automatically recorded and uploaded, creating a comprehensive voice knowledge base that surpasses traditional written documentation [6][11] - The company promotes transparency within enterprises, encouraging the sharing of meeting information across departments to enhance efficiency [14][15] Privacy and Compliance - Otter.ai has faced scrutiny regarding privacy, with a recent lawsuit alleging unauthorized recording of conversations; however, the company asserts compliance with privacy policies and offers opt-in options for AI training [17][18] - Liang advocates for a balance between transparency and privacy, suggesting that existing privacy laws need to evolve to accommodate the AI landscape [19][20]

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]