Zoom Communications, Inc. recently reported its financial results for the second fiscal quarter of 2026, highlighting a significant year-over-year growth in revenue and operational efficiency. The total revenue for the quarter reached $1,217.2 million, reflecting an increase of 4.7% compared to the same period last year. This growth is a promising indicator of Zoom’s continued resilience in the competitive tech landscape.
Key Financial Metrics
Revenue Growth:
- Total Revenue: $1,217.2 million, up 4.7% year-over-year.
- Enterprise Revenue: $730.7 million, showcasing a robust growth of 7.0% year over year.
- Online Revenue: While still a significant segment, this saw a modest increase of 1.4% to $486.6 million.
Profitability:
- GAAP Operating Margin: Improved to 26.4%, a notable increase of 9 percentage points year over year.
- Non-GAAP Operating Margin: This reached an impressive 41.3%, demonstrating operational efficiency.
Earnings Per Share (EPS):
- GAAP EPS: $1.16, reflecting a substantial rise of 65.7% year over year.
- Non-GAAP EPS: $1.53, an increase of 10.0% from the previous year.
- Share Repurchase Program:
- In Q2, Zoom repurchased approximately 6.0 million shares of common stock, bringing the total shares repurchased so far to 27.4 million. This demonstrates a commitment to returning value to shareholders.
Customer Metrics and Expansion
Zoom reported a 8.7% increase in its number of customers contributing over $100,000 in trailing 12 months revenue, totaling 4,274. This growth signals the company’s ability to attract and retain high-value customers, bolstering its market position amidst increasing competition. The Enterprise customer base showcased a trailing 12-month net dollar expansion rate of 98%, indicating that existing clients are not only renewing their contracts but also expanding their service use.
Cash Flow and Market Position
Bolstered by these financial results, Zoom reported a healthy cash position, holding $7.8 billion in cash and marketable securities as of July 31, 2025. Net cash provided by operating activities was $515.9 million, up from $449.3 million in the same quarter last year, while free cash flow also increased to $508.0 million. This positions Zoom strongly to invest in innovation and growth initiatives.
Management Commentary
Eric S. Yuan, Zoom’s founder and CEO, highlighted the role of artificial intelligence in transforming workplace collaboration. He stated, "AI is transforming the way we work together, and Zoom is at the forefront, driving innovation that helps people get more done, reduce costs, and deliver better experiences for customers and employees alike." His focus on innovation aligns with Zoom’s mission of creating an AI-first open work platform.
Financial Outlook
Moving forward, Zoom provides a positive outlook for the upcoming quarters:
- Third Quarter Fiscal Year 2026: Total revenue is expected to be between $1.210 billion and $1.215 billion.
- Full Fiscal Year 2026: Estimated total revenue is projected to be between $4.825 billion and $4.835 billion.
This optimistic guidance reflects Zoom’s strategic focus on growth and operational excellence as it continues to invest in its services and platforms.
Conclusion
In summary, Zoom Communications, Inc.’s recent financial results suggest a company that is not only surviving but thriving in the current competitive landscape. With significant growth in revenue, substantial improvements in profitability, and a clear focus on innovation through AI, Zoom is poised for continued success. The robust cash position and strategic share repurchase activities further underline its commitment to deliver shareholder value. As Zoom looks toward the future, its investment in technology and customer engagement will be crucial in maintaining its upward trajectory. As the digital landscape continues to evolve, Zoom’s strategy will likely play a pivotal role in shaping the trajectory of virtual communications and collaboration tools.
