Zoom (ZM) investor relations material

Executive summary

• Q3 FY2026 revenue reached $1.23 billion, up 4.4% year-over-year, with net income of $612.9 million, a 196%–204.5% increase, driven by enterprise customer growth, AI-driven product innovation, and strategic investment gains.

• AI Companion adoption surged over four times year-over-year, with Team Chat monthly active users up 20% and major enterprise partnerships expanding, including the acquisition of BrightHire to enhance AI-powered hiring workflows.

• Up-market and international expansion continued, with a 9% year-over-year increase in customers contributing over $100,000 in trailing 12-month revenue.

• Customer experience segment delivered high double-digit ARR growth, with nine of the top 10 CX deals involving paid AI features.

• Focus remained on AI-led innovation, platform expansion, and disciplined, durable growth, pairing innovation with strong profitability and cash flow.

Financial highlights

• Q3 total revenue was $1.23 billion, up 4.4% year-over-year; enterprise revenue grew 6.1% to $741 million, now 60% of total revenue.

• GAAP gross margin improved to 77.9% (+201 bps YoY); non-GAAP gross margin was 80%.

• GAAP operating margin was 25.2% (+971 bps YoY); non-GAAP operating margin was 41.2%.

• GAAP diluted EPS was $2.01 (up 204.5%–205% YoY); non-GAAP EPS was $1.52 (up 10% YoY); deferred revenue grew 5% to $1.44 billion.

• Operating cash flow was $629 million (51.2% margin), up 30% year-over-year; free cash flow margin was 50%.

Outlook and guidance

• Q4 FY26 revenue expected at $1.23–$1.235 billion; non-GAAP operating income $477–$482 million (38.9% margin midpoint); EPS $1.48–$1.49.

• FY2026 revenue guidance raised to $4.852–$4.857 billion; non-GAAP operating income $1.955–$1.96 billion (40.3% margin midpoint); EPS $5.95–$5.97.

• FY2026 free cash flow outlook increased to $1.86–$1.88 billion; board authorized an additional $1 billion share repurchase.