Zoom (ZM) investor relations material

Executive summary

• Q2 FY27 revenue grew 4.9% year-over-year to $1.28 billion, with enterprise revenue up 7.8%, marking the strongest enterprise growth in three years and now representing 62% of total revenue.

• AI-driven product adoption accelerated, with licensed monthly active users of AI features in Workplace up 125% year-over-year and a 256% increase in Zoom Virtual Agent customers.

• Major customer wins included large tech, wealth management, and insurance firms, with Workvivo surpassing $100 million in ARR and significant expansion across AI and communications platforms.

• Net income surged to $1.54 billion, primarily due to a $1.61 billion unrealized gain on the Anthropic investment.

• The company launched ZoomMate and acquired Common Room to enhance its AI-driven platform and revenue intelligence capabilities.

Financial highlights

• Non-GAAP gross margin was 79.1% (vs. 79.8% prior year); GAAP gross margin was 77.2%.

• Non-GAAP operating margin was 40.0%; GAAP operating margin was 24.6%.

• Non-GAAP diluted EPS was $1.55, up two cents year-over-year and eight cents above guidance; GAAP EPS was $5.15, up from $1.16 year-over-year.

• Free cash flow for Q2 FY27 was $472 million (37% margin); operating cash flow was $495 million (38.7% margin).

• Deferred revenue grew 6% to $1.56 billion; RPO up 14% to $4.5 billion.

Outlook and guidance

• Q3 FY27 revenue guidance: $1.275–$1.28 billion; non-GAAP income from operations: $510–$515 million (40.1% margin midpoint).

• FY27 revenue guidance raised to $5.085–$5.095 billion (4.5% growth at midpoint); non-GAAP EPS: $6.08–$6.12; free cash flow: $1.78–$1.82 billion.

• Non-GAAP operating income for FY27 projected at $2.065–$2.075 billion.

• Management expects continued variability in enterprise spending due to macroeconomic uncertainty, with ongoing investments in AI and international expansion.

• The company believes its liquidity position is strong enough to support growth and capital needs for at least the next 12 months.