Zoom (ZM) Q1 2026 earnings summary

Executive summary

• Q1 FY26 revenue grew 3% year over year to $1.175 billion, exceeding guidance, with enterprise revenue up 6% and online churn improving to 2.8%.

• Major customer wins included Boston Celtics, Raymond James, Rakuten, Mimecast, and Goosehead Insurance, with strong multi-product and AI-driven adoption.

• Accelerated AI innovation and product launches, including Zoom Tasks, Calendar Manager, custom AI Companion, and frontline worker solutions.

• 5.6 million shares repurchased in Q1 as part of a $2.7 billion buyback plan, with $1.2 billion remaining authorized.

• Ended Q1 with $7.8 billion in cash, cash equivalents, and marketable securities.

Financial highlights

• Non-GAAP income from operations grew 2% year over year to $467 million (39.8% margin); GAAP operating income was $241.6 million (20.6% margin).

• Non-GAAP diluted EPS was $1.43, up 8 cents year over year and 12 cents above guidance; GAAP EPS was $0.81, up 18.7%.

• Free cash flow was $463 million (39.4% margin), down from $569.7 million a year ago, mainly due to tax timing.

• Deferred revenue grew 5% year over year to $1.43 billion; RPO increased 6% to $3.9 billion.

• Operating cash flow was $489 million (41.6% margin).

Outlook and guidance

• FY26 revenue guidance raised to $4.8–$4.81 billion, about 3% year-over-year growth at midpoint.

• FY26 non-GAAP operating income expected at $1.865–$1.875 billion (38.9% margin); non-GAAP EPS raised to $5.56–$5.59.

• Q2 FY26 revenue expected at $1.195–$1.2 billion; non-GAAP EPS $1.36–$1.37.

• Free cash flow for FY26 expected at $1.68–$1.72 billion.

• $1.2 billion remains authorized for share repurchases as of April 30, 2025.