Zoom (ZM) Q1 2027 earnings summary

Executive summary

• Q1 FY27 revenue grew 5.5% year-over-year to $1.24 billion, surpassing guidance, with enterprise revenue up 7.2% to $756 million and representing 61% of total revenue.

• AI-driven product adoption accelerated, with AI Companion paid MAUs up 184% year-over-year and My Notes surpassing 1.5 million licensed users.

• Major customer wins included competitive displacements and large multi-product deals in government, healthcare, and sports, reinforcing platform value.

• Net income rose to $425.7 million, up 67% year-over-year, reflecting higher gross margin and gains on strategic investments.

• Board authorized an additional $1 billion share repurchase, reflecting confidence in long-term growth.

Financial highlights

• Total revenue: $1.24 billion, up 5.5% year-over-year and $14 million above guidance.

• Non-GAAP gross margin: 79.9%, up 70 bps year-over-year; GAAP gross margin: 77.9%.

• Non-GAAP operating income: $509 million, up 9% year-over-year; operating margin 41.1%, up 130 bps.

• Non-GAAP diluted EPS: $1.55, $0.13 above guidance and $0.12 higher year-over-year.

• Free cash flow: $500.5 million, up 8% year-over-year; free cash flow margin 40.4%.

• Deferred revenue: $1.49 billion, up 5% year-over-year; RPO: $4.3 billion, up 11%.

Outlook and guidance

• Q2 FY27 revenue guidance: $1.265–$1.270 billion (4.1% year-over-year growth at midpoint); non-GAAP operating income: $508–$513 million; EPS: $1.45–$1.47.

• FY27 revenue guidance raised to $5.08–$5.09 billion (4.4% growth at midpoint); non-GAAP operating income: $2.065–$2.075 billion; EPS: $5.96–$6.00; free cash flow: $1.7–$1.74 billion.