Zoom (ZM) Q2 2027 earnings summary

Executive summary

• Total 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.

• 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 expanding across AI and communications platforms.

• Share repurchases totaled 3.7 million in Q2, with 44.2 million shares repurchased under the current plan.

• The Common Room acquisition enhances AI-driven revenue orchestration and buyer intelligence capabilities.

Financial highlights

• Q2 total revenue: $1.28 billion, up 4.9% year-over-year, exceeding guidance by $7 million.

• Enterprise revenue: $793.6 million, up 7.8% year-over-year, now 62% of total revenue.

• Non-GAAP gross margin: 79.1% (vs. 79.8% prior year); non-GAAP operating margin: 40%.

• Non-GAAP diluted EPS: $1.55, up two cents year-over-year and eight cents above guidance.

• Operating cash flow: $495 million (38.7% margin); free cash flow: $472.4 million (37% margin).

Outlook and guidance

• Q3 revenue guidance: $1.275–$1.28 billion (3.9% year-over-year growth at midpoint).

• Q3 non-GAAP EPS: $1.46–$1.48; non-GAAP operating income: $510–$515 million (40.1% margin midpoint).

• FY 2027 revenue guidance raised to $5.085–$5.095 billion (4.5% growth at midpoint); non-GAAP EPS raised to $6.08–$6.12.

• FY 2027 free cash flow outlook raised to $1.78–$1.82 billion.