Zoom (ZM) Q3 2026 earnings summary

Executive summary

• Achieved Q3 FY26 revenue of $1.23 billion, up 4.4% year-over-year, with strong momentum across products, industries, and customer segments, reflecting business durability and a successful evolution toward an AI-first platform for work and customer experience.

• AI Companion adoption surged over four times year-over-year, Team Chat monthly active users rose 20%, and Workvivo logos grew nearly 70% to 1,225, highlighting rapid AI-driven product uptake and expansion in employee experience.

• Major enterprise partnerships expanded, including Oracle and Salesforce deepening their use of Custom AI Companion, and the acquisition of BrightHire to enhance AI-powered hiring workflows.

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

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

Financial highlights

• Q3 total revenue grew 4.4% year-over-year to $1.23 billion, $15 million above guidance high end; enterprise revenue grew 6.1% to $741 million, now 60% of total revenue.

• Non-GAAP gross margin was 80%, up 117 basis points year-over-year; GAAP gross margin improved to 77.9%.

• Non-GAAP operating income grew 11% to $507 million, with a 41.2% margin; GAAP operating margin was 25.2%.

• Non-GAAP diluted EPS rose to $1.52, up 10% year-over-year; GAAP EPS was $2.01, up 204.5% year-over-year.

• Operating cash flow increased 30% to $629 million (51.2% margin); free cash flow margin rose to 50%.

• Ended Q3 with $7.9 billion in cash, cash equivalents, and marketable securities; repurchased 5.1 million shares for $414 million in Q3, totaling 32.5 million shares under the buyback plan.

Outlook and guidance

• Q4 revenue expected at $1.23–$1.235 billion (4.1% year-over-year growth midpoint); non-GAAP operating income $477–$482 million; EPS $1.48–$1.49.

• FY26 revenue guidance raised to $4.852–$4.857 billion (4.1% growth midpoint); non-GAAP operating income $1.955–$1.96 billion; EPS $5.95–$5.97.

• FY26 free cash flow outlook increased to $1.86–$1.88 billion (3.4% growth midpoint); board authorized an additional $1 billion share repurchase.