Zoom (ZM) Q2 FY2027 Earnings Call: Enterprise and AI Growth Drive Guidance Raise
Source Tradingkey
Key Takeaways
- Zoom Video Communications (ZM) reported Q2 FY2027 revenue of $1.28 billion, up 4.9% year over year and 4.7% in constant currency. Enterprise revenue increased 7.8%, its fastest growth rate in three years, and represented 62% of total revenue.
- Non-GAAP operating income was $510 million, with a 40.0% operating margin. Non-GAAP diluted EPS rose to $1.55, compared with $1.53 a year earlier.
- Remaining performance obligations reached approximately $4.5 billion, up 14%, including 25% growth in noncurrent RPO. Management attributed the increase to larger, longer-term, multiproduct platform contracts.
- AI adoption continued to expand. Licensed monthly active users of Zoom Workplace AI features grew 125%, while Zoom Virtual Agent customer count increased more than 250% year over year.
- Management raised FY2027 revenue guidance to $5.085 billion–$5.095 billion and non-GAAP EPS guidance to $6.08–$6.12. Free cash flow guidance increased to $1.78 billion–$1.82 billion.
- Management expects enterprise revenue to grow faster than previously anticipated, partly offset by flat online revenue and near-term changes in how customers discover products.
Core Financial Results
| Metric | Q2 FY2027 | Year-over-year change / context |
|---|---|---|
| Total revenue | $1.28 billion | +4.9%; +4.7% in constant currency |
| Enterprise revenue | 62% of total revenue | +7.8%; mix increased 2 percentage points |
| Customers contributing over $100,000 in trailing 12-month revenue | — | +8%; represented 33% of total revenue |
| Enterprise net dollar expansion rate | 99% | Up 1 percentage point; unchanged sequentially |
| Online average monthly churn | 2.9% | Unchanged year over year |
| Non-GAAP gross margin | 79.1% | 79.8% a year earlier |
| Non-GAAP operating income | $510 million | +1% |
| Non-GAAP operating margin | 40.0% | 41.3% a year earlier |
| Non-GAAP diluted EPS | $1.55 | $1.53 a year earlier |
| Deferred revenue | $1.56 billion | +6% |
| Remaining performance obligations | Approximately $4.5 billion | +14%; noncurrent RPO +25% |
| Operating cash flow | $495 million | 38.7% margin |
| Free cash flow | $472 million | 37.0% margin |
| Cash, cash equivalents and marketable securities | $7.2 billion | Excludes restricted cash |
Disclaimer: For information purposes only. Past performance is not indicative of future results.
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