Zoom Posts 4.9% Revenue Growth as Enterprise and AI Businesses Accelerate

Enterprise momentum, expanding AI adoption and strong profitability highlight Zoom Communications’ second-quarter FY2027 performance

Zoom Communications delivered another quarter of steady growth in the second quarter of fiscal 2027, with rising enterprise demand and rapid adoption of its artificial intelligence portfolio helping offset slower growth in its online business.

The company reported total revenue of $1.277 billion for the quarter ended July 31, 2026, up 4.9% year over year. On a constant-currency basis, revenue increased 4.7% to $1.2745 billion. Enterprise revenue was the standout performer, rising 7.8% to $787.5 million, while Online revenue increased a more modest 0.6% to $489.7 million.

Zoom’s profitability remained strong. GAAP operating income stood at $314.3 million, translating into a GAAP operating margin of 24.6%. Non-GAAP operating income increased to $510.3 million from $503.2 million a year earlier, producing a non-GAAP operating margin of 40%.

Enterprise business provides the growth engine

The latest results underscore Zoom’s increasing focus on large organizations. The company ended the quarter with 4,625 customers generating more than $100,000 in trailing 12-month revenue, an increase of 8.2% from the same period last year.

The trailing 12-month net dollar expansion rate for enterprise customers also improved to 99%, compared with 98% a year earlier. Meanwhile, online average monthly churn remained stable at 2.9%.

The figures suggest that Zoom is continuing to deepen its relationship with larger customers even as growth in its traditional online business remains relatively subdued.

“Our AI-first Customer Experience portfolio is delivering high-double-digit annual recurring revenue growth. One of the strongest performers has been Zoom Virtual Agent, whose customer count increased 256% year over year.”

- Eric S. Yuan, CEO and founder,  Zoom Communications

AI becomes central to Zoom’s strategy

Artificial intelligence is emerging as a major pillar of Zoom’s growth strategy.

CEO and founder Eric S. Yuan said the company’s AI-first Customer Experience portfolio is delivering high-double-digit annual recurring revenue growth. One of the strongest performers has been Zoom Virtual Agent, whose customer count increased 256% year over year.

Zoom is also integrating AI across a growing range of products, including ZoomMate, My Notes, AI Productivity Suite, ZVA Receptionist and Workvivo HQ Agent. The company has further expanded its capabilities through acquisitions including Common Room and BrightHire.

The broader strategy is to position Zoom not simply as a video-conferencing platform, but as a broader “system of action” for modern work, connecting collaboration, customer experience, revenue operations, recruiting and employee experience.

Net income jumps, but operating performance tells a different story

Zoom reported GAAP net income of $1.542 billion, or $5.15 per diluted share, compared with $358.6 million, or $1.16 per share, in the year-ago quarter.

However, the sharp increase in GAAP earnings should be viewed in context. Non-GAAP net income was $464 million, or $1.55 per diluted share, compared with $471.3 million, or $1.53 per share, a year earlier.

The substantial difference between GAAP and non-GAAP earnings reflects items such as gains on strategic investments and other adjustments.

Strong balance sheet and cash generation

Zoom continued to generate substantial cash despite a year-over-year decline in operating cash flow.

As of July 31, the company held $7.2 billion in cash, cash equivalents and marketable securities, excluding restricted cash.

Operating cash flow during the quarter was $494.8 million, compared with $515.9 million in the same quarter of fiscal 2026. Free cash flow stood at $472.4 million, down from $508 million a year earlier.

Zoom also continued its share repurchase programme. The company bought back approximately 3.7 million shares during the quarter, taking total repurchases under the current programme to 44.2 million shares. Approximately $1.3 billion remained authorized for future repurchases as of July 31.

Zoom raises focus on profitable growth

For the third quarter of fiscal 2027, Zoom expects revenue between $1.275 billion and $1.280 billion. Non-GAAP operating income is forecast at $510 million to $515 million, while non-GAAP diluted EPS is expected to range between $1.46 and $1.48.

For the full fiscal year, the company expects revenue of $5.085 billion to $5.095 billion. Non-GAAP operating income is projected at $2.065 billion to $2.075 billion, while non-GAAP diluted EPS is expected to reach $6.08 to $6.12.

Zoom is also forecasting full-year free cash flow of between $1.78 billion and $1.82 billion.

From video meetings to an AI-powered work platform

Zoom’s latest numbers point to a company undergoing a strategic transition.

The explosive growth associated with the pandemic-era video-conferencing boom has faded, making enterprise expansion, AI-powered services and broader workplace applications increasingly important to the company’s future.

Enterprise revenue growth of 7.8%, improving customer expansion and the rapid adoption of Zoom Virtual Agent indicate that Zoom is gaining traction beyond its traditional meetings business. At the same time, the relatively modest 0.6% growth in Online revenue highlights the challenge of sustaining momentum in its mature core market.

The next phase of Zoom’s growth will therefore depend increasingly on whether it can turn AI capabilities into scalable enterprise products and persuade customers to use Zoom across more aspects of their daily operations.

For now, the second-quarter results show a company combining solid enterprise growth, high operating margins, strong cash generation and aggressive investment in AI as it seeks to redefine itself for the next era of workplace collaboration.