Zoom Video Gears Up to Report Q2 Earnings: What's in the Cards?

Zoom Video Communications ZM is slated to release second-quarter fiscal 2026 results on Aug. 21.

Zoom expects second-quarter fiscal 2026 revenues between $1,195 million and $2 million, representing approximately 3% year-over-year growth at the midpoint. This modest growth projection suggests that management maintained a cautious outlook despite strong execution in the fiscal first quarter. The Zacks Consensus Estimate for the top line is currently pegged at $1.2 billion, indicating growth of 3% from the year-ago quarter.

Non-GAAP earnings per share are expected in the range of $1.36-$1.37. The consensus mark for earnings has remained steady at $1.37 per share over the past 30 days, indicating a decline of 1.44% year over year.

ZM’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, delivering an average surprise of 9.46%.

Zoom Communications, Inc. Price and EPS Surprise

Zoom Communications, Inc. price-eps-surprise | Zoom Communications, Inc. Quote

What Our Model Unveils

Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can see the complete list of today’s Zacks #1 Rank stocks here.

ZM has an Earnings ESP of 0.00% and carries a Zacks Rank #3 at present. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Let’s see how things have shaped up for this announcement.

Factors to Consider

Zoom Video’s second-quarter fiscal 2026 results are likely to reflect continued stability in its core business while navigating persistent macroeconomic headwinds.

The Enterprise segment is likely to have sustained its momentum as the primary growth driver, building on the 6% year-over-year expansion achieved in the fiscal first quarter. The company's focus on multi-product adoption through its Zoom Workplace platform was expected to support Enterprise revenue growth, particularly as customers consolidated their technology stacks to reduce costs in an uncertain economic environment.

The Online segment appears positioned for improved performance following the implementation of a $1 monthly price increase for Pro SKUs, which management estimated would contribute $10-$15 million to full-year revenues.

Zoom's aggressive AI innovation strategy is expected to have dominated the fiscal second quarter's operational narrative. The July launch of Custom AI Companion with connections to 16 third-party applications, including ServiceNow, Jira, and Asana, marked a significant monetization opportunity for the company's AI investments.

The rollout of agentic AI capabilities transformed AI Companion from a meeting assistant into an autonomous task executor, potentially driving higher customer engagement and retention. Monthly active users of AI Companion grew nearly 40% quarter over quarter in the fiscal first quarter, indicating strong adoption momentum that is likely to have continued into the quarter under review.

Product expansion beyond core video conferencing is likely to have shown encouraging signs. Zoom Phone maintained mid-teens revenue growth in the fiscal first quarter, while Contact Center customers increased 65% year over year. The company's Business Services portfolio, including Revenue Accelerator and Workvivo, demonstrated triple-digit growth rates in some segments.

These high-growth products are expected to have contributed incrementally to fiscal second quarter results as the company executed its land-and-expand strategy with enterprise customers seeking unified communication and customer experience platforms.

Zoom shares have declined 11.8% in the past six months compared with the broader Zacks Computer and Technology sector’s growth of 10%. The company still faces significant challenges, including intense competition from Microsoft MSFT Teams, RingCentral RNG and Cisco CSCO Webex, which have been aggressively pushing their collaboration tools. 

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This article originally published on Zacks Investment Research (zacks.com).

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