Zoom's Enterprise Base Benefits From Workvivo Adoption: What's Ahead?

Zoom Communications’ ZM employee experience platform Workvivo is expected to play a growing role as a catalyst for enterprise expansion. In the second quarter of fiscal 2026, Workvivo customers contributing more than $100,000 in Annual Recurring Revenue rose 142% year over year to 168, a pace that is anticipated to continue as adoption among large organizations scales further.

The acquisition is projected to extend Zoom’s presence beyond collaboration into employee engagement and internal communications. Large rollouts, such as Marubeni Corp.’s deployment of more than 10,000 licenses, indicate that enterprises are expected to increasingly view integrated employee platforms as essential for hybrid work and retention strategies. With employee experience becoming a strategic priority, Workvivo is positioned to capture a larger allocation of enterprise technology budgets.

Integration with Zoom Workplace is likely to support cross-selling that raises customer lifetime value, while expansion into mid-market accounts is expected to open new revenue channels. AI-driven enhancements are anticipated to provide differentiation and reinforce premium pricing opportunities, strengthening Zoom’s standing in the competitive employee experience market.

For the third quarter of fiscal 2026, the Zacks Consensus Estimate for enterprise revenues is pegged at $730.97 million, up 4.6% from the year-ago quarter’s figure. With enterprise revenues projected to remain a key growth driver after advancing 7% year over year and representing 60% of total revenues, Workvivo adoption is expected to be central in sustaining momentum across Zoom’s large-account base.

Zoom Faces Stiff Competition

Microsoft MSFT challenges Zoom through its Viva suite, tightly integrated with Microsoft Teams and Office 365. This bundling strengthens adoption across enterprises already embedded in Microsoft’s ecosystem. Alphabet GOOGL, via Google Workspace, is also expanding collaboration and employee engagement, leveraging its cloud and AI capabilities. Microsoft’s advantage lies in bundled pricing and established enterprise ties, while Alphabet’s strength comes from AI-driven innovation. For Zoom, Workvivo’s opportunity rests in cross-selling through Workplace and differentiating as enterprises seek unified platforms outside Microsoft and Alphabet’s ecosystems.

Zoom’s Share Price Performance, Valuation and Estimates

Zoom shares have appreciated 2.3% year to date, underperforming the Zacks Internet – Software industry’s return of 18.3% and the Zacks Computer and Technology sector’s increase of 11.8%.

ZM’s YTD Price Performance

From a valuation standpoint, Zoom stock is currently trading at a forward 12-month Price/Sales ratio of 5.15X compared with the industry’s 5.62X. Zoom has a Value Score of D.

ZM Valuation

The Zacks Consensus Estimate for third-quarter fiscal 2026 earnings is pegged at $1.42 per share, which is up four cents over the past 30 days, indicating a year-over-year improvement of 2.9%.

Zoom Communications, Inc. Price and Consensus

Zoom Communications, Inc. price-consensus-chart | Zoom Communications, Inc. Quote

Zoom currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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

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