Zoom Video Gears Up to Report Q4 Earnings: How to Play the Stock

Zoom Video Communications ZM is slated to release fourth-quarter fiscal 2026 results on Feb. 25.

Zoom expects its fourth-quarter fiscal 2026 revenues to be between $1.23 billion and $1.235 billion. Revenues on a constant currency basis are expected to be between $1.224 billion and $1.229 billion.

The Zacks Consensus Estimate for the top line is currently pegged at $1.23 billion, indicating growth of 4.08% from the year-ago quarter.

Non-GAAP earnings per share are expected in the range of $1.48-$1.49. The consensus mark for earnings has remained steady at $1.48 per share over the past 30 days, indicating an increase of 4.96% year over year.

ZM’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, delivering an average surprise of 8.9%.

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 fourth-quarter fiscal 2026 results are likely to reflect a business still navigating a mature growth phase. Investors had reasons to be both cautiously optimistic and measured in their expectations.

On the AI monetization front, Zoom launched AI Companion 3.0 in December 2025, introducing agentic capabilities, including personal workflows and My Notes, designed to shift the platform from reactive assistance to proactive intelligence. The rollout represented a meaningful product expansion that could have contributed to incremental enterprise upsell activity during the quarter. The company also unveiled agentic prospecting tools for its Revenue Accelerator product in January 2026, targeting sales-driven enterprises and broadening its addressable opportunity beyond core meetings.

Strategic partnerships remained a growth lever entering the fourth quarter. Zoom's go-to-market collaboration with Oracle, focused on customer engagement solutions, along with its NVIDIA partnership for custom enterprise AI, added potential tailwinds for enterprise deal momentum. The introduction of Zoom Virtual Agent for Healthcare in January 2026 opened a specialized vertical with growing demand.

However, the competitive landscape remained a notable headwind. Microsoft MSFT Teams, RingCentral RNG and Cisco CSCO Webex continued to aggressively court enterprise collaboration budgets. With a net dollar expansion rate of 98% and online segment growth of just 2%, expansion within the existing customer base appeared constrained. The projected fourth-quarter non-GAAP operating margin of 38.9% — slightly below the third quarter's 41.2% — suggested modest near-term profitability pressure from increased investment spending.

Given the modest growth trajectory and limited near-term upside catalysts, investors may find it prudent to hold existing positions or await a more attractive entry point before adding exposure ahead of fiscal 2027 guidance clarity.

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

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