Zoom Q4 Earnings Miss Estimates, Revenues Increase Y/Y

Zoom Communications ZM reported fourth-quarter fiscal 2026 adjusted earnings of $1.44 per share, which missed the Zacks Consensus Estimate by 2.70% and increased 2.1% year over year.

Revenues of $1.25 billion beat the consensus mark by 1.18% and increased 5.3% year over year. Adjusting for foreign currency impact, revenues in constant currency were $1.24 billion, up 4.8% year over year.

ZM’s Q4 Details

Enterprise revenues, which account for 60.7% of total revenues, increased 7.1% year over year to $757.3 million. Online revenues, which represent 39.3% of total revenues, increased 2.6% year over year to $489.7 million. 

Customers contributing more than $100,000 in revenues in the trailing 12 months grew 9.3% to 4,468. These customers accounted for 33% of revenues.
 

Zoom Communications, Inc. Price, Consensus and EPS Surprise

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

The number of enterprise customers at the end of the fiscal fourth quarter was 186,400. In the fourth quarter, 74.9% of total Online MRR came from Online customers with a continued term of service of at least 16 months, down 20 basis points year over year.

The company reported a trailing 12-month net dollar expansion rate for Enterprise customers of 98% and an Online average monthly churn of 2.9%, flat year over year.

ZM’s Non-GAAP Operating Details

Non-GAAP gross margin in the fiscal fourth quarter was 79.8% compared with 78.8% in the year-ago period, expanding 100 bps.

On a year-over-year basis, Research and development expenses increased 10.8% to $147.4 million. Sales and marketing expenses rose 5.5% to $291.9 million, and general and administrative expenses increased 18.9% to $66.2 million.

Non-GAAP operating income rose 4.6% to $489.7 million year over year. The operating margin was 39.3% compared with 39.5% in the year-ago quarter.

ZM’s Balance Sheet & Cash Flow

Total cash, cash equivalents and marketable securities as of Jan. 31, 2025, were $7.8 billion compared with $7.9 billion as of Oct. 31, 2025.

Net cash provided by operating activities was $354.5 million for the fiscal fourth quarter compared with $629.3 million in the previous quarter. 

Free cash flow was $338.4 million compared with $614.3 million in the prior quarter.

ZM’s Q1 & FY27 Guidance

Zoom expects its first-quarter fiscal 2027 revenues to be between $1.220 billion and $1.225 billion. Revenues on a constant currency basis are expected to be between $1.212 billion and $1.217 billion.

Non-GAAP income from operations is expected to be between $487.0 million and $492.0 million.

Non-GAAP earnings per share (EPS) are expected to be in the range of $1.40-$1.42.

For fiscal 2027, Zoom expects revenues in the range of $5.065-$5.075 billion. Revenues on a constant currency basis are expected to be between $5.054 billion and $5.064 billion.

Non-GAAP income from operations is expected to be between $2.050 billion and $2.060 billion.

Non-GAAP EPS are expected to be in the band of $5.77-$5.81.

The company expects free cash flow between $1.700 billion and $1.740 billion.

Zoom’s Zacks Rank & Stocks to Consider

Currently, ZM carries a Zacks Rank #3 (Hold).

Micron Technology MU, MongoDB MDB, and Credo Technology Group CRDO are some better-ranked stocks that investors can consider in the broader Zacks Computer and Technology sector.

Micron Technology shares have gained 339% in the past 12 months. This Zacks Rank #1 (Strong Buy) company is scheduled to release second-quarter 2026 results on March 19. You can see the complete list of today’s Zacks #1 Rank stocks here.

MongoDB shares have returned 17.4% in the past 12 months. MDB is scheduled to release its fourth-quarter 2026 results on March 2. The company currently sports a Zacks Rank #1.  
 
Credo Technology Group shares have gained 101.4% in the past 12 months. CRDO is set to report its third-quarter fiscal 2026 results on March 2. The company currently sports a Zacks Rank #1.
 

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