Zoom reports 2.9% Q1FY26 Y-o-Y revenue growth, bets big on enterprise gains

Growth was driven by a strong performance in the Enterprise segment, where revenue climbed 5.9 per cent to $704.7 million, while online revenue declined 1.2 per cent to $470 million

Zoom Communications, Inc. on Thursday reported a 2.9 per cent year-on-year increase in total revenue for the first quarter of fiscal year 2026, posting $1,174.7 million for the three-month period ended April 30, 2025. In constant currency terms, revenue rose 3.4 per cent to $1,179.5 million.

 

Growth wwhere revenue climbed 5.9 per cent to $704.7 million. as driven by a strong performance in the Enterprise segment, Online revenue, by contrast, declined 1.2 per cent to $470 million, the company reported.

 

GAAP income from operations rose to $241.6 million from $203 million in the same quarter last year. On a non-GAAP basis, which excludes stock-based compensation, payroll taxes, and acquisition-related expenses, income from operations reached $467.3 million, up from $456.6 million in the year-ago quarter.

 

Zoom reported a GAAP operating margin of 20.6 per cent and a non-GAAP operating margin of 39.8 per cent.

 

Net income under GAAP came in at $254.6 million, or $0.81 per diluted share, compared with $216.3 million, or $0.69 per share, a year earlier. On a non-GAAP basis, net income rose to $448.3 million, or $1.43 per share, from $426.3 million, or $1.35 per share.

 

“In an uncertain macro-economic environment, customers are turning to Zoom to drive efficiency, improve customer and employee experiences, and future-proof their businesses,” Eric S Yuan, Zoom’s founder and CEO, said.

 

As of April 30, 2025, the company held $7.8 billion in cash, cash equivalents, and marketable securities, excluding restricted cash.

 

However, cash flow from operations fell to $489.3 million from $588.2 million a year earlier. Free cash flow declined to $463.4 million from $569.7 million in the same period last year.

 

Zoom ended the quarter with 4,192 customers contributing more than $100,000 in trailing 12-month revenue, marking an 8 per cent increase from the prior year. The trailing 12-month net dollar expansion rate for Enterprise customers was 98 per cent.

 

Online customer metrics showed improved retention. Average monthly churn for the Online segment dropped 40 basis points to 2.8 per cent. The share of Online monthly recurring revenue from customers with at least 16 months of continual service rose to 74.2 per cent, up 40 basis points year-on-year.

 

For the second quarter of fiscal year 2026, Zoom expects total revenue between $1.195 billion and $1.200 billion, and revenue in constant currency between $1.196 billion and $1.201 billion. Non-GAAP income from operations is forecast to be in the range of $460 million to $465 million. Non-GAAP diluted earnings per share (EPS) are projected to be between $1.36 and $1.37, based on approximately 310 million weighted average shares outstanding.

 

For the full fiscal year, the company raised its guidance slightly. Total revenue is expected to range from $4.8 billion to $4.81 billion, with constant currency revenue estimated between $4.808 billion and $4.818 billion. Full-year non-GAAP income from operations is projected between $1.865 billion and $1.875 billion. Zoom expects non-GAAP diluted EPS between $5.56 and $5.59, based on approximately 312 million weighted average shares. Free cash flow for the year is forecast to be between $1.68 billion and $1.72 billion.