Earnings Snapshot: Zoom Q2 EPS beat meets 7.8% enterprise growth; FY27 FCF outlook strong

Zoom Communications reported strong quarterly results, surpassing both earnings per share and revenue expectations. The San Jose-based company, known for its video calling services which experienced explosive growth during the COVID-19 pandemic, raised its full year adjusted profit and revenue guidance. However, ZM's class A shares declined 3.7% after the earnings release.

Zoom has been shifting its focus towards an AI-powered enterprise platform since the AI boom in late 2022. The company's flagship product, Zoom Workplace app, offers meeting scheduling, chat, email viewing, and AI plugins such as ZoomMate and My Notes. Zoom's AI efforts and consistent demand for its services have driven the stock's performance this year, outpacing software rivals and the S&P 500 index.

For the second fiscal quarter of 2027, Zoom earned $1.55 per share on revenue of $1.28 billion, beating analysts' estimates of $1.48 per share and $1.27 billion in revenue. Enterprise revenue grew 7.8% year-over-year to $787.5 million, marking the strongest growth in three years. The number of enterprise customers contributing more than $100k in trailing 12 months revenue increased 8.2% year-over-year to 4,625, with a 99% trailing 12-month net dollar expansion rate.

Zoom expects fiscal Q3 2027 adjusted earnings of $1.46 to $1.48 per share and revenue between $1.275 billion and $1.28 billion. For the full fiscal year 2027, Zoom anticipates adjusted earnings of $6.08 to $6.12 per share and revenue between $5.085 billion and $5.095 billion.