Zoom Communications, Inc.

Zoom reported Q1 FY27 revenue of $1.24 billion, up 5.5% year over year, or 4.6% in constant currency, and $14 million above the high end of guidance. Non-GAAP operating income rose 9% year over year to $509 million, non-GAAP operating margin was 41.1% (up 130 basis points), and non-GAAP diluted EPS was $1.55, up $0.12 from last year and $0.13 above the high end of guidance. Non-GAAP gross margin was 79.9%, up 70 basis points year over year; operating cash flow was $522 million and free cash flow was $500 million. For Q2, Zoom guided revenue to $1.265 billion to $1.27 billion and non-GAAP EPS to $1.45 to $1.47. For FY27, it raised revenue guidance to $5.08 billion to $5.09 billion, non-GAAP operating income to $2.065 billion to $2.075 billion, non-GAAP EPS to $5.96 to $6, and free cash flow to $1.7 billion to $1.74 billion.

Eric Yuan framed the quarter as evidence that Zoom is becoming an AI-first “system of action,” with stronger adoption across Workplace, Phone, and Customer Experience. He highlighted AI Companion 3.0, My Notes, Custom AI Companion, ZVA receptionist, and Zoom AI Services as the next layers of monetization, and pointed to multiple customer wins where Zoom displaced incumbents and expanded across products. His tone was upbeat and confident, but he also acknowledged a current awareness gap around Zoom’s broader capabilities and said the company will lean harder into marketing and go-to-market execution in coming quarters.

Michelle Chang emphasized the beat-and-raise quarter and the mix of durable enterprise growth, AI monetization, and product diversification. She cited enterprise revenue growth of 7.2%, non-GAAP gross margin of 79.9%, non-GAAP operating margin of 41.1%, EPS of $1.55, deferred revenue of $1.49 billion, RPO of about $4.3 billion, and strong cash generation with $522 million in operating cash flow and $500 million in free cash flow. She also said the board authorized an incremental $1 billion buyback, bringing total authorized repurchases to $4.7 billion, with $3.1 billion already executed.

Analysts focused on AI monetization, ZCX/CCaaS momentum, online churn, deferred revenue timing, custom AI Companion conversion, and capital returns. Management said AI is already helping ZCX, pricing is becoming more flexible, and some offerings may move toward usage- or outcome-based models; it also said deferred revenue upside reflected fewer deals needing grace periods, online churn only ticked up nominally, and the business remains stable. On buybacks, Michelle said the new authorization does not change the company’s overall approach: repurchases will be driven by cash flow, market conditions, and stock price rather than a specific tranche.