Zoom (ZM) Q1 2026 earnings summary

Executive summary

• Q1 FY26 revenue grew 2.9% year over year to $1.175 billion, exceeding guidance, with enterprise revenue up 5.9% and online revenue down 1.2%.

• Enterprise revenue accounted for 60% of total revenue, with customers contributing over $100,000 in trailing 12-month revenue rising 8% to 4,192 and net dollar expansion rate at 98%.

• AI innovation and new product launches, including Zoom Tasks, Calendar Manager, and custom AI Companion, drove multi-product adoption and customer wins.

• Major customer wins included the Boston Celtics, Raymond James, Rakuten, Mimecast, and Goosehead Insurance, with significant upsell activity in Contact Center and Phone.

• Strong cash flow generation and accelerated share buybacks, with $7.8 billion in cash and 5.6 million shares repurchased in Q1.

Financial highlights

• Non-GAAP income from operations grew to $467 million (39.8% margin); GAAP operating income was $241.6 million (20.6% margin).

• Non-GAAP diluted EPS was $1.43 (up 6% year over year), GAAP EPS was $0.81 (up 18.7%).

• Deferred revenue grew 5% year over year to $1.43 billion; RPO increased 6% to $3.9 billion.

• Operating cash flow was $489 million (41.6% margin); free cash flow was $463 million (39.4% margin), down from $569.7 million a year ago.

• Ended Q1 with $7.8 billion in cash, cash equivalents, and marketable securities.

Outlook and guidance

• FY26 revenue guidance raised to $4.8–$4.81 billion (about 3% year-over-year growth at midpoint); non-GAAP EPS $5.56–$5.59.

• Q2 revenue expected at $1.195–$1.2 billion; non-GAAP EPS $1.36–$1.37.

• Free cash flow for FY26 expected at $1.68–$1.72 billion.

• $1.2 billion remains authorized for share repurchases as of April 30, 2025.