Zoom (ZM) Q4 2026 earnings summary

Executive summary

• Q4 FY26 revenue grew 5.3% year-over-year to $1.25 billion, with full-year revenue up 4.4% to $4.87 billion; enterprise revenue grew 7.1% in Q4 and 6.5% for the year, now representing 61% of total revenue.

• AI-driven innovations, including AI Companion 3.0 and acquisitions like BrightHire, are driving product differentiation, customer wins, and growth across major sectors.

• Major competitive displacements in Contact Center and Phone, with bundled deals and platform adoption increasing among large enterprises.

• Strategic investments in AI and product expansion are positioning the company for durable growth beyond $5 billion in revenue.

• Online business stabilized, with Q4 average monthly churn at 2.9%, near all-time lows.

Financial highlights

• Q4 non-GAAP gross margin was 79.8%, up 1 point year-over-year; GAAP gross margin was 76.3%.

• Q4 non-GAAP income from operations grew 4.6% year-over-year to $490 million; non-GAAP operating margin was 39.3%.

• Q4 non-GAAP diluted EPS was $1.44, up $0.03 year-over-year; GAAP EPS was $2.22, up 91% year-over-year.

• Free cash flow for Q4 was $338 million (27.1% margin); full-year free cash flow grew 6.4% to $1.9 billion.

• Ended Q4 with $7.8 billion in cash and marketable securities; repurchased 3.8 million shares for $324 million in Q4.

Outlook and guidance

• Q1 FY27 revenue expected at $1.22–$1.225 billion; FY27 revenue guidance is $5.065–$5.075 billion.

• FY27 non-GAAP operating income expected at $2.05–$2.06 billion, with a 40.5% margin at midpoint.

• FY27 non-GAAP EPS guidance is $5.77–$5.81; free cash flow expected at $1.7–$1.74 billion.

• $1.0 billion authorized share repurchase remains as of January 31, 2026; buybacks will continue to offset dilution.

• Guidance includes a $50 million interest income headwind and a 40 basis point headwind from a large competitor white-label churn.