SAN JOSE, August 25, 2026, 16:49 EDT
- Zoom traded at $97.63 after hours, 6.9% below Monday’s close.
- Enterprise revenue rose 7.8%, while Online revenue grew only 0.6%.
- Fiscal-year revenue guidance increased by just $5 million at the midpoint.
Zoom Communications shares fell about 6.9% from their previous close after quarterly results showed faster enterprise growth but little change to the annual sales outlook. Zoom Communications Inc. (NASDAQ: ZM) traded at $97.63 after hours, versus Monday’s $104.83 close.
The stock had already lost 3.7% during Tuesday’s regular session. It dropped another 3.3% after the release, according to Google Finance. That erased roughly $2 billion of quoted equity value from Monday’s level.
Zoom reported fiscal second-quarter revenue of $1.277 billion, up 4.9%. Enterprise revenue climbed 7.8% to $787.5 million. Online revenue increased 0.6% to $489.7 million Zoom’s earnings release.
The split matters. Enterprise supplied 61.7% of quarterly sales and nearly all incremental revenue. Online added only $3.1 million from a year earlier.
| Measure | Q2 FY2027 | Year earlier | Change |
|---|---|---|---|
| Total revenue | $1.277 billion | $1.217 billion | +4.9% |
| Enterprise revenue | $787.5 million | $730.7 million | +7.8% |
| Online revenue | $489.7 million | $486.6 million | +0.6% |
| GAAP operating income | $314.3 million | $321.7 million | −2.3% |
| Free cash flow | $472.4 million | $508.0 million | −7.0% |
AI adoption was visible in customer activity. Chief Executive Eric Yuan said Zoom Virtual Agent’s customer count rose 256% year over year. Customer-experience annual recurring revenue expanded at a high-double-digit rate.
Large accounts also grew. Zoom ended the quarter with 4,625 customers generating more than $100,000 annually, an 8.2% increase. Enterprise net dollar expansion reached 99%, still below the 100% level that indicates existing customers are expanding overall.
The annual forecast offered less acceleration. Zoom raised the fiscal-year revenue range to $5.085 billion-$5.095 billion. Its prior range was $5.080 billion-$5.090 billion first-quarter guidance.
The midpoint therefore increased only $5 million, or about 0.1%. By comparison, the adjusted earnings midpoint rose 2.0% to $6.10 per share. The free-cash-flow midpoint increased 4.7% to $1.80 billion.
That mix suggests cost control and a lower share count are doing more work than revenue revisions. Zoom repurchased 3.7 million shares during the quarter. It retained $1.3 billion of authorization at July 31.
GAAP net income reached $1.542 billion, but $1.614 billion came from gains on strategic investments. Those gains equaled 81% of pretax income. Non-GAAP net income slipped 1.5% to $464.0 million.
Third-quarter revenue guidance was $1.275 billion-$1.280 billion. That midpoint implies roughly 5% growth. Adjusted operating income is expected at $510 million-$515 million.
Analyst sentiment remained positive before the release. StockAnalysis listed a Buy consensus from 30 analysts and a $116.80 average target, based on its latest compilation analyst estimates.
Risks run both ways. Faster paid adoption of ZoomMate and Virtual Agent could lift expansion above 100%. However, weak Online growth, Microsoft competition and falling free cash flow could keep total growth near mid-single digits.
The next test is whether enterprise expansion crosses 100% while margins hold. Until then, the after-hours reaction values Zoom’s AI story as an efficiency lever, not a clear growth reset.
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