Zoom Video Q2 Earnings Preview: Revenue Growth Expected at 3% YoY

Zoom Video Communications expects Q2 revenues between $1.2 bln and $2 bln, representing 3% YoY growth at the midpoint. Non-GAAP EPS is expected between $1.36 and $1.37. The company's Enterprise segment is likely to sustain momentum, while the Online segment may see improved performance following a $1 monthly price increase for Pro SKUs. Zoom's aggressive AI innovation strategy is expected to have dominated the fiscal second quarter's operational narrative.

Zoom Video Communications (ZM) is set to release its second-quarter fiscal 2026 results on August 21. The company expects revenues between $1.195 billion and $2 billion, representing approximately 3% year-over-year (YoY) growth at the midpoint. This projection indicates a cautious outlook from management despite strong execution in the first quarter [1].

Non-GAAP earnings per share (EPS) are anticipated to be between $1.36 and $1.37, with the consensus mark remaining steady at $1.37 per share over the past 30 days, reflecting a 1.44% decline year over year. Zoom's earnings have consistently beaten the Zacks Consensus Estimate in the past four quarters, with an average surprise of 9.46% [1].

Key factors influencing Zoom's Q2 results include the continued stability of its core business and the impact of macroeconomic headwinds. The Enterprise segment, which drove 6% YoY growth in the first quarter, is expected to maintain momentum. The Online segment may see improved performance following a $1 monthly price increase for Pro SKUs, which is projected to contribute $10-$15 million to full-year revenues [1].

Zoom's aggressive AI innovation strategy is expected to have dominated the second quarter's operational narrative. The July launch of Custom AI Companion, which connects to third-party applications, marks a significant monetization opportunity. The rollout of agentic AI capabilities transformed AI Companion into an autonomous task executor, potentially driving higher customer engagement and retention [1].

The company's product expansion beyond core video conferencing, including Zoom Phone and Contact Center customers, is likely to have contributed incrementally to Q2 results. High-growth products such as Zoom Phone and Contact Center customers increased mid-teens and 65% YoY, respectively, in the first quarter [1].

Despite these positive indicators, Zoom faces intense competition from Microsoft Teams, RingCentral, and Cisco Webex. The company's stock has declined 11.8% in the past six months compared to the broader Zacks Computer and Technology sector's growth of 10% [1].

The global Cloud Video Conferencing Solutions market, projected to reach USD 12.5 billion by 2031, is driven by rising industrial adoption and continuous innovation in Information Technology and Telecom applications. The market is expected to hit USD 6.3 billion in 2024, highlighting strong growth potential [2].

References:
[1] https://finance.yahoo.com/news/zoom-video-gears-report-q2-153000593.html
[2] https://www.openpr.com/news/4149042/cloud-video-conferencing-solutions-market-segmentation