Zoom Communications 2026 Q1 Earnings Record High Net Income Growth of 17.7%
Daily EarningsWednesday, May 21, 2025 11:02 pm ET
36min readZoom Communications (ZM) reported its fiscal 2026 Q1 earnings on May 21st, 2025. The company achieved a record high net income for a fiscal Q1, the highest in eight years, with a growth of 17.7%. Zoom's earnings per share (EPS) also showed a notable increase, reflecting a 20% rise from last year. Despite these achievements, the stock price has seen fluctuations, including a slight decline over the latest trading day. Zoom's guidance for FY 2026 indicates continued growth, with revenue and non-GAAP EPS projections reflecting positive year-over-year changes.
Revenue
The total revenue of increased by 2.9% to $1.17 billion in 2026 Q1, up from $1.14 billion in 2025 Q1.
Earnings/Net Income
Zoom Communications' EPS rose 20.0% to $0.84 in 2026 Q1 from $0.70 in 2025 Q1, marking continued earnings growth. Meanwhile, the company's profitability strengthened with a net income of $254.60 million in 2026 Q1, marking 17.7% growth from $216.31 million in 2025 Q1. This EPS growth indicates a strong financial performance.
Price Action
The stock price of Communications has edged down 0.36% during the latest trading day, has edged down 1.20% during the most recent full trading week, and has surged 16.71% month-to-date.
Post-Earnings Price Action Review
Investors adopting the strategy of purchasing Zoom Communications (ZM) shares following a quarter-over-quarter revenue decline on earnings report dates and holding for 30 days have faced significant losses. Over the past three years, this approach has resulted in a return of -12.30%, starkly contrasting with a benchmark return of 44.88%, yielding an excess return of -57.17%. The strategy's Sharpe ratio of -0.11 indicates poor risk-adjusted returns, while a maximum drawdown of -55.21% underscores the high risk and potential for substantial losses associated with this approach.
CEO Commentary
Eric Yuan, Founder & CEO, highlighted that Zoom delivered a solid quarter, driven by AI-powered innovations that redefine modern work and enhance customer productivity. He mentioned significant growth in the adoption of Zoom AI Companion, which has expanded usage by nearly 40% quarter-over-quarter. Yuan emphasized the company's focus on continuous innovation and customer value, noting partnerships with organizations like Raymond James and the Boston Celtics as evidence of Zoom's ability to adapt and grow amidst challenges. He expressed optimism about future opportunities, citing strong enthusiasm for new features and the integration of AI into customer workflows as key growth drivers.
Guidance
For FY 2026, Zoom Communications expects revenue in the range of $4.8 billion to $4.81 billion, reflecting approximately 3% year-over-year growth at the midpoint. Non-GAAP earnings per share are projected to be between $5.56 and $5.59, based on approximately 312 million shares outstanding. For Q2, revenue is anticipated to be between $1.195 billion and $1.2 billion, representing about 3% year-over-year growth at the midpoint. The company also forecasts non-GAAP operating income of $460 million to $465 million, indicating an operating margin of 38.6% at the midpoint.
Additional News
Zoom Communications has announced a strategic integration with ServiceNow, combining Zoom CX with ServiceNow's CRM and IT Service Management platforms. This collaboration aims to enhance customer and employee experiences by creating a unified workspace where agents can manage interactions seamlessly. Additionally, Zoom launched Zoom Workplace for Frontline, a mobile-first solution targeting communication and work management for frontline workers across various sectors. The platform integrates with Zoom AI Companion, offering features like real-time activity feeds and task management. In other developments, Zoom has been recognized by Fast Company as one of the World's Most Innovative Companies for 2025, underscoring its commitment to innovation and AI-driven solutions.
Revenue
The total revenue of increased by 2.9% to $1.17 billion in 2026 Q1, up from $1.14 billion in 2025 Q1.
Earnings/Net Income
Zoom Communications' EPS rose 20.0% to $0.84 in 2026 Q1 from $0.70 in 2025 Q1, marking continued earnings growth. Meanwhile, the company's profitability strengthened with a net income of $254.60 million in 2026 Q1, marking 17.7% growth from $216.31 million in 2025 Q1. This EPS growth indicates a strong financial performance.
Price Action
The stock price of Communications has edged down 0.36% during the latest trading day, has edged down 1.20% during the most recent full trading week, and has surged 16.71% month-to-date.
Post-Earnings Price Action Review
Investors adopting the strategy of purchasing Zoom Communications (ZM) shares following a quarter-over-quarter revenue decline on earnings report dates and holding for 30 days have faced significant losses. Over the past three years, this approach has resulted in a return of -12.30%, starkly contrasting with a benchmark return of 44.88%, yielding an excess return of -57.17%. The strategy's Sharpe ratio of -0.11 indicates poor risk-adjusted returns, while a maximum drawdown of -55.21% underscores the high risk and potential for substantial losses associated with this approach.
CEO Commentary
Eric Yuan, Founder & CEO, highlighted that Zoom delivered a solid quarter, driven by AI-powered innovations that redefine modern work and enhance customer productivity. He mentioned significant growth in the adoption of Zoom AI Companion, which has expanded usage by nearly 40% quarter-over-quarter. Yuan emphasized the company's focus on continuous innovation and customer value, noting partnerships with organizations like Raymond James and the Boston Celtics as evidence of Zoom's ability to adapt and grow amidst challenges. He expressed optimism about future opportunities, citing strong enthusiasm for new features and the integration of AI into customer workflows as key growth drivers.
Guidance
For FY 2026, Zoom Communications expects revenue in the range of $4.8 billion to $4.81 billion, reflecting approximately 3% year-over-year growth at the midpoint. Non-GAAP earnings per share are projected to be between $5.56 and $5.59, based on approximately 312 million shares outstanding. For Q2, revenue is anticipated to be between $1.195 billion and $1.2 billion, representing about 3% year-over-year growth at the midpoint. The company also forecasts non-GAAP operating income of $460 million to $465 million, indicating an operating margin of 38.6% at the midpoint.
Additional News
Zoom Communications has announced a strategic integration with ServiceNow, combining Zoom CX with ServiceNow's CRM and IT Service Management platforms. This collaboration aims to enhance customer and employee experiences by creating a unified workspace where agents can manage interactions seamlessly. Additionally, Zoom launched Zoom Workplace for Frontline, a mobile-first solution targeting communication and work management for frontline workers across various sectors. The platform integrates with Zoom AI Companion, offering features like real-time activity feeds and task management. In other developments, Zoom has been recognized by Fast Company as one of the World's Most Innovative Companies for 2025, underscoring its commitment to innovation and AI-driven solutions.
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