Zoom Communications 2026 Q3 Earnings Record Net Income Surges 196%

Zoom Communications (ZM) reported fiscal 2026 Q3 earnings on Nov 24, 2025, exceeding expectations with a 206% surge in EPS and 4.4% revenue growth. The company raised full-year revenue guidance and announced a $1 billion share buyback expansion, reflecting confidence in its financial trajectory.

Revenue

The total revenue of Zoom Communications increased by 4.4% to $1.23 billion in 2026 Q3, up from $1.18 billion in 2025 Q3.

Earnings/Net Income

Zoom Communications's EPS rose 206.0% to $2.05 in 2026 Q3 from $0.67 in 2025 Q3, marking continued earnings growth. Meanwhile, the company's profitability strengthened with net income of $612.87 million in 2026 Q3, marking 196.0% growth from $207.05 million in 2025 Q3. Remarkably, in 2026 Q3, the company set a new record high for fiscal Q3 net income, the highest in 8 years. The EPS growth and record net income underscore robust profitability driven by AI integration and operational efficiency.

Price Action

The stock price of Zoom Communications has edged down 0.63% during the latest trading day, has dropped 3.98% during the most recent full trading week, and has dropped 5.06% month-to-date.

Post-Earnings Price Action Review

The strategy of buying Zoom Communications (ZM) shares after its revenue raise q/q on the financial report release date and holding for 30 days resulted in poor performance. The strategy had a CAGR of 0.22% and an excess return of -68.57%, significantly underperforming the benchmark return of 69.21%. The strategy also had a high maximum drawdown of 34.04%, indicating significant risk and losses.

CEO Commentary

Eric Yuan, Founder, President, CEO & Chairman, highlighted Zoom’s Q3 performance driven by “broad momentum across products, industries, and customer segments,” emphasizing a shift to an “AI-first platform for work and customer experience.” Strategic priorities include elevating core products with AI (e.g., AI Companion 3.0, which saw 4x YoY adoption), expanding new AI offerings (e.g., Custom AI Companion with Fortune 200 wins), and scaling AI-driven customer experience (e.g., Zoom Contact Center’s high double-digit ARR growth). Yuan expressed optimism, stating AI is “transforming how work gets done” and enabling “measurable value for customers and shareholders,” with acquisitions like BrightHire accelerating vertical expansion.

Guidance

Zoom provided Q4 revenue guidance of $1.23B–$1.235B (4.1% YoY growth at midpoint) and FY 2026 revenue guidance of $4.852B–$4.857B (4.1% YoY growth at midpoint). Non-GAAP EPS is expected to rise to $5.95–$5.97 for FY 2026. Michelle Chang, CFO, noted $1.52 Q3 EPS (exceeding guidance by $0.08) and raised full-year operating income guidance to $1.955B–$1.96B. The company authorized an incremental $1B share repurchase, reflecting confidence in cash flow and shareholder returns.

Additional News

Zoom Communications announced a $1 billion expansion of its share repurchase program, signaling strong cash flow and commitment to shareholder returns. The company also highlighted significant AI adoption, with AI Companion 3.0 experiencing 4x year-over-year usage growth. CEO Eric Yuan emphasized AI as a strategic pillar, including Custom AI Companion deployments with Fortune 200 clients and AI-driven enhancements in Zoom Contact Center. Additionally, Zoom Phone surpassed 10 million paid seats, reinforcing its leadership in unified communications.

Guidance

Zoom’s Q4 revenue guidance of $1.23B–$1.235B and FY 2026 revenue guidance of $4.852B–$4.857B reflect 4.1% year-over-year growth at the midpoint. Non-GAAP EPS is projected at $5.95–$5.97 for FY 2026, with CFO Michelle Chang citing $1.52 Q3 EPS (up $0.08 from guidance) and raising full-year operating income guidance to $1.955B–$1.96B.