Zoom Communications 2026 Q3 Earnings Record Net Income Surges 196%

Zoom Communications (ZM) reported Q3 2026 results that exceeded expectations, with net income soaring 196% to $612.87 million and revenue rising 4.4% to $1.23 billion. The company raised its full-year revenue guidance to $4.852-$4.857 billion and non-GAAP EPS to $5.95-$5.97.

Revenue

Zoom’s total revenue for Q3 2026 reached $1.23 billion, reflecting a 4.4% year-over-year increase from $1.18 billion. This growth was driven by higher demand in enterprise and online segments, which saw 6.1% and 2% year-over-year revenue gains, respectively. The company also noted progress in its AI-powered platform and expanded customer base.

Earnings/Net Income

Zoom’s EPS surged 206% to $2.05 in Q3 2026, up from $0.67 in the same period a year ago. Net income hit a record $612.87 million, marking an 8-year high. These results underscore the company’s strong profitability and operational efficiency. The EPS growth and net income increase signal robust earnings performance, driven by effective cost management and AI-driven product innovations.

Price Action

Zoom’s stock price rose 3.28% in the latest trading day, 6.19% for the week, and 2.44% month-to-date. However, the post-earnings strategy of buying shares on the report date and holding for 30 days yielded a 10.16% return—well below the market’s 65.99% benchmark. The Sharpe ratio of 0.10 and volatility of 33.98% highlight modest risk-adjusted returns, with minimal downside risk but limited upside potential compared to broader markets.

CEO Commentary

CEO Eric Yuan emphasized Zoom’s AI-first platform strategy, highlighting progress in AI Companion 3.0, Team Chat growth, and Zoom Phone milestones. He reiterated the company’s focus on elevating core products with AI, driving new AI offerings, and scaling customer experience. CFO Michelle Chang noted strong financial discipline and profitability, aligning with the raised guidance.

Guidance

Zoom provided Q4 2026 revenue guidance of $1.23-$1.235 billion and non-GAAP EPS of $1.48-$1.49. For the full year, it expects revenue of $4.852-$4.857 billion and non-GAAP EPS of $5.95-$5.97. The company also announced a $2.38 billion share repurchase program, underscoring confidence in its financial strength.

Additional News

Wedbush reiterated an “Outperform” rating for Zoom with a $95 price target, citing strong earnings and guidance. Insider selling activity, including sales by CFO Michelle Chang and other executives, totaled $32.3 million in the last quarter. Additionally, Zoom completed a $2.38 billion share repurchase program, signaling management’s commitment to enhancing shareholder value. These developments highlight mixed market sentiment but reinforce the company’s strategic focus on profitability and AI-driven growth.