Zoom Communications 2026 Q3 Earnings Record Net Income Surges 196%

Zoom Communications (ZM) reported its fiscal 2026 Q3 earnings on Nov 25th, 2025, surpassing expectations with a 4.4% revenue increase and a 196% net income surge. The company raised full-year revenue guidance to $4.85–$4.857B and signaled confidence in AI-driven growth through product innovations and strategic acquisitions.

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 performance reflects strong operational execution and cost discipline.

Price Action

The stock price of Zoom Communications has climbed 3.28% during the latest trading day, has climbed 6.19% during the most recent full trading week, and has edged up 2.44% month-to-date.

Post-Earnings Price Action Review

The strategy of buying Zoom Communications (ZM) shares after a revenue raise quarter-over-quarter on the financial report release date and holding for 30 days delivered moderate returns but underperformed the market. The strategy achieved a 10.16% return, significantly below the benchmark return of 65.99%. The Sharpe ratio was low at 0.10, indicating modest risk-adjusted returns. With a maximum drawdown of 0.00% and a volatility of 33.98%, the strategy had minimal downside risk but lacked the potential for substantial gains compared to the broader market.

CEO Commentary

Eric Yuan, Founder, President, CEO & Chairman, highlighted Zoom’s strong Q3 performance driven by AI adoption across core products and new offerings. He emphasized the company’s shift to an “AI-first platform for work and customer experience,” with AI Companion 3.0 enabling proactive task management and a 4x YoY adoption surge. Strategic priorities include elevating workplace tools with AI, scaling AI-powered customer experience (e.g., Zoom Contact Center’s high double-digit ARR growth), and expanding into verticals via acquisitions like BrightHire. Yuan expressed optimism about turning AI momentum into value for customers and shareholders, citing partnerships with Oracle and Salesforce, Zoom Phone’s 10M paid seats milestone, and disciplined financial execution.

Guidance

Zoom provided Q4 FY 2026 revenue guidance of $1.23–$1.235B (4.1% YoY growth at midpoint) and full-year revenue of $4.852–$4.857B (4.1% YoY growth at midpoint). Non-GAAP operating income is expected to reach $1.955–$1.96B (40.3% margin at midpoint), with EPS of $5.95–$5.97. Free cash flow is projected at $1.86–$1.88B. The company authorized an incremental $1B share repurchase, reflecting confidence in leveraging cash flow for shareholder returns while balancing AI investments and cost efficiencies.

Additional News

Zoom Communications completed a $2.38B share repurchase program, signaling confidence in its financial strength and commitment to shareholder value. The company also launched AI Companion 3.0 and Zoomie, AI-powered tools designed to enhance productivity in hybrid work environments. Additionally, insider selling activity totaled $32.75M in the past three months, raising questions about management’s confidence in near-term stock performance.