Zoom Communications 2026 Q3 Earnings Surpasses Expectations with 196% Net Income Surge

Zoom Communications (ZM) delivered a strong Q3 2026 performance, exceeding revenue and earnings expectations while raising its full-year guidance. The company reported $1.23 billion in revenue, a 4.4% year-over-year increase, and $2.05 in EPS, reflecting a 206% year-over-year jump. CEO Eric Yuan highlighted AI-driven product adoption and strategic acquisitions as key growth drivers, while a $1 billion stock buyback authorization further boosted investor confidence.

Revenue

Total revenue for Q3 2026 reached $1.23 billion, representing a 4.4% increase from $1.18 billion in the prior-year period. The growth was driven by sustained demand for Zoom’s core communication tools and expansion into AI-enhanced offerings like AI Companion 3.0 and Zoom Phone. Enterprise revenue grew 6.1% year-over-year, with 9.2% more customers generating over $100,000 in trailing 12-month revenue.

Earnings/Net Income

Zoom’s net income surged 196% year-over-year to $612.87 million, with EPS climbing to $2.05 from $0.67. The 206% EPS increase underscores robust profitability, aligning with the company’s strategic focus on AI and operational efficiency.

Price Action

Following the earnings report, Zoom’s stock price rose 3.28% on the day, 6.19% for the week, and 2.44% month-to-date. Analysts cited the AI-driven growth narrative and revised guidance as catalysts for the upward momentum.

Post-Earnings Price Action Review

The stock’s post-earnings rally was fueled by a combination of strong results and positive sentiment around Zoom’s AI initiatives. With a 12.7% surge in extended trading, the market reacted favorably to the company’s $1.23 billion revenue beat and $1.52 non-GAAP EPS. Analysts from Cantor Fitzgerald, Wedbush, and Rosenblatt reaffirmed bullish ratings, while the $1 billion buyback program signaled management’s confidence in long-term value.

CEO Commentary

CEO Eric Yuan emphasized Zoom’s “AI-first” transformation, noting the success of AI Companion 3.0 and partnerships with Oracle and Salesforce. He highlighted a 10 million seat milestone for Zoom Phone and the acquisition of BrightHire as strategic moves to expand into customer experience (CX) solutions. Yuan’s remarks underscored optimism about hybrid work trends and AI’s role in driving future growth.

Guidance

Zoom raised its FY2026 revenue guidance to $4.852–$4.857 billion and EPS to $5.95–$5.97, up from prior estimates of $4.83–$4.84 billion and $5.81–$5.84. Q4 revenue guidance is set at $1.23–$1.235 billion, with EPS expected between $1.48–$1.49. The company also announced a $1 billion share repurchase program, reinforcing its commitment to shareholder returns.

Additional News

1. Stock Buyback Authorization: Zoom announced a new $1 billion share repurchase program, signaling confidence in its financial position and long-term value.

2. CEO Insider Sale: Eric Yuan sold 73,383 shares in October, valued at $6.07 million, while CFO Michelle Chang sold 33,956 shares, reducing her ownership by 62%.

3. AI Partnership Expansion: Zoom integrated Nvidia’s Nemotron open technologies into AI Companion 3.0, enhancing capabilities for industries like finance and healthcare.