Zoom Communications ZM 2026Q1 Earnings Preview Upside Potential on Revenue Growth

Forward-Looking Analysis
Zoom Communications is set to release its Q1 2026 earnings report on May 21st, 2025. Analysts project revenue growth of approximately 3% per annum over the next few years, slightly below the 12% forecast for the broader U.S. software industry. The consensus for Zoom's Q1 2026 earnings per share (EPS) stands at $1.30. For fiscal year 2025, Zoom reported a revenue of $4.67 billion, up 3.1% from the previous year, with EPS of $3.28, surpassing analyst estimates by 20%. Despite recent stock volatility, Zoom's valuation appears favorable based on multiple metrics, suggesting potential undervaluation. Analysts forecast modest growth in earnings and revenue, with EPS projected to increase by 1.7% per annum. The company's shares have declined 8.4% over the past week. Overall, expectations are cautiously optimistic, driven by consistent revenue growth and robust profit margins.

Historical Performance Review
For Zoom Communications' 2025Q4, the company reported a revenue of $1.18 billion, marking a 3.3% year-over-year increase. The net income was recorded at $367.87 million, with earnings per share (EPS) of $1.20. The gross profit reached $896.78 million, reflecting strong profitability. These results underscore Zoom's ability to maintain revenue growth while improving profit margins.

Additional News
Recently, Zoom Communications announced its positive earnings for the third quarter, surpassing analysts' expectations. The company has revised its fiscal year 2025 outlook, anticipating adjusted EPS between $5.41 and $5.43 and revenue between $4.656 billion to $4.661 billion. Despite a decline in stock value by 8.4% over the past week, Zoom remains optimistic about its future financial performance. Looking ahead, the company plans to host a webinar for investors on February 24, 2025, discussing strategic initiatives and financial projections. These developments reflect Zoom's continued focus on enterprise growth and strategic communication with stakeholders.

Summary & Outlook
Zoom Communications exhibits a strong financial position with consistent revenue growth and improved profit margins. The company's projected revenue and EPS growth are steady, although slightly trailing the broader software industry. Recent earnings surpassed expectations, bolstering confidence in Zoom's operational efficiency. Despite short-term stock volatility, Zoom's valuation suggests potential upside, making it an attractive prospect for investors. The company's proactive engagement through investor webinars highlights a commitment to transparency and strategic growth. Given these factors, the outlook for Zoom Communications remains bullish, with continued focus on expanding enterprise services and optimizing financial performance.