Zoom's Revenue Surges 4.7% Year-Over-Year, Driven by AI Adoption

Zoom Video Communications, a prominent player in video communication technology, has revised its revenue outlook for the fiscal year ending in January 2026. The company reported a robust revenue growth projection that surpassed market expectations, driven by the increasing adoption of artificial intelligence applications and enterprise growth. The company's second-quarter revenue grew by 4.7% year-over-year to 1.22 billion dollars, with strong performance from its AI and customer service center solutions.

In its earnings guidance report, Zoom projected total revenue for the fiscal year ending in January 2026 to be approximately 4.83 billion dollars. Under non-GAAP standards, the company expects earnings to be in the range of 5.81 to 5.84 dollars per share. This outlook indicates that the company's expanded product suite, including generative AI tools, is gaining traction among enterprise customers. These customers are purchasing more of the company's expanded software product lines, driving the company to achieve its strongest revenue growth in 11 quarters.

Zoom's video conferencing and enterprise communication platform gained prominence during the global COVID-19 pandemic. As global COVID-19 restrictions eased, many consumers and small businesses chose to let their Zoom licenses expire. In contrast, a significant portion of enterprise customers retained the company's services, even as more employees returned to the office and Microsoft intensified competition with its Teams series of enterprise-level products.

During the second quarter of the 2026 fiscal year, the company's enterprise business sales increased by 7% year-over-year to 730.7 million dollars, surpassing the average analyst expectation. Zoom reported that it had 4,274 customers during the period, each contributing more than 100,000 dollars in revenue over the past year.

Over the past few years, the company has been diversifying its enterprise video communication business into a software platform with a suite of business tools, including an innovative generative AI all-in-one assistant. In the earnings call following the release of the financial report, Zoom stated that the "AI Companion" feature now has "millions" of monthly active users, a fourfold increase from the previous year.

The company's strong performance and outlook have driven its stock price to rise approximately 5% in after-hours trading following the close. The integration of AI into Zoom's software has become a new hallmark of the company. The new paid AI features appear to be significantly boosting revenue and profits. However, the annual revenue growth rate has been lackluster since the end of the COVID-19 pandemic, and it is expected to remain around 3% for at least the next two years.

Zoom has deeply integrated generative/agent AI capabilities into its communication and collaboration product lines, including Meetings, Team Chat, Mail, Phone, and Contact Center. The Zoom AI Companion, a platform-level AI tool for the entire Zoom Workplace suite, is the most popular AI tool on the Zoom video communication platform. It supports automated and precise compilation of meeting summaries, task and action item operations, in-meeting questions, chat communication content and email drafting, intelligent chaptering of recordings, and schedule coordination.

The company has positioned the AI Companion as an "agent AI that can coordinate and execute multi-step operations," such as automatically organizing information, drafting and sending communications, triggering follow-up tasks, and native document capabilities that can convert meeting content into project briefs or minutes with a single click and generate, rewrite, and summarize within the document. Zoom is gradually making the AI Companion the "engine" of the video communication workspace, emphasizing unified access through Meetings, Chat, Mail, and Phone.

The company has recently attempted to expand the use and coverage of the AI Companion across meetings, chats, documents, contact centers, and phones, and continuously update and iterate executable agent workflows and virtual seats to extend the video conferencing platform into an AI-driven business operations layer. In terms of Contact Center features, Zoom has launched AI Expert Assist, which provides real-time knowledge and next-step suggestions for agents, summarizes conversations, and identifies intent. It has also launched Virtual Agent/Phone digital front desks, such as the latest AI virtual seat/operator, which can handle natural language reception, appointments, and inventory queries without coding, and support multiple languages.