ZM earnings analysis
What we found in ZM's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
Zoom delivered Q2 FY27 revenue of $1.2772 billion and non-GAAP diluted EPS of $1.55, exceeding consensus estimates of $1.2691 billion and $1.38, respectively. Enterprise revenue grew 7.8% year over year to $787.5 million, but free cash flow declined to $472.4 million from $508.0 million. The outlook calls for FY27 revenue of $5.085 billion-$5.095 billion and non-GAAP EPS of $6.08-$6.12, although the filing does not provide the prior full-year outlook needed to assess a raise or reduction. Large private-investment exposure, the ongoing EDNY investigation, and AI, privacy, and regulatory risks temper the positive operating trends.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Revenue and EPS beat consensus
- Revenue was $1.2772 billion, approximately 0.6% above the $1.2691 billion consensus estimate. Non-GAAP diluted EPS was $1.55 versus the $1.38 estimate, a 12.3% beat.
- Enterprise growth accelerated
- Enterprise revenue increased 7.8% year over year to $787.5 million, indicating stronger momentum in the large-customer business.
- Liquidity remained substantial
- The company maintained substantial liquidity, with $932.0 million of cash and cash equivalents and $6.3177 billion of marketable securities as of July 31, 2026.
- Share repurchases continued
- The company repurchased 3,740,213 shares during the quarter at an average price of $94.07, leaving approximately $1.273 billion available under the repurchase authorization.
- Two governance developments improved
- The NDCA investigation concluded in August 2026 without further action, while management stated that disclosure controls were effective at a reasonable assurance level as of July 31, 2026.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- Free cash flow declined year over year
- Free cash flow declined to $472.4 million from $508.0 million in the prior-year period, a decrease of approximately 7.0%, despite the reported EPS and revenue beats.
- Large private-investment exposure
- Private equity and debt securities totaled $3.7859 billion as of July 31, 2026, including a $3.1345 billion investment in Anthropic. Changes in private-company valuations could therefore create material gains or losses in reported results.
- Regulatory and FX exposure persists
- The EDNY investigation remains ongoing, and the filing states that a negative outcome could result in substantial fines, penalties, or other financial exposure. Separately, 20.5% of six-month revenue and 17.0% of expenses were denominated in currencies other than the U.S. dollar, creating continued foreign-exchange exposure.
- AI costs and monetization remain uncertain
- The filing highlights AI-related cost and adoption risks: third-party AI service price increases may be significant, while certain AI features are currently offered at no additional cost. Failure to recover those costs could pressure profitability.
- AI regulation raises compliance risk
- The company faces potential regulatory penalties tied to evolving AI and privacy rules, including EU AI Act fines of up to €35 million or 7% of worldwide annual turnover, whichever is higher.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $1.55
- Segment
- Enterprise revenue: $787.5 million, up 7.8% year over year.
- Segment
- Online segment revenue: not disclosed in the provided filing text.
What they said about what is next.
FY27 revenue guidance is $5.085 billion-$5.095 billion and non-GAAP diluted EPS guidance is $6.08-$6.12. Q3 FY27 guidance is revenue of $1.275 billion-$1.280 billion and non-GAAP diluted EPS of $1.46-$1.48. The filing materials do not provide the prior full-year outlook needed to determine whether guidance was raised or lowered.
The filing reads about the same as the one before it.
What came before.
- 10-Q · May 22, 2026
- Zoom Video Communications reported a solid Q1 2026 with total revenue of $1.239 billion, reflecting a 5.5% increase year-over-year. Diluted EPS for the quarter was $1.55, exceeding consensus estimates due to improved…
- 10-K · February 27, 2026
- Zoom positions itself as an AI-first unified communications and collaboration platform (Zoom Workplace and Zoom Business Services) with AI Companion woven across Meetings, Chat, Phone, Contact Center and Workvivo.…
- 10-Q · August 23, 2024
- Zoom reported quarterly revenue of $1,162,520,000 (up $23,844,000 or +2.1% year-over-year) and net income of $219,015,000, with diluted EPS of $0.70 for the three months ended July 31, 2024. Operating income rose to…
- 10-K · March 4, 2024
- Zoom positions itself as a unified communications platform focused on hybrid work and AI-driven productivity, highlighting product breadth (Meetings, Phone, Team Chat, Docs, Whiteboard) and recent AI initiatives such as…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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