Zoom Enterprise Revenue Grows 7.8% to $787.5 Million
The collaboration software company posted second-quarter revenue of $1,277.2 million, up 4.9% from a year earlier.
Zoom Communications (ZM) reported Enterprise revenue of $787.5 million in the fiscal second quarter ended July 31, 2026, up 7.8% from a year earlier, the fastest Enterprise growth rate in three years.
That Enterprise pace picked up from 7.2% year-over-year growth in the first quarter and 7.1% in the fourth quarter of fiscal 2026. Total revenue was $1,277.2 million, up 4.9% as reported and 4.7% in constant currency, after first-quarter revenue of $1,239.0 million had risen 5.5% as reported.
Online revenue was $489.7 million, up 0.6% year over year, after a 2.8% increase in the first quarter.
GAAP income from operations was $314.3 million, for a 24.6% operating margin, compared with 25.1% in the first quarter. Non-GAAP income from operations was $510.3 million, and non-GAAP operating margin was 40.0%, versus 41.1% in the prior quarter. Non-GAAP net income was $464.0 million, or $1.55 a share, matching the first-quarter non-GAAP result of $1.55 a share. GAAP net income was $1,542.4 million, or $5.15 a share, including $1,614.2 million of gains on strategic investments, net.
Yuan said the AI-first Customer Experience portfolio continued to scale, with high-double-digit ARR expansion and a 256% year-over-year increase in Zoom Virtual Agent customer count. The portfolio included ZoomMate, My Notes, AI Productivity Suite, ZVA Receptionist and Workvivo HQ Agent, along with acquisitions including Common Room and BrightHire.
The trailing 12-month net dollar expansion rate for Enterprise customers was 99%, up from 98% a year earlier and unchanged from the 99% reported in the first quarter. Customers contributing more than $100,000 in trailing 12-month revenue numbered 4,625, up 8.2% from the same quarter last fiscal year, after 9.3% year-over-year growth in the fourth quarter of fiscal 2026. Online average monthly churn was 2.9%, consistent with a year earlier. Online customers with at least 16 months of continual service represented 75.6% of total Online MRR, up 70 basis points year over year.
Net cash provided by operating activities was $494.8 million. Free cash flow was $472.4 million. Cash, cash equivalents and marketable securities, excluding restricted cash, were $7.2 billion as of July 31, 2026.
Zoom repurchased approximately 3.7 million shares in the quarter, bringing shares bought under the current plan to 44.2 million after a $1.0 billion increase in the authorization in the first quarter. About $1.3 billion of authorized share repurchase remained as of July 31, 2026.
For the third quarter of fiscal 2027, the company expects total revenue of $1.275 billion to $1.280 billion, non-GAAP income from operations of $510.0 million to $515.0 million, and non-GAAP diluted EPS of $1.46 to $1.48 on about 301 million weighted-average shares. Full fiscal 2027 revenue is expected at $5.085 billion to $5.095 billion, non-GAAP income from operations at $2.065 billion to $2.075 billion, non-GAAP diluted EPS at $6.08 to $6.12, and free cash flow at $1.780 billion to $1.820 billion. Full-year constant-currency revenue is expected at $5.071 billion to $5.081 billion.