-         Second quarter total revenue of $1,217.2 million, up 4.7% year over year as reported and 4.4% in constant currency

By: Amir Taha

Zoom Communications, Inc. (NASDAQ: ZM) today announced financial results for the second fiscal quarter ended July 31, 2025.

“AI is transforming the way we work together, and Zoom is at the forefront, driving innovation that helps people get more done, reduce costs, and deliver better experiences for customers and employees alike,” said Eric S. Yuan, Zoom’s founder and CEO. “We delivered an across-the-board strong Q2 marked by achieving our highest year-over-year revenue growth in 11 quarters and expanding GAAP operating margin year over year by 9 percentage points.  With our robust performance, we are happy to raise our full year outlook for revenue, non-GAAP operating income, as well as free cash flow, which we now expect to be in the range of $1.74 billion to $1.78 billion.”

Second Quarter Fiscal Year 2026 Financial Highlights:

Revenue: Total revenue for the second quarter was $1,217.2 million, up 4.7% year over year. Adjusting for foreign currency impact, revenue in constant currency was $1,213.6 million, up 4.4% year over year. Enterprise revenue was $730.7 million, up 7.0% year over year, and Online revenue was $486.6 million, up 1.4% year over year.

Income from Operations and Operating Margin: GAAP income from operations for the second quarter was $321.7 million, compared to GAAP income from operations of $202.4 million in the second quarter of fiscal year 2025. Non-GAAP income from operations, which adjusts for stock-based compensation expense and related payroll taxes, acquisition-related expenses, and litigation settlements, net, was $503.2 million for the second quarter, compared to non-GAAP income from operations of $455.5 million in the second quarter of fiscal year 2025. For the second quarter, GAAP operating margin was 26.4% and non-GAAP operating margin was 41.3%.

Net Income and Diluted Net Income Per Share: GAAP net income for the second quarter was $358.6 million, or $1.16 per share, compared to GAAP net income of $219.0 million, or $0.70 per share, in the second quarter of fiscal year 2025. Non-GAAP net income for the second quarter, which adjusts for stock-based compensation expense and related payroll taxes, gains on strategic investments, net, acquisition-related expenses, litigation settlements, net, and the tax effects on non-GAAP adjustments, was $471.3 million, or $1.53 per share. In the second quarter of fiscal year 2025, non-GAAP net income was $436.4 million, or $1.39 per share.

Cash and Marketable Securities: Total cash, cash equivalents, and marketable securities, excluding restricted cash, as of July 31, 2025 was $7.8 billion.

Cash Flow: Net cash provided by operating activities was $515.9 million for the second quarter, compared to $449.3 million in the second quarter of fiscal year 2025. Free cash flow, which is net cash provided by operating activities less purchases of property and equipment, was $508.0 million, compared to $365.1 million in the second quarter of fiscal year 2025.

Customer Metrics: Drivers of total revenue included acquiring new customers. At the end of the second quarter of fiscal year 2026, Zoom had:

4,274 customers contributing more than $100,000 in trailing 12 months revenue, up 8.7% from the same quarter last fiscal year.

A trailing 12-month net dollar expansion rate for Enterprise customers of 98%.

Online average monthly churn of 2.9% for the second quarter, flat year over year.

The percentage of total Online MRR from Online customers with a continual term of service of at least 16 months was 74.9%, up 50 bps year over year.

Financial Outlook: Zoom is providing the following guidance for its third quarter of fiscal year 2026 and its full fiscal year 2026. Third Quarter Fiscal Year 2026: Total revenue is expected to be between $1.210 billion and $1.215 billion and revenue in constant currency is expected to be between $1.207 billion and $1.212 billion. Non-GAAP income from operations is expected to be between $465.0 million and $470.0 million. Non-GAAP diluted EPS is expected to be between $1.42 and $1.44 with approximately 307 million weighted average shares outstanding. Full Fiscal Year 2026: Total revenue is expected to be between $4.825 billion and $4.835 billion and revenue in constant currency is expected to be between $4.817 billion and $4.827 billion. Full fiscal year non-GAAP income from operations is expected to be between $1.905 billion and $1.915 billion. Full fiscal year non-GAAP diluted EPS is expected to be between $5.81 and $5.84 with approximately 308 million weighted average shares outstanding. Full fiscal year free cash flow is expected to be between $1.740 billion and $1.780 billion.

The EPS and share count figures do not include any impact from $724.7 million of authorized share repurchase remaining as of July 31, 2025. Additional information on Zoom's reported results, including a reconciliation of the non-GAAP results to their most comparable GAAP measures, is included in the financial tables below. A reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis without unreasonable effort due to the uncertainty of expenses that may be incurred in the future, although it is important to note that these factors could be material to Zoom's results computed in accordance with GAAP.

A supplemental financial presentation and other information can be accessed through Zoom’s investor relations website at investors.zoom.us.