Zoom Q1 Earnings Beat, Raises Outlook

Zoom Communications (NASDAQ: ZM) reported Q1 earnings for the quarter ended April 30, 2026, that exceeded Wall Street estimates on revenue and adjusted EPS. On May 21, the company raised its FY2027 revenue and adjusted-EPS guidance and expanded its share-repurchase authorization.

Quarter Results and Guidance

The company said in a press release on May 21, 2026, that Q1 fiscal 2027 revenue reached $1.24 billion, surpassing analyst estimates near $1.22 billion. Adjusted non-GAAP EPS was $1.55, above the consensus of about $1.41, representing an earnings surprise of roughly 9.6% and a revenue surprise of 1.3%. Profitability metrics included a net margin of 39.03% and a return on equity of 11.88%. Management attributed the strong performance to demand for enterprise-oriented products.

Zoom raised its full-year FY2027 revenue guidance to $5.08 billion–$5.09 billion from a prior range of $5.07 billion–$5.08 billion. Adjusted EPS guidance increased to $5.96–$6.00 from $5.77–$5.81. For Q2, the company forecast revenue of $1.26 billion–$1.27 billion and adjusted EPS of $1.45–$1.47, slightly below analyst averages of $1.27 billion and $1.48 per share. The updated guidance assumes continued enterprise spending, increased adoption of AI-enabled features, operating leverage, and a shift toward higher-value enterprise offerings.

AI Adoption and Capital Allocation

Management highlighted Zoom AI growth as a key driver, noting expanded AI features such as Zoom AI Companion and contact-center offerings that support enterprise demand and the raised outlook. CEO Eric Yuan reported a 184% year-over-year increase in paid users adopting the AI-driven platform. The company also described enhancements to its Modern Collaboration Platform, combining conversation intelligence with enterprise data and retrieval-optimized AI to improve organizational context and tool responsiveness.

The board authorized an additional $1 billion share repurchase program, supplementing prior authorizations. This move signals a greater emphasis on capital return alongside ongoing investment in AI and enterprise capabilities.

Analyst sentiment remains cautious, with consensus ratings averaging a "Hold" and an average price target near $97.57. This reflects expectations for modest revenue growth amid improving margins. Management acknowledged ongoing competitive pressure and more measured revenue expansion despite near-term momentum from AI adoption and enterprise demand.