Zoom Communications (NASDAQ:ZM) Announces Quarterly Earnings Results

Zoom Communications (NASDAQ:ZM) posted its quarterly earnings data on Thursday. The company reported $1.55 earnings per share for the quarter, topping the consensus estimate of $1.42 by $0.13, FiscalAI reports. Zoom Communications had a return on equity of 12.06% and a net margin of 41.99%.The business had revenue of $1.24 billion for the quarter, compared to analysts’ expectations of $1.22 billion. During the same quarter in the previous year, the firm earned $1.43 earnings per share. The business’s revenue was up 5.5% on a year-over-year basis. Zoom Communications updated its FY 2027 guidance to 5.960-6.000 EPS and its Q2 2027 guidance to 1.450-1.470 EPS.

Here are the key takeaways from Zoom Communications’ conference call:

• Revenue beat and guidance raise: Q1 revenue rose 5.5% year over year to $1.24 billion, above the high end of guidance, and Zoom raised full-year FY2027 revenue and profitability outlooks while reaffirming strong free cash flow expectations.
• AI momentum is accelerating: Paid AI Companion MAUs grew 184% year over year, My Notes topped 1.5 million monthly active users, and management highlighted expanding adoption of AI Companion 3.0 and Custom AI Companion across enterprise customers.
• Enterprise and CX are driving growth: Enterprise revenue increased 7.2%, large customers and net dollar expansion improved, and Zoom Customer Experience continued to post high double-digit growth with paid AI in nine of the top 10 ZCX deals.
• Profitability and cash generation remain strong: Non-GAAP operating margin reached 41.1% and free cash flow was $500 million, while the board authorized an additional $1 billion share repurchase, signaling confidence in future cash returns.
• Management sees a larger “system of action” opportunity: Zoom emphasized that it is evolving from a communications platform into an AI-enabled workflow layer, but also acknowledged a need to boost customer awareness and go-to-market execution to fully monetize that shift.

Zoom Communications Stock Performance

Shares of Zoom Communications stock opened at $105.64 on Friday. Zoom Communications has a 52-week low of $69.15 and a 52-week high of $113.73. The stock’s 50-day simple moving average is $88.73 and its 200 day simple moving average is $86.72. The stock has a market capitalization of $31.13 billion, a P/E ratio of 15.51, a P/E/G ratio of 5.54 and a beta of 1.00.

Insiders Place Their Bets

In related news, CFO Michelle Chang sold 8,489 shares of the business’s stock in a transaction dated Friday, April 10th. The stock was sold at an average price of $81.32, for a total value of $690,325.48. Following the sale, the chief financial officer directly owned 30,467 shares in the company, valued at approximately $2,477,576.44. The trade was a 21.79% decrease in their position. The sale was disclosed in a legal filing with the SEC, which is accessible through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, Director Santiago Subotovsky sold 5,274 shares of the stock in a transaction dated Monday, May 4th. The stock was sold at an average price of $106.58, for a total value of $562,102.92. Following the sale, the director directly owned 142,882 shares in the company, valued at $15,228,363.56. This trade represents a 3.56% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold a total of 144,329 shares of company stock worth $12,364,989 in the last ninety days. 11.51% of the stock is owned by corporate insiders.

Institutional Trading of Zoom Communications

A number of institutional investors have recently added to or reduced their stakes in ZM. Advocate Investing Services LLC bought a new position in shares of Zoom Communications during the 4th quarter valued at about $26,000. Strive Financial Group LLC bought a new position in shares of Zoom Communications during the 4th quarter valued at about $27,000. Towarzystwo Funduszy Inwestycyjnych PZU SA increased its position in shares of Zoom Communications by 83.3% during the 4th quarter. Towarzystwo Funduszy Inwestycyjnych PZU SA now owns 440 shares of the company’s stock valued at $38,000 after purchasing an additional 200 shares during the last quarter. Triumph Capital Management bought a new position in shares of Zoom Communications during the 3rd quarter valued at about $50,000. Finally, UMB Bank n.a. increased its position in shares of Zoom Communications by 1,626.3% during the 4th quarter. UMB Bank n.a. now owns 656 shares of the company’s stock valued at $57,000 after purchasing an additional 618 shares during the last quarter. Hedge funds and other institutional investors own 66.54% of the company’s stock.

Key Headlines Impacting Zoom Communications

Here are the key news stories impacting Zoom Communications this week:

• Positive Sentiment: Zoom beat fiscal Q1 expectations, posting EPS of $1.55 versus the $1.41 consensus and revenue of $1.24 billion versus $1.22 billion expected, with revenue up 5.5% year over year. Zoom Communications Reports Financial Results for the First Quarter of Fiscal Year 2027
• Positive Sentiment: The company lifted FY2027 guidance, now targeting EPS of $5.96-$6.00, above prior expectations, which signals management confidence in continued margin and profit expansion. Zoom Raises FY2027 Outlook After 184% Paid AI User Growth
• Positive Sentiment: AI momentum was a key driver, with paid AI users surging 184% and enterprise revenue rising 7.2%, suggesting Zoom is successfully expanding beyond basic video conferencing into higher-value enterprise tools. Zoom raises annual forecasts, banks on AI features to drive demand
• Positive Sentiment: Several Wall Street firms raised price targets after the results, including RBC, Rosenblatt, Needham, BTIG, Mizuho, Benchmark, and Piper Sandler, reflecting improved sentiment around Zoom’s growth outlook. These Analysts Increase Their Forecasts On Zoom After Upbeat Q1 Results
• Neutral Sentiment: Zoom also reported a modest uptick in churn and competitive pressure, which investors may continue to monitor even as the broader earnings picture remains strong. Zoom Communications Inc (ZM) Q1 2027 Earnings Call Highlights: Strong Revenue Growth and AI …

Analysts Set New Price Targets

Several research firms have weighed in on ZM. Cantor Fitzgerald boosted their price objective on Zoom Communications from $87.00 to $104.00 and gave the stock a “neutral” rating in a research report on Friday. Jefferies Financial Group boosted their price objective on Zoom Communications from $105.00 to $118.00 and gave the stock a “buy” rating in a research report on Friday. Wall Street Zen cut Zoom Communications from a “buy” rating to a “hold” rating in a research report on Saturday, March 7th. Wolfe Research raised Zoom Communications from a “peer perform” rating to an “outperform” rating and set a $115.00 price objective on the stock in a research report on Thursday, February 5th. Finally, Citizens Jmp reissued a “market perform” rating on shares of Zoom Communications in a research report on Wednesday. Fourteen investment analysts have rated the stock with a Buy rating and twelve have given a Hold rating to the stock. According to data from MarketBeat, the company has a consensus rating of “Moderate Buy” and an average target price of $107.95.

About Zoom Communications

Zoom Video Communications, Inc (commonly referred to as Zoom) is a provider of cloud-based communications and collaboration solutions. The company’s platform supports video conferencing, voice calling, instant messaging, webinars and large-scale virtual events, and meeting room systems, marketed to businesses, educational institutions, government organizations and individual users. Zoom’s product lineup includes Zoom Meetings, Zoom Phone, Zoom Rooms, Zoom Video Webinars and Zoom Chat, and the company offers integrations and extensions through a developer marketplace and third-party apps.

Founded in 2011 by Eric S.