Q1 2026 Zoom Communications Inc Earnings Call Transcript
Key Points
- Zoom Communications Inc (ZM) reported a 3% year-over-year revenue growth to $1.175 billion, exceeding guidance by $8 million.
- The company saw a 40% quarter-over-quarter increase in monthly active users for its AI Companion, indicating strong adoption.
- Zoom Phone revenue grew in the mid-teens, outperforming industry growth rates and suggesting market share gains.
- The Zoom Contact Center customer base grew 65% year-over-year, with significant upsell opportunities for Zoom Virtual Agent.
- The company accelerated its share buyback plan, purchasing 5.6 million shares for $418 million, demonstrating confidence in its financial position.
- Zoom Communications Inc (ZM) noted a more cautious outlook for its enterprise business due to a challenging macroeconomic environment.
- There was an observed elongation in sales cycles and increased scrutiny on deal terms for larger U.S. enterprise customers.
- Non-GAAP gross margin slightly decreased to 79.2% due to investments in AI, with a long-term goal of reaching 80%.
- The company reported a decline in non-GAAP operating margin to 39.8%, attributed to changes in bonus structure and AI investments.
- Despite strong AI Companion adoption, the monetization of custom AI Companion features is still in early stages, with limited immediate revenue impact.
Hello, and welcome to Zoom's Q1 FY26 earnings release webinar. As a reminder, today's webinar is being recorded. I will now hand things over to Charles Eveslage, Head of Investor Relations. Charles, over to you.
Thank you, Megan. Hello, everyone, and welcome to Zoom's earnings webinar for the first quarter of fiscal year 2026. I'm joined today by Zoom's Founder and CEO, Eric Yuan; and Zoom's CFO, Michelle Chang. Our earnings release was issued today after the market closed and may be downloaded from the Investor Relations page at investors.zoom.com. Also on this page, you'll be able to find a copy of today's prepared remarks, a slide deck with financial highlights that, along with our earnings release, include a reconciliation of GAAP to non-GAAP financial results.
These measures should not be considered in isolation from or as a substitute for financial information prepared in accordance with GAAP. During this call, we will make forward-looking statements including statements
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