Q3 2026 Zoom Communications Inc Earnings Call Transcript
Key Points
- Zoom Communications Inc (ZM) reported a 4.4% year-over-year revenue growth to $1.23 billion, exceeding the high end of their guidance by $15 million.
- The company saw a significant increase in AI Companion adoption, with usage surging more than four times year over year.
- Zoom Phone surpassed 10 million paid seats, marking a major milestone and reinforcing its leadership in unified communications.
- The company achieved a non-GAAP gross margin of 80%, up 117 basis points from the previous year, due to cost optimization efforts.
- Zoom Communications Inc (ZM) announced an incremental $1 billion share repurchase, reflecting confidence in its financial position and future growth prospects.
- The enterprise net-dollar expansion rate remained below 100%, indicating room for improvement in customer retention and upselling.
- Despite revenue growth, the company continues to face challenges with post-COVID seat-based contraction, affecting some competitors as well.
- Deferred revenue growth was slightly below expectations, although guidance for the next quarter appears strong.
- The company is still in the early stages of integrating AI into its product offerings, which may present execution risks.
- Zoom Communications Inc (ZM) faces competitive pressures in the contact center market, with peers exploring consumption-based pricing models.
Hello, everyone, we'll get started shortly. Hello, and welcome to Zoom's Q3 FY26 earnings release webinar. As a reminder, today's webinar is being recorded.
It is now my pleasure to introduce Charles Eveslage, Head of Investor Relations. Charles, over to you.
Thank you, Megan. Hello, everyone, and welcome to Zoom's earnings video webinar for the third 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 and 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.
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