Q4 2026 Zoom Communications Inc Earnings Call Transcript
Key Points
- Zoom Communications Inc (ZM) reported a 5.3% year-over-year revenue growth in Q4, surpassing guidance by $12 million.
- The company saw a strong performance in its Enterprise segment, with a 7.1% year-over-year revenue increase, now representing 61% of total revenue.
- Zoom's AI innovations, such as AI Companion 3.0, are driving growth and customer engagement, with AI-related products included in top deals.
- The company achieved significant competitive displacements, including major wins against leading CCaaS vendors and Cisco Calling.
- Zoom's strategic investments in AI and product diversification are expected to drive durable growth beyond $5 billion in revenue for FY27.
- The company's Q1 deferred revenue growth guidance is relatively low at 1% to 2%, due to larger and longer duration competitive takeouts.
- Non-GAAP operating margin slightly declined to 39.3% in Q4, attributed to changes in bonus structure and investments in AI.
- Zoom's free cash flow decreased to $338 million in Q4 from $416 million in the prior year period.
- The company faces a $50 million interest income headwind in FY27 due to lower yields in a declining rate environment.
- Despite growth, the trailing 12-month net dollar expansion rate for enterprise customers remains steady at 98%, indicating limited upsell momentum.
(audio in progress) 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.
During this call, we will make forward-looking statements, including statements regarding our financial outlook for the first quarter and full fiscal year 2027, our expectations regarding financial and business trends, impacts from a macroeconomic environment, our market position, stock repurchase program, opportunities, go-to-market initiatives, growth strategy and business aspirations and product initiatives, including future product and feature releases and the expected benefits of such initiatives.
These statements are only predictions that are based on what we believe today,
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