01—Abstract
Summary
Summary of the 10-Q filed November 25, 2025. Cited figures are marked; the original filing is the authoritative source.
Zoom Communications, Inc. reported revenue of $1,229.8 milliona for the three months ended October 31, 2025, up 4.4% from $1,177.5 million a year earlier, and $3,621.8 million for the nine months, up 4.0%.
Income from operations was $310.4 millionb for the quarter versus $182.8 million in the prior-year quarter, and net income was $612.9 million, boosted by $406.1 million in gains on strategic investments, net. Nine-month net income was $1,226.1 million compared with $642.4 million. Management attributes the revenue growth to 6.1% growth in Enterprise revenue in the quarter and a 2.0% increase in Online revenue, while noting that macroeconomic uncertainty has led to longer sales cycles and caution in enterprise spending.
The company's trailing 12-month net dollar expansion rate for Enterprise customers was 98% as of October 31, 2025 and 2024. Cash flow and capital return remained central. Net cash provided by operating activities was $1,634.5 millionc for the nine months, and free cash flow, a non-GAAP measure, was $1,585.6 million.
The company repurchased 16,624,306 Class A shares during the nine months for $1,295.8 milliond, and as of October 31, 2025, $310.4 million remained under the repurchase authorization. In November 2025, the Board authorized an additional $1.0 billion repurchase program. Liquidity totaled $7.9 billion in cash, cash equivalents, and marketable securities, and management believes this is sufficient for at least the next 12 months.
The filing also notes a subsequent event: an agreement to acquire BrightHire, Inc., an AI-powered interview intelligence and hiring automation company, expected to close in the fourth fiscal quarter with consideration paid in cash. Ongoing EDNY and NDCA government investigations remain unresolved, with the company unable to estimate a range of possible loss, while the SEC investigation was concluded on July 30, 2025 without an enforcement recommendation.
02—Key points
Key Highlights
- Revenue rose to $1,229.8 million in the quarter, up 4.4% year over year, and to $3,621.8 million for the nine months, up 4.0%.
- Gross margin was 77.9% for the quarter versus 75.9% a year earlier, driven partly by a $7.3 million reduction in cost-of-revenue stock-based compensation and lower hosting costs.
- Net income was $612.9 million for the quarter versus $207.1 million, helped by $406.1 million of gains on strategic investments, net.
- Free cash flow (non-GAAP) was $1,585.6 million for the nine months, compared with $1,392.5 million a year earlier.
- Share repurchases totaled $1,295.8 million over the nine months, and the Board authorized an additional $1.0 billion in November 2025.
- Trailing 12-month net dollar expansion rate for Enterprise customers was 98%, and the number of customers contributing more than $100,000 of trailing 12-month revenue rose to 4,363 from 3,995.
- A definitive agreement to acquire BrightHire, Inc. was entered into in November 2025, with closing expected in the fourth fiscal quarter.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2026, Zoom Communications kept $0.50.
- Revenue$1.23B100.0%
- Cost of revenue−$271.8M22.1%
- Gross profit$958.1M77.9%
- Operating costs−$647.7M52.7%
- Operating income$310.4M25.2%
- Interest, other & tax$302.5M24.6%
- Net income$612.9M49.8%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2026filed November 25, 2025Financial Statements
Q3 FY2026 against Q3 FY2025
| Line item | Q3 FY2026Q3 FY2025 | Change |
|---|---|---|
| Revenue | $1.23B$1.18B | +4.4% |
| Cost of Revenue | $271.77M$283.88M | −4.3% |
| Gross Profit | $958.07M$893.66M | +7.2% |
| R&D Expenses | $210.10M$222.98M | −5.8% |
| Operating Expenses | $647.65M$710.82M | −8.9% |
| Operating Income | $310.41M$182.84M | +69.8% |
| Net Income | $612.87M$207.05M | +196.0% |
| EPS (Basic) | $2.05$0.67 | +206.0% |
| EPS (Diluted) | $2.01$0.66 | +204.5% |
| Shares Outstanding (Basic) | 298.66M307.53M | −2.9% |
| Shares Outstanding (Diluted) | 305.02M314.19M | −2.9% |
05—Questions
Frequently Asked Questions
How did Zoom's core revenue and profitability trend in the quarter?
Revenue grew 4.4% to $1,229.8 million, and income from operations rose to $310.4 million from $182.8 million. Operating expenses declined to $647.7 million from $710.8 million, largely reflecting lower stock-based compensation and the prior-year SEC investigation accrual. Net income was boosted by $406.1 million of strategic investment gains, so operating income is the better gauge of core profitability.
What drove the large increase in net income?
Gains on strategic investments, net, were $406.1 million in the quarter versus $6.3 million a year earlier, primarily reflecting changes in the fair value of privately held securities. Income tax provision also rose to $181.8 million from $73.4 million.
How much capital has Zoom returned to shareholders, and what authorization remains?
Zoom repurchased 16,624,306 Class A shares for $1,295.8 million during the nine months. As of October 31, 2025, $310.4 million remained under the prior authorization, and the Board added $1.0 billion in November 2025.
What legal and regulatory risks remain open?
The EDNY and NDCA investigations relating to interactions with foreign governments and data practices remain ongoing, and the company cannot predict their outcome or estimate a range of possible loss. The SEC informed the company on July 30, 2025 that it would not recommend enforcement action, and the company reversed the $18.0 million accrual previously recorded for that matter.
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