01—Abstract
Summary
Summary of the 8-K filed August 25, 2026. Cited figures are marked; the original filing is the authoritative source.
Zoom Communications, Inc. (NASDAQ: ZM) filed this Form 8-K on August 25, 2026 under Item 2.02 to furnish a press release (Exhibit 99.1) announcing financial results for the second fiscal quarter of fiscal year 2027, ended July 31, 2026.
Total revenue was $1,277.2 milliona, up 4.9% year over year (4.7% in constant currency). Enterprise revenue was $787.5 million, up 7.8%, which the company describes as its strongest growth rate in three years, while Online revenue was $489.7 million, up 0.6%. GAAP net income was $1,542.4 million, or $5.15 per diluted share, compared with $358.6 million, or $1.16 per diluted share, a year earlier.
The filing attributes the sharp GAAP increase to gains on strategic investments of $1,614.2 millionb, which are excluded from non-GAAP results. Non-GAAP net income was $464.0 million, or $1.55 per diluted share, versus $471.3 million, or $1.53 per share, in the prior-year quarter. Operating performance was steady on a non-GAAP basis.
Non-GAAP income from operations was $510.3 millionc with a 40.0% non-GAAP operating margin, compared with $503.2 million in the prior-year quarter. GAAP income from operations was $314.3 million, versus $321.7 million a year earlier, and the GAAP operating margin was 24.6%. Operating cash flow was $494.8 million and free cash flow was $472.4 million, both slightly below the prior-year quarter.
The company repurchased approximately 3.7 million shares in the quarter, bringing total repurchases under the current plan to 44.2 million shares, and ended the quarter with $7.2 billiond in cash, cash equivalents and marketable securities. For the outlook, Zoom guided third-quarter fiscal 2027 total revenue to $1.275 billion to $1.280 billion and non-GAAP diluted EPS to $1.46 to $1.48. For full fiscal 2027, it guided total revenue to $5.085 billion to $5.095 billion, non-GAAP income from operations to $2.065 billion to $2.075 billion, non-GAAP diluted EPS to $6.08 to $6.12, and free cash flow to $1.780 billion to $1.820 billion.
The company noted that the EPS and share count guidance excludes about $1.3 billion of remaining authorized share repurchases. The information is furnished under Item 2.02 and is not deemed filed under Section 18 of the Exchange Act.
02—Key points
Key Highlights
- Total revenue of $1,277.2 million, up 4.9% year over year (4.7% in constant currency); Enterprise revenue of $787.5 million, up 7.8%; Online revenue of $489.7 million, up 0.6%.
- GAAP net income of $1,542.4 million ($5.15 diluted EPS) was driven by $1,614.2 million in gains on strategic investments; non-GAAP net income was $464.0 million ($1.55 diluted EPS) versus $1.53 a year earlier.
- Non-GAAP operating margin of 40.0% and non-GAAP income from operations of $510.3 million, up from $503.2 million; GAAP operating margin of 24.6%, down from 26.4%.
- Free cash flow of $472.4 million in the quarter, compared with $508.0 million a year earlier; operating cash flow of $494.8 million.
- Trailing 12-month Enterprise net dollar expansion rate rose to 99% from 98%; customers contributing over $100,000 in trailing 12-month revenue reached 4,625, up 8.2%.
- Full fiscal 2027 guidance: total revenue of $5.085 billion to $5.095 billion, non-GAAP income from operations of $2.065 billion to $2.075 billion, non-GAAP diluted EPS of $6.08 to $6.12, and free cash flow of $1.780 billion to $1.820 billion.
- Repurchased about 3.7 million shares in the quarter; about $1.3 billion of authorized repurchases remained as of July 31, 2026, and this amount is excluded from EPS and share count guidance.
03—Questions
Frequently Asked Questions
How did Zoom's revenue perform in the second quarter of fiscal 2027?
Total revenue was $1,277.2 million, up 4.9% year over year, or 4.7% in constant currency. Enterprise revenue grew 7.8% to $787.5 million, which the company called its strongest growth rate in three years, while Online revenue grew 0.6% to $489.7 million.
Why did GAAP net income increase so sharply compared with the prior year?
GAAP net income was $1,542.4 million, or $5.15 per diluted share, versus $358.6 million, or $1.16 per share, a year earlier. The filing shows gains on strategic investments, net, of $1,614.2 million in the quarter compared with $45.1 million in the prior-year quarter. Non-GAAP net income, which excludes these gains, was $464.0 million, or $1.55 per diluted share, compared with $471.3 million, or $1.53 per share.
What is Zoom's guidance for the third quarter and full fiscal year 2027?
For the third quarter, Zoom expects total revenue of $1.275 billion to $1.280 billion and non-GAAP diluted EPS of $1.46 to $1.48. For the full fiscal year, it expects total revenue of $5.085 billion to $5.095 billion, non-GAAP income from operations of $2.065 billion to $2.075 billion, non-GAAP diluted EPS of $6.08 to $6.12, and free cash flow of $1.780 billion to $1.820 billion. Guidance assumes approximately 301 million weighted average shares outstanding.
How is Zoom returning capital to shareholders and how much cash does it hold?
Zoom repurchased approximately 3.7 million shares in the second quarter, bringing total repurchases under the current plan to 44.2 million shares. About $1.3 billion of authorized repurchases remained as of July 31, 2026. Total cash, cash equivalents and marketable securities, excluding restricted cash, were $7.2 billion at that date.
What do the customer metrics indicate about the business?
The trailing 12-month net dollar expansion rate for Enterprise customers increased to 99% from 98% a year earlier. Customers contributing more than $100,000 in trailing 12-month revenue numbered 4,625, up 8.2%. Online average monthly churn was 2.9%, consistent with the prior-year quarter, and Online customers with at least 16 months of continual service represented 75.6% of Online MRR, up 70 bps.
04—Continue