Key Highlights
- Adjusted EPS reached $1.55 for Q1, surpassing the $1.42 Street estimate
- Quarterly revenue hit $1.24 billion, marking 5.5% YoY growth and exceeding $1.22 billion consensus
- AI Companion paid users exploded by 184% compared to last year
- Enterprise segment revenue increased 7.2% to $755.7 million
- Fiscal 2027 annual outlook upgraded beyond analyst expectations for both earnings and revenue
Zoom Video Communications (ZM) stock experienced a significant premarket rally Friday morning, climbing over 7% following the company’s announcement of first-quarter fiscal results that exceeded Wall Street projections and an upgraded annual forecast.
Shares traded 7.8% higher before the market opened, building on the 12% year-to-date appreciation already recorded in 2026.
For the quarter concluding on April 30, adjusted earnings per share totaled $1.55. This figure exceeded analyst projections of $1.42 by thirteen cents.
Quarterly revenue totaled $1.24 billion, representing a 5.5% increase from the previous year and surpassing the Street’s $1.22 billion projection.
Chief Executive Eric Yuan highlighted the role of artificial intelligence in driving results. “Customers are increasingly adopting Zoom as an AI-first system of action for modern work,” Yuan stated in the company’s earnings announcement.
The number of paying subscribers for Zoom’s AI Companion offering skyrocketed 184% on a year-over-year basis. Additionally, the platform’s “My Notes” AI-powered feature attracted 1.5 million licensed subscribers in merely four months since its introduction.
Strong Enterprise Performance
Revenue from the enterprise segment expanded 7.2% year-over-year, reaching $755.7 million. The trailing twelve-month net dollar expansion rate among enterprise clients improved to 99%, up from 98% in the comparable quarter last year.
The company now serves 4,534 customers each contributing over $100,000 in trailing 12-month revenue, reflecting 8.2% year-over-year growth.
Operating cash flow for the period totaled $500.5 million, compared to $463.4 million in the prior-year quarter.
Zoom’s board of directors also approved a new $1.0 billion share buyback program, supplementing $625 million still available under an existing authorization.
Forward Outlook
For the second quarter, management projected adjusted EPS ranging from $1.45 to $1.47, trailing the $1.49 analyst consensus slightly. Revenue guidance of $1.265 billion to $1.27 billion aligned closely with Street expectations.
For the complete fiscal year 2027, the company elevated its EPS forecast to a range of $5.96 to $6.00, exceeding the $5.87 analyst consensus. Annual revenue projections now stand between $5.08 billion and $5.09 billion, above Wall Street’s $5.07 billion estimate.
Analysts at Morgan Stanley observed that the “path to re-rating hinges on durably higher growth,” while noting that “Zoom’s Q1 showed stable growth at scale with strong margins, but FY27 growth remains mid-single digits.”
Yuan emphasized the company’s strategic direction around artificial intelligence capabilities. “We remain focused on turning AI innovation into durable growth, measurable customer value, and long-term shareholder returns,” the CEO remarked.
