Zoom Communications has raised its full-year adjusted earnings and revenue forecasts after reporting better-than-expected results for its fiscal second quarter, although the company’s Class A shares fell 5.1% in pre-market trading on Wednesday.
The San Jose, California-based company reported adjusted earnings of $1.55 per share on revenue of $1.28 billion for fiscal Q2 2027, beating analysts’ expectations of $1.48 per share and $1.27 billion in revenue.
Zoom’s enterprise business remained a key growth driver, with revenue rising 7.8% year-on-year to $787.5 million, marking the strongest growth rate in three years. The number of customers generating more than $100,000 in trailing 12-month revenue also increased 8.2% to 4,625.
The company’s trailing 12-month net dollar expansion rate for enterprise customers stood at 99% at the end of the quarter, compared with 98% a year earlier.
Zoom has increasingly sought to expand beyond its roots in video conferencing by developing an AI-powered enterprise platform. Its flagship Zoom Workplace app combines meetings, chat and email capabilities with AI features including meeting summaries and in-meeting note-taking.
The company said licensed monthly active users of its AI features in Workplace increased 125% year-on-year.
Zoom chief executive Eric Yuan said the company was encouraged by the broader use of its AI tools, with customer engagement expanding from communication summaries to querying information and building workflows.
Despite the stronger results, Morgan Stanley analysts said the quarter reinforced the case for Zoom’s expansion into a broader enterprise platform but noted weaker online customer acquisition dynamics and an unchanged second-half constant-currency outlook.
They said the results provided further evidence of enterprise momentum, but argued that Zoom had yet to demonstrate the combination of growth and profitability required for a significant re-rating of its shares.
Zoom expects adjusted earnings of $1.46 to $1.48 per share on revenue of $1.275 billion to $1.28 billion for fiscal Q3 2027.
For the full fiscal year, the company now expects adjusted earnings of $6.08 to $6.12 per share and revenue of $5.085 billion to $5.095 billion. That compares with its previous forecast of $5.96 to $6.00 in adjusted earnings per share and $5.08 billion to $5.09 billion in revenue.
Zoom’s shares had risen 17% since the start of the year before the earnings report, outperforming both the iShares Expanded Tech-Software Sector ETF, which had fallen 3.6%, and the S&P 500, which had gained 12.2%.
The company became one of the most prominent beneficiaries of the shift to online communication during the COVID-19 pandemic, when its daily users increased sharply as lockdowns moved meetings and gatherings online. Since the artificial intelligence boom began in late 2022, Zoom has been repositioning itself as a broader AI-enabled enterprise technology platform.
