Key Highlights
- Adjusted EPS reached $1.55 for Q1, surpassing the $1.42 Wall Street forecast
- Q1 revenue hit $1.24 billion, reflecting 5.5% year-over-year growth and exceeding the $1.22 billion estimate
- AI Companion paid users experienced a remarkable 184% year-over-year increase
- Enterprise segment revenue rose 7.2% to reach $755.7 million
- Fiscal 2027 full-year projections upgraded beyond analyst expectations for both earnings and revenue
Shares of Zoom Video Communications (ZM) surged more than 7% during Friday’s premarket session following the company’s announcement of fiscal first-quarter performance that exceeded Wall Street projections, coupled with an upward revision to its annual forecast.
Premarket trading showed the stock climbing 7.8%, building upon the 12% advance already recorded throughout 2026.
The company delivered adjusted earnings of $1.55 per share for the three-month period concluding April 30. This result exceeded the Street’s consensus estimate of $1.42 by thirteen cents.
Total revenue climbed to $1.24 billion, marking a 5.5% year-over-year increase and surpassing the anticipated $1.22 billion figure.
Chief Executive Officer Eric Yuan highlighted artificial intelligence adoption as a critical growth catalyst. “Customers are increasingly adopting Zoom as an AI-first system of action for modern work,” Yuan stated in the quarterly earnings announcement.
The number of paying subscribers for Zoom’s AI Companion offering surged 184% versus the comparable quarter last year. Additionally, the company’s “My Notes” AI-powered feature attracted 1.5 million licensed users in merely four months since its introduction.
Enterprise Segment Shows Strength
Revenue from enterprise clients increased 7.2% year-over-year, totaling $755.7 million. The trailing 12-month net dollar expansion rate for enterprise accounts improved to 99%, compared with 98% recorded in the year-ago period.
The company now serves 4,534 customers that each contribute over $100,000 in trailing 12-month revenue, representing an 8.2% year-over-year gain.
Free cash flow generated during the quarter amounted to $500.5 million, an increase from the $463.4 million produced in the prior-year period.
Zoom’s board of directors approved an additional $1.0 billion share buyback program, supplementing the $625 million still available under a previous authorization.
Forward Outlook
For the second quarter, Zoom projected adjusted EPS in the range of $1.45 to $1.47, modestly trailing the $1.49 analyst consensus. The company’s revenue guidance of $1.265 billion to $1.27 billion aligned closely with Street expectations.
For the complete fiscal year 2027, Zoom elevated its EPS projection to a range of $5.96–$6.00, surpassing the $5.87 analyst consensus. Annual revenue expectations were revised to between $5.08 billion and $5.09 billion, exceeding Wall Street’s $5.07 billion forecast.
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 AI-driven strategy as fundamental to future success. “We remain focused on turning AI innovation into durable growth, measurable customer value, and long-term shareholder returns,” the CEO remarked.
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