ZM Nasdaq Russell 1000 Earnings call
Zoom Communications (ZM) · Q2 2026 results and valuation
Share price: $98.08 · 2026-11-11
Results Q2 2026 vs Q1 2026 · previous quarter · fiscal Q2 2027 · published 25 Aug 2026 and 21 May 2026
Net income up 262.4% on the previous quarter, guidance raised. Management sounded upbeat, in its script and in answers to analysts.
Only a basic analysis is available for this company at the moment.
1 · Numbers
+262.4%
Net income vs Q1 2026
Guidance raised
Net income 1.54B vs 425.7M
Revenue +3.1%
Against the same quarter last year (Q2 2025) it is +330.1%, so it is not just seasonal.
2 · How management spoke
Upbeat
More upbeat than 74% of company calls
Answers to analysts: upbeat, in line with the script.
Similar to last call.
3 · What stood out
Licensed monthly active users of Zoom Communications' AI features in Workplace grew 125% year over year.
Valuation
Is Zoom Communications undervalued?
Reverse DCF. Free cash flow from the last full fiscal year (2026-01-31), grown for 10 years, discounted back, plus a terminal value. “Implied growth” is the rate the current price assumes.
At 3.5% growth a year (3-year revenue growth), the model's fair value is $115.51 a share — the stock trades 15% below it. Today's price assumes 0.6% growth a year.
Current price
$98.08
close of 2026-11-11
Market implies growth of iThe yearly free-cash-flow growth, for the next 10 years, that today’s share price already assumes. If you believe the company grows faster than this, the stock is cheap under this model; slower, and it is expensive.
+0.6% for 10 yrs
Fair value / share
$115.51
Buy below
$86.63
Price vs fair value
Undervalued 15%
Price vs buy-below price
Overvalued 13%
Read between the lines
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Key theme
The Enterprise business experienced a 7.8% growth rate, which is the strongest in 3 years despite white label churn.
Source quote
“Look, if you look at that 7.8%, the strongest in 3 years, that is even with that white label churn... Look, I think it tells the story of our Enterprise business at large. You see it in the NDE inflection.”
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Guidance ↑
The company raised its revenue outlook because Enterprise revenue is growing faster than expected, partially offset by flat online growth.
Source quote
“Our increased revenue outlook assumes Enterprise revenue is growing faster than expected, partially offset by flat online growth.”
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Guidance
For Q3, the company expects deferred revenue to be up 3% to 4% year over year.
Source quote
“For Q3, we expect deferred revenue to be up 3% to 4% year over year.”
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Fading
Free cash flow in the quarter grew 8% year-over-year to $500 million, representing a free cash flow margin of 40.4%…
Source quote
“Free cash flow in the quarter grew 8% year-over-year to $500 million, representing a free cash flow margin of 40.4%... In Q1, operating cash flow grew 7% year-over-year to $522 million, representing an operating cash flow margin of 42.1%, up 50 basis points year-over-year. We ended the quarter with $7.7 billion in cash, cash equivalents, marketable securities, excluding restricted cash.”
Tone
How upbeat the language was, compared with other companiesiTone counts positive minus negative finance words, adjusted for length. Executives mostly speak positively, so the labels compare each call with every company's latest call: “typical” is the middle third, “very upbeat” the top tenth, “cautious” the bottom tenth.. Dot: Q2 2026. Ring: Q1 2026.
Script and answers carried a similar tone, so the script's message held up under questioning.
Sentences that drove the tone
“The strong growth in RPO reflects our continued success landing larger, longer-term, multi-product platform deals, demonstrating growing demand for our AI-first platform.”
“We are encouraged by the momentum across our platform, and proud of our progress expanding AI monetization to durable growth, and most importantly deliver enduring value for our customers.”
“We continue to deliver very strong operating margins while improving topline growth as we further invest in our growing portfolio of AI products and drive future efficiencies in our AI...”
Full figures
USD · SEC EDGAR XBRL (10-Q, period end 2026-07-31)
| Metric | Q2 2026period end 2026-07-31 | Q1 2026period end 2026-04-30 | Change | Q2 2025 | YoY |
|---|---|---|---|---|---|
| Revenue | 1.28B | 1.24B | +3.1% | 1.22B | +4.9% |
| Gross profit | 985.5M | 964.7M | +2.2% | 944.1M | +4.4% |
| Operating income | 314.3M | 310.5M | +1.2% | 321.7M | −2.3% |
| Net income | 1.54B | 425.7M | +262.4% | 358.6M | +330.1% |
| EPS | 5.15 | 1.42 | +262.7% | 1.16 | +344.0% |
| P/E today 8.7 | 8.9 | 14.3 | −5.4 | 19.5 | −10.6 |
Topics
Most discussed now
- In Q2, total revenue grew 4.9% year over year to $1.28 billion, or 4.7% in constant currency.
- Zoom Communications continues to deliver strong gross margins as it broadens its AI product portfolio and optimize for scaling customer…
- Zoom Communications' trailing 12-month net dollar expansion rate for Enterprise customers in Q2 was 99%, up 1 point from the prior...
- I was maybe hoping, Michelle and Eric, you could elaborate on what you are seeing in terms of Phone demand...
- Zoom Communications is seeing continuing strength in verticals and international.
Faded since Q1 2026
- Dropped I'd be remiss if I didn't say also that AI usage and threading that in is also a very important...
- Dropped As the AI costs spike in a good way with usage, Zoom Communications has got offsetting measures against it.
- Fading The EMEA growth rate was predominantly driven by year-over-year changes in foreign exchange rates.
Latest announcements
Official filings, newest first.
- Director or officer change; Regulation FD disclosure · SEC 8-K
- Results of operations · SEC 8-K
- Director or officer change · SEC 8-K
- Shareholder vote results · SEC 8-K
- Results of operations · SEC 8-K
- Director or officer change · SEC 8-K
- Results of operations · SEC 8-K
- Results of operations · SEC 8-K