Zoom reported second-quarter fiscal 2027 revenue of USD $1.28 billion, with enterprise revenue up 7.8% from a year earlier.
Total revenue reached USD $1,277.2 million in the quarter, up 4.9% year on year on a reported basis and 4.7% in constant currency. Online revenue was USD $489.7 million, up 0.6%, while enterprise revenue totalled USD $787.5 million.
Operating profitability remained strong, though GAAP operating income edged down from the comparable period last year. GAAP income from operations was USD $314.3 million, compared with USD $321.7 million a year earlier, while non-GAAP income from operations rose to USD $510.3 million from USD $503.2 million.
GAAP operating margin was 24.6% and non-GAAP operating margin was 40.0% for the quarter.
GAAP net income jumped to USD $1,542.4 million, or USD $5.15 per share, from USD $358.6 million, or USD $1.16 per share, in the same quarter of the prior fiscal year. On a non-GAAP basis, net income was USD $464.0 million, or USD $1.55 per share, compared with USD $471.3 million, or USD $1.53 per share, a year earlier.
Zoom ended the quarter with USD $7.2 billion in cash, cash equivalents and marketable securities, excluding restricted cash.
Customer trends
Customer metrics pointed to continued growth among larger accounts. The number of customers contributing more than USD $100,000 in trailing 12-month revenue rose 8.2% from a year earlier to 4,625.
The trailing 12-month net dollar expansion rate for enterprise customers increased to 99% from 98% in the same quarter last fiscal year. Online average monthly churn was 2.9%, unchanged from a year earlier. Online customers with at least 16 months of continual service represented 75.6% of total online monthly recurring revenue, up 70 basis points.
During the quarter, Zoom repurchased about 3.7 million shares of common stock. That brought the total repurchased under the current plan to 44.2 million shares, with about USD $1.3 billion of authorisation remaining at quarter end.
Cash generation softened from the prior year. Net cash provided by operating activities was USD $494.8 million, down from USD $515.9 million, while free cash flow fell to USD $472.4 million from USD $508.0 million.
AI focus
Management pointed to enterprise demand and adoption of newer artificial intelligence products as contributors to growth in the quarter.
"FY27 continues to progress well, reflecting focused execution against our three priorities and clear Enterprise business momentum. Total revenue grew 4.9% year over year, anchored by 7.8% growth in Enterprise revenue, its strongest growth rate in three years," said Eric S. Yuan, Founder and Chief Executive Officer of Zoom.
He also highlighted expansion in the group's customer service software products.
"Our AI-first Customer Experience portfolio continues to scale, delivering high-double-digit ARR expansion, driven in part by strong adoption of Zoom Virtual Agent, whose customer count increased 256% year over year. With innovations including ZoomMate, My Notes, AI Productivity Suite, ZVA Receptionist, and Workvivo HQ Agent, and acquisitions like Common Room and BrightHire, we are embedding AI into the flow of work across collaboration, customer experience, revenue orchestration, recruiting, and employee experience. The breadth of that AI adoption reflects how Zoom is differentiating as a system of action for modern work, moving enterprise operations from conversation to completion," Yuan said.
Outlook
For the third quarter, Zoom forecast revenue of between USD $1.275 billion and USD $1.280 billion. It expects non-GAAP income from operations of between USD $510.0 million and USD $515.0 million, with non-GAAP diluted earnings per share of between USD $1.46 and USD $1.48.
For the full fiscal year, Zoom raised or reaffirmed guidance for revenue of between USD $5.085 billion and USD $5.095 billion. It projected non-GAAP income from operations of between USD $2.065 billion and USD $2.075 billion, non-GAAP diluted earnings per share of between USD $6.08 and USD $6.12, and free cash flow of between USD $1.780 billion and USD $1.820 billion.
The third-quarter outlook implies broadly flat sequential revenue after the second-quarter result, as Zoom balances steadier growth in its online business with stronger momentum in enterprise accounts and newer software lines.