Key Highlights

● Revenue was $1,277.2 million, up 4.9% year on year.

● GAAP net income was $1,542.4 million against non-GAAP net income of $464.0 million.

● Enterprise revenue rose 7.8% to $787.5 million.

● Cash and marketable securities totalled $7.2 billion at 31 July 2026.

Why the results matter

Zoom Communications Inc. (NASDAQ:ZM) reported on 25 August 2026 that revenue for the second quarter of fiscal 2027, which ended on 31 July 2026, was $1,277.2 million, up 4.9% year on year. GAAP net income was $1,542.4 million, or $5.15 per diluted share, far above non-GAAP net income of $464.0 million.

Business and sector

Zoom provides a communications and collaboration platform that combines video meetings, team chat, phone, contact-centre software and AI-based assistant features. It operates in a competitive workplace-software market in which it faces large suppliers that bundle collaboration tools into wider productivity suites. Since the pandemic-era surge in video use, the company has focused on selling to enterprises and on broadening its product range. Chief Executive Officer Eric Yuan said fiscal 2027 "continues to progress well, reflecting focused execution against our three priorities."

Latest reported results

Total revenue of $1,277.2 million was up 4.9%, or 4.7% in constant currency. Enterprise revenue, which Zoom reports separately, was $787.5 million, up 7.8%, so enterprise revenue grew noticeably faster than the company as a whole did. Customers contributing more than $100,000 in trailing twelve-month revenue numbered 4,625, up 8.2%.

GAAP income from operations was $314.3 million, a margin of 24.6%, while non-GAAP income from operations was $510.3 million, a margin of 40.0%. Non-GAAP diluted earnings per share were $1.55. The GAAP net income of $1,542.4 million is much larger than GAAP operating income, which implies that substantial non-operating or tax-related items contributed; the release does not itemise them.

Financial performance and industry context

Operating cash flow was $494.8 million and free cash flow was $472.4 million. Cash, cash equivalents and marketable securities, excluding restricted cash, totalled $7.2 billion at 31 July 2026, a substantial and liquid financial reserve.

For the third quarter, Zoom guided to revenue of $1.275 billion to $1.280 billion, in both reported and constant currency, with non-GAAP operating income of $510.0 million to $515.0 million and non-GAAP diluted earnings per share of $1.46 to $1.48. Guidance assumes about 301 million weighted average shares.

For fiscal 2027 as a whole, the company updated its outlook to revenue of $5.085 billion to $5.095 billion, or $5.071 billion to $5.081 billion in constant currency. It expects non-GAAP income from operations of $2.065 billion to $2.075 billion, non-GAAP diluted earnings per share of $6.08 to $6.12 and free cash flow of $1.780 billion to $1.820 billion.

The third-quarter revenue guide is essentially flat with the second-quarter result, indicating a company that is highly profitable on an operating basis but growing at a low single-digit rate overall. The gap between a 7.8% rise in Enterprise revenue and 4.9% growth in total revenue implies that the remainder of the business, which is not broken out, is growing more slowly or declining.

Risks and uncertainties

Zoom's main uncertainty is how long it can sustain profitability while growth remains modest. Competition from bundled offerings, changes in customer demand for meetings and phone products, and the pace at which AI features can be monetised all bear on the outlook. Because the GAAP result includes items that the release does not explain, GAAP earnings may not be a reliable guide to future profits. Foreign-exchange movements also affect reported revenue, as the small difference between reported and constant-currency figures shows.

Third-quarter revenue and earnings quality

The third-quarter report will show whether revenue reaches the guided range, whether Enterprise growth stays near 7.8%, and how the company deploys its $7.2 billion of cash and investments. Detail on the composition of GAAP net income in the filed quarterly report will also be important for assessing earnings quality.