• Zoom Video Communications beats estimates with Q2 revenue of $1.277B, up 4.9% YoY.
  • Management raises FY27 guidance, signaling confidence in continued growth.
  • Company allocates capital to buybacks, with ~$1.3B remaining under authorization.

A Steady Quarter

Zoom reported a solid second quarter for fiscal 2026, exceeding analyst expectations. Adjusted EPS came in at $1.55, while GAAP EPS was $5.15, boosted by one-time items. Revenue reached $1.277 billion, a 4.9% increase year-over-year, with enterprise revenue growing 7.8% to $787.5 million.

The company’s non-GAAP operating margin expanded to 40.0%, and free cash flow reached $472.4 million. Enterprise net dollar retention stood at 99%, indicating stable spending from existing customers.

Raising the Bar

Looking ahead, Zoom raised its full-year fiscal 2027 guidance. The company now expects revenue in the range of $5.085 billion to $5.095 billion, up from its previous forecast. Adjusted EPS is projected between $6.08 and $6.12, with free cash flow expected to hit $1.78 billion to $1.82 billion.

For the upcoming third quarter, management guides revenue of $1.275 billion to $1.280 billion and adjusted EPS of $1.46 to $1.48.

"Our results reflect the strength of our platform and the continued adoption of AI-powered solutions," said a company spokesperson in a statement. "We are focused on driving durable growth while expanding margins and returning capital to shareholders."

Strategic Buybacks

Zoom’s board has authorized additional share repurchases, leaving approximately $1.3 billion under the existing buyback program. This signals management's confidence in the company's financial position and future cash generation.

Analysts view the buybacks positively. "Zoom is demonstrating disciplined capital allocation, balancing growth investments with shareholder returns," noted one analyst familiar with the company.

Looking Ahead

Zoom continues to innovate in the collaboration space, with ongoing enhancements to its AI features. The company faces macroeconomic headwinds, but its enterprise focus and expanding margins provide a cushion.

We reached out to Zoom for additional comments on the quarter's performance, but did not receive a response by press time.

This article was updated to reflect the company's official guidance figures.