Zoom Reports Q4 & FY26 Results; Issues FY27 Guidance Below Prior Year EPS & FCF

summarizeSummary

Zoom Communications reported mixed financial results for Q4 and full fiscal year 2026, with strong GAAP EPS growth largely driven by significant gains on strategic investments. However, non-GAAP EPS growth was modest. More critically, the company's guidance for fiscal year 2027 projects a deceleration in revenue growth, a decline in non-GAAP diluted EPS, and a decrease in free cash flow compared to FY26. This forward-looking outlook suggests a challenging operational environment and a potential contraction in profitability and cash generation, which is a significant negative signal for investors. The ongoing share repurchase program, with $1.0 billion remaining authorization, provides some shareholder return but does not fully offset the deteriorating operational guidance.

check_boxKey Events

• Q4 and FY26 Financial Performance

  For Q4 FY26, total revenue was $1,247.0 million (up 5.3% YoY) and GAAP EPS was $2.22 (up 91.4% YoY), while non-GAAP EPS was $1.44 (up 2.1% YoY). Full fiscal year 2026 revenue reached $4,868.8 million (up 4.4% YoY), with GAAP EPS of $6.18 (up 92.5% YoY) and non-GAAP EPS of $5.92 (up 6.9% YoY). The strong GAAP EPS was significantly boosted by gains on strategic investments.

• FY27 Financial Guidance

  For full fiscal year 2027, Zoom expects total revenue between $5.065 billion and $5.075 billion, implying a deceleration in growth. Non-GAAP diluted EPS is projected to be between $5.77 and $5.81, a decline from FY26's $5.92. Free cash flow is guided between $1.700 billion and $1.740 billion, also a decrease from FY26's $1,924.1 million.

• Share Repurchase Program

  The company repurchased approximately 3.8 million shares in Q4 and 20.4 million shares during the full fiscal year 2026. A remaining authorization of $1.0 billion for share repurchases was noted as of January 31, 2026.

• Customer Metrics

  Zoom reported 4,468 customers contributing over $100,000 in trailing 12-month revenue, an increase of 9.3% year-over-year. The trailing 12-month net dollar expansion rate for Enterprise customers was 98%, indicating slight contraction from existing customers, and online average monthly churn slightly increased to 2.9%.

auto_awesomeAnalysis

Zoom Communications reported mixed financial results for Q4 and full fiscal year 2026, with strong GAAP EPS growth largely driven by significant gains on strategic investments. However, non-GAAP EPS growth was modest. More critically, the company's guidance for fiscal year 2027 projects a deceleration in revenue growth, a decline in non-GAAP diluted EPS, and a decrease in free cash flow compared to FY26. This forward-looking outlook suggests a challenging operational environment and a potential contraction in profitability and cash generation, which is a significant negative signal for investors. The ongoing share repurchase program, with $1.0 billion remaining authorization, provides some shareholder return but does not fully offset the deteriorating operational guidance.