Zoom Briefly Anticipates Q1 Fiscal 2026 Earnings Results

Zoom Communications (ZM) is set to release its first-quarter fiscal 2026 financial results on May 21.

For this quarter, Zoom projects revenues between $1.162 billion and $1.167 billion. Non-GAAP earnings per share are anticipated to fall between $1.29 and $1.31.

The Zacks Consensus Estimate currently places ZM’s expected revenues at $1.16 billion, reflecting a 2.03% increase compared to the same quarter last year.

On the earnings side, the consensus estimate is $1.30 per share, which has remained steady over the past 90 days. This indicates a 3.70% decrease from the prior year’s earnings.

ZM has successfully exceeded the Zacks Consensus Estimate for earnings in the last four quarters, showcasing an average surprise of 10.33%.

Zoom Communications, Inc. Price and EPS Surprise

Zoom Communications, Inc. price-eps-surprise | Zoom Communications, Inc. Quote

Factors Impacting Performance

Zoom’s latest enhancements in AI Companion capabilities are likely to have positively influenced its revenue performance. With the introduction of AI Companion 2.0 and a customizable add-on rollout in April, the company has begun monetizing its AI features. These advancements are expected to enhance customer engagement during the quarter.

Furthermore, the enterprise sector is projected to remain a key growth driver. In the fourth quarter of fiscal 2025, enterprise revenues rose 6% year-over-year, contributing 60% to total revenue. The number of enterprise customers generating over $100,000 in annual revenue increased by 7%, while churn rates declined sharply, supporting sustained growth momentum.

Meanwhile, the Online business segment, which caters to small and medium businesses (SMBs) and individual clients, is expected to reflect flat or slightly declining performance. This trend aligns with continued stabilization, marked by record-low churn rates from the previous quarter. In contrast, significant contract acquisitions, such as deployment of Zoom solutions for Amazon employees and Delta Airlines’ adoption of Workvivo, are expected to bolster the enterprise segment’s growth.

On the profitability front, investments in AI are anticipated to exert some pressure on gross margins. However, Zoom’s infrastructure optimization and federated AI strategy may help mitigate these impacts, maintaining operating margins around 39%. Free cash flow during the quarter could be influenced by timing differences, tax conditions, and fluctuating interest rates.

Earnings Outlook for Zoom

According to the Zacks model, a combination of a positive earnings ESP and a Zacks Rank of #1 (Strong Buy), #2 (Buy), or #3 (Hold) typically indicates a greater likelihood of an earnings surprise. Currently, ZM holds an earnings ESP of -1.68% and a Zacks Rank #3, suggesting limited chances of an earnings beat.

Stocks Worth Considering

Several other companies show promise for potential earnings beats in their upcoming reports:

NVIDIA (NVDA) currently has an earnings ESP of +3.87% and a Zacks Rank #3. Shares have gained 0.8% year-to-date and are scheduled to report first-quarter fiscal 2026 results on May 28.

Ralph Lauren (RL) has an earnings ESP of +2.72% and a Zacks Rank #3. The stock has risen 18.9% year-to-date and will report its fourth-quarter fiscal 2025 results on May 22.

Amer Sports, Inc. (AS) has an earnings ESP of +1.06% with a Zacks Rank #3. Shares have increased 11.4% year-to-date, with a report due for first-quarter fiscal 2025 on May 20.