Zoom Communications (NASDAQ:ZM) reported fiscal fourth-quarter and full-year 2026 results highlighting accelerating revenue growth, expanding adoption of its AI features, and continued momentum in Zoom Phone and Zoom’s customer experience offerings.
Revenue growth accelerated as enterprise remained the primary driver
Founder and CEO Eric Yuan said fiscal 2026 was “a pivotal year” as Zoom expanded beyond collaboration into what he described as an “AI-powered system of action for modern work.” Zoom grew fourth-quarter revenue 5.3% year-over-year and full-year revenue 4.4%, which Yuan said represented an acceleration of 130 basis points over fiscal 2025.
Internationally, Chang reported revenue growth of 6% in the Americas, 5% in EMEA, and 3% in APAC. In Q&A, management pointed to product expansion in Phone, Contact Center, and Workvivo, alongside channel investments and local infrastructure such as a U.K. data center, as factors supporting growth outside the U.S.
AI adoption and monetization focus: Custom AI Companion and CX momentum
Yuan emphasized three priorities: elevating Zoom Workplace with AI, driving growth of new AI products, and scaling “AI-first customer experience.” He argued that Zoom’s customer experience advantage comes from embedding CX into the broader platform rather than treating it as a standalone solution.
Zoom pointed to continued strength in its customer experience business, noting that Zoom Contact Center annual recurring revenue (ARR) continued to grow in “high double digits” and accelerated in Q4, which management attributed to AI monetization. Yuan said every one of Zoom’s top 10 customer experience deals in the quarter included paid AI, and seven of those deals displaced “leading CCaaS vendors.”
Management highlighted several customer examples discussed on the call:
- Aeroflow Health selected Zoom Contact Center in a deal spanning ZCC Elite and Zoom Virtual Agent (ZVA) Voice plus chat, replacing a CCaaS vendor.
- MLB and OPENLANE expanded with a combination of ZCC Elite and ZVA Voice.
- A “major insurance provider” chose a bundle of Zoom Phone, Zoom Contact Center, and ZVA Voice to automate call triage and reduce agent workload.
- Surrey and Sussex Healthcare NHS Trust partnered with Zoom to modernize inbound call operations using Zoom Phone, Zoom Contact Center, and ZVA Voice plus chat.
Zoom also highlighted early traction for its voice-based virtual agent. Yuan said ZVA Voice, only a few quarters into market, was included in four of the top 10 CX deals in Q4, and Zoom signed a nearly seven-figure ARR deal with a U.S. retailer using ZVA to handle inbound calls across more than 1,100 locations. Zoom announced ZVA 3.0 the day before the call, which management said expands across voice and chat and can execute multi-step workflows while bringing in human agents with full context when needed.
On broader AI monetization, Yuan said Zoom was “very optimistic” about fiscal 2027, with Custom AI Companion positioned as a key paid offering for customers seeking connectors, workflow tools, and enterprise knowledge retrieval. He said Custom AI Companion had already contributed to growth with large customer deals in Q3 and Q4 and was expected to help further in fiscal 2027.
Zoom Workplace and Phone: competitive takeouts and expanding AI engagement
Yuan said the launch of AI Companion 3.0 in Q4 was designed to turn meetings into “engines of ongoing work.” Zoom reported that AI Companion monthly active users more than tripled year-over-year in Q4, while monthly active users engaging AI through the side panel more than doubled quarter-over-quarter. Within Zoom Phone, monthly active users using AI features increased 35% sequentially.
Zoom Phone remained a major focus, with Yuan saying Phone ARR continued to grow in the “mid-teens.” He cited competitive wins including a Fortune 10 Zoom Phone deal for 140,000 seats replacing Cisco Calling, two large U.S. financial institutions displacing Teams and Cisco Calling, and a leading global bank adding nearly 50,000 seats in Q4 to reach 150,000 total Zoom Phone seats deployed.
In Q&A, Yuan attributed increasing cloud phone migrations to AI, arguing large enterprises cannot leverage AI in the same way on on-prem systems. Chang added that Zoom had previously disclosed phone penetration at 19% of its meetings base at Zoomtopia 2024, framing that as evidence of both progress and remaining opportunity.
Margins, cash flow, and buybacks
Chang reported fourth-quarter non-GAAP gross margin of 79.8%, up 1 point year-over-year, primarily due to cost optimization while continuing to invest in AI. Non-GAAP operating income rose 4.6% to $490 million, with a non-GAAP operating margin of 39.3% versus 39.5% a year earlier. Non-GAAP EPS increased $0.03 to $1.44, though Chang said results included a $0.11 headwind from higher-than-expected taxes due in part to discrete quarter-end true-ups.
Operating cash flow was $355 million and free cash flow was $338 million in Q4, down from $425 million and $416 million, respectively, in the prior-year quarter. Zoom ended the quarter with $7.8 billion in cash, cash equivalents, and marketable securities (excluding restricted cash).
Zoom repurchased 3.8 million shares for about $324 million during Q4 under its $3.7 billion buyback plan, bringing total repurchases under the plan to 36.3 million shares for $2.7 billion as of quarter end. Chang said Zoom intended to use buybacks to at least offset dilution annually, and noted Zoom reduced stock-based compensation expense 18% in fiscal 2026.
Outlook: revenue expected to surpass $5 billion in fiscal 2027
For the first quarter of fiscal 2027, Zoom guided for revenue of $1.22 billion to $1.225 billion, implying 4.1% growth at the midpoint. The company projected non-GAAP operating income of $487 million to $492 million (about a 40% operating margin at the midpoint) and non-GAAP EPS of $1.40 to $1.42 based on approximately 304 million shares.
For fiscal 2027, Zoom forecast revenue of $5.065 billion to $5.075 billion, which Chang said would cross the $5 billion milestone and imply 4.1% growth at the midpoint. Non-GAAP operating income was guided to $2.05 billion to $2.06 billion (40.5% margin at the midpoint). Chang said the operating margin outlook includes a 180-basis-point tailwind from an accounting amortization change, partially offset by 70 basis points of pressure from the second year of Zoom’s shift from stock-based compensation to cash bonus compensation.
Chang also flagged an expected $50 million headwind to interest income in fiscal 2027 due to lower yields, and guided free cash flow to $1.7 billion to $1.74 billion, including roughly $75 million of incremental capital expenditures tied to a post-pandemic refresh cycle across U.S. data centers.
During Q&A, Chang said the online outlook includes a 6% price increase on annual SKUs effective mid-March, which she framed as a mechanism to reflect “incremental value” added across Workplace and AI. She also noted a 40-basis-point revenue headwind in fiscal 2027 from a “single large competitor, white labeling” customer that churned at the end of fiscal 2026.
Management repeatedly returned to its view that AI is reshaping customer expectations and enterprise buying patterns, with Chang and Yuan emphasizing larger, longer-term platform deals combining Zoom Workplace, Phone, and Contact Center, increasingly sold through channel partners and systems integrators.
About Zoom Communications (NASDAQ:ZM)
Zoom Video Communications, Inc (commonly referred to as Zoom) is a provider of cloud-based communications and collaboration solutions. The company’s platform supports video conferencing, voice calling, instant messaging, webinars and large-scale virtual events, and meeting room systems, marketed to businesses, educational institutions, government organizations and individual users. Zoom’s product lineup includes Zoom Meetings, Zoom Phone, Zoom Rooms, Zoom Video Webinars and Zoom Chat, and the company offers integrations and extensions through a developer marketplace and third-party apps.
Founded in 2011 by Eric S.
