Zoom Communications (NASDAQ:ZM) reported fiscal second-quarter results that exceeded Wall Street expectations for both revenue and adjusted earnings, while also raising its full-year forecasts.
Despite the stronger-than-expected numbers, Class A shares of the San Jose, California-based company fell 5.1% in premarket trading on Wednesday.
Zoom became widely known for its video conferencing services during the COVID-19 pandemic, when daily usage increased dramatically as work, education and social activities moved online. More recently, the company has been repositioning itself as an AI-powered enterprise software platform rather than relying primarily on video communications.
Zoom expands AI capabilities across Workplace platform
At the centre of the company’s strategy is Zoom Workplace, which combines meetings, messaging, email and other collaboration functions within a single platform.
Zoom has increasingly integrated artificial intelligence into the service through products including ZoomMate, which can summarise meetings, and My Notes, an in-meeting note-taking feature.
Growing adoption of these AI capabilities, alongside continued demand from enterprise customers, has supported Zoom shares during 2026. Ahead of Tuesday’s earnings announcement, ZM Class A shares had risen 17% year-to-date, compared with a 3.6% decline for the iShares Expanded Tech-Software Sector ETF and a 12.2% gain for the S&P 500.
Enterprise revenue records strongest growth in three years
For fiscal Q2 2027, Zoom reported adjusted earnings of $1.55 per share on revenue of $1.28 billion. Analysts had forecast adjusted earnings of $1.48 per share and revenue of $1.27 billion.
Enterprise revenue increased 7.8% year-over-year to $787.5 million, representing its strongest growth rate in three years.
The number of customers generating more than $100,000 in revenue over the trailing 12 months increased 8.2% from a year earlier to 4,625. Zoom’s trailing 12-month net dollar expansion rate among enterprise customers reached 99% at the end of the quarter, compared with 98% a year ago.
“Licensed Monthly Active Users of our AI features in Workplace grew 125% year over year. We are even more encouraged by the broadening engagement, which has expanded from reactive communication summaries into active querying and building workflows, turning insights into action and conversations into outcomes,” Zoom chief executive Eric Yuan said in prepared remarks.
Morgan Stanley highlights enterprise momentum
Morgan Stanley analysts said the latest results provided further evidence that Zoom’s strategy of expanding beyond its traditional communications offering is gaining traction.
The second quarter “strengthens the platform-extension thesis, with record Enterprise growth and strong bookings supported by broader product adoption, but weaker Online top-of-funnel dynamics and unchanged constant currency 2H outlook keep the timing of a consolidated growth inflection unresolved.”
The analysts said enterprise momentum is becoming increasingly evident, although Zoom has yet to demonstrate the combination of sustained growth and profitability they believe would be required to support a meaningful re-rating of the shares.
Zoom raises fiscal 2027 earnings and revenue forecasts
For fiscal Q3 2027, Zoom expects adjusted earnings of between $1.46 and $1.48 per share, with revenue forecast at $1.275 billion to $1.28 billion.
The company also increased its guidance for the full fiscal year.
Zoom now expects adjusted earnings per share of $6.08 to $6.12, compared with its previous forecast of $5.96 to $6.00.
Full-year revenue is projected at between $5.085 billion and $5.095 billion, slightly above the previous guidance range of $5.08 billion to $5.09 billion.
While the quarterly beat, accelerating enterprise growth and increased guidance point to continued progress in Zoom’s transformation, the premarket share-price decline suggests investors remain cautious about the pace at which stronger enterprise and AI adoption can translate into faster overall growth.