Zoom Video Communications delivered a solid QQ1 2026 performance with revenue of $1.1747 billion, up 2.93% year over year and a modest 0.8% sequential decline. The company produced a robust gross margin of 76.3% and an operating margin of approximately 20.6%, contributing to an EBITDA margin near 29.9%. Net income of $254.6 million and diluted EPS of $0.814–$0.835 (GAAP vs. diluted) underscored improving profitability in the quarter.
Free cash flow was strong at $463.4 million, supported by operating cash flow of $489.3 million and modest capital expenditures of about $25.9 million. Zoom ends the quarter with a fortress balance sheet: cash and short-term investments of roughly $7.81 billion, total assets of about $10.95 billion, and a net cash position of approximately $1.19 billion after accounting for debt. Deferred revenue remains a meaningful driver of revenue visibility, with current deferred revenue around $1.41 billion, signaling durable ARR and long-term revenue visibility.
Strategically, Zoom is advancing platform monetization through Zoom One, Zoom Phone, and Zoom Events, while investing in the Developer Platform and ecosystem to broaden cross-sell opportunities. Management emphasized continued focus on monetization, customer retention, and operating efficiency, even as macro and competitive pressures persist in the UCaaS market. The absence of formal forward guidance suggests a cautious frame around near-term macro volatility, but the strong FCF profile and balance sheet imply the company can fund growth initiatives and capital allocation (including buybacks) from ongoing cash generation.