Zoom delivered a solid QQ2 2026 performance, underscoring the durability of its software-as-a-service model while accelerating AI-enabled differentiation. Total revenue of $1.217 billion rose 4.7% year over year (4.4% in constant currency), with the Enterprise segment accounting for 60% of revenue and continuing to outgrow Online. Non-GAAP gross margin improved to 79.8% (+128 bps YoY), and non-GAAP operating margin expanded to 41.3% (+216 bps), driven by disciplined cost management and the ongoing shift of investments toward AI capabilities. Free cash flow reached $508 million (up 39% YoY) on a 42.4% operating cash flow margin, and the company ended the quarter with a substantial liquidity position (~$7.8 billion in cash, cash equivalents, and marketable securities) while continuing a buyback program totaling $463 million for 6 million shares in the quarter. Management highlighted strong AI momentum, with AI Companion MAUs up more than 4x year-over-year and Enterprise-driven AI workflows expanding across meetings, contact center, and customer experience. Management also signaled a constructive, albeit dynamic, macro backdrop with raised full-year guidance for FY26 and continued emphasis on AI-driven product differentiation and platform cohesion.
Key accelerants include: (1) AI Companion and customized AI capabilities expanding beyond meeting summaries into pre- and post-meeting workflows and cross-product automation; (2) stronger displacement-driven CCaaS growth and high-end AI features under Zoom Contact Center Elite; (3) strategic partnerships (PwC, AWS Marketplace expansion) that broaden go-to-market reach; and (4) sustained profitability and strong FCF supporting a robust capital return program. Investors should monitor the trajectory of AI-related operating costs versus efficiency gains, the rate of enterprise win-rate expansion, the evolution of RPO and deferred revenue, and the pace of AI-driven monetization in targeted SKUs (e.g., Custom AI Companion) amid a competitive AI and collaboration landscape.