Zoom (ZM) Stock Soars 7.8% Following Strong Q1 Results and Raised Outlook

TLDR

• Zoom exceeded Q1 projections with adjusted EPS reaching $1.55 compared to the $1.42 forecast
• Quarterly revenue increased 5.5% annually to $1.24 billion, surpassing the $1.22 billion projection
• AI Companion paying users jumped 184% compared to last year
• Enterprise segment revenue rose 7.2% to $755.7 million
• Fiscal 2027 annual projections elevated beyond analyst predictions for both earnings and revenue

Shares of Zoom Video Communications (ZM) climbed more than 7% during Friday’s premarket session following the video conferencing company’s announcement of fiscal first-quarter performance that exceeded Wall Street expectations alongside an improved annual forecast.

Zoom Communications, Inc., ZM

The shares advanced 7.8% before the opening bell, extending the stock’s year-to-date gain to approximately 12% for 2026.

For the three-month period concluding April 30, adjusted earnings per share reached $1.55. This figure topped analyst projections of $1.42 by thirteen cents.

Quarterly revenue totaled $1.24 billion, representing a 5.5% annual increase and exceeding the Street’s $1.22 billion projection.

The number of paying subscribers to Zoom’s AI Companion offering surged 184% versus the comparable quarter from the previous year. Additionally, the company’s “My Notes” AI tool accumulated 1.5 million licensed subscribers in merely four months following its introduction.

Enterprise Momentum

Revenue from enterprise clients expanded 7.2% year-over-year, reaching $755.7 million. The trailing twelve-month net dollar expansion rate among enterprise accounts improved to 99%, up from 98% in the year-ago period.

The platform now serves 4,534 accounts that each contribute over $100,000 in trailing twelve-month revenue, marking an 8.2% annual increase.

Operating cash flow for the quarter totaled $500.5 million, rising from $463.4 million in the prior-year period.

Zoom’s board of directors approved an incremental $1.0 billion share buyback authorization, supplementing $625 million that remained available from a previous program.

Guidance

Looking to Q2, Zoom projected adjusted EPS between $1.45 and $1.47, modestly under the $1.49 Street consensus. The company’s revenue guidance of $1.265 billion to $1.27 billion aligned closely with analyst forecasts.

For the complete fiscal year 2027, Zoom elevated its EPS projection to a range of $5.96–$6.00, exceeding the $5.87 analyst consensus. Annual revenue expectations now stand between $5.08 billion and $5.09 billion, surpassing the $5.07 billion Wall Street estimate.

Morgan Stanley analysts observed that the “path to re-rating hinges on durably higher growth,” noting that “Zoom’s Q1 showed stable growth at scale with strong margins, but FY27 growth remains mid-single digits.”

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