Zoom Communications (ZM) reported fourth-quarter earnings and revenue that exceeded Wall Street estimates, driven by strong enterprise sales. However, fiscal 2026 revenue guidance came in slightly below expectations, leading to a decline in Zoom stock.
Zoom Earnings Beat Expectations, But Stock Dips
Zoom posted adjusted earnings of $1.41 per share for the January-ended fourth quarter, just a penny below last year’s figures. Revenue increased by 3.3% year-over-year to $1.184 billion, surpassing analysts’ projections of $1.179 billion.
Jefferies analyst Samad Samana noted, “Zoom posted a beat on revenue of 1%, although the magnitude was more modest vs. Q3. The fiscal 2026 revenue growth outlook was consistent with commentary given last quarter, but currency was a headwind. Investors did not get the accelerating growth they were looking for, but we believe Zoom is entering fiscal 2026 on solid footing with a path to upside.”
Enterprise Business Shows Strength
A key bright spot was Zoom’s enterprise segment, where revenue surged nearly 6% to $706.8 million. Despite the positive growth, Zoom stock fell 3.5% to $78.25 in early trading on Tuesday.
William Blair analyst Arjun Bhatia highlighted, “While we would like to see stronger growth acceleration from the company, we are encouraged by the momentum in the enterprise segment, traction with AI Companion, lower churn rates, and progress with new products like contact center.”
Fiscal 2026 Guidance and AI Expansion
For full-year 2025, Zoom forecasts revenue of $4.79 billion at the midpoint, slightly below analysts’ estimates of $4.81 billion, reflecting a 3% growth. The company also projected earnings per share between $5.34 and $5.37, aligning with expectations of $5.36.
Zoom is aggressively expanding beyond video calls by integrating artificial intelligence into its platform. With AI-powered tools and an evolving product lineup, Zoom aims to solidify its position as a comprehensive business communication solution.
As AI adoption grows, the company is shifting towards AI-driven automation, aligning with a broader industry trend among software firms. Investors will be watching closely to see how AI and enterprise momentum shape Zoom’s long-term growth trajectory.
