Total Revenue

–0.8% sequential decline

Q1 2026 total revenue was reported at $1,174.7 million, a decrease of roughly 0.8% from Q4 2025’s $1,184.2 million. This slight contraction appears to be driven by a modest reduction in combined revenue performance, with the online segment’s weaker growth offsetting strong enterprise demand. "

Enterprise Revenue

Stable / Dominant

Enterprise revenue generated $704.7 million in Q1 2026, representing approximately 60% of total revenue. This continued dominance mirrors previous trends where strong enterprise adoption and a healthy mix of new and existing customers drove sustained performance. " "

Online Revenue

Stable / Underperforming relative to enterprise

Online revenue contributed $470.0 million (about 40% of total revenue) in Q1 2026, indicating that while it remains a key segment, its relatively stagnant or weaker growth compared to enterprise revenue likely contributed to the overall slight decline in total revenue. "

Operating & Net Income

Stable profitability margins

Operating income stood at $241.6 million and net income at $254.6 million, resulting in net margins of roughly 21.7%. Despite the slight revenue dip, these stable margins suggest that operational efficiency was maintained relative to previous periods. "

Earnings per Share (EPS)

–30% sequential drop

Basic EPS fell sharply from $1.20 in Q4 2025 to $0.84 in Q1 2026—a decline of about 30%. This significant drop, despite nearly flat total revenue, hints at increased per share cost pressures or unfavorable share count dynamics impacting profitability on a per share basis. " "

Cash & Cash Equivalents

Stable

Cash and cash equivalents remained robust at $1,228.8 million, reflecting consistent liquidity management and a solid balance sheet, which supports operational resilience even in a period marked by some fluctuations in revenue and EPS. "

Revenue

Q2 2026

$1.162 - $1.167 billion "

$1.195 - $1.2 billion "

raised

Non-GAAP Operating Income

Q2 2026

$440 - $445 million "

$460 - $465 million "

raised

Non-GAAP Operating Margin

Q2 2026

38% "

38.6% "

raised

Non-GAAP EPS

Q2 2026

$1.29 - $1.31 "

$1.36 - $1.37 "

raised

Accelerated AI Adoption

In Q4 2025, AI Companion monthly active usage grew 68% QoQ with an AI-first platform rollout. " Q3 2025 reported 59% growth and broad customer enthusiasm. " " Q2 2025 highlighted 1.2 million enabled accounts and strong adoption of multiple AI features. " "

Q1 2026 noted a nearly 40% QoQ increase in monthly active users for AI Companion, with strong customer interest in new custom features despite AI-driven revenue remaining modest. " " "

Consistent customer enthusiasm for AI remains, though growth rates show a slight deceleration. Emphasis is shifting toward integrating monetizable custom features even as adoption stays robust.

Monetization Challenges

Q4 2025 emphasized free AI features for lower-tier customers and plans to launch paid add-ons starting April 2025. " " Q3 2025 discussed future monetization via customized solutions while balancing free offerings. " " Q2 2025 explained the free use of core AI Companion as a trust builder with monetization later via business services. " "

Q1 2026 is monetizing through the Custom AI Companion add-on with trial enthusiasm from Global 2000 customers; however, revenue impact in FY26 is expected to be modest while growth potential is highlighted. " " "

Monetization remains a challenge as Zoom continues to offer core AI for free to build trust, but is increasingly focusing on customized, fee-based features to drive long-term revenue.

Evolving AI Product Portfolio

Q4 2025 detailed the upcoming launch of Custom AI Companion at $12 per seat and introduced AI Companion Studio for building custom agents. " " " Q3 2025 discussed customization and integration with enterprise systems including early feedback from Zoomtopia. " " Q2 2025 did not specifically mention these products but focused on AI Companion’s broader role. " "

Q1 2026 expanded on Custom AI Companion and introduced AI Companion Studio as part of its “agentic” framework, highlighting customizable integrations (e.g. Bring Your Own Dictionary, Jira integration) with strong trial customer interest, yet with near-term revenue modesty. " " "

Focus on innovative, customizable AI products is increasing. Zoom is evolving its offering from broad AI adoption into targeted, integrated solutions for enterprises, signaling long-term strategic impact.

Robust Contact Center Growth & International Expansion

Q4 2025 showcased record Contact Center deals (e.g. a Fortune 100 deal with 15,000+ agents) and consistent regional revenue gains. " " Q3 2025 reported the largest-ever Contact Center customer (20,000 seats) with strong channel contributions and emphasized expanding in EMEA. " " Q2 2025 highlighted over 1,100 Contact Center customers with premium ASPs and noted mixed growth regionally. " " "

Q1 2026 reported 65% YoY growth in Contact Center customers, the largest ARR contribution quarter for Zoom Virtual Agent, and a noticeable mix shift towards the Elite SKU. International expansion remains a focus with positive momentum in multiple regions. " " " " "

Sustained strong growth in the Contact Center business coupled with steady international expansion, with continued emphasis on leveraging integrated platform advantages and channel partnerships to drive enterprise adoption.

Enterprise Sales Elongation & Macroeconomic Uncertainty

Q4 2025 noted a “mixed but stable” macro environment with enterprise sales momentum and sequential improvement in downsells. " Q3 2025 reported elongation in sales cycles via lengthening billing terms while acknowledging cautious customer spending amid uncertain conditions. " " Q2 2025 cited stable enterprise growth alongside macro concerns in the SMB segment and EMEA challenges. " " "

Q1 2026 observed deal elongation and increased scrutiny on deal terms among U.S. enterprises attributed to a cautious macroeconomic environment, though overall buying behavior remained largely unchanged. " " "

Continued caution in enterprise sales due to macro uncertainties with elongated deal cycles; however, core enterprise demand remains stable as customers weigh total cost and value.

Channel Partnerships & Integration Strategies

Q4 2025 emphasized the role of channel partnerships (e.g. Amazon) in driving Contact Center and Phone growth, and detailed integration strategies for enterprise solutions. " " " Q3 2025 highlighted channel-led Contact Center deals and integration with partners like ServiceNow to bolster AI offerings. " Q2 2025 mentioned working with partners to support digital transformation. " " "

Q1 2026 announced a major channel transformation with improved partner processes, a new strategic partnership with Bell Canada, and reinforced integrated approaches across Zoom Phone, Contact Center, and Workplace to streamline sales. " " " "

Intensified channel focus and better integration tactics are emerging, with significant process improvements and new strategic partnerships aimed at boosting sales and enhancing the unified platform experience.

Online Segment Dynamics

Q4 2025 guidance suggested the Online segment would be flat to slightly declining, emphasizing record-low churn and stabilization. " " " Q3 2025 noted flat growth following earlier price increases and improved churn (2.7%). " " Q2 2025 observed low churn and modest growth amidst economic headwinds in the SMB segment. " " " "

Q1 2026 reported a modest $1 price increase for monthly Pro SKUs paired with doubled storage, record low churn, and strong customer acquisition, while noting no immediate plans for further price changes. " " " "

A shift from leveraging pricing power to focusing on stabilization is evident, with continued strong customer retention and incremental pricing adjustments aimed at maintaining overall platform stability amid flat growth.

Rising AI Investment Costs & Margin Compression

Q4 2025 highlighted rising AI investments offset by efficiency measures; modest margin compression was discussed with FY26 operating margin expected near 39%. " " " " Q3 2025 noted non-GAAP operating margins dipped from 39.3% to 38.9% due to significant AI investments. " " " " Q2 2025 discussed a drop in non-GAAP gross margin from 80.3% to 78.6% tied to AI investments but noted long-term margin targets remained. " " "

Q1 2026 reported a non‐GAAP gross margin of 79.2% and operating margin of 39.8%, with margin compression attributed to ongoing investments in AI; meanwhile, Zoom remains focused on cost optimization to reach its long-term margin targets. " "

Persistent cost pressures from AI investments are resulting in slight margin compression. The company remains vigilant through efficiency initiatives, balancing short‐term cost increases with long‐term margin goals.

Reduced Emphasis on Legacy Initiatives

In Q2 2025 and earlier periods, Workvivo was promoted as a growth engine alongside traditional offerings, while explicit price adjustments were less stressed amid a broader focus on AI and digital transformation. " Q3 2025 and Q4 2025 highlighted Workvivo’s strong growth driven by Meta migrations; there was no heavy emphasis on legacy pricing adjustments. " " "

Q1 2026 noted robust Workvivo customer growth (up 106% YoY) and maintained a modest $1 price increase for Pro SKUs. The emphasis remains on driving innovation and capitalizing on new digital engagement platforms over legacy models. " " " "

A gradual shift away from legacy initiatives is apparent as Zoom focuses on next‐generation digital engagement products (e.g. Workvivo) and maintains moderate, value‐based pricing adjustments rather than aggressive price increases.

Shifting Sentiment on AI Adoption vs. Profitability

Q3 2025 discussed growing customer budget reallocation toward AI, with sentiment driven by free AI Companion offerings that bolster trust despite margin pressure. " Q4 2025 reaffirmed that free core AI features would build long‐term value while AI investments were embedded in overall guidance. " Q2 2025 mentioned strong AI adoption in product enhancements without explicitly contrasting profitability. " "

Q1 2026 presented a balanced view: strong AI adoption with 40% QoQ user increases and enthusiasm for new features, paired with ongoing concerns about margin compression due to rising investment costs; the sentiment reflects careful management of cost versus long‐term AI monetization. " " " " "

There is a growing focus on balancing customer enthusiasm for AI with the need to sustain profitability. While customers favor free, value‐added AI features, Zoom remains cautious about short‐term margin impacts as it invests in long‐term AI monetization.