Zoom Reports $1.28 Billion Q2 Revenue as Enterprise AI Business Records Strongest Growth in Three Years

Zoom has delivered a solid financial performance for the second quarter of fiscal year 2027, reporting $1.28 billion in revenue as its enterprise business achieved its fastest growth rate in three years. The results highlight the company’s successful shift from being primarily a video conferencing platform to becoming a broader AI-powered workplace collaboration and customer experience software provider.

The company generated $1.277 billion in total revenue during the quarter, representing 4.9% year-over-year growth. Enterprise customers remained the primary growth driver, with enterprise revenue increasing 7.8% compared to the same period last year. Meanwhile, the online business showed stable performance, reflecting Zoom’s continued ability to retain a large base of individual users and small businesses while expanding its presence in the enterprise software market.

Enterprise revenue reached $787.5 million, while online revenue totaled $489.7 million. The stronger performance from enterprise accounts demonstrates growing demand for Zoom’s collaboration, communication, and AI-powered productivity tools among businesses adopting digital workplace technologies.

Zoom maintained healthy profitability despite increased investment in artificial intelligence and enterprise products. The company reported GAAP operating income of $314.3 million, while non-GAAP operating income increased to $510.3 million. Its non-GAAP operating margin reached 40%, highlighting the company’s ability to generate strong earnings while continuing to invest in new technology and product development.

One of the biggest highlights of the quarter was the significant increase in GAAP net income, which climbed to $1.54 billion, compared to $358.6 million a year earlier. On a non-GAAP basis, net income remained stable at $464 million, reflecting consistent operational performance across the business.

Zoom also ended the quarter with a strong financial position, holding approximately $7.2 billion in cash, cash equivalents, and marketable securities. This large cash reserve provides flexibility for acquisitions, product innovation, AI infrastructure investments, and shareholder returns through stock repurchase programs.

Customer growth metrics continued to improve across the enterprise segment. The number of customers generating more than $100,000 in annual recurring revenue increased by 8.2%, reaching 4,625 enterprise customers. This indicates that more large organizations are expanding their investments in Zoom’s software ecosystem beyond traditional meetings.

The company also reported improvements in enterprise customer retention and expansion. Its net dollar expansion rate for enterprise customers increased to 99%, showing that existing customers continue purchasing additional products and services. Online customer churn remained stable, while long-term subscriber retention also improved slightly during the quarter.

Artificial intelligence has become a central pillar of Zoom’s business strategy. The company said enterprise growth was supported by increasing adoption of its AI-first Customer Experience portfolio, which includes tools designed to automate customer support, improve productivity, and enhance collaboration across organizations.

Among the fastest-growing AI products is Zoom Virtual Agent, whose customer count grew 256% year over year. Businesses are increasingly adopting AI-powered virtual agents to automate customer interactions, reduce response times, and improve service quality without increasing operational costs.

Zoom also expanded its AI ecosystem with products such as ZoomMate, My Notes, AI Productivity Suite, ZVA Receptionist, and Workvivo HQ Agent. These solutions use artificial intelligence to summarize meetings, generate notes, automate workplace tasks, assist customer support teams, improve recruiting workflows, and enhance employee communication.

The company strengthened its AI capabilities further through strategic acquisitions, adding technologies focused on customer intelligence, recruiting automation, and enterprise engagement. These investments reflect Zoom’s broader vision of embedding AI into everyday business workflows rather than limiting AI to meeting assistance.

Cash generation remained strong, although it declined slightly compared to the previous year. Operating cash flow reached $494.8 million, while free cash flow totaled $472.4 million during the quarter. The company also continued returning capital to shareholders by repurchasing approximately 3.7 million shares, leaving $1.3 billion available under its current share buyback authorization.

Looking ahead, Zoom expects third-quarter revenue between $1.275 billion and $1.280 billion, with non-GAAP earnings per share projected between $1.46 and $1.48. For the full fiscal year, the company raised or reaffirmed its outlook, forecasting annual revenue between $5.085 billion and $5.095 billion and free cash flow between $1.78 billion and $1.82 billion.

The updated guidance reflects confidence in continued enterprise momentum, growing AI adoption, and expanding software offerings. While online revenue growth is expected to remain steady, enterprise customers and AI-powered workplace solutions are becoming increasingly important contributors to Zoom’s long-term growth strategy.

Zoom’s latest quarterly performance signals that the company is successfully evolving into an AI-driven enterprise software platform. By combining collaboration tools with intelligent automation, customer experience solutions, productivity assistants, and workplace AI features, Zoom is positioning itself as a comprehensive platform for modern digital work and enterprise operations.