Zoom Communications (ZM) ZM Q3 Financial Results Summary

2025-11-25 · Stocks · QuoteReporter

Zoom Communications (ZM) Q3 2026 Financial Results Summary

On November 24, 2025, Zoom Communications, Inc. (NASDAQ: ZM) released its financial results for the third fiscal quarter ended October 31, 2025. The report highlights promising growth indicators and significant operational metrics, summarized as follows:

Key Financial Metrics

Total Revenue:
$1,229.8 million, an increase of 4.4% year over year (YoY).
Constant Currency: $1,227.4 million, up 4.2% YoY.
Enterprise Revenue:
$741.4 million, up 6.1% YoY.
Online Revenue:
$488.4 million, up 2.0% YoY.

Profitability Metrics

GAAP Operating Margin:
25.2% compared to 15.5% in Q3 2025 (up 9.7 percentage points).
Non-GAAP Operating Margin:
41.2%, an increase from 38.9% YoY.
GAAP Earnings Per Share (EPS):
$2.01, a substantial increase of 204.5% YoY.
Non-GAAP EPS:
$1.52, up 10.1% YoY.

Cash Flow Metrics

Operating Cash Flow:
$629.3 million, an impressive rise of 30.2% YoY.
Operating Cash Flow Margin:
51.2% compared to 41.0% in Q3 2025.
Free Cash Flow:
$614.3 million, up from $457.7 million in Q3 2025.

Customer Metrics

High-Value Customers:
4,363 customers generated over $100,000 in trailing 12 months revenue, up 9.2% YoY.
Net Dollar Expansion Rate:
98% for Enterprise customers.
Online Average Monthly Churn:
Remained stable at 2.7% YoY.
Continual Term Service Duration:
74.4% of Online Monthly Recurring Revenue (MRR) from customers with a term duration of at least 16 months (up 30 basis points YoY).

Share Repurchase and Dividend Information

Share Repurchase:
Approximately 5.1 million shares of common stock were repurchased during Q3, totaling 32.5 million shares under the current buyback plan.
The stock repurchase authorization has increased by $1.0 billion, in addition to the $310.4 million remaining authorization as of October 31, 2025.
Dividends:
No quarterly dividend has been declared.

Balance Sheet Highlights

Total Cash, Cash Equivalents, and Marketable Securities:
$7.9 billion as of October 31, 2025.

Financial Outlook

Fourth Quarter Fiscal Year 2026 Guidance:
Expected revenue: $1.230 billion to $1.235 billion.
Non-GAAP income from operations is projected between $477.0 million and $482.0 million.
Non-GAAP diluted EPS is expected to be between $1.48 and $1.49.
Full Fiscal Year 2026 Guidance:
Expected revenue: $4.852 billion to $4.857 billion.
Non-GAAP income from operations is projected between $1.955 billion and $1.960 billion.
Non-GAAP diluted EPS is expected to be between $5.95 and $5.97.

Conference Call Announcement

Zoom will host an investor webinar on November 24, 2025, at 2:00 p.m. Pacific Time / 5:00 p.m. Eastern Time to discuss these results further. Investors can join via Zoom Video Webinar at investors.zoom.com.

This comprehensive report underscores Zoom’s ongoing growth trajectory with significant increases in revenue, profitability, and customer metrics while also emphasizing their strategic stock buyback initiative.

	Three Months Ended October 31,		Nine Months Ended October 31,
	2025	2024	2025	2024
Revenue	$ 1,229,835	$ 1,177,541	$ 3,621,777	$ 3,481,295
Cost of revenue	271,770	283,881	823,337	842,272
Gross profit	958,065	893,660	2,798,440	2,639,023
Operating expenses:
Research and development	210,097	222,980	621,960	635,294
Sales and marketing	342,814	361,703	1,028,779	1,068,481
General and administrative	94,740	126,137	273,960	347,016
Total operating expenses	647,651	710,820	1,924,699	2,050,791
Income from operations	310,414	182,840	873,741	588,232
Gains on strategic investments, net	406,060	6,324	437,497	26,785
Other income, net	78,235	91,248	247,398	250,248
Income before provision for income taxes	794,709	280,412	1,558,636	865,265
Provision for income taxes	181,836	73,362	332,568	222,892
Net income	612,873	207,050	1,226,068	642,373
Net income per share:
Basic	$ 2.05	$ 0.67	$ 4.06	$ 2.08
Diluted	$ 2.01	$ 0.66	$ 3.97	$ 2.04
Weighted-average shares used in computing net income per share:
Basic	298,660,092	307,529,696	301,807,298	308,443,893
Diluted	305,024,411	314,191,269	308,702,227	314,514,244

Assets	As of October 31, 2025	As of January 31, 2025
-unaudited
Current assets:
Cash and cash equivalents	$ 1,215,877	$ 1,349,380
Marketable securities	6,727,428	6,442,329
Accounts receivable, net	417,693	495,228
Deferred contract acquisition costs, current	175,047	188,358
Prepaid expenses and other current assets	178,922	200,679
Total current assets	8,714,967	8,675,974
Deferred contract acquisition costs, noncurrent	118,316	123,464
Property and equipment, net	284,851	330,475
Operating lease right-of-use assets	40,870	55,900
Strategic investments	1,052,604	591,481
Goodwill	307,295	307,295
Deferred tax assets	746,400	749,759
Other assets, noncurrent	125,508	154,073
Total assets	$ 11,390,811	$ 10,988,421
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$ 12,843	$ 8,345
Accrued expenses and other current liabilities	514,778	558,562
Deferred revenue, current	1,431,802	1,336,387
Total current liabilities	1,959,423	1,903,294
Deferred revenue, noncurrent	12,682	17,274
Operating lease liabilities, noncurrent	28,072	37,406
Other liabilities, noncurrent	103,794	95,363
Total liabilities	$ 2,103,971	$ 2,053,337
Stockholders’ equity:
Common stock	296	305
Additional paid-in capital	4,250,595	5,130,271
Accumulated other comprehensive income	10,363	4,990
Retained earnings	5,025,586	3,799,518
Total stockholders’ equity	9,286,840	8,935,084
Total liabilities and stockholders’ equity	11,390,811	10,988,421