Zoom Communications, Inc. Q3 FY2026 earnings call

• Elevating core products with AI: Unveiled AI Companion 3.0, which is transforming work, runs on federated AI architecture, and has surging adoption. - Driving growth of new AI products: Custom AI Companion scaling with Fortune 200 wins, Oracle and Salesforce deepening partnerships. - Scaling AI-first customer experience: Customer experience ARR grew in high double digits, with nine of top 10 CX deals involving paid AI. - Acquisitions: Acquired BrightHire to enhance hiring process. - Financials: Deferred revenue at end of Q3 grew 5% year over year to $1,440,000,000. RPO increased 8% year over year to $4,000,000,000.

In Q3, total revenue grew 4.4% year over year to $1,230,000,000. Enterprise revenue grew 6.1% year over year, representing 60% of total revenue. Zoom Workplace saw Team chat monthly active users rise 20% year over year. Workvivo logos grew nearly 70% year over year to 1,225 customers. Zoom Phone surpassed 10,000,000 paid seats early in Q3 with consistent ARR growth in the mid-teens. Customer experience (contact center) had ARR growing in high double digits. AI Companion adoption surged more than four times year over year. Non-GAAP gross margin in Q3 was 80%, up 117 basis points from Q3 of last year.

• Q4 revenue expected in the range of $1,230,000,000 to $1,235,000,000 (approx. 4.1% year over year midpoint). - FY26 revenue expected in the range of $4,852,000,000 to $4,857,000,000 (4.1% year over year midpoint). - Non-GAAP operating income for FY26 expected in the range of $1,955,000,000 to $1,960,000,000. - Non-GAAP EPS for FY26 expected $5.95 to $5.97. - Board authorized an incremental $1,000,000,000 share repurchase.

• Macroeconomic environment impacts on financial results. - Execution risks with AI integrations and acquisitions. - Uncertainties in maintaining growth rates as planned.

Q: Tyler Radke asked about Q4 outlook, pricing, and long-term growth.

A: Michelle Chang responded on pricing transparency, enterprise as growth driver, and focus on churn, product diversification, etc.

Q: Michael Funk asked about enterprise net dollar expansion and post-COVID seat contraction.

A: Michelle Chang noted net dollar expansion stabilizing, with products like contact center and Workvivo bringing new customers.

Q: Rishi Jaluria asked about M&A strategy.

A: Michelle Chang said M&A will be thoughtful, disciplined, with small to medium sized investments aligned strategically.

Q: Josh Baer asked about growth vectors sustainability.

A: Michelle Chang discussed priorities around AI in workplace, new products with AI, and scaling AI-first customer experience.

Q: Ryan MacWilliams asked about product development with AI.

A: Eric Yuan talked about innovation speed in AI era, changing company culture for product development.

Q: Patrick Walravens asked about Salesforce win details.

A: Eric Yuan explained integration with Salesforce's agent force framework to drive productivity.

Q: Alex Zukin asked about AI monetization and deferred revenue.

A: Eric Yuan discussed AI monetization across product portfolio, and Michelle Chang noted deferred revenue was as expected.

Q: Timothy Horan asked about integrating with other productivity software.

A: Eric Yuan mentioned integration with Google, Microsoft, ServiceNow, Salesforce, Atlassian, etc.

Q: Seth Gilbert asked about free cash flow details.

A: Michelle Chang discussed sustainable changes in collections process improving DSO.

Q: James Fish asked about BrightHire and install base duration.

A: Eric Yuan said BrightHire fits strategy of focusing on business mission critical use cases, and Michelle Chang talked about stable RPO trend with cross-sell and new customers.

Q: Mark Murphy asked about mid-market strength.

A: Michelle Chang and Eric Yuan noted strong AI usage and growth in mid-market.

Q: Chad TVB asked about broader demand environment.

A: Michelle Chang said demand improved, focusing on sustainable TCO for customers.

Q: Jackson Adair asked about nonrevenue metrics outpacing revenue.

A: Michelle Chang and Eric Yuan mentioned AI usage and CSAT as outpacing revenue growth.

Q: Peter Levine asked about BrightHire and platform expansion.

A: Eric Yuan explained BrightHire fits strategy of applying technology to HR use cases.

Q: Tom Blakey asked about CX pricing and online growth.

A: Eric Yuan talked about consumption-based pricing for virtual agent, and Michelle Chang clarified online growth tweak in guidance.

Q: William Power asked about contact center go-to-market.

A: Eric Yuan and Michelle Chang discussed channel partner reach and investment, with many contact center deals coming from partners.

Q: Alinda (Arjun Bhatia) asked about custom AI companion adoption.

A: Eric Yuan said custom AI companions initially focus on large enterprise customers for complex use cases.

Q: Andrew King asked about channel partner platform performance.

A: Michelle Chang talked about healthy channel ecosystem, with pipe up 30% and many deals from partners.

Q: Andrew King (Catherine Trebnick) asked about BrightHire opportunity.

A: Michelle Chang said BrightHire is a large, unpenetrated market with clear value point, expanding TAM and offering upsell.