Zoom Technologies Inc (NASDAQ:ZOOM) shares opened more than 11% lower following the release of its fourth quarter and full-year fiscal 2026 results, as the company reported an earnings shortfall and issued guidance slightly below analyst expectations.
For the fourth quarter, Zoom reported non-GAAP earnings per share of $1.44, missing the consensus analyst estimate of $1.49 by $0.05.
Revenue reached $1.25 billion, modestly above the expected $1.23 billion, marking a 5.3% increase year-over-year.
Enterprise revenue for the quarter totaled $757.3 million, up 7.1% from a year earlier. The number of customers generating more than $100,000 in trailing 12-month revenue increased 9.3% year-over-year.
On the profitability side, Zoom reported a GAAP operating margin of 20%, up 100 basis points from the prior year, and a non-GAAP operating margin of 39.3%, down slightly by 20 basis points. GAAP EPS was $2.22, a 91.4% increase from the prior year, while non-GAAP EPS rose 2.1% to $1.44.
For the full fiscal year, Zoom reported total revenue of $4.87 billion, up 4.4% year-over-year, with non-GAAP EPS of $5.92, up 6.9% from the prior year.
“In FY26, revenue growth accelerated 130 basis points to 4.4%, reflecting the growing adoption of Zoom as a system of action for modern work,” Zoom CEO Eric Yuan said in a statement. “As work increasingly starts in conversations, customers are choosing Zoom to turn those conversations into completed workflows across customer-facing and internal use cases.
Looking ahead, Zoom expects first quarter fiscal 2027 non-GAAP EPS of $1.40 to $1.42, below the consensus estimate of $1.45, while revenue is projected between $1.22 billion and $1.225 billion, slightly above the $1.221 billion consensus.
Full-year fiscal 2027 revenue is expected to range from $5.065 billion to $5.075 billion, with non-GAAP EPS of $5.77 to $5.81. The company also anticipates full-year free cash flow between $1.7 billion and $1.74 billion.
Following the report, Wedbush analysts maintained an ‘Outperform’ rating on Zoom with a 12-month price target of $110. They highlighted that Zoom delivered a top-line beat and a bottom-line miss and provided a mixed 2027 guide, while continuing to advance its AI-focused platform strategy.
The analysts wrote that Zoom’s fourth-quarter revenue of $1.247 billion came in above both Street expectations and the company’s guidance, driven by strong demand for AI-driven innovations such as AI Companion 3.0 and ZM ZCX, which saw annual recurring revenue grow in the high double digits.
They noted that the enterprise segment remains solid, with 4,468 customers contributing $100,000 or more in trailing 12-month revenue, up 9% year over year, and a retention rate of 98%.
