Zoom Gears Up to Post Q1 Earnings: What's in Store for the Stock?
Zoom Communications ZM is scheduled to report its first-quarter fiscal 2026 results on May 21.
Zoom expects first-quarter fiscal 2026 revenues between $1.162 billion and $1.167 billion. Non-GAAP earnings per share are expected in the range of $1.29-$1.31.
The Zacks Consensus Estimate for ZM's first-quarter fiscal 2026 revenues is currently pegged at $1.16 billion, indicating a 2.03% increase from the year-ago quarter's reported figure.
The consensus mark for earnings is pinned at $1.30 per share, which has remained unchanged over the past 90 days. The figure suggests a 3.70% decrease from the year-ago reported figure.
ZM surpassed the Zacks Consensus Estimate for earnings in each of the trailing four quarters, with an average surprise of 10.33%. (See the Zacks Earnings Calendar to stay ahead of market-making news.)
Zoom Communications, Inc. Price and EPS Surprise
Zoom Communications, Inc. price-eps-surprise | Zoom Communications, Inc. Quote
Let us see how things are shaping up for the upcoming announcement.
Factors to Consider
The expansion of Zoom's AI Companion capabilities is anticipated to have played a major role in boosting the company's top-line performance. With the launch of AI Companion 2.0 and the rollout of the customizable add-on in April, Zoom began to monetize its agentic AI features. These innovations are likely to have improved customer stickiness and platform engagement in the quarter under review, directly benefiting the top line.
Enterprise is expected to have continued being the dominant growth driver. In the fourth quarter of fiscal 2025, enterprise revenues grew 6% year over year and accounted for 60% of total revenues. The number of customers generating over $100,000 in trailing 12-month revenues grew 7% year over year, while churn rates reached record lows. This trend is expected to have persisted in the to-be-reported quarter, supported by continued momentum in Zoom Phone, Contact Center, and Workvivo, particularly as large deals likely ramped up.
The Online business segment, which includes SMB and individual customers, is expected to have remained flat to slightly down during the quarter. This performance reflects ongoing stabilization trends, including record-low churn levels achieved in the previous quarter. In contrast, Zoom's Enterprise segment is anticipated to have carried the bulk of the growth in the fiscal first quarter. Large deal wins, such as the deployment of Zoom solutions to Amazon employees and Delta Airlines' adoption of Workvivo, is expected to have reinforced the platform's relevance and appeal to upmarket clients.
From a bottom-line perspective, strategic investments in AI are expected to have weighed on gross margins, though the company remains committed to achieving long-term efficiency gains. Zoom's federated AI approach and infrastructure optimization efforts are expected to have helped offset these costs in the fiscal first quarter, keeping operating margins stable near 39%. Additionally, free cash flow in the quarter under review is expected to have been impacted by timing differences, tax conditions and changes in interest rates.
What Our Model Says for ZM
Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here.
ZM currently has an Earnings ESP of -1.68% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Stocks to Consider
Here are some companies worth considering, as our model shows that these have the right combination of elements to beat earnings in their upcoming releases:
NVIDIA NVDA currently has an Earnings ESP of +3.87% and a Zacks Rank #3. You can see the complete list of today's Zacks #1 Rank stocks here.
NVDA shares have gained 0.8% in the year-to-date (YTD) period. It is slated to report its first-quarter fiscal 2026 results on May 28.
Ralph Lauren RL has an Earnings ESP of +2.72% and a Zacks Rank #3 at present.
RL shares have gained 18.9% YTD. It is scheduled to report its fourth-quarter fiscal 2025 results on May 22.
Amer Sports, Inc. AS has an Earnings ESP of +1.06% and a Zacks Rank #3 at present.
AS shares have gained 11.4% YTD. It is scheduled to report its first-quarter 2025 results on May 20.
7 Best Stocks for the Next 30 Days
Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."
Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.0% per year. So be sure to give these hand picked 7 your immediate attention.
See them now >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
NVIDIA Corporation (NVDA): Free Stock Analysis Report
Ralph Lauren Corporation (RL): Free Stock Analysis Report
Zoom Communications, Inc. (ZM): Free Stock Analysis Report
Amer Sports, Inc. (AS): Free Stock Analysis Report
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
National Post
22 minutes ago
- National Post
Goldman Sachs Asset Management Announces Final Liquidating Distribution of $0.291 Per Share for Goldman Sachs MLP and Energy Renaissance Fund
Article content NEW YORK — Goldman Sachs Asset Management is announcing the final liquidating distribution of $0.291 per common share of the Goldman Sachs MLP and Energy Renaissance Fund (the 'Fund'). Pursuant to the Fund's Plan of Liquidation and Dissolution previously announced on June 7, 2023, shareholders of the Fund as of the close of business on July 10, 2023 will be entitled to receive the liquidating distribution. The liquidating distribution will be paid entirely in cash and will represent all of the Fund's remaining assets after satisfying all liabilities and obligations of the Fund. Distribution proceeds are expected to be disbursed on June 3, 2025. Article content Article content Distributions may result in a taxable event for shareholders, depending on their individual circumstances. Shareholders should consult their own tax advisors about any tax liability resulting from the receipt of liquidation proceeds. Article content About Goldman Sachs Asset Management, L.P. Article content Bringing together traditional and alternative investments, Goldman Sachs Asset Management provides clients around the world with a dedicated partnership and focus on long-term performance. As the primary investing area within Goldman Sachs (NYSE: GS), we deliver investment and advisory services for the world's leading institutions, financial advisors and individuals, drawing from our deeply connected global network and tailored expert insights, across every region and market – overseeing approximately $3.2 trillion in assets under supervision worldwide as of March 31, 2025. Driven by a passion for our clients' performance, we seek to build long-term relationships based on conviction, sustainable outcomes, and shared success over time. Follow us on LinkedIn. Article content Date of First Use: May 30, 2025 Article content 1 Assets Under Supervision (AUS) includes assets under management and other client assets for which Goldman Sachs does not have full discretion. AUS figure is as of March 31, 2025. Article content Article content Article content Article content Contacts Article content Media Contact: Victoria Zarella Tel: 212-902-5400 Article content Article content Article content
National Post
22 minutes ago
- National Post
Why Canadian military's Cyclone helicopters were grounded for 27 days in May
The Canadian military's Cyclone helicopters weren't flying for 27 days in May due to a lack of spare parts, and only one of them is now able to take to the skies. Article content Article content Canada has 26 of the ship-borne maritime helicopters, with a final one slated for delivery this year. The $5.8-billion fleet is normally used to provide air support for the Royal Canadian Navy. Their missions include surface and subsurface surveillance, search and rescue, and anti-submarine warfare. Article content 'On May 1, the Commander of 1 Canadian Air Division ordered a temporary pause to flying operations for the CH-148 Cyclone fleet, after questions emerged in late April about whether various spare parts for the aircraft were potentially in use beyond their service life. The temporary pause to flying operations was lifted as of May 27,' Kened Sadiku, who speaks for the Department of National Defence (DND), said in an email. Article content Article content 'Certain aircraft components have a defined service life to ensure continued safety and airworthiness. Because using parts beyond their defined service life would pose risks to the safety of personnel and equipment, the decision was made to temporarily pause flight operations until certainty is regained.' Article content DND, the military and Sikorsky, which manufactured the helicopters, 'have been working together to identify potential parts of concern. This includes components of the Cyclone's landing gear, tail rotor driveshaft flange and auxiliary power unit, as well as engine parts,' Sadiku said. Article content Article content As of this past Wednesday, one Cyclone, now on deployment, returned to flying operations, he said. 'The team works to do the same for the rest of the fleet.' Article content Article content The Cyclone 'fleet is currently facing some challenges, such as aging datalink systems as well as sensor and other capabilities that are overdue for important upgrades,' he said. 'Specific details, however, cannot be provided for reasons of operational security.' Article content Military and government officials 'are working together with industry partners to determine a way forward for the aircraft and the capabilities it supports,' Sadiku said. Article content 'The Cyclone remains capable of supporting Royal Canadian Navy operations and will continue to do so for the foreseeable future.' Article content Sadiku wouldn't confirm Sikorsky has put a hefty price tag on replacing the Cyclones' ageing datalinks — used to communicate digital information such as radar images to other aircraft, warships and shore bases. 'The datalink upgrade project is still under evaluation, as such, schedule and costs are still being negotiated.'
National Post
22 minutes ago
- National Post
Real Announces $150 Million Share Repurchase Authorization
Article content MIAMI — The Real Brokerage Inc. (NASDAQ: REAX), a technology platform reshaping real estate for agents, home buyers, and sellers, today announced that its Board of Directors has authorized a new share repurchase program for up to the lesser of $150 million in value, or 35 million in shares. Article content Article content 'This new authorization reflects our Board's confidence in Real's long-term strategy, and our commitment to delivering value to shareholders,' said Tamir Poleg, Chairman and Chief Executive Officer of Real. 'We remain focused on disciplined capital allocation, including investing in innovation, supporting our agents, and returning capital to shareholders.' Article content The timing and total amount of stock repurchases will depend upon market conditions and may be made from time to time in open market purchases. This program has no termination date provided it continues to comply with exemptions from the issuer bid requirements of applicable Canadian securities laws at the applicable time. The program may be suspended or discontinued at any time and does not obligate the company to acquire any amount of common shares. Article content Real (NASDAQ: REAX) is a real estate experience company working to make life's most complex transaction simple. The fast-growing company combines essential real estate, mortgage and closing services with powerful technology to deliver a single seamless end-to-end consumer experience, guided by trusted agents. With a presence in all 50 states throughout the U.S. and Canada, Real supports over 27,000 agents who use its digital brokerage platform and tight-knit professional community to power their own forward-thinking businesses. Additional information can be found on its website at Article content Some of the statements in this press release are 'forward-looking statements,' as that term is defined in the Private Securities Litigation Reform Act of 1995, including statements regarding the stock repurchase authorization. These forward-looking statements are subject to risks, uncertainties and assumptions, including the risk that no shares are repurchased. Accordingly, these forward-looking statements should be evaluated with consideration given to the many risks and uncertainties that could cause actual results and events to differ materially from those in the forward-looking statements. They include the risks discussed under the heading 'Risk Factors' in the Company's Annual Information Form dated March 6, 2025, and 'Risks and Uncertainties' in the Company's Quarterly Management's Discussion and Analysis for the period ended March 31, 2025, copies of which are available under the Company's SEDAR+ profile at It is not possible for management to predict all the possible risks that could affect Real or to assess the impact of all possible risks on Real's business. Article content Article content Article content Article content Article content Contacts Article content Ravi Jani Chief Financial Officer investors@ 908.280.2515 Article content Article content
