"We had a strong quarter marked by broadening our Zoom Workplace offering, marching up market with contact center..." - Eric Yuan, CEO
— Eric Yuan
03Detailed Report
ZM
Zoom Video Communications Inc
Period
Q2 2025
CurrencyUSD
Report TypeQuarterly Earnings
GeneratedJun 5, 2026
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Executive Summary
In Q2 2025, Zoom Video Communications Inc (ZM) reported total revenues of $1.163 billion, a 2% year-over-year increase, driven largely by a resilient enterprise segment which showed 4% growth. Despite slight declines in specific regional segments, notably APAC due to macroeconomic pressures, overall performance beat market expectations by approximately $13 million. The quarter also marked significant traction in revenue from Contact Center solutions, which are becoming essential as customers look to integrate AI capabilities. CEO Eric Yuan emphasized the successful rollout of AI Companion, stating that it is now enabled on over 1.2 million accounts, illustrating Zoom's commitment to bolstering productivity via new technologies. The combination of strong existing customer relationships and newly acquired accounts positions Zoom to better navigate the competitive landscape, especially with the upcoming Q3 guidance indicating expected further growth.
Key Performance Indicators
Revenue
Increasing
1.16B
QoQ: 1.87% | YoY: 2.09%
Gross Profit
Increasing
877.43M
75.48% margin
QoQ: 8.74% | YoY: 0.61%
Operating Income
Increasing
202.37M
QoQ: -26.73% | YoY: 13.94%
Net Income
Increasing
219.02M
QoQ: 1.25% | YoY: 20.36%
EPS
Increasing
0.71
QoQ: 1.43% | YoY: 16.39%
Revenue Trend
Margin Analysis
Financial Highlights
- Revenue: $1.163 billion (+2.09% YoY; +1.87% QoQ)
- Gross Profit: $877.43 million (Gross Margin: 75.5%)
- Operating Income: $202.37 million (Operating Margin: 17.4%)
- Net Income: $219.02 million (Net Margin: 18.8%)
- Earnings Per Share: $0.71
- Deferred Revenue: $1.41 billion (+3% YoY)
- Cash, Cash Equivalents, and Short-term Investments: $7.52 billion
- Operating Cash Flow: $449 million (+34% YoY)
- Free Cash Flow: $365 million (+26% YoY)
The company maintains a solid financial position, with a current ratio of 4.56 indicating strong liquidity. Investments in AI and updated product offerings are expected to sustain future growth and profitability.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
1.16B
2.09%
1.87%
Gross Profit
877.43M
0.61%
8.74%
Operating Income
202.37M
13.94%
-26.73%
Net Income
219.02M
20.36%
1.25%
EPS
0.71
16.39%
1.43%
Key Financial Ratios
Gross Profit Margin
Excellent
75.50%
Gross profit margin is exceptional, indicating strong pricing power and operational efficiency
Operating Profit Margin
Good
17.40%
Operating margin is healthy and competitive within industry standards
Net Profit Margin
Good
18.80%
Net profit margin is healthy and competitive within industry standards
Return on Assets
Weak
2.08%
Return on assets suggests inefficient capital allocation
Return on Equity
Weak
2.57%
Return on equity suggests inefficient capital allocation
Current Ratio
Strong
4.56
Current ratio indicates excellent liquidity and financial flexibility
Debt to Equity
Conservative
0.01
Debt-to-equity shows conservative leverage and low financial risk
P/E Ratio
Fair Value
21.31x
P/E ratio in line with market averages
Price to Book
Fair Value
2.19x
Price-to-book ratio reasonable for profitable companies
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