"We are excited about the differentiated agentic AI vision and the value it’s delivering to customers." - Eric Yuan
— Eric Yuan
03Detailed Report
ZM
Zoom Video Communications Inc
Period
Q4 2025
CurrencyUSD
Report TypeQuarterly Earnings
GeneratedJun 5, 2026
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Executive Summary
Zoom Video Communications Inc. has reported Q4 revenues of $1.184 billion, marking a 3% increase year-over-year. This performance shows resilience as the company transitions towards an AI-first work platform amid a competitive technology landscape. The CEO, Eric Yuan, emphasized the rapid adoption of their AI Companion, which saw a 68% quarter-over-quarter growth, positioning the company favorably for future growth. Despite macroeconomic challenges, the company is optimistic about sustaining revenue growth and improving profitability over the coming year as AI capabilities begin to monetize fully.
Key Performance Indicators
Revenue
Increasing
1.18B
QoQ: 0.56% | YoY: 3.29%
Gross Profit
Increasing
896.78M
75.73% margin
QoQ: 0.35% | YoY: 3.06%
Operating Income
Decreasing
151.88M
QoQ: -16.93% | YoY: -9.88%
Net Income
Increasing
367.87M
QoQ: 77.67% | YoY: 23.10%
EPS
Increasing
1.20
QoQ: 79.10% | YoY: 22.45%
Revenue Trend
Margin Analysis
Financial Highlights
Financial Metrics:
- Revenue: $1.184 billion (YoY: 3%, QoQ: 0.56%)
- Gross Profit: $896.8 million (Gross Profit Margin: 75.7%)
- Operating Income: $151.9 million (Operating Margin: 12.8%)
- Net Income: $367.9 million (Net Income Margin: 31.1%, YoY increase of 23.1%)
- EPS: $1.20 (Diluted EPS: $1.16, YoY increase of 22.5%)
- Cash Flow from Operations: $425 million (YoY increase of 21%)
- Free Cash Flow: $416 million (YoY increase of 25%)
Performance Trends:
- steady revenue growth in Enterprise business (6% YoY).
- reduction in churn rate to 2.8% represents operational stability.
Management cited efficiency gains from strategic investments in AI that aim to achieve an 80% gross margin over the long term, although current non-GAAP margins were slightly below that at 78.8%.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
1.18B
3.29%
0.56%
Gross Profit
896.78M
3.06%
0.35%
Operating Income
151.88M
-9.88%
-16.93%
Net Income
367.87M
23.10%
77.67%
EPS
1.20
22.45%
79.10%
Key Financial Ratios
Gross Profit Margin
Excellent
75.70%
Gross profit margin is exceptional, indicating strong pricing power and operational efficiency
Operating Profit Margin
Fair
12.80%
Operating margin is moderate, room for improvement in cost management
Net Profit Margin
Excellent
31.10%
Net profit margin is exceptional, indicating strong pricing power and operational efficiency
Return on Assets
Fair
3.35%
Return on assets is acceptable but below top-tier companies
Return on Equity
Weak
4.12%
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
18.11x
P/E ratio in line with market averages
Price to Book
Fair Value
2.98x
Price-to-book ratio reasonable for profitable companies
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