Zoom Video stock leapt +12.9% in morning trading following the company's release of first-quarter results for fiscal 2027 the prior evening. The quarter delivered revenue and earnings comfortably ahead of Wall Street forecasts, prompted an upward revision to annual guidance and included a substantial expansion of the firm's shareholder return program.
Quarterly results and guidance
Zoom reported Q1 FY2027 revenue of $1.24 billion, a 5.5% increase from the year-ago period. Enterprise revenue rose 7.2% to $755.7 million while online revenue reached $483.3 million, up 2.8% year over year. On a non-GAAP basis, the company posted profit of $1.55 per share, which was 9.5% above analysts' consensus estimates.
Alongside the quarterly results, Zoom provided full-year revenue guidance of $5.08 billion to $5.09 billion for FY2027 and authorized an additional $1.0 billion Class A share repurchase program.
Management commentary
CEO Eric Yuan emphasized the role of artificial intelligence in the quarter's performance, saying: "We saw continued momentum in the first quarter, with revenue up 5.5% year over year, exceeding the high end of our guidance. Customers are increasingly adopting Zoom as an AI-first system of action for modern work, with AI Companion paid users growing 184% year over year."
Customer and expansion metrics
The company ended the quarter with 4,534 customers generating more than $100,000 in trailing 12-month revenue, an increase of 8.2% year over year. Zoom's enterprise net dollar expansion rate improved to 99%.
Balance sheet and cash flow
Free cash flow for the quarter totaled $500.5 million, while total cash and marketable securities stood at $7.7 billion at quarter-end. The combination of strong cash generation and a sizable liquidity position reinforced investor confidence in the company's financial flexibility.
Market reaction and analyst moves
The market reacted strongly to the news: Zoom's shares touched a 52-week high of $113.73 during the session. Analysts moved quickly in response to the results and outlook. Citi analyst Tyler Radke raised his price target on Zoom to $122 from $106 while keeping a Buy rating. KeyCorp upgraded its rating on Zoom from an "underweight" to a "sector weight."
The broader market provided a constructive but much smaller backdrop for Zoom's move, with the S&P 500 up +0.5%, the Dow Jones Industrial Average rising +0.7% and the NASDAQ adding +0.3% during the same trading period.
Why the stock surged
Investors responded to several simultaneous developments: a clear earnings beat, a modest upward revision to full-year revenue expectations, a newly enlarged buyback authorization and timely analyst support in the form of upgrades and target-price increases. Executives highlighted enterprise demand, AI adoption and customer experience products as the principal contributors to the quarter's outperformance, a narrative that resonated with market participants seeking signs that Zoom's AI-first strategy is translating into measurable financial gains.
Note: The article reports the company's Q1 FY2027 results and market reaction as disclosed by Zoom and reflected in analyst commentary and market prices cited above.