Zoom (ZM) Grew Enterprise Revenue 7.8% but Online Revenue Only 0.6%. Can AI Restore Broader Growth?
Zoom Communications, Inc. (NASDAQ: ZM ) reported fiscal second-quarter 2027 revenue of $1.28 billion, up 4.9% year over year. The composition showed that growth remained concentrated in the enterprise business.
Enterprise revenue increased 7.8% to $787.5 million, its strongest growth rate in three years, according to management. Online revenue rose only 0.6% to $489.7 million. Enterprise generated approximately $56.8 million of Zoom Communications, Inc.'s (NASDAQ:ZM) $60 million year-over-year revenue increase, supplying nearly 95% of the incremental revenue.
The question is whether AI adoption can eventually translate into broader revenue acceleration.
Management said Zoom Virtual Agent's customer count increased 256% year over year, while annual recurring revenue from the company's AI-first Customer Experience portfolio grew at a high-double-digit rate. These adoption indicators suggest that AI may be strengthening Zoom Communications, Inc.'s (NASDAQ:ZM) enterprise offering, although the company did not quantify AI's contribution to enterprise revenue growth.
The number of customers contributing more than $100,000 in trailing-12-month revenue increased 8.2% to 4,625. That indicates healthy growth in Zoom Communications, Inc.'s (NASDAQ:ZM) population of large accounts, but it does not establish that existing large customers increased their spending.
Enterprise net-dollar expansion improved to 99% from 98% a year earlier. Zoom Communications, Inc. (NASDAQ:ZM) calculates the metric by comparing annual recurring revenue from an Enterprise customer cohort with ARR from the same cohort 12 months earlier, including upsells, contractions and attrition. The reported trailing-12-month rate averages those period-end calculations over the preceding 12 months.
Zoom Communications, Inc. (NASDAQ:ZM) also held $7.2 billion in cash, cash equivalents and marketable securities, excluding restricted cash, providing substantial capacity for product investment and acquisitions.
Total revenue increased only 4.9%, slightly above the prior-year quarter's 4.7% growth. Online revenue contributed approximately $3.1 million of incremental sales and remained nearly flat despite the company's expanding AI portfolio.
The 99% enterprise net-dollar expansion rate means that, on average, current ARR from comparable Enterprise cohorts remained approximately 1% below their ARR 12 months earlier. The improvement from 98% is encouraging, but existing-customer ARR has not returned to net expansion. Zoom Communications, Inc. (NASDAQ:ZM) also did not disclose how much of enterprise growth came from new customers, existing customers, or AI products.
The AI adoption percentages lack scale context. Zoom Communications, Inc. (NASDAQ:ZM) did not provide the starting number of Zoom Virtual Agent customers or the dollar value of AI-first Customer Experience ARR.
Profit and cash-flow trends were mixed. GAAP operating income declined to $314.3 million from $321.7 million, while GAAP operating margin fell to 24.6% from 26.4%. Company-defined non-GAAP free cash flow, calculated as operating cash flow less purchases of property and equipment, declined 7% to $472.4 million.
The filings available so far reflect positions held before Zoom Communications, Inc. (NASDAQ:ZM) reported its fiscal second-quarter results. Insider Monkey's database showed 71 hedge funds holding ZM at the end of 2Q2026, up from 60 funds three months earlier.
AI adoption suggests that Zoom Communications, Inc. (NASDAQ:ZM) is strengthening its enterprise platform, but the company has not demonstrated that AI caused the acceleration in enterprise revenue. Broader growth will require enterprise net-dollar expansion to rise above 100% and the online business to move beyond near-flat revenue.
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