Shares of Zoom Communications (NASDAQ: ZM) surged more than 11% Friday after the video conferencing software provider reported better-than-expected second-quarter results and raised its full-year outlook.
The upbeat earnings, fueled by continued enterprise growth and advances in artificial intelligence, offered some relief for a stock that remains down year-to-date.
The stock surged 11.32% to intraday high of $81.46. At the time of writing, the stock was trading at $81.15.
This is the stock’s best day since August 22, 2024, when it gained 12.97%.
Strong quarterly results exceed expectations
For its fiscal 2026 second quarter, Zoom posted adjusted earnings of $1.53 per share on revenue of $1.22 billion, surpassing analyst expectations of $1.37 per share and $1.20 billion, respectively.
Revenue rose nearly 5% year-over-year, with enterprise sales providing most of the momentum.
Enterprise revenue increased 7% to $730.7 million, while online revenue grew 1.4% to $486.6 million.
The company reported 4,274 customers generating more than $100,000 in trailing 12-month revenue, a 9% increase from the prior year.
Founder and CEO Eric Yuan highlighted Zoom’s role in leveraging AI to improve workplace efficiency.
“AI is transforming the way we work together, and Zoom is at the forefront, driving innovation that helps people get more done, reduce costs, and deliver better experiences for customers and employees alike,” Yuan said.
Updated full-year guidance
Zoom raised its full-year adjusted earnings per share forecast to a range of $5.81 to $5.84, up from $5.56 to $5.59 previously.
Revenue is now expected to reach between $4.825 billion and $4.835 billion, compared with earlier guidance of $4.800 billion to $4.810 billion.
Despite the stronger outlook, Zoom shares are down by 0.23% in 2025.
The company has faced pressure as growth slows from its pandemic-era highs, and competition in the video conferencing and collaboration software market remains intense.
Mixed analyst reactions
Wall Street analysts welcomed the stronger quarter but remained divided on Zoom’s longer-term trajectory.
Benchmark analyst Matthew Harrigan reiterated a Buy rating and $102 price target, citing demand for Zoom’s AI-powered features.
He noted that AI is being integrated across Zoom’s core video conferencing, contact center, and hybrid work solutions, providing cost savings for clients.
Cantor Fitzgerald’s Thomas Blakey maintained a Neutral rating with an $87 target price, praising the strong quarter and raised guidance, but stopping short of a bullish call.
Others were more cautious. KeyBanc Capital Markets’ Jackson Ader argued the guidance upgrade was less impressive than it appeared, noting that the $9 million increase to revenue projections was smaller than Zoom’s Q2 beat.
That implied the company’s second-half outlook was actually weaker, he said. KeyBanc maintained an Underweight rating and trimmed its target price to $69 from $73.
“For how positive the commentary and the characterization of the outlook sounded, bottom-lining the numbers with a second-half cut just didn’t seem to fit the puzzle,” Ader wrote.
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