ZMBy Calypso Research9 min read

Zoom (ZM) Q4 2025 Earnings Analysis

Zoom's Q4 Wasn't Bad. The Market Disagrees.

Key Takeaways

Zoom (ZM) reported Q4 2025 earnings with revenue of $1.2B, representing a +5.3% year-over-year change. The stock moved -13.4% on earnings day.

The bull case: Zoom’s deep real-time collaboration stack plus accelerating AI monetization across Phone, Contact Center, and new AI workflows positions the company to compound revenue above 4% with elite 40%+ margins and rising strategic relevance in modern work.

The bear case: Despite AI buzz and strong margins, Zoom may be settling into a structurally low-growth profile with modest NRR, heavy reliance on external AI partners, and limited upside from mature meetings and price-driven SMB/online segments, capping multiple expansion and EPS growth.

Financial Highlights

  • Revenue: $1.2B (+5.3% YoY)
  • Gross Profit: $951M (76.3% margin, +0.6% YoY)
  • Operating Income: $250M (20.0% margin, +1.0% YoY)
  • Net Income: $674M
  • TTM Revenue: $4.9B

Stock Performance

  • Earnings Day Move: -13.4%
  • Year-to-Date: -11.8%
  • 1-Year Return: -1.1%
  • vs. S&P 500 (since earnings): -12.0%
  • vs. Nasdaq (since earnings): -9.5%

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What Management Said

Here are the key debates and direct quotes from Zoom's Q4 2025 earnings call:

Depth, Timing, and Mix of AI Monetization (Custom AI Companion, ZVA, ZRA, CX)

Sentiment: Positive

"We're very optimistic about our AI technology monetization in FY '27... AI Companion are built for free, but Custom AI Companion is different, we can monetize... we leverage that technology to empower other use cases like ZVA, Zoom Contact Center, Zoom Phone and ZRA... I cannot be more excited than before because of AI and because of our monetization strategy for AI." — Eric Yuan
"Custom AI Companion... is a customized workflow builder and also the information search capabilities to connect with all kind of third-party enterprise applications... extremely powerful, and we can monetize for those -- to targeted enterprise customers... it already contributed... we've already closed the big customer AI Companion deals in the quarter in Q3 and Q4 with more innovation, for sure, it's going to help us more in FY '27." — Eric Yuan

Enterprise Growth Durability vs. NRR Headwinds and Deferred Revenue/Grace-Period Credits

Sentiment: Mixed

"This is a billing dynamic and not sort of a rev rec thing. What we saw was a recent trend that's actually great for Zoom's business. Wins in large and longer competitive platforms where we're providing a grace period to our customers to help them with that transition... you can see... in the long-term RPO that's up 15% relative to 3% in Q3." — Michelle Chang
"Our trailing 12-month net dollar expansion rate for enterprise customers in Q4 continues to hold steady at 98%... we've said that it will rebound in the long term... but... there is... headwind... from a single large competitor white labeling that churned at the end of FY '26... with Workvivo and Contact Center, we're seeing them bring in new customers to Zoom... in the fullness of time, that will replicate through our net dollar expansion. But obviously, it will take a little bit more time." — Michelle Chang

Competitive Moat vs. AI Platform Risk (Foundation Models, Anthropic, and Disintermediation)

Sentiment: Mixed

"If you think about the mission-critical communication like Zoom, reliability is extremely important... security also extremely important... it's extremely hard to replicate what we built over the past many years because... a lot of code still C++ code... Today... it is so hard to build a very scalable... system... You can build it very easy system, using high-end tools. But it's more like toys, nobody going to use that... when it comes to mission critical video collaboration tools like Zoom, it's really hard to leverage the AI coding tool to replicate what we achieved." — Eric Yuan
"Zoom has a Zoom Ventures Fund that we use to strategically invest in tech that we feel like is important to Zoom... you'll see a gain of $532 million pretax. This is due mainly, of course, to the change in the valuation of Anthropic... We have a minority stake, but Anthropic is a critical partner... Zoom has long standing, talked about our federated approach to AI and Anthropic is key to our road map and a great partner in our federated approach." — Michelle Chang

Zoom Phone & Contact Center: Scale, Share Gains, and On-Prem to Cloud Migration Pace

Sentiment: Positive

"Phone, we've been seeing very durable mid-teens growth... we haven't updated our penetration stats... but... in Zoomtopia, I think in '24, we said it was 19% of our meeting space... On contact center... multiple quarters, now 4 quarters at high double digit and actually Q4 accelerating... for many quarters, we've been talking about the majority of the top 10 deals being large displacements... 4 of 10 in voice... 6 of our 10 largest contact center deals, as an example, pulled through Phone as well." — Michelle Chang
"Believe it or not... a lot of... probably still more than 50%... still on-prem deployment... they deployed the on-prem phone system for a long time... why they want to hurry to migrate to the cloud... Now with AI, that's a strong reason for those very large enterprise customer, they cannot lever the AI for the on-prem... that will be acceleration for those large enterprise customers to migrate away from on-prem to cloud. Zoom is in much better position... Again, AI is a driver... for those customers to migrate the AI first cloud phone system." — Eric Yuan

Online/SMB and International: Stabilization vs. Re-acceleration Potential

Sentiment: Mixed

"Online... returned to growth. It was the first time we've had growth since fiscal '22... that growth comes off of adding value in our portfolio... as well as AI value... Our guide assumes an additional price increase on the annual SKU... But... Enterprise is going to be the durable driver for growth going forward." — Michelle Chang
"We're pleased... they're up and growing across our international business... as we move into areas like Contact Center, and Phone as well as Workvivo, that's giving us, together with investments in channel, an opportunity really to break into international markets... We've also done maybe more local investments like U.K. data center... it's something we think will grow in the future." — Michelle Chang

Bull Case

Zoom’s deep real-time collaboration stack plus accelerating AI monetization across Phone, Contact Center, and new AI workflows positions the company to compound revenue above 4% with elite 40%+ margins and rising strategic relevance in modern work.

Bear Case

Despite AI buzz and strong margins, Zoom may be settling into a structurally low-growth profile with modest NRR, heavy reliance on external AI partners, and limited upside from mature meetings and price-driven SMB/online segments, capping multiple expansion and EPS growth.

Looking Ahead

Investors will be closely watching Zoom's next quarterly report for continued execution, particularly around depth, Timing, and Mix of AI Monetization (Custom AI Companion, ZVA, ZRA, CX). With operating margins at 20.0%, margin trends will remain a focal point. The market's negative earnings-day reaction signals that investors need to see stronger execution, and the next earnings report will be a key catalyst for the stock.

Frequently Asked Questions

What was Zoom's revenue in Q4 2025?

Zoom reported Q4 2025 revenue of $1.2B, representing a +5.3% year-over-year change.

Did Zoom beat earnings expectations in Q4 2025?

The stock declined -13.4% on earnings day, suggesting the results fell short of market expectations. The current bull case centers on: Zoom’s deep real-time collaboration stack plus accelerating AI monetization across Phone, Contact Center, and new AI workflows positions the company to compound revenue above 4% with elite 40%+ margins and rising strategic relevance in modern work.

What is the bull case for ZM stock?

The bull case for ZM centers on: Zoom’s deep real-time collaboration stack plus accelerating AI monetization across Phone, Contact Center, and new AI workflows positions the company to compound revenue above 4% with elite 40%+ margins and rising strategic relevance in modern work.

What is the bear case for ZM stock?

The bear case for ZM centers on: Despite AI buzz and strong margins, Zoom may be settling into a structurally low-growth profile with modest NRR, heavy reliance on external AI partners, and limited upside from mature meetings and price-driven SMB/online segments, capping multiple expansion and EPS growth.

How has ZM stock performed since its Q4 2025 earnings?

ZM moved -13.4% on the day of its Q4 2025 earnings report, underperforming the S&P 500 by +12.0% since earnings. Year-to-date, the stock has returned -11.8%.

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