Zoom Communication (ZM) Stock: Slides as Revenue Grows 5% and Enterprise Demand Strengthens

TLDR

• Zoom dips on margin mix despite steady Q4 revenue growth and enterprise gains.
• Enterprise keeps climbing, but after-hours drop puts guidance under a spotlight.
• Revenue up, big customers rising, yet mixed margins spook investors this week.
• Buybacks stay aggressive, but the market wants clearer growth acceleration.
• Zoom holds steady fundamentals, but sentiment turns cautious on the new range.

Zoom (ZM) shares began the week under pressure as the stock ended at $85.43, down 2.38%, and moved lower in overnight trading to $82.20, down 3.78%. The company posted steady fourth-quarter revenue growth and reported stronger trends across its enterprise segment. Yet the market reacted to the mixed margin picture and the latest trading range shaped broader sentiment.

Zoom Communications, Inc., ZM

Revenue Gains Support Steady Performance

Zoom reported fourth-quarter revenue of $1.247 billion, and the figure rose 5.3 percent from last year. The company also delivered full-year revenue of $4.868 billion, and this showed a 4.4 percent increase. Moreover, the results reflected demand stability across multiple regions and supported consistent platform activity.

Enterprise revenue reached $757.3 million in the fourth quarter, and the figure grew 7.1 percent year over year. The full-year enterprise revenue totaled $2.934 billion, and this advanced 6.5 percent. Furthermore, the segment continued to show deeper usage from large customers and also strengthened long-term contracts.

The number of customers generating over $100,000 in trailing revenue climbed 9.3 percent. This group expanded across several sectors and continued to drive broader service adoption. Additionally, the company highlighted rising renewals that reinforced multi-year commitments.

Margins Improve as Spending Discipline Continues

Zoom posted a fourth-quarter GAAP operating margin of 20.0% and the figure expanded by 100 basis points. The company reported a non-GAAP operating margin of 39.3% and this slipped by 20 basis points.  The full-year GAAP operating margin improved 570 basis points to 23.1%.

Non-GAAP operating margin for the full fiscal year reached 40.4% and it rose 100 basis points. Cost controls supported margin gains and aligned with the company’s restructuring programs. The operating structure continued to shift toward higher-value services.

Fourth-quarter GAAP EPS reached $2.22, and the figure rose 91.4 percent from last year. Non-GAAP EPS came in at $1.44, and this increased 2.1%. Full-year GAAP EPS reached $6.18, and the figure grew 92.5% as efficiency efforts gained traction.

Share Repurchases Shape Capital Strategy

Zoom repurchased 3.8 million shares during the fourth quarter, and the move supported its capital return plans. The company bought back 20.4 million shares across the full fiscal year, and this marked a sizable commitment. The program signaled confidence in long-term growth paths.

The firm used buybacks to optimize its balance sheet and maintain capital flexibility. The strategy also positioned the company to offset dilution from stock-based programs. The repurchase activity aligned with broader financial priorities.

Zoom entered the new fiscal year with stable revenue growth and a stronger enterprise base. The stock decline reflected near-term reactions, yet the company maintained its focus on expanding platform capabilities. Consequently, market attention now shifts to upcoming guidance and the pace of enterprise adoption.

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