AI Product Expansion Boosts Earnings: Zoom Phone Drives Adoption (ZM Q1 2027 Earnings Call)
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Zoom Workplace and Zoom Phone are driving a successful transition into an AI-first system of action, helping the company secure larger enterprise deals and expand its customer experience footprint.
Strong Enterprise Demand Drives Record First Quarter Revenue and Profitability
Zoom delivered strong financial performance in the opening quarter. The company generated consolidated total revenue of $1.24 billion, which represents a constant currency growth rate of 4.6% compared to the prior year. This strong operational execution drove non-GAAP diluted earnings per share to $1.55 during the period.
Raised Full Year Guidance Reflects Confidence in AI Platform Expansion
Based on Q1 momentum, management increased its financial outlook for the full fiscal year. CFO Michelle Chang stated: "For the full year for FY '27, we're pleased to raise both our revenue and profitability guidance." Consequently, Zoom raised its full-year revenue guidance to a range between $5.08 billion and $5.09 billion. The company also lifted its full-year non-GAAP diluted earnings per share guidance to a range of $5.96 to $6.
Operational Efficiency and Deferred Revenue Growth Highlight Financial Strength
During the quarter, Zoom achieved a non-GAAP operating margin of 41.1%, representing an expansion of 130 basis points year-over-year. The company's deferred revenue grew to $1.49 billion. This strong growth reflects Zoom's success in landing larger, longer-term multiproduct platform deals.
AI Companion Scaling Drives Double Digit Zoom Phone Adoption
Strategic diversification across the product portfolio is delivering strong enterprise growth. Zoom's enterprise segment grew 7.2% year-over-year, now representing 61% of total consolidated revenue. This segment momentum was heavily supported by AI Companion adoption, which reached a paid monthly active user growth rate of 184% year-over-year. To support these solutions, Baptist Health selected Zoom Phone to connect workers across points of care.
Transition to Completion Centric Workflows Accelerates via Custom AI Solutions
In response to analyst inquiries, CEO Eric Yuan explained that tailwinds are accelerating as customers shift from conversation-centric collaboration to completion-centric workflows. Illustrating this traction, paid AI features were embedded in 9 of the top 10 customer experience deals. To support customized oversight and compliance, Raymond James expanded deployment of these custom solutions to approximately 10,000 seats during the quarter.