Zoom Communications Inc.

05/22/2026 | Press release | Distributed by Public on 05/22/2026 14:05

Quarterly Report for Quarter Ending April 30, 2026 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
You should read the following discussion and analysis of our financial condition and results of operations together with the unaudited condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q. This discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those discussed in the section titled "Risk Factors" and in other parts of this Quarterly Report on Form 10-Q.
Overview
Zoom is redefining modern work as a system of action, turning live collaboration into completed results and moving conversations to completion. From entrepreneurs to global enterprises, customers choose Zoom to seamlessly collaborate, communicate, and drive outcomes across meetings, chat, phone, contact center, events, and more - all with the built-in assistance of Zoom AI Companion. Our culture of delivering happiness, grounded in our core value of care, is fundamental to everything we do at Zoom.
Our AI-first, open work platform bridges work both inside and outside the organization by integrating AI capabilities across employee collaboration and customer-facing workflows, enabling seamless communication, collaboration, and engagement through Zoom Workplace and Zoom Business Services. Zoom Workplace with AI Companion brings together Zoom's core communication and productivity tools-including Zoom Meetings, Zoom Phone, Zoom Team Chat, Zoom Canvas (formerly Zoom Docs), Zoom Whiteboard, and Workvivo-to support collaboration across organizations of varying sizes. Zoom's Business Services offerings support customer engagement across the customer lifecycle, including Zoom Contact Center and Zoom Virtual Agent for customer service teams, Zoom Revenue Accelerator for sales teams, and Zoom Events and Zoom Webinars for marketing teams. Trust is a cornerstone of the Zoom platform. We equip users with a comprehensive set of tools designed to make their interactions safe, secure, and private. We believe that strong security should never compromise a great user experience.
AI is core to Zoom's product innovation. We continue to advance our AI capabilities, focusing on three priorities that bring our system of action to life: elevating Zoom Workplace with AI, driving growth of new AI products, and scaling AI-first customer experience. Zoom AI Companion is our smart assistant designed to empower workers to increase productivity, improve team effectiveness, and enhance skills. Our federated approach to AI enables the use of multiple large language models ("LLMs"), including Zoom's own, to complete tasks for users. Zoom's federated approach allows its platform architecture to dynamically select from multiple AI models, which currently include those from OpenAI, Anthropic, and NVIDIA, making AI accessible and affordable so more people can incorporate it into their day-to-day workflows. In addition to AI Companion, we have embedded AI capabilities across our broader product portfolio, including Zoom Revenue Accelerator and Zoom Virtual Agent, to support sales and customer service use cases. With these advancements in AI Companion and across our AI-enabled products, we believe we are well-positioned as AI technology continues to advance. We are enhancing our agentic AI capabilities within AI Companion to continue delivering practical value to customers while advancing our ambitious vision of AI that truly amplifies human potential. In line with our commitment to responsible AI, Zoom does not use customer audio, video, chat, screen sharing, attachments, or other communications (such as poll results, whiteboard, and reactions) to train Zoom's or third-party AI models.
Zoom's platform prioritizes security and privacy, with 18 co-located data centers globally and robust encryption options. We are committed to safeguarding our customers' data.
Revenue is driven by subscriptions to Zoom Workplace and Zoom Business Services. Our core offerings include Zoom Workplace Pro, Business, and Enterprise bundles, as well as vertical-specific plans for Education, Healthcare, and Government. We also offer Zoom Phone, with regional and international calling plans, and Zoom Contact Center, providing advanced customer experience solutions designed to meet diverse customer needs.
Our revenue was $1,239.0 million and $1,174.7 million for the three months ended April 30, 2026 and 2025, respectively, representing period-over-period growth of 5.5%. We generated net income of $425.7 million and $254.6 million for the three months ended April 30, 2026 and 2025, respectively. Net cash provided by operating activities was $521.6 million and $489.3 million for the three months ended April 30, 2026 and 2025, respectively.
Macroeconomic Conditions and Other Factors
The macroeconomic environment, including ongoing geopolitical uncertainties, evolving monetary policy, energy market volatility, and foreign currency exchange rate fluctuations, has created and may continue to create uncertainty in demand for subscriptions to our AI-first, open work platform. Recent geopolitical events, including the conflict involving Iran and disruptions to energy supply routes, have contributed to elevated energy prices and heightened volatility in financial markets, which may influence inflation expectations, corporate cost structures, and global growth prospects. Although headline inflation in many major economies has moderated relative to prior years, cost pressures remain uneven across regions, and the combined effects of interest rates, policy actions, and slower global growth conditions continue to influence corporate spending patterns. These dynamics, together with shifts in customers' internal priorities, including budget realignment and evolving
investment focus, have contributed to variability in sales cycles and continued caution in enterprise spending decisions, potentially affecting customer upsell, downsell, or renewal activity.
We continue to monitor the potential effects of these circumstances as well as the overall global economy and geopolitical landscape on our business and financial results. The implications of macroeconomic conditions on our business, results of operations, and overall financial position, particularly over the long term, remain uncertain.
Refer to "Part II-Other Information, Item 1A. Risk Factors" of this Quarterly Report on Form 10-Q for further discussions of the potential impacts of the current macroeconomic conditions on our business.
Key Business Metrics and Factors Affecting Our Performance
We review the following key business metrics and strategic factors to measure our performance, identify trends, formulate financial projections, and make strategic decisions, including evaluating our ability to grow the number of customers who use our AI-first, open work platform. Our operating results and growth prospects will depend, in part, on our ability to attract new customers. While we believe there is a significant market opportunity for our platform, it is difficult to predict customer adoption rates, the future growth rate, or the size of the market for our platform.
Large Enterprise Customers - Customers Contributing More Than $100,000 of Trailing 12 Months Revenue
We focus on growing the number of customers that contribute more than $100,000 of trailing 12 months revenue as it is a measure of our ability to scale with our customers and attract larger organizations to Zoom. Revenue from these customers represented 32.7% and 31.9% of total revenue for the three months ended April 30, 2026 and 2025, respectively. As of April 30, 2026 and 2025, we had 4,534 and 4,192 customers, respectively, that contributed more than $100,000 of trailing 12 months revenue, demonstrating our increasing penetration of larger organizations. These customers are a subset of Enterprise customers.
Expansion of Zoom Across Existing Enterprise Customers - Net Dollar Expansion Rate
We believe that there is a large opportunity for growth with many of our existing Enterprise customers. Historically, customers have increased the size of their subscriptions as they expanded their use of our AI-first, open work platform across their operations. Over the past few years, macroeconomic headwinds resulted in slower hiring and higher seat count downsells from our existing Enterprise customers in key markets, which impacted the rate of expansion and caused our net dollar expansion rate for Enterprise customers to drop below one hundred percent. Despite the decline, we believe there are still opportunities for future growth with our existing Enterprise customers as we innovate our platform with additional product offerings and by incorporating AI. Expansion in the use of our platform also provides us with opportunities to market and sell additional products to our customers, such as Zoom Phone, Zoom Contact Center, and Workvivo. To address this opportunity and expand the use of our products by our existing Enterprise customers, we will need to maintain the reliability of our platform and produce new features and functionality that are responsive to our customers' requirements for enterprise-grade solutions.
We quantify our expansion across existing Enterprise customers through our net dollar expansion rate. We define Enterprise customers as distinct business units who have been engaged by either our direct sales team, resellers, or strategic partners. Revenue from Enterprise customers represented 61.0% and 60.0% of total revenue for the three months ended April 30, 2026 and 2025, respectively. Our net dollar expansion rate includes the increase in user adoption within our Enterprise customers, as our subscription revenue is primarily driven by the number of paid licenses within a customer and the purchase of additional products, and compares our subscription revenue from the same set of Enterprise customers across comparable periods. We calculate net dollar expansion rate as of a period end by starting with the annual recurring revenue ("ARR") from all Enterprise customers as of 12 months prior ("Prior Period ARR"). We define ARR as the annualized revenue run rate of subscription agreements from all customers at a point in time. We calculate ARR by taking the monthly recurring revenue ("MRR") and multiplying it by 12. MRR is defined as the recurring revenue run-rate of subscription agreements from all Enterprise customers for the last month of the period, including revenue from monthly subscribers who have not provided any indication that they intend to cancel their subscriptions. We then calculate the ARR from these Enterprise customers as of the current period end ("Current Period ARR"), which includes any upsells, contractions, and attrition. We divide the Current Period ARR by the Prior Period ARR to arrive at the net dollar expansion rate. For the trailing 12 months calculation, we take an average of the net dollar expansion rate over the trailing 12 months. Our net dollar expansion rate may fluctuate as a result of a number of factors, including the level of penetration within our Enterprise customer base, expansion of products and features, and our ability to retain our Enterprise customers. Our trailing 12-month net dollar expansion rate for Enterprise customers was 99% and 98% as of April 30, 2026 and 2025, respectively.
Retention of Online Customers - Average Monthly Churn Rate & Percentage of MRR from ≥16-Month Customers
In addition to Enterprise customers, we also have a significant number of customers who subscribe to our services directly through our website ("Online customers" or "Online business"). Online customers represent a diverse customer base, ranging from individual consumers to small and medium-sized businesses. We continue to focus on acquisition and retention of our Online customer base through various strategies to improve the features and functionalities of our products and services. Revenue from Online customers represented 39.0% and 40.0% of total revenue for the three months ended April 30, 2026 and 2025, respectively. Our ability to retain these Online customers will have an impact on our future revenue. The online monthly average churn for our Online customers was 3.0% and 2.8% per month for the three months ended April 30, 2026 and 2025, respectively. One of the dynamics in the Online portion of the business is the MRR contribution from customers who have retained Zoom services for a certain portion of time as these customers tend to maintain their subscriptions and contribute meaningfully to the Online business. As of April 30, 2026 and 2025, the percentage of total Online MRR from Online customers with a continuous term of service of at least 16 months was 74.4% and 74.2%, respectively.
We calculate the Online average monthly churn by starting with the Online customer MRR as of the beginning of the applicable quarter ("Entry MRR"). We define Entry MRR as the recurring revenue run-rate of subscription agreements from all Online customers except for subscriptions that we recorded as churn in a previous quarter based on the customers' earlier indication to us of their intention to cancel that subscription. We then determine the MRR related to customers who canceled or downgraded their subscription or notified us of that intention during the applicable quarter ("Applicable Quarter MRR Churn") and divide the Applicable Quarter MRR Churn by the applicable quarter Entry MRR to arrive at the MRR churn rate for Online customers. We then divide that amount by three to calculate the Online average monthly churn for the applicable quarter.
Innovation and Expansion of Our Platform
We continue to invest and enhance the capabilities of Zoom Workplace and Zoom Business Services, including ongoing investments in AI, with a focus on expanding agentic AI skills, agents, and models.
We recently introduced a series of new products and enhancements across Zoom Workplace and Zoom Business Services. These included My Notes, which provides a personal AI note-taker that captures context across Zoom, in-person, and third-party meetings, helping users stay present while turning conversations into organized takeaways, action items, and follow-through; AI Expert Assist 3.0, a Contact Center capability understands and reasons across the full customer context; Zoom Virtual Agent 3.0, which preserves customer history and context across channels while orchestrating actions, triggering workflows, and applying knowledge to future interactions; CX Insights; AI Companion 3.0 across Zoom Phone; a voice translator with live audio translation in Meetings; and realistic and stylized avatars for Zoom Meetings. These offerings expand our agentic AI capabilities across collaboration, customer support, and industry-specific workflows through new integrations and platform enhancements.
We also enhanced the Custom AI Companion add-on, a paid add-on for Zoom Workplace that enables organizations to tailor AI Companion to their specific business needs. These enhancements are designed to allow customers to connect AI Companion to relevant enterprise data sources and third-party applications, configure custom agents and workflows, and apply organization-specific context to support information retrieval, task automation, and workflow execution across applications.
Zoom is an AI-first, open work platform, and third-party developers are a key component of our strategy for platform innovation to make it easier for customers and developers to extend our product portfolio with new functionalities. We believe that as more developers and other third parties use our platform to integrate major third-party applications, we will become the ubiquitous platform for modern work as a system of action, turning live collaboration into completed results and moving conversations to completion. We will need to expend additional resources to continue introducing new products, features, and AI functionality, and supporting the efforts of third parties to enhance the value of our platform with their own applications.
International Opportunities
Our AI-first, open work platform addresses the communications and collaboration needs of users worldwide, and international expansion remains a meaningful component of our long-term growth strategy. Our revenue outside of the Americas (APAC and EMEA) represented 27.9% and 27.8% of our total revenue for the three months ended April 30, 2026 and 2025, respectively. We use strategic partners and resellers to sell in certain international markets where we have limited or no direct sales presence. While we believe global demand for our platform will continue to increase as international market awareness of Zoom grows, our ability to conduct our operations internationally will require considerable management attention and resources and is subject to the particular challenges of supporting a rapidly growing business in an environment of multiple languages, cultures, customs, legal and regulatory systems, alternative dispute systems, and commercial markets.
Non-GAAP Financial Measure
In addition to our results determined in accordance with GAAP, free cash flow ("FCF") is a non-GAAP financial measure that we believe is useful in evaluating our liquidity.
Free Cash Flow
We define FCF as GAAP net cash provided by operating activities less purchases of property and equipment. We believe that FCF is a useful indicator of liquidity that provides information to management and investors about the amount of cash generated from our operations that, after investments in property and equipment, can be used for future growth or other corporate purposes. FCF is presented for supplemental informational purposes only, has limitations as an analytical tool, and should not be considered in isolation or as a substitute for analysis of other GAAP financial measures, such as net cash provided by operating activities. It is important to note that other companies, including companies in our industry, may not use this metric, may calculate this metric differently, or may use other financial measures to evaluate their liquidity, all of which could reduce the usefulness of this non-GAAP metric as a comparative measure.
The following table presents a summary of our cash flows for the periods presented and a reconciliation of FCF to net cash provided by operating activities, the most directly comparable financial measure calculated in accordance with GAAP:
Three Months Ended April 30,
2026 2025
(in thousands)
Net cash provided by operating activities $ 521,610 $ 489,261
Less: purchases of property and equipment (21,113) (25,910)
Free cash flow (non-GAAP) $ 500,497 $ 463,351
Net cash used in investing activities $ (480,716) $ (125,130)
Net cash used in financing activities $ (394,110) $ (490,530)
Components of Results of Operations
Revenue
We derive our revenue from subscription agreements with customers for access to our AI-first, open work platform. Our customers generally do not have the ability to take possession of our software. We also provide services, which include professional services, consulting services, and online event hosting, which are generally considered distinct from the access to our AI-first, open work platform. The amount of revenue recognized reflects the consideration that we expect to receive in exchange for these services over the contract term, which can include a free period discount.
Cost of Revenue
Cost of revenue primarily consists of costs related to hosting our AI-first, open work platform and providing general operating support services to our customers. These costs are related to our co-located data centers, third-party cloud hosting, integrated third-party PSTN services, personnel-related expenses, amortization of capitalized software development and acquired intangible assets, royalty payments, and allocated overhead.
Operating Expenses
Research and Development
Research and development expenses primarily consist of personnel-related expenses directly associated with our research and development organization, depreciation of equipment used in research and development, and allocated overhead. Research and development costs are expensed as incurred.
Sales and Marketing
Sales and marketing expenses primarily consist of personnel-related expenses directly associated with our sales and marketing organization. Other sales and marketing expenses include advertising and promotional events to promote our brand, such as awareness programs, digital programs, public relations, tradeshows, and our user conference, Zoomtopia, and allocated overhead. Sales and marketing expenses also include credit card processing fees related to customer transactions and amortization of deferred contract acquisition costs.
General and Administrative
General and administrative expenses primarily consist of personnel-related expenses associated with our finance, legal, and other organizations; professional fees for external legal, accounting, and other consulting services; expected credit losses; insurance; certain indirect taxes; litigation settlements; corporate security and regulatory expenses; and allocated overhead.
Gains (losses) on Strategic Investments, Net
Gains on strategic investments, net consist primarily of remeasurement gains or losses on our equity investments.
Other Income, Net
Other income, net consists primarily of interest income and net accretion on our marketable securities and effect of changes in foreign currency exchange rates.
Provision for Income Taxes
Provision for income taxes consists primarily of income taxes related to federal, state, and foreign jurisdictions where we conduct business.
Results of Operations
The following tables set forth selected condensed consolidated statements of operations data and such data as a percentage of revenue for each of the periods indicated:
Three Months Ended April 30,
2026 2025
(in thousands)
Revenue $ 1,239,006 $ 1,174,715
Cost of revenue (1)
274,287 278,402
Gross profit 964,719 896,313
Operating expenses:
Research and development (1)
227,926 205,416
Sales and marketing (1)
330,050 346,970
General and administrative (1)
96,270 102,335
Total operating expenses 654,246 654,721
Income from operations 310,473 241,592
Gains (losses) on strategic investments, net 152,297 (13,619)
Other income, net 68,850 87,792
Income before provision for income taxes 531,620 315,765
Provision for income taxes 105,943 61,162
Net income $ 425,677 $ 254,603
(1) Includes stock-based compensation expense as follows:
Cost of revenue $ 20,963 $ 27,427
Research and development 71,026 72,936
Sales and marketing 58,039 68,433
General and administrative 28,925 32,773
Total stock-based compensation expense $ 178,953 $ 201,569
Three Months Ended April 30,
2026 2025
(as a percentage of revenue)
Revenue 100.0 % 100.0 %
Cost of revenue 22.1 23.7
Gross profit 77.9 76.3
Operating expenses:
Research and development 18.4 17.5
Sales and marketing 26.6 29.5
General and administrative 7.8 8.7
Total operating expenses 52.8 55.7
Income from operations 25.1 20.6
Gains (losses) on strategic investments, net 12.3 (1.2)
Other income, net 5.6 7.5
Income before provision for income taxes 43.0 26.9
Provision for income taxes 8.6 5.2
Net income 34.4 % 21.7 %
Comparison of the Three Months Ended April 30, 2026 and 2025
Revenue
Three Months Ended April 30,
2026 2025 % Change
(in thousands)
Revenue $ 1,239,006 $ 1,174,715 5.5 %
Revenue for the three months ended April 30, 2026 increased by $64.3 million, or 5.5%, compared to the three months ended April 30, 2025. The increase was driven by 7.2% growth in revenue from Enterprise customers, of which 47.3% and 52.7% was from new and existing customers, respectively, and by a 2.8% increase in revenue from Online customers.
Cost of Revenue
Three Months Ended April 30,
2026 2025 % Change
(in thousands)
Cost of revenue $ 274,287 $ 278,402 (1.5) %
Gross profit 964,719 896,313 7.6 %
Gross margin 77.9 % 76.3 %
Cost of revenue for the three months ended April 30, 2026 decreased by $4.1 million, or 1.5%, compared to the three months ended April 30, 2025. The decline was mainly due to a $6.5 million reduction in stock-based compensation. The reduction in stock-based compensation is due to changes in our equity program.
Gross margin grew to 77.9% for the three months ended April 30, 2026, from 76.3% for the three months ended April 30, 2025. The increase in gross margin was driven by the decrease in stock-based compensation as well as other operational efficiencies.
Operating Expenses
Research and Development
Three Months Ended April 30,
2026 2025 % Change
(in thousands)
Research and development $ 227,926 $ 205,416 11.0 %
Research and development expense for the three months ended April 30, 2026 increased by $22.5 million, or 11.0%, compared to the three months ended April 30, 2025. The increase was mainly driven by a $20.0 million increase in personnel-related expenses as a result of higher headcount as we invested in AI innovation, partially offset by a $1.9 million decrease in stock-based compensation due to changes in our equity program.
Sales and Marketing
Three Months Ended April 30,
2026 2025 % Change
(in thousands)
Sales and marketing $ 330,050 $ 346,970 (4.9) %
Sales and marketing expense for the three months ended April 30, 2026 decreased by $16.9 million, or 4.9%, compared to the three months ended April 30, 2025. The decrease was primarily driven by a $22.0 million decrease in commissions expense, which includes both internal and external costs, from the change in the amortization period for deferred contract acquisition costs from three years to five years, effective January 31, 2026, in addition to lower stock-based compensation of
$10.4 million due to changes in our equity program. These decreases were partially offset by a $6.4 million increase in personnel-related expenses and continued investments supporting customer acquisition, retention, and expansion initiatives.
General and Administrative
Three Months Ended April 30,
2026 2025 % Change
(in thousands)
General and administrative $ 96,270 $ 102,335 (5.9) %
General and administrative expense for the three months ended April 30, 2026 decreased by $6.1 million, or 5.9%, compared to the three months ended April 30, 2025. The decrease was primarily driven by a $3.8 million decrease in stock-based compensation due to changes in our equity program.
Gains (losses) on Strategic Investments, Net
Three Months Ended April 30,
2026 2025 % Change
(in thousands)
Gains (losses) on strategic investments, net $ 152,297 $ (13,619) NM
Gains on strategic investments, net for the three months ended April 30, 2026 were primarily driven by changes in the fair value of our privately held securities, which were attributable to investments other than Anthropic, while losses on strategic investments, net for the three months ended April 30, 2025 were primarily driven by changes in the fair value of our publicly held securities.
Other Income, Net
Three Months Ended April 30,
2026 2025 % Change
(in thousands)
Other income, net $ 68,850 $ 87,792 (21.6) %
Other income, net for the three months ended April 30, 2026 decreased by $18.9 million, or 21.6%, compared to the three months ended April 30, 2025. The decrease was primarily driven by an $11.5 million decrease in interest income from cash and marketable securities and a $7.0 million unfavorable impact from changes in foreign currency exchange rates.
Provision for Income Taxes
Three Months Ended April 30,
2026 2025 % Change
(in thousands)
Provision for income taxes $ 105,943 $ 61,162 73.2 %
Provision for income taxes for the three months ended April 30, 2026 increased by $44.8 million, or 73.2%, compared to the three months ended April 30, 2025. The year-over-year change was primarily due to an increase in income before taxes partially offset by a decrease in tax shortfalls and increase in tax benefits related to stock-based compensation.
Liquidity and Capital Resources
As of April 30, 2026, our principal sources of liquidity were cash, cash equivalents, and marketable securities of $7.7 billion, which were held for working capital purposes and for investment in growth opportunities. Our marketable securities generally consist of agency bonds, U.S. government agency securities, and treasury bills.
We finance our operations primarily through income from operations. Cash from operations may also be affected by various risks and uncertainties, including, but not limited to, macroeconomic factors, such as geopolitical conflicts, tariffs and trade tensions, inflationary pressures, interest rate fluctuations, and the fluctuations in foreign currency exchange rates. These
factors and other risks detailed in the section titled "Risk Factors" could impact the timing of cash collections from our customers. However, based on our current business plan and revenue prospects, we believe our existing cash, cash equivalents, and marketable securities, together with net cash provided by operations, will be sufficient to meet our needs for at least the next 12 months and allow us to capitalize on growth opportunities. We believe we will meet longer-term expected future cash requirements and obligations through a combination of cash flows from operating activities and available cash balances. Our future capital requirements will depend on many factors, including our revenue growth rate, subscription renewal activity, billing frequency, the timing and extent of spending to support further sales and marketing and research and development efforts, as well as expenses associated with our international expansion, and the timing and extent of additional capital expenditures to invest in existing and new office spaces as well as data center infrastructure. We may, in the future, enter into arrangements to acquire or invest in complementary businesses, services, and technologies, including intellectual property rights. We may choose or be required to seek additional equity or debt financing. In the event that additional financing is required from outside sources, we may not be able to enter into debt agreements on terms acceptable to us or at all. If we are unable to raise additional capital when desired, our business, results of operations, and financial condition would be materially and adversely affected.
There have been no material changes to our cash requirements from known contractual and other obligations from those disclosed in our Management's Discussion and Analysis of Financial Condition and Results of Operations, included in our Annual Report on Form 10-K for the year ended January 31, 2026, filed with the SEC on February 27, 2026.
Cash Flows
The following table summarizes our cash flows for the periods presented:
Three Months Ended April 30,
2026 2025
(in thousands)
Net cash provided by operating activities $ 521,610 $ 489,261
Net cash used in investing activities $ (480,716) $ (125,130)
Net cash used in financing activities $ (394,110) $ (490,530)
Operating Activities
Our largest source of operating cash is cash collections from our customers for subscriptions to our AI-first, open work platform. Our primary uses of cash from operating activities are for employee-related expenditures, costs related to hosting our platform, and marketing expenses. Net cash provided by operating activities is impacted by our net income adjusted for certain non-cash items, such as stock-based compensation expense, depreciation and amortization expenses, as well as the effect of changes in operating assets and liabilities.
Net cash provided by operating activities was $521.6 million for the three months ended April 30, 2026, compared to $489.3 million for the three months ended April 30, 2025. The increase in operating cash flow was mainly due to higher collections driven by revenue growth.
Investing Activities
Net cash used in investing activities of $480.7 million for the three months ended April 30, 2026 was primarily driven by net purchases of marketable securities of $314.1 million, purchases of strategic investments of $145.7 million, which included an additional $46.0 million investment in preferred stock of Anthropic, and purchases of property and equipment of $21.1 million.
Net cash used in investing activities of $125.1 million for the three months ended April 30, 2025 was due to net purchases of marketable securities of $99.2 million and purchases of property and equipment of $25.9 million.
Financing Activities
Net cash used in financing activities of $394.1 million for the three months ended April 30, 2026 was primarily due to cash paid for repurchases of common stock of $361.7 million and taxes paid related to net share settlement of equity awards of $62.2 million, partially offset by proceeds from employee equity transactions to be remitted to employees and tax authorities, net, of $29.2 million.
Net cash used in financing activities of $490.5 million for the three months ended April 30, 2025 was primarily due to cash paid for repurchases of common stock of $418.0 million and taxes paid related to net share settlement of equity awards of
$82.2 million, partially offset by proceeds from employee equity transactions to be remitted to employees and tax authorities, net, of $8.7 million.
Stock Repurchase Program
In February 2024, our Board of Directors authorized a stock repurchase program of up to $1.5 billion of our Class A common stock. In November 2024, our Board of Directors authorized the repurchase of an additional $1.2 billion of our outstanding Class A common stock. In November 2025, our Board of Directors authorized another $1.0 billion in repurchases of our outstanding Class A common stock. Repurchases of our Class A common stock may be effected, from time to time, either on the open market (including pre-set trading plans), in privately negotiated transactions, and other transactions in accordance with applicable securities laws.
The timing and the amount of any repurchased Class A common stock will be determined by our management based on its evaluation of market conditions and other factors. The repurchase program will be funded using our working capital. Any repurchased shares of Class A common stock will be retired. The repurchase program, which has no expiration date, does not obligate us to acquire any particular amount of Class A common stock, and the repurchase program may be suspended or discontinued at any time at our discretion.
During the three months ended April 30, 2026, we repurchased and subsequently retired 4,169,208 shares of our Class A common stock for an aggregate amount of $361.7 million. As of April 30, 2026, $625.0 million of the repurchase authorization remained available.
In May 2026, our Board of Directors authorized the repurchase of an additional $1.0 billion of our outstanding Class A common stock, under our existing repurchase program.
Critical Accounting Estimates
Critical accounting estimates are those accounting estimates that require the most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. These estimates are developed based on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Critical accounting estimates are accounting estimates where the nature of the estimates is material due to the levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change and the impact of the estimates on financial condition or operating performance is material.
There have been no material changes to our critical accounting estimates as compared to the critical accounting estimates described in our Management's Discussion and Analysis of Financial Condition and Results of Operations, included in our Annual Report on Form 10-K for the year ended January 31, 2026, filed with the SEC on February 27, 2026.
Zoom Communications Inc. published this content on May 22, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on May 22, 2026 at 20:06 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]