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Highlights

  • Total revenue rose 4.7% year-over-year to USD 1,217.2 million in Q2.
  • GAAP operating margin expanded to 26.4%; non-GAAP margin at 41.3%.
  • Company raised full-year outlook, now forecasting free cash flow USD 1.74–USD 1.78 billion.

Zoom Communications, Inc. (NASDAQ: ZM) released second fiscal quarter results for the period ended July 31, 2025, reporting modest revenue growth alongside notable margin expansion and stronger cash generation. Management said the company is updating its full-year guidance for revenue, non-GAAP operating income and free cash flow.

Revenue for Q2 totaled USD 1,217.2 million, an increase of 4.7% versus the prior year. On a constant-currency basis revenue was USD 1,213.6 million, up 4.4% year-over-year. Enterprise revenue contributed USD 730.7 million, up 7.0%, while Online revenue was USD 486.6 million, up 1.4%. The mix indicates continued traction in enterprise contracts relative to other product lines.

Profitability metrics showed a step change versus the year-ago quarter. GAAP income from operations rose to USD 321.7 million from USD 202.4 million a year earlier, yielding a GAAP operating margin of 26.4%. On a non-GAAP basis, which excludes items such as stock-based compensation and certain one-time charges, income from operations was USD 503.2 million and the non-GAAP operating margin registered 41.3%.

Earnings also improved materially. GAAP net income was USD 358.6 million, or USD 1.16 per diluted share, up from USD 219.0 million, or USD 0.70 per diluted share, in the comparable period. Non-GAAP net income amounted to USD 471.3 million, or USD 1.53 per share, compared with USD 436.4 million, or USD 1.39 per share, in the prior-year quarter.

The company reported a healthy liquidity position with total cash, cash equivalents and marketable securities of USD 7.8 billion as of July 31, 2025 (excluding restricted cash). Operating cash flow improved to USD 515.9 million for the quarter, and free cash flow—defined as operating cash less capital expenditures—was USD 508.0 million, up from USD 365.1 million a year earlier.

Management has raised its full-year free cash flow range to USD 1.74 billion–USD 1.78 billion, reflecting the quarter’s results and the updated outlook. The update will be watched closely by investors for its implications on capital allocation, share repurchases and potential investment in AI product development.