Q1 2027 earnings snapshot
Zoom Communications (ZM) opened Q1 2027 with revenue of about US$1.2 billion and basic EPS of US$1.45. This sits against a trailing twelve month EPS of US$6.95 and revenue of roughly US$4.9 billion. Over recent quarters the company has reported revenue moving from US$1.17 billion in Q1 2026 to US$1.24 billion in Q4 2026, and EPS ranging between US$0.84 and US$2.27 across that period. This gives investors a clearer view of how the top line and per share earnings have tracked into the latest result. With net income and margins remaining central to the story, this quarter’s print keeps the focus firmly on how much of that revenue is being turned into profit.
See our full analysis for Zoom Communications.With the headline numbers on the table, the next step is to compare them with the widely held narratives around Zoom Communications to see which views are supported by the data and which are challenged by the latest margin profile.
See what the community is saying about Zoom Communications
Margins look strong but one off gain matters
- Over the last 12 months, Zoom reported a net profit margin of 42% on about US$4.9 billion of revenue and net income of roughly US$2.1 billion, with that profit figure boosted by a US$1.1 billion one off gain.
- Bulls argue that expanding use of AI features and products like Zoom Phone and Contact Center could support high profitability over time. However, the current 42% margin and 97.5% earnings growth include that one off gain, which means:
- The bullish view that margins can stay high is partly tested by the gap between a 42% trailing margin and forecasts that margins shrink to around the mid 20% range in some scenarios.
- Stripping out the US$1.1 billion one off contribution would leave a smaller profit base feeding into those AI and platform expansion stories, so investors need to separate ongoing earnings from that boosted starting point.
Bulls who see AI and platform expansion as the next leg for Zoom may want to weigh these margin trends against a fuller bullish narrative before deciding how durable this profitability looks over time 🐂 Zoom Communications Bull Case
Revenue growth trails broader market
- Revenue is expected to grow by about 3.8% per year compared with 11.7% for the broader US market, even though quarterly revenue has been in a tight band around US$1.2 billion from Q1 2026 to Q1 2027.
- Bears highlight that slower top line growth and tougher competition could pressure Zoom over time, and the data here lines up with that concern in a few ways:
- Forecast revenue growth of 3.8% a year is below both the US market and the more optimistic 5.9% revenue growth path used by bullish analysts, which limits how much earnings can expand without relying heavily on margins.
- Guidance in the narratives that online revenue may be flat and that growth is more reliant on enterprise and new products fits with the modest growth rate in the data, which cautious investors point to as a key constraint.
Earnings forecasts point to declines
- Trailing 12 month basic EPS sits at US$6.95, but analysts expect earnings to decline by about 11.4% per year over the next three years, even though the stock trades at around US$105.64 on a P/E of roughly 15x, slightly below the DCF fair value of US$106.68.
- Consensus narrative talks about strong AI driven adoption and product expansion, yet the numbers introduce some tension with that story:
- Analysts expect earnings to move from about US$1.9 billion today to around US$1.4 billion in some consensus scenarios, which contrasts with the idea of steadily rising profits from a broader AI powered platform.
- The current share price of US$105.64 is close to both the DCF fair value of US$106.68 and the allowed analyst target of US$111.50, so any future shift in those earnings expectations could matter more than near term valuation differences.
Next Steps
To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Zoom Communications on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.
With all this in mind, sentiment around Zoom Communications is clearly mixed. Check the numbers yourself, weigh the trade offs, and review the 3 key rewards and 2 important warning signs
See What Else Is Out There
Zoom Communications faces modest revenue growth of about 3.8% a year and forecasts of earnings declines of roughly 11.4% a year, despite strong current margins.
If that mix of slower growth and falling earnings worries you, compare it with companies that look attractively priced on our 49 high quality undervalued stocks.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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