The immediate market reaction was negative, with Reuters reporting a 3.8% drop in extended trading after the August 25 results. But the numbers published by Zoom tell a more nuanced story: its enterprise business is still growing faster than the company overall, while its online business has barely moved. For Windows and Microsoft 365 administrators, the significance is less about Zoom’s share price than about what vendors are now competing to own: the meeting itself, the transcript, the follow-up task, and the data controls around all three.
The submitted report is also dated August 27, but the underlying earnings release and investor call occurred on August 25, 2026. Zoom reported results for the second quarter of fiscal year 2027, which ended July 31, then issued guidance for its fiscal third quarter. That fiscal labeling matters when comparing the forecast with prior results.
Zoom beat on the quarter, then guided to slower per-share earnings
Zoom reported second-quarter revenue of $1.2772 billion, up 4.9% year over year, and non-GAAP earnings of $1.55 per diluted share. Both exceeded the consensus figures referenced in Reuters’ report. The company’s forward guide is weaker only relative to Wall Street’s per-share expectation; revenue guidance reaches the consensus estimate at its high end.
Calling this a revenue miss would overstate it. At the midpoint, Zoom’s projected third-quarter revenue is about $1.2775 billion — virtually unchanged from the just-reported quarter. Its forecast non-GAAP operating income of $510 million to $515 million is also essentially level with the $510.3 million it generated in the second quarter.
The lower earnings-per-share outlook therefore should not be read automatically as proof that Microsoft Teams or Google Meet has suddenly damaged Zoom’s core meeting business. Zoom’s own release does list competition, customer renewals, upgrades, long enterprise sales cycles, and AI adoption among the risks facing its outlook. It does not provide a financial bridge attributing the projected per-share decline specifically to Teams, Google Meet, or the cost of AI.
That distinction is important. Reuters’ competitive framing is reasonable given the market, but Zoom’s reported guidance shows a company expecting steady revenue and steady adjusted operating income, not one forecasting a steep contraction.
Enterprise growth is carrying an almost-flat online business
The split inside Zoom’s second-quarter report is sharper than the headline result. Enterprise revenue reached $787.5 million, up 7.8% from a year earlier, its strongest growth rate in three years according to chief executive Eric Yuan. Online revenue was $489.7 million, up only 0.6%.
That puts the company’s challenge in plain view. Zoom is adding enterprise business, but its direct online customer business is doing little to lift the total. Online average monthly churn stayed at 2.9%, unchanged year over year. The company also reported that customers contributing more than $100,000 in trailing-12-month revenue rose 8.2% to 4,625, while enterprise net-dollar expansion improved to 99% from 98%.
Those are encouraging retention and large-account indicators, yet a 99% net-dollar expansion rate still means the existing enterprise base, in aggregate, is only close to holding its spending level after accounting for upgrades, downgrades, and churn. Zoom’s growth is coming from new enterprise business and particular expanding products rather than broad-based, accelerating seat growth across its installed base.
For Microsoft 365 customers, this gets to the heart of the competitive pressure. Microsoft sells Teams as part of broader business plans that also include identity administration, Exchange, SharePoint, OneDrive, endpoint management, and security services. Zoom must therefore win or retain a separate budget line by demonstrating an operational advantage over tools an organization may already have licensed and governed.
A high-quality Zoom deployment can still be justified for external events, webinar-scale meetings, Zoom Rooms, contact-center workflows, phone systems, or a workforce that relies heavily on Zoom’s meeting experience. The earnings report, however, is evidence that those use cases have to be specific. Generic video meetings are increasingly difficult to sell as a separate platform purchase.
Zoom’s AI branding has changed, but the governance issue has not
The Reuters report describes Zoom’s AI Companion and enterprise AI offerings as part of its response to competition. That description is already partly outdated. In June, Zoom said the meeting summaries, transcription, chat composition, call summaries, and other features formerly grouped under the AI Companion brand had been folded into Zoom Workplace under functional names. Its newer agentic product is called ZoomMate.
Zoom’s August earnings release emphasizes ZoomMate, My Notes, the AI Productivity Suite, Zoom Virtual Agent Receptionist, and Workvivo HQ Agent. The company said its Zoom Virtual Agent customer count increased 256% year over year, though it did not disclose the underlying customer count, recurring-revenue figure, or how much of that adoption translated into incremental companywide revenue.
That omission is material. Zoom has demonstrated product activity, particularly in its customer-experience portfolio, but it has not supplied enough detail to show whether AI is changing the company’s overall growth trajectory. The fiscal third-quarter guide certainly does not show a near-term surge from AI monetization.
The more immediate concern for IT administrators is that AI-based meeting services expand the boundary of a meeting beyond the conferencing client. Zoom’s support documentation says licensed users can invite its assistant to Microsoft Teams and Google Meet meetings to transcribe discussions, create summaries, and answer questions afterward. The feature requires the relevant Zoom Workplace plan, calendar and contacts integration, an enabled administrator setting, and Zoom Workplace for Windows version 6.4.5 or later.
In a Teams environment, that can turn a Zoom account into a parallel capture and retention path for Teams meeting content. Zoom says its assistant posts notices and displays a visible tile when it joins third-party meetings, but administrators should not treat participant notice as a substitute for policy. The relevant questions are where transcripts and summaries are stored, which account owns them, what retention and eDiscovery rules apply, whether external guests are covered by the organization’s disclosure rules, and whether business units have been authorized to connect their calendars.
AI meeting assistants are now an information-governance decision, not a conferencing preference. Zoom’s financial pressure may encourage it to make these cross-platform tools more prominent, because they give the company a role even where the meeting itself runs in Teams.
Competition is about workflow ownership, not video quality
Zoom’s stated strategy is to move from meetings into what it calls a “system of action”: calls, chat, phone, contact center, employee experience, sales workflows, recruiting, and AI-driven follow-up. That positioning is a direct acknowledgement that video alone no longer differentiates the company enough.
Microsoft is pursuing the same territory from a different starting point. Teams connects meetings to Microsoft 365 identities, documents, collaboration spaces, administration, security tooling, and Copilot services. Zoom is trying to compete by offering AI tools that work across its own applications and, in some cases, across third-party meeting platforms and connected enterprise systems.
For organizations already standardized on Microsoft 365, Zoom’s cross-platform posture can be useful rather than redundant. A company may want Zoom’s webinar features while keeping collaboration records in Microsoft 365, or it may operate a mixed environment after acquisitions. But every added integration raises administrative questions: who may enable it, who can invite a bot to meetings, whether service accounts are needed, and how records are collected during investigations or legal holds.
The earnings release does not change any Microsoft Teams policy, licensing term, or Windows client requirement. It does offer a warning against assuming Zoom will retreat to being only a legacy meeting client. Its enterprise growth is increasingly tied to the services that sit around meetings, and Zoom’s AI products are designed to follow users into Teams and Google Meet rather than wait for them to return to a Zoom call.
The next practical move is an AI-assistant inventory
Zoom raised its full-year fiscal 2027 outlook to $5.085 billion to $5.095 billion in revenue and $6.08 to $6.12 in non-GAAP earnings per share. That makes the third-quarter consensus miss a limited forecast issue, not a withdrawal of the company’s annual expectations.
For enterprise IT teams, the useful response is to inventory the AI assistants already present in meetings across Zoom, Teams, and Google Meet; identify who can enable third-party attendance and calendar integrations; and confirm where transcripts, summaries, and post-meeting tasks reside. Zoom’s forecast shows why those checks cannot wait for a formal migration project: the competitive battle is increasingly being fought inside the data generated by meetings, including meetings hosted on a rival platform.