Un-Muting Growth: Slight Normalized Acceleration in Pivot to "System of Action"

Research evidence excerpt

Un-Muting Growth: Slight Normalized Acceleration in Pivot to "System of Action"

C O M PA N Y N O T E

M a y 2 1 , 2 0 2 6

Zoom Communications, Inc. (ZM) Neutral

CONCLUSION PRICE: US$96.75

FQ1 results largely came in as expected, with Zoom continuing to show modest TARGET: US$107.00

acceleration across RPO and revenue while maintaining operational efficiency and 12.5x EV/CY27E FCF of $1.96B (inclusive

emphasizing Zoom's relevancy via AI-solutions with a shift towards a "system of action" of net cash of $7.7B and fully diluted shares

company. Zoom is benefitting from vendor consolidation, longer duration contracts, cross- outstanding of 300M)

sell, Online price increases, and FX (with CC growth of 4.6% vs. 4.8% LQ, though this

James Fishincluded 0.5% of the white-label headwind). Buyside's #1 thesis point though is focused on Sr. Research Analyst, Piper Sandler & Co.

its Anthropic stake rather than the fundamental drivers. Our view is unchanged following 612 303-6509, james.fish@psc.com

the quarter - Zoom needs to think about leveraging its cash-position to find ways to re- Ryan Abbott

accelerate growth and expand the portfolio to other adjacent markets beyond Phone, CX, Research Analyst, Piper Sandler & Co.

Workvivo, and AIC monetization. Reit. Neutral, PT to $107. 503 351-5391, ryan.abbott@psc.com

Timothy Shubsda

• What Happened?: Sales grew 5.5% Y/Y (4.6% CC) to $1.24B, which came in 1.4% Research Analyst, Piper Sandler & Co.

716 461-2680, timothy.shubsda@psc.com above guide (but at the low-end of our inputs). By segment, $756M Direct (+7% Y/Y /

same vs LQ) drove most of the total beat, while Online ($483M, +3% Y/Y) saw slightly Changes Previous Current

higher churn than anticipated (3.0% vs. 2.8% LY) that offset some of the price increase. Rating — Neutral