Zoom Trades Like a Slow Phone Company With a Vault Nobody Counts

The business behind the meeting link

Zoom sells Zoom Workplace (Meetings, Phone, Team Chat, Docs, Whiteboard and the Companion assistant), Business Services (Contact Center, Revenue Accelerator, Events), Workvivo for employee experience, and a developer platform with more than 3,100 marketplace apps. Revenue is subscription licences plus add-ons, with a free plan feeding paid upgrades.

Enterprise customers, served by direct sales, resellers and partners, were 60.3% of FY2026 revenue; Online customers buy on the website. No customer exceeds 10% of revenue.

Competitors include Microsoft Teams, Google Meet, Cisco Webex, RingCentral, Five9, Genesys and NICE.

Q2 FY2027 revenue was $1,277.2M, up 4.9%. Enterprise grew 7.8% to $787.5M, its fastest pace in three years, while Online grew 0.6% to $489.7M with 2.9% average monthly churn.

Enterprise net dollar expansion was 99%, still below 100% on seat downsells, and 4,625 customers each paid more than $100K over twelve months, up 8.2%. Remaining performance obligations were $4,185.0M at FY2026 year end.

The risk is product, not superintelligence

The main risk is execution rather than superintelligence replacing meetings. Video meetings have become a feature inside suites and lighter tools, and Zoom's newer products must carry growth.

Contact Center is the bright spot, with high double-digit ARR growth and Virtual Agent customers up 256%, but it is still too small to lift the total much. Management guides FY2027 revenue to $5,085M to $5,095M and free cash flow to $1.78B to $1.82B.

The board added a former Oracle chief financial officer as a director on Aug 31, 2026.

Cheap on strict math

Owner cash is substantial. Over the trailing twelve months, operating cash flow of $2,000.2M less the deferred-revenue build, $74.6M of capex, $729.3M of stock pay and $295.0M of interest income leaves an owner anchor of $833.5M.

Counting only $932.0M of cash and excluding $6,317.7M of marketable securities and $3,785.9M of strategic investments (Anthropic preferred is carried at $3,134.5M), enterprise value at the $95.77 close on Oct 23, 2026 is about $27.67B, or 33.2x the anchor. That implies 11.6% annual owner-cash growth for ten years at a 9% discount rate.

Applying the lowest multiple of the last five positive years (35.0x) gives a base value of $100.80, about 5% above the price.

Counting the excluded securities and stakes would drop the multiple to about 21.1x, so the strict basis is conservative. Buybacks were $1.62B in FY2026 and $722M in the first half of FY2027. Class B shares carry ten votes and held 51.8% of the vote at Jan 31, 2026. The Q3 FY2027 print, expected around Nov 23, 2026, should show whether Enterprise growth holds near 8% and expansion crosses 100%.

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