Zoom has been trying to convince enterprise buyers over the past few years that it’s more than just a conferencing tool. When CEO Eric Yuan presented the company’s first-quarter fiscal 2027 results to investors on May 21, the numbers gave him some rationale. Revenue of $1.239 billion was up 5.5% year-over-year and $14 million above the high end of Zoom’s own guidance. Corporate sales grew faster than the overall business at 7.2%. Paid users of Zoom’s embedded AI product, AI Companion, increased 184% year-over-year. And its contact center business, which Zoom is positioning as the other half of its UCaaS-CCaaS integration strategy, has seen high double-digit revenue growth.
None of that addresses the broader question of whether Zoom can sustain meaningful growth against Microsoft Teams and a crowded CCaaS market. But the first quarter numbers are a reasonable starting point for Yuan’s argument. This means customers are purchasing more of the platform rather than simply renewing their meeting licenses.
Enterprise customers are spending more
Corporate revenue increased 7.2% to $755.7 million, now accounting for 61% of total revenue and up 1 percentage point year-over-year. The number of business accounts generating more than $100,000 in revenue over the past 12 months increased 8.2% to 4,534, accounting for 33% of total revenue, while net dollar expansion for businesses improved to 99%.
Wins on calls show a consistent picture. A major government contractor returned to Zoom in a seven-figure ARR deal, replacing both Microsoft Teams and Cisco needs to meet government security requirements and route real-time communications data into broader AI workflows. Zoom Phone has signed an additional seven-figure deal with Baptist Health in Jacksonville, Florida. It has 16,000 employees across more than 200 points of care, and healthcare integration was cited as a deciding factor. Yuan told investors that 15 of Zoom’s top 20 successes this quarter included Zoom Workplace or Zoom Phone, indicating that customers are buying platforms rather than single products.
AI Companion: From meeting summaries to workflow automation
AI Companion’s paid monthly active users increased 184% year-over-year, driven by AI Companion 3.0. The product has evolved beyond meeting summaries into what Zoom calls agent discovery. This means getting context from a third-party system connected to Zoom to get the job done. Yuan says the product range has changed as follows:
“AI Companion 3.0 provides agent discovery across Zoom and connected work sources, extending AI Companion beyond meeting summaries into a broader workflow layer that turns conversations into action.”
Two customer stories are of some importance. Raymond James initially adopted it only for summary meetings, then expanded with Custom AI Companion across approximately 10,000 seats, building compliance-specific workflows for wealth advisors who needed AI that understood financial services oversight requirements as well as general productivity features. MongoDB went further and deployed Custom AI Companion with Zoom Contact Center and Zoom Virtual Agent as part of the Zoom Workplace Enterprise Plus upgrade to automate tasks across IT ticketing, CRM, and other third-party systems. Both cases follow the same logic. Customers start with AI Companion for narrow use cases and expand to agent workflows that impact more businesses.
My Notes, Zoom’s AI note taker, has surpassed 1.5 million monthly active users, excluding trial users, in just four months since launch, making it one of the fastest product launches Zoom has seen in recent years.
Telephone and Contact Center: Integrated Promotion
Zoom Phone ARR has grown in the mid-teens. Zoom Customer Experience, which encompasses contact centers, virtual agents and related products, saw high double-digit revenue growth, with nine of the top 10 ZCX deals in the quarter including paid AI features.
The commercial argument Zoom is making to IT buyers is UCaaS-CCaaS integration. One platform, one vendor, one contract covering employee communications and customer engagement. Yuan said the business case was simple enough for buyers to reach their own conclusions.
“When you look at on-premises to cloud, or pre-AI solutions to AI solutions, if you can combine those two systems, why not integrate them into one platform, one vendor? That’s a great ROI. That’s why you often see UCaaS and CCaaS integrated together.”
Eight of the top 10 contact centers that replaced their legacy CCaaS providers this quarter were successful. For IT leaders who are currently managing separate UCaaS and CCaaS contracts, the case for integration is something that most procurement teams are crunching the numbers on, and Zoom is clearly joining the conversation.
Financials and Outlook
Non-GAAP operating margin reached 41.1%, up from 39.8% a year ago, and free cash flow increased 8% to $505 million. Remaining performance obligations of approximately $4.3 billion increased 11%, while the non-current portion increased 19%. This reflects more customers signing long-term, multi-product contracts rather than annual deals. Deferred revenue beat guidance, rising 5% compared to the guidance range of 1-2% for the same changes.
Softer numbers are in the online sector, where the average monthly churn rate rose to 3.0% from 2.8% a year ago. CFO Michelle Chang provided the following assessment during the call:
“We said we were going to stabilize our online business, and we did that not just from a revenue perspective, but also from a much more stable nature of our online business.”
Stabilization does not equal growth, and the self-service business is a small part of the story each quarter.
Zoom raised its fiscal 2027 revenue target to $5.09 billion from $5.08 billion and added $1 billion to authorize share buybacks, on top of the $625 million already remaining. Analyst reaction was generally positive, but measured. Needham’s Josh Reilly cited Zoom Phone’s mid-teens growth and AI cross-selling trends as notable positives. BTIG’s Nikolay Verkhovski pointed out that the low churn rate in phone and contact centers reflects the lack of large competitive acquisitions during the period. This is a sign that Zoom is holding on to accounts rather than gaining net new accounts.
The 184% increase in paid AI Companion users is the number Zoom wants IT leaders to take this quarter, and there’s ample supporting evidence from Raymond James and MongoDB expansions to suggest the cross-selling move is working. Whether mid-single-digit revenue growth is the floor or ceiling for AI monetization is a question that will have to be answered in the next two quarters.