Zoom's ambition: AI system of action to completed work

Zoom's march to become "an AI-first system of action for work" is progressing as the company's first quarter results highlight traction in contact centers, customer experience and use of AI Companion.

The first quarter earnings highlight Zoom's continued traction in the enterprise and an ability to drive sales with AI features. Zoom is planning more AI launches next month.

The company reported first quarter earnings of $425.7 million, or $1.42 a share, on revenue of $1.24 billion, up 5.5% from a year ago. Non-GAAP earnings were $1.55 a share, 13 cents a share ahead of expectations.

Enterprise revenue was $755.7 million, up 7.2% from a year ago with online revenue (SMBs) was $483.3 million. That split was closer to 50-50 just a few years ago.

As for the outlook, Zoom projected second quarter revenue of $1.265 billion to $1.27 billion and non-GAAP earnings between $1.45 a share to $1.47 a share. For fiscal 2027, Zoom is projecting revenue of $5.08 billion to $5.09 billion with non-GAAP earnings of $5.96 a share to $6 a share. Those projections for the year were ahead of estimates.

Zoom's business is becoming much more enterprise driven as AI Companion paid users were up 184% in the first quarter from a year ago. Zoom Customer Experience is seeing high double-digit growth. CEO Eric Yuan said Zoom is winning enterprise displacements.

The company is also planning to step up its enterprise focus with the hire of Russell Dicker as Chief Product Officer. Dicker is a veteran of Microsoft, Google and Amazon and led Microsoft Teams. His remit: “Advancing Zoom’s system of action to turn conversations into completed work.”

Yuan said the plan is to become a system of action. Zoom is in a crowded context market but can capture meetings, notes and conversations via Zoom Workplace. AI Companion is the lever that is designed to drive engagement and context.

"AI Companion 3.0 brings agentic retrieval across Zoom and connected workforces, extending AI companion beyond meeting summaries into a broader workflow layer that turns conversations into action. This AI momentum is also reinforcing the strength of our core business. In Q1, 15 of our top 20 wins included Zoom Workplace or Zoom Phone," said Yuan, who said he's confident that Zoom Workspace becomes an entry to use the broader platform.

Zoom is clearly going for a piece of the broader AI workflow pie and large enterprises are developing custom versions of AI Companion. Yuan cited wins at Raymond James and MongoDB as well as UCaaS momentum.

The company is also pursuing a similar progression with ZVA receptionist, which is an AI-driven front door for Zoom Phone. Customer engagement and experience is another key target for Zoom.

"Zoom customer experience continued to accelerate in Q1 with high double-digit growth driven by paid AI in 9 of the top 10 ZCX deals, showing that customers are increasingly turning to Zoom to automate service, empower agents and improve resolution. Zoom customer experience is emerging as a key growth driver and represents the strategic expansion of our platform into mission-critical customer operations," said Yuan.

Zoom has a consumption model that includes usage as well as seats.

What Zoom represents is the shift from a software company to one driven by AI. Yuan explained the still building inflection point in perception of enterprise software companies. Yuan said:

"I had a call with one of our big customers in the financial sector. What's the customer perception about Zoom? Are you an AI company or not AI company? For now, in my view, when I talk to so many customers, but now they all view like Nvidia or the OpenAI and Anthropic as AI company.

I think that's right because whenever the new technology, you look at the stack, right, from infrastructure leader, right, the cloud infrastructure, the chip layer and also large language model, more like an AI company.

But in the application layer, you will see some company will emerge as an AI company. We want to be part of that because of our AI innovation. More and more customers will deploy those AI services and say this is an AI company."