Zoom Communications (ZM) continues to expand beyond video conferencing into a "broader enterprise communications and collaboration platform" spanning messaging, calendaring, email and artificial intelligence-powered workflow tools, RBC Capital Markets said in a report emailed Friday.
The company delivered fiscal Q1 results above consensus estimates and raised its fiscal 2027 guidance across most metrics, with reported revenue of $1.239 billion, up 5.5% year over year and above consensus estimates of $1.224 billion, while non-GAAP earnings per share came in at $1.55, topping expectations of $1.42.
The brokerage said "enterprise fundamentals remain strong," supported by growth in customers contributing more than $100,000 in annual revenue and improving "net dollar expansion" rates. RBC also highlighted continued strength in Zoom's "contact center" business and said AI products are contributing more meaningfully to revenue growth.
Zoom's "Custom AI Companion" secured notable customer wins during the quarter, including deployments at Raymond James Financial (RJF) and MongoDB (MDB), while the company's "My Notes" product reached 1.5 million monthly active users within four months of launch, according to the report.
RBC raised its price target on Zoom to $130 from $110 while maintaining its outperform rating.
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