Zoom Video Communications (NASDAQ: ZM) released its fourth-quarter and full-year fiscal 2026 earnings today, February 25, 2026, marking a pivotal moment in the company’s post-pandemic evolution. Far from the simple video-conferencing tool that became a household name in 2020, the latest results showcase a company that has successfully rebranded itself as an "AI-first work platform," significantly expanding its footprint within the lucrative enterprise and public sector markets.

The earnings report, delivered after the market close, beat Wall Street expectations across several key metrics, reflecting the company’s aggressive push into artificial intelligence and unified communications. As organizations continue to navigate the complexities of hybrid work, Zoom’s ability to integrate AI into every facet of the workflow—from automated meeting summaries to sophisticated contact center agents—has allowed it to maintain relevance and drive growth in an increasingly crowded software-as-a-service (SaaS) landscape.

Turning the Page on the Pandemic Era

For the fourth quarter of fiscal 2026, Zoom reported revenue of $1.24 billion, slightly exceeding its guidance range of $1.23 billion to $1.235 billion and representing a 4.5% increase year-over-year. The company’s non-GAAP earnings per share (EPS) came in at $1.51, surpassing the projected $1.48 to $1.49 range. These results highlight a steady stabilization of the business after the volatile growth cycles seen during the early 2020s.

The timeline leading to this quarter’s success began in early 2024 with the launch of "Zoom Workplace," a comprehensive rebranding designed to position the company against giants like Microsoft Corporation (NASDAQ: MSFT) and Salesforce, Inc. (NYSE: CRM). Throughout 2025, Zoom accelerated this transition by deploying its AI Companion 3.0, an "agentic AI" capable of performing complex tasks across different apps. By the end of fiscal 2026, AI Companion adoption had surged more than fourfold compared to the previous year, providing a robust defensive moat that has helped lower the company's online churn rate to a historic low of 2.7%.

Key stakeholders, including CEO Eric Yuan, have emphasized the shift toward the "up-market" segment. This strategy appears to be paying off: Zoom now boasts 4,363 customers contributing more than $100,000 in trailing 12-month revenue, a 9.2% increase over the previous year. This growth in high-value enterprise accounts has been the primary engine driving the company’s high operating margins, which remain among the best in the industry at approximately 40%.

Identifying the Winners and Losers in the Unified Communications Race

Zoom’s continued resurgence places it firmly in the "winners" column for 2026. By successfully diversifying its revenue streams through Zoom Phone and Zoom Contact Center, the company is no longer reliant solely on meeting subscriptions. Zoom Phone reached a massive milestone this year, surpassing 10 million paid seats, while the Zoom Contact Center doubled its customer base to over 1,100 enterprises. Hardware partners like Logitech International S.A. (NASDAQ: LOGI) also stand to benefit as Zoom’s expansion into physical "Zoom Rooms" and AI-optimized hardware continues to gain traction in corporate offices.

Conversely, legacy telecommunications and legacy contact center providers appear to be the primary "losers" in this shift. Companies like Cisco Systems, Inc. (NASDAQ: CSCO) and other traditional PBX (Private Branch Exchange) providers are facing intense pressure as Zoom Phone becomes the preferred choice for multinational enterprises looking to consolidate their global telephony into a single cloud-based app. Similarly, specialized contact center players are finding it harder to compete with Zoom’s integrated AI features, which are often bundled at a more competitive price point.

The competitive landscape with Microsoft remains a stalemate. While Microsoft Teams continues to enjoy a massive installed base due to its inclusion in the Office 365 suite, Zoom has managed to carve out a niche for "best-of-breed" AI performance and user experience. Analysts note that Zoom's "federated AI approach"—which uses multiple models from providers like Alphabet Inc. (NASDAQ: GOOGL) and OpenAI rather than relying on a single source—has provided a level of flexibility and accuracy that some enterprise customers prefer over Microsoft’s more closed ecosystem.

AI and the Public Sector: A Broader Strategic Shift

The wider significance of Zoom's Q4 results lies in the broader industry trend of "Agentic AI"—AI that doesn't just summarize information but takes action on behalf of the user. Zoom’s transition to this model signifies a major shift in how SaaS companies provide value; they are no longer just "warehouses for data" but active participants in business processes. This mirrors trends seen across the tech sector, where productivity apps are evolving into intelligent operating systems.

Furthermore, Zoom’s recent breakthrough into the defense and public sector markets marks a historical precedent for the company. By achieving DISA IL4 authorization from the U.S. Department of Defense, Zoom has cleared a major regulatory hurdle that previously limited its growth in government sectors. This move positions the company to capture significant government contracts that were once the exclusive domain of older, more established defense contractors. This entry into regulated industries provides a high-barrier-to-entry revenue stream that is much more resilient to economic downturns than the consumer-facing business of years past.

The Road Ahead: Monetization and Global Expansion

Looking forward, the short-term challenge for Zoom will be successfully monetizing its advanced AI features. While the basic AI Companion remains free for paid users, the newly launched "Custom AI Companion"—priced at approximately $12 per user per month—will be a critical test of whether enterprises are willing to pay a premium for specialized automation. If successful, this could significantly boost Zoom’s average revenue per user (ARPU) and accelerate top-line growth back into the double digits.

In the long term, Zoom is likely to explore deeper integrations into vertical-specific AI, such as dedicated tools for healthcare and legal services. The potential for strategic pivots remains high, especially as the company sits on a massive, debt-free cash pile. Market analysts speculate that Zoom could pursue tactical acquisitions in the AI space to further bolster its "agentic" capabilities and maintain its lead over newer startups that are attempting to disrupt the video space with generative AI features.

A Balanced Outlook for Investors

In summary, Zoom’s Q4 2026 earnings report confirms that the company has successfully navigated the difficult transition from a pandemic-era utility to a multi-product AI enterprise platform. The growth in the Contact Center and Phone segments, combined with the successful rollout of AI Companion 3.0, provides a clear roadmap for sustainable growth. While the days of triple-digit revenue increases are gone, the current "Growth at a Reasonable Price" (GARP) profile of the stock is attracting a new class of value-oriented institutional investors.

As the market moves forward, investors should keep a close eye on the adoption rates of the Custom AI Companion and the company’s progress in winning large-scale government contracts. The stock’s 35% gain over the last 12 months suggests that the market is finally beginning to price in Zoom's transformation. For the coming months, the focus will remain on whether Zoom can maintain its disciplined cost management while continuing to innovate fast enough to stay ahead of the "Big Tech" pack.

This content is intended for informational purposes only and is not financial advice.