To The Moon

$Zoom(ZM)$ is scheduled to release its fiscal Q2 2026 earnings after the market closes on Thursday, August 21, 2025. The report will provide a key look into the company's progress beyond its core video conferencing business and its strategy to compete in a post-pandemic world.

Revenue : Analysts' consensus for Q2 2026 revenue is approximately $1.20 billion, representing a modest year-over-year increase.

Earnings Per Share (EPS) : The consensus EPS is around $1.38 per share. Investors will be looking to see if the company can exceed these expectations, as it has in previous quarters.

Summary of Zoom Video Communications (ZM) Fiscal Q1 2026 Earnings

Zoom Video Communications (ZM) reported its fiscal Q1 2026 earnings on May 21, 2025, and the results were a testament to the company's successful pivot away from being a single-product pandemic darling to a more diversified, enterprise-focused platform. The company exceeded analyst expectations on both the top and bottom lines and delivered a positive surprise on its forward guidance.

Financial Performance:

Revenue: Total revenue was $1.175 billion, a modest 2.9% increase year-over-year. This was slightly above consensus estimates.

Earnings Per Share (EPS): Non-GAAP EPS was $1.43, a strong beat against analyst forecasts.

Profitability: Zoom's non-GAAP operating margin was a robust 39.8%, reflecting its continued focus on operational efficiency and profitability.

Enterprise Growth: The most encouraging sign was the enterprise segment, which grew revenue by nearly 6% year-over-year and now accounts for a significant portion of total revenue. The number of customers contributing over $100,000 in trailing 12-month revenue grew by 8%.

Online Business: The online segment saw a modest revenue decline but showed encouraging signs of stability, with a record-low churn rate for a first quarter.

Lessons Learned from the Guidance

Zoom's guidance and management commentary on the Q1 call provided a clear message and a roadmap for the future.

Lesson 1: The Platform Strategy is Gaining Traction. The biggest takeaway is that Zoom's strategic push to become a unified communications platform, rather than just a video conferencing tool, is working. Management highlighted strong adoption of new products like Zoom Phone, Zoom Contact Center, and Workvivo, as well as its AI Companion offerings. The guidance, which was raised for the full year, suggests confidence that this platform expansion will continue to be a key growth driver.

Lesson 2: AI is Central to Future Growth and Monetization. The company emphasized its "AI-first" approach and provided updates on the strong adoption of its AI Companion features. While many of these are currently offered to paid users at no extra cost, management's comments on its "Custom AI Companion" and new features suggest a clear path to monetizing these innovations in the future. This is a crucial lesson for investors who are looking for new revenue streams beyond the core video business.

Lesson 3: The Enterprise is the Future. The Q1 results reinforced that the enterprise segment is the foundation of Zoom's long-term growth and stability. The company's success in "land and expand" strategies, where it cross-sells additional products to existing enterprise customers, is a key lesson in its resilience. The focus on high-value, up-market customers and the corresponding decline in online churn rates demonstrate that this strategy is not only effective but also helping to stabilize the overall business.

Analysis of Zoom Video Communications (ZM) Q2 2026 Earnings

Investors will be focused on a variety of metrics to assess the company's health and future growth prospects.

Key Metrics to Watch

Enterprise Customer Growth: This is a crucial metric for Zoom. As the company seeks to diversify its revenue beyond individual users, the number of enterprise customers and their spending habits will be a key indicator of success. Investors will be watching for growth in customers with more than $100,000 in trailing 12-month revenue.

Non-Core Product Adoption: Zoom has been aggressively pushing new products and services, including Zoom Phone, Zoom Contact Center, and Zoom AI Companion. The Q2 report will be a chance for the company to provide updates on the adoption and monetization of these new offerings. Commentary on the success of these products and their contribution to overall revenue will be a major driver of sentiment.

Profitability and Margins: Zoom has been consistently profitable on a non-GAAP basis. However, as it invests heavily in new products and R&D, investors will be watching to see if the company can maintain or expand its margins.

Forward Guidance: As with any company, management's guidance for fiscal Q3 2026 and the full fiscal year will be the most important factor. Any change in the company's outlook, particularly regarding its ability to grow its enterprise business and monetize its new products, will likely cause a significant stock price movement.

Zoom (ZM) Price Target

Based on 24 analysts from Tiger Brokers offering 12 month price targets for Zoom Video Communications in the last 3 months. The average price target is $90.67 with a high forecast of $115.00 and a low forecast of $65.00. The average price target represents a 25.60% change from the last price of $72.19.

Short-Term Trading Opportunities Post-Earnings

Trading Zoom after its earnings report is a high-risk, high-reward endeavor.

History of Earnings Beats: Zoom has a strong history of beating analyst EPS estimates, which could lead to a positive surprise. The market has already priced in a decline in EPS compared to the prior-year quarter, so a beat could be seen as a sign of resilience.

Volatility: The stock is known for its post-earnings volatility. While its day-to-day volatility has been stable, earnings reports are a major event. Options prices often reflect an expected price swing of several percentage points.

Catalyst for a Turnaround: The market is skeptical about Zoom's long-term growth prospects. A strong report, particularly one that shows significant traction in its new products and a clear path to sustainable growth, could serve as a powerful catalyst for a short-term rally. Conversely, a weak report could confirm investor fears and lead to a sell-off.

Technical Analysis - Exponential Moving Average (EMA)

We are seeing that ZM is experiencing a negative momentum and we are seeing that the bears are in control, with the rotation out of tech not ending soon, we could see more volatility after ZM’s earnings, so this might be a chance to use option which I have shared in the next section.

Market is skeptical about Zoom's long-term growth prospects as there have been many incumbents which is a good replacement for Zoom solutions.

Long Straddle Options Strategy On Zoom Communications (ZM)

A long straddle options strategy on Zoom Communications (ZM) could be a suitable play for its fiscal Q2 2026 earnings release, which is expected on Thursday, August 21, 2025, after the market closes.

A long straddle is a neutral options strategy where the investor buys both a call and a put option on the same underlying asset with the same strike price and expiration date. The goal of this strategy is to profit from a significant price movement in either direction, regardless of whether the stock goes up or down.

Here is why this strategy might be particularly suitable for ZM's post-earnings announcement:

1. High Earnings Volatility

Earnings reports are a major catalyst for stock price swings. Companies that have a history of surprising the market—either positively or negatively—are prime candidates for a long straddle. ZM has a history of beating earnings estimates, but the stock's reaction can still be unpredictable. The long straddle capitalizes on this inherent uncertainty.

2. Market Uncertainty and Mixed Outlook

Despite its consistent earnings beats, ZM's business outlook has been a subject of debate. The company is transitioning from a pandemic-era growth darling to a more mature enterprise software provider. There are questions about its ability to maintain growth in the face of competition and a challenging macroeconomic environment.

Bullish Case: ZM's continued focus on enterprise solutions, AI integration, and new products like Zoom Phone and Contact Center could lead to a positive surprise in revenue and a strong forward-looking guidance. This could trigger a significant upward move.

Bearish Case: The company's slowing growth rate, particularly in the online business segment, and concerns about a potential economic downturn could lead to a cautious outlook from management. If guidance disappoints, the stock could see a sharp decline.

The wide range of potential outcomes makes it difficult to predict the direction of the stock. A long straddle sidesteps this directional risk.

3. Elevated Implied Volatility (IV)

Leading up to an earnings announcement, the implied volatility (IV) of a stock's options typically rises. This is because traders are anticipating a large move and are willing to pay a higher premium for options. After the earnings announcement, this elevated IV usually "crashes" or declines sharply.

A long straddle is a long volatility strategy. You are betting that the actual price movement will be large enough to offset the cost of the premiums and the subsequent IV crush.

For the strategy to be profitable, the stock's move must exceed the total cost of buying both the call and the put. This is the break-even point for the strategy.

4. Avoiding Directional Bias

As mentioned, predicting ZM's post-earnings direction can be tricky. A long straddle removes the need to guess. You are not betting on a specific direction, but rather on the magnitude of the move. If the stock moves significantly in either direction, you profit.

How a Long Straddle Works with ZM:

Let's imagine a simplified scenario for ZM before its Q2 2026 earnings:

Current Stock Price: ZM is trading at, for example, $73.

Strategy: You buy a call and a put option, both with a strike price of $73 and an expiration date shortly after the earnings report.

Cost of call option: $3

Cost of put option: $3

Total cost (premium paid): $6

Break-even points:

Upside: $73 (strike price) + $6 (total premium) = $79

Downside: $73 (strike price) - $6 (total premium) = $67

Profit/Loss:

If ZM closes at $80: The call option is "in the money" by $7 ($80 - $73), and the put option expires worthless. Your profit is $7 - $6 (cost) = $1 per share.

If ZM closes at $66: The put option is "in the money" by $7 ($73 - $66), and the call option expires worthless. Your profit is $7 - $6 (cost) = $1 per share.

If ZM closes at $70: Both options expire worthless or are "out of the money" and you lose the entire $6 premium.

Summary

Zoom Video Communications (ZM) is scheduled to report its Q2 2026 earnings after the market closes on August 21. Analysts expect modest growth, with a consensus revenue forecast of approximately $1.20 billion and an EPS of around $1.38 per share.

Key metrics to watch will be enterprise customer growth and the adoption of new products like Zoom Phone and Zoom Contact Center, as the company diversifies beyond its core video conferencing business. Investors will also scrutinize the company's ability to maintain its strong profitability and operating margins while investing in these new areas.

Despite a history of beating analyst estimates, the stock's post-earnings movement will heavily rely on the company's forward guidance. A strong report showing significant traction in its new products could be a major catalyst for a short-term rally, confirming its successful business transition. Conversely, a weak report could lead to a sell-off, solidifying investor skepticism about its long-term growth prospects. The stock's post-earnings volatility offers high-risk trading opportunities.

A long straddle is a good choice when you have a strong conviction that an event will cause a big price swing, but you are uncertain about the direction. Given the current market's mixed outlook on ZM and the potential for a volatile earnings reaction, a long straddle could be a compelling way to play the post-earnings move.

Appreciate if you could share your thoughts in the comment section whether you think ZM would be able to produce an earnings beat but trading post earnings would be volatile due to the rotation pullback.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire @MillionaireTiger appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.