Zoom Earnings Face Two Tests: Core Growth and Anthropic Gain

Zoom Video Communications is scheduled to report fiscal second-quarter 2027 earnings after the US market closes on August 25. Analysts anticipate adjusted earnings per share of approximately $1.48 on revenue of $1.27 billion. The report presents a dual narrative, testing both the health of Zoom's core communications business and the potential mark-to-market revaluation of its early-stage investment in artificial intelligence company Anthropic. This analysis is based on reporting from investinglive.com.

Context — why this matters now

Zoom’s earnings arrive at a critical juncture for the company. The widespread adoption of remote work during the pandemic fueled explosive growth, but the subsequent normalization of demand has pressured the stock. The company is now executing a strategic pivot to become a broader platform, moving beyond its foundational video meetings product. This shift hinges on the successful monetization of new services like Zoom Phone, Contact Center, and AI Companion.

The investment in Anthropic, announced in 2023, adds a complex financial dimension. As a private company, Anthropic’s valuation is subject to significant changes based on subsequent funding rounds. A sharp increase in its valuation during Zoom’s fiscal quarter creates the conditions for a non-cash accounting gain. The core challenge for investors is disentangling the transient effects of an investment revaluation from the sustainable trends in Zoom’s operating business. The last time Zoom reported a major adjustment to its investment portfolio was in the first quarter of fiscal 2027, when it valued its Anthropic stake at $1.27 billion.

Data — what the numbers show

Wall Street’s consensus points to modest top-line growth. The expected $1.27 billion in revenue represents a year-over-year increase of approximately 4%. Zoom’s own guidance for the quarter was narrowly bracketed between $1.265 billion and $1.270 billion. For the full fiscal year, the company previously projected revenue of $5.08 billion to $5.09 billion and adjusted EPS of $5.96 to $6.00. The upcoming report will be measured against these benchmarks.

The divergence between GAAP and adjusted earnings is a critical data point. Adjusted EPS, expected to be around $1.48, excludes gains or losses from strategic investments. GAAP EPS will incorporate any change in the carrying value of the Anthropic stake. The value of that investment was $1.27 billion as of April 30, based on Anthropic’s February 2026 valuation of approximately $380 billion. A subsequent funding round in May 2026 valued Anthropic at roughly $965 billion, suggesting a potential upward adjustment on Zoom’s books.

Key operating metrics from the previous quarter provide a baseline for comparison. Enterprise revenue grew 7.2% year-over-year. The net dollar expansion rate for enterprise customers improved to 99%, indicating customer spending is nearly back to previous levels. Paid users of the Zoom AI Companion product surged 184%. Zoom reported free cash flow of $500.5 million in the first quarter.

Metric	Q1 FY2027 Actual	Q2 FY2027 Expectation
Revenue	$1.239 Billion	~$1.27 Billion
Enterprise Revenue Growth	7.2% (YoY)	Watch for acceleration
Net Dollar Expansion	99%	Watch for move above 100%

Analysis — what it means for markets

The primary implication for equity markets is the potential reassessment of Zoom’s sum-of-the-parts value. A significantly higher valuation for the Anthropic investment could lead some investors to value Zoom by separating its core software business, its cash reserves, and its strategic holdings. This analytical approach might reveal latent value not immediately apparent in the company’s total market capitalization. A paper gain would strengthen Zoom’s balance sheet but does not directly enhance its operational cash flow.

The AI partnership with Anthropic also supports Zoom’s strategic narrative. The integration of Claude’s AI capabilities aims to transform Zoom from a communication tool into a productivity platform that automates tasks like meeting summarization and follow-ups. Success here is crucial for justifying a higher multiple relative to peers in the competitive unified communications sector. A counter-argument is that the Anthropic gain, while financially material, does not address the central challenge of re-accelerating growth in Zoom’s mature core business.

Market positioning suggests investors are cautiously optimistic but focused on fundamentals. Option flow data preceding the report typically indicates whether traders are hedging for a large move or speculating on a specific direction. The stock’s reaction will likely be dominated by revisions to revenue guidance and enterprise metrics rather than the investment gain alone. A positive surprise in the core business could attract growth-oriented funds, while a miss might intensify pressure from value-focused investors questioning the sustainability of its model.

Outlook — what to watch next

The immediate catalyst is the earnings conference call scheduled for 5:00 p.m. EDT on August 25. Management’s commentary on the demand environment for enterprise contracts and the sales pipeline for Zoom Contact Center will be critical. Any update on the timing or scale of a potential Anthropic initial public offering would provide clarity on the liquidity of Zoom’s investment.

For the remainder of 2026, investors should monitor Zoom’s quarterly net dollar expansion rate. A sustained move above 100% would signal that the company is successfully expanding relationships with existing customers. The adoption curve of paid AI Companion features will indicate whether AI is becoming a tangible revenue driver rather than a free add-on.

Key technical levels for ZM stock will be its 50-day and 200-day moving averages post-earnings. A breakout above resistance or breakdown below support on heavy volume will confirm the market’s interpretation of the results. The stock’s correlation to the broader technology sector, as measured by the Nasdaq-100 index, may decouple if the earnings report is perceived as highly company-specific.

Frequently Asked Questions

What is the difference between Zoom's GAAP and adjusted earnings?

GAAP earnings follow strict accounting rules and include all gains and losses, such as changes in the value of strategic investments like Anthropic. Adjusted earnings exclude these items to provide a clearer view of the core business performance. A large gap between the two figures in the upcoming report would likely be due to a mark-to-market adjustment of the Anthropic stake, representing a paper gain rather than cash received by Zoom.

How does Zoom's investment in Anthropic make money?

Zoom profits from its Anthropic investment through appreciation in the value of its shares. This gain is realized only if Zoom sells part of its stake or when Anthropic undergoes a liquidity event like an initial public offering. Until then, valuation changes are accounting entries that affect the balance sheet and GAAP income. The strategic partnership also allows Zoom to integrate Anthropic's Claude AI to enhance its own products, potentially driving subscription revenue.

What is a good net dollar expansion rate for Zoom?

A net dollar expansion rate above 100% is considered healthy for a subscription software company like Zoom. It indicates that revenue from the existing customer base is growing because upsells and expansions outweigh cancellations or downsizing. Zoom's rate improved to 99% last quarter, so crossing the 100% threshold would be a positive signal that its platform expansion strategy is gaining traction with current clients.

Bottom Line

The Zoom earnings report hinges on whether operational improvements in its core business can command more attention than a non-cash gain from an AI investment.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. CFD trading carries high risk of capital loss.