Zoom reported Q1 revenue of $1.239B, up 5.5% YoY, with enterprise growing 7.2%. AI Companion paid users jumped 184%. The Anthropic stake, carried at $1.27B, could be worth $2B-$4B, underpinning the stock.
Alpha Score of 45 reflects weak overall profile with moderate momentum, poor value, strong quality, moderate sentiment.
Zoom reported quarterly revenue that topped guidance and showed the company's first sustained re-acceleration in years. Revenue hit $1.239 billion in the fiscal first quarter ended April 30, up 5.5% from a year earlier. The company guided full-year revenue to about $5.08 billion, implying a run rate near $5 billion.
Enterprise revenue rose 7.2% to $755.7 million, now 61% of total revenue. Online revenue grew just 2.8% to $483.3 million. The shift reflects a deliberate move upmarket. Enterprise net dollar retention ticked up to 99% from 98% a year ago, still below 100%. Online monthly churn worsened to 3.0% from 2.8%. The growth is coming from new customers and new product attach, not from existing account expansion, the SaaStr analysis noted.
AI Companion paid users grew 184% year-over-year. The "My Notes" feature reached 1.5 million licensed users within four months of launch. Customer Experience products grew at high double digits, and paid AI appeared in every one of Zoom's top 10 CX deals last quarter. The company built AI into paid SKUs and customers are buying them, a contrast to many peers giving away AI features for free. The attach motion mirrors the product cycle seen at other enterprise software companies like ServiceNow, where AI features drive attach rates.
Non-GAAP operating margin was 41.1%. Free cash flow reached $500.5 million in the quarter, a 40.4% margin. The board added $1 billion to the buyback authorization, on top of $625 million remaining, after retiring roughly 20.4 million shares over the prior fiscal year. The Rule of 40 lands around 46, with profit doing almost all the lifting.
Zoom Ventures invested roughly $51 million in Anthropic in May 2023. That stake is now carried on the balance sheet at $1.27 billion, based on Anthropic's February 2026 round at a $380 billion valuation. Zoom added a $46 million follow-on this quarter to protect against dilution. Baird has estimated the stake could be worth $2 billion to $4 billion depending on dilution. The investment gives Zoom deep access to Claude inside its federated AI approach, where it routes tasks to different models based on cost and performance.
Strip out $7.7 billion in cash and marketable securities and the Anthropic stake, and public investors are paying around $16 billion to $18 billion for a business generating roughly $5 billion in revenue and $1.7 billion in free cash flow. That is a high-single to low-double-digit multiple of free cash flow for a profitable, re-accelerating B2B leader.
The cash and the Anthropic position act as a floor under the stock. The SaaStr analysis concluded that a single early, high-conviction strategic investment can create more shareholder value than years of operating execution.
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