Zoom told investors in May that its first quarter of fiscal 2027 was one of its best in years. Revenue grew 5.5%, beating the top of its own guidance range, and CEO Eric Yuan called it “among our best growth rates in recent years” on the call. In that same breath, Zoom guided Q2 lower: $1.265 billion to $1.270 billion, which at the midpoint is 4.1% year-on-year growth. A company doesn’t usually follow its best quarter in years with guidance for a weaker one unless it has a specific reason to expect the slowdown.
That reason matters more now than it would have three months ago. Cisco’s Collaboration segment just delivered its best quarter in seven years, up 12%. RingCentral grew 5.9% in its own most recent quarter. Zoom’s 5.5% in Q1 sat ahead of RingCentral’s pace. Its 4.1% guidance for Q2, if it holds, would sit behind both.
- Zoom Reports $1.24bn Q1 Revenue as AI Companion Users Surge 184%
- Cisco’s AI Paradox: Why Record Earnings Still Triggered a Market Sell-Off
AI Companion Usage Is Growing Faster Than the Revenue Behind It
Zoom’s own explanation for where growth comes from next is AI. Paid AI Companion users grew 184% year on year in Q1, and My Notes, a feature barely four months old, already has 1.5 million licensed users. Those are adoption numbers, not revenue numbers, and revenue is what decides whether Q2 beats or misses guidance. The one place that adoption is visibly turning into money is Zoom’s Customer Experience business, its contact centre product, which delivered accelerating high double-digit growth well ahead of the core business.
Set against that is a business Zoom is still trying to grow past. Online churn, from self-serve and non-enterprise customers, rose from 2.8% to 3% in Q1, and Yuan told analysts the company still has “a little bit of an awareness problem” convincing the market it’s more than a meetings app. The gap between 184% usage growth and 4.1% guided revenue growth is that awareness problem stated in numbers: Zoom can point to how many people are using AI Companion, but hasn’t yet shown that usage converting cleanly into the topline.
Zoom’s Answer to That Gap Arrived Three Weeks Before This Earnings Report
It didn’t come on the call. Zoom appointed Carlos Quaderi as Head of APAC on 21 July, effective 1 August, and his mandate reads like a direct response to where the gap sits. Quaderi, a 30-year industry veteran with prior leadership roles at Workday, AWS and Microsoft, previously ran Zoom’s Southeast Asia, Hong Kong and Taiwan business. In the new role, reporting to Chief Sales and Growth Officer Graeme Geddes, he’s responsible for enterprise and SMB growth, the CX business, and channel expansion, not meetings, not core calling.
Geddes framed the appointment around where Zoom sees the opening:
APAC is a critical growth region, and our continued investment reflects the opportunities we see across enterprise & SMB segments, CX business, and our partner ecosystem.
Putting a CX and SMB specialist in charge of an entire region says plainly what the Q1 numbers only implied: Zoom’s growth case now runs through Customer Experience and enterprise expansion, not through meetings and calling. If Q2’s results show APAC or CX contributing more than usual to the headline number, this appointment is why.
What 25 August Actually Tests
None of this changes what Zoom already told investors to expect: growth slower than Q1, and slower than what Cisco and RingCentral have just posted. What it does change is what that number will mean. A soft topline alongside AI Companion usage still climbing and CX still accelerating reads as a company mid-transition, its revenue mix catching up to where its product bets already are. A soft topline alongside stalling usage or a full-year guidance cut would read as something closer to the “awareness problem” Yuan admitted to, unresolved rather than in progress. Zoom raised that full-year guidance in May to $5.08 billion to $5.09 billion. Whether it survives 25 August unchanged is the clearest single signal of which version investors get.
