Zoom stock opened sharply higher on Friday, climbing more than 9% to around $105.55, after the company posted a strong first quarter and revealed a quietly massive return on its early bet on Anthropic.
The numbers were clean across the board. Revenue hit $1.24 billion, up 5.5% year over year, and comfortably ahead of Zoom’s own guidance of $1.22 billion. Adjusted earnings came in at $1.55 per share, up from $1.43 a year ago. Free cash flow rose 8% to $500.5 million.
Enterprise revenue grew 7.2% to $755.7 million and now accounts for 61% of total revenue. Customers spending over $100,000 annually grew 8.2% to 4,534.
Net dollar expansion rate ticked up to 99% from 98%, a sign that existing customers are spending slightly more.
CEO Eric Yuan pointed to AI as the engine behind the momentum. AI Companion paid users grew 184% year over year. My Notes, a newer AI note-taking feature, reached 1.5 million licensed users within four months of launch.
“Customers are increasingly adopting Zoom as an AI-first system of action for modern work,” Yuan said.
The earnings story got a second act on Friday when a regulatory filing revealed the full scope of Zoom’s Anthropic investment.
Zoom put roughly $51 million into Anthropic in May 2023 through its Zoom Ventures arm. That stake is now worth nearly $1.3 billion — a return of more than $1 billion. The original investment was structured to help integrate Anthropic’s Claude models into Zoom’s AI products.
Anthropic is reportedly close to closing a new funding round of up to $30 billion at a $900 billion valuation, with Sequoia Capital, Dragoneer, Altimeter, and Greenoaks expected to each contribute $2 billion. If that valuation holds, Zoom’s stake could be worth even more.
Cantor Fitzgerald noted that if the Anthropic holding, estimated at $1.5 billion of Zoom’s total $1.88 billion in strategic investments, reaches the $900 billion valuation level, Zoom’s stock could be worth $116 per share.
Management raised full-year guidance. Zoom now expects revenue of $5.08 to $5.09 billion, adjusted EPS of $5.96 to $6.00, and free cash flow of $1.7 billion for fiscal 2027.
The company also authorized a new $1 billion share buyback program.
Analysts moved quickly. Morgan Stanley raised its target to $105 from $92. Rosenblatt went to $130 from $115. Benchmark lifted its target to $125 from $121. Mizuho moved to $120, and Needham also raised to $130. BofA went to $105 while keeping a Neutral rating.
Cantor Fitzgerald, which maintained a Neutral rating, raised its target to $104 from $87, citing adoption of Zoom’s CX, Phone, and AI products.
Zoom’s 52-week high stands at $113.73, reached during Friday’s session.
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