Zoom Communications, Inc.ZM
Zoom Communications, Inc. Revenue Disclosure
Revenue Recognition
Disaggregation of Revenue
The following table summarizes revenue by region based on the billing address of customers:
| Year Ended January 31, | ||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2024 | ||||||||||||||||||||||||||||||||||||
| Amount | Percentage of Revenue | Amount | Percentage of Revenue | Amount | Percentage of Revenue | |||||||||||||||||||||||||||||||||
| (in thousands, except percentages) | ||||||||||||||||||||||||||||||||||||||
| Americas | $ | 3,508,148 | 72.1 | % | $ | 3,351,286 | 71.8 | % | $ | 3,228,914 | 71.3 | % | ||||||||||||||||||||||||||
| APAC | 590,710 | 12.1 | % | 571,443 | 12.2 | % | 571,596 | 12.6 | % | |||||||||||||||||||||||||||||
| EMEA | 769,911 | 15.8 | % | 742,704 | 16.0 | % | 726,714 | 16.1 | % | |||||||||||||||||||||||||||||
| Total | $ | 4,868,769 | 100.0 | % | $ | 4,665,433 | 100.0 | % | $ | 4,527,224 | 100.0 | % | ||||||||||||||||||||||||||
Contract Balances
We receive payments from customers based on a billing schedule as established in our customer contracts. Accounts receivable are recorded when we contractually have the right to consideration. In some arrangements, a right to consideration for our performance under the customer contract may occur before invoicing to the customer, resulting in an unbilled accounts receivable. The amount of unbilled accounts receivable included within accounts receivable, net of allowances on the consolidated balance sheets, was $84.9 million and $118.5 million as of January 31, 2026 and 2025, respectively, and the amount of unbilled accounts receivable included within other assets, noncurrent on the consolidated balance sheets was de minimis as of January 31, 2026 and 2025.
Contract liabilities consist of deferred revenue. Revenue is deferred when we have the right to invoice in advance of performance under a customer contract. The current portion of deferred revenue balances is recognized over the next 12 months. The amount of revenue recognized during the fiscal years ended January 31, 2026, 2025, and 2024 that was included in deferred revenue at the beginning of each period was $1,336.0 million, $1,249.8 million, and $1,257.4 million, respectively.
Remaining Performance Obligations
The terms of our subscription agreements are monthly, annual, and multiyear and we may bill for the full term in advance or on an annual, quarterly, or monthly basis, depending on the billing terms with customers. As of January 31, 2026, the aggregate amount of the transaction price allocated to our remaining performance obligations was $4,185.0 million, which consists of both billed consideration in the amount of $1,424.3 million and unbilled consideration in the amount of $2,760.7 million that we expect to recognize as revenue. We expect to recognize 57% of our remaining performance obligations as revenue over the next 12 months and the remainder thereafter.
Cost to Obtain a Contract
We primarily capitalize sales commissions and associated payroll taxes paid to internal sales personnel that are incremental costs from the acquisition of customer contracts. These costs are recorded as deferred contract acquisition costs in the consolidated balance sheets. We determine whether costs should be deferred based on our sales compensation plans and if the commissions are incremental and would not have occurred absent the customer contract.
Sales commissions paid upon the initial acquisition of a customer contract were historically amortized over an estimated period of benefit of three years. We determine the period of benefit for commissions paid for the acquisition of the initial customer contract by taking into consideration the initial estimated customer life and the technological life of our unified communications and collaboration platform and related significant features. Generally, we do not pay sales commissions upon contract renewal. Amortization is recognized on a straight-line basis commensurate with the pattern of revenue recognition and is included in sales and marketing expense in the consolidated statements of operations.
We periodically review these deferred contract acquisition costs to determine whether events or changes in circumstances have occurred that could impact the period of benefit. At the end of fiscal 2026, we completed a re-assessment of the estimated period of benefit for deferred contract acquisition costs and determined that we should increase the amortization period from three years to five years. The impact of the change in the accounting estimate is reflected in the consolidated balance sheet as of January 31, 2026, and is accounted for prospectively from that date. The change in amortization period did not impact sales and marketing expenses for the fiscal year ended January 31, 2026. There were no impairment losses recorded during the periods presented.
The following table represents a rollforward of deferred contract acquisition costs:
| Year Ended January 31, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| (in thousands) | ||||||||||||||
| Beginning balance | $ | 311,822 | $ | 347,198 | ||||||||||
| Additions to deferred contract acquisition costs | 295,949 | 246,727 | ||||||||||||
| Amortization of deferred contract acquisition costs | (283,382) | (282,103) | ||||||||||||
| Ending balance | $ | 324,389 | $ | 311,822 | ||||||||||
| Deferred contract acquisition costs, current (to be amortized in next 12 months) | $ | 108,856 | $ | 188,358 | ||||||||||
| Deferred contract acquisition costs, noncurrent | 215,533 | 123,464 | ||||||||||||
| Total deferred contract acquisition costs | $ | 324,389 | $ | 311,822 | ||||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2026 | Feb 27, 2026 | Showing above |
| 2025 | Feb 28, 2025 | |
| 2024 | Mar 4, 2024 | |
| 2023 | Mar 3, 2023 | |
| 2022 | Mar 7, 2022 | |
| 2021 | Mar 18, 2021 | |
| 2020 | Mar 20, 2020 | |
About Revenue Disclosures
Revenue disclosures under ASC 606 explain how a company identifies performance obligations, allocates transaction prices, and determines when revenue is recognized. This section is essential for understanding whether reported revenue reflects genuine economic activity or aggressive accounting choices. Analysts examine the mix of point-in-time versus over-time recognition, which directly affects revenue timing and comparability.
Key signals: rising contract liabilities (deferred revenue) suggest strong future revenue visibility, while declining contract assets may indicate slowing project milestones. Watch for variable consideration estimates — rebates, returns, and performance bonuses that require management judgment. Significant changes in disaggregated revenue by geography or product line can reveal shifting business mix before it appears in headline numbers. Compare revenue growth against contract liability growth to assess sustainability, and scrutinize any changes in the timing of recognition that coincide with earnings pressure.