Zoom Video Communications (ZM) 26 Feb 242024 Q4 Earnings call transcript

Okay. Hello, everyone, and welcome to Zoom's Q4 FY '24 Earnings Webinar.

As a reminder, today's webinar is being recorded. And now I would like to hand things over to Tom McCallum, Head of Investor Relations.

Thank you, David. to full video fiscal welcome fourth for and and quarter year everyone, Zoom's webinar earnings the Hello, XXXX. Steckelberg. I'm and joined Kelly CEO, Founder Eric Yuan; today and Zoom's by Zoom's CFO,

after our slide earnings copy prepared the with downloaded Our that, of release, the page page, today's on Relations deck remarks a highlights reconciliation investors.zoom. Investor was along to you'll release issued be from market and able with may include press financial closed earnings GAAP results. be Also this a non-GAAP to at and today find a of financial

During statements, financial and our this will call, first year full we make including statements quarter the for forward-looking regarding XXXX. outlook

initiatives, Our and statements aspirations the results trends, business based may differ environment, the growth and today, expectations product from we initiatives go-to-market predictions actual benefits only impacts on These strategy business initiatives. financial what of such believe and and our regarding are macroeconomic that expected are opportunities, market materially. position, and

forward-looking we Form statements financial on results, annual SEC, on subject financial our other quarterly and and on assumes in and performance affect any risks webinar. which that today's including the could statements Form update we in filings factors XX-Q. forward-looking with our detail report our obligation the These reports Zoom no XX-K discuss to are to may make

just discussion to over the Eric. me turn let that, with And

In our made FY limitless Thank you, mission connection. delivering we Tom. platform, progress everyone, Thank one human 'XX, you, today. tremendous us of amount joining a for of towards

innovation is commits a up AI their customers has [indiscernible] the carefully that responsible, in deliver platform. our empowering world to and in As by that generative and with entire storm, to take serve that AI can needs, best way unifies listened began order to gone we

Since Zoom from all AI generative we no AI included to and X additional cost X launched effectiveness productivity, enhanced team the our employees products, users. and company combining ago, down. expanded far customers empowers the we're with to its license assistant, skills. only AI, Zoom months at But

to map driving road by future is AI guided XXX% value. Our customer

hard a to their work hope see are Enterprise in and unique more share month at We you new customers all AI We we at help will business to to Connect. there. achieve developing have objectives, capabilities

such expanding customer pricing companies assist, our customers tiered unified solution and workforce relationships virtual suite The to center Our for contact management, to launched AI-first omnichannel seeking CS offers AI includes is strengthen base better that AIX deliver value and allows all capabilities a add as and tremendous sizes quality of management, to product outcomes. combining support. newly specialized agent

expanding head-to-head its competition beginning contact by legacy incumbents. is in center win Boosted to suite the with our features,

merits Beyond Zoom to own that, is completely the customers it platform. its with broadening the competing funnel Zoom, to new on

from a we excited. full becomes very Zoom migrate As customers are chat workplace products seeing Zoom other on to solution, chat, team

Over team in chat last increased past has Xx transition tool Zoom designed migration simplify our a dollars seen the year, paid XXX% months. X accounts, the our across increase the and in to usage has

users, by user over chat, to over payments financial also law solutions as well team chain experiences collaboration Zoom who global Customers collaboration and cost Zoom including migrated Customers on leader leader their as has to across the the industries X,XXX a who appreciate and moved a a has are our consolidating team product who improved Zoom. has users. X,XXX realized users X,XXX chat and during communications enhanced efficiencies moving supply migrated firm major

customer and it its acquired Workvivo a integration into strengthened Workvivo, market the has we and long-standing making to biggest XX [indiscernible] date. Zoom its on Zoom customer Fortune a interface April, position. Workvivo's QX, company Last In

platform. a side, the ] Workvivo back as global saw broader started who Zoom [ flip a the we also on customer And adopt

to on can you Internet product both report We virtuous recognized in its into packaged very adding solutions. and larger a by cycle, sell first pleased [indiscernible] a to see, Workvivo base. products, more were creates organically allowing inorganically new see us a as As leader

recognized its a revenue teams. Zoom to value fourth a [ its was in strong sales tool of enabled performer testament accelerator year covered, week ] first value amazing AI the powerful as Similarly, to an as being in driving

those difficult more faced we FY perspective, on. disciplined year continuing become and to 'XX and was macro focused We challenges head prioritize a from opportunities. those while a

much As better were a positioned than are X year we result, we ago.

moat drive and [ are goals primed ] cognizant and is teams expertise and go-to-market our is our platform deeper, empower Our to growth sharpened our defining with offering more customers. robust

some talk our customers. about Now amazing let's of

excited First, family. Zoom technology communicate Recognizing welcome of the they of the leader enterprise Broadcom, to opted I'm the Zoom global and our collaborate. ease and infrastructure expanding to so modernize for simplicity platform, to the use they a way bundle

Let value from me Zoom on beverage deployment. they expanded meetings, rooms In Zoom center and also thank contact [ seeing doubling Zoom, strong Diageo existing and their agent. leading to ], company down a firm global virtual QX, for

APIs needs. financial our solutions for their to platform, Unit, solving our member Zoom partnerships in Zoom's video-first of Let through the Zoom core integrations with Financial to Community our because me engagement approach banking Communitive thank all our cooperative one have with and broader communications Financial modernize process. were to investing decision-making also chosen Zoom for full-service Credit platform. their contact They key center.

Zoom thank leader. their the Civera wider the FX X Zoom me payments from ], [ platform they adopted products Zoom companion, leverage Team streamline Zoom there, their ] foundation seeing in than let the world's the order chat meeting to in our deeply of was [ And the less tight AI engagement. Zoom post years, pre, the during, communication Finally, all platform. and to within by underpinned of they began benefits of recently integration

our rooted this this are productive. biggest is departments of Everything This customer why employees, in delivering our our And employees happy modern in the champions. of is are culture the here employees we most is IT course, do why is happiness. -- why employees

win everyone. becomes choosing a for So Zoom

on not laser-focused it and could best to of optimistic our our are The mission future. be more come. is yet We

Thank it you. And to with that, I'll pass Kelly. over

hello, everyone. and Eric, you, Thank

of the start with revenue We financial XX%. with to our enterprise X% flow with me pleased a strong Let FY finish and for up were 'XX. growing free the highlights year view cash

achieved operating XX.X%, We basis up from margin of a points XXX FY non-GAAP also in XX.X% 'XX.

but in significant QX, a a saw emerging nearly In products, of center increase average also contact we Zoom only new including expanded traction not our licenses deal we in size. added as number customers, Xx

X.X have created close as Zoom months enabled XX% of 'XX. year-over-year more tremendously meeting of in grew to AI And XX,XXX phone with million X FY customers summaries or the Zoom with XXX,XXX accounts companion and grown just seats XX. over

excited benefits are these new about our products for We and the the drive customers. strong across growth they

financial our QX, total $X.XXX up guidance. results. in X% the let's Now the billion, dive high revenue This result year-over-year. end above at million In came $XX of was into approximately

and grew Our XX% revenue, revenue up from ago. year-over-year X% year enterprise represented total a XX% of

We continue to decreased and is we X.X% see monthly improvement consistent 'XX. churn X% QX the lowest which reported. average with FY in of have This churn, to in the ever online from previous quarter

approximately grew X% of enterprise XX,XXX. to customers number year-over-year The

the revenue. with year-over-year customers These in up expansion trailing of came saw 'XX. rate at enterprise XX% ended growth $XXX,XXX customers quarter We in FY represented in QX revenue, net X,XXX more as Our we QX contributing dollar from XX in of customer XX% XX in months XX% than upmarket the for XXX%. trailing

than sales grew as partially in was The APAC domestically. longer year-over-year, internationally early Our reorganization the as and was headwinds flat of complete Americas revenue X%. X% declined to the impact international while well FX EMEA by 'XX performance took APAC FY that due in to

to due of all than our which associated on activities QX Moving income in stock-based tax XX.X% margin exclude our results, net payroll compensation last companion. year, benefits investments, from tax which expenses, in or effects. losses Non-GAAP and XX.X% mainly was slightly investment and taxes, expense and in was to non-GAAP associated lower acquisition-related discrete gains AI QX gross strategic

In in FY AI approximately be gross features. expect our to we reflecting 'XX, investments our focused XX%, margin

of to FY data optimize some and contact target we as higher Over 'XX, strategy directionally our long-term XX%, margin center gross of expect we Zoom the like products to of center. continue towards course ASP our our improve grow

in to Non-GAAP XX.X% of QX operating of exceeding of per an net XX% translates share non-GAAP a approximately income non-GAAP outstanding. $XXX improvement $XXX year. was and shares higher million, This million. the income to year-over-year result our from of high QX $X.XX million QX, $X.XX high end for diluted Non-GAAP from operations $X.XX last guidance was year. margin This diluted grew than $XXX our the guidance last on weighted of average above XX.X% end by QX in

percentage last X% last points $X.XX from of at sheet. end the year. the quarter. of was Turning than roughly This we X balance down provided to high the billion, the revenue of range QX approximately end the period better was Deferred

For revenue QX, down to be deferred we expect year-over-year. to X% X%

and contracts, our unbilled our both year-over-year increased Looking at RPO to billion. approximately $X.XX billed X%

We year. XX to as XX% of to of the last as the approximately expect next revenue months RPO over in total XX% recognize QX compared

due expense the The flow $XXX to our targeted year-over-year XX% was collections, million. management year-over-year million. quarter in cash flow grew cash stronger metrics XX% grew $XXX Operating income. higher cash to interest flow and Free sharp to in increase

and cash and XX.X% cash to respectively. expanded flow flow Our free operating XX%, margins million

restricted approximately equivalents billion We excluding ended securities, quarter in cash, with cash $X marketable the and cash.

Turning to guidance.

the FY view outlook. we 'XX, not our macroeconomic any and As in we consider have for changes QX assumed

For year-over-year expect represent to X.X% This revenue incorporates in fewer approximately X we QX QX, growth. billion. $X.XXX and approximately be would days

non-GAAP income million to the operating We $XXX $XXX of million. in expect range to be

XXX outstanding. share for approximately outlook is based earnings $X.XX per shares non-GAAP million $X.XX Our on to

year year-over-year be which full $X.X approximately the of revenue approximately we expect X.X% billion, represents For FY 'XX, growth. to

to accelerate from growth be the point from there. year-over-year perspective and We expect a to low QX

be approximately of $X.XX representing to income the operating margin an XX.X%. billion range non-GAAP to operating billion, of our expect We in $X.XX

$X.XX for per 'XX shares XXX non-GAAP approximately based outlook outstanding. FY for $X.XX on to Our earnings is million share

with be is discipline, 'XX, We free a powerful cash billion financial flow billion. expect we generation the FY flow $X.XX believe combination. of range to our responsible and in allocation capital $X.XX cash strong coupled that to For

consider authorized our also and M&A executing billion also to our confidence flow the Board to this cash strong quarter. balance share profitability, will allows our This As management customers. drive us us indicated team we start of the our our program but Board accelerate leverage future in to while underscores deliver repurchase earnings release and the options Zoom, today, has growth shareholder to not for flexibility $X.X press returns allowing that have only sheet a in and

share repurchase guide account the the from in program. As note, shareholder a impacts and our for EPS the count metrics do not

Eric where where we and what echo said, we we optimistic are now are going. To are about

base innovation beyond. FY and up position, competitive us engine set customer 'XX Our and in success for

Zoom entire our the your trust customers support. community for our to investors you our Thank team, and and

person more years. their one Before just support over for the like closing, I would to thank

Our Head with decided of career. and honor IR, to a a Tom been an summer retire XX-year to after this it's has seasoned work IR McCallum, Tom, pleasure you.

and tremendously be since Thank much you to before have for will even Zoom's contributed You the you have success dearly so done congratulations. and IPO all missed.

our continue until from and ensure for team. Charles smooth be Tom will to investment pleased service Charles will the community us helm, will for years the Evaslage midyear am receive with has Tom goodbyes hold as confident to the are me transition. I of with for who Please at that now several your With a worked announce level he high to that a role. now IR we assume

question. please the up first David, that, queue With

Baird. [Operator from with our Power question Instructions] And first comes William

for Kelly, well, wanted kick over you for this maybe Tom, the to help with Tom. all -- guess it you. the just said thanks to just But to hold say years. Kelly, I I off

providing heard maybe then I what's in about think at we year-over-year As in that do how look trough about QX, you confidence talk year-over-year year we ensuing fiscal key and guidance, half drivers should that think if maybe growth right. the over accelerate you into the of the And we trajectory back How 'XX? to about the XX get perhaps that? months past the perhaps growth do as just

for we've growth what in down the Zoom having accelerating by back Center, being the effect which that then So in by talking driven retention chat the you company. coming about phone, to by are Zoom we've while, QX, is overall the seen metrics AI which Contact is a this of the and culmination think half, continue been adoption about of on when mature team the of but

exit be but then, comment is what And come those we're after but confidence that in to I going it's of to 'XX, QX, see that 'XX. factors all will to that that mean, an FY gives 'XX reaccelerate FY on it be So indicator start rate for FY us indicator will very down then an early that. for

question Morgan from Our with comes next Meta Marshall Stanley.

just saw deferred talked would down. deferred people come you ask little kind on bit. had wanted mentioned in last down of quarter, we of that quarter, of wondering, the just a just the that past it you in terms seeing to be extending the revenue, in come quarter terms about you I the maybe revenue deals or were their And

kind Just terms either that terms in in might they're of you're just terms that you're and in be any of what trends renewals seeing seeing? of just of compression also maybe term renewals they seeing adding, but products

really They're about are And So terms. decrease that's our seen target, amazing to hanging continued renewals QX. customers talked contributes continued to what this huge -- job deferred. we've trend to Remember, shorter have in to their on payment of was our renewals cash. team exceeding that Actually their we we is see what the did QX to strength in thanks in great the see. which of wanting in an

And is timing then of the renewals. other the thing

seeing necessarily not are renewal We wait to customers start discussions. these period their to

a X months. For for example, proposal that's a not I going renew customer to reviewed for today

thoughtful ahead really to RPO about things. being because it's in variability that and it create these timing does, And are thinking what of sensitive very customers this. some contracts the deferred about So both their the the and very

Our ] Brock next from Wolfe question [ comes Research. from Ethan

I of here. Congrats on on Alex the -- ask question And results. the behalf

for on just So fiscal little I would the a guess question bit my 'XX. be guidance back

said factoring guys not and improvement, enterprise out pricing increases. you you I macro puts and online I we should the Just know know if rolling takes. think some about how but you're both give can you piece? some are

numbers So for into maybe year? how next to factor going that

piece, the NRR to And roughly that when just you're trough. also maybe expecting

Just be any would color on great. that

off of touched prepared enterprise a we this direct fast kind or remarks. to sales the of about terms in that. they're year. this We're the the in organization, on excited start So But really

organization not only reduction last in company, of remember the the a you had recover frankly. took but from, to year, lot reorganization, If the sales we the for overall which time

to exciting pleased, the especially see, And that is to really half growth the so the for churn the example, expecting and to year. And off an back that's metric. certainly perspective, seeing year contribute then see, well this of to positioned going QX them overall in strong start with really from we're online to

and to to the see higher QX that I seasonally think put considering that has of churn we that rate platform, indicative they typically is lowest QX at holding rate improvements QX churn that place. from in ongoing the made really the initiatives QX, X.X all in of team

And guide. FY what us gives of around so considerations confidence those 'XX is the all

are kind as think next embedding some you monetization successfully And about stack just if around mean, It's I'm just the you quick products price think to rank we the it about SKUs, you to follow-up. higher the on of the for that are curious across or were now. years, more where value, just combination a contact like example, I you're obviously just side to matching getting curious, which AI, doing the center, into over to of how are platform. folks moving angles the guys adopt, thinking just few already right of upsell you guys

Sure. take it. I can

and So fronts. are many we monetizing on -- AI

all customers like summary, to for also so we companion, really cost. for on do right? the we they existing not because not the That's because reduce created, generate customers right, look You meeting AI we forth. Because Zoom the So charge -- are all, so features. first meeting those our our do of to of at trying customers that, and value [indiscernible] why

for our source enterprise of companion, those AI we AI can how lever monetize. customers, directionally, Enterprise and customized customers, tailored for example. customer a like to However, companion monetize, can build Zoom take a we data to AI areas also of the lot a Zoom companion, sort

And also the just I'll look all at for a example. center, contact maybe services, take

can month few we a product. are tiers announced that's Zoom why, per is agent, virtual reason center The $XXX. Zoom a we one features. offering are charge per The contact last And there We recently, we one of monetize. X agent

is assist One of the feature right? Zoom expert

All AI driven are to by AI we new also services by those to are Zoom companion well. as going features features. are Not mention, build empowered and

to effort. Zoom I down also going doubling are our think customization monetization. year, focus on this and do we That's AI on

question from Our next comes with Tyler Radke Citi.

with does about how wanted signal decision I billion about ask up outstanding. do hoping be size now helpful. And that of the of why come process $X.X is that of that I anything your you Anything could you do? to in of number? potential the and what announced to kind recently share -- impressive, you're buyback. guess that X% shares terms just But would you the M&A

Yes.

cash So allocation this Eric. times our $X we've of many the discussion of with talked have balance course, about about capital on quarter, outlook today with through that having might we our this us transactions Board, and string does with of Every as the in break we exciting past. sitting M&A still And this sheet billion in the feel an do place plenty 'XX, confident our and to see for authorization in flow FY we that provides future. flexibility

for bring we're most amount opportunities to targeting for approximately continue that the offset that's sense it. would that how we're portfolio. And to about an we And make FY to another any thinking Zoom 'XX, of organization the look and dilution potentially

of that set that acquire -- an single we course, math, And looking it Of variability quarter. every quick calculation way programs. as amount execution but be approximate just to there's will these always did of you the want the we we in execute we

year. this through we be we'll as year So evaluating this move the

Tom from from Blakey comes question next Our KeyBanc.

clarification retirement, Tom. just I'll -- Congratulations point on first, say, on. of The Kelly the, early

being about point done. and asking XQ fiscal about was the you just mentioned would clarification, that be of you from Meta implying, and Were XQ down quarter-on-quarter think fiscal something XQ? guide, I

will QX. it be outlook, We're than current it not growth that in rates positive. will the growth growth in going negative the compared saying It based lower the Yes, but our -- as be on QX. year-over-year year-over-year decline it's QX rate be rate to to will go won't year-over-year in

the key your question There's love lot you're be give ]. It the demand the sounds hearing off a [ there on of of visibility fiscal and great you to pricing, the just virtual to quarter from would here you talk -- uptake strong of in to terms 'XX baked about in assist of functionality I'd fourth you've agent, agent any what start. out CCS some My as peers. of like type 'XX? into maybe out into opportunity come a fiscal very

to about a in do want for contact minute talk Eric, you general center first?

Sure. Absolutely.

directly. Tom, had or think, not job product contact marketing, already recently, become sales, I you reported new management may the a General engineers, got they center Zoom. I the team, at know Manager I actually, here go-to-market team

That huge opportunity means of ahead a us.

like to well very, why to While X-tier I contact of be QX, a we per is want pricing they confidence a reason have quarter. per every right, a And on solutions, because customer We're a $XX all extremely anyway, to basic seriously. introduced competitive, another very features. center the the In very GMO plus, need the But agent, based contact the head lot cool very positive. amazing. the us, probably doing month of customers number feedback

buy $XX pay also auto and they assist they more social another we not features. want want customers can And management, and expert huge X,XXX agent. if workforce a bond maybe the channel, some agents gave all to enterprise Zoom Or for per dialer,

offering. be hours internally, can Guess XX% we incumbents. of any has one month, and agent. XXX,XXX virtual deployed by full become see agent to Zoom, virtual by technology. We inbound AI give can our You can we head-to-head legacy suite than inquiries our compete done I'll what? more driven Zoom the Every received center contact a example.

so our excited center positive. we down also doubling about excited. is a That everything and going full that's are contact video doing very we we tripling modern because to very suite. are are offering a the build I'm that's down, why first, we solution, AI-powered, on and feedback Again,

quota. think I'm on enthusiasm, going your your I Eric, to based raise

Yes, raise there's so the day, team no the every quota I of difference.

you is is the And -- commentary strength And are kind Kelly, this then in, This online right about of what 'XX? terms here, outlook the self baking of that now, fiscal right? enterprise the right? there service visibility is in just and

Yes, correct.

Thank in Not ways. center yet. to you're But on. for you helping monetize contact us yes, also other right

Yes.

seeing, for have looked Tom, built sales at new that capacity our the and all of how So trends over of rate, consideration, number been pricing FY quarters. been outlook the the growth we've the and of in expanding size 'XX. last taking -- course, including that several the And which we just we customers, that's deals, of tiers, the

Fish Our comes from James Sandler. next question with Piper

Tom, congrats the on announcement.

couple to Just about on ago year? for future think increases the past going guide on quantitative price approach a back the how to here this of or questions on

especially over Or And the as for like to month? larger companion guys $XX competitor platform? consolidation it, causing a playing here, to are Zoom Eric, function further chat what's Just role onto main $XX, one opposed move concluding Teams? you your customers is to it and off as a AI

first Kelly, to take want one? you the

No, ahead. you go

You go ahead first.

Sure. Sure.

AI, a Zoom plus, as that said, send competitor's well. Very product, they also as -- I on. their users, I cost. message. on have key use solution, with lot send they Zoom we James, So long functionality customers, as thing the A I right want it do I product. And do even we of want features, extremely do to AI, they using you they has well, James, you're did have marketing chat see right. persistent and I works a team know Customers, a to mentioned leverage additional All not you integrated no not any well did one message. front. well. chat is well send And before, the you not think great also other

not combining if additional at it's our other all also no even itself, cost. only use but have you core AI, solutions, sometimes, with other functionalities, building case, However, AI in not free, also solutions And right?

users, so Zoom core a chat team you so chat the can right? license, All no already use too well and the on in I and Zoom the customers, any in, leverage message to already -- features, can companion order built it meeting cost. works forth, AI additional for at have you AI use

much built client, of cost Zoom we like team chat ownership other native the team the better And a any web-based of also, clients. than not total other solutions. some The chat competitors, is

Sometimes, really like a I'm using and clunky and Zoom That's forth, and Mac. the team so discover say, to it's on why Performance, not more zoom they chat capabilities good so customers reason experience. more not move wow, platform? why

They chat and additional Zoom cost, at more right? no give have we are confidence. That's hope move going why team customers the the functionalities team I reason chat. to more to

well, built migration a as also customer very have We migrate to to team chat. Zoom similar Zoom to a

thank -- you, Eric. And

In terms increases, of James. the price

those we increases about customer opportunities in to we're seen last of in doing implementing the our increases, there. about and are team, would pipeline our QX the talking that has trends the forward-looking team they're price online we've that. been certainly price in call there over quarters where as they've up that out talked renewals are that for And few show last the all then And So that renewals also guidance. the

context, that also been in it's considered. So

a and We email in James group you if a way, the address. it and is. my first-hand team how all powerful create the can get a with your By chat Zoom let's here, analysts Yes. client, log Zoom experience, know

easy. very it's So

time Face James. Eric, to access one-on-one have him. can You

with question VanVliet comes Matthew next BTIG. from Our

terms being different mix center. I in involvement those with Curious maybe how guess involved the is invested the months on a channel in program. the more couple as of over deals and you last of one partners really contact in the panel

existing the sales what I And of that Zoom customers? secondarily, days contact than existing different early of phone guess, center mix? customers, any into especially terms the is Is in of, the then mix Zoom phone

Yes.

feel -- in. free to So chime Kelly,

large, directly direct I driven. and think product, Zoom channel is core and and is mixed, the for driven phone this by right,

for at Zoom look contact the have You center center contact product, sure, here.

those right, the primarily established third-party -- and think I by of and lot agents, variable partners. are driven channel But a

have already area. into relationship. they We heavily So a great invest that

us are So lot by that's a the reason of channel the deals partners. why to brought those,

that. customers, zoom of Some Zoom use a they've contact are not the center never become first even meeting them also, They but customers..

that's also a So channel kind Zoom of the center specialist. contact and

integrated specialists, internal same at are also right? to center, well. center and phone Also, The capacity Zoom further sales a as those all time, Zoom phone Zoom the our well, we training very become also Zoom contact have because we and contact specialists

and hopefully, look well. I the me can GM, overall growth. wrong, our and, -- the I maybe you And revenue think as it's that to we very beat at similar phone if become trajectory Kelly, after correct I'm Zoom

we So -- and are anyway, so that's now. where

that to we're in thing only this The is I in He a add Morrissey We would hired November. Chris that is very space. excited. veteran

new is customers Center. for Zoom. to really have customers here we have at coming seen And other center to then talents Zoom Contact has excited -- So One his contact thing note which been actually about interesting

center. we So new expose platform in to about an -- it's really excited this that really prospects to to technology have they're modern contact bring start and also the as opportunity customers Zoom

NIC directly. By contact. came the way, reports ], Chris NIC [ from so It in to me

from comes Panigrahi with question Siti Mizuho. next our

on the what's or like revenue of side? number how update your where growth phone fiscal on you right the you terms this states of other penetration by us understand the have -- installed And in have the help driver year? phone any the end about of phone side? So base now So within on

Yes.

even the -- penetration terms rate is So growth ahead, new about opportunity the I still strength for internally, we ongoing are under, in and The in excited of attach the phone. deal really think, XX%.

within customer. existing So our a greenfield highlights Zoom there's that also just even --

XX% increased that metric XX% than we XX,XXX this greater XX%. quarter seats customers to with the gave year-over-year And quarter-over-quarter, that sorry, year-over-year -- XX% was XX% or

It's a So the in give we're that really or quarter. this that base, about. in count seeing we probably of customer lots something which the do of excited seat didn't end quarter high And we'll strength metric next X.

next Our Bhatia Blair . with Arjun from William comes question

are going center result? as of over AI contact should off kind a adopting they you're up loop to upsell piece that something a expert driver come is side. assist of tiers and customers the usage And expand in we a whether seeing in, time? as the assist the this then and trying have of you do end future sense think ticking Maybe at of When bat? Or low the to maybe the as premium expert is customers land, the back

why Each a perspective. reason from Yes, that's at customer the because center a customer, great different really have question. for look the model requirements. they tiers it The or contact introduced we we demands a totally

-- the do they from other super do functionality, really seats about need few just not or Just not upon migrate right? care media workforce And sometimes, care right? based cloud management, it and And a solutions, hundred need core center right? a channel, management

have right? why reason customer, now, the think customers contact essentials SMB I X,XXX X agents. tiers Quite is the with more Zoom the good center than for talk And enough, right? That's often we we with

assist workforce For management and forth? sure, have management we so or and expert AI would so like to those quality on

in demand, We see those the the everything That's every Based lot can perspective. channel different future. center segment, reason at a on specialists multiple demand very not and you reason customer customers, again, a from healthy. it's based look That's multi know. But demand, from partners customers, tiers. The introduce might packages, and right? and contact customer those tier why partners interested more why SMB we customer our working on that. the do we offer have -- because tiers We together, we'll coming

tiers. is X,XXX what a just are packages ASP start. ASP We've to tiers. the licenses Eric was existing off good sold before our really additional introduced those said. The to upper further double And those in what those we for had approximately And

you this how address a our is also not revenue only So broader going here. accelerate market growth it but shows really to

little be a to Used XX. Yes. bit over

is is it Now great XXX. a This result.

question next Taz with Your Koujalgi from comes Wedbush.

I question online 'XX? think have in guide we Should growing growth see the about for how Kelly, a next enterprise do the on for year. start year? online breakdown next year-over-year between and you

Yes.

-- slightly quarter the which the -- I is to but segment, in segment. We to you think continuing it the was were how to focused aren't 'XX going in stabilization we for for basically give actually would -- QX, saw guidance on have to focusing really on in stabilization specific FY quarter up happen And again initiatives drive see. segments, online are about online the segments is which great both really both this

then similar different, increasing contact between values for center. lower. a guessing Eric. and the for ASP Eric, I'm Zoom the Can seat And is because the contact buys phone the deal But customer does center? lot deal Zoom seat follow-up count compare you mentioned and a sizes when sizes contact lot deal is compare buys for a you center, are one contact center? phone -- How higher

that's -- I question. a think great

started for think I smaller. so think of a deal phone compare Zoom a have sure, contact not I we I But every we do center, size is normally, as Zoom by that accounts. lot

see before. And is double phone, size right? It's -- terms package, month. a industry we why Zoom I customers, the know do is -- that and reason we our at Zoom center, the of every it's think, XX every much look deal medium deal is Now And you per it of better more We more healthy. see different from bigger perspective, focus why than that but customers, right? and that's large Zoom, very that XXX of are much size agent you contact package different. see that number size greater, the bigger. user customers and on is Zoom of And much can greater pricing, That's This -- from in is right? think and month, and and bigger than That's is competitors elite right? per enterprise very I very per per reason the the

Matthew Bank America. comes Bullock from Our of with question next

of behalf today. Matt on be I'll

an progress enterprise in contact better and center company's term, where road Zoom's the position you product focus Can provide development. on for for map in company's near-term update terms the then And larger-scale of is functionality the deployments? improvement? Regarding offering to the priorities longer

Yes, this is great.

ready did a already of to from customers works it live very and for very So a big we are you first a architecture of all, tell of I number concrete test, agents, in terms well. we an perspective, want

other legacy For the of they without problem. we side. from center deploy already lots or on from Migrate center any providers can features. Again, Zoom we providers. contact now, focus the Most of contact cloud just migrate solution feature the customers, solution have

a of terms In new feature.

we're features big a For like few so working right, And not related, right? the also -- compliance the of channel enterprise is the like All partners, that. on and right? right? compliance, to think sort quarters, be supporter may of support channel features need the picture those support and next partners, PCI -- also core one that, We in also features, but to also all I PCI those like the also how and

management, features like well. and also that. also of AI And workforce further lot add some enhance a management as

we there? I we we yes, some few -- think, and channels and XXX% in for like add that. see, support the think on How already corner the the a to social core WhatsApp, like almost -- add set more channel, as other ready. the and and right? social you next already in here team there, media there And channel, just even just there Like the quarters. well, hard this feature It's the need do WhatsApp few media in very how support is to here working can feature

Our with JPMorgan. Murphy next question from comes Mark

on all This is Mark ] the milestones. on Murphy. for Arty [ Congrats

remarks customer a outsized of an You you or customers? mentioned In of that pretty our kind interest. where with in you're seeing your lot Are how industry a strong of center been tools? an area AI is seeing similar pretty pattern scaled AI for with Is the those guys interest in have into contact your solutions. Gen AI discussions contacts, companion applications prepared of integrated suite sort about utilization

very think similar. I it's Yes,

what's companion export summary. to like If can And after to like AI that get to right? constantly -- those at agent would while and you leverage Manager going Zoom Zoom the And meeting a these kind knows customers. feature the with also update look help the and thing. they have center, in same features. AI, base product, assist, that, and agent, Zoom they AI on you right, order the We and Contact discover the real any the discover right? about time meeting and virtual a in adopt real-time

of faster -- AI very services. that terms to probably contact kind agent in value use. features, why think will dramatically features All the for easy not it's I of like right? time of the AI agents And of than rate so because the those adoption features other core longer -- it's adoption efficiency, take a -- reason can rate, the That's realize kind core AI much center feel the improved those I a even

Our next with from Benchmark. Matthew question comes Harrigan

virtues is relative Do you have Pacific just the Rim, U.S., the area investment any thoughts Europe, now, seeing Buffet an in Japan? [ strength on et you're was right extolling macro of Japan Obviously, different markets, cetera? ]

very see is focus EMEA reinvigorating for We Yes. is And We reinvesting certainly FY both core our as agree. it a APAC. a us. teams Japan market and in and go-to-market important 'XX for

have are from this of some quick really to the about things look go We ready we're forward again year. the market in them in those new great and markets leadership teams and excited start, to being

Weed with from Bernstein. Our next Peter question comes

and churn refresh coming along expansion I like pretty guess, kind kind think I I And what unpack customers on coming on news customers, is to enterprise from all portion those the of that you maybe really got with the that trying of seats. with long-tenured of customers. appreciate coming customer evolving from exciting what the with continued online with on portion around a with see commented it's is are I'm have follow-ups all going X group. I cycle [indiscernible]. obviously, floor the how still is don't customers. the with coming churn opportunities of down continued versus that and tailing in obviously detail, you to enterprise the

that if of And through long you're talking some is then in. I have -- on and longer really on going that's being and acceleration those are later look NRR those tenure no functionality And seats by coming about customers in starting this that it's to year. that you the mix is second really in that down, the replaced think part is kind coming expansion

or If how so out seat greater a year are of customers that at being can of are expansive maybe those past their a to readjustment, you look forward customers look that the kind portion we mix? those

Yes.

Peter. it's really So point, a good

talked few in we So renewal saw a our that majority 'XX, but about FY had we've this customers know event. we the of a times, --

So opportunity count. to needed us with rightsize as the they to they had potentially work their seat

phone to an amazing add maintaining Zoom Zoom has of X them to team to renewals talk or so to products, done opportunity job the our to the additional upgrade taking Again, opportunity spend. that about in potentially

the as shifting at does start but grow now SKUs spend. again, focused that us is higher honestly, start we've maintaining price So customers in seats And those grow overall point, that the adding that more that terms well in of and potentially are can to customers different sitting seen situates what retentive they that also are some into really a as on they again. really portfolio, very around it

that do a customers this year. renewal be didn't for up there's are to lower We of percentage event going year much see our have last that a renewal

they of of them of FY to in the the the opportunity work majority our We've have that seen, majority through again, had rightsizing. terms So that in customers we've 'XX. something do seen to

lower a in that So FY much impact to we have 'XX. expect

has how of of Or gone it churn enterprise has the is much side, NRR because it, been side roll-off churn to in And on is be always the pretty continuing it the up? what stable?

rightsizing. -- It's customers these pretty we're did stable. talked been We about we've that

a that XX-month remember You themselves was but impact saw -- given been our customer in base, the that metric. our trailing net saw saw last that, you number stable. And you rates for across year, some and churn have pretty generally ARR reductions organizations we is the there

little of metric year. revenue a that see to with reaccelerate decline back see going we're that likely before the you're this again, along in half expecting more to starts our at it So to

Shelby from comes question Securities. FBN next Our Seyrafi with

ramping, days but QX, X% growth. products you're the fewer projection, for guiding new them center, So back still about you're phone, QX going you're for the the I it half like guiding in X.X%, X.X% know adjusted QX. the seems the growth, reasonable year, the in year, AI, for in X so growth et these you to And have for a going to roughly there's QX, half cetera. bought in the like of be X% contact with in X% growth

instead implied understand back acceleration growth to revenue why deceleration the of an don't you get trying the I I'm half model. adjusted my expect in in

We QX. in to Yes. are do we X.X% guiding --

giving. that the that's outlook are we So

reminder, If from expecting you're something giving, in QX. backing a that we're year is the But year-over-year a we into are X.X% growth full with different. as and that for the then the guidance decline X.X% perspective

from X.X% X a Let But the hit QX has me be clear. fewer days.

the So the So down something new have apples-to-apples, in back goes ramping year. X of it's adjusted half you and in the like right? X.X% half products back for of X.X% X to the year, that, to in QX, growth

So I'm trying to understand that.

remarks, economic mentioned So in of and/or as prepared the macro our improvement in contribution. I overall international outlook are not we assuming changes terms significantly in any

all of be combined, what taking year. an to outlook believe that So appropriately we are the for we prudent

comes Catharine question from next Our Rosenblatt Securities. with Trebnick

quite lot model. that is with when pricing seems light, say And the there well to are center, gathered a I contact your agents. seems there's push So it beat for horse. a information dead contact fits Zoom mean back -- those big and I I to like nonagents centers the versus light It a of this was that

be agent be because So traditional outside were do trying versus like on just for to there agents license get a you good willing to handle a split quarter That that there. would for opportunity seems non-agent? the a have the that share? you I'm growth to good

the I human in hand, agent, more And think real for center solution. right. on direction contact wise, you're so still one they need the

vendor working We cloud on solutions hard legacy solutions. replace other that, business or are

Can more On to human and anymore, the customers, the more have going they do the not right? a hand, think agent. virtual agent it is deploy I and other demand,

I also why reason the that's think well. say agent Zoom virtual as I

maybe next in to few and are the maybe think ready disclose I quarters that.

number. not both you ready think our more And AI. okay, disclose good. can but -- agents, more can focus Or buy I we know plan. that we're the either too. do is yes, have to that's now, I you For you don't can This have sides. And that's on agent,

with living Our from Levine Peter comes question Evercore. next

to it terms Is you comments CCaaS? what you're about on thinking on what you're Kelly, portfolio? in you're thinking sense M&A, of your area can would flow adding you consider? share us with kind the contribution, like of or any it where But collaboration? how inorganic but thinking Is maybe

little actually opportunities exploring all been CCaaS in example good either accelerate obviously bit and the We've next already product for a opportunities that our those Yes. the as Peter. a areas, or something around well. is what great Workvivo we did to in of agent with look across it, virtual past a what that Solvay space we example have, of be We would sits which to is which

continuing us with are as look areas our both So to we portfolio productivity as things current in around within well like tools.

So that's to how is we're thinking want add? you Eric, it. anything there about

Pretty interested technology just also services. existing double our driven to down we on offering. very you're either are X expand or our on things, those on the Yes, maybe cap or yes, much just right

have one that question, comes with Iwanyc and George more We for Oppenheimer. only from time

year, where Kelly, North your you maybe effort? like the and on feel side the look you you How are most internationally? investing at and this in productivity reorg. when And expanding comments about putting the sales your on America do

Yes.

'XX. results fast half for in reacceleration start and 'XX. in So QX And of saw productivity sales really in FY had our again, you the off for QX back that we FY to a

that. about excited So

a here fueling well. have direct also both in global that markets North reinvigorating our growth we as investing are the in America, on important We basis that but we really as keep reinvesting and and driver international it's channel

Q&A. to Eric I would for to concludes now comments. back pass things like This closing our And

thank for for next Thank your Thank you all quarter. time. your support. see Well, you I you. all appreciate, you and really

We today's concludes for our this participation. Again, release. you. you yours, to thank all family From thank your