Zoom Video Communications (ZM) 20 May 242025 Q1 Earnings call transcript

I will hand things over to Charles Eveslage, incoming Head of Investor Relations. Charles, over to you.

Thank you, Kelsey. Hello, everyone, and welcome to Zoom's earnings video webinar for the first quarter of fiscal year 2025. I'm joined today by Zoom's Founder and CEO, Eric Yuan; and Zoom's CFO, Kelly Steckelberg.

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

including and macroeconomic business and statements environment, we business expectations outlook for what financial initiatives. During we this that and discussed and factors our affect that subject our the on from will call, may make no differ forward-looking materially. believe results webinar. with financial detail impacts, any XXXX, benefits could second we market trends make we obligation growth in our may statements predictions in other position, opportunities, on our such full assumes filings These results forward-looking to and aspirations the today, annual quarter regarding initiatives, to statements Zoom actual which go-to-market risks of regarding year These and and SEC, forward-looking Form quarterly strategy on our on only based XX-Q. performance report financial statements, initiatives statements including are are the our and update product Form fiscal reports XX-K are today's expected the

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

Charles. joining Thank today. you, Thank you, for everyone, us

powerhouse prestigious Time the our the and infused that mission we recognized so time far solve process, taken In platform their customers AI that just deliberately works. as providing years been the us further across Our conferencing. added enable our has validating with Most over and a way natively of pleased platform. and a March, are by And video and collaboration communication Gartner, very and have others. dedication greater again, customer high-quality Zoom of a Fast to to AI rapid has of we collaboration created Every Innovative innovation TrustRadius beyond Companies list with guided the we by XXXX, problems open productivity. Company are step in GX, many World's by leader our powered the

announced to customers AI-powered improve and Workplace, our optimize we help increase March, time. the our employee designed productivity, streamline platform collaboration In in-person communications, Zoom engagement

are their collaboration, Within along document AI-powered the platform Zoom make with like and will launch the across features employees products view, which of time. and enhancements like Workplace portrait capabilities to lighting multi-speaker AI help most of upcoming Companion, work the Ask new

Phone, AI customers Whiteboard The Chat, launch to also productive. help many and Zoom Team with Events more our boosts Workplace Companion capabilities more make

is the time in-person core pillars embracing Workplace flexible of work. of One optimizing Zoom and

integrated Our into Spaces from like Digital Workplace has portfolio expanded adjacencies and Management Signage. Rooms Visitor Reservation, Zoom

of over end provisioned support desks over Zoom number to the the million. work. XX in of last the cumulative X XXX,XXX licenses in-office in Reservations QX, was purchased of And As Rooms months, we Workspace

Health to Care is dispersed Workspace as for a Meta's financial to through platform. in integration and and seats Workplace into others their from Home partner only we it and Workvivo, of to to Flex QX, hybrid Rooms and as bought In customer the XXX,XXX engagement increase in-office meta. for such Leading its designed Workvivo Workvivo preferred approximately legal like landed workforce Capital have retires on named Zoom Workplace time. Reservation support customers migration also Cooley firms employee and our use Rooms telco Zoom globally who BAYADA optimize major One expanded Zoom was services order

is on is the events, including Workplace business full Accelerator, seamlessly Our ready in Revenue services, that time. exists success have their ago, Zoom beachhead others. and Zoom Compliance, in We the Contact for support Agent PCI now Center, us employee in Virtual for workflows. and X processing Zoom alongside our opening integrate experience customers Center, prime represents payment years for important to customers designed Contact only door an with suite. upselling launched

our agencies them and to SKUs, authorization and Essentials allowing Premium business We Contact U.S. with government doing also received entities leverage moderate center. Fedramp for Zoom

We all employee Whatsapp bridge to enabled between Facebook zoom customer key have other and and center direct Gmail; have and launched including Phone, transfers social helping channels, contact via and agents experiences. further Messenger, departments the

of a deals come, beat displaced Top of CCaaS we X have strong a in a result has far the have product or a where how As Gartner seen growth we player. number

business, ability We increase in have larger an partnerships, for deals. compete significant also strengthened our leading to to our a channel channel

the north further ASPs lean Assist, further into tier and by Quality Management more. Expert AI AI and managers Management, agents allow that are Workforce packages learn heading -- with to higher buoyed popularity our of to

recognize Now of let our me some customers. amazing

this Zoom value drive Phone Expedia partner Accelerator and Zoom First, Lighthouse our partnership sellers a who let AI based to platform me We continuously use no the Expedia and We're to the improve Accelerator and includes based better on them workflows, thank model tailor efficiencies. quarter, revenue. automate improve AI-centric for quadruple-digit which to user initial feedback. Zoom product case. of customer deal, Revenue power their our they industry-specific on for wanted A coach needs our Revenue drive team an to with with becoming of drive products so excited leaning on in heavily working business directly into about introduction and years, customer

accessibility by highly streamline Quality support successful Baseball. Zoom impressed Management the by operations. to further year and their interactive set the and integrating Let the expand Zoom me features, it League center of strategy enhancement Center. into the decision This MLB strategic A fan adopt deployment. also Zoom a enhanced business was made ago, Contact Management a our QX, engagement engagement. Quality ability MLB Zoom fan strengthens to particularly virtual In Major Contact partnership chose to

to use Rooms and Zoom better thank all provide Seeing disorder they and also platform. treatments Meetings, a Phone on in Zoom Team value health for and Zoom and health me Phone strong in existing nonprofit leverage from for in from system single deployed, Zoom their zoom. Center veterans to to care substance Zoom and communications QX, Contact mental order Let individuals, specializing AI in expanded streamline Centerstone added families doubling down Chat a order in

pass also Zoom very to We're excited services pleased to over expanded I'm financial XXX,XXX. leading share greatly seats footprint with that a their we to more so who see global doubled our firm Phone services business our Thank in Zoom integrated benefit and our the technologies. you. I'll order adopting over to modern, AI-powered customers Workplace of Kelly. that, reap to it with And natively product

everyone. Thank you, Eric, and hello,

for This emerging Contact QX. in additional saw saw reached larger higher over Phone deals. continued our products as success a XX we ARR, recently with by expansion with upmarket. traction Zoom We Zoom in driven in our in XXX% start milestones $XXX,XXX was as growth. our launched Let's pricing exciting tiers well year-over-year representing Center some as customers

financial with With just of as significantly months XXX,XXX AI just more of the mentioned, or Eric companion with the addition we drive Business engagement priority up enabled across all to seats. Workplace the over from all has AI services users. Zoom have . Zoom continue range grown Services of customers X and solopreneurs customer productivity marquee XXX,XXX as with These our aspects for and customer, Zoom enterprises Embedding to customers Phone we a accounts now in customers. over today. way is XXX,XXX X key

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

to a from revenue represented period in of in unmade slight XX% X% payments, year ago. some in pulled up X.X% FY total revenue, uptick XX% year-over-year as the of for related which Our monthly to up compared churn 'XX. churn churn came X.X% forward. was QX and grew tightening Online average enterprise The grace at

QX online the months up reported. last 'XX. quarters XX% change, this trailing FY monthly in contributing in XX% of Absent $XXX,XXX would We saw consistent These revenue, quarter ended from more XX growth X,XXX churn year-over-year revenue. ever with the remain of customers the lowest upmarket X% in we X.X%, we average than customers at as X with represented the had

our by and team, resellers reminder, who self-serve. referring online customers direct partners, of engage by classification with we to enterprise enterprise referring determined versus is our the customer or strategic to customers sales supported are a As online how who

QX, During

customer note online. was revenue customers part It transition had on important of is minimis, approximately customer the drive an the ARR and with customers number enterprise online. greater XX,XXX impact the to $X the transitioned of we enterprise million effort associated for noticeable a of shift end our experience enterprise as low at The approximately improve representing after an from QX, operations, was while the efficiency of transition accounting customers in to in that our de number to XXX,XXX. enterprise QX to

came our which Additionally, by expansion in rate not was XX-month in enterprise XX%, net trailing customers transition. at this for affected dollar QX

EMEA Our and increased X% declined FX in due and Americas headwinds X%. by Japan was the revenue The APAC by to while Australia. performance grew X% year-over-year, APAC

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

for backbone will to incur the we gross QX, center XX% expect our data to investments and upgrade to margins In onetime dip quarter.

margin from XX%. continue of income QX This a expect to end gross year our operations non-GAAP Non-GAAP X% to an translates to to grew XX.X% we of year. XX% For in approximately from last of year-over-year operating exceeding $XXX the improvement $XXX full our FY of by be guidance 'XX, QX, high the million, million. for margin

net weighted outstanding. of million QX share $X.XX XXX was diluted higher the than average guidance $X.XX QX $X.XX and Non-GAAP end last above income was high approximately This diluted shares per of our year. result on in non-GAAP

sheet. QX last higher last balance approximately roughly the tightening was at was down Deferred X points X% our billion, percentage of the discounting last period range quarter, from provided This the partially we year. to up year. $X.XX than Turning the end to revenue practices due of

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

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

year-over-year million. We of XX% cash year. revenue RPOs approximately XX% flow next of grew flow Free $XXX last expect million. Operating grew XX% over XX flow total the with $XXX to the to consistent QX to the year-over-year in months, quarter cash recognize

XX.X% restricted approximately to in higher cash increase income. Our in securities, expanded and free cash, cash the cash. and to due XX.X%, ended margins expense flow management operating interest flow quarter equivalents was excluding with collections, our targeted sharp marketable billion The cash flow We $X.X stronger respectively. metrics and and cash

Last $X.X billion plan. announced the we quarter, of buyback share authorization a

end representing stock, $XXX have the QX, of repurchased X.X of million shares. of As we million

to guidance. Now turning

billion in X% to year-over-year expect of be representing billion, range QX, the approximately revenue we For $X.XXX growth. to $X.XX

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

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

We low growth billion, in from are the expect to outlook top represents for of year at range improve pleased XX.X% 'XX. growth. We a to be profitability non-GAAP the believe income approximately be in billion, to point FY margin and the midpoint. revenue still to the to forecast $X.XX QX for range now line operating the there. our of year-over-year raise be will which We and year-over-year billion our $X.XX representing $X.XX from X% an operating of to perspective of it that We billion full $X.XX

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

decrease federal due remember XX% free U.S. to to Moving and cash to QX, CapEx, worth we paid expect state cash in normalizing amounts before AI-related the and tax and and in flow timing in payments, minimal on by to that in QX the of free to due primarily quarters seasonality we QX. approximately Please QX quarter-over-quarter XX% X flow. QX

your Zoom free With to we flow billion of free operating you trust and our 'XX, flow towards the be full $X.XX income investors the Thank $X.XX billion the for increased in expect high our end team, to our entire customers, and and of QX in cash to strength outlook FY for the range year. support. in our cash community now for

up queue first please Kelsey, the question.

come [Operator first from So Meta with Marshall question Instructions] will Stanley. our Morgan

just Great. side to year as And then the you throughoutthroughout you point the on maybe fiscal last if noted the give still A couple appreciate And just on given the Maybe you're quarter? holds throughout commentary sense QX the I kind quarter of year? others just kind the be DBNE, congrats to that second, of of questions. SMB it. what of start down environment, you you could of on a that from of seeing look just kind quarter. with, expected kind of of

Sure.

So year. the it, for the looking as we're at the rest outlook of

the growth end see expect you if As expansion be point at you'll we and dollar expansion, net you mentioned, we will a behind quarter rate the do similarly look from was net look -- actually that. to that follow When perspective year-over-year that low consistent it at still dollar QX quarter-over-quarter. the

of stabilization, that performance then indicator wins different to as well. also saw, enterprise we that and upmarket, across think about the months SME, that's both of but trailing And on of expansion the net in rate the really So dollar amazing our in we're see in some we of all terms ones nice you business. really that I follow. segments our SMB heard we starting good similarly think, a customer will And had similar XX some

Jefferies. with We'll now Samad move Samana on to

the the prime Enterprise Connect see couple ready of to Eric, as a ago. dig months took product mentioned, well and So at wanted time, [ investors we you CCaaS to side, for as ] it I into

you -- seeing and customers you're us was in wondering, we clearly prime gotten define about think So what just prime logos? forward? time going I So if time, would we larger Should understand better payment you an larger I means, but think that? could Is when see should the how inflection uptime about the side, maybe right? how help understand you

a great question. it's Yes,

just the all, launched X First ago, over of Center. right, Zoom years we Contact

our we quarterly the every You customers, Center, that's progress, look they customers [indiscernible] so at many Because right? our product. quarter, added trust Contact

quarter, look top They right, Silicon prime competitor company. which is the like cloud give features greater And like business I'll what, lot they Valley center right? terms switched guess recent and In you feature of just CCaaS, a also contact example. of software at the X our the uptime seamless So That's you really provider. integration like time, set, right? our examples, one in, of and based one X . solution, of built to AI platform cloud they the one our because deployed

top than deal. also we're that, you right, [ if the the a And example, what, right? are at -- -- our ] total It's customers, just right, X That's the that's CCaaS Another deals another you installed almost X at just [ also competing for And growth. base, last If largest it not we look compared we're ], of another big you deal, QX. those in $XXX,XXX small the we XXX% is look the year-over-year of year, are look XX And X,XXX few deal those not examples. at this XXX, against seats. Guess Also, competing look like won. to -- vendors, QX, the ARR most at right? more more one than to end for around have for right? like new

to I is we're innovate. yes, That's center, good we the important listen our making the The a time. think reason say, and our and customers those with brand. in, most They why I very prime time. all contact factors thing progress the would the prime customer trust this is know is we

Michael next America. of question Our Funk come will with from Bank

then last I Eric, Microsoft competitive, on that, is you more today, competitive it the or competition guess, to maybe XX And video touched And you're to to pricing. less side? And if environment or but love the XX contrast it about whether competitive? pricing more months briefly seeing how hear specifically question, ago. not with changing, with on from related would the

Yes.

talking on Center or pricing you're sorry, So overall Contact about

solutions, pricing entire -- the platform are trends. just likely now probably general competitors the that bundling Really, more

is right, together, sure, the for So past the competitor, impact. I their some there Overall, so right? Microsoft, years, Yes. only one think few bundled is which over they solutions the

because past number bundling their saw You strategy. years already over the the several of

at you base like look we service. customers the we very our However, ] if a installed at our look year positive see a and cost of ago, lot our why [ feedback also price, really increased and installed our reappreciated in a base, do like service and of online

using other of When that Even right? why reason bundled, it, in -- employees is guess it Zoom, price sort you like the use reason and the do free. the they right? truly customers what, they our enjoy The not like why product, competitors' customers' -- the

However, your price cost, the we not well. of total big in of deep the the breed think the think can't at price always now. the why telling of convince best did at customers, reason look think time cost us, quarter. guess reason least strategy over the the talk That's customers ownership customer, what, when are see very they to in AI all the really to last maintaining want every we support service not and they terms -- hey, or appreciate, dive, like cost I of those the press I positioned pressure we better much I we're they of deploy all That's kind the things, And why

take And Okay. better. see it pricing didn't quickly pricing stabilizing there, mean last last really price quarter. comment is to pressure is that very to -- to Should just I your was you that getting where relative

And I And because lot now. our right, online have enterprise of look as mentioned at look I low, a think right? kind the much the we services a position of as upsell historical because right, well you so customers entire overall think at other in also Kelly earlier, it's product churn, suite. better

Jaluria Markets. with will hear Capital Rishi We now RBC from

either on? each vendors have. more Eric. the provide top CCaaS Gartner. help by comment what and Wonderful. to Eric, provide Can features CCaS us ask, capabilities? wanted pricing? vector you the I win Was Do it the that on on did more you you X made a up that? displaced ranked They beaten color understand and would you Was have of as Thanks, and color those side. just -- Maybe that certain you following have it on helpful. be little don't Maybe those wins? on to tend or

Yes.

X give to you just examples. So

a I So have lot examples. of other

the If the you it let examples, customer at X to decision. make I one just do and think look factor just not that

is they years are integration, of ago, the they at customers, ago, replicate look reason trust all Phone, at Zoom And but are customers trusted are now, factors, innovative. interestingly set, AI those brand. customers, the at, say, We they -- features, Zoom know all, of That's going look great to do first road even very existing years Zoom You also we at look product this at vendor that not the story. And at feature look deployed map, a pricing. because right? -- many "Yes, our look story." logos they you think right, the But some they the QX, some yes. the trust They they those in won they why customers this we enough, look

vendors, CCaaS look we're what, why that's you built a and all win was [indiscernible] confidence other going deals. interface, the it on-prem to If have guess really long ago we and time solutions more is of a sort their not at reason high recently. from were cloud It to

Our next question will Mizuho. come from Siti Panigrahi with

workspace, you Eric. I like saw feature AI your Companion Zoom demo added, that terms the AI Ask impressive in of of very like

questions. So have couple a I of

How you the that traction you see do side? so, like And should do or what's this combine if start how on do more this AI, drive like your you effect? Firstly, with when migration? workspace? or plan on workspace in of free-to-paid this we more And go-to-market small we expect the if the more end, should you more enterprise Zoom low And this branding seeing on product? to -- push the to terms strategy see do business segment

great It's it's Zoom a Yes, Workplace. you like question. to know a great

we Overall, journey, a at Look look more first enterprise only [indiscernible] they have done, right? revenue like it's everything the Zoom, have the back, you do adoption XX live within take the work if Zoom is mean but platform they Zoom right, SMB a platform. drive think can not years, the and at growth, I collaboration customers For slogan from we our collaboration a step should if get Does you customers. platform Workplace. the right, essentially Meet Happy, to right? now, not all use

chat, the all also leaders. vendors Cornercenter, when other sort a We collaboration -- ServiceNow That's evolution, coexist the Google, look Meet used And the time, lot to Whiteboard happy, with platform right? they use Salesforce things together. well. Meetings, or can slogan a Happy very from Microsoft, and Zoom at to That's team you at And customer Phone or requirements, same SaaS full be work our the those right? right? Atlassian of Like of

that. also a of is AI And part

And one collaboration become into SMB our of That's the for that, customers, You but Also So like Workplace platform. to years our application right? they guess doubling interesting our like they not of is sure, from and look provider to they many, a cost, no we service, that, Workplace, what, plus many a at open the it's is Happy vision. a reason that down additional at ago best-of-breed. only AI deploy and customer, suite, the full why also service part want platform customer, from the essentially, Work so too platform. that are and

Securities. Moving Rosenblatt Catherine on Trebnick to with

competitively how and you against update What trying the the are ] really traditional yourself partners? [ is to really us into Can position Ring partner I'm you dig program. on

Kelly?

Eric, you that. to want me take

ahead. Go

Yes. Okay.

organization. with So direct partners our sales and our continue we with

-- deal momentum end well. ease as We deals this partners think I in Contact to of but the It's their vectors, around also, I not not but continue should selling the think, value ownership, in only deploying the able and side We Cloud, right? to in that product. against as several also Phone Center just around our cost on the that only of believe of see as Eric of because pricing other win, be user total the and providers use mentioned, it's the

we but if continue you're And about ensure also compensation are the competitive appropriate. so partners, partner that to programs asking to our

And that talk well internal this some only additional not margins. We as also to we last us named the if are heard quarter impact partnerships remember, about for as always them as you have we've you also to the Twilio partner quarter, but about preferred been well. as and our migration as thinking Meta,

Yes, those add reason that, for the good because what cited. most have to want say, like businesses more and really the And many great just right? partners time build is Because Kelly right? have partners a why Meta, yes, because why with I Zoom. customers, partnerships ask they to they we Those that's Avaya of or recently quickly on are reason This assumed all they example.

And Ryan MacWilliams with Barclays.

Appreciate it Eric, me to you it. I Meta was the and partnership. Kelly Avaya beat about to ask as going usual. and

So opportunity they customer the the from can exactly do the of How Avaya partnership, frame how as sense is open great love their that have trying to you on how customers do click between to guess, the workplace migration at? kind solution. partnership? get see Workvivo on that on And you hear, move this any to the chose that, door could like And partner for these for to over? guys? double timing more that just relationships just then of what you partnership I

your I question like know Looks now.

for X you questions. those thank asking So

for of X and to think such it's of workplace Meta their great and the products. company, terms wanted lot AI in reason they on right, why So open Meta I is Meta retire source. That's a works great a Llama partnership,

not going -- I the of smooth won for those many to deal. all make right? very entire platform sure, we next -- telco earlier, Meta, very months, as have is reason I a in to right, sure their XX talk solution. with For innovations. a customers work think right, It's Zoom transition large customers, can And a a work why customers small we preferred Zoom period That's the became very, XX to have Workvivo right, a Meta just is together, with seamless. We're a preferred a lot sure is and workplace to next make together transition, mature the So I partner. very the mentioned they deal, seats, XXX,XXX understand very platform

. And high and the transition. that have but about They not a are about great that we only confidence. mean excited I and great again, So the are partnership very also partner Meta. we partner, a customer,

In not they very, lots big, customers, of terms UCaaS who deployed everything to both enterprise fully are large large very solutions. of Those CCaaS deals, cloud. ready have So enterprise Avaya, to and migrate they customers right?

overnight. look You put, many, integrations, impossible almost cloud migrate it's effort they at to to many years

However, want features, right? that's the online leverage from to share why us, a AI lot of customer like of features, also with So lot a both the of reason both we the Avaya. innovations, they

Zoom can And to is architecture this also Avaya they're to workplace leverage they on-prem are one servers, on-premise And they that is ready a on how when a leverage. move the to the of future solution. what, [indiscernible] talk doing and with Guess the hybrid not client to cloud, Workplace Zoom hand, has client right? lot rich features

Avaya future customers. hybrid help partnership, reason right, also think very, on-prem why very for will servers the us architecture I they in complicated hand, enterprise customers, other of That's the kind think big, benefit Avaya, us, benefit with lot. a very ] benefit particular integrate [ that I seamlessly the is this win-win all those On the

Power next the William question. has Baird's

help year year guidance QX we're pretty accelerate? raising given me the growth in understand tied from Okay. that, level can and Kelly, beat, you, still And the guess, reflect the to you Great. can calling of us for early QX hear just confidence outlook Hopefully, about here? okay in as you full to your Should I the then talk that maybe mobile. I we from trough expect enterprise guess well in here?

Yes.

discussed yes, the company for the So with expect Will, that we being the entire that trend enterprise similar follow growth QX low point. will we've

all and perspective from that terms similar half the for of looking guidance, And we're back our that initiatives, together And in to in growth for pipeline course, the year, of what's also then setting the outlook. is our at at we're then of online the sales always year-over that, talking we're approach and terms what's to do with on churn? we seeing from seeing a the 'XX reacceleration up our looking and trends there. FY applied a coming performance For seeing deck seeing organization, it with confidence of putting we which in that

on to Radke Citi. with Tyler move will We

start enterprise into the of moving off, customers, those the just the Kelly, to of movement on some explanation I online. appreciate customers on

back out, sequentially. I if think that decline it's still I

quarter how if think bit term? enterprise could of little I second despite a outlook, that the puts just then that Any for customer was of, kind we about then about what I kind bit Should driving that And should think being of that, billings wondering we the on are second little came of below you thinking revenue billings be would in be about number all, guess, and the thinking of divergence? kind long takes the growth terms as unpack about? drivers consensus. in the change that So for as and stronger a I you're that think we

Yes.

first to enterprise if all, out numbers. want of be on clear, you decline So just number, quarter-over-quarter. those I didn't the it even back

should So be it up.

expect but and selling products the existing Phone revenue strategy, on rate selling those past to discussed this of and Contact base historically, you grow grow Zoom did coming that that growth into is customer that same installed our more not Center is that have selling in base, installed did and these should our at emerging especially adds they our from quarter-over-quarter. our We as the it into as existing

of then terms to itself. clear you So know, want too, guidance -- of the I said you we've I really always can what future best be in that. which is I the it's not revenue hear of terms this about indicator to in just -- is, And RPO, billings and our about give before, that want

in trends terms. in in annual changes are billing longer and from to -- we monthly really tenured to well to terms as terms, they've also typically multiyear longer those there we that's continue of online, do the expanded see movement expansion into -- means strength positive So into in we billing which as growth customers see so

we've thoughtful some free discounting really enterprise. in periods seen benefit, also more as as the we've And which been we fewer practices, our about includes mentioned,

of side seeing is the And of and growth so from the things. billings you're all to that revenue leading deferred that

will with Research. are so moving along, from Wolfe right We now hear Alex we Zukin

Sales of stack seen all then like if Contact a rank guys Center, phone, of acknowledge, just Management growth, the driving this look enterprise the called just Even we factors it's us, billings saw in and And out, remarks, I terms for follow-up. you quarter, force at got the Workvivo, want OpEx, rank to . growth those prepared whether that or declining Quality something things the long so where landed accelerating enterprise we accelerating maybe time, you from driving behind Eric, you stack the First, acceleration? a in haven't quick Product kind you referenced and the in I've product revenue

You want it? to pic

sure. Yes,

about Let me talk revenue.

momentum continues about But in of the with growth think I we Workvivo also own can very general. the pleased its driver, very you gaining strong seeing center be growing Phone contact momentum right. business Zoom talk in from sort to and a are then

very very, business a In quickly. is terms but is relative of of the overall Workvivo growing component dollars, smaller still

customer result coming certainly, So a new to Revenue both and exciting some had from well a that Accelerator contributing are we really coming And Zoom Workvivo. Center as Contact as this also, won quarter. of customers

emerging that's logos new bringing these to company. to exciting So the really new and see that products customers are

kind of we're those to terms in else in think I but you anything So excited of add? of [indiscernible], all Eric, that across want order. momentum,

great a observation. that's Aleks

echo boils think X is key cited, product momentum to our the what that Kelly It's pillars. actually down strategy. I to

Zoom Workplace. The first one is the

second The Services. Business is one

When and of Workplace, at Zoom Zoom of look the Center that's they out Look Business why at has that They from I kind Whiteboard, Accelerator support at other now cost. say, great more take is good trust so functionality admire, for plus Zoom to at the the to Whiteboard Event Services, that. like of feature, example, services, some perspective, is important right? look has "Wow, Sessions solution try for their additional need AI customer platform. AI they a at It's only Zoom best, A and have a summary no other our they truly help part for Revenue . But Zoom put solutions [indiscernible] new additional team, lot. cost. cannot a chat Contact no worked This test well, also workplace. Zoom Workplace scheduler Zoom is, the plus, If solution, right, our marketing right, We Meeting well, consolidate, will also the it's to well." they Workplace meetings that Zoom what's it at is Workvivo as Chat, the part team, is they all sales the of flexible, our like positive part pick I vision for for also and features to their partner AI feature. meeting you of pick solutions, us team feedback, feature, who those deploy Meta, right? Workvivo client, deployment as can look Team the not that. company, also -- why they is want for a right, believe lot customer of as up and look at this part for the those workplace greater to because reason they

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maybe And pricing. Eric, on just

It being You a this it stable. couple you're of times. about question got feels like asked talking

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talk I chime to in business if the want you free, on side, about Yes, Kelly, feel revenue can side.

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because also use low that well However, they not services a just other any That's of story. is different the is huge a price do a for business competitors. as customer Zoom, very because value. here like want against to the not Oh, a price. case Compete is Also,

Yes.

because isn't I locations here attach rate, see of like have There's at an X:X we've of have we for a much say, retail or attach terms Contact that do Phone, because products of attach Zoom rate a to a X:X, revenue about rate even terms Phone certain for bigger greater sometimes upside, it that customers product by of talked of Zoom Meetings when seats in before, saw we Center generally But phones ratio kind should ASPs, number X:X they look Meetings. example. example, course, right? Alex, of have lesser of In attach there. the than the for in varies higher rate

just a with new it So lot of you say will I also when rollout that The of at something which the varies. gross contact that those ASP, especially of look continues for margins these tiers. the emerging almost of will pricing thing especially in because and functionality, generally quarter had center like tiers, products better helpful is is to And saw expand. the we features doubled quarter continue the from those the upper I the as with tiers products pricing ASPs the to think rollout

Matthew VanVliet with BTIG.

higher? phone sort as of bringing larger deal I only last meetings? all limited at and on actually is or in guess you mix. like those maybe How together, point, How drive are more only you the opportunity more than a you do feel how Companion monetizing that's this -- individual AI include helping the the sizes customers maybe seats, Workspace by

entire the of plus value charge out also opportunities. the as monetization, of premium services, are new not our also do services, right? to entire AI cost, Ask our and new edge customers as at Companion company. at Team kind that services AI and the At AI think more a ] across well platform that make services -- right, Zoom Phone, power can mentioned the AI time, we value business look had not right, working right? part this And services add but price I terms to build Chat, existing AI I help right? only and of a be to lot AI without also right? more, better, all line can appreciated, is its no earlier, AI But there's collaboration customers, add introduced AI business a and a those new I differentiation a the We of Meetings, think to well. because in premium key customer more look new the as same our additional services a for Companion deployment, to the of like our value. leverage product the leverage lot for of new time, plus going charging also also will is also things, build some customer new price, for later And we're and on to coming, overall, given year [indiscernible] other we AI and because right, . At That's the Companion same only workplace, federated services, at approach, the [ platform collaboration workplace you all is we

Ryan with from Needham. hear Koontz now will We

First, in customers, to expected reclassification housekeeping those all? change at like like a right your that the The direction KPIs is of quick [indiscernible] of any one. that,

no I significant. mean

was although and the $X we change it minimis, shift so it indicated, only for revenue the As on we expansion million, up didn't we de enterprise dollar online didn't it was mentioned, at -- it to didn't move example, was net impact pretty the number calculation, all. significant, as from it because make

quick building question on a of for complex update penetrate, it. any terms ecosystem have update there I how strategic out? is And Got Eric, events. know there to Helpful. the you maybe a in Any us that's market

look examples I Zoom we of for and kind we one, very most that Zoom I that. because question. a have they extremely to doing the competitors, the tell is something not well. our large gave to and And have Zoom Events I We few about our I reason our best at and the can why now do you very even long right, going platform. most par on have great you, trustable webinar And flexible think a Events, a And right? not Webinar, And you service will the any reason a Zoom then ago, [ think the offer every more it's customers. events is important competitor similar. think their us product right? contribution and with is enterprise very a growth But why Yes, if revenue is look the do ] you these event it's customer, brand, service. almost best introduces time more had other look Events Sessions, probably, sessions, for at offer the and every -- long, it at Events That's Sessions quarter large

not does even have that. competitors Our

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We James now from with Piper hear will Sandler. Fish

X about base, of greater Opportunity, to the accounts we as $XXX,XXX, and center think the hard entire in between contact this than are Contact conversions probably following how to together? cloud for the packaging Maybe is adoption spaces kind the whether, Contact out Center, of backlog go those see over over parse pipeline could installed Phone to center that And but relative overlap those maybe just or bridging starting it's guys across -- you last that if increase you the XX going year? of

Yes, sure.

Center, right, chime they when Center. are Meeting became the Phone either to quarter Phone customers a not quite customers, we you we be -- often, Zoom Contact some they Kelly, the thought of the yes, at Meeting will not at however, customers, it, the existing customer, a And -- feel in. the the customers, Because customers, right. that's look first So the to customers. probably But not if customer free we deploy Contact started, quarterly we the look won, saw most deals we

opportunities lot for installed we of a that have So existing base. means

works So we're double going very well. the already because to product that on down

different. And is plus, [indiscernible]

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more think success I after acceleration Contact and business right, they our going I are heard growth. story, to existing of think center Contact Center base, the see more installed we about

So

will Turrin Michael Fargo. Wells which come question, additional with X have We from

now standard Okay. operating terms me if is coming mindful with business any driver of wondering Zoom more us of had squeezing us visibility just tightening have able in. additional be comments drivers discounts, details to you the terms if growth as for here into things I'm Kelly, is few to point on help Thanks marking you if the there somewhat for and confidence for a on useful. just or stabilizing. in QX grace model, in from that's periods, low tightening that's from the And you're procedure that

Yes.

impact talked started last that the about think that starting the thoughtful disciplined times I the working that and dunning the the to are some that rolling renewal, tightening terms you're on about accounts. as discounting ones before. up up year, of And results and then more We've benefit customers being which we several on especially year. that annual sense in for of are those And makes coming of through this see period.

right right and to mature financial as what's the only what's continue we really seeing business, as just sure look as just And it's that and our not our for at about that our for and -- with what's the for make organization those policies well an be right and customers align continuously good thoughtful for business, go customers right that and think time. was good again, through well. I accounting as we our it

those being business about more it's and in about anything thoughtful policies. maturing just than else sort and happening less think the of some of that into that's I other

And the questions have That again, all we today. concludes questions. is for that time our

back for it comments any you Eric turn I'll might So closing to have.

our appreciate. all I'd as I as Yes. are partners. and to this every And truly customers Zoomies for quarter. leverage hard their all to we working Thank you today. really you us Thank appreciate, also for thank really opportunity can to time. and next to you deliver we and happiness like See hard joining work your for

Thank next much, your and you This quarter. you Enjoy concludes Kelly, your release. so thank all see you for everyone. participation. today's and earnings summer, We will we again, Eric and