Zoom Video Communications (ZM) 21 Aug 242025 Q2 Earnings call transcript

Now I would love to hand things over to Charles Eveslage, Head of Investor Relations. Charles?

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

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

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

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

that of how across the very in capabilities experience Meetings, most strengthening to the and Zoom the Workplace burdening these the significant also Chat Workplace from for that the reinvigorated AI rollout everyone, few the Zoom Zoom simplicity and defined you, Phone features Zoom Companion strong Zoom today. by Zoom capabilities the We and modalities. upgrade UI center, the has We adding marketed us represent with last AI entire Thank underpin joining to with Charles. you, Thank over platform. The Team and beginning, months marching while our years. deepening up contact of a quarter Zoom reliability our offering, market had operates

the in We also flexible in up brought ago, Zoom order to organizations points life of our Docs. we modern can Zoom that into information took Rooms, towards cycle, major Zoom advantage productivity work. Visitor tasks with platform right host Docs platform work million scalability to so bases, clear to a support Meetings we month, architecture. Earlier on way this to just the in another expanding stay the announced customers' attendees, X of Management, step inherent better needs. revolutionizing massive effortlessly team offering And can Webinar knowledge days Zoom helping Workplace connect next strategy and level our focused Reservation by launch and vision the actionable fits touch new more the audiences transform can the and meaningful our across documents, demonstrating launching into our from

landed our or deal Zoom largest who Contact In CX a new QX, we our with coupled top-tier customer Elite Phone. package Center choose

our top solutions. Center increased to Of our advanced AI capabilities migrations displacements were XX are agent enhance Contact of wins, seek of major We to first-generation Center packages, vendors our represented utilize Contact and Contact as of cloud-based all seeing adoption Center our XX% performance. customers

while well the of Center our together how needs customers our prospects highlight metrics Contact better These meets and validating strategy. also

Contact solutions, employee This Zoom who integrated either Workplace. Zoom Zoom experience in conjunction buy to Center; customer existing who In Center or represent Workplace the fact, desire Contact wins customers Zoom, at new delivery. which Center and excels Contact on for most customers demonstrates add seamlessly with

compose, features Companion platform. generative like to as to capabilities Center. productivity technology chat Companion seamless unify live boost using upon Contact image The translation customer AI in experience employee whole fabric integration and the enhanced employee's enhances generation, features and rests of AI through AI Today the an meeting a summary Zoom's

Companion grown happy share to have we features AI accounts. But that Zoom enabled very in the only these on are now we over is surface. have As scratched popularity, X.X million

day Zoom Contact broadening of work. enhanced Center transition out building AI a phase across contextual Workplace, It and us behalf. by of is large Companion performing our workday productive. ensure to the will well providing this collaboration simplifying base tools amassing on for and AI and move sets up platform beyond Zoom phase, into your X.X operating do your enhancing progress skills will AI insights, Our this to In tasks to your AI-enabled users interconnected

at in share about can AI you hope join to We our us. Zoomtopia more have October. will strategy We

recognize Now some customers. let me of our amazing

TIAA, thank further for to in Zoom. and Zoom retirements upgraded leading with of strengthening TIAA A Center their me outcome-focused Zoom let provider solutions, to enhance and partnership Plus customer, added Enterprise Management long-time Workplace order QX, and secure customer employee Contact First, experience. Quality and in a investment the

Webinar flexible there. in their and Management. Inc., they companies power natively and their experience delivery America. came of stop of to trucking us customer did employee of integrated value largest Recognizing chose Rooms the Prime Zoom as corporate the working provide elevate to But the one and I they platform, and also Workplace our experience with needs Center Zoom collaboration to the well Contact added to would and support the the not Quality thank North channel, through further drivers offices. Prime like as freight and

Lyra our Health, their our leader In -- for developer-focused applications, benefits in Zoom, migrated addition, exemplifying leader Lyra SDK health in a has to video Zoom's Video Toolkit thank bringing into approach. a into cutting-edge directly their platform. workplace integrating to technology like mental successfully workforce I'd

amazing which brand. an bank logos European Asian Workvivo's the a a including North quarter, was American QX, wins Meta telco. leading Southeast and had famed with in by automotive contributed Workvivo new a exciting Finally, extended success some major including partnership,

engage happy platform seamlessly employees these and broader way provide connect so with the to integrate are and Employee inform, with Experience the companies elevates We an Zoom portfolio. that they

role share IPO in to made April opportunity this has almost years Kelly X take news successful after our joined X Kelly in her building her in that the decision about and years, of XXXX, to her will skills the for Zoom. and Zoom before businesses here. scale the another time leave has that in been process leverage Zoom. to to She startup next a successful helping help like I'd highlight companies that

expanded the and of momentum cash her She been maintained of pandemic. the integral has has strong the flow base part and Under financial during growth. an continuing leadership, IPO in our our profitability track journey, XXXX Zoom rapidly record as customer Zoom consistent a steering

her next We of staying assistance a firm. earnings, search conducting Kelly leading that to very development, the a best. all finance We have organization Kelly the transition. a that am we are be CFO for will a wish comprehensive executive robust I confident through talent our QX on with there seamless given commitment through will very search and be

I'll it to -- pass Now it off over Kelly. to pass

Thank you, Eric.

team incredible past transformed but First, years. I'd over globally. like to not X Zoom thank everyday made the entire only work has you, for of people of have we the lives an productive, course, the experience Zoom and more

seamless other committed the QX again, bye, mentioned, to not the transition. Eric earnings, each get help is this with I'm see to and we'll the so I will through staying As

earnings. to back Now,

we and our top in that are We pleased line profitability guidance beat QX.

representing we as customers first, million surpassed second, AI amazing accounts are Companion Zoom reached with Zoom with the over Contact approximately and Here of a ARR, X.X the from X,XXX enabled we reached in Center of we quarter: as few traction growth. QX; saw roughly more doubling XX XXX% end year-over-year achievements year-over-year; customers $XXX,XXX Workvivo than finally,

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

FY grew X.X% total from revenue, year-over-year ago. year average X.X%, of that XX% and down Our at we lowest ever represented QX up churn rate XX% in monthly 'XX. This from X% the Enterprise have a is reported. came in Online of revenue

XX% We of a XX-months quarter as upmarket QX These X,XXX growth the more 'XX. year-over-year revenue, than up from customers with XX% contributing in saw in X% represented $XXX,XXX ended FY we customers trailing of revenue. in the

XX-month XXX,XXX. this QX end Zoom rate as time net with QX Enterprise on Zoom XX%. customers of existing note, The in in focus new other number for metric trailing approximately Phone, over has diminished Contact Our of we in Enterprise customers larger and and at the upselling at value dollar prospects was Please Center expansion came customers landing products.

X% and EMEA while Americas On APAC EMEA revenue X% year-over-year, by was Our year-over-year. a X% declined grew grew currency and constant X%. declined APAC basis, flat,

of last was all compared center upgrades in to as Moving settlements acquisition-related expenses, taxes, mainly expense gross to AI to compensation margin to due gains litigation QX which investments, as stock-based in exclude and associated strategic associated results, as tax effects. QX Non-GAAP data net in net XX.X% our payroll XX.X% and on investments our year, non-GAAP backbone. well

FY Non-GAAP million non-GAAP in of gross million. Non-GAAP our and a result from as income to our translates high of be high approximately long-term of approximately QX 'XX, higher continue of end target guidance $X.XX last XX% operations per QX to towards XX%. This For diluted was our XXX than margin for shares improving end QX expect net year. This in exceeding diluted the above we of average compared the full $X.XX XX.X% share year. the came in year was $XXX QX XX.X% income last our on margin of outstanding. million, weighted at guidance before $XXX will non-GAAP to operating of $X.XX

revenue year-over-year continued percentage the X to last billion. as the the of at grew the due period as $X.XX Turning higher than to billing rate balance sheet. quarter, was lengthening partially end the terms. discounting well practices of The growth roughly to points growth X% refinement provided Deferred

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

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

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

million. Operating cash year-over-year grew $XXX XX% flow to quarter XX% in year-over-year to $XXX million. Free the flow cash grew

from for margins metrics billion cash. million income, and $XXX billion We our buyback from respectively. up the share QX, and plan increased approximately cash in year-over-year improvement collections ended $X.X for X.X shares expanded settlement. The a million million. shares cash legal Under free X.X This million prior restricted equivalents year excluding is to flow marketable due in in in and the purchased we higher with was flow operating QX. flow Our higher securities, XX.X% $X.X cash, XX.X%, $XXX and interest to billings, cash cash quarter

guidance. to Turning

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

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

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

expect revenue to the top be range full We year-over-year midpoint are of billion, outlook $X.XX at 'XX. growth. in our now the pleased to to for billion raise which X.X% and profitability We $X.XX year approximately FY of the represents line

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

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

the for our full Thank queue first team, support. David, for $X.XX to billion cash customers, and 'XX, free your ongoing up be billion $X.XX in and investors we expect Zoom the you to in our flow to our strength income increased the the and trust flow our the year. and cash With FY operating in for first question. free of outlook community half now entire range please

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

for question quick Eric. a just Maybe Great.

the And of just going where most to it AI interest kind Just kind how you inform products are Companion you're does invest forward? of in looking seeing how usage? the kind most or of the

question. great Yes,

want our AI of Zoom like first customers think, all, really I Companion. to and share you -- I with

First of well. works all, it so

some Secondly, package. additional of not customer who charge part case, of cost, to in at our lot. is a this And vendors got no a like the other our

the of set team almost AI the right? empowered while think feature introduced everywhere, every Zoom you phone, or by terms I and So chat look -- AI back, we product Companion in So the Companion. So live at Meetings, a right? in

right? use better. And than right? improving example, and For right? July, and we product, summary, case at the had or deliveries, summary a meeting in the meeting [indiscernible] another keep #X better quarter-wise, quality you previous each we better even sure, like take for like in Like Look that upgrade are a Meeting, getting

in features next few And also also [indiscernible] to to Take focus as action And leveraged about again, lever experience. an AI delivered Contact wrap give use as And Contact all in Center automatically assist on services. at right, our bunch why are your few a have disposition, lot to also right? we to our And So empower like of AI AI will -- AI be excited. of expert we just the in a and I and every those well, used are a we empowering the our and we also like features new services. for up a for how next and have quarters. few our the think available announce a engagement our features Companion, Center, I every also product -- and Zoomtopia, to notes. billing we're going we automatically Companion very example. example, in months improve enhancements. we features, and That's just service, Companion features QX, look October, AI

Blair. Our with next question Bhatia comes from William Arjun

get Real of value recently strong understanding a for Chris on Workvivo, in is in are wanted seen you've customers helping Arjun. seeing drive some quick. the where vein, that. similar with then to adoption most what's of the better And This I

terms In they cannot helped all, lever phone to flexible to in given Workvivo, that. This think, the right? meetings is of seamlessly are. important, no it's engagement. in how very the do employees work employee So of chat or first I matter or engage where You particular, your really

have Workvivo A right? well. have companies, we new realize customers, a for reason of That's very acquired value, lot especially to service. enterprise the the solution before, that the And right? You large why very works and

on [indiscernible] the to so platform putting look migration of the the platform a is That's important. order is and this well recently such their UI, same us, when And they right, on Workvivo customers other Meta, and to further right, hand, more for reason experience the mention phone have time, at works only Zoom in essentially, communication Zoom and where collaboration. and decided load. big well platform retire At out why becomes engagement more the

and deals of quite a very closed few the logos we a lot QX new in So in also large as well. pipeline

about Workvivo not will way, are is messages announcement, rather excited any very to are chat Workvivo Workvivo really either. the also go the scalable, the or platform. By friendly just the we to e-mails not employees for news, So using to internally, we any interface go than

with question William next comes Baird. from Our Power

Kelly, over thanks And the Great. Okay. here all years. for help the great

So right? want the kind of kind consumer. still for on sort of we'll I mean, it I while, that's still start, little though, which of center is the health guess, of have concerns macro, to a being stage great. of I new

so baked market, the consumer what guess But macro I within at rate in if comment expectations of there, And the suggests we what's going online a churn real mean, segment, I the least seeing in could you're well on that standpoint. wondered of are relatively you I and time okay. kind kind things from

the of hear then great the on front, video on And of side sales, be cetera. is other of seeing just kind in et to what Enterprise terms that cycles, you're down sales

Eric, do you say generally first? to anything want

dive may You in.

Thank Yes. you. go ahead. Just

right, guidance, continue that's our for in we of we're we you've year. are QX to chance at about. this excited that's that year. that point reflected And the very and lot the like to guidance, next as rates growth, is we see -- of be you of a the we in the said all dollar reflected you'll year-over-year year expect really our up net and of start guidance been to look show reaccelerate QX. what's to as had see in forecasting, in Enterprise, stability we that growth of in terms that to to And low when have our a in our start retention would reaccelerate to going expansion to eventually we come which terms terms and middle see would We've in So there, this

Zoom our In that our including of the terms retention features just noted, about, AI the which talked progress which are you see paying. there, reflected online, well the as as I that all about included customers making we in all platform, online Companion are think of improvement is rates we're great for ongoing Eric in

to see. that's And really great so been

some -- one we some certainly were with being say I and originally be to about concern overall there. what area I peers we've the is that SMB which customers. pretty the But in economy think small the consistent is would like We've in seen the some headwinds, with forecasting for close year. line seen full

So a very that. keeping we're watch just close on

Our with next Panigrahi question comes from Siti Mizuho.

you me? Can hear

Yes.

with Great. And you. it's Kelly, working great Great.

in the It's question they some are your peers Contact to see my traction Center Center. but in market. good side, So pressure about about we Contact hearing this macro seeing are the from

features the question, and win them? Center helping Contact see your Contact you And revenue compared material contributor? Like expect competitors? Zoom against do we capabilities like what's the Center should you how then to a So to be when

Kelly start, and feel free can in. I to Yes, chime

the of innovate only -- customer a customer our a time, and like customers features, why in our our AI for they a features, particular, deliver any think they we look And wins first closed core innovation at at the And reason faster customer, we features, some workforce And just competitors. had perspective some winners, -- We and we we with the to integration but key other very the Contact in solutions the with you at reason right? From seamless. Contact can't and single management that's QX for to deal if the And up correctly, in a quarters, past large And then the of and about right? it did feature the in We our powerful. and progress. higher we're in feedback, that making I wow, we're serious all, not also -- I Look UC So recall resell confidence. other the the similars, few largest quality Look over also, long we Contact deals customers in customers much very are those large closed lose also like I set. not came especially do have we set, some Zoom and right? great the of XXX because they works it's Zoom together the well, trust they speed. like we of know they also it customer the QX, they the plus, of good momentum. think already at than the other with QX, we very, all the management closed feature gaining very Center around our because and realize and terms want integration deals, truly Center. XX to is -- not own offering, right? of feature realized, our is set also And we so about so platform like after QX, Center in why right? And test

our pricing price we've with very market. And that tiers else in, new competitive against remember, we now even are very, everyone still the added in

from look most it, cost a at there. you So -- this with when the combined of architecture out modern perspective, modern total ownership

to compelling customers a for it's very think switch. reason I our

also so right? and deliver, PCI thing We compliance trust. made another commitment, another in to and on And the and deliver. QX did did is forth, FedRAMP every the build we time way We we a that's make

comes Ryan from next Our Barclays. with MacWilliams question

charge generative to usage revenue basis So features cost on generally And cost a of do now power versus and you could Companion, Kelly, here? you the these seeing about do more that capabilities? AI users trying for think eventually opportunities of you're the Zoom of weigh how just providing think adoption, Zoom

is to customer from philosophy right? for consolidate on right? so environment, costs So macroeconomic and always question. save forth. the a So company that's our every great money, tries look Especially and the a everything the perspective, so at given we And

think should AI I launched retire AI the think So do Companion. customer Companion, do not charge -- right? mean for we want I we to I the customer. we when not

I all workplace those However, Contact for like the monetize. business new for sure, services offerings. think the going And that's a we Center, to are for

to the earnings you previous the we on workplace think right? want and calls, cost not offering or -- are quality, -- in services, see I mentioned on see offering new solutions are billing core focus team's I we reduction on AI the charge. I Companion, collaboration do our and the charge. going want But and great AI, They our AI right? to the really new to and forth. And so I effort, appreciate focus As

customers reason -- customers and the stress, our that's the at I are the you in terms wow, And reason look think offering, why product cost ownership on winning. that's we it's the total deployment. Zoom in at support down the going why double look continue cost better of AI to realize, some of it's cost, also

impact you of on And gross off the maybe and what just alleviate then, maybe of generative margins, do Kelly, AI some to like there. can that

our to [ guiding we we're gross we really to prioritization think XX% we for the XX%. of strong to in will also but future to investments ] we important prioritize are time, mean for they margins And these I as the of AI, point growth. for this this that which set reflects But apply. discipline Yes. at year, continue course, very up it's target long-term us very of holding

sense definitely first. it think it on I to focus makes

Yes.

I thing. credit also demo more our office one team. to give to want a Just

GPUs, that automated the make for room that's so have to way save going our other money and hand, team right another sure, level forth, to areas, some right? more right, are buy more fully right? also AI. us the and for cost, from the to So on And to save and On so we tried for

next Citi. Our Radke Tyler question from comes with

you there? are Tyler,

Yes. Can you hear me, okay?

Yes.

Yes.

couple how you new and of equation been initiatives to how business to doing the speak sort drive to if business of of And actually see the Wendy do it equation. -- quarters curious side you see there. it rate. record the was in or But high great a could the could just to some of about the have team if relative know side terms of new I'm stabilization online I improvements wondering were you you the ago? the renewal thinking I'm Kelly,

Yes.

continue job expand and do team great looking offerings features, to there. continue to adding to additional of growth a for our Wendy So

certainly and are pleased guidance of think able I we growth the very in to board. across raise terms quarter, our be our saw to

one SMB concerned The the from hearing that future is really and because headwinds, everybody the consistent think economy of and thoughtful I we what the seen about peers very in being decisions. is small about you're area area with which have some is the very buying business

With execute with it's line were seen the is roughly coming against why to year, guidance forward. us and that going said, where in our continue expecting we you've into which be able raise to

from Our next question Stifel. comes Parker Lane with

Jack accomplish? Congrats Contact choose nice This looking the to they Parker. on in for that And was kind ultimately the large on of why touch is What Zoom? did this quarter. Wanted customer on to win Center. initiatives

vendors, customers. we innovate can before brand But comes like Center, market really boils solution understand other and the actually, for your did to the this all the also, were against a down it as AI like AI trust. want in to We and they wise, right, Phone again, innovate multiple Center always a together. before, we well. the faster. especially embrace sure, ultimately, and trust given Zoom happening like the slow solutions, and is team. We Contact road together Zoom know so features, it comparing they and Contact much and is about initiative, can architecture the move. innovate. other slow to We map legacy POC AI. And itself, really I this the our the right? features, evaluated price -- with And We're customer evaded and and real and experience. new to we And it's all architecture, given recognition And multiple Zoom mode think, They We solutions the deliver. with better promised innovated the and and built to offerings the And the

So so Zoom. -- a pickup and not and why

with Michael Bank of America. Our question next comes from Funk

for see quarter you years. thank I again the next Kelly, well. as my you know for help over I'll

if Center, on Contact question can. Another I

are or they The clarification. wins, internal towards more Center. recent Contact Just a skewed external

employees customers? meaning So versus

For their quarters Center IT [indiscernible], right? many PC the Contact the for partners, their of When some engagement and [indiscernible] that internal our to customer for the launched accidental, now with primarily majority They team. of we in the engage right, [indiscernible] ago, but for right? support just and use desk, help use customer team, customers

and expected to this when I That's you Center for then you expectations very -- contact helpful. mentioned expectation. or year And to for Kelly, those you phone met center similar that line? Are above a in that growth growth that, Contact think you growth good I with ramp then precedent growing earlier was

We're with in that. line

mean, in with hasn't -- it drive and it was growth, pleased it both very changed to So expected. but how I had what are dramatically. more continuing we're Center with Phone Contact we is line

next Our Murphy from comes question Mark JPMorgan. with

looking heard at us. comparing to here things One there. is customers if field offered on you're of out Companion, that we've Arti a other Zoom in kind from thanks that provided question are you the AI I had Kelly, Mark Murphy, when and help of for great all lot products the

of using kind you you you Is success lines? charge of Can guys way given for millions directly with you having kind it, whether retention, think it's of remind us of utilization people any it? beyond how kind don't the those that along product internally, improvement it about about track there anything in tracking

been account the Yes. mean activation. metrics talking is I about on here that we've

of approval -- we it's go internally, go an it's that through, larger number how meeting produced. individual it. have but enterprises, actual And imagine process they like we're summaries there's through, the at accounts activated many that. usually we not So that users, And you for then watch for -- can things looking customer watching

of some usage the and evaluating other how success. usage we're So like is metrics

with never lot a productivity share employees' the AI of we yes, customers. helping action stories feedback often, about like how very very Companion very well. are And as our items AI And EDCs summary, so adopting they And have their is [ positive like also accurate Zoom Zoom ] Companion.

Our from Fish Sandler. with James next Piper question comes

with at directed it's great is been And you. my more Kelly, you. question working

if as XX% we're of retention here, mentioned about we're to had You rate. starting the trailing see XX-month sounds it that. bottom talking And

math would actually the on fact, today In period. above XXX% our end imply

you're you other getting of this break math Phone expansion? And upmarket of upsell meetings or potentially, what if mix point you [ terms it's to you Center but or if accelerating how So across what because across X% point, you of but to are any the from between involved, ] just there Contact we again, can is expansion the products upsell a starting absolute seats, interpreting see if products, should down that at that dollar seats in I we like not number? impacting changes, adoption be similar other get like this that, at run saw rounding would is use perspective suggest pricing

Yes.

-- when growth for upmarket. segment, thinking next year this it. half and about the -- think that you the of segment, about looking the Very year even but the So is back into within by of driven that being direct certainly, upmarket portion the forward, we're specifically, way our

year-over-year, revenue you at higher the than which of than our XX good X% metrics growth look at months greater is you $XXX,XXX that's If see growing indicator rate, growth our which of a trailing that. and overall customers rate with with is

net our why to to our similar of know middle and we of we've calculation, that's kind ahead metric. And next that see so we when see in dollar is reported of started expansion, do we in-quarter runs the said what year. And externally I stabilization

Contact again. And obviously, Center, of that's to the Workvivo is add-on. by sometimes that an ongoing Zoom reaccelerating start being Phone, driven performance expect We

-- those enterprise don't coming And mentioned I in. we -- stabilization Sometimes I retention that say, as in that earlier, know would in well. customers our rates are seen I we've brand-new what we are

see even of there seats for customers. that terms on starting renewal some in good stabilization if terms to rates that's we're in aren't additive of meetings being So

Our with Peter Bernstein. next Weed question comes from

Kelly, on been have normal with mode you've should you it's helpful. my me in honest No, you. a will and been [indiscernible]. I miss over very time, open And we mean and us very

bit was comes basis, about forward going you when that stabilization because to into market our upmarket. When does always number, I And like Or down be model, early the Whereas the talking from love getting last some in of expansion. a said like are it of look middle there's next do definitely that quarter-over-quarter on step how this a and to see of like it this coming can about shaping of flat, one expect up? start at of I case of been kind And is of it I think which been strength. escalating Is just flatter, little cannibalization now. is upmarket year, you've like you of little least about unpack quarters? to think over makes building going guess, the here, we seeing, bit we you question accelerations kind a up, like itself I'd you those which think to the kind then that seem those on quarter-over-quarter? of follow where like look up on the how thing of saw where type it kind that And on? that, out historically the kind that you kind has

couple Let clarify a me so of -- things. let me

and with from contribution this retention and rate that the QX. guiding in what's Center, online, very Phone, So see ongoing from start from in what's Workvivo, the of metric. reaccelerating to seeing is strong grow is growth. And our middle we look low we we're at seeing we because enterprise point XX-month the the year, rate reaccelerate the stabilization That's in QX guidance strength the trailing this, leading What year-over-year given when stabilize Contact future. we're and to all terms are net the you specifically. next as in revenue was, of we're And dollar on in expansion is that forecast starting it's growth that in to going to improvements the in a again now of in combined

color to people or of kind for as that components guess When on of both adding kind of at a I you sign you when underlying moves versus types of many of acceleration about kind the getting market. some are of contribution think I strength, one And it's kind between balance us and up Contact these pushed look Center of forward. things. the of It's Give the those this those, driving guess, both that these versions not products additional, the of have into kind seats. probably that then

see. see Yes. expansion and that expand motion land We do a we being --

it's especially for Contact the on Center adding meetings, keep it been historically, really this seen Contact is on expanded for the allow touched Phone. as the well course, more see also Of for We to it externally. Center as serve Eric see as motion we've but it really that we we we've -- and right features functionality

a of are we're external acceleration that's and PCI all base, to like seeing really in Center. things some the company which what's component social any this talk FedRAMP customer integrations, Contact compliance that necessary led its and to to for and So

from question Peter Evercore. next comes Our with Levine

-- Maybe seen to and want competitive $X.X think Eric just think even Center, about and Kelly, your into you on Phone. advantage, billion Contact in capital you or like about you We've have sit you retain if down strategy, cash. move allocation.

help buyback larger investors the you're but well. understand as thinking on to help top that. a about how plan have of of any terms to Just product? best maybe deploying tech? -- us seen in reaccelerate it's if us been apps You it's what while help it terms we've way productivity Is in you're You how in that you activity, the for the thinking about understand What's capital? line since strategy think place, but new

Yes.

know really they example, -- customers cannot for a level, So right? that manner. high build they when employee engagement customer tools." we we together, timely customers like this feature they about needed so better look at from and quite from We talk a a take like sometimes, "Yes, And right, often everything I a we perspective, really say, innovating Workvivo, --

have through M&A. We to go the

everything features, one especially that's of course, and quickly of have era, our kind up to, existing AI services also at faster. opportunities go the there's build there. offering, before. we as play on. a and culture given And can plus are right, we to to, look here to want we or hey, beef so right, and and organically we sort added those not But more new working I plus to platform now right, how many you think services, of billing out and are aggressive do AI of what we move the our if And [indiscernible] top

think opportunities in M&A my lot I the it's a view, like of road. more down

kind our that's of So strategy. -- and

hit a then the terms of if plan -- Is number And we you contact can there revenue share XX%, share gave on that when you because willing an think number with center or Contact target to Kelly, hit you're Center, at internal you the milestone. us XX%? will roll in least

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with Wolfe Rich Our Magnus comes next Research. from question

on Rich for Alex. It's

the contact the to Just large being were displacements. and center for wins you ads back XX highlighting to top wanted come

were said from You XX% legacy migrations.

So solutions, biggest the we're gen AI else of that first replacing wins? functionality that Was or the something were were not of the drivers pricing, what those six it missing?

for second. want super to be about just I So it a clear

were top [indiscernible]. legacy; existing were So of X other on-prem all wins, them cloud and replacing four, displacements, replacing XX of we're the

again, contact So highlights at the very to I center now, modern that's all from with in core them built Eric, of I free you architecture, chime -- mean, just but the the it its think, AI feel beginning.

and or comes is very -- think is right? customers I not And and also of from quite customers, their the forth. always the some it just right? very often of so that innovation, solutions, I are as well, Contact service they a with like And other you pricing, And we stability, actually mission, do customer important a role actually because a just constantly role also And delivers very stability Center know architecture engage stable, everything things we not, that's a I also faster plays have winning. reverse with plays important, scalable together, think, stable so they so together, Rich, more right? Zoom on stability a AI believe think when also number architecture ultimately and

Rosenblatt next question Our Trebnick Catharine from comes with Securities. Catharine?

I'm always late.

Sorry, guys.

it's to -- what's Contact Center? And But I released RingCentral this wondering, $X for much has RingCentral pipeline in phone. Center, your talk is pretty looking Contact How NICE about their center, do bucket. and that question with not contact progressing? you -- when just So was my UC

I comment feel to Kelly, the offering. Yes, UC chime free in, can on

you don't do please. Why that first,

Yes.

hard tell. win set UC right? like competitors' had So This space. many again, to they and and my the experience to scalable We -- it's others so could the great UC others, mistake into move, I with architecture. comment hard to is Zoom will our view, the right, a years' on believe timing In have compete against been how because they

have UC confidence, could to wrong, be going are high a so win I know they space. I I And but not

lot integration scalability of the features, stability, don't again, believe I investment So and because that. a technology in

two think driving ongoing the Contact of And going Phone driving. seeing is Zoom being Center see Phone this leads better be the so talked remarks Contact we to for inherent And rest much see come that with Zoom see to and entire of Center across we're of of all and it new products to this And across platform that Yes. I combination brings very power as the Companion able Zoom way desire together. in you're we other the as We about continue prepared platform. driving really those just the the it leverage AI the to strong. platform about what and need that well

in essence, it was UC there is though whatsoever even a $X just to the back So price? piece, no disruption

phone, who's do $X new You have I like to -- -- deploy something customer mean a buy want mean to it's take going new. Android And do that? why iPhone that. want to to more we today, the you see, Who's phone, you going to risk, introduce you that. deploy already an and $X want Why

that's view. So my

Our next Matthew VanVliet with from BTIG. question comes

hear you Can me?

Yes.

driving the tiers Congrats upselling and expansion with new products AI premium selling But are or existing apologize to much Matt. this It's Center Spencer versus of existing functionalities was already is for tiers quarter. asked. customers? products? if of cross-selling premium just other on Contact the key on or I it footprint How how the the the like phones,

base, trust. at long-term "hey, they with all Workplace use for you guess our they They know part. the the I going And the like for and long right? That's to think experience. to We increase with platform, This at see will use features." that's more value customers. If can stuck trust, some you that essentially keep value. right, at already -- you no installed price right? be guess if They Zoom, vendors, they all free cost. what? additional Zoom not what, And philosophy, like Workplace existing They adding look a look customers, more for time, our other the service, right? are So

other innovate, hand, AI is add the again, right? On set, to Companion because On right? is think are to And customer other differentiation wanted a a and free existing charge trusts we part take the I mentioned, customers. features to [ key more quarter, value I released all kind right? well, some to every ], feature of AI we AI as the going premium as Contact our Center, we example, for services,

hand, track services the those some features customers other we the as with On the and well. features need can the because customer for really [indiscernible] bringing also

next question with from Samad? Jefferies. Our Samana comes Samad

company there? the the on Just -- of that? sense just you mix installed of mix in attach those any in rate maybe of into the what's the XXX-plus Is us the versus versus kind those base Enterprise there under that has? terms of give CCaaS seat like How related, X,XXX many first, of maybe deployments CCaaS. And So of customers. are anything SMB on XXX,XXX-plus

about think me Let this.

seen we disclosed. we've up XXX Center. for ] that certainly to XXX,XXX customers So [ Contact growth in the We're

to moving that also And been working digital think these into they're with partners about help that channel sure. customers the So we've their working you for can in with realm see and transformation. how we

we deals use size what the we it to as before, a externally getting of allowing couple of I about talked last are reasons them In tiers. terms introduction as of larger for as this added is of -- say across our getting disbursement that either pricing definitely They're larger. the the or that would they the was is quarter functionality, well talked quarter about, the this because

expansion the it's and one remember, the because majority of actually but would product. I look started the count when in And them seat tier. almost such what highest terms more only not is in is derived We quarter-over-quarter Center were with is a of from in agent earlier, contributing at tiers, eventually so pricing of AI the tier. QX value added terms you expansion in the was that If of we We double I is feature. to saw our the speaking deals, that two all like X being ASPs Eric about purchasing Contact premium say for one of top

either should pretty make? last due better is Just on new features quarter, that uptick moving to assumption great is retention, we the grace that? period I'm durable you are see reasonable? the of that through So the it from slight then curious it's before much improvement thinking And and further new there. even right? just versus online how you. was tightening Got you that than that like it's of released how that the maybe that this away to the Is

Yes.

great I question. the are turn we all I keep this question X%. modeling at better. getting can is time, I about that stay you tell So to guess will it's a I mean it

you reflect. for churn quarter positive a breaks, dunning forward, QX clean seeing you high quarter, online, because customers little really the in breaks, you're winter as will, large rates that a use platform, seasonally think pull that's a see because in we because change meaning product typically, we of and mentioned. But think see But and historically, of in I should remember, really they that's bit continue put we quarter holiday last I to this for need. did as QX the is don't and improvements Typically, we QX this period, holidays. the cycle it what if the right, rate. you if And and want on higher friction of is period in the a the churn because holiday summer cancellation a see summer -- in to larger we

this rate costly down see in to record So low high I quarter. think a this it's seasonally very churn

from comes Benchmark. next with Our question Matthew Harrigan

U.S. anything Europe can political data modulated or sounds in What's there? activity seeing the broad of It of innovation? like the sweep you you concerns. some you've AI response to set, view some in dampen regulation your that in your Are gathering Europe think in

think I with it comes AI.

the right? That's very models, right? AI mentioned, we and of we brand we approach, we know And trust of reason customer any AI responsive very data why our not Companion, are right? launch our they as to going a they customer, our taking are We what And use data a to that we're already train take trust customers very, doing. seriously,

any impact in And see so do I like regulation. far, terms not of

So us, to again, EMEA AI rapidly, to impact But business, actually look moving And our far, the we here almost the extremely so all is at potential and I it's regulation. right? think this limited.

like very important a summary, and meeting that. like a it's feature, So customer

keep using our impact not And I no far. our think to turn use model. do so it, not why cost there's we I data think AI

come I Great. brilliant presentation guess you, more from Kelly. one to

Yes. Thank you, Matthew.

Walravens comes Securities. from JMP Patrick question Our with next

Cole This is Austin for Pat. on

mistaken, revenues constant look year, those if mentioned and Just in you to well. shrink like this wanted we're at currency, again. X% as I maybe on declined international, just And not where on track last shrank EMEA touch to Kelly, looking year at

wondering regions. and demand of could international talk is Just in you what kind you're how if there seeing your presence about those

certainly that I of so as We've continents. all happening continue wars are -- the facing economy our the in in to seen ongoing by that, And EMEA, especially think are Yes. be that general, impacted in peers well.

-- are been in We process. have we the

that's a team new have coming leadership into there. We place

partners We just amazing. our up last opportunity in bring also to London growth. on a and It's and the we focused focused in on all a investing leading And customers together that. is prospects an really to Executive really opened place, really reaccelerating and it's region. and beautiful really investing and I Center, forward, -- great Briefing quarter, we're Zoom looking that expanded see it's the mean entire X.X story which area are So

our so back concludes now comments. Eric session. you everyone. closing it Q&A Thank much, This to for I'll pass Eric?

Yes.

First of about all asking great questions. for those you all, thank all

all very for to very, your quarter. are thank grateful. We you also and we for their going trust work, And every all you. as innovate. thank Thank to next you Zoomies for hard And and are continue you

everybody. Bye,

earnings you rest your evening. thank concludes Enjoy We today's This all your Thank of for you. release. the participation.