When videoconferencing software company Zoom Video Communications (ZM -0.93%) held its initial public offering (IPO) in 2019, shares began trading around $65. Today, Zoom trades at only $70. In short, it hasn't helped anyone become a millionaire so far -- it's losing to the market, after all.Counterintuitively, Zoom's business is mind-numbingly bigger now than it was then. In less than five years, its trailing-12-month (TTM) revenue is up close to 1,300%, and it continues to climb. And it has a $6.5 billion ...

Zoom Video Communications (ZM) closed the most recent trading day at $69.10, moving -1.93% from the previous trading session. This change lagged the S&P 500's 0.37% loss on the day. Meanwhile, the Dow lost 0.62%, and the Nasdaq, a tech-heavy index, lost 0.19%.Heading into today, shares of the video-conferencing company had lost 1.26% over the past month, lagging the Computer and Technology sector's gain of 1.22% and the S&P 500's gain of 1.56% in that time.The investment community will be closely monitoring ...

Zoom Video Communications (ZM) closed the most recent trading day at $68.18, moving -0.19% from the previous trading session. The stock's change was less than the S&P 500's daily gain of 0.57%. Meanwhile, the Dow gained 0.46%, and the Nasdaq, a tech-heavy index, added 0.75%.The video-conferencing company's shares have seen a decrease of 4.17% over the last month, not keeping up with the Computer and Technology sector's gain of 1.51% and the S&P 500's gain of 3.4%.Investors will be eagerly watching for the p ...

Just about every company on Earth pushed to incorporate artificial intelligence into their operations and products in 2023. Indeed, AI is driving massive increases in productivity for knowledge workers around the world. And one company is poised to see a huge benefit as businesses push to make their employees more efficient.Zoom Video Communications (ZM 0.09%) has built out several AI features to help remote workers -- everyone from salespeople to software engineers -- use their time more effectively. And A ...

alexsl Zoom’s (NASDAQ:ZM) business, although performing with slow momentum, continues to outpace investor expectations. For FY 2024, Zoom management now expects to generate about $4,495 billion in sales and $1,743 billion in operating earnings. And while the new calendar year is unlikely to bring a pivot in Zoom’s organic growth trajectory, there is little indication that suggests contracting fundamentals. On that note, I view Zoom’s EV/EBIT multiple of <9x as a "no-brainer" buying opportunity. I reiter ...

Zoom Video Communications, Inc. (NASDAQ:ZM) Barclays Global Technology Conference December 6, 2023 1:25 PM ET Company Participants Kelly Steckelberg - CFO Conference Call Participants Pete Newton - Barclays Pete Newton Awesome. Good morning, everybody. And thank you for coming to the Barclays TMT Global Tech Conference. Happy to be here today. My name is Pete Newton. Obviously, I'm not Ryan MacWilliams. Ryan just gave birth or his wife just gave birth or their first job. So, if you see him, congrats. If you ...

Summary of Zoom Video Communications, Inc. Conference Call Company Overview - **Company**: Zoom Video Communications, Inc. (NASDAQ: ZM) - **Event**: 2023 Wells Fargo TMT Summit - **Date**: November 29, 2023 - **Participants**: Kelly Steckelberg (CFO), Michael Turrin (Wells Fargo) Key Points Industry and Product Developments - **AI Integration**: Zoom AI companion launched with over 200,000 activated accounts and 3 million meeting summaries issued, included at no additional cost for paying customers [3][4] - **Zoom Doc**: Introduction of productivity tools with AI integration, marking a significant step in enhancing document functionalities [4] - **Zoom Phone**: Surpassed 7 million seats, contributing over 10% to revenue, with significant adoption among Fortune 10 customers and a recent license to operate in India [7][8] - **Contact Center Growth**: Currently has 700 customers, with ongoing enhancements to features like email and social media integration, and a focus on PCI compliance [11][12][13] Financial Performance and Strategy - **Gross Margins**: Historically above 80%, currently around 80%, with Zoom Phone having slightly lower margins due to transport costs, while the contact center has higher margins due to its pricing [16][18] - **Operating Margins**: Reported at 39% in Q3, with a strategic reduction in workforce by 15% to manage operating costs [20][19] - **Investment Focus**: Plans to invest in sales capacity, channel programs, and R&D, particularly in AI and productivity tools [21][22] Customer Engagement and Market Position - **Customer Retention**: Notable growth in customers using the Zoom One bundle, which increased by 330% year-over-year, indicating strong retention and upsell potential [43] - **Online Business Stabilization**: Monthly churn rate improved to 3.0%, with ongoing price increases across various product tiers to enhance revenue [36][38] - **Enterprise Segment**: Anticipated slight decline in expansion rates due to macroeconomic factors, but long-term contracts are growing, positioning the company for future growth [42][44] Capital Allocation and M&A Strategy - **Cash Reserves**: Company holds $6.5 billion in cash, with a focus on organic and inorganic growth opportunities [46] - **M&A Considerations**: Emphasis on customer experience, cultural fit, and valuation when considering acquisitions, with a preference for smaller tech and talent acquisitions [48][49] Future Outlook - **Growth Drivers**: Anticipated growth from Zoom Phone, Zoom Contact Center, and international expansion, with a focus on stabilizing and growing the international market [55][56] - **Product Portfolio Expansion**: Continuous innovation in product offerings, including Zoom Events and asynchronous video communication tools, to enhance user engagement [55] Additional Insights - **AI Strategy**: Federated approach to AI, leveraging multiple partners to enhance performance and reduce dependency on a single provider [24][25] - **Customer Feedback**: Positive reception of AI features, particularly meeting summaries, which have improved significantly in quality [26][27] This summary encapsulates the key insights and strategic directions discussed during the conference call, highlighting Zoom's focus on innovation, customer retention, and financial management in a competitive landscape.

Summary of Zoom Video Communications, Inc. Conference Call Company Overview - **Company**: Zoom Video Communications, Inc. (NASDAQ: ZM) - **Event**: 2023 UBS Global Technology Conference Call - **Date**: November 28, 2023 Key Industry Insights - **Shift in Revenue Mix**: Zoom's revenue is increasingly coming from Phone and Contact Center services, indicating a strategic pivot towards Unified Communications as a Service (UCaaS) [1][2] - **Growth Drivers**: Focus on growth drivers for 2024 and 2025 rather than dissecting past performance [2][3] Core Growth Drivers 1. **Zoom Phone**: - Achieved over 7 million seats in Q3, with aspirations for it to represent at least 25% of revenue in the future [4] - Significant opportunity exists in converting landlines and on-premise seats to Zoom Phone [4] - Growth in Zoom One bundle, which includes Zoom Phone, increased by 330% year-over-year [8][9] 2. **Contact Center**: - Currently has 700 customers, with potential for growth as features and functionalities are enhanced [5] - Integration with social media and email is expected within the next 6 months, which is crucial for larger enterprise deals [17][18] 3. **International Expansion**: - Growth in the U.S. but decline in EMEA and Asia Pacific due to a sales reorganization [6] - Focus on building channel relationships internationally to drive growth [6][8] 4. **Bundling and Pricing Strategy**: - Zoom One is a key growth driver, encouraging customers to adopt multiple products for better retention [22][24] - Price increases for Business and Business Plus packages were announced, reflecting confidence in the platform's value [38] 5. **AI Integration**: - AI features are embedded in the platform, enhancing productivity without additional costs for paying customers [28][29] - Stand-alone AI products like Zoom Virtual Agents are also available [28] 6. **Enterprise New Logos**: - Added 1,600 new enterprise logos, indicating continued market penetration despite perceptions of market saturation [30] - Opportunities exist to capture market share from competitors like Webex [31] 7. **M&A Potential**: - Over $6 billion in cash available for potential acquisitions, with a focus on technology, culture, and valuation as key criteria [33][34] Financial Performance and Outlook - **Retention Rates**: Churn rate improved to 3% per month, the lowest recorded, indicating better customer retention [37] - **Enterprise Segment Stability**: Despite a challenging environment, the enterprise segment showed slight outperformance, attributed to effective execution post-reorganization [40][41] - **Margins**: Current EBIT margins at 39%, above long-term targets of 28% to 32%, with plans to invest in growth while being mindful of margin impacts [49][50] Additional Considerations - **Channel Strategy**: Balancing relationships with channel partners while maintaining profitability is a key focus [10][12] - **Customer Feedback**: Larger accounts are eager for enhanced features, indicating demand for a modern, integrated platform [20][21] - **Market Dynamics**: The competitive landscape is evolving, with AI and integrated offerings becoming increasingly important [47][48] This summary encapsulates the key points discussed during the conference call, highlighting Zoom's strategic focus on growth drivers, market opportunities, and financial performance.

Financial Data and Key Metrics Changes - Total revenue for Q3 was $1.137 billion, up 3% year-over-year and 4% in constant currency, exceeding guidance by approximately $17 million [67] - Non-GAAP operating income grew by 17% to $447 million, translating to a non-GAAP operating margin of 39.3%, an improvement from 34.6% in Q3 of the previous year [48] - Operating cash flow increased by 67% year-over-year to $493 million, with free cash flow growing by 66% to $453 million [70] Business Line Data and Key Metrics Changes - The Enterprise business grew 8% year-over-year, representing 58% of total revenue, up from 56% a year ago [67] - Zoom Phone reached approximately 7 million paid seats, while Zoom Contact Center had around 700 customers by quarter-end [46] - The number of customers on Zoom One bundles grew approximately 330% year-over-year [46] Market Data and Key Metrics Changes - Americas revenue grew 5% year-over-year, while EMEA and APAC both declined by 2% each [47] - The trailing 12-month net dollar expansion rate for Enterprise customers was 105% [47] - Online Average Monthly Churn decreased to 3.0% from 3.1% in Q3 of the previous year, marking the lowest churn reported [67] Company Strategy and Development Direction - The company is focusing on enhancing its AI capabilities, with innovations like Zoom AI Companion being included at no additional cost to paid plans [41] - There is a strategic emphasis on medium-sized companies for the contact center business, targeting those with 100 to 1,000 agents [20][24] - The company is optimistic about the future growth of its contact center solutions, drawing parallels to the early success of Zoom Phone [86] Management's Comments on Operating Environment and Future Outlook - Management noted that the macro environment has remained consistent, with deal scrutiny and back-end loaded bookings continuing [90] - The company anticipates a significant renewal cycle in Q1, which may positively impact deferred revenue growth [138] - Management expressed confidence in the long-term retention and growth potential driven by AI innovations and customer experience enhancements [77][161] Other Important Information - Non-GAAP gross margin in Q3 was 79.7%, slightly lower than the first half of the year but an improvement from 79.5% in the previous year [68] - Deferred revenue at the end of the period was $1.32 billion, down approximately 3% year-over-year [69] - The company expects non-GAAP gross margin to be approximately 80% for the full year [48] Q&A Session Summary Question: Changes in the overall macro environment in Q3 compared to Q2 - Management indicated that the macro environment remained consistent, with similar trends in deal scrutiny and back-end loaded bookings [90] Question: Initiatives to reduce SMB online churn - Management highlighted that AI features included for paid users are expected to enhance retention and conversion rates [77] Question: Feedback on AI Companion and its impact on free-to-pay conversion - Management noted that the AI Companion has been well-received, contributing to improved user engagement and retention [92] Question: Stability in online metrics and expectations for Q4 and FY '25 - Management expects slight declines in online metrics for Q4 but anticipates stabilization and potential growth in FY '25 [113] Question: Guidance on deferred revenue and its implications for growth - Management explained that while deferred revenue is expected to decline, customers are committing to long-term agreements but preferring shorter payment terms [103] Question: Performance of Zoom Phone and Contact Center in Q3 - Management reported strong growth in the upper segments of Zoom Phone, with significant customer traction in the Contact Center [117][119]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ___________________________________________________________________ FORM 10-Q ___________________________________________________________________ (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended October 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO ...