Financial Data and Key Metrics Changes - Total revenue grew 4.7% year over year to $1.217 billion, exceeding guidance by $17 million [15][19] - Non-GAAP gross margin increased to 79.8%, up 128 basis points year over year, driven by cost optimization [17] - Non-GAAP operating income grew 10.5% year over year to $503 million, exceeding guidance by over $38 million [18] - Free cash flow increased 39% year over year to $508 million, representing a free cash flow margin of 41.7% [20] Business Line Data and Key Metrics Changes - Enterprise business revenue grew 7% year over year, representing 60% of total revenue, up one point year over year [15][16] - Average monthly churn in the online business remained flat at 2.9% [16] - The number of enterprise customers contributing over $100,000 in trailing twelve-month revenue grew approximately 9% year over year [16] - Zoom Phone sustained mid-teens ARR growth, gaining market share against competitors [11] Market Data and Key Metrics Changes - Revenue growth in the Americas was 5% year over year, EMEA grew 6%, and APAC grew 4% [17] - Deferred revenue grew 5% year over year to $1.48 billion, slightly ahead of the high end of the previously provided range [19] Company Strategy and Development Direction - The company is focused on three key priorities: delivering world-class AI, rapidly innovating Zoom Workplace, and scaling high-growth departmental solutions [5][9] - Zoom aims to strengthen its position as a leader in AI-powered collaboration, with significant growth in AI Companion monthly active users [6][7] - The company is expanding its collaboration with PwC to enhance its contact center and AI opportunities [13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of customer demand and the ability to navigate a dynamic macroeconomic environment [91] - The company raised its full-year revenue guidance to a range of $4.825 to $4.835 billion, representing approximately 3.5% year-over-year growth [22] - Management noted that AI adoption is critical for driving business outcomes and customer engagement [7][11] Other Important Information - The company has been recognized with multiple awards for innovation and leadership in the UCaaS space [9] - The launch of Virtual Agent 2.0 is expected to enhance customer engagement and drive revenue growth [8] Q&A Session Summary Question: What ROI are customers seeing from AI solutions? - Management highlighted that AI adoption has significantly increased, with monthly active users growing four times year over year, indicating positive feedback and productivity improvements [28][30] Question: How are vertical-specific AI companions informing customer needs? - Management noted that early adopters are looking beyond basic functionalities and are interested in customized AI solutions that integrate with their existing systems [34][35] Question: What feedback has been received regarding the price increase for the online segment? - Management reported stable churn rates and positive customer feedback regarding the value proposition, indicating that the price increase has not led to significant pushback [41][42] Question: What is the outlook for the AI Companion add-on? - Management indicated that initial customer feedback has been positive, and there is a strong interest in customizing AI solutions to better meet specific needs [56][62] Question: What is driving the success of the contact center solutions? - Management attributed success to customer dissatisfaction with existing providers, the comprehensive feature set of Zoom's solutions, and the trust in the Zoom brand [99][100]

Financial Data and Key Metrics Changes - Total revenue grew 4.7% year over year to $1.217 billion, exceeding guidance by $17 million [14][19] - Non-GAAP gross margin increased to 79.8%, up 128 basis points year over year, driven by cost optimization [17] - Non-GAAP income from operations rose 10.5% year over year to $503 million, exceeding guidance by over $38 million [18] - Operating cash flow grew 15% year over year to $516 million, with a margin of 42.4% [20] - Free cash flow increased 39% year over year to $508 million, representing a margin of 41.7% [20] Business Line Data and Key Metrics Changes - Enterprise business revenue grew 7% year over year, representing 60% of total revenue, up one point year over year [15] - Average monthly churn in the online business remained flat year over year at 2.9% [16] - The number of enterprise customers contributing over $100,000 in trailing twelve-month revenue grew approximately 9% year over year [16] - The number of Zoom contact center customers with over $100,000 in ARR grew 94% year over year to 229 [10] Market Data and Key Metrics Changes - Revenue growth in the Americas was 5% year over year, EMEA grew 6%, and APAC grew 4% [17] - Deferred revenue at the end of the period grew 5% year over year to $1.48 billion [19] Company Strategy and Development Direction - The company is focusing on three key priorities: delivering world-class AI, rapidly innovating Zoom Workplace, and scaling high-growth departmental solutions [4] - AI adoption is expanding beyond meeting summaries to include meeting preparation, task management, and integration with other services [5][6] - The company aims to maintain a long-term goal of 80% non-GAAP gross margins while balancing investments in AI with cost efficiencies [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of customer demand and the ability to navigate a dynamic macroeconomic environment [90] - The company anticipates continued growth in AI adoption among customers, which is expected to enhance productivity and operational effectiveness [30][31] - Guidance for Q3 revenue is projected to be in the range of $1.21 to $1.215 billion, representing approximately 3% year-over-year growth [21] Other Important Information - The company has accelerated its share buyback program, purchasing 6 million shares for $463 million [20] - Upcoming event Zoomtopia is expected to showcase new product innovations and customer success stories [12] Q&A Session Summary Question: What ROI are customers seeing from AI solutions? - Management noted that AI adoption has led to significant increases in monthly active users, with a fourfold increase year over year [29] Question: How are vertical-specific AI companions informing customer needs? - Management indicated that customers are looking beyond basic functionalities and are interested in customized AI solutions that integrate with their existing systems [36] Question: Feedback on the online segment and price increase impact? - Management confirmed that the price increase is on track to add $10 to $15 million in incremental revenue, with stable churn rates and no significant pushback from customers [42][45] Question: Insights on WorkVivo's growth and market opportunities? - Management highlighted strong growth in WorkVivo, with a focus on ensuring smooth transitions for customers and expanding opportunities in the medium-sized customer segment [51] Question: What is driving success in the contact center business? - Management attributed success to customer dissatisfaction with existing providers, the comprehensive feature set of Zoom's solutions, and a strong focus on customer experience [98][100]