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]

Core Viewpoint - Zoom Communications, Inc. reported strong financial results for the second fiscal quarter, achieving the highest year-over-year revenue growth in 11 quarters and expanding its GAAP operating margin by 9 percentage points year over year. The company raised its full-year outlook for revenue, non-GAAP operating income, and free cash flow, now expected to be between $1.74 billion and $1.78 billion [2][5]. Financial Highlights - Total revenue for Q2 was $1,217.2 million, reflecting a 4.7% increase year over year, and 4.4% in constant currency [5][6]. - Enterprise revenue reached $730.7 million, up 7.0% year over year, while Online revenue was $486.6 million, up 1.4% year over year [5][6]. - GAAP operating margin was 26.4%, and non-GAAP operating margin was 41.3% [5][6]. - GAAP EPS was $1.16, a 65.7% increase year over year, and non-GAAP EPS was $1.53, up 10.0% year over year [5][6]. Customer Metrics - The number of customers contributing more than $100,000 in trailing 12 months revenue increased by 8.7% year over year, totaling 4,274 customers [4][5]. - The trailing 12-month net dollar expansion rate for Enterprise customers was 98% [13]. - Online average monthly churn was 2.9%, remaining flat year over year [13]. Cash Flow and Securities - Net cash provided by operating activities was $515.9 million for Q2, compared to $449.3 million in the same quarter last year [6][30]. - Free cash flow for the quarter was $508.0 million, up from $365.1 million year over year [6][30]. - Total cash, cash equivalents, and marketable securities as of July 31, 2025, amounted to $7.8 billion [6]. Financial Outlook - For Q3 FY 2026, total revenue is expected to be between $1.210 billion and $1.215 billion, with non-GAAP income from operations projected between $465.0 million and $470.0 million [13]. - For the full fiscal year 2026, total revenue is anticipated to be between $4.825 billion and $4.835 billion, with non-GAAP income from operations expected between $1.905 billion and $1.915 billion [13].

Group 1 - Zoom Communications, Inc. will release its financial results for Q2 of fiscal year 2026 on August 21, 2025, after market close [1] - A live Zoom Webinar for the financial results will be accessible at 2:00 pm PT / 5:00 pm ET through Zoom's investor relations website [1] - A replay of the event will be available approximately two hours after the live event concludes [1] Group 2 - Zoom's mission is to provide an AI-first work platform for human connection, emphasizing productivity through its open collaboration platform, Zoom Workplace [2] - Zoom's Business Services, including Zoom Contact Center, aim to strengthen customer relationships throughout the customer lifecycle [2] - Founded in 2011, Zoom is publicly traded on NASDAQ under the ticker ZM and is headquartered in San Jose, California [2]

Core Insights - Zoom Communications, Inc. has been recognized as a "leader" in the UCaaS platform space with above-average customer feedback according to Forrester's Q3 2025 report [1][4] Platform Capabilities - Zoom excels in meeting experience, work persistence, and reliability, featuring an integrated AI companion and flexible video layout support [2] - The platform offers a 99.999% uptime SLA for its phone system and supports local backup for video meetings and messaging [2] - Zoom received the highest scores in criteria such as meeting experience, chat intelligence, collaboration organization, and security [2] Strategic Vision for the Future - Zoom aims to enhance collaboration through meaningful connections and is innovating to improve the meetings experience, including AI notetaking linked to work automation [3] - The company scored highest in vision, innovation, and supporting services within its strategic category [3] Customer Feedback - Customers report significant success using the entire Zoom suite, which has helped modernize their processes and collaboration styles [4]

Financial Data and Key Metrics Changes - The company has evolved its mission and refined its strategy to strengthen its value proposition for long-term success [1] - The focus has shifted to an AI-first open work platform, significantly expanding capabilities across communication, collaboration, customer experience, and employee engagement [1][2] Business Line Data and Key Metrics Changes - The company has identified three key strategic priorities: expanding AI capabilities, innovating within Zoom workplace, and scaling growth businesses [2] Market Data and Key Metrics Changes - The company is navigating ongoing macroeconomic pressures while enhancing agility and innovation to deliver value to customers and shareholders [2] Company Strategy and Development Direction - The strategic priorities are guiding the company as it builds upon the progress achieved in FY 2025, focusing on AI and innovation [2] Management's Comments on Operating Environment and Future Outlook - Management expressed pride in the company's evolution and commitment to long-term success, emphasizing the importance of innovation and customer value [1][2] Other Important Information - The annual stockholders meeting included the election of directors and the ratification of KPMG as the independent registered public accounting firm for the fiscal year ending January 31, 2026 [14][16] - The compensation of named executive officers was approved on an advisory nonbinding basis [16] Q&A Session Summary Question: Are there any questions pertaining to the proposals? - There were no questions submitted regarding the proposals [15]

Financial Data and Key Metrics Changes - Total revenue for Q1 FY26 grew approximately 3% year over year to $1,175 million, exceeding guidance by $8 million [18] - Enterprise revenue increased approximately 6% year over year, now representing 60% of total revenue, up two points year over year [19] - Average monthly churn improved to 2.8%, a 40 basis point improvement year over year, marking the lowest churn rate for Q1 [19] - Non-GAAP gross margin for Q1 was 79.2%, slightly lower than the previous year due to AI investments [20] - Non-GAAP diluted net income per share was $1.43, exceeding guidance by $0.12 and up $0.08 from Q1 of last year [22] - Deferred revenue grew 5% year over year to $1,430 million, in line with the high end of the previously provided range [22] Business Line Data and Key Metrics Changes - Adoption of Zoom AI Companion grew with monthly active users up nearly 40% quarter over quarter [8] - Zoom Phone revenue grew in the mid-teens, indicating strong performance and market expansion [12] - The number of Zoom contact center customers grew 65% year over year, with Zoom Virtual Agent landing its largest deal to date [13] - Total WorkVivo customer count grew 106% year over year, driven partly by a partnership with Meta [15] Market Data and Key Metrics Changes - Americas revenue grew 4% year over year, EMEA grew 1%, and APAC grew 2% [20] - The customer experience offering has rapidly evolved, with a triple-digit million ARR business growing in high double digits [13] Company Strategy and Development Direction - The company is focused on AI-powered innovation to redefine modern work and deliver cost savings and productivity gains [6] - A strategic partnership with Bell Canada was announced, enhancing channel capabilities [16] - The company aims to drive value for customers while navigating an uncertain macro environment, emphasizing an AI-first strategy [17] Management's Comments on Operating Environment and Future Outlook - Management noted strong demand across the business, with no significant impact from macroeconomic conditions on online business [44] - The outlook for enterprise business is cautious due to elongating deal cycles and increased scrutiny on deal terms [44] - The company raised its full-year revenue guidance by $15 million, reflecting increased product value [25] Other Important Information - The company accelerated its share buyback plan, purchasing 5.6 million shares for $418 million, indicating a commitment to delivering shareholder value [24] - The company expects to recognize 61% of total RPO as revenue over the next twelve months, up from 59% in Q1 of last year [23] Q&A Session Summary Question: Adoption of Zoom AI Companion in SMB segment - Management noted that the number of active users has significantly increased, with more customers realizing the value of AI features [31][32] Question: Customer traction with higher price SKUs in contact center - Management highlighted that Q1 was the largest quarter for ARR contribution from the contact center, with many customers opting for elite SKUs due to AI value [40][42] Question: Competitive dynamics in core video meeting solutions - Management emphasized that employee preference for Zoom remains high, and the total cost of ownership is favorable compared to competitors [48][49] Question: Early reception of online monthly pro pricing increase - Management indicated that the pricing increase reflects incremental value delivered to customers, with no significant churn observed [66][67] Question: Trends in enterprise deal elongation and down sells - Management reported continued low churn rates in enterprise and online segments, with no significant down sells noted [114]

Core Insights - Zoom Communications, Inc. reported strong financial results for the first fiscal quarter ended April 30, 2025, exceeding guidance in both revenue and profitability, driven by AI-first innovation and customer demand for efficiency [2][5]. Financial Highlights - Total revenue for Q1 was $1,174.7 million, representing a year-over-year increase of 2.9% and 3.4% in constant currency [5][6]. - Enterprise revenue reached $704.7 million, up 5.9% year-over-year, while Online revenue was $470.0 million, down 1.2% year-over-year [5][6]. - GAAP operating margin was 20.6%, and non-GAAP operating margin was 39.8% [5][6]. - GAAP EPS was $0.81, an increase of 18.7% year-over-year, while non-GAAP EPS was $1.43, up 6.0% year-over-year [5][6]. Customer Metrics - The number of customers contributing more than $100,000 in trailing 12 months revenue increased by 8.0% year-over-year, totaling 4,192 customers [4][5]. - The trailing 12-month net dollar expansion rate for Enterprise customers was 98% [13]. - Online average monthly churn was 2.8%, down 40 basis points from the same quarter last fiscal year [13]. Cash Flow and Share Repurchase - Net cash provided by operating activities was $489.3 million, compared to $588.2 million in the same quarter last year [6]. - Free cash flow for the quarter was $463.4 million, down from $569.7 million year-over-year [6]. - Approximately 5.6 million shares of common stock were repurchased in Q1, an increase from 4.3 million shares in Q4 [5]. Financial Outlook - For Q2 FY 2026, total revenue is expected to be between $1.195 billion and $1.200 billion, with non-GAAP diluted EPS projected between $1.36 and $1.37 [13]. - For the full fiscal year 2026, total revenue is anticipated to be between $4.800 billion and $4.810 billion, with non-GAAP diluted EPS expected between $5.56 and $5.59 [13].

Group 1 - Zoom Communications, Inc. will release its financial results for Q1 of fiscal year 2026 on May 21, 2025, after market close [1] - A live Zoom Webinar for the financial results will be accessible at 2:00 pm PT / 5:00 pm ET through Zoom's investor relations website [1] - A replay of the event will be available approximately two hours after the live event concludes [1] Group 2 - Zoom's mission is to provide an AI-first work platform for human connection, emphasizing teamwork and productivity [2] - Zoom Workplace is an open collaboration platform that includes an AI Companion to enhance team productivity [2] - The company offers Business Services for sales, marketing, and customer experience, including Zoom Contact Center, to strengthen customer relationships [2]

Financial Data and Key Metrics Changes - Total revenue for Q4 grew approximately 3% year over year to $1,184 million, exceeding guidance by $4 million [20] - Non-GAAP gross margin in Q4 was 78.8%, slightly lower than the previous year due to strategic investments in AI [24] - Operating cash flow increased 21% year over year to $425 million, while free cash flow grew 25% to $416 million [26] - For FY '25, total revenue grew 3% and total enterprise revenue grew 5% year over year [27] Business Line Data and Key Metrics Changes - Enterprise revenue grew approximately 6% year over year, now making up 60% of total revenue [20] - The number of enterprise customers contributing over $100,000 in trailing twelve months revenue grew 7% year over year [21] - Zoom Docs usage more than doubled quarter over quarter, indicating strong adoption [12] Market Data and Key Metrics Changes - Americas revenue grew 4% year over year, EMEA grew 2%, and APAC grew 3% [23] - The number of contact center customers with over $100,000 in ARR grew over 100% year over year [14] Company Strategy and Development Direction - The company is focused on expanding AI capabilities to drive customer value and rapidly innovate within Zoom Workplace [17] - Strategic partnerships, such as with Amazon, are expected to enhance distribution channels and drive growth [66] - The company aims to return its online business to growth while continuing to move its enterprise business upmarket [54] Management's Comments on Operating Environment and Future Outlook - Management described the macro environment as mixed but stable, with positive momentum in the enterprise segment [62] - The company is encouraged by the traction of its value proposition and total cost of ownership in the market [17] - Future growth is expected to be driven primarily by enterprise customers, with online growth anticipated to be flat to slightly down [48] Other Important Information - The company plans to launch a custom AI companion add-on in April to automate workplace tasks [8] - Non-GAAP diluted net income per share in Q4 was $1.41, exceeding guidance by $0.11 [24] Q&A Session Summary Question: AI capabilities as a tailwind for business growth - Management believes AI investments are already enhancing service stickiness and driving customer value, with plans to monetize AI features for enterprise customers in the future [34] Question: AI's impact on larger customers' decisions - Management noted that customers are increasingly recognizing the value of AI features without additional costs, which builds trust and long-term relationships [40] Question: Top three drivers for new revenue in FY '26 - Management indicated that enterprise growth will be the dominant driver, with contact center and AI also contributing significantly [46] Question: Go-to-market investments and large customer deals - The company is prioritizing moving upmarket and accelerating channel partnerships to drive growth in contact center and other services [54] Question: Demand environment post-election - Management characterized the demand environment as mixed but stable, with improvements in churn rates and enterprise momentum [62] Question: Use cases for the custom AI companion - The company aims to provide flexibility for customers to customize their AI needs, enhancing productivity and collaboration [73] Question: Margin profile for AI products - Management expects increased usage in AI to be offset by efficiencies, maintaining a focus on profitability while investing in growth [81]