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DATE

Thursday, May 21, 2026 at 5 p.m. ET

CALL PARTICIPANTS

• Founder & Chief Executive Officer — Eric S. Yuan
• Chief Financial Officer — Michelle Chang
• Head of Investor Relations — Charles Eveslage

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TAKEAWAYS

• Total Revenue -- $1.24 billion, representing 5.5% year-over-year growth and $14 million above the high end of guidance.
• Enterprise Revenue -- Increased 7.2% year over year, making up 61% of total revenue, up 1 point.
• Enterprise Customers ($100K+ TTM) -- Up 8%, now contributing 33% of total revenue, up 1 point.
• Net Dollar Expansion Rate (Enterprise) -- Improved to 99% for the trailing 12 months.
• AI Companion Monthly Active Users -- Paid MAUs rose 184% year over year, primarily from early adoption of AI Companion 3.0.
• Product Launch (MyNotes) -- Surpassed 1.5 million monthly active users within four months of launch, excluding trial users.
• Zoom Phone ARR Growth -- Mid-teens percentage increase, with customer examples including Baptist Health selecting Zoom Phone for a 16,000-employee deployment.
• Non-GAAP Gross Margin -- 79.9%, up 70 basis points year over year due to ongoing cost optimization.
• Non-GAAP Operating Margin -- 41.1%, up 130 basis points compared to last year, mainly due to amortization accounting change and gross margin improvement.
• Non-GAAP Operating Income -- $509 million, up 9% year over year, exceeding guidance by $17 million.
• Non-GAAP Diluted EPS -- $1.55, 13¢ above guidance and 12¢ higher than prior year's Q1.
• Deferred Revenue -- $1.49 billion, up 5%, above the 1%-2% guided range; explained by fewer contracts needing grace periods.
• RPO (Remaining Performance Obligation) -- Approximately $4.3 billion, up 11%; non-current RPO up 19%.
• Operating Cash Flow -- $522 million, up 7%, with an operating cash flow margin of 42.1% (+50 bps).
• Free Cash Flow -- $500 million, up 8%, for a free cash flow margin of 40.4% (+100 bps).
• Cash & Equivalents -- $7.7 billion as of quarter-end, excluding restricted cash.
• Share Repurchase Activity -- 4.2 million shares repurchased in the quarter for $362 million; cumulative total 40.4 million shares for $3.1 billion.
• Incremental Share Repurchase Authorization -- New $1 billion buyback authorized, bringing total authorization to $4.7 billion, with $1.6 billion remaining.
• Q2 Guidance (Revenue) -- $1.265 billion to $1.270 billion, indicating 4.1% year-over-year growth at midpoint.
• Q2 Guidance (Non-GAAP Operating Income) -- $508 million to $513 million, with a projected 40.3% operating margin at midpoint.
• Q2 Guidance (Non-GAAP EPS) -- $1.45 to $1.47, assuming about 304 million shares outstanding.
• FY 2027 Guidance (Revenue) -- $5.08 billion to $5.09 billion, 4.4% growth at midpoint, with raised outlook.
• FY 2027 Guidance (Non-GAAP Operating Income) -- $2.065 billion to $2.075 billion, with a 40.7% operating margin at midpoint.
• FY 2027 Guidance (Non-GAAP EPS) -- $5.96 to $6.00; share count guidance excludes future repurchases.
• FY 2027 Free Cash Flow Guidance -- $1.7 billion to $1.74 billion for the full year.
• International Revenue Growth -- Americas and EMEA each grew 5%, APAC rose 6%; EMEA’s gain mainly due to FX.
• Churn (Online Business) -- Q1 average monthly churn recorded at 3%, up from 2.8% the previous year.
• Zoom Customer Experience (ZCX) -- High double-digit revenue growth with paid AI present in 9 of the top 10 ZCX deals.
• Custom AI Companion Adoption -- Example: Raymond James expanded to ~10,000 seats with tailored AI workflows in Q1.
• ZVA Receptionist & AI Monetization -- Introduced as a new monetization layer; examples provided of cost reductions and improved workflow automation for law and insurance firms.
• AI Services (Scribe API) -- Launched in March; early BPO customer adoption highlighted for ASR technology.

SUMMARY

Zoom Video Communications (ZM 2.69%) delivered notable revenue acceleration, outperforming guidance and highlighting strong momentum in enterprise and AI-driven products, while providing increased guidance for both revenue and profitability for the fiscal year. Product usage metrics underscore rapid adoption of new AI features, with management identifying Custom AI Companion and Zoom Workplace as key sources of ongoing expansion and monetization. The company authorized an additional $1 billion share buyback, signaling robust capital allocation confidence, and shifted its multi-product contract base toward longer-term agreements, as evidenced by the RPO mix and stated enterprise wins over legacy providers.

• Zoom’s leadership cited a strategy to combine unified communications and contact center capabilities as a primary differentiator, with 8 of the top 10 contact center deals displacing legacy CCaaS vendors.
• The CFO noted, "we said we would stabilize our business in online, and we have done that both in terms of revenue as well as just in the nature of our online business is far more stable," emphasizing nominal churn impact and ongoing strength in the online business despite sequential changes.
• Customer examples, such as the "7-figure ARR deal" with a returning major government contractor and Baptist Health’s deployment of Zoom Phone, illustrate wins in verticals requiring security and reliability for large-scale users.
• Rapid growth in non-current RPO is attributed to an increasing mix of long-term, multi-product enterprise contracts, particularly in phone, contact center, and AI offerings.
• Custom AI Companion’s adoption across a range of industries demonstrates traction, and leadership highlighted ongoing product innovation and the intent to further accelerate go-to-market awareness for its AI system of action capabilities.

INDUSTRY GLOSSARY

• ARR: Annual Recurring Revenue, typically denotes the expected yearly recurring revenue from subscriptions, excluding non-recurring items.
• MAUs: Monthly Active Users, the count of unique users engaging with a product within a calendar month.
• RPO: Remaining Performance Obligation, the total contracted but unrecognized revenue (billed and unbilled) for future periods.
• CCaaS: Contact Center as a Service, cloud-based customer engagement platforms for managing customer interactions across multiple channels.
• ZCX: Zoom Customer Experience suite, Zoom’s integrated contact center solution including analytics, automation, and AI features.
• ZVA: Zoom Virtual Agent, AI-powered virtual assistant capabilities within Zoom’s CX offerings.
• ZVE: Zoom Virtual Expert, a capability for advanced virtual advisor support leveraging AI within contact center offerings.
• AI Companion: Zoom’s integrated AI product set providing automation, intelligence, and productivity tools within its workflow and collaboration platform.
• Scribe API: Zoom’s API service for providing high-quality, cross-platform speech-to-text transcription.

Full Conference Call Transcript

Operator: Hello, and welcome to Zoom's Q1 f y 27 earnings release webinar. I will now hand things over to Charles Eveslage, head of investor relations. Charles, over to you. Thank you, Catharine.

Charles Eveslage: Hello, everyone, and welcome to Zoom's earnings webinar for the first quarter of fiscal year 27. I am joined today by Zoom's founder and CEO, Eric S. Yuan, Zoom's CFO, Michelle Chang. Our earnings release was issued today after the market closed and may be downloaded from the Investor Relations page at investors.zoom.com. Also, on this page, you will be able to find a copy of today's prepared remarks and a slide deck with financial highlights that along with our earnings release include a reconciliation of GAAP to non GAAP financial results. These measures should not be considered in isolation from or as a substitute for financial information prepared in accordance with GAAP.

During this call, we will make forward looking statements. Including statements regarding our financial outlook, the second quarter and full fiscal year 2027, our expectations regarding financial and business trends, impacts from the macroeconomic environment our market position, stock repurchase program, opportunities, go to market initiatives, growth strategy, and business aspirations, and product initiatives, including future product and future releases and the expected benefits of such initiatives. These statements are only predictions that are based on what we believe today, and actual results may differ materially.

These forward looking statements are subject to risks and other factors that could affect our performance and our financial results which we discuss in detail in our filings with the SEC, including our annual report on Form 10 k, And quarterly reports on Form 10 Q. Zoom assumes no obligation to update any forward looking statements we may make today on today's webinar. And with that, let me turn the discussion over to Eric, who is giving his prepared remarks via Zoom custom avatar.

Eric S. Yuan: Thank you, Charles. FY 2027 is off to a good start. Continuing the momentum from FY 2026. Q1 revenue grew 5.5%, exceeding the high end of our guidance and among our best growth rates in recent years. This progress underscores the increasing value of our system for modern work. To help accelerate that vision, we appointed Russell Dicker as chief product officer. Russell brings more than 25 years of product leadership experience across Microsoft, Google, and Amazon. Including leading Microsoft Teams product and data science teams. He will help drive our AI first roadmap as we connect conversations, workflows, and outcomes through our system of action.

The foundation of our system of action is Zoom workplace, where context is created across the full meetings and work life cycle. With AI Companion that context becomes actionable helping customers drive productivity, automate follow through, and turn everyday collaboration into measurable business value. In Q1, AI companion usage continued to scale, with paid MAUs growing 184% year over year driven by strong early adoption of AI companion 3.0 capabilities, MyNotes has quickly emerged as a breakout product. Surpassing 1.5 million monthly active users excluding trial users just 4 months after launch.

It gives users a personal AI notetaker that captures context in Zoom, in-person, and third party meetings, helping them stay present while turning conversations into organized takeaways, action items, and follow through, Altogether, AI Companion 3.0 brings agentic retrieval across Zoom and connected work sources. Extending AI Companion beyond meeting summaries into a broader workflow layer that turns conversations into action. This AI momentum is also reinforcing the strength of our core business. In Q1, 15 of our top 20 wins included Zoom Workplace or Zoom Phone. As customers increasingly choose Zoom for secure AI first communications that improve productivity, reduce complexity, and turn conversations into action. Zoom workplace continues to win on product quality, platform breadth, and security.

In Q1, a major government contractor came back to Zoom for the full suite of Zoom workplace phone events and webinars in a 7-figure ARR deal. Displacing Teams and Cisco calling, the customer chose Zoom to meet stringent government security requirements and unlock insights from live communications data support its broader AI workflows. Zoom Phone continued to grow ARR in the mid teens taking share as customers modernize voice on our reliable flexible platform that integrates with their existing workflows and extends AI into everyday communications. A great example of this is Baptist Health in Jackson, Florida. Who in Q1 chose Zoom Phone to support 16 thousand workers across more than 200 points of care in a 7-figure ARR deal.

Baptist Health selected Zoom Phone because of its reliability, hybrid flexibility, and industry specific integrations. Taken together, these wins show a consistent pattern, Customers are choosing Zoom as a secure integrated multiproduct platform often displacing multiple vendors and expanding over time, as AI becomes embedded in their workflows. This reinforces our confidence in Zoom's ability to turn conversations into action and drive durable platform expansion. Our progress elevating work with AI sets the foundation for our second priority, driving growth in new AI revenue streams. As customers experience the value of AI Companion in Zoom Workplace, Custom AI is the natural next step that takes them from conversation to action by unlocking agentic search customization, and agentic workflows.

Raymond James is a strong example of this expansion motion. After adopting AI Companion for meeting summaries, they expanded in Q1 to custom AI Companion across approximately 10 thousand seats. Giving wealth advisers more tailored AI workflows and customized summaries with the security, compliance, and centralized oversight required in financial services. Custom AI Companion also wins on its ability to support agentic workflows. In Q1, as part of MongoDBDB's upgrade to Zoom Workplace Enterprise Plus, Zoom Contact Center, and ZVA. They chose Custom AI Companion to translate live conversations into actions across their IT ticketing, customer relationship management, and other third party systems.

Just as Custom AI Companion creates an AI monetization path within Zoom Workplace, ZVA receptionist represents an important new monetization layer for Zoom Phone. ZVA receptionist turns Zoom Phone into an AI front door for the business. Helping customers qualify callers, capture context, answer common questions, and route requests to the right person or team. In Q1, we saw it deliver real business value across a variety of customers, including an industry association, improving lead capture and lowering costs, an insurance firm automating after hours and overflow calls, and a law firm managing high call volume by filtering unsupported requests so staff can focus on actionable cases.

We also added AI innovation to employee experience with the launch of SEER by WorkVivo. Expanding from employee communications into AI powered people intelligence and creating another path for AI monetization. SEER helps leaders listen to employee feedback, measure engagement, understand sentiment with AI, act through built in communication tools, and track progress in real time. Beyond these application level AI monetization layers, Zoom AI services opens our core AI technologies to customers and developers. Launched in March, Zoom AI services extends our speech recognition advantage honed across countless daily meetings and ranked among the top models on the hugging face open ASR leaderboard.

Its Scribe API gives customers and developers high quality, flexible speech to text across platforms with early adoption from BPOs like Inflection CX, validating the real world value of our ASR technology. We are also extending AI into high value vertical workflows. BrightHire which brings conversational AI to recruiting and hiring, had a strong quarter. With continued momentum in tech and other sectors. In Q1, BrightHire landed Figma on its core product to help support consistent objective, and calibrated hiring decisions and expanded with HubSpot from its core interview intelligence product into BrightHire Screen, its AI interviewer. To support go to market hiring.

Taken together, these examples show how we are extending Zoom AI beyond core collaboration into a broader monetization engine across workplace, AI services, and vertical workflows. The same combination of AI context and workflow orchestration is also driving our third priority, scaling AI first customer experience. The same AI first platform that powers Zoom work and phone also extends to customer engagement, This is a true point of differentiation. Zoom is 1 of the few scaled companies with a native platform that bridges UC and CX.

By connecting collaboration, voice, contact center, virtual agents, expert assist, and more, we help customers carry context across teams, channels, and systems, moving from reactive service to faster, more intelligent resolution, and measurable business value. To further bolster the suite in March, we introduced CX Insights, a new SKU within ZCX that gives business and CX leaders a natural language way to analyze CX data across contact center, workforce management, quality management, and virtual agent. We also announced AI Expert Assist 3.0 customer workflow orchestration. Advanced quality management for virtual agent, and new work management capabilities to help organizations deliver better outcomes with greater efficiency.

Zoom customer experience continued in Q1, with high double digit growth driven by paid AI in 9 of the top 10 ZCX deals. Showing that customers are increasingly turning to Zoom to automate service, empower agents, and improve resolution. Zoom customer experience is emerging as a key growth driver and represents the strategic expansion of our platform into mission critical customer operations. We are increasingly winning competitive displacements and larger deals as customers look to consolidate contact center and UC systems with a unified AI workflow and analytics platform that works across all channels. Let me bring this to life with a couple of customer wins.

Showcasing the strength of our full system of action, landed Chelsea FC, 1 of the world's most recognized football clubs. They selected Zoom Phone, ZCC Elite, and ZVA Chad to modernize fan engagement across touch points. Zoom will help the club deliver faster, more personalized experiences while creating a connected data foundation to improve insight, efficiency, and long term growth. Also, in Q1, Caliber Collision, a leading automobile repair provider, chose to deploy Zoom Phone with ZCC Elite in order to streamline their customer experience across more than 1.8 thousand repair centers and their central contact center eliminate the cold call experience for customers, and provide unified CX analytics for end to end visibility.

We also saw a strong full CX platform win in Japan with Rensa, who selected Zoom Virtual Agent agentless dialer, and ZCC Elite to modernize high volume customer interactions. They chose Zoom for the flexibility and automation capabilities of the platform and are using Zoom Virtual Agent in a differentiated way for outbound engagement, including preconfirmation calls tied to electricity and gas connection. Which helps free teams for higher value sales activity. Taken together, our progress across our 3 priorities gives us confidence in the opportunity ahead. As customers increasingly adopt Zoom as an AI system of action, we are excited to turn that momentum into durable growth and long term value.

Michelle will now take us through our Q1 financial results. Michelle, Thank you, Eric, and hello, everyone.

Michelle Chang: I am excited to be here with you today to share Zoom's Q1 f 27 performance. In Q1, total revenue grew 5.5% year over year to $1.24 billion or 4.6% in constant currency. This result was $14 million above the high end of our guidance. Our enterprise business continues to be strong with revenue growing 7.2% year over year, representing 61% of our total revenue up 1 point year-over-year. In our online business, Q1 average monthly churn was 3%, as compared to 2.8% in Q1 of f y 26. Within our enterprise business, we saw 8% year over year growth in the number of customers contributing more than a $100 thousand in trailing 12 month revenue.

These customers now make up 33% of our total revenue, up 1 point year-over-year. Our trailing 12 month net dollar expansion rate for enterprise customers in Q1 improved to 99%. Looking at our international growth. Our Americas revenue and EMEA revenue both grew 5% year over year, while APAC grew 6%. The EMEA growth rate was predominantly driven by year over year changes in foreign exchange rates. Moving to our non GAAP results. Which as a reminder exclude stock based compensation expenses and associated payroll taxes, acquisition related expenses, net gains or losses on strategic investments, and all associated tax effects. Non GAAP gross margin in Q1 was 79.9%. Up 70 basis points from Q1 of last year.

Primarily due to our continued cost optimization efforts aligned with our long term target of 80%. Our non GAAP income from operations grew 9% year over year, to $509 million. Exceeding the high end of our guidance by $17 million Non GAAP operating margin for Q1 was 41.1%, up 130 basis points from Q1 of last year. The operating margin improvement was primarily driven by the accounting amortization change we discussed last quarter and our gross margin improvements. This was partially offset by the second year of our shift from SBC to cash bonus compensation. Non GAAP diluted net income per share in Q1 increased to $1.55 on 300 million non GAAP diluted weighted average shares outstanding.

This result was 13¢ above the high end of our guidance, and 12¢ higher than Q1 of last year. The EPS growth reflects strong business performance, effective cost management, as well as anti dilution efforts across our buyback program, and stock compensation management. Turning to the balance sheet. Deferred revenue at the end of Q1 grew 5% year over year, to $1.49 billion. Above the high end of our previously provided range of 1 to 2%. For Q2, we expect deferred revenue to be up 2 to 3% year over year. As we discussed last quarter, larger and longer duration competitive takeouts in phone and contact center can include grace periods that affect deferred revenue timing.

In Q1, fewer contracts than expected required such terms. We continue to expect some quarter to quarter variability based on the timing and the structure of larger deals. Looking at both our billed and unbilled contracts. Our RPO increased 11% year over year, to approximately $4.3 billion. Driven by non current RPO growth of 19%. The strong growth in non current RPO reflects our continued success, landing larger, longer term multiproduct platform deals. In Q1, operating cash flow grew 7% year over year. To $522 million. Representing an operating cash flow margin of 42.1%. Up 50 basis points year over year.

Free cash flow in the quarter grew 8% year over year, to $500 million representing a free cash flow margin of 40.4% up 100 basis points year over year. We ended the quarter with $7.7 billion in cash, cash equivalents, marketable securities, excluding restricted cash. In Q1, we repurchased 4.2 million shares for $362 million. Across the preexisting $3.7 billion share repurchase plan. We have repurchased a total of 40.4 million shares for $3.1 billion. Turning to the guidance. For Q2, we expect revenue to be in the range of $1.265 billion to $1.270 billion. Representing 4.1% year over year growth at the midpoint.

We expect non GAAP operating income to be in the range of $508 million to $513 million. Representing an operating margin of 40.3% at the midpoint. Our outlook for non GAAP earnings per share is $1.45 to $1.47 based on approximately 304 million shares outstanding. For the full year for f y 27, we are pleased to raise both our revenue and profitability guidance. We now expect revenue to be in the range of $5.08 billion to $5.090 billion. Which at the midpoint represents 4.4% year over year growth. We expect our non GAAP operating income to be in the range of $2.065 billion to $2.075 billion. Representing an operating margin of 40.7% at the midpoint.

In addition, our outlook for non GAAP earnings per share in FY 27 is increasing to $5.96 to $6 based on approximately 304 million shares outstanding. As a reminder, future share repurchases are not reflected in share count and EPS guidance. We continue to expect free cash flows for f y 27 to be in the range of $1.7 billion to $1.740 billion. As indicated in our press release today, we are excited to announce our board has authorized an incremental $1 billion share repurchase. This reinforces our board and management team's confidence in Zoom as we continue to leverage our strong cash flow and balance sheet to drive shareholder value.

In closing, Q1 was a strong start to f y 2027. With continued execution across our 3 priorities, and growing adoption of Zoom as an AI first system of action. We are encouraged by progress scaling customer experience, and the early momentum across new AI revenue streams. We remain on track to surpass $5 billion in revenue this year, while maintaining our focus on profitability cash flow generation, and shareholder returns. Thank you to our customers investors, and, of course, the entire Zoom team for your trust and support. With that, Catharine, please queue up the first question.

Operator: Thank you, Michelle. Will now begin the q and a portion of the call. When I read your name, please turn on your video and unmute. As a reminder, in an effort to hear from everyone, please limit yourself to 1 question. Our first question will come from Alex Zukin with Wolfe Research.

Analyst (Alex Zukin): Hey, guys. Thanks for taking the time and taking the question. And congrats on a really solid quarter. I guess maybe Eric, first 1 for you. You think about the execution that you are seeing, particularly both in the AI products, and particularly on, ZCX, which sounds like it did not need as much discounting or flexibility in terms of billings terms as before. Maybe what are you seeing in the pull through from some of your AI solutions And how much incremental expansion of your wallet within customers is that driving Michelle, I have got a quick follow-up for you.

Eric S. Yuan: Yeah. So Alex asked this really question. And so, you know, speaking of, ZCX. You see? You look at the now out of the top 10 deals, paid AI was involved. You see? And it is-- meaning AI has really helped our DCX. Also look at the top 10 ZCX deals, 4 of them also the includes ZVE as well. You see? So as we further improve our, you know, the this year's product, doubling down on AI, our know, pricing model is getting more and more flexible. For now, you take a ZX, for example, is you know, uses based. You know, very soon, we are going to introduce all the companies. You see?

Some customer like all the companies, Some customers like prepaid usage base. You see? So we are aware flexible. You see? We co innovate with the customer in terms of product innovation, AI features, and, also the business model as well. that is why we have high confidence. ZVA, just 1 example, ZVA, all those vertical AI product, we are taking the same approach. Excellent.

Michelle Chang: And then, Michelle, kind of maybe just a 2 parter for you. Really strong execution on billings. I think some of your best outperformance that we have seen for you guys in a while. Maybe what drove that? You referenced, I think, some of it in the script, but maybe how much of it was better execution and demand environment versus maybe some other stuff? And then online, maybe a little higher churn than we have seen in some time. Yeah. Maybe a little bit of a tale of 2 cities. I am curious if you can just unpack both of those dynamics. Yeah.

And your question is in part, you know, sort of what changed on the deferred revenue as well as just broadly what we are seeing kind of in enterprise billings? Mhmm. Okay. So, look, in enterprise billings, Alex, it is exactly what we have been talking to investors about. We are diversifying our product set. Working on churn. Churn year over year continued its trend of going down, and we are working on AI monetization. And, look, I think you can see that across the 3 parties that we talk about. You see? Some of the progress from going up 184% and additional customer references and even new products coming in AI.

And then, certainly, Eric covered a lot of the contact center. Maybe I will add in my favorites of high double digits. That now for the second quarter in a row has even increased. On top of that. So, look, broadly, the answer is durable. Revenue from the enterprise that is driving it. With respect to the sort of deferred revenue, maybe I will add a mechanical element. Look. I think because I think for investors, may see more variability in this We saw a 5% growth versus the sort of 1 to 2 that we guided us.

Because we just did not see the need with the nature of the customer contracts to kind of leverage those early grace periods that I mentioned in February. And look, those grace periods are great. For Zoom. They come with less discount, longer term deals. They ease our cutter customers into large competitive wins. Look. If we do not need them in a quarter, we will not take them. Second question. On churn. Look. I would say we saw a nominal uptick in churn and online. I really do not read too much into it. it is been a long term low churn for us.

I think we are making progress As investors can see, we said we would stabilize our business in online, and we have done that both in terms of revenue as well as just in the nature of our online business is far more stable. And, look, it is a nominal uptick in churn in online. Thank you, guys. K.

Operator: Our next question comes from Siti Panigrahi from Mizuho.

Analyst (Siti Panigrahi): Alright. Thanks for taking my question. Just continue that Alex question. Your revenue accelerated 505 and a half percent this quarter. I think that is 1 of the best trade and growth rate we have seen in recent years. And you talked about some of this AI monetization page skew in my notes. So how much of that acceleration is attributable to AI monetization? Versus, you know, broader enterprise deal activity that you saw. And how should we think about the durability of that pace in the back half back half of fiscal 27, given your guidance implies some kind of deceleration in the second half.

Michelle Chang: Yeah. Perfect. I will go ahead and, take that 1. So, look, 5.5% growth, we are super pleased to your comment. It says it is among our highest and a beat of high guide. Look. it is important to note that some of that was FX driven. So in terms of, like, modeling and thinking about future going forward. So then maybe let me break it down by enterprise and online. From an enterprise perspective, what we are seeing is very durable growth and the drivers, many of which I touched on in the in the Alex answer, but let me add a few here.

We saw 7.2% revenue growth in enterprise up from 7.1% in Q4, but that is with a 60-bps impact of that white label churn. You see? So clearly product diversification. AI monetization, moving up market, moving into new channels, all the things that we have said and working on churn as well. All the things that we said would be sort of durable elements with investors we are seeing the fruits of. From an online perspective, you know, that we saw-- so mechanically for investors modeling, you do see a little bit more of the FX impact in online just because it is a little bit more international based.

And we faced an easier comparable with no price increase in the prior. Q1. But we will have it here. So you will see we are still projecting online to be a slight growth on the full year. But you will see some deceleration in the in the growth rate. In Q2 through '4. Okay. Great. Thank you. Alright.

Operator: Our next question comes from Josh Baer with Morgan Stanley.

Analyst (Josh Baer): Excellent. Thanks for the question. I wanted to ask about Custom AI Companion. A little bit more about the path to conversion, Just what are some of the features or the use cases in custom that are really key to that conversion? And then also wondering what can be done from, like, an in product perspective or from a sales perspective to help to drive that conversion?

Eric S. Yuan: Yeah. So, Josh, this is a great question. So you know, when Adecoms would customize AI combining, we have a few key features. You know, like enterprise agenda retrieval. And also the workflow builder and also the agentic builder as well. A Some customers like you know, yeah, like, workflow or agent or enterprise search. All 3 are part of the key features of our customer AI company. And speaking of know, how to leverage customer AI company, drive a product usage, or maybe when the customer use the product, you know, to discover that the customer company. I will give 1 example. The day when you schedule a Zoom call, right, you can attach a meeting with a workflow.

So meaning during the meeting, we generate my notes. After meeting is over, workflow will automatically take over to get something done for you. Customer really like that vision, you know, focus on the conversation. To completion. You see? Without a customer AI company, we really cannot you know, transform our business from a conversation-centric business to completion centric. that is why, you know, customer AI is a great the part of that, you know, the vision. So Excellent. Thanks, Eric.

Michelle Chang: And maybe quick 1 for Michelle. I mean, low-40s operating margins and free cash flow margins are obviously excellent. I am just wondering from here, where can margins go? And, if they expand, what are the largest sources of leverage? Yeah. I mean, I think first of all, just to give credit, maybe I will even add 1 in there. You know, we are super pleased with our free cash flow generation, had a strong Q1 in regards to that. You know, operating margins, plus 40, best in class, as you know. Also worth noting that our GAAP margins, you know, are equally important. So, look, we are gonna keep working at that.

Maybe I would say, on the COGS front, we continue to make sure that we have got an always on kind of efficiency. So as the AI costs spike in a good way with usage, we have got offsetting measures. Against it. I would say a lot of internal capital allocation, making sure that every dollar and head count that we deploy is sort of to its best ROI. And is oriented around those 3 priorities of growth that we talk about with investors. it is not just a frame to talk to you guys. it is how we run the company. Internally. And then look, you know, I would say broadly AI.

Super excited at what Custom AI Companion has done even in the finance team to reinvent things. And look. Our we are our own customer zero. And my favorite example is in contact center. You know, we have been able to remove costs out of our own. Customer support organization at the same time that we also raised our customer CSAT and improved our response time. So you know, making sure we are using each seller to its best purpose, being our first own users of AI, and then continuing to kind of work on margins. Yeah. Thank you. Congrats on the consistent Thank you, Josh.

Operator: Our next question comes from James Fish with Piper Sandler.

Analyst (James Fish): James, sorry. You are muted. Yeah. Thanks for the question here. So maybe on the CX side, you guys talked about some strength here, and Salesforce launched their own native voice within CX. So I guess how are you thinking about the impact on Zoom CX in terms of where you guys typically compete what you are seeing competitively in that space, you know, granted it is early days, but they do have a large agent force in general. CRM install base. Overall. And it seemed like you guys also highlighted a few boomerang deals more so. Is there something incremental you are trying to call out here, or what is the causation? Thanks, guys.

Eric S. Yuan: Yeah. So, yeah, Salesforce is a great customer. And partner. And we are entering into this market from different angle. And, you know, their strengths are really about, know, like, CRM. And the marketing club and so on and so forth. You know, we entered into this market based on our customer feedback because many customers already deployed our UC solutions, our meeting solutions. Naturally, the next step is really about a contact center. You see? it is more like a you look at contact center. it is more like a conversation centric. rather than a system record centric. You see? That is that is kind of our key differentiation. And plus, know, we have a infrastructure layer.

You know, when customer call, the agent, you know, the infrastructure, also our UC system. You know? And quite often, if agent want to turn on the video, that is also our strength as well. You see? And with, AI combining or customer AI combining, I think we are I think, you know, we offer a very differentiated you know, CCaaS solution.

Michelle Chang: And plus ZVE and also CX inside a lot of AI innovations the reason why customer trust us. So And then, James, on your comment or question around the win backs, I think a lot of them are because of this sort of better together across the contact center, back into Zoom workplace, You know, that differentiated approach versus we are also seeing a lot of on prem displacement. So rather than something in the quarter, I think we have been highlighting more of those increasingly. And so it is it is something we see because of our differentiated kind of position inside and outside of the company.

And I think just times are changing in more of that on prem base is being unseated. K. Eric. Thanks, Michelle. Thank you.

Operator: Next, we have a question from Michael Funk with Bank of America.

Analyst (Michael Funk): Alright, guys. Give me 1 second here. No worries. Yeah. A little-- it happens even on earnings calls. And every day There we out there. There we go. Yeah. Thank you all for that. So, you know, a couple questions for me. You already touched on it briefly, Michelle. But wanted to hear more about your success moving up market in contact center. And, you know, how you are being more successful in winning those deals against more established providers, you know, functionality, or even bidding process. And then, know, another 1, just on use of cash.

I know you get asked all the time on this, but Eric, love to hear from you on how you think about capability to grow AI organically versus potential to maybe acquire some interesting capabilities or platforms?

Eric S. Yuan: Yep. So maybe Michelle, feel free to tell me. Maybe I will address the this x. So we build a very scalable the DCX platform. You see? And because quite often, a lot of new customer, they want to deploy CCaaS. They would like to leverage a channel partners. So you look at our top 10 deals, 10 out of 10 are channel driven. Deals to sell enterprise. Meaning, from go to market side, it is already scalable. Our channel partners, they know how to pitch our story. How to sell to our enterprise customers. And, also, you look at, you know, our top 10 deals.

In 8 out of 10 deals, we are replacing some of the other CCaaS vendors. So meaning, you know, look at the entire CCaaS market is pretty big, and we are replacing almost every 1 of them. So, because of our product, you know, a feature rich feature, and innovation, and also the and also the AI and plus our UC and CC in a combined story. And that is the reason why we are winning. You look at the CCaaS top 10 ZX deals. 4 out of 10 also include Phone. You look at top 10 of phone deals.

4 out of the 10 also included CCaaS as well. there is a UC and a CC combination also helping us a lot. So in terms of organic growth, to build AI or the acquisition, first of all, we look at everything from customer perspective. What kind of services or feature they want us innovate together as you know, and like a search, like agentic. You see? We wanna build it ourselves. However, if there are any other innovative startup companies, we are willing to. But we are also very disciplined and make sure either the technology or the customer and some of, you know, the services, you know, we cannot build are going to leverage the acquisition.

Again, you know, look at our r and d. You know, 26%. You see? And the you know, in terms of revenue, you know, the percentage is pretty large spending. You see? We have so many greater top talents. You know? We have a high confidence. We can build a lot of innovations. At the same time, see, Michelle, if you know of any great startup companies, with a great technology, we are very open minded of course. Very nice quarter, guys. Thank you. Appreciate it.

Operator: Up next, we have a question from Jackson Ader with KeyBanc.

Analyst (Jackson Ader): Great. Hey, guys. Good to see you. The question I had was on the online segment, Michelle. Mhmm. With churn just kinda ticking up a little bit, but also revenue accelerating, that kinda suggest to me that maybe net new customers or you know, either customer additions or ARPU for the net new customers is healthier than maybe you would expect. Can you just talk about maybe the dynamics of the online net new customer ads you are seeing?

Michelle Chang: Yeah. Let me let me kind of attack it from a revenue perspective. So I think it may be a little easier to digest. So our Q1 revenue went up 2.8% in Q1, Really important to bring in my comments earlier on FX. Well, you know, which lifted the total number, will have a sort of disproportionate impact to online. As well as we lapped a quarter prior where we did not have sort of the impact of a price increase. Let me pivot and kinda talk about what I think we are seeing more broadly in online revenue and kinda how to think about it going forward.

So, look, we saw some, you know, continued progress with low churn it is a very different base than sort of what we had in the pandemic. Can see that, I think, in so many ways. And then I think we are getting more of a frame of sort of how to land an expand within that, bringing down customer or products, excuse me, that hunt in enterprise where they make sense for online customers. Bringing new paths to AI monetization. MyNotes being a great example of that. And then certainly, new products and acquisitions, since Eric just mentioned them, we did welcome but I think that is sort of it is the dynamic of sort of popping up Q1.

And then, look, there is durable and strength in our online business, and that is why we continue to think that it will grow. Slightly in the full year of 2027. K.

Analyst (Jackson Ader): And then a real quick follow-up. If you know, we continue to kinda see this noncurrent RPO Yeah. Outgrow current RPO. So is this you know, is it customer led? Are customers looking for longer term deals? Is Zoom really pushing longer term deals? Just curious about, like, the push and pull there.

Michelle Chang: Yeah. What we are seeing there is just a reflection of what we have been talking about. If you think about our levers for growth and kind of growth inflection are changing, More into the phone, more into contact center, more into AI, And contact center, in particular, comes with longer term deals than maybe a traditional Zoom meetings, and so that is really what you are seeing there. And, look, we are pleased that it that it went up even versus Q4, which tends to be our biggest selling quarter. And look too, I might throw in deals over a million dollars was 1 of the strongest that we have seen. Even in a Q1.

So think it is something that really just reflects more where our business is going. Got it. Thanks, guys. Thank you.

Operator: Up next, we have a question from William Power with Baird.

Analyst (Ioannis Samoilis): Great. Thanks. Ioannis Samoilis on for William Power tonight. Good to see the enterprise and net dollar expansion rate higher. I was hoping you could just talk a bit about that inflection, and then more broadly, maybe a bit about how conversations are going with your enterprise customers at renewal. I know there is some headlines out there about seat counts, but wondering if there is anything you would call out there, if that is still maybe status quo. And then you already talked a little bit about discounting, but just how are you thinking about discipline there given the value of the platform and the AI products that you are offering? Thanks.

Michelle Chang: I will try and take those in order. Net dollar expansion, look. We have been saying to investors that the intent would be to inflect that, and we were pleased to see in this quarter a modest improvement. Most of that, just to avoid repeating myself, is the same durable things that we have been talking about, AI monetization, product diversification, You know? And, you know, the intent in the in the fullness of time is that, that thing would continue to grow. Off those dynamics. We will have a little bit of the white label churn that we mentioned going forward.

To your second question, which I took to be kind of the macro nature, look, we continue to see strong and durable enterprise conditions. And more importantly, sometimes we do not always get to control the conditions that we are given. I think Zoom has a very strong TCO story even within whatever conditions we are given, and it is only getting stronger as we move into this system of action. We are moving a very different relationship with our customers. That we are very excited about. And then remind me on your third part of your question here. What was the third part? Yeah. Just, I mean, the last bit on discounting, discipline, around that. Pricing. Yes.

So, look, generally, you know, we do price raises in the enterprise, and you have seen us do that. On phone and contact center. But, generally, we try and we will do those when sort of market conditions or competitive dynamics make sense. But more and large, we work discounting. We work deal terms and conditions as you would expect us to do. And we feel good about where we are with Deal Health as well as opportunities going forward. Awesome. Super helpful. Thank you.

Operator: Our next question comes from Alan Verkovsky with BTIG.

Analyst (Allan Verkhovski): Awesome. Hey, guys. Thanks for taking the question here. Eric, I have a question on the AI momentum you are seeing. You have been rolling out a lot of new functionality. And based on the conversation, conversations you are having, can you talk through how the average customer's perception of Zoom being a system of action and the enterprise progressed over this past quarter, And then just as a follow-up another question on custom AI companion. Can you share what kind of trends you are seeing in terms of adoption today? Are there specific industries or size of customers where you are maybe seeing more success with? Any other color would be helpful.

Eric S. Yuan: Yeah. Alan, such a great question. And hey, interestingly enough, this morning, I had a call with 1 of our big customers in the financial and sector Exactly the same, you know, you know, as you said. You see? what is the customer's perception about Zoom? Are you an AI company or not an AI company? For now, in my view, when I talk to so many customers, I know they all view, like, NVIDIA, or OpenAI and so forth as AI company. Everybody else I am not sure because from a cost perspective, they think any other software company, the AI company. I think that is-- naturally, I think that is right.

Because whenever the new technology, you look at a stack from infrastructure layer. You see? You know, the cloud infrastructure, the chip layer, and also large language model large language model, more like AI company. But more and more on the application there, you will see some company will emerge as AI. Company. I think we want to be part of that you know, because of our AI innovation. You know, when customer, they tested our my news feature, they love that. When I shared our, you know, the new, innovation, we are gonna announce next month, We love that. More and more, when customers deploy all those innovative AI services, give me some time for sure. Wow.

This is AI company. For now, because, you know, as I explained the technology stack, right, So that is the perception. So I am sorry. what is your second part of the question? Second part was just any trends you are seeing in terms of customers that are adopting Custom AI Companion, maybe specific industries or more upmarket, midmarket, just generally, any trends would be helpful in terms of what you are seeing there. Yeah. So look at Not only for a lot of enterprise customers, SMB in the even including the entrepreneurs. I think in terms of conversation centric AI, like a transcription summary, all is there.

The CX Insight, ZV, all those, I think, is doing very well, adopted very well. I mean, side of that, that is more like conversation centric AI. And when we announce a new product, which is focused on completion, that also we help out to change the concept of special. Perception. You see? More like, hey. How do I leverage Zoom AI to build agent? To leverage AI build workflow attached with the conversation and how to leverage AI to focus on organic retrieval, I think more and more you know, we shifted our focus to AI completion part. Got it. Perfect. Thank you, guys. Congrats.

Michelle Chang: Thank you, Alan. Appreciate it.

Operator: Our next question comes from Tyler Radke with Citi.

Analyst (Tyler Radke): Hi. Thank you. This is Katy on today for Tyler, and congrats on a great start to the year. 1 for both of you, Eric, maybe starting with you. As enterprise figure out that build versus buy allocation, How is Zoom positioning the new AI services and AI companion to win that wallet share, especially with it launching in March and Scribe seeing some early adoption. What would you call out as some of the biggest moats for that and the others coming on the road map?

Eric S. Yuan: Yeah. Good question. Yeah. You mentioned our AI service. is We offer the speech, and the API service. Because when customer tests that, the quality much better. Than any other competitors. You see? This is kind of a-- speaks to our you know, the product. And they also meaning also have great AI talents. that is why when we, you know, build all those AI, you know, services, we also co-innovate with the customer. You know, even before build, you know, we already shared why we want to build those services. You know, customer resonated very well. that is the reason why, you know, in next month, we will have some quite a few announcements, some customer in the pilot.

They really like that, right, because of the co innovation. And also to especially for lighting of our customers, even AI is such a great technology. The adoption you know, speed is not as fast as we want. that is why we also have you know, have some, you know, FD, you know, full time deployment engineer. Working together. You know, take ZVE, for example. Some customer really like our technology, but you know, if you wanna let Zoom, deploy those solutions, take some time. We have FD working together with the enterprise customers drive the AI adoption. that is another way for us to win. Overall, we have high confidence about our AI innovation.

Michelle Chang: Great. And then 1 for you, Michelle. I understand it is early on AI services. So with all of the monetization avenues you are now offering, for AI, what would you rank order as sort of the most significant drivers in the in the upcoming 12 to 18 months? Yeah. First, I know there is a lot out there that like to put out the AI revenue stat. Meta just to use this opportunity to throw in, to me, the most important thing is to ensure that AI monetization reflects your total revenue growth. And so, look, that is already happening from the same perspective.

Clearly, the area where we have the most momentum, and you hear that even reflected in our 3 priority wording. Is to scale the clear signal that we have in customer experience. And I will not add to all the metrics, as I think Eric covered a couple, and I have covered a couple. But that is clearly the most important. And then look within new revenue streams of AI. Look at how much just even quarter over quarter, we are just bringing new to the market. And so, look, we get excited. there is progress in things like ZRA, WorkVivo came out with new stuff relative to AI monetization clearly custom AI companion. And, look, services is 1.

I would not I would not put it at the top of the list. Maybe just answer the question explicitly. And then, look, I would be remiss if I did not say also that, you know, AI usage and threading that in is also a very important indirect measure. In terms of how to think about monetization. Meaning, putting it in our paid SKUs at no additional cost is intended to reduce churn and bring in new interest in customers, So we are excited. And, look, every single quarter, there is just a more momentum coming at us, and we look forward to talking about it with investors going on. Going forward.

Eric S. Yuan: But by the way, we have some very exciting new product solution announcement next month, all our AI driven product. So Thank you.

Michelle Chang: Appreciate Yeah.

Operator: Our next question comes from Andrew King with Rosenblatt Securities.

Analyst (Andrew King): Hey, there. Thanks for taking my question and congrats on the really strong quarter. Just wanted to double click on that, Rensa win in Japan. It was really notable because of the first time I can remember hearing of ZBA being deployed for outbound engagement rather than, traditional inbound deflection. How large is that outbound ZBA opportunity in your view? Is this an emerging use case that you are looking to actively build go to market around And is there any, needed pricing change for the outbound versus inbound? Thank you.

Eric S. Yuan: So those are 2 different use cases. it is harder to see which 1 is bigger because, you know, you are so right. and naturally, you think probably you are focused on inbound. that is not the case because you look at the technology outbound. You see? You know, I think it is I think it might be even larger. You see? Because, you know, more and more, you know, and the companies, right, they want to leverage AI technology to reach as many customers as possible. You see? And that is why outbound, I feel like even more opportunity Again, the same technology, same technology stack. You know, we just focus on all those different use cases.

You see? that is kind of the platform approach. And yeah, we when we started, like, a few years ago, we also focused on inbound. And now I feel like a outbound, inbound, sometimes, you know, a hybrid of things will bring us a lot of new exciting opportunities. And then just any comments on if there is any needed pricing structure changes between outbound versus inbound? it is a great question. I think inbound might be more like a usage or outcome-based. You know, outbound, we also want to focus on, like, the outcome-based. You see? Asking that model, you know, customers resonate resident very well. You see? If I reached, like, 1 thousand people leverage our technology.

You see? if only 5 of them out and, you know, reply back, you get the leads. Think it does not make any sense. You see? So that is why auto outcome-based model, I think, is more and more for outbound. Got it. Thank you. Yeah. Thank you.

Operator: Our next question comes from Peter Weed with Bernstein.

Analyst (Peter Weed): And there we go. Sorry. I have got a lot of reports. Harder to get it unmuted. I think you have talked about this in the past, but maybe remind us is obviously doing really well for you guys. But if we look forward, 1 of the areas where there seems to be a lot of pressure from AI is perhaps the scale of people employed in centers. How do you how do you see that impacting your revenue opportunity and kind of when you look at how you can price and maybe get value, how you kind of stay away from what is used, potential challenges then.

Michelle Chang: Michelle, you want to address that? You cut out a little bit, Peter, there, but I think your question was sort of how do we find the right balance between sort of consumptive and per-user Business models. Did I get it right? Well, I think very specifically in contact center itself Okay. Where, you know, I think there is some pressure maybe. Yeah. So this is a good 1 because it is it is actually, I think, a little bit different for Zoom than it is maybe some of the legacy players. Look.

Legacy players have and part of why I think you are seeing this when I think Eric gave it, but if not, 8 of 10 were legacy displacements of our top 10 deals in contact center. And, look, it is because we do not have the tech debt. We come at Cotton Center contact center a very fresh and modern approach, an AI first approach. To your question, maybe more specifically, we also do not have the business model pressure. And so, look, our agent assisted product, we have a per user 3 tiered structure, kinda good, better, best. best being the elite where we kinda get to the AI value.

Increasingly, we are introducing where I think kind of the market is going, and Eric touched on this a little bit earlier, a more consumptive based business model potentially outcomes 1 base, and that is the pricing structure for ZVA. And Zoom added a new, really important layer this quarter. Of insights to be able to look across that entire stack, and that is consumptive as well.

Eric S. Yuan: So, yeah, Peter, from a high level, let's say any customer if they are going to hire more and more human agent, it is great. They can deploy more Zoom and ZCX seats. if they do not want to hire know, do not wanna hire more human agent, guess what? They can deploy more Zoom ZVA as well. You see? So we are giving customer a very flexible solution. I appreciate it. Thank you.

Operator: Thank you, Peter. Our next question comes from Peter Levine with Hey, guys. This is Charles Tevebaugh for Peter Levine.

Analyst (Charles Tevebaugh): Thanks very much for taking our question, and congrats on the strong quarter. Michelle, 1 for you on capital returns. With the new 1 billion authorization on top of the $650 million remaining, Mhmm. You now have about 1.6 billion of, you know, buyback capacity against almost 8 billion of cash. And then I think last quarter, you framed buyback as a minimum offsetting dilution. Yeah. But the size of this incremental authorization feels like an upping posture. And how should we best think about the pace and size of buyback from here? Thanks again, guys.

Michelle Chang: Yeah. I mean, I do not see it as different. I think this is an area where investors have given Zoom feedback. We do have a large cash balance even though it went down. You know? We are at very free cash flow generative company. And, look, I am proud of the progress that we have made in buyback. And I do not necessarily think about it per se by tranche. So you know, we tend to think more holistically. We authorized 4.7 billion in total. that is been a big change for Zoom. And now we have executed against 3.1 of that. And so that we have 1.6 remaining, and we are gonna leverage that.

We think that is a great sign, this latest tranche of confidence that Eric, myself, and the board have in where Zoom is going. And, look, we will we will, you know, we will leverage that as it makes sense relative to what is going on in the market and stock price. But it is something I would not get overly thought or thinking about a particular tranche rather than keeping the kind of broader perspective in mind. It is in Great. Thank you.

Operator: Our last question today comes from Tom Blakey with Cantor Fitzgerald.

Analyst (Tom Blakey): Oh, I think I am on there. Thank you, Eric and Michelle for taking the question. I just maybe as a final question, it is a good wrap up here. I think with the big AI disruption you were hinting at, Eric, could you just maybe talk about the durability of the communications app, if you will, of a communications layer when you talk with customers and maybe as a secondary to that. Just what is the strategic value of the data, the real time data that you can bring to AI applications when you talk to your customers to kinda illuminate the value proposition of what Zoom is selling to these large customers. Thank you.

Eric S. Yuan: Tom, thank you. I wish you are the first 1 to ask with question because those 2 have the most important questions in my view. So I think, first of all, you look at the prior AI era for any of us. To complete a task, Normally, it will need 2 steps. You see? Step 1, you and I have a Zoom call or in person conversation. You see? Let's say I am a sales, you know, rep. I talk with you. You are a potential customer. After the Zoom call, guess what?

I look at my manual notes, and log in to the back end system, and, you know, how big this deal is, and so on and so forth. So I just updated it back in the system. that is 2-step process. In the AI era, with the AI technology, it becomes 1 step. Zoom interface will remain the same. But after Zoom conversations or work, my agent will automatically get the work done for me. You see? that is a beautiful part of the AI. I dramatically automated all those work.

I used it to spend a lot of time working Another example, like a doctor, the patient, spend 30 minutes talking to patient, After the conversation with the patient, they need to spend a lot of time to operate an epic Now with AI, as everything can be done automatically. You see? that is why Zoom has become-- in the human to human interaction not only remain the same, but become more and more important because Zoom conversation will generate a lot of very of very meaningful, important asset of data. To help you drive your next step. You know, without I call that a context layer. Let's take this Zoom call, for example.

After the this Zoom call is over, I have huge context how to leverage the AI. You know, generate the insights, the tasks, get a thing done. I think, well, uniquely position because of AI, because of human to human interaction. Because I cannot imagine? You see? You your agent and my agent talk with each other. We are not gonna use Zoom. It never worked in my view. So that is why Zoom call, we become more important in the AI era. Yeah. That cannot be displaced. So that is great. Absolutely. Otherwise, what do we do? If you send your agent, my agent to work together, so it is never worked in my view. Thank you, Eric.

Thank you, Michelle. Tom.

Operator: We have 1 more question today from Arjun Bhatia from William Blair.

Analyst (Arjun Bhatia): Oh, perfect. Thank you. Let me see. I gotta change my camera. Well, there we go. Thanks for taking the question. Congrats on the strong quarter. Eric, actually, I will follow up on that last question because I think 1 of the important or interesting rather, use cases or customer examples you pointed out in the prepared remarks was the MongoDB example where, you know, they were basically taking actions in ticketing from a Zoom conversation.

But how aware are customers that Zoom can do this, right, and that you are becoming this system of action and what do you need to do on the go to market side to really you know, raise awareness that, hey. that we are kind of evolving as a as a company, and it is becoming a lot more strategic.

Eric S. Yuan: Yeah. it is great question. You know, first of all, you know, we have a new release next month. And based on all the customer feedback, for sure that, you know, from a quality, a feature perspective, much better. Afterwards, you are so right. We just need to double down on go to market side and make sure everyone aware of that. For sure, we have a little bit of awareness problem. Customer do not know that. But at the same time, the huge opportunity. And I think, you know, internally, based on our Zoom employee feedback, a lot of information, wow. I did not realize, you know, you can do this, can do that.

I think it does tell us that the product is ready and which is-- taking on our marketing machine. And make sure every 1 of our customers, you know, they can turn on those very cool features. And that is exactly our focus, you know, next few months and quarters. If you have any good idea, please let us know. I really appreciate it. Yes. I will keep you posted. Thank you so much. Appreciate it. Thank you. Yep.

Operator: This concludes the q and a portion of today's call. I will now turn it back over to Eric for closing remarks.

Eric S. Yuan: Yeah. Thank you to every great customer's partners, Zoom employees, and also thank you to our beloved investors I truly appreciate for your greater support And we are going to work as hard as we can in the AI era to building some innovative solutions to delight our customers. See you next quarter. Thank you.

Operator: This concludes today's earnings call. You for all for attending, and have a great rest of your day.