Q4 2023 Zoom Video Communications Inc Earnings Call

February 27, 2023

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Eric S. Yuan: Wow, that's amazing. Thank you, Tom and thank you everyone for joining us today. So FY2023 was truly a pivotal period. We have an evolution into a full collaboration platform. As you saw in the video, we launched multiple innovations to help transform the world and expanded our product portfolio to open new markets.

Thank you everyone for joining us today, so FY2023 once it is truly a pivotal Peter our.

Our avenues into a full collaboration platform.

As you saw in the video we launched multiple innovations.

Transform the world and expanded our product portfolio to open new markets.

Since Zoom contact centers released early last year, we have worked hard to expand its features, functionality, and integration. In Q4, we landed a 2000 [inaudible] contact center deal, our largest to date. It has truly demonstrated the rapid progress we have made towards becoming a full-fledged contact center solution.

In Q4, we landed 2006.

<unk> contact center deal.

Our largest to date.

It is truly demonstrate David the rapid progress we have made towards becoming a full fledged contact center solution.

And to the success of our Zoom One Bundle, which we launched last June, contributed to the strong performance of zoom phone which in Q4 exceeded 5.5 million [inaudible], making us a clear leader in the space.

<unk> to the strong performance of zoom phone.

In Q4 exceeded.

Five 5 million states, making us a clear leader in the <unk>.

Base.

We closed out the fiscal year with a release of a Zoom virtual agent, an intelligent conversational AI and it's had about a solution that we believe will transform the way businesses assist their customers and employees.

Intelligent conversational AI and it's had about a solution that we believe will transform the way business is assist their customers and employees.

The industry was not without its challenges. We experienced headwinds in terms of currency impact, online construction and scrutiny, which continued into Q4. And a few weeks ago, we made a very tough but a necessary decision to reduce our team by 15% and saying goodbye to around 1,300 hardworking talented Zoom colleagues.

And a few weeks ago, we made it a very tough.

But in a necessary decision to reduce our team by 50% and as and goodbye to around 1300 hardworking talented zoom colleagues.

I want to extend to them a heartfelt appreciation and deepest gratitude for their crucial contribution to Zoom. This painful exercise has been a tremendous learning experience for us, and it allows us to look inward to reset all of ourselves so we can weather the economic environment with greater focus and agility, deliver for our customers and achieve Zoom's long term vision.

Heartfelt appreciation.

Deep is the gratitude for their crucial contribution to zoom.

This painful exercise has being a tremendous learning sprint's boss.

And it allows us to look inward to reset all of ourselves. So we can weather the economic environment with greater focus and agility deliver for our customers and achieve zumiez long term vision.

Now, let me discuss our strategic focuses in FY24 and beyond. First, we will have redefined teamwork for new immersive experiences that improve employee engagement and the modern collaborative tools for ideation across locations and modalities, and we will give it teams everything they need through a single pane of glass.

First we will have redefined teamwork.

For a new immersive experiences that improve employee engagement and the modern collaborative tools for ideation across locations and modalities.

And we will give it teams Airbus, England need through a single pane of glass.

Second, the age of AI and large language models have arrived and we want to empower smarter experiences and the workflows that will truly enable our customers to benefit from this transformational tools. By embedding AI into more workflows, we can provide our customers with a richer, more [inaudible] insights that empower them to work smarter and serve their customers better. Zoom IQ, Zoom Virtual Agent as well as our translation, captioning and and meeting summary tools are just the beginning. We will lay out more AI technologies into our products to truly help our customers maximize their ROI on our platform and thrive in this new era of computing.

And we wanted to empower smarter experiences and the workflows that are truly enable our customers to benefit from this transformational tools.

By embedding AI into more workflows, we can provide our customers with a richer more accidental insights.

Empower them to work smarter and a silver their customers better. Zoom IQ zoom virtual agent as well as our translation happening and in meeting summary tools. At the beginning. We will lay out more AI technologies into our products to truly help our customers maximize their ROI on our platform. Thrive is there is a new era of computing.

Zoom IQ zoom virtual agent as well as our translation happening and in meeting summary tools. At the beginning. We will lay out more AI technologies into our products to truly help our customers maximize their ROI on our platform. Thrive is there is a new era of computing.

At the beginning. We will lay out more AI technologies into our products to truly help our customers maximize their ROI on our platform. Thrive is there is a new era of computing.

We will lay out more AI technologies into our products to truly help our customers maximize their ROI on our platform. Thrive is there is a new era of computing.

Thrive is there is a new era of computing.

Third, we will offer more and more departments tailored solutions to meet their newest digital transformation needs. We constantly solicited feedback, not only from CIOs, but also from sales customer experience leads and in many other leaders across various industries. Zoom [inaudible] was built in this collaborative fashion and has already added tremendous value to many of Zoom teams. You can expect additional industry specific and department specific applications developed both by us and our third party auditors.

We constantly solicited feedback not only from <unk>, but also has off of sales customer experience leads and in many other leaders across various industries.

Zoom argue for sales was built in this collaborative fashion and has already added tremendous value to many of <unk> chips.

You can expect additional industry specific and the department of specific applications developed both by Us and our third party auditors.

All of this comes together as a collaboration platform that unites people to unlock their potential, enables more dynamics and intelligent experiences, and allow us to re imagine productivity and work.

All of this comes together as a collaboration platform that units people to unlock their potential.

Enables more dynamics.

And intelligent experiences and allow us to re imagined productivity and work.

As we navigate this period of technological and economic volatility, our role as a trusted partner, providing best in class unified communications services has never been more crucial.

Our role as a trusted partner, providing best in class Unified Communications services has never been more crucial.

Again, this is a tremendous opportunity in front of us and we are very confident that our strong foundation, ambitious vision, and customer centric culture will enable us to seize this opportunity and continue to lead the way in the unified communications and collaboration space.

<unk> us to seize this opportunity and it continued to lead the way in the unified communications and collaboration space.

Now moving on to some of our customer wins. I want to thank Remco, one of the world's leading integrated energy and chemicals companies for establishing a strategic partnership with Zoom. This is a landmark multiyear partnership where we will provide a full suite of collaboration services, including Zoom meetings, human chat, fun events, and zoom rooms.

I want to thank remco.

One of the world's leading integrated energy and chemicals companies.

Establishing a strategic partnership with zoom.

This is a landmark multiyear partnership where we will provide a full suite of <unk> services, including zoom meetings.

Human chat fun events and zoom rooms.

In addition, we will work together to build a data center in the region and explore the joined development of innovative technology solutions. We are so grateful that Remco has chosen to partner with Zoom on their digitization strategy.

I'd also like to thank NASDAQ, my favorite company, who has been a Zoom customer for several years. Recognizing Zoom's strong reliability, security, and ease of use, they expanded to Zoom [inaudible] our all in one unified communications and collaboration bundle. As part of this expansion, NASDAQ will be deploying Zoom phone and also adding capabilities like of translation and launch a whiteboard with Zoom meetings.

Recognizing zoom strong reliability security and ease of use.

They expanded to zoom, what our all in one unified.

Unified communications and collaboration bundle.

As part of this expansion nostoc will be deployed zoom phone and also adding capabilities lack of translation and launched a whiteboard with zoom meetings.

I want to also thank Raymond James, a leading financial services company for expanding their relationship with us by integrating Zoom phone with our Zoom meetings communication for more company communications package. We're excited to work with Raymond James to provide a highly reliable and secure system enabling their employees to communicate, collaborate, and ultimately thrive in a hybrid work world.

Expanding their relationship with us by integrating zoom phone to zoom meetings implementation for.

More company to communications package.

Excited to work with Raymond James to provide a highly reliable and secure system.

Enabling their employees to communicate collaborate and ultimately thrive in a hybrid world World.

I want to also thank Barracuda Networks, which [inaudible] cloud for us enterprise grade security solutions for expanding with Zoom. Our long standing zoom meetings customer Barracuda saw the value of having a single platform for all their communication needs and [inaudible] walk us through what enterprise plus in Q4. In addition, Barracuda also [inaudible] Q4 sales to enhance sales engagement and as Zoom contact centers to elevate the customer experience.

Our long standing zoom meetings customer Barracuda saw the value of having a single platform for all their communication needs and <unk>.

Obligated or what walk us through what enterprise plus in Q4.

In addition, Barracuda also towards Xuemei Q4 sales to enhance sales engagement and as zoom Carnegie center to elevate the customer experience.

Again, thank you Remco, NASDAQ, Raymond James, Barracuda Networks, and all of our customers worldwide.

And before closing, I want to express my warm welcome to Cyndi Hoots for joining our board of directors. Cyndi brings a wealth of experience [inaudible] is a Chief Data Officer, and a Chief Information Officer at Astra Zeneca. We're so excited to work with her.

Express My walk work hub to Cyndi Hoots, four joining our board of directors. <unk> brings a wealth of experience in <unk>. Foundry is a chief data officer, and a chief information Officer, Ed <unk>. That impact was. We're so excited to work in Pittsburgh.

<unk> brings a wealth of experience in <unk>.

Foundry is a chief data officer, and a chief information Officer, Ed <unk>.

That impact was.

We're so excited to work in Pittsburgh.

I also want to welcome our new Chief Product Officer [inaudible] who joins us from a seasoned executive career at Microsoft and Google. We're also super excited to work with [inaudible].

Who joins us from a seasoned executive career at Microsoft.

And Google.

We're also super excited to work with square.

And with that, I'll pass over to Kelly. Thank you.

I'll pass over to Kelly. Thank you.

Kelly S. Steckelberg: Thank you, Eric and hello, everyone.

Let me start with a few of the financial highlights for FY2023 and the results for Q4, and then provide our outlook for Q1 and FY24.

We delivered solid results in FY23, here were some of the highlights. Our enterprise business grew 24%, our non-GAAP operating margin was 35.9%, and we achieved a free cash flow margin of 27%.

Our enterprise business grew 24%.

Our non-GAAP operating margin was 35, 9%.

And we achieved a free cash flow margin of 27%.

In Q4, total revenue came in at 1.118 billion, up 4% year over year and 6% in constant currency. This result was approximately $13 million above the high end of our guidance.

At 4% year over year and 6% in constant currency.

This result was approximately $13 million above the high end of our guidance.

The growth in revenue was primarily driven by strength in our enterprise business, which grew 18% year over year and represented 57% of total revenue up from 50% a year ago. We expect enterprise customers to comprise an increasingly higher percentage of total revenue overtime.

We expect enterprise customers to comprise an increasingly higher percentage of total revenue overtime.

From a product perspective, we had strong growth in Zoom phones, coupled with contribution from Zoom rooms and other products.

Online average monthly churn decreased to 3.4% from 3.8% in Q4 of FY '22 and increased slightly from 3.1% in Q3 as expected due to seasonality.

The number of enterprise customers grew 12% year over year to approximately 213,000.

Our trailing 12 month net dollar expansion rate for enterprise customers in Q4 came in at a healthy 115%.

We saw 27% year over year growth in the upmarket as we ended the quarter with 3,471 customers contributing more than $100,000 in trailing 12 months revenue. These customers represent 28% of revenue, up from 23% in Q4 of FY22 and spanned diverse industries, such as healthcare, education, government, and more.

These customers represent 28% of revenue, up from 23% in Q4 of FY22 and spanned diverse industries, such as healthcare, education, government, and more.

And spanned diverse industries, such as healthcare education government and more.

Our Americas revenue grew 10% year over year. EMEA continues to be impacted by the stronger dollar, macro headwinds, and online performance, which combined led to a decline of 9% year over year. APAC also impacted by the stronger dollar, declined 5% year over year.

EMEA continues to be impacted by the stronger dollar macro headwinds and online performance, which combined led to a decline of 9% year over year.

APAC also impacted by the stronger dollar declined 5% year over year.

Now turning to expenses and margins, a quick note on our GAAP results. In Q4, they included a one-time stock based compensation expense of $208 million due to the sunsetting of our supplemental grant program, which carries neither dilutive nor tax deduction impact.

A quick note on our GAAP results in Q4, they included a onetime stock based compensation expense of $208 million due.

Due to the sunsetting of our supplemental grant program, which carries neither dilutive nor tax deduction impact.

Moving on to our non-GAAP results, which excludes stock based compensation expense and associated payroll taxes, acquisition related expenses, net litigation settlement, net gains or losses on strategic investments, undistributed earnings attributable to participating securities, and all associated tax effects.

Non-GAAP gross margin in Q4 was 79.8%, an improvement from 78.3% in Q4 of last year and 79.5% last quarter. The sequential improvement was mainly due to optimizing usage across the public cloud and our co located data centers. For FY24, we expect non-GAAP gross margin to be approximately 79.5%.

The sequential improvement was mainly due to optimizing usage across the public cloud and our co located data centers.

For FY 'twenty four we expect non-GAAP gross margin to be approximately 79, 5%.

Research and development expense grew by 43% year over year to approximately $103 million. As a percentage of total revenue, R&D expense increased to 9.2% from 6.7% in Q4 of last year, reflecting our investments in expanding our product portfolio. Looking ahead innovation will remain a top priority for Zoom.

As a percentage of total revenue R&D expense increased to nine 2% from six 7% in Q4 of last year, reflecting our investments in expanding our product portfolio.

Looking ahead innovation will remain a top priority for Zoom.

Sales and marketing expense grew by 20% year over year to $301 million. This represented approximately 26.9% of total revenue up from 23.4% in Q4 of last year.

This represented approximately 26, 9% of total revenue up from 23, 4% in Q4 of last year.

As part of our restructuring we are optimizing our go to market strategy to better support our enterprise customers and drive additional productivity.

G&A expense declined by 12% to $84 million or approximately 7.5% of total revenue down from 8.9% in Q4 of last year as we focused on achieving greater efficiencies in our back office.

Non-GAAP operating income was $405 million exceeding the high end of our guidance of $326 million as we took actions to reprioritize our investments in Q4. This translates to a 36.2% non-GAAP operating margin for Q4 as compared to 39.2% in Q4 of last year.

This translates to a 36, 2% non-GAAP operating margin for Q4 as compared to 39, 2% in Q4 of last year.

Non-GAAP diluted earnings per share in Q4 was $1.20, 44 cents above the high end of our guidance.

<unk> 44 above the high end of our guidance.

Due to our share repurchase program, our Q4 weighted average share count has decreased year over year by approximately 5 million shares to $301 million.

Turning to the balance sheet, deferred revenue at the end of the period was $1.3 billion, up 11% year over year from $1.2 billion. This is above our guidance as we saw increased commitments from customers and extended contact duration.

<unk> revenue at the end of the period was $1 3 billion up 11% year over year from $1 2 billion.

This is above our guidance as we saw increased commitments from customers and extended contact duration.

Looking at both our billed and unbilled contracts, our RPO totaled approximately $3.4 billion, up 30% year over year from $2.6 billion. We expect to recognize approximately 56% of the total RPO as revenue over the next 12 months as compared to 63% in Q4 of last year.

Up 30% year over year from $2 6 billion.

We expect to recognize approximately 56% of the total RPM as revenue over the next 12 months as compared to 63% in Q4 of last year.

As a reminder, our annual seasonality [inaudible] is weighted towards the first half of the year.

We expect Q1 deferred revenue to be up zero to 1% year over year, partially due to the strengthening of the dollar starting late in Q1 of FY2023. Since then, the major currencies we do business in are down 5% to 10% visa visa dollar.

Since then the major currencies, we do business in are down 5% to 10% vis vis the dollar.

We ended the quarter with approximately $5.4 billion in cash, cash equivalents, and marketable securities excluding restricted cash.

We had operating cash flow in the quarter of $212 million, up from $209 million in Q4 of last year.

Free cash flow was $183 million as compared to $189 million in Q4 of last year.

Our margins for operating cash flow and free cash flow were 18.9 and 16.4% respectively.

Because the section 174 tax legislation requiring capitalization of R&D expenses was not repealed in FY2023, we incurred an additional cash tax payment in Q4. Despite this payment we still exceeded the high end of our previously provided range by $36 million for a full year total of $1.186 billion.

Despite this payment we still exceeded the high end of our previously provided range by $36 million for a full year total of $1.186 billion.

For FY24, we expect free cash flow to be in the range of $1.2 to $1.25 billion.

Now turning to guidance, for the first quarter of FY24 we expect revenue to be in the range of 1.08 to 1.085 billion, which at the midpoint would represent approximately 1% year over year growth or 2% in constant currency.

For the first quarter of FY 'twenty four we expect revenue to be in the range of 1.08 to 1.085 billion.

Which at the midpoint would represent approximately 1% year over year growth or 2% in constant currency.

We expect non-GAAP operating income to be in the range of $374 million to $379 million.

Our outlook for non-GAAP earnings per share is 96 to 98 cents based on approximately 304 million shares outstanding. This outlook reflects the three fewer days in Q1 versus all other quarters.

This outlook reflects the three fewer days in Q1 versus all other quarters.

For the full year of FY24, we expect revenue to be in the range of $4.435 to 4.455 billion, which at the midpoint represents approximately 1% of year over year growth or 2% in constant currency.

Which at the midpoint represents approximately 1% of year over year growth or 2% in constant currency.

We expect our non-GAAP operating income to be in the range of $1.606 to 1.626 billion, representing a non-GAAP operating margin of approximately 36%.

<unk> and non-GAAP operating margin of approximately 36%.

Our tax rate is expected to approximate the blended US federal and state rates.

Our outlook for non-GAAP earnings per share is $4.11 to $4.18 based on approximately 309 million shares outstanding.

Zoom is dedicated to maintaining a careful balance between growth and profitability. We remain committed to innovating our platform, optimizing our go to market motions, and evolving our culture to meet the dynamic needs of the market.

We are confident that our continued investment in innovation will enable us to provide even greater value to our customers while also positioning us for sustained growth.

Thank you to the Zoom employees, our customers, our community, and our investors.

Kelcey, please queue up our first question.

Kelcey McKinley: Thank you Kelly. And again, everyone we will go ahead and move into the Q&A session. So when I call your name, please turn around video and unmute yourself. And as a reminder, in an effort to hear from everyone, we please ask that you limit yourself to one question. And our first question will come from Fred Lee with Credit Suisse.

Frederick Lee: Hey, there we go. Can you all hear me?

Hey, Joe can you hear me.

Eric S. Yuan: Yup.

Frederick Lee: Great. Kelly, just a question regarding your full year operating margin guide, which it looks like it's coming in around five percentage points above consensus, I was wondering if you could break down where those efficiencies are coming from, how much was coming from a risk versus efficiencies in other operating expense line items. Thank you.

Just a question regarding our full year operating margin guide, which it looks like it's coming in around five percentage points above consensus I was wondering if you could break down where those efficiencies are coming from how much was coming from a risk versus efficiencies in other operating expense line items.

Kelly S. Steckelberg: Thank you. So as I mentioned in the prepared remarks, we started really focusing on driving efficiencies across the business in Q4. As you saw in the results, this came from looking across all third party spend and then as we moved into Q1 of course the reduction so it's really a combination of that as well as looking across all of our business processes, including go to market where there is a restructuring happening to really focus our resources on our enterprise customers and be as efficient as we can in our commercial and small business teams.

So it's really a combination of that as well as looking across all of our business processes, including go to market, where there is a restructuring happening to really focus our resources on our enterprise customers and be as efficient as we can in our commercial and small business teams.

Frederick Lee: Got it, thank you. And a quick question for Eric, with regard to everything that's happening around AI and generative AI, you've talked a little bit about some of the new product areas where you're expecting some initial impact. So what kind of analogy can you draw for investors and for us with regard to the uptake of all things generative AI? A little bit of commentary around that would be greatly appreciated.

You've talked a little bit about some of the new product areas were expected were you expecting some initial impact. So how would you what kind of analogy can you draw for investors and for US with regard to the uptake of <unk>.

All things generative NII.

A little bit of commentary around that would be greatly appreciate it.

Eric S. Yuan: Yeah, sure. So first of all, that's a great question about AI. I think your question about AI sort of reminds me of 1995, 1996, it was the first wave of internet revolution. I was so excited that's why I moved to [inaudible] to embrace that approach [inaudible] and since then I was a startup for retirement collaboration and through today I can tell you were speaking of AI, I'm excited as in 1995, maybe I'm wrong, maybe more excited than 1995, 1996 given my engineering and product background. I think AI is sort of faced with a challenge. At the same time, we also have a huge opportunity ahead of us. Given our strong innovation culture, I think AI can truly help Zoom to evolve us to sort of part of the Zoom [inaudible] journey. I think that Zoom maybe the AI across the company. Speaking of specific features, [inaudible]. Even before we talked about Chat GPT before being part about all of the AI, actually we already invested heavily in AI. So some customers may not see that [inaudible] obviously, which background on audits things like that. Even recently, we announced the feature for Zoom smart meeting summary where we are already leveraging the [inaudible] to improve that experience. We are gonna [inaudible] AI a lot of features like what's your agent or who might be more serious [inaudible] solution. Canada as well I think AI can truly empower everything we're doing here and it will benefit our customers. Plus, we are taking a very open approach and we have our own AI engineers, a lot of tenants working very hard and those who are going to partner with other comment of opening items grid of [inaudible] within reason today and this is great. Again, I can talk a lot about AI, I am very, very excited.

It reminds me of 90 90 596, the Internet. It was the first wave of Internet of revenues.

I was so excited that's why I moved to sitting nobody right to embrace that approach.

Robert Wilson and since then I was a startup for retirement collaboration and through today I can tell you were speaking of E. R.

Im excited at 90, 95, maybe I'm wrong, maybe more excited than net in any environment and a fixed given my engineering and product bag, one I think the AI era.

And I'll sort of faced with a challenge at the same time.

also have a huge opportunity ahead of us. Given our strong innovation culture, I think AI can truly help Zoom to evolve us to sort of part of the Zoom [inaudible] journey. I think that Zoom maybe the AI across the company. Speaking of specific features, [inaudible]. Even before we talked about Chat GPT before being part about all of the AI, actually we already invested heavily in AI. So some customers may not see that [inaudible] obviously, which background on audits things like that. Even recently, we announced the feature for Zoom smart meeting summary where we are already leveraging the [inaudible] to improve that experience. We are gonna [inaudible] AI a lot of features like what's your agent or who might be more serious [inaudible] solution. Canada as well I think AI can truly empower everything we're doing here and it will benefit our customers. Plus, we are taking a very open approach and we have our own AI engineers, a lot of tenants working very hard and those who are going to partner with other comment of opening items grid of [inaudible] within reason today and this is great. Again, I can talk a lot about AI, I am very, very excited.

Alright to evolve us to sort of.

Part of the Zune put although journey.

I think that's maybe the AI across the company speaking of specific features Overleveraged E R.

Even before we talk about <unk> before being part about all of the AI.

Actually we already invest have in <unk> right. So you know some customer may not see that northern ring, obviously, which background on audits things like that even recently, we announced the featured horizontal more smart and meeting summary.

Where we are already leveraging the GBP three two all of them into our email. Improve that experience. We are gonna Domino entrepreneur. Auto features like what's your agent or who might be more serious our shadow solution. Canada as well I think AI can truly empower everything we're doing here and it will benefit our customers plus we are taking a very open approach and we have our own AI engineers a lot of tenants working very hard and those who are going to partner with other comment of opening items grid of comedy and adjusted part within reason today and. This is Greg again, I can talk a lot about. I am very very excited.

Improve that experience. We are gonna Domino entrepreneur. Auto features like what's your agent or who might be more serious our shadow solution. Canada as well I think AI can truly empower everything we're doing here and it will benefit our customers plus we are taking a very open approach and we have our own AI engineers a lot of tenants working very hard and those who are going to partner with other comment of opening items grid of comedy and adjusted part within reason today and. This is Greg again, I can talk a lot about. I am very very excited.

We are gonna Domino entrepreneur. Auto features like what's your agent or who might be more serious our shadow solution. Canada as well I think AI can truly empower everything we're doing here and it will benefit our customers plus we are taking a very open approach and we have our own AI engineers a lot of tenants working very hard and those who are going to partner with other comment of opening items grid of comedy and adjusted part within reason today and. This is Greg again, I can talk a lot about. I am very very excited.

Auto features like what's your agent or who might be more serious our shadow solution. Canada as well I think AI can truly empower everything we're doing here and it will benefit our customers plus we are taking a very open approach and we have our own AI engineers a lot of tenants working very hard and those who are going to partner with other comment of opening items grid of comedy and adjusted part within reason today and. This is Greg again, I can talk a lot about. I am very very excited.

Canada as well I think AI can truly empower everything we're doing here and it will benefit our customers plus we are taking a very open approach and we have our own AI engineers a lot of tenants working very hard and those who are going to partner with other comment of opening items grid of comedy and adjusted part within reason today and. This is Greg again, I can talk a lot about. I am very very excited.

This is Greg again, I can talk a lot about. I am very very excited.

I am very very excited.

Frederick Lee: Great. Thank you, that was very helpful.

Eric S. Yuan: Thank you.

Kelcey McKinley: And Michael Funk with Bank of America has the next question.

I'm sorry Michael, you're muted.

Michael J. Funk: I'm unmuted on my phone.

Kelly S. Steckelberg: Now we can hear you Michael.

Michael J. Funk: Okay, thank you Kelly. First for you Eric, you've returned a cash balance, it's a huge strategic asset for Zoom. Specifically today when a lot of your competitors don't have that optionality, so what is the argument in your opinion against deploying that cash to further your advantage and improve your capacity? So yes, [inaudible] better to delegated to Kelly [inaudible].

First for you Eric you've returned a cash balance it's a huge strategic asset for us.

Specifically today when a lot of your competitors don't have that.

Optionality. So wondering if your argument and euro opinion against a coin that cash to further your advantage and improve your capacity.

So yes, we are in a constant marnier better to delegated to Kelly at Providence is a barrier to them, but have a magic number.

Eric S. Yuan: So yes, [inaudible] better to delegated to Kelly [inaudible].

Kelly S. Steckelberg: Thank you Michael. I don't think there is any argument against deploying our cash certainly to continue to advance our technology, advance our customer base, and as I said, we are constantly looking for opportunities. And as I've mentioned in the past, we have kind of three main criteria of course we look at. We look at the technology as we want to make sure that we would be providing our customers something that works as well as the core of Zoom does today as far as the platform. We look at the culture to make sure that the organization could come together very, very well. As you know we take culture so, so seriously here and Eric and the whole executive team has spent a lot of time focusing on building that. And then last but certainly not least is valuation and that has been tricky in the past. We've seen great assets that we love, but just couldn't get there as unfortunately, all of you know. And so we now see that becoming easier and easier. So I will tell you that Sanjay and his team have been very busy continuing to look for targets for us and it certainly is a part of our strategy that we're considering for FY24.

Three main criteria of course, we look at we look at the technology as we want to make sure that we would be providing our customers something that works as well as the core of zoom does today as far as the platform. We look at the culture to make sure that the organization could come together very very well as you know we take culture socio seriously here and.

Eric in the whole executive team has spent a lot of time focusing on building that and then last but certainly not least is valuation and that has been tricky in the past we've seen great assets that we love, but just couldn't get there as unfortunately, all of you know and so we now see that becoming easier and easier. So I will tell you.

That Sanjay and his team have been very busy continuing to look for targets for us and it certainly is a part of our strategy that we're considering for FY 'twenty four.

Michael J. Funk: Great. Thank you for that color. And Kelly while I have you, back to the earlier question about the Delta and operating income fiscal '23 to fiscal '24, we estimated earlier this month about a $260 million benefit from the rep, is there an issue with my math around that?

Back to the earlier question about the Delta in operating income.

<unk> 23 to fiscal 'twenty four.

We estimated ROE our next month about a $260 million benefit.

From the Rep.

Is there an issue with my math around that.

Kelly S. Steckelberg: We're not going to get into the specifics around the reduction. I will tell you it was pretty consistently applied across the company to 15% that Eric mentioned across the organization as well as the US and some of our other locations outside of the US, so you can take that into consideration as you are calculating what you think the savings are.

<unk> as you are calculating what you think the savings are.

Michael J. Funk: Great. Thank you Kelly, thank you Eric.

Eric S. Yuan: Thank you.

Kelcey McKinley: We will now move on to Meta Marshall with Morgan Stanley.

Kelly S. Steckelberg: Hi Meta.

Meta A. Marshall: Hey, great. Thanks. Maybe Kelly just for you to start with, maybe versus where we were 90 days ago when you were kind of talking about low to mid single digit potential for fiscal '24, just trying to get a sense of is kind of the incremental conservatism is that more around the enterprise or the online business, particularly given that you did see some kind of stabilization in the online business in the quarter?

Maybe.

Kelly just for you to start with.

You know maybe versus where we were 90 days ago. When you were kind of talking about low to mid single digit protect all purpose 24, just trying to get a sense of is kind of the incremental conservatism is that more around the enterprise.

Or the online business, particularly given that you did see some kind of stabilization in the online business in the quarter.

Kelly S. Steckelberg: Yeah, I guess I don't know that I would say--remember on the Q3 call we weren't specifically giving guidance, we were trying to help sort of give I think a little bit of visibility, but we were still right in the midst of doing our FY24 planning, so as we continue to work on that with all of the go to market teams and also made this decision around the team and the reduction, putting all of that together came up with what we've now guided to. And we do continue to see headwinds that we spoke about. Of course, currency is still a challenge and as compared to year over year, we're going to see some impact in Q1 because remember the dollar really started to strengthen in the back half of Q1 last year so you should expect to see some year over year impact there. As well as these changes especially in the go to market teams right now, making sure that we get everybody lined up and looking at where that is, all of that was considered as we set the FY24 guidance.

Werent, specifically, giving guidance, we were trying to help sort of give I think a little bit of visibility, but we were still right in the midst of doing our FY 'twenty for planning.

As we continue to work on that with all of the go to market teams and also you made this decision.

Around the team and the reduction putting all of that together came up with.

But what we've now guided to and.

We do continue to see headwinds that we spoke about of course currency is still a challenge and we're going to see some ads compared to year over year, but it isn't impacting Q1, because remember the dollar really started to strengthen the back half of Q1 last year. So you should expect to see some year over year impact there as well.

Yes.

These changes in the especially in the go to market teams right now, making sure that we get everybody lined up and looking at where that is the all of that was considered as we set the FY 'twenty guidance.

Meta A. Marshall: Got it. And then maybe Eric, in the past you guys have wanted to have kind of the singular Zoom platform and let the third party apps be where you would kind of do the departmental or those industry use cases, and it sounded like there was some departure from that so I guess I just wanted to get a sense of are there going to be different Zooms edition for kind of some of these different verticals or will it still kind of be largely third party driven?

I wanted to have kind of the singular zoom platform and let the third party apps be where you would kind of do the departmental or voting industry use cases, and it sounded like there was some departure from that so I guess I just wanted to get a sense of are there going to be different zoom edition for kind of some of these different verticals or or will it still kind of be large.

Eric S. Yuan: Yes, I think that's a good question. First of all, I do want to signal that [inaudible] what we are trying to do before so [inaudible] what we're doing now because given a lot of our new opportunities, I do not think everything should be done by our own developers. That's why I also want to leverage third party. I do [inaudible] just more argument about what we're doing today.

What are we trying to do before so minions morlock augmented what about doing now because it's given a lot of our new opportunities I do not think everything should be done by our own developers right. That's why I also want to leverage third party I do know, it's a machine and a strategy to just more augment what we're doing today.

Meta A. Marshall: Great. Thanks. Thank.

Eric S. Yuan: Thank you.

Kelcey McKinley: And just as a reminder, please limit yourself to one question in an effort to hear from everyone. We will go ahead and we'll move on to Mark Murphy with JP Morgan.

Mark Ronald Murphy: Thank you so much. So you've added so much value into the product, when we look at the amount of recording storage, the white boarding, you have mail and calendar client and so much more that's on the Com, could you update us perhaps on your pricing strategy and whether you think this could be the right time to perhaps increase prices a bit or even to just go out and maybe activate a CPI adjustment that would benefit you?

When we look at the amount of recording storage the white boarding you have.

Mail and calendar client and so much more that's on the Com could you update us perhaps on your pricing strategy and whether you think this could be the right time to.

Perhaps increased prices a bit or even to just go out and maybe activate a CPI adjustment that would benefit you.

Yeah got it. Please go ahead, Sir we have announced a price increase for our online customers that we will be effective I believe the date is March 1st as we announced it last earlier this month and we believe that reflects and Thats only for monthly consume. <unk> not for annual customers and we believe that starts to reflect the value as you said that we have created for our customers over the last few years. It's been many many many years. It predates me since the last time, there was a price increase and then on the enterprise side, we did a pricing updates you'll all inclusive.

Eric S. Yuan: Yeah, Kelly please go ahead,

Kelly S. Steckelberg: Sure. We have announced a price increase for our online customers that will be effective I believe the date is March 1st as we announced it earlier this month, and that's only for monthly customers not for annual customers. And we believe that starts to reflect the value as you said that we have created for our customers over the last few years. It's been many, many many years, it predates me since the last time there was a price increase. And then on the enterprise side, we did a pricing update all inclusive with Zoom One, the bundle that we came up with last year and we believe that really reflects the best way for our customers to buy and to get full value out of that platform and that considers all of the products that are included and what we feel is an appropriate price point at this time.

<unk> not for annual customers and we believe that starts to reflect the value as you said that we have created for our customers over the last few years. It's been many many many years. It predates me since the last time, there was a price increase and then on the enterprise side, we did a pricing updates you'll all inclusive.

With you won the bundle that we came up with last year and we believe that really reflects the the best way for our customers to buy and to get full value out of that.

Platform.

And that considers.

All of the products that are included in what we feel is an appropriate price point at this time.

Mark Ronald Murphy: Okay, so nothing planned outside of Zoom One on the enterprise side and nothing more material than what you had already announced?

Kelly S. Steckelberg: No, that's right.

Mark Ronald Murphy: Thank you.

Kelcey McKinley: Piper Sandler's James Fish has the next question.

Unknown: Hey, thanks guys. This is [inaudible] for James Fish. In terms of the longer term vision for Zoom, how is the team thinking about the maturity of the core meetings and phone products at this point, especially following what was a really strong phone quarter in Q4? Do we need adoption of emerging products like contact center and e-mail or calendar to reaccelerate growth as we look to '25 and '26 or are there catalysts that can help the core products kind of reaccelerate from the guide in 2024 levels? Thank you.

Do we need adoption of emerging products like contact center, an E mail or calendar to Reaccelerate growth. If we looked at 25 and 26 or are there catalysts that can help the core products kind of Reaccelerate from a guide in 2024 levels. Thank you.

Eric S. Yuan: I think good question. I think we shared with folks on [inaudible]. The phone for example, the market potential is still huge and we're doing extremely well and it will help us more because given the product is very reliable as a great innovation, better than any other phone service providers, that's why [inaudible] the huge growth opportunity. That is a new product going to zoom on contact center of which you as in as you [inaudible] down the route of more and more departmental applications, in particular, AI and another good layer, I feel like a lot of new opportunities are ahead of us. I think in the second half of this year probably the transition period for us given we launched [inaudible] early last year [inaudible] as well as the new services in the pipeline I think will help us. We need to focus on both. The reason why our [inaudible] to all new collaboration platform. You can leave [inaudible] I think that that's our business plan.

Pick up the phone for example, the market potential is still huge.

We're doing extremely well and will help us more because given the product.

Very reliable as Australia inhibition is better than any other food service providers, that's why encore part ice goosing the huge growth opportunity.

That is a new product going to zoom on contact center of which you as in as you might be more serious down the route of more and more departmental applications in particular, AI and did not agree with Alere I feel like a lot of new opportunities ahead of us I think.

Second half of this year probably the. Transition period for us given the we launched from our cornerstone early last year Mike.

Transition period for us given the we launched from our cornerstone early last year Mike.

As well, although the newest services plus new servicing the pipeline I think will help us we need to focus on both the reason why our window distributor to all U collaboration platform right you can leave it in.

The base kind of get most of that will work with them I think that thats our business.

Unknown: Thanks, that's very helpful.

Kelcey McKinley: [inaudible] with RBC has the next question.

Unknown: Wonderful, thanks so much for taking my question. I have one. I wanted to dive a little bit deeper into some of the new features that you're seeing. I know [inaudible] if we think about chat, email, calendar and just to the extent possible, I would love to hear what you're seeing in terms of actual uptake rates of these features. It's available to anyone who is on Zoom one, but probably more actively using it and if you think about those customers who are using these additional features or modules, what are you seeing from those customers in terms of anything like engagement time spent on the platform, retention, ARPA expansion rates, anything like that because I think that will really help us get some color in terms of your ability to expand into a broader set of customers [inaudible]. Thank you.

Markets.

So if we think about chat email calendar and just to the extent possible.

Love to hear what you're seeing in terms of actual uptake rates.

Features like available to anyone who is on June one, but probably more actively using it and if you think about those customers who are using these.

Additional features or modules what are you seeing from those customers in terms of anything like engagement time spent on the platform where tension ARPA expansion rates anything like that because I think that will really help us get some color as to your ability to expand into a broader set of customers.

Eric S. Yuan: Yeah, that's a great question. First of all, I would say last year we developed more than 1,500 [inaudible]. I think all of our teams worked extremely hard, but one thing we did not do well, I think we should improve, read about a product adoption. [inaudible] features, we also need to remember customers, again this is something important for us this year. There are a lot of customers in order to for a lot of features, pick a nonstarter for example, we would like to [inaudible] meetings with the whiteboard as well, the whiteboard, they really like that. And also another feature, we also have a team chat which is a persistent chat solutions. We use that for many years, a lot of our customers [inaudible]. Why do they want other services to say wow, Zoom has the worst [inaudible] that would also likely but we also may adopt all of those features. A lot of things like that, the sales department, right. Again, a lot of innovations, but a renewed focus on product adoption, let our customers know that the huge value from the Zoom platform so that's something we need to focus on. And quite a few [inaudible] use Zoom team chat. I can tell you again, much better, whiteboard as well so anyway, a lot of features, innovations, we should focus on adoption.

<unk> finished the veteran features we also need to remember and customers.

Again this is something important for us this year.

There are a lot of customers in order to fund a lot of features pick a nonstarter for example, right we would like to consolidate and alike.

Meeting with our whiteboard as well.

Why do you know they really like is that right and also another feature we will have acumen check which is a persistent <unk> solutions.

We use that for many years a lot with <unk> auto deployed why do they want to people other services operate upon a wow zoom at the worst forgettable also word flexible the greater chemo, China citizen offer. These new phones that are the tests that would also likely but they also may adopt all of those features you know a lot of things like that north. The sales department, right and <unk> opportunity a bit a lot of innovations, but a renewed focus on product adoption, let our customers know that the huge value. Some of the zoom. So that's something we need to focus on and. Quite a few broader audio zoom team I can tell you against much bigger linerboard as well so anyway, a lot of features innovations risk with a focus on adoption.

The sales department, right and <unk> opportunity a bit a lot of innovations, but a renewed focus on product adoption, let our customers know that the huge value. Some of the zoom. So that's something we need to focus on and. Quite a few broader audio zoom team I can tell you against much bigger linerboard as well so anyway, a lot of features innovations risk with a focus on adoption.

Some of the zoom. So that's something we need to focus on and. Quite a few broader audio zoom team I can tell you against much bigger linerboard as well so anyway, a lot of features innovations risk with a focus on adoption.

So that's something we need to focus on and. Quite a few broader audio zoom team I can tell you against much bigger linerboard as well so anyway, a lot of features innovations risk with a focus on adoption.

Quite a few broader audio zoom team I can tell you against much bigger linerboard as well so anyway, a lot of features innovations risk with a focus on adoption.

Unknown: Thank you.

Thank you.

Kelcey McKinley: And we will now hear from Matt Vanvliet with BTIG.

Matthew David VanVliet: Hi, good afternoon. I guess on that last point Eric, maybe you could share a few details or some of the winning points around the contact center product, what's driving the adoption there, are you seeing replacing existing contact centers or some of these sort of net new where video is going to be a key component, whether it's field service or things of that nature, where video really lends an extra help to it?

Again, something that last point Eric.

Maybe you could share a few details or some of the winning points around the contact center product.

What's driving the adoption there.

Are you seeing replacing existing contact centers or some of these sort of net new where video is going to be a key component, whether it's field service or things of that nature, where video really blends and extra help to it.

Eric S. Yuan: Yes good question. So on product front, we launched early last year, almost our one year anniversary now. I think we are going to keep innovating. Essentially today, the contact center customer, we just declared a 2000 seat contact center solution might be tested everything is wow, Zoom contact center works very well, not only for the just like early last year, we weren't part of [inaudible]. This is for their support agents. A lot of features already built in. I think on the political front, more and more features very quickly I think we're doing very well and I have a huge confidence for our team.

Early last year, almost almost one year anniversary now I think we are going to keep innovating.

Sensitive today, who could hover.

The contents on customer we just declared a 2000 seat contact center solution might be tested everything is part of what zoom cornerstone. It works very well not only for the just like all of last year, we werent part of reduce it.

<unk> this is for their support.

Support agent right a lot of features already to beauty and I think the political front.

And more and more features very quickly I think we're doing very well.

We have a huge confidence for our team.

However on go to market side.

However, on the go to market side, I think we should have done a better job to be honest with you. And so the bar is different but the good news over the past 12 months, we've learned a lot and are working to sort of change our go to market strategy and make sure all those traditional customers no matter, which on premise solution deployed or other cloud contact center deployed we shouldn't let them know Zoom has [inaudible] contact center solutions like those third party resellers and also we needed to change our go to market model for contact center, because before that it worked so well. So that part, I think we need to focus on this year.

Make sure all those traditional customers no matter, which on premise solution and deploy or other cloud contact center deployed we shouldn't let them know zoom adverse forgettable contact center solutions like <unk>. Those are. Third party <unk>. Sellers right and also changed our go to market model for contact center, because before that it works for a while so that a part of it I think we need to focus on this year.

Those are. Third party <unk>. Sellers right and also changed our go to market model for contact center, because before that it works for a while so that a part of it I think we need to focus on this year.

Third party <unk>. Sellers right and also changed our go to market model for contact center, because before that it works for a while so that a part of it I think we need to focus on this year.

Sellers right and also changed our go to market model for contact center, because before that it works for a while so that a part of it I think we need to focus on this year.

Matthew David VanVliet: Great. Thank you.

Kelcey McKinley: Thank you. And our next question will come from Tyler Radke with Citi.

Tyler Maverick Radke: Hey, thanks for taking the question. So clearly the profitability guidance was much stronger than consensus and you've talked about some of the hard decisions you've made as it relates to restructuring. Kelly and Eric, I'm wondering just about your willingness to kind of expand margins from here. Obviously, you're guiding to a pretty low revenue growth for the coming year of about 1%, but how do you just think about the puts and takes on future margin expansion from here in a scenario where you don't get a reacceleration in total revenue?

Hey, Thanks for taking the question. So clearly the profitability guidance was much stronger than consensus and.

You've talked about some of the hard decisions you've made as it relates to restructuring.

Kelly and Eric I'm wondering just about your willingness to kind of expand margins from here, obviously, you're guiding to a pretty low revenue growth for the coming year of about 1%, but how do you just think about the puts and takes on future margin expansion from here in a scenario, where you don't get a reacceleration.

<unk> total revenue.

Kelly S. Steckelberg: Tyler, we're always focused on being as efficient as possible in our gross margin and you've seen we said we expected to be 79 and a half percent for next year, which is right on top of our long term target margins. In terms of our operating margin, we want to always watch for opportunities for investment in top line growth. That's really what we are driving for so we will continue to make these decisions and watch for opportunities throughout the year. If we see opportunities to invest in go to market, maybe channel programs, anything that we can do to drive topline growth that would be our first priority, but as we said in the prepared remarks, we're going to balance that with profitability. So we're certainly committed to the guidance that we set. I don't think we're committing to expanding beyond that today as again, our first priority is continuing to accelerate through go to market efficiencies as well as continuing to expand our product portfolio.

Set for next year, which is right on top of our long term target margins in terms of our operating margin, we want to always watch for opportunities for investment in top line and Thats really what we are driving more so we will continue to make these decisions and.

Watch for opportunities throughout the year, if we see opportunities to invest in go to market maybe channel programs anything that we can do to drive topline growth that would be our first priority, but as we said in the prepared remarks, we're going to balance that with profitability. So we're certainly committed to the guidance that we set I don't think we're committing to.

Two expanding beyond that today as again, our first priority is continuing to accelerate through.

Go to market efficiencies as well as expand continuing to expand our product portfolio.

Tyler Maverick Radke: Thank you.

Kelcey McKinley: UBS's Karl Keirstead has the next question but Kelly and Eric he's on audio only so he won't appear to you via video. Karl go ahead.

Karl Emil Keirstead: No, I'm good. Thank you. Sorry.

Kelcey McKinley: No problem at all Karl, thank you so much for letting us know. In that case, we'll move onto [inaudible] with Mizuho.

No problem with our Carl Thank you so much for letting US know then in that case, we'll move onto CD panic Rocky with Mizuho.

Unknown: Hey, thanks for taking my question Kelly and Eric. So when you think about this year's growth I know you're expecting the online segment to kind of bottom at some point, so what's your expectation when you think about online segment versus enterprise? And I know this is again the renewal will come in Q1, Q2. What are you are now pushing to customers during renewal? I know last few years it was phone so what are the products you are right now pushing their renewal?

Kelly I'm very calm so when you think about this your growth I know you're expecting some in the online segment to kind of bottom at some point. So what's your expectation when you think about online segment versus enterprise and I know this is again the renewal will come in Q on Q2, and what are you are now pushing to an hour.

During renewal I know last few years it does.

<unk>. So what are the products you are right now pushing their enrollment.

Kelly S. Steckelberg: So in terms of the expectations for online this year, they are consistent with what we've been saying for the last couple of quarters, which we expect it to stabilize during mid next year from a dollar amount, meaning we've seen it continue to decline quarter over quarter from a dollar perspective for the last probably five or six quarters. And when we get kind of like Q2 to Q3 of next year, we expect to see that start to stabilize which is great when you look at all the initiatives that are in place. And then I'm sorry, the last part of your question was about renewals? Yes, also the enterprise part of the business how are you thinking about the growth in renewal?

<unk> seen it continue to decline quarter over quarter from a dollar perspective for the last probably five or six quarters.

And when we get kind of like Q2 to Q3 of next year, we expect to see that start to stabilize which is great. When you look at all the initiatives that are in place and then I'm sorry. The last part of your question about renewals, what's the matter.

Unknown: Yes, also the enterprise part of the business how are you thinking about the growth in renewal?

Enterprise part of the business how are you thinking about the growth and growth.

Kelly S. Steckelberg: Yes, so renewables or not there is always an opportunity to talk to our enterprise customers around Zoom One, the platform bundle, which we think is a great opportunity for our enterprise customers to help our prospects and customers understand the full features of the platform. And then of course, there is a natural opportunity to do that as they're going through the renewal period. And as we guided, we expect renewals to be strong in Q1, however, there is going to be that impact of currency that we've already experienced from Q2 through Q4, but unfortunately, we have one more quarter against the previous year comps that there's going to be some impact and some headwinds there.

To help our prospects and customers understand the full features of the platform and then of course, there is a natural opportunity to do that as theyre going during the renewal period.

And as we guided we expect renewals to be strong in Q1. However, there is going to be that impact of currency that we've already experienced for Q2 through Q4, but unfortunately, we have one more quarter against the previous year comps that theres going to be some impact on some headwinds there.

Unknown: Great. Thank you.

Kelcey McKinley: And Sterling Auty with SBB Moffett Nathanson has the next question.

Sterling Auty: Thanks. Hi, guys. Kelly, maybe just to clarify on that last answer now that we're in fiscal '24 on that online answer you just gave, you may see the turn in Q2, Q3 of this fiscal year correct right? Yeah, this fiscal year, yes. I just want to make sure people didn't think fiscal '25. Not FY '25 no, thank you for clarifying.

Kelly, maybe just to clarify on that last answer now that we're in fiscal 'twenty four on that online answer you just gave you may.

See the turn in Q2 Q3 of this fiscal year correct right and I think yeah. This fiscal year, yes for FY <unk> I just want to make sure people didn't think fiscal 'twenty FY 'twenty five no. Thank you for clarifying you're welcome.

Kelly S. Steckelberg: Yeah, this fiscal year, yes. I just want to make sure people didn't think fiscal '25. Not FY '25 no, thank you for clarifying.

Kelly S. Steckelberg: Yeah, this fiscal year, yes.

Sterling Auty: I just want to make sure people didn't think fiscal '25. Not FY '25 no, thank you for clarifying.

Sterling Auty: I just want to make sure people didn't think fiscal '25.

Kelly S. Steckelberg: Not FY '25 no, thank you for clarifying.

Sterling Auty: You're welcome. So in terms of questions, I wanted to take the other side of it and go to the enterprise. What's built into the expectation for full year revenue around the enterprise and maybe dive into at least some qualitative commentary around net retention and what you expect on renewals from customers and what you're expecting from contribution of new customers. So what needs to happen for the enterprise to deliver that side.

At least some qualitative commentary around net retention and what you expect on renewals from customers and what youre expecting from contribution of new customers. So what needs to happen for the enterprise to deliver that style.

Kelly S. Steckelberg: So we talked about renewals over the last year in the last 12 months and we expect them to consider continue at the same rate. And what we've mentioned in the past is that we have seen some contraction in seats as organizations around the world are experiencing reductions working with them on that. But on the other side, the opportunity to really bring a lot of value to our customers through our total cost of ownership, which includes expansion of the total portfolio. So as you saw, phone really, really resonating very well, especially in this economy and contact center, while it's still small, small from an absolute dollar perspective, if doubled the ARR for contact center doubled from Q3 to Q4. So again, small relative dollars, but really exciting to see it coming into its own and we expect that to continue to contribute through all of this year, but then really start to accelerate from a contribution perspective in FY '25 and I do mean FY '25 in that comment. And then of course, there's Zoom IQ for sales as well, which is on a kind of a similar trajectory in terms of contact center that small dollar contribution, but you're accelerating in terms of its overall growth.

Round the world are experiencing reductions of working with them on that but on the other side the opportunity to really bring a lot of value to our customers through our total cost of ownership, which include expansion of the total portfolio. So as you saw phone really really resonating very well, especially in this economy and.

Contact center, while it's still small small from a absolute dollar perspective.

<unk> doubled the the IRR for contact center doubled from Q3 to Q4, so again small relative dollars, but really exciting to see it coming into its own and that we expect that to continue to contribute through all of this year, but then really start to accelerate from a.

Contribution perspective in FY, 'twenty, five and I do mean FY 'twenty five in that comment and then of course, there's zoom IQ for sales as well, which is on a kind of a similar trajectory in terms of contact center that small dollar contribution, but youre accelerating in terms of its overall growth.

Sterling Auty: Got it, thank you.

Kelcey McKinley: We will now hear from Matt Stotler with William Blair.

Matthew Alan Stotler: Thank you Kelly and Eric, thank you for taking the question. Maybe just one, a follow up on Zoom One, you mentioned some strength there obviously early days a couple of quarters then, I would love to get some color on maybe the portion of new customers are going with the Zoom One bundle versus other paths to Biogen product and then what the characteristics are that you're seeing of those early adopters, both in terms of customer size, whether they are adopting up for specific departments and rolling that out like you've seen before meetings product historically, any color there would be helpful.

Maybe just one on a follow up on zoom, one you mentioned some strength there obviously.

We early days a couple of quarters, then I would love to get some color on.

A portion of new customers are going with.

Assume one bundle versus other paths to Biogen product and then what.

The characteristics are that you're seeing of those early adopters right both in terms of.

Customer size.

Whether they are adopting up for specific departments and rolling that out like you've seen the court meetings product historically.

There would be helpful.

Kelly S. Steckelberg: I think what's amazing and really interesting about Zoom One is it's not just new customers that are buying the Zoom One bundle, it's existing customers as well that are upgrading. And as a reminder, it includes Zoom meetings, but also Zoom phone, it includes team chat and whiteboard, so really starting to see customers embracing the full effects of the platform. We have a fortune 10 customer now that is a long standing customer of ours that moved geographies in one bundle and is standardized on Zoom team chat, which we're super excited to see. So that's the example of what starts to happen when these customers are really exposed to the full value of the platform that we can bring to them. And I don't know exactly the percentage of how it broke out in Q4, but it is really starting to take the lead in terms of how our enterprise sales teams are selling.

As a reminder, it includes zoom meetings, but also zoom phone. It includes teen chat and whiteboard, so really starting to see customers embracing the full effects of the platform. We have a fortune 10 customer now that is a long standing customer of ours that moved geographies in one bundle and his standard.

Eyes on zoom team chat, which we're super excited to see so that's the example of what starts to happen. When these customers are really exposed to the full value of the platform that we can bring to them and I. I don't know exactly the percentage of how it broke out in Q3 Q4, but it is really starting to take the lead in terms of how our enterprise sales teams are selling.

I don't know exactly the percentage of how it broke out in Q3 Q4, but it is really starting to take the lead in terms of how our enterprise sales teams are selling.

Matthew Alan Stotler: Very helpful, thank you. Anything you want to add Eric? No, that's great. Thank you.

Matthew Alan Stotler: Very helpful, thank you.

Kelly S. Steckelberg: Anything you want to add Eric? No, that's great. Thank you.

Kelly S. Steckelberg: Anything you want to add Eric?

Matthew Alan Stotler: No, that's great. Thank you.

Kelcey McKinley: Moving on to Kash Rangan with Goldman Sachs.

Kasthuri Gopalan Rangan: Okay, thank you so much, good to see you guys Eric and Kelly. I sort of understand how we should reconcile the guidance going forward, which seems to be pretty close to the anniversary effect of the SMB attrition and then we should start to really narrow the growth of the so called enterprise business but the guidance still seems to be quite conservative. Could you just help us understand what might have happened at a higher level incrementally relative to this anniversary effect and what we should be seeing by this time real acceleration of the business. Thank you so much.

Eric Kelly.

I sort of understand how we should reconcile the.

The guidance going forward, we should be which seems to be pretty close to the anniversary effect of SMB attrition and then we should start to really narrow the growth of the so called enterprise business with the guidance still seems to be quite quite conservative could just help us understand what might have.

Happened at a higher level incrementally.

This anniversary effect of what we should be seeing by this time.

Real acceleration of the business. Thank you so much.

Kelly S. Steckelberg: Sure. So one thing to remember Kash is that while we are expecting the online portion of that business to stabilize from a dollar perspective during the year. It is still down year over year because of what happened in FY2023 where it was much higher, the dollar amounts were much higher in those earlier quarters as it came down. So we still have the unfortunate impact of the online segment of the business tamping down the growth of the enterprise business and so that's what you're seeing reflected there and so the stabilization that occurred this year will really help as we look forward to next year, which is what we always said is sort of reacceleration in the back half of this year into FY25 and that's what we see in our internal models today.

One thing to remember cash is that while we are expecting the online portion of that business to stabilize from a dollar perspective during the year. It is still down year over year because of what happened in FY2023 where it was much higher the dollar amounts were much higher in those earlier quarters as it came down.

So we still have the unfortunate impact of the online segment of the business tamping down the growth of the enterprise business and so that's that's what youre seeing reflected there and so the stabilization that occurred this year will really help as we look forward to next year, which is what we always do.

That is sort of reacceleration in the back half of this year into FY 'twenty five and.

That's what we see in our internal models today.

Kasthuri Gopalan Rangan: Got it. Curious Kelly, why does it take till fiscal '25 to see the net effect will be positive, can you help us understand the timing of why it takes another year from now?

Curious Kelly why does it take till fiscal 'twenty five to see the effect. The net effect will be positive can you help us understand the timing of why it takes another. Youre from now well.

Youre from now well.

Kelly S. Steckelberg: Well, the combination first of all online is still down year over year, and so you're not going to start to see that year over year stabilization of online until the back half of it even though the dollars are stabilizing right, the year over year comparables are still down until the very back half of this year. And then while we've seen all the strength we've talked about in Zoom one and Zoom phone, part of the expected growth is coming from these other newer products that are still doing great. They are all positive indicators, but there are still so early in their trajectory that you remember and think about [inaudible] Zoom phone was in its second year of life, that's where Zoom contact center and you might keep our sales and now you see Zoom phone, which is about to turn four I believe how it's really contributing, so we've just got a little little time ahead to get things turning and really contributing.

We've seen all the strength, we've talked about in the morning zoom phone part of the expected growth is coming from these other newer products that are still so they're doing great. We are all positive indicators, but theres still so early in their trajectory that you remember and think about housewares inbound was in its second year of life, that's where zoom contact center.

And you might keep our sales and now you see zoom phone, which is about to turn and for I believe how it's really contributing so we've just got a little little time ahead to get touring.

Kasthuri Gopalan Rangan: Got it. Thank you so much, very clear, I appreciate it.

Kelcey McKinley: We'll now hear from Bernstein's Peter Weed. Peter, please go ahead.

Peter Weed: Thank you. Maybe I'll follow up on that and kind of reinforce what appears to be a reasonably conservative revenue guide this year when we started to think about some of the things you've chatted about earlier in this conversation and everything from stabilization in the online business, which may even do better than that perhaps hopefully with some of the pricing increases that go on all of the product that you've been shipping, these types of things and when we take into account the fact that a year ago on the top line this business was even a little bit smaller than what we're anticipating quarter one this upcoming year by [inaudible], help me understand why we would do as bad I guess as all the way to a 1% year over year like what's the downside case that gets us there or is this more of an opportunity to perhaps start to see some of the lift coming out of here? Thank you.

Maybe I'll follow up on that and kind of reinforce what appears to be a reasonably conservative revenue guide this year. Sure when we start to think about some of the things you've chatted about earlier in this conversation and everything from stabilization in the online business, which may even do better than that perhaps hopefully with some of the pricing increases that go on all of the product that you've. But you've been shipping. These types of things and when we take into account the fact that a year ago on the top line you know this business was. Even a little bit smaller than what were anticipating quarter. One this upcoming year by D. Help me understand why we would do as bad I guess. Has all the way to a 1% year over year like what's the downside case that gets us there or is this more of an opportunity to perhaps start to see some of the lift coming out of here. Thank you.

Sure when we start to think about some of the things you've chatted about earlier in this conversation and everything from stabilization in the online business, which may even do better than that perhaps hopefully with some of the pricing increases that go on all of the product that you've.

But you've been shipping.

These types of things and when we take into account the fact that a year ago on the top line you know this business was.

Even a little bit smaller than what were anticipating quarter. One this upcoming year by D.

Help me understand why we would do as bad I guess.

Has all the way to a 1% year over year like what's the downside case that gets us there or is this more of an opportunity to perhaps start to see some of the lift coming out of here. Thank you.

Kelly S. Steckelberg: Remember for Q1, there is the definite impact of being three fewer days, which has real impact as compared to three fewer days of Rev Rec as well as the impact of currency, which we didn't have last year, so that year over year impact is going to definitely be visible in Q1 of FY '24. And then we continue to see in the enterprise elongated sales cycles, deal scrutiny. I was sort of laughing with a fellow CFO, saying this is the year of the CFO because I have gotten invited to speak at more sales kickoffs this year than you can imagine because every sales team is having to learn how to sell to the CFO including ours and that is exactly the experience that we're having. And so it just means they are taking a little bit longer and everybody is being very, very thoughtful about their purchases and so all of that was taken into consideration as we set our full year guidance.

Be visible in Q1 of FY 'twenty four and then. We continue to see in the enterprise.

We continue to see in the enterprise.

Elongated sales cycles deal scrutiny.

<unk> sort of lapping with their fellow CFO , saying this is the year of the CFO because I have gotten invited to speak at more sales kickoff. This year. Then you can imagine because every sales team is having to learn how to sell to the CFO and including ours and that is exactly the experience that we're having and so it just means there.

Taking a little bit longer and everybody is being very very thoughtful about their purchases and so all of that was taken into consideration as we set our full year guidance.

Peter Weed: But I guess, many of those things stopped I guess in the second half of this year, you have been addressing and are kind of carrying forward so they are not kind of brand new. I would think that some of this unless you are anticipating another leg down for some reason are there any additional legs down relative to the things that you've been already seeing in the business or is this just conservatism on like we just don't know how long this stuff is going to be really impacted and we can't really say how much people are really goin to be purchasing the Zoom One bundle, which is kind of a standard thing you're putting out really how well people are going to react to price increases this year so that has really created a floor on which we hope to do better than.

Kelly S. Steckelberg: I definitely think there is a question as to the state of the economy and when it comes to investments, while we think we are incredibly well positioned with our total cost of ownership and the value that we bring to our customers, everybody is being very cautious until there is better visibility about the potential of a recession or not and where we are going to come through this and we expect that could impact us at least through the rest of this year.

Hope to do better than.

I definitely think there is a question as to the state of the economy and when it comes to investments. While we think we are incredibly well positioned with our total cost of ownership and the value that we bring to our customers everybody is being very cautious until there is better visibility about the potential. Of a recession or not and where we are going to come through this and we expect that could impact us at least through the rest of this year.

Of a recession or not and where we are going to come through this and we expect that could impact us at least through the rest of this year.

Peter Weed: Thank you.

Kelcey McKinley: [inaudible] with Wedbush has the next question.

Unknown: Two questions, one for Eric. Eric, you spoke about Zoom One traction in the quarter, it's still pretty early I understand that. But when you sell a customer Zoom One from Zoom meetings was it difficult [inaudible] you are seeing in the deal sizes, let's say somebody has Zoom meetings today and then we have Zoom One, what is kind of the uptick you get to the deal value there?

In the quarter, it's still pretty early understand that when you sell a customer zoom one from zoom meetings was it difficult uplift you are seeing in the deal sizes, let's say somebody has zoom meetings today and then we have assumed one what is the.

Kind of the uptick you get to the deal the deal value there, yes, no money.

Eric S. Yuan: Good question. It comes from other market opportunities right and not of our SMB customers like whiteboard and some others. The enterprise customer, given the economic uncertainty in China due to cost reduction, they would likely consolidate in our One platform and mostly to from a total window perspective. When you look at it as a Zoom product just trying to understand what kind of other services features we can leverage more and [inaudible] with whiteboard on human chat contact centers, who might pursue more and more sale opportunities and this is a great time for those other market customers, especially our commercial and enterprise customers. Because the audit [inaudible] brand the newest service provider because they know what we are doing. They know our service will be better than the others so not surprising that this is a great example.

And use that go why aboard and some others.

The future is the enterprise customer.

Economic uncertainty in China due to cost reduction.

With that I'm going to consolidate.

One platform right and most of the two former total window perspective, when you look at it as zoom product just trying to understand what kind of other services features we can leverage more and have the most with cognizant my whiteboard on human chat contact centers, who might you pursue more and more of a sale opportunities and this is a great time for those op market.

Customers, especially.

Because the audit [inaudible] brand the newest service provider because they know what we are doing. They know our service will be better than the others so not surprising that this is a great example. So the only deals that we've had so far what is the uplift you see it in I guess dollars you're getting from the customer, how much do you see typically I guess, there is an uptick factor when somebody goes from just using Zoom meetings to using Zoom One, what is I guess the upsell or the uptick in the deal value? It really depends on the customer. The thing that I would point out though is it's not just the uplift in the dollar amount, it's the retention that we see which is really important to us as customers that have more--I remember at Analyst Day, we showed that chart that like I can't remember exactly what it is, more than 50 percent improved retention rates when they have more than one product deployed and so the value of us having a broader platform in there, including the ones that are much more retentive like Zoom chat and Zoom phone really brings a lot of value to us.

They know our service will be better than the others why not surprising that this is a great example.

Unknown: So the only deals that we've had so far what is the uplift you see it in I guess dollars you're getting from the customer, how much do you see typically I guess, there is an uptick factor when somebody goes from just using Zoom meetings to using Zoom One, what is I guess the upsell or the uptick in the deal value? It

So the only deals that we've had so far what is the uplift you see it in I guess dollars you're getting from the customer how much from what you see typically.

I guess, there isn't a big factor when somebody goes from just using zoom meetings using zoom one what is the what.

I guess, the upsell of the uptick in <unk>. Value. It really depends on the customer the thing that I would point out though is it's not just the uplift in the dollar amount is the retention that we see which is really important to us as customers that have more I remember at analyst day, we showed that chart that like I can't remember exactly what it is more than 50. Percent improved retention rates when they have more than one product deployed and so the value of having a broader platform in there, including the ones that are much more retentive licensing chat and zoom phone really brings a lot of value to us.

Value. It really depends on the customer the thing that I would point out though is it's not just the uplift in the dollar amount is the retention that we see which is really important to us as customers that have more I remember at analyst day, we showed that chart that like I can't remember exactly what it is more than 50. Percent improved retention rates when they have more than one product deployed and so the value of having a broader platform in there, including the ones that are much more retentive licensing chat and zoom phone really brings a lot of value to us.

It really depends on the customer the thing that I would point out though is it's not just the uplift in the dollar amount is the retention that we see which is really important to us as customers that have more I remember at analyst day, we showed that chart that like I can't remember exactly what it is more than 50. Percent improved retention rates when they have more than one product deployed and so the value of having a broader platform in there, including the ones that are much more retentive licensing chat and zoom phone really brings a lot of value to us.

Kelly S. Steckelberg: It depends on the customer. The thing that I would point out though is it's not just the uplift in the dollar amount, it's the retention that we see which is really important to us as customers that have more--I remember at Analyst Day, we showed that chart that like I can't remember exactly what it is, more than 50 percent improved retention rates when they have more than one product deployed and so the value of us having a broader platform in there, including the ones that are much more retentive like Zoom chat and Zoom phone really brings a lot of value to us.

Percent improved retention rates when they have more than one product deployed and so the value of having a broader platform in there, including the ones that are much more retentive licensing chat and zoom phone really brings a lot of value to us.

Unknown: And just one follow up Kelly, typically we see companies having free cash flow margins higher than operating margins, yours reversed last year, I think you had a drag from gas taxes and stock based comp. Again your guide implies cash flow margin I believe are lower by about nine points of operating margin, does that reverse at some point in the future or would we see that as more of a program? Given that we are a cash taxpayer for here to eternity now, I think you're likely to see it be slightly under but what we're getting back to you which was very disruptive last year is a more normalized relationship between those two as we're on more of a normal course now from a cash tax perspective.

Higher than operating margins use reverse last year, I think you had a drag from gas taxes and stock based comp.

Is that was that again your guide implies for margin I believe are.

Lower by about nine points of operating margin does that reverse at some point in the future would we see that as more of a program given that we are a cash taxpayer for here to eternity now I think you're likely to see it be slightly under but what we're getting back to you which was very disruptive last year is a more normalized relays.

Kelly S. Steckelberg: Given that we are a cash taxpayer for here to eternity now, I think you're likely to see it be slightly under but what we're getting back to you which was very disruptive last year is a more normalized relationship between those two as we're on more of a normal course now from a cash tax perspective.

<unk> shipped between those two as we're on more of a normal course now from a cash tax perspective.

Kelcey McKinley: Moving on to Matthew Harrigan with Benchmark.

Moving on to Matthew Harrigan with benchmark.

Matthew you're currently muted if you will come out--

I'm sorry, I'm trying to take myself out of the queue [inaudible]. No problem at all. Thanks Matthew, see you next time. Alright, well, we'll go ahead and in that case, then move on to William [inaudible] William, if you'll go ahead and turn on your video and [inaudible] for us.

Matthew Harrigan: I'm sorry, I'm trying to take myself out of the queue [inaudible].

Kelcey McKinley: No problem at all. Thanks Matthew, see you next time. Alright, well, we'll go ahead and in that case, then move on to William Power. William, if you'll go ahead and turn on your video and [inaudible] for us.

William Power: Great. Thanks for squeezing me in. A lot of my questions have been answered, but I did want to ask about Zoom phone and it looked like a particularly strong quarter. I think the push around Zoom One is probably helping, but if I could get any other perspective on what seems to be a nice acceleration there in Zoom phone adoption and then any color you are able to provide just round pricing trends and when does this become a 10% revenue component?

Hello. My question has been answered, but I did want to ask about zoom phone and it looked like a particularly strong quarter I think you know that.

Push around zoom, one is probably helping but if I forget any other perspective on what seems to be a nice acceleration there and zoom phone adoption and then any color you are able to provide just round.

Pricing trends and when does this become a 10%.

Kelly S. Steckelberg: In terms of when it's going to become 10%, sometime early this year in FY '24 and we are very excited about the momentum. We had 100% year over year growth in the product and it's back to even in this economy and especially in this economy companies looking for opportunities to standardize on one vendor, and also because there is a lot of value to be gained by getting rid of those on prem servers as well as the very disruptive price point that we have all the way around it's just proving to be very, very attractive. And as Eric mentioned there's still a lot of opportunity in market available so we expect that to continue.

In terms of when it's going to become a <unk>. 10% is sometime sometime early this year in FY 'twenty four. And we are very excited about the momentum we had 100% year over year growth in the product and he gets it.

10% is sometime sometime early this year in FY 'twenty four. And we are very excited about the momentum we had 100% year over year growth in the product and he gets it.

And we are very excited about the momentum we had 100% year over year growth in the product and he gets it.

It's back to even in this economy and especially in this economy companies looking for opportunities to standardize on one vendor.

And also because there is a lot of value to be gained by getting rid of those on prem servers as well as the very disruptive price point that we have all the way around it's just proving to be very very attractive and as Eric mentioned Theres still a lot of opportunity in market available. So we expect that to continue.

Just to remind everybody, Q2 and Q4 tend to be our really peak quarters in terms of Zoom phone ads. So while we had an amazing number of additions in Q4, I don't expect that necessarily to be the new bar. We expected to be seasonally down in Q1, but still very excited that the momentum continues to be up into the right.

As a reminder, everybody Q2, and Q4 tend to be are really peak quarters in terms of zoom phone adds. So while we had an amazing number of additions in Q4, I don't expect that necessarily to be the new bar, we expected to be seasonally down in Q1, but still very excited that the momentum continues to be up into the right.

So while we had an amazing number of additions in Q4, I don't expect that necessarily to be the new bar, we expected to be seasonally down in Q1, but still very excited that the momentum continues to be up into the right.

William Power: Thank you.

Kelcey McKinley: JMP Securities' Patrick Walravens has the next question.

Patrick D. Walravens: Oh, great. Thank you. I have a really fun question for Eric. So Eric in 2021, you guys invested in Stephen for their deal and you also invested in Monday. So how do you feel about those two spaces today? How do you feel about event technologies, how do you feel about collaborative work management?

For their their deal and you also invested in Monday. So how do you feel about those two spaces today, how do you feel about event technologies, how do you feel about collaborative work management.

So how do you feel about those two spaces today, how do you feel about event technologies, how do you feel about collaborative work management.

Eric S. Yuan: So given this is a phone question, maybe actually the launch of Chat GPT, answer to your question is it's better so I'll give you a final answer. But anyway, I think Monday dot com interesting because the reason why most of them a lot of our customers, especially in Europe also be brought into service. They integrated to us and also they're also doing customer as well I think as far as I know. And I think it's more from a customer perspective, the one offs in working together to integrate but there's a reason why you must have right.

But anyway, I think our Montney dot com interesting right across the reason why most of them a lot of our customers you know they also especially in Uruguay also be brought into service.

The integrated to US and also they're also doing customer as well I think as far as I know.

And I think it's more like a from a customer perspective, the one offs in working together to integrate but there's a reason why you must have right.

Zoom [inaudible] for example, during COVID a lot of customers, who deployed our zoom are more and more webinars new events, and then especially for those hybrid events, in person events were more like a pure technology platform also into some other components to help make sure you streamline your events management. And that's why we partnered with Stephen, we see the opportunity to further solidify our relationship, why not invest. I think now is more of a company to support a hybrid world I think assuming I think they would do well and that's another reason why we invest. So that's pretty much, maybe my answer not as fine as Chat GPT but that's pretty much what I can do.

<unk> Youre events management and Thats why Im pardon me, assuming we see the opportunity to further solidify our leadership why not to investors I think are giving now is more of a company to support a hybrid world I think assuming I think they would do well and that's another reason why we invest so that's pretty much maybe my answer as far as.

The challenge of beauty, but that's pretty much I can do so.

Patrick D. Walravens: Great. Thank you.

Eric S. Yuan: Thank you.

Kelcey McKinley: We do have time for one additional question that will come from Ryan MacWilliams with Barclays.

Ryan MacWilliams: Guys I appreciate you fitting me in, my question is kind of in the same spirit of the last question. But Kelly, it looks like you filled the remaining amount of your share repurchase authorization this quarter. I guess, how are you thinking about a new authorization for a buyback? And in terms of M&A with Zoom potentially look at acquisitions where you already have a competing product today or are you looking at adjacent solutions? Thanks.

Filled the remaining amount of your share repurchase authorization. This quarter I guess, how you're thinking about a new authorization for a buyback and in terms of M&A with zoom potentially look at acquisitions, where you already have a competing product today or are you looking at adjacent solutions. Thanks.

Kelly S. Steckelberg: In terms of M&A, we look at both. We've been very successful in the past by buying those technology tuck ins to accelerate our development as you have seen with the Salvi acquisition, which has been a great accelerant for us in terms of contact center and continue to look at those. But also looking at other areas, there might be leaders in this space that makes sense for us. So we're continuing to look at both and every quarter we talk to our board about our capital allocation strategy, and of course M&A is at the top of the list. We do not as you indicated have a buyback authorization in place today. We will continue to look for opportunities to deploy our capital in the best way possible for our investors, and right now again, as I said earlier, our number one focus is reaccelerating topline growth and making sure that we have the flexibility to do that as opportunities arise. And so that's why for the moment, we've decided to hold at least on requesting an authorization for a buyback.

There might be leaders in this space that makes sense for us. So we're continuing to look at bolt and.

We every every quarter, we talk to our board about our capital allocation strategy and of course M&A is at the top of the list. We do not as you indicated have a buyback authorization in place today.

We will continue to look for opportunities to deploy our capital in the best way possible for our investors, and right now again, as I said earlier, our number one focus is reaccelerating topline growth and making sure that we have the flexibility to do that as opportunities arise. And so that's why for the moment, we've decided to hold at least on requesting an authorization for a buyback.

As opportunities arise and so that's why for the moment, we've decided to hold at least on requesting an authorization for a buyback.

Ryan MacWilliams: Appreciate the color. Thanks, so much.

Kelcey McKinley: And again, everyone that does conclude our Q&A for today. I'll go ahead and pass it back to you Eric for any closing or additional comments.

Eric S. Yuan: Thank you all, I really appreciate the time. Love you all. Thank you, take care.

Kelly S. Steckelberg: Bye everybody.

Kelcey McKinley: And again everyone, this does conclude today's earnings release. As always, we thank you all for your participation and we look forward to seeing you again in the spring and summer. Until then, take care and enjoy the rest of your day.

Q4 2023 Zoom Video Communications Inc Earnings Call

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