1
00:00:06,720 --> 00:00:09,160
Speaker 1: Zoom, of course, the video conferencing company we all know,

2
00:00:09,240 --> 00:00:12,560
Speaker 1: reported second quarter results and boosted the outlook with a

3
00:00:12,600 --> 00:00:15,440
Speaker 1: move beyond video calls, of course, and about phones and

4
00:00:15,440 --> 00:00:18,159
Speaker 1: the like. But let's dig into the future visibility of

5
00:00:18,200 --> 00:00:21,160
Speaker 1: strength for this business. Kelly Stockelberg, Zoom CFO, joins us

6
00:00:21,160 --> 00:00:24,480
Speaker 1: now and it's interesting. We saw some excitement around the

7
00:00:24,560 --> 00:00:27,280
Speaker 1: numbers being posted after the bill yesterday, and then reality

8
00:00:27,360 --> 00:00:30,080
Speaker 1: hits a little bit today amid a macro picture that

9
00:00:30,200 --> 00:00:33,400
Speaker 1: is worrying. Can you give your investor base, our audience,

10
00:00:33,760 --> 00:00:36,840
Speaker 1: just some visibility into the future growth story for Zoom

11
00:00:36,920 --> 00:00:37,320
Speaker 1: right now?

12
00:00:38,400 --> 00:00:41,360
Speaker 2: Sure? So, we were really pleased with our qtube results.

13
00:00:41,440 --> 00:00:44,880
Speaker 2: As you said, we beat both our top line revenue

14
00:00:44,880 --> 00:00:48,840
Speaker 2: guidance as well as our profitability outlook, and we raise

15
00:00:49,080 --> 00:00:52,040
Speaker 2: those numbers for the full year of f y twenty four,

16
00:00:52,120 --> 00:00:56,640
Speaker 2: both top and bottom line guidance. And what I think

17
00:00:56,680 --> 00:01:00,520
Speaker 2: people are looking for is long term growth which will

18
00:01:00,520 --> 00:01:04,880
Speaker 2: be driven from the expansion of our platform, our new products,

19
00:01:05,080 --> 00:01:08,160
Speaker 2: some of our newer products like Zoom Foam, which is

20
00:01:08,160 --> 00:01:12,759
Speaker 2: our cloud PBX solution, also Zoom Contact Center, which is

21
00:01:12,800 --> 00:01:16,200
Speaker 2: only six quarters old and already has five hundred customers.

22
00:01:16,240 --> 00:01:19,680
Speaker 2: On it, and that is our natively built, fully modern

23
00:01:19,760 --> 00:01:23,880
Speaker 2: cloud contact center. We have lots of other products across

24
00:01:23,880 --> 00:01:27,039
Speaker 2: our platform too, like Zoom Scheduler, and all of this

25
00:01:27,160 --> 00:01:31,440
Speaker 2: brings together a platform that as those products into Neue mature,

26
00:01:31,480 --> 00:01:36,440
Speaker 2: will drive growth. We're also looking for stabilization the overall macro,

27
00:01:36,640 --> 00:01:39,960
Speaker 2: as you mentioned, both in the US and internationally, which

28
00:01:40,000 --> 00:01:43,000
Speaker 2: is really important for us for both segments of our business.

29
00:01:43,600 --> 00:01:45,959
Speaker 2: And as we work with our customers, as some of

30
00:01:46,000 --> 00:01:50,040
Speaker 2: them have gone through reductions in their own employees, we

31
00:01:50,120 --> 00:01:53,360
Speaker 2: help them transition that spend potentially from meetings into some

32
00:01:53,440 --> 00:01:54,480
Speaker 2: of our newer products.

33
00:01:55,080 --> 00:01:58,760
Speaker 3: You know, Kelly, the Zoom story was really clear. In

34
00:01:58,800 --> 00:02:01,880
Speaker 3: the fiscal second Quarta earning has gone right, So topline

35
00:02:01,920 --> 00:02:06,080
Speaker 3: growth of ten percent overall, but sales to individuals and

36
00:02:06,120 --> 00:02:10,400
Speaker 3: small businesses down four point three percent. Okay, So in

37
00:02:10,440 --> 00:02:14,119
Speaker 3: other words, enterprise is great, but the individual user every day,

38
00:02:14,160 --> 00:02:18,280
Speaker 3: you and I falling away. How permanent is that dynamic

39
00:02:18,320 --> 00:02:19,720
Speaker 3: in that story for your company?

40
00:02:20,960 --> 00:02:23,800
Speaker 2: The online segment of our business that you're referring to

41
00:02:24,560 --> 00:02:27,399
Speaker 2: is about forty percent of our business today, and it

42
00:02:27,440 --> 00:02:30,960
Speaker 2: is individuals like you and I that are using the product.

43
00:02:30,960 --> 00:02:34,080
Speaker 2: But it's also small businesses, which is really important to remember.

44
00:02:34,520 --> 00:02:38,440
Speaker 2: A lot of these customers buy online and we are

45
00:02:38,480 --> 00:02:43,000
Speaker 2: continuing to expand the opportunity by adding more currencies in

46
00:02:43,080 --> 00:02:45,960
Speaker 2: which we sell, adding more products to the platform. So

47
00:02:46,040 --> 00:02:48,640
Speaker 2: it's a very important part of our business and the

48
00:02:48,680 --> 00:02:51,680
Speaker 2: team is consistently innovating around how do we bring more

49
00:02:51,720 --> 00:02:55,440
Speaker 2: products to them and how do we expand the top

50
00:02:55,480 --> 00:02:58,560
Speaker 2: of the funnel. We've seen a lot of stabilization in

51
00:02:58,600 --> 00:03:02,240
Speaker 2: the churn rate there. We're to pre pandemic levels, which

52
00:03:02,280 --> 00:03:04,080
Speaker 2: is really great. It's just going to take a little

53
00:03:04,080 --> 00:03:06,960
Speaker 2: longer than we expected to stabilize over time. Though.

54
00:03:07,680 --> 00:03:10,880
Speaker 1: What about leuphoria that everyone wants to discuss that is AI?

55
00:03:11,120 --> 00:03:13,200
Speaker 1: How much are you trying to lean into that if

56
00:03:13,280 --> 00:03:14,959
Speaker 1: you're an investm base that wants to hear it, or

57
00:03:14,960 --> 00:03:16,760
Speaker 1: how much are you trying to be realistic about what

58
00:03:16,840 --> 00:03:18,280
Speaker 1: it adds to your product portfolio.

59
00:03:18,919 --> 00:03:22,160
Speaker 2: Yeah, so we think that AI is a really important

60
00:03:22,200 --> 00:03:25,360
Speaker 2: strategic part of our product portfolio going forwards. We just

61
00:03:25,560 --> 00:03:28,760
Speaker 2: hired XD Wong, for example, to lead that initiatives. We're

62
00:03:28,760 --> 00:03:31,480
Speaker 2: thrilled to have him as part of our team, and

63
00:03:32,240 --> 00:03:34,680
Speaker 2: Eric talked about it a little bit on the call yesterday.

64
00:03:34,760 --> 00:03:38,520
Speaker 2: We have individual skews today that al already leverage a

65
00:03:38,560 --> 00:03:41,440
Speaker 2: lot of AI. We have Zoom Virtual Agent, for example,

66
00:03:41,480 --> 00:03:44,240
Speaker 2: which is part of our contact center solution, but we

67
00:03:44,400 --> 00:03:49,600
Speaker 2: also will bring those benefits into the broader platform without

68
00:03:49,680 --> 00:03:52,560
Speaker 2: necessarily adding a lot of cost to our customer base.

69
00:03:52,640 --> 00:03:55,120
Speaker 2: We want them to get the benefit from it, and

70
00:03:55,520 --> 00:03:59,200
Speaker 2: we will talk more about additional features or products that

71
00:03:59,280 --> 00:04:02,960
Speaker 2: really lever AI to the hilt when it comes out

72
00:04:03,000 --> 00:04:05,320
Speaker 2: in Zoomtopia, which is our user's conference.

73
00:04:05,320 --> 00:04:10,440
Speaker 3: In October, Kelly, there was a pretty strong reaction to

74
00:04:10,600 --> 00:04:14,640
Speaker 3: news that Zoom was pushing its workforce back to the office.

75
00:04:15,240 --> 00:04:19,080
Speaker 3: Many saw that with a sense of irony. Right given

76
00:04:19,120 --> 00:04:21,839
Speaker 3: the role that your technology played in the work from

77
00:04:21,839 --> 00:04:25,960
Speaker 3: home era, was that severe reaction justified. You might be

78
00:04:26,000 --> 00:04:29,599
Speaker 3: surprised that people were so surprised in their own mind

79
00:04:30,040 --> 00:04:31,520
Speaker 3: that you have made that move.

80
00:04:32,520 --> 00:04:36,640
Speaker 2: Well, we believe that a structured hybrid approach is best

81
00:04:36,800 --> 00:04:40,240
Speaker 2: for Zoom. We hear from our employees they want to

82
00:04:40,240 --> 00:04:43,440
Speaker 2: be together for collaboration. So by structuring days in the

83
00:04:43,520 --> 00:04:45,960
Speaker 2: office just two days in the office, by the way,

84
00:04:46,560 --> 00:04:49,720
Speaker 2: it ensures that when they come to the office, they're

85
00:04:49,720 --> 00:04:52,000
Speaker 2: going to see their colleagues they're going to see their friends.

86
00:04:52,279 --> 00:04:55,520
Speaker 2: It also really helps drive innovation. We are the best

87
00:04:55,560 --> 00:04:58,400
Speaker 2: to leverage our products to ensure that we're meeting the

88
00:04:58,400 --> 00:05:02,240
Speaker 2: needs of our customers. We're also in a hybrid environment,

89
00:05:02,720 --> 00:05:05,919
Speaker 2: and so by leveraging Zoom Rooms and new features like

90
00:05:05,960 --> 00:05:09,640
Speaker 2: Intelligent Director, we're able to ensure that we're being the

91
00:05:09,680 --> 00:05:11,480
Speaker 2: best possible products to market.

92
00:05:12,800 --> 00:05:15,760
Speaker 3: All right, Kelly Steckelberg, Zoom ZFO, thank you for joining

93
00:05:15,800 --> 00:05:18,279
Speaker 3: us so close after earnings. Here a move technology