Hello, everyone, and welcome to Zoom’s Q4 FY ’25 earnings release webinar. I now turn it over to Charles Eveslage, head of investor relations. Charles, the floor is yours.

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Charles Eveslage — Head of Investor Relations

Thank you, Kelcey. Welcome, everyone, to Zoom’s earnings webinar for the fourth quarter and full fiscal year 2025. Joining me today are Zoom’s founder and CEO, Eric Yuan, and CFO, Michelle Chang. Our earnings report was released today after market hours and can be accessed on our Investor Relations page at investors.zoom.us.

You can also find today’s prepared remarks and a slide deck highlighting our financial performance on that same page. This includes a reconciliation of GAAP and non-GAAP financial results. We urge you not to consider these measures alone as replacements for GAAP-compliant financial data. During this call, we’ll discuss forward-looking statements regarding our financial outlook for the upcoming quarter and fiscal year 2026. Specific predictions pertain to financial and business trends, market positioning, stock repurchase strategies, growth initiatives, and product improvements. These are estimates based on current beliefs, and actual results may vary.

We detail the risks and other factors affecting our performance in our SEC filings, including our Form 10-K and quarterly reports on Form 10-Q. Zoom has no obligation to update any forward-looking statements made during this webinar. Now, I’ll pass it over to Eric.

Eric Yuan — Founder and Chief Executive Officer

Thank you, Charles. I appreciate everyone being here today. Fiscal Year 2025 was remarkable for us, highlighted by significant breakthroughs in AI as Zoom evolved into an AI-first work platform, including Phone, Teams Chat, Events, Docs, and more. We experienced robust growth in our Contact Center and Workvivo offerings. Notably, our AI capabilities gained traction, with monthly active users of Zoom AI Companion increasing by 68% from the previous quarter, showcasing the value AI is adding for our customers.

As we look to the future, we aim to maximize the benefits of agentic AI for our users. In April, we plan to introduce the Custom AI Companion add-on, designed to automate workplace tasks through tailored agents that will work with users’ existing data and third-party tools. Additionally, we’re upgrading services aimed at clinicians to enhance clinical note-taking functionality.

Furthermore, we are expanding our Business Services with improved agentic features. Our upcoming Zoom Virtual Agent will enhance its reasoning capabilities to handle complex tasks more effectively. The unique interaction of our platform, combined with real-time data from ongoing conversations, places us in a strong position to capture value for our customers. Our federated AI approach allows us to harness specialized models for specific tasks while benefiting from larger models for complex reasoning, ensuring both quality and cost effectiveness.

We have a reputation for simplifying complicated technologies for our users. Our competitive edge lies in managing the complexities of AI while providing an intuitive, integrated experience with popular third-party applications. Our strategic focus is on delivering real value while striving for a vision of AI that significantly enhances human potential.

The momentum behind our AI-first work platform is bolstered by our core strengths in meetings and a growing suite of integrated solutions, including Phone, Team Chat, Events, Zoom Docs, Whiteboard, and Zoom Rooms. This is reflected in our latest achievements, such as a significant deal with Amazon in Q4. The Zoom Phone service continues to thrive both with new customers and expansions, utilizing our strengths in retail, healthcare, and education to seal seven of our top 10 Zoom Phone agreements this quarter.

Additionally, our partnership with Mitel opens doors for access to 70 million global users, reinforcing our open ecosystem approach that meets customer demand for flexible deployment options. Zoom Team Chat remains a vital collaboration hub in our platform, with our recent sidebar redesign improving navigation and productivity and our new workflow automation features fostering deeper collaboration.

“`

Zoom Reports strong Q4 Growth with Record Wins and Expanding AI Capabilities

Zoom Video Communications showed impressive performance in its latest financial report, highlighting strong customer adoption and innovative offerings. The company continues to expand its portfolio, showcasing the success of tools like Zoom Docs, which saw a remarkable increase in use.

Record-Setting Progress in Contact Center and Workvivo

During this quarter, Zoom Docs usage more than doubled, reflecting the growing integration of AI across their platform. The Whiteboard tool, recognized in the 2024 Gartner Peer Insights’ Voice of the Customer report for Visual Collaboration Applications, stands out alongside Zoom Team Chat and Docs as central to Zoom’s vision of an AI-first engagement system. The Contact Center product achieved a major milestone with its largest Annual Recurring Revenue (ARR) deal ever, signing on a Fortune 100 tech company for over 15,000 agents. This milestone illustrates Zoom’s capacity to meet the needs of large enterprise clients effectively.

Significant growth in Contact Center customers also emerged, with over a 100% increase in ARR clients contributing more than $100,000 year over year. The success in this sector is bolstered by a commitment to an AI-driven model, as a majority of deals now fall under the Elite or Premium packages, underscoring the demand for Zoom’s advanced AI and workforce engagement tools.

Workvivo’s Remarkable Growth and Strategic Partnerships

Workvivo, another key area for Zoom, also reported excellent results. The user base increased by 89% year over year, surpassing the previous quarter’s growth rate of 79%. Three contracts were signed, each exceeding $1 million in ARR, which highlights the platform’s appeal to major global brands. This growth has been fueled by Zoom’s strategic alliance with Meta Workplace, serving as their preferred migration partner.

Workvivo’s offerings extend beyond employee communication, positively impacting company culture through features like live streaming and engagement analytics. This strategic direction emphasizes Zoom’s commitment to enriching not only external customer relationships but also internal employee collaboration.

Future Prospects Driven by Innovation

Looking ahead to fiscal year ’26, Zoom plans to focus on expanding its AI capabilities and rapidly innovating within its product line. They aim to maintain momentum in new offerings like Contact Center and Workvivo. Despite external economic challenges, Zoom remains confident that their value proposition and competitive pricing are resonating with customers, laying the groundwork for future opportunities and growth.

In addition to these successes, Zoom secured a partnership with Amazon employees, further solidifying their long-standing relationship with AWS. This strategic move enhances the ease of obtaining and deploying Zoom services through the AWS Marketplace. Delta Air Lines also transitioned to Workvivo for its employee engagement needs, marking a significant win as they commemorate their centennial anniversary.

Financial Results Exceed Expectations

Michelle Chang, Zoom’s Chief Financial Officer, reported strong financial results, indicating that the company surpassed its revenue and profit guidance. Total revenue for Q4 reached $1.184 billion, a 3% increase year over year, and netted $4 million above expectations. The constant currency revenue adjustment was $1.188 billion, also exceeding projections.

Enterprise revenue saw a solid 6% growth and now represents 60% of total revenue. Monthly churn improved to 2.8%, marking the lowest fourth-quarter churn rate to date. Additionally, the number of customers generating more than $100,000 in revenue increased by 7% year over year, constituting 31% of total revenue.

International Growth and Strategic Investments

Zoom’s revenue in the Americas grew by 4% year over year, while EMEA and APAC regions saw increases of 2% and 3%, respectively. The non-GAAP gross margin for Q4 was recorded at 78.8%, slightly down due to investments in AI but still aligned with previous guidance. Operating income showed a 5% year-over-year increase, reaching $468 million, exceeding forecasts.

Deferred revenue also saw positive growth, reaching $1.35 billion, up 7% from last year, surpassing earlier estimates. Looking ahead, Zoom expects deferred revenue to increase by 4% to 5% for the upcoming quarter.

Overall, Zoom’s robust performance and expansive approach showcase its commitment to enhancing both customer and employee engagement through a focused integration of innovative technology.

Zoom Reports Strong Financial Growth and AI Initiatives in Latest Earnings Update

Zoom posted a 6% year-over-year increase in Remaining Performance Obligations (RPO), totaling approximately $3.8 billion. The company anticipates recognizing 59% of this RPO as revenue in the next 12 months, an increase from 58% in the previous quarter.

For the quarter, operating cash flow rose by 21% year over year to $425 million, while free cash flow grew by 25% to $416 million. Operating cash flow and free cash flow margins reached 35.9% and 35.2%, respectively. As of the end of the quarter, Zoom held around $7.8 billion in cash, cash equivalents, and marketable securities, excluding restricted cash. During the fourth quarter, the company repurchased 4.3 million shares worth $355 million under its $2.7 billion share buyback program, which was $53 million more than the previous quarter, effectively reducing the number of common shares outstanding.

Reflecting on the full fiscal year 2025, Zoom saw total revenue increase by 3%, with enterprise revenue growing by 5%. Notably, growth accelerated during the latter half of the year. Free cash flow for FY ’25 was $1.8 billion, representing a 23% year-over-year increase. A non-GAAP operating margin of 39.4% marked a 20-basis point improvement from FY ’24. Additionally, stock-based compensation decreased to 20% of revenue, a three-point reduction compared to the previous year, demonstrating better cost control.

Throughout FY ’25, Zoom repurchased a total of 15.9 million shares for $1.1 billion, contributing further to the decline in outstanding common stock. Looking ahead, Zoom projects Q1 revenue to fall between $1.162 billion and $1.167 billion, which indicates about 2% growth year-over-year at the midpoint. Given that Q1 of FY ’26 has one less day than the previous year, this growth reflects resilience in the company’s performance.

For guidance on non-GAAP operating income, Zoom expects a range of $440 million to $445 million, leading to an operating margin of 38% at the midpoint. Non-GAAP earnings per share are forecasted to be between $1.29 and $1.31, based on approximately 316 million shares outstanding. It’s important to note that future share repurchase plans are not factored into the share count or earnings per share guidance.

For the full fiscal year FY ’26, revenue is projected between $4.785 billion and $4.795 billion, suggesting a potential growth rate of about 2.7% year-over-year at the midpoint or 3.1% on a constant-currency basis. The company expects its non-GAAP operating income for FY ’26 to range from $1.85 billion to $1.86 billion, translating to an approximate operating margin of 39% at the midpoint. The free cash flow outlook for the year stands between $1.68 billion and $1.72 billion.

Zoom remains committed to its vision of integrating AI into its offerings, which the company believes will significantly enhance customer value. Investments in AI technology are seen as key priorities moving forward, while the focus on generating profitability and robust cash flow remains steadfast.

Kelcey McKinley — Event Consultant

Thank you, Michelle. We will now open the floor for questions. When I call your name, please switch on your video and unmute. Remember to keep your questions limited to one to allow everyone a chance to speak.

Our first question comes from Kash Rangan with Goldman Sachs. Kash, go ahead.

Kash Rangan — Analyst

Hi. Thank you. Congratulations on wrapping up the fiscal year. Eric, I’d like to ask about AI’s role in your future plans. With the advances you’ve made, particularly with Zoom Companion and your deal with Amazon, when do you see AI becoming a significant growth driver for your business? Even if growth is steady now, could AI innovations pave the way for accelerated revenue growth?

Eric Yuan — Founder and Chief Executive Officer

Great question, Kash. Our investment in AI has been a top priority for some time, and we are already starting to see positive outcomes. For example, our AI Companion, offered at no extra cost to low-end SMB customers, has made our service more attractive and sticky. Features like meeting summaries have gained popularity, enhancing the overall customer experience.

For our higher-end clients, we plan to monetize AI capabilities in the near future. For instance, we’ll unveil customized AI solutions in April for those interested. In terms of business services, AI features such as AI Expert Assist are creating competitive advantages. Our strategy is to leverage AI to elevate customer engagement and drive usage of Zoom services.

Kash Rangan — Analyst

Thank you, Eric.

Kelcey McKinley — Event Consultant

Next, we have Samad Samana with Jefferies.

Samad Samana — Analyst

Good evening, and I echo Kash’s congratulations on your progress. Eric, regarding AI, how do you see it impacting larger customers’ decisions to adopt existing Zoom features? Are these AI enhancements influencing their willingness to expand their use of the platform?

Michelle, regarding our AI ambitions, are those investments fully accounted for in this year’s guidance? I’d appreciate your insights on both these points.

Eric Yuan — Founder and Chief Executive Officer

To answer the first part, customers are intelligent in their approach to AI integration. They seek clear value from AI and often test services before full commitment. Our AI Companion, which is included at no extra cost, is something that clients appreciate, especially given the consistent quality improvements. When customers realize that our quality and value surpass our competitors, they are more willing to embrace our offerings.

Zoom Continues to Build Trust and Revenue Strategies Amid Changing Market Conditions

Trust and Technology: A Winning Combination

Zoom is on a mission to deepen its trust-based relationships with customers, leveraging AI technology to improve efficiency without passing costs onto them. During a recent earnings call, CEO Eric Yuan emphasized the importance of transparency, highlighting the company’s strategy of openly sharing AI roadmaps, features, and pricing with clients. This approach has helped Zoom gain customer trust while improving service offerings.

Financial Insights from Michelle Chang

Chief Financial Officer Michelle Chang provided insights into future growth opportunities. The company is focusing on reducing customer churn and anticipating an uptick in revenues from their elite Contact Center segment. With products like the custom AI Companion expected to play a role in their growth strategy, the team is poised for a ramp-up in these services.

Analyzing Growth Drivers for Fiscal 2026

During the call, analyst Ryan MacWilliams from Barclays asked about the main drivers behind Zoom’s anticipated revenue growth in fiscal 2026. Chang responded by stating that while revenue growth for online services might be flat or slightly declining, the enterprise segment is expected to drive significant growth.

“The enterprise segment will be the primary contributor to revenue,” she said, indicating that traditional services like Phone will continue to perform well while efforts to reduce churn in the enterprise sector show improving results.

Broader Market Engagement Strategies

As Zoom progresses, analyst Meta Marshall from Morgan Stanley inquired about the company’s marketing strategies, particularly concerning the Contact Center. Chang noted the prioritization of expanding enterprise engagement and channel partnerships to ensure sustained growth. Continuing efforts will focus on moving upmarket to enhance their customer base.

Further Investments in Partnerships

Eric Yuan contrasted these strategies with data from recent successes in the Contact Center segment. He pointed out that six of the top ten deals in that area were facilitated by channel partners, reaffirming the importance of deepening these relationships as part of their growth strategy.

Looking Ahead: Demand and Opportunities

Analyst Alex Zukin raised questions about post-election demand across different segments, asking how Zoom will navigate market uncertainties. In response, Yuan noted ongoing challenges but emphasized opportunities for growth through partnerships with established companies like Amazon. The collaboration with major players not only strengthens Zoom’s market position but also opens avenues for further distribution and customer acquisition.

In summary, Zoom’s strategic focus on trust-based resolutions, coupled with investments in AI and partnerships, aims to position the company for continued long-term success amidst evolving market dynamics.

Zoom’s Financial Outlook: A Mixed Yet Stable Macro Environment

Michelle Chang — Chief Financial Officer

It’s clear that the macroeconomic environment is displaying a mix of stability and challenges. On the positive side, we’re experiencing strong momentum among enterprise clients, evident in our latest results. There has been a noticeable improvement in down-sells within this sector. Additionally, we’ve achieved record-low churn rates during both Q3 and Q4, signaling positive retention. However, headlines about layoffs and uncertain economic conditions contribute to a mixed sentiment overall.

Eric Yuan — Founder and Chief Executive Officer

Turning to our partnership with Amazon, it’s important to note that this collaboration stems from Amazon’s adoption of our video conferencing platform acquired several years ago. Video conferencing is now becoming increasingly crucial. Zoom is not just about video calls; rather, we offer a comprehensive workplace platform, including various services relevant for conference rooms. Amazon is reviewing these offerings to enhance employee experience, and we believe Zoom stands out as the optimal choice to bolster their communication and collaboration needs.

Many organizations that prioritize employee experience are likely to choose Zoom as their vendor. We have already begun collaborating with Amazon and recognize a significant opportunity to utilize their marketplace for our growth, with early signs of success emerging.

Kelcey McKinley — Event Consultant

Thank you, Alex. Next, we have a question from Evercore’s Peter Levine.

Peter Levine — Analyst

Thank you. In April, once the AI Companion becomes available at $11 or $12 per seat, could you clarify its main use cases? Additionally, how do you anticipate organizations will adopt this application? Also, with your observations of return-to-office policies, do you think this trend may hinder your clients’ willingness to expand?

Eric Yuan — Founder and Chief Executive Officer

The expectation for in-office work mainly applies to financial institutions, which necessitate in-person meetings for myriad benefits. However, many employees work remotely or from various locations, including international offices. Conversations with customers show that they continue to rely heavily on Zoom. Internal usage may fluctuate, but Zoom remains essential for business collaboration. I respect each company’s choice, whether remote, in-office, or hybrid.

Our goal is to assist clients regardless of their work model, ensuring they have the best collaboration tools to enhance productivity. Michelle, would you like to address Peter’s question about the AI Companion?

Michelle Chang — Chief Financial Officer

Certainly. Looking at the projected $12 price point for the AI Companion, our primary targets are enterprise customers. While we will focus on our existing client base, we are not limiting our approach. Expect more details to be shared at Enterprise Connect. We aim to see some level of monetization begin in FY 2026, with significant potential in 2027. This price point presents a compelling total cost of ownership (TCO) that we believe differentiates us from competitors.

Eric Yuan — Founder and Chief Executive Officer

Regarding customer use cases, we strive to provide flexibility for clients to tailor our offerings to their specific needs. For instance, we plan to introduce a Zoom feature called video clip that enables users to customize templates. Third-party integrations will also allow clients to incorporate their data into our solutions.

Peter Levine — Analyst

Thank you very much.

Eric Yuan — Founder and Chief Executive Officer

Thank you, Peter.

Kelcey McKinley — Event Consultant

Next, we will hear from Mark Murphy at JPMorgan.

Mark Murphy — Analyst

Thank you. I echo the congratulations on completing the fiscal year. Eric, could you share your thoughts on DeepSeek and its potential implications for reducing AI model inference costs? Michelle, considering your impressive cash flow, could you discuss the margin profile of the AI products, particularly concerning the AI Companion?

Eric Yuan — Founder and Chief Executive Officer

Absolutely. Concerning DeepSeek, I recently shared insights on LinkedIn after an earnings call. At a high level, since this project is open source, it inspires innovation within our application layers and AI technologies. We are developing a large language model which integrates various optimization techniques that benefit vendors like us.

Zoom’s Shift Towards AI: Insights on Margins and Growth Strategies

Connectively, Zoom’s leadership shared important details on the company’s focus on AI development and its implications for financial performance in an investor call. Chief Financial Officer Michelle Chang and CEO Eric Yuan addressed pressing questions regarding margins and growth while emphasizing the importance of AI for the company’s future.

The Rising Demand for GPUs

As demand for Graphics Processing Units (GPUs) increases, companies like Zoom find themselves in competitive company with large cloud providers such as Media, Broadcom, and AMD. Historically, these cloud vendors have prioritized their purchasing, leaving smaller organizations like Zoom at a lower priority for acquiring GPU resources. However, this growing interest in AI applications is also pushing Zoom to expand its own GPU usage, sparking optimism across the industry. Executives believe this trend, driven by a booming market for large language models and AI applications, will ultimately benefit all players involved as they strive for lower costs through open-source solutions.

Margins Under Review

In response to Mark Murphy, an analyst questioning margin trajectories, Chang explained that while margins per active user have been decreasing, they were adjusting to expected trends rather than purely reacting to market conditions. Expectations for fiscal year 2026 suggest that although margins may not reach the previously targeted 80%, the company remains committed to improving efficiency and maintaining profitability.

Cash Flow and Investment Strategy

Furthermore, Chang clarified the discrepancies between operating and free cash flow margins, attributing them to a mix of timing factors and economic conditions. Looking to the future, she emphasized maintaining focus on revenue growth while balancing profitability, preparing investors for a balanced approach in upcoming fiscal years.

Transitioning to Agentic AI

On the topic of evolving pricing models in relation to new AI features, Eric Yuan discussed the company’s strategic move towards agentic AI capabilities. Zoom’s current AI products already incorporate these advanced features, with a focus on creating an integrated framework that serves various business needs. Yuan noted that introducing separate pricing structures for agentic functionalities would not be necessary, as they are part of the broader Zoom AI Companion offerings.

Enterprise Growth and Future Expectations

Analyst Michael Turrin inquired about the enterprise segment’s performance and its potential to drive revenue growth. Chang expressed confidence that the company would see growth through ongoing efforts to penetrate the enterprise market successfully while addressing challenges like churn and market fluctuations. The recent strategic partnerships and expansions signal strong potential as Zoom moves forward, refining its approach to harness AI capabilities while managing financial health.

Ultimately, the conversation underscored Zoom’s commitment to balancing innovation in AI with financial prudence, ensuring stakeholders remain informed of the company’s evolving strategies in a rapidly changing tech landscape.

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Key Insights into Zoom’s Financial Performance: Margin Management and Future Growth Prospects

Michelle Chang — Chief Financial Officer

In response to questions about pricing strategies and free cash flow, Michelle Chang provided clarification on margins and business models. She acknowledged the challenges posed by rising AI costs but emphasized a strategic focus on efficiency to ensure sustainable growth. “What we expect to see is similar to what you saw in FY ’25,” she noted, referring to the anticipated stability in margins. This year, efforts to optimize costs are expected to continue, driven by the federated approach to AI deployment. Matching the right AI model with the appropriate costs for specific customer actions remains a core strategy.

When discussing free cash flow, Michelle stated that FY ’25 benefited from favorable interest rates and strong operating income, factors likely to change in FY ’26. Instead, the company will face evolving interest rates and tax conditions but aims to maintain growth in operating income. “We must consider timing,” she added, regarding the anticipated fluctuations in cash flow conversion rates.

Kelcey McKinley — Event Consultant

Next, Kelcey directed questions to Tom Blakey from Cantor Fitzgerald.

Thomas Blakey — Analyst

Tom inquired about the growth of Zoom’s Contact Center as a Service (CCaaS) and its integration into revenue strategies. He wondered if recent successes would accelerate the timeline for CCaaS to reach 10% of overall revenue. He also expressed interest in the potential growth from Workvivo, especially amid changes from Meta’s Workplace platform.

Eric Yuan — Founder and Chief Executive Officer

Eric responded, highlighting the importance of the Contact Center in Zoom’s growth strategy. He noted that many customers still rely on on-premise solutions, presenting an opportunity for Zoom as companies shift to cloud-based options. “There’s a significant potential for growth as customer needs evolve,” he remarked, stressing the company’s focus on innovation and strong partnerships.

Michelle Chang — Chief Financial Officer

Michelle then reaffirmed Workvivo’s achievements, mentioning a remarkable 89% increase in customers. “Meta’s initiatives are indeed fostering this growth, but we had solid numbers even before,” she said, highlighting the brand’s strength in the market despite competitive pressures. Looking ahead, she suggested that a mixture of enterprise and online strategies would support continued growth in FY ’26.

Thomas Blakey — Analyst

As the discussion shifted, Tom thanked the team before transitioning to the next question from Bank of America’s Michael Funk.

Michael Funk — Analyst

Michael commended Zoom’s recent achievements but sought clarification on revenue growth expectations. While acknowledging earlier goals for mid-single-digit increases, he asked if recent figures indicated a shift toward customer retention strategies such as bundling or discounts, especially considering possible macroeconomic challenges.

Michelle Chang — Chief Financial Officer

Michelle assured investors that there has been no fundamental change in strategy. “We’re witnessing positive trends in our enterprise down sell and maintaining low churn rates in online segments,” she explained, underlining continuity in their approach as they seek to broaden their market presence with growth in various sectors, including Phone, Workvivo, and Contact Center.

Michael Funk — Analyst

Michael posed a follow-up question regarding the slight decline in revenue from customers exceeding 100,000, seeking an explanation for this trend.

Michelle Chang — Chief Financial Officer

Michelle acknowledged the question and reassured attendees that the core analysis of these customer metrics is ongoing. She noted that variations might arise from shifts in product offerings or customer engagement strategies rather than any systemic decline.

“`

Zoom Sees Growth Amid Mixed Customer Sentiments

Analyzing Customer Growth and Revenue Trends

Michelle Chang — Chief Financial Officer

Our customer base surpassed 100,000, showing a 7% growth over the past year. Am I misunderstanding your question?

Michael Funk — Analyst

No, that’s clear. However, when I calculate the percentage of revenue generated from these customers and divide it by their total number, it appears that revenue per customer has decreased since last year. Perhaps we can discuss this further after the call.

Maintaining an Optimistic Market Outlook

Michelle Chang — Chief Financial Officer

I’m open to discussing this in our next follow-up.

Michael Funk — Analyst

Thank you very much.

Michelle Chang — Chief Financial Officer

In summary, we feel confident about our progress in the market.

Michael Funk — Analyst

Thank you, Michelle. Thank you, Eric.

Zoom Team Chat Gains Traction

Kelcey McKinley — Event Consultant

Next, we’ll hear from Rishi Jaluria with RBC Capital Markets.

Rishi Jaluria — Analyst

Thank you for taking my question. Eric, I appreciate your focus on Zoom Team Chat in your comments. Could you elaborate on where you’re seeing traction with this product and any impacts on your customer metrics, like churn or expansion rates? Insights on recent developments would be valuable. Thank you.

Eric Yuan — Founder and Chief Executive Officer

Thank you. Let’s discuss Zoom Team Chat specifically. In the fourth quarter, we landed a significant deal that included 30,000 Zoom Workplace seats and 12,000 Zoom Team Chat users. Customers recognize that Zoom Team Chat is part of the broader Zoom Workplace Suite at no extra charge. Many have realized the powerful features of Team Chat, prompting interest among startups that often operate with limited capital.

While we have offered this feature for some time, many customers remain unaware. This indicates a marketing gap we need to address, showcasing the complete value of our Zoom Workplace Suite.

Rishi Jaluria — Analyst

Thank you for that explanation.

Michelle Chang — Chief Financial Officer

To emphasize, we recently noted a customer with 12,000 users commenting on how valuable Team Chat was in their decision-making process compared to Microsoft. These early indicators excite us as we continue to develop this offering.

Rishi Jaluria — Analyst

That’s very helpful. Thanks, Eric. Thanks, Michelle.

Eric Yuan — Founder and Chief Executive Officer

Just to add, Rishi, you can also utilize Zoom Team Chat to connect with me anytime. It’s very user-friendly.

Rishi Jaluria — Analyst

Let’s plan on it. Thank you.

Eric Yuan — Founder and Chief Executive Officer

Absolutely. We can easily get that set up. Thank you, Rishi.

Exploring Contact Center Opportunities

Kelcey McKinley — Event Consultant

We have time for one more question from Siti Panigrahi with Mizuho. Siti, go ahead.

Siti Panigrahi — Analyst

Thank you for the opportunity. Eric, wearing your General Manager hat for Contact Center, what’s your perspective on the growth in this segment? It’s been about two to three years since launch. Are we at a turning point, or do you think some clients are still hesitant due to their ongoing AI strategy considerations? Also, how does Avaya’s decision not to support certain customers impact your outlook for the Contact Center?

Eric Yuan — Founder and Chief Executive Officer

We are indeed witnessing strong momentum. In Q3, we’ve noted increased seat numbers and larger deals. As customers understand the capabilities of Zoom Contact Center—especially its innovation and scalability—more are expressing interest. Many of our top ten deals involve replacing existing cloud vendors. We recognize that before our announcement two years ago, many customers were not aware of our service. Indeed, this indicates we have marketing challenges to address, but we remain confident in our product.

We hope to outperform the growth trajectory we experienced with Zoom Phone, which remains an aspiration for us.

Michelle Chang — Chief Financial Officer

Just for clarification, out of our top ten deals, seven originated from cloud-based solutions and three from on-premise. Six experienced growth momentum via our channels.

Eric Yuan — Founder and Chief Executive Officer

Exactly.

Kelcey McKinley — Event Consultant

Thank you, Siti. That wraps up our Q&A session. Eric, Michelle, any closing remarks?

Eric Yuan — Founder and Chief Executive Officer

Thanks to everyone for your time. We truly appreciate it.

Michelle Chang — Chief Financial Officer

Thank you!

Kelcey McKinley — Event Consultant

This concludes today’s earnings webinar. We appreciate your participation and look forward to our next quarter. Take care.

Eric Yuan — Founder and Chief Executive Officer

Thank you.

Kelcey McKinley — Event Consultant

Goodbye.

Duration: 0 minutes

Call participants:

Kelcey McKinley — Event Consultant

Charles Eveslage — Head of Investor Relations

Eric Yuan — Founder and Chief Executive Officer

Michelle Chang — Chief Financial Officer

Kash Rangan — Analyst

Samad Samana — Analyst

Ryan MacWilliams — Analyst

Meta Marshall — Analyst

Alex Zukin — Analyst

Peter Levine — Analyst

Mark Murphy — Analyst

Michael Turrin — Analyst

Arjun Bhatia — Analyst

Jim Fish — Analyst

Thomas Blakey — Analyst

Tom Blakey — Analyst

Michael Funk — Analyst

Rishi Jaluria — Analyst

Siti Panigrahi — Analyst

More ZM analysis

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The Motley Fool has positions in and recommends Zoom Communications. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.

Zoom Video Communications Q4 2025 Earnings Call Highlights and Insights

Daily Market Recaps (no fluff)

Zoom’s Fourth Quarter 2025 Earnings Show Strong Growth Amid AI Advancements

What You Need to Know About Zoom’s Future

Prepared Remarks:

Is Zoom a Good Investment Right Now?

Zoom Reports strong Q4 Growth with Record Wins and Expanding AI Capabilities

Record-Setting Progress in Contact Center and Workvivo

Workvivo’s Remarkable Growth and Strategic Partnerships

Future Prospects Driven by Innovation

Financial Results Exceed Expectations

International Growth and Strategic Investments

Zoom Reports Strong Financial Growth and AI Initiatives in Latest Earnings Update

Zoom Continues to Build Trust and Revenue Strategies Amid Changing Market Conditions

Zoom’s Financial Outlook: A Mixed Yet Stable Macro Environment

Zoom’s Shift Towards AI: Insights on Margins and Growth Strategies

The Rising Demand for GPUs

Margins Under Review

Cash Flow and Investment Strategy

Transitioning to Agentic AI

Enterprise Growth and Future Expectations

Key Insights into Zoom’s Financial Performance: Margin Management and Future Growth Prospects

Zoom Sees Growth Amid Mixed Customer Sentiments

Analyzing Customer Growth and Revenue Trends

Maintaining an Optimistic Market Outlook

Zoom Team Chat Gains Traction

Exploring Contact Center Opportunities

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