Good morning, welcome to the Zoom financial analyst briefing at Zoomtopia. I'd like to remind everyone this call is being recorded. At this time, I'd like to hand it over to Tom McCallum, Head of Investor Relations.
Thank you, Matt. Good morning, everyone, and welcome to our Analyst Day meeting, Zoomtopia 2021. We appreciate everyone joining us today for this virtual session hosted on Zoom Events technology. Let me do a few quick housekeeping items. First, our agenda. Kelly Steckelberg, Zoom's CFO, will discuss Zoom now and in the future. We will have an update from Oded Gal, Zoom's Chief Product Officer, who will discuss some of the announcements that we're making today as we enhance our platform. Graeme Geddes, Head of Zoom Phone and Zoom Rooms, will take a deeper dive into these products. Following Graeme, Laura Padilla, Head of Channels and Business Development, will discuss our partner ecosystem strategy. She will then host a partner panel, and we are honored to have three of our key partners participate.
After the chat, Eric Yuan, Zoom's Founder and CEO, and Ryan Azus, our CRO, will join Kelly and Laura for a Q&A session. We have a full schedule that'll take us all the way to 1:00 P.M. Pacific so that you can get out and enjoy the rest of Zoomtopia. We will be presenting non-GAAP financial metrics. Please see the reconciliation to non-GAAP metrics in the back of the presentation, which is available on investors.zoom.us in the Events section.
During this webinar, we will make forward-looking statements about our market size and growth strategy, our estimated and projected costs, margins, revenue, expenditures, investments, and growth rates, our future financial performance, and other future events or trends, including Zoom's expectations regarding financial and business trends, Zoom's growth strategy, and business aspirations to drive evolution on multiple fronts as organizations and people reimagine work, communication, and collaboration, and Zoom being well-positioned to be successful as a platform. These statements are only predictions that are based on what we believe today, and actual results may differ materially. These forward-looking statements are subject to the risks and other factors that could affect our performance and financial results, which we discuss in detail in our latest 10-Q filings with the SEC. Zoom assumes no obligation to update any forward-looking statements we may make on today's webinar.
Again, we are excited about joining forces with Five9, but please note that we will not be addressing specific questions regarding the pending transaction at this time, as we are in the process of regulatory review. With that, let me turn it over to Kelly.
Sorry. Okay, here we go. Hello, everybody. Thank you, Tom. Thanks for joining us today. We are excited to have you here at our fully virtual Analyst Day run on Zoom Events for the very first time. A lot has changed since our last Zoomtopia. Collaboration and work continue to evolve. It is no longer confined to just a physical space. We are so humbled to help lead the evolution of how work gets done. We believe that as a platform, Zoom has the opportunity to be the new operating system, empowering individuals and organizations to thrive in the new environment. As you heard from the keynotes this morning, Oded and Graeme will echo later in the session, Zoom is creating the future now. Visionaries like Marc Andreessen see the possibilities that arise from technology reducing friction in the way we work and communicate.
Employees want to work in a flexible, untethered manner, and organizations want to find and retain the best talent wherever they are. We are truly beginning a new era for communications and collaboration. At Zoom, we are committed to capitalizing on these secular trends in a way that delivers happiness to our customers, our employees, and our communities. Our goal is to enable customers and organizations to navigate and thrive in this new world of work. Zoom is designed for today's dynamic, hybrid environment that will ignite a new era of connection and collaboration. The Zoom platform is transforming the trajectory of communication by advancing the way we connect, share ideas, and get more done today together, regardless of location. "This could've been a Zoom meeting." We've all said it, and even The New York Times agrees.
With the support of Zoom, we can now accomplish more in a day than we ever could've imagined years ago. I'm sure we've all had days like this. We start our morning checking our chats and voicemails and aligning with our teams. We find intermissions in the workday to take care of ourselves and those we love via video-enabled fitness and healthcare providers. The Zoom platform allows people to seamlessly move between work and personal life, untethered to physical locations. We have heard countless stories from our customers and employees about how our technology improves productivity, inclusivity, and flexibility by reducing barriers to communication and work. By focusing on innovative, frictionless products and delivering customer happiness, Zoom has achieved incredible financial results.
We have been able to attract more than 500,000 customers with more than 10 employees and retain and expand their spend with us. These factors have helped to drive our revenue by 130% CAGR over the last four years, and we expect to hit the $4 billion revenue milestone this fiscal year. This remarkable growth has come alongside disciplined spending and investing in strategic initiatives to create additional growth, resulting in strong profitability and cash flow. While we have achieved remarkable growth and brand elevation in the last few years, the market opportunity ahead is huge, and we are only in early innings. Our TAM is expected to increase to $91 billion by 2025, which is approximately 2.7 times larger than it was a couple of years ago.
We are excited to have added contact center to our TAM, and we see tremendous opportunity in this space, as you can see, based on announcements today and over the past few quarters. We continue to be thrilled about the opportunity to have Five9 join as part of the Zoom platform and see significant benefits in the combined entity for both customers and shareholders. While there has been some recent volatility in our stock, we believe the terms of the deal are compelling and that there is meaningful value creation opportunity for both sets of shareholders as we drive a combined growth agenda going forward. Looking at additional global metrics like knowledge workers, conference rooms, and desk phones, we continue to see significant opportunities for our platform. We estimate our penetration rate for all products is in the range of low single digits, leaving us a large and expanding opportunity.
Now, I'd like to double-click on a few parts of our business so you can better understand how it has evolved over the last few years and where we stand in the current dynamic environment and why we are well-positioned for the future. Here is a view of our business you have likely seen before. Over the last couple of years, we grew rapidly as customers of all sizes have relied on Zoom to deliver frictionless and secure communication and collaboration. While we have driven high revenue growth across both customer cohorts, we have seen a shift as small customers have grown from contributing 20% in Q4 FY 2020 to 36% in the most recent quarter. Customers with fewer than 10 employees peaked in Q3 of last year, and since then, we have seen a growing portion of the business with larger customers.
Based on email domains, we estimate that approximately 83% of our customers are related to business addresses. The remaining 17% are email domains that are commonly associated with personal use and have one license. Pre-COVID, the amount of personal email addresses with one license in the base was approximately 5%. One should note that some of these customer accounts might actually be businesses registering with personal email domains. We also broke apart the cohort of customers with more than 10 employees from Q2 FY 2022. Customers with 11-250 employees represented 26% of revenue, and customers with greater than 250 employees represented 38% of revenue, validating that the largest percentage of our revenue is coming from the most retentive customers. This split has been relatively steady over the past few quarters, demonstrating Zoom's ability to serve and retain customers of all sizes. We have two primary routes to market.
The online channel introduces millions of free and paid customers to the power of Zoom and enables our viral growth. We see tremendous profitability and leverage from this channel. In response to the strong demand last year, we enhanced the flexibility for larger teams to self-serve in our online channel. We find that the online channel is an excellent funnel into our direct business as the majority of our large customers started in the online channel, often with a single employee who became enamored with our product and advocated up the ladder. The direct business, which includes our robust and growing community of channel partners, focuses on selling into large enterprises and expanding the reach of the Zoom platform. We expect this channel to continue to gain share and gradually return to pre-pandemic levels over the coming years through a combination of acquiring new logos and expanding within our base.
Let's take a deeper look at our online customer behavior over time. The graph on the left illustrates churn by customer's tenure and reflects the typical trend we have observed where churn peaks in the first six months after subscription, then tapers into a long tail of retention. The Q2 trends lines reflect heightened churn across early tenures. However, the older tenure cohorts experienced churn that was lower and in line with historical levels. This aligns to our view that these customers will contribute to long-term revenue and profitability. The chart on the right breaks down the online customer by tenure across time. In the Q2 FY 2022 column, you can see that about 25% of our business is at the highest risk of churn, as they have tenures of fewer than six months. This percentage is lower than in FY 2021 and FY 2020.
Based on the historical patterns depicted in the graph on the left, the remaining 75% of the online business should perform at a more predictable rate. Discussed in the Q2 results, we had seen additional churn over the summer and factored that into our second half guidance. Our most recent data indicates that churn remains consistent with our assumptions. Let's look at the impact that our growth in the direct business is having. Looking at contract length and the billings split, you will notice that these metrics are beginning to positively trend back toward what we observed prior to the pandemic, where direct customers had a higher contribution. For example, contract length shortened in early FY 2021 with the large influx of customers from our online channel, but has expanded over the last several quarters, improving our retention.
You can also see a positive trend in the mix of monthly and annual contract terms, which has shifted back towards a higher portion of longer commitments. We expect this trend to continue given our focus on the upmarket. Let's talk about the tremendous opportunity we have ahead. A few of our strategies to continue gaining market share include focusing on the upmarket and enterprise, promoting international growth, and landing and expanding by upselling our products. Starting with the upmarket opportunity, I've been asked a lot lately about Zoom Meetings penetration because isn't everybody who needs Zoom already using it? The answer is no. As you can see, looking at our penetration and progress in the G2000 accounts, we continue to see significant opportunities to expand and add new logos. Year-over-year, the penetration rate by recurring revenue threshold continued to increase across all cohorts.
Our 36% penetration rate for customers spending more than $10,000 ARR might be small in potential dollar terms, but it is a foot in the door of some of the largest companies in the world. In the $100,000 ARR threshold, the penetration rate is only 16%, signifying there are still lots of expansion opportunities ahead. This year, we added a new chart of customers spending more than $1 million in ARR. Here we are only 5% penetrated, so there is a large opportunity to expand and upsell with the remaining 95%. We disclosed on our Q2 results that we had a total of 156 customers that spend more than $1 million in ARR with us. Interestingly, 64 of those customers are not yet in the Global 2K, reflecting that many businesses not large enough to rank in the Global 2K are still large enough to spend significantly with Zoom.
We also see strong growth in our international markets. The 66% year-over-year growth in APAC stood out, as did our new logos and partnerships in the region. EMEA also grew at an impressive 60% year-over-year. The U.K., Japan, and Canada continue to lead in the top 10 international markets as they did last year, while Germany made gains and Italy joined the group. We have also seen strong traction in Latin America. As of Q2 FY 2022, approximately 33% of business was from APAC and EMEA. We believe international can eventually become approximately 50% of our business. As discussed in the Q2 earnings, we saw strong traction in both Zoom Rooms and Zoom Phone. However, meetings had a huge head start, as is evident in the relatively low penetration rates of Zoom Phone and Zoom Rooms.
This shows that we have tremendous opportunity to continue to expand in our existing install base. Later in the session, Graeme will dive deeper into our progress and the opportunity with Zoom Phone and Zoom Rooms. Next is our growth strategy to upsell additional products to customers beyond Zoom Meetings. As we continue to evolve, we have a growing set of opportunities to drive additional revenue, strengthen retention, and expand the use cases of our technology in order to enhance our strategic importance to enterprises. Here, you can see the evolution of our relationship with a financial services customer that demonstrates our ability to not only land and grow our initial Meetings footprint, but also upsell Zoom Rooms and Zoom Phone along the way to achieve a 4 x multiplier from the original Meetings purchase.
Imagine how large this customer can grow to when you add Zoom Events, Contact Center, Whiteboard, and other products in our platform. The next example is a large global retailer with a customer not only deployed Zoom Meetings and Zoom Rooms, but added a significantly larger number of Zoom Phones for their store locations. This customer had a 3.7x multiplier from their original purchase. These examples highlight the importance and power of our land and expand selling motion. Zoom has scaled at an unprecedented rate over the last year and a half, we have continued to strengthen our competitive advantage in the marketplace. First, our innovation engine is strong, and we continue to rapidly develop products and features to meet the needs of our customers.
We have been recognized as best of breed by industry analyst firms, including leadership recognition in Gartner's Magic Quadrant for both UCaaS and Meeting Solutions. Second, we have amassed a large base of loyal customers who rely on Zoom to enable frictionless and secure technology for work and collaboration. These customers provide a tremendous opportunity to upsell additional licenses and products when taking into account our estimated penetration rates. Third, the Zoom brand continues to shine. We were recognized by Interbrand in their 2020 list of 100 best brands, joining many iconic names. All of this is made possible by our unique culture, which is focused on delivering happiness to our customers and our employees every single day. Our team at Zoom has worked hard to instill these values in every new Zoomie and ensure a cohesive culture.
Prioritizing our values has enabled us to scale to 5,700 employees in a very short time. Navigating the high demand for a modern communications platform has been a humbling learning experience, giving us newfound appreciation for what we have achieved this far, and most importantly, a renewed commitment to work harder to better serve our customers, our communities, and our shareholders. Thank you to the entire Zoom team for everything they have done and continue to do. Let me turn the presentation over to Oded, who will tell us more about our incredible innovation engine and some exciting new features announced today.
Hi, everyone. Our Zoomtopia announcements focus on improving our existing products, reinforcing our innovation leadership position, and inspiring new use cases and applications. We have categorized these announcements into five key areas. Continuous Collaboration, how you collaborate on an idea with Zoom by using collaboration tools and technologies. New Hybrid Workplace, how these tools can enhance communication, coordination, and communication in the New Hybrid Workplace. Apps and Integration, how Zoom can be built into your business processes through your favorite apps and development platform integrations. Content Outreach, how you launch a product, build communities, and reach widespread audiences with our event solutions such as Zoom Events and video webinars. Customer Engagement, how we support our customers to improve their customer interaction using Zoom. Graeme and I will cover these areas in more detail in this presentation. I will cover Continuous Collaboration, Apps and Integration, and Content Outreach.
Graeme will follow to provide updates on the new hybrid workplace, including Zoom Rooms, Zoom Phone, and our advanced whiteboard features. We will also explain our new video engagement center. Let's first start with continuous collaboration and the announcements with meetings, chat, and security. We have introduced several new feature announcements that now allow collaboration to be simple, inclusive, and continuous while maintaining the highest levels of security. Let me share a couple of examples. Enhancing the meeting experience is always top of mind since we are a video-first company. As you know, we recently acquired Kites, a company dedicated to providing natural language processing and automatic speech recognition. Now, you can connect across languages with transcription and real-time translation. Here is a short video showing the live translation.
Hi. It's a pleasure to be joining you from Germany.
Hi. We have people watching our presentation from all over the world. It's very exciting that people who speak other languages like Japanese, Chinese, Portuguese, or Korean can now understand us. This will make communication much easier.
Yes. That's why we're thrilled to be part of the Zoom family. We're working hard to support transcription and translation in many languages. This makes the world just a little bit smaller and our team more productive.
Alex, can you tell me something about the technology that makes this work? That's great. We're excited to have you join us, and welcome once again to Zoom.
Yeah, as you can see, this is actually using the Kites technology. We're working hand in hand with that team, so really excited about that work. We are all familiar with the phrase "Next slide, please," right? We're hoping to eliminate this phrase through our slide control feature so that multiple presenters can have control over slides. Back, one slide back. Yes. Not done with meetings. When waiting to enter a meeting before the host arrives, we're providing the ability for attendees to have chat discussions. Note that we will also have the ability to run videos or messages instead of simply showing "Please wait for the host." We are bringing you your own personal Zoom Assistant, the Zoom widget.
Using Zoom Assistant, you'll be able to see upcoming meetings at a glance, see who is already in the meeting, and notify the host using Zoom Chat if you're running late. When you're ready, simply join your meeting with a single click. There are some other meeting improvements that we've added based on customer feedback, including in-meeting Chat emojis, avatars, and more. The end result is an enriched meeting experience that is simple and inclusive. Moving to Chat. Most of you probably are familiar with our in-meeting Chat, but as shown on the bottom right, we have standalone Zoom Chat as well. We're enhancing Chat functionality to focus on continuous collaboration. How often are we in meetings and when the meeting is over, you lose the Chat, or you don't have a seamless way to continue discussion and dialogue outside of the meeting?
The time to spend communicating outside of a meeting is extremely important, and as a result, we have added the ability to make creativity, collaboration, and communication easy and part of a single unified flow. Now you can automatically share meeting content, record videos, whiteboard drawings, chat, and more beyond the meeting. Let's look at a short video clip on that. You can see here this is the chat in the meeting itself. Then post-meeting, you can actually publish the chat content through a channel card into the channel or the people that were with you in the meeting itself. You can see the chat itself as a transcript. We will continue to look for ways to enhance the chat experience across teams, organizations, and even cross-communication applications through integrations, including with Mio, online storage partners, and other partners. Moving on to security.
At Zoom, security and privacy are the cornerstones of everything we do. We're continuously innovating our security capabilities with features such as end-to-end encryption, secure login, and role-based access controls. Now we're taking additional steps, beginning with identity. We've partnered with Okta to provide Zoom users a way to feel confident that the person at the other end is indeed who they think they are. Verified attendees will now show with a check mark next to the name to provide higher levels of comfort and confidence. Bring Your Own Key, BYOK. You will be able to provision and manage your own encryption keys to secure your assets, including meeting webinar recording, files, and phone voice notes. I just want to reinforce that we here at Zoom take seriously security, and we'll continue to do so moving forward.
Actually, let's move to the next one. Hybrid workforce. Of course, what I have shared with you, continuous collaboration, meetings, Zoom Chat, security, are going to be critical to the future of work. That future will undoubtedly be a hybrid model. Work is no longer a place, it is a space. All of these collaboration tools, including Zoom Phone, Zoom Rooms, and our new advanced Zoom Whiteboard product, will be critical to make this workspace of the future a reality. Graeme will talk about these products after my section. Let's talk a bit about how Zoom can be built into your business processes through your favorite apps and development platform integrations. It starts with the Zoom Developer Platform. The Zoom Developer Platform enables customers, developers, and service providers to easily build apps and integrations with Zoom's industry-leading video technology.
It results in an app ecosystem to ensure that these apps are known and available to Zoom customers globally. We're planning to go big on the Zoom Developer Platform. It is a way to enhance the Zoom offering with innovative complementary applications and extend the Zoom footprint, both in which will drive revenue growth. What comprises the Zoom Developer Platform? We have API that mirror popular Zoom features within a second-party and third-party application. We have two types of SDKs. First is the Meeting SDK that allows developers to embed the Zoom video meeting into the client. They can use the Zoom Video SDK to build native apps using core Zoom video technology. The end result is the ability to create new and innovative applications and use cases based on the proven Zoom platform. It doesn't end there.
We've also created an app ecosystem that enabled the discovery and distribution of these apps to global audience. In addition, the integration through our APIs and SDKs, we have Zoom Apps, which are apps integrated into the Zoom Meetings platform. We have the Zoom App Marketplace, through which over 1,500 third-party integrations and Zoom Apps can be found. We'll talk more about Zoom Apps shortly. We have tools that enable apps to be built quickly, easily, and effortlessly. Here are some examples of applications that were developed using Zoom's APIs, Zoom Video SDK, and Zoom Meeting SDK. As mentioned, we have over 1,500 third-party integrations and over 50 Zoom Apps to date, and we expect this to grow even more as we focus more on our Zoom Developer Platform. You can see here Calendly, TaskHuman, and Connect.io. A little less than two months ago, we announced Zoom Apps.
Zoom Apps consist of over 50 launch partners with apps that you can use in the Zoom meeting today. There are already some of the most popular of the 1,500 plus third-party integrations in the Zoom App Marketplace, include integrations with HubSpot, DocuSign, Google Workspace, Microsoft Office, and more. Here is a short video of the DocuSign Zoom App. As you will see, the traditional DocuSign signature application is now enhanced with Zoom video. You can see here the workflow really integrates the ability to sign a document while you're in a video meeting. By enabling third-party applications into the Zoom experience, we're making meetings more productive, more engaging, and more fun. For clarification, since I get this question all the time, what is the difference between Zoom Apps and the apps on the Apps Marketplace?
Think of Zoom Apps as those in-product apps that are seamlessly integrated into the Zoom experience, whereas all apps are available on the Zoom Apps Marketplace. This year, we launched the Zoom Apps Fund, a new $100 million venture fund that's all about stimulating growth within Zoom's ecosystem of Zoom Apps, integrations, developer platform, and hardware partners. The first batch of funded apps was just announced on August 30th, we'll continue to invest in developer partners to seed the ecosystem with investments ranging from $250,000-$2.5 million. Zoom knows how vital early funding can be to entrepreneurs, we're looking to support your efforts to build new solutions that will become core to how Zoom customers connect, communicate, and collaborate.
At the same time that we announced Zoom Apps, we also introduced Zoom Events, a secure, flexible, all-in-one event platform to create virtual experiences attendees will love. We are all familiar with Zoom Webinar. In fact, over 1 billion people have attended a Zoom Webinar this year alone. We added another product that allows us to extend reach further and other multi-day, multi-track sessions as Zoom Events. The single most requested feature for Webinar is a gathering place for speakers before, during, and after the session. In real life, this is the green room. Virtually here at Zoom, we are calling it Backstage. With Backstage, speakers, panelists, and production support can hang out backstage, watch the live webinar, respond to Q&A, and get pulled live by the host.
We've also enhanced our Zoom Events offering since launch, adding some important features such as multi-track, multi-day support, and enhanced lobby experience that integrates live streaming, networking, chat, recording video in one lobby. One feature I want to highlight is the Expo feature. We want to bring the thrill of discovery to the virtual event as if you were actually on a trade show or expo floor. With Expo, you can move your avatar around a virtual floor and meet with product experts in booth. You can also chat with other attendees in close proximity. Let me show you a short video snippet showing this. You can see they're entering into the lobby itself. See the avatars that allow you to really connect with others by proximity. We are bullish on our entire events platform, including Webinar and Zoom Events.
The list of updates is quite large, and it will only reinforce the customer feedback that Zoom Events is a game changer. That brings me to the end of my session. I will now turn things over to Graeme to talk about the hybrid workplace and our new Zoom Contact Center, which as mentioned, allows our customers to improve their customer interactions using Zoom.
Appreciate it, Oded, and I'm excited to join today, share an update for both Zoom Phone and Rooms, both of which have really been a focus for our customers as they embrace these new hybrid work trends that Kelly highlighted earlier. Starting off with Zoom Phone, I wanted to quickly highlight just how busy we've been over this past year, expanding our native Zoom Phone calling plans in new markets like Israel, Japan, South Africa, Turkey, with coverage now in 47 countries and territories, with bring your own carrier for others. We've dramatically expanded our channel partnerships to help us accelerate new routes to market with new distributors, master agents, and resellers.
We've continued to listen to our customers and really innovate at record pace, delivering new capabilities to the platform like our native attendant console, real-time analytics dashboard, and a growing list of key integrations as well as hardware partnerships and devices. Speaking of hardware, we've continued to expand our supported device portfolio, which has really helped us address the diverse needs we're seeing from our customers in a wide range of verticals. For example, high-density analog adapters to support our customers in manufacturing and hospitality, wireless DECT devices to support frontline workers or healthcare workers, and the list goes on and on. This has really helped contribute to the results that we're seeing with Zoom Phone.
Last month, we celebrated surpassing over 2 million seats sold in market. It was actually Bickford Senior Living who purchased the 2 millionth seat, a big thank you to them. They're an industry-leading care provider for seniors with 62 locations across the U.S. As you can see from the pie chart here, 91% of those 2 million seats that we've sold are with our business customers that Kelly was highlighting, with employees greater than 10. We've seen really great traction at the top end of the market as well. Now having 26 customers with more than 10,000 paid seats. Some very large deployments there. Now moving to total Zoom Phone customers. This has continued to increase at record pace with just 5,800 customers back in Q2 of last year. Now with just over 18,000 this year, representing 212% year-over-year growth.
We also now have 317 customers that are spending greater than $100K in ARR that is just Zoom Phone ARR with 21 of these that are greater than $1 million in Zoom Phone ARR. We also have a tremendous opportunity as we sell into the base of existing meetings customers. That's the 504,000 that Kelly mentioned earlier. We also see continued adoption from customers that are totally net new to Zoom, where they're buying the entire UCaaS platform. Phone, Meetings, and Chat all together up front. This has increased from 20% of our Zoom Phone revenue, to 24% of this year. From a geographic breakdown, we continue to see broad success in the Americas, represented by the majority of our Zoom Phone bookings.
As you can see in the pie chart on the left, both EMEA at 11% and APAC at 5% represent both growing and large potential opportunities for our future expansions. I'll touch on this in a moment when we highlight some of our Zoomtopia announcements. Our contribution from channel continues to increase up to 27% of our Zoom Phone MRR from 17% last year. I mentioned Bickford as our 2 millionth seat customer. Bickford was also an example of a channel-led deal. Laura, who will be presenting next, will highlight a number of investments we're making to continue our channel growth. Lastly here, highlighting our top verticals. We're seeing broad success with Zoom Phone and broad adoption for customers in a wide range of industry verticals, retail, manufacturing, financial services, and many more.
These are customers with very complex telephony needs, and in many cases, are replacing legacy old PBX systems and key system infrastructures. I want to quickly highlight some of the Zoom Phone announcements that we're making this week. First, just this morning, we announced our Zoom Phone Provider Exchange. This is the next step in our BYOC or Bring Your Own Carrier model, which gives our customers the flexibility of choice to connect with their preferred PSTN provider. We're extremely excited to partner with the providers you see listed on here, and this really allows us to expand both new geographies and new routes to market with Zoom Phone. Next, we announced Zoom Phone Video Voicemail.
Video is at the core of everything that we do here at Zoom, we're continuing to leverage the power of our video-first platform for all engagements that our customers have, both internally and externally. Videomail is a great segue into our newly announced Video Engagement Center. Our customers have been asking us to help them leverage video in ways that they engage with their customers. This is all about experiences that are focused on the quality of the interaction and building rapport and trust with their clients. We see a wide range of use cases for Video Engagement Center, from healthcare doctors visits to wealth advisory services, retail experiences with instant find an expert capabilities. We're really excited about the future of this space. Next, pivoting to Zoom Rooms.
We've seen a tremendous level of interest and adoption from Zoom Rooms from our customers, as it's been central to their own return-to-office strategies. Over the past year, we've leveraged the power of Zoom Rooms to help our customers build new spaces and workflows to support a new hybrid way of working. We introduced a number of capabilities. For example, if we go to the next slide, Kiosk Mode to support virtual receptionists, people counting and voice commands to support corporate safety standards and social distancing practices, and Smart Gallery, which I'll actually touch on here in a moment. Just like Zoom Phone, we've continued to grow and expand our supported device ecosystem with a focus of Zoom Room appliances, which really make it simple for our customers to deploy and manage Zoom Rooms at scale.
The breadth of the portfolio is industry leading, and it's all about ensuring that we have the right device for the right space within our customer's environment. Moving into our Zoomtopia announcements for Zoom Rooms. This morning, we announced new hybrid workspace capabilities that leverage our existing Zoom Rooms and Digital Signage solutions to help our customers with seamless workflows as they potentially move from, say, dedicated office spaces to a more hybrid work style environment with hoteling and hot desking type of environments. This allows users to be able to view and reserve spaces from home or in the office, check into that space locally on the device itself, or via their Zoom client using a mobile QR code, and seamlessly sign out of that space at the end of the day.
This feature set has been extremely top of mind for our customers and is a great example of the power of the entire end-to-end Zoom platform. We've also seen amazing traction with Smart Gallery capabilities, which are really centered around democratizing the experience for the remote participant so that they get the same experience as they did when everybody was remote. This is all about everybody's picture-in-picture being the same. We've been pushing the industry here since we announced this capability last Zoomtopia, and we're excited to announce phase two of our Smart Gallery capabilities, which is all about addressing more complex environments. Supporting many multiple cameras with many multiple outbound streams. If we look at the next slide. We've also been listening to our customers who have said that they're really interested in digitizing the other interactions that happen within their conference room spaces, notably the whiteboard.
This morning, we announced an expansion of our native whiteboarding capabilities, providing a persistent whiteboard capability that's available both before, during, and after meetings. All of this is seamless across devices. This has been well received by our customers. Taking a step further around these capabilities, we also announced that our whiteboarding service would be available in the newly announced Meta Horizon Workrooms integration. With our approach to VR, we see this as an area for continued innovation, but really our focus is about consulting with our customers and focusing on the use cases that really add tangible value to their business workflows. We're excited to extend our virtual whiteboard capabilities into this new experience and provide the ability to virtually walk up to the whiteboard and start drawing. That's it for me, and now I'll hand it over to Laura Padilla.
Thank you, Graeme. Happy to be here today as well. Next slide. As we further expand our global presence as well as product and platform story, a strong partner ecosystem will further accelerate our geographical footprint and our customer use cases that are available today. Next slide. There are three pillars in our strategy. With now over 3,500 partners in our community, it is more important than ever to provide them a framework that they can all succeed in. Starting on the left-hand side with our delivery, this is where our partner journey started at Zoom several years ago. We had partners who always were supporting us as certified integrators for our Zoom Rooms, and now they're also able to do Zoom Phone as a certified integrator as well. We also have partners who are hardware partners who are certified as well on our platform.
Next, we have sales, which is our second pillar. We have over 3,500 sales partners as well. In our master agent referral community, just that community alone is over 3,000 partners with 18 master agents globally. Our distribution partners are now 12 globally, and we have over 2,000 resellers as well. We have some of the largest carriers and service providers in the globe, as well as integrating and selling with Zoom. On the integrate pillar, we have technology partners like AWS and Oracle, who are partners of ours as well. We have a brand new route to market called ISV, where we have software partners integrating with our platform through our APIs and SDKs, building value-added services for their customers, and then reselling the joint offering together. Next slide.
As we partner with our international leadership, furthering our geographical footprint is super important, and distribution is one of the ways that we are doing that today. We have partnered with some of the key distributors globally in certain geographical markets to further accelerate our sales. For example, Carahsoft in the federal market here in the U.S. We just onboarded Synnex in Latin America. We have Nuvias in Western Europe, Komsa in the DACH region, INCUBE and FVC in the Middle East, Veracomp for Eastern Europe. Then we have Rhipe for broader APAC, Savex in India, SB C&S in Japan, and Dicker Data for ANZ. Next slide. Resellers. We have over 2,000 value-added resellers now in our community.
This is even more important for our international story as we make sure we partner with partners who not only can help us in different commercial segments, but as well in different vertical markets as well. I won't go over every name here, but as you can see, some that stick out, for example, in North America, are names like Dell and SHI and CDW. In EMEA, there are partners like SoftBank, Indacom, and Duplon. If we think about also in APAC, NEC, Ricoh, SoftBank, et cetera. Next slide. Here you can see we have partnered with some of the largest service providers in the world. We have Lumen with us here today, who's going to speak, as well as AT&T. We have BT, OBS, Deutsche Telekom, as well as Telefónica in EMEA, and some of these are extremely new partnerships.
Telefónica, for example, just helped us close an extremely large deal in Spain to kick off our just signing the agreement. As well as in APAC, partners like Singtel, Smartfren, and Vocus. Slide. In our master agent community, we have over 3,000 partners now, and this program is only a year and a half old. Large partners that you've heard, and mostly it is a program that is strongest in North America, like Avant and Intelisys and Telarus. We have partners in EMEA and ANZ as well, partners like Nuvias and Veracomp, who have also signed master agent agreements, as well as Dicker Data and Tradewinds in ANZ. Next slide. ISVs are an extremely exciting and an important part of how we're proliferating our platform story.
We have closed some of the largest deals that the company has done with, for example, Telkomsel last quarter through this new route to market. Partners like Miro and Cvent, for example, are other partners that are taking advantage of our platform story to further integrate with Zoom and offer brand-new services to their customers. Next slide. We've had several announcements here at Zoomtopia around enhancements to our program. As most of you, hopefully, you have all seen that we are now offering partners to be able to resell Zoom Phone through our BYOC program. We've announced a new cloud peering program as well called Zoom Phone Provider Exchange. We're also increasing our focus around investment and a new tiered program that we will be talking about in more detail at a later time with new levels.
As partners invest more, they get rewarded more as well for being a partner in the community. We have also spent an amazing amount of time increasing the way that we do business together. As I said, we have over 3,500 new partners. We have invested quite heavily in areas around operations and automation and partner success, and to making sure that we are extremely easy to do business with. Our contribution with channel is now over 20% of the overall business, minus online, and our deals are larger and larger now through the channel, with deals that are sometimes over $500K as well. We have spent a considerable amount of time as well aligning our sales teams, both on the direct side with our partners as well. Our partner satisfaction score is over 70.
We have our own partner council now and surveys that we put out to our community to make sure we understand how they're feeling and areas that we can improve on as well. That is only getting better. Our deal registration acceptance rate this quarter is over 80%. This is an extremely important milestone because if we look at the quarters before, this was considerably lower. Again, tying together partner satisfaction as well as all the investments we've made in alignment. Finally, we've launched this partner advisory council, which I referenced earlier, which we are doing once or twice a year to make sure that we're understanding from our partners what's working, what isn't, and how we can make sure we're building the best program available. Next slide. Great. I am super excited to have three of our key partners with us here today.
The first one is Carl Orleman from Lumen Technologies. He is the VP of Sales and Customer Success. We have Andy Dignan from Five9, who is the SVP of Global Partners and Services. We have Daichi Nozaki from SoftBank, who is the VP Head of Global Business Division. Thank you, all three of you, for being here with us today. I'm hoping to ask the three of you just some questions. We'd love to just have you introduce yourselves and tell us a little about how you partner with Zoom and why you're partnering with Zoom. Carl, why don't you start? You're on mute. Carl, you're on mute still. Why don't we kick it off to Andy? Why don't you go ahead and do it?
Yeah, no problem. Thanks, Laura, for having me. I think this is my fourth Zoomtopia. Yeah, partner at Five9, lead our partner and services business. In terms of why we partner with Zoom, ultimately, what the market is looking at right now, and I love this idea of continuous collaboration. Anyone who's been in this space for a long time, that's kind of been the panacea of where we've been trying to get to, and I think we're almost there. Having a partner like Zoom that's bringing that to market, allowing a partner like Five9 to also bring our best CCaaS solutions to the market, I think is really important. Yeah, thanks for having me. I'm looking forward to the conversation.
Awesome. Tell me a little bit about one or two customer stories that you think really speak well to our partnership and the platform story that we're building together.
Yeah, good question. I spent some time over the weekend, actually reviewed every win that we had together. What was pretty cool was to see it was a pretty broad spectrum of customer sizes from small to large, as well as verticals, whether it's higher education, financial services, legal. I think the number one use case that stuck out to me was this idea of being able to connect in the Contact Center to the knowledge worker, right? Really, that starts with a very simple integration of just what's called presence, right?
The ability for an agent to get a call and then to be able to reach out into the workforce to say, "Hey, I need some help from a knowledge worker or a subject matter expert." I think one good example is a really large university that we're actually currently a Zoom Meetings customer, and they're now adopting Zoom Phone as well as Five9 Contact Center. What they're looking at is every call coming inbound into Zoom and Five9 to be able to then distribute those calls out to every group within the organization. The second one is the financial services. I think that's kind of the presence example. The second one is a financial services joint customer we have in Florida, where ultimately they're leveraging the presence integration piece of it.
When you think about IT versus maybe a line-of-business buyer, what they're looking at is consolidation of routing of their calls. The ability for them to not have to manage multiple contracts in terms of voice and be able to easily route those integrations. All the calls then come into the contact center, and then all their agents can route all of their calls outbound through the Zoom connection that we have together. A lot of different use cases, and I think there's a lot more to come, but those are two good examples.
Awesome. Thank you, Andy. Carl, sounds like you're good now.
Yeah, sorry about that. Little end user error. First time, I guess.
Oh.
Thanks for having us today. Just a little bit about the Lumen platform and how we partner with Zoom overall here. Obviously, Lumen is one of the largest global providers of telecom services, and we've been going through a transformation for the past few years. Our partnership with Zoom has just exploded over the past couple of years, and I'm sure that this upcoming future is going to bring even greater success. Our go-to-market focus is primarily around direct connectivity for our customers, leveraging agile IT solutions, incorporating basically connected security across all facets, as well as obviously a collaboration platform that I think is bar none the best partnership that we have out there. From a day one, day zero, day two support model, we really differentiate ourselves on that front.
We really go to market focusing in on a platform for amazing things, enabling kind of a cloud connectivity, cloud migrations, and connected security throughout all of our customer needs. It's not just about one application layer or one architecture or one gateway. It's multiple facets of this kind of coming in, and we're seeing more and more around our customer needs coming directly into complex solutions, right? It's no longer buying just a siloed set of services. It's wrapping it all together and ensuring that that hybrid model experience is going to be ubiquitous across the platforms.
Awesome. Tell me about one or two customer stories that you thought.
Yeah.
I'm excited.
Yeah, that's a great question. We just had a great win last month, actually. Retail customer that was looking to totally transform how their vision and go-to-market is for their customer base, as well as their internal customers, right? They had multiple platforms, and they were looking to standardize on a single solution. Lumen was able to go in with Zoom and partner together on that front, which enabled basically them consolidating several different PBX legacy platforms, tying that all together, and putting it into not only a global solution that offered virtual SBC management, but it also had total TN management and everything from a telephony component that normally they would be handling internally, that they just knew they didn't have the scale as they were starting their expansion into the hybrid workforce.
As we got into the distributed model and looking at the overall cloud migration that they were looking at across some of their ERP systems, as well as what they're looking for their CRM systems, their ERP overall solution wound up having to migrate at the same time as they were looking to do this phone solution. Ultimately, the kind of UCaaS application solution, standardizing into one platform with Zoom, enabled us to differentiate Lumen's overall platform for amazing things and being able to tie in security, cloud migration, and a UCaaS experience. So far, everything's gone great, and customers seem to be very happy. A very large win and obviously, hopefully many more to come.
That's great, and that's what we like to hear. Customers happy. That's exactly what we want. Thank you, Carl. Daichi, hi. How are you today?
Hi, Laura. How are you? Thank you for having me.
Thank you for being here. I'd love to understand a little bit about the Zoom partnership and also one or two customer stories that you'd like to share.
Sure. Probably a lot of audience may know SoftBank as a Vision Fund and those big funds. Yes, that's part of our fund, our ecosystem. SoftBank itself is a telco in Japan, and the Zoom relationship is very meaningful for us, very important for us from two angle, two elements. One is that Japan is still, although it's the number three GDP country in the world, but a lot of the business structure and processes are so legacy, very not digital. Because of this pandemic, obviously, a lot of enterprise customers, including SMB, they are forced to change. Zoom helped us to become a trigger to change their business processes and to go towards that digitization, digital transformation. Zoom was very important for us to make customer realize how important for them to shift their direction to that area. That's one.
The other part is that, as I said earlier, SoftBank has its own ecosystem, including the Vision Fund portfolio. My role is that how I can create the new business development, leveraging all those, our ecosystem and partners. From that point of view, Zoom is a very important partner for us to come up with a new business model, the development together with the SoftBank ecosystem in not only Japan, but APAC, entire APAC. From those two angles, Zoom is very important. Now, one good example for that, and also probably this is very unique about Japan, the insurance company, that's a significant win for us. The insurance business industry in Japan is very traditional. Majority, most of the sales has been done in person, nothing online.
They are forced to change to online environment because of this pandemic. One, those sales from people are not necessarily tech-savvy, so the UI is very important. It really needs to be easy to use, right? That's one. The other one is the quality, because that's completely sales processes, not the internal use. Unless salespeople are happy with the quality, they're not going to use it. There was some competition, but they love the UI, they love the quality. That's why over other competitors, we jointly won this big contract from this insurance company in Japan. That's probably a very significant win for us.
I love to hear that. Great. Thank you. I'd love to hear from the three of you. The environment, as we all know, is changing rapidly, and our customers are requesting new solutions. What do you see as important to our partnership in the next 12 years, and what are you most excited about?
Yeah, I'll go ahead and jump in, Laura. Yeah, that's a loaded question. I think where we see the market going, and specifically in the contact center space, we've talked to many of our largest customers and the at-home agent, the remote agent, there's no going back. This transition is there to stay. As we know, if you look at the $24 billion contact center TAM, it's only about 15% penetrated. One of the things holding, I think, organizations back was the fact that the IT buyer definitely wants to have a great experience between a UC solution and a contact center solution, and really about the full partner ecosystem that can be wrapped around it.
I think what we're going to see is just an acceleration of the migration to cloud for Contact Center, again, specifically with UC. Having been a part of the prem to IT collaboration change, lucky to be part of two transitions happening, I think this one's going to be even more impactful. Yeah, over the next 12 months or maybe 12 years, as you mentioned, that's a long time, it's going to be exciting.
We're looking forward to it, Andy. That's great. Carl or Daichi?
Well, I think from a Lumen perspective, I'm hoping that 12 years from now at least I'm retired. Bringing it back to reality, I would say.
Sorry, I meant 12 months. Sorry.
Okay. All right.
12 years is a long time. In tech it's a blink, yeah.
All good. Yeah. I think as Andy hit the nail on the head there, I think the contact center space, meetings, and consolidation around our UCaaS experience, I think almost contact center is going to become the focal point of all kind of communications coming in, right? I think the platforms that we look for from Zoom and our enablement from service provider model and reseller for Zoom is that we can come in and be able to provide that reliable, consistent experience across voice, video, messaging. Bringing in that solution into the contact center, because there are so many intricacies and nuances associated what the customer's looking for, and being able to capture that customer experience and knowing what that customer engagement model is going to look like moving forward, as well as relevant content, right? Just the relevant content out of the CRM.
Tying that all in, whereas I believe in the past, we've been selling a lot of our solutions in contact center have been isolated and off to the side or a pull-through, are now becoming the actual entrance into all of our opportunities. We're finding this on a consistent basis. It's not because it's been in the past three or six months, it's literally the past 18 months. I think as we sit there, we really become more of an integral part of the customer technology.
We look at the customer experience from the end user experience and being able to read out on that, be able to provide those KPIs. The APIs associated to it are going to be critical for us. I know the development and partnership that we've had with you so far has been phenomenal. It's better than any partnership that we've ever brought on by far, and I just look forward to the near future here to see how that continues to evolve.
Thank you, Carl. We're looking forward to it too. Thank you. Daichi?
Sure. Unfortunately, even today, this day that Japan, most of the big city in Tokyo and in Japan is under state of emergency. 12 months from now, I hope we can get out of that situation. Having said that, still the working environment, people tend to try going back to the office, but I don't really think that it's going to be 100% office work. It's going to be hybrid for sure. Having said that, the very early stage of this pandemic, all those, as I mentioned earlier, a lot of enterprise customers, small business, they are forced to work remotely because it was the strong recommendation from the government, yet they don't have any environment for the remote work at all. Zoom was chosen. One of the reason is that because easy to use and they don't need to have too much integration whatsoever.
That was one of the major reason they chose to use Zoom. Now, they have choices, obviously, that your competitors are catching up and come up with new features and those. For Zoom to be chosen, key chosen going forward that obviously as we heard today, a lot of new features, that's obviously clearly important, and like Zoom Rooms and Zoom Phone, those new features will be very important for them to make Zoom sticky for those enterprise customers and SMB. Not only that, I believe that there is a cultural difference between every different geographical, like U.S. and European countries versus Japan or any other APAC countries. There is a cultural difference in terms of business practice, preferences. As local partner and telco, we really would like to contribute how we can help localizing a product of Zoom in Japan and all APAC.
Also are not only regulation, but also how we can interface the customer to sell, in terms of co-marketing, co-sales. That would be something we can add value for Zoom. In addition to that, as I said, as a telco, we may be able to come up with the co-develop the product, like a more secured services local in Japan or have some sort of more collaboration with the software ecosystem and Zoom. That may be something we're trying to come up with ideas, and we are discussing aggressively with the Zoom team. That's my expectation.
That's perfect. I think what you talked about, Daichi, is extremely important, is that that is why we're partnering with partners like yourself who understand the local market so well and are specialized in it, that you can help us make sure we're building the right solution and we're entering it in the right way. Thank you so much for your partnership.
My pleasure. Thank you.
Well, thank you so much for being on the panel today. That was the last question.
Thank you.
Thank you.
Okay. Thank you, Laura, and thank you to all of our panelists. We appreciate you being here so much. Now we are actually going to go ahead and open it up for questions. Matt, are you going to help us, in terms of lining up the questions here?
Yes. Let me bring all of you on. Going to hand Ryan here.
Sorry. Thank you, Matt. Joining us for questions today will be Ryan Azus, our CRO, of course, Eric Yuan, our Founder and CEO, and also Laura, who you all just met. She's going to stay and join us for the Q&A portion.
Yeah. Our first question is going to be from Meta Marshall with Morgan Stanley.
Great. Thanks. Hopefully you can hear me. Obviously a lot of great stats as far as how far you've made your penetration into Zoom Phone and Zoom Rooms thus far. Just how you think about where you can get that penetration to, and just maybe another point just on that of understanding Zoom Meetings and Zoom Phone are obviously a place for monetization. Some of these features you rolled out today, whether improved Zoom Chat or Zoom Whiteboard, just what other opportunities are there for ARPU uplift within kind of your current portfolio? Thanks.
In terms of the opportunity for penetration, as you saw from the stats, as a reminder for everybody, earlier in the presentation, we showed that from an account basis, both in Phone and Zoom Room penetration rates are under 5%, or 5% and under. That means there are tremendous opportunities and that any meeting user basically has the opportunity to upgrade to Phone and potentially all those organizations to also add Zoom Room. A quick reminder that one of the other stats we shared is the multiplier effect when you start from original MRR and add on Meetings and Phone, we saw two use cases where the multiplier effect one was 3.7 and one was four.
In terms of the opportunity, in terms of what that penetration rate can get to Meta, I think at this point we're so early that the opportunity is almost unlimited, meaning that we have a huge install base that we have the opportunity to continue selling into, as well as we talked about our penetration rates continue to stay still being very low. When you look at all the new features and functionality that we added today, it even makes the platform more compelling for our existing customers to continue to expand their spend with us, as well as creating an opportunity for future additional logos.
Got it. Just on that second piece of the question, how should we think of some of the features you introduced today, whether that be kind of improved chat, improved whiteboarding? Are there chances to monetize those, or do they kind of stay within that core, kind of keeping the ARPU of the meetings platform relatively steady?
Yeah.
As we're focused on continuing to deliver happiness to our customers, there's some component of whiteboarding, for example, that will be included with the free version, the basic version of our product. Think about it, as you continue to expand your use, there would be an opportunity for increasing your use of that product based on an opportunity to pay more for it. There is going to be some potential opportunity for increased ARPU on whiteboarding specifically. In terms of chat, that doesn't matter. That's something that comes for free with our meetings product.
Great.
Video Engagement Center would also be another opportunity. One of the things that we talked about today. Meta, that would definitely be a ARPU revenue opportunity.
Great. Thank you, guys.
Our next question is from William Power with Baird.
Great. Thank you. Thanks for taking the question and hosting the event. Maybe backing up, Eric, you look at all the assortment of announcements you made today. If you could pick one or two that you're most excited about or you think could be most impactful for the business, what might those be?
That's a good question. If I just want to mention one or two features, I guess probably a lot of engineers, they may not be happy because they all worked so hard. Anyway, I think among all those features, I would say, as Ryan just mentioned, Zoom Contact Center is pretty interesting. The reason why is I think a lot of customers did ask a question about a Zoom Contact Center. I would want to leverage this opportunity to share with you all what's the Zoom Contact Center. First of all, it does bring a new revenue opportunity for us, right? That's one, right? Two, it also has a video component built in as well, right? Compared to any other traditional contact or engagement center, right? Third thing is it seamlessly integrates with our video and phone. Last but not least, it's very flexible.
Meaning it can be used by healthcare professionals, like a telemedicine doctor or financial advisors. Can be used, applied to the technical support team. We are going to take the same approach as we did before when we launched Zoom Phone, meaning after we reach GA early next year, we are going to sit down, solicit a feedback with our customers. We will decide where we are going to double down. It's too flexible, can be used as so many use cases, right? That's the reason why I'm so excited about a Video Engagement Center.
That makes a lot of-
Yeah.
Yeah, that makes a lot of sense. Maybe just as a quick follow-up, any thoughts as to how that would integrate potentially with Five9 and fit within that capability?
Actually, prior to the announcement with Five9, we did a partnership very closely. Now, given the announcement, because of the FTC rule, we even cannot talk with them very open anymore. It's really hard for us to look at what's the plan look like until we close the deal.
Okay. Thank you.
Thank you.
Our next question is from James Fish with Piper Sandler.
Hey, guys. Thanks for the day today. Really cool announcements. I did want to go back to Meta's question. It looks like it's about 110 seats per phone customer, and you're roughly at 500,000 total customers or so. Kelly, is that 110 average seats a fair representative of the average customer at Zoom? Now that your install base would imply that your install base could get you to 55 million available seats out there. Is that the right way to think about, and how do we think about the win rates with an existing meetings customer with Phone versus a completely new customer?
If you remember, we have a wide range of customers. Starting from very small and extending all the way into the largest enterprise. We went through all the stats that you've seen in terms of the customer sizes and the various spends that we have. It's hard to say specifically what an average is, Jim, because it really can move around. It's like up and down, given the diversity of our customer base. What would you ask me about win rates on Zoom Phone regarding meetings customers? Okay. Ryan, do you want to talk about that?
Yeah. Jim, very positive is the short answer. First off, existing customers, as you can imagine, trust us. They know Zoom for delivering. They know Zoom for innovation. Selling Phone is different. There is a different sales cycle. There is quite often in any mid-size to large organization, some level of proof of concept. Our job's really just to get them to proof of concept. If we do that, the rest kind of takes care of itself. That's usually the usability, the innovation, the functionality, the TCO and the ROI are definitely a winning combination. Just a matter of us getting them to get to that point of proof of concept.
Thanks. Thanks, Ryan and Kelly. Last one, just on Zoom Phone. A lot of mud out there about price points in the space with Zoom Phone, Zoom Meetings and Zoom Chat all in. I guess, Ryan, what kind of range are you seeing them all kind of come in together or separately if it's kind of standalone? Is it like a 1.5 or two times per seat ASP driver? How should we think about price points adding on to that ARPU?
Yeah. The one comment I'd make is, it really depends on the type of phone. I think Kelly's talked about this in the past, but we have a variety of different offerings. There's some where it's just the software and the PBX side of it, and of course, that would be a lower ARPU, especially as you scale up to extremely large numbers. There's others where you're having unlimited local and long distance, let's say, for the U.S. There's others where you're doing that from a global nature. You could be at $5 on one, $10 on another, and up to $20 on another. It really depends more than the competitiveness of it.
It's really the mix of how the customer wants to buy it, and are they using another underlying carrier or not, or Zoom delivering the full solution with the transport, is normally how we look at it.
That's awesome. Thank you, guys.
Thank you, Tim.
Our next question is from Matt Stotler with William Blair.
Yeah. Hey, everybody. Thanks for putting this on today. Maybe a couple kind of higher level questions from me. First one on the Zoom App Marketplace, specifically looking at kind of the developer resources that you guys are investing in. Seems like a really interesting opportunity to, as you're putting the platform in other people's hands, and they're continuing to build off it, to effectively expand your TAM outside of what you maybe would've done internally. Let's just maybe dig into what you're seeing people build from the developer standpoint and with the Zoom App Marketplace, and how you think about how this effectively expands your TAM beyond what you maybe would've done from your own internal development efforts from here.
Sure. Eric, do you want to talk about what we're seeing built first, and then I can address kind of the TAM aspect of that?
Yeah, sure. Absolutely. I think given what's happening over the past 15 months, we do see so many brand new use cases. We look at our engineer resources in a lot of areas. We just realized we just can't do everything, right? That's why we doubled down on our Zoom Apps ecosystem as well as SDK business. Take Class Technologies , for example. They are leveraging our SDK to build an online education platform, right? A lot of the business productivity tools, like a DocuSign, like a Dropbox, they also wanted to build Zoom Apps. I think some of them already uploaded to our marketplace. I think for us, right, really the way to think about the Zoom Apps is that this is more like the iPhone ecosystem, right? Huge opportunities.
I do see a lot of game developers that are thinking about how to build all kinds of games upon the Zoom Apps platform ecosystem, and I'm very excited about playing games, right? With that, actually, the service is more sticky. You do not have Zoom fatigue anymore. I think the sky is the limit because the developers are so creative. Any applications, I think in the next several quarters, you will see that a lot of Zoom Apps either built by us or built by our partners.
That is also a huge partner area as well that we're investing in and expanding in. If you think about technology companies with their own technology using our APIs and SDKs to build further value to their platform and then bringing that to market, system integrators will also be able to build custom applications on Zoom for their customers. It's just going to make the opportunity even bigger.
Yes, that's very helpful. Maybe just one more question from me. Again, at kind of a high level. When I think about traditional use cases for video have been very internally focused around collaboration, but with what you've built around webinars and now conferences and especially as we kind of think about adding on contact center and things, it seems like you're looking to build a much more ubiquitous collaboration engagement, right? Especially on the customer engagement front. As you think about Zoom as potentially providing a more holistic customer engagement solution going forward, leveraging the core video platform, what does that look like and how do you think about what kind of key components are left to kind of layer into the platform here? Thank you.
Eric, do you want to take that?
Yeah, sure. Matt, you look at our core, it still is video communications. We started with video conferencing, and also you look at the full usage stack. The last piece is more like engagement center. We just talk about that. I think first of all, as Carl just shared. With video and voice and its built-in chat and also the engagement center together, to offer a full stack, that's the value we are going to offer to our customer. This is what our customers ask about. They really want Zoom offer a full stack. That's more like step one. Step two is how to make sure open up brand new use cases and opportunities based on our platform. The platform not only for Zoom Apps or the Zoom SDK.
Like take engagement center, for example. We also will publish the API as well, right? Third-party, they can build some specific vertical engagement center upon our API as well. That's why step one is a full usage stack and is on platform. I think that's our growth strategy.
Very helpful. Thanks again.
Thank you, Matt.
Thank you, Matt.
Up next, we have a question from Siti Panigrahi with Mizuho.
Hey, guys. Thanks for taking my question and a very insightful presentation. I wanted to ask a high-level Zoom Phone question. You said 2 million phone out of 464 million TAM. Question is, what are the factors not right now inhibiting that kind of penetration on the cloud PBX market? Why do you think that's a big opportunity for you? When you think of competitive landscape, what else, besides technology, kind of stops others to get into the space? How are you looking at this opportunity? That'll be helpful.
Ryan, you want to address that?
Yeah, I'll take that. I think the big opportunity, and make sure I'm understanding, Siti, is really there's a very large legacy on-premise. That's traditionally companies like Cisco, like Avaya, like Mitel, that aren't on the cloud. Most large companies, that's what they're on today, and the reality is they know that's not the solution for the future. It's a traditional on-prem to cloud migration. In addition, we also see opportunity from other cloud providers, but that's really the huge market opportunity, and I think that was just timing. A couple years ago, you'd go to the large enterprise and someone would be like, "I have 50,000 employees, 100,000.
That's not for me." They're used to kind of managing and hugging their boxes and running it, and now the mindset's completely changed. They know that's not going to be what they do in the future, and so now it's a matter of if and when and how, and kind of managing through that process.
Just to quickly add on to what Ryan said. I think if you look at what's happening in the cloud, the PBX market or overall the PBX market, I see two opportunities. One is from migration from on-prem to cloud. We all know that. Another thing is, I think, only high-tech companies really understand it for now, but we will spread it to all other industry as well, meaning video and voice, those two are converged into one service.
Zoom has a unique architecture. We build video first and phone upon that. Any other solutions, if you do phone first and then add video, it's so hard, almost impossible. That's the reason why last quarter look at a new customer and Seagate Technology, they deploy both video and phone. I think this kind of convergence, I think I would say next several years will drive the growth. Normally we'll start from high-tech companies.
One more question, Kelly, probably on the business. When you look at your user space with business emails, you get something there are 83% ARR with business emails. Just wondering overall business user segment, what percentage of those users with business email are free users? I'm asking is that's a huge potential growth opportunity in the future. What could you do to monetize that? You are adding more and more feature, do you think at some point you can monetize that base? Help us understand how big is that user base.
The percentage of the users that we talked about, the 17% has one paid license, just to be clear. The split that we talked about was for our paid install base. Beyond that, we do have a very significant base of free users that we love and value as they continue to be a very important part of driving our viral growth. They have the opportunity every day to expand and expose new people to the power of Zoom. Then, I think Eric has always been thinking of new ways to and opportunities for potentially monetizing. Those are probably discussions to come for the future, unless there's, Eric, anything else you want to talk about in regards to that?
Yeah. Thank you, Kelly. I think, Siti, just a quick comment. I think prior to pandemic crisis, when we look at our online users, mainly for more like a marketing platform, right? A little bit of conversion rate to become pay users. That's our strategy before. Given what's happening over the past 15 months, you are so right. Look at our daily meeting participants. 1/3 are still free meeting participants, right? For us, still to focus on conversion from free to paid, I think that's old fashioned. We got to be creative, right? Stay tuned next several weeks or months. Thank you.
Great. Thank you.
Thank you, Siti.
Our next question is from Rishi Jaluria with RBC.
Wonderful. Thanks so much for taking my questions, nice to see a whole slate of product announcements today at Zoomtopia. First question I wanted to ask is exactly on that, which is you really teased this more robust chat functionality, and you've talked about that before. I think that's really exciting, this move to become a broader platform. How should we be thinking about the longer term opportunity with this? Is this something that is primarily more of an enhancement to make the platform more valuable for existing customers? Can it be something that can be charged for and monetized as a separate SKU? Maybe help us understand that, and then I've got a follow-up on international.
Yeah. Rishi, I think when it comes to Zoom Chat, I think for now, we do not have a plan to monetize. The reason why you look at the full usage stack, the way for us to look at a chat, it should be a part of this overall full usage stack. A lot of customers already deployed Zoom Chat as well. Also, we think we got to give a customer flexibilities, meaning they already deploy Teams or Slack, we partner with Mio, right? All those three chat solutions can interoperate. Also, some customers, especially from a UC perspective, they really want AI to send you a message and call you, I think makes it easier to facilitate a UC conversation. That's the reason why we offer this full stack. Plus, we do not have a plan to monetize the Chat, even if the usage is pretty healthy.
Okay, great. That's helpful. I wanted to get to international. Kelly, in your prepared remarks, you talked about how you expect international to become half the business over time. Can you help us understand what are the drivers to really grow your international penetration? Is it just more of the same? Is there more that you have to do with the partner channel and ISVs and the like out there? Related to that, do you have to change your pricing methodology over time? I know you do price in certain places in local currencies. If you do the translation, even in an emerging market like India, it's actually equivalent or, depending on exchange rates, a slight premium to what you're charging the U.S. Feels like the broader opportunity might require a little bit of discounting, as a lot of enterprise software does.
Maybe help us understand the international piece.
Well, since we have the two people also here that are responsible for this with Ryan and Laura, why don't I let them answer first, and then I can address it.
Sure. High level, to the more of the same, I think there's a ton of opportunity, and really executing, and there's a couple pieces there. The first is in larger companies. Rishi, as you'd imagine, it's really expanding our coverage internationally. Especially in thinking about the Global 2K, and if you think about what Kelly showed earlier, we tend to get a seed. That seed leads to more sales, which tends to lead to a full deployment over time. The international markets, we've had less time in market. Depending on each market, of course, it's different. There's a lot of opportunity there. We are seeing a lot of opportunity, even in developing, like Southeast Asia and lots of smaller countries where maybe we just didn't have coverage before, is another.
Then, as you can imagine, with partners, of course, from SoftBank to lots of the distributors that Laura talked about, really leveraging partners and whether that be for localization, whether that be sometimes for currency, whether that be for service relationship, a variety of different factors. Partners become even more important internationally. They're important everywhere, but I think they become even more critical to really support our expansion as we go forward.
There are price sensitivities, Rishi, to your comment around different markets. Absolutely. We hear that from the partners all the time. We're actively looking at our partner program and ways that we should address that in the most appropriate way possible. Yes, there are discussions right now about different markets and what that means from a pricing point of view. Ryan summarized it well around, we are going to rely heavily on partners on this next phase of growth for us geographically. They know the markets, they're experts in the markets, and that partnership's going to be critical for success.
Great. Thank you.
Thank you, Rishi.
Our next question is from Steven Enders with KeyBanc.
Okay, great. Thanks for taking the question here. I just want to get a better sense of where we are in terms of the channel initiatives, in terms of them coming in and fulfilling versus driving the relationship and customers to Zoom at this point.
Yeah. Really depends on the market and what we're doing. In general, we don't do a lot of just fulfillment. That would be one thing, is this is not a business where we're like, "Let's just take all our opportunities and give them to the channel." This is where we work with channel partners to find that value add. If you do the pure definition of fulfillment, it's minimal to none. All channel partners have some value add. Again, whether it be the relationship, quite often services, bundling, existing customer contracts, commitments. Quite often, they traditionally sold the existing legacy services we're replacing, is definitely one of those places, along with all the other things that they're able to add.
Great. In our new partner program, we're actually building a competency center now as well. Partners can now build competencies around our products like Zoom Phone, Zoom Rooms, become certified integrators, do their own tier one support and so forth. Even more so, they'll continue to add more value to their customers around Zoom.
Okay. Great to hear. Maybe for Kelly, just want to get a better sense of how you're thinking about the opportunity for the cash component of the business now. I know there's about $5 billion out there. Just what you're thinking about that usage going forward.
First of all, there's a couple areas in the company itself that we're really focused on investing in, including R&D, where we're not yet spending as a percentage of revenue to our target. Also sales, as we're continuing to expand quota-carrying heads. We just heard Ryan talk about that. Also advertising, focusing on specific product marketing. As the brand awareness globally has really accelerated, we want to ensure that's consistent in terms of other products like Zoom Phone and Zoom Rooms. Then we are also constantly watching for opportunities for M&A to continue expanding both our technology as well as our talent. Really excited that we actually recently had Sanjay Rao join our team. He's running corp dev and M&A strategy, and he'll continue to help us think and look for amazing opportunities.
We've done two small acquisitions to date with Keybase and Kites, and they were both great additions to our team and we'll continue to watch for more in that size as well as mid-size. Then, of course, there's the pending Five9 acquisition as well.
Okay, great. Thanks for taking my questions.
Thank you, Steve.
Our next question is from Alex Zukin with Wolfe Research.
Hey, guys. Thanks for taking the question. Just two for me. First, I want to double down on Rooms. You talked about 90 million rooms out there. I want to get a sense for how many of those do you think are going to be video enabled? What percentage could Zoom take in that market? Is it 50% share, 10% share, 25% share? What's the right way to think about more mature pricing? We know today it's $600 per room per year, but give us an idea so that we can get a sense for what the longer-term incremental revenue contribution could be.
Sure. Eric, do you want to just talk about your vision for Zoom Rooms, or Eric or Ryan? I have my perspective. I think it'd be great to hear from each of you.
Yes, sure. Alex, and even if you look at today's size of conference rooms, I would say, in the future, there we have more and more conference rooms to support hybrid work. Today, by and large, most of the conference rooms are not equipped with video capabilities, right? That's why I do not know the exact number, but based on our check with our customers, and many of those customers, their conference room is still the traditional conference room, right? Maybe just a projector or something like that, right? I think it's a huge opportunity. Not only do we focus on video, but also we want to build a full stack for the conference room, like Digital Signage, right? Virtual receptionist, right? Smart Gallery. We want to make sure offer customer a solution. Essentially more like a conference room platform. They can use it for video conferencing.
They can use it for Digital Signage, for a lot of other things. Essentially, in the future, to support hybrid work, every business, they will realize they will need a more video-enabled conference rooms.
Alex, that's exactly what we hear from customers. At the end of the day, it's kind of like whatever the market was isn't what it is and what it'll be in the future, especially as people really return to office in this hybrid way of working. It's like going into a room without video seems kind of empty. Like, it just doesn't make sense. Customers are really rethinking, what is a video-enabled room? What does that look like? Of course, how do we help them do that? They're very excited around a lot of the technology for rooms of all sizes with the hardware partners that we work with, along with things like Smart Gallery and some of the other things that we're doing to make it really easy to be able to work hybrid, just because that's what people are seeing.
They're going to be in the rooms, but they also know that people are going to be remote, that are going to be joining those meetings, and how do they make it very effective for them?
Yeah. Alex, if you look at some reports from Frost, they estimate that of those 90 million rooms, about 8% are video-enabled today, and 25% will be in 2025. I kind of agree with the sentiment, though, you've heard from Eric and Ryan. That seems greatly underestimated to me given the future and what we're moving towards, that a conference room that doesn't have video in it is going to become a storage room. It's not going to be used, as people just won't be there, right? I think that presents this tremendous opportunity for us ahead.
Yeah.
Got it. I want to just address the retention dynamics. You broke out a new cohort of customers today, and you have now, we've got almost three to consider, right? We've got the less than 10, we've got the 11 to 250, and then we've got the 250 and up. Can you talk about the purchasing and retention characteristics, particularly to compare that 11 to 250 versus that less than 10? There was a really good slide about how only really 25% of the user base is kind of most exposed to churn. If you can assign that 25% between those two cohorts, just so we can get a better understanding, I think that would be helpful.
The 25% was specifically. Give me a couple minutes. I am just trying to make sure that I am not mixing up the cohorts versus the channel. It was specific to customers that are buying online. Most customers greater than that 11-250 are probably touching a sales rep. Not all of them, because we do have flexibility for them online to go up to a higher number. The majority of those customers in that segment would be coming through one of our direct sales reps. They would be in a more retentive category than even that online segment that we showed you.
Got it. Okay. Understood. Thank you, guys.
Okay. Yep.
Our next question is from Matt Van Vliet with BTIG.
Yeah, thanks for taking the question. Great work here. Maybe a question for Laura and maybe Ryan. You gave us some good stats on the channel. It's now over, I think, 20% contribution. You also mentioned an 80%+ deal acceptance now with registration. I wonder if you could help us maybe ultimately kind of where you're seeing that go over the next couple of years in sort of total contribution, and where was that deal registration acceptance six months ago or one year ago as you got the program started?
Laura, why don't you take the deal regs, and I'll take the other part.
Sure. Why don't you start, Ryan?
Sure. I'd say, just high level on a percentage of business, on that piece first, what I can say is that's well over double what it was give or take one year and a half ago. That's despite the tremendous growth that Zoom's gone through. We see that continuing to grow. Now, one thing is Zoom does have a very large brand, does have a huge asset there, and does have a unique presence in how well it's known and loved. We do see channel as one of our key investment areas, and we'll expect that to materially go up as we continue forward. Deal reg is just one piece of that, but go ahead, Laura.
Yeah. Just to add a little bit what Ryan is saying. Our partner ecosystem is still pretty new, if you think about it. Our partnerships like Carl from Lumen, that is still about a year old. I see that there is huge upside for all of these partnerships. We are just starting to get started in the investment piece of it and getting really deep with these relationships, and especially in the international markets, some of them are just less than a year old, most of those relationships. When I talked about over 3,500 partners, if you look just a year ago, we had less than 2,000. If you think about how much momentum we are having, it is huge.
On the deal acceptance part, if you think about a year ago, we're probably closer to about 60%, 50%-60% acceptance rate, a large part of that is just around the sales alignment piece. We spent a ton of time with Ryan and the teams around defining what it means to partner in the field with our partners and making sure our AEs are comfortable doing that and doing that in the right way.
As you continue to expand the platform here, obviously video meetings aren't necessarily for all users, not all users necessarily will use a phone or an event page, but as you look at whatever the number, 400 or 450 million business users out across the world, what is the ultimate addressable market that you think you have a product for now? How has that changed from a year ago, and what's sort of the forward-looking as you give us those TAM slides? Are you now going to be able to reach sort of that entire ecosystem?
Why isn't everyone a video meeting user? I think Kelly had the best quote. If that room isn't video enabled, it becomes a storage room. I think our vision is everyone's going to be using video in meetings. Sorry, go ahead, Kelly.
No, I think that's exactly right, Laura. If you look at that TAM that's out there, we look at very specifically, we said it's growing to $91 billion, with all of the products and features in our platform today, that's what we can address. We're really excited about the opportunity, especially when you look at the continued advancement of the features we announced today, that all of that creates an opportunity and a market that should be all completely addressable by us at some point.
All right, great. Thank you.
The next question is from Matthew Niknam with Deutsche Bank.
Hey, thanks for doing this. It's more of a conceptual question on Phone, maybe for Ryan or Eric. As customers migrate from on-prem PBX systems onto Zoom Phone, is there any way to tell whether there's some lines that just don't get ported over to the cloud or effectively get canceled, implying that telephony could theoretically be less relevant as customers adopt cloud UCaaS collaboration suites? I've got one follow-up afterwards.
Matthew, we do see some of that. Let me be clear, it's very relevant. Is it relevant for every single user? Part of that is the success of Zoom Meetings has changed that. If you think about the day that most of us have, we're in a session like this, we're doing an interview, we're in other team meetings, and the reality is we're using telephony, but we're using it through the meeting for all of those. We will see certain use cases where maybe the footprint, and it's not that they won't need it's maybe they don't need their own DID, or maybe what version of the product or service they use is a little different. They definitely need Zoom in some way, and it's just kind of finding the optimal mix for the customers that we work with.
Got it. My follow-up, maybe for Kelly. Can you clarify the color you gave earlier in the session on churn, particularly within that sub 10 employee cohort? I think you had said churn remains consistent with expectations thus far in the quarter. I just want to make sure I got that correct.
Yes. That's exactly what we said was, when we gave our Q2 guidance, which was two weeks ago, we were looking at the information we had seen based on the behavior, especially in that online segment in Q2. A couple of weeks now, six weeks into Q3, we see the behavior is quarter to date is consistent with the assumptions, and thus the guidance that we gave.
Perfect. Thanks again.
Yeah.
Our next question is from Boyoung Kim with Citi.
Hi. Thank you for taking my question. I am on for Tyler Radke. Just one question for me. I thought it was interesting that you called out around 60% of customers with over $1 million in ARR actually don't belong in the Global 2000, or at least a large chunk of that customer base. How much of that is a function of those customers being further along in their multi-product adoption, and what is driving that? If you could also talk about the flip side of that, why are those mega enterprises in the Global 2000 kind of underspending their potential, and what does it take for them to catch up to the smaller customers?
Ryan, you want to talk about the Global 2K first?
Yeah. I think you'll see different, sometimes those are industry use cases, where there's specific value within an industry. Sometimes, honestly, more innovative companies that can move faster at the end of the day is one of the pieces. Decision-making tends to be less layered. When they see something that's working and good, they could take action faster. That's probably the main piece. The larger companies get there, but they kind of get there over time. They're very successful, but they have their processes, their systems, their previous providers and existing things, there's a level of kind of building that case and also a level of having them shift off some of the existing services that they're using.
Great. Thank you.
Yeah, I also think that if you have to look at the international versus U.S. split, approximately 30% of our revenue still, or sorry, 60% coming from North America and the Americas. Thinking about the opportunity to continue to expand internationally will also allow us, enable us to capture more of that Global 2K.
Thank you very much.
Thank you, Bo.
Our next question is from Ryan Koontz with Needham.
Hi, Ryan.
Great. Thanks. My question, some exciting announcements today on events, sounds like you're really starting taking a turnkey approach with the initial launch. How does turnkey compare to an ecosystem approach to going after this market? We've seen that as you go after larger and larger events, it gets exponentially more complex. How should we think about the events product going forward, what sort of scale are you aiming for? Thank you.
Sure. I'll take that unless you want to, Eric.
Yeah, great.
I think like Zoom Phone, you start somewhere and then look where it is today. We're confident to go against anyone in the world with any type of phone or UC product and think we have the best product, service, and value. I would think somewhat similar for events. Events come in different shapes and sizes, and there's a variety of partners, just like we use in the other parts of our business, where we'll, at times, rely on other partners and ecosystems to do different parts of the product or service we're offering to the customer. Our vision is large and our desire is large, and there's a big opportunity, and really a big need out there in the market today that we're looking to capture.
Great. Really exciting. Thanks for the question.
Just a quick comment. I think our goal is very simple. We will build and offer the customers the best events platform, period.
Yeah. Excellent. Thanks.
Thank you.
Thank you, Ryan.
That was our final question of the day. I'll turn it back over to you, Kelly.
Okay. Thank you, Matt. Thank you so much, everybody, for joining us in our Analyst and Investor Day today. We really appreciate it. Special thanks to all of our panelists, and of course, Ryan, Laura, Eric, Oded, and Graeme for joining today. We really appreciate it, and we hope you enjoy the rest of the session. Bye, everybody.