Okay. All right. Hello everyone, and welcome to our investor session at Zoomtopia 2026. We are so happy to have everyone here in the room, and also on the virtual audience. Hope you guys got to experience the keynote and all the exciting things happening there. For those of you here today, hope you enjoyed the nice lunch with a view. We have a packed agenda for you all today. First, Michelle, our CFO, will touch on Zoom's strategy, vision, priorities, and progress, and connect that to what you all care about, our growth, our ability to generate cash and return capital for shareholders. Then Graeme, our Chief Sales Officer, will take us through the first priority of elevating our core business with AI. Chris Morrissey, our GM of Customer Experience, will take us through all the exciting things in his world.
Russell Dicker, our Chief Product Officer, will come on to take us through the new AI revenue streams. At the end, we will host an executive panel where we will bring on Eric, our CEO, Kim, our CMO, and then bring back Michelle, Graeme, and Russell. A few notes on the Q&A. We will be doing most of the Q&A during the Q&A session. We may have some time after each of the speakers to take one to two questions, but that will just depend on how the timing progresses. During the Q&A session, if you are in the virtual audience, please submit questions on the Q&A function over Zoom, and we will try our best to get to those. The market just closed, and this presentation will soon be available on the investor relations website, investors.zoom.us. The presentation does include non-GAAP metrics.
Please see an appendix for a reconciliation to GAAP. These metrics should not be considered as a substitute for GAAP. During this webinar and in this deck, we will be making forward-looking statements. Please be familiar with this slide. Forward-looking statements are only predictions that are based on what we believe today, and actual results may differ materially. Please see our filings for a detailed list of risk factors. Zoom assumes no obligation to update any forward-looking statements we may make on today's webinar. With that, I will turn the discussion over to Michelle.
All right. Click this. Let's see. Hopefully, I will get the right direction. Welcome, everybody. Hopefully, everybody had a great time up at the keynote. Really our intention in the keynote was simple: breathe life into the system of action. We actually debuted our system of action vision with our investors in February earnings, and it takes a little bit to sort of get the message out. Really our intention with the entire Zoomtopia presentation was to breathe life into it, help you understand where we are going as a company. I am excited to be here with all of you. We have some new stuff that we are going to give you.
More evidence and proof of where we are going and our progress. Then we are going to update our long-term guidance. With that, let's dive right in. I have three sections that I am going to talk about.
The first is just get us all grounded on Zoom. Where is it going? What are its priorities? How are those changing as we pivot into the next fiscal year? What, in my opinion, were the big things that were announced this morning for investors to think about? The bulk of what I am going to talk about is progress. Progress that we have made against revenue growth, progress that we have made towards durable vectors as part of that, and then the financials. Then I am going to wrap up with that long-term guidance. So this is a bit of a refreshed visual, but it really paints the picture of where the company is going. This system of action that I think Eric has this great way that humans connecting and communicating, that will never change. That is durable. That is what will give us that sort of conversation.
That is where work begins. Look, it is no matter whether it is a sales call or a customer support call or just a team interaction. But look, clearly you heard the centerpiece of today's dialogue was that Unified Context Layer, that that is what is underlying all of this, getting smarter, learning more about you, and connecting dots on your behalf. But look, as the CFO, and I said this in a customer panel afterwards, conversation and context are great, but what really matters is the ability to get it to completion, because that is what drives business value for your customers, whether it is improving revenue rates or driving better CSAT or getting cost downs or people more productive, right? So I love this idea. It plays out, as you can see on the bottom, across all of our products.
Look, the thing I think maybe the takeaway here for investors, too, and I think you see this in our ability to announce today what we did with Unified Context Layer, is that it is built on one platform of AI, meaning we build the AI once, and it replicates across all of our products, and it enables things like the context layer. All right. So if that is where we are going, let us get down into, okay, in a world where you guys see a lot of different companies, right, why does Zoom have a structural advantage in an AI world? Look, first and foremost, it starts with the rich context and the conversations
We own so much of the world's dialogue, and in those dialogues is hidden meaning and tone and decisions and follow-ups and discussion and the richness of that. So that is, to us, where it starts. But we are not stopping there. It is about taking them into a system of action, improving business value. That is really number two. Hopefully you can begin to see, in Russell's presentation, where he sort of stitched so many different products in that scenario together, that being in adjacent markets in an AI world that have natural synergies is proven to be a really good place for us to be in being able to deliver that value. Zoom has always had an open ecosystem kind of approach to it. It started with, you can come to Zoom even if you are not on our meetings.
We are sort of embracing those customers and whatever technology they own, and that is just as important, if not more important, in an AI world. So you saw us talk a lot about headless and MCPs and announcements, in regards to APIs. That is all part of this.
That gets down to that deployment flexibility, being able to say, "We're going to meet customers where they are, whether they're in the Zoom product, or whether they want to take Zoom AI and their Zoom data and be able to move that in a headless scenario." Of course, you'd be remiss if you didn't talk about trust. I love the fact that we talked about new announcements in the Zoomtopia around trust. We hear that we win with customers around trust because we give, this is sort of the finance person's definition of it, but we give more knobs and dials in order to allow our customers to use AI as they see fit. It's the reason that we win in industries like banking, it's the reason that we win in industries like cyber. All right.
Every single time I get in front of you guys, I want to talk about our business priorities. These are the structural durable drivers of what will drive our revenue growth acceleration. Let me talk about how they've changed a little bit. You're getting the preview to FY 2028. Let me start at sort of Disco's most accelerated, or biggest revenue drivers, to sort of emerging, just so you sort of follow the frame. Elevating the core with AI. You heard today, we're not just sitting still on Meetings. We're continuing to innovate and reinvent how meetings happen. We didn't talk a lot about Events, but there's some very cool stuff happening in Events of being able to take a live event where we have a lot of market share and debut it and share it out in different ways.
The first priority is really elevate the core with AI, make sure we're not stopping there. Okay? Then you get into the second business priority, which is really around accelerating those line of business solutions, the vertical solutions. In many ways, no different. We've been talking about customer experience with our investors, and it continues to be a huge priority for this company. What we wanted to do in this 28 version is begin to sharpen the other lines of business that we're going to go after. Hopefully not a surprise that we're going after that sales piece with our acquisition of Common Room. Many of you asked, when we acquired Common Room, we already had ZRA. You did Common Room. What's your level of ambition? We did a fast follow of announcing Engage and Forecast right after in September.
Hopefully gives you a picture of where we're going. On the HR audience, think of this as things like Workvivo and BrightHire. Really the central theme is conversations where we think we have a unique opportunity to provide additional value. The third priority is sort of our most emergent area, which is drive new AI work streams that are sort of outside of this vertical targeted line of business. That's things like Minos and ZoomMate that we've been talking to investors about, and we've added things like Zoom as a service. A lot of what we talked about today in the keynote. All right. I wanted to give investors a takeaway slide. A lot of the keynote had a sort of conversational flow about it. I wanted to give you just a tear-away slide of everything that we announced.
To me, the big headliner was the context layer. Another big headline, moving into it is not just in the Zoom service, but Meeting and that deployment flexibility that I talked about. Lots of innovation in lines of business and Events, and of course, in the core Meeting. If that is where we are going, and that is the durable reason that Zoom exists and succeeds in an AI world, those are our business priorities. Let us get into talking about the progress that we have made in the last year. This is my report card to all of you. I have to say, I am proud when I look at this. I just passed my two-year mark at Zoom. This revenue growth acceleration, let me start there. I think when we started, we were talking about numbers in the 2%.
In our last half, we passed 5%. So some really good progress, and we will have a milestone moment as a company of crossing $5 billion. So clearly, revenue growth acceleration, and I am going to go deep here, so I will leave it just at that. Look, it is not just about revenue growth acceleration. We got to do it while also holding profitability. I am proud to say Zoom has best-in-class profitability, and we have even been growing off of that while we drove that revenue growth acceleration. Look, I think back at, I see several faces that I met with when I first started. It kind of gave me a healthy push on capital return to shareholders, shareholder return. I am pleased to say that I think we have made a lot of progress in that.
We have made our buyback programs much more predictable and structural in nature. As a result of that and our top-off grants that we did in the pandemic coming down, our share counts are coming down. So I look at those and I say, great progress so far. I am going to go deep on the revenue driver and obviously the thesis for our revenue growth acceleration is our enterprise business. So you can read the stats over there. My favorite was last quarter, we grew 7.5%. That is our highest enterprise growth in the last three years. So another good evidence point of our acceleration. Look, even in the last four years, we have gone from our enterprise business being 58% to now over 62%. So great to see. What are the elements that all of you should be thinking about in terms of growth acceleration?
I have listed them there, and what I am going to go through is each one of them individually and give you additional context and color behind them. But said simply, we are going to make progress in continuing to grow enterprise by moving up market, by continuing to diversify our product set, and by focusing on those three business priorities that I talked about, which represent kind of our path to growth. Driver number one, moving up market. To me, this is all about the evidence points that you are playing a more strategic role with our customers. When you play that more strategic role with your customers, it means they are in it for the longer haul, they sign longer deals with you, and you are getting larger customers. So we are making progress here in customers over 1 million growing and over 100,000. So meeting both.
We frequently refer to them as singles and doubles, but making progress in both tranches in our enterprise growth acceleration. Driver number two. This is a question that investors ask a lot, and I wanted to give you a representation like, how do we think about the size of your various products? But clearly we have our more established large dollars, in many cases still growing events, Phone, Meetings, Rooms. Then we have our high growth getting to materiality. So this is frequently for us crossing that $100 million or more line, and then our more emerging bets for the future. What I really hope the headline for investors on this slide is that Zoom is no longer just a Meetings company. Hopefully you saw that expressed in the keynote.
But look, I think this clearly says that there are multiple paths to continue to grow revenue going forward. This isn't just about our Meetings. And we've got products that we're excited about at all stages along the journey. All right, now we're moving into those business priorities. Let's go to the first one, which is all about elevating our core products, Meetings, Phone, Webinar Rooms with AI. And look, our conversations with investors frequently get down to one thing. Zoom took a very differentiated position early on in the journey of AI and said, "We're going to put AI in our paid SKUs at no additional cost." You can imagine as a CFO, that may have struck a little fear. But I'm pleased to share with you today that the question you guys have been asking us, how is it going?
Are you seeing evidence of that panning out? And the great news is that when our customers are adopting AI, we see 70% lower churn rate among them. Second sort of bet for the core was this land and expand motion. And we're pleased to give investors updated stats of where we are on our attach journey. You can read there, but Phone at 29%, Webinars at 27%, Rooms at 17%. To me, what this says is there is both progress. We haven't given all three of these previously. I think we've given Phone previously, but there's both progress and headroom and opportunity still to grow. And look, we know when we have those products and customers are buying three or more products, it isn't just the monetization of the land and the expand, it also drives lower churn.
Intuitively makes sense, but the stat we want to share with investors is we see 43% lower dollar churn when customers buy three or more even versus one or two. There's a stat I didn't put on this slide, but I think it is a great transition to the next slide, which is all about our Phone business. Our Phone business is having a resurgence of sorts. So here we think about it, we're talking about it as penetration to our Meetings base, to our Enterprise kind of account core. But I'm excited to share that our Phone in a third of our Phone deals, they are net new customers to Zoom. Okay? That's going to make sense when I go to the next slide, which is talking about our Contact Center and customer support.
But I think it's also reflective of the fact that we've been taking, and really pushing things like our Teams integration, right? Where we know the Teams Phone product isn't strong, and it's another vector to gaining share. Probably my favorite or one of my favorite slides in the deck, talking about our customer experience, our Contact Center. Lots of new data on this slide, so let me talk through it with all of you. First, we've taken a little different pivot on sort of our AI. Obviously, the headline you all know here is AI is driving sort of our growth story. What we did is we took revenue, so this is in that darker blue down here. Any SKU that has AI value in it, think of this as ZVA, Elite, Contact Center Intelligence, right?
Represents over 60% of our Contact Center business, and it has growth in the mid 100s, right? So really just another way of saying what we've been saying to investors, that AI is clearly driving that growth. And look, we're seeing a lot of different paths to capturing that. Sometimes we're seeing customers start in ZCC and move to Elite. And the realized, meaning inclusive of churn, uplift that we see from that is 122%. Sometimes they're starting in ZCC and adding a Virtual Agent, and that's about 40% realized uplift. That one you got to factor in a new product, and it's a consumptive business model. But look, there's also paths where they start in ZVA and go over. We just wanted to paint the picture of the opportunity in the two more common. What I love probably most on this slide, however, is this.
Contact Center is winning on its own. In our top 100 deals, 90% were net new customers to Zoom. 70% brought Phone with them. I think it's a really great signal for a lot of what we've been talking about with investors, but now you sort of have the data, and we wanted to share it with you. But look, that doesn't mean that attaching to our Meetings base is not also opportunity. It's a huge base, but the penetration is still low. But look, I look at this slide and I say, in a moment where a market is transforming, this is a great durable element of revenue growth for us. Now we're going to move more into the stuff that's a little bit further out, but important to talk to investors about.
In talking about our lines of business related to sales and HR, I want to kind of give you a sense of how do we see the opportunity, what are early signs of success, and ultimately, what is that business value that we hold in our head that we're trying to drive for our customers. Starting in sales, this is a combination of ZRA and Common Room. Look, you can read the addressable market, which is big, but the thing I really want to make sure investors understand is so many of those sales conversations are taking place on Zoom. It gives us that natural conversation, that natural context to go and sort of add on to that with customers.
One of the last places, and I am kind of smiling because Graeme is sitting back there, and he is a great evidence point of this, but sales does not want to have calls that are not on Zoom because of the external quality issues. This represents a great base for Zoom. We have customers already in ZRA growing strong. I am not going to read this, but they just came out with an IDC ranking for this area, and Zoom was named a leader. So already, early in our journey, some great progress. I mentioned earlier, but in case you all missed the press release, we announced Common Room, which is about the intelligence signal. We added Engage and Forecast to ZRA.
What it does is gives us that entire platform of revenue orchestration and being able to really help our customers with something that is so critical to all of them, driving revenue, gets them better intelligence about who they target, improves things like win rates, Forecast accuracy, and end-to-end orchestration, but there is a very important word in there, live. Because Zoom owns the conversation, they can infuse intelligence live into the moment that others cannot. If we go down to the HR with Workvivo and BrightHire, I am going to focus more on BrightHire. You can read the addressable market. It is really the reinvention of the recruiting motion in general. But look, very similar to the sales, this is an area where Zoom holds a lot of those conversations and a lot of those interviews. Pleased to share early success.
BrightHire customers up over 75%, and it is really in service to driving more efficient hiring. Hiring is one of the most important things a customer does, and fraud detection. You heard us talk about it, but this is a huge issue for people in interviews. I am going to finish this off with the last driver of revenue growth for the enterprise, which is sort of our new AI revenue streams. Look, there is a lot more that I am not going to talk about that goes into this, but as it is more our sort of future state, I wanted to just paint the picture for ZoomMate. So ZoomMate is our horizontal value SKU that attaches to sort of our core workplace, or meeting SKU. The opportunity is clear and simple.
It is the entirety of our meeting space. This is not a realized uplift, it is just a price uplift, given where the product is in its path. But you can see the uplift potential that will come with that. Pleased to be announced already on the Gartner Magic Quadrant, big-name customers adopting and refining our approach. We are getting good signal from both enterprise and SMB, and just try to capture the customer value. But I think you saw a lot of it today in the keynote. It is about enterprise search, agentic orchestration, and then being able to take that into AI creation, like creating a PowerPoint deck that you saw or creating a slide deck. With that, I want to continue our revenue with a slide on online. Really the headline here is just stabilization continues.
We've kept churn down low, and that's despite two rounds of price increase. We have a much different customer base in online, with over 75%, and this is the stuff that's been growing, with us for over 16 months. That's really helped to stabilize our revenue in online. Similar to the stat that I shared on AI adoption and what is it doing for the core, I wanted to share that we see a 50% churn reduction when these customers are using things like My Notes. Okay? Our path of land and expand in online is earlier stage than enterprise, but something that we're still excited. Moving us from revenue into our P&L. So proud of what the Zoom teams have done in our gross margins. You can see there the progress. We've held best-in-class gross margins at 79%-80%.
Look, that's because we've had many different levers to work. Clearly, as AI usage goes up and we move to an enterprise business, that puts pressure on our margins. Yet we've been able to offset that with AI monetization, infrastructure optimization sort of in our core. Then this federated model that we talked about. All of that is a long way to say we have a fluid way of taking in AI scenarios and determining whether they should go to SLM, the Zoom model, or a large language provider. We have various third parties to choose from, and we embrace open models as well. Okay? We also embrace OpenAI.
What I wanted to do here with investors was show you just a visual of that AI inflection going up and the progress that we've made in being able to put it on Zoom's model. Really key for cost and for quality balance, and also building that context layer. Moving beyond gross margin. What I hope you take from this slide is really, look, we've been investing in innovation. We've been building out a channel, and we have been able to keep our margins best in class because we've been harvesting efficiencies in AI, in general productivity, in economies of scale. I'm so proud of what the teams have done. In a GAAP world, we've also done the same thing with stock-based compensation expenses going down, in part because Zoom gave that top-up grant post-pandemic, and that naturally tapers off.
But we've also been really working to move to more market norms in terms of stock-based comp, and that's part of our progress as well. Not only are we growing revenue and holding profitability, but now we're going to move to the cash flow. We are, of course, strong generators of cash flow and conversion. You can read it for yourself. Generally, what I would say to investors is you should think about us as generally growing cash in line with operating margins. But something unique to Zoom, certainly we have large cash balances to the extent that there are changes in interest rates that can come in and influence. That's what you see really at play with the conversion as well as some of the stock-based comp. We moved from stock-based comp to more cash-based.
But generally, as a principle, think about that as the rule. It will grow in line with OpEx, and we feel great about our progress there. All right, last slide of progress, then I'm going to hit the long-term slide to wrap us up. We've made strong progress as well in returning capital to our shareholders. This was something, again, I got a lot of feedback when I first came in, and we'd had sort of spotty use of buybacks. I'm super pleased to say that I think we've announced $4.7 billion of buybacks. We've executed $3.4 billion against that and given investors the frame that we committed to reduce share count in FY 2027 and beyond with our buybacks. When I came in, there was also just confusion around M&A and what that path looked like.
And so what we've done with investors is really tighten our frame to say, if we acquire, it will be in one of the three business priorities that I talked about, and it will be more small to medium-sized in nature. So that you all have clarity of what that looks like. And I'm proud to say that we've executed three acquisitions in the last year, and they have each fallen straight into that guidance. And then lastly, our strategic investments. This represents not the value of Anthropic for those that are orienting to the slide, but it represents sort of our buy-in for the year, or what we've invested in in the year. And that's Anthropic, but it's also many others. This is a great vehicle for us, not only in financial return, but one that gives us access to early partnerships in technology.
So with that progress, let me hit the long-term guidance slide. What I hope everyone takes away from this is that we're all about continued revenue acceleration, and we're going to do it while driving strong profitability. There's a lot new to this slide, so let me orient everyone. For the first time ever, Zoom is setting a time bound on its long-term guidance. And for the first time ever, we're giving top-line guidance. So I'm pleased to say that our revenue guidance in FY 2030 is 6%-8%, with enterprise getting to double-digit growth. Let me give you a little bit of color and context around that number. One, it represents organic business momentum. It is really reflective of those established products and those scaling products that I mentioned.
In other words, the vast majority of the bridge of this FY 2030 comes from things and products that are already hunting and proven in market. It presumes sort of flattish online, where we think we can hold to stability there and then reflect that sort of earlier stage land and expand motion. So that's sort of how to think about the top-line guidance. Let's go to gross margins. We continue to reiterate with so many of those things that I talked about on the previous slide that we can hold to gross margin. And I'm going to skip down to the bottom. We're saying we're going to be in the 40 range, for non-GAAP operating margins. All of this way of saying we're going to continue to invest in innovation.
We're going to continue to invest in those three priorities, continue to invest in channel, but we feel great about our ability to offset that with efficiencies, AI or otherwise, in COGS and still have efficiencies in our infrastructure optimization and our ability to find them within our OpEx as well. Roughly our allocations. Let me say one more thing here. This supersedes the previous guidance. I think it was day two when I got called into Zoomtopia and we debuted long-term guidance to you. This is the previous number that had been in the 33%-36%. This guidance supersedes that, so this is the new guidance.
Really is no different than what I've been saying, if you've been following what I've been talking about in the earnings release, you should expect that when the revenue growth has similar zip codes to where we are, that we're going to continue to hold profitability and won't be going into the 33%-36%. So it just makes that official. From a non-GAAP perspective, great to see the expansion in 28%-30%. This obviously excludes any sort of one-off items, and you can see the stock-based comp range as part of that. All right. Let me then go to sort of a wrap-up slide before I hand it to Graeme with really what I hope investors walk away with. From an AI perspective, we have an AI advantage. It starts in the conversation. It builds in the context that we talked about.
But look, nobody should be mistaken that the true line for customers is your ability to drive that into action and business results for them. Zoom has a tremendous focus on our customers, and I can tell you day in and day out, that's the bar of success. We have an ambitious system of action vision. We're accelerating top line, and we're doing it while holding strong best-in-class margins. We have durable elements of enterprise growth with broad platform momentum, and we continue to be a robust cash flow generator and return that value to shareholders. So with that, let me set up. Are we taking? Do you want-
Okay. Okay, sorry. I ran long, but we will have the exec Q&A. This is the frame, you guys. These are durable elements for growth. What we want to do is just breathe even more depth into hearing not just from me, but all of our leaders. Graeme is going to take us through elevate with the core. Chris is going to come on, and we want to go deep with investors on CX. Russell is going to take us through the more future stuff, and then we will wrap with a panel at the end. All right, Graeme, great to have you here. Thanks for joining.
I wanted to take the opportunity today, as Michelle said, we are walking through these different pillars and categories, elevate the core, CX, and AI. While I would love to talk about all three, what I want to do is maybe start with a contextual frame. One of the benefits I have in my job is I get to meet and speak with customers every single day, multiple customers, large and small. I want to share some insights into just some of the dynamics that are happening with the conversations we are having. I will start specific to the core of it, AI. This is specific to our meetings, our phone, our webinar, and events business. Some of this carries throughout. I think the most important frame here is to think about the way that our customers are using Zoom is changing.
If you think about in years past, Zoom was about how do I bring in a remote participant? With video conferencing, you think about during the pandemic era and post, it was about hybrid work. How do I bring people together when they are in different work environments? We are entering an age where our customers are asking for Zoom to participate in every single conversation across their enterprise. I think this is really, really important for us to all kind of consider because it is a big shift in what is driving the buying behaviors of our customers. Every conversation counts, and it counts at scale. This is not about conversations just within a contact center, resolving things like, how long did it take my ticket to resolve? This is not just about a sales conversation.
Of, okay, what are my win rates? This goes horizontal across an enterprise, and what is important is that this is driving that Unified Context Layer that Michelle touched on earlier, but was a big part of the announcements that we had this morning. It is a driver across our meetings, phone, and webinar business. I do want to call out the note here, which is super important, that AI, intelligence, is only as good as the contextual understanding that you can give to it. Guess what? Garbage in, garbage out. That contextual understanding and the ability to give quality context is paramount. That is where you see what we are doing. We are actually investing in the AI primitives, the deep tech, to allow us to have a structural advantage here. It all starts with making sure that we are capturing what was said accurately.
XD on the exec panel mentioned our Zoom ASR that we're doing with Zoom Scribe, leading the industry in our automated speech recognition technologies, doing audio isolation. This is making sure that the quality of the input that can feed that to contextual understanding. Another important one is who said what. If you think about in the future, this idea that our customers are wanting Zoom to participate in every conversation. The thing that makes that real is when a customer says, "Hey, I'm fully in the office. I have five people in the conference room, and I want Zoom. I want My Notes to participate in that conversation because I want the recording. I want the transcription.
I want the diarization so I know who said what, so I can automatically assign action items afterwards." This is a new use case where it's no longer about bringing in a remote participant. It's about adding value to every single conversation. But guess what? Understanding in a shared meeting space with a single microphone who said what. That's not easy. There are a lot of underlying technologies, as I mentioned, things like Smart Name Tags, speaker recognition, that are actually allowing us to truly understand what's being said. This carries across the platform. By everyone, this is really, really critical. It's driving a lot of our international opportunity with things like Voice Translator, and as announced this morning, things like Touch up my Voice. The bottom layer is also critically important. It's about the trust layer.
You saw some of our announcements. This is very much customer driven around how do I make sure that the people who are speaking should be there, that I have that layer of trust. This is augmenting the platform with deepfake detection sensitivity labels so that a high sensitivity conversation, that summary is making sure that it's flagged and categorized as high. This is allowing us to have conversations in highly regulated markets. Other areas across the globe, we're leveraging our node architecture for delivering AI on-prem. You saw a couple of months ago some announcements from us there, which allow us to expand where and how we can do this. As Michelle mentioned, with regards to these areas of meetings and phone and the opportunity to expand in phone and webinar, there's still a tremendous amount of opportunity.
The reason why customers are buying is changing, and that's what I want to talk through. The drivers of the past for phone, it used to be, okay, I'm replacing dial tone. It used to be that, okay, maybe I'm moving from prem to cloud, and I'm going to. Business driver was that, hey, I have less complexity. I don't have to manage a phone system anymore. I'm going to offload that to a vendor like Zoom. We've seen great success. The business has grown. These new contextual understanding, this universal context layer is providing a new conversation that is driving these customers to Zoom. When we think about things like phone, it's no longer about dial tone.
It is this understanding of when I can have a contextual understanding of what's being said, I can help an organization get real work done. You see here, whether it be the before, during, and after, it's driving meaningful impacts with customers. You see an example here. Customers that previously had voice is one of the things that's pretty fragmented, especially within enterprise customers. They might have multiple different systems. But now this universal context layer is consolidating onto a single platform. A national wealth manager that we work with, 16,000 locations consolidating all of that onto the Zoom platform, onto Zoom Phone, so that we can build this universal context layer and then augment the organization with AI. An AI receptionist being a meaningful part of that strategy. We talk about it as the digital front door of an enterprise.
This resonates across customers of all shapes and sizes, where I think there's a meaningful opportunity in that mid-market, lower end of the market. You think organizations that might have historically not even had potential use cases for Zoom, and I think it's evidenced in Michelle's stats, around a third of our Zoom Phone customers being net new to the platform. Think of businesses that have a plumbing or a landscaping company. I might not be out in the field. I have 25, I have 50, I have 100 employees. How can I have an automated system, an AI system that's intelligent, that can offload things like scheduling, appointments, reminders, calendaring? It's a huge upsell opportunity. It's a huge driver of why Phone and telephony matters versus just dial tone replacement. Does that make sense? Shifting into our webinar business.
I think Michelle sometimes says that it's the part of our business that's sometimes less looked at, but is meaningful, huge opportunity to deliver value in what I would say a persona that typically people don't really think that Zoom's working with. Kind of within that sales and marketing arm, but more towards the marketing of how do I help a customer get their brand and message out. But the market is under tremendous consolidation. We've seen a lot of disruption over the past year. That's because the buying criteria, augmented with AI, is changing how people are thinking about this. It's no longer about just running an event or running a webinar. There's a true TCO conversation where you can replace multiple different parts of the technology stack within a customer.
You see here, we've added capability, Production Studio, Content Studio, video management, turning this into a true MarTech life cycle stack, and delivering a tremendous amount of value. Then it's personal pride of mine. You see the comment at the bottom. This is a great land-and-expand opportunity. This is a technology where we can go to a customer, a competitively held customer, have this conversation, the absolute best of breed, win, and get a wedge, a foot in the door. Actually, some of our top competitors that you would think of are actually leveraging our webinar and events platform. I think that speaks to our ability to use that as a wedge into accounts. I did want to give an example. One of I think a very large technology supplier, one of the world's largest.
Now, this is kind of a journey that they had with webinar and events. In the last eight months, we've had six expansion opportunities. You want to talk about defining land and expand. This is the gift that keeps on giving. 47 different events licenses ranged in different size and capacities, up to 10,000 attendees. Then they're actually doing a pilot right now for our video management product. Video management is an area that I'm really excited about because if you think about it, some webinar or events usage can be episodic. It's either seasonal or I use it, then maybe after I do my event, I don't need it anymore. With video management, we're turning that into. It's building in terms of the stickiness of the solution. It's no longer about producing a single event.
It's now about a full life cycle around that. Whether it be the ability to create, manage, repurpose, use AI to actually learn from that, how do I make that session better? How do I actually drive more engagement from my end customers that I'm trying to target to get that message out from a scale perspective? Very excited with what we're doing with video management as well. I think that's it for meeting, phone, and webinar. I think we might have-
We have time for a few questions for you.
Perfect.
Do we have- Before we move-
Yeah. Please. Yeah, so before we hop into customer experience.
All right. Can we have one more mic so Michelle, why don't you take this one?
All right.
And let me have another mic to pass around.
Alex, you had your hand up.
Hey, guys. Alex Zukin from Wolfe Research. Thank you for the wonderful presentation. It is really great. Just on the guide for the long term, can you maybe just clarify, is that a CAGR? Is that a point in time? What is assumed? Because I think you allude to double-digit enterprise growth. We are saying that is in FY 2030. Is that before then? Kind of what is the implication for online? Just any more kind of substance. Then the other point is you have not given a guide for a long time. Why are you doing it now? What is the confidence or the visibility that you have that gives you enough data points to put it out there?
Yeah. First, to answer the question specifically, it is a target in FY 2030. Generally, in terms of the path to that, we will give 2028 guidance in February, but generally think of it as sort of like a gradual path to that. I think I gave a lot of color on sort of what the drivers will be. With respect to why now, look, I think it is because we do have more confidence and we have built sort of that path, and we want investors to be able to know where we are headed on both top line and bottom line.
And maybe just on the topic of M&A, is there any thought of how much with all organic?
Organic- only. Yeah.
Perfect.
All right. I'm going to move around the room a little bit. All right. Yeah, Power, why don't you-
Yeah. Power from Baird. Just within the visibility that you have to accelerate the enterprise business, how are you planning on incentivizing the sales force to be able to achieve that? Are you increasing quotas? Are you focused on incentivizing the AI attach more, or is it really just a cross-sell motion that's going to drive the story? Just anything there, and then what's the Zoom for the channel as well?
Yeah. I would say the one, I will let Michelle comment on quotas. But when it comes to compensation or sales behavior, we continue to evolve our compensation philosophy, both for our direct business as well as our channel programs and how we drive outcomes with them. For our direct sellers, we are in the middle of our FY 2028 planning now, talking about specific mechanisms that we can use to drive the upsell, cross-sell, and also the expansion in areas like consumptive. Those are all conversations we are having. Then we have made pretty big changes to our channel partner programs as well, where we have tied the channel partner economics, both to not just to a specific deal, but to a book of business and outcomes, but then also delivering on things like net retention, churn targets as well.
So really bringing a level of sophistication to the way that we do our channel motions as well.
I'll just self-direct. Go ahead and ask questions. Here you go.
Sorry.
Thanks. Arjun Bhatia from William Blair. Michelle, I noticed there was not a free cash flow target, but you did walk through some of the headwinds that you're seeing in free cash flow. How do you think about what the long term of that metric might look like? Is there room to get that back to 40%, or are the working capital headwinds?
The 40%?
Free cash flow margin.
Oh. Look, what I'd say with free cash flow, you have our margins guidance. What I would say with free cash flow is what I tried to say earlier. We didn't give explicit guidance, but you should generally think about that growing in line with operating income. The wild card is interest rates given Zoom's large cash balance and what you believe about that, and taxes would obviously be the other piece. But we've given tax rates in the 22%-23%. So hopefully that gives investors enough kind of pieces to be able to back into it.
I think we're going to go to actually do Chris Morrissey last, and we'll do Russell's presentation.
Why not?
Yeah. All right.
All right. Then we'll be back again, you guys, with the panel at the end. All right. I will introduce you. Russell, our newest entrant to the E-Staff, I believe, is just I think you had Tom up there, but just such a great addition to our team, and is going to talk more about those kind of outer year things, in terms of our priorities. All right.
All right. We're good? All right. Awesome. Well, Graeme talked to you a little bit about the elevate the core with AI. I think you'll hear from Chris in a little bit. Oh, okay. Chris now. Okay. What I'm going to talk a bit about is how we are working to drive revenue, in this third bucket here. It's all part of the same story in how we think about it. It's all part of this idea of the system of action. So what we're looking at, the framework, how we think about all these pieces fitting together. Before getting into the products a little bit, we had a version of this slide that I talked about earlier, and we really do think that this idea of the Unified Context Layer is a lot of what powers everything that we can go do.
I think what we're increasingly seeing is that there's a lot of companies with a lot of AI models. The leaderboards change over every 45 seconds. There's a new one that is leading at this particular benchmark, another one leading at that particular benchmark. So the question is, when everyone has a good AI model or has access to a good AI model, what do you start to see as being interesting and meaningful distinction? We really think a lot of that is context, because AI models are never going to have the specifics of any individual business and the knowledge about who works on what and what's going on there.
Increasingly, what you're seeing, even with the magic of things like Claude Code and others, is the idea that the more agents are able to have access to the specific context of a business, of a workflow, of an organization, and they're able to understand and use and reason over that context, the more they're going to be able to take on, the more they're able to go do. So that becomes which company, which organization has the right context and the right access becomes an incredibly important thing. We look at our opportunity with Zoom as we're conversations. We have access to so much of the raw information, often unrefined, often unstructured, that is the context of how businesses work and how they operate. So by owning the conversation, Zoom's actually in an incredibly unique position to capture that.
Not just the transcripts, but how it all fits together, what is going on in the meeting across what is presented and everything else. That makes this richer version of context that we think that we can go do. As we can connect that all together across different surfaces, from meetings, phone, webinar, chat, with our agentic search, we can reach into other document repositories. It is not just a transcript, it is a picture of how everything relates that can be fed into the model to go start to do interesting pieces of work. For us, a lot of it starts with My Notes as the core engine to help capture a lot of this stuff.
It is not just a folder of transcripts, but it is already one of the clearest proof points of how this starts to get sticky and what we are seeing in terms of how the use of My Notes affects how people are using Zoom more broadly. When you look at, for example, our online business, people who are using My Notes, they churn at less than half the rate of the people that are not using it. Because it moves us from a position where, hey, you have this meeting, then you go have this discussion, then you are done, you do not think about Zoom anymore, to something that is very durable and sticks with you.
We have lots of examples of how when people not only start to capture what is happening in a meeting with My Notes, but then they start to use, either via ZoomMate or some other tool, they use that information again. They start to see the power of what is being built for them in their memory and their personal context within the Zoom platform. We already have, I think, 1.5 million monthly active users in My Notes. We have a lot more work that we are going to do to keep driving the growth of that. ZoomMate is obviously how we are building this idea of taking a lot of this context and helping drive it to completion so that people can actually get work done. They are seeing the productivity gains with it. ZoomMate is our completion engine.
It has a wide degree of functionality that with a sandbox, we can go write code to go figure stuff out. It is connected deeply to our agentic search system. There is easy example of, hey, prep me for this sales call. It can reach into a connected CRM, look at meetings that you had, preparing for conversations you had last time, chat threads, then start to draft a briefing specifically for you. A very true story that I tell sometimes, I am still reasonably new to Zoom, like six months in. By one month in, I had to present on our AI strategy to the board. That was great for me because I was still only a month in. I knew I had talked about a bunch of stuff and a bunch of ideas, and using My Notes, I was able to actually get that going incredibly quickly.
It became this really powerful proof point where you start to say, "Oh, how do we start to then turn this into a thing that customers can connect the dots on and use that?" Then you really drive a lot of the sticky behavior that we've seen in ZoomMate was what helped get all that done. We are seeing ZoomMate being powering across a variety of different systems. We have the AI productivity suite, which is able to reach into both writing to and pulling information out of. It is able to connect to other systems, Salesforce, Jira. We are using that for a lot of our own internal automation of our product building process, ServiceNow. We are starting to see this story land with customers. We had our first APAC deal that we closed in Q2, which is University of Newcastle.
They are already a full Zoom platform customer, and now they are getting into the AI story. It is not just something that we are seeing in the U.S., we are seeing it overseas as well. It is starting to show real traction globally. With ZoomMate driving this for a lot of our information workers, we are also starting to see versions of this gaining traction on the front line. I think 80% of the global workforce is not information workers. They are front line. There is a huge opportunity there that we are very connected with our Workvivo product that we have. They have HQ Agent, which is their version built on ZoomMate that brings this into the front line workflows. Workvivo passed $100 million ARR in Q2.
Front line workers can use HQ Agent to ask questions in plain language about what is going on and how they can act right in that moment. It saves a bunch of productivity for them in a bunch of ways. I think there is a lot of just another example of how we can have a new AI-driven business that is built into what we are working on today. One example of this for Workvivo in particular, we just had a top U.S. insurer, 100,000 users on top of Workvivo. What they found was that before there was a huge fragmented set of tools that people were working with, a lot of shadow IT stuff of things written down here, things written down there. It really hit their team in a bunch of ways. The field teams were some of the hardest for them to go reach.
This was, I think, a little over $210,000 net MRR, just from a single customer getting them into this platform. I think it changes the discussion that they are having from, hey, is this a thing that they saw? Did this information diffuse itself throughout the organization to something that they have kind of tracked acknowledgement, they know who saw it and how it is connected and everything else. The next opportunity for all these kinds of deals that are often new logos to Zoom in a bunch of ways is to attach HQ Agent to what they are doing. So get that going for the 100,000 frontline workers. We have, Woody's is a company that started to use the Workvivo platform. It went from 57% to, I think, 88% engagement. BusRM, was 55%.
We use this for our own internal work for our large workforce within Zoom. We get 89% participation in a lot of our cultural surveys and stuff like that really shows the reach that these tools can start to have. I think what we see over and over again in a core thesis for how we designed a lot of our products is that when you reach people where they already are, where their workflows already exist, you just get much better engagement than when you are saying, "Hey, please go remember to go check another inbox or learn a new tool, in order to go get something done." We see this playbook extending to a lot of other important functions as well.
We look at this in the context of HR and recruiting, with our BrightHire product, and we see it for revenue organization sales teams with the new unified Common Room and ZRA product. BrightHire, it goes down this pattern of you have interviews, you have structured context that you need to bring into these centers. You can get the idea of the hiring brain, what your organizational policies are, what you are trying to go hire for in a particular role. Sometimes that is happening dozens or hundreds of times, particularly for organizations that have scaled hiring operations, if you are running a lot of retail organizations or something like that. You compound what is going on in that brain, and you can feed that back into what you are seeing in the hiring process.
Then you can use that to refine your job descriptions, refine the questions that you are asking in the interview and everything else. Very similar pattern that we are seeing success on with the revenue side of the house. What are the buying signals? What are the actions around outreach, coaching, deal acceleration, dealing with objections, forecasting, stuff like that, and accelerating it through to trying to get the deal closed as best you can. You start to look at these things and say, "Okay, these are the patterns." The specifics and the details might be different between the two, but you start to match the pattern, and you can scale up and build a number of these. If you own the conversation, you figure out how to then go structure the context, and then you drive all that through to completion.
When you kind of double-click on each of these things, BrightHire in particular, this is one where it is embedded in Zoom, and we know that so many are interviews now are taking place virtually, very commonly Zoom, because it is a product that works so well for kind of lightweight, low setup meetings that people really like. There are organizations that use Zoom, almost exclusively for their kind of external calls and stuff like that. It is not a new tool. It is not a separate app that they need to deploy. We have got BrightHire in around 1,000 hiring orgs right now.
It is also really one that is very thoughtful about the workflow that we have built. It is not just a transcript tool. It is this whole idea of the hiring brain, that I mentioned a moment ago. Every interview becomes structured content that compounds in a really compelling way.
I think, a lot of this is capability that is difficult for competitors to be able to match because we can have a lot of our real-time guidance that is built directly into the platform. We have a lot of the seamless consent. It uses Zoom's deepfake detection system, which is a huge topic of conversation in the world of hiring right now. I think we have caught hundreds of fraudulent candidates dialing in from who knows where. What our customers are starting to see is 27% fewer interviews per hire across a variety of clients. We have a couple case studies we looked at, Included Health recruiter screening hours went from 274 down to 110. Surge hiring recruiters went from 5 down to 1. They reported about $1+ million in net savings by using the product, versus kind of having some sort of outsource model.
They maintained their they do surveys around candidate experience, and they maintained a very high 4.7 out of 5 on the candidate experience there. I think the quote they have speaks to themself, really talks to the idea that we really want to embed things directly into the workflow in order to create the transformation and not send people off to a separate tool. I think that is a lot of the difference that you are seeing between something that is just a transcript or something that is a complete separate tool versus embedding it directly into the workflows that people are already using inside the Zoom meeting in this case.
When we go down to the revenue side of things, we have the Common Room ZRA, what we are really starting to see there, again, you look at this where this is a scenario that has lots of conversations, lots of outbound conversations. Zoom owns a lot of telephony stuff. We have the dialer, we have SMS. A lot of competitors in this space only rely on something like a third-party API, like a Twilio or something like that, but we can integrate that entire thing into the existing stack that users have. We build a lot of real-time interventions, the Sales Assist Coach. We do not just analyze things after the call is over because we can look at what is happening in real time, not just the words spoken, but we can think about what is on the screen and what is happening in the back channel.
We have a good set of clean buyer identity stuff that Common Room is able to bring us because having this continuous buyer view across every channel. Again, you get this pattern where the context is compounding. It is not just a matter of what happened specifically in this call, but how we build all that up over time. When we go through and when we are winning deals, we do our surveys of, "Hey, why did you choose us?" More than half the time, it is because of the product functionality. It is not purely a pricing play. They are saying, "This is a better product that is going to help me serve my needs substantially better." I think, we are also seeing there has been a huge explosion of people trying new tools as a lot of the technology has evolved.
We're also hearing from customers and seeing that they see the benefit in some of this consolidation and not having to weave or not have their users need to weave 45 different things together, in terms of how to go make that happen, like having this clean solution. Jira customers are up 41% year-on-year. Okta, a customer of ours expanded their Common Room contract, because they can get more of the value from the AI intelligence. We were just named a leader in the IDC MarketScape for the unified revenue orchestration platforms. We're seeing a lot of the traction benefit from that part. Again, just back to where we started, showing how all the pieces fit together in a huge way.
I would say that our bet that we feel very good on is the value of having all the context that comes in from the conversation, having the richest real-time access to that. Not just the sort of after the fact transcript, but what you can do in real time and understanding all the nuance of that. How we can then also use that particular moment, both during the conversation and directly afterwards, and the shoulders of when it happens, help drive the completion in that moment and be very tightly connected to the workflows that people are already a part of. Again, they don't have to go somewhere else. They don't have to remember something else. I don't think there's any point solutions that can go solve all these problems in the way that we're capable of doing that.
They can look at one side of the equation or the other, but we can see the whole thing, wall to wall, I think, in a really powerful way. I think that just becomes a structural advantage for us that no point tool, no contact center vendor by themselves can go manage. I think the context layer and our bet on that and how we're able to go build that and how we're able to go flesh that out is what's going to allow us to be really successful and go in here. It's not just one market, but you see that how across functions, the same patterns emerge over and over again. As we continue to improve our ability to execute on that, there's, I think, more domains that we'll be able to go into.
It says we're going to go to Q&A, but I think we're going to go to Chris. Come on up, Chris.
I know we went out of order, but I am sorry. The good news is I am late because we had our first ever CX Connect at Zoomtopia, which I was extremely excited about. The plan was I was going to leave the stage and say, "Now Eric's going to come up on stage and talk," and then Eric said, "Chris, why don't you stay with me?" I am not the smartest person in the world, but I know how to read an org chart, so I stayed. But it was good. The CX Connect session is going very well. For those of you I have met, I am the GM of our CX practice here at Zoom.
Been here for three years, and it has been just a phenomenal journey in a lot of things we are doing. It ties directly to the pivot. We are very disciplined in strategy.
We spend a lot of time, and you have seen this slide a couple times, so I do not need to go through it. But we are talking about the middle, the customer experience, specifically under accelerating line of business, which is the business that I run. This includes the Zoom Virtual Agent, the traditional CX platforms. So I wanted to start just framing before we get into some of the successes and whys. But when I started here three years ago, and I have been in the CCaaS space for 174 years, I think. It has been a while. But I said, our goal is not to chase the CCaaS market. That is not exciting. The reason I said that is a couple things.
One is there is so much changing in the CX space right now that if you are chasing a market that has existed for 12 years, you are just chasing a dinosaur. So we have a very strong opinion of what is happening in the market and why you need to look at things differently and go over them quickly, like there is a massive convergence happening in the market. An example, CRMs are now becoming ITSM platforms. ITSM platforms are becoming CRMs. UC and CC platforms are coming closer together. Some CRMs think they are becoming CCaaS vendors. I think that is more marketing than truth, but these are the types of things that are happening in the space right now. AI is changing everything.
I feel like I get paid a nickel every time I say AI, so I will say it a couple times. AI is pervasive across the entire platform. A lot of people think of AI about Zoom Virtual Agent, which it definitely is. But AI is around giving more insights. It is around helping humans do their jobs better. We do not subscribe to the belief that AI means there will be no humans in a CX world anymore. That is not our fundamental belief. We think the belief is when AI and humans work together, your outcomes will be better. Now, there is definitely cost reduction you can use in AI.
I am not saying that there is not, but the questions with the brands that save that money is, are you going to take that money and save it and just apply it as cost savings, or are you going to redirect that money into other areas of the business? The perfect example is IKEA, where they had a. So with AI, they saved the equivalent of 1,000, what was it?
1,000 employees that they saved by using AI, but they didn't fire them. They repurposed them into a new role, and they ended up generating $1 billion in new revenue by creating them as design experts. Yes, there's savings, but brands can decide how to use the savings. It's moving from personalization to individualization, and this ties very directly to the concept that Russell's talking about, where that Unified Context Layer. For years, people talk about personalization, and if you're super special, they said hyper-personalization. They use other buzz phrases. All that, example of that would be if you called an airline that says, "Thanks, Chris. Thanks for being a diamond member. Are you calling about your flight to L.A.?
When you start taking the context, every conversation a customer has with a brand, they're telling you something about themselves, and that's never captured in the CRM. What we're doing is we're capturing all those insights, putting them into our Unified Context Layer. So now when we talk to her, it's not like, "Chris, you're a diamond member." It's like, "Chris, I know you like aisle seats, direct flights only. You don't like to sit next to the latrines," which I usually do anyway, but it'll give me a more personalized experience for me. Then CX is becoming a revenue driver.
If you talk about a look at all these things, you can't talk about just CCaaS because the way I say this is, CCaaS vendors historically love to say, "We are a CX vendor, so long as you call my contact center." But if you think about customer experience through the lens of a brand and they're like, "Well, what if they call the phone?" Right out of the gate, the CCaaS vendors are in trouble because, well, I don't have a phone. I just have a contact center. But what if they want to use a kiosk in a store or at a clinic? Well, I can't do that either. What if I wanted to use video on meetings? Well, I can't do that either. So what you're saying is you're a great CX platform in a very narrow view of CX.
Zoom is saying, what brands are saying is CX is much broader than that. We just fundamentally changed the narrative. It's landing very well. Now, here's the good news is I was saying this three years ago. I said, "I think CCaaS will die. New markets will be formed, and when new markets are formed, new leaders rise." I think that was one of my first quotes when I started at Zoom three years ago. I'm not always right, but this time I was. Now you look, these are reports that just came out this year. This is a new report that says it's the, well, they call it the agentic CCaaS, which is way more powerful than CCaaS because it's agentic. But it is a report that came out, and if you look at it, and it's pretty far, but this is Zoom.
This is NICE. This is Genesys. This is Five9. You know why that is? It is because I wasn't chasing NICE and Genesys and Five9 to be a CCaaS. We were changing the market, and when markets change, new leaders rise. When new leaders rise, it is Zoom, right? The other version is convergence. We said, "We think UC and CC will come together." I believed that three years ago. Well, now this is a report that says, "How are the integrated platforms?" This measures the platforms that have both UC and CC. We are market leader. So we have been building for years where the market is going, not where it is coming from. These are the narratives. These are how we start every conversation with a customer. We do not go in there like, "My CCaaS is better than your CCaaS," right? It is not the conversation.
You start it much broader than that. So you get into all the tools we have in our CX platform. It is the traditional CCaaS products. When I say we are not a CCaaS vendor, we do all the capabilities, quality management, workforce management, conversational intelligence. We have all those capabilities as a narrow part of the scope, but we go much, much, much wider. Virtual Agent right now is one of our fastest growing products within the CX suite. The beautiful thing about our Virtual Agent is it does not have to be tied to our platform. In fact, right now our largest Virtual Agent customer isn't attached to our CX platform. This particular case, they have 1,100 storefronts, and they rolled it out in eight months, that Virtual Agent with a pretty high deflection rate.
I was just on a call with them last week, and I was teasing the kiosks that we are going to be having Virtual Agent on kiosks within storefronts, where you can go to a, say if you go to a Best Buy. These are the types of conversations we have with customers, right? You go into a Best Buy and you are trying to buy an LG TV, and there is one LG TV expert, and he has got three people in line waiting to talk to him. What do most consumers do then? You turn, leave the room. Like, I cannot wait for, I have got to go do something else.
But if there is a kiosk there, multimodal, you can go there and like, "Here is the TV I am looking at. Can you tell me about it? Do I need any cables with it?" So the Virtual Agent will be helping people in store.
If it cannot help them in store, you can elevate and talk to a contact center expert somewhere else. So this is where all CX starts blending together and you start having very different narratives. So this is a huge success win and they are going to innovate more with kiosks and some pilots with us pretty soon. Any chart up and to the right is usually pretty free, like this one. But this is showing our volume of Virtual Agents, both engagements, both chat and voice. We are growing in both, but we are having the most inflection point in our voice Virtual Agent. Now, if you believe pundits like five years ago, they were all saying voice is dead. Voice is the fastest growing Virtual Agent tool on the market right now. Then we are following suit. Again, we see a huge adoption within our own customer base.
We see customers buying as a part of the full suite up front. We're going back, we're selling to our current customers, and we're selling ZVA to customers that have no other Zoom products. The potential just for that product on its own is massive. The other thing we talk about is the unified customer view and trend. These are components of what we call our Elite product. Elite, we start bringing some AI capabilities into one of our bundles. We try to make certain parts of AI accessible to everybody and then other parts you can buy and upsell, and you get more of a consumption-based model. Zoom Virtual Agent is not bundled in a suite. It's a separate offering, but we do have some AI bundles. We try to democratize it in some areas. But when we do that, we have 122% uplift.
Some people think, is AI going to make contact center sales go down? No. It's making it go up. It's adding value. Sometimes I've been asked, "Well, what if you've got a contact center and they have 100 agents and all 100 left?" I'm like, "Well, why'd they leave?" "Well, because they're using your virtual agent." I'm like, "That would be amazing." Because if I'm doing the virtual agent, my revenue goes up like 30% just by adding the virtual agents. It's huge there. Here's another example, which again, we talk about convergence and things coming together. Here's a customer that had to have separate products. They had a separate virtual agent, separate UCaaS, separate CCaaS, separate quality management. Convergence. We do that all together. We sold all of that and replaced four or five vendors in one sale. My CX1, that's where I came from.
I say if it's truth in advertising, they call themselves CX9 because there's nine products in the background. It's not one product. But 8x8, Cognigy, which is the phone, Cognigy, which is the virtual agent, and Observe.AI, which was their QM. We replaced all of those in one sale. When we win, we are winning a lot against incumbents. Ironically, I had some theories when I came on board, and one of them was like, we'll continue selling everyone moving from prem to cloud. But most of our sales are replacing, I call it first generation legacy cloud vendors. That's where a lot of our growth is coming from right now. I think Russell's up next. Just kidding. No, but I went rather fast, but I did want to make sure that we save some time for questions.
Siti Panigrahi from Mizuho. Just on the CX part, I think you're saying you're not changing the CCaaS market. I can see more than CX. Are you seeing customer layering in AI product or agents into their existing CCaaS, or are you seeing customer, like the example you have given, all the five products replacing one. Which one would be right?
We are seeing both. That one example was layering just our Virtual Agent on top of another person's product. We are seeing people just buy components of our AI. We have some customers that buy everything we have on the truck day one. They are going to buy our Elite, which is Expert Assist, QM, WFM, and Virtual Agent on top of it all. Then we have a massive land and expand approach too, where they might start with a basic essentials bundle, and then later they come back, and they want to add Expert Assist, so they go to Elite, and they will come back, and they want to add Virtual Agent. When we land an account, it is very rare that is the end of our sales of that account.
There is much more upsell on every account we sell into, which is exciting because it is not like it is one product and the only way you can grow is if you have more people. Even if you have less people, we can grow by bringing more AI tools to that same customer. It is all three of them.
One more follow-up. You know that recently with Muse and all these personal agents coming in, and they soon start calling all the customer support. How do you think this contact center or customer experience business is going to evolve, and how prepared are you for that?
Yeah, it is a great question, and it actually came up upstairs. Just one observation on that is that shows you how fast the market is changing. Three months ago, nobody talked about Muse. It did not exist. Now all of a sudden, everybody is talking about it. This actually might be a sales pitch, but when you talk to customers, they know how fast the market is moving. Then you ask them, you need to partner with someone that is innovating as fast, if not faster than the market. Frankly, Zoom is innovating faster than any. You think of what we are doing today in three years. It is more than some vendors that have been around for 20 years. So they believe we are moving fast to take care of that. It validates how fast the market is moving.
Now I'll answer your question after I gave you a pitch. I think we have a significant change in the volume of calls into contact centers. Russell and I have talked about this a couple of times, where there's many calls that I don't make to any brand because of time. I think my Verizon bill, I could probably save $15 a month, but it's not worth it. The juice isn't worth the squeeze for me to call and try to get $15 . But if Muse is calling, then all day long do it, right. And they do the same here. There will be a massive influx of engagements to brands. And some of them don't know what to do with it. Some of them are just shutting it down. If it's an agent calling, don't handle it. They're trying to debate.
As a vendor, it's very exciting because it will get sorted out. You never put genies back in the bottle, right. Once they come out, it's just a matter of how fast it's going to come out. It will continue down this path. But there's a lot of things that need to get sorted out, like if a personal agent is calling a brand, how do you know they're actually authenticated and they're actually representing the customer and it's not a malicious call. And so we are working with Muse right now, and Meta, on what these protocols look like. But once that's sorted out, the inflow will come in. Now, that contact center's got one of two ways to handle it. Put a human on it, highly recommend against it, or put a virtual agent on it. Love that.
And if they put a virtual agent on it, and more calls go into a contact center, they're going to need more virtual agents handling those calls. I think it's a good thing for vendors. It's probably a little bit scarier for brands because they will see a massive influx of calls because it's easier for us to use a personal agent to go do things that I don't have time to do. So yeah, I think that we're still trying to figure out all that stuff, so it'll be good for us.
I was late to this one. I will be late to the next one, too.
I will go with Jackson.
Thanks. Jackson Ader at KeyBanc. Why would not you put a human on that? Just like, on the Muse interaction, what was the rationale for not putting a human on that?
It is the most expensive resource in the contact center, right? You could, but I think what you do, the same reason you would not put a human as your first channel of choice on someone calling about an account inquiry, right? That can be handled by a virtual agent. Why would you put a human on that call? It is not-
It's not it's like an agent coming in, you don't want a human being interacting with an agent coming in. It's just like, hey, anything, your first priority now is going to be-
First priority is there. But if it's a virtual agent, if you think about humans calling in and Zoom Virtual Agent, you get into things like, how natural does that agent sound? How latency is it? How human, how well does it communicate with me? But if you're talking to another bot, those things matter less, right? Because the bot's not going to get upset that you didn't sound perfect English or whatever. It is going to talk to you. I think bots are going to be best suited to solve that. I also don't think it should be a voice agent bot. It'll probably say, let's take this conversation into more of a chat conversation because voice is the most expensive. Humans first, then voice virtual agents, and then chat virtual agents.
What brands are going to want to do is if it's a bot calling in, I want to go to the lowest channel to serve, so it'll probably go to a chat virtual agent. All the same things there, the reasoning, the guardrails, all that will still be in place. But let's not burn tokens to talk to a bot. But you can. I think what's going to happen, another observation is, you know when humans, all of us, call into a call center and then we get annoyed and we're like, "Agent, agent, agent," right? Because we're like, we don't want to talk to the bot anymore. That's going to get flipped where one day brands are going to start getting phone calls from bots, like the Chris bot. I'm a bot, right?
Chris bot will call into a contact center, and that brand's going to be like, "Human, human, human." It's going to get flipped. So yeah.
I think we got to get you to your next meeting.
Yeah.
We are going to move on to the Q&A session.
We will do it
All right. Thank you so much. Sorry I was late.
Yeah.
All right. Thank you.
All right. Wait a second, wait a second. We got to get everybody up here first. All right. This might have to go to the speakers. All right. Should I give this speaker to somebody?
Yes.
All right. Okay.
For now. I stand.
Oh, Eric likes to stand. Yeah. Maybe put that one on the first chair. All right. Michelle, you should sit here so it kind of goes underneath. Graeme, why don't you-
Follow along and-
Russell, right there. All right.
This is like a non-virtual product coming from them. All right, Charles, are you running the Q&A?
Yeah.
Once we know all the microphones are set up, we'll start.
Yeah.
All right. You guys all good? Okay. Catherine, why don't you. Yeah.
All right. One of the things I've noticed today is that you have a very broad product folio, and you also have a really broad reach to customers. What are you doing that won't dilute the brand? What specifically are you going to do for some of the products to really push them for upsell and land and expand? Thanks.
We can double team. Okay, perfect.
I will start on the brand side, and then I will have Graeme kind of cover off the second piece of the question. Ultimately, yes, we do. We have a very broad portfolio. What is interesting about it is that it is not like we have taken one persona and added more products just to do that persona. We have really acquired and built products and solutions that talk to the pain points of a variety of personas. Ultimately, the balance that we are doing from a marketing standpoint is, yes, we want to increase general awareness of like, "Oh, wow, I did not know that Zoom did that," because we do need to be cost-efficient with our media buys and how we are reaching the broadest mental availability. That is kind of marketing science 101.
But when it comes to brand to demand and really connecting the dots between that top of the funnel, although the funnel does not really exist anymore, all the way down through the lead generation, we have to be talking specifically to those personas. We are working really hard to ensure that the storyline and the narrative to the CX persona, that we are finding the right creators, the right influencers, we are finding the right communities, we are finding the right industry third-party events where that persona is showing up and engaging, and making sure that Zoom is present in those conversations, whether we are in the conversations or not. That brand-to-demand strategy is ultimately what is allowing us to increase our pipeline.
We have increased our pipeline over 50% year- over- year, and it is because we have connected the dots from that top of the funnel all the way down through the needs of each persona. But it is a balance. We do have to make prioritizations and trade-offs and figure out what are the right personas for us to be talking to at this moment in time, and how do we leverage the things that are happening in the industries for each of those personas. We are not having to create the moments ourselves necessarily, because that could obviously get pretty costly. But by leveraging the things that already exist, we are able to be cost-effective, to reach them in the channels, through the creators, through the influencers, through the media, through the events that matter to them.
It is really connecting the dots between that broad awareness all the way down to the persona needs of each individual persona.
And then to the question on land and expand, I'll expand that to just more broadly in terms of how we're thinking about from a go-to-market perspective. These are areas that we feel very compelled that we can win on a persona and kind of per product basis. So we have a right to win. We have depth of capability and feature set to win head-to-head, right, with the best of the best within that specific persona. That's where we can land, and I think we've shown evidence of our ability to do that with where we're winning even net new customers to the platform and then pulling through the rest.
But also then leveraging the story arc and the platform vision, things like Unified Context Layer and everything else that gives us the opportunity to have a differentiated viewpoint to those buyers versus any point solution across those personas. So you think about things like BrightHire, right? Great recruiting capabilities, awesome. Delivers a ton of value to that recruiting HR persona, but also solves pain points for the IT teams, right, leveraging Zoom deepfake technologies, everything else that we're doing, right? That actually pulls the value of the entire platform together. Oh, by the way, guess what? If I can hire better people, right, that context feeds back into how I'm actually then, where is my number one turnover spot, right? It's in support where my contact center agents turnover all the time, right? So how do I turn that into a flywheel? Right?
Leveraging these personas as a landing moment, winning on their own, but then also adding value in terms of the whole platform narrative. Then I'll just comment, in terms of from a direct perspective, we have sales specialists that operate within each one of these. These are people that understand this persona backwards and forwards. This is what they do all day long. So that gives us the ability to go head-to-head and win, but then also serve as kind of the expertise to help our generals. They're kind of covering the broader portfolio. Then we're doing the same thing within our channel programs and channel motions. Not all channel partners are the same. So we have CX specialized partners. We actually have partners that are specialized in Workvivo and in the HR persona.
Leveraging our partner ecosystem to onboard a new type of partner that are focused on all of these different personas, and they have specific boutique practices around each specific one.
Thank you. Appreciate it.
I have one more thing around online because we did not touch on that. We have to start bringing people in. We do have a very large online business where a lot of people use either meetings or webinars or phones and everything else, and we are doing a lot of work to think about what are the magic moments where we can start to introduce people to other parts of the Zoom portfolio, whether it is My Notes or things around Whiteboard or some of these other things that we know start to drive stickiness to that and also start to provide more opportunities for us to do other kinds of upsell to the value we create there. We have more permission to do that in the online SMB side than we do in some of the direct enterprise side.
We have a different set of motions that we are working on there.
Samik?
Thank you. Samik from JPMorgan. In addition to your system of action sort of move towards that approach more and more, you were traditionally a conversation-led company as you move towards more workflow management. How do you envision some of the incumbents or some of the software vendors that have been sort of managing workflow react to that? Particularly, you have talked about openness today on your front, headless and MCPs, but how do you think about sort of openness from the vendors or the partners on the other side to enable you to more deeper go into workflow management?
I mean, it's a little hard to predict what other people are going to do. We certainly see a lot of demand from customers that they want a clean, integrated story, and they're starting to look at saying things like, "Okay, how do we make sure that the people that we're working with are setting up this kind of openness in any new RFP they're going and doing?" Because they see the value of being able to string all these things together.
From our perspective, we're doing a lot of work, like getting very close to the customers to start to understand their specific workflows and how we can build the different components that we need, the different contexts we need in order to go make sure that we have the kind of subject matter expertise to go do a lot of that automation to help them with that.
I would say, this is where some of that persona specificity actually rings true. So you look at the example within CX, and the deep understanding of the actual workflow of a user, of the full life cycle, the ability for us to do that at a level that's differentiated than others that are purely horizontal, I think is really showing up in the results with the attach rates that we see with ZCC Elite, moving into ZVA workflows as well.
So within these personas, now within sales, how do I have a contextual understanding of, with leveraging Common Room and intent data, of who is it that a seller should talk to and why and when, and how do I feed that into an Engage product and then automatically feed that into a conversational intelligence feedback loop that then goes into Forecast in the virtuous cycle. So, those workflows within a specific persona, I think we're seeing really good signal that we can land differentiated value there. From a horizontal perspective for other, we can fit in. We have a great solution for customers, but if they choose to go a different route, we have the headless go-to-market as well.
Great.
Elizabeth Porter from Morgan Stanley. I wanted to dive a little bit deeper on the lines of business. I think there was a stat on there that for Common Room there was 60% of the win cited product functionality as the main reason for winning. When we think about the incremental investment, how much should it be directed towards going deeper in those current footholds, increasing that functionality versus broadening out into different lines of business? Second, what have you learned from the sales and HR side on how much of the AI platform is reusable versus how much incremental investment needs to be done to get that domain specificity?
Yeah. I will comment on the first part, then I will let Russell comment on the product pieces. I would say currently within the I would say definitely the sales persona, even with the recruiting persona, the focus is on depth first. As I mentioned, we want to make sure that we have a right to win head-to-head against anyone within these specific spaces. That is where we are focused right now. I think we have quite a bit of opportunity. We just made some really large announcements within the RevTech space back about a month ago, expanding. Now it is about going deeper with our entire RevOS vision. We are already using that within my teams, and we are seeing the benefit and lift of that and continue to progress that.
Russell can comment specifically on from a product perspective.
Yeah. I do not know a percentage that I could go put on it. You certainly see a mix. We will see things like a sequencer or dialer that have very specific use in RevTech and have limited to no use in hiring in the same way. We do see a lot of overlap in terms of how we want to think about building the AI systems that can ingest context, bootstrap context, how we are able to start processing the core models and core information in near real-time, get our latency and quality up across those things. Obviously, the kind of guidance that you will give will be different domain by domain, but a lot of that is abstracted away into instructions that is not specifically part of the software.
I think we're also seeing that when we do need to build specialized stuff, it is for us as it is for a lot of people in the industry, and we're putting a lot of work into continuing to improve. It's just getting cheaper for us to go do those sorts of things, right? Because all the work that we're doing to try to improve our own product shipping, our own automation, we go, "Great, we need a sequencer for the RevTech system." How quickly can we start to get a sequencer built and out? The cost to us of doing those things ends up not being what it would have been four years ago or honestly, even two years ago.
Maybe I'll just make a comment, specifically to the piece around how much is the same or similar can you leverage with the other persona. I'll maybe make a juxtaposition of sales and support. If you think about it from an organizational perspective, how do I get new customers and how do I maintain the customers that I already have? So it's the two kind of main priorities for any business is about how do I be in business. But if you look through that tech stack.
Right. So within sales, we have conversational intelligence. How do I help my sellers? How do I coach them to be better? In Contact Center, that's called quality management, QM, the same tech. So within Contact Center, I have Live Agent Assist, which is helping my Contact Center agents with next best action and what should they actually say next. That's called Live Sales Assist within our sales tech stack. Guess what? It's the same thing, just a different knowledge base that you're using to power that. Right? So you go through that outbound dialer for Contact Center used with heavy collections. Outbound dialer from a sales perspective, used for prospecting. Forecasting in sales is how do I manage my pipeline? Forecasting in Contact Center is actually called WFM, workforce management. How many agents do I need at a given time based on call volume?
So just to kind of draw some corollaries there. These are two areas that are very persona specific, and it's really important that we do the last mile to contextualize it for each buyer to deliver that last mile value. But at the baseline core building blocks, very similar.
Allan, here you go.
Awesome. Allan Verkhovski with U.S. Bank for BTIG. Thanks for taking the question and awesome presentation today. Michelle, I wanted to ask about the online business, considering it's a much harder business to forecast than enterprise. Can you give us more color specifically to online? What drives your confidence it will in fiscal 2030, at least be flattish? Are you factoring in taking in more price? Are you seeing more improvements on the top of funnel side coming from what we saw in Q2? What else should we know for why you can achieve that? And maybe kind of going into what's also embedded in those stable macro assumptions.
Yeah. Stable macro assumptions, I think is sort of conditions like we're seeing today is helpful as a zip code. What's behind it? Look, we've been able to keep churn low, and we've been able to do it across two price increases because we've been adding more value, AI and value within our workplace. Look, I think that's a lot of. You saw Russell's stat on My Notes is even a more new entrant to that. But look, I think, we look out into the future and look at even the growth, in that stat of our online customers that have been with us for over 16 months is growing and now over 75%. So that gives me a lot of confidence that it's stable.
Then you go to things like, look, we're reinventing a lot of the value, even within the core, which only further sort of says that there are pricing and packaging levers I think we could, and always do look at, but it's not sort of explicitly baked in. Then I would say that we've sort of assumed that land and expand products are kind of early stage, and probably have been prudent in our assumptions on that. Yeah.
Tim.
Thank you. I just wanted to talk about the system of action platform. Can you talk about maybe what you think the TAM is now, what it could be in a few years? How unique is this platform, and what do you need to do to get it to go viral in terms of opening up the APIs for other suppliers and maybe reinforce learning? Yeah, just longer-term vision.
Look, I think our TAM is sort of hard to give an uber stat to. We have it, and I do not know, Charles, if you have it top of mind, but look, I think it depends on each market, and it depends also where the market is in its reinvention stage. I think I talked about that, yes, the recruiting SaaS spend today is relatively small, but when you think about the potential to reinvent recruiting spend as a line item, the opportunity is more. So we tend to look at not only just the TAM in terms of where to target, but where we have natural adjacencies right to win. I think Graeme talked a lot about synergies across our products. That is sort of how I would say we think about TAM as a company rather than one big monolith, if you will.
All right. Taylor.
Yeah, thank you so much. Taylor McGinnis, with UBS. Michelle, when we think about the bridge to get to double digits for enterprise, I am hoping you can unpack that a little bit more. I would imagine the core meetings business is still a material portion of the business and probably is low growth. So when you look at that FY 2030 guide, what are you assuming in terms of core meeting growth? Then secondly, you gave us some good data points on where Phone, CX, and ZoomMate obviously very early today, but when we think about the biggest contributors of that bridge, how would you break that up between the three?
Perfect. Let me hit meetings first, then I'll kind of go to the rest of the products. Look, what we've been seeing in meetings and enterprise, your question is unique to enterprise, correct?
What we've been seeing is, and what we've been sharing with investors is that the dollar churn has been coming down over many sequential quarters. I think we're in the six-ish range, at this point. Look, the expectation is that generally that we'll sort of follow a similar vector to what we've been doing history-wise. We feel good about that from the standpoint that a lot of those data points that I gave, we know when people are using AI, we know when they're consuming three or more products, that that comes with churn. Look, the primary takeaways that I would give to enterprise building blocks at double digit would be this. What we've assumed is organic-o nly.
What we've assumed is that the bulk of what will drive that is going to be those five vectors that I talked about and kind of went through individual proof points. Up market, product diversification, the three vectors, but the bulk of it in product, more in the scaling and established than anything in the emerging piece.
Josh.
Josh Reilly from Needham. Thanks for taking my question. After speaking with partners and customers here at the event, you're clearly winning some very large enterprise Contact Center opportunities. Curious what's shifted from a competitive and product setup there that's enabling you to win these very large opportunities. Thanks.
What I would say is we've made a lot of progress from a platform perspective. I think we've moved very fast. We've built out the platform, so it's no longer just Contact Center. Many of the largest established incumbents still leverage a very ecosystem approach to deliver a whole offer to customers. They actually partner with a WFM vendor. They partner with a QM vendor. They partner with another reporting vendor. We've actually delivered native solutions across that. There's a tremendous amount of value that that brings in an integrated approach, lowering a lot of the friction, the burden from an administrative perspective. Also, when we think of the context layer of being able to tie all of that together, really delivers a more seamless solution. That's probably one. Then I would say the decision-making criteria is also changing within the CX space.
What I'd say is in the world of AI, it's no longer about a feature matrix where you say, "Okay, I'm going to compare vendor X to Y. Do you have a bunch of features?" Compare left and right. It's about the velocity at which the vendors are moving. When I talk with customers, you might like this analogy or not, I use the analogy of drag racing, right? If you run the quarter mile in a drag race, okay, who ran it fastest? That's elapsed time. But there's also a second metric that they give you, which is your trap speed at the end. That's the velocity at which you're moving. What I would say is the decision-making criteria, especially for Contact Center. Think about it.
These are decisions that large enterprises are going to be making that are at a minimum a five-year type of decision. You don't want to rip out and replace. It's like an ERP. You don't want to do it every year. As critical, as far as the legacy features and everything else, is the velocity at which the vendor is moving. That's where I think Zoom is really shining and as evidenced in how we're showing up for a lot of these different conversations.
I'm going to ask this nicely. Alex Zukin with Wolfe Research. I think coming in here and listening to all this, it's very clear you're confident in accelerating growth. You've got a lot of products. There's an exciting dynamic in the backdrop of the market that you're taking advantage of.
You guys are going to have about $10+ billion of cash. You have $2+ billion of cash flow every year. Why are we not buying back a lot more stock? It doesn't sound like we're getting ready for big M&A. If there's so much confidence, what is the message that we're sending with that dynamic, and how do you want folks to think about that? Because either there's an investment opportunity to take advantage of a lot more growth, and maybe we should be investing even more in the business and maybe accelerating faster, or there's an opportunity for a little bit more capital allocation. That's the question I've gotten 17 times today from investors. I thought it would be good to ask you guys.
Let me maybe start with our capital allocation progress and theory of how we think about it. Eric, if you want to jump in, you can. Look, I think sort of implied, we have $7 billion-$8 billion in the bank and $2 billion free cash flow. Generally, what we've said to investors with regards to buyback is that we're committed in 2027 beyond to take the share count down. I think that if you look at our history several years back, we were basically doing no buybacks, and now we've tried to make that more programmatic to where it's just shy, like 80% of free cash flow, if you will. Look, we look at and we've tried to sharpen the M&A at the same time in response to investors of where and how we'd invest.
Small to medium to me makes sense, but there's a wide swath within what small to medium means. I would characterize the ones that we've done to date as helpful for investors as sort of being small in nature. Look, in this environment, some degree of a cash balance makes sense in terms of financial flexibility. Maybe the last thing I'd say is we constantly just look at that and look at the balance of that and consider all forms of capital return. I think maybe if I can try and get at what might be a hidden question in there is sort of, well, what are you going to do about your Anthropic stake and all of that?
At this stage, it's something we think about and we talk about internally, but it wouldn't make sense to comment on anything at this stage, and we look forward to updating investors when it makes more sense.
Maybe just one more then around. You got to ask the question that online is hard to predict because it's not contracted, not committed. So is consumption revenue, and you're getting more and more of that as you scale ZVA.
How are you thinking, if you look at the numbers, a lot of the incremental growth that you are seeing that is driving the acceleration is coming from ZCC. Right. How do we think about the layering in of consumption revenue in that line item, and how are you modeling it to get to that. In your mind, how much of that 2030 kind of revenue base is now more consumptive?
Let me correct something, though, because not all of that ZCC AI is consumptive. ZVA, which is sort of our newer entrant, is consumptive, but ZCC Elite, which is a big portion of that, is certainly a per user. Look, in terms of its percentage to Zoom overall, our consumptive business model, if this is relatively small, that certainly would be a different picture. Consumptive business models are higher growth, and you are spot on that it requires a different way of operating as a company, different way of selling. Look, at this stage, it is not material relative to Zoom right now. It will be more material in 2030 as it is a fast grower, and we are readying the company sort of around that. I do not know whether you would say anything from the market.
No, I would just say they are not mutually exclusive. With consumptive, it is a great opportunity for expansion, low friction in getting started. Then customers very quickly are saying, "Look, I want a little bit more predictability. I have a certain baseline volume that I am willing to commit to at a better price point." We have a very established practice going back decades of moving cost. For example, back when Zoom was first started, we had audio. Audio dial-in was a consumptive offering. If you think of the traditional phone bridges, people wanted to have toll-free numbers and dial into a bridge. It was consumptive. You could pay by the minute, or you could make a monthly commitment at a certain baseline rate. That carries forward, and it does not matter whether we are talking about ZoomMate and credits or ZVA.
These consumptive offers, customers start in that, but then very quickly are looking to how do I have a level of predictability and a baseline type of commit as they move into certain volumes.
Siti Panigrahi from Mizuho. Let me ask you on that long-term guidance for your growth, like your double-digit growth in enterprise. What kind of conservatism baked into the guidance? The reason I am asking this is there are so many products announced today, so many AI products. You did not talk about the Zoom AI, the API services like your voice AI, speech-to-text, text-to-speech, that speaking up and line of business. There are so many products there. Help us understand in your guidance what is included, what is conservatism included into that. Potentially in next two, three years, we might see some kind of acceleration adoption, then we might see upside to that.
Yeah. What I would answer is, sorry, here is how I would have you think about it. I think we have given the guidance in line with what we feel confidence to. This is the first time we have given it. We have given it with a time bound, and I think it reflects where we are as a group and what we see ahead of us. We wanted to share that with investors. There is no explicit conservatism baked into it. Maybe let me turn the question and answer it like this in terms of upsides and downsides. I think if there are upsides, it could be the potential of land and expand motion more in online. As I said, it was organic, so anything inorganic would be inherently upside.
Then those, I think we have taken a prudent approach to those emerging products, and to the extent that they take off would be that. But we have assumed stable on the subsides, stable macro conditions, and our world is ever-changing and evolving, not only in macro, but in an AI world, and so those might be things to the counter.
Any buy-side questions? Nope. All right. Well, do you have a question?
Maybe just to follow up to that, Michelle. You did mention that the bulk of the bridge between now and the 6%-8% growth in FY 2030 is coming from products that are launched today. If there's a hugely successful-
Maybe even more specific.
Yeah.
Proven in market.
Proven in market.
The wording.
Got it. Would it be fair to assume that if there's a hugely successful product, as you guys continue to innovate over the next few years, that starts contributing, that could be upside to even the 6%-8%?
I think all of that to me is another way of saying we've taken a prudent approach in emerging products. But yeah.
Just a quick announcement. If there is anybody on the virtual audience that wants to ask a question, just feel free to submit on the Q&A function over Zoom, and we will see if we can get to it. Ioannis, your next question.
Ioannis Samoilis from Baird. Thanks again for doing this. There is a long tail of small and medium-sized businesses out there in America. This is a question more for the online segment, I suppose. Dentist offices, law firms, mom-and-pop restaurants that could all probably use an AI receptionist. Seems like a product that could potentially go viral at some point. How do you think about marketing that and attacking that opportunity?
Yeah, maybe I didn't get to as explicitly talking about this, but what I talked about on that online side where we said, "Hey, it is kind of stable, and the expectation is sort of flattish." I talked about that land and expand motion. We have been more prudent in that. Let me paint you what I think are the three land and expand scenarios, because I think it gets at one of yours.
One, certainly the combination of moving Phone to more of an online channel in combination with AI receptionist, I think you are spot on. There is a great opportunity for small medical, legal, fill in the blank, but a ton of those where there is true out-of-the-box value. The second one would be some combination of what Russell talked about in My Notes and ZoomMate. The third would be, and I thank Graeme for talking about Webinar because I probably didn't get to it. Look, that is a very different marketing product, always on, the ability to share, asynchronous clips and across all of that, I think a very different product set.
We look out and we say there's a lot of thesis of what we already know is working for SMB customers in an enterprise channel, and there's potential to bring that to more of an online channel to an SMB customer as well.
Well, I'll just weigh in on the marketing part of that question as well, because you're right. It is an opportunity to position Zoom as indispensable to these SMBs and solopreneurs. We also know that for solopreneurs and for SMB, that they trust third parties more than they trust brands. For what we've been doing to really reach this critical audience is to build programs that specifically leverage the credibility and the authenticity of people who are in the shoes of these SMB and solopreneurs. For example, we launched our Zoombassador program, which is a creator program, absolutely kind of social first, but all of these creators are SMB owners. They are leveraging the Zoom product like ZVA, like Phone, like even Meetings or some of our emerging products to show how they're using Zoom to grow their business.
That's a really important part of driving that trust and credibility and reaching new audiences. Same thing with our Solopreneur 50 program. We brought 50 solopreneurs onto this list. We thought we'd have a couple of hundred applicants in the first year. We had 3,000+ . We think we're going to have 10,000 applicants in our second year. These solopreneurs have turned into Zoom advocates, leveraging our products, telling those stories, speaking on stage at these SMB, whether it's the Inc. 5000 or it's Create & Cultivate here in L.A., representing how Zoom is indispensable to running their business. We're really seeing success in being able to drive credibility through those third parties, reviews, analysts, et cetera. These are the people that the SMB audience is listening to.
We're really spending that focus and that energy in helping to position ourselves as indispensable for them and their businesses across all products.
I think for Receptionist in particular, we recently broke it out to be a separate product from the Zoom Virtual Agent overall. We previously kind of treated them as one. They still share the same core engine, but we are starting to treat them separately because a lot of what we look at from how growth will happen, how setup happens, and how you kind of get people engaged is going to end up being very different if you are saying, "I am running a call center that I have dedicated people to go do this with," versus, "I am solopreneur, small business dentist.
I just need this thing to answer calls and schedule appointments and stuff like that." I also think there is a big opportunity that will be there a little bit related to a question Alex asked earlier about the growth of personal agents like a Muse or whatever else, where, yes, this is going to have a large impact on your biggest brands and calling into that. I think there is also potentially on a sort of per business basis, an even bigger impact that might happen for a lot of these small businesses where you go say, "Great, I need to buy flowers for my wife for the weekend.
I am just going to have Muse call 30 different florists and figure out what the best opportunity is." I would never go spend the time to go do that, but I am happy to go burn all of their time. The ability for these small businesses to absorb that kind of impact if you start to see that pattern, it is just not there. You will need to start to look at something like ZVA to help them with that.
Jackson?
Thanks. Jackson Ader again at KeyBanc Capital Markets. I was curious about the lengthening of the terms, the contract terms, I think from 20 to 30 months or something in the enterprise. How much of that is it enterprise customers maybe adding products and looking to just make a longer-term investment versus maybe some saying, "Hey, how about we do a three-year agreement, but my per seat instead of 100 is at 98 or something?" How do you maintain pricing discipline if people are committing to longer-term contracts?
I would say that it's predominantly based on different product mix. As I mentioned before, as we get into different personas and different solutions, the commitments are very different, and they typically tie to the level of complexity around the deployment. For a contact center, if I'm doing a very large contact center deployment that has a ton of integrations, there's actual capital intensive. You're paying maybe potentially tens or hundreds of thousands of dollars in an actual migration. That's not something that you're wanting to do and potentially change every year. They're more willing to make a longer-term commitment because they know that they want to have that level of commitment. I think that as we see the mix change within the product portfolio, that's also driving some of that expansion and change in terms of term.
Maybe to your pricing kind of discipline and how we do that. I actually started talking in the last earnings call about that because we've gotten a lot of questions about would you ever consider a price increase in Enterprise, and how do you think about that. I'll reiterate here what I said in the last earnings, which is we've grown a lot of the maturity in our discounting processes to really be able to put at the hands of our sellers discounts, customer history, typical in industry, and make sure that they're much more And frankly, goals as part of that. We've developed a scoring system, and we put it in place. I'm looking at Steve back there. We put it in place about a year ago, and we're seeing already some results that we're pleased with.
Yes-ish. What I would say is with Zoom Phone, a lot of people, we're not just talking about soft phones. There are still a lot of businesses, you think retail, hospitality, manufacturing, where they have an actual handset need. Handsets come at a capital allocation, and so typically in those specific personas, if I'm making that capital allocation, I am making a commitment that's longer in term. That's where I would see a distinction between a meetings and a Zoom Phone commitment. If it's a company that's moving kind of, hey, it's all knowledge workers, and I just want to move to more of a soft phone type of deployment, we would see a more corollary to across meetings and Zoom Phone.
We probably have time for one or two more questions.
Did you just ask the question?
No, I didn't.
Thank you again. Allan Verkhovski with U.S. Bank of BTIG. Your platform is highly strategic in terms of how much context is captured with the amount of time people, and increasingly agents spend on it. I want to ask about the Unified Context Layer that an increasing number of software companies are looking to build out, leveraging third-party connectors like you guys are too. Just one example we have seen many companies show is a demo of prepping a salesperson for a call. Can you talk about how you are most differentiated specifically as it relates to the context layer, driving incremental dollars from your existing customer base, and where we will see those dollars most show up? Thank you.
Yeah, I can have the first part of it. I think, we do see a lot of people trying to load the space. I think everyone sees the benefit of the data that is available there. Our perspective is that there's a different level and detail of context that will be available if it is built natively into the conversation platform and the ability to span across them. It's not just what's happening, that maybe an over-the-top recorder can hear in the meeting. It's also what's going on stream by stream, because we understand all the different streams. It's also so you can solve problems like crosstalk and stuff like that.
It's the ability to understand what's being shared specifically in the meeting, what's going on in the meeting chat and everything else, and then to bring that ability across also things like phone calls and webinars and events, which are often a big lead gen driver for all those things. As you start to build all that up, what you do is you also build the sort of internal expertise about how to weave all that together into one coherent story. Those are the kinds of things that I think we're in a position structurally to go do that many other people that are looking and seeing the same kinds of problems as we are not able to go do.
I would just say, as the person running the sales teams, the things like a Live Sales Assist. The ability not just in prepping my sellers in terms of how and what the customer care abouts are, what they should maybe talk about, but the actual customer conversation itself, the ability for AI to show up and add value there, and owning that real estate at which the conversation's actually happening, I think, is a key differentiator. It's not just the before or the after, right? It's kind of the before, predominantly a big differentiator in the during, right? Then taking that workflow. I think if we have the right to win and own the during, everything post, there's a lot of differentiation that we can drive there as well.
All right. We are at the end of our session, so I will pass it to Eric for some closing remarks.
Thank you, Charles. Thank you all for your great questions, and thank you our team as well. As I am listening to those question and answers, I just want to share a few comments as well. I think number one, really about our core meeting business, our playbook was to talk with head of IT or CIOs. Sell Zoom license to each of those customers. We do not think that is the right playbook for now. Meaning there is still huge opportunity for us to sell meeting services, but we do not sell to CIO or head of IT. We sell to sales team. Meaning, let us say, like a customer, they say they standardize or the Microsoft solution and for whatever reason, maybe cost, a lot of things.
The sales team, they do not like using any other solutions except for Zoom, because the sales call extremely important. Our new playbook is even for customers who standardize on other solutions, we can target each of the customer sales team. Still huge upside potential. That is our playbook for core meeting business. In terms of online business, today, by and large, I think almost 100% revenue are coming from our communication part product. Now our vision is to move from communication to completion. A lot of opportunities around the completion part, like My Notes and Zoom Virtual Agent Receptionist, ZoomMate, and Zoom AI productivity suite. Also we made a mistake, meaning whenever we build a product, we say, "We have a great product. Graeme is this great guy, just give it to him.
He can sell a lot." For a product like a Contact Center, Zoom Phone works so well. For a lot of the completion products, they do not work. Because the reason why it is something new, it is brand new, we need to follow the product-led growth, similar to what we did many years ago to what we did for meeting. We are aware of this problem. That is why we are going to recruit quite a few product-led marketers for each of those completion products. I personally will manage all those PLG marketers to drive all those completion products to help contribute to our top-line online growth. It is a huge opportunity because a lot of the completion products, nowadays, customers do not know that.
Sales teams, they say, "Wow, it is very hard to sell." We also do not have a PLG growth. We are going to fix that problem. Back to Alex, your question, given the cash, we are fully aware of this problem. Back to 1998 and 1999, 1997. What is the best time to acquire those companies?
In 2001 or 2002. My point is, given the powerful tools, AI tools available, you look at next, I think 24 months, you look at a system of action companies, system of recorded companies, I think AI for sure will have a huge impact in those businesses. Not to mention all those, the capital will go to the infrastructure layer. In particular, after OpenAI and so will go public. Next 24 months, I would say a huge opportunity for us. We just be patient, wait for the best moment. With that cash, we can do a lot of things. That is why we have high confidence. Just be patient. It is going to happen. Yeah, just a few comments. Thank you.
Appreciate it for your time. Thank you.