Kelly Steckelberg: Only six quarters old today. So it’s very relative, right, to the existing ARR base. It’s small. It’s growing very quickly, though. So it won’t be visible to you probably for at least another four — I don’t know, four to five to six quarters, probably, but we’re really pleased with the growth. And then as Eric mentioned, when you start considering Workforce Management, of course, Zoom Virtual Agent, Quality Management, which is coming, it starts to be a platform itself that could really be a significant growth driver over time.
Sitikantha Panigrahi: [indiscernible] Zoomtopia.
Eric Yuan: Thank you.
Operator: Our next question comes from Rishi Jaluria with RBC.
Rishi Jaluria: Wonderful. Hey, Eric. Hey, Kelly. Thanks so much for taking my question. Two quick ones. First, look, I appreciate a lot of the investments you’re making around generative AI. And I know it’s early, but I want to think about how do you think longer term about your strategy around monetizing generative AI? Is it around specific modules and discretionally charging for them? Is it about gatekeeping them behind higher tiers and using that to drive upgrades? And maybe alongside that, you’re starting to see better adoption, I think, of your noncore products, including Zoom Phone $0.5 billion in ARR. Eric, you called out some great customer wins on Zoom Chat. How do you think about using generative AI as kind of a connective tissue to drive more usage of noncore products and maybe even of the entire Zoom One pricing packaging? Thank you.
Eric Yuan: Yeah. That’s a wonderful question. So look at the Zoom platform, right, so not only do we have Meetings, right? So some people still sort of we’re just a Meeting company [indiscernible] of a full company, right? For those customers, we deployed like Team Chat, USPS deployed Zoom Team Chat. A lot of companies deployed the Zoom Phone and Whiteboard Zoom Contact Center as well Scheduler and also the Zoom Clips. As we build more and more services, right, and essentially, when we double on our platform, how to look at everything from a customer perspective, how to add more value? Let’s take a Zoom One, for example. Customers say, I really like Zoom, already paid a platform. A lot of features to take this generative features like Meeting summary and to leverage GenAI to Team Chat and meeting inquiry and let’s say, you are late to the meeting, how to get a quick real-time summary about what had been discussed over the past 5 minutes.
All those GenAI features can make the entire platform, not only sticky, but also more value, right? So quite often, some customers say, yes, you can charge and some other competitors do that. We are taking a different approach. We think if you add more value to customers, and they are doing more — were likely to move on to our entire platform, right? It does not mean we cannot monetize AI. How do you think about AI to build new services, right? [indiscernible] one example. Back to 1995, 1996, I mean Internet was sort of born, when every — let’s say, the stores, right, when they Internet, you do not want to increase the price, right? You buy online, why increase price? However, you can have the Internet to build new services, right, new innovations.
That’s why we’re taking a different approach, not as some other competitors. They gave us free service AI, oh my god, they charge you a crazy price. I do not think that’s fair to customers, right? And we are taking a different approach and more value to leverage GenAI to our existing customers focus on the future improvements to leverage GenAI. At the same time, given our speed of innovation, how to leverage GenAI to build some brand new AI services to monetize. That’s our goal. That’s our direction. That’s our differentiated pricing strategy as well. Hopefully, my answer is clear. Otherwise, let’s talk more at Zoomtopia.
Rishi Jaluria: Yeah. Very helpful. I’m looking forward to it. Thank you.
Eric Yuan: Appreciate it. Thank you.
Operator: Our next question comes from Alex Zukin with Wolf Research.
Alex Zukin: Hey, guys. Thanks for taking the question. I guess, so when I sit back and look at the quarter, this quarter looks a little bit different than last quarter. You grew sequentially your revenue base on Enterprise and Online for the first time together in some time where both of those things happen. Your Enterprise billings actually grew as well. And so I look at the guidance, and it looks like we’re taking a step back, and I appreciate the conservatism in the macroeconomic environment. I appreciate the fact that you’ve got changes you’re still working through in the go-to-market. But help us understand, if we look at the trends as they — as churn stabilized to a point where we can expect, for instance, on the Online business that this is a new floor we can count on.
Because if I look at the exit rate for Enterprise revenue, I don’t think it’s at the rate that any of us sitting here would be jumping up and down about you mentioned NRR on the Enterprise side starting to — I think you said in but maybe go back up in the first half of next year, what’s the right way to interpret the Enterprise growth exiting this year and into next year? And then I’ve got a quick follow-up.
Kelly Steckelberg: Yeah. So in terms of Online, I would say that we are very pleased with the performance that we’re seeing in the churn rate itself. And I do think we’re stabilizing around a new level that is back to historic levels. And I think that’s a reasonable assumption to make going forward. And then in terms of Enterprise, we’re obviously not in a place that we’re going to comment on FY ’25 yet. We’re not going to do that on this call. But Enterprise, when you look at it from — I don’t say this for you. When you look at it in terms of the growth rate that you’re expecting, you’ve been back into, right, what it is. And we are, as you say, still considering no improvement from the macro at this point. And as you said, continuing to have the sales force settle into our new structure.
