We’re thrilled to have Graeme leading the organization. We — some of the transitions took a little bit longer in EMEA and APAC than the rest of the world, as you’ve heard us talk about. But as we’re coming into Q3, the pipeline is strong. It’s stronger than it was as we were coming into Q2. So I think those are the factors you can take into consideration as you’re looking for the growth rate for the rest of the year.
Alex Zukin: Okay. And then maybe, Eric, for you. Obviously, the evolution of Zoom from a point solution to a platform is nice to watch. You’ve talked about Zoom One. You’ve now given us that $500 million annualized number for Zoom Phone. What’s the penetration today for Zoom One within the Enterprise base? And what’s the penetration for the Phone product in the Enterprise base? And where does it go from here in your mind, like what does success look like for you?
Eric Yuan: Yeah. I think Zoom Phone penetration is doing relatively well. But Zoom One, I think still we had a huge opportunity, right? Zoom one is not only for Zoom Meetings, the Phone, right? Also the Team Chat, if the customer wanted to deploy our free Team Chat solution and Whiteboard and a lot of other services, right, I think a huge opportunity, especially for medium and larger-sized customers and we needed to kind of share them the value. As I said earlier, about like GenAI features, all those kind of things is part of Zoom One, right? So leverage all those up, the cool features, right to penetrate more about Zoom One the market share, right? And Zoom Phone itself doing right at well, but a huge opportunity ahead of us for Zoom One penetration.
And I will say we just started. I give one example. I take USPS, for example. When the reader is wow, you have a greater Team Chat solution is also part of Zoom One and also it’s free. That’s amazing, [indiscernible] why not deploy Zoom One, right? So many more customers when they realize the full potential of a Zoom One platform, I think that’s the value, right? We need to do focus on.
Alex Zukin: Thank you, guys.
Eric Yuan: Thank you, Alex.
Operator: Our next question comes from Peter Weed with Bernstein.
Peter Weed: Thank you. And maybe this kind of follows up a little bit of what Alex just getting at. But first off, I want to say it’s really exciting to see the progress on Zoom Phone and Contact Center. It’s been amazing to watch that and all the checks I do with folks are very positive on things that are going there. I think, Kelly, you commented a few minutes ago and were to think with Alex here, that NRR may come down a bit before it starts reaccelerating maybe by the end of this fiscal year and maybe the beginning of next year, we start to see some line of sight to some benefit there. I’d really love to kind of dig into like what will drive that improvement? And kind of when split the customer base, you do a really nice job of reporting bolt-on greater than 100,000 and less than 100,000, like some quick math suggests where it’s been really painful recently is on the greater than 100,000 customers.
And I tried to figure out like on that reacceleration is it about kind of reigniting those greater than 100,000 is the opportunity with the less than $100,000, like growing them up because they’re less mature. And like really what is it that you are going to be delivering with these customers to reignite that between those customer bases?
Kelly Steckelberg: So one of the things I commented on is that we have seen some dislocation in our customers’ own employee base and that our sales reps do a great job when they’re talking to those customers about helping them potentially right size if they have downsize in their employee base, but upselling and retaining that revenue in other parts of our platform. So that — as is there’s still pressure in the macroeconomic environment, you’re going to see that a little bit, right? So maintaining logos, even maintaining the same amount of revenue, but would have been an upsell, if not for a down sell due to seat. So part of it is just an ongoing potential change in the macro, which we have not factored into the guidance that we gave.
And then the continued acceleration of all these new products that we keep talking about, right? Phone is obviously doing really well. And it’s well hit its stride. But remember, that’s taken three to four years to accomplish. And so Contact Center that we expect to follow the same is just — it just needs a little more time. And then you heard about all the additions into the Contact Center platform itself with ZDA, with Workforce Management and Quality Management that’s coming, all of those will continue contribute to growth over time. And then Eric sort of hinted thinking about the ways that AI over time is going to help with both retention as well as potential opportunity to grow revenue. So it’s just — some of these things just have to grow a little bit or age a little bit and mature into the stage that they’re contributing in a way that you can see them.
Peter Weed: And how high do you anticipate NRR being able to get once all that stuff works out? I mean, obviously, you’ve seen some of those headwinds. So you kind of know how much you’re like I lost this and it would have been so much better. Like if you’re looking forward, like what should we aspire to be getting NRR back to? And like how soon do you think we can get there?
Kelly Steckelberg: Yes. Peter, we’ll talk about that more when we’re ready to give FY ’25 guidance, but not today.
Eric Yuan: Yeah, I can take a little bit more, Peter. So the question you asked was very similar to what about Zoom One. Actually, today, the problem is Zoom is a too strong brand on Meetings side, right, right? Many of the customers unfortunately, they even did not realize we have a lot of other services, not to mention a Zoom One platform, right? That’s the number one challenge that we are facing. How to make sure all those – even existing – even for existing customers. They also think Zoom just a meeting, that’s not the case, right? When we and share a greater story, make sure most of our customers are publicly realize our Zoom not only just the meetings had a full platform, I think the inflection point will not happen until then.
