Zoom Video Communications, Inc. (NASDAQ:ZM) Q3 2023 Earnings Call Transcript

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Eric Yuan: Yeah. So, yeah, again, the Contact Center is a new service, We are very excited in particular for those customers who deploy our — full service who would like to consolidate the UC and CC together. And also, we found interesting use cases, well, not only do those traditional customer interaction department, we started deploying the Zoom Contact Center, but also the internal IT desk as well, right? And again, the Contact Center seat cycle a little bit longer like the Meetings. But, however, we showcase our platform capability and the speed of innovation, customers are very excited. And plus, you look at our own business, right? And we used to deploying other cloud Contact Center solutions, also with our own Contact Center solutions, our teams themselves are very, very excited.

And a lot of potential pipelines and leads right in the pipeline and also we are doubling that on that. And again, the product side, we have higher confidence. Go-to-market side, we are gaining attractions as quickly as possible, because again, it takes some time plus also leverage channel and internal go-to-market investment. And I think that’s a future big revenue driver for us, especially customer like CC and UC together, right, and with a much better experience and also the total ownership of costs also much better.

George Iwanyc: Thank you.

Eric Yuan: Thank you.

Operator: Moving on to Siti Panigrahi with Mizuho.

Siti Panigrahi: Thank you. Thanks for taking my question. Just wanted to ask about macro pressure, you talked about last quarter sales elongation on the Enterprise side. What kind of plans you are seeing, anything worsened and also how does that impact your pipeline as well?

Kelly Steckelberg: So we certainly have seen impact, as I mentioned, from FX of the reduced guidance of $15 million, $14 million of that is coming from FX pressure and you saw that certainly in our year-over-year growth in Europe and in APAC. In the Enterprise, again, renewals stayed strong, excitement about the products. But as we discussed, it’s continued in terms of additional deal scrutiny, I think all of my peer CFOs now are looking at deals and that’s just causing elongation in general not that things are losing, not that We are losing deals. They are just taking longer to get done and potentially some of them pushing over quarters. But we haven’t seen that have impact. It’s just taking longer and longer, not that they are going anywhere else.

It’s just taking longer to get those done. Now the good news is, right, especially with all of the new products, the consolidation that we offer is a really great value story for our customers in terms of elimination of additional vendors, getting rid of on-prem servers and that continues to be a great story that our customers love.

Siti Panigrahi: Thank you.

Kelly Steckelberg: Thank you, Siti.

Operator: SVB Moffett, Sterling Auty has the next question.

Sterling Auty: Thanks. Hi, guys. Kelly, maybe following on that, I want to understand the 20% growth in Enterprise in the quarter versus the guidance of low-to-mid 20% for the full year, does that mean that there’s a little bit of a back-end loaded hockey stick or a bump up that we will see next quarter. And specifically, I think, investors are really interested in trying to gauge how should that business react as we move into next fiscal year in light of the concern about layoffs across all industries and a lot of your Zoom Meetings, et cetera, are based on per employee per seat pricing?

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