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

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Eric Yuan: Also, in terms of the full platform experience that I mentioned, our customer, the number one thing they like in our experience. Let’s say, if you look at the other biggest service provider, right? How to make sure you have a consistent experience, that’s not an easy. That’s why we tend to look at all those greater technology companies like Solvvy, we acquired many years ago. Again, if you want to just the focus on the branded new service, we might think about the inorganic opportunity. But now look at the UC platform, we already did everything. Now We are just focus on the go-to-market side, right? And we are — we have a high confidence like We are getting more and more traction there, so.

Matthew Niknam: Thank you.

Eric Yuan: Thank you.

Operator: Moving on to Alex Zukin with Wolfe Research.

Alex Zukin: Hey, guys. Just maybe I have one question that it’s a bit forward, it’s a bit hard. But if I look at the — kind of the Shebly’s point, the forward looking metrics and the implicit guide for Enterprise revenue next quarter is about 15% to maintain that low 20s for the full year. If you go forward a second, it does look like growth next year is going to be kind of in the low-to-mid single digits, assuming the normalization or stabilization of the Online business and assuming some further decel with the macro getting tougher. With OpEx growing nearly 30% this year, what — how are we thinking about a worsening environment, like, what’s the recession playbook for Zoom. We have seen some companies take some pretty meaningful steps with respect to employees, with respect to dialing up, if you will, the efficiency of the business, what’s the plan — what’s the recession plan here maybe for both you and Eric?

Kelly Steckelberg: Yeah. So I think that your assessment in terms — We are not giving — we just may be caveat first of all, We are not giving FY 2024 guidance on this call. We will do that obviously at the Q4 call. But your assessment in the way you are kind of thinking about the topline growth is right in line with kind of how We are thinking about it right now. And in terms of then from an operating margin perspective, the way We are thinking about it is, as We are working on our FY 2024 plan, we are being very, very thoughtful about prioritization of investments. It’s how I would say it. And as you noted, we have grown our expenses and we have hired a lot this year, and so being very thoughtful about ensuring that they are focused on the right things that we are prioritized internally.

We are committed to continuing on innovation and meeting our customer’s needs, as well as go-to-market expansion. Those are really the top priorities that we have and making sure that we have resources in the right areas for that. I guess that’s what I would say.

Eric Yuan: Yeah. So, Alex, I think, We are a much better position. You look at the efficiency and the potential productivity improvements like cash flow profitability and plus we had, as Kelly mentioned, we had a lot of teams this year. I think that they are going to reach full productivity next year. That’s why I think, yeah, I think we can weather the storm, right? And for any either short-term or long-term or short or long recession, and yeah, we feel very confident to drive efficiency and productivity.

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