Zoom Video Communications, Inc. (NASDAQ:ZM) Q4 2023 Earnings Call Transcript

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Peter Weed: Maybe I’ll follow up on that and kind of reinforce what appears to be a reasonably conservative revenue guide this year when we start to think about some of the things you’ve chatted about earlier in this conversation, everything from stabilization in the online business, which may even do better than that perhaps, hopefully, with some of the pricing increases that go on all of the product that you’ve that you’ve been shipping these types of things. And when we take into account the fact that a year ago on the top line, this business was even a little bit smaller than what we’re anticipating in quarter one, this upcoming year might be. Help me understand why we would do as bad, I guess, has only a 1% year-over-year, like what’s the downside case that gets us there. Or is this more of an opportunity to perhaps start to see some of the lift coming out of here?

Kelly Steckelberg : So remember, for Q1, there is the definite impact of being three fewer days, which has real impact as compared to three fewer days of rev rec as well as the impact of currency, which we didn’t have last year. So that year-over-year impact is going to definitely be visible in Q1 of FY ’24. And then we continue to see in the Enterprise, elongated sales cycles, deal scrutiny, I was sort of lapping with a fellow CFO saying, this is the year of the CFO because I have gotten invited to speak at more sales kickoffs this year than you can imagine because every sales team is having to learn how to sell to the CFO and including ours. And that is exactly the experience that we’re having. And so it just means they’re taking a little bit longer and everybody is being very, very thoughtful about their purchases. And so all of that was taken into consideration as we set our full year guidance.

Peter Weed: I guess many of those things are stuff, I guess, in the second half of this year. You have been addressing and are kind of carrying forward, so they’re not kind of brand new. I would think that some of this unless you are anticipating another leg down for some reason, are there any additional legs down relative to things that you’ve been already seeing in the business? Or is this just conservatism on like we just don’t know how long this stuff is going to really be impacting? And we can’t really say how much people are going to be purchasing the Zoom One bundle, which is kind of the standard thing that you’re putting out really how well people are going to react to price increases this year so that it’s really created a floor on which we hope to do better than.

Kelly Steckelberg : I definitely think there is a question as to the state of the economy. And when it comes to investments, while we think we are incredibly well positioned with our total cost of ownership and the value that we bring to our customers, everybody is being very cautious until there’s better visibility about the potential of a recession or not and where we’re going to come through this. And we expect that could impact us at least through the rest of this year.

Kelcey McKinley: Taz Koujalgi with Wedbush has the next question.

Imtiaz Koujalgi : Two questions, one for Eric. Eric, when you spoke about Zoom One traction in the quarter. And it’s still pretty early. I understand that, but when you sell a customer Zoom One from Zoom Meetings, what is the difficult uplift you’re seeing in the deal sizes? Let’s say somebody has Zoom Meetings today and that were to Zoom One, what is the kind of the uptick you get in the deal value there?

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