Zoom Communications, Inc.

Hello, and welcome to Zoom's Q2 FY26 earnings release webinar. As a reminder, today's webinar is being recorded. I will now hand things over to Charles Avislage, head of investor relations. Charles, over to you.

Thank you, Megan. Hello, everyone, and welcome to Zoom's earnings video webinar for the second quarter of fiscal year 2026. I'm joined today by Zoom's founder and CEO, Eric Yuan, and Zoom's CFO, Michelle Chang. Our earnings release was issued today after the market closed and may be downloaded from the investor relations page at investors.zoom.com. Also on this page, you'll be able to find a copy of today's prepared remarks and a slide deck with financial highlights that, along with our earnings relief, include a reconciliation of GAAP to non-GAAP financial results. These measures should not be considered in isolation from or as a substitution for financial information prepared in accordance with GAAP. During this call, we will make forward-looking statements, including statements regarding our financial outlook for the third quarter and full fiscal year 2026, our expectations regarding financial and business trends, impacts on a macroeconomic environment, our market position, stock repurchase program, opportunities, go-to-market initiatives, growth strategy and business aspirations, and product initiatives, including future product and future releases and the expected benefits of such initiatives. These statements are only predictions that are based on what we believe today, and actual results may differ materially. These forward-looking statements are subject to risks and other factors that could affect our performance and financial results, which we discuss in detail in our filings with the SEC, including our annual report on Form 10-K and quarterly reports on Form 10-Q. Zoom assumes no obligation to update any forward-looking statements we may make on today's webinar. And with that, let me turn the discussion over to Eric, who, like last quarter, is giving his prepared remarks via Zoom custom avatar.

Eric? Thank you, Charles. We delivered strong results highlighted by revenue growing at its fastest rate in 11 quarters. We also achieved meaningful progress on our three key priorities, delivering world-class AI to enhance customer value, rapidly innovating Zoom workplace, and scaling high-growth departmental solutions. Zoom is strengthening its position as a leader in AI-powered collaboration, helping customers work smarter, operate more efficiently, and deliver greater value to their organizations. Reflecting this impact, AI Companion Monthly active users have grown over four times year-over-year, with millions using our AI to boost business value throughout the meeting lifecycle and beyond. AI adoption now extends well beyond meeting summaries with strong momentum in meeting prep and post-meeting task management. call summaries for Zoom Phone, and AI first meeting integration and content generation capabilities for Zoom Docs. This progress is just the beginning, and we look forward to sharing more AI innovations at Zoomtopia next month. Our broadening AI adoption is also translating into greater customer investment as organizations increasingly see our AI as critical to driving business outcomes. In Q2, a Fortune 200 U.S. tech company deployed Zoom Custom AI Companion, our paid AI add-on for Zoom Workplace, for nearly 60,000 employees to tap into company knowledge during meetings, generate action-ready memories that power agentic workflows, and integrate directly with their AI bot to streamline IT service operations. Customers are also benefiting from our AI supporting human agents in our Contact Center Elite offering, which is a critical component driving revenue growth in Zoom customer experience. One example is ATPI, a leading UK-based global travel and events management company known for its expertise in complex sectors, who in Q2 selected Zoom Contact Center Elite alongside Zoom Phone to transform their global customer engagement ATPI chose Zoom over the competition for our Better Together Voice and Contact Center offering and because of the measurable potential of our AI features across AI Expert Assist, Quality Management, and Workforce Management to significantly reduce hours spent by both agents and supervisors on repeatable tasks. Lastly, we are also excited about the Q2 launch of Virtual Agent 2.0, which advances from conversational to agentic AI designed to deliver measurable customer outcomes. In its first month, we saw deals including SecureOne, a private security company who replaced an expensive manual after-hours answering service with ZVA for voice. The solution integrated seamlessly with their existing Zoom phone deployment, reduced costs by tens of thousands of dollars annually, and enhanced sales prospecting through intelligent automation. This is just one example of how Zoom's agentic AI tools can help customers drive both meaningful cost savings and new revenue opportunities. Zoom continues to innovate with Zoom Workplace, delivering a seamless and integrated collaboration experience with Zoom meetings, phone, team chat, events, docs, whiteboard, and rooms. We have been honored with four UC Today Awards, recognizing our continued innovation and leadership, including Most Innovative Product for AI Companion, Best UC Platform for Zoom Workplace, Best UC AAS Provider Americas, and Best Contact Center Solution. Furthermore, in recognition of our customer focus and innovation, we are proud to be named a UCAS leader in the Forrester wave. Our continued momentum reflects not only strong customer demand for our modern collaboration solutions, but also the success of meeting buyers where they are through preferred channels like AWS Marketplace. In Q2, for example, HubSpot expanded to Zoom Workplace. including Zoom phone, rooms, sessions, whiteboard, translated captions and more. This will deliver the benefits of our modern, integrated and cohesive collaboration suite to help them enable hybrid work across their global workforce, reduce costs and simplify billing on AWS Marketplace. Our focus on customer value led many companies to boomerang to Zoom after trying other services. One such company is F5, a global technology leader in application delivery and security. F5 bounced back to Zoom with a seven-figure ARR deal due to the increased productivity and lower total cost of ownership of our modern, easy-to-use platform. And finally, Zoom Phone delivered another strong quarter, sustaining mid-teens ARR growth and gaining market share versus leading competitors, an impressive result given its already large scale as a UCAS leader. Our Better Together vision, unifying best-in-class voice collaboration and customer engagement solutions, drove a major five-year success. seven-figure ARR Zoom phone deal displacing Cisco, which also includes Workplace and Contact Center Elite. We also continue to drive amazing growth with our customer experience and employee experience solutions. As I mentioned earlier, AI adoption is increasing within our customer experience, offering and transforming how brands engage their customers and build loyalty with our set of modern, differentiated AI-first tools. You see this momentum in the number of Zoom contact center customers with over $100K ARR, which grew 94% year-over-year to 229%, highlighting our ability to win with large accounts in high-stakes deployments and migrate them into the high-end AI products. Our top 10 contact center deals were all displacements of leading competitors, and all but one were cloud displacements. Inland Real Estate Group, whose member companies employ more than 1,200 people, faced challenges for years managing disparate systems. In Q2, they chose the full Zoom platform, including workplace, phone, and contact center to unify their collaboration and customer experience and future-proof their business. We have also made progress in building additional routes to market. We are excited about our newly established collaboration with PwC, which expands our Zoom contact center and AI opportunity and ability to meet the needs of global enterprise customers. Together, we have already co-sold several large deals, including a Fortune 50 technology firm for which PwC will provide advisory and implementation services. In Q2, our employee experience offering continued to shine, with Workvivo reaching 168 customers with over $100K ARR, up 142% year-over-year. One of these large deals was Marubeni Corporation, a large diversified Japanese conglomerate that transitioned to Workvivo from Metta Workplace with more than 10,000 licenses to elevate how it informs, connects, and engages employees. Before I hand it to Michelle to take us through the financial results, let me close by saying that on September 17th, we look forward to bringing you Zoomtopia 2025 For the People, our biggest event of the year. You'll learn about exciting product reveals, inspiring stories, and much more. See you there.