I'm going to start with disclosures. For any research disclosures, please see morganstanley.com/researchdisclosures. Again, I'm Anita Marshall. I cover communication software here at Morgan Stanley. We're delighted to have Michelle Chang, CFO of Zoom, here with us today. You've now got kind of Q2 behind you as CFO. It would just be great to get a sense of what led you to Zoom, what you saw as the biggest opportunity, and what are your kind of top priorities as we head through fiscal '26 calendar year '25. Yeah. So maybe for those that may not be aware, I joined Zoom in October. And I joined from Microsoft, where I was actually the CFO, strangely, of Teams business. So a lot of background in the area. But I got really excited when I was talking to Eric, our CEO, about the second chapter for what is an iconic company, a company that just did iconic things in the pandemic. And we got talking a lot about things that Zoom was already doing to reinvent itself and the path that he saw it being on. And just throughout our discussions, got more and more excited and really saw a nice symbiotic things I thought I could help and things I thought I would learn as well. And so in terms of what my priorities are, maybe let me just start with what are Zoom's priorities, because this is something that I think, depending on your level of familiarity, is always good to just ground on. First, everybody thinks about us as a meetings company. And a lot of what we have been about here for many years is moving the strength in meetings to our Workplace business. What that means to us is it's things like calendar and chat and email and things like Docs, et cetera. So a much broader platform of a central place where you can avoid that toggle tax and get stuff done. And then moving into kind of adjacent businesses and contact center and employee engagement. And then now kind of building that AI chapter like so many others. So basically, my priorities are going to be to get in and really help Zoom with its top-line growth. I know you and I talk about that a lot. Yeah. I mean, maybe let's start with AI, because you guys maybe have a different approach, which is kind of let's democratize AI. In a lot of cases, particularly on the meetings platform, you're not charging for it. Just why is that a winning strategy, do you guys think? And then how do you ultimately kind of monetize some of those investments? Awesome. So I won't repeat, but it is a stance that Zoom has taken, I think, very different to others in the market, to democratize. Think of it as like a base level AI. So if you're in a meeting or you want to catch up on what's happened in your email or get a report out on what happened in the meeting, that's the stuff that we're not individually charging for. It comes with all our paid SKUs. And I think that's a differentiated position for Zoom, because look, it's hard to come in, I think, at least speaking to some of our competitors, and start out of the gate with a $30 per user per month. It's a toughie. I hear it all the time with my peer set and CFOs. And so I think it's a really customer-friendly approach relative to kind of what Zoom is known for of come in, try out the value. And then where we'll monetize will be on sort of higher value tier SKUs. So think of that as anytime you want to connect with your own workflow, your own data, vertical-specific scenarios. And also in our contact center, we have a high-end SKU. And so I think it's a really great customer-friendly and a differentiated approach, and ultimately where I think the market will go. Yeah. I mean, Eric talks a lot about it kind of being it's only useful if everybody can kind of use it. So summarization, you just mentioned kind of a natural use case. But where else are you seeing kind of on that traditional Zoom platform kind of the pull for more AI functionality from customers? Yeah. So look, we're still early days at Zoom in terms of our AI journey. I would say so the higher end stuff that I just mentioned is coming out here shortly. And so where we currently use it a lot is in summarization, content creation, a lot of prioritization, help me know how to sort through all of these things. And what I would call early task generation, maybe steps towards agentic. We talk about it. Agentic is a heavily overused word at this point. But yeah, that I think is sort of where we are today. OK, great. Given kind of a different monetization path than maybe competitors or even kind of that we're seeing in the AI landscape, just how do you think about kind of from your seat kind of how to determine how much money to kind of dedicate towards investment in AI? You noted last year kind of seeing a 30% decrease in the COGS per user. But just how are you kind of weighing levels of investment and where are you kind of seeing that cost curve? Yeah, so look, we've taken a differentiated approach in AI and with that comes the need to really make sure that we've got full grip on that from a margin perspective, so we focus a lot on AI per users and making sure that those are coming down, but broadly, I think about investments as across those three vectors that I kind of opened up with and really making sure that we, whether it's our M&A strategy or whether it's how we internally allocate capital, that we're really focused and putting our maximum kind of efforts behind those three things, and then making sure that they're going to pay off in some balance of current and longer term time frame. OK. And then you guys have always been very good at building out a lot of those capabilities. Just how are you thinking about build versus buy versus partner, particularly when it comes to kind of expanding out those AI functionalities? Yeah. I mean, you're so right. We do tend to be a very heavy build. I think we have one very successful acquisition, that's the employee experience space in Workvivo that we went into, as well as I would say that there's more strategic partnerships that we've striven to do. So think of that as the Meta gave us the preferred partnership with Workvivo, but also our partnerships with Mitel and Avaya and Amazon and other hyperscalers. So I think we're broadening our approach, but we do tend to be pretty centric. And that's because it's in essence what made Zoom Zoom, right? That pace of innovation that's centered on the customer. I mean, we talked a lot about. Broadening, but still at our heart. Exactly. I mean, we've talked a lot about kind of how you plan to kind of monetize and sell AI. How are you guys using AI internally today? Yeah. Maybe this is probably an audience that will appreciate this answer. So here it goes. I just finished earnings. And maybe it'd be fun just to share a little bit of how I used it for earnings. I mean, I should give the corporate answer. Look, Zoom is running on our contact center. We use ZVA, which is another element of our contact center, and some elements of ZRA. But just in terms of the broad employee base, I use it when I meet with you. When was the last time I met with you? What sorts of questions did you ask? What do your last notes say about me? Or whatever say about that. What are you asking my competitors? You know what I mean? And there's just, gosh, if you think about the time cut savings, so that's just really powerful. And then I meet with other CFOs. And so you can just kind of see, simplify this answer. How would you take this technical space and articulate it to a financial audience? And I've been delighted with how much time it honestly saves in earnings, perhaps. Hopefully, it doesn't say I asked the same questions. It does not. It says you asked great questions. Exactly. All right. So maybe turning to contact center. You continue to see strong traction here. You had another 15,000 plus seat win that you announced on earnings last week. Just how have you kind of targeted who that target Zoom customer is? And has that changed kind of in the year plus now that the product has been out? Yeah. So I would say probably our roots, if you will, started more in mid-market enterprise-y. And so we started there. But I think a lot of the same wins that you've been talking about show that we're really there in terms of enterprise. The other deal was Agencia Tributaria, the Spanish IRS, was our largest seat-based. And so I think it's a very different space in many ways, doing contact center that you tend to be digital, no human, sort of in the lower end versus much more integrations and a more complicated and more heavy partner base at the top. But we're pleased that we're seeing strength in all of those. And I think it opens up a lot of good opportunity for Zoom. OK. You saw meaningful adoption of the top-tier packages last year as you introduced more AI capabilities kind of on this conversation about AI monetization. Just how did that change the roadmap? And is the goal for more AI functionality that you can monetize, or is it for some of these integrations that are kind of necessary for some of the larger wins? Yeah. I think it's hard to say it's one or the other. I mean, maybe it's a cheap answer, but I think it's both. AI is transforming contact center full stop. Just having run a contact center as a CFO, they're incredibly painful. No customer enjoys their experience. The costs are often going up exponentially, far beyond revenue, even in a strong growing company, and so it's an inherent problem, and I think AI has the opportunity to fundamentally change that, so you'd be remiss if you didn't do that, and if our intent is to go kind of more upmarket to our earlier conversation, you just have to have those integrations, or you won't. This convergence and agentic of system of engagement and system of record, I think you have to have those integrations. We won't be everything to everybody. Yeah. OK. And then another piece of going upmarket is that clearly the channel kind of becomes a lot more, or needing services to kind of help with the installation, becomes a lot more important. Just what kind of investments are you making here? Just how critical do you find the channel to kind of the expansion of the Contact Center business? Yeah. I mean, maybe I'll answer that broadly for Zoom and then narrow back to the contact center, but channel is a massive investment for us in terms of making sure that we can have broad reach with our customers, and there's businesses like phone for us and contact center where you just cannot be in those businesses without a strong channel, so look, we're working to build out, if you take the broadest definition of channel, strategic partnerships, as well as we're looking at making sure that we have competitive channel incentives and programs and that we're easy to do business with, so I would say across many different vectors, we're investing in channel. I mean, are there investments that you will need to make in services as well, or do you think that you can just utilize the channel for a lot of the integration work that's being done on contact center? It's a great question. I think something we've been refining, and I think a lot of tech companies go through this where they start out thinking they need to be everything, everywhere to services, and then you realize it's probably in a couple of products and needing to be thoughtful about kind of the Venn diagram overlap with where your partner ecosystem is, so I would say Zoom is in that zone of narrowing the aperture where our services arm plays, and that broadly would be in the two areas where we have the partner focus, and so getting more refined is kind of what I would call us. Six of your top 10 deals this last quarter were channel sourced. Just what early traction are you seeing there in terms of this kind of transformation to incorporating more of the channel? Yeah. I mean, look, whether you look at our bookings growth or your stat on the top, we are seeing a much broader momentum with our partner ecosystem, in particular in the two businesses that I talked about, contact center and phone. I would also say that our channel ecosystem is helping us move down market and helping us move internationally. So we look at that and say that's an integral part of kind of Zoom's growth story. And that's why you see us invest in it. OK. You noted on the fiscal Q4 call last week that phone's trajectory may not be the best way to measure kind of contact center trajectory. So I think it's kind of been the mindset investors had been in for the past couple of years. Just how should we be judging your success in contact center? Maybe just a little bit of background to people of why we originally said to think about phone as the indicator and why maybe it doesn't make sense now. Look, if you think broadly back to Zoom's trajectory, we've been making a sort of journey from singular product to product portfolio. And so phone was sort of our first more material foray into that. We hit the 10%. And so as we began to add more, it made sense to hook people to that. With that said, our phone product sort of reached its crescendo, if you will, during the middle of the pandemic. So it's a tough comparable to sort of hook people to. And so early days pre-pandemic, we're saying that's probably a good model. But after that, probably less applicable just given the trajectory of phone. So then what do you actually look at? I look a lot at new customers versus let me just kind of go P times Q, if you will, so are we bringing in new customers with contact center? How is the attach relative to Zoom's base and studying that, and it's similar in contact center to WorkVivo. We've been pleased that we're seeing bidirectional growth, meaning sometimes customers are coming in as Zoom existing customers and landing, expanding, and other times they're starting in contact center, WorkVivo, and coming over, so then I kind of go to, OK, elements of our and you mentioned this in your earlier one, but maybe for the broader group, we have kind of three tiers, if you will, of contact center SKUs, the first sort of being inbound, the next one being inbound outbound, and the top tier being AI. And I think it reflects broad market momentum as well as where we've certainly put our efforts, where we're really seeing the growth in contact center is in that top tier. It's an AI. It's what's plaguing our customers and is also a great solution. And then maybe I'd say then there's kind of those horizontal elements of international exposure, push up market, channel. So the fundamentals and then kind of the vectors of how we think we win. I mean, WorkVivo has been, I think at the time, I will fairly say kind of was dismissive of. OK, this seems interesting, but I don't really know what it is. And then kind of over time, it's actually been quite a successful product for you guys. Just can you explain maybe what WorkVivo is and how it kind of fits into Zoom as a whole? Or is it kind of its own standalone? Yeah. Great. I actually gained an appreciation for maybe people don't intuitively understand what it is. And so it's a great reminder to your question. It's such a good one that it's a good thing to remind people what it is. So it's in the category, if you will, of employee experience. I'm a simple person. So I tend to think of it as like it's like that employee internal website of where you go instead of one website to get your policies and another one to get your HR and another one or your information about what the CEO is talking about and another one to get this, that, and the other. It's like that central place where you know you can go to get everything, internal communication, where a CEO can communicate out. So it's sort of bidirectional communication. Think about it as internal intranet. And so WorkVivo for us was an acquisition, one of the good examples for Zoom in terms of our non-build. And really what we're seeing is great success in what I would call Fortune 100 type customers, where they know they lose a lot of productivity across the employee base when you have to toggle all over the place, when you have to ask all your peers where to go to find information. And honestly, just as a user, it's delightful to go. And so look, for us, categorically to your question, it's in the workplace, which is what we call our platform. So it's in there. But sometimes you'll hear us even talk with investors as though it's a natural adjacency because it does open up a much larger TAM for us and a much larger growth vector. So it's maybe within Eric's bubble of keeping people happy. But it's kind of a natural adjacency. Yeah. It's in the broad brush of it's in our platform technically. It's under the base of employee communications and collaboration. OK. So I mean, under kind of the previous CFO, a lot of times Zoom was talked about in terms of it's going to be about 50% meetings and then 50% other products kind of longer term. Is that still like a good rough proxy as you add in more products to the platform? Or is there a way to kind of contextualize how much of this company will be meetings versus other products at this point? Yeah. I think, you know, sure, if that's helpful, it's not a bad way to think about it. But I might give you sort of my version of the answer, which is I think it's almost more important rather than sort of telling people the snapshot in an undefined period of time at some future state to just talk about how we internalize the priorities of the company and how, frankly, they manifest themselves every day and what we're going to look to for durable growth factors. So we talk about those three priorities that I started out about. And look, as signals of strength and things we look at, it's like how are we, like, everybody in the SaaS space saw some reset after the pandemic and some macro pressures. How's that going? Are we getting people? We've invested quite a bit in workplace. Like, if you were to for those that may not be using Workplace, it is chat. It is calendar. It is everything, Slack and Outlook and name all the competitive stuff, but all in sort of one envelope at a much more competitive price. And so we look for elements of durability and growth in there. And then if you go to our new businesses, we look for customer growth. We look for contribution to revenue growth. We look also at where sort of the signal of where we're seeing and where there might be natural wins for Zoom. And then increasingly, it's about AI. But not just AI like infused from a product perspective, but how do we monetize? I think that was the big headline for us at Zoomtopia was, yes, AI, and we have AI Companion. But how are we going to get it in? How are we going to monetize, and starting to paint that picture a little bit more for investors? OK. So turning to the model, on earnings last week, you guided to 3.1% growth for fiscal 2026, slightly ahead of the 2.7% you guys saw in fiscal 2027. I know there's some puts and takes around FX and such. But at the same time, you were clearly seeing strength with larger customers with 7% revenue growth in the 100K plus customers. Just what do you see as kind of the biggest inhibitors and drivers of re-acceleration? Yeah. Let me give just maybe a click more on the actual tactical guidance just to make sure people get it. And then I'll get to inhibitors and kind of how we think about it. So originally in Q4, we'd sort of said 7%. We updated our guidance in the last call. And I'm just going to shortcut and say when you strip out FX and all of those things, you get to roughly a 3.3% guide, which is sort of on par with where we've been. And then you layer on sort of we always seek to beat guidance and tend to be prudent in our approach, et cetera. Setting all that aside, we tend to think about it. I look at it and I'm like, OK, there's durable elements for growth. One really important element to understand about Zoom is 40% of our business is an online served business and tends to have. We worked very hard to kind of stabilize that business from a decline to now flat, and we actually grew in Q4, and so a lot of how we're thinking about that 40% of the business is how do we get it back to growth? How do we move from this era of just trying to stabilize? How do we move into growth? And there we're very focused just because we haven't talked as much about online. There we're very focused on, hey, this differentiated approach on AI that we talked about has such an opportunity, I think, to really make business value difference to our customers in the online set. We have an awesome TCO story. And so that's a lot of where we're focused, as well as thinking about pricing and packaging for that space. And then in enterprise, it's a lot of the things that we've talked about, yes, sort of stabilization in certain parts as we saw some downsells as part of macro, et cetera. But now it's like, how do we continue to grow phone? How do we continue to take share? How do we then continue to move into different spaces with contact center and WorkVivo? OK, so clearly a lot of traction in the business. You have a backward-looking metric of DBNE, which has been 98% in the last couple of quarters. Just when can some of these factors that you've talked about kind of when should we expect that to drive DB higher? Yeah. So our net dollar expansion rate metric had been sort of coming down. And we worked very hard to stabilize. And that's really where we've been in the last couple of quarters, where I think what we talked about in earnings is, hey, that's a trailing 12-month metric. And the drawback to those is you carry the sins of the past or whatever if you want. And so what we talked about on earnings is based on what we see now, we should see an inflection in 2026. But certainly my personal goal will be to get that to 100 plus at some point in time. Fiscal 26. Yes. As we talked about online, you talked about kind of, OK, let's get this out of stabilization and to a place of growth. Does that come from better free-to-pay conversion? Who are those pool of customers that are going to come to you on the online portion of the business? Yes. But maybe let me back up and maybe just give a little bit of kind of how to think about our online base that exists today because we did go through that post-pandemic kind of reset moment. This is also where we had some of our consumer solopreneur type space. So we stabilized that. And then to me, the stat I really love is, let's see, about Q3 of our business in online has been with us for over 16 months, which means they're pretty stable. I mean, you never want to take a customer for granted, but they're pretty stable with us. You might sort of say, well, why can't that be 100? And that's because, look, you're going to inherently have seasonal fluctuations. So the base, if you will, that exists on online is very different to maybe where it was in the past. And so look, in terms of how to think about what grows, maybe I'll take the liberty to pivot it to how to think about growth. Yes, free-to-pay conversions are definitely a vector for us in how we think about it. I actually think, too, though, that there's a lot of land and upsell piece as well as there are pricing and packaging elements. Maybe the other thing, so if free conversions are a channel in and then there's things you can do on pricing and packaging and product upsell, there's also an element of strategic partnerships. And how do you get in at the point of a small business creation? And how do we form smart strategic inroads as new vectors of kind of bringing customers in? Something I've seen be very successful. And so I'm excited about it for Zoom. OK. That's interesting. Understanding the chief focus today is to re-accelerate growth. You still have impressive margins well ahead of your long-term targets. Just should we think of that as two curves that if you're able to re-accelerate growth, then maybe profitability comes down? Or just how should we think about kind of that trade-off of growth and profitability? Yeah. So for those that may not follow us deeply, we provide long-term guidance, and in that, when we updated it at our big conference, Zoomtopia, we gave some OI guidance that I think had a pretty wide kind of margin of potential for what we could do and do so with the intent that we are in a fast-growing tech space and want to make sure that we leave a wide margin, if you will, for things that we may want to do in M&A or otherwise, and then in 2026, but yet Zoom has had such a history of maintaining profitability, and so in 2026, what we guided to, I think, was a very measured piece. It's a decline in operating income. But actually, when you factor in some of the elements we've been moving away from stock-based comp into more cash-based compensation in line with the market, it's really a flap. And so, to the heart of your question, kind of, look, we're going to invest in growth. And we want to be mindful of shareholder return and profitability. And so we're going to hold those things sort of in tension in terms of how we allocate internally, in terms of how we think about M&A and even then buybacks and sort of other vectors, if you will, off that. OK. You've mentioned kind of pricing and packaging a couple of times. You also noted on the earnings call kind of tightening up discounting practices. Just how should we think about kind of where the most pricing power is today? And just looking forward, how do you think about that? Yeah. Let me just, and this probably won't surprise after so many of our conversations, but look, Zoom inherently is a value provider. Our first, second, and third thoughts out of us is about customer delight and product truth and pace of innovation more than it is pricing and packaging. And frankly, as a CFO, I wouldn't want it any other way. That being said, we need to do smart things in terms of pricing and packaging. I would think about them kind of differently between online and enterprise. In online, I think it's much more intuitive that you would do broad price increases when the moment serves. We've done those. We said on earnings that we don't have any. It's not baked into our guidance that we would do it again in 2026. So that'll be a touch of a headwind. But it doesn't mean we won't. I still think we have pricing power there. But again, everything when you sort of wake me up is everything else we've talked about. Then I go to the enterprise side. And look, we're in such different markets. I think you really have to think about it in the product set. And are we competitively priced? We kind of want to be, in my opinion, on that edge of still an awesome TCO story, still value, but not to the detriment of sort of either revenue or kind of your position and perception in the market. And so I think what that means is we will look opportunistically to make sure that we're well priced in the market. We'll also look for packaging elements. And then I think you're more likely to see us just tighten up on discounting rather than some broad-based pricing mechanism in market. Yeah, on the enterprise side. Got it. So you guys have a very healthy balance sheet, $7 billion worth of cash, no debt, sizable share of purchases, and have had some sizable share of purchases already in fiscal 2025. Just what is your capital allocation philosophy? And then maybe specifically, how are you guys thinking about M&A or as part of it? Yeah. Well, let me maybe start with the capital allocation piece and kind of broaden from there. I think it is the ultimate question of investors out there. It's a lot of cash. I'm learning to appreciate that. Yeah. What both feels good as a CFO is also like the question that you get, but look, I think by nature, we're probably a little hesitant on the debt side of things. I don't know that I would expect anything there. I think it comes back to this balance and holding intentional growth. Our number one, number two, number three focus is about growth re-acceleration. I tend to think a lot about what that looks like internally. I think that's why it was important for me as a CFO to go back to, hey, what are our business priorities? And then if we believe that this is our strategy and our business priorities, how do our dollars across engineering to sales and marketing to anything stack up against that, and so look, we'll use that as our barometer for internal capital allocation. I think investors rightly pushed us on buyback, and look, that was a very different motion. It wasn't a well-used vehicle, if you will, for Zoom, and my predecessor did one for about $1.5 billion in February. I felt it was important when I came in to kind of re-up our game and start to work towards dilution, so what we announced was another one of $1.2 billion buyback and put a time bound and said that the intent would be to address dilution in the combo of the two, and so look, we're going to continue to look at that and really take kind of the approach that this should be maybe even more so of a motion for us than it has been historically, and then really, I think at the crux of your question is M&A, and so this is one where I think you shared. I took the opportunity when I first came into role of hearing from investors of like, OK. It's always interesting. Some people want you to be very inquisitive and others don't. So you kind of just have to go back to your fundamentals and say, if we do an acquisition, we're going to do it in those three business priorities that I mentioned. We're going to be thoughtful. We're going to be disciplined about how we do it. It's going to be an accretive to our revenue growth or an accelerant to existing revenue streams. We could go in a space that would be net new, but it would still be in the vector of the three. It could be something that accelerates us. And so look, I think then the million-dollar question that I sort of got from investors is, OK, what does that mean? Size? Are we talking about transformational? Are we talking about the other? And so what we took the opportunity is that it'll probably more realistically be something in the small to medium. And I think that makes sense for Zoom. It's where we've tended to be more successful. So look, never say never. And things and conditions change. But I think that's more realistic of where you can expect things to be. All right. Well, this has been super enlightening. Michelle, thank you so much for being here. Yeah. Thanks for having me. Great. Take care. Enjoy your day.