Hello and welcome to Zoom's Q2 FY 2026 earnings release webinar. As a reminder, today's webinar is being recorded. I will now hand things over to Charles Eveslage, 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 release, 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 from the 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 feature 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. 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 4x 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 summaries 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 U.K.-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 UCaaS Provider Americas, and Best Contact Center Solution. Furthermore, in recognition of our customer focus and innovation, we are proud to be named a UCaaS 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. 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 UCaaS leader. Our Better Together vision, unifying best-in-class voice collaboration and customer engagement solutions, drove a major five-year, 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 $100,000 ARR, which grew 94% year over year to $229,000 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 $100,000 ARR, up 142% year over year. One of these large deals was Marubeni Corporation, a large diversified Japanese conglomerate that transitioned to Workvivo from Meta 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. Thank you, Eric, and hello everybody. I'm excited to share Zoom's Q2 FY 2026 financial performance today. In Q2, total revenue grew 4.7% year- over- year to $1.217 billion, or 4.4% in constant currency. The result was $17 million above the high end of our guidance. Our enterprise business continues to be the key point of strength, with revenue growing 7% year- over- year and representing 60% of our total revenue, up one point year- over- year. Our online business continues to show signs of stabilizing. In Q2, average monthly churn was flat year- over- year at continued lows of 2.9%. In our enterprise business, we saw approximately 9% year- over- year growth in the number of customers contributing more than $100,000 in trailing 12-month revenue. These customers make up 32% of our total revenue, up one point year- over- year. Our trailing 12-month net dollar expansion rate for enterprise customers in Q2 held steady at 98%. Pivoting to our growth internationally, our Americas revenue grew 5% year- over- year, EMEA grew 6%, and APAC grew 4%. Moving to our non-GAAP results, which as a reminder exclude stock-based compensation expense and associated payroll taxes, acquisition-related expenses, net gains on strategic investments, net litigation settlements, and all associated payroll tax effects. Non-GAAP gross margin in Q2 was 79.8%, up 128 basis points from Q2 of last year, primarily due to cost optimization efforts. We continue to reiterate our long-term goal of 80% non-GAAP gross margins and remain focused in the near term around balancing investments with AI with cost efficiencies. Non-GAAP income from operations grew 10.5% year- over- year to $503 million, exceeding the high end of our guidance by over $38 million. Non-GAAP operating margin for Q2 was 41.3%, up 216 basis points from Q2 of last year. The operating margin improvement was driven by ongoing cost management and timing of spend. Non-GAAP diluted net income per share in Q2 was $1.53 on approximately 308 million non-GAAP diluted weighted average shares outstanding. This result was $0.16 above the high end of our guidance and $0.14 higher than Q2 of FY 2025. The EPS growth reflects strong business performance, effective cost management, and less dilution driven by our buyback program and disciplined stock compensation management. Turning to the balance sheet, deferred revenue at the end of the period grew 5% year- over- year to $1.48 billion, slightly ahead of the high end of our previously provided range. In Q3, we expect deferred revenue to be up 4%- 5% year- over- year. Looking at both our billed and unbilled contracts, our RPO increased over 5% year- over- year to approximately $4 billion. We expect to recognize just under 61% of the total RPO as revenue over the next 12 months, slightly up from 60% in Q2 of FY 2025. Operating cash flow in Q2 grew 15% year- over- year to $516 million, representing an operating cash flow margin of 42.4%. Free cash flow in the quarter grew 39% year- over -year to $508 million, representing a free cash flow margin of 41.7%, up 10 points year- over- year. The year-over-year increase in free cash flow margin was driven by the timing of tax payments and the lapping of significant PP&E investments. We ended the quarter with approximately $7.8 billion in cash, cash equivalents, marketable securities, excluding restricted cash. In Q2, we again accelerated execution of our existing $2.7 billion share buyback plan, purchasing 6 million shares for $463 million, an increase of approximately 389,000 shares quarter- over- quarter, underscoring our commitment to delivering value to our shareholders. Turning to guidance, in Q3, we expect revenue to be in the range of $1.21 billion- $1.215 billion. This represents approximately 3% year-over-year growth at the midpoint. We expect non-GAAP operating income to be in the range of $465 million- $470 million, representing an operating margin of 38.6% at the midpoint. Our outlook for non-GAAP earnings per share is $1.42- $1.44, based on approximately 307 million shares outstanding. As a reminder, future share repurchases are not reflected in the share count and EPS guidance. For the full year of FY 2026, we're excited to raise both our revenue and our profitability guidance. We now expect revenue to be in the range of $4.825 billion- $4.835 billion, which at the midpoint represents approximately 3.5% year-over-year growth. We expect our non-GAAP operating income to be in the range of $1.905 million- $1.915 billion, representing an operating margin of 39.5% at the midpoint. In addition, our outlook for non-GAAP earnings per share in FY 2026 is increasing to $5.81- $5.84, based on approximately 308 million shares outstanding. With the strength in free cash flow in the first half and increased outlook for operating income in FY 2026, we now expect free cash flow to be in the range of $1.74 billion- $1.78 billion for the full year. In closing, we've made progress improving top-line growth. We sustained best-in-class profitability and reduced dilution. We're executing on our three priorities with discipline and momentum, and we remain committed to building on this success to deliver lasting value for our shareholders. Thank you to the entire Zoom team, our customers, and our investors for your trust and support. With that, Megan, please cue the first question. Thank you, Michelle. We will now begin the Q&A portion of the call. When I read your name, please turn on your video and unmute. As a reminder, in an effort to hear from everyone, please limit yourself to one question. Our first question will come from Peter Levine with Evercore. Great. Thank you very much for taking my question. I'm impressed on a good quarter. Eric, you're seeing your AI solution really take off. Can you help us share with us, what's the ROI that your customers are seeing, right? In terms of the 2.0, you referenced a customer, a pretty large customer that adopted 2.0. We'd love to know, what's the use case that you're seeing, the ROI? Second, just from a macro perspective, anything you can share with us in terms of what you're hearing or seeing from your customers in terms of their appetite, IT budgets for collaboration? Yeah, great question. Yeah, I'm using my iPhone to join this earnings call. I think in terms of AI, you are right. We launched the Zoom AI Companion 2.0, and hopefully we're also going to launch something exciting at Zoomtopia next month as well. Two years ago, everyone talked about AI. The first step for us was to leverage AI to improve our functionalities, like meeting summary, transcription, and so on and so forth. That's already done very well. The reason why we announced the Zoom 2.0 is how to leverage agentic capabilities. Also, not only do we support the meeting summary, but we also look at the entire meeting lifecycle from pre-meeting, how to schedule the meeting to leverage AI, in-meeting experience, post-meeting experience, and also how to leverage AI to improve the other product experience, like Phone and other workplace point products as well. Overall, the feedback is pretty positive. Looking at the usage compared to last year, in terms of monthly active users, it's 4x more in this quarter compared to the quarter last year. Overall, customers all look at how to leverage AI to improve productivity and working effectiveness. There are so many things for us to do. In terms of IT budget, overall, almost every customer looks at how they can leverage AI to make their product better, how to work together with their vendors to leverage AI. That's the reason why many of our customers have either already enabled the AI Companion or are in the process to enable AI Companion, not to mention our AI Companion is part of their offering. We do not charge customers extra except for Custom AI Companion. Thank you very much. Appreciate it. Thank you. Our next question comes from Meta Marshall with Morgan Stanley. Great, thanks. Noted the AI Companion vertical-specific win with the Fortune 200 tech company. I guess just, you know, how are some of these wins that you're getting on these vertical-specific AI Companions informing what customer needs are, what they can do with AI beyond what we traditionally think of as summarization? Yes, very good question. In essence, we introduced the AI Companion. For sure, there were some early adopters who adopted the AI early for a while. Now they look beyond AI Companion. Are there any other things they can achieve with our AI capabilities? That's the reason why they paid for Custom AI Companion, where we connect with their index, their content, or with the customized meeting template for their summaries and so on and so forth. I think for sure some other customers are still in the process to adopt the AI Companion. AI Companion, again, as I mentioned earlier, is part of a package. More and more customers are going to adopt that or already adopt that. At the same time, for those customers who already adopted AI Companion, they look at it beyond today's AI Companion. Are there any new things? That's the reason why we offer Custom AI Companion. I think ultimately, we also want to innovate more. It's not only do we have an AI Companion 2.0, Custom AI Companion. That's why we are very excited for the new AI Companion announcement at Zoomtopia next month. Great, thanks. Appreciate it. Thank you. Our next question comes from Tyler Radke with Citi. Oh, we might be having some technical difficulty. Tyler, are you there? All right, moving on. Our next question comes from William Power with Baird. Okay, great. This is Yanni Somolosan from Will Power. Thanks for taking the question. A couple on the online segment. I know you folks instituted a price increase for the monthly Pro SKU earlier this summer, I think. First of all, I think you mentioned last quarter that you're expecting that to add $10 million- $15 million of incremental revenue this year, or at least as it compares to your initial forecast. Based on what you've seen so far, I'm wondering if any of your assumptions around that have changed or if your expectations there are still consistent. Also, just taking a step back, I was hoping you could comment on any feedback you've heard from customers so far, just in general. Looks like churn largely held stable. I'd be curious if you have observed any other changes in customer behavior, maybe customers switching to annual plans to avoid that price increase, or any other dynamics that you might have noticed. Thanks. Yeah, I can take that one. First, we're pleased with the growth of 1.4% and pleased with continued low churn with that. I'd reiterate that the same range of guidance from 10%- 15% is still on track for that. I continue to guide to a flat online number on the full year. We did see, to your question, some shift to long- term, but nothing I would say is extreme. Maybe a little bit more color in terms of the customer conversation is that we didn't see a lot of pushback. I think that's really a statement of it's a relatively small price increase, but it has to do, I think, even more with the value that we've put in the Workplace SKU, be it AI or so many of the more products in there. As well as with the particular price increase, we increased storage limits. For us and what we heard, the value prop was still very much there. Okay, thank you. Our next question is from James Fish with Piper Sandler. Hey, thanks for the question here. Two-parter though. Eric, for you, Workvivo continues to have another strong quarter, really spike in usage from what we can tell. I guess, what are you seeing with that asset that we had into the back half of the year, both from that partnership angle with Meta and the overall market? Michelle, on the numbers here, you raised by $25 million to the top line, beat by $20 million on the quarter, have FX in your favor. Walk us through why we're not getting more of a roll forward of kind of the top line upside here. Is it just prudency or anything to think about for the back half of the year? Thanks. Michelle, you want me to address the first one? Sure. Yeah, so in terms of Workvivo growth, Meta partnerships certainly help us a lot since last year. For now, our top priority is to make sure for those customers to switch to our Workvivo platform in order to help them transition to our Workvivo platform very smoothly, right? Make sure every feature works, no regression, and that's still the top priority. At the same time, a lot of customers realized they needed to have an employee engagement platform and more and more opportunities in the pipeline. Also at the same time, we are going to innovate more, right? Add a lot of innovations upon our Workvivo platform. I think also the AI is also another way for us to innovate as well to further improve our Workvivo platform experience. I think it used to be we just focused on very, very large deals. I think a lot of the commercial, the medium-sized customers also will benefit from deploying the Workvivo platform. That's kind of our next growth opportunity for the Workvivo platform. Yeah, maybe a couple comments, James, in terms of the forecast. First, as you noted, we feel good about the consistent beat as well as the raise regardless of USD or constant currency. We feel good about the steady progress made towards the growth rate despite dynamic macro conditions. For example, raising from $2.7 million at the beginning of the year to now $3.5 million. We feel good about the three areas of strategic focus and the progress that we see within those. The color that I give you is that we already talked about online and sort of the guidance being flat. Relatively speaking, the H1 versus H2 dollars, revenue is relatively consistent. It's really the growth rate from enterprise that is driving the H2 outlook. We've used a consistent forecast methodology, and we've assumed macro conditions that are strong in their demand and durable with respect to our drivers, but still a dynamic economic environment. If I could insert a little bit, James, some comments on last quarter, you'll remember that I said we saw some scrutiny, no losses, but additional scrutiny in some geographies. I'm pleased to say that we saw partial abatement to that in Q2. As such, we've expected that H2 outlook will be in line with what we saw in Q2. Great to hear. Thank you very much. Samad Samana from Jefferies will take the next question. Hey everyone, this is Billy Fitzsimmons on for Samad. Eric, maybe for you, there have been a couple of questions on the AI Companion, but want to dig deeper on the Custom AI Companion add-on. It's still early. It's only been a few months now since launch, and I'm guessing we'll hear more at Zoomtopia. Can you share some anecdotes around what some of the initial customers who've purchased the add-on are saying about it? Some prominent use cases day-to-day. I know you have third-party integrations with a bunch of different vendors. From a product or sales standpoint, you're getting customers to move from the included AI Companion to the paid add-on. If I could sneak in one more for Michelle, it just launched. It's still early. I imagine it'll be more of a fiscal 2027 tailwind. Can you just level set for us if there'll be any kind of benefit in the guide in the back half of this year? Thank you. Yeah, I can address the AI Companion question. First of all, please join our user conference Zoomtopia next month. Again, a lot of exciting stuff around the Zoom AI Companion. For those customers who deploy AI Companions for a while, they love AI Companions. However, at the same time, they also ask about what they can do to leverage AI Companions to help them more, right? Because some companies deploy AI Companions, they also have other applications like ServiceNow, Salesforce, Workday, and a lot of other applications. They're also knowledge-based as well. How to connect with all those different data sources, right? Some customers even use other data index, like Amazon Q or Glean, right? You also need to connect with them as well. We offer the basic meeting summary template. Customers want to have a very flexible, customized template and also connect with their dictionary and their knowledge base. A lot of the capabilities can be added into AI Companion to further improve the AI Companion for those customers. That's the reason why those customers talk with us, hey, they want to enable customized AI Companion and also share a lot of feedback with us. This is the reason why we want to announce more and more innovations upon our AI Companion, the platform. Yeah, with respect to kind of how to think about AI products and what's in and out of our forecast, I kind of break it into two pieces. First, we're already seeing notable progress from AI in our contact center business. We talked about broadly the contact center business growing high double digit, and it continues to be. Certainly, our Elite SKU, which is where you get the AI value, as well as ZVA, are part of that. I would sort of say that's in the 2026 numbers. In terms of the other products that just [GA'd] in the April timeframe, this is sort of first quarter where we're pleased with the customer examples that we shared and the pipeline building. I really would just continue to emphasize what I've said previously, which is those won't really come in until 2027, given law of large numbers, building product, etc. Thank you. Our next question is from Michael Funk with Bank of America. There we go. How you doing, guys? Very well. Yeah, good to see you all. Also, on the AI products, can you provide any color on the size of the funnel and the growth of the funnel that you're seeing? Very strong growth, obviously, in 2Q. Any commentary on the uplift in customer ARR from adding AI solutions would be helpful. Yeah, maybe I can address some of your questions. I can jump in as well. Feel free to chime in. Yeah. Given there's too many AI questions, I wish our AI Companion can answer those questions on behalf of me next time. Overall, I think looking at AI Companion, not only for improving our meeting or workplace platform, actually, AI Companion is the backend, is our AI infrastructure platform. Our other products also benefit a lot from AI Companion. I'll give one example. Take Zoom Virtual Agent 2.0, for example. Literally, we just announced it recently. We offer the voice and the agent, and it's very important and very helpful to our contact center customers. The backend architecture, a lot of innovations are coming from AI Companion as well. AI Companion is the platform, right? It's the phone, contact center, almost every service will benefit from our AI Companion. Look at the core workplace meeting services. AI Companion is part of that. We only monetize for Custom AI Companion, but AI Companion is extremely important for us to empower our other services. That's the way for us to further monetize AI Companion. Maybe I'll jump in as well. I took sort of the spirit of your question of how do we really think about what we look at with respect to AI and measurement. Certainly. Michelle, just in the context of revenue growth acceleration, several years ago, management talked about accelerating revenue back to mid-single digits. You're well on your way there now, 4.4% constant currency this quarter. Trying to think about contribution to future growth, talking about funnel size and uplift ARR so we can contextualize the benefit. Which one do you want? Do you want me to go AI usage, or do you want to go revenue? The usage and then the benefit to annual recurring revenue, if you have any thoughts on that, how it's benefiting. Okay, so look, in terms of the framework, how we think about AI and AI health, broadly, we originally started talking about enabled. Then we went to, let's talk about MAO. Eric shared in his write-up that our MAO is up 4x year- over- year, now in the millions. I would say we also look quite heavily at the depth of usage, right? You know, things like moving more into the productivity lifecycle, moving more into the meetings lifecycle with our customers using things like side panel much more, tasks much more, using AI integration in products like Phone, for example, as well as using AI features that are agentic and go across our platform, like things with calendar management. We look very closely at broad breadth and depth usage. Obviously, innovation and recognition and pace of that is important to Eric and I. You hit on the last piece, which is the monetization. I just continue to reiterate the frame I gave earlier, which is, you know, Contact Center Elite, ZVA, those are the more mature, or I should say Contact Center Elite is the more mature. Putting AI value in all of our paid SKUs and what that could do to churn and bringing in new customers, those are sort of the more immediate ones. Certainly with Custom AI Companion, the 2.0 launch of ZVA and some of our vertical SKUs, that offers a lot more going forward. Great, thank you, Eric. Thank you, Michelle. Appreciate it, thank you. Alex Zukin with Wolfe Research will ask the next question. Alex. Hey guys, thanks for taking the time. Maybe two quick ones, Eric. The first one for you, and then Michelle, one for you as well. Eric, if I think about the way AI adoption is progressing inside of your customer base, both on the online portion as well as the enterprise portion, how is that changing your opinion around the timeline, the timing of monetization to the extent that can start to bend the growth curve and the competitive framing and environment, both against two hyperscalers with two very different opinions on pricing? One, incrementally higher, and one, it's part of it for free. I'd love kind of your thought process on that going forward, and then a quick follow-up. Yeah, Alex, great question. As I mentioned earlier, Zoom AI Companion is a platform. AI Companion is empowering almost every product we announced, right? Or the customers that they used. That's the reason why you look at our contact center, for example. Why are we doing so well? Because we look at our top 10 deals. None of our top 10 switched from other cloud vendors. When they look at our product, take a Zoom Virtual Agent, for example, right? We build everything from the ground up. The innovation, the speed is very fast because we all can leverage the capabilities from AI Companion. We announced Zoom Virtual Agent in 2012. Internally, we deploy that. Our support team is very, very satisfied with the AI, a Zoom Virtual Agent powered by AI Companion. When we look at AI Companion as a platform, how to leverage it, empower all other point of services, either phone or contact center, whiteboard, and a lot of other things, we are going to win. That can help us win more deals. At the same time, you look at it as a core of the meeting product, right? It's a lot of features, and it's a part of AI Companion. Customers love that as well. Again, we are going to innovate faster. That's the reason why I mentioned a few times. Please join our user conference next month. One of the key themes on the Zoomtopia this year is about AI and the Zoom AI Companion. Perfect. Michelle, maybe for you, yeah, leading indicators are always important. It sounds like some of the deal cycle elongation that you saw resolved. I assume some of those deals that may be pushed also closed. Is there anything we're not seeing that is maybe creating a headwind in terms of the CRPL metrics, in terms of billings, that maybe is not painting the same picture around those KPIs as the largest beat that you've had in the years on a revenue basis maybe is? There seems to be a little bit of a divergence. Anything that you can point us to to help us kind of marry those two data points? Yeah, maybe let me start, Alex, with just backing up on some broad comments on macro, and then talk a little bit about RPO. First, from a macro perspective, you know, what I said in Q1 last time, was that we saw strong demand, broad strong demand, and we think we have durable drivers in a dynamic macro environment. Certainly, I would say that is still true. It's still a dynamic environment, as we all know. Last time we talked, as you noted, around some scrutiny that we're seeing in some geos. Want to make clear that we've seen a partial abatement of that. We've seen SMB demand continue to be very strong. You see that reflected, I think, in the revenue results, and you see it reflected in churn, low churn on the online side, but also churn going down year over year, consistently over multiple quarters on the enterprise side. Look, it's still dynamic, but we feel good about that. To your RPO question, RPO growth of 5% is strong. I would also point out that it's lapping a very high comparable, and that our RPO bookings are sort of the highest in many years. From a current RPO, it's really just the strong comparable at play there. I guess that's what I call out. Maybe one thing we didn't touch on, but just in terms of thinking about the overall growth rate, if I sort of look, Alex, at the spirit of your question, we talked about the FX piece. We talked about the easier comparable might be another thing. We're lapping that trough that we talked about for a very long time, as well as to a much lesser degree, we had some professional services, one-time recognition. Thank you. Thank you, Alex. Our next question is from Arjun Bhatia with William Blair. All right, thank you. Eric, I want to touch on a point that you actually brought up proactively on the last question, but contact center, and I have a million questions on this, but I'll try to focus it on a couple of questions. The fact that you're winning contact center deals against other cloud providers is very surprising, not for anything other than the fact that there are so many on-prem to cloud migrations that are happening. I'm curious what's driving the cloud displacements. Are those failed implementations? What are customers seeing, I guess, in Zoom? Is it the AI capabilities? Is it a cleaner tech stack? Is it easier to implement? What are the kind of key drivers that are creating success for Zoom Contact Center, especially against the other cloud providers? Yeah, it's a great question. It's not surprising to us. We know we are going to win. There's more, I think, more reasons. Number one reason, customers, you know, they were not happy with the existing cloud contact center providers. If they're not very happy, no matter what you do, they say, "I don't want to switch," right? They are not happy. Sometimes this is either quality is not good, outage, or too expensive, or very slow innovation, or architecture is wrong, AI adoption is so slow, and so on. All reasons are very different. However, for those customers, they really want to look at modern contact center solutions. When they test Zoom, they say, "Wow, I cannot believe that you almost have every feature we need." Not to mention, they trust us. They trust our core meeting of Zoom platform. They know actually our company culture is really focused on delivering happiness. We do all we can to delight our customers, right? Because of the capabilities, because of the culture, because of the innovation speed, those customers trust Zoom. I'll give one example. Look at recently the UC Awards. Zoom won four awards. One thing you might feel surprised as well, Zoom is the best contact center solution, right? Customers, partners, analysts, they know what we're doing. That's the reason why, given that we have a very solid foundation, we're going to double down on that. As long as we innovate faster, focus on the product and the customer experience, I think we're going to win more. That's kind of the way I look at why we are winning. Let me just jump in and give a couple of the stats that might give you a little dimension to some of our wins. We look at a lot of our top 10 wins, 9/ 10 are replacing the leading contact center provider, 7/ 10 on AI. We're seeing triple-digit growth in our elite, 8/ 10 come in from channel. Just, you know, another evidence point of us really building out more of a channel and what's resonating with customers. Yeah, another thing, you look at the product experience, you know, not like some other vendors. They needed to acquire this company, that company, you know, need to put everything together. The experience is not consistent. You know, we have our own virtual agent. We have our own quality management, workforce management, and core platform integration. It seems to have a very consistent experience. That's another reason why, you know, customers really want to select Zoom as their, you know, contact center solution provider. Thank you. Congrats on the success. Thank you, guys. Appreciate it. Thank you. Our next question is from Rishi Jaluria with RBC Capital Markets. Wonderful. Thanks so much for taking my questions. Hey, Eric. Hey, Michelle. Really appreciate the time. Nice to see continued strength in the business in spite of everything going on there. Maybe two AI-related questions I'd like to ask. One for Eric, one for Michelle. From a financial perspective, you know, look, Eric, you've talked about your ambitions to become an AI-first company, and obviously you're seeing this great traction with your AI SKUs. As we think about, you know, the cost of inferencing and all these models, right, no matter how efficient you are, how do we square that away with, you know, the continued raise in cash flow guidance? How should we be thinking about the long-term financial implications as, you know, the usage of AI among your customer base grows as the use cases continue to expand, etc.? Maybe a little bit related to that, you know, obviously you've been doing great things with AI so far. How do we think about your plan to really leverage all the vast troves of unstructured data that's going through the Zoom platform and, you know, maybe build out even, you know, newer use cases on that in ways that are harder for customers to do themselves and, you know, relies on your domain expertise, your engineering talent, etc.? Thank you. Yeah, this is a wonderful question. You are so right. You know, how to leverage the data, right? How to leverage the product, right? It's all AI to create something new, right? So AI-first experience, I'll give one example. I used to schedule a meeting. I need to go to my calendar to schedule a meeting, right? Or maybe my year to help me to schedule a meeting. It would take a lot of clicks, a lot of manual steps. Nowadays, the way for me to schedule a Zoom meeting, I just go to Zoom AI Companion, and I chat with the AI Companion, please schedule a meeting with Michelle next week for 30 minutes. It's a conversational interface. It's a very, very smooth experience. I do not need to click so many things. I do not need to learn any GUI interface. That's an AI-first experience. In terms of innovation, you are so right. We announced 2.0 next month. We're going to announce 3.0. 3.0 really, everything is about agentic framework, right? How to automate your work, how to leverage the data. Like I said today, I can use Zoom AI Companion and write a Zoom Doc. I still need to manually create so many things, click here and there. How to leverage AI Companion to help you write something that's very cool and very easy, frictionless experience. I think also another thing is, let's say, in my day-to-day work, I needed to manually do so many things, copy this application and then open another application. Workflow has become more and more important as well. I used to be looking at workflow, right? You need to manually tell the workflow system what you want. How to leverage AI? If it's just an AI-first experience, I just tell Zoom AI Companion what I want. Zoom AI Companion, more like a super agent, will talk to each of the other systems or applications and get things done, making it fully automated. That's part of our vision. That's the reason why I want to invite you to join Zoomtopia. Next month, you will see a lot of new capabilities we're going to introduce to further beef up our core capabilities of AI Companion. Maybe Rishi will hit the more what I took as a P&L question and come back if I didn't answer it. We're proud of the fact that we're still hitting 79.8% gross margin, up over 100 basis points year- over- year. That's because we're offsetting AI investments and AI usage with cost optimization. There's a little bit of one-time benefit in the second quarter, but there are durable elements that we're actively working across this on the COG side. I'll drop and make some quick comments on the OpEx side. Migrating cloud to colo still continues to be a lever for us on the COG side. We've talked about the federated approach and making sure that we're applying the right model to the right tasks so that we can get both best quality and best price or best cost for our customers. Obviously, just making sure that we're constantly looking at AI cost perks as we go through. On the R&D side, we've made a lot of investments and will continue to invest in AI. We're going to need to offset that with other efficiencies that we see in the business, of which AI is one for us. We're going to live the same reality that our customers are living there. Yeah, very helpful. Awesome. Thanks, Eric. Thanks, Michelle. Really appreciate it. Thank you, Rishi. I appreciate it. Tom Blakey with Cantor Fitzgerald will ask the next question. Thank you. Thank you, Eric and Michelle, for the opportunity to ask a question here. I was wondering if you could maybe, it's maybe an extension from some of the questions that were asked prior. Could you just maybe talk about CCaaS and some of the momentum on a sequential basis? That strong 94% call out, Eric. I remember asking you about a year or two ago about the monetization efforts here in CCaaS, and you got awfully excited about it. Just, you know, and it is an extension for that, maybe from Michelle, what is kind of embedded in guidance there in terms of maybe continued momentum in CCaaS? Again, just the sequential growth color would be helpful. If you want, maybe expand on seats versus price, that'd be helpful. Similarly, continued momentum in phone. We've been monitoring this for years. With this acceleration in CCaaS and continued strong double-digit growth in phone, could you just maybe combine in the one big question, talk about what you're seeing in terms of going into the second half, maybe even further out into fiscal 2027, where you know, maybe some of the downsells or some of the other kind of structural things that are happening in the core could abate, and we can see, you know, kind of like 100% plus kind of NRR going forward with this. Again, these strong numbers in CCaaS and phone are just awesome, Eric. Thank you very much for this question. Thank you. Michelle, do you want to address that question? I mean, look, we don't give kind of forward-looking product guidance for contact center and Zoom Phone. I'd probably just comment on the nature of that and then broadly, you know, expectations for the future. Starting on contact center, another quarter of high double digit, which we're very proud of. I think I covered earlier kind of the nature of the top deal, so I won't repeat it there. You mentioned the stat, of course, about us making progress up market, which is obviously, you know, a key consideration. That is all with a not ZVA 2.0 number. We look to the future and the reality that our customers are facing in growing labor costs and poor customer experience and stay a durable driver in contact center going forward. From a Zoom Phone perspective, continue to see mid-teens. We said that last time. We're saying it now. Maybe the things that haven't come out as much on this call that I mentioned for investors is really twofold. Just how much we're seeing phone be a gateway in our deals to other products, right? Starting with meetings, you often go to phone, but now much more of a breakdown to contact center. Sort of that better together story of being able to solve the customer problem, go back in the office, and have that seamless experience that Eric talked about. We see that being a durable thing. Also, some new announcements that we're very excited about with the connection of ZVA and Zoom Phone, as well as we're seeing connections of Zoom Phone to Zoom Revenue Accelerator. A lot of real momentum. Maybe the second thing that I would say on Zoom Phone that we would feel good about when we look to the future is just the AI progress within it. Sequentially, the MAO quarter over quarter has gone up over 30%. We're proud to see that as well. Great. Thank you, Michelle. Our next question comes from Mark Murphy with JP Morgan. Great. This is Sonam Khare on for Mark Murphy. Thank you for taking the question and congrats on the results. Eric, first I just wanted to hit on the recent launch of the AI-first auto-dialer to streamline outbound sales. Would love to hear how you're thinking about the long-term opportunity here and some of the feedback you're picking up since launch, particularly how you see this opening up doors for incremental wallet share in some of your customers. I had a quick follow-up for Michelle. Any items to call out in terms of diverging demand patterns, whether by geo or vertical? I saw international growth slightly outpace that of the Americas. Is that much of that delta largely FX-driven or something else to consider? Thank you. Yeah, it's a great question. Regarding the contact center innovations, recently in Q2, we had quite a few contact center innovations. One thing is, as you mentioned, agent lists in the outbound dialers. Internally, we call that a proactive outreach feature. Essentially, the way it works is it can automatically place outbound calls and pre-recorded messages, something like appointment reminders, without requiring a live agent to do so many things manually. This is one of the innovations the customer told us they love. They shared the feedback with us, and we quickly delivered. This is just one of the innovations. That's the reason why, back to the contact center wins, customers like Zoom Contact Center, because when they share the feedback, we can quickly deliver. Every quarter has so many innovations. In Q2, we also delivered another feedback like division features. In contact center, the customer uses a contact center, sometimes uses support, internal hyper desk to use Zoom Contact Center. The technical support team also uses that. That's the reason why we go to support the divisions as well. A lot of new innovations we introduced to the market every quarter, and outbound dialer is just one of those innovations. Yeah, maybe I'd also just tag on to what Eric said and say that I'm excited, you know, just as the CFO, that a lot of the AI innovations now bring us much more into that value conversation of helping the customer, you know, create a better experience for their customers, drive revenue increasingly in many instances. I think it's an exciting direction in terms of the value that we can provide customers. Real quick to your question, I wouldn't really call out any difference in broad demand. I'd say that FX was primarily an impact on the EMEA results. Got it. Thank you so much. Our final question comes from Siti Panigrahi with Mizuho. Siti, are you there? It's cool. This is Samir. I'm calling in from Siti. One thing I do want to check, if you could double-click on the one-time margin benefit that you saw in the quarter. You mentioned it's because of professional services and some AI-related adjustments you're doing. If you could clarify that. Yeah, different. What I talked about with the professional services was sort of a one-time small impact to the Q2 revenue growth rate. I think I separately mentioned on the gross margin that we did see some sort of one-time savings costs. Broadly, what's going on on the revenue side are durable elements to revenue growth, all the things that we talk about, product diversification, moving up market, etc. Broadly, what's going on on the gross margin is incremental AI investments and costs, and we're offsetting those with efficiencies. Great, thanks. Just another clarification is that for the second half outlook, the main driver is the enterprise side of things, and that's why the beat is not getting carried forward as much as it should be. What I did in the guide was reiterate what I'd said previously, that we're going to capture the online price increase in the amount that we previously communicated. We're going to hold to online being flat, which is consistent to what I said last quarter. The raise is really on the enterprise side, a combination of many broad things across enterprise that we've talked about today. Excellent. Thank you. All right. Thank you, everyone. This concludes the Q&A portion of today's call. I'll turn it back over to Michelle for closing remarks. I just wanted to close and to say that we look forward to hosting everyone for a virtual investor session, Q&A, and a little bit of a presentation after Zoomtopia on the 17th of September. We're going to have an exec panel with Eric and myself and other Zoom executives, where we're going to do just a time to talk about insights onto our business strategy, key initiatives, and the innovations that we'll be debuting. We look forward to hosting everyone. Thank you. Thank you all. Thank you.