Hello everyone, and welcome to Zoom's earnings webinar for the second quarter of fiscal year 2027. I am joined today by Zoom's founder and CEO, Eric Yuan, and Zoom's CFO, Michelle Chang. Today I am giving my prepared remarks by Zoom custom avatar, and so will Eric and Michelle. After the scripted portion of the call, Eric and Michelle will be on camera live to answer your questions. 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 will 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 substitute 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 2027, 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, including our AI strategy and investments, 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 is also giving his prepared remarks via Zoom custom avatar. Thank you, Charles. FY 2027 continues to progress well. Total revenue grew 4.9%, with enterprise revenue growing 7.8%, its strongest rate in three years. The enterprise acceleration was driven by our focused execution against our three priorities of elevating Workplace with AI, scaling AI-first customer experience, and driving growth in new AI products. This progress reflects our success in bringing our AI-first system of action vision to life, helping customers reduce costs and create greater business value. That vision is grounded in Zoom Workplace, which we continue to enhance with AI. Across Workplace and our broader communications platform, AI is becoming increasingly embedded in how users work throughout the communication and collaboration life cycle. Licensed monthly active users of our AI features in Workplace grew 125% year-over-year. We are even more encouraged by the broadening engagement, which has expanded from reactive communication summaries into active querying and building workflows, turning insights into action and conversations into outcomes. Our wins in Q2 speak to our growing ability to win as a system of action for modern work. We saw one of the largest U.S. tech companies renew Zoom Workplace in a deal that expanded its ARR by $1.9 million, driven by the deep employee appreciation for the Zoom Meetings and Rooms Experience, our AI vision, and our ability to integrate and coexist with Google Workspace. With ARR growing in the teens, Zoom Phone continues to demonstrate its value, both as a natural add-on to Zoom Workplace and increasingly as a driver to broader platform adoption. We saw both dynamics in Q2. A major U.S. wealth manager upgraded to Zoom Workplace Enterprise Premier, including a wall-to-wall rollout of Zoom Phone, replacing multiple vendors. Zoom Phone is also creating pull-through for our broader platform. For example, QXO, a large North American distributor and installer of building products, chose Zoom Phone company-wide for roughly 8,000 employees alongside Zoom Contact Center to unify their UCaaS and CCaaS systems, integrate with Microsoft Teams, and automatically drive CRM updates from live interactions. We were also very pleased with the progress of our employee experience offering within our system of action. In Q2, a leading U.S. insurer and major Zoom Workplace and Phone user expanded into Workvivo, marking one of Workvivo's largest-ever deals as it also surpassed $100 million in ARR. We are also priming Workvivo for the AI era by launching Workvivo HQ, an AI-native digital headquarters built on Zoom's AI technology, bringing communication, knowledge, and action together for every employee. A global luxury retail brand selected Workvivo HQ as their employee experience platform and will deploy Workvivo HQ Agent to give thousands of frontline workers faster access to answers from their policies and databases. As you can see, customers are choosing Zoom as an AI-first secure integrated multi-product system of action, sometimes displacing multiple vendors, other times coexisting with them. This progress exemplifies our ability to meet customers where they are, turn conversations into business value while driving durable platform expansion for Zoom. Customer experience is a clear example of our platform strategy translating into growth and direct AI monetization. In Q2, Zoom CX ARR continued to grow at a high double-digit year-over-year rate, and we set a record for the number of seven-figure ARR deals. AI continues to drive this momentum with paid AI in nine of the top 10 Zoom CX deals, showing growing demand for a system of action that connects automation, human agents, and intelligence. We saw rapid adoption in Zoom Virtual Agent, both as a Zoom Contact Center attach and as a standalone offering with its customer count growing more than 250% year- over- year. ZVA's voice and chat agents go beyond simply answering questions. They resolve issues, complete multi-step workflows, and escalate to human agents with full context when needed. This validates our vision of moving customers from chatbots to resolution agents, turning conversations into resolved outcomes at scale. Increasingly, customers are going all in on Zoom CX, combining our Zoom Virtual Agent and agent-assisted AI solutions to enable seamless transitions from automated self-service to human support. For example, in Q2, one of the largest U.S. banks chose ZVA while expanding its existing ZCC Elite deployment to enable self-service alongside AI-assisted human support, helping them scale to meet surging help desk volume. For others, the value is in breaking down the fragmentation between UCaaS and CCaaS solutions and bringing communications onto a unified platform. In Q2, a leading enterprise software company selected ZVA Voice as a natural extension to Zoom Phone as they look to modernize their customer experience. We also saw a major U.S. cybersecurity company select Zoom Contact Center to replace multiple vendors and securely unify their UCaaS and CCaaS solutions, building on their use of Zoom video in customer interactions and allowing agents to escalate voice calls to ZCC video sessions seamlessly and natively. It is not only customer recognition. Early this month, Zoom was named a leader in the IDC MarketScape for agentic CCaaS. This progress demonstrates the momentum behind Zoom CX and validates our differentiated approach, a unified AI-first system of action that connects self-service, human support, and internal communications to deliver better customer outcomes at scale. Our progress in enhancing Workplace and scaling customer experience gives us a natural foundation from which to deliver new AI value to our customers in horizontal and vertical scenarios. In horizontal AI, we launched ZoomMate in June, bringing our system of action strategy to life for our Workplace users through AI-first productivity tools, agentic search, and agentic workflows. We have already seen interest spanning our Zoom Workplace base, from small businesses to the world's largest enterprises. By combining Zoom conversation data and proprietary intelligence with other enterprise systems, ZoomMate turns conversations into completed work and business value. In Q2, we were delighted to see the University of Newcastle in Australia, already a full platform Zoom customer, add ZoomMate to further enhance its collaboration and communication capabilities. As we expand this system of action across the enterprise, we are using Zoom's unique position in live communications to capture context and intent and apply that intelligence to vertical workflows. Sales is a strong example. Zoom Revenue Accelerator, our revenue orchestration solution, turns live sales conversations into intelligence that supports coaching and action to improve seller productivity and win rates. ZRA had another strong quarter, with paid customers growing 41% year-over-year. Common Room extends this value upstream, creating a fuller end-to-end revenue intelligence and orchestration solution together with ZRA and the broader Zoom platform. We closed the acquisition in mid-July, adding buyer intelligence that unifies fragmented signals to identify in-market accounts, key buyers, and the right reasons to engage. In Q2, Okta expanded their Common Room contract as they look to further capture the value that AI-driven buyer intelligence delivers by consolidating customer insights across platforms and surfacing real-time buyer signals to convert deals into wins faster. Across our three priorities, the common thread is clear. Zoom is deepening its value to our customers as a system of action. We are embedding AI across our platform to turn conversational context into action and deliver what customers want: real AI value that produces outcomes. We are encouraged by the momentum across our platform and proud of our progress expanding AI monetization to durable growth and, most importantly, deliver enduring value for our customers. Michelle, via Zoom avatars, will now take us through our Q2 financial results. Michelle? Thank you, Eric, and hello, everyone. I am excited to be with you today to share Zoom's Q2 FY 2027 financial performance. In Q2, total revenue grew 4.9% year-over-year to $1.28 billion, or 4.7% in constant currency. This result was $7 million above the high end of our guidance. Our enterprise business drove the outperformance, with revenue growing 7.8% year-over-year, representing 62% of our total revenue, up two points year-over-year. In our online business, Q2 average monthly churn was 2.9%, in line with Q2 of last year. Within our enterprise business, we saw 8% year-over-year growth in the number of customers contributing more than $100,000 in trailing 12-month revenue. These customers now make up 33% of our total revenue, up one point year-over-year. Our trailing 12-month net dollar expansion rate for enterprise customers in Q2 was 99%, up one point from the prior year period and in line with the prior quarter. Looking at our international growth, our Americas revenue grew 6% year-over-year, EMEA grew 2%, and APAC grew 4%. Moving to our non-GAAP results, which, as a reminder, exclude stock-based compensation expense and associated payroll taxes, net litigation settlements, acquisition-related expenses, net gains or losses on strategic investments, and all associated tax effects. Non-GAAP gross margin in Q2 was 79.1%, compared to 79.8% in Q2 of last year. We continue to deliver strong gross margins as we broaden our AI product portfolio and optimize for scaling customer adoption. Non-GAAP income from operations grew 1% year-over-year to $510 million, in line with our guidance. Non-GAAP operating margin for Q2 was 40%, compared to 41.3% in Q2 of last year. We continue to deliver very strong operating margins while improving top-line growth as we further invest in our growing portfolio of AI products and drive future efficiencies in our AI infrastructure. Non-GAAP diluted net income per share in Q2 increased to $1.55 on approximately 300 million non-GAAP diluted weighted average shares outstanding. This result was eight cents above the high end of our guidance and two cents higher than Q2 of last year. The EPS growth reflects strong top-line performance as well as anti-dilution, driven by our buyback program and disciplined stock compensation management. Turning to the balance sheet. Deferred revenue at the end of Q2 grew 6% year-over-year to $1.56 billion, above the high end of our previously provided range of 2%-3%. For Q3, we expect deferred revenue to be up 3%-4% year-over-year. Looking at both our billed and unbilled contracts, our RPO increased 14% year- over- year to approximately $4.5 billion, driven by non-current RPO growth of 25%. The strong growth in RPO reflects our continued success landing larger, longer-term, multi-product platform deals, demonstrating growing demand for our AI-first platform. In Q2, operating cash flow was $495 million, representing an operating cash flow margin of 38.7%. Free cash flow in the quarter was $472 million, representing a free cash flow margin of 37%. We ended the quarter with $7.2 billion in cash equivalents, and marketable securities, excluding restricted cash. In Q2, we repurchased 3.7 million shares for approximately $352 million. Across our $4.7 billion share repurchase plan, we have repurchased a total of 44.2 million shares for $3.4 billion. Turning to guidance. For Q3, we expect revenue to be in the range of $1.275 billion to $1.28 billion, representing 3.9% year- over- year growth at the midpoint. We expect non-GAAP operating income to be in the range of $510 million to $515 million, representing an operating margin of 40.1% at the midpoint. Our outlook for non-GAAP earnings per share is $1.46 to $1.48 based on approximately 301 million shares outstanding. For the full year of FY 2027, we are excited to raise our revenue and EPS guidance. We now expect revenue to be in the range of $5.085 billion- $5.095 billion, which represents 4.5% year- over- year growth at the midpoint. Our increased revenue outlook assumes enterprise revenue growing faster than expected, partially offset by flat online growth. We continue to expect our non-GAAP operating income to be in the range of $2.065 billion- $2.075 billion, representing an operating margin of 40.7% at the midpoint. In addition, our outlook for non-GAAP earnings per share in fiscal year 2027 is increasing to $6.08 to $6.12, based on approximately 301 million shares outstanding. As a reminder, future share repurchases are not reflected in share count and EPS guidance. We are also pleased to raise our free cash flow outlook for the full year, which we now expect to be in the range of $1.78 billion to $1.82 billion. This raise reflects the strength in free cash flow in the first half, as well as a downward revision in our CapEx spend for the year. In closing, Q2 was a good quarter with continued execution across our three priorities and growing adoption of Zoom as an AI-first system of action. We are pleased with our progress in AI monetization, led by customer experience and early momentum across new AI revenue streams. We remain on track to surpass $5 billion in revenue this year while maintaining our focus on profitability, cash flow generation, and shareholder returns. Thank you to our customers, investors, and of course, the entire Zoom team for your trust and support. With that, Catharine, please queue up 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 Matt Bullock with Bank of America. Hey, everyone. Good to see you, Michelle and Eric. It is nice to be working with you again. I was maybe hoping, Michelle and Eric, you could elaborate on what you are seeing in terms of Phone demand and customer purchasing behavior in the second quarter, and then maybe help us think through the outlook for modeling the rest of the year. Thanks. Your latter part of your question, Matthew, is on the entirety of the business or Phone uniquely? Phone specifically. Yep. Eric, did you want to lead off here? I am happy to take this one as well. No, go ahead, please. Yeah. Look, we are really encouraged with our Zoom Phone results. You saw us highlight a lot of the things about it continues to be in team growth. Let me maybe give a little bit of context and color, Matthew, to other dimensions that we are seeing. I think we are seeing strong takeout motions. 10 of our top 10 deals were takeouts. We are seeing continuing strength in verticals and international. We are seeing that continued UCaaS and CCaaS. Then maybe two new elements within Zoom Phone before I flip to talking about the revenue guide that I would call out is, I think increasingly it is going to be a great pathway to other AI monetization. Meaning we are seeing it set up a lot of Zoom Revenue Accelerator deals, ZoomMate deals, Zoom Virtual Agent Receptionist deals. So we are encouraged by that. And we are also seeing strong momentum in our Microsoft Teams integration. With respect to our guide, look, it represents a constant currency beat and raise. We are pleased with the progress to the full year. It is a raise from where we came in at the beginning, which was at 4.1% growth. So now guiding at the mid at 4.5%. And that is up versus last year. And also I will remind investors about that headwind of a white label deal that we had that had about a 40 basis points impact to the top line. Look, the fundamental headline in our growth inflection is enterprise. You saw from Eric the three-year highest growth rate. I am sure we will get to talking more about that. Then we tempered it slightly with results in online. That is great. Maybe just one more to follow up, if I could. It looks like the strongest RPO quarter in a few years. Really nice step up. Yeah. You mentioned a couple things, landing larger, longer duration contracts, but I was hoping you could expand maybe on some of the underlying drivers of what you think is driving the strength and the step-up in bookings in the quarter. Yeah. Look, I think it tells the story of our enterprise business at large. Look, if you look at that 7.8, the strongest in three years, that is even with that white label turn headwind that I talk about that had about a 60 bps impact to enterprise. You see it in the NDE inflection. Look, it is really what we have been telling investors we would work on, product diversification, AI monetization, moving upmarket, expanding in new routes of market with channel while working our churn. Look, as we move into these different businesses, and we move into that deeper relationship that Eric talked about with our customers, it will come with longer, larger AI-related deals. Great. Thanks. Our next question comes from Samik Chatterjee with JP Morgan. Hi. Hi, Eric and Michelle. Thanks for taking my question. Maybe if you can talk a bit more about the record seven-figure deals that you highlighted for the quarter. How is the composition of these deals changing as you sort of see these record deals come through? Is this being more driven by Contact Center seats? Are you seeing more AI attached, sort of starting to make these deals larger in size? Just curious in terms of whether it is certain products that are driving some of the deal sizes to expand over time, and how should we think about that? And a quick follow for you, Michelle, just on the gross margin side, how are you looking to sort of continuously navigate the increasing compute cost as well, particularly as we saw gross margins moderate slightly in the quarter? How do we think about sort of managing those on an ongoing basis? Thank you. Thanks for taking my questions. Yeah, let me start with the first one. Look, I think it is both, and it is all the elements that I just talked through with Matthew on sort of the enterprise business, so I will not repeat it. The stat that I think you are referencing, however, was in Contact Center, so let me maybe make some comments about what we are seeing in Contact Center before I hit gross margin. Look, we continued to see it in high double digit. We are clearly taking share. It is driven by AI. We are winning in upmarket. So we saw a record quarter of a million plus deals in Contact Center, as well as we saw strength in over 100,000 and a million in our all-up business. Look, it is the same dynamics that we have been highlighting quarter in and quarter out with investors. We are displacing big competitors. It is off the backs of AI. We are encouraged by our investments in channel really being part of that. Look, when it comes to gross margins, I think the teams have done a beautiful job in holding gross margins best in class. They go, and they can have some variability from any quarter one to the other. We have been able to hold that as we shift to an enterprise business and AI usage goes up. We had a little bit of a growth in expenses this quarter as we saw AI usage spike with some of our new products. As is everyone, we will work to optimize that in the second half, and we continue to reiterate our comments about holding to long-term margins. Let me say, I will give you kind of the quick version of what gives us confidence in working to those margins is our federated approach in AI. Being able to take the best model for the right time at the right cost and be able to fluidly direct traffic in between that while we work to bring high volumes onto the Zoom SLM. Additionally, we sort of create products once in our core, and then we take those core technologies, and we infuse them throughout our products. That together with additional kind of areas of improvement in our core gives us confidence on the long term 80%. Thank you. Thanks for the question. Up next, we have a question from James Fish with Piper Sandler. Hey, good afternoon, guys. Thanks for the questions here. Maybe just on ZVA, a lot of consumption models out there for paid AI, interesting seeing attach across Contact Center and as a standalone. I guess, how are you guys balancing or looking at consumption or usage models rather than perceived monetization, how that impacts the model? Secondly, you guys increased online the price back in mid-March by mid-single digits. Still not seeing much churn activity, really, and you are even seeing that 16-month-plus cohort move higher, in terms of the growth rate. I guess, how much more price elasticity do you guys think you have, understanding you guys do not typically increase price just for the sake of it? Thanks, guys. Eric, do you want to take the consumption, or do you want. I am happy to take it too. Yeah, go ahead. Look, we benefit broadly from per-user models. That is what has been the norm. The market at large is shifting to more consumptive, and so you have seen us in ZVA, which was where the root of your question was, but we also employ full consumptive, outcome-based, and a combination of per user with a certain amount of consumptive. I think there are benefits to customers on both sides of the fence, and there are learnings for everyone involved. Broadly, our approach is to match what makes sense relative to market and competitive dynamics and ultimately what is in the customer's best interest. Your second question about progress in online. I am not going to make any comments about future pricing in that other than to just reiterate what you were noting. This is our second round of price increase. We did one to the monthly and then one annual, so you can kind of think about it as one all up of roughly 6% in our online business. To your point, we did not really see a massive or really any change in our churn. It remained low. To your point, those customers that have been with us for over 16 months just continues to inflect up. Look, we think that is a really good sign about the stability of our base. In our online business, we are going to work on sort of land and expand. Look, we contemplate price increases as we think they make sense, and we work discounts down in the enterprise. There is really nothing that I would sort of add to it about any future plans. Thanks, Michelle. Yeah. Our next question comes from Peter Levine with Evercore. Great. Thank you for taking my question. I guess if you look at Phone ARR, it is still growing teens even, size and scale. I guess the question is, how much more runway do you see remains in Phone, particularly within your existing kind of Workplace install base? If you look at Phone today, is it still acting as an entry point for CX, or is it still an add-on to Meetings? Just more curious, how much room do you have left for Phone? Michelle, similar question with Contact Center. How much of those net new deals that you saw this quarter, which was impressive to see, were net new customers to Zoom, or are these all just kind of renewals, upsells, that you kind of saw just through execution? Thank you. Yeah. Let me hit Phone first, then I will get to Contact Center. Look, I think we have been growing in the teens for a while and clearly gaining share. Look, if you think about it from a market perspective, there is about, I think, 130-some-odd cloud seats and about 150 million equivalent on-prem. We are winning in both and feel good about our ability to capture competitive share there. This quarter was no different. 10 of our top 10 deals involved takeouts. I will note it can differ, Peter, from one quarter to the next, but this quarter saw a large percentage of those in online. Look, to your question of kind of the UCaaS, CCaaS synergies, about five of our top 10 Phone deals had a Contact Center in them, so it gives you the sense that both you are bringing in customers outside of that, and clearly there is a UCaaS, CCaaS connection. When I go to Contact Center, I think we are clearly seeing a lot of new inroads. What I say by that is, some of them, of course, come from Phone. If you look at it, I think three of the top 10 deals in Contact Center had Phone on them. There is also a clear signal that some of them are just coming for Contact Center in and of themselves. Look, sometimes that comes, I think you saw the customer examples in Eric's prepared remarks, some coming in through ZVA, some coming in through Contact Center, and some going all in with Zoom from day one. Clearly there is an AI story in Contact Center. Clearly there is a competitive displacement across both. I think these represent durable drivers for Zoom for the foreseeable future. Thank you, Michelle. Yeah. Our next question comes from Elizabeth Porter with Morgan Stanley. Great. Thank you so much. I wanted to follow up on the enterprise revenue acceleration. You have highlighted that it was the strongest growth in three years, while the trailing 12-month enterprise NDR remained about that 99%. How should we think about the balance of acceleration between some of these new logos, larger initial lands where you highlight some displacements an expansion of the install base? Are there any products, whether it's Phone, CX, or paid AI, that are more influential in moving that NDR sustainably above 100%? Thanks. There's a lot in there, so keep me honest, Elizabeth, if I don't get to some of the nuances in your question. Let me start with NDE, and then I'll work back to enterprise and the fundamental drivers and, broadly, the balance of new versus expansion, if I got sort of the frame of your questions. From an NDE perspective, look, I think we've said for a long time that the goal is obviously to move that up in a 100 and beyond. You're seeing it go up to 99% now for the second quarter. I will remind investors we have that white label churn that will come in a touch more in the second half. But look, broadly, it tells the story of enterprise. It tells the 7.8% growth in enterprise, a 60 bps increase even quarter-over-quarter. Factor in, again, that white label churn headwind, and you can get a sense of where the enterprise growth is. It's off product diversification. All these same factors kind of play through net dollar expansion. We're diversifying our product set. Big headlines there are obviously Phone, Contact Center, but also the onset of a lot of AI monetization that the teams have been working very hard on. If helpful, the way we think about it, the way we talk to investors, the way we run the company, allocate resources, are those three priorities that we frame in our prepared remarks are really the fundamental building blocks for our long-term growth. We feel good about, they're at different stages, but we feel good about those. So those are durable things that you can continue to watch. Maybe the last thing that I will say is we continue to make progress in churn and deal dynamics in the enterprise space. Certainly that plus moving up market, we think are durable elements to continue. Maybe one last comment on new versus expansion. It is clearly coming from both. I guess I would go back to, I think it was Peter's question on Contact Center and Phone. Clearly we are benefiting from a Zoom base and our customers there. But increasingly with AI monetization, new routes and new products being delivered, plus Contact Center, it is also helping us to bring in net new customers to Zoom, and that is supported by our investments in our channel. Yeah. By the way, to add on to what Michelle said, just look at a Contact Center, for example. Customer not only look at the cloud-based Contact Center, but also look at agentic capability. Look at the latest report from IDC MarketScape, for agentic CCaaS. Zoom was named a leader in a much better position than a lot of traditional cloud Contact Center vendors. It does speak of the capability of Zoom Contact Center with agentic capability and a much better position, I think. Next up, we have a question from Samad Samana with Jefferies. Hi, good evening, and thanks for taking my question. Maybe just on the Common Room acquisition, help us think through what the contribution there was to the guidance. From a strategic perspective, how should we see that maybe pairing with the Revenue Accelerator offering that you already have, and how does it fit into kind of this overall theme of adding more robust functionality that is maybe borderline front office functionality, if I would put it that way? Eric, do you want to maybe start with the thesis? Yeah. ...of why Common Room, and then I'll jump in with sort of the numbers components. Absolutely. In terms of strategic value, you look at our AI capabilities, we build a federated AI, and also not only do we add those capabilities to the horizontal product lines, but also we focus on the lines of the business, right? Like a contact center and a ZRA as well. ZRA, I think, become more and more important because we add more and more capability to our ZRA, right? We build those products organically. Also, how to accelerate the ZRA portfolio, right? That's why we acquired Common Room. With Common Room, with ZRA, plus upcoming, the engagement or the forecast, a lot of new capabilities in the pipeline. Our ZVA is also uniquely positioned to win in the sales space. Essentially, we have AI vertical product to target a sales department. I think that's a big opportunity for the future quarters. We are very excited about that synergy between the ZRA as well as, and the Common Room opportunity. Yeah, maybe just to give a little bit more in terms of the guidance. Our prior guidance included acquisitions like BrightHire. Common Room was folded in here. These are early-stage companies. While Common Room was Zoom's largest acquisition to date at $250 million, these are early-stage companies, and so they are going to be de minimis to the impact of our revenue to a $5 billion base. For all the things Eric said, we are excited about what they can mean to our future growth, to our system of action vision. I think the combination of ZRA, together with Common Room is a perfect example of what we are talking about in system of action, moving into a different layer of value, now helping our customers help drive their revenue. So we are really excited about the future potential. Maybe just a comment, of course, when you do acquisitions like this, they do not come with Zoom best-in-class margins. So maybe an element of why we met margins and held them on the full year is we obviously folded that in, and we will continue to work those as the businesses scale and abate that difference. Yeah. Great. Great. Yeah, a little bit more color about that integration, because Common Room is based in Seattle. We have a large AI team over there. I think engineering integration, product integration, even the sales integration, we are doing very well in just a few weeks after closing the deal. This is very promising. Great. Thank you both. Thank you. Our next question comes from Siti Panigrahi with Mizuho. Thank you. Thanks for taking my question. I just wanted to dig into the contact center. This is one area you see most of the AI-driven innovations coming in in a few years. Also recently, we saw OpenAI presence there, and even some of the CRM vendors trying to get into native voice and CX capabilities. How are you seeing that this competitive landscape evolving, and what is Zoom's wavelength against some of the other new entrants in the market? Yes, it is a good question. First of all, so many players in that market. This is good news, right? Because this market is growing a lot of opportunities ahead of us. At the same time, you look at our ZVA, right, I think a unique position, because for those you look at the AI, I think you have access to all the data in a way better than those other vendors, right? They only focus on one piece, right, UCaaS or CCaaS, or just ZVA. We have everything. That is one. Two, you look at our technology, and even further the AI, our ASR technology, I think is one of the best technologies in the world, right? Look at the latency, and also we built all those technologies by ourselves. We also can leverage the third party as well. I think a federated AI approach put us in a unique position. You look at latency and the speech quality, ASR, TTS, right? We keep improving those features. I think also better positioning. We already won the trust, in particular for a lot of enterprise customers over the past many years, and they deploy the meetings. We tell them we are giving the phone, doing very well. We tell them build a contact center, also doing very well. Now, we added a ZVA, and they trust our brand as well. With the UCaaS, CCaaS, ZVA, plus our AI technology, we have high confidence we can execute very well compared to any other vendors. Thank you. Appreciate it. I like your virtual background, Siti. Our next question is from Jackson Ader with KeyBanc. Great. Hey, guys. Good to see you. I actually had a question on that particular topic, Eric, on the difference in Contact Center. You guys talked about seeing strength in Contact Center and Virtual Agent, and that sometimes it was combined, and sometimes it would be sold, like Virtual Agent would be sold separately as like a standalone product. I am curious, we are talking a lot about bundling. We are talking a lot about consolidating onto a single platform. I am curious, how prevalent is it for a Virtual Agent to be sold on a standalone basis, and what are the kind of merits of that. Michelle, just quickly, any kind of net expansion rate you can share on the Contact Center piece. Is this a land and expand motion, or is it just big lands and not much expansion effort. Thank you both. Yeah. Speaking of ZVA, in Q2, a leading enterprise software company, they deployed Zoom Phone service before. They have deployed a ZVA Voice and natural extensions to Zoom Phone. Meaning customers, let us say they deploy Meetings, might look at ZVA. They deploy Phone, also might be looking at ZVA as well, or for sure for Contact Center customer also look at ZVA as well. Essentially, we can bundle ZVA and Contact Center together as one solution, and also we sell the ZVA separately as well. Even some customer, they do not use Zoom Meeting or Phone in Contact Center. They also look at ZVA as well because it is something new, and it is the new market opportunity. We focus on the two things, the product experience and make sure and build something customer really like. The second is we own the technology. The speed of innovation is always something customer really like. That is why I think you look at ZVA opportunity, I think we are much better positioned. Even if we announce ZVA a little bit later compared to some startup vendors, as you look at our speed of innovation, we have high confidence we are going to keep gaining market share. Maybe just to layer on with sort of maybe some stats in terms of thinking about kind of the typical motions that we see. The short answer is it is a variety of that, and that is why in our prepared remarks, we wanted to kind of paint the different picture of what we are seeing in our customers. Maybe just to give you a couple of stats. In our top 10 ZVA deals, six of 10 came with Contact Center. So I think it gives you a sense that it is both a sell-with motion, meaning when they want that whole platform that Eric is talking about, and they want to go all in with Zoom. It also paints the picture that some of the customers are starting in ZVA, and then it gives us an opportunity to land and expand from there. Similar sort of comments, I think, on the Contact Center side. Of our top 10 deals, seven of 10 were Elite, so that is an agent being assisted by AI, and four of our top 10 were ZVA. All of that a way of numerically saying there is many paths to the growth here, and we think for that reason, it gives us a lot to go on going forward. Okay. Thank you, guys. Thank you. Our next question comes from Ryan MacWilliams with Wells Fargo. Hey, thanks for taking the question. Two-part question from me. For Michelle, just on the online segment, seems like growth is slightly lower than last quarter. Anything to call out on SMBs more broadly, or is it due to generally lapping the price increase? For Eric, as we're seeing AI models improve and organizations build systems around their data and AI, how are your leading-edge AI customers building AI use cases off the data they gather over Zoom? How do you think this data gravity helps Zoom and your stickiness in enterprises going forward? Thanks. Yeah. Let me comment about our online business. Look, I would characterize our Q2 results as solid. We saw low churn, and I think that low churn says, and I think there was an earlier question on this, but we're having success at demonstrating customer value even amidst the backdrop of a price increase. You saw the stability of the base go up even further. Look, we took an opportunity, and I'll emphasize it here, to temper out of prudence our full-year guidance, which had been slight increase to flat. We're adjusting that really due to dynamics that we saw in Q2 at the top of funnel across the industry where people are just discovering products in different ways. We're aggressively working to address that, meaning they're going from search to more AI. We're active in addressing that. And the prudence is really just a near-term statement of expectations. The big picture is to continue to work to that business to return to growth that comes with components of working churn, which we feel very good about, product expansion, which we have never had such a broad portfolio expansion products that we can open up to our online customers due to our AI innovation. And then just continuing to work things like what does this look like in an AI world where we think our brand is also going to be very helpful to us, and working on conversion. And we have a great TCO story that I might also end with from an SMB perspective that I feel like we are going to be able to do great with the audience. Yeah. So Ryan, back to your second part of the question. I think data, as we all know, is extremely important for customers to leverage AI. So we look at all of our services. We want to make sure we look at everything from customer perspectives, meaning how to make sure our data accessible by customer, because they might use other large language models. And let us take my notes, for example. We expose the context layer, right? So that is one. Two, it is customers say, yeah, we also can leverage Zoom AI service as well, like ZoomMate. Right? And ZoomMate can search for all the customer content, not only Zoom data, but also the third-party content as well. Give a customer capability and to search to create an agent, drive workflow as well. Yeah, essentially, we look out for both sides. We expose our data API through MCP, and also the customer can leverage our AI service as well. Essentially, both of those two are extremely important for us to leverage the AI because of the data. Excellent. Thank you. Thank you. Up next, we have a question from Alex Zukin with Wolfe Research. Hey, guys. Thanks for taking the question and the time. Maybe just two quick ones. Eric, can you talk a little bit about the contribution from your new pricing models, both the outcome-based pricing and the consumption-based pricing? When would you expect that to start actually showing up more meaningfully in the net retention rates and in revenue? Michelle, just really, I think the strongest bookings growth, calculated bookings growth, and billings growth in a long time, how much should we read into that from a forward-looking perspective around the potential for continuing to see accelerating enterprise growth over the coming quarters? Yeah. Alex, in terms of usage-based pricing as well as outcome-based pricing, it is more like for the new AI product. I do not think that works for Meeting or Phone. Speaking of the opportunity, take ZVA, for example. By and large, it is still usage-based, but we are embracing outcome-based pricing as well because some customer likes that, some customers still like a usage-based as well. So we support, we have flexibility to support that. As we gain more and more market share for ZVA, I think we will see that more and more the outcome-based pricing probably can contribute to our top-line growth. Again, this is something new, and the market ZVA also is a new product as well. We have a confidence to support all kinds of monetization opportunities, especially for enterprise customers, given the ARM token cost, I think more and more will embrace the outcome-based pricing. Look, on the RPO, I think it's a little bit of both. Look, in our best quarters, let me remind that we always tell investors that the best indicator of future performance is our revenue guide, so you have that. At the same time, look, you're seeing the trend in RPO inflect all up, and it's coming off a long-term RPO, and it's because of durable drivers. It's because we're moving our business, diversifying it in products that come with larger deals, longer term deals. From that standpoint, those would be durable elements. Moving up market even further, those would be elements that would be durable. In terms of doing calculus to get that back into revenue, we continue to point to our revenue guide. By the way, Alex, speaking of outcome-based pricing, we also look at other services as well, like ZRA and BrightHire as well, and we look at all those vertical AI product, right? Whenever it makes sense for us to support the outcome-based pricing model, we would like to do that because this is good for customers as well. Maybe I'll sneak one in, Eric, on voice. Any exciting elements that we should think about, as it seems like you have a meaningful opportunity to lean in on voice, again, maybe following from that consumption-based pricing opportunity as well. Right. API is great, consumption-based. We already have, I think, probably the best ASR model. Based on our smaller model with post training and doing very well. We publish the API as well. Based on all the tests, ASR is a much better position. At the same time, to have full featured speech, API sets, we also need to support the TTS as well. The team is working hard on that. If you have both ASR and also TTS, along with the other services, we have a full, I think, speech, AI opportunity ahead of us. We are very excited about that. Our next question comes from Patrick Walravens with Citizens. Oh, great. Thank you. My favorite part of your call was your custom avatars, Eric. I think it is such a good real-time example of voice AI for us. Charles, yours, and you had to do the dread. Oh, Patrick, I think you are on mute. Pacing few. Oh, really? It is okay. Go again. Okay. Is that okay? Yeah. Charles had fairly uniform pacing, few pauses, and his intonation consistently fell at the end of the phrase. Eric, yours was better. Michelle, did you actually use your custom avatar? I did. Yours was fantastic. Thank you. Yours was really great. Just to help us understand what causes the difference, and if a bank wants to use them or if we want our virtual agents to sound really human, what do we have to do to train them so they sound as much like Michelle as possible? Well, I will answer this, Eric, because I will admit, when Eric kept nudging me to do this, I was a laggard in the adoption curve here. It literally took me 2 minutes to set up. There are some tips that I think, like being as natural as you possibly can, but it literally takes, I think under two minutes to basically get your avatar set up. Then of course we have human in the loop and making sure we review what the avatar says. But, a really fun way, I think, to demonstrate our technology and super easy. For me, Eric, you can give the tech version of this answer, but for me, it was just being as natural as you possibly can in the setup of the avatar, because then it just sort of flows through. Patrick, your observation about Michelle's voice is right on. The reason why, this is the first time for Michelle to use a customized AI avatar, meaning she is using the latest version. The AI avatar I created is six months ago. Oh, interesting. Our technology is getting better and better, and maybe next quarter I am going to create a new one with our latest version. By the way, this is not only for AI avatar. Down the road, I would like maybe, someday my avatar can answer to any question as well. Then I can sit here, just listen to the call. That is our dream. All right. Great. Thank you. We will watch next quarter, and we will see the difference. Thank you, guys. Thank you, Patrick. Our next question comes from Tyler Radke with Citi. Yeah, thanks for taking the question. The enterprise bookings and raise on enterprise look pretty solid. I was wondering if you could help us understand just where we are in terms of Zoom Contact Center milestones. I think five quarters ago you talked about it hitting $100 million of ARR for Zoom CX. You have talked about high double-digit growth for multiple quarters. Will you update this at $200 million, $250 million? Is that kind of the biggest driver of the enterprise raise that you are seeing? Then just a quick follow-up question for Michelle. Can you just touch on what is driving the lower CapEx for the year as well? Sure. Look, I think, in regards to milestone, we are going to give them periodically as it makes sense. That does not mean they come every 100. Look, you have one that is sort of crossed the 100, then I think since then we have seen high double digits, so you can sort of guesstimate from there. Look, the components to the enterprise inflection are the same things I have been highlighting. It is product diversification of which CX is a piece of that. It is AI monetization, of which CX is part of that. It is moving up market. CX is part of that. But the theme being, it is building out a channel, and CX is part of that, but it is certainly not just CX alone. The other thing that I will say on maybe the core enterprise standpoint, and I think this is one that investors frequently ask about, the year-over-year churn has gone down, and that has been a steady trend over the last year to two. Then, people will ask on occasion about pricing elements and all of that, and that has been something that we have been working very hard on in finance together with sales to really make sure that we are getting discounts down and deal terms up and auto renewal. So look, all of that a long way of saying that many components go into that enterprise growth, and certainly CX is part of that. On the CapEx, look, I would say, I think when we went in the year, the guidance was $70 million of CapEx. Just to remind investors, FY 2026 was really a low year in CapEx, and so we were returning more to normal states. Look, we took a decision that benefited our free cash flow raised by about $40 million to simply extend in one of our data centers the useful life of the asset by two years. So because CapEx was sort of a lumpy kind of story going into the free cash flow and more so because of the anomalous year in FY 2026, we just simply wanted to update to investors. Worth also saying we are not a huge CapEx business, and none of this is really AI. It is more just dynamics in our core. Thank you. Our next question comes from Allan Verkhovski with BTIG. Hey there. Thanks for taking the question. Michelle, I have a two-parter for you. One, can you share what trends you are seeing in enterprise Workplace seat growth across larger versus smaller customers? The second part is, given the updated FY 2027 constant currency total revenue guide implies roughly $30 million more enterprise revenue, can you talk through the main drivers of confidence in such a strong raise? Is it fair to assume, given the prior comment, that Common Room is contributing about $10 million or less than that to that updated guidance? Yeah. Okay. A lot in there. Let me try and get to them. Look, from a Workplace perspective, what we typically talk about with investors is an online churn rate. You have seen that continue to be low. I think at our lowest, we are at 2.7%. 2.9% is very much in the norm. To my earlier comments, we feel great about what that says about both the stability of our business with our customers over 16 months going up 75%, as well as the incremental value that we have put in our platform and AI. On the enterprise side, what we talk to with investors is the dollars of the churn going down year- over- year, and certainly Q2 continued in that. We do not really give too much disclosure other than those two. But I would broadly call the trends very much in line with what we've been seeing. On the constant currency and the enterprise, look, for the sake of repeating myself, it is all the same dynamics that I have been highlighting on our enterprise growth, product diversity, product diversification, excuse me, AI monetization, moving up market, building out a channel, and keeping that churn low. Then obviously we folded in our Common Room in this. Just because it is a small component of our revenue, we are not going to get into quantifying it. But it certainly was folded into the revenue guide. Then, I will just reiterate my comment that these are very early-stage companies that we are very encouraged with the growth and what they can mean to our system of action, to all the things Eric Yuan commented on earlier. But relative to a $5 billion base, these are de minimis kind of impact. Makes sense. Thank you, guys. Our last question comes from William Power with Baird. Okay, great. Thanks for sneaking me in here. Maybe two then if I can. Let me start on Workvivo. That was a nice milestone update in the quarter. I would love to understand the ongoing cross-sell opportunity. My suspicion is it is probably still early, but how do we think about that and what that kind of portends for the continuing growth in that product. Then Michelle, given the strength you are seeing in enterprise, RPO, I am just trying to kind of square that with the full-year revenue raise versus the beat in Q2. It feels like some conservatism. Just anything to think about in the second half of the year on that front. Yep. Eric, do you want to take Workvivo? Sure. Absolutely. I think speaking of Workvivo opportunity, we are very excited at that because look at the opportunities we won over the past few quarters. Quite often those customers are not a Zoom customer at all, but they deployed the Workvivo. So meaning, for all of our large enterprise customer installed base, more opportunities for us to upsell Workvivo. Workvivo also launched the Workvivo HQ, AI-driven product as well, because AI era data becoming more and more important, right? Customer, the employee engagement is also becoming more and more important, right? To drive company culture and with Workvivo HQ, I think Workvivo is in better position than before with new launch. So we are very excited about more and more opportunities in the enterprise space to win more deals. Then, maybe with the guide, let me just talk to kind of the full year and the dynamics that I think about. Look, from a constant currency, it represents a beat of 7.5% and a raise of 9% on the full year. We feel good about kind of the dynamics underlying that. We are already guiding to 4.5% growth halfway through the year. Considering, I will just continue to remind investors of that white label churn that has a 40 basis points point. So you can kind of look at that relative to the growth rate of last year. Look, fundamentally, I think I have drained it in so many questions. What is behind that is our enterprise growth inflection. You saw it this quarter with one of the best growth rates we have had in three years. It's product diversification, it's AI, moving up market, keeping churn low, and delivering against those three priorities that we talk about, which are going to be the durable elements of our growth going forward. Maybe the only one that I would just, we talked about it earlier, but to your question of kind of how to reconcile it, we took the opportunity to kind of slightly temper the expectation on online. We'd said previously slight growth. We adjusted that in this earnings to flat, really because of a dynamic that we saw in Q2. Continued to see low churn, to all the conversation earlier. But saw some changes, I think along with the rest of the industry and in top of funnel in terms of our customers and how they discover us, and we're actively working to adjust those and just wanted to be prudent with the near-term guidance. Okay. That's great. Thank you. This concludes the Q&A portion of today's call. I'll now turn it back over to Eric for closing remarks. Thank you. To all Zoom employees, customers, and partners, and also investors, we truly appreciate your support. We will continue innovating to build something we feel proud and also delight our customers. Thank you so much. See you next quarter. Thank you. This concludes today's earnings call. Thank you for attending, and have a great rest of your day.