ZM: On the Road with ZM: AI Monetization, Multi-Product Platform, ZCX Momentum, and NDE Inflection

Research evidence excerpt

ZM: On the Road with ZM: AI Monetization, Multi-Product Platform, ZCX Momentum, and NDE Inflection

Zoom Communications, Inc.

• ZCX displacing legacy CCaaS at scale. Zoom Customer Experience continues to be the fastest-

growing and accelerating part of the business, per management. As mentioned in the Q1

earnings print, 8 of 10 top ZCX deals in the most recent quarter displaced one of the top 3

CCaaS vendors, w/ all 10 of the top deals channel-driven, indicating go-to-market scalability.

The UC/CC cross-sell is working in both directions as 4 of 10 top ZCX deals included Phone,

and 4 of 10 top Phone deals included ZCX. Beyond this, management emphasized its business

model flexibility w/ tiered agent-assisted seats as well as ZVA (Virtual Agent), which is

consumption/outcomes-based, allowing Zoom to benefit whether customers are hiring more

human agents or deflecting calls to AI. Management also noted ZVA Receptionist is now

attached to Phone seats for inbound routing, and that outbound ZVA is an emerging and

potentially larger opportunity.

• Path to NDE inflection and revenue re-acceleration. Enterprise NDE improved to 99% last

quarter (vs. 98% YoY), and management outlined multiple expansion vectors including: 1)

Phone attach leading to Contact Center leading to Revenue Accelerator (and vice versa); 2) SKU

upgrades within CX (base to Elite to Virtual Agents); 3) ZoomMate upsell across the installed

base; and 4) new customer acquisition via Workvivo. Even in cases of seat-count reductions

(which management acknowledged are happening at some customers, including large tech

accounts), the strategy is to sell more per seat through AI attach and product diversification.

Management noted of numerous large customers who have reduced seats but added AI