In its Q4/23 statement to investors, video conference giant Zoom has announced Zoom Phone take-up has risen to above 5.5 million seats.
At the same time, for the period, revenues were up, better than predicted.
Total revenue for the fourth quarter total revenue of $1,117.8 million, up 4% year over year and higher than the $1.10 billion forecasted by analysts.
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Eric Yuan, Zoom founder and CEO, said: “Zoom One adoption continued to accelerate and helped drive Zoom Phone to grow more than 100% year over year, surpassing 5.5 million seats in Q4.”
Zoom has indicated that much of the success of its phone offering was due to the Zoom One bundle, launched last June.
Concerning revenues, Yuan added: “In fiscal year 2023, our growing enterprise customers increasingly looked to Zoom to provide a seamless communication and collaboration platform and drive productivity and efficiency during turbulent times.”
“This was evident in the 27% growth in customers contributing more than $100,000 in trailing 12 months revenue, as well as the 115% trailing 12-month net dollar expansion rate for enterprise customers.”
While enterprise revenue rose to $636.1 million, an 18% increase year over year, online revenue for the video-first unified communications firm was $481.7 million, a fall of 10% year over year.
Expansion of Zoom Contact Center
Remarking on new trends and the current economic climate, the CEO stated: “Our emerging technologies, such as Zoom Contact Center, picked up pace as customer experience teams recognised the value of a modern, integrated collaboration solution. While the macroeconomic situation negatively impacts our overall growth, we have maintained a healthy balance sheet and operating cash flow generation of approximately $1.29 billion.”
Yuan remarked that FY23 was a pivotal period in Zoom’s evolution into a complete collaboration platform; he commented: “Since Zoom Contact Center’s release early last year, we have worked hard to expand its features, functionality and integrations.”
“In Q4, we landed a 2,000-seat contact center deal, our largest to date, demonstrating the rapid progress we have made towards becoming a full-fledged contact center solution.”
Company Lay-Offs
Earlier this month, the firm tightened its belt and announced it would lay off 15% of the workforce. Resulting in a bill of up to $68 million in redundancy packages and charges; Eric Yuan took responsibility and admitted: “We didn’t take as much time as we should have to thoroughly analyse our teams or assess if we were growing sustainably toward the highest priorities.”
Zoom to “Double Down” on AI Progress
In the meantime, Zoom has suggested it will be doubling down on its AI integration and is researching a training environment for its Sales IQ offering. Zoom Meetings can run ‘smart recording’ to create action points and summaries for video sessions across its Zoom Business, Education, and Enterprise accounts.
Speaking about Zoom’s AI developments, Yuan added: “We closed out the fiscal year with the release of Zoom Virtual Agent, an intelligent conversational AI and chatbot solution that we believe will transform how businesses assist their customers and employees.”
In its conference call to investors, Yuan spoke at length about Zoom’s progression, saying the firm wanted to empower customers with more innovative experiences to help them benefit from transformational AI tools and subsequent actionable insights.
When quized by investors about Zoom’s uptake of generative AI, Yuan replied: “Given our strong innovation culture, I think AI can truly really help Zoom to evolve us.
“I think Zoom may be the first AI company, speaking of specific features of, like, the AI and even before we talked about strategy before we talked about all those AI. We already invest heavily in AI, right?”
Currently, Zoom technology integrates AI-powered features such as virtual backgrounds, avatars, gesture recognition, and background noise suppression.
He continued: “Some customers may not see that right, like noise reduction, even which background, or many things like that.
“We are going to double down, triple down on AI and a lot of features like our Zoom people in Asia use, our chat a solution, you know, even Canada as well. AI can truly empower everything we are doing here and benefit the customers. Plus, you know, we are taking a very open approach. And we have our own AI engineers working very hard and will partner with other companies.
Yuan concluded: “OpenAI is a great company, and it is just part of the reason today, and, you know, this is great. Again, I can talk a lot about AI. I am very, very excited. Zoom IQ, Virtual Agent, our translation captioning, and meeting summary tools are just the beginning. We will layer more AI technologies into our products to help our customers maximise their ROI on our platform and thrive in this new era of computing.”
New Board Hires
Yuan closed his remarks by welcoming two of the company’s latest board hires. Cindy Hoots joins as a Non-Executive Director while currently Chief Digital Officer and Chief Information Officer at AstraZeneca. Zoom’s new Chief Product Officer is now Smita Hashim, formerly an executive with Microsoft and Google.
