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10-Q – 2026-05-22 – zm-20260430.htm
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ACT OF 1934 For the quarterly period ended April 30, 2026 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commission File Number 001-38865 ___________________________________________________________________ Zoom Communications, Inc. (Exact name of registrant as specified in its Charter) ___________________________________________________________________ Delaware 61-1648780 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 55 Almaden Boulevard , 6 th Floor San Jose , California 95113 (Address of principal executive offices and Zip Code) ( 888 ) 799-9666 (Registrant’s telephone number, including area code) ___________________________________________________________________ Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading Symbol(s) Name of each exchange on which registered Class A Common Stock, $0.001 par value per share ZM The Nasdaq Global Select Market Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒ As of May 8, 2026, the number of shares of the registrant’s Class A common stock outstanding was 264,645,644 and the number of shares of the registrant’s Class B common stock outstanding was 28,586,574 . Table of Contents Zoom Communications, Inc. Quarterly Report on Form 10-Q For the Quarterly Period Ended April 30, 2026 TABLE OF CONTENTS Page Special Note Regarding Forward-Looking Statements 3 Summary Risk Factors 4 PART I – Financial Information 6 Item 1. Financial Statements (Unaudited) 6 Condensed Consolidated Balance Sheets as of April 30, 2026 and January 31, 2026 6 Condensed Consolidated Statements of Operations for the Three Months Ended April 30, 2026 and 2025 7 Condensed Consolidated Statements of Comprehensive Income for the Three Months Ended April 30, 2026 and 2025 8 Condensed Consolidated Statements of Stockholders’ Equity for the Three Months Ended April 30, 2026 and 2025 9 Condensed Consolidated Statements of Cash Flows for the Three Months Ended April 30, 2026 and 2025 10 Notes to Condensed Consolidated Financial Statements 11 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 22 Item 3. Quantitative and Qualitative Disclosures About Market Risk 32 Item 4. Controls and Procedures 33 PART II – Other Information 34 Item 1. Legal Proceedings 34 Item 1A Risk Factors 34 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 69 Item 3. Defaults Upon Senior Securities 70 Item 4. Mine Safety Disclosures 70 Item 5. Other Information 70 Item 6. Exhibits 71 Signatures 72 Unless the context suggests otherwise, references in this Quarterly Report on Form 10-Q to “Zoom,” the “Company,” “we,” “us” and “our” refer to Zoom Communications, Inc. and, where appropriate, its subsidiaries. 2 Table of Contents SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which statements involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q, including statements regarding our future results of operations or financial condition; business strategy and plans; and objectives of management for future operations, including our statements regarding the benefits and timing of the rollout of new technology, are forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” or “would” or the negative of these words or other similar terms or expressions. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements about: our future financial performance, including our revenue, cost of revenue, gross profit, margins, and operating expenses; trends in our key business metrics; the sufficiency of our cash and cash equivalents, investments, and cash provided by sales of our products and services to meet our liquidity needs; market trends; our market position and opportunity; our growth strategy and business aspirations for our communications and collaboration platform and evolving AI capabilities; our product strategy; our efforts to enhance the security and privacy of our platform; our ability to operate our business and effectively manage our scale under evolving macroeconomic conditions, such as geopolitical conflicts, tariffs and trade tensions, inflationary pressures, interest rate fluctuations, and foreign currency exchange rate volatility; our ability to become the ubiquitous platform for communications and collaboration; our ability to attract new customers and retain existing customers; our ability to successfully expand into our existing markets and into new markets; our ability to effectively manage our growth and future expenses; and the impact of recent accounting pronouncements on our unaudited condensed consolidated financial statements. You should not rely on forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Quarterly Report on Form 10-Q primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, and operating results. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, and other factors described in the section titled “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report on Form 10-Q. The results, events, and circumstances reflected in the forward-looking statements may not be achieved or occur, and actual results, events, or circumstances could differ materially from those described in the forward-looking statements. In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based on information available to us as of the date of this Quarterly Report on Form 10-Q. While we believe that such information provides a reasonable basis for these statements, that information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely on these statements. The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, or investments. You should read this Quarterly Report on Form 10-Q and the documents that we reference in this Quarterly Report on Form 10-Q and have filed with the Securities and Exchange Commission as exhibits to this Quarterly Report on Form 10-Q with the understanding that our actual future results, levels of activity, performance, and events and circumstances may be materially different from what we expect. 3 Table of Contents SUMMARY RISK FACTORS Investing in our Class A common stock involves numerous risks, including the risks described in “Part II—Other Information, Item 1A. Risk Factors” of this Quarterly Report on Form 10-Q. Below are some of these risks, any one of which could materially adversely affect our business, financial condition, results of operations, and prospects. • Our business depends on our ability to attract new customers, retain and upsell additional products and new product categories to existing customers, and upgrade free users to our paid offerings. Any decline in new customers, renewals, or upgrades would harm our business. • Our revenue growth rate has fluctuated in prior periods, and may decline in future periods. • Interruptions, delays, or outages in service from our co-located data centers or cloud hosting services and a variety of other factors, would impair, and in the past have impaired, the delivery of our services, require us to issue credits or pay penalties, and harm our business. • We operate in competitive markets, and we must continue to compete effectively. Many of our actual and potential competitors benefit from competitive advantages over us, such as greater name recognition; longer operating histories; more varied products and services; larger marketing budgets; more established marketing, customer and partner relationships; more third-party integrations; greater accessibility across devices and applications; greater access to larger user bases; major distribution agreements with hardware manufacturers and resellers; and greater financial, technical, and other resources. In addition, as we introduce new products and services to our platform, and with the introduction of new technologies and market entrants, we expect competition to intensify in the future. • Our business may be significantly affected by changes in the economy, including any resulting effect on consumer or business spending. • As we increase sales to large organizations or introduce new products and features, our sales cycles have and could continue to lengthen, and we could experience greater deployment challenges, which could harm our business. • We generate revenue from sales of subscriptions to our platform, and any decline in demand for our platform or for communications and collaboration technologies in general would harm our business. • We have incurred net losses in the past and there are no assurances we will be able to maintain or increase profitability in the future. • We may not be able to respond to rapid technological changes, extend our platform or develop new features, which could make our platform obsolete or adversely affect our business, results of operations, and financial condition. • Our security measures, and those of the third parties with whom we work, have been compromised in the past and may be compromised in the future. If our security measures are compromised in the future or if our information technology fails, this could harm our reputation, expose us to significant fines and liability, impair our sales, and harm our business. In addition, our products and services may be perceived as not being secure. This perception may result in customers and users curtailing or ceasing their use of our products, us incurring significant liabilities, and our business being harmed. • Our business has grown and continues to grow in scale, complexity, and scope, which makes it difficult to evaluate our prospects and future results of operations. • The actual or perceived failure by us, our customers, partners, or vendors to comply with stringent and evolving laws and regulations, industry standards, policies, and contractual obligations relating to privacy, data protection, information security laws, and other matters could harm, and has in the past harmed, our reputation and business or subject us to significant fines and liability. • If we were to lose the services of our Chief Executive Officer or other members of our senior management team, we may not be able to execute our business strategy. • We have significant and expanding operations outside the United States, which may subject us to increased business, regulatory, and economic risks that could harm our business. • We may be subject to, or respond to requests from law enforcement in connection with enforcement of, a variety of U.S. and international laws that could result in claims, increase the cost of operations, or otherwise harm our business due to changes in the laws, changes in the interpretations of the laws, greater enforcement of the laws, or investigations into compliance with the laws. 4 Table of Contents • A number of our products, including Zoom Phone, are subject to U.S. federal and international regulation, and other products we may introduce in the future may also be subject to U.S. federal, state, or international laws, rules, and regulations. Failure to comply with such laws, rules, and regulations could harm our business and expose us to liability. • We use generative artificial intelligence (“AI”), including in our products and services, which may result in operational challenges, legal liability, reputational concerns, competitive risks and regulatory concerns that could adversely affect our business and results of operations. • The dual class structure of our common stock, as contained in our amended and restated certificate of incorporation, has the effect of concentrating voting control with those stockholders who held our stock prior to our initial public offering, including our executive officers, employees, and directors and their affiliates, limiting your ability to influence corporate matters. If we are unable to adequately address these and other risks we face, our business may be harmed. 5 Table of Contents PART I—Financial Information Item 1. FINANCIAL STATEMENTS ZOOM COMMUNICATIONS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share data) As of April 30, 2026 January 31, 2026 Assets (unaudited) Current assets: Cash and cash equivalents $ 890,938 $ 1,272,877 Marketable securities 6,830,037 6,544,031 Accounts receivable, net of allowances of $ 19,120 and $ 18,348 as of April 30, 2026 and January 31, 2026, respectively 467,815 497,339 Deferred contract acquisition costs, current 125,118 108,856 Prepaid expenses and other current assets 261,096 234,856 Total current assets 8,575,004 8,657,959 Deferred contract acquisition costs, noncurrent 234,497 215,533 Property and equipment, net 252,807 264,525 Operating lease right-of-use assets 55,510 52,423 Strategic investments 1,876,419 1,578,611 Goodwill 400,392 400,392 Deferred tax assets 628,432 646,640 Other assets, noncurrent 138,956 144,333 Total assets $ 12,162,017 $ 11,960,416 Liabilities and stockholders’ equity Current liabilities: Accounts payable $ 18,697 $ 6,268 Accrued expenses and other current liabilities 533,193 581,773 Deferred revenue, current 1,479,635 1,411,149 Total current liabilities 2,031,525 1,999,190 Deferred revenue, noncurrent 13,814 13,195 Operating lease liabilities, noncurrent 31,923 30,710 Other liabilities, noncurrent 113,607 109,063 Total liabilities 2,190,869 2,152,158 Commitments and contingencies (Note 7) Stockholders’ equity: Common stock, $ 0.001 par value per share, 2,000,000,000 Class A shares authorized as of April 30, 2026 and January 31, 2026; 264,877,071 and 266,805,638 shares issued and outstanding as of April 30, 2026 and January 31, 2026, respectively; 300,000,000 Class B shares authorized as of April 30, 2026 and January 31, 2026; 28,610,574 and 28,721,770 shares issued and outstanding as of April 30, 2026 and January 31, 2026, respectively 293 295 Additional paid-in capital 3,853,641 4,099,753 Accumulated other comprehensive income ( 8,129 ) 8,544 Retained earnings 6,125,343 5,699,666 Total stockholders’ equity 9,971,148 9,808,258 Total liabilities and stockholders’ equity $ 12,162,017 $ 11,960,416 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 6 Table of Contents ZOOM COMMUNICATIONS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except share and per share data) (unaudited) Three Months Ended April 30, 2026 2025 Revenue $ 1,239,006 $ 1,174,715 Cost of revenue 274,287 278,402 Gross profit 964,719 896,313 Operating expenses: Research and development 227,926 205,416 Sales and marketing 330,050 346,970 General and administrative 96,270 102,335 Total operating expenses 654,246 654,721 Income from operations 310,473 241,592 Gains (losses) on strategic investments, net 152,297 ( 13,619 ) Other income, net 68,850 87,792 Income before provision for income taxes 531,620 315,765 Provision for income taxes 105,943 61,162 Net income 425,677 254,603 Net income per share: Basic $ 1.45 $ 0.84 Diluted $ 1.42 $ 0.81 Weighted-average shares used in computing net income per share: Basic 294,434,952 304,908,652 Diluted 300,233,667 312,783,861 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 7 Table of Contents ZOOM COMMUNICATIONS, INC. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (in thousands) (unaudited) Three Months Ended April 30, 2026 2025 Net income $ 425,677 $ 254,603 Other comprehensive (loss) income: Unrealized (loss) gain on available-for-sale marketable securities, net of income tax benefit (expense) of $ 5,410 and $( 3,123 ) for the three months ended April 30, 2026 and 2025, respectively ( 16,673 ) 10,155 Comprehensive income $ 409,004 $ 264,758 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 8 Table of Contents ZOOM COMMUNICATIONS, INC. CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (in thousands, except share data) (unaudited) Three Months Ended April 30, 2026 Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Income (Loss) Retained Earnings Total Stockholders’ Equity Shares Amount Balance as of January 31, 2026 295,527,408 $ 295 $ 4,099,753 $ 8,544 $ 5,699,666 $ 9,808,258 Issuance of common stock upon exercise of stock options 248,640 — 504 — — 504 Issuance of common stock upon release of restricted stock units 2,642,984 3 ( 3 ) — — — Shares withheld related to net share settlement of equity awards ( 762,179 ) ( 1 ) ( 62,167 ) — — ( 62,168 ) Repurchase of common stock, including excise taxes ( 4,169,208 ) ( 4 ) ( 363,559 ) — — ( 363,563 ) Stock-based compensation expense — — 179,113 — — 179,113 Other comprehensive loss — — — ( 16,673 ) — ( 16,673 ) Net income — — — — 425,677 425,677 Balance as of April 30, 2026 293,487,645 $ 293 $ 3,853,641 $ ( 8,129 ) $ 6,125,343 $ 9,971,148 Three Months Ended April 30, 2025 Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Income Retained Earnings Total Stockholders’ Equity Shares Amount Balance as of January 31, 2025 305,740,864 $ 305 $ 5,130,271 $ 4,990 $ 3,799,518 $ 8,935,084 Issuance of common stock upon exercise of stock options 355,620 — 954 — — 954 Issuance of common stock upon release of restricted stock units 4,016,633 4 ( 4 ) — — — Shares withheld related to net share settlement of equity awards ( 1,171,871 ) ( 1 ) ( 82,152 ) — — ( 82,153 ) Repurchase of common stock, including excise taxes ( 5,561,920 ) ( 6 ) ( 419,900 ) — — ( 419,906 ) Stock-based compensation expense — — 203,631 — — 203,631 Other comprehensive income — — — 10,155 — 10,155 Net income — — — — 254,603 254,603 Balance as of April 30, 2025 303,379,326 $ 302 $ 4,832,800 $ 15,145 $ 4,054,121 $ 8,902,368 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 9 Table of Contents ZOOM COMMUNICATIONS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited) Three Months Ended April 30, 2026 2025 Cash flows from operating activities: Net income $ 425,677 $ 254,603 Adjustments to reconcile net income to net cash provided by operating activities: Stock-based compensation expense 178,953 201,569 Amortization of deferred contract acquisition costs 51,515 69,557 Depreciation and amortization 32,781 35,316 Deferred income taxes 23,294 ( 24,690 ) (Gains) losses on strategic investments, net ( 152,297 ) 13,619 Provision for accounts receivable allowances 3,026 5,855 Unrealized foreign exchange losses (gains) 664 ( 7,626 ) Non-cash operating lease cost 5,884 6,108 Amortization of discount/premium on marketable securities ( 1,293 ) ( 12,845 ) Other 7,350 4,142 Changes in operating assets and liabilities: Accounts receivable 24,690 12,485 Prepaid expenses and other assets 3,116 ( 12,293 ) Deferred contract acquisition costs ( 86,742 ) ( 48,148 ) Accounts payable 10,327 7,252 Accrued expenses and other liabilities ( 67,748 ) ( 80,383 ) Deferred revenue 69,605 72,141 Operating lease liabilities, net ( 7,192 ) ( 7,401 ) Net cash provided by operating activities 521,610 489,261 Cash flows from investing activities: Purchases of marketable securities ( 1,172,217 ) ( 1,135,024 ) Maturities of marketable securities 858,125 1,033,279 Sales of marketable securities — 2,525 Purchases of property and equipment ( 21,113 ) ( 25,910 ) Purchases of strategic investments ( 145,695 ) — Proceeds from strategic investments 184 — Net cash used in investing activities ( 480,716 ) ( 125,130 ) Cash flows from financing activities: Proceeds from exercise of stock options 504 954 Proceeds from employee equity transactions to be remitted to employees and tax authorities, net 29,237 8,690 Cash paid for repurchases of common stock ( 361,683 ) ( 418,021 ) Taxes paid related to net share settlement of equity awards ( 62,168 ) ( 82,153 ) Net cash used in financing activities ( 394,110 ) ( 490,530 ) Effect of exchange rate changes on cash, cash equivalents, and restricted cash 314 11,854 Net decrease in cash, cash equivalents, and restricted cash ( 352,902 ) ( 114,545 ) Cash, cash equivalents, and restricted cash – beginning of period 1,283,781 1,361,417 Cash, cash equivalents, and restricted cash – end of period $ 930,879 $ 1,246,872 Reconciliation of cash, cash equivalents, and restricted cash within the condensed consolidated balance sheets to the amounts shown in the condensed consolidated statements of cash flows above: Cash and cash equivalents $ 890,938 $ 1,228,847 Restricted cash, current included in prepaid expenses and other current assets 39,941 18,025 Total cash, cash equivalents, and restricted cash $ 930,879 $ 1,246,872 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 10 Table of Contents ZOOM COMMUNICATIONS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) 1. Summary of Business and Significant Accounting Policies Description of Business Zoom provides an AI-first, open work platform that enables a system of action for modern work, turning live collaboration into completed results and moving conversations to completion. Zoom enables customers to seamlessly collaborate, communicate, and drive outcomes across meetings, chat, phone, contact center, events, and more — all with the built-in assistance of Zoom AI Companion. We were incorporated in the state of Delaware in April 2011, and are headquartered in San Jose, California. Fiscal Year Our fiscal year ends on January 31. References to fiscal year 2027, for example, refer to the fiscal year ending January 31, 2027. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and applicable regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting, and include the accounts of Zoom Communications, Inc., its subsidiaries, and variable interest entities for which we are the primary beneficiary. All intercompany balances and transactions have been eliminated in consolidation. The condensed consolidated balance sheet as of January 31, 2026 included herein was derived from the audited financial statements as of that date, but does not include all disclosures, including certain notes required by GAAP on an annual reporting basis. The unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary to fairly present the balance sheets, statements of operations, statements of comprehensive income, statements of stockholders’ equity, and statements of cash flows for the interim periods, but are not necessarily indicative of the results of operations to be anticipated for the full fiscal year or any future period. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes included in our Annual Report on Form 10-K for the year ended January 31, 2026, filed with the SEC on February 27, 2026. Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. Significant items subject to such estimates and assumptions include, but are not limited to, the estimated expected benefit period for deferred contract acquisition costs, the fair value of marketable securities, acquired intangible assets and goodwill, the valuation of deferred income tax assets and uncertain tax positions, and accruals and contingencies. Actual results could materially differ from those estimates. Summary of Significant Accounting Policies Our significant accounting policies are discussed in Note 1. “Summary of Business and Significant Accounting Policies” in the notes to consolidated financial statements included in our Annual Report on Form 10-K for the year ended January 31, 2026, filed with the SEC on February 27, 2026. There have been no significant changes to these policies during the three months ended April 30, 2026. Recent Accounting Pronouncements Not Yet Adopted In November 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”), which aims to improve financial reporting by requiring additional disclosure about specific expense categories in the notes to financial statements at interim and annual reporting periods. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. We are currently evaluating the impact of the adoption of this ASU on our consolidated financial statements. 11 Table of Contents In September 2025, the Financial Accounting Standards Board issued ASU No. 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”), which aims to modernize financial reporting by updating how entities recognize and disclose costs incurred for software developed for internal use. ASU 2025-06 is effective for fiscal years beginning after December 15, 2027, and interim periods within those fiscal years. Early adoption is permitted. We are currently evaluating the impact of the adoption of this ASU on our consolidated financial statements. 2. Revenue Recognition Disaggregation of Revenue The following table summarizes revenue by region based on the billing address of customers: Three Months Ended April 30, 2026 2025 Amount Percentage of Revenue Amount Percentage of Revenue (in thousands, except percentages) Americas $ 893,572 72.1 % $ 847,696 72.2 % Asia Pacific (“APAC”) 150,510 12.1 141,770 12.1 Europe, Middle East, and Africa (“EMEA”) 194,924 15.8 185,249 15.7 Total $ 1,239,006 100.0 % $ 1,174,715 100.0 % Contract Balances We receive payments from customers based on a billing schedule as established in our customer contracts. Accounts receivable are recorded when we contractually have the right to consideration. In some arrangements, a right to consideration for our performance under the customer contract may occur before invoicing to the customer, resulting in an unbilled accounts receivable. The amount of unbilled accounts receivable included within accounts receivable, net was $ 87.8 million and $ 84.9 million as of April 30, 2026 and January 31, 2026, respectively. Contract liabilities consist of deferred revenue. Revenue is deferred when we have the right to invoice in advance of performance under a customer contract. The current portion of deferred revenue balances is recognized over the next 12 months. Revenue recognized from amounts included in deferred revenue at the beginning of each period totaled $ 656.3 million and $ 624.1 million for the three months ended April 30, 2026 and 2025, respectively. Remaining Performance Obligations The terms of our subscription agreements are monthly, annual, and multiyear, and we may bill for the full term in advance or on an annual, quarterly, or monthly basis, depending on the billing terms with customers. As of April 30, 2026, the aggregate amount of the transaction price allocated to our remaining performance obligations was $ 4,298.6 million, which consists of both billed consideration in the amount of $ 1,493.4 million and unbilled consideration in the amount of $ 2,805.2 million that we expect to recognize as revenue. We expect to recognize 58 % of our remaining performance obligations as revenue over the next 12 months and the remainder thereafter. 12 Table of Contents 3. Investments Marketable Securities As of April 30, 2026 and January 31, 2026, our marketable securities consisted of the following: As of April 30, 2026 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value (in thousands) U.S. government agency securities $ 5,598,728 $ 3,650 $ ( 11,962 ) $ 5,590,416 Agency bonds 1,198,350 234 ( 3,431 ) 1,195,153 Treasury bills 44,474 — ( 6 ) 44,468 Marketable securities $ 6,841,552 $ 3,884 $ ( 15,399 ) $ 6,830,037 As of January 31, 2026 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value (in thousands) U.S. government agency securities $ 5,373,782 $ 11,094 $ ( 989 ) $ 5,383,887 Agency bonds 1,095,004 1,032 ( 565 ) 1,095,471 Treasury bills 64,671 5 ( 3 ) 64,673 Marketable securities $ 6,533,457 $ 12,131 $ ( 1,557 ) $ 6,544,031 Unrealized losses for securities that have been in an unrealized loss position for less than 12 months were $ 15.4 million and $ 1.5 million as of April 30, 2026 and January 31, 2026, respectively. Unrealized losses for securities that have been in an unrealized loss position for 12 months or longer were de minimis as of both April 30, 2026 and January 31, 2026. We review the individual securities that have unrealized losses on a regular basis to evaluate whether any security has experienced, or is expected to experience, credit losses resulting in the decline in fair value. We evaluate, among other factors, whether we have the intention to sell any of these marketable securities and whether it is more likely than not that we will be required to sell any of them before recovery of the amortized cost basis. We have not recorded an allowance for credit losses, as we believe any such losses would be immaterial based on the high-grade credit rating for each of our marketable securities as of the end of each period. There were no material realized gains or losses from available-for-sale securities that were reclassified out of accumulated other comprehensive income for the three months ended April 30, 2026 and 2025. The following table presents the contractual maturities of our marketable securities as of April 30, 2026 and January 31, 2026: As of April 30, 2026 January 31, 2026 (in thousands) Less than one year $ 3,118,570 $ 3,168,258 Due in one to five years 3,711,467 3,375,773 Total $ 6,830,037 $ 6,544,031 13 Table of Contents Strategic Investments Strategic investments by type and measurement category as of April 30, 2026 were as follows: Measurement Category Fair Value Measurement Alternative Equity Method Total (in thousands) Equity securities $ — $ 1,748,737 $ 123,704 $ 1,872,441 Debt securities 3,978 — — 3,978 Strategic investments $ 3,978 $ 1,748,737 $ 123,704 $ 1,876,419 Strategic investments by type and measurement category as of January 31, 2026 were as follows: Measurement Category Fair Value Measurement Alternative Equity Method Total (in thousands) Equity securities $ — $ 1,448,531 $ 126,112 $ 1,574,643 Debt securities 3,968 — — 3,968 Strategic investments $ 3,968 $ 1,448,531 $ 126,112 $ 1,578,611 During the three months ended April 30, 2026, we made an additional $ 46.0 million investment in preferred stock of Anthropic, PBC (“Anthropic”), bringing the total carrying value of our Anthropic preferred stock to $ 1,266.9 million, based on the valuation implied by Anthropic’s financing round announced on February 12, 2026. Additionally, during the three months ended April 30, 2026, we made a total of $ 99.7 million of strategic investments in equity securities of other private companies developing AI products. Based on the terms of these investments in privately-held securities, we determined that we do not have a controlling interest or the ability to exercise significant influence over the operating and financial policies of the investees. Therefore, these investments are accounted for under the measurement alternative method. During the three months ended April 30, 2026, we recorded net unrealized gains of $ 154.5 million on our investments accounted for under the measurement alternative method, which were attributable to investments other than our investment in Anthropic. 4. Fair Value Measurements The following tables present information about our financial instruments that are measured at fair value on a recurring basis and indicate the level within the fair value hierarchy of the key valuation inputs utilized to determine such fair value: As of April 30, 2026 Fair Value Level 1 Level 2 Level 3 (in thousands) Financial Assets: Money market funds $ 470,662 $ 470,662 $ — $ — Agency bonds 3,486 — 3,486 — Cash equivalents 474,148 470,662 3,486 — U.S. government agency securities 5,590,416 — 5,590,416 — Agency bonds 1,195,153 — 1,195,153 — Treasury bills 44,468 — 44,468 — Marketable securities 6,830,037 — 6,830,037 — Privately held debt securities included in strategic investments 3,978 — — 3,978 Total financial assets $ 7,308,163 $ 470,662 $ 6,833,523 $ 3,978 14 Table of Contents As of January 31, 2026 Fair Value Level 1 Level 2 Level 3 (in thousands) Financial Assets: Money market funds $ 724,236 $ 724,236 $ — $ — Treasury bills 16,876 — 16,876 — Agency bonds 22,298 — 22,298 — Cash equivalents 763,410 724,236 39,174 — U.S. government agency securities 5,383,887 — 5,383,887 — Agency bonds 1,095,471 — 1,095,471 — Treasury bills 64,673 — 64,673 — Marketable securities 6,544,031 — 6,544,031 — Privately held debt securities included in strategic investments 3,968 — — 3,968 Total financial assets $ 7,311,409 $ 724,236 $ 6,583,205 $ 3,968 We classify our highly liquid money market funds as Level 1 of the fair value hierarchy because they are valued based on quoted market prices in active markets. We classify our agency bonds, U.S. government agency securities, and treasury bills as Level 2 because they are valued using inputs other than quoted prices that are directly or indirectly observable in the market, including readily available pricing sources for the identical underlying security, which may not be actively traded. We classify our privately held debt securities as Level 3 due to the lack of relevant observable market data over fair value inputs, such as the probability weighting of the various scenarios that can impact settlement of the arrangement. 5. Business Combinations BrightHire, Inc. On December 1, 2025, we acquired 100 % of the issued and outstanding share capital of BrightHire, Inc., a private company providing AI-powered interview intelligence and hiring automation, for all-cash purchase consideration of $ 98.0 million. The acquisition expands Zoom Workplaces’s capabilities in recruiting and candidate engagement. The acquisition was accounted for as a business combination. In allocating the purchase consideration for the acquisition, the following table summarizes the amounts attributed to goodwill, identifiable intangible assets, and other net assets acquired: (in thousands) Goodwill $ 73,657 Identifiable intangible assets 19,900 Other net assets acquired 4,397 Total purchase consideration $ 97,955 The goodwill amount represents synergies related to our existing products expected to be realized from the acquisition and assembled workforce. The associated goodwill is not deductible for tax purposes. The allocation of the purchase price is based upon a preliminary valuation, and as additional information becomes available, our estimates and assumptions may be subject to refinement within the measurement period, which may be up to one year from the acquisition date. Uncertain tax positions are initially established in connection with the acquisition as of the acquisition date. We continue to collect 15 Table of Contents information and reevaluate these estimates and assumptions quarterly. We will record any adjustments to our preliminary estimates to goodwill, provided that it is within the one-year measurement period. The following table sets forth the components of identifiable intangible assets acquired and their estimated useful lives as of the date of acquisition: Fair Value Useful Life (in thousands) (years) Developed technology $ 9,000 5.0 Customer relationships 9,800 5.0 Trade names 1,100 3.0 Identifiable intangible assets $ 19,900 Intangible assets are amortized using the straight-line method over their respective estimated useful lives. Amortization of developed technology is recorded within cost of revenue, and amortization of customer relationships and trade names is recorded within sales and marketing expense in the consolidated statements of operations. Transaction costs incurred in connection with this acquisition were immaterial. The results of operations of BrightHire, Inc., which are not material, have been included in our consolidated financial statements from the date of the acquisition. Pro forma results of operations reflecting the acquisition of BrightHire, Inc. have not been presented, as the results do not have a material effect on any of the periods presented in our consolidated statements of operations. Other Acquisitions During the fiscal year ended January 31, 2026, we also completed other acquisitions that were immaterial and included the results in our consolidated financial statements from the date of the acquisitions. 6. Balance Sheet Components Accounts Receivable, Net Accounts receivable are recorded for invoiced amounts and amounts for which revenue has been recognized, but not invoiced, net of allowances. Our short-term accounts receivable consist of the following: As of April 30, 2026 January 31, 2026 (in thousands) Accounts receivable, gross $ 486,935 $ 515,687 Less: allowance for credit losses ( 15,081 ) ( 14,373 ) Less: allowance for returns ( 4,039 ) ( 3,975 ) Accounts receivable, net $ 467,815 $ 497,339 The following table is a rollforward of our allowance for credit losses for the three months ended April 30, 2026 and 2025: 2026 2025 (in thousands) Balance as of January 31 $ 14,373 $ 17,262 Provision for credit losses 3,157 5,943 Write-offs ( 2,449 ) ( 4,920 ) Balance as of April 30 $ 15,081 $ 18,285 16 Table of Contents Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consisted of the following: As of April 30, 2026 January 31, 2026 (in thousands) Prepaid expenses $ 199,355 $ 203,443 Restricted cash 39,941 10,904 Other 21,800 20,509 Prepaid expenses and other current assets $ 261,096 $ 234,856 Property and Equipment, Net Property and equipment consisted of the following: As of April 30, 2026 January 31, 2026 (in thousands) Servers $ 384,796 $ 386,702 Software 171,870 157,347 Computer and office equipment 44,543 45,944 Leasehold improvements 54,495 57,761 Furniture and fixtures 5,060 5,706 Property and equipment, gross 660,764 653,460 Less: accumulated depreciation and amortization ( 407,957 ) ( 388,935 ) Property and equipment, net $ 252,807 $ 264,525 Depreciation and amortization expense was $ 28.3 million and $ 32.0 million for the three months ended April 30, 2026 and 2025, respectively. Other Assets, Noncurrent Other assets, noncurrent consisted of the following: As of April 30, 2026 January 31, 2026 (in thousands) Accounts receivable, noncurrent $ 2,227 $ 2,375 Intangible assets subject to amortization, net 41,526 45,997 Indefinite-lived intangible assets 25,239 25,239 Prepaid expenses, noncurrent 30,172 35,000 Income tax receivable, noncurrent 28,776 24,276 Other 11,016 11,446 Other assets, noncurrent $ 138,956 $ 144,333 17 Table of Contents Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following: As of April 30, 2026 January 31, 2026 (in thousands) Accrued expenses $ 183,607 $ 192,478 Accrued compensation and benefits 141,244 206,367 Income tax liabilities 17,386 18,947 Sales and other non-income tax liabilities 39,763 41,919 Customer deposit liabilities 58,561 56,734 Operating lease liabilities, current 28,289 27,765 Other 64,343 37,563 Accrued expenses and other current liabilities $ 533,193 $ 581,773 Other Liabilities, Noncurrent Other liabilities, noncurrent consisted of the following: As of April 30, 2026 January 31, 2026 (in thousands) Sales and other non-income tax liabilities $ 39,353 $ 40,184 Long-term income tax liabilities 65,978 62,771 Other 8,276 6,108 Other liabilities, noncurrent $ 113,607 $ 109,063 7. Commitments and Contingencies Non-cancelable Purchase Obligations During the three months ended April 30, 2026, there have been no material changes to our outstanding non-cancelable purchase obligations from those disclosed in Note 9. “Commitments and Contingencies” in the notes to consolidated financial statements included in our Annual Report on Form 10-K for the year ended January 31, 2026 filed with the SEC on February 27, 2026. 18 Table of Contents Legal Proceedings In June 2020, we received a grand jury subpoena from the Department of Justice’s U.S. Attorney’s Office for Eastern District of New York (“EDNY”), which requested information regarding our interactions with foreign governments and foreign political parties, including the Chinese government, as well as information regarding storage of and access to user data, the development and implementation of Zoom’s privacy policies, and the actions we took responding to law enforcement requests from the Chinese government. In July 2020, we received subpoenas from the Department of Justice’s U.S. Attorney’s Office for the Northern District of California (“NDCA”) and the SEC. Both subpoenas sought documents and information relating to various security, data protection and privacy matters, including our encryption, and our statements relating thereto, as well as calculation of usage metrics and related public statements. In addition, the NDCA subpoena sought information relating to any contacts between our employees and representatives of the Chinese government, and any attempted or successful influence by any foreign government in our policies, procedures, practices, and actions as they relate to users in the United States. We have since received additional subpoenas from EDNY and NDCA seeking related information. We are fully cooperating with all of these investigations and have conducted our own thorough internal investigation. During the fiscal year ended January 31, 2025, we recorded an $ 18.0 million accrual with respect to a tentative settlement offer for the SEC matter. On July 30, 2025, the SEC informed us that their investigation has concluded and they do not intend to recommend an enforcement action. As a result, during the three months ended July 31, 2025, we reversed the $ 18.0 million previously accrued. The EDNY and NDCA investigations are ongoing, and a negative outcome in any or all of these matters could cause us to incur substantial fines, penalties, or other financial exposure, as well as reputational harm. We do not know when the EDNY and NDCA matters will be completed, which facts we will ultimately discover as a result of the investigations, or what actions the government may or may not take. We are unable to predict the ultimate outcome of these matters and are unable to reasonably estimate any range of possible loss for these matters. In addition, from time to time, we are involved in various other legal proceedings arising from the normal course of business activities. We are not presently a party to any other such litigation the outcome of which, we believe, if determined adversely to us, would individually, or taken together, have a material adverse effect on our business, operating results, cash flows, or financial condition. Defending such proceedings is costly and can impose a significant burden on management and employees. We may receive unfavorable preliminary or interim rulings in the course of litigation, and there can be no assurances that favorable final outcomes will be obtained. 8. Stockholders’ Equity and Equity Incentive Plans Common Stock Our amended and restated certificate of incorporation authorizes the issuance of 2,000,000,000 shares of Class A common stock, $ 0.001 par value per share, and 300,000,000 shares of Class B common stock, $ 0.001 par value per share. Class A and Class B common stock are referred to as common stock throughout the notes to the condensed consolidated financial statements, unless otherwise noted. Stock Repurchase Program In February 2024, our Board of Directors authorized a stock repurchase program of up to $ 1.5 billion of our Class A common stock. In November 2024, our Board of Directors authorized the repurchase of an additional $ 1.2 billion of our outstanding Class A common stock. In November 2025, our Board of Directors authorized the repurchase of an additional $ 1.0 billion of our outstanding Class A common stock. Repurchases of our Class A common stock may be effected from time to time, either on the open market (including preset trading plans), in privately negotiated transactions, and other transactions in accordance with applicable securities laws. The repurchase program, which has no expiration date, does not obligate us to repurchase any specific number of shares and may be discontinued at any time. During the three months ended April 30, 2026, we repurchased and subsequently retired 4,169,208 shares of our Class A common stock for an aggregate amount of $ 361.7 million. As of April 30, 2026, $ 625.0 million of the repurchase authorization remained available. In May 2026, our Board of Directors authorized the repurchase of an additional $ 1.0 billion of our outstanding Class A common stock, under our existing repurchase program. Equity Incentive Plans We have two equity incentive plans: the 2011 Global Share Plan (“2011 Plan”) and the 2019 Equity Incentive Plan (“2019 Plan”). All shares that remain available for future grants are under the 2019 Plan. 19 Table of Contents Stock Options A summary of stock option activity under our equity incentive plan and related information is as follows: Stock Options Outstanding Stock Options Weighted- Average Exercise Price Weighted- Average Remaining Contractual Life (Years) Aggregate Intrinsic Value (in thousands, except share, life, and per share data) Balance as of January 31, 2026 1,542,753 $ 11.81 2.2 $ 124,080 Exercised ( 248,640 ) $ 2.03 $ 19,837 Canceled/forfeited/expired — $ — Outstanding and exercisable as of April 30, 2026 1,294,113 $ 13.69 2.2 $ 108,007 As of April 30, 2026, all options have vested and there is no unrecognized stock-based compensation expense remaining. Restricted Stock Units A summary of RSU activity under our equity incentive plan and related information is as follows: RSUs RSUs Weighted- Average Grant Date Fair Value Per Share Unvested as of January 31, 2026 20,106,305 $ 75.51 Granted 5,217,795 $ 82.69 Vested ( 2,642,984 ) $ 74.63 Canceled/forfeited ( 818,494 ) $ 75.86 Unvested as of April 30, 2026 21,862,622 $ 77.32 As of April 30, 2026, unrecognized stock-based compensation expense related to RSUs was $ 1,585.6 million, which is expected to be recognized over a weighted-average period of 3.0 years. 2019 Employee Stock Purchase Plan In April 2019, we adopted the 2019 Employee Stock Purchase Plan (“ESPP”). As of April 30, 2026, unrecognized stock-based compensation expense related to the ESPP was $ 9.4 million, which is expected to be recognized over a weighted-average period of 1.1 years. Stock-Based Compensation The stock-based compensation expense by line item in the accompanying condensed consolidated statements of operations is summarized as follows: Three Months Ended April 30, 2026 2025 (in thousands) Cost of revenue $ 20,963 $ 27,427 Research and development 71,026 72,936 Sales and marketing 58,039 68,433 General and administrative 28,925 32,773 Total stock-based compensation expense $ 178,953 $ 201,569 Benefit from income taxes ( 33,697 ) ( 38,161 ) Total stock-based compensation expense recorded to net income $ 145,256 $ 163,408 20 Table of Contents 9. Income Taxes We compute our provision for income taxes by applying the estimated annual effective tax rate to year-to-date ordinary income and adjust the provision for discrete tax items recorded in the period. In each quarter, we update the estimated annual effective tax rate and make a year-to-date adjustment to the provision. The following table provides details of the provision for income taxes: Three Months Ended April 30, 2026 2025 (in thousands, except percentages) Income before provision for income taxes $ 531,620 $ 315,765 Provision for income taxes 105,943 61,162 Effective tax rate 19.9 % 19.4 % For both the three months ended April 30, 2026 and 2025, the effective tax rate differed from the U.S. federal statutory rate due primarily to the foreign-derived deduction eligible income, tax benefits related to stock-based compensation, and research credits offset by tax shortfalls on stock-based compensation, state income taxes, and other compensation-related permanent differences. 10. Net Income Per Share The following table sets forth the computation of basic and diluted net income per share for the periods presented: Three Months Ended April 30, 2026 2025 Class A Class B Class A Class B (in thousands, except share and per share data) Numerator: Net income, basic $ 384,203 $ 41,474 $ 219,213 $ 35,390 Reallocation of net income ( 949 ) 949 ( 634 ) 634 Net income, diluted $ 383,254 $ 42,423 $ 218,579 $ 36,024 Denominator: Weighted-average shares used in computing net income per share, basic 265,748,247 28,686,705 262,526,502 42,382,150 Weighted-average shares used in computing net income per share, diluted 270,312,284 29,921,383 268,527,554 44,256,307 Net income per share, basic $ 1.45 $ 1.45 $ 0.84 $ 0.84 Net income per share, diluted $ 1.42 $ 1.42 $ 0.81 $ 0.81 The potential shares of common stock that were excluded from the computation of diluted net income per share for the periods presented, because including them would have been anti-dilutive, are as follows: Three Months Ended April 30, 2026 2025 Class A Class B Class A Class B Unvested RSUs 6,876 — 2,262,575 — Purchase rights committed under the ESPP 258,618 — 211,765 — Outstanding stock options 76,424 — 91,637 — Total 341,918 — 2,565,977 — The table above does not include 164,192 shares of issued Class A common stock held by us as of April 30, 2026 and 2025 that are reserved for the sole purpose of being transferred to nonprofit organizations. 21 Table of Contents 11. Segment information Our CEO is the Chief Operating Decision Maker (“CODM”) of the Company. The Company manages the business activities on a consolidated basis and all information provided to and reviewed by our CODM is compiled at the consolidated entity level. Therefore, we have only one operating and reportable segment. The description of the types of products and services from which the reportable segment derives its revenue is the same as those described in the Summary of Business and Significant Accounting Policies. The measure of segment profit or loss that our CODM uses to allocate resources and assess performance is our consolidated net income. The CODM uses net income to monitor results and to decide whether to reinvest profits. Our CODM does not assess segment performance or make decisions using asset or liability information. The following table summarizes the significant segment expenses regularly provided to the CODM as well as other segment items: Three Months Ended April 30, 2026 2025 (in thousands) Revenue $ 1,239,006 $ 1,174,715 Adjusted cost of revenue (1) 248,798 244,631 Adjusted research and development (1) 153,112 127,079 Adjusted sales and marketing (1) 265,240 271,799 Adjusted general and administrative (1) 63,137 63,880 Stock-based compensation expense 178,953 201,569 Interest income ( 70,283 ) ( 81,782 ) Other segment items (2) ( 131,571 ) 31,774 Provision for income taxes 105,943 61,162 Segment net income 425,677 254,603 Adjustments and reconciling items — — Consolidated net income $ 425,677 $ 254,603 (1) Excludes stock-based compensation expense and related payroll taxes, acquisition-related expenses, and litigation settlements, net. (2) Includes payroll taxes related to stock-based compensation, acquisition-related expenses, litigation settlements, net, gains on strategic investments, net, and other income, net excluding interest income. 12. Subsequent Events In May 2026, our Board of Directors authorized the repurchase of an additional $ 1.0 billion of our outstanding Class A common stock, incremental to the $ 625.0 million remaining authorization as of April 30, 2026, under our existing repurchase program. Repurchases of our Class A common stock may be effected, from time to time, either on the open market (including pre-set trading plans), in privately negotiated transactions, and other transactions in accordance with applicable securities laws. The repurchase program, which has no expiration date, does not obligate us to acquire any particular amount of Class A common stock, and the repurchase program may be suspended or discontinued at any time at our discretion. Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS You should read the following discussion and analysis of our financial condition and results of operations together with the unaudited condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q. This discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those discussed in the section titled “Risk Factors” and in other parts of this Quarterly Report on Form 10-Q. 22 Table of Contents Overview Zoom is redefining modern work as a system of action, turning live collaboration into completed results and moving conversations to completion. From entrepreneurs to global enterprises, customers choose Zoom to seamlessly collaborate, communicate, and drive outcomes across meetings, chat, phone, contact center, events, and more — all with the built-in assistance of Zoom AI Companion. Our culture of delivering happiness, grounded in our core value of care, is fundamental to everything we do at Zoom. Our AI-first, open work platform bridges work both inside and outside the organization by integrating AI capabilities across employee collaboration and customer-facing workflows, enabling seamless communication, collaboration, and engagement through Zoom Workplace and Zoom Business Services. Zoom Workplace with AI Companion brings together Zoom’s core communication and productivity tools—including Zoom Meetings, Zoom Phone, Zoom Team Chat, Zoom Canvas (formerly Zoom Docs), Zoom Whiteboard, and Workvivo—to support collaboration across organizations of varying sizes. Zoom’s Business Services offerings support customer engagement across the customer lifecycle, including Zoom Contact Center and Zoom Virtual Agent for customer service teams, Zoom Revenue Accelerator for sales teams, and Zoom Events and Zoom Webinars for marketing teams. Trust is a cornerstone of the Zoom platform. We equip users with a comprehensive set of tools designed to make their interactions safe, secure, and private. We believe that strong security should never compromise a great user experience. AI is core to Zoom’s product innovation. We continue to advance our AI capabilities, focusing on three priorities that bring our system of action to life: elevating Zoom Workplace with AI, driving growth of new AI products, and scaling AI-first customer experience. Zoom AI Companion is our smart assistant designed to empower workers to increase productivity, improve team effectiveness, and enhance skills. Our federated approach to AI enables the use of multiple large language models (“LLMs”), including Zoom’s own, to complete tasks for users. Zoom’s federated approach allows its platform architecture to dynamically select from multiple AI models, which currently include those from OpenAI, Anthropic, and NVIDIA, making AI accessible and affordable so more people can incorporate it into their day-to-day workflows. In addition to AI Companion, we have embedded AI capabilities across our broader product portfolio, including Zoom Revenue Accelerator and Zoom Virtual Agent, to support sales and customer service use cases. With these advancements in AI Companion and across our AI-enabled products, we believe we are well-positioned as AI technology continues to advance. We are enhancing our agentic AI capabilities within AI Companion to continue delivering practical value to customers while advancing our ambitious vision of AI that truly amplifies human potential. In line with our commitment to responsible AI, Zoom does not use customer audio, video, chat, screen sharing, attachments, or other communications (such as poll results, whiteboard, and reactions) to train Zoom’s or third-party AI models. Zoom’s platform prioritizes security and privacy, with 18 co-located data centers globally and robust encryption options. We are committed to safeguarding our customers' data. Revenue is driven by subscriptions to Zoom Workplace and Zoom Business Services. Our core offerings include Zoom Workplace Pro, Business, and Enterprise bundles, as well as vertical-specific plans for Education, Healthcare, and Government. We also offer Zoom Phone, with regional and international calling plans, and Zoom Contact Center, providing advanced customer experience solutions designed to meet diverse customer needs. Our revenue was $1,239.0 million and $1,174.7 million for the three months ended April 30, 2026 and 2025, respectively, representing period-over-period growth of 5.5%. We generated net income of $425.7 million and $254.6 million for the three months ended April 30, 2026 and 2025, respectively. Net cash provided by operating activities was $521.6 million and $489.3 million for the three months ended April 30, 2026 and 2025, respectively. Macroeconomic Conditions and Other Factors The macroeconomic environment, including ongoing geopolitical uncertainties, evolving monetary policy, energy market volatility, and foreign currency exchange rate fluctuations, has created and may continue to create uncertainty in demand for subscriptions to our AI-first, open work platform. Recent geopolitical events, including the conflict involving Iran and disruptions to energy supply routes, have contributed to elevated energy prices and heightened volatility in financial markets, which may influence inflation expectations, corporate cost structures, and global growth prospects. Although headline inflation in many major economies has moderated relative to prior years, cost pressures remain uneven across regions, and the combined effects of interest rates, policy actions, and slower global growth conditions continue to influence corporate spending patterns. These dynamics, together with shifts in customers’ internal priorities, including budget realignment and evolving 23 Table of Contents investment focus, have contributed to variability in sales cycles and continued caution in enterprise spending decisions, potentially affecting customer upsell, downsell, or renewal activity. We continue to monitor the potential effects of these circumstances as well as the overall global economy and geopolitical landscape on our business and financial results. The implications of macroeconomic conditions on our business, results of operations, and overall financial position, particularly over the long term, remain uncertain. Refer to “Part II—Other Information, Item 1A. Risk Factors” of this Quarterly Report on Form 10-Q for further discussions of the potential impacts of the current macroeconomic conditions on our business. Key Business Metrics and Factors Affecting Our Performance We review the following key business metrics and strategic factors to measure our performance, identify trends, formulate financial projections, and make strategic decisions, including evaluating our ability to grow the number of customers who use our AI-first, open work platform. Our operating results and growth prospects will depend, in part, on our ability to attract new customers. While we believe there is a significant market opportunity for our platform, it is difficult to predict customer adoption rates, the future growth rate, or the size of the market for our platform. Large Enterprise Customers - Customers Contributing More Than $100,000 of Trailing 12 Months Revenue We focus on growing the number of customers that contribute more than $100,000 of trailing 12 months revenue as it is a measure of our ability to scale with our customers and attract larger organizations to Zoom. Revenue from these customers represented 32.7% and 31.9% of total revenue for the three months ended April 30, 2026 and 2025, respectively. As of April 30, 2026 and 2025, we had 4,534 and 4,192 customers, respectively, that contributed more than $100,000 of trailing 12 months revenue, demonstrating our increasing penetration of larger organizations. These customers are a subset of Enterprise customers. Expansion of Zoom Across Existing Enterprise Customers - Net Dollar Expansion Rate We believe that there is a large opportunity for growth with many of our existing Enterprise customers. Historically, customers have increased the size of their subscriptions as they expanded their use of our AI-first, open work platform across their operations. Over the past few years, macroeconomic headwinds resulted in slower hiring and higher seat count downsells from our existing Enterprise customers in key markets, which impacted the rate of expansion and caused our net dollar expansion rate for Enterprise customers to drop below one hundred percent. Despite the decline, we believe there are still opportunities for future growth with our existing Enterprise customers as we innovate our platform with additional product offerings and by incorporating AI. Expansion in the use of our platform also provides us with opportunities to market and sell additional products to our customers, such as Zoom Phone, Zoom Contact Center, and Workvivo. To address this opportunity and expand the use of our products by our existing Enterprise customers, we will need to maintain the reliability of our platform and produce new features and functionality that are responsive to our customers’ requirements for enterprise-grade solutions. We quantify our expansion across existing Enterprise customers through our net dollar expansion rate. We define Enterprise customers as distinct business units who have been engaged by either our direct sales team, resellers, or strategic partners. Revenue from Enterprise customers represented 61.0% and 60.0% of total revenue for the three months ended April 30, 2026 and 2025, respectively. Our net dollar expansion rate includes the increase in user adoption within our Enterprise customers, as our subscription revenue is primarily driven by the number of paid licenses within a customer and the purchase of additional products, and compares our subscription revenue from the same set of Enterprise customers across comparable periods. We calculate net dollar expansion rate as of a period end by starting with the annual recurring revenue (“ARR”) from all Enterprise customers as of 12 months prior (“Prior Period ARR”). We define ARR as the annualized revenue run rate of subscription agreements from all customers at a point in time. We calculate ARR by taking the monthly recurring revenue (“MRR”) and multiplying it by 12. MRR is defined as the recurring revenue run-rate of subscription agreements from all Enterprise customers for the last month of the period, including revenue from monthly subscribers who have not provided any indication that they intend to cancel their subscriptions. We then calculate the ARR from these Enterprise customers as of the current period end (“Current Period ARR”), which includes any upsells, contractions, and attrition. We divide the Current Period ARR by the Prior Period ARR to arrive at the net dollar expansion rate. For the trailing 12 months calculation, we take an average of the net dollar expansion rate over the trailing 12 months. Our net dollar expansion rate may fluctuate as a result of a number of factors, including the level of penetration within our Enterprise customer base, expansion of products and features, and our ability to retain our Enterprise customers. Our trailing 12-month net dollar expansion rate for Enterprise customers was 99% and 98% as of April 30, 2026 and 2025, respectively. 24 Table of Contents Retention of Online Customers - Average Monthly Churn Rate & Percentage of MRR from ≥16-Month Customers In addition to Enterprise customers, we also have a significant number of customers who subscribe to our services directly through our website (“Online customers” or “Online business”). Online customers represent a diverse customer base, ranging from individual consumers to small and medium-sized businesses. We continue to focus on acquisition and retention of our Online customer base through various strategies to improve the features and functionalities of our products and services. Revenue from Online customers represented 39.0% and 40.0% of total revenue for the three months ended April 30, 2026 and 2025, respectively. Our ability to retain these Online customers will have an impact on our future revenue. The online monthly average churn for our Online customers was 3.0% and 2.8% per month for the three months ended April 30, 2026 and 2025, respectively. One of the dynamics in the Online portion of the business is the MRR contribution from customers who have retained Zoom services for a certain portion of time as these customers tend to maintain their subscriptions and contribute meaningfully to the Online business. As of April 30, 2026 and 2025, the percentage of total Online MRR from Online customers with a continuous term of service of at least 16 months was 74.4% and 74.2%, respectively. We calculate the Online average monthly churn by starting with the Online customer MRR as of the beginning of the applicable quarter (“Entry MRR”). We define Entry MRR as the recurring revenue run-rate of subscription agreements from all Online customers except for subscriptions that we recorded as churn in a previous quarter based on the customers' earlier indication to us of their intention to cancel that subscription. We then determine the MRR related to customers who canceled or downgraded their subscription or notified us of that intention during the applicable quarter (“Applicable Quarter MRR Churn”) and divide the Applicable Quarter MRR Churn by the applicable quarter Entry MRR to arrive at the MRR churn rate for Online customers. We then divide that amount by three to calculate the Online average monthly churn for the applicable quarter. Innovation and Expansion of Our Platform We continue to invest and enhance the capabilities of Zoom Workplace and Zoom Business Services, including ongoing investments in AI, with a focus on expanding agentic AI skills, agents, and models. We recently introduced a series of new products and enhancements across Zoom Workplace and Zoom Business Services. These included My Notes, which provides a personal AI note-taker that captures context across Zoom, in-person, and third-party meetings, helping users stay present while turning conversations into organized takeaways, action items, and follow-through; AI Expert Assist 3.0, a Contact Center capability understands and reasons across the full customer context; Zoom Virtual Agent 3.0, which preserves customer history and context across channels while orchestrating actions, triggering workflows, and applying knowledge to future interactions; CX Insights; AI Companion 3.0 across Zoom Phone; a voice translator with live audio translation in Meetings; and realistic and stylized avatars for Zoom Meetings. These offerings expand our agentic AI capabilities across collaboration, customer support, and industry-specific workflows through new integrations and platform enhancements. We also enhanced the Custom AI Companion add-on, a paid add-on for Zoom Workplace that enables organizations to tailor AI Companion to their specific business needs. These enhancements are designed to allow customers to connect AI Companion to relevant enterprise data sources and third-party applications, configure custom agents and workflows, and apply organization-specific context to support information retrieval, task automation, and workflow execution across applications. Zoom is an AI-first, open work platform, and third-party developers are a key component of our strategy for platform innovation to make it easier for customers and developers to extend our product portfolio with new functionalities. We believe that as more developers and other third parties use our platform to integrate major third-party applications, we will become the ubiquitous platform for modern work as a system of action, turning live collaboration into completed results and moving conversations to completion. We will need to expend additional resources to continue introducing new products, features, and AI functionality, and supporting the efforts of third parties to enhance the value of our platform with their own applications. International Opportunities Our AI-first, open work platform addresses the communications and collaboration needs of users worldwide, and international expansion remains a meaningful component of our long-term growth strategy. Our revenue outside of the Americas (APAC and EMEA) represented 27.9% and 27.8% of our total revenue for the three months ended April 30, 2026 and 2025, respectively. We use strategic partners and resellers to sell in certain international markets where we have limited or no direct sales presence. While we believe global demand for our platform will continue to increase as international market awareness of Zoom grows, our ability to conduct our operations internationally will require considerable management attention and resources and is subject to the particular challenges of supporting a rapidly growing business in an environment of multiple languages, cultures, customs, legal and regulatory systems, alternative dispute systems, and commercial markets. 25 Table of Contents Non-GAAP Financial Measure In addition to our results determined in accordance with GAAP, free cash flow (“FCF”) is a non-GAAP financial measure that we believe is useful in evaluating our liquidity. Free Cash Flow We define FCF as GAAP net cash provided by operating activities less purchases of property and equipment. We believe that FCF is a useful indicator of liquidity that provides information to management and investors about the amount of cash generated from our operations that, after investments in property and equipment, can be used for future growth or other corporate purposes. FCF is presented for supplemental informational purposes only, has limitations as an analytical tool, and should not be considered in isolation or as a substitute for analysis of other GAAP financial measures, such as net cash provided by operating activities. It is important to note that other companies, including companies in our industry, may not use this metric, may calculate this metric differently, or may use other financial measures to evaluate their liquidity, all of which could reduce the usefulness of this non-GAAP metric as a comparative measure. The following table presents a summary of our cash flows for the periods presented and a reconciliation of FCF to net cash provided by operating activities, the most directly comparable financial measure calculated in accordance with GAAP: Three Months Ended April 30, 2026 2025 (in thousands) Net cash provided by operating activities $ 521,610 $ 489,261 Less: purchases of property and equipment (21,113) (25,910) Free cash flow (non-GAAP) $ 500,497 $ 463,351 Net cash used in investing activities $ (480,716) $ (125,130) Net cash used in financing activities $ (394,110) $ (490,530) Components of Results of Operations Revenue We derive our revenue from subscription agreements with customers for access to our AI-first, open work platform. Our customers generally do not have the ability to take possession of our software. We also provide services, which include professional services, consulting services, and online event hosting, which are generally considered distinct from the access to our AI-first, open work platform. The amount of revenue recognized reflects the consideration that we expect to receive in exchange for these services over the contract term, which can include a free period discount. Cost of Revenue Cost of revenue primarily consists of costs related to hosting our AI-first, open work platform and providing general operating support services to our customers. These costs are related to our co-located data centers, third-party cloud hosting, integrated third-party PSTN services, personnel-related expenses, amortization of capitalized software development and acquired intangible assets, royalty payments, and allocated overhead. Operating Expenses Research and Development Research and development expenses primarily consist of personnel-related expenses directly associated with our research and development organization, depreciation of equipment used in research and development, and allocated overhead. Research and development costs are expensed as incurred. Sales and Marketing Sales and marketing expenses primarily consist of personnel-related expenses directly associated with our sales and marketing organization. Other sales and marketing expenses include advertising and promotional events to promote our brand, such as awareness programs, digital programs, public relations, tradeshows, and our user conference, Zoomtopia, and allocated overhead. Sales and marketing expenses also include credit card processing fees related to customer transactions and amortization of deferred contract acquisition costs. 26 Table of Contents General and Administrative General and administrative expenses primarily consist of personnel-related expenses associated with our finance, legal, and other organizations; professional fees for external legal, accounting, and other consulting services; expected credit losses; insurance; certain indirect taxes; litigation settlements; corporate security and regulatory expenses; and allocated overhead. Gains (losses) on Strategic Investments, Net Gains on strategic investments, net consist primarily of remeasurement gains or losses on our equity investments. Other Income, Net Other income, net consists primarily of interest income and net accretion on our marketable securities and effect of changes in foreign currency exchange rates. Provision for Income Taxes Provision for income taxes consists primarily of income taxes related to federal, state, and foreign jurisdictions where we conduct business. 27 Table of Contents Results of Operations The following tables set forth selected condensed consolidated statements of operations data and such data as a percentage of revenue for each of the periods indicated: Three Months Ended April 30, 2026 2025 (in thousands) Revenue $ 1,239,006 $ 1,174,715 Cost of revenue (1) 274,287 278,402 Gross profit 964,719 896,313 Operating expenses: Research and development (1) 227,926 205,416 Sales and marketing (1) 330,050 346,970 General and administrative (1) 96,270 102,335 Total operating expenses 654,246 654,721 Income from operations 310,473 241,592 Gains (losses) on strategic investments, net 152,297 (13,619) Other income, net 68,850 87,792 Income before provision for income taxes 531,620 315,765 Provision for income taxes 105,943 61,162 Net income $ 425,677 $ 254,603 (1) Includes stock-based compensation expense as follows: Cost of revenue $ 20,963 $ 27,427 Research and development 71,026 72,936 Sales and marketing 58,039 68,433 General and administrative 28,925 32,773 Total stock-based compensation expense $ 178,953 $ 201,569 Three Months Ended April 30, 2026 2025 (as a percentage of revenue) Revenue 100.0 % 100.0 % Cost of revenue 22.1 23.7 Gross profit 77.9 76.3 Operating expenses: Research and development 18.4 17.5 Sales and marketing 26.6 29.5 General and administrative 7.8 8.7 Total operating expenses 52.8 55.7 Income from operations 25.1 20.6 Gains (losses) on strategic investments, net 12.3 (1.2) Other income, net 5.6 7.5 Income before provision for income taxes 43.0 26.9 Provision for income taxes 8.6 5.2 Net income 34.4 % 21.7 % 28 Table of Contents Comparison of the Three Months Ended April 30, 2026 and 2025 Revenue Three Months Ended April 30, 2026 2025 % Change (in thousands) Revenue $ 1,239,006 $ 1,174,715 5.5 % Revenue for the three months ended April 30, 2026 increased by $64.3 million, or 5.5%, compared to the three months ended April 30, 2025. The increase was driven by 7.2% growth in revenue from Enterprise customers, of which 47.3% and 52.7% was from new and existing customers, respectively, and by a 2.8% increase in revenue from Online customers. Cost of Revenue Three Months Ended April 30, 2026 2025 % Change (in thousands) Cost of revenue $ 274,287 $ 278,402 (1.5) % Gross profit 964,719 896,313 7.6 % Gross margin 77.9 % 76.3 % Cost of revenue for the three months ended April 30, 2026 decreased by $4.1 million, or 1.5%, compared to the three months ended April 30, 2025. The decline was mainly due to a $6.5 million reduction in stock-based compensation. The reduction in stock-based compensation is due to changes in our equity program. Gross margin grew to 77.9% for the three months ended April 30, 2026, from 76.3% for the three months ended April 30, 2025. The increase in gross margin was driven by the decrease in stock-based compensation as well as other operational efficiencies. Operating Expenses Research and Development Three Months Ended April 30, 2026 2025 % Change (in thousands) Research and development $ 227,926 $ 205,416 11.0 % Research and development expense for the three months ended April 30, 2026 increased by $22.5 million, or 11.0%, compared to the three months ended April 30, 2025. The increase was mainly driven by a $20.0 million increase in personnel-related expenses as a result of higher headcount as we invested in AI innovation, partially offset by a $1.9 million decrease in stock-based compe nsation due to changes in our equity program. Sales and Marketing Three Months Ended April 30, 2026 2025 % Change (in thousands) Sales and marketing $ 330,050 $ 346,970 (4.9) % Sales and marketing expense for the three months ended April 30, 2026 decreased by $16.9 million, or 4.9%, compared to the three months ended April 30, 2025. The decrease was primarily driven by a $22.0 million decrease in commissions expense, which includes both internal and external costs, from the change in the amortization period for deferred contract acquisition costs from three years to five years, effective January 31, 2026, in addition to lower stock-based compensation of 29 Table of Contents $10.4 million due to changes in our equity program. These decreases were partially offset by a $6.4 million increase in personnel-related expenses and continued investments supporting customer acquisition, retention, and expansion initiatives. General and Administrative Three Months Ended April 30, 2026 2025 % Change (in thousands) General and administrative $ 96,270 $ 102,335 (5.9) % General and administrative expense for the three months ended April 30, 2026 decreased by $6.1 million, or 5.9%, compared to the three months ended April 30, 2025. The decrease was primarily driven by a $3.8 million decrease in stock-based compe nsation due to changes in our equity program. Gains (losses) on Strategic Investments, Net Three Months Ended April 30, 2026 2025 % Change (in thousands) Gains (losses) on strategic investments, net $ 152,297 $ (13,619) NM Gains on strategic investments, net for the three months ended April 30, 2026 were primarily driven by changes in the fair value of our privately held securities, which were attributable to investments other than Anthropic, while losses on strategic investments, net for the three months ended April 30, 2025 were primarily driven by changes in the fair value of our publicly held securities. Other Income, Net Three Months Ended April 30, 2026 2025 % Change (in thousands) Other income, net $ 68,850 $ 87,792 (21.6) % Other income, net for the three months ended April 30, 2026 decreased by $18.9 million, or 21.6%, compared to the three months ended April 30, 2025. The decrease was primarily driven by an $11.5 million decrease in interest income from cash and marketable securities and a $7.0 million unfavorable impact from changes in foreign currency exchange rates. Provision for Income Taxes Three Months Ended April 30, 2026 2025 % Change (in thousands) Provision for income taxes $ 105,943 $ 61,162 73.2 % Provision for income taxes for the three months ended April 30, 2026 increased by $44.8 million, or 73.2%, compared to the three months ended April 30, 2025. The year-over-year change was primarily due to an increase in income before taxes partially offset by a decrease in tax shortfalls and increase in tax benefits related to stock-based compensation. Liquidity and Capital Resources As of April 30, 2026, our principal sources of liquidity were cash, cash equivalents, and marketable securities of $7.7 billion, which were held for working capital purposes and for investment in growth opportunities. Our marketable securities generally consist of agency bonds, U.S. government agency securities, and treasury bills. We finance our operations primarily through income from operations. Cash from operations may also be affected by various risks and uncertainties, including, but not limited to, macroeconomic factors, such as geopolitical conflicts, tariffs and trade tensions, inflationary pressures, interest rate fluctuations, and the fluctuations in foreign currency exchange rates. These 30 Table of Contents factors and other risks detailed in the section titled “Risk Factors” could impact the timing of cash collections from our customers. However, based on our current business plan and revenue prospects, we believe our existing cash, cash equivalents, and marketable securities, together with net cash provided by operations, will be sufficient to meet our needs for at least the next 12 months and allow us to capitalize on growth opportunities. We believe we will meet longer-term expected future cash requirements and obligations through a combination of cash flows from operating activities and available cash balances. Our future capital requirements will depend on many factors, including our revenue growth rate, subscription renewal activity, billing frequency, the timing and extent of spending to support further sales and marketing and research and development efforts, as well as expenses associated with our international expansion, and the timing and extent of additional capital expenditures to invest in existing and new office spaces as well as data center infrastructure. We may, in the future, enter into arrangements to acquire or invest in complementary businesses, services, and technologies, including intellectual property rights. We may choose or be required to seek additional equity or debt financing. In the event that additional financing is required from outside sources, we may not be able to enter into debt agreements on terms acceptable to us or at all. If we are unable to raise additional capital when desired, our business, results of operations, and financial condition would be materially and adversely affected. There have been no material changes to our cash requirements from known contractual and other obligations from those disclosed in our Management’s Discussion and Analysis of Financial Condition and Results of Operations, included in our Annual Report on Form 10-K for the year ended January 31, 2026, filed with the SEC on February 27, 2026. Cash Flows The following table summarizes our cash flows for the periods presented: Three Months Ended April 30, 2026 2025 (in thousands) Net cash provided by operating activities $ 521,610 $ 489,261 Net cash used in investing activities $ (480,716) $ (125,130) Net cash used in financing activities $ (394,110) $ (490,530) Operating Activities Our largest source of operating cash is cash collections from our customers for subscriptions to our AI-first, open work platform. Our primary uses of cash from operating activities are for employee-related expenditures, costs related to hosting our platform, and marketing expenses. Net cash provided by operating activities is impacted by our net income adjusted for certain non-cash items, such as stock-based compensation expense, depreciation and amortization expenses, as well as the effect of changes in operating assets and liabilities. Net cash provided by operating activities was $521.6 million for the three months ended April 30, 2026, compared to $489.3 million for the three months ended April 30, 2025. The increase in operating cash flow was mainly due to higher collections driven by revenue growth. Investing Activities Net cash used in investing activities of $480.7 million for the three months ended April 30, 2026 was primarily driven by net purchases of marketable securities of $314.1 million, purchases of strategic investments of $145.7 million, which included an additional $46.0 million investment in preferred stock of Anthropic, and purchases of property and equipment of $21.1 million. Net cash used in investing activities of $125.1 million for the three months ended April 30, 2025 was due to net purchases of marketable securities of $99.2 million and purchases of property and equipment of $25.9 million. Financing Activities Net cash used in financing activities of $394.1 million for the three months ended April 30, 2026 was primarily due to cash paid for repurchases of common stock of $361.7 million and taxes paid related to net share settlement of equity awards of $62.2 million, partially offset by proceeds from employee equity transactions to be remitted to employees and tax authorities, net, of $29.2 million. Net cash used in financing activities of $490.5 million for the three months ended April 30, 2025 was primarily due to cash paid for repurchases of common stock of $418.0 million and taxes paid related to net share settlement of equity awards of 31 Table of Contents $82.2 million, partially offset by proceeds from employee equity transactions to be remitted to employees and tax authorities, net, of $8.7 million. Stock Repurchase Program In February 2024, our Board of Directors authorized a stock repurchase program of up to $1.5 billion of our Class A common stock. In November 2024, our Board of Directors authorized the repurchase of an additional $1.2 billion of our outstanding Class A common stock. In November 2025, our Board of Directors authorized another $1.0 billion in repurchases of our outstanding Class A common stock. Repurchases of our Class A common stock may be effected, from time to time, either on the open market (including pre-set trading plans), in privately negotiated transactions, and other transactions in accordance with applicable securities laws. The timing and the amount of any repurchased Class A common stock will be determined by our management based on its evaluation of market conditions and other factors. The repurchase program will be funded using our working capital. Any repurchased shares of Class A common stock will be retired. The repurchase program, which has no expiration date, does not obligate us to acquire any particular amount of Class A common stock, and the repurchase program may be suspended or discontinued at any time at our discretion. During the three months ended April 30, 2026, we repurchased and subsequently retired 4,169,208 shares of our Class A common stock for an aggregate amount of $361.7 million. As of April 30, 2026, $625.0 million of the repurchase authorization remained available. In May 2026, our Board of Directors authorized the repurchase of an additional $1.0 billion of our outstanding Class A common stock, under our existing repurchase program. Critical Accounting Estimates Critical accounting estimates are those accounting estimates that require the most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. These estimates are developed based on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Critical accounting estimates are accounting estimates where the nature of the estimates is material due to the levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change and the impact of the estimates on financial condition or operating performance is material. There have been no material changes to our critical accounting estimates as compared to the critical accounting estimates described in our Management’s Discussion and Analysis of Financial Condition and Results of Operations, included in our Annual Report on Form 10-K for the year ended January 31, 2026, filed with the SEC on February 27, 2026. Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Foreign Currency and Exchange Risk The majority of our cash generated from revenue is denominated in U.S. dollars, with a portion in amounts denominated in foreign currencies. Our expenses are generally denominated in the currencies of the jurisdictions in which we conduct our operations, which are primarily in the United States, China, Europe, and Australia. Our results of current and future operations and cash flows are, therefore, subject to fluctuations due to changes in foreign currency exchange rates. For the three months ended April 30, 2026 and 2025, 20.4% and 19.3% of our revenue, respectively, and 20.5% and 16.5% of our expenses, respectively, were denominated in currencies other than the U.S. dollar. The effect of a hypothetical 10% change in foreign currency exchange rates applicable to our business would not have had a material impact on our historical condensed consolidated financial statements for the three months ended April 30, 2026 and 2025. As the impact of foreign currency exchange rates has not been material to our historical operating results, we have not entered into derivative or hedging transactions, but we may do so in the future if our exposure to foreign currency becomes more significant. Interest Rate Risk We had cash and cash equivalents of $890.9 million and marketable securities of $6,830.0 million as of April 30, 2026. Cash and cash equivalents consist of bank deposits, money market funds, high-grade commercial paper, and agency bonds. Our marketable securities generally consist of high-grade commercial paper, agency bonds, corporate and other debt securities, U.S. government agency securities, and treasury bills. The cash and cash equivalents and marketable securities are held for working capital purposes. These interest-earning instruments carry a degree of interest rate risk. The primary objective of our investment activities is to preserve principal while maximizing income without significantly increasing risk. We do not enter into investments for trading or speculative purposes and have not used any derivative financial instruments to manage our interest rate risk exposure. Due to the short-term nature of our investments, we have not been exposed to, nor do we anticipate being 32 Table of Contents exposed to, material risks due to changes in interest rates. A hypothetical 10% change in interest rates during any of the periods presented would not have had a material impact on our historical condensed consolidated financial statements for the three months ended April 30, 2026 and 2025. Equity Investment Risk As of April 30, 2026, our privately held equity and debt securities totaled $1,876.4 million, of which $1,266.9 million relates to our investment in preferred stock of Anthropic. The majority of our investments in privately held equity securities is accounted for under the measurement alternative and are adjusted for observable price changes or impairments. Valuations of private companies are inherently more complex due to the lack of readily available market data; as such, we believe that providing market sensitivities is not practicable. Changes in the valuation of these investments due to future market conditions could result in material gains or losses in our consolidated financial statements. Item 4. CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures Our management, with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on such evaluation, our principal executive officer and principal financial officer have concluded that as of April 30, 2026 , our disclosure controls and procedures were effective at a reasonable assurance level. Changes in Internal Control Over Financial Reporting There has been no change in our internal control over financial reporting (as defined in Rules 13a-15(d) and 15d-15(d) under the Exchange Act) that occurred during the quarter ended April 30, 2026 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. Inherent Limitations on Effectiveness of Disclosure Controls and Procedures Our management, including our principal executive officer and principal financial officer, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Due to inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected. 33 Table of Contents PART II—Other Information Item 1. LEGAL PROCEEDINGS Information with respect to this item may be found in Note 7 - “Commitments and Contingencies” in the accompanying notes to the condensed consolidated financial statements included in Part I, Item 1, “Financial Statements” of this Quarterly Report on Form 10-Q, under “Legal Proceedings,” which is incorporated herein by reference. Item 1A. RISK FACTORS Investing in our securities involves a high degree of risk. You should carefully consider the risks and uncertainties described below, together with all of the other information in this Quarterly Report on Form 10-Q, including the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our condensed consolidated financial statements and related notes, before making a decision to invest in our securities. The risks and uncertainties described below may not be the only ones we face. If any of the risks actually occur, our business could be materially and adversely affected. In that event, the market price of our Class A common stock could decline, and you could lose part or all of your investment. Risks Related to Our Business and Our Industry Our business depends on our ability to attract new customers, retain and upsell additional products and new product categories to existing customers, and upgrade free users to our paid offerings. Any decline in new customers, renewals, or upgrades would harm our business. Our business depends upon our ability to attract new customers and maintain and expand our relationships with our existing customers, including upselling additional products and new product categories to our existing customers and upgrading users from a free plan to one of our paid offerings. Our business is subscription based, and customers are not obligated to, and may choose not to, renew their subscriptions after their existing subscriptions expire. Customers may also terminate or reduce the size of their existing subscriptions. As a result, we cannot provide assurance that customers will renew their subscriptions utilizing the same tier of plan, upgrade to a higher-priced tier, or purchase additional products, if they renew at all. Renewals of subscriptions to our platform may decline or fluctuate because of several factors, such as the composition of our customer base dissatisfaction with our products and support, a customer no longer having a need for our products, or a belief that a competitor’s product is better, more secure, or less expensive than our products and platform. Renewals are also impacted by reductions in customer information technology spending budgets or a decision by the customer to consolidate their spending budgets on one of our competitor’s platforms, both of which are more likely to occur during periods of high inflation or recessionary or uncertain economic environments. We must continually add new customers and licenses to grow our business and to replace customers and licenses who choose not to continue to use our platform. Finally, any decrease in user satisfaction with our products or support would harm our brand, word-of-mouth referrals, and ability to grow. We encourage customers to purchase additional products and encourage users of our free offering to upgrade to one of our paid offerings by recommending additional features and through in-product prompts and notifications. However, free users may never upgrade to one of our paid offerings. We also seek to expand within organizations by adding new licenses, having workplaces purchase additional products, or expanding the use of our platform into other teams and departments within an organization. If we fail to upsell our customers or upgrade free users to one of our paid offerings or expand the number of licenses within organizations, our business would be harmed. Our revenue growth rate has fluctuated in prior periods, and may decline in future periods. Our revenue growth has fluctuated in prior periods. You should not rely on the revenue growth of any prior quarterly or annual period as an indication of our future performance. There are no assurances we will be able to sustain our revenue growth in future periods, and our revenue growth rate may remain flat or decline in future periods. Many factors have and may contribute to declines in our growth rate, including higher market penetration, increased competition, macroeconomic conditions, such as inflation, recessionary or uncertain economic environments, fluctuating foreign currency exchange rates, slowing demand for our platform, a lower than anticipated capitalization on growth opportunities, and the maturation of our business, among others. Our growth rate could adversely affect investors’ perceptions of our business and the trading price of our Class A common stock could be adversely affected. 34 Table of Contents Interruptions, delays, or outages in service from our co-located data centers or cloud hosting services and a variety of other factors, would impair, and in the past have impaired, the delivery of our services, require us to issue credits or pay penalties, and harm our business. We currently serve our users from various co-located data centers located throughout the world. We also utilize cloud hosting services such as Amazon Web Services and Oracle Cloud for the hosting of certain critical aspects of our business and Microsoft Azure for limited customer-specified managed services. As part of our distributed meeting architecture, we establish private links between data centers that automatically transfer data between various data centers. Damage to, or failure of, these data centers has in the past resulted in and could in the future result in interruptions or delays in our services. In addition, we have experienced, and may in the future experience, other interruptions and delays in our services caused by a variety of other factors, including, but not limited to, infrastructure changes, vendor (including cloud hosting) issues, human or software errors, viruses, security attacks, ransomware or cyber extortion, fraud, general internet availability issues, spikes in usage, local administrative actions, changes to legal or permitting requirements, and denial of service issues. In some instances, we may not be able to identify the cause or causes of these problems within an acceptable period of time. For example, we have experienced partial outages in our services that impacted a subset of our users for a limited number of hours. Additionally, in connection with the addition of new data centers, expansion or consolidation of our existing data center facilities, or other reasons, we may move or transfer our data and our users’ metadata to other data centers, not including our China data center. Despite precautions that we take during this process, any unsuccessful data transfers may impair or cause disruptions in the delivery of our service, and we may incur significant costs in connection with any such move or transfer. Interruptions, delays, or outages in our services would reduce our revenue; may require us to issue credits or pay penalties; may subject us to claims and litigation; and may cause customers to terminate their subscriptions and adversely affect our ability to attract new customers. Our ability to attract and retain customers and licenses depends on our ability to provide customers and users with a highly reliable platform and even minor interruptions or delays in our services could harm our business. Additionally, if our data centers or cloud hosting services are unable to keep up with our increasing needs for capacity, customers may experience delays or interruptions in service as we seek to obtain additional capacity, which could result in the loss of customers who use our unified communications and collaboration platform because of its reliability and performance. We plan to continue our practice of opening new co-located data centers throughout the world to meet increased demand, but we may be unable to bring additional data centers online in a timely manner, including as a result of current shortages for certain parts, such as servers. We do not control, or in some cases have limited control over, the operation of the co-located data center facilities and cloud hosting services we use, and they are vulnerable to damage or interruption from human error; intentional bad acts; earthquakes; floods; fires; hurricanes; war; terrorist attacks; power losses; hardware failures; systems failures; telecommunications failures; disease; and other public health related measures, any of which could disrupt our service. In the event of significant physical damage to one of these data centers or disruption of the cloud hosting services we use, it may take a significant period of time to achieve full resumption of our services and our disaster recovery planning may not account for all eventualities. Despite precautions taken at these data center facilities, the occurrence of a natural disaster, an act of terrorism, or other act of malfeasance, a decision to close the facilities without adequate notice or other unanticipated problems at the facilities would harm our business. We operate in competitive markets, and we must continue to compete effectively. The market for communication and collaboration technologies platforms is competitive and rapidly changing and includes companies ranging from new market entrants to hyperscalers that provide technologies to improve communication and collaboration technologies platforms either as bundled solutions or standalone products. Given the range of companies in this space, maintaining an open and robust marketplace with fair competition is important. Certain features of our current platform compete in the communication and collaboration technologies market with products offered by: • bundled productivity suite providers with communication offerings, including Microsoft 365 (with Teams) and Google Workspace (with Meet); • legacy web-based meeting providers, including Cisco Webex and GoTo; • UCaaS and legacy PBX providers, including Avaya, RingCentral, and 8x8; • Contact Center providers, including Five9, Inc., Genesys, and NICE inContact; and • consumer-facing platforms that can support small- or medium-sized businesses, including Amazon, Apple, and Facebook. 35 Table of Contents Other large established companies may also make investments in video communications tools. In addition, as we introduce new products and services into our platform, and with the introduction of new technologies and market entrants, including AI, we expect competition to continue to intensify. As we continue to build out our platform, we may face increased competition from companies that offer similar services and new competitors that may enter that market in the future. Our customers also include consumers or small and medium-sized businesses. With respect to these smaller customers, we face competition from more consumer-oriented platforms, most of which have more experience with the consumer market than we do. Further, many of our actual and potential competitors benefit from competitive advantages over us, such as greater name recognition; longer operating histories; more varied products and services; larger marketing budgets; more established marketing, customer and partner relationships; more third-party integrations; greater accessibility across devices and applications; greater access to larger user bases; major distribution agreements with hardware manufacturers and resellers; and greater financial, technical, and other resources. Some of our competitors may make acquisitions or strategic investments or enter into strategic relationships to offer a broader range of products and services than we do, which may prevent us from using such third parties' technology or offering such products or services. These combinations may make it more difficult for us to compete effectively. We expect these trends to continue as competitors attempt to strengthen or maintain their market positions. Demand for our platform is also price sensitive. Many factors, including our marketing, user acquisition, and technology costs, and our current and future competitors’ pricing and marketing strategies, can significantly affect our pricing strategies. Certain competitors offer, or may in the future offer, lower-priced or free products, or services that compete with our platform, or may bundle and offer a broader range of products and services than we do. Similarly, certain competitors may use marketing strategies that enable them to acquire customers at a lower cost than we can. Furthermore, third parties could build products similar to ours that rely on open source software. Even if such products do not include all the features and functionality that our platform provides, we could face pricing pressure from these third parties to the extent that users find such alternative products to be sufficient to meet their needs. In some cases, we have been forced to engage in price-cutting initiatives or other discounts to attract and retain customers in response to competitive pressures, and may have to do so in the future. We, on occasion, offer customers a free period of time at the beginning of the subscription term that can result in deferred billings or long-term accounts receivable and increase the risk of loss on uncollected accounts receivable. Our results have fluctuated and may in the future fluctuate significantly and may not fully reflect the underlying performance of our business. Our results of operations have fluctuated and may in the future fluctuate significantly, and period-to-period comparisons of our results of operations may not be meaningful. Accordingly, the results of any one quarter should not be relied upon as an indication of future performance. Our results of operations may fluctuate as a result of a variety of factors, many of which are outside of our control, and as a result, may not fully reflect the underlying performance of our business. For example, during fiscal year 2021, we experienced rapid growth in usage of our unified communications and collaboration platform largely due to the COVID-19 pandemic, a significant portion of which was attributable to free Basic accounts, which do not generate any revenue. To meet this increased demand, we have incurred and expect to continue to incur significant costs associated with upgrading our infrastructure and expanding our capacity. Fluctuations in our results may negatively impact the value of our securities. Factors that may cause fluctuations in our results of operations include, without limitation, those listed below: • our ability to retain and upgrade customers to higher-priced plans; • our ability to attract new customers and upgrade free users to one of our paid offerings; • our ability to hire and retain employees, in particular those responsible for the selling or marketing of our platform; • our ability to hire, develop, and retain talented sales personnel who are able to achieve desired productivity levels in a reasonable period of time and provide sales leadership in areas in which we are expanding our sales and marketing efforts; • changes in the way we organize and compensate our sales teams; • the timing of expenses and recognition of revenue; • our ability to increase sales to large organizations; • the length of our sales cycles and linearity of our bookings, especially with respect to sales to large enterprises and highly regulated industries, including financial services and U.S. federal and state and foreign governmental agencies; • the amount and timing of operating expenses related to the maintenance and expansion of our business, operations, and infrastructure, as well as international expansion and entry into operating leases, and the hiring and retention of personnel who can build, manage, and maintain our expanded business operations and infrastructure; 36 Table of Contents • timing and effectiveness of new sales and marketing initiatives; • changes in our pricing policies or those of our competitors; • our ability to hire and retain experienced research and development personnel to design new products, features, and functionality that meet our privacy and security standards; • the timing and success of new products, features, and functionality by us or our competitors; • interruptions or delays in our service, network outages, or actual, alleged, or perceived privacy violations or issues or security vulnerabilities, incidents, or breaches; • lawsuits, regulatory actions or investigations, legislator scrutiny, or negative publicity arising from actual, alleged, or perceived privacy violations or issues or security vulnerabilities, incidents, or breaches; • changes in the competitive dynamics of our industry, including consolidation among competitors; • changes in laws and regulations that impact our business; • any large indemnification payments to our users or other third parties; • the timing of expenses related to any future acquisitions; and • general economic and market conditions. Our business may be significantly affected by changes in the economy, including any resulting effect on consumer or business spending. Our business may be significantly affected by changes in the economy, such as high inflation and the responses by central banking authorities to control such inflation, recessionary or uncertain environments, fluctuations in the foreign currency exchange rates and geopolitical tensions and military conflicts, tariffs, the threat of new or increased tariffs and trade tensions, including the United States' ongoing trade disputes with China and other countries, and the conflict involving Iran and disruptions to energy supply routes, which have contributed to elevated energy prices and heightened volatility in financial markets. While some customers may view a subscription to our platform as a cost-saving purchase, decreasing the need for business travel, others may view a subscription to our platform as a discretionary purchase, and our customers may reduce their information technology spending on our platform during an economic downturn or during times of economic uncertainty. Given current economic conditions, including inflation, we have experienced and may continue to experience a loss of users and customers, as well as a reduction in demand for our platform, especially if the effects of the current economic environment have a prolonged impact on various industries that our unified communications and collaboration platform addresses. In addition to the foregoing, adverse developments that affect financial institutions, transactional counterparties or other third parties, such as bank failures, or concerns or speculation about any similar events or risks, could lead to market-wide liquidity problems, which in turn may cause third parties, including customers, to become unable to meet their obligations under various types of financial arrangements as well as general disruptions or instability in the financial markets. Moreover, we have lost and may continue to lose customers as a result of such customers ceasing to do business, and we have experienced and may continue to experience a material increase in longer payment cycles and greater difficulty in collecting accounts receivable from certain customers. These issues may continue in the future if current economic conditions continue or worsen. As we increase sales to large organizations or introduce new products and features, our sales cycles have and could continue to lengthen, and we could experience greater deployment challenges. We invest significant resources into sales to large organizations as well as to develop new products and features. Large organizations typically undertake a significant evaluation and negotiation process due to their leverage, size, organizational structure, and approval requirements, all of which have and may continue to lengthen our sales cycle. We have also faced and may in the future face unexpected deployment challenges with large organizations or more complicated deployment of some or all aspects of our platform. Large organizations may demand additional features, support services and pricing concessions, or require additional security management or control features. In addition, new products and features that differ meaningfully from our existing offerings, including those that incorporate or leverage artificial intelligence, may require prospective customers to conduct more extensive technical, legal, and operational evaluations prior to purchase, resulting in sales cycles that are longer, less predictable, or more variable than those associated with our established products, and there can be no assurance that customers who do purchase such offerings will adopt or utilize them at the levels or within the timeframes we anticipate. We may spend substantial time, effort, and money on sales efforts to large organizations as well as to develop new products and features, without any assurance that our efforts will produce any sales or that these customers will deploy our platform widely enough across their organization to justify our substantial up-front investment. As a result, we anticipate increased sales to large organizations will lead to higher up-front sales costs and greater unpredictability in our business, results of operations, and financial condition. 37 Table of Contents We generate revenue from sales of subscriptions to our platform, and any decline in demand for our platform or for communications and collaboration technologies in general would harm our business. We generate, and expect to continue to generate, revenue from the sale of subscriptions to our platform. As a result, widespread acceptance and use of communications and collaboration technologies in general, and our platform in particular, is critical to our future growth and success. If the communications and collaboration technologies market fails to grow, or grows more slowly than we currently anticipate, demand for our platform could be negatively affected. Changes in user preferences for communications and collaboration technologies may have a disproportionately greater impact on us than if we offered multiple platforms or disparate products. Demand for communications and collaboration technologies in general, and our platform in particular, is affected by a number of factors, many of which are beyond our control. Some of these potential factors include: • general awareness of the communications and collaboration technologies category; • availability of products and services that compete with ours; • new modes of communications and collaboration that may be developed in the future; • a reduction in customer information technology spending budgets, or a consolidation of spending budgets on our competitors' platforms, especially during periods of inflation or recessionary or uncertain economic environments; • ease of adoption and use; • features and platform experience; • reliability of our platform, including frequency of outages; • performance; • brand; • user support; and • pricing. The communications and collaboration technologies market is subject to rapidly changing user demand and trends in preferences. If we fail to successfully predict and address these changes and trends, meet user demands, or achieve more widespread market acceptance of our platform, our business would be harmed. We have incurred net losses in the past, and there are no assurances we will be able to maintain or increase profitability in the future. We have incurred net losses in the past and could incur net losses in the future. We intend to continue to expend significant funds on our sales and marketing efforts to attract new customers, expand the number of licenses and services used by our customers and develop and enhance our products. We also intend to continue investing in general corporate purposes, including operations, hiring additional personnel, including through acquisitions of other businesses, upgrading our infrastructure, addressing security and privacy issues, and expanding into new geographies and markets. To the extent we are successful in increasing our customer base, we may also incur increased losses because, other than sales commissions, the costs associated with acquiring customers are generally incurred up front, while the subscription revenue is generally recognized ratably over the subscription term, which can be monthly, annual, or on a multiyear basis. Our efforts to grow our business may be costlier than we expect, and we may not be able to increase our revenue enough to offset our higher operating expenses, which may result in decreased profitability. We may incur significant losses in the future for a number of reasons, including as a result of the other risks described herein, and unforeseen expenses, difficulties, complications, delays, and other unknown events. While free users continue to be a meaningful portion of the user base, we have directed marketing programs focused on converting free users to paid subscriptions. Some of these users have upgraded to a paid plan, but the remainder have not and may never do so. If we are unable to increase or sustain our profitability, the value of our business and Class A common stock may significantly decrease. Furthermore, it is difficult to predict the size and growth rate of our market, customer demand for our platform, customer adoption and renewal of our platform, the entry of competitive products and services, or the success of existing competitive products and services. As a result, we may not be able to increase or maintain profitability in future periods. If we fail to grow our revenue sufficiently to keep pace with our investments and other expenses, our business would be harmed. The experience of our users depends upon the interoperability of our platform across devices, operating systems, and third-party applications that we do not control, and if we are not able to maintain and expand our relationships with third parties to integrate our platform with their solutions, our business may be harmed. 38 Table of Contents One of the most important features of our platform is its broad interoperability with a range of diverse devices, operating systems, and third-party applications. Our platform is accessible from the web and from devices running Windows, Mac OS, iOS, Android, and Linux. We also have integrations with Atlassian, Dropbox, Google, Microsoft, Salesforce, Slack, and a variety of other productivity, collaboration, data management, and security vendors. We are dependent on the accessibility of our platform across these and other third-party operating systems and applications that we do not control, and some of these third parties can make it more difficult for our platform to interoperate with their systems in favor of competitive platforms. For example, given the broad adoption of Microsoft Office and other productivity software, it is important that we are able to integrate with this software. Several of our competitors own, develop, operate, or distribute operating systems, app stores, co-located data center services, and other software, and also have material business relationships with companies that own, develop, operate, or distribute operating systems, applications markets, co-located data center services, and other software that our platform requires in order to operate. Moreover, some of these competitors have inherent advantages developing products and services that more tightly integrate with their software and hardware platforms or those of their business partners. Third-party services and products are constantly evolving, and we may not be able to modify our platform to assure its compatibility with that of other third parties following development changes. In addition, some of our competitors may be able to disrupt the operations or compatibility of our platform with their products or services, or exert strong business influence on our ability to, and terms on which we, operate and distribute our platform. For example, we currently offer products that directly compete with several large technology companies that we rely on to ensure the interoperability of our platform with their products or services. As our respective products evolve, we expect this level of competition to increase. Should any of our competitors modify their products or standards in a manner that degrades the functionality of our platform or gives preferential treatment to competitive products or services, whether to enhance their competitive position or for any other reason, the interoperability of our platform with these products could decrease and our business could be harmed. In addition, we provide, develop, and create applications for our platform partners that integrate our platform with our partners’ various offerings. For example, our Zoom Workplace product integrates with tools offered by companies, such as Atlassian and Dropbox, to help teams get more done together. If we are not able to continue and expand on existing and new relationships to integrate our platform with our partners’ solutions, or there are quality issues with our products or service interruptions of our products that integrate with our partners’ solutions, our business will be harmed. We are subject to requirements imposed by app stores such as those operated by Apple and Google, who may change their technical requirements or policies in a manner that adversely impacts the way in which we or our partners collect, use and share data from users. For example, Apple requires mobile applications using its iOS mobile operating system to obtain a user’s permission to track them or access their device’s advertising identifier for certain purposes. The long-term impact of these and any other privacy and regulatory changes remains uncertain. If we do not comply with applicable requirements imposed by app stores, we could lose access to the app store and users, and our business would be harmed. We may not be able to respond to rapid technological changes, extend our platform, or develop new features. The communications and collaboration technologies market is characterized by rapid technological change and frequent new product and service introductions. Our ability to grow our customer base and increase our revenue will depend heavily on our ability to enhance and improve our platform; introduce new features and products; and interoperate across an increasing range of devices, operating systems, and third-party applications. Our customers may require features and capabilities that our current platform does not have. In particular, advancements in technology such as AI and machine learning are changing the way people work, and businesses that are slow to adopt these new technologies may face a competitive disadvantage. We invest significantly in research and development, and our goal is to focus our spending on measures that improve quality and ease of adoption, enhance privacy and security, and create organic demand for our platform. There is no assurance that new additions or other future enhancements to our platform or new product experiences, features, or capabilities will be compelling to our customers or gain market acceptance, or that they will perform as expected. If our research and development investments do not accurately anticipate demand or if we fail to develop our platform in a manner that satisfies customer preferences and requirements in a timely and cost-effective manner, we may fail to retain our existing customers or increase demand for our platform. The introduction of new products and services by competitors or the development of entirely new technologies to replace existing offerings, such as AI-powered communication and collaboration tools, could make our platform obsolete or adversely affect our business, results of operations, and financial condition. We may experience difficulties with software development, design, or marketing that could delay or prevent our development, introduction, or implementation of new product experiences, features, or capabilities. We have in the past experienced delays in our internally planned release dates of new features and capabilities and there can be no assurance that new product experiences, features, or capabilities will be released according to schedule. Any delays could result in adverse publicity, loss of revenue or market acceptance, or claims by users brought against us, all of which could harm our business. Moreover, new productivity features to our platform may require substantial investment, and we have no assurance that such investments will be successful. If customers and users do not widely adopt our 39 Table of Contents new product experiences, features, and capabilities, or they do not perform as expected, we may not be able to realize a return on our investment. If we are unable to develop, license, or acquire new features and capabilities to our platform on a timely and cost-effective basis, or if such enhancements do not achieve market acceptance, our business would be harmed. We use generative AI including in our products and services, which may result in operational challenges, legal liability, reputational concerns, competitive risks and regulatory concerns that could adversely affect our business and results of operations. We use generative AI processes and algorithms, including by deploying generative AI features in our products and services, which may result in adverse effects to our operations, legal liability, reputation and competitive risks. The use of generative and agentic AI at scale is relatively new, and may lead to challenges, concerns and risks that are significant or that we may not be able to predict. For example, AI algorithms use machine learning (“ML”) and predictive analytics which may be insufficient, biased, inaccurate or of poor quality, which could result in customer rejection or skepticism of our products, adversely impact the rights of individuals, affect our reputation or brand, and negatively affect our financial results. Additionally, we rely on third parties for certain AI features of our products and if such third parties do not provide us those features (or do not do so on acceptable terms), experience interruptions, or cease operating, we may need to work with another provider, which may take time or may not be possible, and could result in the disruption of certain of our products or services, affect our reputation or brand, and negatively affect our financial results. We could also face claims from third parties claiming infringement of their intellectual property or other proprietary rights with respect to materials used or created by generative or agentic AI tools or features that we believed to be available for use and not subject to such rights. The investment required to bring AI features to market and the costs associated with providing these features to our customers may be significant, and we may be unable to recover these costs if customers and users do not widely adopt these features. We currently offer certain of our AI features at no additional cost, as we believe they will ultimately enhance user satisfaction, improve customer retention, and drive revenue. If such benefits are not realized, the associated investment costs could further negatively impact our margins. Further, use of generative AI tools by our employees or others could result in disclosure of confidential or sensitive company and customer data, reputational harm, and legal liability. The failure to effectively develop and expand our marketing and sales capabilities could harm our ability to increase our customer base and achieve broader market acceptance of our platform. Our ability to increase our customer base and achieve broader market acceptance of our products and services will depend to a significant extent on our ability to expand our marketing and sales operations. We plan to continue expanding our sales and marketing capabilities, including through strategic partners, both domestically and internationally. If we are unable to expand our sales and marketing operations, our future revenue growth and business could be adversely impacted. Identifying and recruiting qualified sales representatives and training them is time consuming and resource intensive, and they may not be fully trained and productive for a significant amount of time. We also plan to dedicate significant resources to sales and marketing programs, including internet and other online advertising. All of these efforts will require us to invest significant financial and other resources, as the cost to acquire customers through these efforts is high. Our business will be harmed if our efforts do not generate a correspondingly significant increase in revenue. Failures in internet infrastructure or interference with broadband access could cause current or potential users to believe that our systems are unreliable, possibly leading our customers to switch to our competitors, or to cancel their subscriptions to our platform. Unlike traditional communications and collaboration technologies, our services depend on our users’ high-speed broadband access to the internet, usually provided through a cable or digital subscriber line connection. Increasing numbers of users and increasing bandwidth requirements may degrade the performance of our platform due to capacity constraints and other internet infrastructure limitations. As our number of users has grown and their usage of communications capacity has increased, we have been required to make additional investments in network capacity to maintain adequate data transmission speeds, the availability of which may be limited, or the cost of which may be on terms unacceptable to us. If adequate capacity does not continue to be available to us to support our user base in the future, our network may be unable to achieve or maintain sufficiently high data transmission capacity, reliability, or performance. In addition, if internet service providers and other third parties providing internet services have outages or deteriorations in their quality of service, our users will not have access to our platform or may experience a decrease in the quality of our platform. Furthermore, as the rate of adoption of new technologies increases, the networks our platform relies on may not be able to sufficiently adapt to the increased demand for these services, including ours. Frequent or persistent interruptions could cause current or potential users to believe that our systems or platform are unreliable, leading them to switch to our competitors or to avoid our platform, which could permanently harm our business. In addition, users who access our platform through mobile devices, such as smartphones and tablets, must have a high-speed connection, such as 3G, 4G, 5G, LTE, satellite, or Wi-Fi, to use our services and applications. Currently, this access is provided by companies that have significant and increasing market power in the broadband and internet access marketplace, 40 Table of Contents including incumbent phone companies, cable companies, satellite companies, and wireless companies. Some of these providers offer products and subscriptions that directly compete with our own offerings, which can potentially give them a competitive advantage. Also, these providers could take measures that degrade, disrupt, or increase the cost of user access to third-party services, including our platform, by restricting or prohibiting the use of their infrastructure to support or facilitate third-party services or by charging increased fees to third parties or the users of third-party services, any of which would make our platform less attractive to users and reduce our revenue. On January 4, 2018, the Federal Communications Commission (“FCC”) released an order reclassifying broadband internet access as an information service, a regulatory regime generally referred to as network neutrality, subject to certain provisions of Title I of the Communications Act. The order requires broadband providers to publicly disclose accurate information regarding network management practices, performance characteristics, and commercial terms of their broadband internet access services sufficient to enable consumers to make informed choices regarding the purchase and use of such services, and entrepreneurs and other small businesses to develop, market, and maintain internet offerings. The new rules went into effect on June 11, 2018. Numerous parties filed judicial challenges to the order, and on October 1, 2019, the United States Court of Appeals for the District of Columbia Circuit released a decision that rejected nearly all of the challenges to the new rules, but reversed the FCC’s decision to prohibit all state and local regulation targeted at broadband internet service, requiring case-by-case determinations as to whether state and local regulation conflicts with the FCC’s rules. The court also required the FCC to reexamine three issues from the order but allowed the order to remain in effect, while the FCC conducts that review. On October 27, 2020, the FCC adopted an order concluding that the three issues remanded by the court did not provide a basis to alter its conclusions in the 2018 order. On October 19, 2023, the FCC adopted a notice of proposed rulemaking proposing to reinstate the 2015 rules, and on April 24, 2024, adopted an order that substantially reinstated those rules. On January 2, 2025, the U.S. Court of Appeals for the Sixth Circuit issued a decision overturning the FCC order. A petition for rehearing of the decision filed by proponents of network neutrality was denied on March 11, 2025. On August 8, 2025, the proponents of network neutrality announced that they would not seek Supreme Court review of the Sixth Circuit decision. On November 3, 2025, the FCC released a notice of proposed rulemaking that proposed changes to the rules for disclosure of information on broadband services provided to consumers. We cannot predict the impact of the Sixth Circuit decision, the reinstatement of the prior rules or the proposed changes to the rules on our operations or business. In addition, a number of states have adopted or are adopting or considering legislation or executive actions that would regulate the conduct of broadband providers, including legislation to impose state-level network requirements in New York. After a federal court judge denied a request for a preliminary injunction against California’s state-specific network neutrality law, California began enforcing that law on March 25, 2021. Several other states have adopted or are adopting or considering legislation or executive actions that would regulate the conduct of broadband providers. A similar law in Vermont is subject to a pending challenge, but went into effect on April 20, 2022 and the challenge has been suspended until an appeal in another case addressing state powers to adopt internet regulation is resolved. Under the FCC’s 2018 rules, which currently remain in effect, broadband internet access providers may be able to charge web-based services such as ours for priority access or favor services offered by our competitors or by the internet access providers themselves, which could result in increased costs and a loss of existing customers, impair our ability to attract new customers, and harm our business. If there are changes to the regulatory structures in the United States or elsewhere that reduce investment in infrastructure by internet service providers, including a return of the network neutrality regulations that were overturned, any impacts of reduced investment that reduce network capacity or speed could have a negative effect on our business, operating results, and financial condition. Our security measures, and those of third parties with whom we work, have been compromised in the past and may be compromised in the future. If our security measures are compromised in the future or if our information technology fails, this could harm our reputation, expose us to significant fines and liability, impair our sales, and harm our business. In addition, if our products and services are perceived as not being secure, this could result in customers and users curtailing or ceasing their use of our products, us incurring significant liabilities, and our business being harmed. In the ordinary course of our business, we and the third parties with whom we work collect, receive, store, process, generate, use, transfer, disclose, make accessible, protect, secure, dispose of, transmit, and share confidential, proprietary, and sensitive data, including data of ours, our customers, and our users, the data which includes personal information, customer and user content, health-related data, intellectual property, trade secrets, business plans, and financial information. We and the third parties upon which we rely face a variety of evolving threats, including but not limited to ransomware attacks, which could cause security incidents. We routinely investigate security incidents, which have occurred in the past and may occur in the future, that result in unauthorized access to, loss or unauthorized disclosure of, or inadvertent disclosure of confidential, proprietary, and sensitive information. Cyberattacks, other malicious internet-based activity, online and offline fraud, and other similar activities threaten the confidentiality, integrity, and availability of our proprietary, confidential, and sensitive data and information technology 41 Table of Contents systems, and those of the third parties with whom we work. Cloud-based platform providers of products and services have been and are expected to continue to be targeted. Threats are prevalent and continue to rise, are increasingly difficult to detect, and come from a variety of sources, including traditional computer “hackers,” threat actors, “hacktivists,” organized criminal threat actors, personnel (such as through theft or misuse), sophisticated nation-state and nation-state supported actors, and advanced persistent threat intrusions. Some actors now engage and are expected to continue to engage in cyberattacks, including without limitation nation-state actors for geopolitical reasons and in conjunction with military conflicts and defense activities. During times of war and other major conflicts, we and the third parties with whom we work may be vulnerable to a heightened risk of these attacks, which could materially disrupt our systems and operations, supply chain, and ability to provide our services. We and the third parties with whom we work are subject to a variety of evolving threats, including but not limited to social-engineering attacks (including through deep fakes, which may be increasingly difficult to identify as fake, and phishing attacks), malicious code (such as viruses and worms), malware (including as a result of advanced persistent threat intrusions), denial-of-service attacks, credential stuffing, personnel misconduct or error, supply-chain attacks, software bugs, server malfunctions, software or hardware failures, loss of data or other information technology assets, adware, telecommunications failures, attacks enhanced or facilitated by AI, earthquakes, fires, floods, and other similar threats. Ransomware attacks, including those perpetrated by organized criminal threat actors, nation-states, and nation-state-supported actors, are becoming increasingly prevalent and severe and can lead to significant interruptions in our operations or our ability to provide our products or services, loss of data and income, reputational harm, and diversion of funds. Extortion payments may alleviate the negative impact of a ransomware attack, but we may be unwilling or unable to make such payments due to, for example, applicable laws or regulations prohibiting such payments. Moreover, we and many similarly situated companies have been targeted by nation-state sponsored schemes intended to defraud companies through remote-work IT scams. While to date, these scams have not been successful, if they were to succeed, these scams could expose us to governmental and regulatory as well as market and media scrutiny regarding the actual or perceived integrity of our platform or data security, as well as other potential liability and consequences. Additionally, our platform, products, and services are relied on by a large number of companies worldwide and as a result, if our platform, products, or solutions are compromised, a significant number or all of our customers and their data could be simultaneously affected. The potential liability and associated consequences we could suffer as a result of such a large-scale event could be catastrophic and result in irreparable harm. Future or past business transactions (such as acquisitions or integrations) could expose us to additional cybersecurity risks and vulnerabilities, as our systems could be negatively affected by vulnerabilities present in acquired or integrated entities’ systems and technologies. Furthermore, we have discovered, and may in the future discover security issues that were not found during due diligence of such acquired or integrated entities, and it may be difficult to integrate companies into our information technology environment and security program. Our customers may place certain security obligations on us. For example, some of our customers may be subject to the EU’s Digital Operational Resilience Act (DORA) and similar UK regulatory requirements on operational resilience. These laws may obligate our customers to impose contractual provisions on us, including certain mandatory third-party risk management provisions. If we fail to materially comply with these contractual requirements, we may be subject to investigations, audits or other adverse consequences. In addition, our reliance on third parties has in the past and could continue to introduce new cybersecurity risks and vulnerabilities, including supply-chain attacks, and other threats to our business operations. We rely on third parties to operate critical business systems to process confidential, proprietary, and sensitive data in a variety of contexts, including, without limitation, cloud-based infrastructure, data center facilities, encryption and authentication technology, employee email, content delivery to customers, and other functions. We also rely on third parties to provide other products, services and parts, or otherwise to operate our business. Our ability to monitor these third parties’ information security practices is limited, and these third parties may not have adequate information security measures in place. If the third parties with whom we work experience a security incident or other interruption, we could experience adverse consequences. While we may be entitled to damages if the third parties with whom we work fail to satisfy their privacy or security-related obligations to us, any award may be insufficient to cover our damages, or we may be unable to recover such award. In addition, supply-chain attacks have increased in frequency and severity, and we cannot guarantee that third parties’ infrastructure in our supply chain or that of the third parties with whom we work supply chains have not been compromised. If our security measures are compromised, as has occurred in the past, our reputation could be damaged; our data, information or intellectual property, or that of our customers, may be destroyed, stolen, or otherwise compromised; our business may be harmed; and we could incur significant liability. We take steps designed to detect and remediate vulnerabilities in our information systems and those of third parties with whom we work, but we may not detect or remediate all such vulnerabilities or do so in a timely manner. The threats and techniques used to exploit vulnerabilities change frequently and are often sophisticated in nature, and may be difficult to detect by security tools. Vulnerabilities could be exploited and result in a security incident. We have limited budgetary and human resources for detecting and remediating vulnerabilities and have experienced difficulties in hiring and retaining qualified security personnel, especially after our recent restructuring actions. We may experience delays in developing and deploying remedial measures, including patches, designed to address identified 42 Table of Contents vulnerabilities, and our remedial measures may require action by our customers such as installing patches or updates, which may increase the amount of time a vulnerability remains unremediated. We have not always been able in the past and may be unable in the future to anticipate or prevent threats or techniques used to detect or exploit vulnerabilities in our information systems or third-party software, or obtain unauthorized access to or compromise our systems. In addition, security researchers and other individuals have in the past and will continue in the future to actively search for and exploit actual and potential vulnerabilities in our software or services. This activity may increase because of increased demand for our services and increased media scrutiny of our unified communications and collaboration platform, and can lead to additional adverse publicity, reputational harm, extortion threats, business and operational interruptions, security incidents, additional expenses, litigation, regulatory investigations and actions, and substantial harm to our business, some of which we have experienced. For example, in July 2019, a security researcher published a blog highlighting concerns with the Zoom Meeting platform, including certain video-on features. We were able to release updates to the software addressing these vulnerabilities, and we are not aware of any customers being affected or meetings compromised by these vulnerabilities. In most cases, customers are responsible for installing this update to the software, and their software is subject to these vulnerabilities until they do so. Additionally, in March 2020, a security researcher reported certain vulnerabilities related to our macOS version that could have allowed an unauthorized person to gain root access to a user’s system. Given the nature of our business and operations, our products and services will inevitably contain vulnerabilities or critical security defects that have not been identified or remediated and cannot be disclosed without compromising security. We have identified high or critical vulnerabilities in our products, services and information systems in the past, and we expect that we will continue to identify such vulnerabilities in the future. We cannot be certain that we will be able to address any vulnerabilities in our products, services and information systems that we may become aware of in the future, or there may be delays in developing patches that can be effectively deployed to address vulnerabilities. We will continue to make prioritization decisions based on, among other things, our available resources, the efficacy of our security tools, and the increasing workload to meet certain security obligations, to determine which vulnerabilities or security defects to fix and the timing of these fixes, which could result in an exploit that compromises security. In some cases, customers are responsible for installing our software updates, and until they do so, their service remains subject to the vulnerabilities addressed in the software update. Vulnerabilities and critical security defects, errors in remediating vulnerabilities or security defects, failure of third-party providers to remediate vulnerabilities or security defects, or customers not deploying security releases or deciding not to install software updates could result in claims of liability against us, damage our reputation, or otherwise harm our business. Security incidents and vulnerabilities, and concerns regarding privacy, data protection, and information security may also prevent some of our customers and users from using or cause some of our customers and users to stop using our solutions and fail to upgrade or renew their subscriptions. Failures to meet customers’ and users’ expectations with respect to security and confidentiality of their data and information could damage our reputation and affect our ability to retain customers and users, attract new customers and users, and grow our business. In addition, cybersecurity events or security vulnerabilities could result in breaches of our agreements with customers, lawsuits against us (including class action litigation), regulatory investigations or actions, and significant increases in costs, including costs for remediating the effects of such an event or vulnerability, lost revenue due to network downtime, and a decrease in customer and user trust, increases in insurance premiums due to cybersecurity incidents, increased costs to address cybersecurity issues, and attempts to prevent future incidents, fines, penalties, judgments and settlements, and attorney fees, and harm to our business and our reputation because of any such incident. Any of the previously identified or similar threats could cause a security incident or other interruption that could result in unauthorized, unlawful, or accidental acquisition, modification, destruction, loss, alteration, encryption, disclosure of, or access to confidential, proprietary, or sensitive data or our information technology systems, or those of the third parties with whom we work. A security incident or other interruption could disrupt our ability (and that of third parties with whom we work) to provide our services. We expend significant resources or modify our business activities to try to protect against security incidents. Additionally, certain privacy, data protection, and information security obligations require us to implement and maintain certain security measures or industry-standard or reasonable security measures to protect our information technology systems and sensitive data. Many governments have enacted laws requiring companies to provide notice of data security incidents, including those recently promulgated by the SEC. These laws may also require us to take certain measures, such as providing credit monitoring to individuals. Such laws are inconsistent, compliance in the event of a widespread data breach is costly, and the disclosure or the failure to comply with such requirements could lead to adverse consequences. In addition, some of our customers require us to notify them of data security breaches. Actual or perceived security gaps or security compromises experienced in our industry or by our competitors, our customers, a third party with whom we work, or us could cause us to experience adverse consequences, such as government 43 Table of Contents enforcement actions (for example, investigations, fines, penalties, audits, and inspections); additional reporting requirements and/or oversight; restrictions on processing sensitive data (including personal information); litigation (including class claims); indemnification obligations; negative publicity; reputational harm; monetary fund diversions; diversion of management attention; interruptions in our operations (including availability of data); financial loss; and other similar harms. Security incidents and attendant consequences may cause customers to stop using our services, deter new customers from using our services, and negatively impact our ability to grow and operate our business. In addition, while more than half of our employees are based in the United States, like many similarly situated technology companies, we have a sizable number of research and development personnel outside of the United States, including in China, which has exposed and could continue to expose us to governmental and regulatory as well as market and media scrutiny regarding the actual or perceived integrity of our platform or data security and privacy features. Increased usage of our services, novel uses of our services, and additional awareness of Zoom and our brand have led and could in the future lead to greater public scrutiny of, press related to, or a negative perception of our information security and potential vulnerabilities associated with our platform. For example, during the COVID-19 pandemic, we opened our platform to unprecedented numbers of first-time users, leading to challenges for users who did not have full IT support or established protocols for security and privacy like our larger customers. As a result, we have experienced negative publicity related to meeting disruptions and security and privacy issues, including on encryption. Such unfavorable publicity and scrutiny could result in material reputational harm, a loss of customer and user confidence, increased regulatory or litigation exposure, additional expenses, and other harm to our business. There can be no assurance that any limitations of liability provisions in our subscription agreements, terms of use or other agreements would be enforceable or adequate or would otherwise protect us from any such liabilities or damages with respect to any particular claim. We also cannot be sure that our existing general liability insurance coverage and coverage for cyber liability or errors or omissions will continue to be available on acceptable terms or will be available in sufficient amounts to cover one or more large claims or that the insurer will not deny coverage as to any future claim. The successful assertion of one or more large claims against us that are not covered or exceed available insurance coverage, or the occurrence of changes in our insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements, could harm our business. In addition to experiencing a security incident, third parties may gather, collect, or infer sensitive information about us from public sources, data brokers, or other means that reveals competitively sensitive details about our organization and could be used to undermine our competitive advantage or market position. Our business depends on a strong brand, and if we are not able to maintain and enhance our brand, our ability to expand our base of users will be impaired and our business will be harmed. We believe that maintaining and enhancing the Zoom brand is critical to expanding our base of customers and users and, in particular, conveying to users and the public that the Zoom brand consists of a broad communications and collaboration platform, rather than just one distinct product. For example, if users view the Zoom brand primarily as a video conferencing point solution or utility rather than as a workplace collaboration solution that connects people through video, voice, chat and content sharing, or have a negative perception of our privacy and security, then our market position may be detrimentally impacted. We anticipate that, as our market becomes increasingly competitive, maintaining and enhancing our brand may become increasingly difficult and expensive. Any unfavorable publicity or perception of our platform, including from any delays or interruptions in service due to capacity constraints stemming from increased usage, from our privacy or security features, because of sentiment towards the providers of communication and collaboration technologies generally, or from our integration of new product functionalities using technologies with heightened public interest, could adversely affect our reputation and our ability to attract and retain customers. Similarly, any unfavorable perception of our company, including due to any actual or perceived violation by our employees of our policies, such as our Code of Business Conduct and Ethics, could cause us reputational harm and customer loss, impact our financial performance, expose us to litigation, and harm our business, among other things. If we fail to promote and maintain the Zoom brand, including consumer and public perception of our platform or our company, or if we incur excessive expenses in this effort, our business will be harmed. If we fail to manage our growth effectively, our business, financial condition and results of operations may be harmed. While our employee headcount both in the United States and internationally has generally increased over time, we have undertaken, and may undertake from time to time in the future, restructuring actions to better align our financial model. For 44 Table of Contents