Zoom Video Communications Inc

Previous wording

Zoom is an AI-powered, open collaboration platform built for modern work. Zoom Workplace along with AI Companion, Business Services for sales, marketing, and customer care teams, including Zoom Contact Center, and our robust ecosystem with over 2,500 apps and integration, help drive impact, reimagine teamwork, strengthen customer relationships, and enable seamless experiences. Trust is a cornerstone of the Zoom platform. We equip users with a comprehensive set of tools to make their interactions safe, secure, and private. We believe that strong security should never compromise a great user experience.

Current wording

Zoom’s Business Services for sales, marketing, and customer care teams, including Zoom Contact Center, strengthen customer relationships throughout the customer lifecycle. Trust is a cornerstone of the Zoom platform. We equip users with a comprehensive set of tools to make their interactions safe, secure, and private. We believe that strong security should never compromise a great user experience.

Previous wording

We continue to invest in AI and focus on three key areas regarding AI innovation: supporting individual productivity, powering better collaboration, and helping customer-facing teams delight their customers. We launched Zoom AI Companion, our smart assistant that is designed to empower workers to increase productivity, improve team effectiveness, and enhance skills. Additionally, we introduced our federated approach to AI, which enables us to make Zoom’s AI capabilities accessible and affordable so that more people can incorporate them in their day-to-day workflows. 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.

Current wording

AI has been core to Zoom’s product DNA for many years, grounded in our conviction that AI can make work more human by strengthening collaboration, productivity, and inclusivity. We continue to invest in AI and focus on three key areas regarding AI innovation: supporting individual productivity, powering better collaboration, and helping customer-facing teams delight their customers. We launched Zoom AI Companion, our generative AI assistant that is designed to empower workers to increase productivity, improve team effectiveness, and enhance skills. Additionally, we introduced our federated approach to AI, which enables us to make Zoom’s AI capabilities accessible and affordable so that more people can incorporate them into their day-to-day workflows. 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.

Previous wording

We believe that face-to-face communications build greater empathy and trust. We strive to live up to the trust our customers place in us by delivering a communications solution while prioritizing their privacy and security. Our 33 co-located data centers worldwide and the public cloud in conjunction with our proprietary adaptive rate codec enable us to provide both high-quality and high-definition, real-time video to our customers even in low-bandwidth environments.

Current wording

We believe that face-to-face communications build greater empathy and trust. We strive to live up to the trust our customers place in us by delivering a communications solution while prioritizing their privacy and security. Our 32 co-located data centers worldwide and the public cloud, in conjunction with our proprietary adaptive rate codec, enable us to provide both high-quality and high-definition real-time video to our customers, even in low-bandwidth environments.

Previous wording

We generate revenue from the sale of subscriptions to our Zoom Workplace collaboration platform and Business Services. Subscription revenue is driven primarily by the number of customers as well as purchases of additional products, including Zoom Phone, Zoom Spaces, Zoom Events, Zoom Contact Center and Zoom Revenue Accelerator. We define a customer as a separate and distinct buying entity, which can be a single paid user or an organization of any size (including a distinct unit of an organization) that has multiple users. Our Zoom Workplace Basic offering is free and gives users access to Zoom Meetings with core features but with the limitation that meetings time-out at 40 minutes. Our core paid offerings are available with our Zoom Workplace bundles: Zoom Workplace Pro, Business, Business Plus, Enterprise, Enterprise Plus, and Enterprise Premier. The Zoom Workplace bundles are designed for different business needs and are composed of Zoom Meetings, Zoom Team Chat, Zoom Whiteboard and Mail and Calendar, Zoom Clips, as well as Zoom Phone, Zoom Webinars and Zoom Rooms for our Enterprise plans. We also offer vertical-specific plans for Education, Healthcare and Government which provide incremental features and functionality, such as different participant limits, administrative controls, and reporting.

Current wording

We generate revenue from the sale of subscriptions to Zoom Workplace and Zoom Business Services. Subscription revenue is driven primarily by the number of customers, as well as purchases of additional products, including Zoom Phone, Zoom Spaces, Zoom Events, Zoom Contact Center, and Zoom Revenue Accelerator. We define a customer as a separate and distinct buying entity, which can be a single paid user or an organization of any size (including a distinct unit of an organization) that has multiple users. Our Zoom Workplace Basic offering is free and gives users access to Zoom Meetings with core features but with the limitation that meetings time-out at 40 minutes. Our core paid offerings are available with our Zoom Workplace bundles: Zoom Workplace Pro, Business, Business Plus, Enterprise, Enterprise Plus, and Enterprise Premier. The Zoom Workplace bundles are designed for different business needs and are composed of Zoom Meetings, Zoom Team Chat, Zoom Whiteboard and Mail and Calendar, Zoom Clips, as well as Zoom Phone, Zoom Webinars and Zoom Rooms for our Enterprise plans. We also offer vertical-specific plans for Education, Healthcare, and Government which provide incremental features and functionality, such as different participant limits, administrative controls, and reporting.

Previous wording

For Zoom Phone, plans include Zoom Phone Pro, which provides extension-to-extension calling or can be used with the Bring Your Own Carrier model wherein the customer connects Zoom Phone to an existing carrier. We also offer Regional Unlimited and Regional Metered calling plans in four specific markets (Australia/New Zealand, Japan, United Kingdom/Ireland and United States/Canada). In addition, we offer a Global Select plan that allows customers to select from local numbers and domestic calling in more than 45 countries and territories where Zoom has local public switched telephone network (“PSTN”) coverage.

Current wording

For Zoom Phone, plans include Zoom Phone Pro, which provides extension-to-extension calling or which can be used with the Bring Your Own Carrier model, wherein the customer connects Zoom Phone to an existing carrier. We also offer Regional Unlimited and Regional Metered calling plans in four specific markets (Australia/New Zealand, Japan, United Kingdom/Ireland, and United States/Canada). In addition, we offer a Global Select plan that allows customers to select from local numbers and domestic calling in more than 45 countries and territories where Zoom has local public switched telephone network (“PSTN”) coverage.

Previous wording

Our revenue was $1,141.2 million and $1,105.4 million for the three months ended April 30, 2024 and 2023, respectively, representing period-over-period growth of 3.2%. We had net income of $216.3 million and $15.4 million for the three months ended April 30, 2024 and 2023, respectively. Net cash provided by operating activities was $588.2 million and $418.5 million for the three months ended April 30, 2024 and 2023, respectively.

Current wording

Our revenue was $1,162.5 million and $1,138.7 million for the three months ended July 31, 2024 and 2023, respectively, representing period-over-period growth of 2.1%. We had net income of $219.0 million and $182.0 million for the three months ended July 31, 2024 and 2023, respectively. Our revenue was $2,303.8 million and $2,244.0 million for the six months ended July 31, 2024 and 2023, respectively, representing period-over-period growth of 2.7%. We had net income of $435.3 million and $197.4 million for the six months ended July 31, 2024 and 2023, respectively. Net cash provided by operating activities was $1,037.5 million and $754.5 million for the six months ended July 31, 2024 and 2023, respectively.

Previous wording

Macroeconomic factors, including geopolitical conflicts, global economic slowdown, high inflation, increased interest rates, and the responses by central banking authorities, and fluctuations in foreign currency exchange rates, have introduced uncertainty to our business. For the three months ended April 30, 2024, compared to the three months ended April 30, 2023, we continued to experience growth in total revenue and revenue from Enterprise customers. However, macroeconomic conditions have impacted and may continue to impact the future demand for subscriptions to our unified communications and collaboration platform. For example, we have been experiencing elongated sales cycles as well as a decrease in customers’ overall corporate spending. Many factors may contribute to declines in our growth rate as compared to prior fiscal years, among other things, higher market penetration, increased competition, slowing demand for our platform, a slower than anticipated capitalization on growth opportunities, and the maturation of our business.

Current wording

Macroeconomic factors, including geopolitical conflicts, global economic slowdown, high inflation, high interest rates, and the responses by central banking authorities, and fluctuations in foreign currency exchange rates, have introduced uncertainty to our business. For the three and six months ended July 31, 2024, compared to the three and six months ended July 31, 2023, we continued to experience growth in total revenue and revenue from Enterprise customers. However, macroeconomic conditions have impacted and may continue to impact the future demand for subscriptions to our unified communications and collaboration platform. For example, we have been experiencing elongated sales cycles as well as a decrease in customers’ overall corporate spending and increased scrutiny on IT spending, in particular, from existing and potential customers. Many factors may contribute to declines in our growth rate as compared to prior fiscal years, including, among other things, higher market penetration, increased competition, slowing demand for our platform, a slower than anticipated capitalization on growth opportunities, and the maturation of our business.

Previous wording

We are focused on continuing to grow the number of customers that use the Zoom Workplace and our Business Services offerings. 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 that our platform addresses, it is difficult to predict customer adoption rates or the future growth rate and size of the market for our platform. We will need to continue to invest in sales and marketing in order to address this opportunity by hiring, developing, and retaining talented sales personnel who are able to achieve desired productivity levels in a reasonable period of time.

Current wording

We are focused on continuing to grow the number of customers that use Zoom Workplace and Zoom Business Services. 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 that our platform addresses, it is difficult to predict customer adoption rates or the future growth rate and size of the market for our platform. We will need to continue to invest in sales and marketing in order to address this opportunity by hiring, developing, and retaining talented sales personnel who are able to achieve desired productivity levels in a reasonable period of time.

Previous wording

We believe that there is a large opportunity for growth with many of our existing customers. Historically customers have increased the size of their subscriptions as they have expanded their use of our platform across their operations. Despite recent macroeconomic headwinds that have impacted the rate of expansion, we believe there continues to be opportunity for future expansion with our existing customers as we innovate our platform with additional product offerings and the use of AI. This 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, Spaces, Contact Center, Revenue Accelerator, Events and Developer Platform Solutions. In order for us to address this opportunity and expand the use of our products with our existing 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.

Current wording

We believe that there is a large opportunity for growth with many of our existing customers. Historically, customers have increased the size of their subscriptions as they have expanded their use of our platform across their operations. Despite recent macroeconomic headwinds that have impacted the rate of expansion and caused it to drop below one hundred percent, we believe there are still opportunities for future growth with our existing customers as we innovate our platform with additional product offerings and the use of AI. This 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, Spaces, Contact Center, Revenue Accelerator, Events, and our Developer Platform Solutions. In order for us to address this opportunity and expand the use of our products with our existing 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.

Previous wording

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 58.3% and 57.2% of total revenue for the three months ended April 30, 2024 and 2023, 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 users 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, contraction, 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 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 as of April 30, 2024 and 2023 was 99% and 112%, respectively.

Current wording

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 58.7% and 57.9% of total revenue for the three months ended July 31, 2024 and 2023, respectively, and 58.5% and 57.6% of total revenue for the six months ended July 31, 2024 and 2023, 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 users 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, contraction, 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 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 as of July 31, 2024 and 2023 was 98% and 109%, respectively.

Previous wording

In addition to Enterprise customers, we also have a significant number of customers that subscribe to our services directly through our website (“Online customers” or “Online business”). Online customers represent a diverse customer base, ranging from individual users to small and medium size businesses. We continue to focus on acquisition and retention of our Online customers through various strategies to improve the features and functionalities of our products and services. Revenue from Online customers represented 41.7% and 42.8% of total revenue for the three months ended April 30, 2024 and 2023, 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 3.2% and 3.1% per month for the three months ended April 30, 2024 and 2023, respectively. One of the dynamics in the Online business is the MRR contribution from customers that 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, 2024 and 2023, the percentage of total Online MRR from Online customers with a continual term of service of at least 16 months was 73.8% and 72.0%, respectively.

Current wording

In addition to Enterprise customers, we also have a significant number of customers that subscribe to our services directly through our website (“Online customers” or “Online business”). Online customers represent a diverse customer base, ranging from individual users to small and medium size businesses. We continue to focus on acquisition and retention of our Online customers through various strategies to improve the features and functionalities of our products and services. Revenue from Online customers represented 41.3% and 42.1% of total revenue for the three months ended July 31, 2024 and 2023, respectively, and 41.5% and 42.4% of total revenue for the six months ended July 31, 2024 and 2023, 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 2.9% and 3.2% per month for the three months ended July 31, 2024 and 2023, respectively, and 3.1% and 3.2% of total revenue for the six months ended July 31, 2024 and 2023, respectively. One of the dynamics in the Online business is the MRR contribution from customers that 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 July 31, 2024 and 2023, the percentage of total Online MRR from Online customers with a continual term of service of at least 16 months was 74.4% and 72.8%, respectively.

Previous wording

We continue to invest resources to enhance the capabilities of the Zoom Workplace and our Business Services offerings. For example, we have introduced a number of new products and enhancements including Zoom AI Companion, new features for Zoom Contact Center, Zoom Notes, integration of Workvivo into the Zoom desktop client, and ongoing enhancements for Zoom Phone, Meetings, Zoom Rooms, Huddles, Webinars and Zoom Events. We also deliver Zoom Phone calling plans in more than 45 countries and territories as of April 30, 2024.

Current wording

We continue to invest resources to enhance the capabilities of Zoom Workplace and Zoom Business Services. For example, we have introduced a number of new products and enhancements, including Zoom AI Companion, Zoom Docs, new features for Zoom Contact Center, Zoom Notes, the integration of Workvivo into the Zoom desktop client, and ongoing enhancements for Zoom Phone, Meetings, Zoom Rooms, Huddles, Webinars, and Zoom Events. We also deliver Zoom Phone calling plans in more than 45 countries and territories as of July 31, 2024.

Previous wording

We also recently announced several upcoming products including Zoom Docs and an enhanced version of AI Companion that is designed to allow the handling of complex tasks across our platform using information from multiple sources including third party applications. These products are expected to be generally available in 2024.

Current wording

We recently announced several upcoming products including an enhanced version of AI Companion designed to handle complex tasks across our platform using information from multiple sources, including third-party applications. These products are expected to be generally available in 2024.

Previous wording

An end-to-end encryption (“E2EE”) option is available to free and paid Zoom customers globally who host meetings with up to 200 participants as well as on Zoom Phone. Zoom’s E2EE uses the same AES-256-GCM encryption that secures Zoom meetings by default, but with Zoom’s E2EE, the meeting host, or originating caller in the case of Zoom Phone, as opposed to Zoom's servers, generates encryption keys and uses public key cryptography to distribute these keys to the other meeting participants or call recipient.

Current wording

An end-to-end encryption (“E2EE”) option is available to free and paid Zoom customers globally who host meetings with up to 1,000 participants as well as on Zoom Phone for one-on-one calls on the same Zoom account. Zoom’s E2EE uses the same 256-bit AES-GCM encryption to encrypt real-time media in meetings during transit that supports standard Zoom Meetings, but with Zoom’s E2EE, the feature is designed so that the device of the meeting host, or originating caller in the case of Zoom Phone, as opposed to Zoom's servers, generates encryption keys and uses public key cryptography to distribute these keys to the other meeting participants or call recipient. Additionally, Zoom recently announced that post-quantum E2EE is now globally available for Zoom Workplace, specifically for Zoom Meetings and Zoom Phone, with support for Zoom Rooms coming soon. We believe that the launch of the new security enhancement makes Zoom the first UCaaS company to offer a post-quantum E2EE solution for video conferencing.

Previous wording

Our platform addresses the communications and collaboration needs of users worldwide, and we see international expansion as a major opportunity. Our revenue from the rest of world (APAC and EMEA) represented 28.3% and 29.0% of our total revenue for the three months ended April 30, 2024 and 2023, respectively. We plan to add local sales support in further select international markets over time. 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.

Current wording

Our platform addresses the communications and collaboration needs of users worldwide, and we see international expansion as a major opportunity. Our revenue from the rest of the world (APAC and EMEA) represented 28.1% and 29.0% of our total revenue for the three months ended July 31, 2024 and 2023, respectively, and 28.2% and 29.0% of our total revenue for the six months ended July 31, 2024 and 2023, respectively. We plan to add local sales support in further select international markets over time. 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.

Previous wording

We believe that our ability to increase the number of Enterprise customers is an indicator of our potential future business opportunities, the growth of our business, and an indicator of our market penetration. Increasing awareness of our platform and capabilities, coupled with the mainstream adoption of our technology, has expanded the diversity of our customer base to include organizations of all sizes across all industries. Over time, we expect revenue from Enterprise customers to represent a larger share of our business. As of April 30, 2024 and 2023, we had approximately 191,000 and 215,900 Enterprise customers, respectively. During the three months ended April 30, 2024, in order to enhance customer experience and improve efficiency, we transitioned approximately 26,800 Enterprise customers with lower MRR away from working with direct sales teams, resellers, or strategic partners. These customers are now considered Online customers and no longer included in our Enterprise customer total as of April 30, 2024. The impact of this transition did not have a material impact on the percent of revenue from Enterprise and Online customers, net dollar expansion rate, or Online average monthly churn.

Current wording

We believe that our ability to increase the number of Enterprise customers is an indicator of our potential future business opportunities, the growth of our business, and an indicator of our market penetration. Increasing awareness of our platform and capabilities, coupled with the mainstream adoption of our technology, has expanded the diversity of our customer base to include organizations of all sizes across all industries. Over time, we expect revenue from Enterprise customers to represent a larger share of our business. As of July 31, 2024 and 2023, we had approximately 191,600 and 218,100 Enterprise customers, respectively. During the three months ended April 30, 2024, in order to enhance customer experience and improve efficiency, we transitioned approximately 26,800 Enterprise customers with lower MRR away from working with direct sales teams, resellers, or strategic partners. These customers are now considered Online customers and no longer included in our Enterprise customer total as of July 31, 2024. The impact of this transition did not have a material impact on the percent of revenue from Enterprise and Online customers, net dollar expansion rate, or Online average monthly churn.

Previous wording

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 29.9% and 28.6% of total revenue for the three months ended April 30, 2024 and 2023, respectively. As of April 30, 2024 and 2023, we had 3,883 and 3,580 customers, respectively, that contributed more than $100,000 of trailing 12 months revenue, demonstrating our increasing penetration of larger organizations, including enterprises. These customers are a subset of Enterprise customers.

Current wording

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 30.5% and 29.0% of total revenue for the three months ended July 31, 2024 and 2023, respectively, and 30.4% and 28.9% of total revenue for the six months ended July 31, 2024 and 2023, respectively. As of July 31, 2024 and 2023, we had 3,933 and 3,672 customers, respectively, that contributed more than $100,000 of trailing 12 months revenue, demonstrating our increasing penetration of larger organizations, including enterprises. These customers are a subset of Enterprise customers.

Previous wording

Revenue for the three months ended April 30, 2024, increased by $35.9 million, or 3.2%, compared to the three months ended April 30, 2023. The increase was driven by a 5.3% increase in revenue from Enterprise customers, of which 42.7% and 57.3% were from existing and new customers, respectively. Revenue from Online customers remained flat year over year.

Current wording

Revenue for the three months ended July 31, 2024, increased by $23.8 million, or 2.1%, compared to the three months ended July 31, 2023. The increase was driven by a 3.5% increase in revenue from Enterprise customers, of which 24.8% and 75.2% were from existing and new customers, respectively. Revenue from Online customers remained flat year over year.

Previous wording

Research and development expense for the three months ended April 30, 2024, decreased by $3.7 million, or 1.8%, compared to the three months ended April 30, 2023. The decrease was primarilydue to a $8.1 million decrease in personnel-related expenses, including a $19.3 million decrease in restructuring costs as a result of the prior year restructuring plan, offset by a $5.8 million increase in salaries, payroll taxes and benefits, and a$5.4 million increase in stock-based compensation expense.

Current wording

Sales and marketing expense for the three months ended July 31, 2024, decreased by $14.6 million, or 3.9%, compared to the three months ended July 31, 2023. The decrease was primarily due to a$8.7 million decrease in marketing spend, and a $3.0 million decrease in personnel-related expenses, including a $9.7 million decrease instock-based compensation expense, partially offset by a $5.8 million increase in salaries, payroll taxes and benefits; and a $1.2 million decrease in commissions expense, which includes both internal and external costs.

Previous wording

Gains on strategic investments, net for the three months ended April 30, 2024, increased by $15.1 million, or 662.8%, compared to the three months ended April 30, 2023. The decrease was mainly due to changes in the valuations of our privately held securities.

Current wording

Gains on strategic investments, net for the three months ended July 31, 2024, decreased by $28.6 million, or 90.2%, compared to the three months ended July 31, 2023. The decrease was mainly due to changes in the valuations of our publicly held securities.

Previous wording

Other income, net for the three months ended April 30, 2024, increased by $40.4 million, or 129.4%, compared to the three months ended April 30, 2023. The increase was mainly due to a $43.7 million increase in investment yield from cash and marketable securities.

Current wording

Other income, net for the three months ended July 31, 2024, increased by $46.3 million, or 112.8%, compared to the three months ended July 31, 2023. The increase was mainly due to a $44.8 million increase in investment yield from cash and marketable securities.

Previous wording

Provision for income taxes for the three months ended April 30, 2024 increased by $47.9 million, or 172.3%, compared to the three months ended April 30, 2023. The year-over-year change was primarily due to the increase in income before taxes.

Current wording

Provision for income taxes for the three months ended July 31, 2024 increased by $5.5 million, or 8.0%, compared to the three months ended July 31, 2023. The year-over-year change was primarily due to the increase in income before taxes.

Previous wording

Sales and marketing expense for the three months ended April 30, 2024, decreased by $74.5 million, or 17.6%, compared to the three months ended April 30, 2023. The decrease was primarily due to a$78.1 million decrease in personnel-related expenses, including a$33.8 million decrease in restructuring costs as a result of the prior year restructuring plan, a$27.2 million decrease instock-based compensation expense, and a $12.5 million decrease in commissions expense.

Current wording

Sales and marketing expense for the six months ended July 31, 2024, decreased by $89.1 million, or 11.2%, compared to the six months ended July 31, 2023. The decrease in sales and marketing expense was primarily due to a $68.7 million decrease in personnel-related expenses, which includes a $36.9 million decrease in stock-based compensation expense, and a $32.9 million decrease in restructuring costs as a result of the prior year restructuring plan; and a $9.8 million decrease in marketing spend and a $8.4 million decrease in commissions expense, which includes both internal and external costs.

Previous wording

General and administrative expense for the three months ended April 30, 2024, decreased by $88.6 million, or 44.3%, compared to the three months ended April 30, 2023. The decrease was primarilydue to a $50.0 million decrease in legal expenses, including litigation settlements; a $17.8 million decrease in personnel-related expenses, including a $12.9 million decrease in restructuring costs as a result of the prior year restructuring plan, and a $9.2 million decrease in stock-based compensation expense; and a $8.7 million decrease in bad debt expense.

Current wording

General and administrative expense for the six months ended July 31, 2024 decreased by $108.3 million, or 32.9%, compared to the six months ended July 31, 2023. The decrease in general and administrative expenses was primarily due toa$58.9 million decrease in legal expenses, including litigation settlements; and a$26.1 million decrease in personnel-related expenses, which includes a $16.4 million decrease in stock-based compensation expense and$13.3 million decrease in restructuring costs as a result of the prior restructuring plan; and a$9.7 million decrease in bad debt expense.

Previous wording

As of April 30, 2024, our principal sources of liquidity were cash, cash equivalents, and marketable securities of $7.4 billion, which were held for working capital purposes and for investment in growth opportunities. Our marketable securities generally consist of high-grade commercial paper, corporate bonds, agency bonds, corporate and other debt securities, U.S. government agency securities, and treasury bills.

Current wording

As of July 31, 2024, our principal sources of liquidity were cash, cash equivalents, and marketable securities of $7.5 billion, which were held for working capital purposes and for investment in growth opportunities. Our marketable securities generally consist of high-grade commercial paper, corporate bonds, agency bonds, corporate and other debt securities, U.S. government agency securities, and treasury bills.

Previous wording

Net cash provided by operating activities was $588.2 million for the three months ended April 30, 2024, compared to $418.5 million for the three months ended April 30, 2023. The increase in operating cash flow was primarily due to higher collections and higher interest received.

Current wording

Net cash provided by operating activities was $1,037.5 million for the six months ended July 31, 2024, compared to $754.5 million for the six months ended July 31, 2023. The increase in operating cash flow was primarily due to higher net income.

Previous wording

Net cash used in investing activities of $107.8 million for the three months ended April 30, 2024 was due to net purchases of marketable securities of $91.0 million, purchases of property and equipment of $18.5 million, and purchases of strategic investments of $3.0 million, partially offset by proceeds from strategic investments of $4.7 million.

Current wording

Net cash used in investing activities of $648.7 million for the six months ended July 31, 2024 was due to net purchases of marketable securities of $537.1 million, purchases of property and equipment of $102.7 million, and purchases of strategic investments of $13.5 million, partially offset by proceeds from strategic investments of $4.7 million.

Previous wording

Net cash used in investing activities of $480.8 million for the three months ended April 30, 2023 was due to net purchases of marketable securities of $208.5 million, cash paid for acquisition, net of cash acquired, of $199.4 million, purchases of strategic investments of $51.0 million, and purchases of property and equipment of $21.8 million.

Current wording

Net cash used in investing activities of $500.1 million for the six months ended July 31, 2023 was due to net purchases of marketable securities of $283.0 million, cash paid for acquisition, net of cash acquired, of $204.9 million, purchases of property and equipment of $68.4 million, and purchases of strategic investments of $51.0 million, partially offset by proceeds from strategic investments of $107.2 million.

Previous wording

Net cash used in financing activities of $142.5 million for the three months ended April 30, 2024 was due to cash paid for repurchases of common stock of $150.0 million, partially offset by proceeds from employee equity transactions to be remitted to employees and tax authorities, net, of $6.6 million and proceeds from the exercise of stock options of $1.0 million.

Current wording

Net cash used in financing activities of $398.7 million for the six months ended July 31, 2024 was due to cash paid for repurchases of common stock of $437.7 million, partially offset by proceeds from issuance of common stock under our ESPP of $34.3 million, proceeds from employee equity transactions to be remitted to employees and tax authorities, net, of $2.9 million and proceeds from the exercise of stock options of $1.9 million.

Previous wording

Net cash used in financing activities of $7.0 million for the three months ended April 30, 2023 was due to proceeds from the exercise of stock options of $4.3 million and proceeds from employee equity transactions to be remitted to employees and tax authorities, net, of $2.8 million.

Current wording

Net cash used in financing activities of $41.5 million for the six months ended July 31, 2023 was primarily due to proceeds from issuance of common stock under our ESPP of $32.5 million and proceeds from the exercise of stock options of $7.7 million.

Previous wording

In February 2024, our Board of Directors authorized a stock repurchase program of up to $1.5 billion of our Class A common stock, $1,350.0 million of which remain available as of April 30, 2024. 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.

Current wording

In February 2024, our Board of Directors authorized a stock repurchase program of up to $1.5 billion of our Class A common stock, $1,062.3 million of which remain available as of July 31, 2023. 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.

Previous wording

During the three months ended April 30, 2024, we repurchased on the open market 2,400,305 shares of our Class A common stock for an aggregate purchase of $150.0 million.

Current wording

During the three and six months ended July 31, 2024, we repurchased and subsequently retired 4,829,090 and 7,229,395 shares of our Class A common stock, respectively, for an aggregate amount of $287.6 million and $437.7 million, respectively.