Zoom Communications Inc

Previous wording

AI has been core to Zoom’s product DNA for many years, grounded in our conviction that AI can strengthen 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.

Current wording

AI is core to Zoom’s product innovation. Over the past year, Zoom continued to invest in AI, expanding its agentic AI skills, agents, and models, and focused on three key areas: supporting individual productivity, powering better collaboration, and helping customer-facing teams get more done, do better work, and strengthen relationships with AI Companion. Our federated approach to AI dynamically leverages multiple AI Large Language Models (“LLMs”) (including those from OpenAI, Anthropic, and Meta), as well as Small Language Models (“SLMs”), making AI more 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-like customer content (such as poll results, whiteboard, and reactions) to train Zoom’s or its third-party AI models.

Previous wording

Our revenue was $1,177.5 million and $1,136.7 million for the three months ended October 31, 2024 and 2023, respectively, representing period-over-period growth of 3.6%. We had net income of $207.1 million and $141.2 million for the three months ended October 31, 2024 and 2023, respectively. Our revenue was $3,481.3 million and $3,380.8 million for the nine months ended October 31, 2024 and 2023, respectively, representing period-over-period growth of 3.0%. We had net income of $642.4 million and $338.6 million for the nine months ended October 31, 2024 and 2023, respectively. Net cash provided by operating activities was $1,520.7 million and $1,247.6 million for the nine months ended October 31, 2024 and 2023, respectively.

Current wording

Our revenue was $1,174.7 million and $1,141.2 million for the three months ended April 30, 2025 and 2024, respectively, representing period-over-period growth of 2.9%. We had net income of $254.6 million and $216.3 million for the three months ended April 30, 2025 and 2024, respectively. Net cash provided by operating activities was $489.3 million and $588.2 million for the three months ended April 30, 2025 and 2024, respectively.

Previous 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 nine months ended October 31, 2024, compared to the three and nine months ended October 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 have and 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.

Current wording

The macroeconomic environment, including geopolitical conflicts, tariffs and escalating trade tensions, inflationary pressures, interest rate fluctuations, and the global market and foreign currency exchange rate volatility, continues to create uncertainty in demand for subscriptions to our open work platform. These factors, along with responses by central banks and government policies, have placed pressure on consumer and business behavior, leading to elongated sales cycles and increased scrutiny of IT budgets among existing and potential customers. For the three months ended April 30, 2025, compared to the three months ended April 30, 2024, we experienced continued growth in total revenue and revenue from Enterprise customers. However, several factors, in addition to the macroeconomic environment, have impacted and may continue to impact our growth rate, such as higher market penetration, increased competition, and the maturation of our business, among others.

Previous wording

We are continuously monitoring the impact of these circumstances on our business and financial results, as well as the overall global economy and geopolitical landscape. The implications of macroeconomic conditions on our business, results of operations and overall financial position, particularly in the long term, remain uncertain.

Current wording

In recent months, intensifying trade tensions and global market volatility have impacted the macroeconomic environment, and 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 in the long term, remain uncertain.

Previous 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.

Current wording

We are focused on continuing to grow the number of customers who 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 and have caused our net dollar expansion rate for Enterprise customers 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, Scheduler, Contact Center, Revenue Accelerator, Events, Sessions, Webinars, 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.

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. Over the past few years, macroeconomic headwinds have resulted in slower hiring and higher seat count downsells from our existing Enterprise customers in key markets that have impacted the rate of expansion and have caused our net dollar expansion rate for Enterprise customers to drop below one hundred percent. Despite the decline in our net dollar expansion metric, 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, Contact Center, and Workvivo. 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 59.4% and 58.1% of total revenue for the three months ended October 31, 2024 and 2023, respectively, and 58.8% and 57.7% of total revenue for the nine months ended October 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 October 31, 2024 and 2023 was 98% and 105%, respectively.

Current wording

(“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 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, 2025 and 2024 was 98% and 99%, 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 40.6% and 41.9% of total revenue for the three months ended October 31, 2024 and 2023, respectively, and 41.2% and 42.3% of total revenue for the nine months ended October 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 2.7% and 3.0% per month for the three months ended October 31, 2024 and 2023, respectively, and 3.0% and 3.1% of total revenue for the nine months ended October 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 October 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 74.1% and 73.2%, respectively.

Current wording

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 40.0% and 41.7% of total revenue for the three months ended April 30, 2025 and 2024, 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 2.8% and 3.2% per month for the three months ended April 30, 2025 and 2024, 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, 2025 and 2024, the percentage of total Online MRR from Online customers with a continuous term of service of at least 16 months was 74.2% and 73.8%, respectively.

Previous wording

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 divided that amount by three to calculate the Online average monthly churn for the applicable quarter.

Current wording

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.

Previous 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, Sessions, Webinars, and Events. We also deliver Zoom Phone calling plans in more than 45 countries and territories as of October 31, 2024.

Current wording

We continue to invest in enhancing the capabilities of Zoom Workplace and Zoom Business Services. This includes ongoing investments in AI, with a focus on expanding agentic AI skills, agents, and models. Recent product innovations and enhancements include Zoom AI Companion, Zoom Docs, Zoom Tasks and continued enhancements for Phone, Meetings, Zoom Rooms, Sessions, Webinars, Events, Workvivo, Contact Center, and more. We also deliver Zoom Phone calling plans in more than 45 countries and territories as of April 30, 2025.

Previous wording

Third-party developers are also 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 communications and collaboration. We will need to expend additional resources to continue introducing new products, features, and functionality, and supporting the efforts of third parties to enhance the value of our platform with their own applications.

Current wording

Zoom is an open 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 communications and collaboration. We will need to expend additional resources to continue introducing new products, features, and functionality, and supporting the efforts of third parties to enhance the value of our platform with their own applications.

Previous 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.

Current wording

End-to-end encryption (“E2EE”) 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’s post-quantum E2EE is now globally available for Zoom Workplace, specifically for Zoom Meetings, Zoom Phone, and Zoom Rooms. 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 the world (APAC and EMEA) represented 28.1% and 28.4% of our total revenue for the three months ended October 31, 2024 and 2023, respectively, and 28.2% and 28.8% of our total revenue for the nine months ended October 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.

Current wording

Our platform addresses the communications and collaboration needs of users worldwide, and while our international revenue has stabilized in recent quarters, we continue to view international expansion as a meaningful long-term opportunity. Our revenue from the rest of the world (APAC and EMEA) represented 27.8% and 28.3% of our total revenue for the three months ended April 30, 2025 and 2024, 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.

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 30.8% and 29.0% of total revenue for the three months ended October 31, 2024 and 2023, respectively, and 30.7% and 29.0% of total revenue for the nine months ended October 31, 2024 and 2023, respectively. As of October 31, 2024 and 2023, we had 3,995 and 3,731 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 31.9% and 29.9% of total revenue for the three months ended April 30, 2025 and 2024, respectively. As of April 30, 2025 and 2024, we had 4,192 and 3,883 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

Gains (losses) on strategic investments, net consist primarily of remeasurement gains on our equity investments.

Current wording

(Losses) gains on strategic investments, net consist primarily of remeasurement gains or losses on our equity investments.

Previous wording

Revenue for the three months ended October 31, 2024, increased by $40.8 million, or 3.6%, compared to the three months ended October 31, 2023. The increase was driven by a 5.8% increase in revenue from Enterprise customers, of which 46.7% and 53.3% were from existing and new customers, respectively. Revenue from Online customers remained flat year over year.

Current wording

Revenue for the three months ended April 30, 2025, increased by $33.5 million, or 2.9%, compared to the three months ended April 30, 2024. The increase was driven by a 5.9% increase in revenue from Enterprise customers, of which 33.7% and 66.3% were from existing and new customers, respectively, partially offset by a 1.2% decline in revenue from Online customers.

Previous wording

Cost of revenue for the three months ended October 31, 2024, increased by $12.9 million, or 4.8%, compared to the three months ended October 31, 2023. Theincrease was primarily due to a $17.5 million increase in hosting and infrastructure costs, partially offset by a $5.1 million decreasein stock-based compensation. The increase in hosting costs was due to the increased use of AI functionality along with investments to upgrade our data center backbone.

Current wording

Cost of revenue for the three months ended April 30, 2025, increased by $5.1 million, or 1.9%, compared to the three months ended April 30, 2024. Theincrease was primarily due to increased hosting and infrastructure costs partially offset by a $4.1 million decreasein stock-based compensation. The increase in hosting costs was due to the increased use of AI functionality along with investments to upgrade our data center backbone.

Previous wording

Gross margin decreased to 75.9% for the three months ended October 31, 2024, from 76.2% for the three months ended October 31, 2023. The decrease in gross margin was mainly due to costs associated with the increased use of AI functionality along with investments to upgrade our data center backbone.

Current wording

Gross margin increased to 76.3% for the three months ended April 30, 2025, from 76.1% for the three months ended April 30, 2024. The increase in gross margin was mainly due to the decrease in stock-based compensation.

Previous wording

Research and development expense for the three months ended October 31, 2024 increased by $26.1 million, or 13.3%, compared to the three months ended October 31, 2023. The increase was primarily driven by our continued investments in AI-first innovation, which includes a $16.5 million increase in personnel-related expenses as a result of increased headcount. The remaining increase was due to costs from AI-related software and facilities used in development.

Current wording

Research and development expense for the three months ended April 30, 2025 decreased by $0.1 million, or 0.1%, compared to the three months ended April 30, 2024. The decrease was driven by a $9.6 million decrease in stock-based compensation largely offset by our continued investment in AI-innovation, including a$3.7 million increasein personnel-related expenses as a result of increased headcount, as well as costs from AI-related software and facilities used in development.

Previous wording

Sales and marketing expense for the three months ended October 31, 2024, decreased by $12.7 million, or 3.4%, compared to the three months ended October 31, 2023. The decrease was primarily due to a$13.2 million decrease in marketing spend.

Current wording

Sales and marketing expense for the three months ended April 30, 2025, decreased by $1.0 million, or 0.3%, compared to the three months ended April 30, 2024. The decrease was primarily due to a $8.8 million decrease in stock-based compensation offset by a$4.0 million increase in salaries, payroll taxes and benefits, along with costs to support our customer engagement and growth initiatives.

Previous wording

General and administrative expense for the three months ended October 31, 2024, increased by $1.0 million, or 0.8%, compared to the three months ended October 31, 2023. The increase was primarily due toa$18.3 million increase in litigation settlements, partially offset bya $13.4 million decrease in personnel-related expenses, including a $10.2 million decrease in stock-based compe nsation expense.

Current wording

General and administrative expense for the three months ended April 30, 2025, decreased by $9.0 million, or 8.1%, compared to the three months ended April 30, 2024. The decrease was primarily due a $7.3 million decrease in personnel-related expenses, including a $5.3 million decrease in stock-based compe nsation and a $2.0 million decrease in salaries, payroll taxes and benefits.

Previous wording

Gains on strategic investments, net for the three months ended October 31, 2024 was driven by changes in the valuations of our publicly and privately held securities, while losses on strategic investments, net, for the three months ended October 31, 2023 was mainly driven by unrealized losses recognized on our publicly held securities.

Current wording

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, while gains on strategic investments, net, for the three months ended April 30, 2024 were primarily driven by changes in the valuations of our privately held securities.

Previous wording

Other income, net for the three months ended October 31, 2024, increased by $49.3 million, or 117.7%, compared to the three months ended October 31, 2023. The increase was due to a $29.3 million increase in investment yield from cash and marketable securities and a $20.3 million increase from changes in foreign currency exchange rates.

Current wording

Other income, net for the three months ended April 30, 2025, increased by $16.2 million, or 22.6%, compared to the three months ended April 30, 2024. The increase was due to $12.5 million increase from changes in foreign currency exchange rates anda $3.8 million increase in investment yield from cash and marketable securities.

Previous wording

Provision for income taxes for the three months ended October 31, 2024 increased by $28.7 million, or 64.4%, compared to the three months ended October 31, 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 April 30, 2025 decreased by $14.5 million, or 19.2%, compared to the three months ended April 30, 2024. The year-over-year change was primarily due to the decrease in tax shortfalls on stock-based compensation.

Previous wording

As of October 31, 2024, 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 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 April 30, 2025, our principal sources of liquidity were cash, cash equivalents, and marketable securities of $7.8 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

We have financed our operations primarily through income from operations and sales of equity securities. Cash from operations could also be affected by various risks and uncertainties, including, but not limited to, the recent macroeconomic shifts, such as high inflation, elevated interest rates, and the responses by central banking authorities, potential recessionary environments, and the fluctuations in foreign currency exchange rates. These 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 raise it 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.

Current wording

We have financed our operations primarily through income from operations and sales of equity securities. Cash from operations could 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 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 raise it 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.

Previous wording

Net cash used in investing activities of $864.4 million for the nine months ended October 31, 2023 was due to net purchases of marketable securities of $605.5 million, cash paid for acquisition, net of cash acquired, of $204.9 million, purchases of property and equipment of $108.4 million, and purchases of strategic investments of $52.8 million, partially offset by proceeds from strategic investments of $107.2 million.

Current wording

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.

Previous wording

Net cash used in investing activities of $1,101.1 million for the nine months ended October 31, 2024 was due to net purchases of marketable securities of $964.3 million, purchases of property and equipment of $128.2 million, and purchases of strategic investments of $13.5 million, partially offset by proceeds from strategic investments of $4.9 million.

Current 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.

Previous wording

Net cash used in financing activities of $36.0 million for the nine months ended October 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 $8.3 million.

Current wording

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

Previous wording

Net cash used in financing activities of $699.1 million for the nine months ended October 31, 2024 was due to cash paid for repurchases of common stock of $739.3 million, partially offset by proceeds from issuance of common stock under our ESPP of $34.3 million, proceeds from the exercise of stock options of $3.8 million, and proceeds from employee equity transactions to be remitted to employees and tax authorities, net, of $2.2 million.

Current wording

Net cash used in financing activities of $142.5 million for the three months ended April 30, 2024 was primarily 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.

Previous wording

During the three and nine months ended October 31, 2024, we repurchased and subsequently retired 4,377,296 and 11,606,691 shares of our Class A common stock, respectively, for an aggregate amount of $301.6 million and $739.3 million, respectively.

Current wording

During the three months ended April 30, 2025, we repurchased and subsequently retired 5,561,920 shares of our Class A common stock for an aggregate amount of $418.0 million.

Previous wording

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 are 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.

Current wording

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.