Company: ZM
Filing Date: 2025-08-22
Form Type: 10-Q
Source: 0001585521-25-000141
Chunk: 405

Company: Zoom Communications, Inc.
Filing Date: 2025-08-22
Form: 10-Q
Item: Part I, Item 2
Chunk 405
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 our Enterprise customers. Our trailing 12-month net dollar expansion rate for Enterprise customers was 98% as of both July 31, 2025 and 2024.

Retention of Online 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 40.0% and 41.3% of total revenue for the three months ended July 31, 2025 and 2024, respectively, and 40.0% and 41.5% of total revenue for the six months ended July 31, 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 2.9% per month for both the three months ended July 31, 2025 and 2024, and 2.9% and 3.1% per month for the six months ended July 31, 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 July 31, 2025 and 2024, the percentage of total Online MRR from Online customers with a continuous term of service of at least 16 months was 74.9% and 74.4%, 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