Company: ZM
Filing Date: 2025-05-23
Form Type: 10-Q
Source: 0001585521-25-000090
Chunk: 291

Company: Zoom Communications, Inc.
Filing Date: 2025-05-23
Form: 10-Q
Item: Part I, Item 8
Chunk 291
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 performance vesting criteria. The ultimate number of shares eligible to vest pursuant to these RSUs range from 0% to 100% of the target number of shares depending on achievement of the performance metrics. The number of RSUs with service and performance vesting conditions included in the granted amount in the table above reflects the shares that would be eligible to vest at 100% of the target amount.2019 Employee Stock Purchase PlanIn April 2019, we adopted the 2019 ESPP. As of April 30, 2025, unrecognized stock-based compensation expense related to the ESPP was $26.1 million, which is expected to be recognized over a weighted-average period of 1.1 years.

20

Stock-Based CompensationThe stock-based compensation expense by line item in the accompanying condensed consolidated statements of operations is summarized as follows:Three Months Ended April 30,20252024(in thousands)Cost of revenue$27,427 $31,575 Research and development72,936 82,569 Sales and marketing68,433 77,234 General and administrative32,773 38,047 Total stock-based compensation expense$201,569 $229,425 Benefit from income taxes(38,161)(43,474)Total stock-based compensation expense recorded to net income$163,408 $185,951 

8.    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 30,20252024(in thousands, except percentages)Income before provision for income taxes$315,765 $291,964 Provision for income taxes61,162 75,656 Effective tax rate19.4 %25.9 %The year-over-year change in effective tax rate for the three months ended April 30, 2025 was due primarily to the changes in income before taxes and a decrease in net tax shortfalls and windfalls on stock-based compensation. For both the three months ended April 30, 2025 and April 30, 2024, the effective tax rate differed from the U.S. federal statutory rate due primarily to the foreign-derived intangible income deduction and research credits offset by tax short