Company: ZM
Filing Date: 2025-08-22
Form Type: 10-Q
Source: 0001585521-25-000141
Chunk: 301

Company: Zoom Communications, Inc.
Filing Date: 2025-08-22
Form: 10-Q
Item: Part I, Item 8
Chunk 301
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1.2 years.

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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 July 31, Six Months Ended July 31, 2025202420252024(in thousands)Cost of revenue$24,222 $31,299 $51,649 $62,874 Research and development70,476 81,597 143,412 164,166 Sales and marketing63,094 84,225 131,527 161,459 General and administrative30,907 40,829 63,680 78,876 Total stock-based compensation expense$188,699 $237,950 $390,268 $467,375 Benefit from income taxes(35,067)(43,742)(73,228)(87,216)Total stock-based compensation expense recorded to net income$153,632 $194,208 $317,040 $380,159 

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 July 31, Six Months Ended July 31, 2025202420252024(in thousands, except percentages)Income before provision for income taxes$448,162 $292,889 $763,927 $584,853 Provision for income taxes89,570 73,874 150,732 149,530 Effective tax rate20.0 %25.2 %19.7 %25.6 %The year-over-year change in effective tax rate for the three and six months ended July 31, 2025 was primarily driven by changes in income before taxes and changes in tax shortfalls and tax benefits related to stock-based compensation. For both the three and six months ended July 31, 2025 and July 31, 2024, the effective tax rate differed from the U.S. federal statutory rate due primarily to the foreign-derived intangible income deduction, 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.

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