Company: ZM
Filing Date: 2025-11-25
Form Type: 10-Q
Source: 0001585521-25-000202
Chunk: 406

Company: Zoom Communications, Inc.
Filing Date: 2025-11-25
Form: 10-Q
Item: Part I, Item 2
Chunk 406
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 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 39.7% and 40.6% of total revenue for the three months ended October 31, 2025 and 2024, respectively, and 39.9% and 41.2% of total revenue for the nine months ended October 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 2.7% per month for both the three months ended October 31, 2025 and 2024, and 2.8% and 3.0% per month for the nine months ended October 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 

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October 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 74.4% and 74.1%, 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 divide that amount by three to calculate the Online average monthly churn for the applicable quarter.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

Innovation and Expansion of Our Platform

We continue to invest