Zoom Video Communications Inc (NASDAQ:ZM) Q3 2020 Earnings Conference Call - Final Transcript

Dec 05, 2019 • 05:30 pm ET

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Zoom Video Communications Inc (NASDAQ:ZM) Q3 2020 Earnings Conference Call - Final Transcript

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Q & A
Analyst
Operator

Our first question is from Brad from Credit Suisse. Hey, Brad, you're unmuted now.

Analyst
Brad Zelnick

Hi. Can you guys hear me?

Executive
Eric S. Yuan

Yes. Hey, Brad.

Executive
Kelly Steckelberg

Hi, Brad.

Analyst
Brad Zelnick

Fantastic. It's great to see everybody, especially Eric and Tom on the beach enjoying themselves after such great results. You deserve it.

Executive
Kelly Steckelberg

Brad, they wouldn't take me.

Executive
Eric S. Yuan

Yeah, Kelly is working [speech overlap]

Analyst
Brad Zelnick

Fantastic. Well, Eric, it's great to see the traction that you're having with Zoom Phone, particularly the National Australia Bank deal that you highlighted. How has the pipeline trended since the focus on Zoom Phone and Zoom Rooms at Zoomtopia? And when should we start to see you sign more of these Phone and Rooms deals?

Executive
Eric S. Yuan

So first of all, I can tell you, we're very excited about our Zoom Phone opportunity. And even at Zoomtopia, we shared our vision, because we're seeing video conferencing on a cloud with PBX, those truly can be converged into one service as cloud-based PBX, customer really like their story. With that, we have one consistent upfront and experienced the same bug and architecture.

I think a lot of our customers, I mean, existing customer -- existing installed base for us have up-sell opportunity, that's huge. And free to bug from our existing installed base is very, very positive, especially after that goes through the few seats. Their feedback is, wow, that's amazing. I think we have a high confidence about the future opportunities.

Analyst
Brad Zelnick

Okay, great. Thank you. And Kelly, just in follow-up, your operating and free cash flow profitability was very strong yet again. How has the Company been executing against its sales and marketing productivity goals? And why not take some of the outperformance and invest it back into driving more customer ads, or would you be at a point of diminishing returns at that point?

Executive
Kelly Steckelberg

We certainly are committed to investing as much as possible in terms of continuing to drive growth in the top line. And we expect to see hiring to actually accelerate in Q4. So you should see our headcount numbers for the end of the year to finish really strong, as well as -- Janine has seen a lot of progress in terms of efficiency and marketing. So we continue to look for opportunistic ways to add, but ensuring that we continue to produce a high ROI on any of our marketing spend.

Analyst
Brad Zelnick

Great.

Operator
Tom McCallum

Thanks Brad.

Analyst
Brad Zelnick

Okay, great. Thank you.

Operator
Tom McCallum

Thank you, Brad. Matt, can we have the next question please. Matt, you're on mute unfortunately.

Analyst
Operator

Sorry. Our next question is from Sterling Auty from JPMorgan. And Sterling, you are unmuted now.

Analyst
Sterling Auty

All right. Great. Thanks, guys. Given that you're sitting on the beach, I thought you'd bring you a little virtual snow for a little white Christmas.

Executive
Eric S. Yuan

Yes.

Analyst
Sterling Auty

All right. So actually, question start with Kelly, the growth in current RPO, especially outpace what you saw in revenue. Is that kind of telling us something in terms of what the linearity look like in the quarter? And what should