About Kelly Steckelberg
Kelly Steckelberg, Zoom’s CFO, has discussed the company’s financial performance and strategy in multiple media appearances. In February 2024, she told CNBC’s Jim Cramer that Zoom’s priority is investing for growth, both organically and through potential acquisitions, while also executing a $1.5 billion share repurchase program. She stated that Zoom is expanding its platform with features like workspace reservation to support hybrid work. In November 2023, she said on CNBC’s “Squawk Box” that Zoom was pleased with its Q3 results, noting that Zoom Phone had crossed the 10% of revenue threshold and that the company uses a “federated approach” to AI, working with multiple models including OpenAI, Anthropic, and Meta. She also highlighted that the company saw stabilization in its online business earlier than expected and reported peak gross margins of 80.5%.
Steckelberg has also addressed the company’s approach to hybrid work and competition. In a December 2023 interview, she said Zoom’s structured hybrid approach, asking employees near an office to come in two days a week, was going well and that 65% of employees remain remote. She has described Microsoft as a partner, stating that Zoom works with customers to integrate its products with Microsoft’s offerings. At Zoomtopia 2023, she said the company would not charge extra for its AI Companion, aiming to make it available to all paying customers. Steckelberg, a UT McCombs alumna, has said that her goal of becoming a public company CFO was realized with Zoom’s IPO, and she has established an endowed scholarship at the business school.
Source: AI-verified profile updated from Kelly Steckelberg's recent appearances.
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Transcript (9 segments)
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Interviewer0:06
Welcome back, everybody. Shares of Zoom are lower in the pre-market. They jumped in the extended session yesterday after the company beat first quarter top and bottom-line estimates, but the shares later gave back some of those gains. Investors may not have been completely impressed by the amount that the company raised. Stock right now is down by about 2%. Joining us right now, first on CNBC, is Zoom CFO, Kelly Steckelberg. Kelly, welcome. Had strong numbers, but I guess this is maybe a situation where people are always asking what have you done for me lately?
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Kelly Steckelberg0:41
Thank you. Good morning. We're very pleased with our Q1 results, as you just mentioned. We beat on both topline and the bottom line, and we raised our full FY '24 outlook for both our revenue as well as our profit targets. This was largely due to very strong performance in the online segment of our business. That business we've been very focused on getting it stabilized, and that occurred earlier than we expected. We were also very pleased with the performance of Zoom Phone, which is our cloud PBX solution, which we announced is now 10% of our revenue. We're just very pleased with the outlook, and we're going to continue to execute through the rest of the year.
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Interviewer1:25
What is the situation just in terms of controlling your margins? I know you had announced some layoffs earlier in the year. How is that playing out right now, just overall, in terms of whether or not you think additional cuts need to come?
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Kelly Steckelberg1:54
We announced that we had our own target of gross margin of over 80% in Q1. We did indicate that we're going to continue to make some investments in AI throughout the year, but still guided to 79.5%. Then from an operating margin perspective, as you indicated, we made some very difficult decisions earlier this year to reduce, but we're very pleased. We overachieved our operating margins, we came in at 38%, and we are continuing to invest in areas that we see we can drive growth. This includes our teams as well as our sales and marketing teams, focusing on expanding our Zoom Contact Center teams, as well as, of course, continuing to invest in the topic of AI that everyone is talking about. We see that is really important to the future of the company, and we made some collaboration investments this last quarter with both OpenAI as well as Anthropic, and we announced an acquisition of Vivo. We are thrilled to have them join our team. We feel great about where we're situated for the future and will have strong margins for the rest of the year.
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Interviewer2:57
What are you seeing in enterprise? Average per user was down. Some analysts are saying that they will see the forecast that this will continue in the current quarter and going forward. What are you seeing right now?
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Kelly Steckelberg3:14
Well, we had a reorganization in our sales team in Q1, and understandably, that caused some distraction. But we are now really focused, as I just mentioned, on continuing to invest in this area, and we continue to see strength in Zoom Phone, in Zoom Contact Center. We are thrilled that in March, we launched the beta features of Zoom IQ, which launches generative AI now to support our customers in their productivity around things like meeting summary, chat, and email compose. These are all the products that are going to drive the future growth in our enterprise segment.
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Interviewer3:57
You're not seeing any of the enterprise users migrate to the new universe of SaaS? Very strong performance in Q1 in our renewal segments. We have a seasonal trend that Q1 is our large of the renewals quarters. Even though some of our customers have been impacted through their own reductions, we were able to work with them, and even if they wanted to reduce, to repurpose the spend towards areas where we can help them save like Zoom Phone and Zoom Contact Center. We're thrilled with the position we have in terms of AI. Zoom IQ is going to be a smart companion everybody will have to make them more productive. We have that AI already built into our DNA. We've been using it for things like virtual background, as you can see me using here today. That's been part of our DNA from the very beginning. We're excited about the future of continuing to apply it to our entire product suite.
We had an interesting conversation with Take-Two Interactive. Is AI going to make companies more efficient, make it cheaper or easier to do these things, or just increase the expectations, the product at the end of the day? He thinks this is just a situation where all this technology in the past has been used to make the product better. It's not going to be cheaper or increase margins, but it will make the product better. What do you think?
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Kelly Steckelberg5:32
I think it's absolutely going to make the product better. We're focused on how do we make all of our customers more productive. If you think about you can spend less time on tasks like meeting summaries and more time with your team, that makes us all better and that improves human connection. That's really what we're focused on. I think in the near term, what you're going to see are significant investments across all companies as we're looking to leverage our approaches, take a federated approach to AI. You're going to benefit from the earnings from our language models as well as some of these key collaborations we put in place and, of course, our customers' models as well. In the future, I think we're going to see a very different landscape.
