Kelly Steckelberg: Yes. So in terms of our gross margins, we’ll obviously give FY ’25 guidance on our call next quarter. But as we are working on our planning, our DevOps team is doing an amazing job of continuing to optimize around the data centers and being very thoughtful about leveraging capacity to its highest and best use and making room for all of this AI innovation. So while we are going to invest, and we’re actually — we’re going to invest to the extent that XT and the team really believe that we need to and that for the long term, it’s an amazing ROI when you look at what it’s going to do for our customers, for our growth and for our retention. But we do expect there’s going to be some impact on gross margins. I mean we — I don’t think it’s going to be significant because the team will continue to work to operate, the very efficient manner that they do and run our colors that way, but we do expect there’s going to be some impact to our gross margin as we move forward.
Do you want to add anything, Eric?
Eric Yuan: Yes. So you are right on. Just to echo what Kelly said, led by our CTO, XT and his team our federated AI approach, as I mentioned earlier, really contribute a lot. So for sure, and there’s a cost impact, but extremely manageable, right? And our team is really, really, I think I had a very smart architecture. That’s why I think in terms of cost, very manageable, but also the quality is pretty good. So and we are keep innovating on that.
Peter Levine: Thank you both.
Kelly Steckelberg: Peter, regarding stock-based comp, about a third of our expense this year is related to the supplemental grants. So as a reminder, those that best along with how the underlying grants are vesting. So there’s a couple more years for that to just start to bleed off, if you will. If you’re going to model that out.
Peter Levine: Thank you.
Kelly Steckelberg: Yeah.
Operator: And we will now hear from Patrick Walravens with JMP Securities.
Patrick Walravens: Great. Thank you. Hi. So Eric, what is your ideal customer profile on the contact center side of the business?
Eric Yuan: That’s great question. I think first of all, again, this is based on architecture and AI features. I think [indiscernible] medium-sized because the reason why for very, very large customers, even if our architecture, everything, ever ready, but sometimes they just want to look at, hey, you are still too early, but even product fully ready. That’s the reason why sometimes even we do not reach out to them. It’s very large, let’s say tens of thousands in customers, if they take our certain series. [Technical Difficulty]
Kelly Steckelberg: Is it Eric freeze or did I freeze.
Operator: I think Eric is — Okay.
Kelly Steckelberg: Okay. Let me — sorry for that. Eric, we lost you for a minute there.
Eric Yuan: Yeah. I’m sorry. And so given the new solution is sort of a modern architecture and all the new AI features those, let’s say, like 20,000, 10,000 agent customers, if they look at our solutions, they have confidence. Because of that, we want to be a little bit of practice to focus on medium-sized companies, like form of hundreds agent to thousands of agents. That’s our obviously a sweet spot. But not me, I’m going to stop here, as I mentioned earlier, any when, very big large companies, when you look at our contact center solution seriously, we have a confidence about to win. But however, to get there, they focused on the medium-sized companies.
Patrick Walravens: Okay. Thank you, Eric.
Kelly Steckelberg: All right. I could give you an example, Patrick. We have a customer called Venture, which provides like payroll and HR services. And they became in the last year, they doubled their Zoom Phone seats. They’ve doubled their contact center our seats into four digits now. They also have deployed workforce management as well as quality management and ZVA (ph). So really taking advantage of the whole suite Zoom products, not only the contact center and its extensions, but the full suite of Zoom. And I think when they start to deploy like that, they really see the power, and it’s been very exciting to see them grow.
Patrick Walravens: Okay. Thank you both.
Eric Yuan: Thank you.
Operator: Our next question comes from Arjun Bhatia with William Blair.
Arjun Bhatia: Perfect. Thank you. Can you just touch on the international business a little bit? It seems like it’s certainly trailing the U.S. but what gets that business to turn around? And maybe talk about some of your new growth drivers, how they’re faring there with Zoom Phone and contact center? Thank you.
Kelly Steckelberg: Yeah. So Unfortunately, both EMEA and APAC over the last year have been impacted both by currency and then EMEA has been impacted by the general economy and the war there. But in terms of our focus, we have very recently actually added a new European leader and a new leader in Australia and New Zealand. So we’re very excited about the team. And since we did the reorganization earlier this year, those regions have just taken a little bit longer than the U.S. but we’re starting to see that momentum build again and really excited about what they’re going to contribute and watching their success in the future.
Arjun Bhatia: Perfect. Thank you.
Kelly Steckelberg: Yeah.
Operator: Our next question will come from Alex Zukin with Wolfe Research. His video is not on, so he may just be audio only.
Kelly Steckelberg: Hi, Alex. Hey, Alex. Do you want to go ahead.
