Zoom Video Communications plans to offer a subscription-based add-on service to its artificial intelligence offerings. The company made the announcement at its annual customer conference, Zoomtopia. In 2024 Zoom stock has retreated 3% as Wall Street looks for a reacceleration in revenue growth.
Zoom hosted the annual customer conference on Wednesday. The company unveiled the 2.0 version of Zoom AI Companion. It can detect, track, and complete actions in the Zoom Workplace and will have a more advanced contextual understanding of information.
As of July 30, the company said 1.2 million accounts were using "AI Companion," up from 700,000 on May 20 and 510,000 at the end of fiscal 2024.
Zoom Stock: AI Companion 2.0
"Though AI Companion will continue to be free for paid users, Zoom is adding a subscription-based add-on for $12 per user per month that will enable users to customize AI Companion to their business needs," said William Blair analyst Arjun Bhatia in a report. "This approach stands in contrast to many other software companies who have elected to monetize AI offerings primarily through consumption-based pricing models."
Zoom's cloud-based software sets up video calls, with chat tools available. Further, Zoom Video aims to morph into a broader communications platform for business customers. The optional add-on for AI Companion will launch in the first half of 2025.
"The core of the add-on is AI Studio, which allows users to tailor their organization's AI Companion to fit the specific needs of the individual business," said Jefferies analyst Samad Samana in a report.
Zoom Stock: Higher Margins Expected
"The add-on also expands AI Companion's integrations with other third party apps beyond Microsoft and Google," Samana said. Zoom is adding ServiceNow, Atlassian, Workday and others. "AI Companion will be able to get answers from or perform actions in these apps," he added.
Also at Zoomtopia, the company provided an updated long-term financial model. Management now expects 33% to 36% operating margins, up from 28% to 32%.
Meanwhile, Microsoft and its Teams communication platform is a big competitor.
In early April, Microsoft said it will separate Teams from its Office software suite in an apparent move to head off probes by global antitrust enforcers.
Also, Zoom stock owns an IBD Relative Strength Rating of 74 out of a best possible 99, according to IBD Stock Checkup.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
