…Happy Customers… Zoom = Free User Conversion to Paid Subscribers Free to Join, When Paid User Hosts… …High LTV / CAC Ratio* Goldman Sachs Investment Research LTV:CAC Estimate 6x o i Rat t Cos n o 3.7x 3.7x ti i s ..we really want to get customers to test our product… i u It’s really hard to get customers to q Ac try Zoom without a freemium product... r e 3x m to We make our freemium product work so well… Cus If they like our product, very soon they are to e u going to pay for the subscription. l Va e The most important thing is to make sure the existing m ti fe customer [is] happy rather than chasing after new prospects. i L Our NPS is in the 67-69 range vs. our peers in the 20’s… 0x We do not want to spend money on [the] FQ1:19 FQ2:19 FQ3:19 FQ4:19 FQ1:20 marketing side to generate leads. FY = January Eric Yuan – Founder / CEO, Zoom, 8/17 Source: Interview with SaaStr (8/17). Zoom S-1. Goldman Sachs Investment Research estimates of LTV & CAC. Note: *Goldman Sachs Investment Research calculated LTV as the value of $1 of Annual Recurring Revenue, discounted for GAAP gross margin, Goldman Sachs Investment Research estimated Gross Churn & an 11% assumed discount rate. Internet Trends 33 2019 CAC is calculated as the amount of Sales & Marketing expense in a relevant period, divided by the gross new Annual Recurring Revenue added in the same period.