Item 9A. Controls and Procedures
Item 9A. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), as of the end of the period covered by this Annual Report on Form 10-K. Based on such evaluation, our principal executive officer and principal financial officer have concluded that as of such date, our disclosure controls and procedures were effective at a reasonable assurance level.
Management's Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Management conducted an assessment of the effectiveness of the Company’s internal control over financial reporting based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Management has concluded that its internal control over financial reporting was effective as of January 31, 2023 to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with U.S. GAAP.
The effectiveness of our internal control over financial reporting as of January 31, 2023 has been audited by KPMG LLP, an independent registered public accounting firm, as stated in their report, which is included in Item 8 of this Annual Report on Form 10-K.
Changes in Internal Control Over Financial Reporting
There has been no change in our internal control over financial reporting (as defined in Rules 13a-15(d) and 15d-15(d) under the Exchange Act) that occurred during the quarter ended January 31, 2023 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Inherent Limitations on Effectiveness of Disclosure Controls and Procedures
Our management, including our principal executive officer and principal financial officer, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Due to inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
Item 9B. OTHER INFORMATION
On March 1, 2023, our Board of Directors (the “Board”) approved amendments to our Amended and Restated Bylaws (the “Bylaws”), which became effective the same day. Among other things, the amendments:
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• update the advance notice provisions that apply where a stockholder intends to propose a director nomination or other business at a stockholder meeting, including to address newly adopted Rule 14a-19 of the Exchange Act (“Rule 14a-19”), by requiring:
◦ any stockholder submitting a nomination notice to make a representation as to whether such stockholder intends to solicit proxies in support of director nominees other than our nominees in accordance with Rule 14a-19 and to provide reasonable evidence that certain requirements of such rule have been satisfied;
◦ the nomination of each proposed director nominee other than our nominees be disregarded (notwithstanding that the nominee is included as a nominee in our proxy statement, notice of meeting or other proxy materials for any stockholder meeting (or any supplement thereto) and notwithstanding that proxies or votes in respect of the election of such proposed nominees may have been received by us (which proxies and votes shall be disregarded)) if, after a stockholder provides notice pursuant to Rule 14a-19, such stockholder subsequently fails to comply with the requirements of Rule 14a-19 or fails to timely provide reasonable evidence that certain requirements of such rule have been satisfied;
◦ that the number of nominees a stockholder may nominate for election at a stockholder meeting may not exceed the number of directors to be elected at such meeting;
◦ certain representations with respect to a proposed nominee regarding the absence of certain voting commitments, disclosure of compensation for service and compliance with our corporate governance and other policies, and intent to serve the entire term;
◦ additional background information and disclosures regarding proposing stockholders, proposed nominees and business, and other persons related to a stockholder’s solicitation of proxies; and
◦ that whenever a document or information must be delivered to us under the advance notice provisions such document or information must be in writing exclusively and must be delivered exclusively by hand, or by certified or registered mail, return receipt requested.
• require that any stockholder directly or indirectly soliciting proxies from other stockholders must use a proxy card color other than white, with the white proxy card being reserved for exclusive use by our Board; and
• make certain other technical, modernizing and clarifying changes.
The foregoing description is a summary and is qualified in its entirety by reference to the full text of the Bylaws, a copy of which is attached as Exhibit 3.2 hereto and is incorporated by reference herein.
Item 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
PART III
Item 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE
We maintain a Code of Business Conduct and Ethics that incorporates our code of ethics applicable to all employees, including all directors and executive officers. Our Code of Business Conduct and Ethics is published on our Investor Relations website at investors.zoom.us under “Corporate Governance.” We intend to satisfy the disclosure requirement under Item 5.05 of Form 8-K regarding amendments to, or waiver from, a provision of our Code of Business Conduct and Ethics by posting such information on the website address and location specified above.
The remaining information required by this item is incorporated by reference to the definitive Proxy Statement for our 2023 Annual Meeting of Stockholders, which will be filed with the SEC no later than 120 days after January 31, 2023.
Item 11. EXECUTIVE COMPENSATION
The information required by this item is incorporated by reference to the definitive Proxy Statement for our 2023 Annual Meeting of Stockholders, which will be filed with the SEC no later than 120 days after January 31, 2023.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The information required by this item is incorporated by reference to the definitive Proxy Statement for our 2023 Annual Meeting of Stockholders, which will be filed with the SEC no later than 120 days after January 31, 2023.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
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The information required by this item is incorporated by reference to the definitive Proxy Statement for our 2023 Annual Meeting of Stockholders, which will be filed with the SEC no later than 120 days after January 31, 2023.
Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The information required by this item is incorporated by reference to the definitive Proxy Statement for our 2023 Annual Meeting of Stockholders, which will be filed with the SEC no later than 120 days after January 31, 2023.
PART IV
Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) The following documents are filed as a part of this Annual Report on Form 10-K:
(1) Consolidated Financial Statements:
Our Consolidated Financial Statements are listed in the “Index to Consolidated Financial Statements” under Part II, Item 8 of this Annual Report on Form 10-K.
(2) Financial Statement Schedules:
Schedule II: Valuation and Qualifying Accounts is filed as part of this Annual Report on Form 10-K and should be read in conjunction with the Consolidated Financial Statements and Notes thereto.
Schedules not listed above have been omitted because the information required to be set forth therein is not applicable or is shown in the financial statements or notes herein.
(3) Exhibits
The documents listed in the following Exhibit Index of this Annual Report on Form 10-K are incorporated by reference or are filed with this Annual Report on Form 10-K, in each case as indicated therein (numbered in accordance with Item 601 of Regulation S-K).
Exhibits
Exhibit
Number Exhibit Description Incorporated by Reference
Form File No. Exhibit Filing Date
3.1 Amended and Restated Certificate of Incorporation of Zoom Video Communications, Inc.
8-K 001-38865 3.1 April 23, 2019
3.2 Amended and Restated Bylaws of Zoom Video Communications, Inc.
4.1 Form of Class A Common Stock Certificate
S-1/A 333-230444 4.1 April 8, 2019
4.2# Third Amended and Restated Investors’ Rights Agreement by and among the Registrant and certain of its stockholders, dated December 1, 2016
S-1 333-230444 4.2 March 22, 2019
4.3 Description of Securities
10.1# Zoom Video Communications, Inc. Fourth Amended and Restated 2011 Global Share Plan, and forms of agreements thereunder
S-1 333-230444 10.1 March 22, 2019
10.2# Zoom Video Communications, Inc. 2019 Equity Incentive Plan, as amended, and forms of agreements thereunder
10-Q 001-38865 10.2 November 23, 2022
10.3 Zoom Video Communications, Inc. 2019 Equity Incentive Plan Non-Employee Director Global Restricted Stock Unit Award Grant Notice, as amended
10-Q 001-38865 10.3 September 3, 2020
10.4 Zoom Video Communications, Inc. 2019 Equity Incentive Plan Global Restricted Stock Unit Award Grant Notice for Executive Officers, as amended
10-Q 001-38865 10.1 December 4, 2020
10.5# Zoom Video Communications, Inc. 2019 Employee Stock Purchase Plan
S-1/A 333-230444 10.3 April 8, 2019
10.6# Form of Indemnification Agreement entered into by and between the Registrant and each director and executive officer
S-1 333-230444 10.4 March 22, 2019
10.7# Zoom Video Communications, Inc. Non-Employee Director Compensation Policy, as amended
10.8# Zoom Video Communications, Inc. 2019 Equity Incentive Plan Global RSU Award G r ant Notice
10-Q 001-38865 10.2 September 13, 2019
10.9# Zoom Video Communications, Inc. 2019 Equity Incentive Plan Non-Employee Director Global RSU Award Grant Notice
10-Q 001-38865 10.3 September 13, 2019
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10.10# Confirmatory Offer Letter by and between the Registrant and Eric S. Yuan, dated December 18, 2018
S-1 333-230444 10.5 March 22, 2019
10.11# Confirmatory Offer Letter by and between the Registrant and Aparna Bawa, dated December 18, 2018
S-1 333-230444 10.6 March 22, 2019
10.12# Confirmatory Offer Letter by and between the Registrant and Janine Pelosi, dated December 18, 2018
S-1 333-230444 10.7 March 22, 2019
10.13# Confirmatory Offer Letter by and between the Registrant and Kelly Steckelberg, dated December 18, 2018
S-1 333-230444 10.8 March 22, 2019
10.14# Offer Letter by and between the Registrant and Ryan Azus dated June 29, 2019
10-Q 001-38865 10.4 September 13, 2019
10.15# Offer Letter by and between the Registrant and Velchamy Sankarlingam dated May 19, 2020
10-Q 001-38865 10.1 September 3, 2020
10.16# Offer Letter by and between the Registrant and Greg Tomb, dated May 31, 2020
10-Q 001-38865 10.1 August 24, 2022
10.17# Director Offer Letter by and between the Registrant and Lieut. General H.R. McMaster dated May 6, 2020
10-Q 001-38865 10.2 September 3, 2020
10.18# Director Offer Letter by and between the Registrant and Janet Napolitano dated November 2, 2020
10-K 001-38865 10.17 March 18, 2021
10.19# Director Offer Letter by and between the Registrant and William R. McDermott dated February 23, 2022
10-Q 001-38865 10.2 May 25, 2022
10.20# Director Offer Letter by and between the Registrant and Cindy Hoots dated January 4, 2023
10.21 Lease Agreement dated August 1, 2016, as amended, by and between the Registrant and KBSIII Almaden Financial Plaza, LLC
S-1 333-230444 10.9 March 22, 2019
10.22 Fourth Amendment to Lease Agreement by and between the Registrant and KBSIII Almaden Financial Plaza, LLC
10-Q 001-38865 10.5 September 13, 2019
10.23 Fifth Amendment to Lease Agreement by and between Zoom Video Communications, Inc. and KBSIII Almaden Financial Plaza, LLC dated March 9, 2020
10-Q 001-38865 10.1 June 5, 2020
10.24# Zoom Video Communications, Inc. Officer Incentive Plan, as amended
10-K 001-38865 10.21 March 7, 2022
10.25 Common Stock Purchase Agreement by and among the Registrant, salesforce.com, inc. and Salesforce Ventures LLC, dated as of April 5, 2019
S-1/A 333-230444 10.11 April 8, 2019
10.26# Zoom Video Communications, Inc. Severance and Change in Control Plan and form of Participation Agreement thereunder
10-Q 001-38865 10.2 August 24, 2022
21.1 List of subsidiaries of the Registrant
23.1 Consent of KPMG LLP, independent registered public accounting firm
24.1 Power of Attorney (reference is made to the signature page hereto)
31.1 Certification of Chief Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2 Certification of Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1† Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS XBRL Instance Document
101.SCH XBRL Taxonomy Extension Schema Document
101.CAL XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF XBRL Taxonomy Extension Definition Linkbase Document
101.LAB XBRL Taxonomy Extension Label Linkbase Document
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101.PRE XBRL Taxonomy Extension Presentation Linkbase Document
104 Cover Page Interactive Data File (formatted as inline XBRL)
# Indicates a management contract or compensatory plan or arrangement.
† The certifications attached as Exhibit 32.1 that accompany this Annual Report on Form 10-K are not deemed filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of the Registrant under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date of this Annual Report on Form 10-K, irrespective of any general incorporation language contained in such filing.
(b) Financial Statement Schedules
Schedule II: Valuation and Qualifying Accounts
The table below details the activity of the accounts receivable allowances and deferred tax asset valuation allowance for the fiscal years ended January 31, 2023, 2022, and 2021:
Balance at
Beginning of Year Additions Write-offs or Deductions Balance at
End of Year
(in thousands)
Year ended January 31, 2023
Accounts receivable allowances $ 24,696 $ 57,142 $ ( 48,632 ) $ 33,206
Deferred tax asset valuation allowance $ 12,605 $ 40,965 $ — $ 53,570
Year ended January 31, 2022
Accounts receivable allowances $ 36,844 $ 50,467 $ ( 62,615 ) $ 24,696
Deferred tax asset valuation allowance $ 335,051 $ 5,511 $ ( 327,957 ) $ 12,605
Year ended January 31, 2021
Accounts receivable allowances $ 7,634 $ 47,405 $ ( 18,195 ) $ 36,844
Deferred tax asset valuation allowance $ 36,353 $ 298,698 $ — $ 335,051
All other financial statement schedules have been omitted, since the required information is not applicable or is not present in amounts sufficient to require submission of the schedule, or because the information required is included in the consolidated financial statements and notes thereto included in this Form 10-K.
Item 16. FORM 10-K SUMMARY
None.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
ZOOM VIDEO COMMUNICATIONS, INC.
Date: March 3, 2023 By: /s/ Eric S. Yuan
Eric S. Yuan
President and Chief Executive Officer
(Principal Executive Officer)
Date: March 3, 2023 By: /s/ Kelly Steckelberg
Kelly Steckelberg
Chief Financial Officer
(Principal Financial Officer)
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POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Eric S. Yuan, Kelly Steckelberg, and Aparna Bawa, and each one of them, as his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in their name, place, and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report on Form 10-K has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature Title Date
/s/ Eric S. Yuan President, Chief Executive Officer and Director (Principal Executive Officer)
March 3, 2023
Eric S. Yuan
/s/ Kelly Steckelberg Chief Financial Officer (Principal Financial Officer)
March 3, 2023
Kelly Steckelberg
/s/ Shane Crehan Chief Accounting Officer (Principal Accounting Officer)
March 3, 2023
Shane Crehan
/s/ Jonathan Chadwick Director March 3, 2023
Jonathan Chadwick
/s/ Peter Gassner Director March 3, 2023
Peter Gassner
/s/ Cindy Hoots Director March 3, 2023
Cindy Hoots
/s/ William R. McDermott Director March 3, 2023
William R. McDermott
/s/ Herbert Raymond McMaster Director March 3, 2023
Herbert Raymond McMaster
/s/ Janet Napolitano Director March 3, 2023
Janet Napolitano
/s/ Dan Scheinman Director March 3, 2023
Dan Scheinman
/s/ Santiago Subotovsky Director March 3, 2023
Santiago Subotovsky
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