Mikkel $123.4M Svane Q4 2017 Revenue CEO 39% Q4 Y/Y Revenue Growth 119,000 Paid Customer Accounts Elena Gomez INTRODUCTION CFO In 2017, we made great progress towards our goal of being a $1 billion revenue company in 2020. Through disciplined execution, we expanded our product line, increased our market penetration, and rapidly grew our business. We also delivered on our important strategic goals for the year: moving upmarket by landing larger deals with mid-market and enterprise companies, and becoming a multiproduct company with new revenue opportunities. With this performance, we delivered strong revenue growth, our highest-ever annual net cash from operating activities, and—for the first time in Zendesk’s history—positive full-year free cash flow. Marc As we move into 2018, we are focused on further maturing our omnichannel Cabi offering and accelerating our push upmarket. We enter 2018 with a strong team enhanced by two new board members and a new head of worldwide Strategy & IR sales, and a very high level of optimism about the sales opportunities our teams are pursuing to begin the year. Based on our results and momentum, we have gained additional confidence in our plan to reach our $1 billion 2020 revenue goal. Zendesk Shareholder Letter Q4 2017 - 2

2 Mikkel Svane CEO Elena Gomez CFO Marc Cabi Strategy & IR Q4 2017 Revenue Q4 Y/Y Revenue Growth Paid Customer Accounts INTRODUCTION In 2017, we made great progress towards our goal of being a $1 billion revenue company in 2020. Through disciplined execution, we expanded our product line, increased our market penetration, and rapidly grew our business. We also delivered on our important strategic goals for the year: moving upmarket by landing larger deals with mid-market and enterprise companies, and becoming a multiproduct company with new revenue opportunities. With this performance, we delivered strong revenue growth, our highest-ever annual net cash from operating activities, and—for the first time in Zendesk’s history—positive full-year free cash flow. As we move into 2018, we are focused on further maturing our omnichannel offering and accelerating our push upmarket. We enter 2018 with a strong team enhanced by two new board members and a new head of worldwide sales, and a very high level of optimism about the sales opportunities our teams are pursuing to begin the year. Based on our results and momentum, we have gained additional confidence in our plan to reach our $1 billion 2020 revenue goal. $123.4M 39% 119,000

Our fourth quarter and full-year results highlight our upmarket progress. We For the fourth quarter of 2017, we achieved revenue of $123.4 million, with added many new large businesses as customers, while expanding with many an annual growth rate of 39%. For the full year, we ended 2017 with $430.5 more existing enterprise customers during the quarter. We saw a significant million in revenue, with an annual growth rate of 38%. Looking forward to increase in our metric tracking the percentage of Zendesk Support MRR 2018, we project revenue to be in the range of $555 million to $565 million. coming from customers with 100 or more Support agents—ending 2017 at Our operating results continue to keep us on track to deliver both year-over- 38% compared to 34% a year earlier. Additionally, our portfolio of customer year GAAP and non-GAAP operating margin improvement, and increased success stories expanded in both number and variety throughout 2017, net cash from operating activities and free cash flow, consistent with the showcasing our move into new use cases and our traction in key industry goals that we established in prior years. segments. Fourth quarter and full fiscal year 2017 financial summary (in thousands, except per share data) Three Months Ended Twelve Months Ended December 31, December 31, GAAP Results 2017 2016 2017 2016 Revenue $ 123,426 $ 88,623 $ 430,492 $ 311,999 Gross profit 88,468 63,041 303,070 218,099 Gross margin 71.7% 71.1% 70.4% 69.9% Operating loss $ (28,523) $ (25,130) $ (114,643) $ (104,326) Operating margin -23.1% -28.4% -26.6% -33.4% Net loss $ (26,649) $ (24,548) $ (110,638) $ (103,799) Net loss per share (0.26) (0.26) (1.11) (1.11) Non-GAAP Results Non-GAAP gross profit $ 91,998 $ 66,273 $ 317,623 $ 230,710 Non-GAAP gross margin 74.5% 74.8% 73.8% 73.9% Non-GAAP operating loss $ (2,411) $ (4,394) $ (17,108) $ (21,076) Non-GAAP operating margin -2.0% -5.0% -4.0% -6.8% Non-GAAP net loss $ (537) $ (3,812) $ (13,103) $ (20,549) Non-GAAP net loss per share (0.01) (0.04) (0.13) (0.22) Zendesk Shareholder Letter Q4 2017 - 3

b 2 2017 REVIEW y the n017 umbe One of Zendesk’s biggest strengths has always been the broad appeal rs of our products across industries and organizations of every size. In 2017, 119,000 our prevalence grew to a point where we saw Zendesk increasingly at the Paid customer center of customer experiences worldwide. For example, over the four days accounts between Black Friday and Cyber Monday last November, our chat widget 2,000 reached more than 400 million visitors collectively across our customers’ Employees worldwide individual websites. 1.25 BILLION Throughout 2017, we saw solid improvement in growth opportunities and Support tickets solved operating fundamentals. Our mission to expand beyond customer service in 2017 640 to address customer journeys and relationships more broadly was a key Public apps on the investment theme that generated positive results. 150,000 App Marketplace On the product front, we focused on creating a more unified customer Public apps installed experience and simplifying the buying experience across our product family. to date As part of that process, we launched Chat Enterprise in August and Talk 20,000 Enterprise in September, and brought greater consistency in feature set and Customers with active scalability across all our products. Zendesk Support, Chat, Talk, and Guide web widgets can now be used together across a variety of use cases and degrees of 10,000 complexity to deliver improved customer experiences. Apps using a mobile SDK Zendesk Shareholder Letter Q4 2017 - 4

During the second half of 2017, we observed acceleration in the primary 2018 PRIORITIES metric we use to measure our upmarket progress (percentage of Support MRR from customers with 100 or more Support agents). We benefited As we move into 2018, our key priorities will revolve around two major from a growing level of productivity from the salespeople who joined themes: accelerating our upmarket business through larger deals and Zendesk in the past year. In addition, we saw a strong general uptick in greater penetration with enterprise customers, and empowering our new opportunities worldwide, closing 2017 with a solid set of opportunities customers to provide the best omnichannel customer experiences possible. for new and expanded business across a growing family of products. Our In addition, our product development efforts are focused on delivering increasing number of customer references across certain industries has innovation through new products and enhancements to existing products, contributed to our ability to repeat successes in those industries. including harnessing more data and machine learning opportunities. We believe our progress in 2017 was further underscored by several industry Focus on the Enterprise analyst recognitions in the year. Gartner scored Zendesk the highest for No longer the obsession of small, nimble startups alone, digital its business to consumer (B2C) use case in its December 2017 Critical transformation initiatives are changing even the largest businesses. At Capabilities for the CRM Customer Engagement Center report.* Earlier, the same time, enterprises are recognizing the critical importance of the we improved our position in Gartner’s May 2017 Magic Quadrant for the customer experiences they deliver. We believe these trends and others are CRM Customer Engagement Center* (in which Zendesk is in the Leaders creating new opportunities for us to both attract more enterprise customers quadrant). We also improved our position in The Forrester Wave™: Customer and build deeper relationships with our existing large customers. Service Solutions For Midsize Teams, Q2 2017 (in which Zendesk is a Strong Performer). Enterprise *Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner’s research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose. Zendesk Shareholder Letter Q4 2017 - 5

Our product family enables large companies to transform their customer In addition, we announced the appointment of Norman Gennaro as senior experiences. In 2018, we are focused on building out even more vice president of worldwide sales in December. Norman brings more than sophisticated product capabilities that our largest customers will expect as 25 years of business and technology experience leading and growing they adapt to these new trends. global teams of sales professionals. Most recently, he helped to build the To help guide our teams as we continue to move upmarket, we put an mid-market segment for North America into a multibillion-dollar business emphasis in the second half of 2017 on filling key roles with leaders for Amazon Web Services, and prior to that, he spent 16 years in enterprise who have experience working with larger companies. Two of these key sales with Oracle. Norman will partner with Jeff Titterton, who joined us as additions were for our board of directors—most recently, the appointment senior vice president of marketing earlier in 2017. of Mike Frandsen in November. Mike brings more than three decades of Our new sales and marketing leadership is building experienced teams that valuable enterprise product development experience with companies like can meet the demands of our growing global business. These two teams are DemandTec and PeopleSoft. He is currently executive director of products working in concert on our many go-to-market activities worldwide, including at Workday. customer and prospect events. Our new 2018 events strategy includes more than ten major Zendesk-produced events in our most significant regions around the globe. These events are designed to help generate and accelerate our pipeline of new and expansion business with their focus on Zendesk products and customer experience best practices. In 2018, we plan to expand our investments globally to build a broader partner and channel ecosystem to support our upmarket activities. While we continue to pride ourselves on our products’ ease of use and implementation, we also recognize that our largest enterprise customers frequently require the expertise of systems integrators and partners. Our regional partnerships demonstrated the potential value and impact of such alliances, and we expect to expand the number and scope of these partnerships over this year. Mike Frandsen, Board Member Our largest customers value our ability to scale with them to serve their growing demands. To that end, Zendesk continues to make reliability and scalability top priorities. Our customers view Zendesk as a critical piece Mike joins Hilarie Koplow-McAdams, who was appointed to the board in of their businesses and rely on Zendesk products to achieve successful September. Hilarie brings deep global enterprise software sales expertise to outcomes. In 2017, we began to migrate our data center investments to cloud Zendesk, having formerly held executive leadership positions at New Relic, infrastructure to enable greater reliability, flexibility, and scale. In early 2018, Salesforce, Intuit, and Oracle. Mike and Hilarie will be key product and sales we will finalize our transition plans to cloud infrastructure and develop a plan resources for us as we move upmarket toward our $1 billion revenue goal. for customer migration, which is likely to take several quarters. Zendesk Shareholder Letter Q4 2017 - 6

Focus on Omnichannel In 2017, we put an emphasis on rolling out features that would bring the The rise of new communication channels and ubiquitous access to rest of our products in-line with the scope and scalability of our Support information has made customer journeys increasingly complex. Customers product, including launching Enterprise versions of Chat and Talk. All have individual channel preferences, and they want to be recognized of that foundational work last year paved the way for our 2018 focus on across any and all channels they choose. As more power and control shifts omnichannel, and our product organization is now well positioned for a from companies to consumers, organizations are recognizing the critical unified omnichannel offering. importance of their customer experiences and are searching for solutions to Throughout 2018, we will continue to implement new features for our core improve their customer interactions. products, including an Enterprise version of Guide in the first half of this year. We believe that we are well positioned to help companies deliver the This and other ongoing improvements to all our products ensure that we are omnichannel experiences their customers expect today. The Zendesk always delivering the best capabilities to our customers through a robust product family is purpose-built to unify disparate channels and departments omnichannel solution that can scale to meet the needs of even our largest and to simplify the process of providing great customer service, whether that customers. is through self-service, a phone call, live chat, messaging, or a simple email. Zendesk Shareholder Letter Q4 2017 - 7

Focus on Innovation segmentation opportunities and customer activity While we added many new products to our history for our Support customers as well as family in 2017, our development efforts in 2018 power proactive campaigns across web, email, are focused both on continuing new product and mobile channels. development and delivering enhancements for Zendesk Explore also continues to progress. This our existing products. new customer analytics product will supplement An example of this strategy is Answer Bot, our current Insights and Benchmark capabilities— our first machine learning product to directly both of which we plan to expand while Explore is monetize our data assets. A paid add-on to our in development. Explore’s modern architecture Guide product, Answer Bot continues to gain will give our customers better decision-making traction within our customer base, and we have power by combining Zendesk data with external Answer Bot data sources for a broader, more integrated rolled out new features to enhance the customer picture of the entire customer data set. The good kind of experience. In January, we launched Answer know-it-all Bot for Web Forms, allowing it to work in more customer touchpoints and handle more requests. Answer Bot increases self-service efficiency by responding to customers’ questions with relevant knowledge base articles. In addition, Answer Bot is now available in both Spanish and Portuguese. We expect to add additional channels and languages this year. Meanwhile, we are continuing our development of two new products—currently in early access programs—that we believe will deliver greater innovation for our customers and expand our market opportunities in the longer term. The Outbound technology we acquired last year has been folded into our development efforts for Zendesk Connect, a product that we believe will open more opportunities for us to address the customer experience beyond traditional customer service. Connect will initially offer new customer Zendesk Shareholder Letter Q4 2017 - 8

CUSTOMERS JD Sports Fashion - a U.K. retailer of branded trainer and sports fashion Increasingly, companies are turning to Zendesk Nexway - solutions for online sales and digital when seeking a flexible solution for digital distribution transformation projects centered on improving the customer experience. Large enterprises—and ProctorU - online proctoring and identity even more traditional mid-sized companies— management solutions often are challenged by legacy processes, Rappi - a Mexico City-based ecommerce infrastructure, and systems that don’t provide company active in Mexico, Brazil, and Colombia enough agility for large-scale change. With our ease of integration and quick deployment times, Ryanair - a leading European airline serving 33 we are seeing many such companies start down countries in Europe, Africa, and the Middle East the path to digital transformation using Zendesk. Soothe - a global, on-demand massage service Among the customers to join us or expand with us available in 50 cities recently include: Stride Health - a service to connect individual amaysim - an Australian provider of mobile, workers with health insurance plans broadband, and energy services as well as Tile - devices and technologies to help locate devices missing things Chime - an online bank focused on automatic UncommonGoods - an online retailer of unique savings gifts by independent makers Circles.Life - a digital telecommunications operator in Singapore Conrad Electronic SE - a European online retailer of electronic products Etsy - an online retail marketplace for sellers of creative goods FINALCAD - mobile apps and predictive analytics for construction GoFundMe - a social fundraising platform with 50 million donors Zendesk Shareholder Letter Q4 2017 - 9

OPERATING METRICS % of total quarter-ending Support MRR from paid customer accounts with 100+ Support agents A key metric we use to gauge our penetration within larger organizations is represented by the percentage of Support MRR generated by customers with 100 or more Support agents. That percentage grew to 38% at the end of the fourth quarter of 2017, compared to 37% at the end of the third quarter of 2017 and 34% at the end of the fourth quarter of 2016. While we expect this metric to grow gradually, we see these increases in the second half of 2017 as evidence of 100+ Agents 38% improving upmarket momentum. As a proxy of our success with upmarket opportunities, we Q4 2017 measure our number of contracts signed with an annual value of $50,000 or greater. In the fourth quarter of 2017, the number of these contracts we closed was over 25% greater than in the fourth quarter of 2016. However, we saw a decrease in the average size of these transactions as compared to the same period last year. Our dollar-based net expansion rate, which we use to quantify our annual expansion within existing customers, increased by one percentage point to end the fourth quarter at 119%, compared to 118% at the end of the third quarter of 2017. Our dollar-based net expansion rate was 115% at the end of the fourth quarter of 2016. Consistent with expectations in prior quarters, we expect our dollar-based net expansion rate to remain in the 110% - 120% range over the next several quarters. Zendesk Shareholder Letter Q4 2017 - 10

CORPORATE SOCIAL RESPONSIBILITY (CSR) Our commitment to social responsibility is unwavering as we enter 2018. One of our 2017 projects involved seeking evidence of what we believed to be true: that CSR activity and employee volunteering have a positive downstream impact on a business’s customer experience and satisfaction. To that end, our CSR team commissioned a study from Drexel University to help substantiate whether and how CSR activities influence how customer- facing employees at Zendesk interact with customers and how those interactions affect customer satisfaction. The main takeaways from the research include: • Customer support agents who volunteered at least once every two months were more than three times more likely to be rated among the top third in the company for empathy. • CSR can drive customer satisfaction by stimulating helping behaviors among Zendesk’s customer support agents. Helping behaviors are important because the more an advocate seeks help from others at the company, the higher their CSAT scores. The Zendesk Neighbor Foundation issued $2.1 million in grants in 2017 to its nonprofit partners across the globe. Meanwhile, Zendesk employees invested more than 9,500 engagement hours in their communities around the world. Zendesk’s CSR team also sponsored 28 pro bono customer accounts for a total of $596,000 worth of donated product. Zendesk Shareholder Letter Q4 2017 - 11

FINANCIAL MEASURES AND CASH FLOW GAAP operating loss for the fourth quarter of 2017 was $28.5 million compared to GAAP operating loss for the third quarter of 2017 of $28.4 We made solid progress on operating fundamentals in 2017. Our strong million. GAAP operating loss for the fourth quarter of 2016 was $25.1 million. revenue growth and continued focus on improving operating margins Non-GAAP operating loss for the fourth quarter of 2017 was $2.4 million, have been a key focus of management. In 2017, we achieved GAAP and compared to non-GAAP operating loss for the third quarter of 2017 of $3.3 non-GAAP operating margin expansion based on continued improvements million. Non-GAAP operating loss for the fourth quarter of 2016 was across all our cost categories, despite the impact on our gross margin $4.4 million. incurred by our recent decision to move our infrastructure operations to GAAP operating margin improvement is attributed to overall sales force cloud infrastructure from our current co-located data centers. Our focus in productivity gains and G&A operational scaling. GAAP operating margin for 2018 and beyond is to continue to deliver high revenue growth and further the fourth quarter of 2017 improved to -23.1% from -25.2% in the third quarter scale our business as measured by expanding GAAP and non-GAAP of 2017. GAAP operating margin was -28.4% in the fourth quarter of 2016. operating margins. Non-GAAP operating margin improved to -2.0% in the fourth quarter of 2017 Our revenue growth and improvements in margins also helped drive positive from -2.9% in the third quarter of 2017. Non-GAAP operating margin was results in net cash from operating activities and results for free cash flow. In -5.0% in the fourth quarter of 2016. 2017, we achieved positive net cash from operating activties and free cash GAAP net loss for the fourth quarter of 2017 was $26.6 million or $0.26 per flow in each quarter and for the year. share compared to GAAP net loss of $27.7 million or $0.28 per share for the Fourth Quarter Results third quarter of 2017. GAAP net loss was $24.5 million or $0.26 per share for Our fourth quarter and full-year 2017 results below are based on the revenue the fourth quarter of 2016. recognition standard ASC 605. Our guidance for 2018 will be based on the Non-GAAP net loss for the fourth quarter of 2017 was $0.5 million or $0.01 new revenue recognition standard ASC 606, as discussed further in that per share compared to non-GAAP net loss of $2.5 million or $0.02 per share section. for the third quarter of 2017. Non-GAAP net loss was $3.8 million or $0.04 Revenue was $123.4 million for the fourth quarter of 2017, up 39% year-over- per share for the fourth quarter of 2016. Weighted average shares used to year compared to $88.6 million in the fourth quarter of 2016. GAAP gross compute both GAAP and non-GAAP net loss per share for the fourth quarter margin increased quarter over quarter to 71.7% in the fourth quarter of 2017, of 2017 was 102.0 million. from 70.1% in the third quarter of 2017. GAAP gross margin in the fourth Non-GAAP results for the fourth quarter of 2017 exclude $24.7 million in quarter of 2016 was 71.1%. Non-GAAP gross margin increased quarter over share-based compensation and related expenses (including $2.0 million quarter to 74.5% in the fourth quarter of 2017 compared to 73.5% in the third of employer tax related to employee stock transactions and $0.4 million quarter of 2017. Non-GAAP gross margin in the fourth quarter of 2016 was of amortization of share-based compensation capitalized in internal-use 74.8%. Both GAAP and non-GAAP gross margin continues to be impacted by software), $0.7 million of amortization of purchased intangibles, and our dual infrastructure deployments. $0.7 million of acquisition-related expenses. Non-GAAP results for the third quarter of 2017 exclude $23.7 million in share-based compensation and related expenses (including $0.7 million of employer tax related to Zendesk Shareholder Letter Q4 2017 - 12

employee stock transactions and $0.5 million Full-Year 2017 Results Non-GAAP results for 2017 exclude $91.6 million of amortization of share-based compensation in share-based compensation and related capitalized in internal-use software), $1.0 million Revenue was $430.5 million for the full year of expenses (including $4.8 million of employer of amortization of purchased intangibles, and 2017, up 38% year-over-year compared to $312.0 tax related to employee stock transactions $0.5 million in acquisition-related expenses. million for 2016. GAAP gross margin increased and $1.8 million of amortization of share- Non-GAAP results for the fourth quarter of to 70.4% in 2017 compared to 69.9% in 2016. based compensation capitalized in internal- 2016 exclude $19.8 million in share-based Non-GAAP gross margin decreased slightly to use software), $3.7 million of amortization compensation and related expenses (including 73.8% in 2017 compared to 73.9% in 2016. As of purchased intangibles, and $2.2 million $1.8 million of employer tax related to mentioned above, our gross margins in 2017 of acquisition-related expenses. Non-GAAP employee stock transactions and $0.6 million were negatively impacted by the migration of our results for 2016 exclude $79.5 million in share- of amortization of share-based compensation infrastructure operations to cloud infrastructure based compensation and related expenses capitalized in internal-use software), and $0.9 from our current co-located data centers. (including $3.9 million of employer tax related million of amortization of purchased intangibles. GAAP operating loss for 2017 was $114.6 million to employee stock transactions and $1.8 million During the fourth quarter of 2017, net cash from compared to GAAP operating loss for 2016 of of amortization of share-based compensation operating activities was $17.4 million, and we $104.3 million. Non-GAAP operating loss for capitalized in internal-use software), and $3.8 achieved positive free cash flow of $12.0 million. 2017 was $17.1 million, compared to non-GAAP million of amortization of purchased intangibles. We ended the fourth quarter of 2017 with $109.4 operating loss for 2016 of $21.1 million. For the full year of 2017, net cash from operating million of cash and equivalents, and we had an GAAP operating margin in 2017 improved to activities was $42.1 million, and we achieved additional $137.6 million of short-term marketable -26.6% from -33.4% in 2016. Non-GAAP operating positive free cash flow of $18.2 million. securities and $97.4 million of long-term margin improved to -4.0% in 2017 from -6.8% in marketable securities. 2016. GAAP net loss in 2017 was $110.6 million or $1.11 per share compared to GAAP net loss of $103.8 million or $1.11 per share for 2016. Non-GAAP net loss in 2017 was $13.1 million or $0.13 per share compared to non-GAAP net loss of $20.5 million or $0.22 per share in 2016. Weighted average shares used to compute both GAAP and non-GAAP net loss per share for 2017 was 99.9 million. Zendesk Shareholder Letter Q4 2017 - 13

GUIDANCE enterprise deals close in the second half of the year. Our first quarter revenue guidance reflects this seasonal trend. Our guidance for 2018 is based on the new revenue recognition standard As part of our infrastructure migration, we will continue to incur expenses for ASC 606. The new standard has a minimal impact on our revenue both Amazon Web Services and our co-located data centers while we host recognition, however the requirement to defer sales commissions under customers in both environments during the transition period. We expect to the new standard results in a benefit to our operating margins. The new incur up to approximately 100 basis points of additional depreciation and standard does not impact net cash from operating activities or free cash flow. related costs in each period while the migration continues. We expect to For comparability, we have provided restated historical financial statements finalize our migration plan in the first quarter and will disclose information under the new standard for the full year of 2016 and the full year and about the schedule of expense recognition on our first quarter earnings call. quarters of 2017 on our investor relations website. For the first quarter of 2018, we expect revenue to range between $125.0 We expect net cash from operating activities to be positive for the full year of and $127.0 million and we expect our GAAP operating loss to range between 2018, and for the first time, we are introducing annual guidance on free cash $33.0 and $35.0 million. We expect our non-GAAP operating loss for the flow. For the full year of 2018, we expect free cash flow between $25 million first quarter of 2018 to range between $3.0 and $5.0 million. Our GAAP and $30 million, representing a year over year growth of 51% at the midpoint. operating loss for the first quarter of 2018 is estimated to include share- This target regarding free cash flow includes cash used for purchases of based compensation and related expenses of approximately $28.7 million, property and equipment and internal-use software development costs. We amortization of purchased intangibles of approximately $0.7 million, and have not reconciled free cash flow guidance to net cash from operating acquisition-related expenses of $0.6 million. activities for this future period because we do not provide guidance on the reconciling items between net cash from operating activities and free cash For the full year of 2018, we expect revenue to range between $555.0 flow, as a result of the uncertainty regarding, and the potential variability and $565.0 million, representing growth between 29% and 31% year-over- of, these items. The actual amount of such reconciling items will have a year. We expect our GAAP operating loss for the full year of 2018 to range significant impact on our free cash flow and, accordingly, a reconciliation between $113.0 and $118.0 million, and we expect our non-GAAP operating of net cash from operating activities to free cash flow for the period is not income to range between $0.0 (breakeven) and $5.0 million. Our GAAP available without unreasonable effort. operating loss for the full year of 2018 is estimated to include share-based Finally, we estimate we will have approximately 103.8 million weighted compensation and related expenses of approximately $112.8 million, average shares outstanding for the first quarter of 2018 and 106.2 million amortization of purchased intangibles of approximately $2.7 million, and weighted average shares outstanding for the full year of 2018, each based acquisition-related expenses of $2.5 million. only on current shares outstanding and anticipated activity associated with Our full-year guidance reflects our confidence in maintaining a high growth equity incentive plans. rate in 2018. We note, however, that several factors affect our revenue recognition primarily in the first half of the year, as evidenced by our first quarter 2018 guidance. The first half of the year tends to be more heavily weighted toward our transactional business, whereas we see more Zendesk Shareholder Letter Q4 2017 - 14

Condensed consolidated statements of operations Three Months Ended Year Ended December 31, December 31, (In thousands, except per 2017 2016 2017 2016 share data; unaudited) Revenue $123,426 $88,623 $430,492 $311,999 Cost of revenue 34,958 25,582 127,422 93,900 Gross profit 88,468 63,041 303,070 218,099 Operating expenses: Research and development 30,779 24,383 115,291 91,067 Sales and marketing 64,035 47,566 220,742 166,987 General and administrative 22,177 16,222 81,680 64,371 Total operating expenses 116,991 88,171 417,713 322,425 Operating loss (28,523) (25,130) (114,643) (104,326) Other income, net 1,142 775 2,487 1,520 Loss before provision for (benefit from) income taxes (27,381) (24,355) (112,156) (102,806) Provision for (benefit from) income taxes (732) 193 (1,518) 993 Net loss $(26,649) $(24,548) $(110,638) $(103,799) Net loss per share, basic and diluted $(0.26) $(0.26) $(1.11) $(1.11) Weighted-average shares used to compute net loss per share, 102,044 95,793 99,918 93,161 basic and diluted Zendesk Shareholder Letter Q4 2017 - 15

December 31, December 31, Condensed consolidated 2017 2016 Assets balance sheets Current assets: (In thousands, except par Cash and cash equivalents $109,370 $93,677 Marketable securities 137,576 131,190 value; unaudited) Accounts receivable, net of allowance for doubtful accounts of $1,252 and $1,269 as of 57,096 37,343 December 31, 2017 and December 31, 2016, respectively Prepaid expenses and other 24,165 17,608 current assets Total current assets 328,207 279,818 Marketable securities, noncurrent 97,447 75,168 Property and equipment, net 59,157 62,731 Goodwill and intangible assets, net 67,034 53,296 Other assets 8,359 4,272 Total assets $560,204 $475,285 Liabilities and stockholders’ equity Current liabilities: Accounts payable $5,307 $4,555 Accrued liabilities 21,876 19,106 Accrued compensation and 29,017 20,281 related benefits Deferred revenue 174,524 123,276 Total current liabilities 230,724 167,218 Deferred revenue, noncurrent 1,213 1,257 Other liabilities 6,626 7,382 Total liabilities 238,563 175,857 Stockholders’ equity: Preferred stock, par value $0.01 per share — — Common stock, par value $0.01 per share 1,031 971 Additional paid-in capital 753,568 624,026 Accumulated other comprehensive loss (2,372) (5,197) Accumulated deficit (430,586) (319,720) Treasury stock, at cost — (652) Total stockholders’ equity 321,641 299,428 Total liabilities and stockholders’ equity $560,204 $475,285 Zendesk Shareholder Letter Q4 2017 - 16

Condensed consolidated Three Months Ended Year Ended statements of cash flows December 31, December 31, 2017 2016 2017 2016 (In thousands; unaudited) Cash flows from operating activities Net loss $(26,649) $(24,548) $(110,638) $(103,799) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 7,668 7,506 31,931 27,506 Share-based compensation 22,244 17,444 85,049 73,779 Excess tax benefit from share-based award acvitity — (204) — (337) Other 222 1,884 603 3,106 Changes in operating assets and liabilities: Accounts receivable (6,162) (26) (21,201) (11,808) Prepaid expenses and other current assets 54 1,115 (5,055) (6,286) Other assets and liabilities (442) (2,058) (5,955) (3,887) Accounts payable (5,398) (1,266) 1,839 (3,486) Accrued liabilities 76 2,616 6,919 5,261 Accrued compensation and related benefits 5,896 5,243 7,399 6,055 Deferred revenue 19,847 12,822 51,204 38,418 Net cash provided by operating activities 17,356 20,528 42,095 24,522 Cash flows from investing activities Purchases of property and equipment (3,062) (8,153) (16,396) (20,647) Internal-use software development costs (2,284) (1,997) (7,521) (6,310) Purchases of marketable securities (42,030) (32,408) (177,309) (249,048) Proceeds from maturities of marketable securities 27,775 15,719 116,735 39,690 Proceeds from sale of marketable securities 2,946 14,707 31,090 53,951 Cash paid for acquisition of Outbound, net of cash acquired — — (16,470) — Net cash used in investing activities (16,655) (12,132) (69,871) (182,364) Cash flows from financing activities Proceeds from exercise of employee stock options 13,332 5,526 31,882 25,412 Proceeds from employee stock purchase plan 3,268 2,300 14,248 11,004 Taxes paid related to net share settlement of share-based awards (574) (177) (2,989) (803) Excess tax benefit from share-based award acvitity — 204 — 337 Principal payments on debt — — — (323) Net cash provided by financing activities 16,026 7,853 43,141 35,627 Effect of exchange rate changes on cash 40 (161) 328 (334) and cash equivalents Net increase (decrease) in cash and cash equivalents 16,767 16,088 15,693 (122,549) Cash and cash equivalents at beginning of period 92,603 77,589 93,677 216,226 Cash and cash equivalents at end of period $109,370 $93,677 $109,370 $93,677 Zendesk Shareholder Letter Q4 2017 - 17

Non-GAAP results Three Months Ended Year Ended December 31, December 31, (In thousands, except per 2017 2016 2017 2016 share data) Reconciliation of gross profit and gross margin GAAP gross profit $88,468 $63,041 $303,070 $218,099 The following table shows Plus: Share-based compensation 2,372 1,691 9,040 7,045 Zendesk’s GAAP results Plus: Employer tax related to employee stock transactions 129 106 530 383 reconciled to non-GAAP Plus: Amortization of purchased intangibles 612 837 3,209 3,362 results included in this letter. Plus: Amortization of share-based compensation capitalized in internal-use software 417 598 1,774 1,821 Non-GAAP gross profit $91,998 $66,273 $317,623 $230,710 GAAP gross margin 72% 71% 70% 70% Non-GAAP adjustments 3% 4% 4% 4% Non-GAAP gross margin 75% 75% 74% 74% Reconciliation of operating expenses GAAP research and development $30,779 $24,383 $115,291 $91,067 Less: Share-based compensation (7,697) (6,535) (29,970) (27,083) Less: Employer tax related to employee stock transactions (816) (756) (1,971) (1,559) Less: Acquisition-related expenses (406) — (843) — Non-GAAP research and development $21,860 $17,092 $82,507 $62,425 GAAP research and development as percentage of revenue 25% 28% 27% 29% Non-GAAP research and development as percentage of revenue 18% 19% 19% 20% GAAP sales and marketing $64,035 $47,566 $220,742 $166,987 Less: Share-based compensation (6,414) (5,263) (24,776) (23,043) Less: Employer tax related to employee stock transactions (356) (768) (1,164) (1,342) Less: Amortization of purchased intangibles (135) (104) (495) (418) Less: Acquisition-related expenses (281) — (750) — Non-GAAP sales and marketing $56,849 $41,431 $193,557 $142,184 GAAP sales and marketing as percentage of revenue 52% 54% 51% 54% Non-GAAP sales and marketing as percentage of revenue 46% 47% 45% 46% Zendesk Shareholder Letter Q4 2017 - 18

(continued...) Three Months Ended Year Ended December 31, December 31, Non-GAAP results 2017 2016 2017 2016 GAAP general and administrative $22,177 $16,222 $81,680 $64,371 (In thousands, except per Less: Share-based compensation (5,761) (3,955) (21,263) (16,608) share data) Less: Employer tax related to employee stock transactions (671) (123) (1,184) (586) The following table shows Less: Acquisition-related expenses (45) — (566) — Zendesk’s GAAP results Non-GAAP general and administrative $15,700 $12,144 $58,667 $47,177 GAAP general and administrative as percentage of revenue 18% 18% 19% 21% reconciled to non-GAAP Non-GAAP general and administrative as percentage of revenue 13% 14% 14% 15% results included in this letter. Reconciliation of operating loss and operating margin GAAP operating loss $(28,523) $(25,130) $(114,643) $(104,326) Plus: Share-based compensation 22,244 17,444 85,049 73,779 Plus: Employer tax related to employee stock transactions 1,972 1,753 4,849 3,870 Plus: Amortization of purchased intangibles 747 941 3,704 3,780 Plus: Acquistion-related expenses 732 — 2,159 — Plus: Amortization of share-based compensation capitalized in 417 598 1,774 1,821 internal-use software Non-GAAP operating loss $(2,411) $(4,394) $(17,108) $(21,076) GAAP operating margin (23)% (28)% (27)% (33)% Non-GAAP adjustment 21% 23% 23% 26% Non-GAAP operating margin (2)% (5)% (4)% (7)% Reconciliation of net loss GAAP net loss $(26,649) $(24,548) $(110,638) $(103,799) Plus: Share-based compensation 22,244 17,444 85,049 73,779 Plus: Employer tax related to employee stock transactions 1,972 1,753 4,849 3,870 Plus: Amortization of purchased intangibles 747 941 3,704 3,780 Plus: Acquistion-related expenses 732 — 2,159 — Plus: Amortization of share-based compensation capitalized in 417 598 1,774 1,821 internal-use software Non-GAAP net loss $(537) $(3,812) $(13,103) $(20,549) Zendesk Shareholder Letter Q4 2017 - 19

(continued...) Three Months Ended Year Ended December 31, December 31, Non-GAAP results 2017 2016 2017 2016 (In thousands, except per Reconciliation of net loss per share, basic and diluted share data) GAAP net loss per share, basic and diluted $(0.26) $(0.26) $(1.11) $(1.11) Non-GAAP adjustments to net loss 0.25 0.22 0.98 0.89 The following table shows Non-GAAP net loss per share, basic and diluted $(0.01) $(0.04) $(0.13) $(0.22) Zendesk’s GAAP results Weighted-average shares used to compute reconciled to non-GAAP net loss per share, basic and diluted 102,044 95,793 99,918 93,161 results included in this letter. Computation of free cash flow Net cash provided by operating activities $17,356 $20,528 $42,095 $24,522 Less: purchases of property and equipment (3,062) (8,153) (16,396) (20,647) Less: internal-use software development costs (2,284) (1,997) (7,521) (6,310) Free cash flow $12,010 $10,378 $18,178 $(2,435) Zendesk Shareholder Letter Q4 2017 - 20

About Zendesk About Non-GAAP Financial Measures Zendesk builds software for better customer relationships. It empowers organizations to im- To provide investors and others with additional information regarding Zendesk’s results, the prove customer engagement and better understand their customers. Approximately 119,000 following non-GAAP financial measures were disclosed: non-GAAP gross profit and gross paid customer accounts in over 160 countries and territories use Zendesk products. Based margin, non-GAAP operating expenses, non-GAAP operating loss and operating margin, in San Francisco, Zendesk has operations in the United States, Europe, Asia, Australia, and non-GAAP net loss, non-GAAP net loss per share, basic and diluted, and free cash flow. South America. Learn more at www.zendesk.com. Specifically, Zendesk excludes the following from its historical and prospective non-GAAP Forward-Looking Statements financial measures, as applicable: This press release contains forward-looking statements, including, among other things, Share-based Compensation and Amortization of Share-based Compensation Capitalized statements regarding Zendesk’s future financial performance, its continued investment to in Internal-use Software: Zendesk utilizes share-based compensation to attract and retain grow its business, and progress towards its long-term financial objectives. The words such as employees. It is principally aimed at aligning their interests with those of its stockholders “may,” “should,” “will,” “believe,” “expect,” “anticipate,” “target,” “project,” and similar phrases and at long-term retention, rather than to address operational performance for any particular that denote future expectation or intent regarding Zendesk’s financial results, operations, and period. As a result, share-based compensation expenses vary for reasons that are generally other matters are intended to identify forward-looking statements. You should not rely upon unrelated to financial and operational performance in any particular period. forward-looking statements as predictions of future events. Employer Tax Related to Employee Stock Transactions: Zendesk views the amount of The outcome of the events described in these forward-looking statements is subject to employer taxes related to its employee stock transactions as an expense that is dependent known and unknown risks, uncertainties, and other factors that may cause Zendesk’s actual on its stock price, employee exercise and other award disposition activity, and other factors results, performance, or achievements to differ materially, including (i) adverse changes in that are beyond Zendesk’s control. As a result, employer taxes related to its employee stock general economic or market conditions; (ii) Zendesk’s ability to adapt its products to chang- transactions vary for reasons that are generally unrelated to financial and operational perfor- ing market dynamics and customer preferences or achieve increased market acceptance of mance in any particular period. its products; (iii) Zendesk’s expectation that the future growth rate of its revenues will decline, Amortization of Purchased Intangibles: Zendesk views amortization of purchased intangible and that, as its costs increase, Zendesk may not be able to generate sufficient revenues to assets, including the amortization of the cost associated with an acquired entity’s developed achieve or sustain profitability; (iv) Zendesk’s limited operating history, which makes it difficult technology, as items arising from pre-acquisition activities determined at the time of an to evaluate its prospects and future operating results; (v) the market in which Zendesk oper- acquisition. While these intangible assets are evaluated for impairment regularly, amortization ates is intensely competitive, and Zendesk may not compete effectively; (vi) the development of the cost of purchased intangibles is an expense that is not typically affected by operations of the market for software as a service business software applications; (vii) Zendesk’s ability during any particular period. to introduce and market new products and to support its products on a shared services platform; (viii) Zendesk’s ability to integrate acquired businesses and technologies success- Acquisition-Related Expenses: Zendesk views acquisition-related expenses, such as transac- fully or achieve the expected benefits of such acquisitions; (ix) Zendesk’s ability to effectively tion costs, integration costs, restructuring costs, and acquisition-related retention payments, manage its growth and organizational change; (x) breaches in Zendesk’s security measures including amortization of acquisition-related retention payments capitalized in internal-use or unauthorized access to its customers’ data; (xi) service interruptions or performance prob- software, as events that are not necessarily reflective of operational performance during lems associated with Zendesk’s technology and infrastructure; (xii) real or perceived errors, a period. In particular, Zendesk believes the consideration of measures that exclude such failures, or bugs in its products; (xiii) Zendesk’s substantial reliance on its customers renewing expenses can assist in the comparison of operational performance in different periods which their subscriptions and purchasing additional subscriptions; and (xiv) Zendesk’s ability to may or may not include such expenses. effectively expand its sales capabilities. Zendesk provides disclosures regarding its free cash flow, which is defined as net cash from The forward-looking statements contained in this press release are also subject to additional operating activities, less purchases of property and equipment and internal-use software risks, uncertainties, and factors, including those more fully described in Zendesk’s filings development costs. Zendesk uses free cash flow, among other measures, to evaluate the with the Securities and Exchange Commission, including its Quarterly Report on Form 10-Q ability of its operations to generate cash that is available for purposes other than capital for the quarter ended September 30, 2017. Further information on potential risks that could expenditures and capitalized software development costs. Zendesk believes that informa- affect actual results will be included in the subsequent periodic and current reports and other tion regarding free cash flow provides investors with an important perspective on the cash filings that Zendesk makes with the Securities and Exchange Commission from time to time, available to fund ongoing operations. including its Annual Report on Form 10-K for the year ended December 31, 2017. Zendesk has not reconciled free cash flow guidance to net cash from operating activities for Forward-looking statements represent Zendesk’s management’s beliefs and assumptions the year ending December 31, 2018 because Zendesk does not provide guidance on the only as of the date such statements are made. Zendesk undertakes no obligation to update reconciling items between net cash from operating activities and free cash flow, as a result any forward-looking statements made in this press release to reflect events or circumstances of the uncertainty regarding, and the potential variability of, these items. The actual amount after the date of this press release or to reflect new information or the occurrence of unantici- of such reconciling items will have a significant impact on Zendesk’s free cash flow and, pated events, except as required by law. accordingly, a reconciliation of net cash from operating activities to free cash flow for the year ending December 31, 2018 is not available without unreasonable effort. Zendesk’s disclosures regarding its expectations for its non-GAAP operating margin include adjustments to its expectations for its GAAP operating margin that exclude the expected share-based compensation and related expenses, amortization of purchased intangibles, and acquisition-related expenses excluded from its expectations for non-GAAP operating loss as compared to its expectation for GAAP operating loss for the same period. Zendesk Shareholder Letter Q4 2017 - 21

About Operating Metrics Zendesk does not provide a reconciliation of its non-GAAP operating margin guidance to Zendesk reviews a number of operating metrics to evaluate its business, measure per- GAAP operating margin for future periods beyond the current fiscal year because Zendesk formance, identify trends, formulate business plans, and make strategic decisions. These does not provide guidance on the reconciling items between GAAP operating margin and include the number of paid customer accounts on Zendesk Support, Zendesk Chat, and its non-GAAP operating margin for such periods, as a result of the uncertainty regarding, and other products, dollar-based net expansion rate, monthly recurring revenue represented by the potential variability of, these items. The actual amount of such reconciling items will have its churned customers, and the percentage of its monthly recurring revenue from Support a significant impact on Zendesk’s non-GAAP operating margin and, accordingly, a reconcili- originating from customers with 100 or more agents on Support. ation of GAAP operating margin to non-GAAP operating margin guidance for such periods is Zendesk defines the number of paid customer accounts at the end of any particular period not available without unreasonable effort. as the sum of (i) the number of accounts on Support, exclusive of its legacy Starter plan, free Zendesk’s disclosures regarding its expectations for its non-GAAP gross margin include trials, or other free services, (ii) the number of accounts using Chat, exclusive of free trials adjustments to its expectations for its GAAP gross margin that exclude share-based com- or other free services, and (iii) the number of accounts on all of its other products, exclusive pensation and related expenses in Zendesk’s cost of revenue and amortization of purchased of free trials and other free services, each as of the end of the period and as identified by intangibles related to developed technology. The share-based compensation and related a unique account identifier. Use of Support, Chat, and Zendesk’s other products requires expenses excluded due to such adjustments are primarily comprised of the share-based separate subscriptions and each of these accounts are treated as a separate paid custom- compensation and related expenses for employees associated with Zendesk’s platform er account. Existing customers may also expand their utilization of Zendesk’s products by infrastructure and customer experience organization. adding new accounts and a single consolidated organization or customer may have multiple accounts across each of Zendesk’s products to service separate subsidiaries, divisions, or Zendesk does not provide a reconciliation of its non-GAAP gross margin guidance to GAAP work processes. Each of these accounts is also treated as a separate paid customer account. gross margin for future periods because Zendesk does not provide guidance on the rec- Zendesk’s dollar-based net expansion rate provides a measurement of its ability to increase onciling items between GAAP gross margin and non-GAAP gross margin, as a result of the revenue across its existing customer base through expansion of authorized agents asso- uncertainty regarding, and the potential variability of, these items. The actual amount of such ciated with a paid customer account, upgrades in subscription plans, and the purchase of reconciling items will have a significant impact on Zendesk’s non-GAAP gross margin and, additional products as offset by churn, contraction in authorized agents associated with a accordingly, a reconciliation of GAAP gross margin to non-GAAP gross margin guidance for paid customer account, and downgrades in subscription plans. Zendesk’s dollar-based net the period is not available without unreasonable effort. expansion rate is based upon monthly recurring revenue for a set of paid customer accounts Zendesk uses non-GAAP financial information to evaluate its ongoing operations and for on its products. Monthly recurring revenue for a paid customer account is a legal and con- internal planning and forecasting purposes. Zendesk’s management does not itself, nor does tractual determination made by assessing the contractual terms of each paid customer ac- it suggest that investors should, consider such non-GAAP financial measures in isolation count, as of the date of determination, as to the revenue Zendesk expects to generate in the from, or as a substitute for, financial information prepared in accordance with GAAP. Zendesk next monthly period for that paid customer account, assuming no changes to the subscrip- presents such non-GAAP financial measures in reporting its financial results to provide inves- tion and without taking into account any one-time discounts or any platform usage above tors with an additional tool to evaluate Zendesk’s operating results. Zendesk believes these the subscription base, if any, that may be applicable to such subscription. Monthly recurring non-GAAP financial measures are useful because they allow for greater transparency with revenue is not determined by reference to historical revenue, deferred revenue, or any other respect to key metrics used by management in its financial and operational decision-making. GAAP financial measure over any period. It is forward-looking and contractually derived as of This allows investors and others to better understand and evaluate Zendesk’s operating the date of determination. results and future prospects in the same manner as management. Zendesk calculates its dollar-based net expansion rate by dividing the retained revenue Zendesk’s management believes it is useful for itself and investors to review, as applicable, net of contraction and churn by Zendesk’s base revenue. Zendesk defines its base revenue both GAAP information that may include items such as share-based compensation and relat- as the aggregate monthly recurring revenue across its products for customers with paid ed expenses, amortization of purchased intangibles, and acquisition-related expenses, and customer accounts on Support or Chat as of the date one year prior to the date of calcula- the non-GAAP measures that exclude such information in order to assess the performance tion. Zendesk defines the retained revenue net of contraction and churn as the aggregate of Zendesk’s business and for planning and forecasting in subsequent periods. When Ze- monthly recurring revenue across its products for the same customer base included in the ndesk uses such a non-GAAP financial measure with respect to historical periods, it provides measure of base revenue at the end of the annual period being measured. The dollar-based a reconciliation of the non-GAAP financial measure to the most closely comparable GAAP fi- net expansion rate is also adjusted to eliminate the effect of certain activities that Zendesk nancial measure. When Zendesk uses such a non-GAAP financial measure in a forward-look- identifies involving the transfer of agents between paid customer accounts, consolidation of ing manner for future periods, and a reconciliation is not determinable without unreasonable customer accounts, or the split of a single paid customer account into multiple paid customer effort, Zendesk provides the reconciling information that is determinable without unreason- accounts. In addition, the dollar-based net expansion rate is adjusted to include paid cus- able effort and identifies the information that would need to be added or subtracted from the tomer accounts in the customer base used to determine retained revenue net of contraction non-GAAP measure to arrive at the most directly comparable GAAP measure. Investors are and churn that share common corporate information with customers in the customer base encouraged to review the related GAAP financial measures and the reconciliation of these that are used to determine the base revenue. Giving effect to this consolidation results in non-GAAP financial measures to their most directly comparable GAAP financial measure as Zendesk’s dollar-based net expansion rate being calculated across approximately 92,800 detailed above. customers, as compared to the approximately 118,900 total paid customer accounts as of December 31, 2017. Zendesk Shareholder Letter Q4 2017 - 22

To the extent that Zendesk can determine that the underlying customers do not share com- Customer Metrics mon corporate information, Zendesk does not aggregate paid customer accounts associated with reseller and other similar channel arrangements for the purposes of determining its dollar-based net expansion rate. While not material, Zendesk believes the failure to account December 31, March 31, June 30, September 30, December 31, for these activities would otherwise skew the dollar-based net expansion metrics associated 2016 2017 2017 2017 2017 with customers that maintain multiple paid customer accounts across its products and paid Paid customer accounts on 50,800 54,900 57,800 61,200 64,100 customer accounts associated with reseller and other similar channel arrangements. Zendesk Support (approx.) Zendesk does not currently incorporate operating metrics associated with its analytics prod- + Paid customer accounts on 41,300 44,000 45,300 46,600 47,000 Zendesk Chat (approx.) uct or its Outbound product into its measurement of dollar-based net expansion rate. + Paid customer accounts on For a more detailed description of how Zendesk calculates its dollar-based net expansion other Zendesk products (approx.) 2,200 2,900 4,300 6,100 7,800 rate, please refer to Zendesk’s periodic reports filed with the Securities and Exchange Com- = Approximate number of mission. paid customer accounts 94,300 101,800 107,400 113,900 118,900 Zendesk calculates its monthly recurring revenue represented by its churned customers on an annualized basis by dividing base revenue associated with paid customer accounts on Support that churn, either by termination of the subscription or failure to renew, during the Geographic Information annual period being measured, by Zendesk’s base revenue. Zendesk’s monthly recurring revenue represented by its churned customers excludes expansion or contraction associ- Revenue by geography: ated with paid customer accounts on Support and the effect of upgrades or downgrades Q4’17 FY’17 in subscription plan. The monthly recurring revenue represented by its churned customers is adjusted to exclude paid customer accounts that churned from the customer base used United States 53.2% 53.3% that share common corporate information with customer accounts that did not churn from EMEA 28.9% 28.6% the customer base during the annual period being measured. While not material, Zendesk Other believes the failure to make this adjustment could otherwise skew the monthly recurring rev- 17.9% 18.1% enue represented by its churned customers as a result of customers that maintain multiple paid customer accounts on Support. Zendesk’s percentage of monthly recurring revenue from Support that is generated by cus- Source: Zendesk, Inc. tomers with 100 or more agents on Support is determined by dividing the monthly recurring revenue from Support for paid customer accounts with 100 or more agents on Support as of Contact: the measurement date by the monthly recurring revenue from Support for all paid customer accounts on Support as of the measurement date. Zendesk determines the customers with Investor Contact Media Contact 100 or more agents on Support as of the measurement date based on the number of activat- Tian Lee, +1 415-231-0847 ed agents on Support at the measurement date and includes adjustments to aggregate paid Marc Cabi, +1 415-852-3877 customer accounts that share common corporate information. [email protected] [email protected] Zendesk determines the annualized value of a contract by annualizing the monthly recurring revenue for such contract. Zendesk does not currently incorporate operating metrics associated with products other than Support into its measurement of monthly recurring revenue represented by its churned customers or the percentage of monthly recurring revenue from Support that is generated by customers with 100 or more agents on Support. Zendesk Shareholder Letter Q4 2017 - 23