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Q2 Earnings Highs And Lows: Five9 (NASDAQ:FIVN) Vs The Rest Of The Video Conferencing Stocks


Petr Huřťák /
2023/10/11 6:13 am EDT

Looking back on video conferencing stocks' Q2 earnings, we examine this quarter's best and worst performers, including Five9 (NASDAQ:FIVN) and its peers.

Work is becoming more distributed, both across geographies and devices. In order for businesses to keep functioning efficiently, they need to be able to communicate as well as they did when the teams were co-located, which drives the demand for integrated communication platforms.

The 4 video conferencing stocks we track reported a weak Q2; on average, revenues beat analyst consensus estimates by 1.11%, while on average next quarter revenue guidance was 1.46% under consensus. There has been a stampede out of high valuation technology stocks as raising interest rates encourage investors to value profits over growth again and video conferencing stocks have not been spared, with share prices down 20.8% since the previous earnings results, on average.

Five9 (NASDAQ:FIVN)

Started in 2001, Five9 (NASDAQ: FIVN) offers software as a service that makes it easier for companies to set up and efficiently run call centers, and offer more tailored customer support.

Five9 reported revenues of $222.9 million, up 17.7% year on year, beating analyst expectations by 3.74%. It was a mixed quarter for the company, with underwhelming revenue guidance for the next quarter, although non-GAAP EPS guidance was in line. On the other hand, revenue beat Wall Street's expectations and the company slightly raised full year guidance. We were also glad that its gross margin improved.

“We are pleased to report strong second quarter results with revenue growing 18% year-over-year to a record $222.9 million. This growth continues to be driven by our Enterprise business where LTM subscription revenue grew 28% year-over-year. In the second quarter, we achieved another record for GAAP operating cash flow, as adjusted EBITDA margin reached 19%. We experienced a particularly strong quarter for new logo bookings, demonstrating our strong go-to-market execution. We have been a leader in AI and Automation and will continue to push this industry forward, as AI serves as a tailwind for our business and leads to TAM expansion. We remain strategically focused on enabling enterprises to reimagine their customer experience by providing our Intelligent CX Platform combined with our passionate experts.”

Five9 Total Revenue

Five9 scored the strongest analyst estimates beat and fastest revenue growth of the whole group. The stock is down 20.6% since the results and currently trades at $64.85.

Is now the time to buy Five9? Read our full report on Five9 here.

Best Q2: RingCentral (NYSE:RNG)

Founded in 1999 during the dot-com era, RingCentral (NYSE:RNG) provides software as a service that unifies phone, text, fax, video calls and chat in one platform.

RingCentral reported revenues of $539.3 million, up 10.8% year on year, in line with analyst expectations. It was a decent quarter for the company, with revenue and EPS coming in ahead of Wall Street's estimates.

RingCentral Total Revenue

The stock is down 22.3% since the results and currently trades at $30.29.

Is now the time to buy RingCentral? Access our full analysis of the earnings results here, it's free.

Weakest Q2: 8x8 (NYSE:EGHT)

Founded in 1987, 8x8 (NYSE:EGHT) provides software for organizations to efficiently communicate and collaborate with their customers, employees, and partners.

8x8 reported revenues of $183.3 million, down 2.31% year on year, missing analyst expectations by 2.04%. It was a weak quarter for the company, with revenue guidance for the next quarter and full-year missing analysts' expectations.

8x8 had the weakest performance against analyst estimates, slowest revenue growth, and weakest full year guidance update in the group. The stock is down 41.1% since the results and currently trades at $2.48.

Read our full analysis of 8x8's results here.

Zoom (NASDAQ:ZM)

Started by Eric Yuan who once ran engineering for Cisco’s video conferencing business, Zoom (NASDAQ:ZM) offers an easy to use, cloud-based platform for video conferencing, audio conferencing and screen sharing.

Zoom reported revenues of $1.14 billion, up 3.57% year on year, beating analyst expectations by 2.18%. It was a mixed quarter for the company, with revenue exceeding analysts' estimates, driven by more enterprise-grade contract wins than expected. Furthermore, Zoom raised its adjusted operating profit and EPS guidance for the full year. On the other hand, its revenue guidance for the next quarter missed analysts' expectations, and its net revenue retention decreased.

Zoom pulled off the highest full year guidance raise among the peers. The company added 92 enterprise customers paying more than $100,000 annually to a total of 3,672. The stock is up 0.65% since the results and currently trades at $67.71.

Read our full, actionable report on Zoom here, it's free.

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The author has no position in any of the stocks mentioned