Heading into the new earnings season, it’s time to take stock of this quarter's best and worst performers amongst the video conferencing stocks in Q3, 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 weaker Q3; on average, revenues beat analyst consensus estimates by 0.76%, while on average next quarter revenue guidance was 3% under consensus. Technology stocks have been hit hard on fears of higher interest rates as investors search for near-term cash flows, but video conferencing stocks held their ground better than others, with the share prices up 30.8% since the previous earnings results, on average.
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 $198.3 million, up 28.5% year on year, beating analyst expectations by 1.35%. It was a weak quarter for the company, with revenue guidance for the next quarter and the full year missing analysts' expectations.
“We are pleased to report strong third quarter results with revenue growing 29% year-over-year to a record $198.3 million. This growth was driven by the strength of our Enterprise business where LTM subscription revenue grew 37% year-over-year. This quarter, we achieved an adjusted EBITDA margin of 18.5%, as we continued our disciplined approach of driving balanced growth. We believe there are three immutable trends gathering steam around us, namely the demand for cloud solutions, the digital transformation of contact centers and a growing yet barely penetrated TAM, that will be with us for many years to come. We are still in the early innings of the long-term shift to the cloud and we believe Five9 is very well positioned in this massive market as we continue to execute on product innovation, our march up market and international expansion.”
Five9 achieved the strongest analyst estimates beat and fastest revenue growth, but had the weakest full year guidance update of the whole group. The stock is up 68.8% since the results and currently trades at $79.36.
Read our full report on Five9 here, it's free.
Best Q3: 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 $187.3 million, up 23.6% year on year, in line with analyst expectations. It was a mixed quarter for the company, with accelerating growth in large customers but underwhelming revenue guidance for the next quarter.
The stock is up 35.4% since the results and currently trades at $4.6.
Is now the time to buy 8x8? Access our full analysis of the earnings results here, it's free.
Weakest Q3: Zoom Video (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 Video reported revenues of $1.1 billion, up 4.86% year on year, inline with analyst expectations. It was a weak quarter for the company, with underwhelming revenue guidance for the next quarter and slow revenue growth.
Zoom Video achieved the highest full year guidance raise but had the weakest performance against analyst estimates and weakest performance against analyst estimates in the group. The company added 170 enterprise customers paying more than $100,000 annually to a total of 3,286. The stock is down 13.3% since the results and currently trades at $69.55.
Read our full analysis of Zoom Video's results here.
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 $509 million, up 22.7% year on year, beating analyst expectations by 1.28%. Despite the stock rising on the results, it was a weak quarter for the company, with revenue guidance for the next quarter and the full year missing analysts' expectations.
The stock is up 32.3% since the results and currently trades at $37.5.
Read our full, actionable report on RingCentral here, it's free.
The author has no position in any of the stocks mentioned