The end of an earnings season can be a great time to assess how companies are handling the current business environment and discover new stocks. Let’s have a look at how Zoom Video (NASDAQ:ZM) and the rest of the video conferencing stocks fared in Q1.
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 slower Q1; on average, revenues beat analyst consensus estimates by 1.85%, while on average next quarter revenue guidance was 0.1% under consensus. Investors abandoned cash burning companies since high interest rates will make it harder to raise capital , but video conferencing stocks held their ground better than others, with the share prices up 21.6% since the previous earnings results, on average.
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 $1.11 billion, up 2.94% year on year, beating analyst expectations by 1.94%. It was a mixed quarter for the company, with decelerating growth in large customers and a decline in net revenue retention rate. However, guidance was solid, with next quarter's revenue and adjusted operating profit guidance both slightly ahead. Additionally, full year revenue and adjusted operating profit guidance were both raised and are ahead of consensus.
"The Zoom platform is designed to support limitless human connection to empower the modern workday and strengthen customer relationships. Our customers see Zoom as mission-critical in how they collaborate internally and externally across the globe,” said Eric S. Yuan, Zoom Founder and CEO.
The stock is down 3.48% since the results and currently trades at $69.
Best Q1: 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 $218.4 million, up 19.5% year on year, beating analyst expectations by 5.03%. It was a decent quarter for the company, with a solid beat of analyst estimates but a decline in gross margin.
Five9 pulled off the strongest analyst estimates beat, fastest revenue growth, and highest full year guidance raise among its peers. The stock is up 33.5% since the results and currently trades at $75.29.
Is now the time to buy Five9? Access our full analysis of the earnings results here, it's free.
Weakest Q1: 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 $184.5 million, up 1.74% year on year, missing analyst expectations by 0.65%. It was a weak quarter for the company, with underwhelming guidance for the next year.
8x8 had the weakest performance against analyst estimates, slowest revenue growth, and weakest full year guidance update in the group. The company lost 8 enterprise customers paying more than $100,000 annually and ended up with a total of 1,301. The stock is up 26.5% since the results and currently trades at $4.08.
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 $533.7 million, up 14.1% year on year, beating analyst expectations by 1.07%. It was a mixed quarter for the company, with strong free cash flow generation and revenue guidance for the next quarter roughly inline with analysts' estimates.
The stock is up 29.8% since the results and currently trades at $34.36.
The author has no position in any of the stocks mentioned