Wrapping up Q2 earnings, we look at the numbers and key takeaways for the video conferencing stocks, including Zoom (NASDAQ:ZM) 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. Tech stocks have been under pressure as inflation makes their long-dated profits less valuable and video conferencing stocks have not been spared, with share prices down 19% since the previous earnings results, on average.
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 this quarter, driven by more enterprise-grade contract wins than expected. Furthermore, it raised its adjusted operating profit and EPS guidance for the full year. On the other hand, its revenue guidance for next quarter missed analysts' expectations, and its net revenue retention decreased.
“Our mission of delivering limitless human connection remains core as we continue to innovate and expand our platform to help bring value and enhanced productivity to our customers with new AI features like Zoom IQ Meeting Summary and Team Chat Compose, as well as Intelligent Director. I’m also proud of the team for reinventing modern customer experiences with Zoom Virtual Agent and Zoom Contact Center, which surpassed 500 customers in Q2,” said Eric S. Yuan, Zoom Founder, and CEO.
Zoom pulled off the highest full year guidance raise of the whole group. The company added 92 enterprise customers paying more than $100,000 annually to a total of 3,672. The stock is up 5.62% since the results and currently trades at $71.05.Is now the time to buy Zoom? Read our full report on Zoom 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. The big takeaway was that Vlad Shmunis, Founder and CEO of RingCentral, will be stepping down on August 28, 2023. Tarek Robbiati, a member of the RingCentral Board of Directors since December 2022 and CFO and EVP of Finance and Strategy of Hewlett Packard Enterprise, will succeed him as CEO.
The stock is down 23.2% since the results and currently trades at $29.92.
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 38.2% since the results and currently trades at $2.6.
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 slower quarter for the company, with underwhelming revenue guidance for the next quarter.
Five9 delivered the strongest analyst estimates beat and fastest revenue growth among the peers. The stock is down 20.1% since the results and currently trades at $65.23.
The author has no position in any of the stocks mentioned