Zoom Video (ZM) Reports Q2: Everything You Need To Know Ahead Of Earnings

Adam Hejl /
2022/08/21 5:06 am EDT

Video conferencing platform Zoom (NASDAQ:ZM) will be reporting earnings tomorrow after the bell. Here's what to look for.

Last quarter Zoom Video reported revenues of $1.07 billion, up 12.2% year on year, in line with analyst expectations. Despite the stock rising on the results, it was a weaker quarter for the company, with a decline in net revenue retention rate and a slow revenue growth. The company added 191 enterprise customers paying more than $100,000 annually to a total of 2,916.

Is Zoom Video buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting Zoom Video's revenue to grow 9.32% year on year to $1.11 billion, slowing down from the 53.9% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.93 per share.

Zoom Video Total Revenue

Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company has a history of exceeding Wall St's expectations, beating revenue estimates every single time over the past two years on average by 8.32%.

Looking at Zoom Video's peers in the video conferencing segment, some of them have already reported Q2 earnings results, giving us a hint what we can expect. Five9 delivered top-line growth of 31.7% year on year, beating analyst estimates by 5.16% and RingCentral reported revenues up 28.3% year on year, exceeding estimates by 1.01%. Five9 traded up 8.25% on the results, RingCentral was up 8.67%. Read our full analysis of Five9's results here and RingCentral's results here.

Investors in the software segment have had steady hands going into the earnings, with the stocks up on average 0.69% over the last month. Zoom Video is down 10.7% during the same time, and is heading into the earnings with analyst price target of $125.8, compared to share price of $99.38.

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The author has no position in any of the stocks mentioned.