Wrapping up Q1 earnings, we look at the numbers and key takeaways for the video conferencing stocks, including RingCentral (NYSE:RNG) 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 mixed Q1; on average, revenues beat analyst consensus estimates by 2.25%, while on average next quarter revenue guidance was 1.03% above consensus. Tech stocks have been under pressure since the end of last year, but video conferencing stocks held their ground better than others, with share price down 3.64% since earnings, on average.
Weakest Q1: 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 $467.6 million, up 32.7% year on year, beating analyst expectations by 2.02%. It was a weaker quarter for the company, with a full year guidance missing analysts' expectations and a decline in gross margin.
“We had a very strong start to the year, driven by continued success with large enterprise customers and ramping contributions from our partners,” said Vlad Shmunis, RingCentral’s founder, chairman and CEO.
RingCentral achieved the fastest revenue growth but had the weakest full year guidance update of the whole group. The stock is down 16.2% since the results and currently trades at $57.69.
Best 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 $181.3 million, up 25.3% year on year, missing analyst expectations by 0.02%. It was a decent quarter for the company, with an increase in gross margin and accelerating growth in large customers.
8x8 had the weakest performance against analyst estimates among its peers. The company added 413 enterprise customers paying more than $100,000 annually to a total of 1,320. The stock is down 28.1% since the results and currently trades at $5.54.
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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 $1.07 billion, up 12.2% year on year, in line with analyst expectations. It was a weaker quarter for the company, with a decline in net revenue retention rate and a slow revenue growth.
Zoom Video had the slowest revenue growth in the group. The company added 191 enterprise customers paying more than $100,000 annually to a total of 2,916. The stock is up 33.2% since the results and currently trades at $119.
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 $182.7 million, up 32.5% year on year, beating analyst expectations by 6.96%. It was a strong quarter for the company, with a solid beat of analyst estimates.
Five9 achieved the strongest analyst estimates beat and highest full year guidance raise among the peers. The stock is down 3.44% since the results and currently trades at $99.38.
The author has no position in any of the stocks mentioned