As we reflect back on the just completed Q2 video conferencing sector earnings season, we dig into the relative performance of 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 weak Q2; on average, revenues beat analyst consensus estimates by 1.11%, while on average next quarter revenue guidance was 1.46% under consensus. Technology stocks have been hit hard on fears of higher interest rates as investors search for near-term cash flows and video conferencing stocks have not been spared, with share prices down 16.5% since the previous earnings results, on average.
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.
“It was another solid quarter, as revenue and operating margin were both above our guidance,” said Vlad Shmunis, RingCentral’s founder, chairman and CEO.
The stock is down 19.2% since the results and currently trades at $31.46.
Is now the time to buy RingCentral? Access our full analysis of the earnings results here, it's free.
Zoom (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 reported revenues of $1.14 billion, up 3.57% year on year, beating analyst expectations by 2.18%. It was a slower quarter for the company, with underwhelming revenue guidance for the next quarter and its net revenue retention rate in jeopardy.
Zoom scored the highest full year guidance raise among its peers. The company added 92 enterprise customers paying more than $100,000 annually to a total of 3,672. The stock is up 6.33% since the results and currently trades at $71.52.
Is now the time to buy Zoom? 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 full-year revenue guidance missing analysts' expectations and underwhelming revenue guidance for the next quarter.
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% since the results and currently trades at $2.61.
Read our full analysis of 8x8's results here.
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 $222.9 million, up 17.7% year on year, beating analyst expectations by 3.74%. It was a mixed quarter for the company, with an improvement in gross margin but underwhelming revenue guidance for the next quarter.
Five9 pulled off the strongest analyst estimates beat and fastest revenue growth among the peers. The stock is down 15.2% since the results and currently trades at $69.22.
Read our full, actionable report on Five9 here, it's free.
The author has no position in any of the stocks mentioned