Zoom Video (ZM) to Report Q2 Earnings: What's in the Cards?
Zoom Video Communications ZM is slated to release second-quarter fiscal 2024 results on Aug 21.
Zoom expects second-quarter fiscal 2024 revenues in the range of $1.110-$1.115 billion. The Zacks Consensus Estimate for the top line is currently pegged at $1.11 billion, indicating growth of 1.25% from the year-ago quarter.
Non-GAAP earnings are expected in the range of $1.04-$1.06 per share. The consensus mark for earnings has remained steady at $1.05 per share over the past 30 days. The bottom line remained flat year over year.
Zoom Video Communications, Inc. Price and EPS Surprise
Zoom Video Communications, Inc. price-eps-surprise | Zoom Video Communications, Inc. Quote
Factors to Note
Zoom’s fiscal second-quarter performance is likely to have gained from steady demand for varied products like Zoom Video Webinars, Zoom Rooms and Zoom Phones. An expanding portfolio of solutions is expected to have aided customer growth in the to-be-reported quarter.
The company’s artificial intelligence (AI) related advancements and partnerships in the fiscal second quarter are noteworthy. Zoom adopts a federated approach to AI, utilizing its own exclusive large language AI models as well as models from renowned AI companies like OpenAI and Anthropic.
The launch of new generative AI-powered Zoom IQ features, which is made available to Zoom users via free trials, is expected to have been a key growth driver.
The availability of Zoom Scheduler tool and extension of the free signup period until Jul 19, 2023 is likely to have attracted users in the to-be-reported quarter. The Zoom Scheduler simplifies the process of finding the ideal meeting time by sharing availability for others to conveniently book appointments. This is likely to have aided enterprise customer growth in the to-be-reported quarter.
The consensus estimate for enterprise customers in the fiscal second quarter is currently pegged at 219,032.
The company’s freemium business model helps it win customers rapidly, who it can later convert into paying customers. In the fiscal first quarter, customers contributing more than $100,000 in revenues in the trailing 12 months grew 23% to 3,580.
These customers accounted for 29% of revenues, up from 24% in the year-ago quarter. The momentum is expected to have continued in the to-be-reported quarter. The Zacks Consensus Estimate for customers contributing more than $100,000 in revenues in the fiscal second quarter is currently pegged at 3,698.
However, the company has been facing significant competition from the likes of Cisco, Microsoft and Google Meet. This might have led to a loss in small and medium-sized business customers, which is likely to have hurt top-line growth.
What Our Model Unveils
Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.
Zoom has an Earnings ESP of 0.00% and a Zacks Rank #3 at present. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are a few companies you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat in the upcoming releases:
Jeronimo Martins SGPS JRONY has an Earnings ESP of +4.76% and a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Jeronimo Martins SGPS is expected to release its second-quarter 2023 results on Aug 22. The Zacks Consensus Estimate for JRONY’s earnings has moved north by 10.4% to 74 cents per share in the past 60 days.
PagSeguro Digital PAGS has an Earnings ESP of +6.93% and a Zacks Rank #2 at present.
PagSeguro Digital is expected to report second-quarter 2023 results on Aug 24. The Zacks Consensus Estimate for PAGS’ earnings is pegged at 25 cents per share, which remained unchanged in the past 30 days.
Bank of Montreal BMO has an Earnings ESP of +1.91% and a Zacks Rank #3 at present.
Bank of Montreal is scheduled to report third-quarter fiscal 2023 results on Aug 29. The Zacks Consensus Estimate for BMO’s earnings is pegged at $2.27 per share.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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Bank Of Montreal (BMO) : Free Stock Analysis Report
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Zoom Video Communications, Inc. (ZM) : Free Stock Analysis Report
