Video conferencing platform Zoom (NASDAQ:ZM) will be reporting earnings tomorrow afternoon. Here’s what to expect.
Zoom beat analysts’ revenue expectations by 1.1% last quarter, reporting revenues of $1.16 billion, up 2.1% year on year. It was a very strong quarter for the company, with an impressive beat of analysts’ billings estimates and a solid beat of analysts’ EBITDA estimates. It added 50 enterprise customers paying more than $100,000 annually to reach a total of 3,933.
Is Zoom a buy or sell going into earnings? Read our full analysis here, it’s free.
This quarter, analysts are expecting Zoom’s revenue to grow 2.4% year on year to $1.16 billion, in line with the 3.2% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $1.31 per share.
Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Zoom has only missed Wall Street’s revenue estimates once over the last two years, exceeding top-line expectations by 1.4% on average.
Looking at Zoom’s peers in the video conferencing segment, some have already reported their Q3 results, giving us a hint as to what we can expect. Five9 delivered year-on-year revenue growth of 14.8%, beating analysts’ expectations by 3.6%, and 8x8 reported a revenue decline of 2.2%, topping estimates by 1.5%. Five9 traded up 12.1% following the results while 8x8 was also up 18.5%.
Read our full analysis of Five9’s results here and 8x8’s results here.
There has been positive sentiment among investors in the video conferencing segment, with share prices up 17.6% on average over the last month. Zoom is up 17.7% during the same time and is heading into earnings with an average analyst price target of $77.71 (compared to the current share price of $86.95).
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