The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how video conferencing stocks fared in Q2, starting with 8x8 (NASDAQ:EGHT).
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 slower Q2. As a group, revenues beat analysts’ consensus estimates by 1.2% while next quarter’s revenue guidance was 1.4% below.
Valuation multiples for many growth stocks have not yet reverted to their early 2021 highs, but the market was optimistic at the end of 2023 due to cooling inflation. This year has been a different story as mixed inflation signals have led to market volatility, and video conferencing stocks have had a rough stretch. On average, share prices are down 9.9% since the latest earnings results.
Weakest Q2: 8x8 (NASDAQ: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 $178.1 million, down 2.8% year on year. This print was in line with analysts’ expectations, but overall, it was a weak quarter for the company with underwhelming revenue guidance for the next quarter and a miss of analysts’ billings estimates.
"I am pleased to report that we delivered solid results this quarter, with service revenue, total revenue, and non-GAAP operating margin all within our guidance ranges," said Samuel Wilson, Chief Executive Officer at 8x8, Inc.
8x8 delivered the weakest performance against analyst estimates and slowest revenue growth of the whole group. Unsurprisingly, the stock is down 29.5% since reporting and currently trades at $1.82.
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Best Q2: 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 $1.16 billion, up 2.1% year on year, outperforming analysts’ expectations by 1.1%. It was a decent quarter for the company with an impressive beat of analysts’ billings estimates but decelerating growth in large customers.
The market seems happy with the results as the stock is up 13% since reporting. It currently trades at $68.07.
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 $252.1 million, up 13.1% year on year, exceeding analysts’ expectations by 2.8%. It was a weak quarter for the company with underwhelming revenue guidance for the next quarter and a decline in its gross margin.
Five9 posted the weakest full-year guidance update in the group. As expected, the stock is down 21.8% since the results and currently trades at $33.24.
RingCentral (NYSE: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 $592.9 million, up 9.9% year on year, surpassing analysts’ expectations by 1.1%. Taking a step back, it was a good quarter for the company with a decent beat of analysts’ billings estimates but a decline in its gross margin.
RingCentral delivered the highest full-year guidance raise among its peers. The stock is down 1.3% since reporting and currently trades at $33.03.
This content was originally published on Stock Story
