Zoom Earnings Preview

Zoom Video Communications provides a cloud based conference platform and was founded in 2011 in San Jose, California. Its popularity increased during the pandemic as the lockdown measures and the rise of work from home increased the global need for video conferencing solutions for both personal and professional communication.

After the markets close on Monday August 30th, Zoom Video Communications Inc (ZM.us) will release its financial results for the three-month period that ended in July (Q2 FY2022).

WHAT TO LOOK FOR

This release for Zoom (ZM.us) comes after a blowout first quarter, during which Revenues surged nearly 200% (y/y) to $956.237 million and analysts expect them to rise further to $991.39 million in the second quarter, while for Q2 FY 2021 this figure was $663.520 million

Earnings/share are projected at $1.16 in Q2 FY2022 vs $1.32 in Q1 FY2022 and $0.92 a year ago.

At the end of the first quarter of fiscal year 2022, Zoom had 497,000 customers with more than 10 employees and market participants will scrutinize the updated Customer Metrics.

They will also be looking to the company's forward guidance for Q3 and Full Fiscal Year 2020, with the last report projecting a FY2022 Revenue between $3.975 billion and $3.990 billion.*

*As per https://www.investing.com/earnings-calendar/ on Friday August 20th

M&A ACTIVITY AND NEW PRODUCTS

The California-based company has embarked on a spending spree as of late, announcing in July that it has entered into a definitive agreement to acquire Five9 - a leading provider of the intelligent cloud contact center, in an all-stock transaction valued at approximately $14.7 billion.

Earlier in the reported period it had also announced its intention to buy AI translation startup Kites (Karlsruhe Information Technology Solutions).

Zoom Apps that seamlessly embeds third-party apps within the Zoom Meetings and desktop client experience and Zoom Events which is an all-in-one platform for creating a wide range of interactive and immersive virtual events, became generally available last month.

Two months ago, the firm announced three phone appliances, purpose-built business productivity endpoints that provide both Zoom Phone and Meetings capabilities.

Zoom had faced a lawsuit over privacy rights violations and what came to be known as "Zoombombing", the practice of hackers entering other people's meetings.

After more than a year of litigation, Zoom has agreed to pay an $85 million settlement, as the preliminary court filing revealed on July 31st.

STOCK PERFORMANCE

In 2020 ZM.us had a mindboggling rally of more than 400%, whereas during the first half of the current year it saw modest gains of nearly 15%. Thus far in August, the stock has been trading in the red, closing below $340 on Friday August 20th.

Nikos Tzabouras

Nikos Tzabouras

Senior Market Specialist

Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and…

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