Looking back on video conferencing stocks’ Q2 earnings, we examine this quarter’s best and worst performers, including 8x8 (NASDAQ:EGHT) 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 strong Q2. As a group, revenues beat analysts’ consensus estimates by 1.8% while next quarter’s revenue guidance was in line.
Luckily, video conferencing stocks have performed well with share prices up 11.4% on average since the latest earnings results.
Weakest Q2: 8x8 (NASDAQ:EGHT)
Named after its founding year (1987) with "8x8" representing binary code for communications, 8x8 (NASDAQ:EGHT) provides cloud-based contact center and unified communications solutions that enable businesses to manage customer interactions and internal communications through a single platform.
8x8 reported revenues of $181.4 million, up 1.8% year on year. This print exceeded analysts’ expectations by 2.2%. Despite the top-line beat, it was still a mixed quarter for the company with an impressive beat of analysts’ billings estimates but a significant miss of analysts’ EBITDA estimates.
"Our return to growth this quarter validates the strength of our platform strategy and our alignment with how organizations are engaging customers—intelligently, flexibly, and at scale. We’re executing with purpose, and it’s paying off: product adoption has expanded, consumption-based revenue has accelerated, and we’re building a business that’s not just growing but creating long-term value for shareholders," said Samuel Wilson, Chief Executive Officer at 8x8.
8x8 delivered the slowest revenue growth and weakest full-year guidance update of the whole group. Interestingly, the stock is up 2.9% since reporting and currently trades at $1.98.
Read our full report on 8x8 here, it’s free.
Best Q2: Five9 (NASDAQ:FIVN)
Taking its name from the "five nines" (99.999%) standard for optimal service reliability in telecommunications, Five9 (NASDAQ:FIVN) provides cloud-based software that enables businesses to run their contact centers with tools for customer service, sales, and marketing across multiple communication channels.
Five9 reported revenues of $283.3 million, up 12.4% year on year, outperforming analysts’ expectations by 2.9%. The business had a very strong quarter with a solid beat of analysts’ EBITDA estimates and full-year EPS guidance exceeding analysts’ expectations.
Five9 pulled off the biggest analyst estimates beat and fastest revenue growth among its peers. However, the results were likely priced into the stock as it’s traded sideways since reporting. Shares currently sit at $26.06.
Is now the time to buy Five9? Access our full analysis of the earnings results here, it’s free.
RingCentral (NYSE:RNG)
Built on its proprietary Message Video Phone (MVP) platform that unifies multiple communication methods, RingCentral (NYSE:RNG) provides AI-driven cloud communications and collaboration solutions that enable businesses to connect through voice, video, messaging, and contact center services.
RingCentral reported revenues of $620.4 million, up 4.6% year on year, in line with analysts’ expectations. Still, it was a satisfactory quarter as it posted an impressive beat of analysts’ EBITDA estimates.
RingCentral delivered the weakest performance against analyst estimates in the group. Interestingly, the stock is up 29.3% since the results and currently trades at $30.53.
Read our full analysis of RingCentral’s results here.
Zoom (NASDAQ:ZM)
Once the verb that defined remote work during the pandemic ("let's Zoom later"), Zoom (NASDAQ:ZM) provides a cloud-based platform for video meetings, phone calls, team chat, and collaboration tools that helps businesses and individuals connect virtually.
Zoom reported revenues of $1.22 billion, up 4.7% year on year. This result topped analysts’ expectations by 1.8%. Overall, it was a strong quarter as it also recorded an impressive beat of analysts’ EBITDA estimates and full-year EPS guidance exceeding analysts’ expectations.
Zoom delivered the highest full-year guidance raise among its peers. The company added 82 enterprise customers paying more than $100,000 annually to reach a total of 4,274. The stock is up 12.6% since reporting and currently trades at $82.50.
Read our full, actionable report on Zoom here, it’s free.
Market Update
The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.
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