As the Q3 earnings season wraps, let’s dig into this quarter’s best and worst performers in the video conferencing industry, including RingCentral (NYSE:RNG) 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 Q3. As a group, revenues beat analysts’ consensus estimates by 1.8% while next quarter’s revenue guidance was 0.7% below.
Thankfully, share prices of the companies have been resilient as they are up 8.1% on average since the latest earnings results.
Weakest Q3: RingCentral (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 $608.8 million, up 9.1% year on year. This print exceeded analysts’ expectations by 1.1%. Despite the top-line beat, it was still a mixed quarter for the company with full-year EPS guidance slightly topping analysts’ expectations but annual recurring revenue in line with analysts’ estimates.
“Our strong results were driven by continued momentum with new products, in particular RingCX, and strength in our core UCaaS market,” said Vlad Shmunis, RingCentral’s Founder, Chairman, and CEO.
RingCentral delivered the weakest performance against analyst estimates of the whole group. Unsurprisingly, the stock is down 4.6% since reporting and currently trades at $36.99.
Is now the time to buy RingCentral? Access our full analysis of the earnings results here, it’s free.
Best Q3: 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 to offer more tailored customer support.
Five9 reported revenues of $264.2 million, up 14.8% year on year, outperforming analysts’ expectations by 3.6%. The business had a very strong quarter with an impressive beat of analysts’ EBITDA estimates and full-year EPS guidance exceeding analysts’ expectations.
Five9 scored the biggest analyst estimates beat, fastest revenue growth, and highest full-year guidance raise among its peers. The market seems happy with the results as the stock is up 29% since reporting. It currently trades at $42.36.
Is now the time to buy Five9? Access our full analysis of the earnings results here, it’s free.
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 $181 million, down 2.2% year on year, exceeding analysts’ expectations by 1.5%. Still, it was a mixed quarter as it posted a slight miss of analysts’ annual recurring revenue estimates.
8x8 delivered the slowest revenue growth and weakest full-year guidance update in the group. Interestingly, the stock is up 11.6% since the results and currently trades at $2.59.
Read our full analysis of 8x8’s results here.
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 $1.18 billion, up 3.6% year on year. This result beat analysts’ expectations by 1.2%. It was a strong quarter as it also put up a solid beat of analysts’ billings estimates and an impressive beat of analysts’ EBITDA estimates.
The company added 62 enterprise customers paying more than $100,000 annually to reach a total of 3,995. The stock is down 3.7% since reporting and currently trades at $85.75.
Read our full, actionable report on Zoom here, it’s free.
Market Update
Thanks to the Fed's series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market has thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% each in November and December), and a notable surge followed Donald Trump's presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by the pace and magnitude of future rate cuts as well as potential changes in trade policy and corporate taxes once the Trump administration takes over. The path forward is marked by uncertainty.
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