Zoom Video Set to Report Q3 Earnings: What's in the Cards?

Zoom Video Communications ZM is slated to release its third-quarter fiscal 2025 results on Nov. 25.Zoom expects third-quarter fiscal 2025 revenues between $1.162 billion and $1.165 billion. The Zacks Consensus Estimate for the top line is currently pegged at $1.16 billion, indicating growth of 2.34% from the year-ago quarter.Non-GAAP earnings per share are expected in the range of $1.29-$1.31. The consensus mark for earnings has remained steady at $1.31 per share over the past 30 days, indicating growth of 1.55% year over year.Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.Factors to NoteThe company's fiscal third-quarter performance is likely to have benefited from enhancements in its products, such as Zoom Video Webinars, Visitor Management, Workplace Reservation and Zoom Rooms. Zoom’s new Webinar’s capability to host 1 million attendees demonstrates scalability and is expected to drive the top line and active user growth in the third quarter of fiscal 2025.Zoom Video Communications, Inc. Price and EPS Surprise Zoom Video Communications, Inc. price-eps-surprise | Zoom Video Communications, Inc. QuoteZM's increasing range of solutions is expected to have contributed to customer growth. ZM’s launch of Zoom Docs is expected to have driven customer momentum by expanding offerings across the productivity lifecycle and enabling the transformation of information from a Zoom Meeting into tasks and documents. The company’s advancements and partnerships related to artificial intelligence (AI) in the fiscal third quarter are noteworthy. ZM announced enhancements of its AI features within the Zoom Workplace, aiming to boost team productivity and collaboration. Enhanced capabilities of Zoom Meetings, Zoom Team Chat and Zoom Phone are expected to have driven customer satisfaction and topline in the to-be-reported quarter.The company’s Contact Center package offering, driven by AI capabilities, is expected to have benefited ZM’s prospects in the to-be-reported quarter by allowing users to increase efficiency by integrating solutions across platforms.Zoom Workvivo’s Meta partnership and increasing popularity in reselling partners is expected to have benefited Zoom’s prospects in the third quarter of fiscal 2025. Zoom’s AI Companion is expected to have driven active user growth due to its capability to enhance productivity and capability by leveraging generative AI. At the end of the second quarter of fiscal 2025, Zoom AI Companion had a reach of 1.2 million accounts. Positive momentum is expected in the to-be-reported quarter as well.These efforts are expected to have boosted the adoption of the company’s solution among enterprise customers. The consensus estimate for enterprise customers in the fiscal third quarter is currently pegged at 196,459.Zoom Video’s freemium business model helps it win customers rapidly, whom it can later convert into paying customers. In the fiscal second quarter, customers contributing more than $100,000 in revenues in the trailing 12 months grew 7.1% to 3,933. These customers accounted for 31% of revenues, up from 29% in the year-ago quarter. The momentum is expected to have continued in the to-be-reported quarter. The Zacks Consensus Estimate for customers contributing more than $100,000 in revenues is currently pegged at 4,042 for the third quarter fiscal 2025. However, ZM has been facing significant competition from Cisco, Microsoft and Google Meet. This might have led to a loss in small and medium-sized business customers, which is likely to have hurt top-line growth.International expansion has been causing cost escalations in the form of development expenses. This trend is likely to have continued in the to-be-reported quarter as the company plans to add local sales support in international markets.What Our Model UnveilsPer the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.ZM has an Earnings ESP of 0.00% and sports a Zacks Rank #2 at present. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.Stocks to ConsiderHere are some stocks, which according to our model, have the right combination of elements.Fortinet FTNT has an Earnings ESP of +4.78% and carries a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.The Zacks Consensus Estimate for the company’s long-term earnings is pegged at $17.8 per share. Shares of FTNT have returned 60.7% in the year-to-date period.Meta Platforms META has an Earnings ESP of +0.96% and a Zacks Rank #2 at present.The Zacks Consensus Estimate for the company’s long-term earnings is pegged at $20.1 per share. Shares of META have returned 58.7% in the year-to-date period.Reddit Inc. RDDT has an Earnings ESP of +10.57% and carries a Zacks Rank #2 at present.The Zacks Consensus Estimate for the company’s long-term earnings is pegged at $36 per share. Shares of RDDT have returned 193.5% in the year-to-date period.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Fortinet, Inc. (FTNT): Free Stock Analysis Report Zoom Video Communications, Inc. (ZM): Free Stock Analysis Report Meta Platforms, Inc. (META): Free Stock Analysis Report Reddit Inc. (RDDT): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks