Investors’ focus on Zoom sales growth during Q2 earnings
Sundry Photography/iStock Editorial via Getty Images

Zoom Video Communications Inc (NASDAQ:ZM) is set to report second quarter results on Monday after markets close and investors will keep an eye on revenue growth, especially its enterprise sales amid a weak economy.
Even though Zoom raised its full-year revenue and profit outlook, slowing growth has been a matter of concern for investors.
The video-conferencing tool recorded the slowest quarterly growth on record at 3% during its first-quarter, while this quarter it is expected to rise just 1%.
Zoom saw blistering growth during the pandemic as companies globally flocked to its video-conferencing platform to maintain easy communication. However, growth slowed down in the last few quarters as economies reopened and competition from rivals including Microsoftâs (MSFT) Teams, Ciscoâs (CSCO) Webex and Slack has become intense.
âInvestors I speak with are worried about further macro pressure and additional competitive pressure from Microsoft hurting numbers, which could result in a lowering of guidance,â said RBC analyst Rishi Jaluria, adding that investors are expecting a maintained guidance.
A recent Seeking Alpha analysis also pointed out that it is crucial for Zoom to demonstrate signs of growth re-escalation for its high-paying enterprise customers in order to instill confidence in investors.
However, Zoom constantly expanding its offerings and integrating more artificial intelligence into its products in a bid to retain customers is seen as a positive sign by analysts.
âZoom is clearly investing a lot in AI and thereâs potentially a good story about integration of GenAI into video and generating true conversational intelligence,â Jaluria added.

Wall Street expects California-based Zoom to report Earnings Per Share (EPS) of $1.06, while revenue is expected be $1.11 billion.
Over the last two years, Zoom has beaten EPS estimates 100% of the time and has beaten revenue estimates 63% of the time.
Seeking Alpha analysts rate the stock as âbuyâ, while Seeking Alphaâs Quant Ratings and Wall Street consider the stock a âholdâ. The stock has gained nearly 2% so far this year.

Over the last three months, EPS estimates have seen 15 upward revisions, compared to six downward revisions. Revenue estimates have seen 20 upward revisions versus four downward moves.


More on Zoom Video

Zoom: Reiterate Neutral Rating Until Reported Results Show Growth Recovery
Zoom: Still A Duopoly
Zoom Video: Worrisome Enterprise Growth Forecast Offset By Profits And 25% Net Cash
Hybrid work future positive for Cisco, Dell; challenging for Xerox, REITs - Morgan Stanley survey