Zoom’s AI technology could be a lifesaver for those who have tons of meetings daily.
Remote support provider HelpWire tested Zoom's AI Companion and found it “perfect for fashionably late arrivals.” The AI service provides quick meeting recaps, allowing latecomers to catch up.
Zoom AI’s meeting and thread summaries were also highlighted. It records and summarizes spoken content, simplifying note-taking and making it easy to review chat threads post-meeting, address outstanding comments, and follow up on questions.
Zoom CEO Eric Yuan announced on August 21 during the Q2 earnings call that AI Companion has over 1.2 million user accounts.
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“But we have only scratched the surface,” Yuan said. “Our progress broadening Zoom Workplace, building out enhanced AI tools for Contact Center, and amassing a large base of AI users sets us up well to transition into the 2.0 phase of AI-enabled work.”
Zoom is set to unveil more about its AI strategy at the upcoming Zoomtopia event in October.
Zoom stock surged after earnings
Zoom Video Communications Inc (ZM) soared nearly 13% after the company posted its Q2 financial results, with both revenue and earnings topping the analysts’ forecasts.
For the second quarter, which ended July 31, the video communication company earned $1.39 a share diluted, beating the analysts’ forecast of $1.21. Revenue of $1.16 billion increased by 2% from a year ago and beat the $1.15 billion estimate.
Zoom partly attributed its revenue growth to acquiring new customers.
By the end of July 31, the company had around 191,600 enterprise customers.
Nearly 4,000 customers each contributed over $100,000 in revenue over the past 12 months. The number of high-revenue clients represents an increase of about 7.1% year over year. Online average monthly churn also reached its lowest level.
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“Zoom Contact Center racked up several marquee customers, including its largest single order deal to date,” Yuan said, adding that Zoom’s AI feature enhanced the company’s competitiveness.
The company also raised its full-year outlook for FY25, now anticipating total revenue to range between $4.63 billion and $4.64 billion, an increase from the previous estimate of $4.61 billion to $4.62 billion. EPS is projected to be between $5.29 and $5.32, up from the earlier forecast of $4.99 to $5.02.
Zoom’s CFO, Kelly Steckelberg, will resign on October 31.
Analysts rest Zoom stock price target after earnings
Analysts have mixed moves on Zoom's stock price target.
Wells Fargo raised Zoom Video's price target to $60 from $55 and kept an underweight rating.
The analyst says Q2 results met expectations, with slightly higher revenues and much better free cash flow.
“ROY [rest of year] outlook suggests growth has troughed, which is encouraging but still a leap of faith given prior challenges calling turn and now CFO transition,” the analyst said.
BofA analyst Michael Funk, on the contrary, lowered Zoom’s price target to $75 from $78 and kept a neutral rating.
The analyst acknowledged the Q2 results and raised FY25 and FY26 revenue and operating income estimates, but he sees less clear future growth.
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“A multiple at a discount to the less than 20% growth software peer group is warranted based on Zoom's weaker visibility with regard to future growth trajectory and an increasingly competitive XCaaS environment,” the analyst said.
Baird analyst William Power also lowered Zoom’s price target to $77 from $84 and kept an outperform rating, citing solid earnings results and a modest upside to revenue and profitability. The company also slightly raised Zoom’s full-year revenue, profitability, and cash flow guidance.
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