Zoom Video Communications to Announce Q3 Fiscal Year 2024 Results

Zoom Video Communications (ZM.US) is gearing up to unveil its financial performance for the third quarter of fiscal year 2024. The market forecasts the company's revenues for the third quarter to hit $1.12 billion, marking a year-over-year increase of 1.47%. Adjusted earnings per share are expected to reach $1.08, reflecting a 0.93% annual rise.

The market anticipates that Zoom's third-quarter performance may benefit from steady demand for its array of products such as Zoom Video Webinars, Zoom Rooms, and Zoom Phones. The expanding suite of solutions is expected to drive customer base growth during the quarter. Currently, the consensus estimate for the company's enterprise customers in the third fiscal quarter stands at 221,336.

A significant aspect to closely monitor in Zoom's fiscal third quarter is the progress and partnerships related to artificial intelligence (AI). Specifically, Zoom is adopting an AI collaborative approach, leveraging its unique large-scale language AI model, alongside models from renowned AI companies like OpenAI and Anthropic.

The Zoom Plans

In the upcoming quarter, Zoom plans to offer its generative AI digital assistant at no extra cost to paying customers, expected to be a pivotal growth driver.

Previously, on October 3rd, Zoom announced a groundbreaking platform innovation, Zoom Clips, aiming to harness potent AI capabilities for more efficient communication and collaboration during the workday. The platform allows users to easily record, edit, and share high-fidelity short video messages. This feature can be employed for both internal and external communications, aiding users in conveying information and ideas more intuitively.

Simultaneously, Zoom also launched a new workspace named "Notes," designed to facilitate creation and collaboration before, during, and after meetings. This workspace assists users in better organizing and sharing meeting-related content.

In terms of customer count, the market expects Zoom to acquire approximately 221,336 enterprise customers in the third quarter. Additionally, the company's freemium business model assists in rapidly acquiring customers, which can then be converted into paying customers.

Noteworthy is the fact that the company's previous customers contributing over $100,000 in revenue over the past 12 months increased by 17.8% in the second quarter to 3,672. These clients accounted for 29% of the revenue, marking a 26% increase from the same period last year.

In this regard, the market anticipates this momentum to persist in the upcoming third-quarter results. Zacks' consensus estimate for the company's third quarter for clients generating over $100,000 in revenue over the last month is currently set at 3,796.

However, Zoom has encountered fierce competition from companies like Cisco (CSCO), Microsoft (MSFT), and Google Meet. This competition might have led to the loss of small and medium-sized business clients, potentially impacting revenue growth.