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Zoom’s earnings: Back to earth or up to the sky?

Zoom – a cloud-based video conference provider – has been the pandemic’s corporate sweetheart for a long time now. It started its rise from a startup to a big tech giant a couple of years ago and boomed during the pandemic; however, as economies reopen and people go back to the office and back to seeing people in person, investors worry this boom might not last much longer. And this has reflected on the stock’s price behavior during these past months.

Now that an earnings report is coming for the Fiscal Year 2022 Q2, investors are wary about the possibilities and keeping their expectations on guard. Since the new normal started to open up, the stock has lost almost 40% of its value on investors’ worries about how Zoom will exit the pandemic. In October last year, the stock peaked at more than $500.

According to expectations, this year´s Q2 results might not be as impressive as last year´s when it reported the results of the first full quarter contained within Coronavirus restrictions and lockdowns. This, because of the comparison, might be detrimental to the price of the stock altogether. However, the company is expected to remain profitable, as last quarter’s results still exceeded expectations.

Currently, the company is making significant efforts to diversify its portfolio of services, to broaden its customer base. Zoom Phone and Zoom apps are among the services offered to amplify Zoom’s ecosystem. In this quarterly report, one of the key indicators that investors will be looking for is if these expansions have made the company more profitable by amplifying its user base.

Southeast Asia seems to be one of the prime markets for growth for Zoom, as India becomes increasingly digitalized. Last quarter Zoom grew 288% year-to-year in International presence, compared to a close to 150% growth in the domestic market of the US.

Zoom’s earnings reports are to be released after market close today, August 30th, 2021.

Are you a Zoom user? Let us know in the comments below.

Find out more about the world of Investing in our latest NewsFlight.

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