Zoom Expected to Post Higher Revenue, Net Income — Earnings Preview

ADJUSTED EARNINGS: The San Jose, Calif.-based company is expected to report adjusted earnings of $1.06 a share compared with $1.05 a share in the prior-year period, according to FactSet.

NET INCOME: Zoom is expected to post net income of $60.1 million, up from $45.7 million a year earlier, according to FactSet.

WHAT TO WATCH

— CUSTOMERS: Investors will be looking to see how Zoom’s customers are faring. While the company’s online segment, which serves consumers and small businesses that generally sign up directly on its website, showed signs of stability based on its outlook in the prior quarter, the guidance coupled with its total revenue projection issued in May implied revenue for its enterprise side would rise only 6% year over year. Enterprise sales to large and midsize businesses account for a little over half of its total revenue, and an important portion given the durability of long-term business contracts compared to online customers.

— AI: Watch to see if Zoom offers any commentary on new capabilities launched in Zoom IQ, a generative artificial intelligence assistant. The product was made available in June through free trials for customers in select plans. Look to see if Zoom discusses what customer feedback or adoption has been like so far.

— RTO: Zoom may offer additional details on how its return to office plans are going. The company recently told employees they see value in staffers working with their teams in-person and would begin requiring people who live near its offices to work on-site two days a week. The hybrid work model, which applies to employees who live within about 50 miles of a company office, will take effect in August and September, a spokeswoman said.

Write to Denny Jacob at [email protected]