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Don’t believe the hype: we’re all still Zooming

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Zoom is set to buy Five9

Zoom has reported a significant revenue beat in its second-quarter earnings, exceeding expectations and raising its revenue outlook for the current fiscal year.

The company unveiled these impressive results during its latest earnings report, released after the closing bell on Monday.

Zoom’s Q2 revenue reached $1.14 billion, slightly surpassing analysts’ estimates of $1.11 billion. Additionally, the company adjusted its revenue guidance for the fiscal year 2024, which is the current fiscal year, projecting it to be in the range of $4.49 billion to $4.5 billion. This updated forecast represents an increase from the previous range of $4.47 billion to $4.49 billion and exceeded analyst estimates of $4.48 billion.

Robust performance

The market responded positively to Zoom’s robust performance, with the company’s stock surging over 5% in after-hours trading. Prior to this earnings announcement, Zoom’s shares had experienced relatively flat year-to-date performance.

Zoom entered this earnings cycle with a strategic focus on leveraging artificial intelligence (AI) trends. The company aimed to harness AI-driven advantages after the initial surge in demand during the pandemic subsided.

Q2 results

Here’s a summary of Zoom’s Q2 results in comparison to estimates:

– **Revenue**: Actual – $1.14 billion vs. Estimated – $1.11 billion
– **Adjusted EPS**: Actual – $1.34 vs. Estimated – $1.05
– **Free Cash Flow**: Actual – $289.4 million vs. Estimated – $258.6 million
– **Number of Enterprise Customers**: Actual – 218,000 vs. Estimated – 219,350
– **Q3 Revenue Forecast**: Actual – $1.12 billion vs. Estimated – $1.12 billion

Zoom had high expectations for AI to bolster its performance this year, especially in terms of profit margins. CEO Eric Yuan expressed this sentiment in his prepared remarks, stating, “For the full year, we expect non-GAAP gross margin to be approximately 79.7%, as we make additional investments in new AI technologies.”

To enhance its AI capabilities, the company welcomed XD Huang as its new Chief Technology Officer, who brought valuable AI experience from his previous role at Microsoft as the head of Azure AI.

Yuan emphasized the importance of trust in technology development, particularly regarding AI, by assuring customers that Zoom does not use their content for training its AI models or third-party AI models.

 

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Why the meme-stock frenzy is unlikely to repeat

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GME shares surge 74%, but experts stress a meme-stock frenzy resurgence is unlikely due to fundamental differences in the company’s financial situation.

Australia’s budget unveils a second consecutive surplus of A$9.3 billion, prioritising the critical minerals industry and green energy initiatives to reduce reliance on Chinese supply.

Also, GameStop shares have surged 74%, but experts caution against expecting a repeat of the 2021 meme-stock frenzy. #featured #trending

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Why are airlines after the Biden Administration?

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Major airlines are taking legal action against the Biden administration over a newly implemented rule requiring them to disclose fees upfront.

On this episode of Hot Shots – Major airlines are suing the Biden Administration, AI-piloted fighter jets, SpaceX faces funding challenges, and Apple receives crushing feedback.

Ticker’s Ahron Young & Veronica Dudo discuss. #featured #trending

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The mounting pressure on Government spends

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Questions abound regarding the factors fueling this inflation surge in Australia and whether it correlates with the escalating government expenditures.

Concerns extend to how Chalmers navigates the mounting pressure amid discrepancies in spending allocations.

Moreover, as Australians grapple with the reality of rising living costs, the feasibility of cutting spending becomes a pressing issue. Additionally, amidst economic uncertainties, individuals seek guidance on managing stock market risks effectively. #Featured #Trending

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