Ahead of Zoom (ZM) Q2 Earnings: Get Ready With Wall Street Estimates for Key Metrics

Zoom Communications (ZM) is approaching its second-quarter earnings release with Wall Street expecting quarterly earnings of $1.50 per share, a 2% year-over-year decline, and revenue of $1.27 billion, up 4.2% from the year-ago quarter. The consensus EPS estimate has remained unchanged over the past 30 days. Estimate revisions are an important consideration for investors because historical research has shown a strong relationship between changes in earnings forecasts and a stock’s short-term price performance. Although consensus earnings and revenue estimates provide a broad view of quarterly results, operating metrics can offer additional insight into demand and future growth. Analysts expect online revenue to reach $492.94 million, an increase of 1.3% from the prior-year quarter. Enterprise revenue is projected at $774.78 million, up 6% year over year. The relatively faster projected enterprise growth makes this segment an important focus for investors assessing Zoom’s mix and commercial momentum. Enterprise customers are expected to total 188,367, compared with 184,000 in the same quarter of the previous year. Analysts also forecast current remaining performance obligation (RPO) of $2.54 billion, versus $2.41 billion a year earlier. Customers generating more than $100,000 in trailing-twelve-month revenue are projected to reach 4,572, up from 4,274 in the prior-year quarter. Together, these estimates indicate that investors will be monitoring more than reported earnings and revenue. Enterprise customer expansion, contracted obligations and growth among larger accounts may help gauge the durability of demand and future revenue visibility. Zoom shares have gained 25.2% over the past month, compared with a 3.5% increase for the Zacks S&P 500 composite. Despite that outperformance, Zoom carries a Zacks Rank #3 (Hold), signaling expectations that the stock will broadly match overall market performance in the near term.