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Zoom’s AI technology could be a lifesaver for those who have a lot of meetings every day.
Remote support provider HelpWire tested Zoom AI Companion and found it to be “perfect for latecomers.” The AI service provides quick summaries of meetings, allowing latecomers to catch up.
Zoom AI’s meeting and discussion summaries are also highlighted. They record and summarize spoken content, simplifying note-taking and making it easy to review conversation discussions after a meeting, address pending comments, and follow up on questions.
Zoom CEO Eric Yuan announced on August 21 during its second-quarter earnings call that AI Companion has more than 1.2 million user accounts.
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“But we’ve only just discovered a little bit,” Yuan said. “The progress we’ve made in scaling Zoom Workplace, building AI-enhanced tools for the contact center, and amassing a large AI user base positions us well for the transition to AI-powered work 2.0.”
Zoom is set to reveal more about its AI strategy at its upcoming Zoomtopia event in October.
Zoom shares rise after earnings
Zoom Video Communications Company (Z M) Apple shares rose about 13% after the company reported its second-quarter financial results, with revenue and profits beating analysts’ expectations.
In the second quarter, which ended July 31, the visual communications company posted diluted earnings of $1.39 per share, beating analysts’ expectations of $1.21. Revenue of $1.16 billion was up 2% from a year ago and beat estimates of $1.15 billion.
Zoom attributed its revenue growth in part to new customer acquisitions.
As of July 31, the company had approximately 191,600 institutional clients.
Nearly 4,000 customers contributed over $100,000 in revenue over the past 12 months. The number of high-revenue customers represents a 7.1% year-over-year increase. Average monthly online churn rate also reached record lows.
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“Zoom Contact Center has secured several high-profile customers, including the largest single order deal to date,” Yuan said, adding that Zoom’s AI feature has boosted the company’s competitiveness.
The company also raised its fiscal 2025 outlook, now expecting total revenue to be between $4.63 billion and $4.64 billion, up from a previous estimate of $4.61 billion and $4.62 billion. Earnings per share are expected to be between $5.29 and $5.32, up from a previous estimate of $4.99 and $5.02.
Zoom CFO Kelly Steckelberg is set to resign on October 31.
Analysts Set Zoom Stock Price Target After Earnings
Analysts have mixed views on Zoom’s stock price target.
Wells Fargo raised its price target on Zoom Video to $60 from $55 and maintained an underweight rating.
The analyst says second-quarter results were in line with expectations, with a slight increase in revenue and a significant improvement in free cash flow.
Roy [rest of year] “The outlook is that growth has bottomed out, which is encouraging but still a leap of faith given the previous challenges we faced during the transition and now the CFO transition,” the analyst said.
In contrast, Bank of America analyst Michael Funk cut Zoom’s price target to $75 from $78 and maintained a neutral rating.
The analyst acknowledged the second-quarter results and raised revenue and operating income estimates for fiscal 2025 and fiscal 2026, but sees less pronounced growth ahead.
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“The multiples at a discount to the software peer group with less than 20% growth are justified based on Zoom’s weak visibility regarding its future growth trajectory and the increasingly competitive XCaaS environment,” the analyst said.
Baird analyst William Bower also cut Zoom’s price target to $77 from $84 and maintained an outperform rating, citing strong earnings results and modest gains in revenue and profitability. The company also slightly raised Zoom’s full-year revenue, profitability and cash flow guidance.
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