As the Q3 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the video conferencing industry, including RingCentral (NYSE: RNG) and its peers.

Work is becoming more distributed, both across geographies and devices. In order for businesses to keep functioning efficiently, they need to be able to communicate as well as they did when the teams were co-located, which drives the demand for integrated communication platforms.

The 4 video conferencing stocks we track reported a satisfactory Q3. As a group, revenues beat analysts’ consensus estimates by 1.3% while next quarter’s revenue guidance was 0.9% below.

Thankfully, share prices of the companies have been resilient as they are up 7.5% on average since the latest earnings results.

Weakest Q3: RingCentral (NYSE: RNG)

Built on its proprietary Message Video Phone (MVP) platform that unifies multiple communication methods, RingCentral (NYSE: RNG) provides AI-driven cloud communications and collaboration solutions that enable businesses to connect through voice, video, messaging, and contact center services.

RingCentral reported revenues of $638.7 million, up 4.9% year on year. This print was in line with analysts’ expectations, but overall, it was a slower quarter for the company with revenue guidance for next quarter missing analysts’ expectations significantly and billings in line with analysts’ estimates.

“We delivered a solid quarter reinforcing our leadership in cloud business voice while expanding margins and delivering strong free cash flow,” said Vlad Shmunis, founder and CEO of RingCentral.

The market was likely pricing in the results, and the stock is flat since reporting. It currently trades at $29.71.

Read our full report on RingCentral here, it’s free for active Edge members.

Best Q3: 8x8 (NASDAQ: EGHT)

Named after its founding year (1987) with "8x8" representing binary code for communications, 8x8 (NASDAQ: EGHT) provides cloud-based contact center and unified communications solutions that enable businesses to manage customer interactions and internal communications through a single platform.

8x8 reported revenues of $184.1 million, up 1.7% year on year, outperforming analysts’ expectations by 3.1%. The business had a very strong quarter with an impressive beat of analysts’ billings estimates and a solid beat of analysts’ EBITDA estimates.

8x8 achieved the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 19.7% since reporting. It currently trades at $2.13.

Is now the time to buy 8x8? Access our full analysis of the earnings results here, it’s free for active Edge members.

Five9 (NASDAQ: FIVN)

Taking its name from the "five nines" (99.999%) standard for optimal service reliability in telecommunications, Five9 (NASDAQ: FIVN) provides cloud-based software that enables businesses to run their contact centers with tools for customer service, sales, and marketing across multiple communication channels.

Five9 reported revenues of $285.8 million, up 8.2% year on year, in line with analysts’ expectations. It was a mixed quarter as it posted an impressive beat of analysts’ EBITDA estimates but revenue guidance for next quarter slightly missing analysts’ expectations.

Five9 delivered the fastest revenue growth but had the weakest performance against analyst estimates in the group. The stock is flat since the results and currently trades at $21.51.

Read our full analysis of Five9’s results here.

Zoom (NASDAQ: ZM)

Once the verb that defined remote work during the pandemic ("let's Zoom later"), Zoom (NASDAQ: ZM) provides a cloud-based platform for video meetings, phone calls, team chat, and collaboration tools that helps businesses and individuals connect virtually.

Zoom reported revenues of $1.23 billion, up 4.4% year on year. This print beat analysts’ expectations by 1.3%. Overall, it was a strong quarter as it also logged an impressive beat of analysts’ EBITDA estimates and EPS guidance for next quarter beating analysts’ expectations.

Zoom delivered the highest full-year guidance raise among its peers. The company added 89 enterprise customers paying more than $100,000 annually to reach a total of 4,363. The stock is up 12% since reporting and currently trades at $88.

Read our full, actionable report on Zoom here, it’s free for active Edge members.

Market Update

As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.

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