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Enterprise Customer Base to Aid Zoom Video's (ZM) Q2 Earnings

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Zoom Video Communications’ (ZM - Free Report) second-quarter fiscal 2022 results, set to be reported on Aug 30, are expected to benefit from an expanded enterprise customer base backed by its cloud-native unified communications platform.

Ease of deployment, use and management, and scalability make Zoom Video’s software more popular among its customers. For enterprise customers, minimal involvement of IT, lower cost and scalability are major factors behind users selecting Zoom Video.

For the fiscal second quarter, the Zacks Consensus Estimate for customers with more than 10 employees is currently pegged at 515, 750, indicating growth of 1.7% sequentially.

The consensus mark for revenues from customers with more than 10 employees is currently pegged at $612 million, indicating growth of 3.8% sequentially.

The company had 1,999 customers, contributing to more than $100,000 of trailing 12 months’ (TTM) revenues in first-quarter fiscal 2022. Moreover, Zoom had roughly 497,100 customers with more than 10 employees.

In first-quarter fiscal 2022, Zoom’s trailing 12-month net dollar-expansion rate in customers with more than 10 employees was above 130% for the 12th consecutive quarter. This momentum is expected to have continued in the to-be reported quarter.

Click here to know how Zoom’s overall second-quarter fiscal 2022 results are likely to be.

Portfolio Strength & Strong Partner Base to Fend Off Competition

Zoom is one of the leading names in the unified communications and collaboration (UC&C) space, which is expected to witness a healthy CAGR of 27.8% during 2021-2026, per Mordor Intelligence report.

Portfolio expansion and strength in partner base are likely to have been the key catalysts driving Zoom on the growth trajectory in the second quarter of fiscal 2022. Its solutions combine video, audio, phone, screen sharing and chat functionalities and make remote-working and collaboration easy.

Additionally, the company’s strong partner base that includes the likes of Atlassian (TEAM - Free Report) , ServiceNow and Dropbox (DBX - Free Report) is expected to have benefited the company in winning enterprise customers in the fiscal second quarter.

However, this Zacks Rank #4 (Sell) company continues to face significant competition from the likes of Cisco (CSCO - Free Report) , Microsoft and Google Meet. This might have resulted in loss of small and medium-sized business customers, which is likely to have hurt top-line growth. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.