Welcome back to Cheddar is opening bell
zoom reporting earnings after the bell monday,
the video communication platform posting better
than expected results while also providing a
positive outlook for the second quarter it comes as the pandemic stock continues
um, to really attempt to stay relevant amid the broader return to work and school.
Maybe people aren't using it as much so here to break it all down.
Let's bring in Patrick Healy founder and president at caliber financial Partners.
Thanks for being here Patrick.
We gotta jump right into this because I want to know what
were your biggest takeaways from the zooms first quarter earnings report?
Good morning Shannon. Yeah, I I thought it was an impressive result.
You know, all things considered obviously, you know,
they were a big high flyer during the covid pandemic when
they were looking at triple digit earnings growth and revenue growth,
but they have kind of come back down to earth, so to speak.
But it was still an impressive feat on earnings and
I think signaling revenue growth going forward is
a vote of confidence for the company as they start to kind of
settle in and look for other areas for them to derive revenue.
And they've kind of signaled that in their earnings
report intentions around focusing more on enterprise solution.
Yeah,
we'll definitely want to get more into that because as people return
to their office and in person learning what is zoom staying power.
I mean does the platform have enough strategic
initiatives to whether the decline in use.
Yeah, again,
I think it's gonna be a shift more away from individual
use and more towards focusing on services dedicated to businesses.
Um the Covid lockdown kind of forced everybody to
consider using zoom more as a safety measure,
but I think there's still a lot of relevance for their,
their offerings in the world today.
And business wise,
I use zoom all the time in communications with clients and I think,
you know, while there wasn't a lot of discussion on it in the earnings report,
I think some of the inflation pressures are going to force businesses to try
and be more nimble and some of that business travel that you know,
we, we witnessed back before Covid took place
may have been replaced by services like zoom and I think that
that will be in focus in the several quarters to follow.
Well, they definitely issued an upbeat outlook for the second quarter.
Banking on benefiting from that hybrid work at home and work model.
So is there enough to keep the company relevant?
You know, does the company need to evolve more in their offerings?
Um or is this this time to stay relevant for them?
Yeah, I think all companies need to kind of evolve their offerings.
I think if you become complacent,
perhaps if you're an established company,
you can get away with that and just kind of
book uh recurring revenue like a Microsoft for example,
but zoom is in a growth mode and they're still in
early stage company and so they need to continue to innovate,
but I think they need to do so intelligently not be overspending on
pet projects or initiatives that don't necessarily have staying power.
So I do think that they need to continue to innovate
um put out product and service offerings that um you know,
sort of our dedicated towards business growth um and uh you know,
kind of complacency is not going to get them,
they're not at this stage of the growth cycle.
Yeah, and just opposite of Skype calls, Skype missed the ball on this pandemic one,
but zoom really is what you call, like a pandemic darling,
we really saw them blossom during the pandemic.
How would you say this company compares to you? No other pandemic era stocks.
Yeah, look,
I think zoom uh has has become part of
your everyday vocabulary if you're in the business world,
right, It's not uncommon to hear people say,
well let's do a zoom call or I'm zooming
later or whatever the terminology happens to be.
And so I think they become mainstream in terms
of society in terms of how businesses conduct themselves.
Um and um you know, again I use it all the time. We're on zoom right now.
Um and so I don't think this is just sort of
a fleeting moment where they were relevant or in covid,
I think there's a lot of staying power and again,
their ability to kind of innovate and uh
you know put out different types of services.
You know, Patrick, I'm sorry.
We've got to get ready for the opening bell, so we've got to cut you off there.
But don't worry,
we're gonna continue this conversation and we'll
definitely keep an eye out on that.
Thank you so much, Patrick Healy. We appreciate your time.