RingCentral (NYSE:RNG) Releases Quarterly Earnings Results, Beats Expectations By $0.05 EPS

RingCentral (NYSE:RNG) announced its quarterly earnings data on Thursday. The software maker reported $1.33 EPS for the quarter, topping analysts’ consensus estimates of $1.28 by $0.05, FiscalAI reports. RingCentral had a negative return on equity of 37.87% and a net margin of 25.27%. The business had revenue of $676.04 million during the quarter, compared to the consensus estimate of $667.30 million. During the same period in the previous year, the company posted $1.13 earnings per share. The business’s revenue for the quarter was up 5.8% on a year-over-year basis.

Here are the key takeaways from RingCentral’s conference call:

• AI adoption accelerated: RingCentral reported more than 22,000 AI Receptionist customers, nearly 7,000 ACE customers, and over 14,000 CEB customers. Customers using at least one paid native AI product now represent approximately 15% of ARR, or more than $400 million, with higher ARPU and net retention.
• Q3 results exceeded expectations, with subscription revenue of approximately $653 million, total revenue of $676 million, and monthly net retention above 99%. Management raised its full-year 2026 revenue, non-GAAP EPS, and free cash flow outlooks, including midpoint free cash flow of $625 million.
• Profitability and balance-sheet metrics improved materially. Non-GAAP operating margin reached 24.7%, GAAP operating margin reached a record 8%, free cash flow rose 21% year over year to $157 million, and gross debt fell below $1 billion ahead of schedule.
• Management expects growth to remain a combination of a durable core communications business and increasing AI contributions, but noted that AI is still growing from a relatively small base. The company plans to continue investing more than $250 million annually in product and technology while evaluating acquisitions opportunistically.

RingCentral Stock Up 5.1%

RNG traded up $4.04 on Friday, reaching $83.46. The company had a trading volume of 4,623,082 shares, compared to its average volume of 1,488,702. RingCentral has a 1 year low of $24.14 and a 1 year high of $98.14. The stock has a market capitalization of $6.97 billion, a PE ratio of 11.04, a P/E/G ratio of 1.38 and a beta of 1.10. The stock has a 50-day moving average price of $74.01 and a 200-day moving average price of $54.24.

RingCentral Announces Dividend

The business also recently declared a quarterly dividend, which will be paid on Friday, November 20th. Investors of record on Friday, November 6th will be given a $0.1250 dividend. The ex-dividend date of this dividend is Friday, November 6th. This represents a $0.50 dividend on an annualized basis and a yield of 0.6%. RingCentral’s payout ratio is 40.00%.

Insider Activity at RingCentral

In other news, CFO Vaibhav Agarwal sold 7,046 shares of RingCentral stock in a transaction dated Wednesday, September 2nd. The stock was sold at an average price of $72.10, for a total transaction of $508,016.60. Following the sale, the chief financial officer owned 146,700 shares in the company, valued at approximately $10,577,070. The trade was a 4.58% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, COO Kira Makagon sold 36,185 shares of the business’s stock in a transaction dated Monday, September 14th. The shares were sold at an average price of $70.11, for a total value of $2,536,930.35. Following the completion of the sale, the chief operating officer directly owned 245,385 shares of the company’s stock, valued at $17,203,942.35. The trade was a 12.85% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last 90 days, insiders have sold 84,625 shares of company stock valued at $6,024,953. Corporate insiders own 7.30% of the company’s stock.

RingCentral News Roundup

Here are the key news stories impacting RingCentral this week:

• Positive Sentiment: Raised full-year guidance: RingCentral now expects fiscal 2026 adjusted EPS of $5.07–$5.12, well above the $4.61 analyst consensus, and revenue of approximately $2.7 billion versus expectations of $2.6 billion. Fourth-quarter EPS guidance of $1.32–$1.37 also exceeds the $1.24 consensus, while revenue guidance is slightly above estimates. RingCentral guidance
• Positive Sentiment: Beat quarterly expectations: Third-quarter EPS came in at $1.33 versus the $1.28 consensus, while revenue of $676.04 million exceeded estimates of $667.30 million and increased 5.8% year over year. RingCentral Q3 earnings
• Positive Sentiment: AI growth is becoming material: Paid artificial-intelligence product annual recurring revenue surpassed $400 million, with reports indicating that AI monetization roughly doubled. This supports expectations for stronger growth and margin expansion. RingCentral long-term investor takeaways
• Positive Sentiment: Balance sheet improved: RingCentral reduced gross debt below $1 billion ahead of schedule, while earnings and cash flow improved. The company also declared a quarterly dividend of $0.125 per share, equal to a $0.50 annualized payout. RingCentral outlook and cash flow
• Neutral Sentiment: Analyst targets moved higher: Needham raised its target to $110 with a Buy rating, FBN Securities lifted its target to $105, and Morgan Stanley increased its target to $91 while retaining Equal Weight. Wells Fargo also raised its target to $85 but maintained Equal Weight, suggesting some analysts view the near-term upside as more limited.
• Neutral Sentiment: At approximately $83.46, RingCentral remains below its $98.14 52-week high but trades well above its 50-day and 200-day moving averages, indicating strong momentum alongside a higher valuation.

Wall Street Analyst Weigh In

Several research firms have recently issued reports on RNG. FBN Securities reaffirmed an “outperform” rating and set a $105.00 price objective on shares of RingCentral in a research report on Friday. Royal Bank Of Canada assumed coverage on RingCentral in a research note on Thursday, September 3rd. They issued an “outperform” rating and a $85.00 price target on the stock. Morgan Stanley lifted their price target on RingCentral from $41.00 to $91.00 and gave the stock an “equal weight” rating in a report on Friday. Mizuho set a $85.00 price objective on RingCentral in a research report on Friday. Finally, UBS Group set a $91.00 price objective on RingCentral in a research report on Friday. Six research analysts have rated the stock with a Buy rating and eight have assigned a Hold rating to the company’s stock. Based on data from MarketBeat.com, RingCentral presently has an average rating of “Hold” and an average target price of $89.69.

RingCentral Company Profile

RingCentral, Inc is a provider of cloud-based business communications and collaboration solutions. Its platform enables organizations to manage business phone services, team messaging, video meetings, contact center operations and other communications through internet-based applications rather than traditional on-premises systems.

The company’s offerings include RingEX, a unified communications platform that combines voice, messaging and video; RingCentral Video for online meetings and collaboration; and RingCX, a cloud contact center solution.