RingCentral Q4 Earnings Surpass Estimates, Revenues Increase Y/Y

RingCentral RNG reported fourth-quarter 2025 non-GAAP earnings of $1.18 per share, surpassing the Zacks Consensus Estimate by 3.69% and increasing 20.4% year over year.

Total revenues of $644 million beat the consensus mark by 0.27% and increased 4.8% year over year. A robust product portfolio and strong subscription revenues drove the upside.

RNG’s Quarterly Details

Software subscription revenues (96.6% of total revenues) increased 5.5% year over year to $622.2 million, beating the Zacks Consensus Estimate by 0.06%. 

Other revenues (3.4% of total revenues) decreased 12.2% year over year to $21.8 million, beating the Zacks Consensus Estimate by 6.71%.

Ringcentral, Inc. Price, Consensus and EPS Surprise

Ringcentral, Inc. price-consensus-eps-surprise-chart | Ringcentral, Inc. Quote

Annualized Exit Monthly Recurring Subscriptions (ARR) increased 7% year over year to $2.67 billion, driven by strong demand for AI-powered multi-product offerings.

Enterprise ARR increased 5% year over year to $1.12 billion in the reported quarter.

RingCentral’s Operating Details

Fourth-quarter 2025 non-GAAP gross margin was in line with the year-ago quarter at 77.3%.

On a non-GAAP basis, research and development expenses increased 1.1% year over year to $62.8 million. 

Sales and marketing expenses increased 1.5% year over year to $244.3 million. General and administrative expenses rose 6.7% year over year to $44.2 million in the reported quarter.

On a non-GAAP basis, operating income was $146.7 million, up 11.8% year over year. The operating margin expanded 140 bps from the year-ago quarter to 22.8%.

The non-GAAP EBITDA margin was 26.2%, expanding 130 bps year over year.

RNG’s Balance Sheet & Cash Flow Details

As of Dec. 31, 2025, cash and cash equivalents were $132.5 million compared with $145.3 million as of Sept. 30, 2025.

Cash flow from operations was $149 million in the fourth quarter of 2025 compared with $151 million in the third quarter of 2025.

In the fourth quarter of 2025, RNG bought shares worth $135 million. In the same quarter, the board approved a $250 million increase in the share repurchase plan, bringing the total authorization to $500 million. 

The non-GAAP free cash flow was $126.1 million compared with $129.5 million in the previous quarter. The non-GAAP cash flow margin was 19.6% in the fourth quarter.

RNG Initiates Q1 & 2026 Guidance

For the first quarter of 2026, RingCentral expects revenues in the range of $640-$645 million, indicating year-over-year growth of 4.6-5.4%.

Subscription revenues are expected to be in the range of $620-$625 million, indicating year-over-year growth of 5.1-5.9%. 

The non-GAAP operating margin is expected to be in the range of 22.8% to 22.9% in the first quarter of fiscal 2026. Earnings are expected to be in the range of $1.16-$1.19 per share.

For 2026, RingCentral projects year-over-year revenue growth of 4%-5% on a reported basis. On a year-over-year basis, subscription revenue growth is expected to be between 4.5% and 5.5%. 

The non-GAAP operating margin is expected to be between 23% and 23.5%.

Non-GAAP earnings for 2025 are expected to be in the range of $4.76-$4.97 per share.

Zacks Rank & Stocks to Consider

RingCentral currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the broader Zacks Computer and Technology sector are Micron Technology MU, Credo Technology CRDO, and MongoDB MDB, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Micron Technology shares have gained 308% in the past 12-month period. This company is scheduled to release second-quarter 2026 results on March 19.

Credo Technology Group shares have gained 79.4% in the past 12-month period. CRDO is set to report its third-quarter fiscal 2026 results on March 2.

MongoDB shares have returned 25.2% in the past 12-month period. MDB is scheduled to release its fourth-quarter 2026 results on March 2.

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