RingCentral RNG posted first-quarter 2026 non-GAAP earnings of $1.20 per share, which beat the Zacks Consensus Estimate by 2.56% and rose 20% year over year.
Revenues of $644 million surpassed the Zacks Consensus Estimate by 0.22% and increased 5.3% from the year-ago quarter. The quarter reflected steady subscription momentum and improving profitability.
RNG ended the period with a total ARR of $2.707 billion, up 7% year over year, as demand for its AI-powered customer engagement offerings continued to expand.
RNG’s Quarterly Details
Subscription revenue, representing 97% of total revenue, increased 5.6% year over year to $623.17 million. The performance suggests ongoing traction across the company’s core unified communications offerings, supported by continued customer demand for cloud-based communication tools.
Ringcentral, Inc. Price, Consensus and EPS Surprise
Ringcentral, Inc. price-consensus-eps-surprise-chart | Ringcentral, Inc. Quote
Other revenue was $21.03 million (3.3% of total revenue), which decreased 4.2% from the year-ago quarter. While smaller in overall contribution, the decline indicates that growth remains concentrated in recurring subscriptions, keeping the company’s revenue base anchored in predictable, contract-driven streams.
RingCentral Leans on AI Products and Bundled Demand
Management emphasized progress in AI-driven customer engagement, noting that ARR from customers using at least one paid AI product is now more than 10% of total ARR and doubled year over year. The commentary underscores the company’s effort to move beyond legacy UCaaS into a broader AI-powered platform spanning voice, messaging, and contact center workflows.
Product momentum was supported by multiple launches and enhancements, including RingCentral AIR Pro and expanded AIR functionality across SMS and call queues. The company also highlighted continued traction in its Customer Engagement Bundle, positioning it as a key pillar designed to meet demand for lighter-weight contact center capabilities among RingEX customers.
RingCentral’s Operating Details
First-quarter 2026 non-GAAP gross margin expanded 70 bps from the prior-year quarter to 77.7%.
On a non-GAAP basis, research and development expenses increased 7.3% year over year to $66.2 million. Sales and marketing expenses increased 4.9% year over year to $244.7 million. General and administrative expenses decreased 1.1% year over year to $42.2 million in the reported quarter.
Non-GAAP operating margin improved to 22.9%, expanding 110 basis points from the prior-year quarter. The outcome points to operating leverage, as growth in high-margin subscription revenue and tighter spending supported profitability.
The non-GAAP EBITDA margin was 26.3%, expanding 100 bps year over year.
RNG’s Balance Sheet & Cash Flow Details
As of March 31, 2026, cash and cash equivalents were $116.58 million compared with $132.5 million as of Dec. 31, 2025.
Net cash provided by operating activities was $164.05 million. Free cash flow came in at $140.65 million. The non-GAAP cash flow margin was 21.8% in the first quarter.
Shareholder returns remained a priority, highlighted by $81.33 million of common stock repurchases during the quarter. The company also paid $6.41 million in dividends and noted it has no debt maturities until 2030 following the repayment of its 2026 convertible notes at maturity.
RNG’s Q2 and Full-Year 2026 Outlook
For the second quarter of 2026, RNG expects total revenues between $648 million and $653 million and subscription revenues in the range of $628 million to $633 million. The company expects non-GAAP EPS of $1.15 to $1.17 and forecasts a non-GAAP operating margin of 23% to 23.2%, signaling continued focus on profitability.
For 2026, RingCentral raised its outlook, projecting total revenues of $2.62 billion to $2.64 billion and subscription revenues of $2.54 billion to $2.56 billion. Non-GAAP EPS is expected to be in the range of $4.85 to $5.01, while free cash flow is anticipated to be between $590 million and $605 million, reflecting management’s confidence in sustained execution and cash generation.
RNG’s Zacks Rank & Stocks to Consider
RingCentral currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Zacks Computer and Technology sector include Analog Devices ADI, Applied Materials AMAT, and Audioeye AEYE. Each stock currently carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Shares of Analog Devices have gained 50.7% in the year-to-date period. Analog Devices is set to report the second quarter of fiscal 2026 results on May 20.
Applied Materials shares have gained 59.8% in the year-to-date period. Applied Materials is scheduled to report its second-quarter 2026 results on May 14.
Audioeye shares have lost 19% in the year-to-date period. Audioeye is set to report its first-quarter 2026 results on May 13.
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