RingCentral (NYSE:RNG) Posts Quarterly Earnings Results, Beats Estimates By $0.05 EPS

RingCentral (NYSE:RNG) announced its quarterly earnings results on Thursday. The software maker reported $1.33 earnings per share (EPS) for the quarter, beating the consensus estimate of $1.28 by $0.05, FiscalAI reports. RingCentral had a net margin of 4.27% and a negative return on equity of 34.49%. The company had revenue of $676.04 million during the quarter, compared to analyst estimates of $667.30 million. During the same quarter in the previous year, the business earned $1.13 EPS. The firm’s revenue 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 Performance

NYSE:RNG opened at $89.30 on Friday. The company has a market cap of $7.46 billion, a PE ratio of 69.99, a PEG ratio of 1.43 and a beta of 1.10. The stock has a 50-day simple moving average of $73.63 and a 200 day simple moving average of $54.03. RingCentral has a 52-week low of $24.14 and a 52-week high of $98.14.

RingCentral Announces Dividend

The company also recently disclosed a quarterly dividend, which will be paid on Friday, November 20th. Investors of record on Friday, November 6th will be issued a dividend of $0.1250 per share. The ex-dividend date is Friday, November 6th. This represents a $0.50 dividend on an annualized basis and a dividend yield of 0.6%. RingCentral’s dividend payout ratio (DPR) is presently 40.00%.

Key Stories Impacting RingCentral

Here are the key news stories impacting RingCentral this week:

• Positive Sentiment: Better-than-expected earnings and guidance: RingCentral reported third-quarter adjusted earnings of $1.33 per share, ahead of the $1.27–$1.28 consensus, while revenue of $676.0 million exceeded estimates of $667.3 million. Earnings rose from $1.13 per share a year earlier, and revenue increased 5.8%. The company also raised fiscal 2026 guidance above analyst expectations, supporting the sharp premarket advance. Why RingCentral Shares Are Trading Higher by 15 Percent
• Positive Sentiment: Analysts raised price targets: Needham lifted its target from $85 to $110 and maintained a “buy” rating, implying substantial upside from the reference price. Morgan Stanley raised its target from $41 to $91, though it kept an “equal weight” rating, signaling a more cautious view.
• Positive Sentiment: New dividend declared: RingCentral announced a quarterly dividend of $0.125 per share, or $0.50 annualized. While the approximately 0.6% yield is modest, the payout may improve shareholder returns and investor confidence.
• Neutral Sentiment: Momentum brings valuation concerns: RingCentral recently reached a new 52-week high, with investor attention focused on artificial-intelligence demand and future growth. Continued gains may depend on the company converting that demand into stronger revenue growth and profitability.
• Negative Sentiment: Shareholder investigation adds legal risk: Levi & Korsinsky announced an investigation into possible fiduciary-duty breaches by certain RingCentral officers and directors. The announcement does not establish wrongdoing, but it could create reputational, litigation, and headline risk for shareholders. Shareholder Alert Regarding RingCentral Investigation

Wall Street Analysts Forecast Growth

Several research firms have weighed in on RNG. Needham & Company LLC lifted their target price on RingCentral from $85.00 to $110.00 and gave the stock a “buy” rating in a report on Friday. Piper Sandler restated a “neutral” rating on shares of RingCentral in a report on Friday. Royal Bank Of Canada assumed coverage on RingCentral in a report on Thursday, September 3rd. They issued an “outperform” rating and a $85.00 price target for the company. Morgan Stanley raised their price target on RingCentral from $41.00 to $91.00 and gave the stock an “equal weight” rating in a research report on Friday. Finally, Jefferies Financial Group reiterated a “hold” rating and set a $75.00 price objective on shares of RingCentral in a report on Friday. Five analysts have rated the stock with a Buy rating and eight have assigned a Hold rating to the stock. Based on data from MarketBeat.com, RingCentral currently has a consensus rating of “Hold” and an average target price of $72.50.

Insider Activity

In other news, Director Amy Shenkan sold 1,264 shares of the business’s stock in a transaction on Friday, October 2nd. The shares were sold at an average price of $78.89, for a total value of $99,716.96. Following the sale, the director owned 28,108 shares of the company’s stock, valued at $2,217,440.12. The trade was a 4.30% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which can be accessed through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, COO Kira Makagon sold 36,185 shares of the business’s stock in a transaction on Monday, September 14th. The stock was sold at an average price of $70.11, for a total transaction of $2,536,930.35. Following the completion of the sale, the chief operating officer directly owned 245,385 shares in the company, valued at approximately $17,203,942.35. This represents a 12.85% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last quarter, insiders have sold 84,625 shares of company stock worth $6,024,953. 7.30% of the stock is currently owned by insiders.

About RingCentral

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.