RingCentral beats Q3 revenue estimates on subscription growth

RingCentral

03/11/2025 21:22

Overview

RingCentral Q3 revenue grows 5% yr/yr, beating analyst expectations

Company repurchased $117 mln of stock in Q3, reflecting strong cash flow

Free cash flow rises 23% yr/yr, boosting financial outlook

Outlook

RingCentral raises 2025 free cash flow outlook of $525 mln to $530 mln

Company sees Q4 2025 total revenue of $638 mln to $646 mln

RingCentral expects Q4 2025 non-GAAP EPS of $1.12 to $1.15

Result Drivers

SUBSCRIPTION REVENUE - Subscription revenue increased 6% yr/yr to $616 mln, driving overall revenue growth

OPERATING MARGINS - Improved GAAP operating margin to 4.8% from 0.5% last yr, reflecting cost management

AI PRODUCT EXPANSION - Launched new AI products, including AI Receptionist and AI Virtual Assistant, enhancing product portfolio

Key Details

Metric
Beat/Miss
Actual
Consensus Estimate
Q3 Revenue
Beat
$638.65 mln
$635.56 mln (16 Analysts)
Q3 Net Income
$17.55 mln
Q3 Gross Profit
$458.32 mln
Q3 Income from Operations
$30.80 mln


Analyst Coverage

The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 6 "strong buy" or "buy", 13 "hold" and no "sell" or "strong sell"

The average consensus recommendation for the software peer group is "buy."

Wall Street's median 12-month price target for RingCentral Inc is $32.00, about 5.9% above its October 31 closing price of $30.12

The stock recently traded at 6 times the next 12-month earnings vs. a P/E of 6 three months ago

Press Release: ID:nBw4Hzbh0a

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)