RingCentral (NYSE:RNG) Issues Earnings Results, Beats Estimates By $0.03 EPS

Key Points

• RingCentral beat Wall Street expectations in its latest quarter, posting EPS of $1.20 versus the $1.17 consensus and revenue of $644.2 million, slightly above estimates. Revenue also rose 5.3% year over year.
• Management raised guidance for FY 2026 and Q2 2026, signaling confidence in continued execution. The company also highlighted about $600 million in expected free cash flow.
• AI adoption is becoming a key growth driver, with customers using RingCentral’s AI products more than doubling year over year and AI-related ARR rising sharply. The company said this is helping lift ARPU and keep net retention above 100%.

RingCentral (NYSE:RNG - Get Free Report) issued its earnings results on Thursday. The software maker reported $1.20 earnings per share for the quarter, beating analysts' consensus estimates of $1.17 by $0.03, FiscalAI reports. RingCentral had a negative return on equity of 34.90% and a net margin of 3.31%.The firm had revenue of $644.20 million for the quarter, compared to analysts' expectations of $642.73 million. During the same quarter last year, the firm earned $1.00 earnings per share. The firm's revenue for the quarter was up 5.3% compared to the same quarter last year. RingCentral updated its FY 2026 guidance to 4.850-5.010 EPS and its Q2 2026 guidance to 1.150-1.170 EPS.

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

• Raised guidance and strong cash generation: Q1 revenue came in at the high end ($644M, +5.3% YoY), management raised full‑year revenue and margin guidance and now expects ~$600 million of free cash flow while repurchasing shares and paying the first quarterly dividend.
• Robust early AI adoption: RCAI adoption is accelerating — AI‑using customers doubled YoY to >10% of the base, ARR from those customers more than doubled YoY, with AIR >11,800 paid customers (40% QoQ) and ACE >5,200 customers (85% YoY), driving higher ARPU and net retention >100%.
• Improving profitability and equity discipline: Stock‑based compensation fell to ~9% of revenue and management targets 3–4% medium‑term; non‑GAAP operating margin expanded to ~23% and GAAP operating margin guidance was raised toward ~9% for 2026 with a 3–4 year goal of 20% GAAP operating margin.
• Top‑line growth remains moderate: Revenue growth is stabilized around ~5% YoY and management acknowledged pricing rationalization, COVID lapping effects and that AI/GSP contributions are still early, so sustained acceleration in topline growth is not yet assured.

RingCentral Trading Up 0.7%

NYSE:RNG traded up $0.34 during mid-day trading on Friday, hitting $45.73. The company had a trading volume of 4,777,079 shares, compared to its average volume of 1,711,542. The business has a fifty day simple moving average of $38.76 and a 200-day simple moving average of $32.17. RingCentral has a 1 year low of $23.59 and a 1 year high of $48.57. The firm has a market capitalization of $3.96 billion, a price-to-earnings ratio of 48.64, a PEG ratio of 1.75 and a beta of 1.13.

RingCentral Announces Dividend

The business also recently disclosed a quarterly dividend, which will be paid on Thursday, June 11th. Shareholders of record on Tuesday, June 2nd will be given a $0.075 dividend. The ex-dividend date of this dividend is Tuesday, June 2nd. This represents a $0.30 annualized dividend and a yield of 0.7%. RingCentral's dividend payout ratio (DPR) is 62.50%.

Insiders Place Their Bets

In other news, CEO Vladimir Shmunis sold 95,831 shares of the firm's stock in a transaction dated Tuesday, February 24th. The stock was sold at an average price of $35.59, for a total transaction of $3,410,625.29. Following the completion of the sale, the chief executive officer directly owned 126,685 shares in the company, valued at $4,508,719.15. This trade represents a 43.07% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available at this hyperlink. Also, CFO Vaibhav Agarwal sold 18,680 shares of the stock in a transaction dated Monday, March 2nd. The stock was sold at an average price of $36.33, for a total transaction of $678,644.40. Following the transaction, the chief financial officer directly owned 139,493 shares in the company, valued at $5,067,780.69. The trade was a 11.81% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Insiders have sold 259,854 shares of company stock valued at $9,312,708 over the last ninety days. Insiders own 7.30% of the company's stock.

Hedge Funds Weigh In On RingCentral

Large investors have recently modified their holdings of the stock. Harvest Fund Management Co. Ltd bought a new position in shares of RingCentral during the third quarter worth about $30,000. Global Retirement Partners LLC lifted its position in shares of RingCentral by 70.9% during the fourth quarter. Global Retirement Partners LLC now owns 1,540 shares of the software maker's stock worth $44,000 after purchasing an additional 639 shares during the last quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. lifted its position in shares of RingCentral by 103.0% during the second quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. now owns 1,823 shares of the software maker's stock worth $52,000 after purchasing an additional 925 shares during the last quarter. Atlas Capital Advisors Inc. bought a new position in shares of RingCentral during the fourth quarter worth about $55,000. Finally, Parallel Advisors LLC lifted its position in shares of RingCentral by 43.8% during the fourth quarter. Parallel Advisors LLC now owns 2,230 shares of the software maker's stock worth $64,000 after purchasing an additional 679 shares during the last quarter. Institutional investors own 98.61% of the company's stock.

Analyst Ratings Changes

RNG has been the topic of a number of research analyst reports. Morgan Stanley lifted their target price on RingCentral from $30.00 to $33.00 and gave the company an "equal weight" rating in a report on Friday, February 20th. Wells Fargo & Company raised their price objective on RingCentral from $32.00 to $43.00 and gave the company an "equal weight" rating in a research report on Friday. Needham & Company LLC raised their price objective on RingCentral from $36.00 to $55.00 and gave the company a "buy" rating in a research report on Friday, March 13th. UBS Group set a $38.00 price objective on RingCentral in a research report on Friday, February 20th. Finally, Robert W. Baird set a $45.00 price objective on RingCentral in a research report on Friday. Three analysts have rated the stock with a Buy rating and ten have issued a Hold rating to the company. According to MarketBeat.com, RingCentral has an average rating of "Hold" and a consensus target price of $42.30.

Key Headlines Impacting RingCentral

Here are the key news stories impacting RingCentral this week:

• Positive Sentiment: RingCentral reported Q1 earnings of $1.20 per share, above estimates, with revenue of about $644 million also slightly ahead of expectations. Management said subscription revenue rose about 6% year over year, helped by AI product adoption and expanding margins. RingCentral Announces First Quarter 2026 Financial Results
• Positive Sentiment: The company lifted its full-year 2026 guidance, with EPS now expected above prior consensus and Q2 guidance also coming in above estimates. That stronger outlook suggests improving profitability and execution. RingCentral Q1 Earnings Surpass Estimates, Revenues Increase Y/Y
• Positive Sentiment: Analysts turned more constructive after the report, with Rosenblatt raising its price target to $50 and Wells Fargo lifting its target to $43, reflecting improved expectations around the business. Analyst price target updates
• Positive Sentiment: RingCentral also highlighted new AI-focused product momentum, including “Always-On AI” and recognition as a top provider for AI-powered CCaaS and workforce engagement management, which may support the long-term growth narrative. RingCentral Brings Always-On AI to the Front Lines of Customer Engagement
• Neutral Sentiment: The company announced a quarterly dividend of $0.075 per share, but the yield is modest and the payout is unlikely to be a major driver of the stock. RingCentral stock information

About RingCentral

RingCentral, Inc is a leading provider of cloud-based business communications and collaboration solutions. The company’s flagship platform delivers unified communications as a service (UCaaS), integrating voice over IP (VoIP) phone systems, video conferencing, team messaging and SMS into a single, cloud-native application. In addition to its UCaaS offering, RingCentral provides contact center as a service (CCaaS) capabilities, enabling organizations to manage customer interactions across voice, email, chat and social channels from a centralized dashboard.

Founded in 1999 and headquartered in Belmont, California, RingCentral went public on the New York Stock Exchange under the ticker RNG in 2013.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.