RingCentral ( RNG Quick Quote RNG - Free Report) reported first-quarter 2021 non-GAAP earnings of 27 cents per share, which surpassed the Zacks Consensus Estimate by 8% and surged 42.1% year over year. Net revenues of $352 million also beat the consensus mark by 3.7% and jumped 31.7% year over year. The results reflect solid demand for RingCentral’s cloud-communication solutions. Quarter Details
Software-subscription (92.3% of total revenues) revenues surged 33.8% year over year to $325.2 million.
Annualized Exit Monthly Recurring Subscriptions (“ARR”) increased 37% year over year to $1.4 billion.
RingCentral Office ARR (UCaaS + CCaaS) soared 40% year over year to $1.2 billion. Channel ARR soared 53% year over year to $505 million. Direct and Partners Office ARR increased 33% year over year to $817 million.
Other revenues (7.7% of total revenues) climbed 11.2% year over year to $27.1 million, reflecting higher adoption of RingCentral apps in the prevailing work-from-home wave. First-quarter 2021 non-GAAP gross margin expanded 60 basis points (bps) from the year-ago quarter to 77.1%. On a non-GAAP basis, research & development (R&D) expenses increased 43.6% year over year to $48 million. Sales and marketing expenses were up 28.9% to $153.5 million. General and administrative expenses rose 23.7% to $37.6 million in the reported quarter. On a non-GAAP basis, operating income was $32.5 million, up 50.6% year over year. Non-GAAP operating margin expanded 120 bps from the year-ago quarter to 9.2%. Balance Sheet
As of Mar 31, 2021 cash and cash equivalents were $463.1 million compared with $639.9 million as of Dec 31, 2020.
Key Q1 Developments
RingCentral, in collaboration with
Avaya ( AVYA Quick Quote AVYA - Free Report) , announced the global expansion of Avaya Cloud Office by RingCentral in 13 countries. Moreover, with Atos RingCentral launched Unify Video by RingCentral in Europe. Further, with Alcatel-Lucent Enterprise, RingCentral announced the launch of Rainbow Office, in eight European countries – including Austria, Belgium, France, Germany, Ireland, Italy, Spain, and the Netherlands. RingCentral, in partnership with AT&T Business, introduced AT&T Office@Hand Wireless. Guidance
For the second quarter of 2021, RingCentral expects revenues between $356.5 million and $359.5 million, indicating year-over-year growth of 29-30%.
Moreover, software-subscription revenues for the quarter are expected between $332 million and $334 million, indicating year-over-year growth of 29-30%. Non-GAAP operating margin is expected to be in the 9.3% for the second quarter. Earnings are expected between 27 cents to 28 cents per share. For 2021, RingCentral now expects revenues between $1.500 billion to $1.510 billion (up from previous guidance of $1.475-$1.490 billion), indicating year-over-year growth of 27% to 28%. Further, software-subscription revenues for the year are expected between $1.388 billion and $1.396 billion, implying year-over-year growth of 28% to 29%. Non-GAAP operating margin is expected between 10% and 10.1% for full-year 2021. Earnings are expected between $1.24 and $1.27 per share compared with previous guidance of $1.20-$1.24 per share. Zacks Rank & Stocks to Consider
Currently, RingCentral has a Zacks Rank #3 (Hold).
Better-ranked stocks in the broader technology sector include Synaptics ( SYNA Quick Quote SYNA - Free Report) and Agilent Technologies ( A Quick Quote A - Free Report) . Both carry a Zacks Rank #2 (Buy). You can see . the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here Synaptics and Agilent are set to report their earnings results on May 6 and 20, respectively. Infrastructure Stock Boom to Sweep America
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