A month has gone by since the last earnings report for RingCentral (RNG Quick QuoteRNG - Free Report) . Shares have added about 7.2% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is RingCentral due for a pullback? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent drivers for Ringcentral, Inc. before we dive into how investors and analysts have reacted as of late.

RNG Q3 Earnings Surpass Estimates, Revenues Increase Y/Y

RingCentral reported third-quarter 2025 non-GAAP earnings of $1.13 per share, surpassing the Zacks Consensus Estimate by 4.63% and increasing 18.9% year over year.

Total revenues of $638.7 million beat the consensus mark by 0.29% and increased 4.9% year over year. A robust product portfolio and strong subscription revenues drove the upside.

RNG’s Quarterly Details

Software subscription revenues (96.4% of total revenues) increased 5.6% year over year to $615.8 million, beating the Zacks Consensus Estimate by 0.04%. 

Other revenues (3.6% of total revenues) decreased 11.5% year over year to $22.8 million, beating the Zacks Consensus Estimate by 9.79%.

Annualized Exit Monthly Recurring Subscriptions (ARR) increased 6% year over year to $2.63 billion, driven by strong demand for AI-powered multi-product offerings.

Enterprise ARR increased 3% year over year to $1.107 billion in the reported quarter.

RingCentral’s Operating Details

Third-quarter 2025 non-GAAP gross margin expanded 70 basis points (bps) from the year-ago quarter to 77.6%.

On a non-GAAP basis, research and development expenses decreased 0.7% year over year to $61.9 million. 

Sales and marketing expenses increased 1.1% year over year to $240 million. General and administrative expenses rose 17% year over year to $47.5 million in the reported quarter.

On a non-GAAP basis, operating income was $145.9 million, up 14.1% year over year. The operating margin expanded 180 bps from the year-ago quarter to 22.8%.

The non-GAAP EBITDA margin was 26.3%, expanding 180 bps year over year.

RNG’s Balance Sheet & Cash Flow Details

As of Sept. 30, 2025 cash and cash equivalents were $145.3 million compared with $168 million as of June 30, 2025.

Cash flow from operations was $151 million in the third quarter of 2025 compared with $167 million in the second quarter of 2025.

In the third quarter of 2025, RNG bought shares worth $117 million. The current remaining repurchase authorization is $384 million.

The non-GAAP free cash flow was $129.5 million compared with $144.3 million in the previous quarter. The non-GAAP cash flow margin was 20.3% in the third quarter.

RNG Initiates Q4 & 2025 Guidance

For the fourth quarter of 2025, RingCentral expects revenues in the range of $638-$646 million, indicating year-over-year growth of 3.9-5.2%.

Subscription revenues are expected to be in the range of $618-$626 million, indicating year-over-year growth of 4.8-6.2%. 

The non-GAAP operating margin is expected to be 22.8% in the fourth quarter of 2025. Earnings are expected to be in the range of $1.12-$1.15 per share.

The share-based compensation is anticipated to be in the range of $64-$69 million in the fourth quarter of 2025.

For 2025, RingCentral projects year-over-year revenue growth of 4.5%-5% on a reported basis. On a year-over-year basis, Subscriptions revenue growth is expected to be between 5.5% and 6%. 

The non-GAAP operating margin is expected to be 22.5%, up 150 basis points year over year.

Non-GAAP earnings for 2025 are expected to be in the range of $4.29-$4.33 per share, and share-based compensation is likely to be between $275 and $280 million.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates.

VGM Scores

Currently, RingCentral has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. However, the stock has a grade of A on the value side, putting it in the top quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions looks promising. Interestingly, RingCentral has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

RingCentral is part of the Zacks Internet - Software and Services industry. Over the past month, VeriSign (VRSN Quick QuoteVRSN - Free Report) , a stock from the same industry, has gained 5.6%. The company reported its results for the quarter ended September 2025 more than a month ago.

VeriSign reported revenues of $419.1 million in the last reported quarter, representing a year-over-year change of +7.3%. EPS of $2.27 for the same period compares with $2.07 a year ago.

VeriSign is expected to post earnings of $2.32 per share for the current quarter, representing a year-over-year change of +16%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for VeriSign. Also, the stock has a VGM Score of B.