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RingCentral reported Q4 non-GAAP EPS of $1.18, up 20.4% Y/Y, on $644M in revenue.
RNG subscription revenue rose 5.5% to $622.2M, while ARR grew 7% to $2.67B.
RingCentral guided 2026 revenue growth of 4%-5% and operating margin of 23%-23.5%.
RingCentral (RNG - Free Report) reported fourth-quarter 2025 non-GAAP earnings of $1.18 per share, surpassing the Zacks Consensus Estimate by 3.69% and increasing 20.4% year over year.
Total revenues of $644 million beat the consensus mark by 0.27% and increased 4.8% year over year. A robust product portfolio and strong subscription revenues drove the upside.
RNG’s Quarterly Details
Software subscription revenues (96.6% of total revenues) increased 5.5% year over year to $622.2 million, beating the Zacks Consensus Estimate by 0.06%.
Other revenues (3.4% of total revenues) decreased 12.2% year over year to $21.8 million, beating the Zacks Consensus Estimate by 6.71%.
Ringcentral, Inc. Price, Consensus and EPS Surprise
Annualized Exit Monthly Recurring Subscriptions (ARR) increased 7% year over year to $2.67 billion, driven by strong demand for AI-powered multi-product offerings.
Enterprise ARR increased 5% year over year to $1.12 billion in the reported quarter.
RingCentral’s Operating Details
Fourth-quarter 2025 non-GAAP gross margin was in line with the year-ago quarter at 77.3%.
On a non-GAAP basis, research and development expenses increased 1.1% year over year to $62.8 million.
Sales and marketing expenses increased 1.5% year over year to $244.3 million. General and administrative expenses rose 6.7% year over year to $44.2 million in the reported quarter.
On a non-GAAP basis, operating income was $146.7 million, up 11.8% year over year. The operating margin expanded 140 bps from the year-ago quarter to 22.8%.
The non-GAAP EBITDA margin was 26.2%, expanding 130 bps year over year.
RNG’s Balance Sheet & Cash Flow Details
As of Dec. 31, 2025, cash and cash equivalents were $132.5 million compared with $145.3 million as of Sept. 30, 2025.
Cash flow from operations was $149 million in the fourth quarter of 2025 compared with $151 million in the third quarter of 2025.
In the fourth quarter of 2025, RNG bought shares worth $135 million. In the same quarter, the board approved a $250 million increase in the share repurchase plan, bringing the total authorization to $500 million.
The non-GAAP free cash flow was $126.1 million compared with $129.5 million in the previous quarter. The non-GAAP cash flow margin was 19.6% in the fourth quarter.
RNG Initiates Q1 & 2026 Guidance
For the first quarter of 2026, RingCentral expects revenues in the range of $640-$645 million, indicating year-over-year growth of 4.6-5.4%.
Subscription revenues are expected to be in the range of $620-$625 million, indicating year-over-year growth of 5.1-5.9%.
The non-GAAP operating margin is expected to be in the range of 22.8% to 22.9% in the first quarter of fiscal 2026. Earnings are expected to be in the range of $1.16-$1.19 per share.
For 2026, RingCentral projects year-over-year revenue growth of 4%-5% on a reported basis. On a year-over-year basis, subscription revenue growth is expected to be between 4.5% and 5.5%.
The non-GAAP operating margin is expected to be between 23% and 23.5%.
Non-GAAP earnings for 2025 are expected to be in the range of $4.76-$4.97 per share.
Zacks Rank & Stocks to Consider
RingCentral currently carries a Zacks Rank #4 (Sell).
View the Zacks #1 Rank List
Image: Bigstock
RingCentral Q4 Earnings Surpass Estimates, Revenues Increase Y/Y
Key Takeaways
RingCentral (RNG - Free Report) reported fourth-quarter 2025 non-GAAP earnings of $1.18 per share, surpassing the Zacks Consensus Estimate by 3.69% and increasing 20.4% year over year.
Total revenues of $644 million beat the consensus mark by 0.27% and increased 4.8% year over year. A robust product portfolio and strong subscription revenues drove the upside.
RNG’s Quarterly Details
Software subscription revenues (96.6% of total revenues) increased 5.5% year over year to $622.2 million, beating the Zacks Consensus Estimate by 0.06%.
Other revenues (3.4% of total revenues) decreased 12.2% year over year to $21.8 million, beating the Zacks Consensus Estimate by 6.71%.
Ringcentral, Inc. Price, Consensus and EPS Surprise
Ringcentral, Inc. price-consensus-eps-surprise-chart | Ringcentral, Inc. Quote
Annualized Exit Monthly Recurring Subscriptions (ARR) increased 7% year over year to $2.67 billion, driven by strong demand for AI-powered multi-product offerings.
Enterprise ARR increased 5% year over year to $1.12 billion in the reported quarter.
RingCentral’s Operating Details
Fourth-quarter 2025 non-GAAP gross margin was in line with the year-ago quarter at 77.3%.
On a non-GAAP basis, research and development expenses increased 1.1% year over year to $62.8 million.
Sales and marketing expenses increased 1.5% year over year to $244.3 million. General and administrative expenses rose 6.7% year over year to $44.2 million in the reported quarter.
On a non-GAAP basis, operating income was $146.7 million, up 11.8% year over year. The operating margin expanded 140 bps from the year-ago quarter to 22.8%.
The non-GAAP EBITDA margin was 26.2%, expanding 130 bps year over year.
RNG’s Balance Sheet & Cash Flow Details
As of Dec. 31, 2025, cash and cash equivalents were $132.5 million compared with $145.3 million as of Sept. 30, 2025.
Cash flow from operations was $149 million in the fourth quarter of 2025 compared with $151 million in the third quarter of 2025.
In the fourth quarter of 2025, RNG bought shares worth $135 million. In the same quarter, the board approved a $250 million increase in the share repurchase plan, bringing the total authorization to $500 million.
The non-GAAP free cash flow was $126.1 million compared with $129.5 million in the previous quarter. The non-GAAP cash flow margin was 19.6% in the fourth quarter.
RNG Initiates Q1 & 2026 Guidance
For the first quarter of 2026, RingCentral expects revenues in the range of $640-$645 million, indicating year-over-year growth of 4.6-5.4%.
Subscription revenues are expected to be in the range of $620-$625 million, indicating year-over-year growth of 5.1-5.9%.
The non-GAAP operating margin is expected to be in the range of 22.8% to 22.9% in the first quarter of fiscal 2026. Earnings are expected to be in the range of $1.16-$1.19 per share.
For 2026, RingCentral projects year-over-year revenue growth of 4%-5% on a reported basis. On a year-over-year basis, subscription revenue growth is expected to be between 4.5% and 5.5%.
The non-GAAP operating margin is expected to be between 23% and 23.5%.
Non-GAAP earnings for 2025 are expected to be in the range of $4.76-$4.97 per share.
Zacks Rank & Stocks to Consider
RingCentral currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader Zacks Computer and Technology sector are Micron Technology (MU - Free Report) , Credo Technology (CRDO - Free Report) , and MongoDB (MDB - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Micron Technology shares have gained 308% in the past 12-month period. This company is scheduled to release second-quarter 2026 results on March 19.
Credo Technology Group shares have gained 79.4% in the past 12-month period. CRDO is set to report its third-quarter fiscal 2026 results on March 2.
MongoDB shares have returned 25.2% in the past 12-month period. MDB is scheduled to release its fourth-quarter 2026 results on March 2.