Revenue Performance - Total revenue for Q4 2024 was $615 million, an 8% increase from $571 million in Q4 2023[3] - Subscriptions revenue for Q4 2024 was $590 million, accounting for 96% of total revenue, also an 8% year-over-year growth[3] - Total revenues for Q4 2024 reached $614.5 million, a 7.6% increase from $571.3 million in Q4 2023[34] - Subscription revenues amounted to $589.7 million in Q4 2024, up from $547.4 million in Q4 2023, reflecting a growth of 7.7%[34] - For the year ended December 31, 2024, the company reported total revenues of $2,400,395,000, up 9.0% from $2,202,429,000 in 2023, driven primarily by subscription revenue growth[39] - Subscription revenues for the year ended December 31, 2024, reached $2,297,192,000, an increase of 9.4% compared to $2,100,329,000 in 2023[39] Profitability and Income - GAAP operating income for 2024 was $3 million, a significant improvement from a loss of $199 million in 2023[9] - The company reported a net loss of $7.2 million for Q4 2024, significantly improved from a net loss of $47.2 million in Q4 2023[34] - For the year ended December 31, 2024, the company reported a net loss of $58,288,000, a significant improvement from a net loss of $165,240,000 in 2023, representing a reduction of approximately 64.7%[37] - The company achieved a non-GAAP operating margin of 21.0% for the year ended December 31, 2024, compared to 19.1% in 2023, indicating improved operational efficiency[40] - Non-GAAP net income for the year ended December 31, 2024, was $349,886,000, up from $312,296,000 in 2023, reflecting a growth of approximately 12.0%[42] Cash Flow and Financial Health - Net cash provided by operating activities for 2024 reached a record $483 million, or 20.1% of total revenue[9] - Net cash provided by operating activities for Q4 2024 was $132.882 million, up from $113.844 million in Q4 2023, representing a 16.5% increase[44] - The company reported net cash provided by operating activities of $483,276,000 for the year ended December 31, 2024, compared to $399,662,000 in 2023, marking an increase of 20.9%[37] - Free cash flow for 2024 was $403 million, reflecting a 72% compound annual growth rate since 2021[9] - Non-GAAP free cash flow for Q4 2024 reached $111.829 million, compared to $93.860 million in Q4 2023, reflecting a 19.2% growth[44] - Non-GAAP free cash flow for FY 2025 is expected to be between $500 million and $510 million[45] Assets and Liabilities - Total assets decreased to $1.78 billion as of December 31, 2024, down from $1.94 billion a year earlier[33] - Total liabilities decreased to $2.13 billion as of December 31, 2024, compared to $2.25 billion as of December 31, 2023[33] - The company’s cash and cash equivalents increased to $242.8 million as of December 31, 2024, from $222.2 million a year earlier[33] - The company ended the year with cash, cash equivalents, and restricted cash totaling $242,811,000, an increase from $222,195,000 at the end of 2023[37] Research and Development - Research and development expenses for the year ended December 31, 2024, were $329.3 million, slightly down from $335.9 million in 2023[34] - The company plans to continue investing in research and development to enhance its product offerings and expand market presence[39] Future Projections - The company expects subscriptions revenue growth of 5% to 7% year-over-year for 2025[13] - For FY 2025, GAAP income from operations is forecasted to be between $112 million and $133 million, with a GAAP operating margin ranging from 4.5% to 5.2%[45] - Non-GAAP income from operations for FY 2025 is projected to be between $562 million and $573 million, with a non-GAAP operating margin of 22.5%[45] - Capitalized expenditures for FY 2025 are estimated at $85 million[45] - Share-based compensation for FY 2025 is anticipated to be between $300 million and $310 million[45] Management Changes - Kira Makagon has been promoted to President and Chief Operating Officer, responsible for product and technology[6] Key Metrics - Annualized Exit Monthly Recurring Subscriptions (ARR) increased 7% year-over-year to $2.489 billion[10] - The company’s net monthly subscription dollar retention rate is a critical metric for assessing customer retention and revenue growth[30] - Non-GAAP adjusted EBITDA for the year ended December 31, 2024, was $590,409,000, representing a 17.3% increase from $503,108,000 in 2023[40] - Non-GAAP free cash flow margin improved to 18.2% in Q4 2024, up from 16.4% in Q4 2023[44]

Core Insights - RingCentral (RNG) is set to report its fourth-quarter 2024 results on February 20, with expected earnings between 96-97 cents per share, reflecting an 11.63% year-over-year increase [1] - The company anticipates revenues in the range of $611 million to $613 million, indicating a year-over-year growth of 7% [2] Financial Performance Expectations - The Zacks Consensus Estimate for fourth-quarter 2024 earnings is 96 cents per share, unchanged over the past 30 days [1] - The Zacks Consensus Estimate for revenues is $612.24 million, suggesting a 7.17% increase from the previous year's quarter [2] Revenue and Subscription Growth - Subscription revenues for the fourth quarter are expected to be between $587 million and $589 million, indicating a year-over-year growth of 7% to 8% [4] - The company has consistently beaten the Zacks Consensus Estimate for earnings in the last four quarters, with an average surprise of 4.76% [2] Product and Service Innovations - RingCentral's AI-powered platforms, including RingCX and RingSense, are expected to drive revenue and Annual Recurring Revenue (ARR) growth in the upcoming quarter [5] - The introduction of the RingCentral AI Assistant is anticipated to enhance productivity through AI-driven insights [6] Market Demand and Targeted Industries - The company is focusing on industries such as healthcare, retail, and finance, which are showing strong demand for unified communication solutions [7] - The ongoing shift towards remote and hybrid work environments is expected to boost customer acquisition and retention [7] Partnerships and Strategic Alliances - Partnerships with global service providers like Vodafone and AT&T are expected to expand RingCentral's global footprint and drive growth [9][11] - An expanded partnership with Vodafone Business is set to offer enhanced services across 30 markets by early 2025 [10] Challenges and Competitive Landscape - The company faces challenges from macroeconomic conditions, unfavorable foreign exchange rates, and stiff competition, which may impact its top line [8]

Core Viewpoint - RingCentral is expected to report quarterly earnings of $0.96 per share, an 11.6% increase year-over-year, with revenues projected at $612.24 million, reflecting a 7.2% year-over-year growth [1] Group 1: Earnings and Revenue Estimates - Analysts predict that RingCentral's 'Revenues- Subscriptions' will reach $588.18 million, indicating a 7.5% increase from the prior-year quarter [4] - The 'Revenues- Other' is estimated to be $24.12 million, showing a 0.9% increase from the year-ago quarter [4] - The consensus EPS estimate has remained unchanged over the last 30 days, indicating stability in analysts' projections [1] Group 2: Annualized Metrics - The 'Annualized Exit Monthly Recurring Subscriptions (ARR)' is projected to be $2.54 billion, up from $2.33 billion reported in the same quarter last year [5] Group 3: Market Performance - Over the past month, RingCentral shares have recorded a return of -0.2%, while the Zacks S&P 500 composite has increased by 4.7% [6] - RingCentral holds a Zacks Rank 3 (Hold), suggesting that its performance is expected to align with the overall market in the near term [6]

Core Insights - The article emphasizes a long-term investment strategy focused on quality investing, particularly in the technology sector [1]. Group 1 - The author identifies as an Industrial Engineer PhD candidate with a strong interest in quality investing [1]. - The investment approach is characterized by a buy-and-hold strategy, primarily targeting tech stocks [1].

Performance and Market Position - RingCentral's shares have appreciated 20.2% in the past six months, outperforming the Zacks Computer & Technology sector's return of 2.9% and the Zacks Internet - Software and Services industry's growth of 6.2% [1] - The company has outperformed peers like Sabre (14.6% gain), NetEase (-2.2% loss), and Okta (-11.3% loss) during the same period [1] Growth Drivers - RingCentral's outperformance is driven by expanding AI initiatives, strong demand for its cloud phone system, a growing customer base, and a solid network of partners [2] - The company leverages AI to enhance product offerings such as RingCX, RingSense, and RingCentral Events, improving customer experience and streamlining business communications [3] - Strong demand for Unified Communications as a Service (UCaaS) and contact center Software-as-a-Service solutions continues to benefit the company [3] Financial Targets and Estimates - RingCentral aims to reach at least $100 million in exit annual recurring revenue from new products by the end of 2025 [4] - The Zacks Consensus Estimate for first-quarter fiscal 2025 earnings is $1 per share, indicating a 14.94% year-over-year growth [10] - First-quarter fiscal 2025 revenue estimates are $625.21 million, suggesting a 7.02% year-over-year increase [11] - Fiscal 2025 earnings are estimated at $4.19 per share, reflecting a 13.61% increase from fiscal 2024 [11] - Fiscal 2025 revenue is projected at $2.57 billion, indicating a 7.32% year-over-year growth [11] Partnerships and Global Expansion - RingCentral's partnerships with industry leaders like Verizon and AT&T enhance service accessibility and distribution [5] - The company has expanded its global presence, offering its AI-powered contact center, RingCX, in six countries: the United States, Canada, the U.K., France, Germany, and Australia [7][8] - RingCentral recently received a PAN-India license, allowing it to operate across all 22 telecommunications circles in India, making it the first cloud provider to offer fully compliant UCaaS and CCaaS solutions nationwide [9] Customer and Product Growth - RingCentral Events gained over 100 customers in Q3 2024, including Fortune 500 company Trimble [6] - Key customers such as Block, DHL, eBay, NYU, Rutgers, and TELUS renewed their relationships with RingCentral [6] - The company partnered with Verint to enhance RingCX, strengthening its presence in the Contact Center as a Service (CCaaS) market [7] Earnings Performance - RingCentral's earnings have beaten the Zacks Consensus Estimate in the trailing four quarters, with an average surprise of 4.76% [12]

Group 1 - RingCentral (NYSE: RNG) is expected to outperform in 2025, with the stock recently correcting about 17% down to $35 after reaching a 52-week high of $42 [1] - The stock is considered attractive as it is undervalued, with strong expected above-average revenue growth [1] - The focus is on growth and momentum stocks that are reasonably priced and likely to outperform the market over the long term [1] Group 2 - The article emphasizes the importance of investing in high-quality growth stocks, as demonstrated by past performance where the S&P 500 increased 367% and the Nasdaq increased 685% from 2009 through 2019 [1]

For RingCentral, Inc. (NYSE: RNG ) stock thus far, it has been a forgettable year, as it comfortably lags broader-market gains. The stock has dropped 5% in value over the past six months, while the S&P 500 is up a healthy 12%. On the operational end, though, the unifiedMuslim Farooque is a leading financial journalist and market analyst with over five years of expertise in covering the stock and cryptocurrency markets. His work has been widely featured on platforms such as Seeking Alpha, InvestorPlace, Guru ...

Tired of losing money? Our Tech Contrarians team of Wall Street analysts sifts through the noise in the tech industry and captures outperformers through a coveted research process. We let the work speak for itself here .We’re picking up our coverage of RingCentral, Inc. (NYSE: RNG ); the last article we wrote on RingCentral dates back to December 2022. We now update our thoughts on the stock and seek toAnalyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies me ...

Financial Data and Key Metrics Changes - Subscription revenue for Q3 2024 was $583 million, up 10% year-over-year, exceeding guidance [35] - ARR reached $2.48 billion, a 9% increase year-over-year, with enterprise ARR rising 11% and mid-market and small business up 8% [35] - Free cash flow was $105 million, up 51% year-over-year, with a free cash flow margin of 17.3%, an increase of 480 basis points [38][39] - Operating margin increased approximately 2 points year-over-year to 21%, driven by spending discipline and efficiency [37] Business Line Data and Key Metrics Changes - RingCX, the new CCaaS product, saw strong traction with over 500 customers, a 45% sequential increase, and significant ARPU expansion [22][24] - RingSense, the conversation intelligence platform, now has over 1,200 customers, also up 45% sequentially [25] - RingCentral Events added over 100 new customers during the quarter, including notable Fortune 500 companies [26] Market Data and Key Metrics Changes - The company has been recognized by Gartner as a Leader in the 2024 Magic Quadrant for UCaaS for the tenth consecutive year, highlighting its competitive advantage in voice services [13] - The integration with Microsoft Teams continues to drive enterprise growth, with many larger customers choosing RingCentral as an add-on to Teams [77] Company Strategy and Development Direction - The company aims to solidify its UCaaS leadership by infusing AI across its portfolio and expanding its total addressable market (TAM) through new AI-powered products [10] - A strategic partnership with Verint was announced to enhance RingCX's capabilities, targeting a wide range of use cases from SMBs to large enterprises [23][66] - The focus on reducing stock-based compensation and returning capital to shareholders through buybacks is part of the company's strategy to improve financial health [39][44] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth potential of AI products, indicating that AI will be a significant growth driver and ARPU solidifier [56][60] - The company is optimistic about the performance of RingCX and expects it to capture a meaningful share of the CCaaS market [24][51] - The outlook for Q4 2024 includes subscription revenue growth of 7% to 8% and total revenue growth of 7% [47] Other Important Information - The company has secured a $275 million delayed draw commitment to its Term Loan A, bringing total commitments to $350 million [42] - The liquidity position as of Q3 stands at $788 million, which includes cash on hand and undrawn commitments [43] Q&A Session Summary Question: Insights on AI strategy and its impact on growth - Management highlighted that AI is transformative and is already being monetized, with products like RingSense contributing positively to ARPU [56][60] Question: Trends in CCaaS for SMB vs. enterprise - RingCX is performing well in both segments, with strong growth in SMB and enterprise accounts, indicating its versatility [62][64] Question: Gross margin outlook - The gross margin is still strong at 81%, with slight headwinds due to investments in new products like RingCX [68] Question: Performance of Microsoft Teams opportunities - The integration with Teams is beneficial for larger customers, and the company expects to enhance RingCX's compatibility with Teams in the future [78] Question: Drivers of ARPU expansion - ARPU is being driven by cross-selling new products like RingCX and AI-based solutions, with a focus on delivering high value for the price [80][84]

Core Insights - RingCentral reported revenue of $608.77 million for Q3 2024, a year-over-year increase of 9.1% and a surprise of +1.14% over the Zacks Consensus Estimate of $601.91 million [1] - The company achieved an EPS of $0.95, compared to $0.78 a year ago, with an EPS surprise of +3.26% over the consensus estimate of $0.92 [1] Financial Performance Metrics - Mid-Market and Enterprise ARR was reported at $1.07 billion, below the average estimate of $1.55 billion from two analysts [3] - Annualized Exit Monthly Recurring Subscriptions (ARR) reached $2.48 billion, slightly above the average estimate of $2.47 billion from two analysts [3] - Subscription revenues totaled $582.97 million, exceeding the average estimate of $573.77 million from seven analysts, reflecting a year-over-year change of +9.8% [3] - Other revenues were reported at $25.80 million, below the average estimate of $28.01 million from seven analysts, indicating a year-over-year decline of -4.9% [3] Stock Performance - Over the past month, RingCentral shares have returned +23.3%, significantly outperforming the Zacks S&P 500 composite's +3.2% change [4] - The stock currently holds a Zacks Rank 4 (Sell), suggesting potential underperformance relative to the broader market in the near term [4]