RNG Adds AI Features to RingCX: Should Investors Buy the Stock?

Core Viewpoint - RingCentral (RNG) has shown resilience in its stock performance, gaining 1.9% over the past six months, contrasting with a 13.4% decline in the Zacks Internet - Software and Services industry, primarily driven by its expanding AI initiatives and the launch of its AI-based contact center solution, RingCX [1] Group 1: AI Initiatives and Product Development - RingCentral has introduced new AI features for its RingCX platform, including real-time AI-powered assistant support and AI-based coaching insights for managers [2] - The Intelligent Virtual Agent (IVA) framework allows customers to integrate their preferred IVA with RingCX, supported by partners like Yellow.ai, Cognigy, and Google DialogFlow [2] - The AI features will be available in the U.S. in the coming months, with international expansion expected by early 2025, which is anticipated to increase demand for RingCX [3] Group 2: Customer Adoption and Growth Metrics - Since its launch in November 2023, RingCX has been adopted by 350 customers, reflecting a more than 70% sequential increase [4] - RingCentral has added 300 features to its platform in the past quarter, with 50% of RingCX customers opting for the paid AI capability [4] - The company aims to achieve at least $100 million in exit Annual Recurring Revenue (ARR) from new products by the end of 2025 and is currently on track to meet this goal [6] Group 3: Financial Performance and Guidance - For Q3 2024, RingCentral expects revenues between$600.5 million and $603.5 million, indicating an 8$572 million and $575 million, also reflecting an 8$1 million total contract value [7] - Partnerships with companies like Cox Communications, Vodafone, and Microsoft enhance RingCentral's market presence and product integration [7][8]