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RNG Q4 Earnings Beat Estimates, Revenues Rise Y/Y, Shares Fall
RNGRingCentral(RNG) ZACKS·2025-02-21 17:15

Core Insights - RingCentral (RNG) reported fourth-quarter 2024 non-GAAP earnings of 98 cents per share, exceeding the Zacks Consensus Estimate by 2.08% and reflecting a 14% year-over-year increase [1] - Total revenues reached 614.5million,surpassingtheconsensusmarkby0.37614.5 million, surpassing the consensus mark by 0.37% and showing a 7.6% year-over-year growth, driven by a robust product portfolio and strong subscription revenues [2] - Despite the positive earnings report, RNG shares fell 2.57% in pre-market trading due to concerns over a subdued first-quarter 2025 outlook [2] Financial Performance - Software subscription revenues, which account for 96% of total revenues, increased 7.7% year over year to 589.7 million, beating the Zacks Consensus Estimate by 0.26% [4] - Other revenues, making up 4% of total revenues, rose 3.9% year over year to 24.8million,exceedingtheZacksConsensusEstimateby2.9524.8 million, exceeding the Zacks Consensus Estimate by 2.95% [4] - Annualized Exit Monthly Recurring Subscriptions (ARR) grew 7% year over year to 2.49 billion, with enterprise ARR also increasing 7% to 1.07billion[4]OperatingMetrics−Non−GAAPgrossmarginforthefourthquartercontractedby110basispointsyearoveryearto77.31.07 billion [4] Operating Metrics - Non-GAAP gross margin for the fourth quarter contracted by 110 basis points year over year to 77.3% [6] - Non-GAAP operating income was 131.2 million, up 12.1% year over year, with the operating margin expanding 90 basis points to 21.3% [7] - Non-GAAP EBITDA margin improved by 70 basis points year over year to 24.9% [7] Cash Flow and Share Repurchase - As of December 31, 2024, cash and cash equivalents were 243million,upfrom243 million, up from 213 million as of September 30, 2024 [8] - Cash flow from operations was 132.9millioninthefourthquarter,comparedto132.9 million in the fourth quarter, compared to 127.2 million in the previous quarter [8] - The company repurchased shares worth 77millioninthefourthquarter,witharemainingrepurchaseauthorizationof77 million in the fourth quarter, with a remaining repurchase authorization of 270 million [9] Guidance - For Q1 2025, RingCentral expects revenues of 607−607-612 million, indicating year-over-year growth of 4-5%, with subscription revenues projected at 587−587-592 million [10] - For the full year 2025, the company anticipates revenue growth of 4-6% and subscription revenue growth of 5-7% [11] - Non-GAAP earnings for 2025 are expected to be between 4.13and4.13 and 4.27 per share, with share-based compensation projected at 300−300-310 million [11]