RingCentral(US:RNG) ZACKS·2025-11-04 19:31Core Insights - RingCentral (RNG) reported third-quarter 2025 non-GAAP earnings of $1.13 per share, exceeding the Zacks Consensus Estimate by 4.63% and reflecting an 18.9% year-over-year increase [1][9] - Total revenues reached $638.7 million, surpassing the consensus mark by 0.29% and showing a 4.9% year-over-year growth, driven by a robust product portfolio and strong subscription revenues [1][9] Quarterly Details - Software subscription revenues, which constitute 96.4% of total revenues, increased by 5.6% year over year to $615.8 million, beating the Zacks Consensus Estimate by 0.04% [2] - Other revenues, accounting for 3.6% of total revenues, decreased by 11.5% year over year to $22.8 million, but exceeded the Zacks Consensus Estimate by 9.79% [2] - Annualized Exit Monthly Recurring Subscriptions (ARR) rose by 6% year over year to $2.63 billion, driven by strong demand for AI-powered multi-product offerings [2] Operating Details - Non-GAAP gross margin expanded by 70 basis points year over year to 77.6% [4] - Non-GAAP research and development expenses decreased by 0.7% year over year to $61.9 million, while sales and marketing expenses increased by 1.1% to $240 million [4] - General and administrative expenses rose by 17% year over year to $47.5 million [4] - Non-GAAP operating income was $145.9 million, up 14.1% year over year, with an operating margin expansion of 180 basis points to 22.8% [5] Balance Sheet & Cash Flow Details - As of September 30, 2025, cash and cash equivalents were $145.3 million, down from $168 million as of June 30, 2025 [6] - Cash flow from operations was $151 million in Q3 2025, compared to $167 million in Q2 2025 [6] - In Q3 2025, RNG repurchased shares worth $117 million, with a remaining repurchase authorization of $384 million [6] - Non-GAAP free cash flow was $129.5 million, down from $144.3 million in the previous quarter, with a non-GAAP cash flow margin of 20.3% [7] Guidance - For Q4 2025, RingCentral expects revenues between $638 million and $646 million, indicating year-over-year growth of 3.9% to 5.2% [10] - Subscription revenues are projected to be between $618 million and $626 million, reflecting year-over-year growth of 4.8% to 6.2% [10] - The non-GAAP operating margin is expected to remain at 22.8% in Q4 2025, with earnings anticipated in the range of $1.12 to $1.15 per share [10] - For the full year 2025, revenue growth is projected at 4.5% to 5%, with subscription revenue growth expected between 5.5% and 6% [11] - Non-GAAP earnings for 2025 are anticipated to be in the range of $4.29 to $4.33 per share [12]