Overview

• AI-powered business communications firm's Q4 revenue slightly beat analyst expectations

• Company initiated quarterly cash dividend of $0.075 per share

• Company increased share repurchase authorization to $500 mln

Outlook

• RingCentral expects Q1 2026 revenue between $640 mln and $645 mln

• Company targets full-year 2026 revenue growth of 4% to 5%

• RingCentral aims to reduce gross debt to $1 bln by end of 2026

Result Drivers

• AI PRODUCT DEMAND - ARR from customers using AI products more than doubled, approaching 10% of overall ARR, per CEO Vlad Shmunis

• COST MANAGEMENT - Reduced stock-based compensation expense as a percentage of revenue by 330 basis points YoY

• CASH FLOW GROWTH - Operating cash flow up 28% YoY; free cash flow up 32% YoY

Key Details

Metric	Beat/Miss	Actual	Consensus Estimate
Q4 Revenue	Slight Beat*	$644.03 mln	$643.51 mln (15 Analysts)
Q4 Net Income		$22.97 mln
Q4 Gross Profit		$460.53 mln
Q4 Income from Operations		$42.44 mln
Q4 Pretax Profit		$27.89 mln

*Applies to a deviation of less than 1%; not applicable for per-share numbers.

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 6 "strong buy" or "buy", 11 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the software peer group is "buy."

• Wall Street's median 12-month price target for RingCentral Inc is $32.00, about 8.3% above its February 18 closing price of $29.56

• The stock recently traded at 6 times the next 12-month earnings vs. a P/E of 6 three months ago

Press Release: ID:nBw96nVJDa

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