Shares of RingCentral (NYSE: RNG), the provider of AI-powered global enterprise cloud communications, slumped in pre-market trading at the time of writing on Tuesday after the company announced that its founder and CEO, Vlad Shmunis will step down as its CEO later this month and will transition to executive Chairman.
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Shmunis commented, “My plan is to stay engaged in the company, while dedicating most of my time to innovation, product development, and long-term strategy.” The company named Tarek Robbiati as the new CEO.
Among other management changes, the company also announced that President and COO Mo Katibeh is stepping down but will continue to remain with the company as a “special advisor.”
RingCentral also announced its Q2 results with adjusted earnings of $0.83 per share as compared to $0.45 per share in the same period last year and above Street estimates of $0.75 per share. The company’s revenues grew 11% year-over-year to $539 million in Q2, beating consensus estimates of $536.19 million.
Sonalee Parekh, RingCentral’s CFO commented, “Our focus on profitability and efficiency has allowed us to meaningfully accelerate the attainment of our near term free cash flow goal. We expect to generate $270 to $290 million of adjusted, unlevered free cash flow in 2023, much earlier than previously anticipated.”
In FY23, the company has forecasted total revenue in the range of $2.187 billion to $2.205 billion while adjusted earnings are likely to be between $3.11 and $3.25 per share. In Q3, RNG anticipates revenues to be in the range of $552 million to $556 million while adjusted earnings are projected to be between $0.75 and $0.78 per share.
Analysts are cautiously optimistic about RNG stock with a Moderate Buy consensus rating based on 14 Buys and seven Holds.
