RingCentral reported strong financial results with record revenue and free cash flow. New products are showing promising growth, and the company is leveraging AI to enhance its offerings. Despite currency headwinds and aggressive pricing strategies impacting the top line, the overall business performance and future outlook remain positive.

Company Guidance

In the fourth quarter of 2024, RingCentral reported total revenue of $615 million, exceeding guidance, with operating margins of 21.3%. For the full year, total revenue rose 9% to $2.4 billion, and operating margins improved from 19.1% in 2023 to 21%, marking the first time the company achieved positive GAAP operating profitability for the year. Free cash flow for Q4 reached a record $112 million, contributing to a total of $403 million for 2024, up 24% from the previous year. Stock-based compensation as a percentage of revenue decreased by over 5 percentage points year-over-year to 14%. The company aims to generate $0.5 billion of levered free cash flow in 2025. New products, including RingCX and RingSense, are gaining traction, with over 700 RingCX and 2,000 RingSense customers, contributing significantly to the company's growth. RingCentral is also focusing on AI innovations, exemplified by the launch of RingCentral AI Receptionist (AIR), which is anticipated to enhance customer interactions and efficiency.

Record Revenue and Free Cash Flow

Q4 total revenue of $615 million and operating margins of 21.3% were both above guidance. Free cash flow hit a quarterly record of $112 million, and for the full year, it rose to $403 million, up 24% versus 2023.

Successful New Product Launches

New products such as RingCX and RingSense are contributing to growth. RingCX now has over 700 customers, and RingSense has over 2,000 customers, with a 65% sequential increase.

Strong AI Product Development

The introduction of RingCentral AI Receptionist (AIR) aims to enhance business efficiencies through AI. This product is integrated into the phone system and acts as a digital employee.

Improved Operating Margins and Stock-Based Compensation

Operating margins improved to 21%, up from 19.1% in 2023. Stock-based compensation as a percentage of revenue declined over 5 percentage points year over year to 14%.

Strong Market Position and Partnerships

RingCentral maintains a 20% market share in UCaaS. Partnerships with major service providers like British Telecom and Vodafone UK are expected to boost product adoption.

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RingCentral (DE:3RCA) Earnings, Revenues Date & History

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DE:3RCA Earnings History

Report Date	Fiscal Quarter	Forecast / EPS	Last Year's EPS	EPS YoY Change	Slides	Play Transcript
May 13, 2025	2025 (Q1)	0.91 / -	0.83	―	―	―
Feb 20, 2025	2024 (Q4)	0.92 / 0.93	0.82	13.95% (+0.11)
Nov 07, 2024	2024 (Q3)	0.88 / 0.91	0.744	21.79% (+0.16)
Aug 01, 2024	2024 (Q2)	0.84 / 0.87	0.791	9.64% (+0.08)
May 07, 2024	2024 (Q1)	0.76 / 0.83	0.725	14.47% (+0.10)
Feb 20, 2024	2023 (Q4)	0.79 / 0.82	0.572	43.33% (+0.25)
Nov 06, 2023	2023 (Q3)	0.72 / 0.74	0.524	41.82% (+0.22)
Aug 07, 2023	2023 (Q2)	0.72 / 0.79	0.429	84.44% (+0.36)
May 09, 2023	2023 (Q1)	0.66 / 0.72	0.372	94.87% (+0.35)
Feb 15, 2023	2022 (Q4)	0.56 / 0.57	0.372	53.85% (+0.20)

The table shows recent earnings report dates and whether the forecast was beat or missed. See the change in forecast and EPS from the previous year.

Beat

Missed

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DE:3RCA Earnings-Related Price Changes

Report Date	Price 1 Day Before	Price 1 Day After	Percentage Change
Feb 20, 2025	€29.37	―	―
Nov 07, 2024	€35.45	€35.37	-0.23%
Aug 01, 2024	€31.55	€31.55	0.00%
May 07, 2024	€28.08	€31.88	+13.53%

Earnings announcements can affect a stock’s price. This table shows the stock's price the day before and the day after recent earnings reports, including the percentage change.

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