Core Viewpoint - RingCentral, Inc. is scheduled to present at the Morgan Stanley Technology, Media & Telecom Conference on March 3, 2026, highlighting its position as a leader in AI-powered business communications [1] Group 1 - The presentation will take place at 10:45 a.m. PT / 1:45 p.m. ET [1] - A live webcast and replay of the presentation will be available on the company's investor relations website [1]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ______________________________________________________________________ FORM 10-K ______________________________________________________________________ (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2025 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For transition period from to Commission File Number: ...

Core Insights - RingCentral's shares have increased by 21% since the last earnings report, outperforming a relatively stable S&P 500 index [1] Company Overview - RingCentral is a leading provider of cloud-based communication and collaboration solutions [1] - The company has shown strong performance in the market, indicating positive investor sentiment and confidence in its growth trajectory [1] Performance Metrics - The significant share price increase of 21% suggests robust market confidence and potential for continued growth [1] - The performance of RingCentral is contrasted with the S&P 500, which has remained little changed during the same period, highlighting the company's relative strength [1]

Group 1 - A significant shift is occurring in the tech sector in 2026, with momentum stocks that previously drove software sector gains since COVID losing substantial value [1] - Investors are starting to re-rate many previously overlooked technology companies, indicating a potential change in market sentiment [1] - Gary Alexander, with extensive experience in both Wall Street and Silicon Valley, is actively contributing insights on the evolving themes in the tech industry [1]

So far in 2026, an incredible shift is occurring in the tech sector. Momentum stocks that drove much of the software sector's gains since COVID have lost a dizzying amount of value. But at the same time, investors are beginning to re-rate many forgottenWith combined experience of covering technology companies on Wall Street and working in Silicon Valley, and serving as an outside adviser to several seed-round startups, Gary Alexander has exposure to many of the themes shaping the industry today. He has been ...

Core Insights - RingCentral (RNG) reported fourth-quarter 2025 non-GAAP earnings of $1.18 per share, exceeding the Zacks Consensus Estimate by 3.69% and reflecting a year-over-year increase of 20.4% [1] - Total revenues reached $644 million, surpassing the consensus mark by 0.27% and showing a year-over-year growth of 4.8%, driven by a robust product portfolio and strong subscription revenues [1] Quarterly Details - Software subscription revenues, which constitute 96.6% of total revenues, increased by 5.5% year over year to $622.2 million, beating the Zacks Consensus Estimate by 0.06% [2] - Other revenues, accounting for 3.4% of total revenues, decreased by 12.2% year over year to $21.8 million, but exceeded the Zacks Consensus Estimate by 6.71% [2] - Annualized Exit Monthly Recurring Subscriptions (ARR) grew by 7% year over year to $2.67 billion, driven by strong demand for AI-powered multi-product offerings [2][3] Operating Details - The non-GAAP gross margin for the fourth quarter of 2025 was 77.3%, consistent with the previous year [4] - Non-GAAP research and development expenses rose by 1.1% year over year to $62.8 million, while sales and marketing expenses increased by 1.5% to $244.3 million [4] - General and administrative expenses increased by 6.7% year over year to $44.2 million [4] - Non-GAAP operating income was $146.7 million, reflecting an 11.8% year-over-year increase, with the operating margin expanding by 140 basis points to 22.8% [5] - The non-GAAP EBITDA margin was 26.2%, an increase of 130 basis points year over year [5] Balance Sheet & Cash Flow Details - As of December 31, 2025, cash and cash equivalents totaled $132.5 million, down from $145.3 million as of September 30, 2025 [6] - Cash flow from operations was $149 million in the fourth quarter, slightly down from $151 million in the third quarter [6] - In Q4 2025, RingCentral repurchased shares worth $135 million and approved a $250 million increase in its share repurchase plan, bringing the total authorization to $500 million [6] - The non-GAAP free cash flow was $126.1 million, compared to $129.5 million in the previous quarter, with a non-GAAP cash flow margin of 19.6% [7] Guidance - For Q1 2026, RingCentral expects revenues in the range of $640-$645 million, indicating year-over-year growth of 4.6-5.4% [10] - Subscription revenues are projected to be between $620-$625 million, reflecting a year-over-year growth of 5.1-5.9% [10] - The non-GAAP operating margin is anticipated to be between 22.8% and 22.9% in Q1 2026, with earnings expected in the range of $1.16-$1.19 per share [10] - For the full year 2026, RingCentral projects revenue growth of 4%-5% and subscription revenue growth of 4.5%-5.5% [11] - The non-GAAP operating margin for 2026 is expected to be between 23% and 23.5%, with non-GAAP earnings projected to be in the range of $4.76-$4.97 per share [11]

Core Viewpoint - RingCentral, Inc. (RNG) shares have surged approximately 30 percent following the announcement of its fourth-quarter financial results, indicating a positive market reaction to the company's profitability turnaround [1][2]. Financial Performance - The company reported a profit of $22.97 million, or $0.26 per share, for the fourth quarter, a significant improvement from a net loss of $7.19 million, or $0.08 per share, in the same period last year [1]. - Total revenue for the fourth quarter of 2025 was $644.0 million, up from $615.5 million in the fourth quarter of 2024, reflecting a year-over-year growth of 5 percent [2]. Stock Performance - The stock is currently trading at $38.25, which is an increase of 30.95 percent or $8.94 from the previous close of $29.35 on the New York Stock Exchange [2]. - Over the past year, the stock has traded within a range of $20.59 to $38.25 [2].

Core Insights - RingCentral reported revenue of $644.03 million for Q4 2025, a year-over-year increase of 4.8% and an EPS of $1.18 compared to $0.98 a year ago, exceeding the Zacks Consensus Estimate of $642.29 million by 0.27% [1] - The company delivered an EPS surprise of 3.69%, with the consensus EPS estimate being $1.14 [1] Financial Performance Metrics - Gross Margin - Non-GAAP Other was reported at -10.6%, below the four-analyst average estimate of -9.5% [4] - Gross Margin - Non-GAAP Subscriptions was 80.4%, slightly below the four-analyst average estimate of 80.6% [4] - Subscription revenues reached $622.22 million, surpassing the four-analyst average estimate of $621.84 million, reflecting a year-over-year change of 5.5% [4] - Revenues from Other segments were $21.82 million, exceeding the average estimate of $20.44 million, but showing a year-over-year decline of 12.2% [4] Stock Performance - Shares of RingCentral have returned 14.1% over the past month, contrasting with the Zacks S&P 500 composite's decline of 0.8% [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

Core Insights - RingCentral (RNG) reported quarterly earnings of $1.18 per share, exceeding the Zacks Consensus Estimate of $1.14 per share, and up from $0.98 per share a year ago [1] - The company achieved a revenue of $644.03 million for the quarter, surpassing the Zacks Consensus Estimate by 0.27%, compared to $614.51 million in the same quarter last year [3] Earnings Performance - The earnings surprise for the quarter was +3.69%, and the company has surpassed consensus EPS estimates in all four of the last quarters [2] - RingCentral's shares have increased by approximately 2.4% since the beginning of the year, outperforming the S&P 500's gain of 0.5% [4] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $1.07 on revenues of $639.58 million, and for the current fiscal year, it is $4.69 on revenues of $2.62 billion [8] - The estimate revisions trend for RingCentral was unfavorable prior to the earnings release, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [7] Industry Context - The Internet - Software and Services industry, to which RingCentral belongs, is currently ranked in the bottom 43% of over 250 Zacks industries, suggesting potential challenges ahead [9] - Comparatively, Globant (GLOB), another company in the same industry, is expected to report a year-over-year earnings decline of 12% in its upcoming results [10]

Financial Data and Key Metrics Changes - Total revenue for 2025 grew nearly 5% to $2.52 billion, with subscription revenue increasing just over 5.5% to $2.43 billion [5][27] - Record free cash flow of more than $500 million was achieved, up 32% versus 2024, translating to over $5.80 of free cash flow per share [5][28] - GAAP operating margin reached nearly 5% in 2025, with expectations to double in 2026, targeting approximately 20% GAAP operating margin in the next three to four years [7][30] - Non-GAAP operating margin improved to 22.8% in Q4, up more than 140 basis points year-over-year [26] Business Line Data and Key Metrics Changes - Subscription revenue in Q4 was $622 million, up 5.5% year-over-year, while total revenue was $644 million, up 4.8% [25] - RCAI-utilizing customers, those using at least one AI product, now account for nearly 10% of overall ARR, more than doubling year-over-year [25][11] - AIR, the AI receptionist, saw customer count reach 8,300, up 44% sequentially, indicating strong demand [15] - ACE, the AI conversation expert, exceeded 4,800 customers, up 144% year-over-year, showcasing the growing adoption of AI products [16] Market Data and Key Metrics Changes - Demand remains strong across all customer segments, with small business and global service provider business growing in double digits [45] - The combined revenue from small business and global service providers is over $1.1 billion, performing well above the Rule of 40 [45] - Pricing pressure is more pronounced in the enterprise segment compared to SMB, but small business growth has accelerated year-over-year [45] Company Strategy and Development Direction - The company is focused on transforming into a leading agentic voice AI platform, with significant investments in AI-led products [9][12] - A quarterly dividend of $0.075 per share was announced, marking a strategic enhancement to the capital return strategy [7][24] - The company aims to reduce stock-based compensation (SBC) to 3%-4% of annual revenue over the next three to four years [6][30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business's future, highlighting strong financial performance and a robust market position [23][24] - The ongoing investment in AI is expected to drive long-term growth and enhance customer value [11][12] - Management anticipates that the headwinds from COVID-lapping contracts will subside, entering 2027 with a clean slate [45] Other Important Information - The company reduced debt by more than $275 million, ending the year at 1.7x net leverage [28][29] - New equity grants declined by 36% to approximately $160 million, contributing to a reduction in SBC as a percentage of revenue [28] Q&A Session Summary Question: What are the capital allocation priorities for 2026 and beyond? - The company plans to invest over $250 million in R&D, primarily for AI-led products, while also focusing on reducing leverage and returning capital through buybacks and dividends [38][40] Question: How is demand characterized across different customer segments? - Demand is strong across all segments, with small business growth accelerating and enterprise facing some pricing pressure [45] Question: What levers are being used to improve profitability? - Profitability improvements are driven by strong gross margins, disciplined spending, and operational leverage [51][52] Question: What is the average contract value for AI customers? - AI-related customers are showing significantly better retention and higher average revenue per user (ARPU) compared to non-AI customers [55][58] Question: How is the partner program adjusted for AI priorities? - The partner program is focused on key verticals like healthcare and financial services, with strong uptake of AI products among partners [70][71]