RNG Earnings Prediction
The chart below shows how RNG performed 10 days before and after its earnings report, based on data from the past quarters. Typically, RNG sees a +2.82% change in stock price 10 days leading up to the earnings, and a +1.58% change 10 days following the report. On the earnings day itself, the stock moves by -0.41%. This data can give you a slight idea of what to expect for the next quarter's release.
RNG Key Earning Data
2024/Q4
Year Over Year
Quarter Over Quarter
Total Revenue
614.51M
7.57%
0.94%
Gross Margin
71.01%
1.15%
0.87%
Operating Margin
2.54%
132.23%
89.55%
Net Margin
-1.17%
-85.85%
-9.30%
EPS
-0.08
-84.00%
-11.11%
No Data Available
RNG Earnings Analysis
RingCentral Inc Corporation (RNG.N) Earnings Conference Call
Positive
Earnings Beat Expectations: RingCentral beat earnings expectations with reported EPS of $0.98, exceeding the expected $0.96.
Q4 Revenue Performance: Total revenue for Q4 was $615 million, above guidance, with operating margins of 21.3%.
Record Free Cash Flow: Free cash flow reached a record $112 million in Q4, contributing to a full-year total of $403 million, up 24% year-over-year.
Operating Margin Improvement: Operating margins improved to 21% for the full year, up from 19.1% in 2023, marking the first time achieving positive GAAP operating profitability for the full year.
Stock-Based Compensation Reduction: The company successfully reduced stock-based compensation as a percentage of revenue by over 5 percentage points year-over-year to 14%.
Multi-Product Strategy Success: RingCentral's multi-product strategy is showing success, with new products like RingCX and RingSense contributing to growth, with RingCX customer count increasing to over 700.
AI Receptionist Benefits: The launch of the AI Receptionist (AIR) is expected to deliver significant value to businesses, enhancing customer interactions.
Customer Growth in AI Solutions: Strong traction with RingSense, which saw a 65% sequential increase in customers, indicating positive reception of AI solutions.
Major Contract Wins: The company signed significant contracts, including a $30 million deal with Genpact, showcasing the demand for integrated UCaaS and CCaaS solutions.
Future Cash Flow Plans: RingCentral's commitment to innovation is evident with plans to generate $0.5 billion in free cash flow in 2025, supporting further growth and investment.
Negative
Revenue Growth Below Expectations: Total revenue growth of 8% year-over-year in Q4 was below expectations, indicating potential market saturation or increased competition.
Slowdown in ARR Growth: ARR growth of only 7% year-over-year suggests a slowdown in customer acquisition or retention, raising concerns about future growth prospects.
Operating Margin Improvement Potential: Despite achieving GAAP operating profitability, the overall operating margin of 21.3% is still relatively low compared to industry standards, indicating room for improvement.
Stock-Based Compensation Impact: Stock-based compensation remains high at 14% of revenue, which could impact profitability and investor sentiment if not managed effectively.
Subscription Revenue Outlook: The company anticipates subscription revenue growth of only 5% to 7% for the upcoming year, which may not meet investor expectations for aggressive growth.
UCaaS Market Dependency Risks: The reliance on UCaaS, which constitutes 85% of the business, poses a risk if the market experiences a downturn or if competitors gain market share.
Pricing Strategy Impact: The aggressive pricing strategy for RingCX, while beneficial for market penetration, may negatively impact short-term revenue growth and profitability.
Shift in Customer Preferences: The expectation of reduced hardware phone sales could indicate a shift in customer preferences, which may affect future revenue streams.
RNG FAQs
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RNG Earning Call Sentiment
RingCentral, Inc. (NYSE:RNG) Q4 2024 Earnings Call Transcript
RNG.N
-5.91%Positive
The earnings call summary and Q&A session indicate strong financial performance and optimistic guidance. Revenue and free cash flow have grown significantly, operating margins have improved, and stock-based compensation has decreased. The company is expanding its product lineup and partnerships, with a focus on AI integration. Share repurchase plans further support a positive outlook. Despite some vague responses in the Q&A, the overall sentiment is positive, especially with the new partnership with Verint and the raised guidance. Given the market cap, a positive stock price reaction of 2% to 8% is likely.
