RingCentral Announces Strong Q4 and Fiscal Year 2025 Results, Initiates Dividend, Expands Share Repurchase

Key Financial Highlights

• Total Revenue: \$2.515 billion for FY2025, up 5% year-over-year; Q4 revenue of \$644 million, up 5% YoY.
• Subscriptions Revenue: \$2.427 billion for FY2025, up 6% YoY and accounting for over 95% of total revenue. Q4 subscriptions revenue was \$622 million, up 6% YoY and representing 97% of total revenue.
• Operating Margins: GAAP operating margin expanded to 4.8% for FY2025 (up from 0.1% in 2024) and to 6.6% for Q4 (up from 2.5% in Q4 2024). Non-GAAP operating margin rose to 22.5% for FY2025 (up from 21.0% in 2024) and to 22.8% in Q4 (up 140 bps YoY).
• Net Income: FY2025 GAAP net income per diluted share improved to \$0.48 (vs. (\$0.63) in 2024). Non-GAAP net income per diluted share was \$4.36 (up from \$3.70 in 2024).
• Cash Flow: Operating cash flow hit \$617 million for FY2025 (up 28% YoY), free cash flow was \$530 million (up 32% YoY). Q4 operating cash flow was \$149 million (up 12% YoY), Q4 free cash flow was \$126 million (up 13% YoY).

Capital Allocation & Shareholder Initiatives

• Dividend Initiation: First ever quarterly cash dividend of \$0.075 per share, payable March 16, 2026 to shareholders of record as of March 9, 2026. The company intends ongoing quarterly dividends, subject to Board approval and market conditions.
• Share Repurchase: Increased authorization to \$500 million. During FY2025, RingCentral repurchased approx. 5 million shares for \$135 million.
• Net Leverage: Reduced to 1.7x, aiming for investment-grade profile in the near term.

Strategic & Operational Developments

• AI Tailwind: Annual Recurring Revenue (ARR) from customers using monetized AI products more than doubled YoY, now approaching 10% of overall ARR.
• R&D Investment: Over \$250 million invested annually in innovation.
• AI Product Milestones: New AI-led products achieved \$100 million in ARR. AI Receptionist (AIR) now serves 8,000+ customers, with 44% sequential growth.
• OpenAI Integration: Advanced enterprise-grade voice AI by combining RingCentral’s platform with OpenAI’s GPT-5.2 models, enabling next-gen voice-driven automation and agentic AI solutions.
• Industry Recognition:
  • Leader in IDC MarketScape Worldwide AI-Enabled Contact Center Workforce Engagement Management 2025–2026.
  • Named Top Provider for Unified Communications as a Service (UCaaS) in Metrigy Research’s 2025 MetriStar UCaaS Report, achieving highest customer sentiment and above-average scores in all categories.
• Partnerships: Expanded partnership with TELUS to deliver advanced AI capabilities to TELUS Business Connect.
• Board Appointment: Mahmoud ElAssir (SVP & CTO, UnitedHealth Group) joins Board, bringing deep domain expertise in AI-driven, mission-critical platforms.

2026 Financial Guidance

• Q1 2026:
  • Subscriptions revenue: \$620–\$625 million
  • Total revenue: \$640–\$645 million
  • GAAP operating margin: 7.1%–8.2%
  • Non-GAAP operating margin: 22.8%–22.9% (up ~100 bps YoY)
  • Non-GAAP EPS: \$1.16–\$1.19 (based on 87.0–87.5 million diluted shares)
  • Share-based compensation: \$60–\$65 million
• Full Year 2026:
  • Subscriptions revenue growth: 4.5%–5.5% YoY
  • Total revenue growth: 4%–5% YoY
  • GAAP operating margin: 8.6%–9.6%
  • Non-GAAP operating margin: 23.0%–23.5% (up ~75 bps YoY midpoint)
  • Non-GAAP EPS: \$4.76–\$4.97 (based on 86.5–87.0 million diluted shares)
  • Share-based compensation: \$240–\$250 million
  • Free cash flow: \$580–\$600 million (up ~11% YoY midpoint)
  • Gross debt target: Reduce to \$1 billion by end of 2026

Shareholder & Price-Sensitive Information

Dividend initiation and expanded share buyback are highly price-sensitive and signal both confidence in future cash flows and a commitment to shareholder returns.
Significant improvement in operating margins, cash flows, and net income reflect disciplined execution and financial strength.
AI revenue growth and OpenAI partnership highlight RingCentral’s leadership and growth prospects in the AI-powered communications market—a major sector tailwind.
Industry accolades and new Board member may boost investor confidence.
Guidance for 2026 points to sustained profitability, margin expansion, and deleveraging, supporting potential for further share price appreciation.

Other Notable Details

• Reduced stock-based compensation as a percentage of revenue by 330 bps YoY.
• Maintained strong liquidity with \$133 million in cash and equivalents as of Dec 31, 2025.
• Full details of non-GAAP financial reconciliations and definitions provided in the report.

Conference Call & Investor Resources

• Q4/FY2025 earnings call: February 19, 2026, at 2:00 PM PT.
• Webcast and investor presentation available at https://ir.ringcentral.com.

Disclaimer

This article is for informational purposes only and does not constitute investment advice. The information summarized herein includes forward-looking statements subject to risks and uncertainties. Actual results may differ materially. Please refer to RingCentral’s official filings and consult with your financial advisor before making any investment decisions.

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