powered customer engagement firm RingCentral Q3 revenue beats on subscription growth

Overview

• AI-powered customer engagement platform's Q3 revenue grew 5.9% yr/yr, beating analyst expectations

• Non-GAAP EPS for Q3 rose yr/yr

• Company repurchased $18 mln in shares during Q3

Outlook

• RingCentral raises full-year revenue outlook to $2.650 bln-$2.657 bln

• Company expects Q4 revenue of $673 mln-$680 mln

• RingCentral raises full-year non-GAAP EPS outlook to $5.07-$5.12

Result Drivers

• SUBSCRIPTION GROWTH - Co said Q3 revenue growth was driven by higher subscriptions revenue, up 6% yr/yr

• AI PRODUCT ADOPTION - Co said annual recurring revenue from customers using paid AI products nearly doubled yr/yr

• EXPANDING MARGINS - Co attributed improved operating margins to strong execution and focus on profitable growth, per CFO Vaibhav Agarwal

Company press release:

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 7 "strong buy" or "buy", 10 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the software peer group is "buy."

• Wall Street's median 12-month price target for RingCentral, Inc. is $45.00, about 45.4% below its October 21 closing price of $82.42

• The stock recently traded at 15 times the next 12-month earnings vs. a P/E of 8 three months ago

Reuters Recommended Reads

• Oct 21 - Software provider SAP Q3 revenue rises on cloud business growth

• Oct 20 - France's Sidetrade Q3 revenue rises on AI-native products, international growth

• Oct 20 - Pegasystems Q3 revenue, adjusted EPS miss estimates as contract growth slows

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)