RingCentral delivered a quarter that was well received by the market, with management attributing the performance to continued execution in its core communications platform and growing adoption of new AI-powered products. CEO Vlad Shmunis highlighted expanded partnerships—including the multiyear extension with NiCE and an expanded relationship with AT&T—as key contributors, alongside broad-based customer traction in both small business and enterprise segments. Management also pointed to meaningful growth in the company's AI-driven product suite, with offerings like AIR (AI Receptionist) and RingSense driving tangible customer outcomes and contributing to recurring revenue.
Is now the time to buy RNG? Find out in our full research report (it’s free).
RingCentral (RNG) Q2 CY2025 Highlights:
- Revenue: $620.4 million vs analyst estimates of $617.7 million (4.6% year-on-year growth, in line)
- Adjusted EPS: $1.06 vs analyst estimates of $1.02 (3.6% beat)
- Adjusted Operating Income: $140 million vs analyst estimates of $137.6 million (22.6% margin, 1.7% beat)
- Revenue Guidance for Q3 CY2025 is $635 million at the midpoint, roughly in line with what analysts were expecting
- Management raised its full-year Adjusted EPS guidance to $4.26 at the midpoint, a 1.4% increase
- Operating Margin: 6%, up from -0.9% in the same quarter last year
- Annual Recurring Revenue: $2.59 billion vs analyst estimates of $2.58 billion (6.7% year-on-year growth, in line)
- Billings: $634.7 million at quarter end, up 4.3% year on year
- Market Capitalization: $2.52 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From RingCentral’s Q2 Earnings Call
-
Jamie Faucette (Morgan Stanley) asked about the NiCE partnership renewal and how it differs from the legacy arrangement. CEO Vlad Shmunis explained that the new agreement dispels concerns about its continuity and reinforces a unique product integration for enterprise customers.
-
Kash Rangan (Goldman Sachs) questioned the drivers behind new product adoption and the sustainability of strong free cash flow. Shmunis and CFO Vaibhav Agarwal pointed to RingCentral’s leadership in business telephony and AI, while Agarwal cited operating leverage and disciplined cost management as supporting durable free cash flow growth.
-
Billy Fitzsimmons (Jefferies) asked about the reduction in stock-based compensation (SBC) and full-year revenue guidance assumptions. Agarwal detailed internal changes, including disciplined new grant activity and the gradual reduction of legacy grants, while maintaining prudent revenue expectations given the business’s size and market dynamics.
-
Peter Levine (Evercore) inquired about the go-to-market strategy for RingCX versus NiCE and the long-term balance between growth and profitability. Shmunis clarified the product segmentation—RingCX for simpler use cases and NiCE for high-end enterprise—and Agarwal emphasized a framework balancing sustainable growth with ongoing margin and free cash flow expansion.
-
Catharine Trebnick (Rosenblatt) sought details on deal sizes from the Microsoft Teams partnership and capital allocation priorities. Shmunis highlighted the Teams integration’s role in large enterprise deals, while Agarwal reiterated a flexible approach to debt reduction, share repurchases, innovation investment, and potential M&A.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will closely monitor (1) the pace at which RingCentral’s AI-first products gain traction and generate recurring revenue, (2) the impact of expanded partnerships with NiCE and AT&T on enterprise customer wins, and (3) the company’s ability to sustain margin improvements through disciplined cost management. Progress in multiproduct adoption and execution on innovation investments will also be key indicators of long-term success.
RingCentral currently trades at $27.27, up from $23.62 just before the earnings. Is there an opportunity in the stock?Find out in our full research report (it’s free).
The Best Stocks for High-Quality Investors
Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.
