Summary
RingCentral closed fiscal 2024 with fourth-quarter revenue of $614.51 million, up 7.6% from the prior-year quarter. Full-year revenue reached $2.40 billion, up 9.0% from fiscal 2023. Gross profit rose to $436.34 million in the quarter, up 8.8%, and to $1.69 billion for the full year, up 10.2%. Gross margin was 71.0% in the quarter, up 0.8 percentage points, and 70.6% for the full year, also up 0.8 percentage points. The company swung to GAAP operating income of $15.64 million in the quarter. For the full year, GAAP operating income was $2.67 million. Operating margin improved to 2.5% in the quarter, up 10.4 percentage points, and to 0.1% for the full year, up 9.1 percentage points. Net loss narrowed to $7.19 million in the quarter and to $58.29 million for the full year. Full-year diluted loss per share was -$0.63, an improvement of $1.11.
Cash generation remained a bright spot. Operating cash flow was $132.88 million in the fourth quarter, up 16.7%, and $483.28 million for the full year, up 20.9%. Capital expenditures were $6.38 million in the quarter, up 6.3%, and $24.99 million for the full year, also up 6.3%. Free cash flow, a non-GAAP measure, was $112 million in the quarter and $403 million for the full year, compared with $94 million and $324 million in the prior-year periods. Deferred revenue was $261.88 million at quarter end, up 12.1% from the prior-year quarter. Remaining performance obligations stood at $2.60 billion, up 8.3%. Non-GAAP operating income was $131 million in the quarter, or 21.3% of revenue, compared with $117 million, or 20.5%, a year earlier. Adjusted EBITDA was $153 million, or 24.9% of revenue, compared with $138 million, or 24.2%. For the full year, non-GAAP operating income was $504 million, or 21.0% of revenue, and adjusted EBITDA was $590 million, or 24.6% of revenue.
Operational metrics showed steady expansion. Annualized exit monthly recurring subscriptions, or ARR, increased 7% year over year to $2.489 billion, and rose 8% on a constant currency basis. Enterprise ARR increased 7% to $1.073 billion, and also rose 7% on a constant currency basis. RingCentral won more than 30 deals that were over $1 million in total contract value in the fourth quarter. Product activity included the launch of AI Receptionist, an AI phone agent; BT's launch of Cloud Work RingCX, powered by RingCentral; and new features called Studio and AI Clips within RingCentral Events. RingCX earned industry recognition, including CRN's 2024 Product of the Year and Leader status in the 2025 Aragon Research Globe. Genpact selected RingEX and RingCX to improve collaboration and use RingCentral's licensed availability across all 22 telecom circles in India.
Guidance points to slower top-line growth but further margin expansion. For the full year 2025, management guided non-GAAP operating margin to approximately 22.5%, up approximately 150 basis points year over year. Non-GAAP earnings per diluted share are expected in a range of $4.13 to $4.27 based on 93.5 million to 94.5 million fully diluted shares. Free cash flow is expected to be approximately $500 million to $510 million, representing growth of approximately 25% at the midpoint. For the first quarter of 2025, management guided non-GAAP operating margin to 21.0% to 21.5% and non-GAAP earnings per diluted share to $0.93 to $0.97 based on 93.0 million to 93.5 million fully diluted shares. The company also promoted Kira Makagon to President and Chief Operating Officer and appointed Amy Guggenheim Shenkan to its board.
Risks remain familiar. RingCentral cited macroeconomic factors including persistent inflation, higher interest rates, a change in government administration, supply chain disruptions, decreased economic output, geopolitical conflict, and currency fluctuations. The company said larger customers may slow buying, and it has experienced lower upsell and increased downsell of additional RingEX services as customers slow hiring and rationalize employee counts. Other risks include competition, the ability to attract new customers and retain enterprise customers, acceptance of new products, dependence on channel and strategic partners, acquisition integration, expense management, and general market and business conditions. The MD&A also notes legal proceedings and debt maturity and refinancing risks. Share repurchases during the fourth quarter totaled $77 million, and the board increased the repurchase authorization by $100 million, leaving approximately $270 million remaining.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2024 | Q3 FY2024 | QoQ | Q4 FY2023 | YoY |
|---|---|---|---|---|---|
| Revenue | $614.5M | $608.8M | +0.9% | $571.3M | +7.6% |
| Gross profit | $436.3M | $428.6M | +1.8% | $401.0M | +8.8% |
| Gross margin | 71.0% | 70.4% | +0.6 pp | 70.2% | +0.8 pp |
| Research & development | $84.9M | $84.1M | +0.9% | $84.9M | +0.0% |
| Sales & marketing | $277.3M | $277.0M | +0.1% | $272.6M | +1.7% |
| General & administrative | $58.5M | $64.2M | -8.8% | $88.6M | -33.9% |
| Total operating expenses | $420.7M | $425.3M | -1.1% | $446.1M | -5.7% |
| Operating income (loss) | $15.6M | $3.3M | +375.1% | -$45.0M | +134.7% |
| Operating margin | 2.5% | 0.5% | +2.0 pp | -7.9% | +10.4 pp |
| Net income (loss) | -$7.2M | -$7.9M | +8.5% | -$47.2M | +84.8% |
| Net margin | -1.2% | -1.3% | +0.1 pp | -8.3% | +7.1 pp |
| Diluted EPS | -$0.08 | -$0.09 | +$0.01 | -$0.50 | +$0.42 |
Risks
MD&A highlights persistent inflation, higher interest rates, and geopolitical conflicts, which could cause larger customers to slow hiring and rationalize employee counts, leading to lower upsell and increased downsell of RingEX services. Revenue growth has slowed, and the company expects a near-term headwind to revenue growth as it prioritizes RingCX.
The company faces intense competition in AI-powered features and must invest significantly in AI (including machine learning and large language models). Risks include legal and regulatory scrutiny, IP infringement claims, and the possibility that AI features like RingSense may not enhance the business or achieve market acceptance.
A substantial portion of revenues is derived from channel partners and global service providers (GSPs). Certain strategic partners have failed to meet minimum seat or revenue commitments, and the company is adjusting its channel go-to-market strategy, which could cause longer implementation times and impact revenue.
The company depends heavily on its senior management, particularly co-founder, Chairman and CEO Vladimir Shmunis, who has provided strategic direction for over 20 years. The loss of key personnel could disrupt business and prevent achievement of objectives.
The company has substantial debt, including $161.3 million of 2025 Convertible Notes and $609.1 million of 2026 Convertible Notes due. Servicing debt requires significant cash, and the company may need to refinance or raise additional capital, which could be challenging in adverse market conditions.
Efforts to sell to medium-sized and larger businesses involve higher costs and longer sales cycles, with more complex contract negotiations and implementation requirements that may delay revenue recognition. These larger transactions may strain sales and support resources.
In January 2025, the company experienced a service interruption due to an internal system error that impacted customers for a limited number of hours. Interruptions can reduce revenues, require credits or penalties, and harm renewal rates and reputation.
New TCR registration requirements for SMS and number portability rules can cause customer churn, especially for SMB customers. SMS aggregators may block legitimate traffic without notice, potentially harming the business.
The company relies on third-party competitors like NICE Ltd. and Zoom Communications, Inc. for video, contact center, and SMS services. If these relationships change or terminate, the company may be unable to offer these solutions, materially affecting results.
SaaS KPIs
All quarters →Net Monthly Subscription Dollar Retention Rate
Non-GAAP Operating Margin
Annualized Exit Monthly Recurring Subscriptions (ARR)
Adjusted EBITDA Margin
Free Cash Flow
Free Cash Flow Margin
Enterprise ARR
Monthly Recurring Subscriptions (MRR)
Summary, forecast, risks and KPIs are extracted from RingCentral, Inc.'s SEC filings for Q4 FY2024 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 6, 2026.