Summary
RingCentral closed fiscal 2025 with fourth-quarter revenue of $644.03 million, up 4.8% from the prior-year quarter, and full-year revenue of $2.515 billion, up 4.8%. Gross profit was $460.53 million in the quarter, up 5.5%, and gross margin reached 71.5%, up 0.5 percentage points. For the full year, gross margin was 71.2%, up 0.6 percentage points. The company reported fourth-quarter operating income of $42.44 million, up 171.4%, with an operating margin of 6.6%, up 4.0 percentage points. Full-year operating income was $120.55 million, up 4415.0%, and full-year operating margin was 4.8%, up 4.7 percentage points. Net income was $22.97 million in the quarter, swinging to a profit from the prior-year quarter, and $43.39 million for the full year, also swinging to a profit. Full-year diluted EPS was $0.48, swinging to a profit. Non-GAAP operating margin was 22.8% in the quarter, up 140 basis points, and 22.5% for the full year. Non-GAAP EPS was $1.18 in the quarter versus $0.98 a year earlier, and $4.36 for the full year versus $3.70.
Cash generation remained a bright spot. Operating cash flow was $148.99 million in the fourth quarter, up 12.1%, and $617.43 million for the full year, up 27.8%. Free cash flow, a non-GAAP measure, was $126 million in the quarter, up 13%, and $530 million for the full year, up 32%. Capital expenditures were $7.99 million in the quarter, up 25.3%, and $30.10 million for the full year, up 20.4%. Deferred revenue ended the year at $269.12 million, up 2.8% from the prior-year quarter. Remaining performance obligations were $2.60 billion, flat versus the prior-year quarter. Annualized exit monthly recurring subscriptions reached $2.67 billion at December 31, 2025, compared with $2.49 billion at December 31, 2024. The Net Monthly Subscription Dollar Retention Rate stayed above 99% for the five quarterly periods ended December 31, 2025.
AI-led products produced approximately $100 million in ARR. The AI Receptionist served more than 8,000 customers, representing 44% sequential growth. RingCentral integrated with OpenAI to advance enterprise-grade voice AI, and expanded its partnership with TELUS. The company also initiated a quarterly cash dividend of $0.075 per share, payable March 16, 2026 to stockholders of record on March 9, 2026, and increased its share repurchase authorization to $500 million. In the fourth quarter, RingCentral repurchased approximately 5 million shares for $135 million.
Management issued first-quarter 2026 guidance for non-GAAP operating margin of 22.8% to 22.9%, up approximately 100 basis points year over year, and non-GAAP EPS of $1.16 to $1.19 based on 87.0 million to 87.5 million fully diluted shares, with share-based compensation of $60 million to $65 million. For the full year 2026, guidance calls for total revenue growth of approximately 4% to 5%. Full-year non-GAAP operating margin is guided to approximately 23.0% to 23.5%, up approximately 75 basis points at the midpoint. Full-year non-GAAP EPS is guided to $4.76 to $4.97 based on 86.5 million to 87.0 million fully diluted shares. Share-based compensation is guided to $240 million to $250 million, and free cash flow to approximately $580 million to $600 million, growth of approximately 11% at the midpoint. Management also aims to reduce gross debt to $1 billion by the end of 2026.
The outlook rests on several risks. Macroeconomic pressure includes persistent inflation, elevated interest rates, tariffs, supply chain disruptions, geopolitical conflict and currency fluctuations. Those factors can change customer buying behavior, reduce demand, lower upsell, increase downsell and push down average revenue per user. Competition remains intense in business communications, and the company must keep adding and retaining larger enterprise customers and successfully integrate acquisitions. A near-term capital allocation priority is repaying convertible notes due in March 2026. Because those notes carry a 0% coupon, the repayment will increase cash interest expense beginning in 2026 as the company uses floating-rate borrowings. Revenue can also vary with contract duration, timing of customer purchases, pricing changes, churn, renewals, payment terms and credit card declines. Legal proceedings and contingencies add another layer of uncertainty.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2025 | Q3 FY2025 | QoQ | Q4 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $644.0M | $638.7M | +0.8% | $614.5M | +4.8% |
| Gross profit | $460.5M | $458.3M | +0.5% | $436.3M | +5.5% |
| Gross margin | 71.5% | 71.8% | -0.3 pp | 71.0% | +0.5 pp |
| Research & development | $77.6M | $79.9M | -2.9% | $84.9M | -8.6% |
| Sales & marketing | $275.9M | $281.6M | -2.0% | $277.3M | -0.5% |
| General & administrative | $64.6M | $66.1M | -2.2% | $58.5M | +10.4% |
| Total operating expenses | $418.1M | $427.5M | -2.2% | $420.7M | -0.6% |
| Operating income (loss) | $42.4M | $30.8M | +37.8% | $15.6M | +171.4% |
| Operating margin | 6.6% | 4.8% | +1.8 pp | 2.5% | +4.0 pp |
| Net income (loss) | $23.0M | $17.6M | +30.8% | -$7.2M | +419.5% |
| Net margin | 3.6% | 2.8% | +0.8 pp | -1.2% | +4.7 pp |
| Diluted EPS | $0.25 | $0.19 | +$0.06 | -$0.08 | +$0.33 |
Risks
MD&A states a near-term priority is repaying $609 million of convertible notes due March 2026, using available credit facilities including $650 million of incremental Term Loan capacity. Because the 2026 notes carry a 0% coupon, repayment will increase cash interest expense beginning in 2026 as Term Loan borrowings bear floating SOFR-based interest; risk factors also flag inability to settle conversions in cash or refinance on acceptable terms.
MD&A says RingCentral plans to invest approximately $250 million in R&D in 2026 and that 2025 ARR from new AI-led products was approximately $100 million, making AI central to growth. Risk factors warn AI features may not deliver anticipated benefits, face evolving regulation and IP litigation, may generate biased or erroneous LLM output, and could make certain products redundant or obsolete amid intense competition and AI talent scarcity.
MD&A warns that persistent inflation, elevated interest rates, tariffs, geopolitical conflict, and currency fluctuations can reduce demand, and says RingCentral has in the past and may in the future experience lower upsell and increased downsell as customers slow hiring, rationalize employee counts, or lower average revenue per user. Risk factors note a significant portion of revenue comes from small and medium-sized businesses that are more exposed to economic uncertainty.
Risk factors disclose that RingCentral is adjusting its channel partner go-to-market strategy to better enable a resale/wholesale model, requiring significant systems and process changes that could take longer and impact revenue. The company derives a substantial portion of revenues through channel partners and GSPs, generally lacks long-term contracts with them, and notes certain strategic partners have failed to meet minimum seat or revenue commitments.
Risk factors state that RingCentral relies on third-party competitors including NICE, Bandwidth.com, and Microsoft for contact center, SMS, and other services. If these providers terminate or fail to provide services on cost-effective terms or at reasonable quality and security, or if RingCentral cannot migrate customers to alternatives, results could be materially adversely affected.
Risk factors cite a January 2025 interruption caused by an internal system error that impacted customers for a limited number of hours. It warns that service interruptions have in the past and may in the future reduce revenues, require credits or penalties, cause customer terminations, and harm renewal rates and reputation.
Risk factors highlight dependence on co-founder, Chairman and CEO Vladimir Shmunis, who has provided strategic direction for over 25 years, and on highly skilled employees. They also note intense competition for AI-specialized personnel and that recent company layoffs and U.S. immigration policy changes may inhibit hiring or retention.
MD&A says the board initiated RingCentral's first-ever quarterly cash dividend of $0.075 per share in February 2026 and that the company repurchased about 11.8 million shares for $334.4 million during 2025. Risk factors caution that repurchases and dividends could increase stock volatility, diminish cash reserves, and may be suspended or discontinued, with no assurance future dividends will continue.
SaaS KPIs
All quarters →Net Monthly Subscription Dollar Retention Rate
Non-GAAP Operating Margin
Adjusted EBITDA
Free Cash Flow
Free Cash Flow Margin
ARR
Summary, forecast, risks and KPIs are extracted from RingCentral, Inc.'s SEC filings for Q4 FY2025 (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.