RingCentral (RNG) investor relations material

Executive summary

• Q3 revenue was $676.0M, up 5.9% YoY, with subscription revenue of $652.9M; GAAP and non-GAAP operating margins reached 8.0% and 24.7%.

• ARR reached $2.80B; paid-AI product ARR exceeded $400M, approached 15% of ARR and doubled YoY.

• Free cash flow was $157M, up 21% YoY; net debt to LTM adjusted EBITDA declined to 1.3x.

Financial highlights

• Q3 subscription revenue was $652.9M, up 6.0% YoY; other revenue was $23.1M, up 1%, bringing total revenue to $676.0M.

• Non-GAAP operating margin was 24.7%, versus 22.8% a year earlier; GAAP operating income was $53.9M versus $30.8M.

• Free cash flow was $157M, up 21% YoY; adjusted EBITDA was $190.3M, or 28.1% of revenue, versus $167.8M and 26.3%.

• GAAP net income was $569.7M and diluted EPS was $6.50, including a $544.9M non-cash tax benefit; excluding it, adjusted diluted EPS was $0.28, up 47.4%, and non-GAAP EPS was $1.33.

• Nine-month free cash flow was $477.6M, compared with $404.1M; nine-month revenue was $1.98B, up 6%.

Outlook and guidance

• FY26 guidance: subscription revenue $2.563B–$2.569B; total revenue $2.650B–$2.657B; non-GAAP operating margin 24.0%–24.2%.

• FY26 GAAP operating margin guidance is 9.2%–9.6%; non-GAAP EPS is $5.07–$5.12 and free cash flow is $620M–$630M.

• Q4 guidance: subscription revenue $653M–$659M; total revenue $673M–$680M; non-GAAP operating margin 25.0%–25.5%; non-GAAP EPS $1.32–$1.37.

• FY26 FCF per share is estimated at $7.14 at the midpoint; projected non-GAAP tax rate is 22.5%.

• Medium-term targets remain 20% GAAP operating margin and SBC at 3%–4% of revenue within three to four years; no formal 2027 guidance was issued.