RingCentral (RNG) Q2 2026 earnings summary

Executive summary

• Q2 2026 revenue grew to $657 million, up 5.9%–6% year-over-year, with subscription revenue at $634 million, up 5.8%, and subscriptions accounting for over 90% of total revenue.

• AI-led products drove growth, with ARR from paid AI products doubling year-over-year to 13% of ARR and high net retention rates above 100%.

• Margins and EPS exceeded guidance: GAAP operating margin at 7.7%, non-GAAP at 23.4%, GAAP EPS at $0.45, non-GAAP EPS at $1.22.

• Board increased quarterly dividend by 67% to $0.125 per share and continued share repurchases, reflecting confidence in long-term cash flow.

• Strategic partnerships expanded, including NiCE/NICE and Avaya, and recognized by TIME as one of America's Best Companies for 2026.

Financial highlights

• Q2 2026 ARR reached $2.76–$2.8 billion, up 7% year-over-year, with net monthly subscription dollar retention rate above 99%.

• Free cash flow was $180 million for Q2 (27.4% margin), up 25% year-over-year; six-month free cash flow was $320.8 million.

• Adjusted EBITDA for Q2 was $177 million (26.9% margin), up from $162 million.

• Stock-based compensation as a percentage of revenue declined to 8.7%–9% in Q2 2026.

• Cash and cash equivalents at quarter-end were $111.5–$112 million.

Outlook and guidance

• FY26 guidance raised: subscription revenue $2.55–$2.561 billion, total revenue $2.635–$2.646 billion, GAAP operating margin 9.0%–9.7%, non-GAAP margin 23.6%–24.0%, non-GAAP EPS $4.96–$5.10, free cash flow $615–$625 million.

• Q3 2026 guidance: total revenue $664–$670 million, subscription revenue $643–$649 million, non-GAAP EPS $1.25–$1.30.

• Management expects continued revenue growth, margin expansion, and disciplined capital allocation, with ongoing focus on operational efficiency.

• Projected reduction in stock-based compensation to 3–4% of revenue in 3–4 years.

• Monitoring macroeconomic factors that could impact customer demand and buying behavior.