Subscriptions revenue up 6.0%, above high end of guidance, with record GAAP and non-GAAP margins

ARR from customers utilizing a native paid AI product is approaching 15%, doubling year-over-year

Reduced gross debt to approximately $1 billion

Raising full year outlook for revenue, non-GAAP margins and free cash flow

BELMONT, Calif.--(BUSINESS WIRE)-- RingCentral, Inc. (NYSE: RNG), a global leader in AI-powered customer engagement, today announced financial results for the third quarter ended September 30, 2026.

Third Quarter Financial Highlights

• Subscriptions revenue increased approximately 6.0% year-over-year to $653 million.
• Total revenue increased approximately 5.9% year-over-year to $676 million.
• GAAP operating margin of 8.0%, compared to 4.8% in the prior year.
• Non-GAAP operating margin of 24.7%, up approximately 190 basis points year-over-year.
• GAAP diluted EPS of $6.50. GAAP diluted EPS, excluding the impact of valuation allowance release, was $0.28, up 47.4% year-over-year.
• Non-GAAP EPS of $1.33 compared to $1.13 last year.
• Net cash provided by operating activities of $180 million, up 18.8% year-over-year.
• Free cash flow of $157 million, up 21.0% year-over-year.
• Repurchased approximately 0.4 million shares for a total of $18 million as of the end of the quarter.

“Voice is central to the next wave of AI innovation, and RingCentral is uniquely positioned to lead this transformation,” said Vlad Shmunis, Founder, Chairman and CEO of RingCentral. “Our trusted communications platform and expanding Agentic Voice AI portfolio puts us at the front door of customer interactions. By bringing communications, contact center, and AI together, we are redefining how businesses engage with customers, turning conversations into intelligent actions, better experiences, and measurable business outcomes. We see a significant opportunity ahead as businesses embrace the next generation of AI-powered customer engagement.”

“Our third-quarter results demonstrate strong execution against our financial commitments, with durable growth, expanding operating and free cash flow margins, and improving GAAP profitability,” said Vaibhav Agarwal, Chief Financial Officer of RingCentral. “We also reached our $1 billion gross debt target ahead of schedule, further strengthening our balance sheet while returning capital to shareholders. These results underscore the strength of our financial model and our focus on driving profitable growth and long-term shareholder value.”

RingCentral Declares a Dividend

RingCentral’s Board of Directors approved a quarterly cash dividend of $0.125 per share of our outstanding capital stock, payable on November 20, 2026 to stockholders of record as of the close of business on November 6, 2026.

Financial Results for the Third Quarter 2026

• Revenue: Total revenue was $676 million for the third quarter of 2026, up from $639 million in the third quarter of 2025, representing 5.9% year-over-year growth. Subscriptions revenue of $653 million increased 6.0% year-over-year and accounted for 97% of total revenue.
• Operating Income: GAAP operating income was $54 million, compared to $31 million in the same period last year. Non-GAAP operating income was $167 million, or 24.7% of total revenue, compared to $146 million, or 22.8% of total revenue, in the same period last year.
• Adjusted EBITDA: Adjusted EBITDA was $190 million, or 28.1% of total revenue, compared to $168 million, or 26.3% of total revenue, in the same period last year.
• Net Income Per Share: GAAP diluted EPS improved to $6.50, compared to $0.19 in the same period last year. GAAP diluted EPS, excluding the impact of valuation allowance release, was $0.28, up 47.4% year-over-year. Non-GAAP diluted EPS was $1.33, compared to $1.13 per share in the same period last year. The third quarters of 2026 and 2025 each reflected a non-GAAP tax rate of approximately 22.5%.
• Cash Flow: Net cash provided by operating activities for the third quarter of 2026 was $180 million, or 26.6% of total revenue, compared to $151 million, or 23.7% of total revenue, for the third quarter of 2025. Free cash flow for the third quarter of 2026 was $157 million, or 23.2% of total revenue, compared to $130 million, or 20.3% of total revenue, for the third quarter of 2025.
• Cash and Cash Equivalents: Total cash and cash equivalents at the end of the third quarter of 2026 was $110 million. Our cash balance reflects the repurchase of $18 million in shares during the third quarter of 2026 under the share repurchase plans previously authorized by our Board. We currently have approximately $309 million remaining under our total authorization.

Additional Highlights

• Launched plugins for ChatGPT and Claude, including Claude for Small Business, and MCP connectors to make voice, SMS, and chat data available in LLMs. This enables business users to prompt actions that save time, improve productivity, and complete tasks to drive better business outcomes.
• Expanded partnership with the Golden State Warriors, naming RingCentral the team’s official Agentic AI-Powered Voice Platform for fan engagement.
• Signed Digital Island as our first partner in New Zealand to design, sell, implement, and support Agentic Voice AI, with early-adopter engagement underway ahead of general availability later this year.
• Signed Allnet.Italia as our first wholesale partnership in Italy, putting Agentic Voice AI in the hands of Allnet.Italia’s 5,000+ channel partners to sell to their customer base.
• Named to Business Insider’s America’s Most Innovative Businesses 2027 list, one of 500 public U.S. companies chosen from 4,000+ reviewed on reputation, patent impact, and R&D investment.
• Recognized by several industry analyst firms, including as a Leader in CCaaS, a Major Player in Conversational Intelligence and Analytics, and an Innovator in CPaaS, for its omnichannel engagement, integrated AI capabilities, and ability to turn conversations into business intelligence and automate workflows.

Financial Outlook

Fourth Quarter 2026 Guidance:

• Subscriptions revenue of $653 to $659 million.
• Total revenue of $673 to $680 million.
• GAAP operating margin of 13.3% to 14.7%.
• Non-GAAP operating margin of 25.0% to 25.5%.
• Non-GAAP EPS of $1.32 to $1.37 based on approximately 88.7 million fully diluted shares.
• Share-based compensation of $57 to $62 million.

This results in full year 2026 guidance of:

• Raising subscriptions revenue range to $2.563 billion to $2.569 billion.
• Raising total revenue range to $2.650 billion to $2.657 billion.
• Raising GAAP operating margin to 9.2% to 9.6%.
• Raising non-GAAP operating margin to approximately 24.0% to 24.2%.
• Raising non-GAAP EPS of $5.07 to $5.12 based on 87.5 million fully diluted shares.
• Share-based compensation of $240 to $245 million.
• Raising free cash flow guidance of $620 to $630 million.

Conference Call Details:

• What: RingCentral financial results for the third quarter of 2026 and outlook for the fourth quarter and full year of 2026.
• When: Thursday, October 22, 2026 at 2:00PM PT (5:00PM ET).
• Dial-in: 1-888-349-0093 from the United States; 1-412-317-5201 internationally
• Webcast: https://ir.ringcentral.com (live and replay).

Investor Presentation Details

An investor presentation providing additional information and analysis can be found at https://ir.ringcentral.com.

About RingCentral

RingCentral is a global leader in AI–powered customer engagement, delivering an integrated platform for business phone, SMS, contact center, workforce engagement management, video collaboration, and messaging. Powered by advanced AI capabilities, RingCentral delivers intelligence at every phase of the conversation journey — before, during, and after each human interaction. With RingCentral, businesses can work smarter, respond faster, and connect more meaningfully with their customers. Visit ringcentral.com to learn more.

Forward-Looking Statements

This press release contains “forward-looking statements,” including but not limited to, statements regarding our future financial results, our GAAP and non-GAAP guidance, the results of the pace of our innovation, our expectations around our platform and the contribution of our new products, and the payment of dividends. Forward-looking statements are subject to known and unknown risks and uncertainties, and are based on assumptions that may prove to be incorrect, which could cause actual results to differ materially from those expected or implied by the forward-looking statements. Among the important factors that could cause actual results to differ materially from those in any forward-looking statements are: our ability to attract new customers and grow at our expected rate of growth; our ability to add and retain larger and enterprise customers and enter new geographies and markets; our ability to develop and continue to release, and gain customer acceptance of, new and improved versions of our services; our use of AI technologies to help drive future growth; our ability to compete successfully against existing and new competitors; our ability to enter into and maintain relationships with channel partners and strategic partners; our ability to realize the anticipated benefits of our strategic relationships; our ability to successfully and timely integrate, and realize the benefits of any significant acquisition we may make; our ability to manage our expenses and growth; factors affecting the payment of dividends; and general market, political, economic, and business conditions, as well as those risks and uncertainties included under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in our most recent Form 10-K and Form 10-Q filed with the Securities and Exchange Commission, and in other filings we make with the Securities and Exchange Commission from time to time.

All forward-looking statements in this press release are based on information available to RingCentral as of the date hereof, and we undertake no obligation to update these forward-looking statements, to review or confirm analysts’ expectations, or to provide interim reports or updates on the progress of the current financial quarter.

Non-GAAP Financial Measures

Our reported financial results and financial outlook include certain Non-GAAP financial measures, including Non-GAAP subscriptions gross margin, Non-GAAP other gross margin, Non-GAAP income from operations, Non-GAAP operating margin, Non-GAAP adjusted EBITDA, Non-GAAP net income, Non-GAAP net income per diluted share, Non-GAAP free cash flow and Non-GAAP free cash flow margin.

Non-GAAP subscriptions gross margin is defined as Non-GAAP subscriptions gross profit divided by GAAP subscriptions revenues. Non-GAAP subscriptions gross profit is defined as GAAP subscriptions revenues less Non-GAAP subscriptions cost of revenues. Non-GAAP subscriptions cost of revenues is defined as GAAP subscriptions cost of revenues adjusted for share-based compensation which includes related employer payroll taxes, amortization of acquired intangibles, third-party relocation and other costs and restructuring costs.

Non-GAAP other gross margin is defined as Non-GAAP other gross profit divided by GAAP other revenues. Non-GAAP other gross profit is defined as GAAP other revenues less Non-GAAP other cost of revenues. Non-GAAP other cost of revenues is defined as GAAP other cost of revenues adjusted for share-based compensation which includes related employer payroll taxes, amortization of acquired intangibles and restructuring costs.

Non-GAAP income from operations is defined as GAAP income from operations excluding share-based compensation which includes related employer payroll taxes, amortization of acquired intangibles, asset write-down charges, third-party relocation costs tied to the conflict between Russia and Ukraine and other costs including acquisition-related transaction costs, certain litigation-related costs, impairment charges related to abandoned internal-use software, change in fair-value of contingent consideration, one-time expenses related to strategic consulting services, other cost-reduction and productivity initiatives, and restructuring costs. Non-GAAP operating margin is defined as Non-GAAP income from operations divided by total GAAP revenue. Non-GAAP adjusted EBITDA is defined as Non-GAAP income from operations excluding depreciation and amortization.

Non-GAAP net income is defined as GAAP net income (loss) excluding share-based compensation which includes related employer payroll taxes, amortization of acquired intangibles, asset write-down charges, third-party relocation costs tied to the conflict between Russia and Ukraine and other costs including acquisition-related transaction costs, certain litigation-related costs, impairment charges related to abandoned internal-use software, change in fair-value of contingent consideration, net impact of amended agreements with partners, loss (gain) associated with investments, intercompany remeasurement gains or losses, one-time expenses related to strategic consulting services, other cost-reduction and productivity initiatives, restructuring costs, non-cash interest expense associated with amortization of debt discount and loss (gain) on early extinguishment of debt, related income tax expense effects of these adjustments, and the income tax benefit from a partial release of valuation allowance on U.S. deferred tax assets.

Non-GAAP free cash flow is defined as GAAP net cash provided by operating activities adjusted for capital expenditures including purchases of property and equipment and capitalized internal-use software. We believe information regarding Non-GAAP free cash flow provides useful information to investors in understanding and evaluating the strength of liquidity and available cash. Non-GAAP free cash flow margin is defined as Non-GAAP free cash flow divided by total GAAP revenues.

We have included Non-GAAP subscriptions gross margin, Non-GAAP other gross margin, Non-GAAP operating margin, Non-GAAP income from operations, Non-GAAP adjusted EBITDA, Non-GAAP net income, Non-GAAP net income per diluted share, Non-GAAP free cash flow and Non-GAAP free cash flow margin in this press release because they are key measures used by us to understand and evaluate our operating performance and trends, to prepare and approve our annual budget, and to develop short and long-term operational plans. In particular, the exclusion of certain expenses and cash flow items in calculating Non-GAAP subscriptions gross margin, Non-GAAP other gross margin, Non-GAAP operating margin, Non-GAAP income from operations, Non-GAAP adjusted EBITDA, Non-GAAP net income, Non-GAAP net income per diluted share, Non-GAAP free cash flow, and Non-GAAP free cash flow margin provide useful measure for period-to-period comparisons of our business.

Although Non-GAAP subscriptions gross margin, Non-GAAP other gross margin, Non-GAAP operating margin, Non-GAAP income from operations, Non-GAAP adjusted EBITDA, Non-GAAP net income, Non-GAAP net income per diluted share, Non-GAAP free cash flow and Non-GAAP free cash flow margin are frequently used by investors in their evaluations of companies, these non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP. Because of these limitations, these non-GAAP financial measures should be considered alongside other financial performance measures.

For a reconciliation of our forecasted non-GAAP operating margin and free cash flow, see “Reconciliation of Forecasted Operating Margin and Free Cash Flow GAAP Measures to Non-GAAP Measures.” We have not reconciled our forecasted non-GAAP EPS to its respective forecasted GAAP measure because we do not provide guidance on it. We do not provide guidance on forecasted GAAP EPS because of the inherent uncertainty and complexity involved in forecasting the intercompany remeasurement gain (loss), gain (loss) associated with investments, gain (loss) on early debt extinguishment, and provision (benefit) from income taxes including the effect and timing of release of valuation allowance related to our deferred tax assets in certain jurisdictions, which could be significant reconciling items between the non-GAAP and respective GAAP measures. The intercompany remeasurement gain (loss) is affected by the movement in various exchange rates relative to the U.S. Dollar, which is difficult to predict and subject to constant change. We do not provide guidance on gain (loss) associated with investments as it is based on future share prices, which are difficult to predict and subject to inherent uncertainties. We do not provide guidance on gain (loss) on early debt extinguishments as these are based on timing of future settlement requests and interest rates, which are difficult to predict and are subject to inherent uncertainties. We do not provide guidance on forecasted GAAP tax rates as we do not forecast discrete tax items as they are difficult to predict. We utilized a projected long-term tax rate in our computation of the non-GAAP income tax provision. For fiscal 2026, we have determined the projected non-GAAP tax rate to be 22.5%. Accordingly, a reconciliation of the non-GAAP financial measure guidance to the corresponding GAAP measure is not available without unreasonable effort.

Reconciliations of our non-GAAP financial measures to their most directly comparable GAAP measures has been provided in the financial statement tables included in this press release.

Our reported results also include our annualized exit monthly recurring subscriptions (ARR), as well as Net Monthly Subscriptions Dollar Retention Rate. We define our ARR as our monthly recurring subscriptions (MRR) multiplied by 12. Our MRR equals the monthly value of all customer recurring charges contracted at the end of a given month. We believe this metric is a leading indicator of our anticipated subscriptions revenue. We define our Net Monthly Subscription Dollar Retention Rate as (i) one plus (ii) the quotient of Dollar Net Change divided by Average Monthly Recurring Subscriptions. We calculate dollar net change as the quotient of (i) the difference of our monthly recurring subscriptions at the end of a period minus our monthly recurring subscriptions at the beginning of a period minus our monthly recurring subscriptions at the end of the period from new customers we added during the period, (ii) all divided by the number of months in the period. We define our average monthly recurring subscriptions as the average of the monthly recurring subscriptions at the beginning and end of the measurement period.

© 2026 RingCentral, Inc. All rights reserved. RingCentral, RingCentral Contact Center and the RingCentral logo are trademarks of RingCentral, Inc.

TABLE 4
RINGCENTRAL, INC.
RECONCILIATION OF OPERATING INCOME (LOSS)
GAAP MEASURES TO NON-GAAP MEASURES
(Unaudited, in thousands)
		Three Months Ended September 30,								Nine Months Ended September 30,
		2026				2025				2026				2025
Revenues
Subscriptions		$	652,944			$	615,821			$	1,909,759			$	1,804,661
Other			23,099				22,834				67,494				66,448
Total revenues			676,043				638,655				1,977,253				1,871,109
Cost of revenues reconciliation
GAAP Subscriptions cost of revenues		$	160,841			$	153,938			$	474,753			$	457,821
Share-based compensation			(2,719	)			(3,384	)			(8,219	)			(11,529	)
Amortization of acquired intangibles			(30,832	)			(32,100	)			(93,688	)			(94,547	)
Third-party relocation and other costs, net			—				(32	)			—				(126	)
Restructuring costs			(927	)			(407	)			(2,471	)			(1,375	)
Non-GAAP Subscriptions cost of revenues		$	126,363			$	118,015			$	370,375			$	350,244
GAAP Other cost of revenues		$	20,899			$	26,388			$	71,119			$	81,905
Share-based compensation			(319	)			(987	)			(1,181	)			(3,794	)
Amortization of acquired intangibles			(76	)			(83	)			(232	)			(251	)
Restructuring costs			361				—				(649	)			(716	)
Non-GAAP Other cost of revenues		$	20,865			$	25,318			$	69,057			$	77,144
Gross profit and gross margin reconciliation
Non-GAAP Subscriptions			80.6	%			80.8	%			80.6	%			80.6	%
Non-GAAP Other			9.7	%			(10.9	)%			(2.3	)%			(16.1	)%
Non-GAAP Gross profit			78.2	%			77.6	%			77.8	%			77.2	%
Operating expenses reconciliation
GAAP Research and development		$	88,065			$	79,908			$	252,579			$	239,430
Share-based compensation			(15,183	)			(16,093	)			(45,791	)			(48,782	)
Third-party relocation and other costs, net			(143	)			(328	)			(249	)			(844	)
Restructuring costs			(1,161	)			(1,578	)			(2,198	)			(4,474	)
Non-GAAP Research and development		$	71,578			$	61,909			$	204,341			$	185,330
As a % of total revenues non-GAAP			10.6	%			9.7	%			10.3	%			9.9	%
GAAP Sales and marketing		$	282,918			$	281,558			$	830,668			$	820,041
Share-based compensation			(25,537	)			(27,214	)			(74,126	)			(89,148	)
Amortization of acquired intangibles			(2,384	)			(2,368	)			(7,991	)			(6,478	)
Asset write-down charges			—				(11,440	)			—				(11,440	)
Third-party relocation and other costs, net			(2	)			(182	)			(376	)			(999	)
Restructuring costs			(10,169	)			(328	)			(14,993	)			(4,241	)
Non-GAAP Sales and marketing		$	244,826			$	240,026			$	733,182			$	707,735
As a % of total revenues non-GAAP			36.2	%			37.6	%			37.1	%			37.8	%
GAAP General and administrative		$	69,434			$	66,056			$	193,935			$	193,802
Share-based compensation			(22,555	)			(18,282	)			(53,458	)			(57,970	)
Third-party relocation and other costs, net			(417	)			(148	)			(5,494	)			(2,870	)
Restructuring costs			(1,005	)			(153	)			(2,941	)			(1,563	)
Non-GAAP General and administrative		$	45,457			$	47,473			$	132,042			$	131,399
As a % of total revenues non-GAAP			6.7	%			7.4	%			6.7	%			7.0	%
Income (loss) from operations reconciliation
GAAP income from operations		$	53,886			$	30,807			$	154,199			$	78,110
Share-based compensation			66,313				65,960				182,775				211,223
Amortization of acquired intangibles			33,292				34,551				101,911				101,276
Asset write-down charges			—				11,440				—				11,440
Third-party relocation and other costs, net			562				690				6,119				4,839
Restructuring costs			12,901				2,466				23,252				12,369
Non-GAAP Income from operations		$	166,954			$	145,914			$	468,256			$	419,257
Non-GAAP Operating margin			24.7	%			22.8	%			23.7	%			22.4	%
Adjusted EBITDA reconciliation
Depreciation and amortization			23,309				21,869				68,687				65,126
Non-GAAP Adjusted EBITDA		$	190,263			$	167,783			$	536,943			$	484,383
As a % of total revenues non-GAAP			28.1	%			26.3	%			27.2	%			25.9	%

View source version on businesswire.com: https://www.businesswire.com/news/home/20261022608824/en/

Investor Relations Contact:

Steven Horwitz

[email protected]

Media Contact:

Mariana Leventis, RingCentral

[email protected]

Source: RingCentral, Inc.