RingCentral topped Wall Street’s estimates for third-quarter revenue and adjusted earnings per share, then raised its full-year guidance. Shares surged as much as 23% early Friday before giving back much of the advance, trading up 7% in the afternoon. The results put the focus on whether the customer-contact and AI voice software company can deliver on its higher annual targets.
Revenue and adjusted earnings beat estimates
Revenue for the quarter rose 5.9% year over year to $676 million, above analysts’ forecast of $667 million. Adjusted earnings per share increased 17.7% to $1.33, topping the $1.28 consensus estimate.
RingCentral’s non-GAAP operating margin expanded by 190 basis points from a year earlier to 24.7%. Revenue, earnings and margin all came in ahead of analysts’ expectations for the quarter.
Full-year revenue outlook raised
Management lifted its full-year revenue forecast to a range of $2.650 billion to $2.657 billion and projected adjusted EPS of $5.07 to $5.12. Analysts had expected full-year revenue of $2.654 billion and adjusted EPS of $5.10, both within the company’s updated ranges.
The company expects a full-year non-GAAP operating margin of 24% to 24.2%. That range is below the 24.7% reported for the third quarter; the quarterly result and annual forecast cover different periods, and subsequent results will show how the margin develops.
Shares pared early gains
RingCentral rose as much as 23% early Friday, then trimmed its advance to 7% in afternoon trading. The stock had moved above a chart-based buy point of $81.90 on Wednesday before retreating. Friday’s rise took it back above that level. RingCentral is also a member of the IBD 50 list.
Investors are weighing the quarterly beat against the company’s ability to meet its higher full-year targets. The sharp intraday pullback showed that the market’s response shifted during the session.
Agentic Voice AI remains a focus
RingCentral is increasing its investment in Agentic Voice AI, a product that uses artificial intelligence to handle customer calls and is a key area of development for its voice software business. The company has not disclosed how much the product contributed to third-quarter revenue or its full-year guidance, leaving its commercial impact to be assessed through future results.
Friday’s market coverage also noted that a small number of other stocks had moved above buy points, including a company that may work with SpaceX. It did not provide that company’s results, share performance or details of any potential partnership. RingCentral’s disclosed figures were third-quarter revenue of $676 million, adjusted EPS of $1.33 and its updated full-year outlook.