RingCentral (RNG) Q1 2026 Earnings Transcript

Motley Fool Transcribing, The Motley Fool Sat, May 9, 2026 at 12:18 AM GMT+7 37 min read RNG Image source: The Motley Fool. Founder, Chairman, and CEO — Vladimir Shmunis President and Chief Innovation Officer — Kira Makagon Chief Financial Officer — Vaibhav Agarwal Need a quote from a Motley Fool analyst? Email pr@fool.com Vladimir Shmunis: Good afternoon, and thank you for joining us. We are off to a strong start to the year as we delivered another solid quarter with total revenue at the high end of our guidance. Importantly, we are also making meaningful progress in the quality of our operating model. We delivered record GAAP and non-GAAP operating margins, reduced stock-based compensation, paid down debt and returned capital to shareholders, including our first ever dividend. These are important milestones and reflect the business that is becoming more efficient, more profitable and more durable over time. As to free cash flows, we now expect approximately $600 million of free cash flow this year, which is approaching $7 per share that we believe is among the best in our peer group. Moving forward, we plan to continue to reduce SBC with a path towards our medium-term target of 3% to 4% of revenue. And we are steadily building toward our goal of 20% GAAP operating margin in the next 3 to 4 years. Our strong financial performance is rooted in operational discipline that is underpinned by our unwavering commitment to innovation and a strong competitive position. As one of the original cloud-native SaaS providers, we revolutionized customer communications by taking it from on-prem legacy infrastructure to the multi-tenant cloud. On the strength of that innovation, we ve built a $2.7 billion ARR business that is growing, generating a healthy amount of cash and is returning value to shareholders in a meaningful way. RingCentral s original success was rooted in the convergence of broadband, mobility and cloud computing. We leveraged these megatrends to transform how hundreds of thousands of businesses and millions of users worldwide communicate with their customers. Today, we re at the start of an even bigger innovation namely AI, and specifically the rise of agentic voice AI. AI builds on top of all the world-class assets that RingCentral has created over the years. It plays directly to our strengths. With our robust platform, massive amounts of rich data, omnichannel communication capabilities and global GTM and innovation at scale, we are well positioned to leverage AI as a key driver of our long-term growth and profitability. While agentic AI is very powerful and will be transformational to how businesses interact with consumers, our core belief is that it won t replace all humans. AI can and will do a lot and it will make remaining humans in the loop more effective. RingCentral s secret sauce is to deliver agentic voice AI experiences at every stage of consumer-to-business interactions, while enabling businesses to get human agents involved at the right time. RingCentral s differentiated approach is to make both AI agents and human agents smarter by working together seamlessly, resulting in better customer outcomes and greater cost efficiencies. This hybrid human-in-the-loop model is where RingCentral excels. More specifically, our ability to orchestrate AI and human interactions at scale on a single platform across voice, text and video and do this at a global scale with industry-leading reliability, security and quality of service. This is our structural advantage and a defensible competitive moat. RingCentral processes tens of billions of minutes and billions of calls and messages each year. As the front door to consumer to business interactions at scale, we are uniquely positioned to deploy AI across every stage of the journey before, during and after human involvement. We offer a modern end-to-end customer engagement platform spanning all consumer-to-business interactions. Our portfolio includes RingEX for Cloud PBX, RingCX and RingCentral Workforce Engagement Management or RingWEM for full features contact centers, and our recently introduced Customer Engagement Bundle or CEB for informal contact center capabilities. We embed agentic voice AI across our entire platform. Our agentic voice AI portfolio or RCAI is currently comprised of AI receptionist or AIR and AIR Pro, which automate customer interactions from the get-go; AI Virtual Assistant or AVA, which assist the human agent in real time; and AI Conversation Experts or ACE, for deep conversational analysis and coaching. Overall, we are good at helping businesses connect with more customers, resolve issues faster and more cost effectively, capture more leads and make remaining human agents more effective. Adoption of our AI product portfolio is strong. Customers using our AI adopt more products, spend more with us and stay longer, driving higher ARPU and net retention well above 100%. ARR from customers who utilize at least one of our

RingCentral (RNG) Q1 2026 Earnings Transcript

Key takeaways

Also covered by

RingCentral (RNG) Q1 2026 Earnings Transcript

Key takeaways

Also covered by

More in business