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Mar 31
RingCentral Q1 2025 Earnings Report
Exceeded $2.5 billion in ARR, with total revenue at the high end of guidance and record cash flow.
Key Takeaways
RingCentral reported a solid start to 2025 with Q1 results demonstrating continued leadership in UCaaS and strong momentum in CCaaS. Total revenue reached $612 million, at the high end of guidance, driven by 6% year-over-year growth in subscriptions revenue. The company achieved GAAP operating profitability for the third consecutive quarter and exceeded $2.5 billion in ARR. Non-GAAP operating margin also exceeded guidance, and the company generated record free cash flow of $130 million.
Total revenue for Q1 2025 was $612 million, up 5% year-over-year.
Subscriptions revenue grew 6% year-over-year to $590 million, representing 96% of total revenue.
GAAP operating income was $10 million, a significant improvement from a loss of $11 million in the prior year period.
Non-GAAP operating margin was 21.8%, exceeding guidance and improving from 20.7% in the prior year.
RingCentral
RingCentral
RingCentral Revenue by Segment
Revenue by Segment
Subscriptions Revenue
CapyFin.comOther Revenue
CapyFin.com Forward Guidance
RingCentral provided guidance for the second quarter and full year 2025, projecting continued revenue growth, operating margin expansion, and strong free cash flow generation.
Positive Outlook
- Full year 2025 subscriptions revenue growth expected between 5% and 7% year-over-year.
- Full year 2025 total revenue growth expected between 4% and 6% year-over-year.
- Full year 2025 non-GAAP operating margin expected to be approximately 22.5%, up approximately 150 basis points year-over-year.
- Full year 2025 non-GAAP EPS expected between $4.13 and $4.27.
- Full year 2025 free cash flow expected between $500 million and $510 million, representing approximately 25% growth at the midpoint.
Challenges Ahead
- Second quarter 2025 total revenue growth expected between 4% and 5% year-over-year, slightly lower than full year guidance.
- Second quarter 2025 non-GAAP operating margin expected between 22.0% and 22.5%, potentially slightly lower than full year guidance.
- Guidance for GAAP EPS is not provided due to inherent uncertainties.
- Forecasted GAAP tax rates are not provided as discrete tax items are difficult to predict.
- Share-based compensation is expected to be between $300 million and $310 million for the full year 2025.
Revenue & Expenses
Visualization of income flow from segment revenue to net income