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Dec 31, 2024
RingCentral Q4 2024 Earnings Report
RingCentral reported strong fourth-quarter and fiscal year 2024 results, exceeding guidance for revenue and operating margin, achieving record cash flow, and promoting Kira Makagon to President and COO.
Key Takeaways
RingCentral delivered a strong fourth quarter, with total revenue reaching $615 million, an 8% year-over-year increase. The company achieved GAAP operating profitability for the first time in 2024 and reported record cash flow, driven by disciplined spending and reduced stock-based compensation. New AI-powered products, including RingCentral AI Receptionist (AIR), are gaining traction, contributing to growth and expanding the multi-product portfolio.
Total revenue for Q4 2024 was $615 million, an 8% increase year-over-year.
GAAP operating income for Q4 2024 was $16 million, a significant improvement from a loss of $45 million in the prior year.
Net cash provided by operating activities for Q4 2024 was $133 million, up from $114 million in Q4 2023.
RingCentral's new AI-powered products exceeded $50 million in Annual Recurring Revenue (ARR).
Revenue by Segment
Forward Guidance
For the full year 2025, RingCentral anticipates total revenue growth of 4% to 6% year-over-year and expects to generate almost $600 million in operating cash flow. Non-GAAP operating margin is projected to be approximately 22.5%.
Positive Outlook
- FY 2025 total revenue growth range of 4% to 6% year-over-year.
- FY 2025 Non-GAAP operating margin of approximately 22.5%, up approximately 150 basis points year over year.
- FY 2025 free cash flow of approximately $500 million to $510 million, representing approximately 25% growth at the midpoint.
- Q1 2025 subscriptions revenue growth range of 5% to 6% year-over-year.
- Q1 2025 Non-GAAP operating margin of 21.0% to 21.5%.
Challenges Ahead
- GAAP operating margin for Q1 2025 is projected to be lower, ranging from 0.6% to 1.7%.
- Share-based compensation for FY 2025 is expected to be $300 million to $310 million.
- Amortization of acquired intangibles for FY 2025 is projected at $135 million.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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