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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).
RingCentral
RingCentral
RingCentral Revenue by Segment
Revenue by Segment
Subscriptions Revenue
CapyFin.comOther Revenue
CapyFin.com 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.
- Restructuring costs for FY 2025 are projected at $6 million.
- The company does not provide GAAP EPS guidance due to inherent uncertainties in forecasting certain reconciling items.
Revenue & Expenses
Visualization of income flow from segment revenue to net income