NEW YORK - RingCentral, Inc. (NYSE:RNG) shares jumped 13% after the cloud communications company reported first-quarter earnings and revenue that topped analyst estimates and raised its full-year guidance.
The company's earnings per share (EPS) for the first quarter came in at $0.87, exceeding the consensus estimate by $0.07. Revenue for the quarter was also higher than expected at $584 million, compared to the analyst consensus of $578.15 million.
The company's performance represents a 9% increase in total revenue compared to the same period last year, with subscription revenue growing by 10% to $557 million. RingCentral's adjusted operating margin improved significantly, reaching 20.7%, up from 17.2% in the previous year.
This growth is attributed to the largest UCaaS deal in the company's history, a 40,000 seat agreement with a Fortune 500 retailer, and its RingSense AI winning the Best Overall Award at Enterprise Connect.
Looking ahead, RingCentral raised its guidance for the second quarter of 2024, forecasting EPS in the range of $0.87 to $0.88, above the analyst consensus of $0.85. The company also expects second-quarter revenue to be between $584.5 and $587.5 million, with the midpoint slightly below the consensus of $585.8 million.
For the full year of 2024, the company raised its EPS outlook to a range of $3.59 to $3.67, above the consensus estimate of $3.55. Full-year revenue guidance was also lifted to a range of $2.379 to $2.399 billion, closely aligning with the consensus estimate of $2.384 billion.
RingCentral's Founder and CEO, Vlad Shmunis, expressed confidence in the company's trajectory, stating, "We had a solid start to the year, and exceeded the high end of our revenue and non-GAAP operating profit margin guidance."
CFO Sonalee Parekh emphasized the company's focus on profitability and shareholder value, noting the increase in the 2024 revenue and free cash flow outlook.
Investors responded positively to the robust financial results and optimistic guidance, sending the stock surging in the market. The company's strategic growth initiatives and efficiency improvements appear to be resonating with shareholders, as reflected in the significant stock movement following the earnings release.
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