RingCentral Inc (NYSE:RNG) is trading sharply higher on Friday after the AI‑driven communications company delivered a strong fourth‑quarter report, issued upbeat guidance, announced its first‑ever quarterly dividend and expanded its share buyback program.
RingCentral posted fourth‑quarter earnings of $1.18 per share, topping the consensus estimate of $1.14 and rising 20% from the 98 cents reported a year ago. Revenue came in at $644 million, slightly above expectations and up 4.8% year‑over‑year.
For the first-quarter, the company guided for adjusted EPS of $1.16 to $1.19, ahead of the $1.10 analysts were expecting, and projected revenue of $640 million to $645 million, roughly in line with estimates.
RingCentral Launches First‑Ever Dividend
In a major milestone, RingCentral's board approved the company's first-quarterly cash dividend of $0.075 per share, payable March 16, 2026, to shareholders of record as of March 9. The company plans to continue paying dividends on a quarterly basis, subject to market conditions and board approval.
RingCentral also boosted its share repurchase authorization to $500 million.
Cash Flow Strength Fuels Capital Returns
"We delivered a solid fourth-quarter that capped a strong year of execution, highlighted by record free cash flow and FCF per share," said founder and CEO Vlad Shmunis. He added that the company's confidence in its long‑term outlook is what enabled RingCentral to initiate its first dividend and expand its buyback program.
For 2025, RingCentral generated $617 million in operating cash flow, up 28% year‑over‑year and $530 million in free cash flow, up 32%. The company repurchased roughly 5 million shares for $135 million in the fourth-quarter alone.
Shmunis also highlighted the growing impact of AI on the business, noting that annual recurring revenue from customers using at least one monetized AI product more than doubled year‑over‑year and now represents nearly 10% of total ARR.
RNG Price Action: RingCentral shares were up 34.64% at $39.39 at the time of publication on Friday. The stock is trading at a new 52-week high, according to Benzinga Pro.
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