RingCentral Inc.’s stock rose in after-hours trading today after the company posted a solid earnings beat and issued strong guidance for the upcoming quarter.
The cloud communications provider reported first-quarter earnings before certain costs such as stock compensation of 39 cents per share on revenue of $468 million, up 33% from a year earlier and resulting in a net loss for the period of $150.9 million.
The results were better than expected, with Wall Street looking for adjusted earnings of 34 cents per share on revenue of $458.67 million.
RingCentral’s stock gained more than 3% on the report, helping to claw back some of the 10% loss it suffered during the regular trading session on another big down day for the market.
RingCentral sells a cloud communications platform aimed at business users. It bundles phone, video, messages, texts, chat, conferencing and even fax into a single platform. It has a user interface consistent across smartphones, tablets and computers, so there’s no need to use separate apps for each function. Companies can use RingCentral to power their entire contact center, and many are choosing to do exactly that, as its latest numbers show.
Vlad Shmunis (pictured), founder, chairman and chief executive officer of RingCentral, hailed what he said was a strong start to the year, driven by success with large enterprises and ramping contributions from partners. “We are also seeing the benefits of scale, with strong top-line contributions now being complemented by increasing bottom line profitability, including meaningful free cash flows,” Shmunis said.
The company shared that its subscription revenue rose 35%, to $440 million, during the period. Meanwhile, its annualized monthly recurring subscriptions totaled $1.9 billion, up 35% from a year ago. Within that, midmarket and enterprise ARR rose 46% to $1.2 billion.
Heading into the next quarter, RingCentral offered a strong forecast. It said it expects earnings of 40 to 41 cents per share on revenue of $475.5 million to $479.5 million. That compares with Wall Street’s consensus of 38 cents per share in earnings on $477.2 million in sales.
RingCentral had some news on the leadership front too, saying it has appointed Sonalee Parekh as its new chief financial officer. Parekh, who will assume the role on May 31, has a strong pedigree, as she joins the company from Hewlett-Packard Enterprise Co. executive, where she served as CFO of its Communications Technology group.
In addition to Parekh, RingCentral also announced that Chief Operating Officer Mo Katibeh has been appointed the company’s new president.