RingCentral Prepares to Announce Q3 2024 Financial Results
RingCentral (RNG) will release its financial results for the third quarter of 2024 on November 7.
For the first fiscal quarter of 2025, analysts expect earnings between 92 and 93 cents per share.
The consensus estimate for Q3 2024 stands at 92 cents per share. This figure remains unchanged over the last month and reflects a strong year-over-year growth of 17.95%.
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Recent Performance Insights for RingCentral
RingCentral, Inc. price-eps-surprise | RingCentral, Inc. Quote
Looking at Q3 2024, RingCentral anticipates revenues to fall between $600.5 million and $603.5 million, suggesting an 8% growth from the previous year.
The Zacks Consensus Estimate for revenues is currently $601.91 million, indicating a rise of 7.84% compared to the same quarter last year.
In fact, RingCentral has exceeded earnings estimates in the last four quarters, boasting an average surprise of 4.60%.
Key Factors Influencing Performance
RingCentral’s anticipated success this quarter is linked to its comprehensive product lineup and robust growth in subscription revenue.
The company expects subscription revenues to be between $572 million and $575 million, reflecting an 8% increase year-over-year.
Notably, the growth of innovative products like RingCX (an AI-powered contact center solution) and RingSense (an AI analytics platform) has likely contributed to revenue increases, as businesses more frequently utilize these cutting-edge offerings.
Strategic partnerships with industry giants such as Microsoft (MSFT) and Vodafone (VOD) have expanded market presence and spurred sales through bundled services in the recent quarter.
Moreover, an expanded partnership with Vodafone Business aims to offer the Vodafone Business Contact Center powered by RingCX across 30 markets by early 2025. The benefits from this collaboration are expected to reflect positively in the upcoming results.
In the prior quarter, RingCentral’s RingCX attracted a major U.S. client and introduced over 300 updates, including integrations with platforms like ServiceNow, HubSpot, and Microsoft Teams—likely boosting revenues in Q3 as a result.
Targeting specific industries such as healthcare, retail, and finance—each demonstrating a growing need for unified communication solutions—has likely positioned RingCentral favorably for this reporting period.
As remote and hybrid work becomes commonplace, the demand for unified communication and collaboration technologies remains high. This momentum is expected to support customer acquisition and retention efforts.
However, challenges stemming from current economic conditions, unfavorable foreign exchange rates, and fierce market competition may pose hurdles for RingCentral’s financial results this quarter.
Analysis of Earnings Predictions
According to the Zacks model, a favorable Earnings ESP combined with a Zacks Rank of #1 (Strong Buy), #2 (Buy), or #3 (Hold) typically enhances the odds of beating earnings estimates. Yet, this does not apply to RingCentral at this time.
Currently, RingCentral holds an Earnings ESP of +0.81% alongside a Zacks Rank #4 (Sell). To explore the best stocks to consider before reports are released, utilize our Earnings ESP Filter.
A Stock Worth Considering
One company to keep an eye on is Shopify (SHOP). It possesses the right elements to potentially exceed earnings expectations in its next release.
With an Earnings ESP of +4.13% and a Zacks Rank #1, Shopify shares have appreciated by 0.7% year-to-date, and it is expected to report its third-quarter results on November 12.
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The views and opinions expressed herein are those of the author and do not inherently reflect those of Nasdaq, Inc.
