RingCentral (RNG) Q1 Earnings: What To Expect

Adam Hejl /
2023/05/08 4:28 am EDT
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Office and call centre communications software provider RingCentral (NYSE:RNG) will be reporting results tomorrow after market close. Here's what to look for.

Last quarter RingCentral reported revenues of $524.7 million, up 17% year on year, missing analyst expectations by 0.6%. It was a weak quarter for the company, with a full year guidance missing analysts' expectations.

Is RingCentral buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting RingCentral's revenue to grow 12.9% year on year to $528 million, slowing down from the 32.7% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.69 per share.

RingCentral Total Revenue

Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company only missed Wall St's revenue estimates once over the last two years, and has on average exceeded top line expectations by 2.77%.

Looking at RingCentral's peers in the productivity software segment, some of them have already reported Q1 earnings results, giving us a hint what we can expect. ServiceNow delivered top-line growth of 21.7% year on year, beating analyst estimates by 0.5% and Pegasystems reported revenue decline of 13.5% year on year, missing analyst estimates by 7.14%. ServiceNow traded up 2.01% on the results, Pegasystems was up 4.19%. Read our full analysis of ServiceNow's results here and Pegasystems's results here.

There has been a stampede out of high valuation technology stocks and while some of the software stocks have fared somewhat better, they have not been spared, with share price declining 6.51% over the last month. RingCentral is down 10.5% during the same time, and is heading into the earnings with analyst price target of $49.7, compared to share price of $26.27.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

The author has no position in any of the stocks mentioned.