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RingCentral (RNG) to Report Q1 Earnings: What's in Store?

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  • RNG

RingCentral RNG is set to release first-quarter 2021 results on May 4.

For the quarter, the company expects revenues between $337 million and $340 million, indicating year-over-year growth of 26-27%.

The Zacks Consensus Estimate for revenues currently stands at $339.7 million, indicating growth of 26.9% from the year-ago reported figure.

Moreover, RingCentral expects earnings between 24 cents and 25 cents per share.

The consensus mark for earnings has moved up 4.2% to 25 cents per share over the past 30 days, indicating growth of 35% year over year

Notably, its earnings surpassed the Zacks Consensus Estimate in the trailing four quarters, with the average being 10.3%.

Let’s see how things have shaped up for this announcement.

Ringcentral, Inc. Price and EPS Surprise

Ringcentral, Inc. Price and EPS Surprise
Ringcentral, Inc. Price and EPS Surprise

Ringcentral, Inc. price-eps-surprise | Ringcentral, Inc. Quote

Factors to Note

RingCentral is a dominant name in the cloud-based Unified Communications as a Service space. The company has been benefiting from a continual shift to the cloud, as well as the trend toward convergence in business communications.

It expects software-subscription revenues for the first quarter between $311.5 million and $313.5 million, indicating year-over-year growth of 28-29%.

During the quarter, the company announced the debut of Unify Office in the United States in collaboration with Atos SE.

Moreover, the company launched its Rainbow Office solution in eight European countries including Austria, Belgium, France, Germany, Ireland, Italy, Spain, and the Netherlands. Rainbow Office combines the latest UCaaS technology powered by RingCentral with market-leading telephony and networking products and services from Alcatel-Lucent Enterprise’s portfolio.

Moreover, the coronavirus-induced remote-working trend is expected to have helped the company in expanding subscriber base in the to-be-reported quarter.

On Feb 2, RingCentral introduced innovations such as RingCentral Embeddable for RingCentral Video and Call Supervision, Monitoring, and Streaming API to enable developers bring improved communications capabilities to the business apps.

Moreover, a strong partner base that includes the likes of AT&T, Telus, BT, Atos and Altura is expected to have benefited the top line.

During the quarter, the company expanded its partnership with TELUS to enable Canada-based small businesses to easily transition their legacy phone systems to the cloud via TELUS Business Connect, an all-in-one communications solution for message, video, and phone.

Additionally, RingCentral announced that Stack8 — a leading North American provider of unified communications (UC) solutions — will offer RingCentral’s UCaaS platform to large enterprise customers globally, and provide RingCentral Office along with an international cloud phone system to all customers which is expected to have aided the company’s top-line in the to-be reported quarter.

Meanwhile, integrations with NetSuite, Salesforce and Microsoft Teams are likely to have strengthened RingCentral’s product offerings and led to effectiveness among enterprises, thereby driving its user base and subscription revenues.

Moreover, during the quarter, RingCentral’s wholly-owned subsidiary RingCentral UK announced that the company has secured the United Kingdom National Cyber Security Centre’s (NCSC) Cyber Essentials Plus certification, which demonstrates robust practice across operational processes and resilient cyber defense.

Further, the company’s solid footprint among public sector enterprises, hospitals and education space may have acted as growth catalyst.

Key Q1 Developments

On Mar 22, RingCentral announced the acquisition of the technology and engineering team at Kindite, a developer of leading cryptographic technologies that mitigate and reduce security and privacy risks to information and applications in the cloud. The new technology will be incorporated into RingCentral’s global communications platform, providing customers with enhanced security capabilities including end-to-end encryption.

What Our Model Says

Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

RingCentral has an Earnings ESP of +9.25% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Other Stocks to Consider

Here are a few more companies worth considering as our model shows that these too have the right combination of elements to beat on earnings in their upcoming releases:

Fox Corporation FOXA has an Earnings ESP of +13.64% and is Zacks #1 Ranked. You can see the complete list of today’s Zacks #1 Rank stocks here.

AMETEK AME has an Earnings ESP of +0.49% and a Zacks Rank #2.

CDW Corporation CDW has an Earnings ESP of +0.51% and a Zacks Rank #2.

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