RingCentral closes on strong year with fourth quarter earnings beat

Cloud communications pioneer RingCentral Inc. closed its fiscal 2021 year with a flourish, posting strong fourth quarter financial results that beat expectations on earnings and revenue. It followed up with a fairly bullish outlook for the quarter and year ahead.

The company announced a net loss of $118.3 million, with earnings before certain costs such as stock compensation coming to 39 cents per share. Revenue for the period was $448 million, up 34% from the same period last year.

The results were better than expected, with Wall Street analysts expecting the company to report earnings of 37 cents per share on revenue of $436 million. Even so, RingCentral’s stock price failed to push the needle, saying flat in after-hours trading.

RingCentral founder and Chief Executive Vlad Shmunis (pictured) said the company’s results were “outstanding”, thanks to strong momentum among upmarket customers and contributions from the company’s key partners.

“Our commitment to innovation is driving a rapid pace of new, business-oriented capabilities across our RingCentral Message Video Phone and integrated cloud contact center solutions, and we’ve meaningfully expanded our differentiated market access with our newest exclusive strategic partner, Mitel,” the CEO added. “With a well-seasoned, proven team in place, we are uniquely positioned to lead this generational transformation to cloud-based communications in 2022 and beyond.”

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, with 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.

The company had quite a few impressive numbers to show off. It said subscriptions revenue in the fourth quarter rose 37% from a year ago to $420 million, while its annual recurring revenue from subscriptions jumped 39%, to $1.8 billion. It also highlighted the popularity of its flagship RingCentral Office suite of services, where ARR was up 41% to $1.7 billion. Meanwhile, ARR from mid-market and enterprise customers increased 52% to $1.1 billion.

For its full fiscal 2021 year, revenue came to $1.6 billion, up 35% from the previous year.

RingCentral seems confident it will continue growing, too. For the current quarter, it said it’s looking for earnings of 34 cents per share on revenue of between $455 million and $459 million. Wall Street had earlier forecast a profit of 33 cents per share on sales of $448 million.

For the full year, RingCentral sees earnings of between $1.69 and $1.72 per share on sales of $1.99 billion to $2.015 billion. Wall Street is eyeing full year earnings of $1.66 per share and revenue of $1.974 billion.

Photo: RingCentral