Revenue: As of FY2026 Q1, the actual value is USD 644.2 M, beating the estimate of USD 642.53 M.EPS: As of FY2026 Q1, the actual value is USD 0.35, missing the estimate of USD 0.363.EBIT: As of FY2026 Q1, the actual value is USD 64.23 M.<h4>Segment Revenue</h4>RingCentral, Inc. reported total revenues of $644,199 thousand for the three months ended March 31, 2026, marking a 5% increase compared to $612,056 thousand for the same period in 2025.Subscriptions revenues increased by $33,054 thousand, or 6%, to $623,166 thousand for the three months ended March 31, 2026, from $590,112 thousand in the prior year period, primarily driven by new customer acquisition and upsell of products, including new AI-led offerings.Other revenues decreased by $911 thousand, or -4%, to $21,033 thousand for the three months ended March 31, 2026, from $21,944 thousand in the prior year period, mainly due to lower professional services and pricing.Subscriptions revenues accounted for 97% of total revenues in Q1 2026, up from 96% in Q1 2025, while other revenues constituted 3% of total revenues in Q1 2026, down from 4% in Q1 2025.North America generated 87% of total revenues for the three months ended March 31, 2026, compared to 90% for the same period in 2025.Over 90% of subscription revenues were derived from RingEX and RingCentral contact center solutions for both Q1 2026 and Q1 2025, with RingCentral contact center solutions alone representing over 10% of total revenues during these periods.Product revenues from the sale of pre-configured phones were $12,200 thousand in Q1 2026, an increase from $10,900 thousand in Q1 2025.<h4>Operational Metrics</h4>Gross profit increased to $464,769 thousand in Q1 2026 from $431,606 thousand in Q1 2025.Subscription gross margin remained relatively consistent at 75% in Q1 2026 compared to 74% in Q1 2025, while other gross margin improved from -25% in Q1 2025 to -19% in Q1 2026, primarily due to reduced personnel costs.Total operating expenses decreased by $6,525 thousand, or -2%, to $414,741 thousand in Q1 2026 from $421,266 thousand in Q1 2025.Research and development expenses remained relatively flat at $81,713 thousand in Q1 2026 compared to $81,983 thousand in Q1 2025, mainly due to a $3,400 thousand reduction in share-based compensation, partially offset by a $2,100 thousand increase in headcount-related costs.Sales and marketing expenses decreased by $2,055 thousand, or -1%, to $272,843 thousand in Q1 2026 from $274,898 thousand in Q1 2025, primarily due to an $11,600 thousand reduction in share-based compensation, partially offset by a $9,700 thousand increase from third-party commissions.General and administrative expenses decreased by $4,200 thousand, or -7%, to $60,185 thousand in Q1 2026 from $64,385 thousand in Q1 2025, driven by a $5,200 thousand reduction in share-based compensation, partially offset by a $2,100 thousand increase in professional fees.Income from operations increased significantly to $50,028 thousand in Q1 2026 from $10,340 thousand in Q1 2025, with the operating margin improving to 7.8% in Q1 2026 from 1.7% in Q1 2025.RingCentral, Inc. reported a net income of $30,618 thousand in Q1 2026, a significant improvement from a net loss of - $10,328 thousand in Q1 2025.Interest expense decreased by $1,310 thousand, or -8%, to - $14,805 thousand in Q1 2026 from - $16,115 thousand in Q1 2025, primarily due to the reduction in outstanding 2030 Senior Notes.Other (expense) income decreased by $2,516 thousand to - $1,114 thousand in Q1 2026 from $1,402 thousand in Q1 2025, primarily due to a - $1,600 thousand loss on debt extinguishment.Provision for income taxes decreased to $3,491 thousand in Q1 2026 from $5,955 thousand in Q1 2025.Total share-based compensation expense decreased to $54,665 thousand in Q1 2026 from $77,881 thousand in Q1 2025, representing a reduction from approximately 13.1% to 8.9% of total revenue.Total depreciation and amortization expense was $56,911 thousand in Q1 2026, compared to $55,061 thousand in Q1 2025.Restructuring costs incurred were $2,843 thousand in Q1 2026, compared to $7,090 thousand in Q1 2025, as part of efforts to optimize the cost structure.<h4>Cash Flow</h4>Net cash provided by operating activities increased to $164,046 thousand in Q1 2026 from $149,662 thousand in Q1 2025, driven by a $39,700 thousand improvement in income from operations.Net cash used in investing activities increased to - $31,328 thousand in Q1 2026 from - $19,486 thousand in Q1 2025, attributed to $7,900 thousand for business combinations and a $3,900 thousand increase in capital expenditures.Net cash used in financing activities decreased to - $147,531 thousand in Q1 2026 from - $219,881 thousand in Q1 2025, primarily due to lower net debt paydown of $120,700 thousand compared to the prior year, partially offset by higher common stock repurchases and dividend payments.Non-GAAP Free Cash Flow generated was $140,647 thousand in Q1 2026, compared to $130,176 thousand in Q1 2025.Capitalized expenditures totaled - $23,399 thousand in Q1 2026, compared to - $19,486 thousand in Q1 2025.<h4>Unique Metrics</h4>Annualized Exit Monthly Recurring Subscriptions (ARR) was $2,710 million at March 31, 2026, compared to $2,530 million at March 31, 2025.Net monthly subscription dollar retention rate was greater than 99% for the five quarterly periods ended March 31, 2026.Remaining performance obligations, representing contract revenue not yet recognized, were approximately $2,700 million as of March 31, 2026, with 55% expected to be recognized over the next 12 months and 45% thereafter.$156,700 thousand of revenue was recognized in Q1 2026 from the deferred revenue balance at the beginning of the year.<h4>Future Outlook and Strategy</h4>RingCentral, Inc. plans to invest over $250 million in research and development in 2026, focusing on strategic innovation, particularly in AI-led products.The company is implementing measures to enhance operational efficiencies, expand margins, and free cash flows through disciplined hiring, expanded use of offshore service providers, vendor consolidation, go-to-market optimization, and increased internal deployment of AI tools.Its capital allocation strategy includes reducing debt, returning capital to shareholders through share repurchases and dividend payments, and potentially refinancing existing debt through various financial instruments or early repayment.

Ringcentral | 10-Q: FY2026 Q1 Revenue Beats Estimate at USD 644.2 M