RingCentral shares rose 15.4% in pre-market trading on October 23, 2026, a day after the cloud communications company reported higher third-quarter revenue, improved profitability and a raised full-year outlook. The advance was a pre-market move, not a confirmed closing return, and the available information does not establish the precise cause of the buying.
Key Takeaways
- Third-quarter subscription revenue rose 6.0% to $653 million, exceeding the high end of management’s guidance.
- Operating margins improved, while reported earnings per share included a substantial tax-related benefit.
- RingCentral raised its 2026 forecasts for revenue, non-GAAP earnings and free cash flow.
Table of Contents
- RingCentral shares rise following stronger quarterly results
- Tax benefit makes headline earnings harder to compare
- Higher full-year targets set the next operating benchmark
- Conclusion
RingCentral shares rise following stronger quarterly results
The October 22 third-quarter results announcement provides concrete operating context for the following morning’s rally. For the quarter ended September 30, total revenue increased 5.9% year over year to $676 million from $639 million. Subscriptions accounted for 97% of revenue.
Profitability improved faster than sales. GAAP operating income reached $54 million, compared with $31 million a year earlier, and GAAP operating margin expanded to 8.0% from 4.8%. Non-GAAP operating margin increased to 24.7% from 22.8%.
The results show stronger operating performance, but the share-price gain alone does not establish investors’ expectations for future growth. The earnings announcement also does not verify the size of the pre-market move.
| Item | Details |
|---|---|
| Q4 2026 subscription revenue guidance | $653 million–$659 million. |
| Q4 2026 total revenue guidance | $673 million–$680 million. |
| Q4 2026 GAAP operating margin guidance | 13.3%–14.7%. |
| Q4 2026 non-GAAP operating margin guidance | 25.0%–25.5%. |
| Q4 2026 non-GAAP EPS guidance | $1.32–$1.37, based on approximately 88.7 million fully diluted shares. |
Tax benefit makes headline earnings harder to compare
GAAP diluted earnings per share rose to $6.50 from $0.19 a year earlier. That headline figure included the impact of a valuation allowance release relating to deferred tax assets. Excluding that impact, the company reported GAAP diluted earnings of $0.28 per share, up 47.4%.
Non-GAAP diluted earnings, which exclude additional items, increased to $1.33 from $1.13. These measures should not be treated as interchangeable: the tax-related benefit makes the headline GAAP earnings increase much larger than the improvement excluding that benefit.
Cash generation also strengthened. Operating cash flow increased 18.8% to $180 million, while company-defined free cash flow rose 21.0% to $157 million. RingCentral reduced gross debt to approximately $1 billion, reaching its target ahead of schedule, Chief Financial Officer Vaibhav Agarwal said.
Higher full-year targets set the next operating benchmark
Management raised its full-year revenue forecast to $2.650 billion–$2.657 billion and its non-GAAP earnings forecast to $5.07–$5.12 per share. It also increased projected free cash flow to $620 million–$630 million and non-GAAP operating margin to approximately 24.0%–24.2%. These are forecasts, not completed results.
The fourth-quarter targets provide the next benchmark for whether RingCentral can sustain its improved profitability. The company also said annual recurring revenue from customers using a native paid AI product was approaching 15% of total ARR, doubling year over year; that describes customer adoption rather than AI product revenue alone.
Conclusion
RingCentral’s higher outlook follows improved operating margins and cash generation, although the pre-market rally is not a closing result. The next confirmed shareholder dates are November 6, the record date for its $0.125 quarterly dividend, and November 20, the scheduled payment date.
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