Highlights

  • RingCentral shows 5,183.91% one-year basic EPS growth, a P/E of 10.98 and PEG of 0.61.
  • Third quarter net income was $569,700 thousand, including a $544.9 million tax valuation allowance release.
  • Total revenues were $676,043 thousand in the third quarter, up 6%.
  • RingCentral repurchased 5.2 million shares for $193.0 million in the nine months.

RingCentral (NYSE:RNG) shares were trading at USD 86.53 on October 28, 2026, up 1.09%, alongside one-year basic EPS growth of 5,183.91%, a trailing twelve-month P/E of 10.98 and an expected-basis PEG of 0.61, the three figures behind its place among undervalued growth stocks. In its latest disclosures, the cloud communications and contact center provider initiated its first quarterly cash dividend in February, repaid its 2026 convertible notes with Term Loan borrowings, released $544.9 million of its valuation allowance against U.S. deferred tax assets in the third quarter and reported third quarter net income of $569,700 thousand.

RingCentral, Inc. is based in Belmont, California. It was incorporated in California in 1999 and reincorporated in Delaware on September 26, 2013. The company describes itself as a global leader in AI-powered customer engagement, with an integrated platform for business phone, SMS, contact center, workforce engagement management, video collaboration and messaging. Its portfolio spans Unified Communications as a Service, Contact Center as a Service, RingCentral AI solutions, Video and Events. Subscriptions revenues accounted for over 90% of total revenues, and most revenues came from the U.S. and Canada.

Growth: Third Quarter Net Income, Revenues and Operating Income

Net income was $569,700 thousand in the third quarter against $17,559 thousand a year earlier, and $639,433 thousand for the nine months. Basic net income per share was $6.73 against $0.19, and diluted net income per share was $6.50 against $0.19. For the nine months, diluted net income per share was $7.34 against $0.22. A benefit from income taxes of $541,686 thousand compares with a benefit of $513 thousand, and the company attributed the increase primarily to the $544.9 million non-cash valuation allowance release.

Total revenues were $676,043 thousand against $638,655 thousand, up 6%, and subscriptions revenues were $652,944 thousand against $615,821 thousand, also up 6%. The company said subscriptions revenues increased primarily due to new customers and upsell of its products, including new AI-led products. Income from operations was $53,886 thousand against $30,807 thousand. Annualized exit monthly recurring subscriptions were $2.80 billion against $2.63 billion at September 30, 2025.

Valuation: P/E of 10.98, PEG of 0.61 and Cash Flow

The P/E ratio of 10.98 is measured on trailing twelve-month earnings, and the PEG ratio of 0.61 on expected growth. Net cash provided by operating activities was $550,369 thousand for the nine months. Free cash flow, a non-GAAP measure, was $477,602 thousand against $404,083 thousand for the nine months. Total stockholders' deficit was $12,385 thousand at September 30, 2026, against $588,119 thousand at December 31, 2025.

On the third quarter call, Chief Financial Officer Vaibhav Agarwal said free cash flow per share for the year is expected to be over $7.

Capital Returns, Debt and Liquidity

RingCentral repurchased 5.2 million Class A shares for $193.0 million in the nine months, and approximately $308.9 million remained authorized at September 30, 2026; the authorization does not expire. The Board initiated the quarterly dividend in February at $0.075 per share, raised it in July to $0.125 and approved another $0.125 dividend in October, payable November 20, 2026.

The company repaid the remaining $609.1 million of 2026 Convertible Notes using $600.0 million of Term Loan proceeds and cash, and repaid $250.0 million of 2030 Senior Notes. At September 30, 2026, the Term Loan balance was $916.9 million, the 2030 Senior Notes balance was $100.0 million and the revolving credit facility balance was zero, with $305.0 million of additional liquidity available under it. Cash and cash equivalents were $110.1 million. In October 2026 the company issued a notice to redeem $25.0 million of 2030 Senior Notes.

Disclosed Risks and Outlook

Interest expense increased 23% to $17,134 thousand for the third quarter, primarily from interest on the incremental Term Loan. Other expense was $8,738 thousand against other income of $179 thousand, primarily from an $8.3 million increase in loss on debt extinguishment on the repurchase of 2030 Senior Notes. Restructuring costs were $12.9 million for the quarter and $23.3 million for the nine months.

The company lists persistent inflation, elevated interest rates, tariffs, geopolitical conflict and currency fluctuations as macroeconomic factors, and states that it has experienced lower upsell and increased downsell when customers slow hiring. It also states that its judgment on the valuation allowance may change with expectations of future U.S. profitability and tax law changes.

On the call, the company raised its fiscal 2026 outlook: total revenue of $2.650 billion to $2.657 billion, subscription revenue of $2.563 billion to $2.569 billion, free cash flow of $620 million to $630 million and non-GAAP EPS of $5.07 to $5.12. For the fourth quarter of 2026, it expects total revenue of approximately $673 million to $680 million and non-GAAP EPS of $1.32 to $1.37.