RingCentral (RNG) Q1 2026 earnings summary

Executive summary

• Q1 2026 total revenue reached $644 million, up 5.3% year-over-year, at the high end of guidance, with subscription revenue at $623 million, up 5.6% year-over-year and accounting for 97% of total revenue.

• Record GAAP operating margin of 7.8% and non-GAAP operating margin of 22.9%, both improved year-over-year.

• Free cash flow for Q1 was $141 million, up 8% year-over-year, with free cash flow per share up 15.4% to $1.62.

• First-ever quarterly dividend of $0.075 per share paid, with continued share repurchases and a focus on shareholder returns.

• AI product adoption is strong, with ARR from AI-utilizing customers more than doubling year-over-year and now exceeding 10% of total ARR.

Financial highlights

• Annualized recurring revenue (ARR) reached $2.7 billion, up 7% year-over-year.

• Subscription gross margin remained above 80%.

• Adjusted EBITDA was $170 million (26.3% of revenue), up from $155 million (25.3%) year-over-year.

• Free cash flow margin was 21.8%, up from 21.3% year-over-year.

• Over 99% monthly net retention rate and approximately 600,000 customers in 46 countries.

Outlook and guidance

• Q2 2026 guidance: total revenue $648–$653 million; subscription revenue $628–$633 million; non-GAAP operating margin 23.0–23.2%; non-GAAP EPS $1.15–$1.17.

• Full year 2026 guidance raised: total revenue $2.62–$2.64 billion, subscription revenue $2.54–$2.56 billion, non-GAAP operating margin 23.3–23.7%, free cash flow $590–$605 million, non-GAAP EPS $4.85–$5.01.

• GAAP operating margin guidance raised to 8.9%–9.6%, up 450 basis points year-over-year.

• Non-GAAP EPS guidance raised to $0.0485–$0.0501 per share, up 13% year-over-year.

• Estimated FY26 free cash flow is $598 million, with free cash flow per share projected at $6.89.