Keybanc analyst Steve Enders maintained RingCentral Inc (RNG) with an Overweight and raised the price target from $390 to $404, implying a 72.3 percent upside.
RingCentral reported third-quarter FY21 revenue growth of 37 percent year-on-year to $414.6 million, beating the consensus of $393.4 million.
Subscriptions revenue increased 38 percent Y/Y to $385.4 million.
Total Annualized Exit Monthly Recurring Subscriptions (ARR) increased 39 percent Y/Y to $1.64 billion.
RingCentral Office ARR (UCaaS + CCaaS) increased 42 percent Y/Y to $1.55 billion.
Mid-market and Enterprise ARR increased 53 percent Y/Y to $971 million.
The non-GAAP gross margin expanded 140 bps to 78.1 percent.
EPS of $0.36 beat the consensus of $0.33.
“Third-quarter results were outstanding, with accelerating growth driven by ramping contributions from our key partners and momentum from our upmarket customers,” CEO Vlad Shmunis said.
CFO Transition
Mitesh Dhruv would depart as the CFO after the end of 2021.RingCentral will consider internal and external candidates for the next CFO.
Outlook
RingCentral raised the FY21 revenue outlook from $1.539 billion–$1.545 billion to $1.580 billion–$1.581 billion, above the consensus of $1.55 billion. It sees Non-GAAP EPS of $1.32 (prior view $1.28–$1.30) above the consensus of $1.29.RingCentral sees Q4 revenue of $433.5 million–$434.5 million, above the consensus of $420.6 million. It sees Non-GAAP EPS of $0.37 above the consensus of $0.36.
Price Action
RNG shares closed at 0.24% percent at $280.96 in the premarket session on the last check Wednesday.By Anusuya Lahiri
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