RingCentral, Inc. announced solid financial results for the first quarter ended March 31, 2025, with total revenue reaching $612.1 million, a 5% year-over-year increase at the high end of guidance. The company's Annualized Exit Monthly Recurring Subscriptions (ARR) exceeded $2.5 billion, reflecting continued momentum in its core UCaaS business and strong early traction in CCaaS and AI-powered solutions.
Profitability continued to expand, with a non-GAAP operating margin of 21.8%, exceeding the guidance range and marking the third consecutive quarter of GAAP operating profitability. RingCentral generated a record $130.2 million in non-GAAP free cash flow, representing a 70% year-over-year increase, putting it on track to achieve its 2025 goal of over $500 million in free cash flow.
The company reported significant customer adoption for its new AI-powered offerings, with over 1,000 paying customers on both RingCX and AI Receptionist (AIR). CEO Vlad Shmunis highlighted AIR as a category-defining AI phone agent that lays the groundwork for a broader Voice-First Agentic AI platform, increasing the total addressable market and expanding wallet share.
RingCentral also strengthened its balance sheet by paying down $166 million of debt during the quarter, reducing its net leverage ratio to 2x. Stock-based compensation was reduced by 250 basis points, reflecting disciplined financial management. The company's strong product portfolio and market position continue to drive margin leverage and record cash flow.
Looking ahead, management reaffirmed its full-year 2025 guidance, expecting operating cash flow of approximately $600 million and free cash flow exceeding $500 million. For the second quarter 2025, subscription revenue is projected between $594 million and $600 million, and total revenue between $614 million and $620 million, with a non-GAAP operating margin of 22-22.5%.
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