NEW YORK, July 24, 2026, 13:04 (EDT) — U.S. stocks opened broadly higher with RingCentral (RNG.N) surging 24% after reporting stronger free cash flow and fresh momentum in its AI offerings, triggering a sharp rerating of the stock.
RingCentral, Inc. NYSE:RNG stock surged 23.8% to $47.81 on Friday, with the most recent price noted at 12:49 p.m. EDT. Free cash flow for the quarter accelerated at more than four times the pace of revenue.
An initial estimate shows the market value rising by nearly $800 million in a single day, or roughly 1.3 times the midpoint of projected free cash flow for 2026.
The rerating overshadowed the earnings surprise. Revenue surpassed consensus estimates by close to 1%, as adjusted earnings exceeded expectations by around 5%.
Revenue grew 5.9% to $657 million. Free cash flow was up 24.8%, reaching $180 million. The margin improved by 410 basis points, coming in at 27.4%.
The spread serves as the investor indicator. Quarterly revenue maintained mid-single-digit increases, while cash conversion showed a marked improvement.
The quarter reported increased operating leverage:
| Q2 metric | 2026 | 2025 | Change |
|---|---|---|---|
| Revenue | $657.0 million | $620.4 million | +5.9% |
| GAAP operating margin | 7.7% | 6.0% | +170 bps |
| Free cash flow | $180 million | $144 million | +24.8% |
| Free-cash-flow margin | 27.4% | 23.3% | +410 bps |
| Annual recurring revenue | $2.76 billion | $2.59 billion | +6.6% |
Annual recurring revenue increased to $2.76 billion, up from $2.59 billion. Net monthly subscription dollar retention remained higher than 99% for the fifth consecutive quarter.
Chief Executive Vlad Shmunis said, “Customers using at least one paid AI product now represent approximately 13% of ARR.” The proportion has doubled compared to a year ago. RingCentral
The metric requires attention. It monitors revenue generated from customers who use AI-related products, rather than isolating revenue from AI products alone. As a result, the data offers a clearer view of AI penetration compared to measuring direct monetisation.
RingCentral updated its 2026 revenue outlook, increasing the range to $2.635 billion to $2.646 billion. The company also boosted its free-cash-flow forecast to $615 million to $625 million. The midpoint of these projections suggests a cash-flow margin of approximately 23.5%.
The board approved a 67% increase in the quarterly dividend, bringing it to 12.5 cents. RingCentral bought back 2.2 million shares for a total of $94 million in the quarter.
The action was limited to individual companies. Shares in Zoom Communications Inc. NASDAQ:ZM increased by 3.6%. Five9 Inc. NASDAQ:FIVN climbed 6.1%, and 8×8 Inc. NASDAQ:EGHT was up 9.3%.
Risks: The 13% AI metric does not reveal standalone AI income. RingCentral reported $112 million in cash and approximately $1.13 billion in principal for term loans and senior notes. Its filing further highlights strong competition, pricing challenges, and vague returns from AI spending.
