According to a recent market report, the global Unified Communication as a Service (UCaaS) market size was estimated to grow from $25.85 billion in 2020 to $69.93 billion by 2028 at a CAGR of 13%. Recently, RingCentral (NYSE: RNG) announced its second-quarter results that shattered the market expectations.

RingCentral’s Financials

RingCentral’s second-quarter revenues grew 36% to $370.4 million, significantly ahead of the market’s forecast of $358.79 million. Non-GAAP net income per diluted share was $0.32, ahead of the Street’s estimates of $0.28.

By segment, software subscriptions revenue increased 37% to $351 million. Other revenues grew 34% to $28.1 million.

Among key metrics, Annualized Exit Monthly Recurring Subscriptions (ARR) grew 37% to $1.5 billion. RingCentral Office ARR increased 41% to $1.4 billion. Enterprise ARR, defined as customers with $100,000 or more in ARR, increased 62% to $500 million. Channel ARR increased 53% to $505 million.

For the third quarter, RingCentral expects revenues of $390-$393.5 million, representing an annual growth of 29% to 30%. It expects subscription revenues of $363-$365 million. Non-GAAP EPS is expected to be $0.33-$0.34. For the full year, it expects revenues of $1.539-$1.545 billion, representing an annual growth of 30% to 31%. Non-GAAP EPS is expected to be $1.28 to $1.30.

RingCentral’s Product Upgrades

RingCentral recently announced a range of new capabilities that will allow organizations to run and grow employees by giving employees the ability to communicate and collaborate effectively, securely, and productively from anywhere. The current pandemic has accelerated the transition to remote working conditions for several organizations globally. The new features are geared to support the demand for improved employee communications needed for this hybrid work environment. It added new security and compliance including Dynamic End-to-End Encryption (E2EE) and C5:2020 certification that delivers some of the highest levels of data protection and secure video meetings. Dynamic E2EE for video meetings will allow users to start ad-hoc and scheduled E2EE meetings and to dynamically turn E2EE on (or off) mid-meeting across mobile, desktop, and web browsers.  

It is leveraging its active platform ecosystem to add several third-party capabilities to the service. The new capabilities include the ability to streamline signatures, capture engineering tasks, and deliver an interactive app experience directly within the messaging app. Along with over 250 apps in RingCentral’s App Gallery, there will now be new Add-in apps from Akazio, Asana, BugSnag, DocuSign, Github, Hubspot, Jira, Keeper AI, Prodoscore, RingClone, and Trello.

It also announced an integration with Microsoft Teams that will bring enterprise-grade phone capabilities directly to the Microsoft Teams app. RingCentral’s softphone will be available within the Microsoft Teams app to allow customers to place calls, view call history, and view synced RingCentral contacts directly within the Microsoft Teams app.

Its stock is currently trading at $261.1 with a market capitalization of $23.9 billion. It touched a 52-week high of $449.00 in February and a 52-week low of $229.00 in May.