According to a recent report, the global unified communication as a service market is estimated to grow more than 23% annually through 2028. Earlier last month, RingCentral (NYSE: RNG) announced its second-quarter results that continued to surpass market expectations. The company is focusing on AI capabilities and improving integration with hardware vendors to expand its market share.
 

RingCentral’s Financials

RingCentral’s second-quarter revenues grew 28% to $487 million, ahead of the market’s forecast of $479 million. Non-GAAP net income per diluted share increased from $0.32 last year to $0.45, ahead of the Street’s estimates of $0.40.

By segment, software subscription revenue increased 32% to $463 million, and other revenues brought in the remaining $24 million. Adjusted for constant currency, subscription revenues rose 33%.

For the full year, it expects revenues of $1.99-$2.015 billion and non-GAAP EPS of $1.85-$1.93. The market was looking for revenues of $2.01 billion and an EPS of $1.86.
 

RingCentral’s Product Upgrades

During the quarter, RingCentral continued to advance its AI capabilities. It announced the availability of AI-powered video capabilities, along with extended browser support for RingCentral MVP and RingCentral Video customers. With the growing demand for hybrid work, there is a bigger need to deliver more intelligent meeting experiences. RingCentral Video now has differentiated AI-driven video meeting capabilities that include AI-based advanced meeting insights and summaries that make it faster and easier to catch up on missed meetings, RingCentral Whiteboard that allows the participants to have access to a digital canvas for visual collaboration, AI-based live transcription, AI-powered noise reduction, and remote desktop control to make presentations more seamless.

It also added several new features to make its partner products more effective. RingCentral’s Salesforce integration enhancements now allow for reps to easily click numbers to send an SMS and conduct a warm call transfer that lets reps first speak to whoever is receiving the transfer call to provide context. Its enhancement for the HubSpot integration allows sales teams to now end and view SMS messages and access both voicemail and fax capabilities within HubSpot.

The company also continues to add to its hardware partner network. The new workplace has brought significant changes to old conference rooms to make collaboration more effective. RingCentral has partnered with Avocor, a global provider of touch-enabled interactive displays, to add new innovations for RingCentral Rooms. Through this partnership, the company is launching RingCentral Rooms For Touch which will allow customers to join and end meetings with the touch of a finger. RingCentral Rooms for Touch will also be compatible with Whiteboard, its virtual collaborative canvas.

It entered into a similar go-to-market agreement with EPOS, a premium audio brand. With support for RingCentral Rooms on EPOS, customers will be able to leverage the premium audio of EPOS and the collaboration features for meeting rooms. Finally, within the personal sound space, it entered into an agreement with Jabra. RingCentral Rooms can now harness Jabra’s advanced onboard AI to deliver intelligent features such as automatically detecting who’s speaking and intelligently adjusting the picture to focus on them.

The market is pleased with RingCentral’s performance. Its stock is currently trading at $46.62 with a market capitalization of $4.45 billion. It is still a far cry from the 52-week high of $315.00 that it had reached in November last year. It has recovered from the 52-week low of $40.59 that it had fallen to in August this year.

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