RingCentral CEO: AI-Answered Calls Are Still A 'Very, Very Small Percentage' Of Network Traffic
Founder Vlad Shmunis called AI growth explosive but its share of calls tiny, as the company said AI customers near 15% of recurring revenue.
RingCentral, which sells cloud business phone, messaging, video and contact center software, has a small AI footprint on its own network, founder, Chairman and CEO Vlad Shmunis told analysts on the company's third-quarter earnings call on Thursday. AI growth "has been explosive," he said, but "overall penetration of AI and AI-answered calls on our network is still very, very small percentage-wise."
Explosive growth, small base
Shmunis said traffic growth "has been strong but linear." The opportunity, he said, is to have customers assign AI to more of their traffic, which he called front and center for his teams.
CFO Vaibhav Agarwal said customers using at least one paid native AI product represent approximately 15% of annual recurring revenue, or over $400 million, doubling year over year. He added that AI is "growing off a smaller base" than the overall subscription business.
The AI receptionist product now has more than 22,000 customers, up nearly 4x year over year, management said. The AI conversation expert is approaching 7,000 customers, up 60%, and a lightweight contact center offering has more than 14,000 paying customers.
The base AI is sold into
Shmunis put the platform's annual volume at roughly 40 billion minutes, 14 billion calls and 4 billion text messages. Management argues that scale gives it a base to sell AI into.
Agarwal reported third-quarter subscription revenue of about $653 million, up 6%, and total revenue of about $676 million, up 5.9%. Non-GAAP operating margin reached 24.7%, and free cash flow was $157 million, up 21%. Gross debt fell below $1 billion.
The NICE extension exchange
An analyst asked why the extension of the NICE contact center partnership ran only one year. Shmunis replied, "I'm not sure, you know, where you got the one year from," and said he did not think specifics had ever been disclosed.
He said the extension adds to whatever term existed, leaving "multiple years left on this contract," and that the partnership "could continue being extended as it has been for the last 12 years."
Raised outlook, no 2027 guide
Management raised its 2026 outlook, with total revenue of $2.650 billion to $2.657 billion and free cash flow of $620 million to $630 million. For the fourth quarter it expects subscription revenue of approximately $653 million to $659 million.
Agarwal said the company is not providing formal 2027 guidance, but expects the durable core to continue with AI as a growing layer on top.
Market value stood at $6.9 billion as of the original report on Thursday evening.
Sources
- RingCentral (RNG) Reports Earnings Tomorrow: What To Expect — Yahoo Finance
- RingCentral (RNG) Q3 Earnings and Revenues Top Estimates — Yahoo Finance
- RingCentral: Q3 Earnings Snapshot — Associated Press
- RingCentral Breaks Out Before Earnings, With AI Demand In Focus | Investor's Business Daily — investors.com
- Ringcentral, Inc. (RNG) Hits Fresh High: Is There Still Room to Run? — Yahoo Finance
