THE COCKROACH OF CLOUD COMMUNICATION

(RNG), (ZM), (MSFT), (GOOGL)

Say what you want about RingCentral (RNG) but it just won’t die. 

The company’s been left for dead more times than I can count, but it keeps generating cash, rolling out new features, and, inconveniently for the bears, growing revenue. It’s not sexy. It’s not flashy. 

But if you’re looking for a beat-up tech name with margin expansion, product evolution, and a stock chart no one wants to look at… well, here we are.

Revenue in Q3 grew 10% year-over-year, with subscription revenue up 11%. It’s a far cry from the hypergrowth days of 2020, but RingCentral’s customer base remains sticky, especially at the enterprise level. 

Gross margins are holding steady above 70%, and non-GAAP operating margin improved to 18.7%, up over 700 basis points year-over-year. GAAP losses still exist, but free cash flow is now positive and tracking toward $400 million on an annualized basis. 

For a company that was burning cash not long ago, this is meaningful progress.

Debt is still the elephant in the room. $1.6 billion in convertibles looms large, especially in a higher-rate environment. But the company retired $486 million of it during the quarter, using a mix of cash and discounted buybacks. It’s not clean, but it’s pragmatic. 

And with interest payments now better aligned to actual cash flow, the liquidity picture looks a lot less dire than the stock price would suggest.

Growth is clearly moderating, but churn remains low and upsell momentum is building. RingSense, the company’s AI platform, is now embedded across messaging, video, and analytics. 

It’s still early days, but initial feedback has been positive. AI summaries, coaching insights, automated call scoring – these aren’t interesting and exciting toys. They’re productivity tools with real stickiness for enterprise customers.

RingCentral isn’t just a lone voice yelling into the void. It’s part of a much larger AI inflection that’s reshaping enterprise software and communications. 

Global AI software market revenue is forecast to exceed $170 billion in 2025 and expand toward nearly $470 billion by 2030. This growth speaks to the structural demand underpinning RingCentral’s AI strategy.

And it’s not the only company trying to capitalize on this shift.

Zoom Communications (ZM), a peer in business communications, recently raised its 2026 revenue outlook to about $4.83–$4.84 billion buoyed by the adoption of AI tools like Virtual Agent and agentic AI companions – a sign that customers are willing to pay for AI-enhanced workflows. 

Meanwhile, Microsoft (MSFT), whose Azure cloud and 365 productivity suite are deeply integrated with AI, reported a 10% uptick in quarterly profits and continued heavy AI infrastructure investment running into the tens of billions.

Even the biggest names in tech are doubling down. 

Alphabet (GOOGL) recently saw a stock upgrade tied to its comprehensive AI stack, with cloud revenue growth projected above 40% in 2026 and continued adoption across search, productivity, and AI-assisted services. 

Broad AI adoption isn’t fringe anymore as about 78% of organizations use AI in some business function, and global generative AI use continues to climb, setting the stage for communications platforms that can deliver genuine AI value.

In that competitive ecosystem, RingCentral’s AI isn’t a pet project. 

Its RingWEM workforce engagement tools, AI contact center enhancements, and embedded assistant capabilities aren’t just tick-the-box features . They’re positioning RingCentral as a true player in next-generation AI communications, even if the market hasn’t quite lit its candle yet.

There’s also been a subtle shift in sales strategy. RingCentral is focusing less on unprofitable SMB land grabs and more on high-value enterprise expansions. 

This shows up in average revenue per seat, which increased 5% year-over-year. The company is even talking about modest headcount growth in sales. This isn’t something you hear from many SaaS players right now.

Guidance was raised across the board. Full-year revenue is now projected at $2.43 billion, with operating margins improving faster than expected. That’s not exactly a turnaround headline, but it suggests that this team is executing better than the market gives it credit for. 

The stock, meanwhile, is trading at under 1x forward sales. Even with zero multiple expansion, the path to mid-teens annual returns looks viable if execution continues.

None of this makes RingCentral a rocket ship. But it doesn’t need to be. It just needs to survive, grow slowly, and generate cash. 

In a world where AI is inflating every asset with a pulse, there’s something refreshingly boring about a company that’s actually delivering software that works, for customers who pay, at margins that hold.

So no, it’s not flashy. But it’s functional. And it’s not going anywhere.

Just ask the cockroach.