Shares of RingCentral Inc. jumped over 7% in after-hours trading today after the cloud communications company delivered healthy earnings and revenue beats in its latest quarter.

For its third quarter ended Sept. 30, RingCentral reported adjusted earnings per share of 78 cents, up from 55 cents per share in the same quarter of last year, on revenue of $558 million, up 10% year-over-year. Analysts polled by FactSet had expected adjusted earnings of 75 cents per share on revenue of $554 million.

RingCentral’s higher revenue was driven by subscription revenue, which was up 10% year-over-year, while annualized “exit” monthly recurring subscriptions rose 11%, to $2.26 billion. The company’s midmarket and enterprise annual recurring rose 13%, to $1.41 billion.

As of the end of the quarter, RingCentral had $432 million in cash and cash equivalents on hand, up from $225 million as of the end of the second quarter. The higher figure was from the issuance of $400 million in senior notes due in 2030, with $154 million of the proceeds used in the third quarter to repurchase 2025 and 2026 convertible notes. The company also repurchased $75 million in shares during the quarter.

Business highlights in the quarter included RingCentral acquiring Hopin Ltd.’s flagship Events platform, which companies use to host virtual and hybrid events, and a second product called Session, also from Hopin, for an undisclosed sum in August. Session is geared toward hosting small online events and provides an analytics tool for measuring user engagement and other capabilities.

As part of the acquisition, RingCentral hired engineering, product and go-to-market professionals from Hopin who worked on Events and Sessions. The two platforms’ customers were also planned to be moved into RingCentral.

“RingCentral is leveraging its leading position in Unified Communications to transform into an AI-first, multi-product company with proprietary offerings across UCaaS, CCaaS, Conversation and Revenue Intelligence, and Events, Webinars and Meetings,” Tarek Robbiati, RingCentral’s chief executive, said in the company’s earnings release. “Our solid third-quarter results demonstrate our ability to drive long-term durable, profitable growth.”

RingCentral’s improving bottom line and increased customer growth were also reflected in its outlook, with the company saying it expects adjusted earnings per share of 82 to 83 cents on revenue of $566.6 million to $573.5 million in its fiscal fourth quarter. Analysts had been expecting 82 cents and $570.95 million.

For its full fiscal year 2023, RingCentral expects adjusted earnings per share of $3.19 to $3.20 on revenue of $2.198 billion to $2.205 billion. Analysts were expecting $3.15 and $2.2 billion.

Image: RingCentral