Latest news with #RingSense
Yahoo
23-06-2025
- Business
- Yahoo
Twilio's AI Push: Enough to Boost Communications Revenues Further?
Twilio TWLO is augmenting its product portfolio with the integration of artificial intelligence (AI) and collaborations with AI leaders to enhance its customer engagement capabilities. Last year, Twilio launched Conversational AI through a partnership with OpenAI by integrating OpenAI's Realtime API into this platform. The platform was developed for enterprises so they can automate their customer engagement with natural-sounding interaction. Conversational AI serves across various channels, including voice, SMS, WhatsApp, and web chat. Integrated with features like ConversationRelay, Conversational Intelligence and large language models, the platform simplifies the development and deployment of voice AI agents. The platform can analyze voice and messaging conversations for structured data extraction. The platform also supports real-time streaming, speech recognition, interruption handling, and expressive voices, making customer interactions seamless. Recently, the company launched a unified platform for customer engagement by integrating its messaging tools, customer data platform, and AI tools to enable enterprises to deliver greater personalization for automated customer interaction. Twilio also enhanced the capabilities of its Customer Data Platform and Communications Platform as a Service (CPaaS) through new updates like conversational AI tools, secure communications channels, and intelligent compliance solutions. In one of its research reports, Twilio stated that 58% of non-profits and 47% of B2C businesses in the private sector are using AI with their CPaaS solution. Moreover, 68% of non-profits and 64% of B2C brands are using AI to analyze end-user data to understand their needs and pain points, implying a large-scale adoption of AI. These factors are driving the growth of Twilio's communications division, which grew 13% to reach $1.1 billion in the first quarter of 2025. Twilio expects its 2025 revenues to grow in the range of 7.5-8.5% organically. The Zacks Consensus Estimate for the same has been pegged at $4.81 billion, indicating year-over-year growth of 7.9%. However, Twilio also faces competition from other players in the customer engagement space. RingCentral, Inc. RNG started as a leader in cloud phone systems but now offers messaging, video and AI-powered contact center tools. RNG launched RingSense in 2023 as a proprietary AI engine across its communications tools. Unlike Twilio, which uses OpenAI's AI models, RingCentral uses its proprietary models for auto-generated call summaries and follow-ups and topic extraction from phone and video calls. Bandwidth BAND focuses mostly on voice and messaging services through application programming interfaces. Bandwidth is expanding into emergency services and call protection features, making its platform essential with strong customer retention. Both RingCentral and Bandwidth are growing in the communications space on the back of their uniqueness, but Twilio's edge lies in its broader platform and AI integration. Shares of Twilio have returned 7.8% year to date compared with the Zacks Internet – Software industry's growth of 11.2%. Image Source: Zacks Investment Research From a valuation standpoint, TWLO trades at a forward price-to-sales ratio of 3.58, significantly below the industry's average of 5.62. The company carries a Value Score of F. Image Source: Zacks Investment Research The Zacks Consensus Estimate for Twilio's 2025 earnings is pegged at $4.49 per share, revised downward by a cent over the past 30 days. The estimated earnings figure suggests year-over-year growth of 22.34%. Image Source: Zacks Investment Research Twilio currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Ringcentral, Inc. (RNG) : Free Stock Analysis Report Twilio Inc. (TWLO) : Free Stock Analysis Report Bandwidth Inc. (BAND) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
10-06-2025
- Business
- Yahoo
RNG Q1 Earnings Call: AI-Driven Portfolio Delivers Steady Growth and Margin Expansion
Office and call centre communications software provider RingCentral (NYSE:RNG) met Wall Street's revenue expectations in Q1 CY2025, with sales up 4.8% year on year to $612.1 million. The company expects next quarter's revenue to be around $617 million, close to analysts' estimates. Its non-GAAP profit of $1 per share was 4.2% above analysts' consensus estimates. Is now the time to buy RNG? Find out in our full research report (it's free). Revenue: $612.1 million vs analyst estimates of $610.6 million (4.8% year-on-year growth, in line) Adjusted EPS: $1 vs analyst estimates of $0.96 (4.2% beat) Adjusted Operating Income: $133.4 million vs analyst estimates of $129.7 million (21.8% margin, 2.8% beat) Revenue Guidance for Q2 CY2025 is $617 million at the midpoint, roughly in line with what analysts were expecting Management reiterated its full-year Adjusted EPS guidance of $4.20 at the midpoint Market Capitalization: $2.47 billion RingCentral's first quarter results were shaped by continued adoption of its AI-led multi-product strategy and growing customer demand in core voice communications. CEO Vlad Shmunis emphasized the company's progress in shifting traditional communications to cloud-based solutions, noting, "The early results of these new products are promising." Management highlighted strong momentum in products like RingCX and RingSense, as well as successful expansion within small business and global service provider (GSP) customer segments. President and COO Kira Makagon cited improved operational efficiency and customer outcomes, with AI tools helping to reduce manual work and drive business value for clients across healthcare, financial services, and retail. The company attributed margin improvements to disciplined sales and marketing spending and reported progress in free cash flow generation and debt reduction. Looking forward, RingCentral's outlook is anchored by ongoing investment in AI-powered solutions, expansion of its product suite, and a focus on profitable growth. CFO Abhey Lamba confirmed that the company intends to maintain operating profitability and free cash flow improvement, stating, "We are committed to further driving operational efficiencies resulting in margin expansion while enabling us to invest in growth opportunities." Management signaled cautious optimism given macroeconomic uncertainties, such as tariffs and shifting customer spending patterns, but expects continued demand for cost-saving AI products. CEO Vlad Shmunis added, "The next phase in our growth will be driven by leveraging AI throughout our growing portfolio with increased addressable market and wallet share." Management attributed the quarter's performance to adoption of new AI-enabled products, rising engagement among small businesses and GSP partners, and operational efficiencies that supported margin gains. AI product traction: The company's new AI-powered products, including RingCX (cloud contact center), RingSense (AI insights and coaching), and AIR (AI phone agent), saw rapid early adoption, especially among small businesses and GSPs. Management reported over 1,000 AIR customers and strong sequential growth in RingSense usage, with AI tools cited as drivers of measurable cost savings and productivity gains for clients. Small business momentum: ARR from customers with fewer than 100 employees grew by double digits, reaching a two-year high. These clients, often in healthcare, retail, and financial services, are adopting voice-centric AI products for customer engagement and operational efficiency, delivering higher average revenue per user and faster payback for RingCentral. GSP partnerships expanding: Global service providers accounted for over 10% of ARR, with double-digit growth and efficient customer acquisition. Major partners like AT&T, Vodafone, and Cox Communications are now reselling RingCentral's AI-powered solutions, extending reach in North America and international markets. Enterprise and channel strengths: Larger enterprises continue to adopt RingCentral, drawn to its integrations with platforms such as Microsoft Teams and Salesforce. Over half of $1 million-plus TCV deals in Q1 included multiple RingCentral products, signaling success in cross-selling and up-selling to existing accounts. Operational discipline: Operating margin improvement stemmed from efficiencies in sales, marketing, and internal use of AI, which has increased productivity in customer support, sales outreach, and product development. Record free cash flow enabled debt reduction and share repurchases, supporting a stronger balance sheet. RingCentral's forward guidance rests on expanding its AI-first portfolio, disciplined cost management, and continued growth in core markets despite macroeconomic uncertainties. AI-led product expansion: Management expects ongoing adoption of new AI-powered offerings—such as AIR and RingCX—to drive higher average revenue per user and open new customer segments. These products are positioned as cost-saving and productivity-boosting solutions for both existing and new clients. Go-to-market leverage: The company plans to deepen relationships with GSPs and channel partners, using these alliances to efficiently access international markets and supplement direct sales, particularly as cloud adoption accelerates among businesses replacing legacy systems. Macro environment monitoring: While not seeing immediate headwinds, management remains cautious regarding tariffs, interest rates, and broader economic conditions. The company aims to maintain flexibility in its approach, emphasizing prudent financial management and readiness to adjust strategy if customer demand or deal cycles shift. In the coming quarters, StockStory analysts will be watching (1) sustained adoption and revenue contribution from AI-powered products like AIR and RingCX, (2) the pace of expansion among small business and GSP customer segments, and (3) progress toward free cash flow and margin targets through operational efficiency. The ability to maintain growth despite macroeconomic fluctuations will also be an important marker of execution. RingCentral currently trades at a forward price-to-sales ratio of 1×. In the wake of earnings, is it a buy or sell? See for yourself in our full research report (it's free). The market surged in 2024 and reached record highs after Donald Trump's presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025. While the crowd speculates what might happen next, we're homing in on the companies that can succeed regardless of the political or macroeconomic environment. 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