RingCentral (NYSE:RNG) climbed to a new four-year high on Monday, as investors positioned their portfolios ahead of the cutoff date for its 67-percent higher dividends.
In intra-day trading, the stock jumped to a record high of $55.30 before trimming gains to end the session just up by 11.16 percent at $53.70 apiece.
The company is set to pay the first round of higher dividends amounting to $0.125 per share to all shareholders on record as of August 6, 2026. Payments will be made on August 20.
Photo by Tima Miroshnichenko on Pexels
Q2 Estimates Crushed
The higher dividends followed the company’s strong earnings performance in the second quarter of the year.
RingCentral (NYSE:RNG) said that it grew its revenues in the second quarter of the year by 5.9 percent to $657 million from $620 million in the same period last year. The figure also exceeded earlier expectations of $648 million to $653 million.
The growth was particularly owed to strong subscription revenues, which ended at $634 million during the period, up 5.8 percent from $598.7 million year-on-year, and beating its earlier guidance of $628 million to $633 million.
GAAP diluted earnings per share ended at $0.45, more than tripling the $0.14 posted in the same period last year. Non-GAAP diluted EPS stood at $1.22, or 15 percent higher than the $1.06 year-on-year, and surpassing its earlier outlook of $1.15 to $1.17.
“We delivered another strong quarter, exceeding the high end of guidance across all key metrics while accelerating our transformation into an Agentic Voice AI leader,” RingCentral (NYSE:RNG) Chairman and CEO Vlad Shmunis said.
“Customers using at least one paid AI product now represent approximately 13% of ARR, having doubled year-over-year. This is a reflection of the growing value of our AI portfolio. Powered by our global voice network, rich customer interaction data, and ability to orchestrate AI and human agents, RingCentral is uniquely positioned to lead the future of customer engagement,” he noted.
Hedge Fund Participation Dips but Conviction Strengthens
Institutional investors appeared to be bullish about the company’s long-term growth prospects.
Data from Insider Monkey as of the end of the first quarter of the year showed that 25 hedge funds held positions in the company, down from 27 in the previous quarter.
However, institutional conviction strengthened markedly, with the existing hedge funds collectively owning a $406 million stake in the company, up 17.7 percent from the $344.8 million in the quarter prior.
While we acknowledge the risk and potential of RNG as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than RNG and that has 10,000% upside potential, check out our report about the cheapest AI stock.
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