Why Are RingCentral Shares Trading Higher Premarket?

Keybanc analyst Steve Enders maintained RingCentral Inc RNG with an Overweight and raised the price target from $390 to $404, implying a 72.3% upside.
RingCentral reported third-quarter FY21 revenue growth of 37% year-on-year to $414.6 million, beating the consensus of $393.4 million.
Subscriptions revenue increased 38% Y/Y to $385.4 million.
Total Annualized Exit Monthly Recurring Subscriptions (ARR) increased 39% Y/Y to $1.64 billion.
RingCentral Office ARR (UCaaS + CCaaS) increased 42% Y/Y to $1.55 billion.
Mid-market and Enterprise ARR increased 53% Y/Y to $971 million.
The non-GAAP gross margin expanded 140 bps to 78.1%.
EPS of $0.36 beat the consensus of $0.33.
"Third-quarter results were outstanding, with accelerating growth driven by ramping contributions from our key partners and momentum from our upmarket customers," CEO Vlad Shmunis said.
CFO Transition: Mitesh Dhruv would depart as the CFO after the end of 2021.
RingCentral will consider internal and external candidates for the next CFO.
Outlook: RingCentral raised the FY21 revenue outlook from $1.539 billion - $1.545 billion to $1.580 billion - $1.581 billion, above the consensus of $1.55 billion. It sees Non-GAAP EPS of $1.32 (prior view $1.28 - $1.30) above the consensus of $1.29.
RingCentral sees Q4 revenue of $433.5 million - $434.5 million, above the consensus of $420.6 million. It sees Non-GAAP EPS of $0.37 above the consensus of $0.36.
Price Action: RNG shares traded higher by 22.1% at $285.17 in the premarket session on the last check Wednesday.

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