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BELMONT, Calif. - RingCentral, Inc. (NYSE:RNG), a $2.8 billion market cap company with annual revenues of $2.5 billion, announced Friday the expansion and extension of its credit agreement, increasing the total facility to $1.24 billion with $930 million remaining undrawn. According to InvestingPro analysis, the company appears undervalued based on its Fair Value estimates.
The company plans to use the proceeds primarily to settle its $609 million Convertible Notes due in March 2026 and to refinance other outstanding debt at lower interest rates. The transaction was led by Bank of America and JPMorgan, with participation from Wells Fargo, Goldman Sachs, Morgan Stanley, and Mizuho, among others. With a current ratio of 0.65, this refinancing comes at a crucial time as InvestingPro data shows the company’s short-term obligations currently exceed its liquid assets.
The restated credit agreement includes an increase in the undrawn delayed draw term loan facility from $350 million to $650 million and an expansion of the undrawn revolving credit facility from $225 million to $280 million. The company also secured reduced interest rates across the entire credit facility, including its drawn $310 million term loan, and extended maturities to 2030.
"This is a proactive step to enhance our financial flexibility while securing more favorable terms," said Vaibhav Agarwal, Chief Financial Officer of RingCentral, in the press release statement. Following this transaction, the company expects to have no further debt maturities until 2030.
The refinancing maintains RingCentral’s current leverage profile and comes after recent credit rating upgrades from both Fitch Ratings and Moody’s, according to the company’s announcement.
RingCentral provides AI-powered business communications, contact center, and video solutions to businesses worldwide. The company has shown revenue growth of 6.5% over the last twelve months, and analysts have recently revised their earnings estimates upward. For deeper insights into RingCentral’s financial health and growth prospects, including 10 additional exclusive ProTips, visit InvestingPro.
In other recent news, RingCentral reported its second-quarter 2025 earnings, surpassing Wall Street expectations with an earnings per share (EPS) of $1.06, compared to the forecasted $1.02. Revenue also exceeded projections, reaching $620 million against a forecast of $617.85 million. The company has also acquired CommunityWFM, a cloud-based workforce management software provider, to enhance its RingCX contact center platform with AI-driven capabilities. This acquisition aims to optimize agent scheduling and staffing through AI-based forecasting and automation. Additionally, Oppenheimer upgraded RingCentral’s stock to Outperform, citing strong free cash flow growth and setting a price target of $35. Goldman Sachs reiterated its Neutral rating, highlighting that RingCentral’s subscription revenue, operating margin, and free cash flow surpassed expectations. These developments reflect RingCentral’s strategic moves to strengthen its market position and financial performance.
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