RingCentral Office® ARR up 40% to $1.3
billion
Enterprise ARR up 62% to over $500 million
Global 2000 and Fortune 1000 Enterprise
Business now surpasses $100 million ARR
RingCentral, Inc. (NYSE: RNG), a leading provider of global
enterprise cloud communications, video meetings, collaboration, and
contact center solutions, today announced financial results for the
first quarter ended March 31, 2021.
First Quarter Financial Highlights
- Total revenue increased 32% year over year to $352
million.
- Subscriptions revenue increased 34% year over year to $325
million.
- Total Annualized Exit Monthly Recurring Subscriptions (ARR)
increased 37% year over year to $1.4 billion.
- RingCentral Office® ARR (UCaaS + CCaaS) increased 40% year over
year to $1.3 billion.
- Direct and Partners Office ARR(1) increased 33% year over year
to $817 million, an acceleration of 8 points year over year.
- Channel Office ARR increased 53% year over year to $505
million.
“First quarter results were exceptional, with meaningful
contributions from key partners including Avaya, Atos, AT&T,
BT, and Telus,” said Vlad Shmunis, RingCentral’s founder, chairman
and CEO. “We believe we are witnessing the intersection of two
megatrends of digital transformation and hybrid workforce adoption,
which is creating a structural shift in awareness and demand for
cloud communications solutions. RingCentral has always been about
work from anywhere. With our proven UCaaS platform and a
comprehensive CCaaS portfolio, RingCentral continues to win as a
trusted communications partner of choice for businesses of all
sizes in their digital transformation journeys.”
(1) Direct and Partners Office ARR is defined to include direct,
Avaya, Atos, Alcatel-Lucent Enterprise, AT&T, BT, Telus, and
other non-channel partners.
Financial Results for the First Quarter 2021
- Revenue: Subscriptions revenue of $325 million increased
34% year over year and accounted for 92% of total revenue. Total
revenue was $352 million for the first quarter of 2021, up from
$268 million in the first quarter of 2020, representing 32%
growth.
- Operating Income (Loss): GAAP operating loss was ($42)
million, compared to a GAAP operating loss of ($25) million in the
same period last year, primarily driven by higher share-based
compensation and amortization of acquisition intangibles. Non-GAAP
operating income was $33 million, compared to a non-GAAP operating
income of $22 million in the same period last year.
- Net Income (Loss) Per Share: GAAP net loss per share was
($0.00), compared to ($0.70) in the same period last year. The
lower loss was primarily driven by mark-to-market gains associated
with investments and strategic partnerships. Non-GAAP net income
per diluted share was $0.27, compared to $0.19 per diluted share in
the same period last year. The first quarters of 2021 and 2020
reflected a 22.5% non-GAAP tax rate. There were no material cash
taxes given our net operating loss carryforwards.
- Cash and Cash Equivalents: Total cash and cash
equivalents at the end of the first quarter of 2021 was $463
million. This compares to $640 million at the end of the fourth
quarter of 2020. Our cash balance reflects $183 million cash paid
for partial repurchase of our 2023 convertible senior notes.
Additional Highlights
Partnerships
- Together with Avaya, announced global expansion of Avaya Cloud
Office™ by RingCentral®, now available in 13 countries. In
addition, the companies announced new capabilities including Team
Connect, customizable key layouts, Salesforce integration,
multi-account administration, and conversation folders.
- Together with Atos, launched Unify Video by RingCentral in
Europe. A standalone video with team messaging product, Unify Video
is designed to enhance online meetings and enable people to work
smarter and communicate and collaborate from anywhere.
- Together with Alcatel-Lucent Enterprise, announced the launch
of Rainbow Office, powered by RingCentral, in eight European
countries including Austria, Belgium, France, Germany, Ireland,
Italy, Spain, and the Netherlands.
- Together with AT&T Business, introduced AT&T
Office@Hand Wireless, empowering users with a single phone number
with native mobile dialing and voicemail options. AT&T
Office@Hand Wireless allows businesses to maintain a
high-performing voice presence across all devices - mobile, desk
phones, tablets, and personal computers.
- Announced partnership with Eclipse Technology Solutions, a
leading provider specializing in the delivery of transformative,
end-to-end technology solutions and services, to offer
RingCentral’s market leading UCaaS solutions as a lead cloud
communications offer to enterprise customers in Canada.
- Announced partnership with ecotel communication ag, a leading
provider of IT and telecommunication solutions for business
customers in Germany, whereby RingCentral will be the lead UCaaS
offer for customers of all sizes transitioning to the cloud. As
part of the partnership, ecotel will offer RingCentral Office® and
provide customers with value-added services including migration,
adoption, and integration to help customers rapidly move to the
cloud.
Platform
- Announced a range of new video and team messaging capabilities
to enhance online meetings. Some of the new RingCentral Video
features include video overlay, video virtual backgrounds, breakout
rooms, and picture-in-picture. New team messaging capabilities
include personal folders, export message data, and external guest
controls.
- Announced the release of in-app calling for Salesforce. The new
feature enables sales agents to make, transfer, and control phone
calls directly from Salesforce, resulting in increased productivity
and efficiency, and empowering sales agents to drive improved
customer engagement.
- Acquired the technology and engineering team at Kindite, a
developer of leading cryptographic technologies that mitigate and
reduce security and privacy risks to information and applications
in the cloud. The new technology will be incorporated into
RingCentral’s global communications platform later this year,
providing customers with enhanced security capabilities including
end-to-end encryption.
- Announced plans to open a new innovation center in India with
sites in Bangalore and Gurgaon. Also announced that Anil Goel has
been appointed as Vice President of Engineering and India General
Manager. Goel was most recently Global Chief Technology and Product
Officer at OYO Hotels and Homes, and previous to that, was at
Amazon as Head of Engineering of Customer Returns and Reverse
Logistics Business.
Recognition
- Announced that RingCentral was named a Customers’ Choice in the
April 2021 Gartner Peer Insights ‘Voice of the Customer’: Unified
Communications as a Service (UCaaS), Worldwide report for both the
large and mid-size enterprise. RingCentral was the only vendor to
receive the highest overall rating of 4.6 out of 5 stars, as of
February 28, 2021 based on 126 reviews.
- Announced that RingCentral has been recognized as a Leader in
two IDC MarketScape UCaaS reports for Enterprise and small and
medium-sized business (SMB) market segments. The Enterprise report
evaluates 19 different vendors that sell to organizations with
1,000 or more employees, while the SMB report evaluates 15
different vendors that sell to organizations with fewer than 1,000
employees. In both reports, RingCentral was named a Leader.
Financial Outlook
Full Year 2021 Guidance:
- Raising subscriptions revenue range to $1.388 to $1.396
billion, representing annual growth of 28% to 29%. This is up from
our prior range of $1.365 to $1.375 billion and annual growth of
26% to 27%.
- Raising total revenue range to $1.500 to $1.510 billion,
representing annual growth of 27% to 28%. This is up from our prior
range of $1.475 to $1.490 billion and annual growth of 25% to
26%.
- GAAP operating margin range of (21.3%) to (20.1%).
- Non-GAAP operating margin range of 10.0% to 10.1%.
- Non-GAAP tax rate assumed to be 22.5%. No material cash taxes
expected given net operating loss carryforwards.
- Raising non-GAAP EPS range to $1.24 to $1.27 based on 93.5 to
94.0 million fully diluted shares. This is up from our prior range
of $1.20 to $1.24 based on 94.0 to 94.5 million fully diluted
shares.
- Share-based compensation range of $410 to $420 million,
amortization of debt discount and issuance costs of $64 million,
amortization of acquisition intangibles range of $46 to $49
million, and acquisition related matters of approximately $0.4
million.
Second Quarter 2021 Guidance:
- Subscriptions revenue range of $332 to $334 million,
representing annual growth of 29% to 30%.
- Total revenue range of $356.5 to $359.5 million, representing
annual growth of 28% to 29%.
- GAAP operating margin range of (23.2%) to (21.6%).
- Non-GAAP operating margin of 9.3%.
- Non-GAAP tax rate assumed to be 22.5%. No material cash taxes
expected given net operating loss carryforwards.
- Non-GAAP EPS range of $0.27 to $0.28 based on 93.0 million
fully diluted shares.
- Share-based compensation range of $99 to $104 million,
amortization of debt discount and issuance costs of $16 million,
and amortization of acquisition intangibles of $12 million.
For a reconciliation of our forecasted non-GAAP operating
margin, see “Reconciliation of Forecasted Operating Margin GAAP
Measures to Non-GAAP Measures.” We have not reconciled our
forecasted non-GAAP EPS to its respective forecasted GAAP measure
because we do not provide guidance on it. We do not provide
guidance on forecasted GAAP EPS because of the inherent uncertainty
and complexity involved in forecasting the intercompany
remeasurement gain (loss), gain (loss) associated with investments
and strategic partnerships, gain (loss) on early debt conversions,
and provision (benefit) from income taxes, which could be
significant reconciling items between the non-GAAP and respective
GAAP measures. The intercompany remeasurement gain (loss) is
affected by the movement in various exchange rates relative to the
U.S. Dollar, which is difficult to predict and subject to constant
change. We do not provide guidance on gain (loss) associated with
investments and strategic partnerships as it is based on future
share prices, which are difficult to predict and subject to
inherent uncertainties. We do not provide guidance on gain (loss)
on debt early conversions as it is based on future conversion
requests, future share prices, and interest rates, which are
difficult to predict and are subject to inherent uncertainties. We
do not provide guidance on forecasted GAAP tax rates as we do not
forecast discrete tax items as they are difficult to predict. The
provision (benefit) from income taxes, excluding discrete items, is
expected to have an immaterial impact to our GAAP EPS. We utilized
a projected long-term tax rate in our computation of the non-GAAP
income tax provision. For fiscal 2021, we have determined the
projected non-GAAP tax rate to be 22.5%. Accordingly, a
reconciliation of the non-GAAP financial measure guidance to the
corresponding GAAP measure is not available without unreasonable
effort.
Conference Call Details:
- What: RingCentral financial results for the first
quarter of 2021 and outlook for the second quarter and full year of
2021.
- When: Tuesday, May 4, 2021 at 2:00PM PT (5:00PM
ET).
- Dial-in: To access the call in the United States, please
dial (877) 705-6003, and for international callers, dial (201)
493-6725. Callers are encouraged to dial into the call 10 to 15
minutes prior to the start to prevent any delay in joining.
- Webcast: http://ir.ringcentral.com (live and
replay).
- Replay: Following the completion of the call through
11:59 PM ET on May 11, 2021, a telephone replay will be available
by dialing (844) 512-2921 from the United States or (412) 317-6671
internationally with recording access code 13718511.
Investor Presentation Details
An investor presentation providing additional information and
analysis can be found at http://ir.ringcentral.com.
About RingCentral
RingCentral, Inc. (NYSE: RNG) is a leading provider of business
cloud communications and contact center solutions based on its
powerful Message Video Phone™ (MVP™) platform. More flexible and
cost effective than legacy on-premise PBX and video conferencing
systems that it replaces, RingCentral empowers modern mobile and
distributed workforces to communicate, collaborate, and connect via
any mode, any device, and any location. RingCentral offers three
key products in its portfolio including RingCentral Office® , a
Unified Communications as a Service (UCaaS) platform including team
messaging, video meetings, and a cloud phone system, Glip® the
company’s free video meetings solution with team messaging that
enables Smart Video Meetings™, and RingCentral cloud Contact Center
solutions. RingCentral’s open platform integrates with leading
third party business applications and enables customers to easily
customize business workflows. RingCentral is headquartered in
Belmont, California, and has offices around the world.
© 2021 RingCentral, Inc. All rights reserved. RingCentral,
Message Video Phone, MVP, RingCentral Office, Glip, Smart Video
Meetings, and the RingCentral logo are trademarks of RingCentral,
Inc.
Forward-Looking Statements
This press release contains “forward-looking statements,”
including but not limited to, statements regarding our future
financial results, our GAAP and non-GAAP guidance, our momentum in
mid-market and enterprise, contributions from channel partners, the
success of our strategic relationships, such as our relationships
with Avaya, Atos, AT&T, Alcatel-Lucent Enterprise, BT, Eclipse
Technology Solutions, ecotel communication, Telus, and Vodafone
Business, our expectations regarding our strategic acquisitions,
such as Kindite, our ability to expand and deepen our global
distribution network, our market opportunity, our expectations
around market trends, including digital transformation and hybrid
workforce adoption, our expectations with respect to awareness and
demand for cloud communications solutions, our ability to address
business communication needs in the new work from anywhere
environment, and the effects of the COVID-19 pandemic.
Forward-looking statements are subject to known and unknown risks
and uncertainties, and are based on assumptions that may prove to
be incorrect, which could cause actual results to differ materially
from those expected or implied by the forward-looking statements.
Among the important factors that could cause actual results to
differ materially from those in any forward-looking statements are:
the future effects of the COVID-19 pandemic; our ability to realize
the anticipated benefits of our strategic relationships, such as
our relationships with Avaya, Atos, AT&T, Alcatel-Lucent
Enterprise, BT, Eclipse Technology Solutions, ecotel communication,
Telus, and Vodafone Business; our expectations regarding our
strategic acquisitions, such as Kindite; our ability to grow at our
expected rate of growth; our ability to add and retain larger and
enterprise customers and enter new geographies and markets; our
ability to continue to release, and gain customer acceptance of,
new and improved versions of our services, including RingCentral
Office® and Glip; our ability to compete successfully against
existing and new competitors; our ability to enter into and
maintain relationships with resellers, carriers, channel partners
and strategic partners; our ability to successfully and timely
integrate, and realize the benefits of any significant acquisition
we may make; our ability to manage our expenses and growth; and
general market, political, economic, and business conditions, as
well as those risks and uncertainties included under the captions
“Risk Factors” and “Management’s Discussion and Analysis of
Financial Condition and Results of Operations,” in our Form 10-K
for the year ended December 31, 2020, filed with the Securities and
Exchange Commission, and in other filings we make with the
Securities and Exchange Commission from time to time.
All forward-looking statements in this press release are based
on information available to RingCentral as of the date hereof, and
we undertake no obligation to update these forward-looking
statements, to review or confirm analysts’ expectations, or to
provide interim reports or updates on the progress of the current
financial quarter.
Non-GAAP Financial Measures
Our reported financial results and financial outlook include
certain Non-GAAP financial measures, including Non-GAAP
subscriptions gross margin, Non-GAAP other gross margin, Non-GAAP
operating margin, Non-GAAP income (loss) from operations, Non-GAAP
net income (loss), Non-GAAP net income (loss) per diluted share,
Non-GAAP net cash provided by (used in) operating activities, and
Non-GAAP free cash flow. Non-GAAP subscriptions gross margin is
defined as Non-GAAP subscriptions gross profit divided by GAAP
subscriptions revenue. Non-GAAP other gross margin is defined as
Non-GAAP other gross profit divided by GAAP other revenue. Non-GAAP
income (loss) from operations is defined as GAAP income (loss) from
operations excluding share-based compensation which includes
related employer payroll taxes, amortization of acquisition
intangibles, and acquisition related matters including transaction
costs, integration costs, restructuring costs, and
acquisition-related retention payments, as well as changes in the
fair value of contingent consideration obligations. Non-GAAP
operating margin is defined as Non-GAAP income (loss) from
operations divided by total GAAP revenue. Non-GAAP net income
(loss) is defined as GAAP net income (loss) excluding share-based
compensation which includes related employer payroll taxes,
intercompany remeasurement gains or losses, acquisition related
matters, amortization of acquisition intangibles, non-cash interest
expense associated with amortization of debt discount and issuance
costs related to our convertible senior notes, gain (loss)
associated with investments and strategic partnerships, loss on
early extinguishment of debt, tax benefit from release of valuation
allowance, and the related income tax effect of these
adjustments.
Non-GAAP diluted shares outstanding include the impact on shares
used in per share calculations of our outstanding capped call
transactions. Our outstanding capped call transactions are
anti-dilutive in GAAP earnings per share but are expected to
mitigate the dilutive effect of our convertible notes and therefore
are included in the calculations of non-GAAP diluted shares
outstanding.
Non-GAAP net cash provided by (used in) operating activities is
defined as net cash provided by (used in) operating activities plus
cash paid for repayments of convertible senior notes attributable
to debt discount and cash paid for strategic partnerships. Non-GAAP
free cash flow is defined as Non-GAAP net cash provided by (used
in) operating activities reduced by purchases of property and
equipment and capitalized internal-use software. We believe
information regarding free cash flow provides useful information to
investors in understanding and evaluating the strength of liquidity
and available cash.
We have included Non-GAAP subscriptions gross margin, Non-GAAP
other gross margin, Non-GAAP operating margin, Non-GAAP net income
(loss), Non-GAAP net income (loss) per diluted share, Non-GAAP net
cash provided by (used in) operating activities, and Non-GAAP free
cash flow in this press release because they are key measures used
by us to understand and evaluate our operating performance and
trends, to prepare and approve our annual budget, and to develop
short and long-term operational plans. In particular, the exclusion
of certain expenses and cash flow items in calculating Non-GAAP
subscriptions gross margin, Non-GAAP other gross margin, Non-GAAP
operating margin, Non-GAAP net income (loss), Non-GAAP net income
(loss) per diluted share, Non-GAAP net cash provided by (used in)
operating activities, and Non-GAAP free cash flow provide useful
measure for period-to-period comparisons of our business.
Although Non-GAAP subscriptions gross margin, Non-GAAP other
gross margin, Non-GAAP operating margin, Non-GAAP net income
(loss), Non-GAAP net income (loss) per diluted share, Non-GAAP net
cash provided by (used in) operating activities, and Non-GAAP free
cash flow are frequently used by investors in their evaluations of
companies, these non-GAAP financial measures have limitations as
analytical tools and should not be considered in isolation or as a
substitute for financial information presented in accordance with
GAAP. Because of these limitations, these non-GAAP financial
measures should be considered alongside other financial performance
measures.
Reconciliations of the Company’s non-GAAP financial measures to
their most directly comparable GAAP measures has been provided in
the financial statement tables included in this press release.
Other Measures
Our reported results also include our annualized exit monthly
recurring subscriptions, RingCentral Office® annualized exit
monthly recurring subscriptions, mid-market and enterprise
annualized exit monthly recurring subscriptions, enterprise
annualized exit monthly recurring subscriptions, channel partner
annualized exit monthly recurring subscriptions, and net monthly
subscriptions dollar retention. We define our annualized exit
monthly recurring subscriptions as our monthly recurring
subscriptions multiplied by 12. Our monthly recurring subscriptions
equal the monthly value of all customer recurring charges
contracted at the end of a given month. We believe this metric is a
leading indicator of our anticipated subscriptions revenue. We
calculate our RingCentral Office® annualized exit monthly recurring
subscriptions in the same manner as we calculate our annualized
exit monthly recurring subscriptions, except that only customer
subscriptions from RingCentral Office® and RingCentral customer
engagement solutions customers are included when determining
monthly recurring subscriptions for the purposes of calculating
this key business metric. We calculate mid-market and enterprise
annualized exit monthly recurring subscriptions in the same manner
as we calculate our RingCentral Office® annualized exit monthly
recurring subscriptions, except that only customer subscriptions
from customers generating $25,000 or more in annual recurring
revenue are included. We calculate enterprise annualized exit
monthly recurring subscriptions in the same manner as we calculate
our RingCentral Office® annualized exit monthly recurring
subscriptions, except that only customer subscriptions from
customers generating $100,000 or more in annual recurring revenue
are included. We calculate channel partner Office annualized exit
monthly recurring subscriptions in the same manner as we calculate
our annualized exit monthly revenue subscriptions, except that only
customer subscriptions generated from channel partners are
included. We calculate direct and partners Office annualized exit
monthly recurring subscriptions in the same manner as we calculate
our annualized exit monthly revenue subscriptions, except that only
customer subscriptions not generated from channel partners are
included. We define dollar net change as the quotient of (i) the
difference of our monthly recurring subscriptions at the end of a
period minus our monthly recurring subscriptions at the beginning
of a period minus our monthly recurring subscriptions at the end of
the period from new customers we added during the period, (ii) all
divided by the number of months in the period. We define our
average monthly recurring subscriptions as the average of the
monthly recurring subscriptions at the beginning and end of the
measurement period.
TABLE 1
RINGCENTRAL, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Unaudited, in
thousands)
March 31, 2021
December 31, 2020
Assets
Current assets
Cash and cash equivalents
$
463,067
$
639,853
Accounts receivable, net
166,852
176,034
Deferred and prepaid sales commission
costs
73,578
63,726
Prepaid expenses and other current
assets
40,206
46,516
Total current assets
743,703
926,129
Property and equipment, net
145,598
142,208
Operating lease right-of-use assets
48,938
51,115
Long-term investments
270,697
213,176
Deferred and prepaid sales commission
costs, non-current
680,988
667,779
Goodwill
56,295
57,313
Acquired intangibles, net
115,040
118,313
Other assets
8,453
8,564
Total assets
$
2,069,712
$
2,184,597
Liabilities, Temporary Equity, and
Stockholders’ Equity
Current liabilities
Accounts payable
$
44,719
$
54,043
Accrued liabilities
216,343
210,654
Current portion of convertible senior
notes, net
37,051
31,148
Deferred revenue
146,245
142,223
Total current liabilities
444,358
438,068
Convertible senior notes, net
1,350,792
1,375,320
Operating lease liabilities
36,070
38,722
Other long-term liabilities
21,299
20,241
Total liabilities
1,852,519
1,872,351
Temporary equity
4,125
3,787
Stockholders’ equity
Common stock
9
9
Additional paid-in capital
582,157
673,950
Accumulated other comprehensive income
3,394
6,806
Accumulated deficit
(372,492
)
(372,306
)
Total stockholders’ equity
$
213,068
$
308,459
Total liabilities, temporary equity and
stockholders’ equity
$
2,069,712
$
2,184,597
TABLE 2
RINGCENTRAL, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(Unaudited, in thousands,
except per share data)
Three Months Ended March
31,
2021
2020
Revenues
Subscriptions
$
325,223
$
243,104
Other
27,133
24,408
Total revenues
352,356
267,512
Cost of revenues
Subscriptions
73,247
52,433
Other
23,734
21,011
Total cost of revenues
96,981
73,444
Gross profit
255,375
194,068
Operating expenses
Research and development
62,676
40,910
Sales and marketing
179,249
131,312
General and administrative
55,461
47,336
Total operating expenses
297,386
219,558
Loss from operations
(42,011
)
(25,490
)
Other income (expense), net
Interest expense
(16,278
)
(7,502
)
Other income (expense)
58,543
(27,517
)
Other income (expense), net
42,265
(35,019
)
Gain (loss) before income taxes
254
(60,509
)
Provision for income taxes
440
212
Net loss
$
(186
)
$
(60,721
)
Net loss per common share
Basic and diluted
$
—
$
(0.70
)
Weighted-average number of shares used in
computing net loss per share
Basic and diluted
90,634
87,339
TABLE 3
RINGCENTRAL, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited, in
thousands)
Three Months Ended March
31,
2021
2020
Cash flows from operating
activities
Net loss
$
(186
)
$
(60,721
)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization
24,577
16,548
Share-based compensation
54,962
36,589
Amortization of deferred and prepaid sales
commission costs
15,644
9,809
Amortization of debt discount and issuance
costs
16,200
7,452
Loss on early extinguishment of debt
658
7,250
Repayment of convertible senior notes
attributable to debt discount
(4,712
)
(13,894
)
Reduction of operating lease right-of-use
assets
4,322
3,843
Unrealized (gain) loss on investments
(57,521
)
22,246
Foreign currency remeasurement loss
194
964
Provision for bad debt
1,485
1,492
Deferred income taxes
(274
)
(33
)
Other
153
45
Changes in assets and liabilities:
Accounts receivable
7,697
(6,935
)
Deferred and prepaid sales commission
costs
(36,502
)
(22,544
)
Prepaid expenses and other current
assets
6,310
(8,958
)
Other assets
818
131
Accounts payable
(8,109
)
888
Accrued liabilities
9,063
19,948
Deferred revenue
4,022
2,806
Operating lease liabilities
(4,382
)
(3,783
)
Other liabilities
2,536
(74
)
Net cash provided by operating
activities
36,955
13,069
Cash flows from investing
activities
Purchases of property and equipment
(8,721
)
(6,861
)
Capitalized internal-use software
(9,757
)
(7,389
)
Cash paid for acquisition of intangible
assets
(8,358
)
—
Net cash used in investing activities
(26,836
)
(14,250
)
Cash flows from financing
activities
Proceeds from issuance of convertible
senior notes, net of issuance costs
—
986,508
Payments for 2023 convertible senior notes
partial repurchase
(178,911
)
(495,704
)
Payments for capped calls and transaction
costs
—
(60,900
)
Proceeds from issuance of stock in
connection with stock plans
1,192
4,802
Payments for taxes related to net share
settlement of equity awards
(4,900
)
(10,351
)
Payment for contingent consideration for
business acquisition
(3,600
)
(3,548
)
Repayment of financing obligations
(277
)
(511
)
Net cash (used in) provided by financing
activities
(186,496
)
420,296
Effect of exchange rate changes
(409
)
(657
)
Net (decrease) increase in cash, cash
equivalents, and restricted cash
(176,786
)
418,458
Cash, cash equivalents, and restricted
cash
Beginning of period
639,853
343,606
End of period
$
463,067
$
762,064
TABLE 4
RINGCENTRAL, INC.
RECONCILIATION OF OPERATING
INCOME (LOSS)
GAAP MEASURES TO NON-GAAP
MEASURES
(Unaudited, in
thousands)
Three Months Ended March
31,
2021
2020
Revenues
Subscriptions
$
325,223
$
243,104
Other
27,133
24,408
Total revenues
352,356
267,512
Cost of revenues reconciliation
GAAP Subscriptions cost of revenues
73,247
52,433
Share-based compensation
(3,978
)
(2,076
)
Amortization of acquisition
intangibles
(10,618
)
(7,701
)
Acquisition related matters
—
—
Non-GAAP Subscriptions cost of
revenues
58,651
42,656
GAAP Other cost of revenues
23,734
21,011
Share-based compensation
(1,656
)
(650
)
Non-GAAP Other cost of revenues
22,078
20,361
Gross profit and gross margin
reconciliation
Non-GAAP Subscriptions
82.0
%
82.5
%
Non-GAAP Other
18.6
%
16.6
%
Non-GAAP Gross profit
77.1
%
76.4
%
Operating expenses
reconciliation
GAAP Research and development
62,676
40,910
Share-based compensation
(14,649
)
(7,467
)
Acquisition related matters
—
—
Non-GAAP Research and development
48,027
33,443
As a % of total revenues non-GAAP
13.6
%
12.5
%
GAAP Sales and marketing
179,249
131,312
Share-based compensation
(24,767
)
(11,291
)
Amortization of acquisition
intangibles
(970
)
(931
)
Acquisition related matters
—
4
Non-GAAP Sales and marketing
153,512
119,094
As a % of total revenues non-GAAP
43.6
%
44.5
%
GAAP General and administrative
55,461
47,336
Share-based compensation
(17,443
)
(15,105
)
Acquisition related matters
(438
)
(1,863
)
Non-GAAP General and administrative
37,580
30,368
As a % of total revenues non-GAAP
10.7
%
11.4
%
Income (loss) from operations
reconciliation
GAAP loss from operations
(42,011
)
(25,490
)
Share-based compensation
62,493
36,589
Amortization of acquisition
intangibles
11,588
8,632
Acquisition related matters
438
1,859
Non-GAAP Income from operations
32,508
21,590
Non-GAAP Operating margin
9.2
%
8.1
%
TABLE 5
RINGCENTRAL, INC.
RECONCILIATION OF NET INCOME
(LOSS)
GAAP MEASURES TO NON-GAAP
MEASURES
(In thousands, except per
share data) (Unaudited)
Three Months Ended March
31,
2021
2020
Net income (loss)
reconciliation
GAAP net loss
$
(186
)
$
(60,721
)
Share-based compensation
62,493
36,589
Amortization of acquisition
intangibles
11,588
8,632
Acquisition related matters
438
1,859
Amortization of debt discount and issuance
costs
16,200
7,452
Loss (gain) associated with investments
and strategic partnerships
(59,597
)
20,148
Loss on early extinguishment of debt
658
7,250
Intercompany remeasurement loss
735
898
Income tax expense effects
(6,933
)
(4,809
)
Non-GAAP net income
$
25,396
$
17,298
Reconciliation between GAAP and
non-GAAP weighted average shares used in computing basic and
diluted net income (loss) per common share:
Weighted average number of shares used in
computing basic net (loss) income per share
90,634
87,339
Effect of dilutive securities
2,349
4,927
Non-GAAP weighted average shares used in
computing non-GAAP diluted net income per share
92,983
92,266
Diluted net income (loss) per
share
GAAP net loss per share
$
—
$
(0.70
)
Non-GAAP net income per share
$
0.27
$
0.19
TABLE 6
RINGCENTRAL, INC.
RECONCILIATION OF CASH FLOWS
FROM OPERATING ACTIVITIES
GAAP MEASURES TO NON-GAAP FREE
CASH FLOW MEASURES
(Unaudited, in
thousands)
Three Months Ended March
31,
2021
2020
Net cash provided by operating
activities
$
36,955
$
13,069
Repayment of convertible senior notes
attributable to debt discount
4,712
13,894
Non-GAAP net cash provided by operating
activities
41,667
26,963
Purchases of property and equipment
(8,721
)
(6,861
)
Capitalized internal-use software
(9,757
)
(7,389
)
Non-GAAP free cash flow
$
23,189
$
12,713
TABLE 7
RINGCENTRAL, INC.
RECONCILIATION OF FORECASTED
OPERATING MARGIN
GAAP MEASURES TO NON-GAAP
MEASURES
(Unaudited, in
millions)
Q2 2021
FY 2021
Low Range
High Range
Low Range
High Range
GAAP revenues
356.5
359.5
1,500.0
1,510.0
GAAP loss from operations
(82.8
)
(77.6
)
(319.4
)
(303.9
)
GAAP operating margin
(23.2
%)
(21.6
%)
(21.3
%)
(20.1
%)
Share-based compensation
104.0
99.0
420.0
410.0
Amortization of acquisition
intangibles
12.0
12.0
49.0
46.0
Acquisition related matters
—
—
0.4
0.4
Non-GAAP income from operations
33.2
33.4
150.0
152.5
Non-GAAP operating margin
9.3
%
9.3
%
10.0
%
10.1
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210504006255/en/
Investor Relations Contact: Ryan Goodman, RingCentral
(650) 918-5356 Ryan.Goodman@ringcentral.com Media
Contact: Mariana Leventis, RingCentral (650) 562-6545
Mariana.Leventis@ringcentral.com
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