RingCentral Total ARR of $1.6 billion, up
39%
Mid-Market and Enterprise ARR achieves
approximately $1 billion, up 53%
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
third quarter ended September 30, 2021.
Third Quarter Financial Highlights
- Total revenue increased 37% year over year to $415
million.
- Subscriptions revenue increased 38% year over year to $385
million.
- Total Annualized Exit Monthly Recurring Subscriptions (ARR)
increased 39% year over year to $1.64 billion.
- RingCentral Office® ARR (UCaaS + CCaaS) increased 42% year over
year to $1.55 billion.
- Mid-market and Enterprise ARR increased 53% year over year to
$971 million.
“Third quarter results were outstanding, with accelerating
growth driven by ramping contributions from our key partners and
momentum from our upmarket customers,” said Vlad Shmunis,
RingCentral’s founder, chairman and CEO. “Our success is rooted in
our commitment to cultivating trust with our customers, our
relentless pace of innovation, and our differentiated partner
network with industry leaders. With our award-winning RingCentral
Message Video Phone (or MVP) platform, our seamless integration
with an industry-leading cloud contact center solution, and our
unparalleled market access with strategic partners, we believe we
are uniquely positioned to meet the rising global demand for
cloud-based communications solutions.”
Financial Results for the Third Quarter 2021
- Revenue: Total revenue was $415 million for the third
quarter of 2021, up from $304 million in the third quarter of 2020,
representing 37% growth. Subscriptions revenue of $385 million
increased 38% year over year and accounted for 93% of total
revenue.
- Operating Income (Loss): GAAP operating loss was ($83)
million, compared to ($30) million in the same period last year,
primarily driven by higher share-based compensation. Non-GAAP
operating income was $44 million, compared to a non-GAAP operating
income of $31 million in the same period last year.
- Net Income (Loss) Per Share: GAAP net loss per share was
($1.60), compared to ($0.24) in the same period last year,
primarily driven by higher share-based compensation and
mark-to-market losses associated with investments. Non-GAAP net
income per diluted share was $0.36, compared to $0.26 per diluted
share in the same period last year. The third 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 third quarter of 2021 was $345
million. This compares to $325 million at the end of the second
quarter of 2021.
Financial Outlook
Full Year 2021 Guidance:
- Raising total revenue range to $1.580 to $1.581 billion,
representing annual growth of 33% to 34%. This is up from our prior
range of $1.539 to $1.545 billion and annual growth of 30% to
31%.
- Raising subscriptions revenue range to $1.466 to $1.467
billion, representing annual growth of 35%. This is up from our
prior range of $1.424 to $1.430 billion and annual growth of 31% to
32%.
- Raising GAAP operating margin range to (18.7%) to (18.5%). This
is up from our prior range of (19.2%) to (18.3%).
- Raising non-GAAP operating margin to 10.1%. This is up from our
prior 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 to $1.32 based on 93.5 million fully
diluted shares. This is up from our prior range of $1.28 to $1.30
based on 93.0 to 93.5 million fully diluted shares.
- Share-based compensation range of $378 to $380 million,
amortization of debt discount and issuance costs of $64 million,
amortization of acquisition intangibles of $68 million, and
acquisition related and other matters of approximately $7.6
million.
Fourth Quarter 2021 Guidance:
- Total revenue range of $433.5 to $434.5 million, representing
annual growth of 30%.
- Subscriptions revenue range of $404.5 to $405.5 million,
representing annual growth of 32%.
- GAAP operating margin range of (22.3%) to (21.7%).
- Non-GAAP operating margin range of 10.4% to 10.5%.
- Non-GAAP tax rate assumed to be 22.5%. No material cash taxes
expected given net operating loss carryforwards.
- Non-GAAP EPS of $0.37 based on 94.5 to 95.0 million fully
diluted shares.
- Share-based compensation range of $108 to $110 million,
amortization of debt discount and issuance costs of $16 million,
and amortization of acquisition intangibles of $32 million.
CFO Transition Plan
RingCentral announced today that Mitesh Dhruv will be stepping
down from his role as Chief Financial Officer. Mr. Dhruv will
remain in his current role through the end of 2021.
“On behalf of everyone at RingCentral, I would like to thank
Mitesh for his valuable contributions to our Company over the past
decade. And especially since stepping in as a CFO nearly 5 years
ago, Mitesh has been instrumental in driving consistent profitable
growth and outsized shareholder results. We wish Mitesh all the
best in all of his future endeavors,” said Vlad Shmunis,
RingCentral’s founder, chairman and CEO. “Mitesh established a
strong foundation and we have an exceptional finance and accounting
team in place. We are confident that our ability to execute and
lead in the $100 billion-plus UCaaS digital transformation market
will continue unabated.”
In selecting our next CFO, RingCentral will consider internal
and external candidates.
“It has been a privilege to be the CFO of RingCentral. The
Company’s track record of trust, innovation, and partnerships is
exceptional, and I am proud to have contributed,” said Mr. Dhruv.
“RingCentral is a well-oiled execution machine that I am confident
should continue to operate at a high level. With the company firing
on all cylinders, now is the right time for me to take some time
off as I consider the next chapter of my life.”
Additional Highlights
Recognition
- Recognized as a Leader in the 2021 Gartner Magic Quadrant for
Unified Communications as a Service (UCaaS), Worldwide report,
making this RingCentral’s seventh year in a row being named to the
Leaders quadrant. RingCentral was positioned furthest for
completeness of vision in the Leaders quadrant.
- Ranked highest in three out of four use cases among 14 total
vendors in the 2021 Gartner Critical Capabilities for Unified
Communications as a Service (UCaaS), Worldwide report.
Partnerships
- Introduced RingCentral Rise, a new platform designed
exclusively for service providers around the world. By leveraging
Resources, Innovation, System integration, and Experiences (Rise)
from RingCentral, service providers can now offer their own unique,
co-branded unified cloud communications solutions including team
messaging, video meetings, cloud phone system, and contact center
solutions to businesses around the world in a fast, flexible, and
scalable manner.
- Announced that MCM Telecom will offer a co-branded solution
called RingCentral for Symphony, which will be the lead MCM Unified
Communications as a Service offering to all business customers. MCM
and RingCentral have joined forces to bring together all the
essential elements of hybrid work into a single app for video
conferencing, mobile collaboration, and advanced business phone
capabilities enhanced by MCM’s leading fiber network and expertise
in serving the Mexican enterprise market.
- Announced new partnerships with three leading healthcare
Independent Software Vendors (ISVs) - Ascom, ChronicCareIQ, and
ELLKAY - to bring new capabilities to RingCentral MVP and
RingCentral Contact Center. The partnerships enable providers to
transform point of care workflows managed via ruggedized VoIP
wireless devices. It also helps enhance patient engagement with
data-driven interaction during outbound and inbound patient
calls.
Platform
- Received a Unified License that will enable RingCentral to
provide its Unified Communications as a Service (UCaaS) and Contact
Center as a Service (CCaaS) solutions in India, which will make
RingCentral the first global cloud provider to offer fully
compliant voice and other unified cloud communications in the
country.
- Announced new capabilities that will help organizations to
bring together their preferred apps and services with a cloud-based
business communications platform. Incremental developments include
APIs for call performance analytics and audit trail recording, new
RingCentral Add-ins integrations, and new ISV partnerships.
- Announced new innovative features for RingCentral MVP,
including live meeting transcription, meeting summaries, infinite
whiteboard, and next-gen analytics. Also introduced new
capabilities for RingCentral Rooms, including mobile to room
meeting switch, Rooms as softphone, Rooms proximity sharing, and
Room Connector, as well as several new Room appliances.
- Announced a range of new innovations enabling employees to
communicate and collaborate effectively, securely, and productively
from anywhere. New capabilities include Dynamic End-to-End
Encryption (E2EE), C5:2020 certification, RingCentral Add-ins,
RingCentral for Microsoft Teams embedded dialer, and Mobile Heads
Up Display, as well as RingCentral Video innovations including
presentation mode, touch-appearance capabilities, auto-framing, and
breakout rooms.
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,
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 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 third
quarter of 2021 and outlook for the fourth quarter and full year of
2021.
- When: Tuesday, November 9, 2021 at 2:00PM PT (5:00PM
ET).
- Webcast: RingCentral Q3 2021 Earnings Webcast (live and
replay).
- Replay: Following the completion of the call through
11:59 PM ET on November 16, 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 10161263.
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™) global platform. More
flexible and cost effective than legacy on-premises 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
MVP™, a Unified Communications as a Service (UCaaS) platform
including team messaging, video meetings, and cloud phone system;
RingCentral Video®, the company’s 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, RingCentral Video,
Glip, Smart Video Meetings, RingCentral Rise, 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, the results of
the pace of our innovation and our partner networks, and our
ability to execute and lead in the UCaaS digital transformation
market, our expectations around the demand for our products and the
growth of the markets in which we compete. 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; our
expectations regarding our strategic acquisitions; 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®, RingCentral MVP™, and RingCentral Video®; 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-Q for the quarter ended June
30, 2021, 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 and other matters including
transaction costs, integration costs, restructuring costs,
acquisition-related retention payments, as well as changes in the
fair value of contingent consideration obligations and certain
litigation related costs. 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 and other 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, 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 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 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 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 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 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 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 Office
partner annualized exit monthly recurring subscriptions, direct and
partner Office 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 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.
*Disclaimer
Gartner does not endorse any vendor, product or service depicted
in its research publications, and does not advise technology users
to select only those vendors with the highest ratings or other
designation. Gartner research publications consist of the opinions
of Gartner’s research organization and should not be construed as
statements of fact. Gartner disclaims all warranties, expressed or
implied, with respect to this research, including any warranties of
merchantability or fitness for a particular purpose.
Gartner, “Critical Capabilities for Unified Communications as a
Service, Worldwide” Christopher Trueman, Megan Fernandez, Daniel
O’Connell, Rafael Benitez, Pankil Sheth, October 19, 2021.
Gartner, Magic Quadrant for Unified Communications as a Service,
Worldwide, By Rafael Benitez, Megan Fernandez, Daniel O’Connell,
Christopher Trueman, Pankil Sheth, 18 October 2021
GARTNER and Magic Quadrant are registered trademark and service
mark of Gartner, Inc. and/or its affiliates in the U.S. and
internationally, and are used herein with permission. All rights
reserved.
TABLE 1
RINGCENTRAL, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Unaudited, in
thousands)
September 30, 2021
December 31, 2020
Assets
Current assets
Cash and cash equivalents
$
345,152
$
639,853
Accounts receivable, net
216,126
176,034
Deferred and prepaid sales commission
costs
91,948
63,726
Prepaid expenses and other current
assets
40,371
46,516
Total current assets
693,597
926,129
Property and equipment, net
158,779
142,208
Operating lease right-of-use assets
48,038
51,115
Long-term investments
199,655
213,176
Deferred and prepaid sales commission
costs, non-current
709,347
667,779
Goodwill
56,012
57,313
Acquired intangibles, net
92,346
118,313
Other assets
7,729
8,564
Total assets
$
1,965,503
$
2,184,597
Liabilities, Temporary Equity, and
Stockholders’ Equity
Current liabilities
Accounts payable
$
46,831
$
54,043
Accrued liabilities
259,380
210,654
Current portion of convertible senior
notes, net
—
31,148
Deferred revenue
169,399
142,223
Total current liabilities
475,610
438,068
Convertible senior notes, net
1,382,406
1,375,320
Operating lease liabilities
34,176
38,722
Other long-term liabilities
28,050
20,241
Total liabilities
1,920,242
1,872,351
Temporary equity
—
3,787
Stockholders’ equity
Common stock
9
9
Additional paid-in capital
673,422
673,950
Accumulated other comprehensive income
2,029
6,806
Accumulated deficit
(630,199
)
(372,306
)
Total stockholders’ equity
$
45,261
$
308,459
Total liabilities, temporary equity and
stockholders’ equity
$
1,965,503
$
2,184,597
TABLE 2
RINGCENTRAL, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(Unaudited, in thousands,
except per share data)
Three Months Ended September
30,
Nine Months Ended September
30,
2021
2020
2021
2020
Revenues
Subscriptions
$
385,440
$
279,639
$
1,061,866
$
779,781
Other
29,189
23,985
84,392
69,340
Total revenues
414,629
303,624
1,146,258
849,121
Cost of revenues
Subscriptions
84,229
60,531
236,719
169,685
Other
26,220
21,783
75,634
62,710
Total cost of revenues
110,449
82,314
312,353
232,395
Gross profit
304,180
221,310
833,905
616,726
Operating expenses
Research and development
84,121
48,481
222,958
132,910
Sales and marketing
225,111
152,986
607,758
421,931
General and administrative
78,083
49,513
201,716
146,381
Total operating expenses
387,315
250,980
1,032,432
701,222
Loss from operations
(83,135
)
(29,670
)
(198,527
)
(84,496
)
Other income (expense), net
Interest expense
(15,977
)
(12,680
)
(48,197
)
(32,780
)
Other income (expense)
(47,062
)
21,824
(9,742
)
36,910
Other income (expense), net
(63,039
)
9,144
(57,939
)
4,130
Loss before income taxes
(146,174
)
(20,526
)
(256,466
)
(80,366
)
Provision for income taxes
577
431
1,427
803
Net loss
$
(146,751
)
$
(20,957
)
$
(257,893
)
$
(81,169
)
Net loss per common share
Basic and diluted
$
(1.60
)
$
(0.24
)
$
(2.83
)
$
(0.92
)
Weighted-average number of shares used in
computing net loss per share
Basic and diluted
91,811
89,173
91,213
88,259
TABLE 3
RINGCENTRAL, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited, in
thousands)
Nine Months Ended September
30,
2021
2020
Cash flows from operating
activities
Net loss
$
(257,893
)
$
(81,169
)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization
78,223
53,563
Share-based compensation
254,749
137,410
Amortization of deferred and prepaid sales
commission costs
53,307
33,060
Amortization of debt discount and issuance
costs
47,980
32,613
Loss on early extinguishment of debt
1,736
12,323
Repayment of convertible senior notes
attributable to debt discount
(10,131
)
(32,640
)
Reduction of operating lease right-of-use
assets
13,320
11,478
Unrealized loss (gain) on investments
14,346
(41,453
)
Provision for bad debt
5,384
3,909
Other
1,463
(1
)
Changes in assets and liabilities:
Accounts receivable
(45,476
)
(27,502
)
Deferred and prepaid sales commission
costs
(125,181
)
(183,745
)
Prepaid expenses and other assets
7,849
(14,291
)
Accounts payable
(4,472
)
5,180
Accrued and other liabilities
55,971
49,449
Deferred revenue
27,176
20,128
Operating lease liabilities
(13,851
)
(11,019
)
Net cash provided by (used in) operating
activities
104,500
(32,707
)
Cash flows from investing
activities
Purchases of property and equipment
(21,787
)
(33,992
)
Capitalized internal-use software
(30,932
)
(28,049
)
Purchases of intangible assets and
long-term investments
(10,463
)
—
Net cash used in investing activities
(63,182
)
(62,041
)
Cash flows from financing
activities
Proceeds from issuance of convertible
senior notes, net of issuance costs
—
1,627,209
Payments for repurchase or redemption of
convertible senior notes
(333,632
)
(1,019,813
)
Payments for capped calls and transaction
costs
—
(102,695
)
Proceeds from issuance of stock in
connection with stock plans
21,738
24,123
Payments for taxes related to net share
settlement of equity awards
(16,995
)
(27,698
)
Payment for contingent consideration for
business acquisition
(3,600
)
(3,548
)
Repayment of financing obligations
(2,804
)
(1,215
)
Net cash provided by (used in) financing
activities
(335,293
)
496,363
Effect of exchange rate changes
(726
)
337
Net increase (decrease) in cash, cash
equivalents, and restricted cash
(294,701
)
401,952
Cash, cash equivalents, and restricted
cash
Beginning of period
639,853
343,606
End of period
$
345,152
$
745,558
TABLE 4
RINGCENTRAL, INC.
RECONCILIATION OF OPERATING
INCOME (LOSS)
GAAP MEASURES TO NON-GAAP
MEASURES
(Unaudited, in
thousands)
Three Months Ended September
30,
Nine Months Ended September
30,
2021
2020
2021
2020
Revenues
Subscriptions
$
385,440
$
279,639
$
1,061,866
$
779,781
Other
29,189
23,985
84,392
69,340
Total revenues
414,629
303,624
1,146,258
849,121
Cost of revenues reconciliation
GAAP Subscriptions cost of revenues
84,229
60,531
236,719
169,685
Share-based compensation
(6,337
)
(2,871
)
(16,168
)
(7,623
)
Amortization of acquisition
intangibles
(10,998
)
(7,577
)
(32,618
)
(22,950
)
Non-GAAP Subscriptions cost of
revenues
66,894
50,083
187,933
139,112
GAAP Other cost of revenues
26,220
21,783
75,634
62,710
Share-based compensation
(2,403
)
(976
)
(6,406
)
(2,796
)
Amortization of acquisition
intangibles
(4
)
—
(4
)
—
Non-GAAP Other cost of revenues
23,813
20,807
69,224
59,914
Gross profit and gross margin
reconciliation
Non-GAAP Subscriptions
82.6
%
82.1
%
82.3
%
82.2
%
Non-GAAP Other
18.4
%
13.2
%
18.0
%
13.6
%
Non-GAAP Gross profit
78.1
%
76.7
%
77.6
%
76.6
%
Operating expenses
reconciliation
GAAP Research and development
84,121
48,481
222,958
132,910
Share-based compensation
(25,779
)
(10,679
)
(62,808
)
(27,918
)
Non-GAAP Research and development
58,342
37,802
160,150
104,992
As a % of total revenues non-GAAP
14.1
%
12.5
%
14.0
%
12.4
%
GAAP Sales and marketing
225,111
152,986
607,758
421,931
Share-based compensation
(40,986
)
(17,552
)
(104,371
)
(45,165
)
Amortization of acquisition
intangibles
(959
)
(959
)
(2,900
)
(2,819
)
Acquisition related and other matters
—
—
—
4
Non-GAAP Sales and marketing
183,166
134,475
500,487
373,951
As a % of total revenues non-GAAP
44.2
%
44.3
%
43.7
%
44.0
%
GAAP General and administrative
78,083
49,513
201,716
146,381
Share-based compensation
(32,510
)
(19,488
)
(80,455
)
(53,908
)
Acquisition related and other matters
(6,705
)
(420
)
(7,642
)
(2,576
)
Non-GAAP General and administrative
38,868
29,605
113,619
89,897
As a % of total revenues non-GAAP
9.4
%
9.8
%
9.9
%
10.6
%
Income (loss) from operations
reconciliation
GAAP loss from operations
(83,135
)
(29,670
)
(198,527
)
(84,496
)
Share-based compensation
108,015
51,566
270,208
137,410
Amortization of acquisition
intangibles
11,961
8,536
35,522
25,769
Acquisition related and other matters
6,705
420
7,642
2,572
Non-GAAP Income from operations
43,546
30,852
114,845
81,255
Non-GAAP Operating margin
10.5
%
10.2
%
10.0
%
9.6
%
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 September
30,
Nine Months Ended September
30,
2021
2020
2021
2020
Net income (loss)
reconciliation
GAAP net loss
$
(146,751
)
$
(20,957
)
$
(257,893
)
$
(81,169
)
Share-based compensation
108,015
51,566
270,208
137,410
Amortization of acquisition
intangibles
11,961
8,536
35,522
25,769
Acquisition related and other matters
6,705
420
7,642
2,572
Amortization of debt discount and issuance
costs
15,898
12,595
47,980
32,613
Loss (gain) associated with
investments
45,660
(26,447
)
6,201
(47,805
)
Loss on early extinguishment of debt
—
5,116
1,736
12,323
Intercompany remeasurement loss (gain)
699
(121
)
1,509
416
Income tax expense effects
(9,045
)
(6,575
)
(24,298
)
(17,857
)
Non-GAAP net income
$
33,142
$
24,133
$
88,607
$
64,272
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 per share
91,811
89,173
91,213
88,259
Effect of dilutive securities
1,314
3,751
1,792
4,577
Non-GAAP weighted average shares used in
computing non-GAAP diluted net income per share
93,125
92,924
93,005
92,836
Diluted net income (loss) per
share
GAAP net loss per share
$
(1.60
)
$
(0.24
)
$
(2.83
)
$
(0.92
)
Non-GAAP net income per share
$
0.36
$
0.26
$
0.95
$
0.69
TABLE 6
RINGCENTRAL, INC.
RECONCILIATION OF CASH FLOWS
FROM OPERATING ACTIVITIES
GAAP MEASURES TO NON-GAAP FREE
CASH FLOW MEASURES
(Unaudited, in
thousands)
Nine Months Ended September
30,
2021
2020
Net cash provided by (used in) operating
activities
$
104,500
$
(32,707
)
Strategic partnerships
—
100,000
Repayment of convertible senior notes
attributable to debt discount
10,131
32,640
Non-GAAP net cash provided by operating
activities
114,631
99,933
Purchases of property and equipment
(21,787
)
(33,992
)
Capitalized internal-use software
(30,932
)
(28,049
)
Non-GAAP free cash flow
$
61,912
$
37,892
TABLE 7
RINGCENTRAL, INC.
RECONCILIATION OF FORECASTED
OPERATING MARGIN
GAAP MEASURES TO NON-GAAP
MEASURES
(Unaudited, in
millions)
Q4 2021
FY 2021
Low Range
High Range
Low Range
High Range
GAAP revenues
433.5
434.5
1,579.8
1,580.8
GAAP loss from operations
(96.8)
(94.5)
(295.3)
(293.0)
GAAP operating margin
(22.3
%)
(21.7
%)
(18.7
%)
(18.5
%)
Share-based compensation
110.0
108.0
380.2
378.2
Amortization of acquisition
intangibles
32.0
32.0
67.5
67.5
Acquisition related and other matters
—
—
7.6
7.6
Non-GAAP income from operations
45.2
45.5
160.0
160.4
Non-GAAP operating margin
10.4
%
10.5
%
10.1
%
10.1
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211109006520/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
Ringcentral (NYSE:RNG)
Historical Stock Chart
From Mar 2024 to Apr 2024
Ringcentral (NYSE:RNG)
Historical Stock Chart
From Apr 2023 to Apr 2024