RingCentral Announces Third Quarter 2024 Results
RingCentral announced its Q3 2024 financial results, reporting a 9% year-over-year revenue increase to $609 million. Subscriptions revenue rose 10% to $583 million, representing 96% of total revenue. The company achieved a GAAP operating profit for the first time, with a margin of 0.5%, up from a loss of (9.7%) last year. Non-GAAP operating margin improved to 21%, up 190 basis points. Net cash from operations increased 47% to $127 million, and free cash flow grew 51% to $105 million. RingCentral raised its 2024 revenue guidance to $2.397-$2.399 billion and non-GAAP EPS to $3.69. The company also announced new innovations for its AI-powered contact center solution and strategic partnerships with Verint and Zayo. Additionally, RingCentral received a PAN-India license to operate across all telecommunications circles in India and renewed its agreement with AT&T.
RingCentral ha annunciato i risultati finanziari del terzo trimestre 2024, riportando un aumento del fatturato del 9% rispetto all’anno precedente, arrivando a 609 milioni di dollari. I ricavi da abbonamenti sono aumentati del 10%, raggiungendo 583 milioni di dollari, rappresentando il 96% del ricavo totale. L'azienda ha conseguito un utile operativo GAAP per la prima volta, con un margine dello 0,5%, rispetto a una perdita del (9,7%) dell'anno scorso. Il margine operativo non-GAAP è migliorato al 21%, con un incremento di 190 punti base. Il flusso di cassa netto dalle operazioni è aumentato del 47%, arrivando a 127 milioni di dollari, e il flusso di cassa libero è cresciuto del 51% a 105 milioni di dollari. RingCentral ha alzato le previsioni di fatturato per il 2024 a 2,397-2,399 miliardi di dollari e l'EPS non-GAAP a 3,69 dollari. L'azienda ha anche annunciato nuove innovazioni per la sua soluzione di contact center alimentata da AI e partnership strategiche con Verint e Zayo. Inoltre, RingCentral ha ricevuto una licenza PAN-India per operare in tutti i settori delle telecomunicazioni in India e ha rinnovato l'accordo con AT&T.
RingCentral anunció sus resultados financieros del tercer trimestre de 2024, reportando un aumento del 9% en los ingresos interanuales, alcanzando los 609 millones de dólares. Los ingresos por suscripciones aumentaron un 10% a 583 millones de dólares, lo que representa el 96% de los ingresos totales. La compañía logró un beneficio operativo GAAP por primera vez, con un margen del 0,5%, en comparación con una pérdida del (9,7%) del año pasado. El margen operativo no-GAAP mejoró al 21%, con una subida de 190 puntos básicos. El flujo de caja neto de las operaciones aumentó un 47% a 127 millones de dólares, y el flujo de caja libre creció un 51% a 105 millones de dólares. RingCentral elevó su guía de ingresos para 2024 a 2,397-2,399 mil millones de dólares y el EPS no-GAAP a 3,69. La compañía también anunció nuevas innovaciones para su solución de centro de contacto impulsada por IA y asociaciones estratégicas con Verint y Zayo. Además, RingCentral recibió una licencia PAN-India para operar en todos los círculos de telecomunicaciones en India y renovó su acuerdo con AT&T.
링센트럴은 2024년 3분기 재무 결과를 발표하며 전년 대비 9% 매출 증가를 기록하여 6억 900만 달러에 이를 것이라고 보도했습니다. 구독 매출은 10% 증가하여 5억 8천 3백만 달러에 이르며 총 매출의 96%를 차지합니다. 회사는 처음으로 GAAP 운영 이익을 달성하였고, 마진은 0.5%로 작년의 (9.7%) 손실에서 증가하였습니다. 비 GAAP 운영 마진은 21%로 개선되었으며, 190베이시스 포인트 상승했습니다. 운영으로 인한 순 현금 흐름은 47% 증가한 1억 2천 7백만 달러, 자유 현금 흐름은 51% 증가한 1억 5천 5백만 달러로 성장했습니다. 링센트럴은 2024년 매출 전망을 23억 9천 7백만 - 23억 9천 9백만 달러로 상향 조정하였고, 비 GAAP EPS는 3.69달러로 설정하였습니다. 회사는 또한 AI 기반의 연락 센터 솔루션에 대한 새로운 혁신과 Verint 및 Zayo와의 전략적 파트너십을 발표했습니다. 추가로 링센트럴은 인도의 모든 통신 서클에서 운영할 수 있는 PAN-India 라이센스를 받았으며 AT&T와의 계약을 갱신했습니다.
RingCentral a annoncé ses résultats financiers pour le troisième trimestre 2024, rapportant une augmentation des revenus de 9% par rapport à l'année précédente, atteignant 609 millions de dollars. Les revenus d'abonnement ont augmenté de 10% pour atteindre 583 millions de dollars, représentant 96% des revenus totaux. La société a réalisé un bénéfice d'exploitation GAAP pour la première fois, avec une marge de 0,5%, contre une perte de (9,7%) l'année dernière. La marge d'exploitation non-GAAP s'est améliorée à 21%, en hausse de 190 points de base. Le flux de trésorerie net provenant des opérations a augmenté de 47% pour atteindre 127 millions de dollars, et le flux de trésorerie disponible a crû de 51% à 105 millions de dollars. RingCentral a relevé ses prévisions de revenus pour 2024 à 2,397-2,399 milliards de dollars et le bénéfice par action non-GAAP à 3,69 dollars. La société a également annoncé de nouvelles innovations pour sa solution de centre de contact alimentée par l'IA et des partenariats stratégiques avec Verint et Zayo. De plus, RingCentral a obtenu une licence PAN-India pour opérer dans tous les cercles de télécommunications en Inde et a renouvelé son accord avec AT&T.
RingCentral hat seine finanziellen Ergebnisse für das dritte Quartal 2024 bekannt gegeben und berichtet von einem Umsatzwachstum von 9% im Vergleich zum Vorjahr, das 609 Millionen Dollar erreicht. Die Abonnement-Einnahmen stiegen um 10% auf 583 Millionen Dollar, was 96% des Gesamtumsatzes ausmacht. Das Unternehmen erzielte zum ersten Mal einen GAAP-Betriebsgewinn mit einer Marge von 0,5%, nachdem es im Vorjahr einen Verlust von (9,7%) verzeichnet hatte. Die Nicht-GAAP-Betriebsmargin verbesserte sich auf 21%, was einem Anstieg von 190 Basispunkten entspricht. Der Netto-Cashflow aus dem operativen Geschäft stieg um 47% auf 127 Millionen Dollar, und der freie Cashflow wuchs um 51% auf 105 Millionen Dollar. RingCentral hob seine Umsatzprognose für 2024 auf 2,397-2,399 Milliarden Dollar und das nicht-GAAP EPS auf 3,69 Dollar an. Das Unternehmen kündigte außerdem neue Innovationen für seine KI-gestützte Contact-Center-Lösung und strategische Partnerschaften mit Verint und Zayo an. Zusätzlich erhielt RingCentral eine PAN-India-Lizenz, um in allen Telekommunikationskreisen in Indien tätig zu sein, und erneuerte seine Vereinbarung mit AT&T.
- Q3 2024 revenue increased by 9% to $609 million.
- Subscriptions revenue grew 10% to $583 million.
- GAAP operating margin of 0.5%, compared to (9.7%) last year.
- Non-GAAP operating margin improved to 21%, up 190 basis points.
- Net cash from operations increased 47% to $127 million.
- Free cash flow grew 51% to $105 million.
- Raised 2024 revenue guidance to $2.397-$2.399 billion.
- Increased non-GAAP EPS guidance to $3.69.
- GAAP net loss per share was ($0.09), compared to ($0.45) last year.
Q3 2024 revenue above high end of guidance
Achieves GAAP operating profitability in Q3 2024
Raising 2024 revenue, net cash provided by operating activities and free cash flow outlook
Third Quarter Financial Highlights
-
Total revenue increased
9% year-over-year to .$609 million -
Subscriptions revenue increased
10% year-over-year to .$583 million -
Annualized Exit Monthly Recurring Subscriptions (ARR) increased
9% year-over-year to .$2.48 billion -
Enterprise ARR increased
11% year-over-year to .$1.07 billion -
GAAP operating margin of
0.5% , compared to (9.7% ) in the prior year. -
Stock-based compensation as percent of total revenue of
14.0% , down 630 basis points year-over-year -
Non-GAAP operating margin of
21.0% , up 190 basis points year-over-year. -
Net cash provided by operating activities of
, up$127 million 47% year-over-year -
Free cash flow of
, up$105 million 51% year-over-year.
“Our strong results were driven by continued momentum with new products, in particular RingCX, and strength in our core UCaaS market,” said Vlad Shmunis, RingCentral’s Founder, Chairman, and CEO. “Our healthy top line growth and significant margin expansion, resulted in robust free cash flow generation. This, combined with a material reduction in stock based compensation, resulted in positive GAAP operating income for the first time in our history.”
-
Revenue: Total revenue was
for the third quarter of 2024, up from$609 million in the third quarter of 2023, representing$558 million 9% year-over-year growth. Adjusted for constant currency, total revenue rose9% . Subscriptions revenue of increased$583 million 10% year-over-year and accounted for96% of total revenue. Adjusted for constant currency, subscriptions revenue rose10% . -
Operating Income (Loss): GAAP operating income was
, compared to a loss of$3 million ( in the same period last year. Non-GAAP operating income was$54) million , or$128 million 21.0% of total revenue, compared to , or$107 million 19.1% of total revenue, in the same period last year. -
Adjusted EBITDA: Adjusted EBITDA was
, or$149 million 24.5% of total revenue, compared to , or$128 million 22.9% of total revenue, in the same period last year. -
Net Income (Loss) Per Share: GAAP net loss per share was (
), compared to ($0.09 ) in the same period last year. Diluted non-GAAP net income per share was$0.45 , compared to$0.95 per share in the same period last year. The third quarters of 2024 and 2023 reflected an approximately$0.78 22.5% non-GAAP tax rate. -
Cash Flow: Net cash provided by operating activities for the third quarter of 2024 was
, or$127 million 20.9% of total revenue, compared to , or$87 million 15.5% of total revenue, for the third quarter of 2023. Free cash flow for the third quarter of 2024 was , or$105 million 17.3% of total revenue. This includes cash paid for interest of , restructuring and other payments of$22 million and cash received from certain strategic partners of$5 million . For comparison, free cash flow for the third quarter of 2023 was$5 million , which included cash paid for interest of$70 million , and restructuring and other payments of$7 million .$10 million -
Cash and Cash Equivalents: Total cash and cash equivalents at the end of the third quarter of 2024 was
. Our cash balance reflects the repurchase of$213 million in shares during the third quarter of 2024 under the plans previously authorized by our Board. We currently have approximately$83 million remaining on our total authorization.$243 million
Financial Outlook
Full Year 2024 Guidance:
-
Raising subscriptions revenue range to
to$2.29 5 , representing annual growth of$2.29 7 billion9% . -
Raising total revenue range to
to$2.39 7 , representing annual growth of$2.39 9 billion9% . -
Raising GAAP operating margin range to (
0.7% ) to (0.5% ) from (1.3% ) to (0.8% ). -
Maintaining non-GAAP operating margin of
21.0% . -
Maintaining non-GAAP tax rate assumption of
22.5% . No material cash taxes expected given net operating loss carryforwards. -
Raising non-GAAP EPS to
based on 94.5 million fully diluted shares. This compares to$3.69 to$3.62 based on 96.0 to 95.0 million fully diluted shares previously.$3.67 -
Lowering share-based compensation range to
to$350 from$355 million to$370 .$380 million -
Updating amortization of acquired intangibles to
from$138 million .$140 million -
Updating restructuring costs to
from$16 million to$6 .$7 million -
Raising free cash flow to
to$400 , up from$405 million to$395 . This guidance includes capitalized expenditures of$400 million , cash paid for interest of$85 million and restructuring and other payments of$60 million , as well as$27 million of cash received from certain strategic partners.$25 million
Fourth Quarter 2024 Guidance:
-
Subscriptions revenue range of
to$587.0 , representing year-over-year growth of$589.0 million 7% to8% . -
Total revenue range of
to$611.0 , representing year-over-year growth of$613.0 million 7% . -
GAAP operating margin range of (
0.1% ) to0.8% . -
Non-GAAP operating margin of
21.2% . -
Non-GAAP tax rate assumption of
22.5% . No material cash taxes expected given net operating loss carryforwards. -
Non-GAAP EPS of
to$0.96 based on 93.0 to 92.5 million fully diluted shares.$0.97 -
Share-based compensation range of
to$85 .$90 million -
Amortization of acquired intangibles of
.$35 million -
Restructuring costs of
.$5 million
CFO Announcement
RingCentral today announced that Abhey Lamba has been appointed as the company's Chief Financial Officer. Lamba will be responsible for all the company's financial functions including financial planning, controllership, tax, treasury, corporate development and investor relations.
Please see our separate press release regarding this important announcement.
Additional Highlights
- Announced new innovations for RingCX, our AI-powered contact center solution. These include a native, real-time AI-powered assistant for both agents and supervisors, advanced AI-based coaching insights for managers and supervisors, and a new bring-your-own IVA framework for customers and partners to quickly integrate their Intelligent Virtual Agent of choice with RingCX.
- Announced a strategic partnership with Verint to provide RingCX customers access to best-in-class workforce engagement management (WEM) and CX Automation. Through this partnership, RingCX customers will have more choice and be able to leverage Verint’s leading WEM and CX automation solutions, which complement RingCentral’s native AI capabilities, to enhance employee productivity and improve customer experiences, ultimately driving competitive advantage and operational efficiency.
- Announced new innovations for RingEX, our flagship cloud communications platform. This includes RingCentral AI Assistant, which automatically generates detailed, real-time notes for phone calls; helps write, polish, and translate texts and chats; and summarizes meetings with crisp action items, reducing employees’ daily mundane work to free up their time for more critical, strategic work. AI Assistant is now included in RingEX at no additional cost.
-
Announced the receipt of the PAN-India license from the Department of Telecommunications (DoT) to operate across all 22 telecommunications circles in
India . As the first cloud provider to deliver fully-compliant UCaaS and CCaaS solutions across all ofIndia , Global RingEX Select India connects teams across the globe with offices inIndia , ensuring secure and reliable connectivity and the ability to navigate the regulatory landscape so customers can focus on their core business operations. - Renewed our agreement with AT&T, the nation’s premier fiber, fixed wireless and wireless provider. This powerful combination will continue to make leading access and AI communications platforms available to businesses of all sizes.
- Announced a new joint offering with Zayo, Zayo UC+ with RingCentral. The offering combines Zayo’s robust network infrastructure, integration planning, and engineering expertise with RingCentral’s native, AI-powered, and secure RingEX and RingCX solutions.
- Announced that Gartner has recognized RingCentral as a Leader in the 2024 Magic Quadrant for Unified Communications as a Service (UCaaS) report for the tenth year in a row. The 2024 Gartner Critical Capabilities for UCaaS report, which accompanies the Magic Quadrant report, also revealed that RingCentral is ranked #1 in three out of the six product or service use case categories, including: #1 for Telephony-Centric/Heavy Organizations; #1 for UC with Integrated Contact Center; and #1 for Midsize Enterprises.
For a reconciliation of our forecasted non-GAAP operating margin and free cash flow, 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
Conference Call Details:
- What: RingCentral financial results for the third quarter of 2024 and outlook for the fourth quarter and full year of 2024.
- When: Thursday, November 7, 2024 at 2:00PM PT (5:00PM ET).
-
Dial-in: 1-888-349-0093 from
the United States ; 1-412-317-5201 internationally - Webcast: RingCentral Q3 2024 Earnings Webcast (live and replay).
-
Replay: Following the completion of the call through 11:59 PM ET on November 14, 2024, a telephone replay will be available by dialing 1-844-512-2921 from
the United States or 1-412-317-6671 internationally with recording access code 10193681.
Investor Presentation Details
An investor presentation providing additional information and analysis can be found at https://ir.ringcentral.com.
About RingCentral
RingCentral is a leading provider of AI-powered cloud business communications, contact center, video and hybrid event solutions. RingCentral empowers businesses with conversation intelligence, and unlocks rich customer and employee interactions to provide insights and improved business outcomes. With decades of expertise in reliable and secure cloud communications, RingCentral has earned the trust of millions of customers and thousands of partners worldwide. Visit ringcentral.com to learn more.
© 2024 RingCentral, Inc. All rights reserved. RingCentral, RingCentral Contact Center 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, our expectations regarding our profitability and our non-GAAP free cash flow, our expectations around the contribution of our new products, our estimates and expectations regarding third parties, 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: our ability to realize the anticipated benefits of our strategic relationships; our expectations regarding our strategic acquisitions, including acquisition of select assets from Hopin and Mitel; 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 RingEX (formerly 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 most recent Form 10-K and Form 10-Q 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 adjusted EBITDA, Non-GAAP net income (loss), Non-GAAP net income (loss) per diluted share, Non-GAAP free cash flow, Non-GAAP free cash flow margin, and constant currency revenue. 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, third-party relocation costs tied to the conflict between
Non-GAAP free cash flow is defined as GAAP net cash provided by (used in) operating activities adjusted for capital expenditures including purchases of property and equipment and capitalized internal-use software. We believe information regarding Non-GAAP free cash flow provides useful information to investors in understanding and evaluating the strength of liquidity and available cash. Non-GAAP free cash flow margin is defined as Non-GAAP free cash flow divided by total GAAP revenues.
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 adjusted EBITDA, Non-GAAP net income (loss), Non-GAAP net income (loss) per diluted share, Non-GAAP free cash flow, Non-GAAP free cash flow margin, and constant currency revenue 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 adjusted EBITDA, Non-GAAP net income (loss), Non-GAAP net income (loss) per diluted share, Non-GAAP free cash flow, and Non-GAAP free cash flow margin provide useful measure for period-to-period comparisons of our business.
We have provided certain revenue-related information adjusted for constant currency to provide a framework for assessing how our underlying business performed excluding the effect of foreign currency rate fluctuations. To present this information, current period results in currencies other than
Although Non-GAAP subscriptions gross margin, Non-GAAP other gross margin, Non-GAAP operating margin, Non-GAAP income (loss) from operations, Non-GAAP adjusted EBITDA, Non-GAAP net income (loss), Non-GAAP net income (loss) per diluted share, Non-GAAP free cash flow, Non-GAAP free cash flow margin, and constant currency revenue 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 our 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, mid-market and enterprise annualized exit monthly recurring subscriptions, enterprise annualized exit monthly recurring subscriptions and net monthly subscriptions dollar retention rate. 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 mid-market and enterprise annualized exit monthly recurring subscriptions in the same manner as we calculate our annualized exit monthly recurring subscriptions, except that only customer subscriptions from customers generating
TABLE 1 RINGCENTRAL, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited, in thousands) |
|||||||
|
September 30, 2024 |
|
December 31, 2023 |
||||
Assets |
|
|
|
||||
Current assets |
|
|
|
||||
Cash and cash equivalents |
$ |
212,652 |
|
|
$ |
222,195 |
|
Accounts receivable, net |
|
395,805 |
|
|
|
364,438 |
|
Deferred and prepaid sales commission costs |
|
185,906 |
|
|
|
184,620 |
|
Prepaid expenses and other current assets |
|
64,612 |
|
|
|
77,396 |
|
Total current assets |
|
858,975 |
|
|
|
848,649 |
|
Property and equipment, net |
|
185,160 |
|
|
|
184,390 |
|
Operating lease right-of-use assets |
|
45,100 |
|
|
|
42,989 |
|
Deferred and prepaid sales commission costs, non-current |
|
347,683 |
|
|
|
395,724 |
|
Goodwill |
|
75,322 |
|
|
|
67,370 |
|
Acquired intangibles, net |
|
290,234 |
|
|
|
393,767 |
|
Other assets |
|
15,908 |
|
|
|
12,024 |
|
Total assets |
$ |
1,818,382 |
|
|
$ |
1,944,913 |
|
Liabilities, Temporary Equity, and Stockholders’ Deficit |
|
|
|
||||
Current liabilities |
|
|
|
||||
Accounts payable |
$ |
34,786 |
|
|
$ |
53,295 |
|
Accrued liabilities |
|
287,820 |
|
|
|
325,632 |
|
Current portion of long-term debt, net |
|
181,143 |
|
|
|
20,000 |
|
Deferred revenue |
|
260,999 |
|
|
|
233,619 |
|
Total current liabilities |
|
764,748 |
|
|
|
632,546 |
|
Long-term debt, net |
|
1,352,057 |
|
|
|
1,525,482 |
|
Operating lease liabilities |
|
29,830 |
|
|
|
28,178 |
|
Other long-term liabilities |
|
17,648 |
|
|
|
61,827 |
|
Total liabilities |
|
2,164,283 |
|
|
|
2,248,033 |
|
|
|
|
|
||||
Temporary equity |
|
|
|
||||
Series A convertible preferred stock |
|
199,449 |
|
|
|
199,449 |
|
|
|
|
|
||||
Stockholders’ deficit |
|
|
|
||||
Common stock |
|
9 |
|
|
|
9 |
|
Additional paid-in capital |
|
1,210,961 |
|
|
|
1,204,781 |
|
Accumulated other comprehensive loss |
|
(6,084 |
) |
|
|
(8,223 |
) |
Accumulated deficit |
|
(1,750,236 |
) |
|
|
(1,699,136 |
) |
Total stockholders’ deficit |
$ |
(545,350 |
) |
|
$ |
(502,569 |
) |
Total liabilities, temporary equity and stockholders’ deficit |
$ |
1,818,382 |
|
|
$ |
1,944,913 |
|
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, |
||||||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
Revenues |
|
|
|
|
|
|
|
||||||||
Subscriptions |
$ |
582,970 |
|
|
$ |
531,030 |
|
|
$ |
1,707,515 |
|
|
$ |
1,552,956 |
|
Other |
|
25,795 |
|
|
|
27,134 |
|
|
|
78,368 |
|
|
|
78,202 |
|
Total revenues |
|
608,765 |
|
|
|
558,164 |
|
|
|
1,785,883 |
|
|
|
1,631,158 |
|
Cost of revenues |
|
|
|
|
|
|
|
||||||||
Subscriptions |
|
150,864 |
|
|
|
141,172 |
|
|
|
442,621 |
|
|
|
413,664 |
|
Other |
|
29,320 |
|
|
|
27,802 |
|
|
|
84,712 |
|
|
|
80,403 |
|
Total cost of revenues |
|
180,184 |
|
|
|
168,974 |
|
|
|
527,333 |
|
|
|
494,067 |
|
Gross profit |
|
428,581 |
|
|
|
389,190 |
|
|
|
1,258,550 |
|
|
|
1,137,091 |
|
Operating expenses |
|
|
|
|
|
|
|
||||||||
Research and development |
|
84,144 |
|
|
|
85,444 |
|
|
|
244,422 |
|
|
|
250,965 |
|
Sales and marketing |
|
276,976 |
|
|
|
270,767 |
|
|
|
819,193 |
|
|
|
795,422 |
|
General and administrative |
|
64,170 |
|
|
|
87,154 |
|
|
|
207,902 |
|
|
|
244,472 |
|
Total operating expenses |
|
425,290 |
|
|
|
443,365 |
|
|
|
1,271,517 |
|
|
|
1,290,859 |
|
Income (loss) from operations |
|
3,291 |
|
|
|
(54,175 |
) |
|
|
(12,967 |
) |
|
|
(153,768 |
) |
Other income (expense), net |
|
|
|
|
|
|
|
||||||||
Interest expense |
|
(16,393 |
) |
|
|
(12,162 |
) |
|
|
(48,668 |
) |
|
|
(19,492 |
) |
Other income |
|
1,073 |
|
|
|
20,441 |
|
|
|
12,820 |
|
|
|
61,521 |
|
Other income (expense), net |
|
(15,320 |
) |
|
|
8,279 |
|
|
|
(35,848 |
) |
|
|
42,029 |
|
Loss before income taxes |
|
(12,029 |
) |
|
|
(45,896 |
) |
|
|
(48,815 |
) |
|
|
(111,739 |
) |
(Benefit from) provision for income taxes |
|
(4,176 |
) |
|
|
(3,780 |
) |
|
|
2,285 |
|
|
|
6,258 |
|
Net loss |
$ |
(7,853 |
) |
|
$ |
(42,116 |
) |
|
$ |
(51,100 |
) |
|
$ |
(117,997 |
) |
Net loss per common share |
|
|
|
|
|
|
|
||||||||
Basic and diluted |
$ |
(0.09 |
) |
|
$ |
(0.45 |
) |
|
$ |
(0.55 |
) |
|
$ |
(1.24 |
) |
Weighted-average number of shares used in computing net loss per share |
|
|
|
|
|
|
|
||||||||
Basic and diluted |
|
91,892 |
|
|
|
94,593 |
|
|
|
92,590 |
|
|
|
95,213 |
|
TABLE 3 RINGCENTRAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited, in thousands) |
|||||||
|
Nine Months Ended September 30, |
||||||
|
2024 |
|
2023 |
||||
Cash flows from operating activities |
|
|
|
||||
Net loss |
$ |
(51,100 |
) |
|
$ |
(117,997 |
) |
Adjustments to reconcile net loss to net cash provided by operating activities: |
|
|
|
||||
Depreciation and amortization |
|
167,557 |
|
|
|
174,723 |
|
Share-based compensation |
|
258,607 |
|
|
|
314,533 |
|
Unrealized loss on investments |
|
— |
|
|
|
1,646 |
|
Amortization of deferred and prepaid sales commission costs |
|
120,685 |
|
|
|
100,618 |
|
Amortization of debt discount and issuance costs |
|
3,112 |
|
|
|
3,465 |
|
Gain on early extinguishment of debt |
|
— |
|
|
|
(42,891 |
) |
Reduction of operating lease right-of-use assets |
|
15,329 |
|
|
|
15,272 |
|
Provision for bad debt |
|
4,852 |
|
|
|
5,200 |
|
Other |
|
(11,762 |
) |
|
|
4,879 |
|
Changes in assets and liabilities: |
|
|
|
||||
Accounts receivable |
|
(36,219 |
) |
|
|
(39,641 |
) |
Deferred and prepaid sales commission costs |
|
(99,238 |
) |
|
|
(103,773 |
) |
Prepaid expenses and other assets |
|
15,592 |
|
|
|
(7,251 |
) |
Accounts payable |
|
(17,473 |
) |
|
|
(31,664 |
) |
Accrued and other liabilities |
|
(24,461 |
) |
|
|
9,383 |
|
Deferred revenue |
|
18,709 |
|
|
|
15,309 |
|
Operating lease liabilities |
|
(13,796 |
) |
|
|
(15,993 |
) |
Net cash provided by operating activities |
|
350,394 |
|
|
|
285,818 |
|
Cash flows from investing activities |
|
|
|
||||
Purchases of property and equipment |
|
(18,617 |
) |
|
|
(17,515 |
) |
Capitalized internal-use software |
|
(40,858 |
) |
|
|
(38,241 |
) |
Cash paid for business combination, net of cash acquired |
|
(26,291 |
) |
|
|
(14,709 |
) |
Purchases of intangible assets |
|
(2,540 |
) |
|
|
— |
|
Net cash used in investing activities |
|
(88,306 |
) |
|
|
(70,465 |
) |
Cash flows from financing activities |
|
|
|
||||
Proceeds from issuance of stock in connection with stock plans |
|
10,000 |
|
|
|
10,954 |
|
Payments for taxes related to net share settlement of equity awards |
|
(5,333 |
) |
|
|
(7,124 |
) |
Payments for repurchases of common stock |
|
(244,996 |
) |
|
|
(249,568 |
) |
Proceeds from issuance of long-term debt, net of issuance costs |
|
— |
|
|
|
786,311 |
|
Payments for the repurchase of convertible notes |
|
— |
|
|
|
(580,960 |
) |
Payments for fees on long-term debt |
|
(4,308 |
) |
|
|
— |
|
Repayments of principal on long-term debt |
|
(15,000 |
) |
|
|
(5,000 |
) |
Repayments for financing obligations |
|
(3,085 |
) |
|
|
(4,738 |
) |
Payments for contingent consideration |
|
(10,345 |
) |
|
|
(1,673 |
) |
Net cash used in financing activities |
|
(273,067 |
) |
|
|
(51,798 |
) |
Effect of exchange rate changes |
|
1,436 |
|
|
|
(1,187 |
) |
Net increase (decrease) in cash, cash equivalents, and restricted cash |
|
(9,543 |
) |
|
|
162,368 |
|
Cash, cash equivalents, and restricted cash |
|
|
|
||||
Beginning of period |
|
222,195 |
|
|
|
269,984 |
|
End of period |
$ |
212,652 |
|
|
$ |
432,352 |
|
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, |
||||||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
Revenues |
|
|
|
|
|
|
|
||||||||
Subscriptions |
$ |
582,970 |
|
|
$ |
531,030 |
|
|
$ |
1,707,515 |
|
|
$ |
1,552,956 |
|
Other |
|
25,795 |
|
|
|
27,134 |
|
|
|
78,368 |
|
|
|
78,202 |
|
Total revenues |
$ |
608,765 |
|
|
$ |
558,164 |
|
|
$ |
1,785,883 |
|
|
$ |
1,631,158 |
|
Cost of revenues reconciliation |
|
|
|
|
|
|
|
||||||||
GAAP Subscriptions cost of revenues |
$ |
150,864 |
|
|
$ |
141,172 |
|
|
$ |
442,621 |
|
|
$ |
413,664 |
|
Share-based compensation |
|
(5,536 |
) |
|
|
(7,392 |
) |
|
|
(18,028 |
) |
|
|
(21,096 |
) |
Amortization of acquired intangibles |
|
(31,376 |
) |
|
|
(37,045 |
) |
|
|
(99,228 |
) |
|
|
(110,324 |
) |
Third-party relocation and other costs |
|
— |
|
|
|
(93 |
) |
|
|
(49 |
) |
|
|
(105 |
) |
Restructuring costs |
|
(313 |
) |
|
|
— |
|
|
|
(572 |
) |
|
|
(637 |
) |
Non-GAAP Subscriptions cost of revenues |
$ |
113,639 |
|
|
$ |
96,642 |
|
|
$ |
324,744 |
|
|
$ |
281,502 |
|
|
|
|
|
|
|
|
|
||||||||
GAAP Other cost of revenues |
$ |
29,320 |
|
|
$ |
27,802 |
|
|
$ |
84,712 |
|
|
$ |
80,403 |
|
Share-based compensation |
|
(1,919 |
) |
|
|
(2,380 |
) |
|
|
(5,995 |
) |
|
|
(6,892 |
) |
Amortization of acquired intangibles |
|
(21 |
) |
|
|
(22 |
) |
|
|
(65 |
) |
|
|
(66 |
) |
Restructuring costs |
|
(400 |
) |
|
|
(6 |
) |
|
|
(748 |
) |
|
|
(58 |
) |
Non-GAAP Other cost of revenues |
$ |
26,980 |
|
|
$ |
25,394 |
|
|
$ |
77,904 |
|
|
$ |
73,387 |
|
Gross profit and gross margin reconciliation |
|
|
|
|
|
|
|
||||||||
Non-GAAP Subscriptions |
|
80.5 |
% |
|
|
81.8 |
% |
|
|
81.0 |
% |
|
|
81.9 |
% |
Non-GAAP Other |
|
(4.6 |
)% |
|
|
6.4 |
% |
|
|
0.6 |
% |
|
|
6.2 |
% |
Non-GAAP Gross profit |
|
76.9 |
% |
|
|
78.1 |
% |
|
|
77.5 |
% |
|
|
78.2 |
% |
Operating expenses reconciliation |
|
|
|
|
|
|
|
||||||||
GAAP Research and development |
$ |
84,144 |
|
|
$ |
85,444 |
|
|
$ |
244,422 |
|
|
$ |
250,965 |
|
Share-based compensation |
|
(20,033 |
) |
|
|
(24,576 |
) |
|
|
(59,644 |
) |
|
|
(71,804 |
) |
Third-party relocation and other costs |
|
(732 |
) |
|
|
(3,401 |
) |
|
|
(2,277 |
) |
|
|
(4,964 |
) |
Restructuring costs |
|
(1,056 |
) |
|
|
(1,794 |
) |
|
|
(2,829 |
) |
|
|
(4,281 |
) |
Non-GAAP Research and development |
$ |
62,323 |
|
|
$ |
55,673 |
|
|
$ |
179,672 |
|
|
$ |
169,916 |
|
As a % of total revenues non-GAAP |
|
10.2 |
% |
|
|
10.0 |
% |
|
|
10.1 |
% |
|
|
10.4 |
% |
|
|
|
|
|
|
|
|
||||||||
GAAP Sales and marketing |
$ |
276,976 |
|
|
$ |
270,767 |
|
|
$ |
819,193 |
|
|
$ |
795,422 |
|
Share-based compensation |
|
(35,528 |
) |
|
|
(38,287 |
) |
|
|
(104,028 |
) |
|
|
(117,063 |
) |
Amortization of acquired intangibles |
|
(2,055 |
) |
|
|
(1,134 |
) |
|
|
(3,798 |
) |
|
|
(2,529 |
) |
Third-party relocation and other costs |
|
— |
|
|
|
(86 |
) |
|
|
(332 |
) |
|
|
(101 |
) |
Restructuring costs |
|
(2,028 |
) |
|
|
(1,124 |
) |
|
|
(4,639 |
) |
|
|
(5,093 |
) |
Non-GAAP Sales and marketing |
$ |
237,365 |
|
|
$ |
230,136 |
|
|
$ |
706,396 |
|
|
$ |
670,636 |
|
As a % of total revenues non-GAAP |
|
39.0 |
% |
|
|
41.2 |
% |
|
|
39.6 |
% |
|
|
41.1 |
% |
|
|
|
|
|
|
|
|
||||||||
GAAP General and administrative |
$ |
64,170 |
|
|
$ |
87,154 |
|
|
$ |
207,902 |
|
|
$ |
244,472 |
|
Share-based compensation |
|
(22,092 |
) |
|
|
(40,456 |
) |
|
|
(77,374 |
) |
|
|
(103,858 |
) |
Third-party relocation and other costs |
|
(463 |
) |
|
|
(1,689 |
) |
|
|
(4,691 |
) |
|
|
(5,317 |
) |
Restructuring costs |
|
(1,049 |
) |
|
|
(1,520 |
) |
|
|
(1,838 |
) |
|
|
(2,856 |
) |
Non-GAAP General and administrative |
$ |
40,566 |
|
|
$ |
43,489 |
|
|
$ |
123,999 |
|
|
$ |
132,441 |
|
As a % of total revenues non-GAAP |
|
6.7 |
% |
|
|
7.8 |
% |
|
|
6.9 |
% |
|
|
8.1 |
% |
Income (loss) from operations reconciliation |
|
|
|
|
|
|
|
||||||||
GAAP income (loss) from operations |
$ |
3,291 |
|
|
$ |
(54,175 |
) |
|
$ |
(12,967 |
) |
|
$ |
(153,768 |
) |
Share-based compensation |
|
85,108 |
|
|
|
113,091 |
|
|
|
265,069 |
|
|
|
320,713 |
|
Amortization of acquired intangibles |
|
33,452 |
|
|
|
38,201 |
|
|
|
103,091 |
|
|
|
112,919 |
|
Third-party relocation and other costs, net |
|
1,195 |
|
|
|
5,269 |
|
|
|
7,349 |
|
|
|
10,487 |
|
Restructuring costs |
|
4,846 |
|
|
|
4,444 |
|
|
|
10,626 |
|
|
|
12,925 |
|
Non-GAAP Income from operations |
$ |
127,892 |
|
|
$ |
106,830 |
|
|
$ |
373,168 |
|
|
$ |
303,276 |
|
Non-GAAP Operating margin |
|
21.0 |
% |
|
|
19.1 |
% |
|
|
20.9 |
% |
|
|
18.6 |
% |
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization |
$ |
21,131 |
|
|
$ |
20,966 |
|
|
$ |
64,466 |
|
|
$ |
61,804 |
|
Non-GAAP Adjusted EBITDA |
$ |
149,023 |
|
|
$ |
127,796 |
|
|
$ |
437,634 |
|
|
$ |
365,080 |
|
As a % of total revenues non-GAAP |
|
24.5 |
% |
|
|
22.9 |
% |
|
|
24.5 |
% |
|
|
22.4 |
% |
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, |
||||||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
Net income (loss) reconciliation |
|
|
|
|
|
|
|
||||||||
GAAP net loss |
$ |
(7,853 |
) |
|
$ |
(42,116 |
) |
|
$ |
(51,100 |
) |
|
$ |
(117,997 |
) |
Share-based compensation |
|
85,108 |
|
|
|
113,091 |
|
|
|
265,069 |
|
|
|
320,713 |
|
Amortization of acquired intangibles |
|
33,452 |
|
|
|
38,201 |
|
|
|
103,091 |
|
|
|
112,919 |
|
Third-party relocation and other costs, net |
|
1,158 |
|
|
|
(1,731 |
) |
|
|
(349 |
) |
|
|
(22 |
) |
Restructuring costs |
|
4,846 |
|
|
|
4,444 |
|
|
|
10,626 |
|
|
|
12,925 |
|
Amortization of debt discount and issuance costs |
|
1,098 |
|
|
|
1,067 |
|
|
|
3,112 |
|
|
|
3,465 |
|
Loss associated with investments |
|
— |
|
|
|
99 |
|
|
|
458 |
|
|
|
1,745 |
|
Gain on early extinguishment of debt |
|
— |
|
|
|
(11,784 |
) |
|
|
— |
|
|
|
(42,891 |
) |
Intercompany remeasurement loss (gain) |
|
1,116 |
|
|
|
669 |
|
|
|
820 |
|
|
|
(1,217 |
) |
Income tax expense effects |
|
(29,995 |
) |
|
|
(25,866 |
) |
|
|
(72,868 |
) |
|
|
(60,319 |
) |
Non-GAAP net income |
$ |
88,930 |
|
|
$ |
76,074 |
|
|
$ |
258,859 |
|
|
$ |
229,321 |
|
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 |
|
91,892 |
|
|
|
94,593 |
|
|
|
92,590 |
|
|
|
95,213 |
|
Effect of dilutive securities |
|
1,952 |
|
|
|
2,362 |
|
|
|
2,308 |
|
|
|
1,622 |
|
Non-GAAP weighted average shares used in computing non-GAAP diluted net income per share |
|
93,844 |
|
|
|
96,955 |
|
|
|
94,898 |
|
|
|
96,835 |
|
|
|
|
|
|
|
|
|
||||||||
Diluted net income (loss) per share |
|
|
|
|
|
|
|
||||||||
GAAP net loss per share |
$ |
(0.09 |
) |
|
$ |
(0.45 |
) |
|
$ |
(0.55 |
) |
|
$ |
(1.24 |
) |
Non-GAAP net income per share |
$ |
0.95 |
|
|
$ |
0.78 |
|
|
$ |
2.73 |
|
|
$ |
2.37 |
|
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 September 30, |
|
Nine Months Ended September 30, |
||||||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
Net cash provided by operating activities |
$ |
127,219 |
|
|
$ |
86,594 |
|
|
$ |
350,394 |
|
|
$ |
285,818 |
|
Capitalized expenditures |
|
(21,774 |
) |
|
|
(16,632 |
) |
|
|
(59,475 |
) |
|
|
(55,756 |
) |
Non-GAAP free cash flow |
$ |
105,445 |
|
|
$ |
69,962 |
|
|
$ |
290,919 |
|
|
$ |
230,062 |
|
Non-GAAP free cash flow margin |
|
17.3 |
% |
|
|
12.5 |
% |
|
|
16.3 |
% |
|
|
14.1 |
% |
TABLE 7 RINGCENTRAL, INC. RECONCILIATION OF FORECASTED OPERATING MARGIN AND FREE CASH FLOW GAAP MEASURES TO NON-GAAP MEASURES (Unaudited, in millions) |
|||||||||||||
|
Q4 2024 |
|
FY 2024 |
||||||||||
|
Low Range |
|
High Range |
|
Low Range |
|
High Range |
||||||
GAAP revenues |
611.0 |
|
|
613.0 |
|
|
|
2,396.9 |
|
|
|
2,398.9 |
|
|
|
|
|
|
|
|
|
||||||
GAAP loss from operations |
(0.5 |
) |
|
5.0 |
|
|
|
(17.0 |
) |
|
|
(11.6 |
) |
GAAP operating margin |
(0.1 |
%) |
|
0.8 |
% |
|
|
(0.7 |
%) |
|
|
(0.5 |
%) |
Share-based compensation |
90.0 |
|
|
85.0 |
|
|
|
355.0 |
|
|
|
350.0 |
|
Amortization of acquired intangibles |
35.0 |
|
|
35.0 |
|
|
|
137.8 |
|
|
|
137.8 |
|
Third-party relocation and other costs, net |
— |
|
|
— |
|
|
|
10.8 |
|
|
|
10.8 |
|
Restructuring costs |
5.0 |
|
|
5.0 |
|
|
|
16.0 |
|
|
|
16.0 |
|
Non-GAAP income from operations |
129.5 |
|
|
130.0 |
|
|
|
502.6 |
|
|
|
503.0 |
|
Non-GAAP operating margin |
21.2 |
% |
|
21.2 |
% |
|
|
21.0 |
% |
|
|
21.0 |
% |
|
FY 2024 |
||||||||||||
|
Low Range |
|
High Range |
||||||||||
GAAP net cash provided by operating activities |
$ |
485.0 |
|
|
$ |
490.0 |
|
||||||
Capitalized expenditures |
|
(85.0 |
) |
|
|
(85.0 |
) |
||||||
Non-GAAP free cash flow |
$ |
400.0 |
|
|
$ |
405.0 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20241107332378/en/
Investor Relations Contact:
Will Wong, RingCentral
650-450-4826
ir@ringcentral.com
Media Contact:
Mariana Leventis, RingCentral
650-562-6545
Mariana.Leventis@ringcentral.com
Source: RingCentral, Inc.
FAQ
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