RingCentral (RNG) 9 Nov 202020 Q3 Earnings call transcript

Company Profile

Participants

Ryan Goodman	Head-Investor Relations
Vlad Shmunis	Founder, Chairman and Chief Executive Officer
Anand Eswaran	President and Chief Operating Officer
Mitesh Dhruv	Chief Financial Officer
Terry Tillman	Truist
Bhavan Suri	William Blair
Sterling Auty	JPMorgan
Brian Peterson	Raymond James
Michael Turrin	Wells Fargo
George Sutton	Craig-Hallum
Nikolay Beliov	Bank of America
Samad Samana	Jefferies
Meta Marshall	Morgan Stanley
Taylor McGinnis	Deutsche Bank
Will Power	Baird
Ryan Koontz	Rosenblatt Securities
George Kurosawa	KeyBanc
Siti Panigrahi	Mizuho
Rich Valera	Needham
Peter Levine	Evercore ISI
Jonathan Kees	Summit Redstone
Matt VanVliet	BTIG
Catharine Trebnick	Dougherty

Call transcript

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Operator

Greetings, and welcome to RingCentral’s Third Quarter 2020 Earnings Conference Call. [Operator Instructions] Please note, this conference is being recorded. I would now like to turn the conference over to our host, Ryan Goodman, Head of Investor Relations. Thank you.

You may begin.

Ryan Goodman

you. Thank welcome quarter and call. earnings RingCentral’s to afternoon, XXXX third conference Good am of Head Goodman, Relations. I RingCentral’s Investor Ryan

Joining me and Eswaran, President Financial today CEO; and and are Officer. Chief Vlad Shmunis, Operating Officer; Mitesh Chief Founder, Dhruv, Chairman Anand

format Anand Mitesh, Vlad, followed remarks and today will Q&A. Our prepared by include by

at the by continued to will impact non-GAAP statements assumptions reports, and is The our I extent our to and A our and GAAP of call XXXX In earnings about on slide full of our risks provided Some slide Commission questions our the results and to and its release consumers particular, financial measures Exchange which incorporated indicated, actions assumes remain discussions replay today’s the are forward-looking extent as otherwise underlying including year-over-year comparisons. made including is in Investor ir.ringcentral.com of businesses may business to statements, as outlook from encourage are a today’s and governments, update our comment and contained to several reconciliation all reconciliations, filings non-GAAP to and risks Unless or to does severity, and being earnings responses and of business forward-looking currently access A to obligation follow deck. our our our on COVID-XX of that call. factors, all response discussion and our on discussion. no statements in year These the GAAP release, outlook. well you all our business subject with your and pandemic. more results SEC taken materially our at impacted non-GAAP to pandemic, learn deck, visit this Securities Actual depend RingCentral. will continue by the to and by contain evolve periodic webcast our fourth the RingCentral this on to uncertainties. in related uncertain of is is reference that quarter uncertainties Relations pandemic differ website time. with not of into the with statements. forward-looking intend duration

guidance, to the to corresponding our on Relations GAAP of non-GAAP as forward-looking With the turn posted a available certain deck Vlad. is website. in For not reconciliation guidance detail me call the that, financial over measure discussed the let slide in Investor

Vlad Shmunis

on health. Good We and our for safe conference thank afternoon a you like board newest to warm an Commission Commissioner earnings start years call for this Clyburn member, Public Clyburn. appointment, years, quarter served are committed in joining FCC I third her XX good you where and to closing all would the of of call. hope Ms. she digital Mignon Mignon was South Carolina. was our Ms. welcome divide. with nine federal Prior to Service to the

customers solutions for a tenet our through going With megatrends, and are customers substantial our and to the their continues to digital increase. RingCentral core journeys, continuity. RingCentral. continuing of their solid we we of workforce global communication becoming see numbers these it. Leveraging adoption We as delivered prove needs strong continued are quarter. to transformation saw third there the to Now a importance RingCentral’s business that communication cloud of part a are work-from-home, collaboration to

total mindshare grew have QX, XX% we a billion. XX% new year-over-year. up logo $X.X level with seen before year-over-year Customer to business over grew at For ARR not record

a complete continuing communications Anand these across metrics But need transactional to communications engagement and effectively, retention which meetings recent space. mode we important. Individually, seamless external recognition transforms messages, does message, MVP. video, phone in message, each the in RingCentral what macro-related into communicate: and for Visual as stabilize. And cloud and people details. clear communications phone, means standout and is the so what Mitesh and video, makes MVP customers’ by and major a provide of expanding all calls, record prestigious pipeline enterprise is Interactive RingCentral will elegantly and as or these a trends three modalities see refer more persistent integration our all Arts. solution and Underpinning combines we Additionally, that evidenced needs. internal is from of RingCentral Academy is to of enterprises’ system and the for

Visual won superior We Best in Gold and Website Services WX the is Appeal the that global with awards our platform. born-in-the-cloud award and world-class on capabilities, Utility. Best these our Experience five beginning. Applications WX are Visual have proud interface strengths, and coverage, category, But user a continues feature for humbled the deep nines two Appeal to us and General Silver of strength win reliability, velocity to open well-proven innovation enables platform is accelerate. an just It to Building

XX rooms, in-meeting additional and waiting features, and new controls, side, indicators, including mode, strip dark switching, the quality others. quarter, over released amongst viewing film On innovative security network last the video mode, device we

innovate a roadmap ahead. rapidly rich continue We and to have

back high-volume expect a platform we residency. our of serve We CPaaS across with our and us we as solutions six to presence But Germany enables will on-premise customers. post-COVID been end reminders the let’s for workforce work of now positioned need to are world the new RingCentral been order things local work way look platform simply the has carriers. we have with to announced customers of on-premise legacy from international has partnerships Office most updates they And that at a will data home stronger, of XXXX. exciting European In large, This planning allow are us you conclusion, capabilities. the way major tailwind by to for never the strategic future. now the employees. also for ahead. will our without Anand all Businesses include system In for COVID expansion shortly. see already enhanced To vendors, world, and this go of continue leading inaccessible end, broadened where as well to were is continuing. to RingCentral ecosystem use we of don’t tailwinds better foreseeable open differentiated hybrid our and share RingCentral to solutions. appointment with part our platform that Global SMS third-party address notifications as with SMS fully world integrated a some continents for This uniquely via importantly, global the business number

I’d is reliable secure, in of and nearly over the cloud. winning MVP for preferential like and the President is yet RingCentral exciting unique ecosystem half relationships healthy both of is wish worldwide, give to cloud Operating and With we Our installed-base. Chief to PBX the holiday the And on best to a well-differentiated, call or come. Officer, additional safe global, Stay million over on-premise and season, fronts. a the I our everyone Anand users go-to-market access us to announcements strategic Eswaran. will and platform and turn believe XXX winning, tuned technology now The that,

Anand Eswaran

you, Good Operationally, was a strong everyone. Thank afternoon QX very Vlad. quarter.

engagement communications wins strong all upsell, We unified are across had seeing our logo across segments. momentum and customer portfolio. with new strength and customer We

Let with highlights. me a begin few

ARR be a key upmarket increased to driver continues $XXX Channel million. channel XX% success. our year-over-year to First, of

our that delivered strong carrier expectations. exceeded results our partners Second,

are strategic be I’d warmly Enterprise joint sales go video, new wins integrated MVP QX, also messaging, pipeline and great on for and dollar-plus the pleased million roughly RingCentral. our half with and ramping as important we customer differentiator wins. Alcatel-Lucent return partnerships, enablement Fourth, on strategic cited decision we factor expansion. fifth, as in TCV welcome building. are innovation geographic proved top for with to success like to our early are in partner. unified our the Third, to and Of investments key Atos experience a And way influencing our Avaya and their an top phone seeing in

needs reach open uniquely ecosystem large, companies. us position Our the and platform international of to global serve

details. dive just Let me the into

First channels.

global global, people presence win provides of in strong Cornerstone channel us pace. on-premise example a OnDemand, replace network leader to at solutions. in a unified a systems communications Our channel with our channel mindshare record scale. valuable standout One with at a Cornerstone customer platform. development the is to legacy QX grow in And continues needed community

customer open and XX additionally countries MVP users, over this savings. significant platform, RingCentral them high X,XXX deploy provided globally and and complete across Our solution enabled reliability, to

carrier key had Telus a with our upsell. strong partners. Second, and quarter new logos

include segments products, market our center. new including and are We partnership to contact expanding

public becoming For AT&T’s late and acceleration to with a CCaaS the see lead that, Telecom. lead year-over-year, this an upmarket. new partnership let offering AT&T, me RingCentral to solution earlier digits up direct success, expanded we strong we continue performance, new today, sector excited start will partnerships, by triple agreement, customers. British RingCentral with with and UCaaS into led UCaaS be BT Building Under expansion of for I’m On strategic Cloud share business result Work a provided upon Avaya. year. last is business by This announced

We customer our our with geographic ACO business half sales ACO continued participation, roll-out of and customers. QX partner Over from wins, came coverage. upmarket ramping new

Unify pipeline robust countries. Atos, larger RingCentral coming launched wins seven pleased growth, some are August by we in targeted and the in ACO ACO and We see With are healthcare Office verticals was education. the from European seeing to QX of like in

with as Atos XX,XXX particularly first by to deal an choosing figure its we’re month see have the wins, including TCV to launch. users across pleased forward Office And XX solution, We’re in go of large-scale RingCentral starting early eight delighted countries. Unify

a Dental, CCaaS its organizations. Our integrated contact RingCentral dental be XX,XXX patient added contact CCaaS This partner differentiated adding of UCaaS analytics with Heartland of center to of lasting and us Heartland to QX. center provides UCaaS end-to-end great unique one run customer an to value. will from family center, contact the RingCentral go-to-market Dental example integrated and solutions ecosystem users XXX By long-time their And was offices. nation’s calls able the with local and creates in largest users UCaaS expanded first of win support A our moat. customer

organization Digital, branches. a with national digital government We Engage RingCentral’s CNAM, also platform, had win contact a French healthcare for manages customer large that center

the planning a with CNAM will of multinational importance is with or large and professionals. policyholders to that available others RingCentral above with expanded of Importantly, RingCentral over meeting expansion, was first full key in has to Engage needs software the CNAM Along company. to at to now RingCentral agents which education. one we University A of let me illustrate big center this in In an and healthcare healthcare This users is global and win with Video, a use security. and XX key to share secured conjunction countries. global already Since and verticals Examples many another with with continents, is global RCV, healthcare and X XX,XXX for such connect QX, RingCentral user I’ve also UCaaS platform local the compliance across Digital, a now customer QX regulatory X,XXX office, contact in XXXX, education. initiative a an integrated Knoxville. important customers. win piloting Tennessee, in solution provide as win differentiator mentioned is our in key X,XXX

needs were the industry-leading and Our critical MVP of solution mobile-first meeting this all university. unified to platform

the addition, learning In differentiator. of Canvas our initiative developed important part integrations vertical with an as system management we’ve was the market

talked feature have starts extensive an distribution our in the the RingCentral. at we about While unique network, Trust communications all set, are reliable, environment, and reach current with secure, first is trusted principle trust. it And, paramount. global

quarter. played solution this I an am in tracing COVID UK. are RingCentral’s incredibly helping part that contact humbled has the proud our of in We accomplishments important

discipline. scaling unique inflection technology the strength are a confidence an our brand, partnerships business in and of large us vision platform, and our give We future. the with market effectively, point, With at

to Now over call for I turn Chief will our the Officer, financials, Dhruv. Mitesh Financial the

Mitesh Dhruv

quarter QX standout good a and everyone. afternoon fronts. Thanks, on Anand, was multiple

Here are key some highlights.

year-over-year, subscriptions revenue accelerating in grew overall XX% QX. First, XX% from

bps operating margin XX% a operating year-over-year the of leverage of profitable of our growth This cash non-GAAP was philosophy in Second, up XXX speaks flow XX% to inherent demonstrates year-over-year. point non-GAAP our and business and margin about over expanded model.

our grew year-over-year $X.X billion. Third, XX% ARR to flagship UCaaS Office RingCentral solution for

wins partnerships, include: new of drivers and enterprise across over with strong logo quarter with had strong business to and results momentum year-over-year, up long-term triple customers contributions from wins customers and Contact for opportunity. year-over-year is and center stabilizing strategic in with strong well from the and UCaaS new attach seeing enterprise digits strong COVID-related quarters. driver our acceleration growth. $XXX a growth Finally, million. mid-market ARR with our significant our these upsell, rate from important momentum, Key churn Starting margin of our the an grew boding another recent business trends a XX% enterprise is larger

COVID-driven years for in essential fueling in expand Case bookings ahead. from for and is over base. land guidance. of customers Our saw we QX the Along bookings, in our our XX% at demonstrating upmarket structural had mindshare was continued upmarket also existing in churn shift and strategy business, new contemplated new point, accounted we growing similar than overall to stabilize strong levels with better within our

Avaya partnerships, results to As we from our as notably partners, and our from from pleased are carrier strong contributions Atos see well AT&T. early as most to

users year, These of we first deliver a more structural quarters. throughout contributions. course, finish contributing QX strong will, next these tailwinds come online building with to Momentum confidence ARR, QX XXXX. As incremental strong and us in from show from in partners to subscription to revenue gives ensuing up before continuing into meaningfully expect

that, pipeline With generation a we robust raising good a As start, logo XXXX. with our along coverage strong guidance with annual momentum are healthy an is early off ratio. continued for and new read, QX to

our XX% up are revenue to We growth previously. increasing from subscriptions XX%,

non-recurring from laptop revenue XX% mobile XX%, to shift RingCentral to desktop growth engagement other devices. reflecting expect and apps phones of customer We on

increasing revenue total are up We growth XX% our to previously. XX% from XX%, to

margin range. We which expect of the is top non-GAAP end the at of operating prior X.X%,

long-term. to seeing stabilizing. multiple non-GAAP summary, are previously. continue $X.XX, catalysts for our and $X.XX Macro churn retention our increasing are growth to EPS from $X.XX We profitable for we’re indicators up In to

forging customers. long-term with our are We relationships

the as environment. now unlocked, fruit, strategy next business at ship doubling go-to-market require Alcatel-Lucent And are with to work-from-anywhere Atos. from is They forefront and with further track help expansion BT additional And of bearing fixes productive important expands gap enable workforces hear partners. on persist that growth. platforms is offering. is to that product in lead our early of showing Avaya international Enterprise solutions. solid strategic diversified Also, be will especially focus expect further wins to from to further RingCentral remains are front on shifting down AT&T year. Our about Telus Businesses on and is new the early and post-pandemic initiatives diversified new with journey. the a growth go-to-market already RingCentral both that long-term stop that vectors. a the our

innings are $XX our call in ability market. the for this in and RingCentral thrive are of We still Q&A. let the turn UCaaS the to story, confident to With billion-plus we operator me early that, in the

Operator

of question. your Our question Truist. from comes with proceed Terry Please first line Instructions] Tillman [Operator with the

Terry Tillman

to in you in then Maybe Hi, the moving dollar deals? in Vlad, Anand kind and you million for financial traction deals of terms million I Mitesh, fourth have to exposure programmatic about are more Mitesh the color congrats bit of on a the first and the plus upmarket. of follow-up. question the relates quarter? just quarter. approach, And Maybe thinking dollar large quarter how And a terms little

Mitesh Dhruv

Sure, Terry.

how QX million So doing question on yes and – dollar how so QX they're shaping deals in up. is

touch I'll QX areas. So up of with a let's first, start couple

so increase the was one. deal the dimensions, these terms the the where the saw we the itself, an deal duration, So on in of came size That's sequentially. of both from. average trend and for terms And in deals this dollar the million of dimensions broad-based deals of

strength. or in So center, for across XX% of board, center deals of of these And the these logos, deals an than new very channel broad half deals. more a transactions them, contact contact XX% of in these had these so element accounted

month in had deals value the the in to million compared QX, it it's of four We've of it's booked number deal month, what value total was look about the terms – to in if the the In of – of of start. up, well, QX And how total more up a twice we ahead, month a these month dollar it’s – about fast the as you of size we five deals booked look, shaping first of built first first all than the the terms times first QX. in we we've QX.

into continue this QX. So seeing all-in-all, momentum we're

this a whole that play a out catalyst is turning I RingCentral for shift overall, the us. off good be So feel to structural work-from-anywhere being

Terry Tillman

Vlad this That's RingCentral simple for simple And if good at Anand, just is math, do I'm great the don't what partners you just going color. but around math, kind to of you'll know a if keep it's and those audience know to That's going great. maybe I mean, which stick of to have or of as of are partner follow-up, I them access existing is, the with order Thank early you. you, I users. about you're giving versus you congrats opposed XXX us in signals, use thinking given million captive users what's but plus product, that an seeing now update don't in if customer million or you and strategic kind understand to What platform? their update, different but the propensity several still a how I – know you've again. to these with an of relationships to direction. cloud any have other some trying potentially kind of powered stickiness signals Thank partnerships, like kind those have, as to their

Anand Eswaran

That's the to Anand. the question. a to Great I’ll everyone is question. take This great talk here.

feel we across our about good partners. the So pretty stickiness

catalyst, partners me top you, customer Avaya, I QX, to across in record started were with would and across our save across have I carrier tell highlights Atos, In new for it. with fact, if acquisitions. seen partners were a I the on to want what we growth AT&T, three had BT

pipeline, transactions large the we it'd and momentum Avaya fundamentals, are of Atos. seeing our record it’d whether seeing across whether greater be You're be with be whether upselling, quarter-on-quarter deals, growth on all and it'd

about partners to partnership. good a us or pretty my joint on So fundamental we strategic carrier your the our question next effect, answer taking level our to feel status, net is partners

Operator

with Bhavan proceed William comes with Please question. Our the your from next line Blair. question Suri of

Bhavan Suri

question taking for let me echo nice and job my thanks Terry, there. guys, Hey

Let off with me upmarket. is question, maybe contradict to Terry's start which

other I SMB Let math some company. because like really it Again, really me the go the an If SMB. in strength you to, SMB strength, do the grew amazing upmarket – you're really fantastic. actually well great looked really, direction had market

the Mitesh, financially gather some just and of what driving So color sort both go-to-market what's acceleration, space. that – perspective in around I the on a from SMB

Mitesh Dhruv

you're Yes, the the and perk and see up acceleration, yes, Bhavan. again an quarter. did did SMB board in across we Sure, did strength right. show third

compares table a that year year. So we’re couple at to the compares, despite the said, And, hood. from look last things definitely easier if last happening the of set you but – are under

or could I three here. touch upon So four dimensions

The are first we very in e-commerce, seeing one a traction one. is strong that that's

Second is the branding off. taking is name and work-from-anywhere and RingCentral recent becoming we've done of

dimension from one AT&T Macro our is, And are a third Avaya trends fourth the partners. The some and carrier stabilizing. of is contribution and other churn.

these go for things all perfect for storm take together to came off. to So a four SMB

stronger Now, lower in it motion the lifetime is if what CAC, you now that with at look highly business. and a profitable SMB business higher upmarket SMB it's this means is fuel a value helping

to more cycle it's virtual more starting us. create and for a So

Bhavan Suri

of been the Yes. has the I a benefiting think way stabilization RingCentral Zoom That's touched impact, hasn't my sale sale. But about coronavirus. way you're but it sort it. is good totally a It I the tailwinds for Vlad, maybe you someone not Anand the as much on right. some more it huge, good centralized is, like from work-from-home, is, that The to churn or of get – is from follow-up, hear. And

to you that's have sitting replace people's facilities. at stuff to have replace You PBX,

back moved have thoughts thinking and idea work think people as a these would benefit right? about office, And that, up going almost sort do been love to your about COVID would to old on I trend implementations to think go at so of that's may is more reticent initiatives that and if home about you do the not full not I'd start traditional and office I that projects tailwind people Or about be vis-a-vis going get in on maybe focus to tailwind. Am thinking that play of time sort back lot start to to traditional you going in ripping scene where that, of of that to going a of that. sort phone system, that more will the the

you what how in about are Just you're thinking pipeline? to and the it understand guys seeing

Vlad Shmunis

detail. me this you Let add maybe, take and can

fantastic nicely COVID. as look, before is look or And timely. question Now you this know grew very all RingCentral

at are off flushing stock set COVID. nicely are anyone, to after during that to are don't kind what please the at we and riding it the way. But not – look, just stage, the fan expect nicely We And fully not not we I'm growing monument. COVID we fingers grow day take of this so just pointing

a not service. We’re a work-from-anywhere services, work-from-home we’re

and then, affordable the still That workforces trend technological for can of work-from-anywhere, widely global near-term are of and mobility and place road message which now distributed mega we example. you ago, seven major in one was advent only years, seven more broadband. exactly on And show. some IPO very and all advancement We’re available argue like years workforces, – of went for month we’re that, mobile XG, to workforces, those road so. And was

mobility get another both sudden [ph]. example, yet will For down broadband and

So essential. at for the what high work and look is good good level, for the

the vaccine becoming at okay. one up market will clearly people additional are world to see, can belief have with seen there people productive that even and is a this gets in working We the And in for are our eradication opportunities really we office. and virus, of opening vaccine more total more we is core as works, the thing many from real being even relaxed. not work-from-anywhere a little sure, in hopefully home, hope And hopefully that it will we this hope And as problem. we bit be solve be are, walks will March, present here budgets the

in people the winning Cloud world you cloud was cloud. still over. those thinking So But remain. to office, the still who will tell XXX% it call the RingCentral still that was what, was pre-COVID even winning, are

I we so. penetrate to And And this still a to say, makes RingCentral, and This on-prem as zone. would deal. here, that core system. would the of sense the up to cloud bit still more plus, hybrid $XXX And is a All see I into were say, and to $XXX legacy even do plus makes partnership I reality. It executed of underlying million now, more system have positioned maybe uniquely say to become a little even million easier more or again, long foundation million more light is or sense traditional users, good preferential hybrid before no will is no this really we COVID. have of with It just of puts $XXX access. $XXX lively million million $XXX do because those to cloud-based time in a And or so. our

I said, as about add things. want thinking know, you involved if So with I to thing don’t be was Mitesh. or Anand,

Anand Eswaran

said all. it You

Bhavan Suri

appreciate again. color I Thanks of last. the

Operator

with Please of Our your proceed comes next Auty the question. Sterling JPMorgan. question from line with

Sterling Auty

Yes. Thanks.

kind Alcatel-Lucent, quarter just Just and qualitatively to – Atos in us the of where we're ramped, and benefit you wondering you of full fully full partnerships one those via of which the if the my question from getting contribution all where side, from at do describe from could partnerships? of we ramp contribution, are think

Mitesh Dhruv

– Yes, Sterling, which we that very, the I’ll early very quarter are inning. take in

going going ahead ACO just call is I said, to seats. think in a it's seats will prospective and such. Vlad getting link on X right, as to on, sitting right some point million be inflection that'll Sterling XXX us and QX, just ensuing subsequent be to ratably really it's serve in what via more the traction And million, going far, it subscription journey that going to It's to start revenue. we good with over million roughly to up even X.X we layer it QX and I to it'll quarter be support as saw flywheel then any and Atos, long show back though one don't over is keep net ARR So going mean a the literally There's started. quarters, now, to are way an

So multi-year us. growth be it's journey going a compounding for to

Sterling Auty

Thank you. it. Got

Operator

Raymond Peterson line Please your a from with with James. comes question next proceed of Brian question. Our

Brian Peterson

on Hi strong gentlemen, the congrats quarter.

going first XXXX, the me, know high-level I you're So how question. guys year? for about thinking to you we're the guided haven’t one on real Any get thoughts next but

Mitesh Dhruv

Sure, take I’ll that. Brian. Yes.

for provided We durable in not lot We it specific we've yes, going quarter. do guidance February have how do a the excited our we about So to provide be of which XXXX, forward growth. it. is, things for

four on, points. I’ll catch So three, say, up I would

first the one relevancy We an increased touched the upon on our new mind carrier strengthening XX%. ramping, and next now UCaaS point front, Telus over and with of and go-to-market ship partnerships ALE all is the logos saw partners AT&T, front and with Atos are Sterling. which I customer two. Vlad the to right, customer with will up For year share are center. our mentioned BT Avaya the that's

on the front, of international, XX%. opportunity it's point, on say, one, are Third communication. tech tightly over integrated for That's just mix And the our continuing then of becoming quickly all base of a fourth be ahead an us. I'd modes and innovation shop just we beginning to is unlocked with one-stop our

about and good I visibility for feel – year the XXXX. end so to overall it very are good And how very we going setting up feel into we

Brian Peterson

And Thanks, AT&T That’s color. follow-up, maybe were the results this quarter. obviously, good one Mitesh. strong really

as BT expand you're going looking to relationships potentially into should the we You How expansion, expand you. carrier think mentioned forward? the Thank new the opportunity markets. about to

Anand Eswaran

two-fold. That's an is BT Telus. I say relationships is expand there's a One and good extension which with would AT&T, the have is today, the to And we question. opportunity

BT across Telus. AT&T, geographies portfolios with across with already As expanding you we’re see, and and can

be see see roadmap going us. for well. vector, one to And the of you happen. will will other as that’s the that's logos And which happen vector, the So you journey ahead new is adding

Brian Peterson

Great. you. Thank

Operator

Michael Please of line the from comes question next proceed Our with question. with Fargo. your Turrin Wells

Michael Turrin

afternoon. good and Thanks

here. You're acceleration showing

it's there just question those to Some in well much the likes the added you're of functionality new else understand a timeline, thinking attention answered about to struck in should come? to forward into the with provide certainly there, quarter? of results anything whether going And industry. grabbed anything contributed be the there else terms is Mitesh, to Atos have have here that's may you've you but us expansion regions of and as we the or yet able Avaya partnerships partnerships help how of

Mitesh Dhruv

Yes.

they now. from Michael All including wouldn't one say, I look transactions ramp, won, saw and Part is two number in of deals, in look, the we're the customers, That's with Avaya right? upmarket business of the the importantly, and the wins momentum multiple we happy are We ACO, had with itself. positive progress, pipeline ACO very the if seeing the on seats several at a we but million right above, ACO. deal, way the more upmarket on DCB you dollar part the

is, along that's I happening with had So happened – And eight upmarket jinx the the of Atos GTM expansion of strength product first figure It Avaya. promise of want to is for our Atos, but strength board across and and just don't was an really out motion. so in in all month ACO we But shipping, gate, shipped is was QX the of for all acceleration. deal Atos. we terms what's in that from in the right it. course, international the on look it a

see come, year. I'll to with, growth subscription along to ramp to years these for We'll the revenue loose I able a think next sustained and as start four get partnerships Michael. be

Michael Turrin

That's Thanks. job Nice all clear. team. the to

Operator

comes from question proceed with question. your George Sutton Craig-Hallum. Please next Our line of

George Sutton

could that and quantify the if you're becoming wondered a in that shop number. growth of one-stop you Thank the customer same little and I you. more Mitesh, sense a more bit mentioned you

Mitesh Dhruv

do saw being, in We I one-stop – sure. I'll two shop was – dimensions. Yes, it saying

Let me first. question answer your

customers seeing, million base. and very It saw two, of center. in we're So had in are steady us net good That's TCV multiple buying George, retention contact to one. stabilizing. the or also deal, attach about from we center, products an Part from all churn we XX% customer part saw our very terms contact was rate dollar our XX%

video just the at have the back So to the – technology product, be is, part just newly ramping. of, the here, through the which meant to terms I And it customer link that CCaaS what that's two. experience, – in and CPaaS also the launched one-stop would would to from response previous in then is programming see part what UCaaS SMS link we this shop I

by a what customer for So like that's journey. it call a where, end-to-end I one-stop shop where meant salesforce.com

George Sutton

Got you.

this to relationship a sense BT, of been just new that's us with a Could relative few a now? what's years. relationship So specific for give obviously you

Anand Eswaran

RingCentral, Absolutely, lead we our for announced that what so CCaaS by public and product sector. provided with UCaaS have Work business and the joint Cloud is BT, will be lead which a BT is

of down doubling we’re contact going Two, partnership Three, on one, our expanding we’re center. the we’re partnership. upmarket. So significantly scope with our

as well. we across their So segments are market going

be So next strong to come. to partnership this going for the is years a

George Sutton

Great. very much. Thank you

Operator

the of Our line next Beliov question Please question. to of Nikolay with your comes with proceed America. Bank

Nikolay Beliov

in Phone you you how both on please and to teams going My first effectively what win seeing question teams comment Anand. Zoom Microsoft you and is do is rates is run go-to-market RingCentral? with become one, for and an against Can marketplace? number how for are channel Zoom often the Vlad integration And Microsoft a Phone secondly,

Anand Eswaran

Yes. No, question. good it’s a

teams, for yes. bullish about They we tapping building strived The them Microsoft as far grade – last to enterprise pipeline direct the access. is solidly. feel teams because I announced installed And have Microsoft pretty into cloud the systems. driving phone the a quarter. Microsoft we best-in-class base as gives mean, this So

that. feel we pretty So good about

are Zoom the in views many tell you have one, Now these in say when – this, that But as QX. we generally quarter. don't I we how is I'll talk market not our tell these have expanded I'll of metrics not metrics which you share about are – shared Phone, in this, we UCaaS we

So we'll you. the thing tell first that's

is, thing, of substantially And pretty or color Obviously, in Zoom seats from to double you've be add and click more you this steady. seen is Phone, second it. numbers we at more our more. we'll The point added to all time, ARPU very our substantially steady paid than have continues are tell the seats seats

plus go-to-market So go-to-market mode, pretty mode, we the users with seats quarter million on access we people based XXX their plus every especially the see million VR, on-prem. We mean, on a to the XXX you wide. have I we’re tech widening the which have phone, of mode and feel is

an with developers. X,XXX and integrations XX,XXX have mode We ecosystem

quarter. we So extending effect, the every lead net feel are we

Nikolay Beliov

metrics, is disclose logos Your my XX% Mitesh. you capital can for up digit. you. up Is the triple second deals. is customers the if XX%? [indiscernible] you that up Mitesh, business today And is is enterprise some question two over Thank of size robust the pieces accelerated from from sign to ARR deal pipeline, XX%, together. large new also Average for

much month month first than the of first of The is better QX QX.

progress QX and way based few is Mitesh, you year, and pipeline, triple you. expectation all AT&T ARR and the Thank to revenues, and partnerships? to can the accelerate into quarters? what could with timing the ARR next at going not growing how on in and they're next and this over point, So between share continuing digits of subscription get

Mitesh Dhruv

Okay. Sure.

lot a in packed there. You

So don't good we view, set could you are overall are way we this and fundamental where tailwinds, seeing I transfer these in Nikolai, say And to guidance. in start. are about what the to journey structurally, all – We would are don't the good know, including always point we QX on-prem what of to from pipeline think know prudent a lot But we cloud. derail feel a seats really you. a I of our building we because this, you off really

Nikolay Beliov

Got it. Thank you.

Operator

next Our comes Please the of with Samana line Jefferies. proceed Instructions] from question. Samad [Operator with your question

Samad Samana

when a on suite. the Video, Thanks you the plus MVP integrated video ARPU evening. I of offering. dollar call-out RingCentral for type citing, of there’s maybe seeing curious for what own if, full XX% questions. my customers attach versus you’re if year platform for ago, that and are rates have Good Yes, your Hi. customers didn’t deals know taking attaching notable ARPU any that, mentioned the platform the company million I’m

Anand Eswaran

is, Office, look So which the do the unbundled, not product way we at RingCentral sell sell modes we it communication. of we all contains

every attached acquisitions. message, of to usage of I it I on is Mitesh, substantial – think across out which prepared and in video basically one so collaboration, with probably make year-over-year wants to So say. three persistent all new we the growth is comes called it. We’ve phone, he did in video what his them And ARPU. I’ll transition XX% had would comment Vlad in modes. of that’s one Every had them to at customer remarks, a look XXX% growth quarter-over-quarter, our way we

Mitesh Dhruv

ARPU that, expect right you the No, been Anand. rhetoric able said steady, with are ARPU But trends it so of fact to an product. in our value previous has – despite the ARPU no Samad think holding I we Q&A, been all demonstrate out customers call very in our flat competitive solid a own to with terms and you hear, holding we’ve it’s this and

Samad Samana

That’s And SMS then service. good to on hear. maybe a the follow-up just

that. pretty the lot excited forward. a pushing about how pricing CPaaS like for for about should think a just the again that we of is people I’m think for curious were in Thanks taking features platform preview adding more that. And I questions. model my into

Anand Eswaran

Yes.

notifications as So, end a an high-volume of for a next. And unknown appointment all when us, was from dentist mean, you I you ask it about comes SMS know, get day customer weird would features what reminder, deal launch, from this the because need on is for they number. it the big your

SMS. about the business ask use was huge what customer identity to essentially actually using And this ability an of a was will their send so

key it’s tightly us what for into have and we to application integrated ecosystem our a platform you integration have can do. expect And open actually so and platform feature into been a

the further down expect on us near-future. this should you So go path to in

Samad Samana

on good results. Great. really Congrats the

Operator

question next from question. line lot comes with proceed with a Marshall Meta Morgan to Please Stanley. of the of Our

Meta Marshall

Thanks. Great.

the Just is partnership what the of kind And judge, how some wanted you partnerships pipeline similar would sense you additive. seen the new how cycle have on a kind that with Thanks. versus sales times of get you’re there and of to whether just, substitutional to normally. seeing of much

Anand Eswaran

we channel, with see it, as anyway, consistent of consistent. sales look which most able and pipeline, do the our all partnerships. pipeline, additive that look we new in with it much expected into extending rates the it’s our that’s segments. excited see at see customers mean, pretty the what the we and from what why reach I with we see fairly are all we the velocity was customer is, countries, reach we pipeline If we new this reason we direct new from I new are our geographies to new what extend the – close partnerships customer and and entire about the through And partnerships we to we’re business basically Yes. at the these are through

Meta Marshall

Great. Thanks.

Operator

with Deutsche proceed comes Our Please from Bank. McGinnis with of next your line question. question the Taylor

Taylor McGinnis

Yes. for the question. congrats Hi, quarter and taking on my thanks

so it’s When deal higher which large I really XQ last the subscription like strong sounds yet. only the it at quarters. than two end, at is in So slightly look guess saw we is activity what XX%, guide high I the far revenue

versus And revenue revenue. materialize understand the in the macro stabilizing driven starting some it large falling or by time activity activity should guide? of we deal into how curious is in for I’m embedded on time? revenue. that much strategic maybe trends into I over how think takes that, talk of partnership of to maybe guide these see So you And about to this about these some can flow assumptions But the the

Mitesh Dhruv

again summarize Can question Mitesh. line my I – Taylor, dropped actually for it’s your me? you off.

Taylor McGinnis

guide talked we – lot the and large seeing activity was so mid-XXs about It of a at two beginning the quarters. XX% you only just in call the XQ the end Yes. slightly that deal yet. is higher, like the in subscription last about good The saw high

revenue? activity So in macro these strategic large I’m maybe much the like talk assumptions you at trends of the starting that could guide some about of stabilizing versus just curious, and or to see be fall the deal partnerships some might how embedded

Mitesh Dhruv

have taken Look, Yes. guide. guidance, stance prudent always the on a our on we

So no quarter’s guide is this different.

key from all We stabilizing. elements are sides and seeing macro is

we we’ve good that each strongly, year ending assumption So made every the really it’s me QX. including there. quantify and hard for to to very feel needless end say to But – exactly about – the

Taylor McGinnis

it. Got Thanks.

Operator

comes question. from Will question Please proceed next with your with the of Baird. Power Our line

Will Power

and indicator. I over new leading really a broadly, great. little there? as Okay, Yes. of to on little Maybe growth? there like color to of what new nice want Congratulations strong just in acceleration to think Thanks. strong get year-over-year. customer you you’re want pulling Kind come growth of up to the drivers customers is just a of new the on more kind seeing driving the How that? distribution results. that’s XX% Seems color key is back much COVID more the partnerships, a from

Anand Eswaran

Yes. And the is Vlad that previous and by the driven to to the been thing, distributed mobile always goes workforce. which question the back has the simple transition this one cloud answered. Essentially

light the a And all done, COVID on shine limitations sort of infrastructure. on so has on-premise

businesses anywhere, what now work-from-home about we’ve talked the always get to basically is are transitioning on So need here to to stay. is from to which whole work realizing they that

communication they need And are solution. that on cloud a to realizing so going get businesses

shine will COVID why is that’s So for this sort light? help in new we customer of what forward. help resulting a is acquisition. see this extremely strong which the to think RingCentral going And structure I is

Will Power

Thank you.

Operator

next Rosenblatt Koontz with Securities. Our with the question comes from of line Ryan question. proceed your Please

Ryan Koontz

great continued in there progress go-to-market. and question the for Thanks Hi.

compete all Thanks. channels a the aligned basis? concerns Appreciate that any trying are partners Now of on the terms about get how channel strategically at they these do with question global have and comments. in of do you compete is, you way oversaturation to the

Anand Eswaran

RingCentral. answer that a these no, you we’re is which to we’re what back platform, base because is to if in partnerships, go doing cloud-based converting the natural installed One to communications

and of And XX the which given on have. we is is, step that the and million, these And for base, installed plus the base million, million users distinct XX partners different on-prem. is install so strategic cloud first XXX is the alert each XX million

at had I a we’ve quarter our the oversaturation is Mitesh this influenced and think partner channel channel which of called out, a vectors And quarter, in add the long the before runway the we word add strong the carrier partners, we like XX%. probably then point have partners, then very time. growing use

pretty runway momentum. the continuing of the a So about as the continues. I good feel long channel partners, No, strength back

Ryan Koontz

All right. Thank you.

Operator

from proceed next Please your the Our question KeyBanc. of Kurtz comes Alex with with line question.

George Kurosawa

Hi. Alex. if early still me have pipeline? in are upsell Thank on second And early fitting do you I here. Thanks or This Kurosawa but growth any sense there on know the it’s is of read in George days, for for half guys you. for XXXX? the implications any

Anand Eswaran

of part first the that. answer I’ll

what I upmarket called the is, existing it customers, it say look from was total which XX% especially this new in as QX, business of I Mitesh And his business. so script in upmarket out as well, you is, think would

a And so all trends and that opportunity, that have work installed for the the seen, everyone anywhere should basically as solution we from their creates tell you the is base of employees.

Mitesh Dhruv

second Yes. what pipeline, the to your is product started half to three months fruition. partnership that’s think the I Look, of And question in after of for was shipped showing terms ship to Alcatel about it XXXX. – six takes the for

being other about the ARR then in think in XXXX. half, ALE site, vector, getting in second So the in on into at layered least and continue momentum

George Kurosawa

much. Got it. you Thank very

Mitesh Dhruv

Yes.

Operator

Panigrahi Please comes of Mizuho. question. line with proceed next Our your the Siti from question with

Siti Panigrahi

growth you’re my taking now seeing a for Mitesh, and opportunity for in huge distribution right investing capacity Thanks you’re well. as question.

are I at and forward? going and you’re you looking near-term you, the to how in framework between profitability So mean, long-term. looking want I balancing at what’s growth ask

Mitesh Dhruv

you. RingCentral Sure, Siti for and welcome to the debut call

look here. you picking business business of at up model, on Overall been And So profitable in XX%. of is thanks for deal inherent us. north that if means for balance, growth It’s what same our of the margin the overall our right? it’s coverage recurring terms

profile because higher margin of CAC. now If that a you Atos operating higher tech, it’s lower Alcatel, expands further layer Avaya, on at company LTV partnerships, like the the

our which which the But we steady The to will platform. all to video, dimensions will we all our products lead all all – migrate margin XX% is to a XX%. for own own like users the third-party in state on have our profile when gross layer margin of when

of the is, example, now dollars now scale into what growth. future RingCentral is right business, the was these For at are reinvesting we and happening that of for SMB future the

inherent there’s of under expansion. multiple we’ll dollars reinvested. profit hood, a that’s been showing overall So operating lot XX for years. But points more That’s way the it we’ve margin basis the to getting doing be XX

Siti Panigrahi

follow-up That’s opportunity. the good. quick And international on

to But do think contribution. you be high single I of significant for in digit, single now, call right it’s growth think will digit you terms it percentage enough when globally. out

Mitesh Dhruv

Yes.

lever, a $X billion, over our is look international mix at If much size the This international you us. opportunity right? higher. usually business So key is for a an is

future, out international years, XX% our as markers our especially start change. year the next So a time, we overall, revenue. now point, as ramp, partners to in certain I hit other by And Right we’ll the start milestones. the will right in think mix about of couple or of it’s calling over

Siti Panigrahi

That’s great. Thank you, Mitesh.

Mitesh Dhruv

Yes.

Operator

proceed of from Needham. Rich Please the question. comes with your line question next you’re Our Valera

Rich Valera

I Great you. question for a Thank your squeezing here. Thanks salesforce. progress channel, on in the on had me direct obviously.

saw your some? productivity Mitesh, secondly, quarter, hadn’t you as you First, were And think since get last and Thanks. said baked to initiatives strong I’m into that the guessing, scaling And I balance maybe and you things your in salesforce how were of any be direct going forecast. just they versus channel of your to what up going much sense wanted that’s that going significance forward your might be gains forward?

Anand Eswaran

Yes.

made at updates and percent partners looked with on the your the channels. sales company I’ll had tell at we partners. we the as as never I’ll it metrics thing of it more is, I are the the again, not who productivity And I’ve say, meaningful which So had work across velocity, their reps And close things what versus you, other that. is because I hand-in-hand it rep meaningful whether actually basically sales one sales question rates, harmony all look fundamentals, is RingCentral it these take of second specifically to would relates reps the them. And across update we is, strategic this but direct second attain direct we all as salesforce, – is publish, has of quarters,

full never basically so accomplish potential. always partners it’s helping our And versus, it’s their

So to conflict. it, these multiple that’s is without together, meaningfully much routes market which why look the at they way come all

Operator

your question of Peter with line Please Levine Evercore Our comes ISI. the question. next from proceed with

Peter Levine

me. on a squeezing for Thanks Congrats great. great Okay, quarter.

the and giving So you? about Or it kind some we’d these the around these your – I from us love having other are will it some for mean, where stay budget that. And quarter. they’re you’re least areas you and decisions some bigger at environment, can factors time some But customers’ again, for congrats of to share. when of you’re and taking idea going us deals, with wallet color obviously, after thanks maybe how pulling to of clearly taking give from? make

Anand Eswaran

That’s a great question. Absolutely.

the this think we our I is I as engage I it what with see. at customers, way look

It to this instance I important, to existential The see communication priority. but with were guard. first thing transition has pandemic always companies an and be is, and off remote many the home, caught think become was from in business I suddenly entire your the with need workforce

thing So investments on-premise I first a and to just number bubbled not that business a the see. first three that. redeployment to thing. has their with transitioning communications two, board one, the the up an happens, when be And priority. in conversation. to resources number of number has have line infrastructure become That’s happen cloud That’s conversation, IT This

working not going, people and is, taking is the back for which in People where see puck just for it’s I remotely will thing office, second a will are still end. everybody back solving and not people which is the remote. is now very step actually The today, be people to the solving same the People pandemic way, soon is the office. hopefully come in are

the where coming for that, to we’ve allows together. message, So collaborations, level. which always That’s talked is They’re persistence employee communications, of communications for the productivity people about get of and MVP, which are to persistence starting solving video to phone solve the next that.

feel why company our getting we And instances so the a customers. with those traction as are are we the are two we

Operator

proceed Jonathan Our Please your comes the Kees of Summit question next with from question. line Redstone. with

Jonathan Kees

squeezing Thanks me in. Great. for

you greater a there environment. know you Just I – guess, of you makes there sense. you, the of were wanted I kind market on guys – references That touched ask to more and share. competitive to some have was making

your get growth see, your their is cloud-base peers? are seeing your who against click premise making is and Just that a than there And peers, the is, UCaaS more seeing clashing you cloud entries? Thanks. I double further about substantially against even in space? versus certainly you solution. Your of peers ones? are terms rate on you like peers, embedded the rate greater on What details won to guess, them in just of one win noise Are your cloud against that. have hands same new

Anand Eswaran

geographic And rates to great to Yes. question. matters, extend as well. simple uptick which expansion. or win No, a the have enterprise three against depth, grade we is back peers slightly Actually, goes that so ever it’s our been our more it working cloud we enterprise feature things, two

And things, matter a so so lot, one. that’s those two

I The phone important. video, say And second talked thing about again, together, modes message, all would is, communication that’s persistence collaboration, just that I and the with been of matters. coming

only finally, the developers the estimate fourth call some peers integrations vendors. is one we of which the third if our And The X,XXX one The cloud and five thing, in centers. standpoint. win ecosystem. I’d on nines more again platform to open continue the company off, ecosystem again, haven’t we about is our liability better in we this these and are That’s of from with XX,XXX to addition not talked out differentiation the an strength reason the and contact basically why thing of much on-premise rates, call path

bringing and our all together, win uptick feel have we rates. So continued see that in only we progress that of an

Operator

Please with the next question. your comes VanVliet you’re of proceed from Our question BTIG. Matt line

Matt VanVliet

question. And against market that from Yes. my what you’ve and year, starting potential I The Hi. I of seeing you or this SMS of from customers. to more into share them up in signed how cohort much a like bit terms your guess of own – wanted initially you are that XXXX it’s feel CPaaS, wallet for in expand you projects, just kind little guys of recent? share. your helping larger taking how existing dig guess, much Thanks project, for of video wallet a

Anand Eswaran

question. It’s Yes. a great

always, full was cycle, of thing the end. it’s right? genius first The the life the It’s

in XX% of you, So new we for shared that’s with one growth matters and customers, acquisitions. get creating customer than acquisition greater new things the first the them. value you then Once

is beauty then actually upsell. us, dimensions. portfolio footprint for they’re through our That many next product in And the that’s go of extending happens they the So upsells which cycle, upsell the the number customers and new in a this upmarket was shared I XX% across business example, UCaaS quarter. where where just customers, for almost for which the existing from is, same solution that’s the

So that’s great.

experience. from actually in because is vector products, partnership digital CCaaS our center create customers. to everything where we them other for further own all The engage and first experience our digital together the a extending bring that’s UCaaS voice with InContact contact and we to into are And able upselling customers of basically customer to engage thread

the And last and so video, I well. thirdly, on then we as and phone. three months that launched we features of made things whole just the from reading there’s mean, XX of So we quality. obviously, security plus message, have on the – progress across all communication video to and are modes a in bunch forth, so rooms

meaningful right needs communications to consider together are a coming actually to all of platform And customers mode I their like. this collaboration as what think so make them and look

Matt VanVliet

you. Thank Great.

Operator

line Our final Trebnick of question. question Dougherty. comes Please with your Catharine from proceed the with

Catharine Trebnick

question for expansion So sale? me said sales change much you My in a through aligned driving marketing, are of see the in e-commerce maybe the in. cycle, but digital more how things sites, Thanks. didn’t you thank you a sneaking is, you are procured, seeing especially change more

Anand Eswaran

the said meaningful on uptake great actually a sales across all question. sales Actually, fundamentals. That’s the we’ve was Absolutely. I’ve what even seen cycle,

last Our acceleration. up Pipe velocity steady expanded in meaningfully is year. is and steady, is from

of So it. that’s one side

e-commerce an standpoint as going absolutely we also is, this on is e-commerce, we’ve Mitesh to. an uptick it explosion seen of saw referred up Catharine, segment on you’re what side a well. other is, And market from which further The right,

engagement we see companies about the be making and employees. right decisions as So platform with lines they are buying think to business, quicker for their of also what needs engagement

digital So increase channels seeing, in are we prominence.

we prominence and We can workers can to sure have are well. differently. business differently. help actually engage how make then as nonprofits engage seeing increasing of finally, asking have seen for that lines We healthcare And hospitals we verticals

thing the last we’ve seen. So that’s

well that’s these market feel so and positioned difference RingCentral all across So across We multiple to fair. is the verticals, make board, across a across channels segments.

Mitesh Dhruv

did explosion, use such CEOs words, not The to I the add would did, I COOs is, he said Anand CFOs. use entitled and only guess are not word Catharine what thing but to I

Operator

concludes today’s And that, as with today’s session conference this well question-and-answer as call.

at You time. may now disconnect your this lines and have participation Thank wonderful your a you for day.

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