RNG - Earnings call transcript Q1 2021

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Operator

Greetings. Welcome to the RingCentral First Quarter 2021 Earnings Conference Call. [Operator Instructions] Please note this conference is being recorded. I will now turn the conference over to your host, Ryan Goodman.

You may begin.

Ryan Goodman

you. Thank welcome quarter and call. earnings RingCentral’s to afternoon XXXX first 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

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

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

Vlad Shmunis

We are joining afternoon you thank safe call. all of quarter health. conference Good and and you for in earnings hope good our first

sequentially to seeing our Atos in an was direct saw First billion. Office gain RingCentral sub-$XXX or quarter continuing ago grew XX% to X on exceptional growth is year-over-year $X.X XX% grew X last are momentum. of the both current year-over-year RingCentral of one-quarter partnerships, of strong level. And all than key points This less with points start on all performance to our growth that and ARR and partners, are including fronts. CCaaS and we ARR, similar million years $XXX to acceleration Avaya X XXXX. a base includes an which Office was million. UCaaS and year-over-year. We

TCV plus QX, any pleased work pipeline, accelerating I $X gain strong steam. mode, a $XX As million from across our number QX to in was share am any manifest Also, continues recent and the this performance TCV for or strength record and milestone. with board. many X the a performance saw turns we RingCentral’s saw video We We wins new evidence see our clear about solution our environment for is with work anywhere. businesses, phone platform And hybrid the device, our million message right enterprise MVP world. exceptional to plus in RingCentral post-pandemic emerging business, deals. of that anywhere, always

and million and $XXX XXXX to Enterprise at has stands year-over-year. XXXX Global now over business Our Fortune have closed tripled ARR

So, mobile-first global service data of all High communications why It a by platform. and establish do worldwide. we privacy a enterprises essential unified win? pure-cloud, trust. leading our compliance modern, successes starts with as are with RingCentral to are reliability, business underpinned security, trust regulatory relationship industry

five First, than organization. reliability. business continues be more to reliability, nines hybrid This consistently of an important ever the delivery can reliability hard differentiator. competitors any before. cloud is month translates few Very the environment, to of of this downtime. provide business RingCentral’s communication critical per seconds than platform bit solutions are communications In consistent work of of less XX uptime level

key is data and security privacy. Another requirement

and and continues security us customer a meaningful area between be this of competitors. investments. our some differentiator is And data Our privacy to our a of record focus track

this us year. in For we acquired of developer leading provides enhanced with end-to-end example, later capabilities rollout encryption technologies. to QX, Kindite, security a that cryptographic we intend as This such

their demand and RingCentral, their connectivity a global differentiator competitive for footprint. allows across be connectivity concentrate regulatory in with of centralized to business needs enterprises centralized entire a manner. strong customers their compliant compliance to full care continues on regulatory management us. Additionally, our global taking RingCentral This

Sometimes there ways even and phone well-defined don’t the reach a a for with employees? to must people business begins phones and we employees. that for The be get fact clear companies Why question video just who mobile needs rely answer its a system? the their on

clearly like compliance course, of PBXs voice external that auditability that need flows, While And for companies. by traditional and the for sophisticated systems what on regulatory into most and is side, use are very business is a to came replaced centralized and there of being important cloud-based RingCentral modern now This and phone identity, with phone video is call means reach meetings, enterprise-wide and this communications. analytics, for internal company combined the workflows people play. security all

and UCaaS. mobile are and mobile year-over-year. with As a enables the with as remote phones via capabilities. friend, use our our connected collaborated at wireless, pioneering of variety recently believe endpoints traditional has hand video number mobile paradigm, full mobile leadership, as users outpatient Doubling carriers of to endpoints, XX% and distributed workforces to similar a is with desktop RingCentral, business RingCentral supporting mobile desktop technology an cloud work-from-anywhere phones momentum network. is endpoint native phone phones. of can softphones phones convergence across well ever extending the integration RingCentral a supercharge growing they pure phones, are We PBX this PBX with to approximately Along This with cloud now communications new further foe. and This to softphones more new with their our or and mobile will technology more between to trend to And important seamless AT&T’s that not use deliver RingCentral further use proves mobile phone, this major than MVP. AT&T phones original a mobile and on office and down thesis modes it ever the messaging, their and in to experience important their fixed of access mobile various user converting whereby users and provide

RingCentral this all and overlay picture. as Video new our key part picture XXX innovation, our year breakout At new the incredibly And of since rooms, of last proud of of pace MVP. virtual video introduction the Video, and as recently point, backgrounds, delivered we and partners features customers launch. capabilities new presenter delivered announced over we RingCentral with are of only such are With

front. structural the tuned I we color has will that, Stay we in to are and continue years we backdrop, drive in a agent contact to Operating can We The of product that outpaced market. will partnership portfolio. awareness of to was news a recent closing, and all single wins, and call roadmap win the for trusted for anywhere from By contact entire committed that stronger. Thank center saw be is believe leading exciting in portfolio. MVP pandemic rich turn global Anand platform, through productivity additional Further you. and our unique can this lead are RingCentral Contact is getting solution have center $X ahead exceptional center customers meeting our customer of and $XX over product progress. differentiated the RingCentral on partners’ included our we believe to the million With upcoming UCaaS confident TCV. pole our plus TCV over excellence. and with and now our over Officer, With higher from this solutions plus provider, for million an including needs on here UCaaS our work pipeline global across customers forward largest and CCaaS we employee our of adopting that is Eswaran, improved our $XX pulled satisfaction. Chief President even XX% billion integrated UCaaS QX, innovation network to-date complementing and In In accelerating the our stay. position demand CCaaS

Anand Eswaran

Thank you, Vlad. Good afternoon, everyone.

very strong. ARR quarter. Vlad As growth was a said, strong was QX

New communication partner was exceptionally of in business Small in accelerated segments. the QX of the awareness positive from mid-market segment segment. contributed for every to accelerated to driven systems. was are need economic the their key and strong quarter our also seeing by recovery impact enterprise The enterprise we a modernize growth legacy strong business the as

a solutions. Our and our cloud-based start with level I of pipeline center across record quarter will exiting portfolio was highlights. contact key communications unified at the integrated some

partners provide and partners, to business. accelerated and service more partners, Vodafone direct other have which million, points year-over-year Alcatel-Lucent X non-channel Atos direct To the and including this our with ARR better BT, as our including provider transparency Office into contributions RingCentral metric incorporates Enterprise, from as well First, our business grew we business, Avaya, XX% provided year-over-year. importantly, $XXX TELUS, and AT&T, strategic partners,

community record XX% delivered level a of pipe surpassing year-over-year, of with generation. $XXX channel our Second, growth million ARR

opportunities RingCentral deeply significant factor with logo built Office year-over-year contact standout new UCaaS last center a and integrated our Third, want for a least, posting And critical Team’s demand we have platform enterprises routing. CCaaS pipeline, direct growth in business. was with triple-digit but a closed not the where in Microsoft and quarter we integrated large

QX, begin partnerships dive growth Cloud ACO Office up-market. momentum. in new now our proven and I has into we me Avaya detail. saw in accounts transaction to segments, with solid some win Let where seats, including great saw volume. all strategic will deals In we

Xx exited across and a with With education the pipeline underway up strength Atos continued very opportunity and including We at roughly traction verticals, in are we are excited multiple sequentially. continued campaigns and ahead. quarter healthcare. seeing strong enablement, channel new QX the had

called X with RingCentral look Atos countries forward co-branded Office We video Enterprise right and to by also powered introduced meet need in smart unified their addressable a This market geographies growing innovative for additional and RingCentral. Rainbow ramping equips video We offering motion in in launched the schedule. integrated team solution expand messaging by new coming on meetings. Alcatel-Lucent quarters. to go-to-market

encouraged with are we the initial early, While pipeline still generation.

providers Our delivered we start quarter service global recent AT&T. some and announcements. I will exciting with had a strong

We continue also growth, in year-over-year Trends both to and business in in terms see BT new very strong particularly were the of positive and trends generation. growth pipeline at TELUS up-market.

are announced in elevated was pleased since We to to starting QX. BT particularly CCaaS see the up-market traction, wins partnership and expanded contribute

continue to service We this on in global also Business, partnerships which with across Vodafone year partners, including to launch expand multiple is countries strategic track new Europe.

another of again, with users leading community, proving integration differentiated XX unified was even Equifax, In Teams the dollar we multiple the routing agency. with wins RingCentral. quarter. As was sourced tight was direct channel critical. a solutions. million their also partners proposition want cloud-based the RingCentral our value plus who consumer with are platform across global story channel often to Equifax RingCentral One Interestingly, for platform. in locations where wins, QX, it XX,XXX channel channel effective success customers RingCentral reporting with and had our demonstrating Microsoft Time credit channel partners other with strong drive

When partner channel a over provided leading win security the platform across conversation a IT had begins cases great with global lodges financial a broad win X,XXX decision-makers, that A example cancer capabilities. great direct locations. CIOs services user and American and a stores reliability, working this of communications Society. across the patients. example, comprehensive and user meet For different hope It’s with is requirements. and about platform with very our company routing range Cancer a XX providing of retail with corporate offices, for use They can

over their that are humbled platform single and incredibly with X,XXX meet selected nearly inspirational a across needs We users cloud-based to RingCentral proud organization locations. for diverse XXX this

wanted the and partners trusting team of a I our I call RingCentral of is It a transformation form servicer With are QX. strong key truly on our focus employees to say point center over business. up-sell of Chief a center new Mitesh mortgage best Financial originator contact note, the and of to employees the comprehensive contact you story our the an a selling for of a of hard CCaaS for largest solutions and with yet accomplishments older we UCaaS our deal us turn office and was would extend to will digital won course, proud work platform solution am time existing versus our their leading and with communications over so agents. solutions to to both for customers Our come. is demonstrated thank Dhruv. and our journeys. replace the X,XXX CCaaS a part thanks Officer, over and to further proud customers I On in I demand solutions that for and of we to exciting X,XXX dedication to ever, believe my in that, mix single-integrated logo be in many like to all their

Mitesh Dhruv

afternoon, board. up margin Anand. across was us above came high-end above key a rule XX% start metrics of XX. non-GAAP X%, last Good of from and grew was year strong the year above the revenue in Thanks, QX the well again everyone. to XX% putting guidance. year-over-year, operating All Subscription the

the acceleration several Enterprise $XXX achieved growth. year. was a first standout versus a years office by that metric XX% have management ARR of track, profitable for We growth growth This and Particularly strong in was metric last of consistently grew for exciting time. this XX%, an it points surpassed X with prior as the enterprise for million we, year-over-year and team key momentum customers. ARR driven is

that these buying $X awareness and us. We and is ARR CCaaS up-market growth. of than be enterprises more pandemic this new of more deal a from is RingCentral. the the buying proving more a year-over-year to we of are We large communication pull trend average benefiting over more the are million, customers UCaaS customers of us than several solutions, meaningful factors from number believe and also the platform. are driving entire are saw a The wins seeing increasingly are forward XX% There that for catalyst adoption which embracing doubled. PCB global increase plus cloud In per deals

witnessing We are also higher up-sell.

record UCaaS of existing integrated This again diversified from our solution. networks implementations are surpassed XX% go-to-market as well kicking in. Looking driven of from up-sell contributions customers, business. CCaaS broader as up-market new of our is the partner once by level into And

access office As of Anand saw Vlad user noted, These point acceleration partners and we million an us the X year-over-year in direct roughly half ARR. preferential and XXX give to market. partner

under-penetrated. ahead, incremental precursor We as year, the multiyear this come online opportunity is a sustainable massive market trends. expect just users The from we throughout contributions. more is Looking believe strong and partners of

and long-term in am are I We SaaS drive underpinnings economics this are model here excited the well. continued sustainable large to traction with thriving highlight margins several to as on Along see drivers healthy unit market. to favorable a always the long-term TAM, hinged of pleased

mix with up-market up-sell higher solid from rate, sub-X% churn customers larger a a annual benefiting potential a we of and gross are value. lifetime with First,

sales Second, seeing we as average expands, are productivity. deal size higher

dollars. Third, potential This we RingCentral’s partners markets, performance, higher favorable where not and tailwinds, as even are sales own outlook global lower dynamic that backdrop partnerships expand raising momentum upfront service increasing in a unique from UCaaS with plus see strategic leverage market We force only as partners more are but sales provider our can of from costs. also and Video gross as new highly pronounced RCV, partnerships, for structural lower RingCentral marketing With global experienced And the customer international reach, well acquisition is we XXXX. macro seeing our all unit solid CCaaS from partners. contribution finally, or office economics, long-term. margin we are our

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

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

raising XX.X%. $X.XX, $X.XX. we $X.XX our from And to XX% expect operating We margin $X.XX to are EPS to of non-GAAP up non-GAAP to

as to a count share the lower XXXX from expect benefit from debt. lower convertible we We outstanding slightly redeemed dilution

more as like Enterprise layer to Beyond XXXX, growth partners expect and to Alcatel-Lucent Business fully ramped we contribute. starts Vodafone on

invest We in product structural and capture tailwinds we our in and days. drive that well-positioned becoming opportunity resources. ahead to This long-term R&D, for still dollar continue UCaaS early deliver to growth on us multibillion growth revenue innovation Multiyear believe CCaaS company. are are path to this us. We large partnerships further profitable a quota-carrying to and build to enable pipeline will of

Before turn to With the open Q&A. thanks your the the all execution. for to that, you big back employees I’d also I give the call consistent call to to RingCentral. operator, at a let’s Thank like

Operator

our Truist. And is question question. Please proceed Instructions] with first Tillman from your [Operator Terry with

Terry Tillman

hear Can Yes. everyone. Hey, me Congratulations. you okay?

Mitesh Dhruv

can. we Yes,

Terry Tillman

that Okay, ARR great. Mitesh, will get ranking guess, stock acceleration drivers touch the a Office the usually Thanks acceleration, first, to this if landscape and then picking about love I question. of Vlad? an the the two-part I you I’d you. you And I’d there? of the just ask love Office the to and terms from update. Thank congrats kind could competitive on but ARR stock if on apart in of don’t hear question, ranking

Mitesh Dhruv

Sure, Terry.

to Office and macro for RingCentral-specific trends. in acceleration then elements: there XX%, the strength two on are out let’s the the so parse So

with So, let’s the start macro.

time, we is urgency the communications. recall, I on So of years a for the space the for inertia our mean, of issue lack biggest was for what seeing us environment macro, And have of here covered shift long and broken overall you in on both. if are spend you right we are the cloud a awareness demand.

side. on the that’s So, macro

couple seeing drivers are we here. the On specific of RingCentral side,

XX% very tough compare from where logos The new business first last are trend, year-over-year one a year. up new on our is

own with plus combo am somebody my UCaaS of lot combination turning especially clear enterprise can if I on-ramps partner be CCaaS of differentiator to pre-pandemic CCaaS plus – ways contributions The normalized from for both in. to that’s echo, kicking of us, for Avaya, has So AT&T also a Churn with and are Atos go levels. UCaaS And out on is hearing multiple one. mute. pull-through a The is customers. finally,

are rapid with for product demand, think million growing capture denominator along coming is the our to distribution with a cloud is partnership. the able PBX So at we, XXX I are to right what overall, clip. stack, our And we seats this seeing

So, that’s some of the drivers.

Operator

was That all.

Our Suri with Blair. William next question. with is question Please proceed your Bhavan from

Bhavan Suri

for I and partners. Mitesh touch and through a and touched to have Avaya What like has in to And that? whole team, you understand you some love the it. the guide, what you what color But And Vlad, on maybe the Thank congratulations. about maybe this, just great us especially been, the Atos, clarity or so walk more partners, will help contribution that I’d importantly, result. Mitesh, it want you in what was quarter? assumed around

Mitesh Dhruv

Sure.

So, absolutely.

from So will we Atos. with on we double and start the – out will click Avaya partners’ contribution

French you will If mad. really get person, to Bhavan, say, they a Atos,

it’s So Atos.

to I will stick So to try that.

Bhavan Suri

Yes. understood. Atos, Atos.

Mitesh Dhruv

I Yes. am with just you. kidding

on very progress we with fronts there. lift clearly, are again, a to a both pleased reality. So, heavy the It’s very it make clearly

with build Avaya, So, strength every Avaya. quarter. to start let’s continue we

is happen saw start. off million quarter, this again, dollar And This a we to multiple good deals Atos quarter.

is mentioned Xx offering solution and coming We the the more XXXX. are dozen sequentially. up Anand we also a up spike in have in already Atos countries countries

a off start. are good we to So, really

X are this with provide partners contribution, in element that So direct time, carving accelerated partnerships which an a metric partners, points And and to capture transparency out does RingCentral more we segment definitely Office contribution, along key try our called to XX%. terms these by these did and there. direct the of

beyond the see partnerships, one in we won to this you clearly. and benefits to starting continue one that and a falloff, though that benefit like these from note to are we and it’s XXXX. not is One done not the see thing year get a So, benefits quarter, then way the will benefit

success date. contribution of approach bit it’s as And progress terms good one much we again, at to guide not layering And optionality And in some usual, we of clarify also, continued in Vodafone, have have baked clip, it. till XXXX. assume If everything. a of in in some sort have our which for this for good Alcatel-Lucent what’s left thing that’s of is not in framing the baked part way prudent guide, nice we will so a the we in that’s taken a so and the is – left guidance. that be the Look,

Bhavan Suri

it. Got Very, it. Got very helpful.

little heard a right. the has And We differently Zoom them. people overhang. Let things. that have been RingCentral Zoom environment, me turn There heard the free lot from an competitive is we to a conversation impact a of video to

process, And the about the as changed, look you So, about competitive has are you exclusive at people the in some at some anything you should the maybe think you talk sales how partnership, not for to look feeling are we and especially and Anand, as environment? field, how a that?

Anand Eswaran

Well, it’s a great question.

this say. So I’d what is

Bhavan Suri

Not but worry. fairly, don’t

Anand Eswaran

No, is is through. coming call – no, this this

our compete at from the So macro standpoint steady. just sort rates the win yes, if look – indicators, held so a of I at have look

saw we enterprise. thing rates acceleration meaningful really the tell will fact, win the In you. of That’s in I first a

integrated way, you a what is layer meaningful the office difference. second that is, I’ll tell connected message a saw The XX% actually one plus which why strong video is phone more of we growth. have making in of That ability to saw, together ARR which part thing, MVP was you

they the I and that said interesting going XX% provider. of companies which you The had same is increasingly, almost from – tell is CCaaS third metric are customers using am and joint are an Metrigy, UCaaS decisions to thing for making those this this,

huge a contact with the UCaaS our Over joint our this included we through large portfolios, and CCaaS story, our deals center. is own have of So, XX% difference. which partnerships making inContact

doubled center year-on-year. it of contact the number In more fact, putting differently, with deals than

Enterprise have this, plus pretty of actually UC with So, XXX reach huge is a on-premise provider end our and to XXX we Alcatel-Lucent And the And Avaya, difference. plus the on-premise now million down the partners, day, to across users. much it comes seats. Atos, million partners, that service making then story CC all plus

to velocity, layers of And And so are is put fundamentals accelerating execute starting new showing growth. which sales about these numbers. environment. really that of good it that back, are all rates good pipe, together, close win We translating the to is the deal rates, really the we and all partnerships into feel that bringing competitive starting create progress, all about feel and

Bhavan Suri

Appreciate Thank you, the Great. color. guys.

Anand Eswaran

I got Bhavan, And confused.

I So, want back. to just you call

Bhavan Suri

at I don’t brothers and even about from worry Sterling it mother. all. are another I

appreciate it. color. Thank So you for the I

Operator

And proceed question next our is with from Sterling your Auty Please with JPMorgan. question.

Sterling Auty

timing. great That’s

area and And Bhavan he touch am the I go So, that claiming that at about from and theft. I texting customers – the and want from the which pipeline am Microsoft Microsoft we do something but competition interest that’s is are going in and other generation into, out us that the and forth Teams, that of you what called is you heard of like back Zoom identity through I concerned interest Microsoft walk route. into competition, upon to looks in to this for – on have terms integration integration top maybe point? investors but went pull-through I can

Anand Eswaran

Sterling. a That’s great question,

which pipe. EX access pretty feel good and UCaaS base, routing we talked what X,XXX are I EX, remarks, to in one, uses comes part key work we win head-to-head, gives leading part situation wins Teams, What of remain direct direct when actually of in user we So, as see million because the we solution. it is it sustain, win in Finserv Microsoft instances routing about And as we installed rates And and customers routing the industry you when in there have about our as like win seen compete talked a TCV We strength that about. the direct we see just ever. – prepared directly like see the dollar that. is We just was for the in have our a about QX, rates. where And solution with multiple plus these are us we customer. we do steady strength

so us Teams. And are RingCentral segment whether win new base, accessing creates almost expansion via compete we both we a rates just when to on steady instances, routing installed for into directly, or Microsoft it an direct are

Sterling Auty

then by quarter, question metrics subscription number often about what Are you point? a saying X, that’s base June And follow-up total just taking feeds build sense. subscription the total Are Because ARR is greater of on line the taking as maybe different and we is. Makes confused we RingCentral think ARR the divide of for by we and think divided the get starting by ARR, if X what about you, and have revenue? guidance we component and into X? that it you the the one for take guide revenue I that given I divided guidance software the for Office kind it’s than your

So, just clarify that for us?

Mitesh Dhruv

Sterling. Sure, sure,

So that yes, revenue. I mean, it is – translates it into subscription because should by X, be total ARR divided

account of least elements take quarter, the Now, ARR this, there linearity or we the into revenue reasons. two three One at next in do lags so where two for quarter. are is

loaded a quarter bake As we customers, in linearity in back-end we larger are guidance. our bit do to getting of in a the

center. is on There a center, contact recognition keep second the contact is of it there. because lag revenue in implementation So, And element we prudent cycle.

see is. So, those may two reasons the you the not at as math And if the previous look are being way you why divergent this is it math quarters.

similar. very it’s So,

we to good of And in it guide the news call conservatism our keep the or so way us. ahead prudence

Sterling Auty

you. clear. Thank That’s Excellent. very

Mitesh Dhruv

Thank you, Sterling.

Operator

your Peterson proceed is mute? line our Brian, question from your And next on is Please with question. James. Raymond with Brian

Brian Peterson

strong row. congrats Well, in Apologies, quarters the a two on button, mute guys. quarter. Sorry,

So details financial X-figure there? TCV Any help Mitesh, little the maybe large bit me could activity wins. help you just some on a on impressive some some deal of the of

Mitesh Dhruv

million the unpack can Sure. We financial on details TCV. $X the

let If you’re it unpack different a ways. couple me strength, referring to so of that in

million set, The COVID. did So the a year-over-year. And what’s on because QX deals. deals wasn’t $X it record XX% TCV again, there up pull-through to we was tougher a first, from just for were some see year, level compare in last

So compare. a had we tough

One deals. number. to from top were able of was also XX% did on grow that we X-figure two We So contact center. have

land. think I overall lay the just of an So

Now to for dimensions. color of add some add couple a color, on you I can some

Let’s One quality on say, deals. the three dimensions. is of the

talk will that. about We

products. where We about and will the motions deals the talk go-to-market come the from,

So new deal deals way, the of in at along velocity $XXX quality actually ARR the million deals, wins, we with are disclosed if you increase X,XXX ARR or look a the our companies. of getting per led global this of to doubled. coming And we the that from the in volume, metric larger

the up moving market are we clearly, realize there value. and customers So

On the go-to-market….

Brian Peterson

Great.

Sorry, go ahead.

Mitesh Dhruv

we wins see Anand and the As. one, was on third channel It That’s the And over broad-based, that, three wins partners, side, where from second of multiple XX% upon from did also touched product came the This the included a lead the this would are new contact vector emerge center. we – is seeing or usually, of be to previously, would a just is This that XX% seats more new it wins because up-sell. part. driver.

also a journey. are we seeing multi-product Now

So which be accretive you products days all company, ultimately the and a to brand. on to this and all, on of our leads margins in distribution, both if out we together, multi-dimensional are growth turning put early becoming

Brian Peterson

a lot of there, Great. Obviously, there Mitesh. drivers sounds like

there? guys. if think on you some of you a you the new to alluded had share. of cadence partnerships Thanks maybe is thoughts good some hardware potentially so forward? curious And share there good any Vlad, should how one lot going side, more things can And news for the you, to we about And

Vlad Shmunis

most or – but early will it’s optimistic in too our strategic Yes. are Yes, sometime proven of future. the And we manufacturers, the And I partnership enterprise. carriers global recently, that RingCentral very Avaya, be I recently, channel, partner the foreseeable to with industry we should more PBX into of Look, say, to a to network now, traditional say, partnership service starting mean, grow providers. extending should your Atos, I we’ve think that good traditional course, Alcatel many or call definitely. cautiously players,

the When early start Avaya the or have that. to So not a of BT or you segment seeing are AT&T now approach. profit seeing moving when what you down partnership oriented for going needle we’re Well, And taking is signs will this. you? everyone or time. results? long in We’ve doubling our this is putting. But asked for been are And on we start

from years prepared have our a So and we type of see simply several we We haven’t we accelerating lost this literally there you growth. side, larger when we I sources and maintaining [indiscernible] the today, in are wise an as And can tell be on you, seen I for numbers, number. partners. slightly can percentage as even meaningfully the our growth mentioned on iMRR remarks, we without ad not now, would

we down it strategic Hope for us, on will doubling your tripling that. a question. initiative be and answer so, and is So

Brian Peterson

Thanks a hear. It Great Yes. lot. to does.

Vlad Shmunis

you. Great. Thank

Operator

next from And with proceed with Craig-Hallum. Sutton is your our question. Please question George

George Sutton

center acquisition innovation in mean quarter Can XX on, look on out Thank that there this the for India us clarity what to say, the Cryptographic give if and going months we you just bit I the side, are like a did small, little look you you? more made. strategic perspective these couple you. just staying things that you Vlad, what that are a to strategically a important of but get want

Vlad Shmunis

feel that strategic. do We both Sure. are

specific very that only to a and in reverse There to many take deep order. months. is non-strategic I’ll call I haven’t acquisition, Look, encryption. non-strategic as they the end-to-end is Cryptographic providing not have that done you experts. XX continue can position don’t We end-to-end are which to you it The to It’s to. security but security in a called milestones see world-class next, which company, say, a something security, achieve, we used done relate people that position, thing the be the

deliverable, So this announce would to we year. first that as the are later planning and they expect

will first who improvements. Security be recently hired that continued And expand on is Chief has we I that held not making time. people she Maybe similar ongoing more IBM big role can to remind have our Anand we a there on if will security relatively very difference. also it, a course, Officer, want there stop at and and Of is

Okay.

change. until One to if is are going our here other And how of the been. been this type partnerships. this. are to has going that revenues twofold. and this bigger is it development I will – up the an is And if answer As centers source consistent a think if India, this larger level, company. but by even the we hopefully, we’ve growth, continue better, now, striking have And as is answer the over is concerned, deliver an and partnerships on increase. far as very I was And as we And which is international RingCentral product. you world, is India think management product we it’s simple, is absence, it as customers And the notable look, not number, I’d this will, and larger to all simply amazing its address, and question And of is talent. like

into So we in down, one innovation. doubling on breaking without need to eating world-class way growth been see bit quite obviously, to is we offshore well profitability get will, companies our continued without side, bank our commitment Obviously, product areas you And a product do doing a achieve our which fantastic the that. in little substantial in affordable. frugal, have in be to and Tier innovation and India to if are can is continue is fiscally of to But place X that more the we talent number there. a and

We that a we to optimistic. India are in Torson lead have very, hired extremely very And well-regarded key center. very

that us technical, for we forward. XX we would presence but in we service well think R&D customer a India have moving substantial going analytics, means a a sort as it’s of I specific in months, etcetera, which other what’s competitive maybe be some some functions, product say So leveraging start potentially and to functions, can as substantial, advantage

George Sutton

That’s a great answer.

being mentioned frugal, You Mitesh, approval. not

I fine. it for So think me. That’s you’re

Mitesh Dhruv

other each balance do at. we Yes, out Yes.

Vlad Shmunis

George. you, Thank

Operator

proceed your is with from question Stanley. next Marshall Morgan Please question. Meta Our with Instructions] [Operator

Meta Marshall

how of do Great, into you solutions self-developed do go offers just of your you thanks. attach such And seeing that that contact your the going upmarket relationship that the I today? you help tools NICE tools could some just yourself center, NICE? see given high with more of interplay versus developing you’re see

Anand Eswaran

That’s Anand. Yes. This a Correct. Meta. question, is great

have at is look inContact you we Voice NICE partnership use it. we We if our solution. the this at And them for – basically Engage with basically Engage So and way Digital. and center look the contact

For down use we with to start cases, Engage. go digital-first

to NICE start as inContact. with our larger customer For primary we well. users thing customers inContact we we use approach And go product product at from larger side. That’s the which as NICE also is, and which the partnership as with the customers, work look these we how cases, other second vehicle for

So happier inContact this who point partnership the also in size of NICE we customer with. Couldn’t with with our lead time. at dictates sort be

Meta Marshall

thanks. Great,

Operator

Michael question. proceed is Fargo from Wells with Please question Turrin your next with Securities. Our

Michael Turrin

you’re there. on the you afternoon. on you’re becoming Good mentioned towards how focused what those the walk beyond and sequencing of growth Can Hey, you’re What you. you feeling thinking long-term Thanks. company. the drivers Mitesh, maybe us on a you’re margin? beyond now seeing today path the XXXX? software multibillion-dollar and through about Thank

Mitesh Dhruv

Yes, And – multibillion-dollar Yes. did drivers. growth, I mention growth always become not It’s always not clear. a Sure, to mentioned, are company, as the growth. Michael. just it’s I just profitable drivers the it’s

So with in tie side growth the and the let’s then will start profitability.

to layer the to the again, drivers TAM is on On – trick the capture massive already just TAM side, there. because incremental growth it’s is this

which is to the now, it for proving a One drivers? have video to one. which be have will for the that’s And side We product CCaaS, don’t we is the and our new prove – driver are then combination us. what going be So UCaaS yet. own

company is here ahead. future, is really a years the multiple well. will today, part And plenty will of Alcatel-Lucent but they It increased GEO, in more and contributor again, beyond. expect still so the ramp-up a in On the XXXX have multibillion-dollar and ramp, to third opportunities XXXX, side, our growth international. the the in on in plus, all go-to-market partnerships partnerships it we do And side to performing be becoming for Vodafone we tank like we have

On side, which we are are multiple the we leads leverage to the enterprises customers and marketing very we And able of products a to the high new are experience then again, the again, larger value. with distribution. side, on lifetime partners’ onboarding are because sticky, our and seeing profit distribution sales use

these growth growth nice you you the years profit the going flywheel of So really and profitable combine come. drivers, a get two to and for

Michael Turrin

Thank you.

Operator

question. your proceed Our Please next Jefferies. question from with with Samana is Samad

Samad Samana

my is or the there Hi, questions. good framework? the it, for may deals a quarter visibility afternoon. impact as any As, taking just let’s pipeline guidance right? given that how the does be of change framework the for X much with Do difference that visibility this and direct-led have or pipeline maybe call for Thanks versus you you or deals the, the Anand, have Mitesh, the in but guys guidance in you,

Mitesh Dhruv

Anand? take – look I can yes, you – Yes. part, don’t first can why I the

Anand Eswaran

going was the first let part I me to question. do say, the of

board, good the Samad. across pretty pipeline have We visibility

So what’s I you. have is direct. have I into this VARs, and what’s have good our tell our visibility good with our with visibility visibility into happening all what into partners. I happening good we And

levels have some Our – was quarter, our highest pipe way in as seen. at the the finished we we five

pipeline say, the from standpoint. far, starts fastest to was was a good In one fact, in history our even seen have we April of so

So the of we part the don’t question? feel pretty take good about that. Mitesh, second why you

Mitesh Dhruv

Sure.

works we probably weekly for in happens actually the There weekly that a basis. And bookings operating, way new at we that. is then give a we daily guidance. And forecast is meeting way the on look pipeline rhythm so when Samad, it the our adjust and

So then scientific it’s fine-tuned, and the way guidance. well give very, we almost very our we to adjust it

Samad Samana

just to from different earlier? question Great. Maybe XQ? was in as a follow-up housekeeping, linearity Just Sterling’s

Mitesh Dhruv

back-end did Yes, it different. We more. happening more was and it’s have and quarter, a loaded

see more does noted. you wins, it enterprise come As does in happened back more – and it

of loaded, it yes, back-end the little is bit yes. So curve a the is – shape

Samad Samana

strong congrats to start the year. And Great, on thanks. the

Operator

with your America. with is Bank And Bartus our next proceed of Please question. question from Daniel

Daniel Bartus

lot questions the Office my Hey, well. I wanted far guys. ARR a of ask this. Thanks acceleration so questions for and great to contact here know to I taking center. see about as on

forward? well? two-part different of a standalone kind just about feelings discuss a you CCaaS then partner to angle. you more So aspirations or discuss just two, network I to compete your your can with One, or potential from And wanted Thanks. if as your help can how ask going CCaaS with curious

Anand Eswaran

That’s great a question.

that. take I’ll So

CCaaS. for partners One today of do our we is things. leverage a So couple

the in actually partnership CCaaS was with announced Business example, plus we Vodafone QX together. UCaaS coming back For

also BT. We talked about

in BT and CCaaS we this QX with haven’t at look significantly partnership. announced I the But and the as discussion new on already they UCaaS partnership AT&T – already had to are We and with and BT, wins expanded of much the are CCaaS, expanded details Telus. they contributing

growth, when and we that when do see So us have that’s to And that We to you forward. back in coming new triple-digit bring teams allows the all mean bars going I our our new decisions making that. than the it and result logo And direct together – all more you the CNCC more because that, more momentum sales seeing companies on average of business. that’s already together. doubling. is see partners, already is what and can expect size deal

the one that’s thing. So

who together. But as CC, successfully contact are we primary is this thing solution, we just opportunities. But making our focus contact only decisions and contact do have UCaaS we wanted of as that second center won who have is a have and primary CCaaS competed well. customers increasing our center The pivot, center a customers stand-alone, and do set have

Daniel Bartus

Thanks. Very helpful.

Operator

Please with question. ISI. question Levine your next with Peter proceed from is Our Evercore

Peter Levine

voice I to quarter. mean, are and can having does how a about that give environment a an a on comes voice – deeper us When then video think into how rank companies to in and how end, we I great RCV. of dive I importance? little video on prioritizing or does video? an in guess place, think update remote-work permanent as that you migration Contracts terms Meaning trending? Thanks. want is you voice

Vlad Shmunis

here. Yes. Hi, Vlad

is Message then modes so making we all we’re and It’s what MVP mode mode appropriate, is interesting add situations – of see which with we more go because where is Let are we very And same any stab certainly so certainly, And Videophone, voice video is believe so maybe that also take me we more mark can the any any Anand call device a anywhere important. situations car absolutely where appropriate. MVP. communications in.

meeting saying, has have or Dimon a medium. done – to But many consumer been a reaches with meetings, just today, they’ll of very has interestingly normal. during he call COVID pre-COVID back this their office expecting or they are it voice, important season at run whenever via are what a to that’s you, back cancel and manufacturer that or I year, the over and example, provider least just For internal them customer or do enough, all the Jamie

consumption strong dead are mobile okay. majority think it growth they So particular not seeing well, think coals say, that our depend the And only platform, best of vast okay? really are I do forget or times, seeing will we organization. mentioned I I people prepared on on voice in from it there, leadership – any not of a in we’re that particular many in believe through believe do but overweight depend when slowdown will depends runs side, an mobile voice, that mobile minutes. But remarks on our voice And I is style. I minutes all calls

So voice no far, dead. is, by

were you right ask tool for right is the to there it’s job. – a if me, So

So not to that way. perspective, that from call either our we’re going

absolutely call to we some will expect very the Mitesh? keep position And voice Anand, the domain, on competitive voice, on a are We video Any and be the and in gaining people providing enterprise simply future. add, to best rapidly we business or within foreseeable world’s very thing it. leadership there

Anand Eswaran

question a say No, as thing given the was migration. only only The I’d is thing, on the that well.

as as into We all on customers, beginning them get And so the are to on a been on and motion this And come far. new board, it before migrating has base. are phased-migration been pretty of good well We had making relates have and of put we it they the the we that RCV year. plan. meaningful in progress feedback

Peter Levine

Great. Thank you.

Operator

question Our Tim next Horan with your proceed with question. is Oppenheimer. from Please

Tim Horan

kind out XXX of there? to do Thanks, the expect of Do to go? any you you users teams have bundle where it guys. have Thanks. sense million with Teams and voice begun percentage What

Anand Eswaran

competitors nines. I say mean, is is five important, ask last and our security, it were talked when and the checked, should – but UCaaS nines, we three why especially that reliability, of Vlad Microsoft, just voice I you would companies four between about No, what to as question somewhere comes

a we is routing privacy, Teams and well access segment PBX security, matter to XXX doing seeing for residency, expansion the us, So that head-to-head direct we very the our competes, some the hold users that’s users – win them And all and us RingCentral and data that Teams, feel see why are in through Team. these new who of we things acquiring our of giving of customers for all of to million liability, data these rates steady.

good pretty feel about that. we So

Tim Horan

Thank you.

Operator

Piper question our question. with from Sandler. And next Jim proceed Fish with your Please is

Unidentified Analyst

on Thanks in. This squeezing for this guys. Hey, Jim. Quinton for is

but any one We quick signs us. solutions those your funnel top for it’s the on to positive got know new in the early We the change conversions free-Glip within with Thanks. the process, offering. a paid the Just of from commercial to solutions? still

Anand Eswaran

to about launched it. really since months early Good months talk X or progress on Glip Too based we the X in December.

this, it’s tell serving because is lead-gen optionality freemium a very an that So still I gives early. it engine solution. it incremental of What is as you us

thing tell other traction. is I’d The you this this, partner

them. Atos together is that a customer So RingCentral significant as just is messaging unified serving video acquisition which has and and for announced team recently, we that video, source integrated of launched

with working share beyond partners early it, more data we’re our too So on to any that.

Unidentified Analyst

Thanks for That sense. color. the makes

Operator

Please Niknam question. Matt Deutsche from your with is proceed question next with Our Bank.

Matt Niknam

but bit about or within about specifically those to I’m is if you churn and in year-on-year as little about talk competitive wondering, specific how enterprise. can a stabilized think really Thanks trending enterprise, and well. for guys. SMB talked just growth me a within backdrop, maybe relative Hey, I just and mid-market, seems lot strong plateaued areas? SMB I’m in the squeezing Thanks. the acceleration wondering mid-market it like when We two

Mitesh Dhruv

that. Yes. take I’ll

has if mid-XX. So accelerated, mid-teens. we’ve you model, look as and at SMB the at always And are we been year, on you last said the in growth the SMB, over

very, engine. result on comp. the we very what if through – good the incremental bookings that’s efficient look you very a bookings it’s in So a Also, strong a mid-XXs. a hard was It’s very punched at very

efficient engine, e-commerce drivers helping this hybrid so also no deploying one’s which and is to partnerships cloud, really recent stay behind environment, SMB the that actually is productive. our what in So,

so that’s true And the especially in space. SMB

On enterprise to the mid-market that side. side, have we customers few a graduated quite the did

So, motion. the and this is land expand

remains and that in the so in be churn, overall, whole accretive And will in an churn this to annually the turn terms sub-X% overall, driver forward. going out segment, of model

Matt Niknam

for Thanks Perfect. color. the

Mitesh Dhruv

Yes.

Operator

from & question. And proceed Power Robert with Please our Company. W. is Will next Baird your question with

Will Power

kind Okay, great. Anand, Yes, of a great really that? I’d see. is set just in that? to understand comment coming improved love helping in just enable acceleration, you’re apart enterprise to specifically What’s to which you win to enterprise. the driving you enterprise back had seeing made And that what’s rates

Anand Eswaran

this video makes it’s it. integrated an And would how difference. across solution No, one, a great Yes. question. Number I is message put phone having a

a making been thinking actually what That’s back huge plants collaboration or back thing. the difference. need to coming about hybrid through those is are MVP capacity, their persistent to companies and integrated or be As the one come to office be mechanisms

The second and the thing UCaaS is CCaaS. between integrated motions

As companies a buy I UCaaS shared XX% a the from make who joint of well, vendor. some earlier data single decisions CCaaS a as

is with difference. for have a So integrated to us the solution center our making a ability contact big UCaaS actually deeply platform

and making the we they And see we up excited already are starting is combination what second growth. a Number to layers already This full that of been about the Atos. are was full of So and difference. going. a have execute on create This three, partners and Avaya, is to now pretty quarter year there. starting

with pipe their Xx. doubled, shared, Atos I As

the the both carrier the And side, on difference, also side bars. are partners so the also making huge a and strategic

humming. So truly a that difference engine well. is as making That’s big

how these coming that’s would at all of look So I things together.

Will Power

you. Thank

Operator

also, and your we of this for end the the at you ladies today’s concludes question-and-answer your have and disconnect session. Thank may conference, you gentlemen, lines And participation. reached And time. this

RingCentral (RNG) 5 May 212021 Q1 Earnings call transcript