RNG - Earnings call transcript Q3 2021

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Operator

Good day, and welcome to RingCentral's Third Quarter 2021 Earnings Conference Call. [Operator Instructions]. Please note, this event is being recorded. I would now like to turn the conference over to Ryan Goodman, Head of Investor Relations. Please go ahead.

Ryan Goodman

you. Thank welcome Quarter and Call. Earnings RingCentral's to afternoon, XXXX Third Conference Good Ryan Investor of RingCentral's I'm Head Relations. Goodman,

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

at remarks is Our Vlad, Mitesh, Investor available today's are at Anand Accompanying via shared website by slides format our Q&A. include being by ir.ringcentral.com. webcast. and will presentation today prepared followed The Relations link

the webcast encourage For join those you dial-in, phone by would via select listening to and option. telephone I listen the also

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

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

Vladimir Shmunis

Mitesh a profitable $XX $X.X like contributions outsized to little billion company RingCentral Since thank past and joining the third by stepping over start you thanking X his afternoon, to driving call. nearly Good for for to our valuable from I'd decade consistent run and earnings growth in our years million grew now instrumental as quarter as been conference in over the ago, rate. results. shareholder has Mitesh over CFO

carry the QX will results. and certainly working with on We with I'm finance the best confident on strong all in torch an term We his Mitesh he forward. on exceptional team that, But of will very With a his basis. his left Mitesh has a day-to-day future miss foundation mark that to endeavors. and all wish seeing

Third quarter outstanding. were results

is an First, X XX% million. year-over-year subscriptions to revenue $XXX year-over-year. increased This points acceleration of

and in $X our leading points billion. of year-over-year or over is off billion. total third, And includes more which fastest-growing segment. ARR our This ARR, a RingCentral is $XXX,XXX $X.X base ARR, an of XX% customers increased generating is enterprise growth acceleration this year-over-year to Second, ARR X

And users in billion-plus X hundreds is with the Here, this further in market of continued transformation This our to this of of addressable year-over-year transformation is execution successful by the These PBX points in a our strong strong, tens the estimates in evidenced employees latest capturing our was migrating is again positioned another recognized XX%. for Unified we this of there quadrant. note, a in a cloud. XX% an consistent success to acceleration well-established digital for grew and of RingCentral RingCentral the be traction financial of include millions demonstrates leader of seventh opportunity the This penetration less at growing sources Communications Quadrant on-premise is in speaks of On Magic the strong to Service, to we and year-over-year which total additional dollars forefront an $XXX customers. $XXX generational of solution, not as as In large-scale million. market cusp results RingCentral opportunity and a adjacencies of the massive Report completeness means cloud at year adds center, research date, near billions the industry Leaders' contact for wave than in the the still the cloud. cloud are a are addressable at market. performance. This once vision Gartner of growth report, that is does market. to row. leader proud To Worldwide

In year. with of contact Sullivan Gartner large on and addition, a midsize with UT include Unified RingCentral our as & This cases X Service. and success These this IBD, ranked capabilities [indiscernible] number center. enterprise, for Frost Communications integrated a one in critical use other X out builds

unparalleled. windows. for than track downtime or delivering customers. X of hours per uptime equates downtime competitors to the year X X around maintenance privacy partnerships our why and larger better what commitment. just of close trust, hundred Xs a enterprise innovation So a stakes, not minutes is of a and feature, with years is some like is over This Five to year, Three both all lifeblood trust. are record Xs or It's and a with including RingCentral's TIP. win? Trust that literally counting and times UCaaS is businesses The table This Reliability, internal RingCentral for about it's to external It communications of does for especially security begins provide. data we call worldwide.

has pace RingCentral to a rapid been always innovation. innovation. committed of Next,

requirements year features display, a of continue expected and experience room investing Microsoft user scalable, customers' high This enhance the modern, outside communication in Our app driving call to across new leading Expanding the includes to as we head capability. RingCentral our of This enterprise with enabled engagement. mobile of this meet embedded a video, architecture platform, R&D is as innovation have on capabilities many customer new stringent us in differentiated up dialer cloud-based Teams favorable trends system. platform. well multiple level to

with alive leverage our a closer take and the capabilities. well, Let's almost and customer phone of various modalities. PBX Voice continue is to all look our at accounts

customer in communication. strong RingCentral This and investments messaging deep of accounts adoption finally, made than Overall, we And more innovation have of level accounts of of engaged the and our customer Video. with accounts engaged of a of video XX% Next, of engaged XX% both both all RingCentral with platform. modalities engagement one phone. modality also are approximately customer XX% pace with and This reflection is for phones. rapid customer MVP RingCentral the across driving is innovation our

Video our We are have accounts XX% proceeding and to migrations ongoing upgraded now strong. RingCentral over of

the platform new example streamline will work carrier finding platform for third also will such the process up opportunities this our open on TIP is One pillar Anand the new with leverage our service new Rise. additional ways are provide developed provider partners we to RingCentral. We partners, platform innovation with to This strategy. sources. named to color of RingCentral

based exclusive partners quarter. customers newest during largely extensive across As incremental channels. Avaya, migrate given base leadership as $X have our the primary to XX which Mitel unified the provided will alongside a RingCentral's with see over able then video of to own differentiated Mitel. The digital be and PBX to thousands million-plus PBX will be for provided Mitel path announced at differentiated RingCentral's Enterprise, our Mitel's from This partner the and Mitel, app newly-acquired note, includes this now market very on-premise field that resort transformation cloud industry. Mitel's UCaaS will that position, to is capabilities And Mitel's wins CloudLink communications, in for and channel multiple Alcatel-Lucent Earlier administrative messaging partner, RingCentral partners, are worldwide. team the today, to the full RingCentral to their communications users. of the network MVP and strategic servicing Also, feature on the partnership PBT to utilize strong pace, RingCentral's users our brand. Mitel's in are via globe, unique that is excited million of I'm industry strategic And that million will that clear now path users is we is feedback technology. installed of well-established global users be cloud-based existing leader has cloud an be able be on-premise who announce this contribution see new the which XX is customers key Atos a pleased technology. will the portal. we we to over business incremental on

innovative for base other of speak on-premise we As quarter of in similar technology massive once-in-a-generation million in stages Please The In the installed X such, commencing path a well-established and summary, time. for at great this a together respectively, offer XXXX. flexible over migration results RinCentral. transformation. cloud be Mitel customers. communications second to opportunity The be technologies are for later go-forward in was partnership users, half early conclusion, market extending on-premise CloudLink possibility and will path to Mitel for brand restricted we not also base, global migration note is business strategic all cloud-based will brings cloud customer in In to RingCentral communications, may but of new utilizing the believe and Mitel's provided themselves. a leaders the a XX is cloud point QX that

is call our ecosystem position built and is strategic of for Chief on differentiated partnerships in Operating with our our Officer, Based years in the to these turn continue you. we've a commitment come. industry Eswaran, principles, Thank to the of additional our company rooted that success believe quarter our innovation on to and we customers, building growth relentless leaders. a drivers. I'll trust and with Our leadership that, the over color With to its underlying for Anand President position pace

Anand Eswaran

had Good an excellent board. afternoon, everyone. across Vlad. you, We the QX Thank

drivers strong continue call, is X that cloud growth confidence our the on is Our the reinforced expanding in the communications today's accelerating, to and both growth to market. are our partnerships ability key QX contributed pipeline the focus ramping. meeting performance On I'll and

are our strategic contributions where ramping and growth. partnerships to and partner First, channel continues our carrier strong deliver

wins. international, a with million-plus TCV record of Second, $X number

upmarket upsells. integrated UCaaS is driving see strong we wins which where customer customers new And CCaaS, and Third, momentum. and fourth,

dive now some me into Let details.

particularly strong by systems. Let's Office store retail and solid a legacy In locations base. QX, migrations Cloud begin Avaya, new XXX our with growth across that installed were user RingCentral segment. in with Avaya partners. replaced logos the the X,XXX-plus secured new delivered both multiple we on-premise upmarket Contributions from with Together strategic win

won also solution Hospital an lines. Avaya Avaya on-premise to West Cloud Medical Office migrating with We X,XXX

An this partner. who for opportunity. on year. is with start newest collectively certainly Europe, We These Mitel, XXXX our Atos. expect also And enablement partnership very contributions a RingCentral. upgrading global had the the account office strategic warm And extend last we not and to track, for approximately to example great channel half strong and like but chemical partners welcome market least, next contributing unify Alcatel-Lucent training to a of by a Global from in as strategic I'd users Enterprise, is approximately win to manufacturer our is X,XXX work

office network reach the our partnership are process. a and seeing RingCentral This in of direct cloud is significant go-to-market market growth terms both ARR. Our in migration moat accelerating partner we in evident and for creates

key including strong for As providers, AT&T, delivered partners, and service contributions. global Telus, BT

great with Verizon Our partnership a to also start. off business is

We we share our multiple together. first are in enterprise quarter have already pleased wins working to that

global ECotel our a are deploying already leveraging for the mentioned, providers, experiences. to to with differentiated our we stands Vlad experience Several solutions RISE platform UCaaS and system the offer RISE, this transformation. providers including future. innovation, for resources, excited launched also their As have service up service excited and plug-and-play provides incremental platform, new years are recently cloud which at RingCentral RISE and partners MCM, global of accelerate we and RingCentral opens are co-branded opportunities customers' integration in

$XXX year-on-year Next, our million. increased continue ARR to channel results. strong Channel to partners XX% deliver

across MVP X/X approximately customers large provide once larger Our effective XXX verticals. in $X district motion users contributed XX,XXX million-plus important channel included multiple great across over a school an This that wins. and Case RingCentral channel point, to a reaching partners U.S. and locations. than partners its public in footprint our more go-to-market win again tripled of with TCV

the Building by India XX% a Upmarket of Alcatel-Lucent contributing Allscripts, Atos, and Our growth. more health granted Indian total positioned Deutsche win quarter, global had pipeline meet across International name a in a implementation we major market The at a a a RingCentral all already robust diverse to on in are of where leader than X,XXX-user care great Enterprise, our a us at Telekom close partner on just doubled expansion we healthy and revenue strong with mid-market partner milestone level, solutions. network its the to global this IT like enterprise a had key other partners became growth X efficiently demand. rising capitalize the With Department to and This tailwind remains with with Telecommunications. provider achievement, us. to is few, good to are to is this to scale upmarket unified strong large countries. global our win international channel ahead enabling global the a we year today, reach and international opportunity are international customer be the Vodafone first the with and we to momentum. during continuing We opportunity. steady are position license rates underlying cloud well a holding and of strength

is expand customers. and upmarket NICE we our CCaaS enterprise over end, $X Integrated upsell UCaaS integrated of higher contact million-plus expanded To contributed with of our we our demand recently partnership that natural leveraging UCaaS for to our continue for inContact. to wins. are solution, TCV many As center seeing traction, XX% our a CCaaS

to sell when account an customers we RingCentral great embedded These throughout commitment it and quarter. on solution, trust, per addition, highlighted, both and much to all are In versus our and with tenets stand-alone remain as In integrated are Vlad was CCaS ARR seeing CCaaS. back partnerships. QX These a innovation resulting UCaaS UCaaS. higher we those for UCaaS standardizing conclusion, And dynamics comes UCaaS in core his RingCentral's and you, moving to the want success Officer, our on key billion-plus call ongoing in for and pause him wish partnership, that, this we the I success just over Chief of to and are organization, believe thank forward. luck best our Mitesh and our I for Dhruv, him Mitesh. friendship journey turn huge $XXX and opportunity. impact With the to drivers Over as market Financial

Mitesh Dhruv

saw We our growth everyone. Xx rate Subscription a unique was consistent afternoon, best And We operating up year. as opportunity, moats X as rate XX.X%, of scale. especially as XX% X close leverage years demonstrating retention underlying a partnerships the partnerships Good growth, RingCentral revenue from This, international subscription market in over $X.X the the exceptional grew our start net upmarket the is record contribution, Anand. model, an execution. you, built a us we've again, strength the QX. to success. is uptick. non-GAAP run points function the profitable track of drivers: record our revenue Thank smaller. in to we growth rule well when prior and year-over-year, our puts had had was This and speaks of The on XX important to measure growth of margin billion over of X

a and partnerships, last up ARR, growth. we on This a our like yet our to very XX%, which direct add another I'd last year. welcome from XX% Mitel, is evident note, from extend grew XX-point quarter seeing contributions. partner that First, future which engine will warm On ramping and to in to are acceleration

international our outpaced came international TCV of our million-plus from growth. $X Nearly wins. significantly deals revenue overall Second, growth X/X

ahead come of As us. international large incremental partners presents a untapped online, opportunity this new

seeing and that demanding in differentiator. and of serving are Customers we mid-market phone, video, increasing best-of-breed MVP tightly-integrated platforms bring a needs are RingCentral's as our environment. enterprise the center and continued platform key UCaaS and customers. can Third, together CCaS meet workforce strength messaging contact to hybrid are

business, making over approximately $X mix now is XX%. our about business of enterprise growing XX% and and mid-market billion Our ARR up

well as counts have net user strong to increased along saw We continue a low trends. adoption growth, strong Upsells base our driven well record average positive but strong by healthy account, multimode as with forward in we churn. sales churn. low indicator for in see and were per dollar also the drivers not drove which resulted as key upsell top customer just growth and usage Lastly, line our These revenue center for retention contact underlying record as is our efficiency.

multiyear achieving backdrop, upmarket steadily with into Our high demand is record average this been revenue QX high. recap, has outlook. is retention and To climbing raising our XXXX opening, are kicking a per at partnerships account ramping, net high. is gear are a we international With

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

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

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

higher with than at also ARR growth it strong the direct summary, are Given to to we QX, a on the QX out and our growth pace expect we with momentum. stellar better strong QX partner our and pipeline or close be and was level. In partnerships, year visibility

to is it's trust, operator, to and have innovation record to Before a the the RingCentral's be call contributed. privilege proud to hand want exceptional, of I partnerships CFO I say and of the that RingCentral. track I been am

all Q&A. of turn to grateful call certainly miss all operator I'm analysts your you. will some time I recognition. for entire run. I the for and my With the With investors as all to now extremely extraordinary the cylinders, to least, for consider is off for thank And the support of on me the not the let's our company last that, firing and life. the family take but talking chapter to RingCentral to time surely right next I want an

Operator

question the William from And Suri Bhavan Instructions]. first [Operator Blair. with comes

Bhavanmit Suri

Can you me okay? guys hear

Vladimir Shmunis

Yes, Bhavan.

Bhavanmit Suri

was a I Great. from amazing and impact, Mitesh, Vlad had an side, you Well, congratulations, said on had of too. partnership and The Great. our blemish mean shareholders I guys. massive it, The earnings. on know Anand blockbuster obviously, amazing. number I'll us. you've impact it say But one and all

that You've done a lot to is had do had which in or what a think guess obviously missed. major is stay think should touch we you with really partner But about talk I do How How color here, be the the question Mitel? I period we partner and expect? strong Mitel from how love a we I -- contribution that I'll contribution should some sorely of you my I'd about But want over Mitel. time? contribution. great expect? one which job, forward, have, -- added define and I just some of people will should do that. really, you let you one think there. of friend. to you What do say, going direct you

Mitesh Dhruv

Bhavan. the touch. first in Thank off. you stay Sure, for words, we'll course, And kind of

of In It really partner capture for a be is replicate. for terms of will direct the very Look, others long, to strategy partnerships, to a growth had unique. us and I the does very secular time. And our this clear advantage strong a yes, quarter give we there. think long period hard

facet Mitel, One be is many, partnership RingCentral As going many is in it to that key brand the will this forward. differentiated regards.

channel we'll device meaningfully we to fairly And in in of architecture, And unique after market, terms quickly. begin the it then the we'll contributions of which this back demand time and CloudLink so further that. layer there will start on unlock be to a But following enablement think contributions, have sales so means very is faster compatibility. 'XX half I will what

XXXX, up, thing and partnerships, a contributing Now final And all you'll the year, for of RingCentral have if just the X are for not model Bhavan, layering it click partnerships, financial after really it's you you'll and partnerships all and drumbeat value note of is steady these these the right, benefit with durability extend maturity of one-and-done. these to as The the -- Mitel have a on the on. come take right, partnerships one a significantly. the really terminal increase and year that

Operator

Truist question comes Securities. next The with Terry from Tillman

Terrell Tillman

congratulations spirit a we analyst I of long over decade at fellow say me a the sell-side days as these probably And analyst well. Mitesh, And a in together. being to from embarrass ago, you've come would way trying from sit

unit done, for on you've all trying a was So a consistent the tremendous myself create metrics, narrative really after that quarter and job aid economics good to this financial execution particularly the and the investors. quarter,

So everything congrats going luck forward. and on good

when think, with And quarter, to provide. an I revenue, out, I'm Now guidance, typically conservative, know question. And the subscription kind of fourth XQ? but looks maybe or be drivers you than it particularly the looks than confidence my I the try could actual for are like driving question. that, actually help what I what you what's at anticipated the us that's that's subscription stronger you it stronger looks revenue It unpack much guide looking only

Mitesh Dhruv

you Thank words kind be to Yes. your Terry. for as you, a bag long the Thank well. used I been since journey has carrier. It

question, So terms the your philosophy. look, we no the there's -- to change usual we'll that outperform and actual leave always optionality while. of always as try with prudence hope in still of We guide to fair guidance in do. guidance to amount our do a and there's But a once in

of It's things. a question. of fair or confidence, couple driving that's X in things. X what's higher It's a So the terms from visibility

Point you That's QX. the So number is a It's full recurring so one a fourth see impact pipe in the impact the two, point up the shows high. number business, full pipeline, first one. from the quarter. record revenue is at the

So very week that number high is on. And later three our a also earnings allows is us a to visibility. have

get momentum did see and a So of full we to up the October thereof. month to

the and our confidence enormous with guide. gives forward. for increased it QX we've pipe, demand And net-net, CCaaS UCaaS growth together MVP got pulling firing the multiple with is and So engines us

Terrell Tillman

there. be for to That that sounds though, get bag your correct I'll probably carrying great. --

Operator

The next question James. comes from Peterson Brian with Raymond

Brian Peterson

guide partnership. missed and be the Mitesh, But are of sorely you comments. a you're these with mic kind it's to work going really the quarter, Bhavan I'll dropping here on other going with the Terry's add get the it's you, to we're been and just calls. and then Mitel to to pleasure tomorrow. a on But going aren't to anything, know I on I in. coming but to to want And you CFO XXXX. have more officially guys new I the topic. guess question We're start guiding this

got anything about there qualitatively you've XXXX? share that expectations for to is So

Mitesh Dhruv

Yes. be No, that's for you with we lot given model. as you going I fair drivers guide a be rest drop and durable a assured until we QX, things our with one, Brian, the the that plus, comment. appreciate mic key really Look, again, the of thank XXXX growth we addition our which and the have is is again for place, usual, the this. our should in momentum we, have the don't do for excited But forward, February call. Mitel, of to

be think I come. there no years will for to showstoppers the So

Brian Peterson

And Anand. it. maybe Got just a follow-up for

to potential where why confident continue that aren't with. vendors potentially these as So vendors a it's you can -- to you and obviously, global -- point new carrier a some that build just the it are opportunity? continue cadence Mitel. to of of starting how to partners, in And work kind some There's of you today lot big RingCentral? out news hardware get you going with partners Are is they add with with to

Anand Eswaran

Mitel. So that? take I just the we've don't Why One couple of things. X, -- talked is a about not talked it's Yes. we've about

asked is providers, carrier service haven't guys about you partnerships the have providers. yet also We the

this the types more in says. being partners of are these UCaaS of addition of partners RingCentral growth and getting the on them we what RingCentral both different Vlad displays, started kinds and confident And is establishing the critical to journey industry, in the best to which to of Vlad solution mindset platform layering the as many on just goes earlier, on. as for coming partner-first we innovation are So back that is there's layers and MVP said matter, more always and partnerships equally which

Operator

next comes with The JPMorgan. Auty Sterling question from

Sterling Auty

next great you the will luck step, be the in and quick Just to It a with with congrats work Mitesh. future. good again

your In us UCaaS? the terms on Mitel full how full will time users, the this of it's around be can what of the approach And hybrid initial opportunity, those what are users help to you business, that for pricing for and thoughts that over cloud given plan migration instead evolves? pricing understand

Anand Eswaran

want do the you to pricing take one? Mitesh,

Mitesh Dhruv

I our is we will I to think Look, Sure. product. can Mitel's that take the the be base here for punchline converting it. partnership

So past. will the And been increasing. in been have follow ARPA ARPU we has pricing that super and note, our the done our what on stable has

So continued more I think you of will a story there. see

Vladimir Shmunis

end be absolutely M all I P, on no and full video all not transition hybrid. is of anyone's Sterling. mind and in big and video, the cloud. utilizing messaging customers, being V is with from to RingCentral you going you the -- in It's MVP the or of them strictly are no is had, cloud, strategy comment asked. also if want is that is ability there myself in while result still their to But comment to cloud, steps, on-prem using voice. Strategy CloudLink questions messaging What doubt offers them for us will, with and

transition, customers better pricing. would if expect those we same, not once So

users. it a be for them more technology would familiar be to take. the But of million messaging they to As in even platform, would XX and our to with course, step to the Mitel's smaller be monetize we're able interim, video hoping

digital users reiterate remove to that and now, how But is it we their been transformation. an the has should have done jury absolute seems why people react. to consider it this in Just major, see for want out, is industry the major never obstacle a and that first. as Once before not

Sterling Auty

And the announcement been lot RingCentral Operator some Microsoft, over have the sense. I And with those On that diminish they programs? a alongside program, of direct participate fit of the each to follow-up, opportunity that then does could. exact That where last Connect, your quarter, just in I win does and it's the made of term maybe one announcements are business makes if if forget have and the Microsoft?

Vladimir Shmunis

viable a issues, addressing not has many PBX the core of Microsoft Yes. cloud as ways have they product. do

So let's start that. with

they tailwind into and using those UCaaS routing, Teams to So actually in and strong which direct we Microsoft's Teams by allows providers base. our direct Teams are which So have cloud this Messaging users is plug us, like X.XX peers. ourselves, But remember, Teams where billion a come not okay? Telephony, large, for is user Video,

doing well very are We there.

is -- the but numbers, haven't you it growth are tell I out for us. a can We we broken driver that definitely

If a and direct yes, Teams you as routing -- look at Direct and just subsegment.

for good continue another the very Obviously, anyway. Microsoft, phone plug change MVP you strategy, just Operator into doesn't and They the really the a other the KV P not were talking far that a was like as is the PBX. that we part people again, latest time a technology way, is capability incomplete. by this our worldwide ourselves, have their directly are not that And of thing, as and side Connect, long who does from for coming side, PBX strong we the it's their have Their ones in if AT&T there than frankly, a admission cloud. fact competitive who to KP. ask demonstrating. of strategy to has And are Verizon's strategy, as but M, MVP are me, do. Now Microsoft like product global the they frankly, fact a competitive only have maybe about footprint very, a It and the a don't we

Operator

George with from Sutton Craig-Hallum. next [Operator Instructions]. question The comes

George Sutton

experience told now. that, were going how sitting was insane I and Mitesh, look I like you the model to remember this thought at you and and look about Salesforce.com me down, you

started you result? company the first if capabilities versus And anything a part as congratulations. differently to going in new decision do of make the So I'm video marketing a I'm a curious to from video of believer is have your becoming phone. that a

Anand Eswaran

Yes.

So let it? to Vlad, me you I'll start Yes. do -- want take jump on.

So this is I going to what was say.

is are one, who us, his and strategy so and base, Vlad So across And our messaging lot. customer mean, in multiple phone, I users message, people remarks, and the shared for of using use as number prepared phone. video modalities the video a is phone. even

already So of video part strategy. is integral an our

defaulted them are strategic on et all going share As, on as to their video and as this partners, business, RCV well. new of carrier Mitel at forward, wanted customers our is you I thing time. the customers second X point at all new all The in also defaulting are cetera, All partners, our look now, Vodafone of our

already the is So going RCV path. right in along

thing And -- third increase XX% by I installed looking would host RCV, even to usage our see and when their we there is migrated offer the of RCV. do our at The installed base base, migrate already better. get daily to has they actually over active way,

represent path that want as So market. the strategy. video the we phone, propositions that's we in customers go we already of to. of our message, right on best unified People we part feel back And and video the one strategy MVP a where feel for is and across communication value

Vladimir Shmunis

video-led this is letting in may these to telephony with add that CloudLink now look into to -- little while much [indiscernible] that that on be the phone that double-click just Mitel thing want that is video plays just move messaging, I will I'll a bit, we new actually at the with And them to be many able very later whole sec, point date. a at of lead a the you announcement, but if these and you sales. it the have,

is and where play which opportunity majority okay? opportunity now, that's -- users, So double way it already to [indiscernible]. key fairly is we So And by of one Europe, operate, Mitel million to namely a should XX be vast the Americas Western click, does the it's that in immediate point. regions and here,

or has side it the I competitors is less on now a are -- video are able at highlight Another video RingCentral their we on is well. of is positive or we are look as that People decade-strong sticky seeing would-be you doubling to source as And which Ring is not start they issue equation, is this on messaging from realizes because that happy technology. will may now one, very, it you switch video-led, or of this true And OEM product, are it, down to users sufficient that happy if that that than migrating messaging if though, and competitors experiences lot to going for why the migration long jump a the as then are to also Video the all have phone. be comparable, very home, their decade-old are people is sales switch. also hand an want while basically, and phone

the technological world see me like partnerships, with hard Enterprise, our not behind now Mitel and for of The going announcement, any especially this or second and insurmountable we of there reliability Five remaining a the is, for strategy a against to and is call now component bending are very it's all I carriers is top there urge which innovation little positive almost There Xs between of we something TIP, I play competitors well. trust, of Trust, this only remaining strategy, stands XX% one none We how the and partnership our have. would for in RingCentral, part very, say, a bit XX% for that we're advantage Avaya, to over to which T advantage X partnerships, an years. strategic compare is Alcatel, way. record you and all would out that as

pretty confident. So

Operator

next with Marshall Meta Stanley. from Morgan comes The question

Meta Marshall

access to on some is Or require stay Just have do technology of the kind you to allows more could platform terms it partnership your Mitel CloudLink, partnerships? you eventually porting a that something since kind of with of where to other question that the the that only? -- use would exclusive

Vladimir Shmunis

Yes. Vlad here.

that. me take Let

enhancements. specifically, just to to of There be But meaningful dollars XX yes. absolutely number our And base, So as The for cooperation as between it changed further of is other Mitel's companies IP, apply is but not hands and ability short CloudLink million other transaction. to will CloudLink. apply term platform to RingCentral part feature own reason it to platforms. that is our only now user there the -- other outright. this well enhancements in

Operator

with comes Samana question Jefferies. from next The Samad

Samad Samana

that's to time your you have some the hope several How your get being IP? able Mitesh, seat last commitments? built years. I well unpack in so is the next to to and for game. on wanted Maybe $XXX you improving best the maybe transition which of you challenge, that much bigger deal invested Mitel. even are acquired to First, on the into versus exclusivity over there is the it that golf being get I question, the you on the RingCentral congrats million And guide having the for minimums of off and could wish yourselves minimum I base in terms

Mitesh Dhruv

on try each game. is us I first $XXX exclusivity it's IP to the But yes, together, And separately. going hard break the down will us which contract component rest which in some mentioned, into assured, been has is provisions, But for for industry-first competitive what to I are be cool there we get Samad, a golf it's Sure. CloudLink terms of to the the kinds call never reasons. will has all part, of of on before. combination which million, hard and Vlad defining for this doing, done things be think

So stay tuned.

Operator

next Fish comes Sandler. Piper James from with question The

James Fish

down with forward congrats working Mitesh And here, to road. and you the look exit here the

of change penetration new longer where versus of between that of some a deals could any here, with wins update in what endpoints, mix about is in are kind -- term? you way ones your in how big the new going reselling one you on those of guys the and to guys versus I'm And terms sneak users, me, one And partners Just nonstrategic course? is carriers, strategic terms between CCaaS stuff? of to selling for partners terms in mix the an the Xb own your seeing did what of between and that third-party provide think

Vladimir Shmunis

choosing we beggars, -- win. question. not it we I but mean rephrase like comes is not can I'm win, Yes. And every where Jim, sure, we're regardless the from. win maybe a a we're not

you the again question could maybe ask just -- what please? So

James Fish

Yes. percentage quarter. NEC, how you you users partners talking trying So that are getting, you I'm new is are winning Cisco, about or nonstrategic for given that partnerships the of doing this coming of what the strategic the to have? guys from versus guys those trying understand the partnerships, against that are kind success just have especially companies, with example, understand you to

Anand Eswaran

take to that. going I'm Yes.

then first a shot take me it, and yes. at Let

So these of this is I partners how actually, is growth right are it, phrase expectations would the all way. or layering in on which actually Jim,

I more quarters strong So of which same at in same driver deals, look are look growth progress the by sequentially of really growth. when in wins, mean, look better Atos, carriers, international and international. of important was quarter, it's at good Avaya, of strength $X in the the sort million-plus volume, at it's getting same, TCV seats, new upmarket, When record I when sort the is large strength transaction I sequential it a year-on-year. good I accounts, The thing, way on

a lot momentum are continues. the also key finally, of has don't health channel popping verticals good board and enough foundation The We really vertical education, we with the channel. starting we And building momentum on about channel carriers. benefit then been a are across see are upmarket the talk And for care, the and retail. nicely, the up to us

acceleration of partners varieties of in the to which right a by partner XX-point way. on a going Mitesh way, direct And VAR say other about different result partners, all sorts nonstrategic, a there's the not which these together growth is these to and is strategic on of it's way, organization. -- discount layering what of are right in coming to these is way, all be propelling hard and versus direct of talked the So different our is in

sales the segments. all customer across really direct have Our of across quarter-on-quarter on force good been putting wins board

fire a to of coming on this well So and starting all board. them of case is

Operator

Deutsche from Bank. The with next question comes Matthew Niknam

Matthew Niknam

Can linearity roughly it to any one how color you has then And in? well. out that the talk XQ during as halfway keep started we're the And quarter? about I'll now on

Mitesh Dhruv

there. very we've not month, QX. XQ, was usual as was for that start for given for as strong Linearity the the -- been And it more visibility unusual far start call a to the it's the seen to out us also has full And October. full and Matt. us, Sure, guidance results for nothing XQ,

Matthew Niknam

That's Mitesh. great. Congrats

Mitesh Dhruv

friend. my you, Thank

Operator

from Baird. Power question next The comes with Will

Charles Erlikh

guys your should it's How higher going Mitesh, internal think you. results forward? on and partner to plans How Will. to the we going should Erlikh do we been pleasure think for just and on your about actually strategy How on a working about contact ask internal on the about wanted your your question center. forward? Charlie capabilities feel that I strategy end? capabilities for you This one Congrats with is

Anand Eswaran

That's great a question.

So let was me the just it set One, for context. quarter contact fabulous a some center.

that also actually has new with $X shared again, deals included really digit -- center. the And we've XX% momentum. Our been growth strong triple new TCV the enterprise over contact growth business good, year-over-year of million-plus

call well. all at quarters. look the with follow partnership very, been with NICE digital-first of a they as same now, CXone lead inContact The sort has with working we stable we playbook, strong or As lead right really NICE for Engage, and been we else, use everything very same it strategy, it, inContact, over the NICE the we mix cases, it's for

Operator

question The Alex comes from next Wolfe Research. with Zukin

Aleksandr Zukin

progression? with of from economics guess the I could of think or partnership the one. the of basis, Just to if how Mitesh, progression we an think, mentioned you a latest that faster acquisition the this be on-ramp for deals? it And ROI quick unit compare housekeeping would we you other the think how than around customer I one the -- Mitel should or others. the others cost seats the about

next resumption some how that? model. marketing, we year. we of margin And good increased the the margin sales about travel, kind thinking Or of model progression should of as we think kind assume the to year, given So we pause the that do But investment obviously, in as reopen? should about start and margin in in continue side, this leverage? on the then we

Mitesh Dhruv

as packing in XX question. in for questions And you. job, Alex, amazing one thank usual,

a not to try address just will it's all I them. again. But So follow-up of

go-forward of particular brand the RingCentral's The no first seats the faster a or function brand. question being is is is in order. So a one ramping

market spent -- no the time is along happens enablement channel co-branding with a it's and faster time to be there there's sales So product to the enablement, on no immediately. because the

especially partnerships, marketing profile model, of RingCentral. because enormous on Point along number economics side the is massively with unit that such way the sales our the margin point about partnerships So economics, and ones to number think for one, one. other and partnerships leverage these economics Mitel on there's to out accretive that's these that long-term two, the us, this work the these are for these

So on that's two. look, business in number you economics if look the leverage at the leverage Number year, enormous next model. the unit again, three, for is there

of look XX%. If sold recurring the north some is margin, recurring our less and goods of you which at our revenue cost costs, of it's

seats what of we into So are those though doing fueling because XXX this too is opportunity on. is million growth big dollars plowing margin to further pass up

of a you So year enormous fuel to next the redeploying see more is what the but continuation value leverage of will company. more terminal and model and the of same, the money growth, elongate business

Aleksandr Zukin

I I do them. even questions, a of better think multipart do asking answering job of good an As you as job

next step. the on congratulations So

Operator

The from comes next with Siti question Panigrahi Mizuho.

Sitikantha Panigrahi

Congratulations and to what $X.X journey from million congratulations. an billion, $XX Mitesh, impressive

to and quarter the accelerating direct partner to good this wanted even That's I as you ask and next growth see on growth. well. that quarter So

Avaya growth this from have going you and to where as of Any like understand that us are next with major sense partners the help So partners? at other is stagger timing Avaya to how point year? we

Mitesh Dhruv

and partnership every I'll the Sure, about you to of -- Thank partnerships the way words sure, kind with amazingly out is here. think and Siti. then them. it for in parse The I'll amalgamate ours, each

and what hope contributions is will -- Avaya you coming see saw latest flagged Alcatel-Lucent, XXXX, is then 'XX. QX. in ramp on. the is next ramped earlier. QX are earnest, back half and line, we in be of what where to The Mitel the we which installment which in in seeing contributions So we Atos now would where And is starting is have you one furthest next of

to steady come. coming are beyond years this going be be The the will beauty Siti, that's is of these so to because roll And to in for as is here, a what you partnerships of seats effect. forward 'XX, drumbeat there the punchline multiple layering

Sitikantha Panigrahi

That's growing. will we great. see acceleration this probably And

Operator

Ryan from comes question next The MacWilliams [ph] Barclays. with

Unidentified Analyst

fair have the talk kind But pretty wanted and with channel. the complex That's different of given X,XXX-seat the RingCentral interesting, had now deployments to then a those are channel, with today, hospital of I direction go channel, we Cisco about I your on-prem Avaya. for win some and after think we it's Avaya reseller So how hospitals. to say the

are that customers cloud those deployments? health sectors see So accelerate to solutions the been or in voice starting to to adopt like have you larger public sector starting previously care slower cloud

Anand Eswaran

Absolutely, Ryan.

how well. these I to why that's it make does bit -- up see health And education I as different. we a partnerships are coming Avaya, actually actually said vertical and called out from are We just care strength starting strategic

popping specific one Autos. Also for from plus record Mitesh similar called where financial for Almost a some a terms TCV on to partners traction out are $X verticals And these the internationally. key segment. some are Avaya So and which thing, verticals not large we large mean health out well. up Avaya, partners, in deal, converting is coming that million-plus strength And International way, in $X the on us but coming I million-dollar a was of are services. way, some also retail, where in lot a wins pop on-prem saw carrier education, we're as seeing to of key specific is X/X this internationally care, ACO. in seeing the that's we early bigger in a from of of larger leading these just significant also of wins.

Operator

The Enders Steve with next from question comes KeyBanc.

George Kurosawa

idea the as Just help to accelerate product wanted just adoption explain to to it I'll partners a George Can to follow tool Mitel. on else's a as be up echo Is would their color outside those into on sell is previous the you to more? curves? it This applying utilize congratulations. is of helpful. strategy this CloudLink about little for other any bases? everyone question Steve. Or a a I

Vladimir Shmunis

No, value great those allow middleware Yes. Vlad deployments. transitional CloudLink here. of is No, is to latter. CloudLink question. it's for the and

the in and So heavy exists. monetize approach their for without will that later, for to having part V than as differentiating the position wait sooner in with monetization monetization a piece be will we will that continue the be Ring, M as parts from that this of went monetizing and now to MVP, phone phone, lift message, MVP, for video to long Mitel and And will again, that P is come later. on-prem

Operator

Turrin Fargo Michael comes Wells The next from with Securities. question

Michael Turrin

and a it I the team I very wanted the a degree which congrats sneak little but note know on a to high expanding on Mitesh, Mexico, just international. in now Anand bit one results stepping ago, you're in on Congrats the licensing India. partnerships just here. to stands moment on down there in referenced to out,

some put those So you from just differentiate, an Can help how it's from continues or where are context expand. a global of investments standpoint around whether some footprint international perspective? multinational region-specific to you and just

Anand Eswaran

many there, Michael. is It layers

international our large deal a lot actually powerhouse well, many establish internationally. actually partnerships right? extend as us out helping helping there. is just where You us wins called Which the -- a some is we international of them has and of are in reach huge This many wins Atos been

lot which there's a Now of things is which done, been it. adding have to

the You unified license granted called is UCaaS ever the to provider. which India, in out first a

more difference. where posture a of are a Five we we -- That difference. and so lot. The when makes recently we security of launched makes Xs, is And on than RingCentral that, And Vlad not is that. years. trust X which Xs that been pretty top the we've Video, this talks the announced end-to-end security encryption, a we matters Five and also a of our is On commitment. proud huge about It just reliability journey SLA for

for residency announced that we privacy, data which difference. posture, a security have Our data makes

carrier international things to momentum partnerships from a Telekom, wins, is Deutsche to create from Avaya our actually together soon. about So significant all those more deal large to Vodafone partners we growth. business, even layers upmarket yet coming wins are which momentum to is Atos, Telecom, coming significant of talked in on soon, And coming of in British is starting and have create the not which on

pretty well. has significant bullish. And a Mitel international we as are presence So

overall bullish on terms very are to where is in of going So contribution business. the international we

Operator

Horan The comes next with from Oppenheimer. Tim question

Timothy Horan

quarter. the now they conversations can you out and we're they Vlad, Do should of work enterprise maybe talk new to COVID? pulling the that normal be about customers accelerate realize kind work X of is of of Great just normal? adoption, next cloud years, with hybrid the X, And years X -- given normal kind X, you timing see like of we think and do more maybe adoption? can X the hybrid X, new going type

Vladimir Shmunis

Yes.

themselves. was Just everyone, a story, -- right? to for speak not remind numbers our And not Ring is COVID

growth are into -- now, COVID we is We performed and a before hopefully year-over-year COVID COVID, subsiding.

only segment. in It you and Again, over disclosed, was accelerating. can As the what fastest growth is our see, at ARR. a the significant rise numbers growing year-over-year, is we over with $XXX thinking is our growing looking now it just our of and strong at Enterprise is million already it XX% business business very

before, So again, certainly numbers lie. don't

attributed talked this renewed growth connect they mobile did from just it -- seeing to talked reminder, work it hit, and we and though did about We as about again, foe. that. lots And We changed, We board are we to numbers. little do consistent well with change, So of I players in CCaaS. click all Now Now phones, and question and I many a no of how CCaaS I will seeing are seeing not think pretty and say, you're anywhere lots a obviously interest of And led okay? pure really now A in desktop good bit calls only couple work this to cloud just hasn't when more the talk in I strengthening. not. we said hybrid? is double are anywhere want because what about from to people also, have. from okay? trend a It's segments, being home, quarters across It's center did in work terminate not. don't contact a devices, is COVID Mobility, mobile as customers through go, by we friend. Enterprise, the is devices companies

relationship Mitel core And But great. business think very again, into that. than we hybrid stronger just what course, ever. do if this absolutely benefiting for that's and has again, with that's is CloudLink, So Mitel us. -- it of new We're the will future well our from again, strong, is with

Operator

you Thank for attending call. concludes This today's presentation. today's

disconnect. may You now

RingCentral (RNG) 10 Nov 212021 Q3 Earnings call transcript