RNG - Earnings call 4 2023 | RingCentral, Inc.

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Operator

Good afternoon, and welcome to the RingCentral Fourth Quarter 2023 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Will Wong, Vice President of Investor Relations. Please go ahead.

William Wong

Thank you. to Quarter welcome Call. Earnings and afternoon, RingCentral's XXXX Fourth Conference Good

me Founder, Parekh, Shmunis, are and Joining Vlad Sonalee Chairman today CEO; and CFO.

Sonalee will by today prepared followed and format by Our Q&A. include Vlad remarks

that the a have which on Relations today's presentation We section will find at also with under slide coincide can results our available Investor website financial you call, ir.ringcentral.com.

company's subject outlook. and will some contain risks regarding the Some These uncertainties, are questions forward-looking and performance are your of business our responses control our of forward-looking guarantees beyond no Actual statements are financial performance. we to to call. results and discussion and differ statements and obligation our operations, statements not from this of these update after materially future to undertake which may statements,

uncertainties well discussion our earnings in our complete of to refer the and and Securities as as the risks the Exchange information related to a Commission today's filings contained please business, For release. with

all in are non-GAAP results indicated, that to with earnings our otherwise follow provided slide GAAP year-over-year and deck. release non-GAAP comparisons. reconciliation all is measures Unless the A of with

now For in as a certain the is of financial discussed to Investor forward-looking the posted measure GAAP in reconciliation guidance detail on deck the corresponding website. slide non-GAAP our guidance, available Relations

turn I'll Vlad. over that, the With to call

Vladimir Shmunis

and afternoon, call. welcome Good to our earnings fourth XXXX quarter

financial expert, working look members. a finance Chief and XX Prat as experience, Segal Prat with is Systems years. technology, to RingCentral is an market at new I Bhatt Twitter, Ned technology years Accounting Ned them with seasoned for Intuit executive First, veteran including Cisco Board the I'd accomplished Sachs. more served both. and and over industry having X capital forward to Officer at Goldman like the family. than and welcome of to XX

I QX. our Thygesen off as Board years to on in the thank warmly service be Board for will also Allan X of his he transitioning want

strong billion. to a our total rose year our XX% ended revenue midpoint to We results. note. Now X%, $X.X In above the on rose moving of ARR the QX, guidance.

We free nearly also million, outlook. quarterly profitability margin operating of our well flow XX.X% above and record $XXX with achieved of cash

to XXXX Our positions to strategy beyond. and finish XXXX execute us in our on strong well

new [indiscernible] CEO durable delivering portfolio. To we And over growth professionals cash on-site Sales center; Events, leader. RingSense two, continued maximizing our our generation sales hybrid growth of the cash our robust on reducing term. value intelligence flow communication end, turning native long RingCentral a AI X our SBC to for and while first for virtual, strategy first events and flow per TAM deliver our recently to one, materially contact multiproduct have our new free products core; and by platform added and our RingCentral into expanding platform. conversation AI three, driving that free RingCX, from share

right-to-win platform infused in capabilities. and rooted contact [ business our global, includes and webinars industry-leading is reliable, with featured ] events, cloud PBX, that Our now center meetings, all AI cloud state-of-the-art video fully communications

delivering testament SMB. the RingCentral XXXX, consecutive in named we market. competitive solution are And to firm Unified Research, the A as year. just Magic for report Report in We to continue to independent for As contact Gartner Aragon was Worldwide intelligent ability leader a an center this research RingCentral's Quadrant differentiated believe November ninth superior, that third-party named RingCX a a As a excited the leader is a industrial our Service, testament for a in to leadership, in Communications

XXX,XXX customers and across have growing, are a serves proud We business to mid-market SMB. $X.X billion profitable and recurring is built revenue that enterprise, over

a $X ARR generate major billion that milestone has to proud report This our particularly segment customers as or define we more, achieved that is this am which enterprise, for $XXX,XXX just Within in of company. I ARR.

our In Fortune X companies. Notably, solutions Microsoft a within for of the our our utilize to driver car large and of the almost add alongside Fortune companies us. world, the in customers brands, in world's one and our we enterprise integrated enterprise testament XX% as Today, post-COVID largest to ability fact, company hotel the count our have environment growth of Microsoft enterprise are with continues service customers XXXX world's X strong largest trust of XXX This strong enterprise value and a products is many the customers. customers Teams. our to environment. majority rental Team's be the with presence and this leading Among to these Teams financial

with Our reason a Republic This Teams in the largest as outlook. U.S. positive the Overall, continues includes new enterprise Airways, a of with RingCentral one customers customers Microsoft the RingCentral. such be growth airlines is to enterprise long-term key integration driver regional advanced select for the

RingCentral Let me noted customers now communications. share their to of continuing choose to just power additional some highlights that why I

compliance picked us of XX.XXX% five the nines achieved breadth which robust regulatory have quarter, historically customers because and depth feature our speaking, of Broadly our and straight set reliability for we or XXnd integrations.

distributed examples Here of field One of offices. large this network wins key expansion and is for the purchased made provider UCaaS Fortune up to connect insurance quarter. seats of are XX,XXX broker that thousands its XXX some

across millions care retailer finally, XXX And added purchased one contracts. stores. power to existing XX,XXX have XXX than company, Fortune seats of solutions communications a dollars to Another X,XXX more who their global a its that is UCaaS global health

employees. customer to of key capabilities integrations already a for reliable this calling embedded One which powerful Teams, and in deployed Microsoft the have is their they

a testament markets $XX current value virtual multiple for These over additional double that events to CCaaS, hybrid for addressable drive into and providing our more and to are intelligence expanding add Team's profitable than long-term the is growth. core strengths, sales. our we deliver us categories opportunity billion, have as and such The now to vectors conversational platform to communications environment. to a ability full Leveraging our adjacencies, in their confidence spend

recognizing functionality, which alike mainly includes disruptive our Industry analytics, adjacencies, one a to of Aragon easy analysts management, being and deliver all AI powerful Research in ability key conversational our and price point. RingCX's easy In easily to automated already ability while quality placed deliver and coaching to maintain use CCaaS. and at to deployed, report, latest the customers are

customers, Fortune we paying over XXX each over have Regarding And now we seats. from RingCX enterprises X,XXX up accounts when November. X accounts, purchased who in launched XX include about these XXXX

now after also We the just second paying of launched RingSense hundreds customers XXXX. for of Sales half having in have

we Lastly, approximately ago, acquired X Events months business. Hopin

well-known of virtual on and RingCentral and key such months. XXX includes HubSpot. this This in a view Spotify, the We hybrid have as businesses are past to Since many Events, our customers platform this hosted events Reddit companies hundreds as happy addition portfolio. it acquisition Fortune relaunching with and few large and as

Harvard SMB We University pricing [ and branding our packaging significantly see level Notably, demand expect ] over because recently ] and for competitor. features our well-known platform. continue a us chose we advanced to of scale addition business user to superior strong and time. of product Harvard AI production video-first [ experience. won Events, capabilities, of recent improvements this for Events the in With we over

believe the XXXX. level While early least end million at new products, collectively Events ARR we of by $XXX we from and RingCX, RingCentral traction the of can already still seeing, it in is our achieve given RingSense are we for

our of new long-term growth. contributors these products meaningful expect to We strategy delivering profitable to be

AI forward, in communicates. going by will Importantly, an approach innovation The works to way strategy of is accelerating. we our first everything our the augmented be pace revolutionizing and AI taking AI multiproduct world do. is industry the

help should competition. We map features our new have and from of a robust AI that products road differentiate best core new the

the experiences. will Stay products both to many more and tuned course and announcements Enterprise of customer March. at year, are we Over announce the for this some of innovations employee innovation at AI-rooted that end Connect enhance planning exciting

we others. as our service Vodafone valuable BT, global that strategy. will includes Brightspeed broad first family pleased formerly other I Centurylink, Charter our join as now AI Communications, multiproduct amongst We of who vein, In leverage will AT&T, provider welcome and members [indiscernible] execute on our go-to-market that to am known capabilities

Italy, of landing IKEA, recent enterprise XX,XXX-seat And Vodafone, a with certainly Vodafone excited Germany. least, in about XXXX, super started but with we we're expanded Speaking and and at And Vodafone last U.K. with profitability. wins the not Portugal Germany in deal into Vodafone we Spain.

in We have greatly to over operating XX% exiting margins XXXX XX% expanded XXXX. our from improving profitability with

We adjusted, the also doubled for unlevered $XXX more our than free flow million cash year. to

We continue to and and expect to cash free flow drive in margin expansion generation beyond. further XXXX robust

]. value laser-focused XXXX improvements are Board to creating management shareholder and [ entire in and and team Another is minimizing I in and meaningful delivering senior committed SBC important our on beyond. the factor

on as our to a Sonalee In company. closing, multiproduct will business profitable we provide more well shortly. color and an leaner, portfolio becoming we stronger, exited are XXXX more way AI-first

and we strategy back our large, [ happy executing. optimistic are heads-down our leading and is ] opportunity future, helm to I'm at I'm chapter. the RingCentral's next Our be clear, is about

thank that, you, to call turn Sonalee. let the and With over me

Sonalee Parekh

range. and year. Vlad. was will guidance and $X.XX of for midpoint X% guidance $XXX from discuss was XX% of ARR Thanks, up XXXX revenue billion the now then subscription I the year In fourth year-over-year, last provide full our our quarter XXXX. highlights of versus QX, up above million

Within XXX seasonally SMB, ARR versus in grew stabilize. TCV XX% strong million-plus the begun large enterprise billion. grew environment year, X believe a demand deals. $X to and good We with to ARR rose our for resulting Our X% the last in we mid-market saw deals and We XX%, year over ARR year. traction last finished has versus QX,

XX% both $XXX CCaaS ARR CCaaS. our saw and of include Moving to TCV total we UCaaS base. large, represents than CCaaS. Once ARR million-dollar-plus more million deals of now again, our over

prior referring gross Now above XX%, margin to Subscription moving to quarters. profitability. again was noted. unless Overall be $XX. results, ARPU consistent non-GAAP otherwise with I'll was

seeing good our with are we traction new products. Additionally,

sold corporate ARPU and higher and to are seats that products already than be to RingCX accretive for retention thousands over have new our time. at We expect RingSense and Sales ARPUs of average

above XX.X%, points our Operating last rose versus XX% guidance margin of XXX year. for basis

the our efficiency meaningful business Our to drive significant continues and profitability. in the in and on increased focus leverage our operating productivity increase

$XX quarterly, cash of flow generated record. Importantly, we free quarterly adjusted a million, unlevered

balance In Moving notes sheet. December, of million to our repurchased XXXX $XXX convertible value we XXX nominal approximately million. our for

During of we an million average X.X the approximately $XX. at repurchased price quarter, shares also

full the to turning Now year.

Let few a me takeaways. share key

we delivered the growth First, was that market. above

our profile. flow transformed and cash meaningfully we Second, generation free profitability

includes reduction, in investing that policy allocation capital both debt our against share executed inorganically. innovation, and repurchase organically we and Third,

provide let some each. about more Now me details

second up We began regarding see of billion Total revenue growth. $X.X First, the XX%. stabilization demand of was in half XXXX. of to

operating over total continue Second, by declined we flat. as incremental our from and free This XXX rising subscription added in partners XXXX, revenue, profitability. as be a while expense, teams keeping roughly flow marketing marketing sales XX.X% and basis the expenses resulted This value reduction optimize We points operating year disciplined in $XXX in on revenue in year to of versus they compensating versus last X.X% cash which productivity points margins, unlevered sales spend, and our was increasing the million basis adjusted, create. driven XX.X%. increase of the to percentage last of our based to margin XXX

we capital commissions flow, have increase working year, in for flow optimize and cash unlevered undertaken free our free by cash free our efforts our flow of exceeded million. midpoint guidance cash million Regarding which profitability of as our we reflects significant generated roughly as the improve well $XX channel the upfront increasing to efficiency. $XXX adjusted, The

executed policy shared. previously that against we capital our we allocation have Lastly,

of convertible X.Xx sheet able We turns the strengthened our by over notes million to we a XXXX to XXXX down XXXX. our net debt we convertible adjusted almost and compared reduce to EBITDA, X our as XXXX, at notes we exited year discount, our million were In repurchased balance and at gross debt million. XX XXX meaningful $XX of

$XX.XX million also roughly shares repurchased approximately or $XXX We per million share. XX for

Board Our our we million currently $XXX repurchase $XXX million, on authorization. by remaining authorization our and have increased total

platform event products. XXXX, lot repurchase our business in one, on in development share net continuing And from and launch organic efficiency spend and to: drive on three, in a SBC expand inorganic invest allocation In priorities both focused expense and on around growth; the of centered to profitability increasing significantly an capital while our accomplished approach and reducing acquired We new two, the and many Hopin continue we to and front investments. disciplined remaining to share by productivity; deleveraging, deploy invest are a four, XXXX. Lastly, the financial dilution.

Let of these me priorities. each now on expand

remained business investing UCaaS Growth our First, to continues stable expand. core business growth. in our drive market to large and the as in is

of Additionally, the increase profitability. end as Vlad $XXX expect to XXXX; noted, contribute we by ARR at and our products million of meaningfully expanding new second, least TAM

we beyond, expenses. operating revenue and we Going continue than forward, in believe XXXX faster can to grow

efficiency. commissions increasing highest We and marketing includes will to partners continue to resources discipline we reallocating and focus where increased channel ROI. see and sellers to the paid with This on sales

Third, and very importantly, SBC.

on the team noted, compensation senior Board and the Vlad management reducing dilution. As are stock-based and laser-focused

to grants XXX compensation stock-based basis from in new expect We coming XXXX. XX% levels. by in net over total by reduce XXXX results in approximately points This XXXX down

We expect further beyond. XXXX improvement in meaningful and

cash to pay by against and March maturity priority. XXXX net million down, our XXXX Xx. the executing a XXXX. deleveraging its our key of XX, $XXX trend XXXX capital priorities, addressing portion outstanding Finally, a is remains of our free XXXX ratio retire our guidance in our flow to allocation Based convert XXXX. date XXXX post We to plan the utilize will closer convert leverage and at December converts on

cash leverage fully credit to BB converts ratio, gives improving flow our strong free growth options XXXX and low maturity. addressing prior rating us strong numerous and Our for

Beyond addressing an between returns. how to allocate investments and free our to with strength take market of the our and business. our and opportunity of where the we investments values inorganic the includes inherent the advantage and This converts, will organic flow we currently share see us dislocation cash repurchases, highest

significant We to intermediate XXXX reduce will all count growth of share our and expect allow the term. share to flow drive in these per us unlevered XX% approximately adjusted, free in cash actions in

in remain to turn that with improvement the environment further is conditions. in me and business the current or let no deterioration Embedded trends Now macro expectation guidance our guidance. stable

of expect X%. quarter X% X% EPS of of subscription margin of to to revenue X%. $X.XX. XX.X%, to first of Non-GAAP growth XXXX, growth the For we operating revenue $X.XX Total non-GAAP

and $X of QX roughly We resources charges in also RingCX million million $X to RingSense. such expect to as products to restructuring with new incur our connection of the in reallocation

XXX total to X% the the XX% XX%. is subscription X%, down percentage X% This we XXXX, revenue be Non-GAAP as XXXX. Stock-based in compensation year basis full in growth at approximately revenue XX% approximately expected expect is XXXX, versus X%. revenue XXXX. For up growth of a of to from and of points of margin operating to midpoint

further revenue a improvement in We of compensation in and are also targeting a stock-based percentage XXXX as meaningful beyond.

EPS of $X.XX. non-GAAP to expect We $X.XX

Lastly, roughly million versus expect unlevered represents we XXX basis adjusted $XXX flow point increase $XXX cash margin of XX.X% This XXXX. an a to free or million.

all delivered achieving margins was and in In free summary, on top profitability in while guidance. flow flow. our we margin and to stock-based of we the compensation. percentage that significant year we above-market in expand, Building flow while XXXX margins combined is free free XXX cash a and we which line improvement continue record have This improvement XXXX, in a SBC growth cash as achieved to over reducing the operating reflected expect points revenue cash in shared basis

and well and in financial XXXX beyond. set We multiproduct have margins our up strong foundation, are deliver believe in put growth place on of strategy we a expanding I to and

questions. let's open that, With the call for

Operator

Our is Marshall from first today Stanley. Instructions] with Morgan Meta question [Operator

Meta Marshall

could given speak management of with in some any just of into you lot role, has are to, traction X And the you role over been different seeing change back the customers. were you clearly, the RingCX, new Vlad, a whether just stepping in that of CEO on last there between just objectives maybe Maybe then guys months. Great. kind

that new that Or the customers into sell is to Just initiatives being sold largely to any installed base? today?

Vladimir Shmunis

Sure.

has new a around new So months. look, few as changes. for couple you the of management, Look, say, been

expect little that period and coming technology that was look me a would and So a a I focus you more whatever large can obviously, fresh things, momentum and that continued. taking on bit I back innovation. say carried think at we're company But into with

saw prepared I in think remarks, focus and product introduction. renewed as becoming you there new the multiproduct company is on a

word you the little product maybe So me from bit more the can management often expect hear to than a prior from here.

continual is there and on profitability profitable concentration growth. And and focus

change. to going not is that So

SMB, want some origins enterprise. were an is to I a is company, plan few RingCentral, confusion SMB maybe a with what is, there it, RingCentral, about back indeed -- think from we've call our retreating but in all-market of That one to last better ago into large spent part I Another my expanding that not months -- decade SMB. highlight the is. was including

$X it be business. a heard it is -- the us. vector most away for a to not it's that from As particular, you growth in today, It's now billion in billion And and am enterprise, not $X neither something would walk people I. continues

the getting Teams believe remarks, we now So XXXX you you've faster I XX% And our of as that in the Fortune extremely it amongst customers. with grows the count overall. And are than heard -- within company we we're ecosystem. traction prepared pleased enterprise

not users clear, or a but [ are close I that these be users. we're half to that to in Teams it $XXX,XXX-plus think, ARR and these seats ] of means deals, are you company, So it so actually XX% large have XXX saying real over are

this me will So continue hope that, segment great perform. to really that gives

Operator

with next The Siti question from Mizuho. is Panigrahi

Sitikantha Panigrahi

margin impressive top if But at very now from decelerating flow digit now cash Sonalee, growth your I generation. expansion 'XX. look high XX% single line in to and

this XXXX baked to into to Or needs key you what back this double-digit growth growth? guidance? year are possibility the in to assumptions there for or And a for what And embedded sort the driver you happen? what guidance? in So your of is that get conservatism

Sonalee Parekh

out seeing I'm your there. approach take address some really, did we for I to conservative is I free asked because line, And year for revenue mean, on to uncertainty on deliberately this the for it. We On all way we're it's guide flow. me a macro it. still think there you cash top and thanks glad profitability Firstly, great question. comments secondly, it. important really

to of wanted have because software in and the across I uncertainty, guide. think the up all if that prudent reported you now, to be that companies look we

And back we This building what in strong double-digit something we being drive I is growth. place I today. very we based strongly do And not on are prudent. to blocks very This would operation. the say that we're is is that can can believe have realize an already

You've as at our heard a our but to products feedback of ability receiving about new and Vlad, to upsell, confidence past very products analyst gives products positive our from talk the and have least we're $XXX And call to lot I'm well. these me the from Customer scale new environment. by 'XX. been impacted have out that million the me current of by macro in of ARR on you've going end impact heard a will which

But as we our macro important these growth. tailwinds, do believe improves, be percentage will point tailwinds the several to

and are together products, the to improved now. key X% incremental or growth those reacceleration we talked high So getting single the with a digit from new think as from above the that result core of about that the growth retention, just you catalysts

want In to expansion the terms have it just I've one that XXX XXXX is guided which to, of make I that point higher. would margins, is margin other points, for been basis

made to incentivization. 'XX gen including the and business and some growth channel in new customer investments drive in in However, products, demand around we've

have we deliberate a made of also cash. compensation But a our decision to to stock-based shift portion

operating in point of resulted both headwind together to basis about those margin. elements So XXX a

And would the model. able we due in in been continue So year deliver the terms beyond and that to better operating this that to it leverage next expect year, guide. to expansion to the be margin have annual much of

Operator

question Terry Truist Securities. next Tillman is The from with

Terrell Tillman

Sonalee. there, Thanks extra for that color

just I'm part on conservatism, going understand maybe to then this the how And from a million million to trying talking the even we teens to ARR, single comfortable of question the enterprise I we on million $XX 'XX. curious mean, into $XX ARR need [ like here multipart question second of are for ARR in assume steepness is or target at enterprise XX% should there, kind first with of of is $XXX low Just the above 'XX. growth. we're even much my just Just 'XX? end or ]

Sonalee Parekh

And deliver again, we actual last will a feel share leaving just I all continue RingCX. achievable updates of that. So by on very mean, number. that conservatism the look to you the we've the like that of But driven be the that we've certainly will we lion's that terms think to give to opportunities is million or quarter we across will introduced we in in will that mainly it, the $XXX so. That new point, target for products set, milestone be but

And I we our thought guidance, very the importantly, about think specifically when be decided on conservative XXXX. we to for ramp

much and see in more to to beyond. expect hit that So of XXXX

XXXX, I'd So strong like second half 'XX in really, of say, certainly contribution. very very, and Terry, then

Operator

with Ryan The Barclays. question MacWilliams from next is

Ryan MacWilliams

to implied the quarter. growth year-over-year -- see fourth Great the to in quarter, revenue similar growth first the

changes get see the linearity we do are improve of overall in generally? starting to you you quarter? where like the in macro? Like better So are the of see terms conditions at end bookings And the any things

Sonalee Parekh

Yes.

linearity, on So question. great

heard So last about that it is in change the you've this last talk way assuming was bookings The of exaggerated no quite in particularly and X much more quarters seeing linearity. that for couple and year we've quarter. me that the month quarters to the final guided of really back-end loaded,

that's loading. So back-end more

us we seen some months. some the to in out XX macro However, trends heard of call that the have in last you've stabilization XX

that. cycles, deal particular, things deployments, in approvals, like size, like things And sales

today assumes a see stand do continued that stabilization seen as we QX now. And certainly the into are continue that guidance We've we So stabilization. stability. we where just

Vladimir Shmunis

Yes. Bookings just bookings little add a pretty strong. to Look, And that are bit. want I to good. are actually

in a us instability more for macro, upsell Given still of bit challenged. bit a little is

So particular. when in I logos mean and new bookings, we say new business

we would the there, what are well bode we demand strong okay? that's future. seeing And for think So really

are rightsizing. and you turn can Issue pretty will is important saw releases economy remarks, a upsell tailwind. as a segment SMB release you too which press logos. is hopefully, our $X.X into our recovers, and cases and certain -- prepared also of our billion And But is And is going as the signing this into back bit downsell. the with a comment, doing. how I more from as some enterprise businesses just But the went in this logos business, to segment, this and we is very well look, strong. continue new make up But

it's high that feeling are general say from is would it's say my -- frothy. out certainly But -- there. would I far that being I things So a general healthy

Operator

next The America. Funk from of is question Michael with Bank

Michael Funk

I could. if Vlad, for One

playbook is with improvement and subscription-based roll smaller slowing in in a growth gain to model Vlad, So up competitors scale.

Sonalee her of mentioned inorganic capital a potential during as earlier remarks. use

in rolling potentially So view, at improve smaller RingCentral grow what competitors your against your argument is the up faster and scale margin and position. to dominant market share

Vladimir Shmunis

so Hopin It firstly, well are and by recent sense. means no Look, Yes. make to has we to averse highlighted it's us. We've how for M&A. acquisition our doing

of So would will be competitor. it adjacency a in versus I the Hopin say an that case, more

would that different would buying provide or think and look set growth. a acquiring this. up like TAMs and going well as to be, think, we business for long-term that I into are whole after the deals SAMs. to new new adjacencies, But by at tailwinds it there And long-term ways you're would

about were that, one amongst be you mixed. in many in results these of As reasons mergers have one little a do space where folks bit do think far relatively such about are other? efficiencies I But garnered. as competitors, platforms, they that if as what buying a say, it, can then up our run the multiple talking some the look, they where the we're be to that from of it's yielded industry then matter competitors, platforms, direct would even recent do move there various would to our we examples types

be to need a little just more you bit careful. So

our I flow expansion business. numerous do cash price, certainly, our you size right But free natural profitability, can in we or the would importantly, at never are of opportunities a And given we acquirer say and tell look we stability no. that we natural recent that at our and And consolidator. very most cash routinely feel

lookout. a on always So

Michael Funk

That for forward NDR. to in week certainly host next the you helpful was and very look Boston

So to forward then. look seeing I you

Operator

question Samana with The next from is Jefferies. Samad

Samad Samana

It's as kind of a well. multi-parter

up But just the against we big fit just the then some your of you CCaaS XXXX versus UCaaS you some with? least maybe products, kind they of portfolio. ecosystem you what of about because about the growth at growth maybe big differences think the other think And partner think the how events, are versus also what partners rates. on about just should of So there as certainly, into versus where I we in touch companies provide has new assuming been ARR expansion that if for ISV sales, Vlad,

Vladimir Shmunis

no, Look, when companies you're RingCX Look, I to RingCentral NICE great some is which saying questions. assume by you're with, we hosted of Center, the Contact referring partner inContact. vis-a-vis

use I proven to designed of multi-thousand are market enterprise assuming different they are NICE to have address complicated cases. question segments Look, the have is the right. a -- So cases. They and inContact different well-established success and in large, and able use very contact By leader. hosting seat centers with

of nice the a And very in niche end upper market. the they sell

see of larger streamlined this multiyear years, as this, of obviously has And workflows. quite to relationship. more opportunity end customers, for And with more the where the with simpler that a the said an is in that's come successful some old. even with and for them Having we this us been them bottom and stay a simpler, committed cost-effective. the but have integration at differentiated product. to we opportunity simple we That's clearly with lot So market it over we well an to as maybe deploy, to saw use,

the of we We we've truly doubled months. in notice. think And we X I it people mentioned -- disruptive number taking And pricing. logos about are are positioning are with

we're And very success. a Look, pleasant for result. So have breeds with of some We that but frankly, early it's surprise positive. us. happy larger that But already pretty customers are was success signs in seats, the thousands -- early,

we now, X that for believe will So the coexist.

Sonalee Parekh

CCaS to just about your growth answer Samad, breakdown. question So bookings UCaaS,

not or of grow you faster can I markets. and I certainly see specifically to do in know we're than certainly a for bit bookings and think growth firstly, these We can don't and on the So the where made earlier We each by guide give you But about we believe product. just of bookings market embedded guiding. upside we the we there. guide color we comments believe do

So about the talking could is when data where I market, We of sort we mid-single. think talk about UCaaS third-party I'm above significantly that. grow

will And in both then And below faster third-party data what terms But it's believe we again, of RingCX for market, overall, will that. think market segments. certainly, I in than CCaaS, the saying. be the we well is those of above XX% grow

Operator

The with Sachs. from next is Goldman question Kash Rangan

Kasthuri Rangan

et over back good cetera. a talked it's lot What to the Sonalee have satisfied rate. business. agree look Where sure, I'm But of you you At Vlad, being the see growth, RingCentral the reaccelerating to founders see like inherently And new next opportunities products, that out? pointed good growth get can few always you untapped this you as about do with more mean Yes. I innovation company not for to than back. direction product will years? does they're are founders, Vlad, in anybody, growth it's people. stage, the the involved single-digit new

next the put you your strategy and could the in your context doing what are real aspirations product be we new differently do in how for of -- years? the company few So put the that that things

Vladimir Shmunis

on at executing of we exactly I that outlined. Yes. Yes. early the so strategy say, Look, would you've the are, stages

what you you particular X in multiproduct company. is talking becoming needs NPIs, about for are simple, So one to people a I technology have are a company, trained for who go product sounds a et for are you area, it base product we and specialists new maybe existence another frankly, you where particular particular and sure, introductions, to It have now have okay, time can public from add. that force case, product, about in to I first X really single product now a tell only address actively we cetera. -- what's remember, sales and X big your that as the deal, where area where sell to X use solution, actually a only support, our

a lift. be done times to several needs now everything So is which over, heavy

new buyer us personas. very provides new think worth for up opens squeeze But TAM. a here us, might importantly, it largely the we that expands cumulative be because TAMs And our juice with

-- introductions, already in okay? RingCX if at okay? or So you quarter, look it as your over look, increases the just So market our last we've addressable recent XXX introduced just reintroduced addition to has TAM well increasing, And we've logos. had

a with was and last head-to-head against Events, we a We we've announced win okay? a also a very win repackaged a Events -- announced competitor, very major major let's That's win very say, and well-funded That deal. was RingCentral well-known -- have big quarter, today. that Harvard

signs think So early of to these that successes come. we are

from wiz, points Because that company it's products, these you guess it, million can be the as $X.X goalpost RingCentral billion years, we've If additional of meaningful. for about would certainly is $XXX you new well, it X in say, gee I think worth And today, was set of a it if $XXX But million. okay? it deal, it's of had big growth. is another we that, a

would into this that digits. put is double itself by And So us early.

would introducing be I on manage. market. That into the which we little center core gets market, belief mean, per by a bit product than that large, contact not growing cloud be is the traditional the So But introductions, faster squarely here UCaaS RingCX to cannot is products, new hard redoubling quarter.

So it will growth driver. be a

Events buyer is us. completely for persona a different

marketing to products. We able do to something departments sell and with and our are that able sales never we're to departments traditional now

meaningful meanwhile, base. our in So we And stability we to see going that's business. believe continued be a

to new We logos, are substantial both covered that. I in able SMB enterprise. and gain already

we mark I $X.X over of can, that back believe into that this get we double-digit will optimistic And adding cross So that. even I and think time, up. billion beyond as growth, the be all I'm

a have large a -- which in we of but we grossly are are in playing still the are And do playing And profitable have importantly, one lift, we space. team. few we underpenetrated. most mean for large, the and one the markets strong heavy companies companies, I it's profitable of

Operator

is next with Koontz Ryan The Needham. question from

Ryan Koontz

decision it that's CCaaS new the bump whether competitors types legacy want like criteria UCaaS or Zoom environment I on competitive maybe of forefront? or And impact maybe seeing how want the buy is more AI. customers your shift you Dialpad on changing or AI focused and you're that the toward to And into, and seeing player and the the you how about just it's are of to that ask products. features shift

Vladimir Shmunis

doing. RingCX, on very AI-first having as see traction AI company. and RingSense platform there. technology, ourselves than out I comment little we are. ourselves. good that more question are Dialpad Yes. I'll would Well, an We or do bit in won't is maybe our any concentrated saying is our on speak Zoom leveraging particular, a just which look, I anyone about is is else of what that or them AI

much Our least. growth mind is my at in very

tied people center against be a it quality, or way AI-first in go for way My transactions an money AI from, And radically as feature changing power incumbents. specifically, we up reduce set example, much the by is but technologies, availability look, let's [ and understanding just replicate IVAs is With game product, let's to handle that LLMs. And can shift versus to service very because competitive And more the letting a equalizer. a contact we their with entire need to okay? more don't approach, great AI staff. industry customer just agents hey, of companies empower at ] is them save being

more which for products to So of particular, have be we're would Events, more is is it we'll we okay, absolutely up which X a both about is coming that Again, for for the Connect, tailwind. and innovation. Enterprise year. it a highlighting. RingCX, in Same ripe these AI at think And next lot great some say

answer market? said done, straightforward. is is is product Now do core people in why least, relatively RingCentral as all far and And as the concerned, the when look, to me at our buy options the other is given

as they always stable, we're a, So us buy we're up. because

for Xs we many this being And have So is best, We to industry this years for okay? availability and reason. told, counting. absolutely -- X are X is one

Second unfortunately, regulatory are and do are compliant still that reason China. allowed example, Wherever there we countries is global we to the are for are closed, world. some business, and across

going services either. we're there offering to not not be and a compliant regulatory we're okay, So

check we'll else, everywhere But all the boxes.

pioneered So safe from we've -- that for added We've been reselling companies integrations large okay? feature then okay? set, that the else and small some for is of, you simply And can be out or we the and perspective can have using us, -- that even it's there okay? of easily data than feel us features think space. there anyone is Then includes said And to there, importantly, and commitment very our the more competitors more longest. that larger We privacy. can

our that from And be in are And commitment We levels. that don't privacy commitment coming our are or highest just data religious it's customers as to is data. about the something is just our we about concerned our about security. a customers' tend data to

buy is this So RingCentral. people why

AI. it does with to do Now what have

don't platform People, innovation If next with solution, then this with you get But overlay compare quite that's with to think of take you industry-leading, simply of RingCentral us will that that now this AI need take truly and know we then beyond. secure a people okay? our combine the when experiencing status And AI global, buy powerful AI. in we you I size our the and state-of-the-art you into what AI don't on okay? alone, it, stable, decade if for more all given field, are that could something capabilities, will magnitude have happen differentiated. and

opportunity obviously, share better can a that all and okay? but at And and and much again, So what We'll speak between I you profitability there early really the moving of then. even are innovate urge themselves, have Enterprise Connect. results would expect are more balance past. said please We're and boundless, to to very towards you literally we in as to perhaps the growth years super differentiate us to visit we will for

innovation Our is commitment to unwavering.

that or so saving area. area with that in goodness company. It on on engineers over We have the skimping more well involved expect X,XXX is we're not an

Operator

question today Peterson with Raymond is final Brian James. from The

Brian Peterson

A cash quarter. nice this flow free on job the ramp

appreciate mix on perspective environment. of a there. I going the enterprise hear changes products, via Any has all the partner new love any that the Sonalee, let at But color top what's about would notable or demand me How to direct in trended? versus the get on funnel. there

Sonalee Parekh

Yes, sure. flow. cash kind the for free Thanks on words

not the a I So in give so really what we're we're seeing segments. we real there's just from segments house. big in in of demand reflecting the we is did One from change trends out. I enterprise would more what say much would what the And or no this on a stabilization that how continued strong stabilization, terms comment tend you assuming we're breakdown seeing don't We SMB. to really environment, in saw of side is guidance seeing, improvement. see to of call of the terms But the thing in it's terms

churn in of be see some or improve So net to if today. the to if we improvement, to what see for to of you example, environment an retention, taking we've would the we out were were terms steps traction from upsell we're upside then in around that laid

that in reductions we I team to you the the extremely XXXX. hopefully, And are Vlad saw say SBC. in senior other I on meaningful the there's thing call, and way just and before meaningful, I focused want management conclude guided The that

not XX%. So from to But down going guiding coming we're stop we're XX% there. to

basis will hundred down to grants for XXXX. but forward you expect several drive 'XX should we our down. as be point on And XX%. to by bring look Net you that approximately continue new further will improvement

This cash And seriously you we growth. free is take noted free per for thanks XXXX for per the the we and have something about free flow flow flow flow, deliver in very free care will XX% share. but cash that is share mentioning calling cash and year-over-year cash will out you that growth the hopefully, that we

coming weeks. that the to up with to time home. point several forward be all next sure taken that, of the wanted was look I over you more in But just spending conferences So

Operator

The now concluded. has Thank you conference today's attending for presentation.

may You disconnect. now

RingCentral (RNG) 20 Feb 242023 Q4 Earnings call transcript