RNG - Earnings call transcript Q2 2024

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Operator

Good day, and welcome to the RingCentral Second Quarter 2024 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 Second 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,

with uncertainties well discussion follow in the our earnings in our complete release. Unless of to is refer the and our and and release Securities as otherwise non-GAAP non-GAAP as the earnings risks the Exchange to all information provided related to a indicated, Commission A that with results today's slide all filings are contained of GAAP please business reconciliation year-over-year measures For deck. with comparisons.

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

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

Vladimir Shmunis

solid had again in first traction expectations. contact solidly traction saw end our rose of our and quarter center product. quarter, to native welcome midpoint our of with We AI metrics all the We conference a results cloud second on above million Total this key afternoon, were Good to RingCX, revenue second $X the our guidance above our products, new as XX% with million, call. good quarter. particular, above was high earnings RingCX $XXX guidance.

and expanding flows. another Importantly, strong of profitability also we delivered cash quarter

above customers which comprised over represent of free of which margin are down our points an of XX% about ARR ARR. and quarterly being Sonalee million key a some These enterprise that that of are large of or XXX,XXX highlights achieving X flow, include Mid-market our see and ARR customers groups. percentage XX.X%, will of provide customers major less We total our of which customer XXX,XXX businesses X total between levered SBC ARR. more by total represent of and cash detail are which XX% was generate XX operating year-over-year guidance. $XXX ARR. are record. as about which and business about shortly, of but generating than And our XX% generate ARR XX,XXX represent our businesses small with which which Driving to

UCaaS results core reflect continued all across Our our business strength groups. customer in

also in number We're seeing around deals Our year-over-year QX in trend in Enterprise on deals deal double-digit and in average with of the growth million QX. XXXX. line enterprise of X business growth which was Value or We QX, Total size closed XX TCV such Contract over acquisitions with the the in both continued upsell.

deal grew large by of TCV XX% average the Importantly, year-over-year.

want seen enterprise have we our many As last in integration. quarters, few teams customers the deep

Teams. In utilizing grow differentiator fact, are with need to used in our also see that collaboration, solutions but our large enterprises many win. we We for important teams best-in-class half a telephony. quarter key large our the presence why that were alongside with to and an had reason tremendous again opportunity deals and more of are than this of Microsoft integrated is customers This a

financial and and professional Enterprise, verticals, public also health continue Within to gold retail strong sector. see which include traction we in our services, care,

million on-prem this industries, of our estimate gold to opportunity capture disproportionately least we to that time. to opportunity the nature mission-critical Given the vertical. seats in XXX are expect positioned over We we these the in voice represents move uniquely cloud at

have in services financial we large quarters, care. and health wins discussed past enterprise In our

specifically to significant X/X gold announced are XXX company we our want the the with This vertical. a win fees Last I largest XX,XXX in of quarter, PBX, flagship RingCX in which quarter, call comprises strength cloud the out UCaaS, This our believe we nearly large seat retail seeing sector, with our we product was in Fortune retailer. win history.

seat we as XX,XXX-plus the well. won in quarter, two vertical retail This deals

RingCX XX,XXX a is first of Europe stores that retailer large with across The seats. hundreds purchased

in seats. The largest that the second region XX,XXX purchased retailer APAC The Asia Pacific in company's history. is a RingCX deal well-known our

team macro. continually support challenging due portfolio to greater us customer is our a ongoing our reliability. SMB of focus to This well In RingCentral as integration as from deep combination proven signs and base. of we're our early our seeing our vertical-specific transition a company, cases solving customers sizable and share integrations, groups, allows in use get stabilization experience on mid-market small These multiproduct ability because complex of despite selected best-in-class critically customer which wallet to

ahead, improvements Looking should retention growth net believe and higher. drive these we

trust, strategy do or we why innovation our driven is success So TIP win? as partnerships of and we by Our differentiated call it.

its a easily our RingCX U.S. manufacturer XX.XXX% achieved one X,XXX reasons carrier-grade the is RingCentral reliable, why for purchased deployable and this differentiator. the selected scalable. uptime The deliver straight XXth reliability selected quarter platform combined [indiscernible] that and It tenders and tested with to is manufacturing continues communications to to secure our platform a We Trust. ability battle cloud communications key compliance of be seats a company us plants. XXX at our and Fortune power quarter for First,

our RingSense, marked have platform, history. short RingCX, this CCaaS company's company. most into multiproduct Innovation. launched sales, In The portfolio offerings past intelligence native our events, hybrid has the the product, transformed a RigSense conversation our we RingCentral This for time, months events AI innovative in one us product. of and periods XX our

the from we least will target. of achieving XXXX. million across of these products seeing are X positive this in momentum set products. are confident already on I'm all months impact exit our by February achieve at We growth, our XXX ARR of this early strong a new products having a new we year, and end of target In our

Let me provide are product. we each new the traction detail more seeing on with

RingCX. First,

is both is is a We easy and over for natively our industry-leading XXX are million-plus new AI books than sequentially. priced. deploy TCV integrated is RingCX to wins doubled it XQ, which RingCX more and UCaaS is a account. and now higher net our deals because of XX% has demand including nearly by up reliable expansion RingEX [indiscernible] product modern been revenue first delivering fueled that customers, seeing largely solution. XX% over in This with X strong RingCX RingCX. now our The RingEX RingCX, disruptively average per has use

features, XXX the RingCX add-on, than importantly, provides the In this QX, AI rapid RingSense continued a of and currently HubSpot and This which controlled powered as product including we we availability conversational ServiceNow, rollout. added Teams. with phase integrations innovation of premium quality analytics. Microsoft out Notably, management for in pace more additional in rolled QX, is

our we're price seeing is TCV deals traction RingCX, nearly X/X our RingSense lease roughly early attaching However, alongside purchased RingCX, strong with $XXX. that also of already When included combined RingSense. is X million-plus

a States. is as seats added and The quarter Midwestern X,XXX RingCX. as of the a largest of the win RingCX gold RingSense well use of and RingEX, communications a to allowing The XX also in United RingEX RingCX large collaboration contact XXX seats county, country as and the major last CX sector, combined is example RingEX across one bring for on power good our in county X verticals. county will power a center, key U.S. example great RingSense such in for and public A the purchased to its The treasury seamless of its departments workforce elections. win

seeing be RingCX, offer RingCX use the RingCX customer customers complex that first center continue more Vodafone winning with recent the its RingCX, also our with RingCentral great we will base. cases. early momentum With product, Building reselling to which to major on our we upmarket the traction all targets with contact global announcement is GSP are

leisure presence travel increased global the quarter, the health we significantly and with a multinational During care large our and organization. firm

UCaaS RingCentral contact credit especially large also CCaaS We center solution. voice gold enterprises, customers. strong RingEX best-in-class RingCentral our with integrated a vertical to Many while Contact demand Gartner unions customers RingEX, power [indiscernible] Magic X combination to RingCX looking integration offer. combined X the workflows where is unique mission-critical have a added And Quadrant leveraging in with for to products. streamline between leading deep Center of the is AI, we

scalability, stakes. RingEX continue case, In set integration and to reach, reliability, RingEX RingCX security, ] [ breadth so. doing with with the be and GF and table and RCC, unique compliance, robust depth in their of [indiscernible] are global feature standards

year-over-year. stands at $XXX million Contact ARR, Center now total up Our business XX% of

Customers sequentially. care ability malls allow and now We provide deliver have comprehensive with to for almost Now of easy-to-access AI-powered customers have choose Sales tripled on bookings conversations, about team's over moving Sales. to to net XXX RingSense customers what a managers on new performance. view insights its RingSense the summarize record coaching, and for for

from to Tarrytown now creates review productivity strong needing all Salesforce integration interactions CRM QX, their significant and example, our toggle to thus applications. gains. a without leading with keep and with allow of between In combined XXX% our conversations. now such introduced insights track of which goals, our we tools largest pharmacy in with Expocare, customers that teams For is integrations captures able HubSpot ITD This, as Microsoft, new America their reported the with innovation realizing focused customer Continuing to cadence.

now over was sequentially XX% growth XX% sequentially. with Customer RingCentral bookings up to And on over count events. of

aerospace the large consulting X-figure New some, wins with large management leading a included the computing and largest the global companies global of one personal world's deal company.

front, base, and as all all to is can net LinkedIn traction users innovation register believe are we share new integration, we well which we driver products, a introduced as across key new we the The of seeing allows within new events On increase to attract existing our retention. our customers upsells LinkedIn. which a directly

certain updates with you milestones. as new achieve providing be will on products we our periodic We

TIP. to but Back not Partnerships. Last least,

allows differentiated service which multiple verticals our partners our selling includes motion, This As business, direct our to go-to-market will ecosystem, and providers, segments, and with global combined strategic multiproduct we and key It us scale channel business. mode have partners, to continue our ecosystem. to successfully we access leverage that been part allows our success to scale to routes expansive and us market. has our important of competitive to an

now me quarter. give some from the Let highlights you

First, GSP.

GSP business total of again Our ARR. than XXX [ grew and business overall over now our represents ] our faster

UCaaS them Our deep [ go-to-market peers. to I'd are with and like have UC our launch Cox comprehensive U.S. to ] and Cox this GSP warmly welcome future the [ in that both provider solutions products family. GSP with we growing the plans largest for ] by CC technology broadband and to UCaaS engagements and selected our Communications, and Today, the of their network to later provider built private RingCentral businesses support year. partners on unmatched CCaaS

of [ cloud. meaningful customers as provides move on-prem the us in follow have rollout [ to GAP X providers network another XXXX. with successful late in Charter now We channel total, MSOs ] the a Cox XX including Cox ] help of more to

with expansion be presence. reselling our user and is to RingCX presence Vodafone their key already scaling I this that as mentioned, to GSPs Our In in base. will the recently international announced way, leading Europe it

to also We geographies into with continue new expand Vodafone.

retailers. toys, example, Ireland largest and second at a Smyths toy country's quarter, in of we the the one sizable already launched in For deal won

We total XX XX global by expect a from to XXXX, markets today. up have through of Vodafone access to

Now on to partnerships. strategic

to additional assets Mitel's acquired platforms. Mitel. and customer First, we MiCloud related Connect UCaaS relationships and certain In Skype QX,

is that remaining customer cloud-based in While us this we to of we experience will provide hundreds their journey. cloud of already, migrated customers' allow better for Mitel's thousands a have transformation their digital expect

nonexclusive and be forward, Mitel partners. RingCentral Moving will

to on Earlier announced extension of relationship. Avaya. our year, Now this and we

on-prem We QX, with XX several win are all also recent commercial traction, with digital we with announced going a own new existing their the their In North jointly one either or new hybrid of calling. Avaya enable to will allowing transformation. their cloud Avaya locations pace top already DDS who Office hybrid solution from by by or products approach messaging with ACO, or that RingCentral This well another customers busiest seeing of as including solutions. powered an RingCentral in company This allows Avaya employees Avaya's ports through power in use to to are states. Avaya includes on-prem the with integrate to win their ACO good a to as customers America retailer and large auto at same product, Cloud transition customers

transition are for that of Meanwhile, Avaya's drive they we RingCentral's cloud. with cloud messaging use well believe VDA significant and can our base We AI-powered Avaya and to remains digital to capabilities large positioned the the opportunity collaboration. UC

execution first continuation In business strong we summary, Demand UCaaS QX results solid. in remains our were saw core the in quarter. the that a of

are partnerships. quickening, Our is traction, new we're innovation of gaining our our products and expanding pace

continuing value for over reduce and time. all free cash while and free We cash flow believe We stock-based are share. doing will this generate per to flow profitability, all compensation improve our stakeholders this grow

We to I'm quarters path, are we and on an and that years continue confident exciting the in execute can ahead.

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

Sonalee Parekh

I'll highlights Vlad. provide the outlook solidly traction up high last XX% up third subscription X% RingCX. versus $X.XX range. and the billion year-over-year, last up was was our XX% with Thanks, then from was quarter above good from quarter currency, million, versus million of In revenue and ARR early up the XX% for second guidance of ARR business year. Adjusted CCaaS for ARR our year-over-year. of year. year, full was discuss $XXX constant QX, $XXX end

noted, large of Vlad roughly up average flat of number last the XX%. the deals was on deal each but TCV year, was As versus value

Additionally, only the our UCaaS value year. deals over grew XX% last versus faster, up of even large

of While UCaaS our in is continued that leading and size our believe has an size are illustrative deal encouraging business opportunity and us we wins still of large the impacted front growth X and years, of of the is last macro growth in market adoption. indicator stabilizing the the

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

the as new growth from products overall ARPUs our increasingly product become penetration new new large expect ARPUs. time, we solidly than overall Over increases, and base its products contribution Our to within to current higher are accretive ARPU.

XXX of XXX our a declined points revenue was XX.X%. driven rose to outperformance is and basis margin revenue discipline continued XX.X%, Sales as The expense percent guidance. spending. by above marketing basis and Operating year-over-year to around total which points outperformance

area focused second half higher the continues to this we for This expect and drive company, further and productivity be improvements compensation of with commensurate the sales we incremental As keeping an remain created. value in on the drive to of focus year.

we the to Importantly, back into able support continuing innovation and while margin drive expansion business reinvest growth. to are to

cash $XX million. XXXX, partners $XXX of second $X other of from we strategic This to of $X In million free flow. cash last free the XX% up interest Moving million, of year. includes quarter payments generated million cash versus and flow and received restructuring of

revenue. points Moving to stock-based stock compensation. XX% to remain brands. versus Stock-based compensation fell We last disciplined on year XXX total of basis

entire we As a have SBC management reducing said is team. before, key priority for the

share XX% of XXXX, is the by new are year, XXXX our down reduce last levels. As first of of to stated goal almost share versus XX% net previously grants half which of grants ahead

in outlook our our a improved to SBC quarter. as percent again, also, have SBC We last total XX.X% of of be now prior and revenue of ahead XX.X% guidance XXXX, expect

stock-based this have both cash as growing free reduced compensation compensation base. and significantly with time cash Along large ever focus ARR our free disciplined flow continued efficiency to quarter. first progress Importantly, This spend and initiatives. on flow exceeded we the from the a as for leverage operating grow is through made testament to stock-based well

allocation. sheet to balance Moving our and capital

have over made great months strengthening last sheet XXXX, balance XXXX. We QX with X.Xx QX the debt at in at from to to our adjusted progress X.Xx EBITDA net declining XX

outlook positive. our expansion recently was cash future and free Ratings margin Fitch fact, leverage EBITDA from low potential improving for upgraded flow based RingCentral upgraded stable on growth. to its and This outlook In on and

driving high a flexibility. shareholders growth. also be while capital debt cash Going to also share to a considering repurchase based our while for between and forward, on in through flexible to both continue we shareholders repayment disciplined ROI priorities approach preserving these Allocating balanced will financial will inorganic employ remaining and returning

XX%. to $XXX now generated the With framework, color profile. and our notes me let and expect bank our XXXX, flow XXXX We cash balance generate notes address of we our gross and plan access hand, intend we million our XX, credit financial approximately to some give reducing this now portion with you XXXX, free between We lending XXXX free the a the capital. how to allocate convertible at to XXXX remaining given between June and outstanding markets March cash on March debt of to incremental flow the strong by plan with on convertible and cash improving address

Regarding buybacks, an we currently believe that provides share return. repurchase attractive relative

Directors. As this of previously X in plan declining we have by by $XXX shares approximately XX, repurchases of under share our million shares XXXX, fully repurchased Board million for million year. share diluted the June X.X and our paid Resulting authorized count

XXXX. authorization We million total at XX, on have our June approximately $XXX remaining

from are no $X of we more debt XXXX. targeting to end before to Importantly, than the gross today billion billion reduce our $X.X

We least respect to from excess offset fully also plan while flexibility SBC to continue cash. financial via to buybacks. dilution preserving with at All

guidance. Now the subscription and is current improvement material no of with let backdrop, we revenue deterioration that guidance $X.XX in me $X.XX. EPS of of further business in for non-GAAP to our relatively to Embedded margin turn and the expectation revenue of growth conditions. trends XX% the macro operating or X%. growth that stable remain third quarter Non-GAAP expect environment of With XXXX, Total X%.

outlook. to and year, X%. now representing of we billion raising For growth $ of subscription billion, $ We to the total of $X.XXX X.XXX X% our of representing revenue revenue $X.XXX expect billion, X.XXX billion annual full revenue are growth

operating as margin the continue expect XX% business. we non-GAAP We into with back profitability balance to of a reinvesting

XX.X% XX.X% percentage midpoint now of total down at revenue Importantly, from at be as the previously. a expect to we stock-based midpoint, compensation the

XXXX, million XX fully non-GAAP previously. up to we million million million shares to diluted of to as shares $X.XX $X.XX from XX from expect expect $X.XX, also in to outstanding We down XX XX $X.XX now EPS

of to million cash $XXX $XXX $XXX we million, to from Regarding free up $XXX flow, now expect million cash million. flow free

Our restructuring expenditures million. $XX of include partners. outlook $XX continues Cash million cash and interest paid million $XX well as $XX and million certain other to of as for capitalized strategic from of payments of received

summary, In had we strong another quarter.

our right through of We against from materially for will generation this stakeholders while continuing continued is that lowering against are it. the believe our SBC. new our We strongly flow cash value all forward maximize expanding addressable to executing markets returns growth and profitable delivering and durable, strategy look execute core, driving and products strategy to free

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

Operator

Instructions] America. We will [Operator Bank question-and-answer Funk now from of session. begin with the Michael comes first The question

Michael Funk

for Vlad, question. years. of really industry kind contact the structure level you providers question One right? center several whether tonight. left static, you, Thank number see capabilities, higher isn't of voice for add or it was structure Industry a You

expanded portfolio. clearly own your You product

So And outgrow believe allow hear and the portfolio share support have than to your can degree you seen? be that if on to why maybe provide can thought love you will to great. any you we your pricing metrics a would product greater you maintain be to RingCentral if consolidator, industry a discipline

Vladimir Shmunis

question. Yes, Michael, thank you for the

sure So I'm why be we just would understand, would -- make sorry, to to consolidator? asking a you're I make just shared or not sure

Michael Funk

the share be, you a should that in be should portfolio. ex you why more the why you in as consolidator can No.Why And your if discipline be you pricing to cat products environment. believe competitive with add portfolio greater evolving product and

Vladimir Shmunis

and goal triple we Right. planning you market profitable on is I share growth. what we consolidated. down be Is were stated believe double, continue mean? that Our don't to to that

and to they So up. opportunities to profitability, growth we we keep and obviously come evaluate will do open present accelerate much mind for as as an us in opportunities themselves that as the

with at internal our point. are But progress said happy internal that, we having our this and plan quite

the We market are leading UCaaS. in consistently

strong in up coming CCaaS. are We

rapidly. events many Our happy and there logos. RigSense now gaining growing is and customers, traction, are very And and new platform major is it's have gathering platform we

is this our horsepower. under of All own

Sonalee Parekh

here. Mike, Sonalee hi it's

saw Just ARPUs on to in you of terms above price pricing just there ARPU. and couple we a make of $XX. remain obviously, discipline, disclosed And points

place. So opposing taking we have some dynamics

more with we shifting And enterprise. quarters. business the last to as And discounting. deals announced is enterprise those larger quarter slightly comes well some of deals this very our one is obviously, more really successfully big you've So couple as seen

So have that on pricing. an does impact

the my which side, by significantly say, would carry higher you other been remarks, that's on products, new heard But ARPU. offset in scripted have me

growing very, products base, a new very will off they of those today to but are continue So ramp. small

ARPU ARPA, X see I just point And paid focused really per to the average. RingCentral we so around is and But And of Average focus per there how you live focused plus and share our we drive the million other is Revenue on higher innovation se the month much are month. on greater Per of ARPU make I out $XX higher on products. you'll base. overall just where and well. with pricing in that's more $XX think remind more per would the RingSense wallet seat expect new retention seat, so Account And above less on for corporate terms per proposition. RingCX, value way we to as ARPUs see at comes Sales about And of

So hopefully, a pricing. that around answers the bit

Operator

Next Mizuho. Panigrahi question with comes Siti from

Sitikantha Panigrahi

Great.

RingCX the above talked traction about be that your expectation. seems guys to You

you talk $XXX what are do million, seeing of So that this RingCX? could growth by Contact how say Contact of And the yourself driven use about up in the XX%. against the also see then opportunity? cases Where Center, And position sweet Cloud see the spot? you specifically do you much CCaaS you competitor How Center traction? you kind

Vladimir Shmunis

Right.

first So question. let foremost, flagship is, the is -- me product. take center. part our seamlessly Look, first integrated the and is modern first RingCX That of contact with this AI RingEX a

to being at deployment because as existing of too. of RingCX huge just So RingCX prospects. seats large that's use leader a UCaaS accounting. paid Sonalee have very now being million the simplicity, well for that And ease in and to as well with customers number and captive priced mentioned, are is absolute a those mine are this base we resonates we new our And as designed X -- offer RingCX very advantage disruptively for

internationally core values retube the of global course, via about resonating that it now partnership is including Vodafone. it's again, we will be So -- reliability, simplicity, with our integration, available fact security, shared of where

a that's think first of product for this development. stage I at So the

So again, it. we feel very, very good about

can maybe the [indiscernible]. Sonalee you take

Sonalee Parekh

Yes.

much the how the that terms you We of about that out. that by versus growth talked RingCX actually Xx growth of in sequentially. up net of more the customers is the of being don't quarter-over-quarter. and number new terms in of we But we XX% driven if And customer growth So RCCC. disclosed being than bookings break being XX% consider

ahead very in You can we more ARR. that of meaningful overall center. see growth pleased over were today, of where significant our part today, we driving small to And contact hoping and much are time, tracking a become be. And a portion it's although contact will center of this it's already

Operator

Meta comes Morgan next Marshall The from with Stanley. question

Meta Marshall

Great. what breakdown traction you're Maybe particularly kind you your products, of from kind just since a you the type, seeing giving state in stabilization clearly could were lot just a noted ARR on a by markets. perspective? new but play of you But end customer of between wondered any regions types if or that customer seeing a different international of of just you're of seeing Vlad, trends seeing macro just

Vladimir Shmunis

we [indiscernible], growth to time okay? But the business. ability customer actually Look, is believe also enterprise to is recovers, segment we see is that that partnership particularly That outperforming even are given continues that we've our healthier small with it to business. as that to the will currently environment small in macro And pleased customer be group. return stabilize a been by with segment quite still we difficult. that not surprising or our can And disclosing size

So as far as size. by

is we XX,XXX-plus we deal a in reasons. As existing announced far by a look, continue be to have North the as provider. seat geography, But largest. which We APAC, predominantly our American

there. seeing partners. getting good we're GSP a definitely, We're actions through of traction number So

announced you large we our in end of the countries well think I on a noticed And with Vodafone we be prepared win Ireland. track XX in by Vodafone year. remarks, with in to next are as

be So domestically is very internationally. to and believe And positive for there a signs these lot are we both that us. done, all

Operator

question next from James. with The Peterson Brian comes Raymond

Brian Peterson

over curious, term? that of can just what So I partners about the as do -- opportunity we to get that GSP. think think the more you percentage Vlad, ARR, wanted of on how on we base And the momentum to or over I'm you the expand spend Are there about should think to with? long that build could expand time?

Vladimir Shmunis

practice really unique. Yes. but Very our Look, it's good question. GSP differentiated, is

us, We includes practice. other larger enclosed than have our peer. an have to companies no This GSP

said Dallas, XX I now AT&T, Today, Dallas major ] announced [ have goes we on think and we GSPs Vodafone, discount British logos Cox on. we've list like Charter. communications,

already said their this that time we think and said first is this I the that at around we disclosed XX%. So -- that we point, contribution is this I think

So registers. obviously that already

growth whole And tailwind of that us. actually a as a segment is for

two in segment grows this Now ways.

which As through add logos and logos, we are new existing as get the sales forces, our products their channels massive. and

it very growth and that that the as that it In well for and believe for pulling firmly overall driver GSP a up. is will to be continues a core be defined it us. the is defensible I asset mode us as much So growth our

more family ] us. certainly from be with expect I So Cox the business welcoming them and could happier [ not and to

Operator

comes The Rosenblatt. Catharine next Trebnick from question with

Catharine Trebnick

GSP, nice your enterprise channel? a do -- here? the town see growth Back GSP? you this out market traditional you've your the to where had and getting traditional And Or through through market, going you more are opportunities

Vladimir Shmunis

smaller Most former. at think GSPs Cox not of contrary. extra absolutely you if to and the businesses. positioning and notable it's the large. Charter, you us ] They medium-sized is logos sell answer that if for look examples large But are we the -- Short say, but [ medium Yes. There have, forward. are small, going

it's yes, traditional for channels. our now well through as So most as direct

partners. world's count enterprise own our of they as So GSP within with the GSP when most or, leads each we every partners are get by our within footprint. amongst through more the comfortable our way, tend their possibilities logos, come best and to of absolutely some expand particular But be channel as product, traditional GSPs as seeing they we to

Operator

with comes question Power from next The Baird. Will

William Power

since your announcements Vlad, Microsoft last Dynamics Okay. center guess, contact announcement. one new Great. of call Yes, was the the, I

I think you perspective. interesting probably have some all

you with or the noted, flip a providing some approach. increasingly working growth been you native it's contact a good source center of on pushing also that's whether And As of nice your relationship network teams side, the capabilities. underlying course, Microsoft, a own of have partnership with you're

broader love impacts your to maybe you get on the I'd how So too. and/or that perspective think you just maybe industry,

Vladimir Shmunis

as UCaaS Look, early with early, and not with Sure. our for ourselves in and Microsoft, be a it do for speak new I would others. a for and rolling an very them Microsoft's teams it's being happy on view out way, well. RingEX upgrade but our platform. open is with or [indiscernible] selves contact it's us us are product, Look, center to We integrating we integration absolutely

for it the with prior is that, is in delivers the said major And reliability, integrated answers. expect modern paying in is but -- competitive one main fact already benefits what security, is and which the which benefits the forward-looking one one customers. I of it X seamlessly the people mentioned CX case, RingEX, Having the and In every quite offering the of leader RingCentral down when million all market at is respect. any also, basically of that which

Microsoft are on saying absolutely And of with there again, So Microsoft center still majority with products. Microsoft's just Teams, coexist room contact that and seats, brand. with not vast to but is we're look, they other

people other be and and some get will So and will some grow. get Microsoft some will everyone will at we

Operator

The with Wells Fargo. Turrin comes from Mike next question

Unknown Analyst

rest of prior through The was sub the Michael how actually on X potential larger some impact mind David the talking revenue and for quarters. It's of for we beat Would the should work think the the than mechanics year? there of just you about Turrin.

Sonalee Parekh

that. I'll Sure, take

So you saw revenue products. progress which guided. we obviously for carry what expected yes, where line that we terms beat, But will as the how second And of is and terms the drove we of in through, driver our than can the beat end half better in the you from terms was in key really see of also implying new growth. on what top of

was particular, in So RingCX expectations. above

you And was quarter which in we talk in also Vlad pleased business, another ahead strong were about heard which earlier expectations. about. really We stabilization growth had our Enterprise, SMB of double-digit

to is XX% on also other mention of we upsell did that, products, just bit. sizes the with in only of our business the would by side up slightly not recover were be I saw side our see pricing that traction But a enterprise quarter. we in they actually, macro. deal new overall strong impacted thing And One continues but quite and the

in the So apply and how you as factoring QX ahead, with full for clear improvement year. really were or can we not macro. we We're any in we change the guided look

guiding what really based it's today. we have on and we expectations see the So

Operator

in the that, are queue. for With There our questions no further this concludes call today.

may disconnect. You now

RingCentral (RNG) 1 Aug 242024 Q2 Earnings call transcript