[August 06, 2018] |
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RingCentral Announces Second Quarter 2018 Results
RingCentral,
Inc. (NYSE: RNG), a leading provider of global enterprise cloud
communications and collaboration solutions, today announced financial
results for the second quarter ended June 30, 2018.
Second Quarter Financial Highlights
-
Total revenue increased 34% year over year to $161 million.
-
Software subscriptions revenue increased 32% year over year to $146
million.
-
Annualized Exit Monthly Recurring Subscriptions (ARR) increased 32%
year over year to $630 million.
-
RingCentral Office® ARR increased 37% year over year to $548 million.
-
Enterprise ARR increased over 110% year over year to $122 million.
-
GAAP operating margin was (2.9%), down 0.7 points year over year,
while non-GAAP operating margin was 8.8%, up 1.8 points year over year.
"We had an outstanding second quarter, led by continuing strength in our
mid-market and enterprise businesses and momentum from our channel
partners. Our enterprise business again grew triple digits with
significant wins from landing new logos and expanding into existing
enterprise accounts," said Vlad Shmunis, RingCentral's founder, chairman
and CEO. "We believe our relentless focus on product innovation
continues to differentiate us in the marketplace and it underpins our
broad-based momentum. With our growing lead in the cloud communications
industry and the large underpenetrated market opportunity in front of
us, we believe we are well positioned to achieve our goal of exceeding
$1 billion in revenue in 2020."
New Accounting Standard
The Company adopted the new standard related to revenue recognition
(Topic 606) effective January 1, 2018. The financial information in this
press release is prepared in accordance with Topic 606, and the
comparison period amounts used to calculate growth rates are based on
amounts that have been adjusted from previously reported amounts to
conform to the requirements of Topic 606.
Financial Results for the Second Quarter 2018
-
Revenue and Gross Margin: Total revenue was $161 million for
the second quarter of 2018, up from $120 million in the second quarter
of 2017, representing 34% growth. Total GAAP gross margin was 76.3%
for the second quarter of 2018, up 1.0 points compared to 75.3% in the
second quarter of 2017.
-
Net Income (Loss) Per Share: GAAP net loss per share was
($0.10) for the second quarter of 2018 compared with ($0.03) for the
second quarter of 2017. Non-GAAP net income per diluted share was
$0.19 for the second quarter of 2018, compared with $0.10 per diluted
share for the second quarter of 2017.
-
Balance Sheet: Total cash and cash equivalents at the end of
the second quarter of 2018 was $567 million, compared with $555
million at the end of the first quarter of 2018.
Recent Highlights
-
RingCentral was added to the Russell 1000 index after equity markets
closed on June 22, 2018. The Russell 1000 index is comprised of the
largest 1,000 companies across various Russell indexes. The Russell
Indexes are widely used by investment managers and institutional
investors as index funds and benchmarks for both active and passive
investment strategies. Approximately $8.6 trillion in assets are
benchmarked against the Russell indexes.
-
RingCentral added Japanese and Brazilian Portuguese language support
to its end points and admin portal. This provides fully localized
experience for end users and administrators located in global offices
in Japan and Brazil.
-
Announced RingCentral has been ranked #1 in IHS Markit's 2018 North
American Unified Communications as a Service (UCaaS) Scorecard. Named
the leader for the second consecutive year, RingCentral achieved this
recognition due to its market share position, business growth, product
capabilities, and continued traction among mid-market and large
enterprise businesses.
-
RingCentral Glip® was recognized as an industry leader in the 2018
Aragon Research Globe for Mobile Collaboration report. Glip was chosen
as an industry leader because of its mobile first design,
best-in-class user experience and ability to serve as a digital
communications hub and increase workforce productivity.
-
RingCentral won the 2018 API Award for best in communication APIs,
given by API World. RingCentral was recognized for technical
innovation and adoption by the developer community.
Financial Outlook
Full Year 2018 Guidance:
-
Raising software subscriptions revenue range to $595 to $600 million,
representing annual growth of 28% to 29%. This is up from our prior
range of $588 to $594 million and annual growth of 26% to 28%.
-
Raising total revenue range to $649 to $656 million, representing
annual growth of 29% to 30%. This is up from our prior range of $638
to $647 million and annual growth of 27% to 28%.
-
Raising GAAP operating margin range to (3.5%) to (2.9%), up from the
prior range of (4.0%) to (3.4%).
-
Raising non-GAAP operating margin range to 8.2% to 8.4%, up from the
prior range of 8.1% to 8.3%.
-
Raising non-GAAP EPS range to $0.66 to $0.70 based on 86.0 million
fully diluted shares. This is up from our prior range of $0.61 to
$0.65.
Third Quarter 2018 Guidance:
-
Software subscriptions revenue range of $152.0 to $154.0 million,
representing annual growth of 27% to 28%
-
Total revenue range of $165 to $168 million, representing annual
growth of 27% to 29%
-
GAAP operating margin range of (4.5%) and (3.5%)
-
Non-GAAP operating margin range of 8.0% and 8.2%
-
Non-GAAP EPS range of $0.15 to $0.17 based on 86.0 million fully
diluted shares
For a reconciliation of our forecasted non-GAAP operating margin, see
"Reconciliation of Forecasted Operating Margin GAAP Measures to Non-GAAP
Measures." We have not reconciled our forecasted non-GAAP EPS to GAAP
EPS because we do not provide guidance on it. We do not provide guidance
on forecasted GAAP EPS because of the inherent uncertainty and
complexity involved in forecasting the intercompany remeasurement gain
(loss), which could be a significant reconciling item between the
non-GAAP and respective GAAP measure. The intercompany remeasurement
gain (loss) is affected by the movement in various exchange rates
relative to the US Dollar, which is difficult to predict and subject to
constant change. Accordingly, a reconciliation of the non-GAAP financial
measure guidance to the corresponding GAAP measure is not available
without unreasonable effort.
Conference Call Details:
-
What: RingCentral financial results for the second quarter of
2018 and outlook for the third quarter and full year of 2018.
-
When: Monday, August 6, 2018 at 2:00PM PT (5:00PM ET).
-
Dial-in: To access the call in the United States, please dial
(877) 705-6003, and for international callers, dial (201) 493-6725.
Callers are encouraged to dial into the call 10 to 15 minutes prior to
the start to prevent any delay in joining.
-
Webcast: http://ir.ringcentral.com/
(live and replay).
-
Replay: Following the completion of the call through 11:59 PM
Eastern Time on August 13, 2018, a telephone replay will be available
by dialing (844) 512-2921 from the United States or (412) 317-6671
internationally with recording access code 13681614.
Investor Presentation Details
An investor presentation providing additional information and analysis
can be found at http://ir.ringcentral.com/.
About RingCentral
RingCentral, Inc. (NYSE: RNG) is a leading provider of global enterprise
cloud communications and collaboration solutions. More flexible and
cost-effective than legacy on-premises systems, RingCentral empowers
today's mobile and distributed workforce to communicate, collaborate,
and connect from anywhere, on any device. RingCentral unifies voice,
video, team messaging and collaboration, conferencing, online meetings,
and integrated contact center solutions. RingCentral's open platform
integrates with leading business apps and enables customers to easily
customize business workflows. RingCentral is headquartered in Belmont,
California, and has offices around the world.
©2018 RingCentral, Inc. All rights reserved. RingCentral, RingCentral
Office, RingCentral Glip and the RingCentral logo are trademarks of
RingCentral, Inc.
Forward-Looking Statements
This press release contains "forward-looking statements," including but
not limited to, statements regarding our future financial results, our
GAAP and non-GAAP guidance, our revenue growth and our expectation of
exceeding $1 billion in revenue by the end of 2020, our strength in the
mid-market and enterprise segments, and our channel partner momentum,
our growing lead in the cloud communications industry and our market
opportunity. Forward-looking statements are subject to known and unknown
risks and uncertainties and are based on assumptions that may prove to
be incorrect, which could cause actual results to differ materially from
those expected or implied by the forward-looking statements. Among the
important factors that could cause actual results to differ materially
from those in any forward-looking statements are: our ability to grow at
our expected rate of growth; our ability to add and retain larger and
enterprise customers and enter new geographies and markets; our ability
to continue to release, and gain customer acceptance of, new and
improved versions of our services; our ability to compete successfully
against existing and new competitors; our ability to enter into and
maintain relationships with carriers and other resellers; our ability to
manage our expenses and growth; and general market, political, economic,
and business conditions, as well as those risks and uncertainties
included under the captions "Risk Factors" and "Management's Discussion
and Analysis of Financial Condition and Results of Operations," in our
Form 10-Q for the quarter ended March 31, 2018, filed with the
Securities and Exchange Commission; and in other filings we make with
the Securities and Exchange Commission from time to time.
All forward-looking statements in this press release are based on
information available to RingCentral as of the date hereof, and we
undertake no obligation to update these forward-looking statements, to
review or confirm analysts' expectations, or to provide interim reports
or updates on the progress of the current financial quarter.
Non-GAAP Financial Measures
Our reported financial results and financial outlook include certain
Non-GAAP financial measures, including Non-GAAP software subscriptions
gross margin, Non-GAAP other gross margin, Non-GAAP operating margin,
Non-GAAP operating income (loss), Non-GAAP net income (loss) and
Non-GAAP net income (loss) per diluted share. Non-GAAP software
subscriptions gross margin is defined as Non-GAAP subscriptions gross
profit divided by GAAP subscriptions revenue. Non-GAAP other gross
margin is defined as Non-GAAP other gross profit divided by GAAP other
revenue. Non-GAAP operating income (loss) is defined as operating income
(loss) excluding share-based compensation, amortization of acquisition
intangibles, and acquisition related matters. Non-GAAP operating margin
is defined as Non-GAAP operating income (loss) divided by total GAAP
revenue. Non-GAAP net income (loss) is defined as GAAP net income (loss)
excluding share-based compensation, intercompany remeasurement gains or
losses, acquisition related matters, amortization of acquisition
intangibles, non-cash interest expense associated with amortization of
debt discount and issuance costs related to our convertible senior
notes, and the related income tax effect of these adjustments.
Non-GAAP diluted shares outstanding include the impact on shares used in
per share calculations of our outstanding capped call transactions. Our
outstanding capped call transactions are anti-dilutive in GAAP earnings
per share but are expected to mitigate the dilutive effect of our
convertible notes and therefore will be included in the calculations of
non-GAAP diluted shares outstanding.
We have included Non-GAAP software subscriptions gross margin, Non-GAAP
other gross margin, Non-GAAP operating margin, Non-GAAP net income
(loss) and Non-GAAP net income (loss) per diluted share in this press
release because they are key measures used by us to understand and
evaluate our operating performance and trends, to prepare and approve
our annual budget, and to develop short and long-term operational plans.
In particular, the exclusion of certain expenses in calculating Non-GAAP
software subscriptions gross margin, Non-GAAP other gross margin,
Non-GAAP operating margin, Non-GAAP net income (loss), and Non-GAAP net
income (loss) per diluted share provide useful measure for
period-to-period comparisons of our business.
Although Non-GAAP software subscriptions gross margin, Non-GAAP other
gross margin, Non-GAAP operating margin, Non-GAAP net income (loss), and
Non-GAAP net income (loss) per diluted share, are frequently used by
investors in their evaluations of companies, these non-GAAP financial
measures have limitations as analytical tools and should not be
considered in isolation or as a substitute for financial information
presented in accordance with GAAP. Because of these limitations, these
non-GAAP financial measures should be considered alongside other
financial performance measures.
Reconciliations of the Company's non-GAAP financial measures to their
most directly comparable GAAP measures has been provided in the
financial statement tables included in this press release.
Other Measures
Our reported results also include our annualized exit monthly recurring
subscriptions, RingCentral Office® annualized exit monthly recurring
subscriptions, enterprise annualized exit monthly recurring
subscriptions and net monthly subscriptions dollar retention. We define
our annualized exit monthly recurring subscriptions as our monthly
recurring subscriptions multiplied by 12. Our monthly recurring
subscriptions equal the monthly value of all recurring charges in effect
at the end of a given month. We believe this metric is a leading
indicator of our anticipated subscriptions revenue. We calculate our
RingCentral Office® annualized exit monthly recurring subscriptions in
the same manner as we calculate our annualized exit monthly recurring
subscriptions, except that only customer subscriptions from RingCentral
Office® customers are included when determining monthly recurring
subscriptions for the purposes of calculating this key business metric.
We calculate enterprise annualized exit monthly recurring subscriptions
in the same manner as we calculate our annualized exit monthly recurring
subscriptions, except that only customer subscriptions from customers
generating $100,000 or more in monthly recurring revenue are included,
We define Dollar Net Change as the quotient of (i) the difference of our
Monthly Recurring Subscriptions at the end of a period minus our Monthly
Recurring Subscriptions at the beginning of a period minus our Monthly
Recurring Subscriptions at the end of the period from new customers we
added during the period, (ii) all divided by the number of months in the
period. We define our Average Monthly Recurring Subscriptions as the
average of the Monthly Recurring Subscriptions at the beginning and end
of the measurement period.
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TABLE 1
RINGCENTRAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands)
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|
|
|
|
|
|
|
|
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June 30,
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December 31,
|
|
|
|
|
|
|
2018
|
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
*As Adjusted
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
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Current assets
|
|
|
|
|
|
|
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Cash and cash equivalents
|
|
|
|
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$
|
567,280
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|
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$
|
181,192
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|
Accounts receivable, net
|
|
|
|
|
|
67,015
|
|
|
|
46,690
|
|
Deferred sales commission costs
|
|
|
|
|
|
19,140
|
|
|
|
15,424
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|
Prepaid expenses and other current assets
|
|
|
|
|
|
24,643
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|
|
|
21,512
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Total current assets
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|
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678,078
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|
264,818
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Property and equipment, net
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|
55,076
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|
|
43,298
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Deferred sales commission costs, noncurrent
|
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|
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|
47,085
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|
37,871
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Goodwill
|
|
|
|
|
|
9,393
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|
|
|
9,393
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Acquired intangibles, net
|
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|
|
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|
21,128
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|
|
1,462
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Other assets
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|
|
|
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2,569
|
|
|
|
2,972
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Total assets
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$
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813,329
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$
|
359,814
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Liabilities and Stockholders' Equity
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Current liabilities
|
|
|
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|
|
|
|
|
|
|
|
Accounts payable
|
|
|
|
|
$
|
6,366
|
|
|
$
|
7,322
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|
Accrued liabilities
|
|
|
|
|
|
76,382
|
|
|
|
54,977
|
|
Current portion of capital lease obligation
|
|
|
|
|
|
943
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|
|
|
-
|
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Deferred revenue
|
|
|
|
|
|
73,240
|
|
|
|
62,917
|
|
Total current liabilities
|
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|
|
|
|
156,931
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|
|
|
125,216
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Convertible senior notes, net
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|
|
|
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356,788
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|
|
|
-
|
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Capital lease obligation
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2,829
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|
|
-
|
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Other long-term liabilities
|
|
|
|
|
|
5,757
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|
|
|
6,252
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Total liabilities
|
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522,305
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|
|
131,468
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Stockholders' equity:
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|
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Common stock
|
|
|
|
|
|
8
|
|
|
|
8
|
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Additional paid-in capital
|
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508,728
|
|
|
|
434,840
|
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Accumulated other comprehensive income
|
|
|
|
|
|
2,795
|
|
|
|
2,998
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|
Accumulated deficit
|
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(220,507
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)
|
|
|
(209,500
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)
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Total stockholders' equity
|
|
|
|
|
$
|
291,024
|
|
|
$
|
228,346
|
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Total liabilities and stockholders' equity
|
|
|
|
|
$
|
813,329
|
|
|
$
|
359,814
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* Prior-period information has been adjusted for the adoption of
ASU 2014-09, Revenue from Contracts with Customers (Topic 606),
which we adopted on January 1, 2018.
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TABLE 2
RINGCENTRAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands, except per share data)
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Three Months Ended
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Six Months Ended
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June 30,
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June 30,
|
|
|
|
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2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
|
|
|
|
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*As Adjusted
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*As Adjusted
|
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Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Software subscriptions
|
|
|
$
|
145,959
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|
|
$
|
110,896
|
|
|
$
|
282,919
|
|
|
$
|
215,026
|
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Other
|
|
|
|
14,873
|
|
|
|
9,023
|
|
|
|
28,256
|
|
|
|
17,127
|
|
Total revenues
|
|
|
|
160,832
|
|
|
|
119,919
|
|
|
|
311,175
|
|
|
|
232,153
|
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Cost of revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Software subscriptions
|
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|
|
26,716
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|
|
|
21,795
|
|
|
|
51,242
|
|
|
|
42,058
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Other
|
|
|
|
11,350
|
|
|
|
7,766
|
|
|
|
22,498
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|
|
|
14,809
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|
Total cost of revenues
|
|
|
|
38,066
|
|
|
|
29,561
|
|
|
|
73,740
|
|
|
|
56,867
|
|
Gross profit
|
|
|
|
122,766
|
|
|
|
90,358
|
|
|
|
237,435
|
|
|
|
175,286
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|
Operating expenses
|
|
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|
|
|
|
|
|
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|
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Research and development
|
|
|
|
24,814
|
|
|
|
18,617
|
|
|
|
47,465
|
|
|
|
35,704
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Sales and marketing
|
|
|
|
79,023
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|
|
|
56,361
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|
|
|
150,943
|
|
|
|
110,626
|
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General and administrative
|
|
|
|
23,583
|
|
|
|
18,007
|
|
|
|
45,032
|
|
|
|
33,812
|
|
Total operating expenses
|
|
|
|
127,420
|
|
|
|
92,985
|
|
|
|
243,440
|
|
|
|
180,142
|
|
Loss from operations
|
|
|
|
(4,654
|
)
|
|
|
(2,627
|
)
|
|
|
(6,005
|
)
|
|
|
(4,856
|
)
|
Other income (expense), net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
|
(4,836
|
)
|
|
|
(9
|
)
|
|
|
(6,247
|
)
|
|
|
(88
|
)
|
Other income, net
|
|
|
|
1,338
|
|
|
|
578
|
|
|
|
1,411
|
|
|
|
700
|
|
Other income (expense), net
|
|
|
|
(3,498
|
)
|
|
|
569
|
|
|
|
(4,836
|
)
|
|
|
612
|
|
Loss before income taxes
|
|
|
|
(8,152
|
)
|
|
|
(2,058
|
)
|
|
|
(10,841
|
)
|
|
|
(4,244
|
)
|
Provision for income taxes
|
|
|
|
139
|
|
|
|
57
|
|
|
|
166
|
|
|
|
108
|
|
Net loss
|
|
|
$
|
(8,291
|
)
|
|
$
|
(2,115
|
)
|
|
$
|
(11,007
|
)
|
|
$
|
(4,352
|
)
|
Net loss per common share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
|
|
|
$
|
(0.10
|
)
|
|
$
|
(0.03
|
)
|
|
$
|
(0.14
|
)
|
|
$
|
(0.06
|
)
|
Weighted-average number of shares used in computing net loss per
share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
|
|
|
|
79,089
|
|
|
|
75,867
|
|
|
|
78,717
|
|
|
|
75,278
|
|
* Prior-period information has been adjusted for the adoption of ASU
2014-09, Revenue from Contracts with Customers (Topic 606),
which we adopted on January 1, 2018.
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TABLE 3
RINGCENTRAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
|
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|
|
|
|
|
|
|
Six months ended June 30,
|
|
|
|
|
2018
|
|
|
2017
|
|
|
|
|
|
|
|
|
*As Adjusted
|
|
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
$
|
(11,007
|
)
|
|
$
|
(4,352
|
)
|
Adjustments to reconcile net loss to net cash provided by operating
activities
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
11,476
|
|
|
|
7,842
|
|
Share-based compensation
|
|
|
|
30,864
|
|
|
|
19,562
|
|
Amortization of deferred sales commission costs
|
|
|
|
8,673
|
|
|
|
5,543
|
|
Amortization of debt discount and issuance costs
|
|
|
|
6,154
|
|
|
|
-
|
|
Foreign currency remeasurement (gain) loss
|
|
|
|
778
|
|
|
|
(463
|
)
|
Provision for bad debt
|
|
|
|
1,137
|
|
|
|
1,003
|
|
Deferred income taxes
|
|
|
|
11
|
|
|
|
(12
|
)
|
Other
|
|
|
|
210
|
|
|
|
113
|
|
Changes in assets and liabilities
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
|
(21,462
|
)
|
|
|
(4,711
|
)
|
Deferred sales commission costs
|
|
|
|
(21,603
|
)
|
|
|
(14,605
|
)
|
Prepaid expenses and other current assets
|
|
|
|
(2,795
|
)
|
|
|
(2,623
|
)
|
Other assets
|
|
|
|
(626
|
)
|
|
|
501
|
|
Accounts payable
|
|
|
|
(499
|
)
|
|
|
(1,427
|
)
|
Accrued liabilities
|
|
|
|
17,736
|
|
|
|
3,136
|
|
Deferred revenue
|
|
|
|
10,323
|
|
|
|
7,969
|
|
Other liabilities
|
|
|
|
(495
|
)
|
|
|
(24
|
)
|
Net cash provided by operating activities
|
|
|
|
28,875
|
|
|
|
17,452
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|
Purchases of property and equipment
|
|
|
|
(11,856
|
)
|
|
|
(8,814
|
)
|
Capitalized internal-use software
|
|
|
|
(5,367
|
)
|
|
|
(3,488
|
)
|
Cash paid for acquisition of intangible assets
|
|
|
|
(18,470
|
)
|
|
|
-
|
|
Restricted investment
|
|
|
|
-
|
|
|
|
530
|
|
Net cash used in investing activities
|
|
|
|
(35,693
|
)
|
|
|
(11,772
|
)
|
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|
Proceeds from issuance of convertible senior notes, net of issuance
costs
|
|
|
|
449,457
|
|
|
|
-
|
|
Payments for capped call transactions and costs
|
|
|
|
(49,910
|
)
|
|
|
-
|
|
Repurchase of common stock
|
|
|
|
(15,000
|
)
|
|
|
-
|
|
Proceeds from issuance of stock in connection with stock plans
|
|
|
|
11,729
|
|
|
|
17,449
|
|
Taxes paid related to net share settlement of equity awards
|
|
|
|
(2,986
|
)
|
|
|
(1,118
|
)
|
Repayment of debt
|
|
|
|
-
|
|
|
|
(14,840
|
)
|
Repayment of capital lease obligations
|
|
|
|
(741
|
)
|
|
|
(181
|
)
|
Net cash provided by financing activities
|
|
|
|
392,549
|
|
|
|
1,310
|
|
Effect of exchange rate changes
|
|
|
|
357
|
|
|
|
(330
|
)
|
Net increase in cash, cash equivalents and restricted cash
|
|
|
|
386,088
|
|
|
|
6,660
|
|
Cash, cash equivalents and restricted cash
|
|
|
|
|
|
|
|
|
|
Beginning of period
|
|
|
|
181,192
|
|
|
|
160,355
|
|
End of period
|
|
|
$
|
567,280
|
|
|
$
|
167,015
|
|
* Prior-period information has been adjusted for the adoption of ASU
2014-09, Revenue from Contracts with Customers (Topic 606),
which we adopted on January 1, 2018.
|
|
|
|
|
|
|
|
|
TABLE 4
RINGCENTRAL, INC.
RECONCILIATION OF OPERATING INCOME (LOSS)
GAAP MEASURES TO NON-GAAP MEASURES
(Unaudited, in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
|
Six Months ended
June 30,
|
|
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
|
|
|
|
|
|
|
*As Adjusted
|
|
|
|
|
|
|
*As Adjusted
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Software subscriptions
|
|
|
$
|
145,959
|
|
|
$
|
110,896
|
|
|
$
|
282,919
|
|
|
$
|
215,026
|
|
Other
|
|
|
|
14,873
|
|
|
|
9,023
|
|
|
|
28,256
|
|
|
|
17,127
|
|
Total revenues
|
|
|
|
160,832
|
|
|
|
119,919
|
|
|
|
311,175
|
|
|
|
232,153
|
|
Cost of revenues reconciliation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Software subscriptions cost of revenues
|
|
|
|
26,716
|
|
|
|
21,795
|
|
|
|
51,242
|
|
|
|
42,058
|
|
Stock-based compensation
|
|
|
|
(1,136
|
)
|
|
|
(997
|
)
|
|
|
(2,012
|
)
|
|
|
(1,722
|
)
|
Amortization of acquisition intangibles
|
|
|
|
(150
|
)
|
|
|
(150
|
)
|
|
|
(301
|
)
|
|
|
(301
|
)
|
Non-GAAP Software subscriptions cost of revenues
|
|
|
|
25,430
|
|
|
|
20,648
|
|
|
|
48,929
|
|
|
|
40,035
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Other cost of revenues
|
|
|
|
11,350
|
|
|
|
7,766
|
|
|
|
22,498
|
|
|
|
14,809
|
|
Stock-based compensation
|
|
|
|
(165
|
)
|
|
|
(41
|
)
|
|
|
(299
|
)
|
|
|
(73
|
)
|
Non-GAAP Other cost of revenues
|
|
|
|
11,185
|
|
|
|
7,725
|
|
|
|
22,199
|
|
|
|
14,736
|
|
Gross profit and gross margin reconciliation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Subscriptions
|
|
|
|
82.6
|
%
|
|
|
81.4
|
%
|
|
|
82.7
|
%
|
|
|
81.4
|
%
|
Non-GAAP Other
|
|
|
|
24.8
|
%
|
|
|
14.4
|
%
|
|
|
21.4
|
%
|
|
|
14.0
|
%
|
Non-GAAP Gross profit
|
|
|
|
77.2
|
%
|
|
|
76.3
|
%
|
|
|
77.1
|
%
|
|
|
76.4
|
%
|
Operating expenses reconciliation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Research and development
|
|
|
|
24,814
|
|
|
|
18,617
|
|
|
|
47,465
|
|
|
|
35,704
|
|
Stock-based compensation
|
|
|
|
(3,906
|
)
|
|
|
(2,342
|
)
|
|
|
(7,000
|
)
|
|
|
(4,201
|
)
|
Acquisition related matters
|
|
|
|
-
|
|
|
|
(178
|
)
|
|
|
-
|
|
|
|
(443
|
)
|
Non-GAAP Research and development
|
|
|
|
20,908
|
|
|
|
16,097
|
|
|
|
40,465
|
|
|
|
31,060
|
|
As a % of total revenues non-GAAP
|
|
|
|
13.0
|
%
|
|
|
13.4
|
%
|
|
|
13.0
|
%
|
|
|
13.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Sales and marketing
|
|
|
|
79,023
|
|
|
|
56,361
|
|
|
|
150,943
|
|
|
|
110,626
|
|
Stock-based compensation
|
|
|
|
(7,189
|
)
|
|
|
(3,926
|
)
|
|
|
(12,230
|
)
|
|
|
(7,451
|
)
|
Amortization of acquisition intangibles
|
|
|
|
(1,099
|
)
|
|
|
(76
|
)
|
|
|
(2,015
|
)
|
|
|
(180
|
)
|
Non-GAAP Sales and marketing
|
|
|
|
70,735
|
|
|
|
52,359
|
|
|
|
136,698
|
|
|
|
102,995
|
|
As a % of total revenues non-GAAP
|
|
|
|
44.0
|
%
|
|
|
43.7
|
%
|
|
|
43.9
|
%
|
|
|
44.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP General and administrative
|
|
|
|
23,583
|
|
|
|
18,007
|
|
|
|
45,032
|
|
|
|
33,812
|
|
Stock-based compensation
|
|
|
|
(5,201
|
)
|
|
|
(3,321
|
)
|
|
|
(9,323
|
)
|
|
|
(6,115
|
)
|
Non-GAAP General and administrative
|
|
|
|
18,382
|
|
|
|
14,686
|
|
|
|
35,709
|
|
|
|
27,697
|
|
As a % of total revenues non-GAAP
|
|
|
|
11.4
|
%
|
|
|
12.2
|
%
|
|
|
11.5
|
%
|
|
|
11.9
|
%
|
Income (loss) from operations reconciliation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP loss from operations
|
|
|
|
(4,654
|
)
|
|
|
(2,627
|
)
|
|
|
(6,005
|
)
|
|
|
(4,856
|
)
|
Stock-based compensation
|
|
|
|
17,597
|
|
|
|
10,627
|
|
|
|
30,864
|
|
|
|
19,562
|
|
Amortization of acquisition intangibles
|
|
|
|
1,249
|
|
|
|
226
|
|
|
|
2,316
|
|
|
|
481
|
|
Acquisition related matters
|
|
|
|
-
|
|
|
|
178
|
|
|
|
-
|
|
|
|
443
|
|
Non-GAAP Income from operations
|
|
|
|
14,192
|
|
|
|
8,404
|
|
|
|
27,175
|
|
|
|
15,630
|
|
Non-GAAP Operating margin
|
|
|
|
8.8
|
%
|
|
|
7.0
|
%
|
|
|
8.7
|
%
|
|
|
6.7
|
%
|
* Prior-period information has been adjusted for the adoption of ASU
2014-09, Revenue from Contracts with Customers (Topic 606), which we
adopted on January 1, 2018.
|
|
|
|
|
|
|
|
|
|
TABLE 5
RINGCENTRAL, INC.
RECONCILIATION OF NET INCOME (LOSS)
GAAP MEASURES TO NON-GAAP MEASURES
(In thousands, except per share data) (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
|
|
|
|
|
|
|
|
*As Adjusted
|
|
|
|
|
|
|
*As Adjusted
|
|
Net Income (loss) reconciliation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net loss
|
|
|
|
$
|
(8,291
|
)
|
|
$
|
(2,115
|
)
|
|
$
|
(11,007
|
)
|
|
$
|
(4,352
|
)
|
Stock-based compensation
|
|
|
|
|
17,597
|
|
|
|
10,627
|
|
|
|
30,864
|
|
|
|
19,562
|
|
Amortization of acquisition intangibles
|
|
|
|
|
1,249
|
|
|
|
226
|
|
|
|
2,316
|
|
|
|
481
|
|
Acquisition related matters
|
|
|
|
|
-
|
|
|
|
178
|
|
|
|
-
|
|
|
|
443
|
|
Amortization of debt discount and issuance costs
|
|
|
|
|
4,784
|
|
|
|
-
|
|
|
|
6,154
|
|
|
|
-
|
|
Intercompany remeasurement loss (gain)
|
|
|
|
|
749
|
|
|
|
(435
|
)
|
|
|
1,023
|
|
|
|
(478
|
)
|
Income tax expense effects **
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Non-GAAP net income
|
|
|
|
$
|
16,088
|
|
|
$
|
8,481
|
|
|
$
|
29,350
|
|
|
$
|
15,656
|
|
Basic and diluted net income (loss) per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation between GAAP and non-GAAP weighted average shares
used in computing basic and diluted net income / (loss) per common
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares used in
computing net loss per share
|
|
|
|
|
79,089
|
|
|
|
75,867
|
|
|
|
78,717
|
|
|
|
75,278
|
|
Effect of dilutive securities
|
|
|
|
|
6,579
|
|
|
|
6,192
|
|
|
|
6,604
|
|
|
|
5,579
|
|
Non-GAAP weighted average shares used in
computing non-GAAP net income per share
|
|
|
|
|
85,668
|
|
|
|
82,059
|
|
|
|
85,321
|
|
|
|
80,857
|
|
GAAP Net loss per share
|
|
|
|
$
|
(0.10
|
)
|
|
$
|
(0.03
|
)
|
|
$
|
(0.14
|
)
|
|
$
|
(0.06
|
)
|
Non-GAAP Net income per share
|
|
|
|
$
|
0.19
|
|
|
$
|
0.10
|
|
|
$
|
0.34
|
|
|
$
|
0.19
|
|
* Prior-period information has been adjusted for the adoption of ASU
2014-09, Revenue from Contracts with Customers (Topic 606),
which we adopted on January 1, 2018.
|
** The non-GAAP adjustments do not have an impact on our income tax
provision due to our continued history of non-GAAP losses and full
valuation allowance.
|
|
|
|
|
|
|
|
|
TABLE 6
RINGCENTRAL, INC.
RECONCILIATION OF FORECASTED OPERATING MARGIN
GAAP MEASURES TO NON-GAAP MEASURES
(In millions, except per share data)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Q3 2018
|
|
|
FY 2018
|
|
|
|
|
Low Range
|
|
|
High Range
|
|
|
Low Range
|
|
|
High Range
|
|
GAAP revenues
|
|
|
|
165.0
|
|
|
|
168.0
|
|
|
|
649.0
|
|
|
|
656.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP loss from operations
|
|
|
|
(7.5
|
)
|
|
|
(5.9
|
)
|
|
|
(22.8
|
)
|
|
|
(18.9
|
)
|
GAAP operating margin
|
|
|
|
(4.5
|
%)
|
|
|
(3.5
|
%)
|
|
|
(3.5
|
%)
|
|
|
(2.9
|
%)
|
Stock-based compensation
|
|
|
|
19.4
|
|
|
|
18.4
|
|
|
|
71.0
|
|
|
|
69.0
|
|
Amortization of acquisition intangibles
|
|
|
|
1.3
|
|
|
|
1.3
|
|
|
|
5.0
|
|
|
|
5.0
|
|
Non-GAAP income from operations
|
|
|
$
|
13.2
|
|
|
$
|
13.8
|
|
|
$
|
53.2
|
|
|
$
|
55.1
|
|
Non-GAAP operating margin
|
|
|
|
8.0
|
%
|
|
|
8.2
|
%
|
|
|
8.2
|
%
|
|
|
8.4
|
%
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20180806005563/en/
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|