RNG
$138.57
Ringcentral
($.04)
(.03%)
Earnings Details
2nd Quarter June 2019
Monday, July 29, 2019 4:05:00 PM
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Summary

Ringcentral Beats

Ringcentral (RNG) reported 2nd Quarter June 2019 earnings of $0.29 per share on revenue of $215.2 million. The consensus earnings estimate was $0.16 per share on revenue of $204.6 million. The Earnings Whisper number was $0.19 per share. Revenue grew 33.8% on a year-over-year basis.

The company said it expects third quarter non-GAAP earnings of $0.18 to $0.20 per share on revenue of $220.0 million to $222.0 million. The current consensus earnings estimate is $0.18 per share on revenue of $219.5 million for the quarter ending September 30, 2019. The company said it expects 2019 earnings of $0.77 to $0.79 per share on revenue of $874.0 million to $877.0 million. The company's previous guidance was earnings of $0.71 to $0.75 per share on revenue of $862.0 million to $866.0 million and the current consensus earnings estimate is $0.73 per share on revenue of $864.0 million for the year ending December 31, 2019.

RingCentral Inc., provides software-as-a-service, or SaaS, solutions for business communications. Its solutions can be used in multiple devices including Smartphones, Tablets, PC’s and Desk Phones which allow communication across multiple channels.

Results
Reported Earnings
$0.29
Earnings Whisper
$0.19
Consensus Estimate
$0.16
Reported Revenue
$215.2 Mil
Revenue Estimate
$204.6 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

RingCentral Announces Second Quarter 2019 Results

Total Revenue up 34%, surpasses $850 million annual run-rate

New record of 30 seven-digit TCV deals

BELMONT, Calif.--(BUSINESS WIRE)--RingCentral, Inc. (NYSE: RNG), a leading provider of global enterprise cloud communications, collaboration, and contact center solutions, today announced financial results for the second quarter ended June 30, 2019.

Second Quarter Financial Highlights

  • Total revenue increased 34% year over year to $215 million.
  • Software subscriptions revenue increased 33% year over year to $195 million.
  • Annualized Exit Monthly Recurring Subscriptions (ARR) increased 32% year over year to $831 million.
  • RingCentral Office® ARR increased 37% year over year to $749 million.
  • Mid-market and Enterprise ARR increased 66% year over year to $386 million.
  • Enterprise ARR increased 88% year over year to $230 million.
  • Channel ARR increased 69% year over year to $235 million.

“We had another strong quarter. Enterprise continues to drive our growth, benefiting from strong contributions from channel. We also reached a new milestone of 30 seven-digit TCV deals,” said Vlad Shmunis, RingCentral's founder, chairman, and CEO. “These achievements are a testament to the strength of our market-leading cloud communications solution that uniquely integrates voice, video, team messaging, and contact center with an open platform and unmatched global footprint. This enables enterprises worldwide to drive productivity enhancements and improve overall customer and employee engagement.”

Financial Results for the Second Quarter 2019

  • Revenue: Total revenue was $215 million for the second quarter of 2019, up from $161 million in the second quarter of 2018, representing 34% growth.
  • Operating Profit (Loss): GAAP operating loss was $7.2 million, compared to a GAAP operating loss of $4.7 million in the same period last year, primarily driven by higher share-based compensation and amortization of intangibles. Non-GAAP operating profit was $20.4 million, compared to a non-GAAP operating profit of $14.2 million in the same period last year.
  • Net Income (Loss) Per Share: GAAP net loss per share was ($0.11), compared to ($0.10) in the same period last year, primarily driven by higher share-based compensation and amortization of intangibles. Non-GAAP net income per diluted share was $0.21, compared to $0.19 per diluted share in the same period last year. The second quarter of 2019 reflected a 22.5% non-GAAP tax rate. There were no material cash taxes given our net operating loss carryforwards.
  • Balance Sheet: Total cash and cash equivalents at the end of the second quarter of 2019 was $568 million. This compares with $549 million at the end of the first quarter of 2019.

Additional Highlights

  • Ranked first in IHS Markit 2019 Unified Communications as a Service North American Scorecard for the third consecutive year. The IHS Markit annual report evaluates the top 10 North American UCaaS providers, based on market share, financial stability, market momentum, service development, and support options.
  • Ranked highest for growth and innovation in the new 2019 Frost & Sullivan UCaaS Radar Report. Frost & Sullivan's first North American hosted IP telephony and UCaaS Radar report delivers analysis of 30 providers across growth strategy, execution, and performance, as well as their ability to develop solutions that are globally applicable and aligned with mega trends and customers' evolving needs.

Financial Outlook

Full Year 2019 Guidance:

  • Raising total revenue range to $874 to $877 million, representing annual growth of 30%. This is up from our prior range of $862 to $866 million and annual growth of 28% to 29%.
  • Raising software subscriptions revenue range to $795 to $797 million, representing annual growth of 30%. This is up from our prior range of $786 to $790 million and annual growth of 28% to 29%.
  • GAAP operating margin between (4.3%) and (3.9%).
  • Non-GAAP operating margin between 9.1% and 9.2%.
  • Non-GAAP tax rate for 2019 assumed to be 22.5%, compared to 0% non-GAAP tax rate for 2018. No material cash taxes expected given net operating loss carryforwards.
  • Raising non-GAAP EPS range to $0.77 to $0.79 based on 88.5 million fully diluted shares. This is up from our prior range of $0.71 to $0.75.
  • Share-based compensation range of $103 to $105 million, amortization of debt discount of $20 million, amortization of acquired intangibles of $9 million, and acquisition related matters of approximately $3 million.

Third Quarter 2019 Guidance:

  • Total revenue range of $220 to $222 million, representing annual growth of 27% to 28%.
  • Software subscriptions revenue range of $200 to $202 million, representing annual growth of 27% to 28%.
  • GAAP operating margin range of (5.1%) to (4.3%).
  • Non-GAAP operating margin range of 9.2% to 9.4%.
  • Non-GAAP tax rate assumed to be 22.5%, compared to 0% non-GAAP tax rate in 2018. No material cash taxes expected given net operating loss carryforwards.
  • Non-GAAP EPS range of $0.18 to $0.20 based on 88 million fully diluted shares.
  • Share-based compensation range of $28 to $29 million, amortization of debt discount of $5 million, and amortization of acquired intangibles of $2.4 million.

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) and provision (benefit) from income taxes, which could be significant reconciling items between the non-GAAP and respective GAAP measures. The intercompany remeasurement gain (loss) is affected by the movement in various exchange rates relative to the U.S. Dollar, which is difficult to predict and subject to constant change. We do not provide guidance on forecasted GAAP tax rates as we do not forecast discrete tax items as they are difficult to predict. The provision (benefit) from income taxes, excluding discrete items, is expected to have an immaterial impact to our GAAP EPS. We utilized a projected long-term tax rate in our computation of the non-GAAP income tax provision. For fiscal 2019, we have determined the projected non-GAAP tax rate to be 22.5%. 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 2019 and outlook for the third quarter and full year of 2019.
  • When: Monday, July 29, 2019 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 ET on August 5, 2019, a telephone replay will be available by dialing (844) 512-2921 from the United States or (412) 317-6671 internationally with recording access code 13692491.

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, collaboration, and contact center solutions. More flexible and cost-effective than legacy on-premises systems, the RingCentral platform empowers employees to work better together, from any location, on any device, and via any mode to serve customers, improving business efficiency and customer satisfaction. That is the promise of Work as One. The company provides unified voice, video meetings, team messaging, digital customer engagement, and integrated contact center solutions for enterprises globally. 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.

©2019 RingCentral, Inc. All rights reserved. RingCentral, Work as One 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, the contributions of enterprise and the channel in driving our growth, our ability to enable enterprises to drive productivity enhancements and improve customer and employee engagement, 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 successfully and timely integrate, and realize the benefits of any significant acquisition we may make; 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, 2019, 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 including transaction costs, integration costs, restructuring costs, and acquisition-related retention payments, as well as changes in the fair value of contingent consideration obligations. 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, tax benefit from release of valuation allowance, 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 are 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, mid-market and enterprise annualized exit monthly recurring subscriptions, and enterprise annualized exit monthly recurring subscriptions, channel partner 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 customer recurring charges contracted 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 and RingCentral Contact Center solutions customers are included when determining monthly recurring subscriptions for the purposes of calculating this key business metric. We calculate mid-market and 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 $25,000 or more in annual recurring revenue are included. 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 annual recurring revenue are included. We calculate channel annualized exit monthly recurring subscriptions in the same manner as we calculate our annualized exit monthly revenue subscriptions, except that only customer subscriptions generated from channel partners 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.

TABLE 1

RINGCENTRAL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited, in thousands)

 

 

June 30, 2019

 

December 31, 2018

Assets

 

 

 

Current assets

 

 

 

Cash and cash equivalents

$

567,668

 

 

$

566,329

 

Accounts receivable, net

105,585

 

 

94,375

 

Deferred sales commission costs

28,726

 

 

23,038

 

Prepaid expenses and other current assets

33,127

 

 

23,772

 

Total current assets

735,106

 

 

707,514

 

Property and equipment, net

78,549

 

 

70,205

 

Operating lease right-of-use-assets

34,341

 

 

 

Deferred sales commission costs, non-current

69,883

 

 

55,735

 

Goodwill

55,613

 

 

31,238

 

Acquired intangibles, net

28,514

 

 

19,480

 

Other assets

10,194

 

 

10,154

 

Total assets

$

1,012,200

 

 

$

894,326

 

Liabilities and Stockholders' Equity

 

 

 

Current liabilities

 

 

 

Accounts payable

$

21,161

 

 

$

10,145

 

Accrued liabilities

121,075

 

 

100,687

 

Deferred revenue

103,362

 

 

88,527

 

Total current liabilities

245,598

 

 

199,359

 

Convertible senior notes, net

376,583

 

 

366,552

 

Operating lease liabilities

24,911

 

 

 

Other long-term liabilities

9,541

 

 

10,806

 

Total liabilities

656,633

 

 

576,717

 

 

 

 

 

Stockholders' equity

 

 

 

Common stock

8

 

 

8

 

Additional paid-in capital

604,770

 

 

551,078

 

Accumulated other comprehensive income

2,093

 

 

2,226

 

Accumulated deficit

(251,304

)

 

(235,703

)

Total stockholders' equity

$

355,567

 

 

$

317,609

 

Total liabilities and stockholders' equity

$

1,012,200

 

 

$

894,326

 

The Company adopted the new accounting standard related to leases (Topic 842) effective January 1, 2019.

TABLE 2

RINGCENTRAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited, in thousands, except per share data)

 

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

2019

 

2018

 

2019

 

2018

Revenues

 

 

 

 

 

 

 

Software subscriptions

$

194,792

 

 

$

145,959

 

 

$

377,500

 

 

$

282,919

 

Other

20,360

 

 

14,873

 

 

39,141

 

 

28,256

 

Total revenues

215,152

 

 

160,832

 

 

416,641

 

 

311,175

 

Cost of revenues

 

 

 

 

 

 

 

Software subscriptions

38,079

 

 

26,716

 

 

73,413

 

 

51,242

 

Other

15,551

 

 

11,350

 

 

31,052

 

 

22,498

 

Total cost of revenues

53,630

 

 

38,066

 

 

104,465

 

 

73,740

 

Gross profit

161,522

 

 

122,766

 

 

312,176

 

 

237,435

 

Operating expenses

 

 

 

 

 

 

 

Research and development

32,632

 

 

24,814

 

 

62,419

 

 

47,465

 

Sales and marketing

103,590

 

 

79,023

 

 

203,141

 

 

150,943

 

General and administrative

32,480

 

 

23,583

 

 

61,259

 

 

45,032

 

Total operating expenses

168,702

 

 

127,420

 

 

326,819

 

 

243,440

 

Loss from operations

(7,180

)

 

(4,654

)

 

(14,643

)

 

(6,005

)

Other income (expense), net

 

 

 

 

 

 

 

Interest expense

(5,088

)

 

(4,836

)

 

(10,120

)

 

(6,247

)

Other income, net

3,141

 

 

1,338

 

 

6,192

 

 

1,411

 

Other income (expense), net

(1,947

)

 

(3,498

)

 

(3,928

)

 

(4,836

)

Loss before income taxes

(9,127

)

 

(8,152

)

 

(18,571

)

 

(10,841

)

Provision for (benefit from) income taxes

116

 

 

139

 

 

(2,970

)

 

166

 

Net loss

$

(9,243

)

 

$

(8,291

)

 

$

(15,601

)

 

$

(11,007

)

Net loss per common share:

 

 

 

 

 

 

 

Basic and diluted

$

(0.11

)

 

$

(0.10

)

 

$

(0.19

)

 

$

(0.14

)

Weighted-average number of shares used in computing net loss per share:

 

 

 

 

 

 

 

Basic and diluted

82,339

 

 

79,089

 

 

81,872

 

 

78,717

 

TABLE 3

RINGCENTRAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, in thousands)

 

Six Months Ended
June 30,

 

2019

 

2018

Cash flows from operating activities

 

 

 

Net loss

$

(15,601

)

 

$

(11,007

)

Adjustments to reconcile net loss to net cash provided by operating activities:

 

 

 

Depreciation and amortization

16,486

 

 

11,476

 

Share-based compensation

44,314

 

 

30,864

 

Amortization of deferred sales commission costs

13,196

 

 

8,673

 

Amortization of debt discount and issuance costs

10,031

 

 

6,154

 

Foreign currency remeasurement (gain) loss

(323

)

 

778

 

Provision for bad debt

995

 

 

1,137

 

Deferred income taxes

(347

)

 

11

 

Tax benefit from release of valuation allowance

(3,210

)

 

 

Other

1,232

 

 

210

 

Changes in assets and liabilities:

 

 

 

Accounts receivable

(10,804

)

 

(21,462

)

Deferred sales commission costs

(33,032

)

 

(21,603

)

Prepaid expenses and other current assets

(9,253

)

 

(2,795

)

Other assets

181

 

 

(626

)

Accounts payable

11,146

 

 

(499

)

Accrued liabilities

4,730

 

 

17,736

 

Deferred revenue

14,835

 

 

10,323

 

Other liabilities

(328

)

 

(495

)

Net cash provided by operating activities

44,248

 

 

28,875

 

Cash flows from investing activities

 

 

 

Purchases of property and equipment

(14,994

)

 

(11,856

)

Capitalized internal-use software

(7,602

)

 

(5,367

)

Cash paid for business combination, net of cash acquired

(27,870

)

 

 

Cash paid for acquisition of intangible assets

 

 

(18,470

)

Net cash used in investing activities

(50,466

)

 

(35,693

)

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

13,509

 

 

11,729

 

Taxes paid related to net share settlement of equity awards

(5,047

)

 

(2,986

)

Repayment of financing obligations

(943

)

 

(741

)

Net cash provided by financing activities

7,519

 

 

392,549

 

Effect of exchange rate changes

38

 

 

357

 

Net increase in cash, cash equivalents and restricted cash

1,339

 

 

386,088

 

Cash, cash equivalents and restricted cash

 

 

 

Beginning of period

566,329

 

 

181,192

 

End of period

$

567,668

 

 

$

567,280

 

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,

 

2019

 

2018

 

2019

 

2018

Revenues

 

 

 

 

 

 

 

Software subscriptions

$

194,792

 

 

$

145,959

 

 

$

377,500

 

 

$

282,919

 

Other

20,360

 

 

14,873

 

 

39,141

 

 

28,256

 

Total revenues

215,152

 

 

160,832

 

 

416,641

 

 

311,175

 

Cost of revenues reconciliation

 

 

 

 

 

 

 

GAAP Software subscriptions cost of revenues

38,079

 

 

26,716

 

 

73,413

 

 

51,242

 

Share-based compensation

(1,691

)

 

(1,136

)

 

(3,037

)

 

(2,012

)

Amortization of acquisition intangibles

(1,340

)

 

(150

)

 

(2,350

)

 

(301

)

Acquisition related matters

(14

)

 

 

 

(64

)

 

 

Non-GAAP Software subscriptions cost of revenues

35,034

 

 

25,430

 

 

67,962

 

 

48,929

 

 

 

 

 

 

 

 

 

GAAP Other cost of revenues

15,551

 

 

11,350

 

 

31,052

 

 

22,498

 

Share-based compensation

(429

)

 

(165

)

 

(724

)

 

(299

)

Non-GAAP Other cost of revenues

15,122

 

 

11,185

 

 

30,328

 

 

22,199

 

Gross profit and gross margin reconciliation

 

 

 

 

 

 

 

Non-GAAP Subscriptions

82.0

%

 

82.6

%

 

82.0

%

 

82.7

%

Non-GAAP Other

25.7

%

 

24.8

%

 

22.5

%

 

21.4

%

Non-GAAP Gross profit

76.7

%

 

77.2

%

 

76.4

%

 

77.1

%

Operating expenses reconciliation

 

 

 

 

 

 

 

GAAP Research and development

32,632

 

 

24,814

 

 

62,419

 

 

47,465

 

Share-based compensation

(5,508

)

 

(3,906

)

 

(9,770

)

 

(7,000

)

Acquisition related matters

(5

)

 

 

 

(352

)

 

 

Non-GAAP Research and development

27,119

 

 

20,908

 

 

52,297

 

 

40,465

 

As a % of total revenues non-GAAP

12.6

%

 

13.0

%

 

12.6

%

 

13.0

%

 

 

 

 

 

 

 

 

GAAP Sales and marketing

103,590

 

 

79,023

 

 

203,141

 

 

150,943

 

Share-based compensation

(9,799

)

 

(7,189

)

 

(17,407

)

 

(12,230

)

Amortization of acquisition intangibles

(938

)

 

(1,099

)

 

(1,860

)

 

(2,015

)

Acquisition related matters

32

 

 

 

 

(1,610

)

 

 

Non-GAAP Sales and marketing

92,885

 

 

70,735

 

 

182,264

 

 

136,698

 

As a % of total revenues non-GAAP

43.2

%

 

44.0

%

 

43.7

%

 

43.9

%

 

 

 

 

 

 

 

 

GAAP General and administrative

32,480

 

 

23,583

 

 

61,259

 

 

45,032

 

Share-based compensation

(7,489

)

 

(5,201

)

 

(13,376

)

 

(9,323

)

Acquisition related matters

(402

)

 

 

 

(825

)

 

 

Non-GAAP General and administrative

24,589

 

 

18,382

 

 

47,058

 

 

35,709

 

As a % of total revenues non-GAAP

11.4

%

 

11.4

%

 

11.3

%

 

11.5

%

Income (loss) from operations reconciliation

 

 

 

 

 

 

 

GAAP loss from operations

(7,180

)

 

(4,654

)

 

(14,643

)

 

(6,005

)

Share-based compensation

24,916

 

 

17,597

 

 

44,314

 

 

30,864

 

Amortization of acquisition intangibles

2,278

 

 

1,249

 

 

4,210

 

 

2,316

 

Acquisition related matters

389

 

 

 

 

2,851

 

 

 

Non-GAAP Income from operations

20,403

 

 

14,192

 

 

36,732

 

 

27,175

 

Non-GAAP Operating margin

9.5

%

 

8.8

%

 

8.8

%

 

8.7

%

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
June 30,

 

Six Months Ended
June 30,

 

2019

 

2018

 

2019

 

2018

Net (loss) income reconciliation

 

 

 

 

 

 

 

GAAP net loss

$

(9,243

)

 

$

(8,291

)

 

$

(15,601

)

 

$

(11,007

)

Share-based compensation

24,916

 

 

17,597

 

 

44,314

 

 

30,864

 

Amortization of acquisition intangibles

2,278

 

 

1,249

 

 

4,210

 

 

2,316

 

Acquisition related matters

389

 

 

 

 

2,851

 

 

 

Amortization of debt discount and issuance costs

5,049

 

 

4,784

 

 

10,031

 

 

6,154

 

Intercompany remeasurement loss (gain)

(202

)

 

749

 

 

(76

)

 

1,023

 

Tax benefit from release of valuation allowance

35

 

 

 

 

(3,210

)

 

 

Income tax expense effects

(5,162

)

 

 

 

(9,380

)

 

 

Non-GAAP net income

$

18,060

 

 

$

16,088

 

 

$

33,139

 

 

$

29,350

 

Reconciliation between GAAP and non-GAAP weighted average shares used in computing basic and diluted net (loss) income per common share:

 

 

 

 

 

 

 

Weighted average number of shares used in computing basic net (loss) income per share

82,339

 

 

79,089

 

 

81,872

 

 

78,717

 

Effect of dilutive securities

5,137

 

 

6,579

 

 

5,331

 

 

6,604

 

Non-GAAP weighted average shares used in computing non-GAAP diluted net income per share

87,476

 

 

85,668

 

 

87,203

 

 

85,321

 

 

 

 

 

 

 

 

 

Diluted net (loss) income per share

 

 

 

 

 

 

 

GAAP net loss per share

$

(0.11

)

 

$

(0.10

)

 

$

(0.19

)

 

$

(0.14

)

Non-GAAP net income per share

$

0.21

 

 

$

0.19

 

 

$

0.38

 

 

$

0.34

 

TABLE 6

RINGCENTRAL, INC.

RECONCILIATION OF FORECASTED OPERATING MARGIN

GAAP MEASURES TO NON-GAAP MEASURES

(Unaudited, in millions)

 

 

Q3 2019

 

FY 2019

 

Low Range

 

High Range

 

Low Range

 

High Range

GAAP revenues

220.0

 

 

222.0

 

 

874.0

 

 

877.0

 

 

 

 

 

 

 

 

 

GAAP loss from operations

(11.2

)

 

(9.5

)

 

(37.4

)

 

(34.2

)

GAAP operating margin

(5.1

%)

 

(4.3

%)

 

(4.3

%)

 

(3.9

%)

Share-based compensation

29.0

 

 

28.0

 

 

105.0

 

 

103.0

 

Amortization of acquisition intangibles

2.4

 

 

2.4

 

 

9.0

 

 

9.0

 

Acquisition related matters

 

 

 

 

2.9

 

 

2.9

 

Non-GAAP income from operations

20.2

 

 

20.9

 

 

79.5

 

 

80.7

 

Non-GAAP operating margin

9.2

 %

 

9.4

 %

 

9.1

 %

 

9.2

 %

 

Investor Relations Contact:
Ryan Goodman, RingCentral
(650) 918-5356
Ryan.Goodman@ringcentral.com

Media Contact:
Mariana Kosturos, RingCentral
(650) 562-6545
Mariana.Kosturos@ringcentral.com

Source: RingCentral, Inc.