Software Subscriptions Revenue up 28%
RingCentral Office®
ARR up 38%
GAAP Software Subscriptions Gross
Margin of 80%; Non-GAAP: 81%
BELMONT, Calif.--(BUSINESS WIRE)--
RingCentral,
Inc. (NYSE: RNG), a leading provider of cloud
business communications and collaboration solutions, today announced
financial results for the fourth quarter and full year ended December
31, 2016.
Fourth Quarter Financial Highlights
-
Software subscriptions revenue grew 28% year-over-year to $98.0
million; total revenue was $104.5 million.
-
RingCentral Office® annualized exit recurring software subscriptions
(ARR) grew 38% year-over-year to $341.5 million.
-
Total annualized exit recurring software subscriptions (ARR) grew 31%
year-over-year to $414.4 million.
-
GAAP software subscriptions gross margin was 80.2%, up 2.2 points
year-over-year, while Non-GAAP software subscriptions gross margin was
81.2%, up 2.5 points year-over-year.
-
GAAP operating margin was (6.3%), up 0.9 points year-over-year, while
Non-GAAP operating margin was 2.1%, up 1.1 points year-over-year.
-
Net monthly subscriptions dollar retention: RingCentral Office® over
100% and overall subscriptions over 99%.
“The fourth quarter was a strong finish to a great year driven by our
success with midmarket and enterprise customers. Our technology
leadership and strategy of delivering integrated communications and
collaboration solutions are paying off handsomely,” said Vlad Shmunis,
RingCentral’s Chairman and CEO. “Additionally, the reseller channels are
now increasingly switching their focus to cloud solutions and it has
enabled us to scale our midmarket and enterprise go-to-market efforts
rapidly. These larger customer segments are now an over $100 million
business, growing at over 90% year over year. With this momentum and the
very large underpenetrated market, I feel confident that we will be a $1
billion revenue company by the end of 2020.”
Financial Results for the Fourth Quarter 2016
-
Revenue: Total revenue was $104.5 million for the fourth
quarter of 2016, up from $83.4 million in the fourth quarter of 2015.
Software subscriptions revenue was $98.0 million for the fourth
quarter of 2016, up from $76.5 million in the fourth quarter of 2015.
-
Pro Forma1 Revenue Comparison: Total
revenue of $104.5 million in the fourth quarter of 2016, up from $80.8
million in the fourth quarter of 2015, representing 29% growth,
adjusting for the agency model on a comparable basis.
-
Net Income (Loss) Per Share: GAAP net loss per share was
($0.09) for the fourth quarter of 2016 compared with ($0.10) for the
fourth quarter of 2015. Non-GAAP net income per diluted share was
$0.03 for the fourth quarter of 2016, compared with $0.01 per diluted
share for the fourth quarter of 2015.
-
Balance Sheet: Total cash and cash equivalents at the end of
the fourth quarter of 2016 was $160.4 million, compared with $152.4
million at the end of the third quarter of 2016.
Financial Results for the Full Year 2016
-
Revenue: Total revenue was $379.7 million for the full year of
2016, up from $296.2 million in the full year of 2015. Software
subscriptions revenue was $355.9 million for the full year of 2016, up
from $271.2 million in the full year of 2015.
-
Pro Forma1 Revenue Comparison: Total
revenue of $378.3 million in the full year of 2016, up from $287.0
million in the full year of 2015, representing 32% growth, adjusting
for the agency model on a comparable basis.
-
Net Income (Loss) Per Share: GAAP net loss per share was
($0.40) for the full year of 2016 compared with ($0.46) for the full
year of 2015. Non-GAAP net income (loss) per diluted share was $0.09
for the full year of 2016, compared with ($0.12) per diluted share for
the full year of 2015.
-
Balance Sheet: Total cash and cash equivalents at the end of
2016 was $160.4 million, compared with $137.6 million at the end of
2015.
Fourth Quarter 2016 and Recent Business Highlights
-
RingCentral Global Office™ has expanded to provide a local experience
in over 30 countries and has been adopted by over 600 multinational
enterprises.
-
Announced that Structural Group has selected RingCentral as its new
cloud communications and collaboration solution provider. With more
than 1,800 employees across 22 locations in North America, Structural
Group needed a new generation of flexible, mobile-first solutions to
enhance customer engagement and productivity for its distributed and
mobile workforce.
-
Announced that Sungevity will replace its existing legacy on-premise
PBX system and other applications for over 700 users with RingCentral.
RingCentral’s architecture and open platform makes for a seamless
integration with Sungevity’s existing business process and software
platform. RingCentral will reduce Sungevity’s communication and
collaboration solution costs by nearly 50 percent.
-
Achieved milestone of issuing 100th U.S. patent,
reinforcing RingCentral’s strong commitment to technology development
and intellectual property protection.
-
RingCentral Connect Platform reached 1.6 million API requests per day
and a 300% annual increase in API requests overall.
-
Announced the addition of Extended Enterprise Support to the
RingCentral Professional Services™ portfolio. This program provides
enterprises requiring premium support services a dedicated team of
technical account managers and customer success managers.
Conference Call Details:
-
What: RingCentral financial results for the fourth quarter and
full year of 2016 and outlook for the first quarter and full year of
2017.
-
When: Monday, February 13, 2017 at 1:30PM PT (4:30PM 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 may provide confirmation number 13653961 to access the call
more quickly, and 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: A replay of the call will be available via telephone
for seven days, beginning two hours after the call. To listen to the
telephone replay in the U.S., please dial (844) 512-2921 from the
United States or (412) 317-6671 internationally with recording access
code 13653961.
About RingCentral
RingCentral, Inc. (NYSE: RNG) is a global provider of cloud unified
communications and collaboration solutions. More flexible and
cost-effective than legacy on-premise systems, RingCentral empowers
today’s mobile and distributed workforce to be connected anywhere and on
any device through voice, video, team messaging, collaboration, SMS,
conferencing, online meetings, contact center, and fax. RingCentral
provides an open platform that integrates with today’s leading business
apps while giving customers the flexibility to customize their own
workflows. RingCentral is a leader in the 2016 Gartner Magic Quadrant
for Unified Communications as a Service Worldwide for the second
consecutive year. RingCentral is headquartered in Belmont, Calif.
RingCentral 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, our GAAP and non-GAAP
guidance, our markets and strategic opportunities, and our expectations
regarding our strategy of providing integrated global open
communications and collaboration solutions, our reseller channels, our
revenue growth and our momentum to reach $1 billion in revenues.
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 September 30, 2016, 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 include certain Non-GAAP financial
measures, including Non-GAAP operating income (loss), Non-GAAP operating
margin, Non-GAAP net income (loss), and Non-GAAP net income (loss) per
diluted share. 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 net
income (loss) excluding stock-based compensation, intercompany
remeasurement gains or losses, acquisition related matters, amortization
of acquisition intangibles, and tax benefit for release of valuation
allowance.
We have included Non-GAAP operating income (loss), 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 core 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 operating income (loss), Non-GAAP
operating margin, Non-GAAP net income (loss), and Non-GAAP net income
(loss) per diluted share can provide a useful measure for
period-to-period comparisons of our core business.
Although Non-GAAP operating income (loss), 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 historical non-GAAP financial measures
and key metrics 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 total annualized exit monthly
recurring subscriptions, RingCentral Office® annualized exit monthly
recurring subscriptions, and net monthly subscriptions dollar retention.
We define our total annualized exit monthly recurring subscriptions as
our total monthly recurring subscriptions multiplied by 12. Our total
monthly recurring subscriptions equal the monthly value of all customer
subscriptions 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 total 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 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.
1 In 1Q’16, RingCentral transitioned direct phone sales to an
agency model, in which RingCentral receives a commission for phone sales
instead of separately recognizing the full sale price and cost of the
product. RingCentral is providing supplemental information on a pro
forma basis to provide a clear comparison of the Company’s results with
prior periods as-if the Company had transitioned phone sales to the new
agency model on January 1, 2015. Carrier phone sales remained under the
direct phone sales model.
|
|
|
TABLE 1
RINGCENTRAL, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands)
|
|
|
|
|
|
|
|
|
|
December 31, 2016
|
|
|
December 31, 2015
|
|
|
Assets
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
$
|
160,355
|
|
|
$
|
137,588
|
|
|
Accounts receivable, net
|
|
30,243
|
|
|
|
19,163
|
|
|
Inventory
|
|
63
|
|
|
|
2,317
|
|
|
Prepaid expenses and other current assets
|
|
15,250
|
|
|
|
11,978
|
|
|
Total current assets
|
|
205,911
|
|
|
|
171,046
|
|
|
Property and equipment, net
|
|
31,994
|
|
|
|
28,160
|
|
|
Goodwill
|
|
9,393
|
|
|
|
9,393
|
|
|
Acquired intangibles, net
|
|
2,244
|
|
|
|
3,266
|
|
|
Other assets
|
|
3,087
|
|
|
|
2,948
|
|
|
Total assets
|
$
|
252,629
|
|
|
$
|
214,813
|
|
|
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
Accounts payable
|
$
|
7,810
|
|
|
$
|
5,196
|
|
|
Accrued liabilities
|
|
48,322
|
|
|
|
34,702
|
|
|
Current portion of capital lease obligation
|
|
181
|
|
|
|
269
|
|
|
Current portion of long-term debt
|
|
14,528
|
|
|
|
3,750
|
|
|
Deferred revenue
|
|
45,159
|
|
|
|
36,657
|
|
|
Total current liabilities
|
|
116,000
|
|
|
|
80,574
|
|
|
Long-term debt
|
|
312
|
|
|
|
14,840
|
|
|
Sales tax liability
|
|
3,077
|
|
|
|
3,670
|
|
|
Capital lease obligation
|
|
-
|
|
|
|
181
|
|
|
Other long-term liabilities
|
|
3,199
|
|
|
|
5,416
|
|
|
Total liabilities
|
|
122,588
|
|
|
|
104,681
|
|
|
Stockholders' equity
|
|
|
|
|
|
|
|
|
Common stock
|
|
7
|
|
|
|
7
|
|
|
Additional paid-in capital
|
|
366,800
|
|
|
|
319,792
|
|
|
Accumulated other comprehensive income
|
|
2,737
|
|
|
|
527
|
|
|
Accumulated deficit
|
|
(239,503
|
)
|
|
|
(210,194
|
)
|
|
Total stockholders' equity
|
|
130,041
|
|
|
|
110,132
|
|
|
Total liabilities and stockholders' equity
|
$
|
252,629
|
|
|
$
|
214,813
|
|
|
|
|
TABLE 2
RINGCENTRAL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Year Ended
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Software subscriptions
|
$
|
97,952
|
|
|
$
|
76,532
|
|
|
$
|
355,850
|
|
|
$
|
271,245
|
|
|
Other
|
|
6,551
|
|
|
|
6,907
|
|
|
|
23,874
|
|
|
|
24,983
|
|
|
Total revenues
|
|
104,503
|
|
|
|
83,439
|
|
|
|
379,724
|
|
|
|
296,228
|
|
|
Cost of revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Software subscriptions
|
|
19,363
|
|
|
|
16,851
|
|
|
|
73,470
|
|
|
|
66,354
|
|
|
Other
|
|
5,289
|
|
|
|
6,011
|
|
|
|
18,741
|
|
|
|
20,917
|
|
|
Total cost of revenues
|
|
24,652
|
|
|
|
22,862
|
|
|
|
92,211
|
|
|
|
87,271
|
|
|
Gross profit
|
|
79,851
|
|
|
|
60,577
|
|
|
|
287,513
|
|
|
|
208,957
|
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development
|
|
17,417
|
|
|
|
15,312
|
|
|
|
65,514
|
|
|
|
52,924
|
|
|
Sales and marketing
|
|
54,701
|
|
|
|
38,378
|
|
|
|
192,497
|
|
|
|
139,851
|
|
|
General and administrative
|
|
14,339
|
|
|
|
12,883
|
|
|
|
55,454
|
|
|
|
47,114
|
|
|
Total operating expenses
|
|
86,457
|
|
|
|
66,573
|
|
|
|
313,465
|
|
|
|
239,889
|
|
|
Loss from operations
|
|
(6,606
|
)
|
|
|
(5,996
|
)
|
|
|
(25,952
|
)
|
|
|
(30,932
|
)
|
|
Other income (expense), net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
(162
|
)
|
|
|
(196
|
)
|
|
|
(746
|
)
|
|
|
(1,123
|
)
|
|
Other income (expense), net
|
|
(94
|
)
|
|
|
(670
|
)
|
|
|
(2,375
|
)
|
|
|
(1,307
|
)
|
|
Other income (expense), net
|
|
(256
|
)
|
|
|
(866
|
)
|
|
|
(3,121
|
)
|
|
|
(2,430
|
)
|
|
Loss before provision (benefit) for income taxes
|
|
(6,862
|
)
|
|
|
(6,862
|
)
|
|
|
(29,073
|
)
|
|
|
(33,362
|
)
|
|
Provision (benefit) for income taxes
|
|
84
|
|
|
|
79
|
|
|
|
236
|
|
|
|
(1,263
|
)
|
|
Net loss
|
$
|
(6,946
|
)
|
|
$
|
(6,941
|
)
|
|
$
|
(29,309
|
)
|
|
$
|
(32,099
|
)
|
|
Net loss per common share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
|
$
|
(0.09
|
)
|
|
$
|
(0.10
|
)
|
|
$
|
(0.40
|
)
|
|
$
|
(0.46
|
)
|
|
Weighted-average number of shares used in computing net loss per
share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
|
|
73,961
|
|
|
|
71,420
|
|
|
|
72,994
|
|
|
|
70,069
|
|
|
|
|
TABLE 3
RINGCENTRAL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
|
|
|
|
|
|
|
Year Ended
|
|
|
|
December 31,
|
|
|
|
2016
|
|
|
2015
|
|
|
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
Net loss
|
$
|
(29,309
|
)
|
|
$
|
(32,099
|
)
|
|
Adjustments to reconcile net loss to net cash provided by operating
activities
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
14,663
|
|
|
|
13,467
|
|
|
Share-based compensation
|
|
30,840
|
|
|
|
22,088
|
|
|
Foreign currency remeasurement loss
|
|
2,615
|
|
|
|
843
|
|
|
Tax benefit from release of valuation allowance
|
|
—
|
|
|
|
(1,411
|
)
|
|
Impairment of fixed assets
|
|
—
|
|
|
|
1,317
|
|
|
Non-cash interest expense and other expenses related to debt
|
|
—
|
|
|
|
156
|
|
|
Net accretion of discount and amortization of premium on
available-for-sale securities
|
|
—
|
|
|
|
616
|
|
|
Provision for bad debt
|
|
648
|
|
|
|
411
|
|
|
Deferred income taxes
|
|
(36
|
)
|
|
|
(8
|
)
|
|
Others
|
|
583
|
|
|
|
416
|
|
|
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
(11,728
|
)
|
|
|
(11,923
|
)
|
|
Inventory
|
|
2,254
|
|
|
|
(606
|
)
|
|
Prepaid expenses and other current assets
|
|
(3,272
|
)
|
|
|
(3,636
|
)
|
|
Other assets
|
|
76
|
|
|
|
(422
|
)
|
|
Accounts payable
|
|
1,516
|
|
|
|
1,591
|
|
|
Accrued liabilities
|
|
15,165
|
|
|
|
2,354
|
|
|
Deferred revenue
|
|
8,502
|
|
|
|
11,071
|
|
|
Other liabilities
|
|
(2,809
|
)
|
|
|
861
|
|
|
Net cash provided by operating activities
|
|
29,708
|
|
|
|
5,086
|
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
Purchases of property and equipment
|
|
(14,236
|
)
|
|
|
(14,631
|
)
|
|
Capitalized internal-use software
|
|
(2,162
|
)
|
|
|
(2,513
|
)
|
|
Cash paid in business combination, net of cash acquired
|
|
—
|
|
|
|
(4,670
|
)
|
|
Proceeds from the maturity of available-for-sale securities
|
|
—
|
|
|
|
28,080
|
|
|
Proceeds from the maturity of restricted investments
|
|
—
|
|
|
|
100
|
|
|
Net cash provided by (used in) investing activities
|
|
(16,398
|
)
|
|
|
6,366
|
|
|
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
Proceeds from issuance of stock in connection with stock plans
|
|
15,104
|
|
|
|
19,524
|
|
|
Taxes paid related to net share settlement of equity awards
|
|
(255
|
)
|
|
|
(151
|
)
|
|
Payment of holdback from Glip acquisition
|
|
(1,500
|
)
|
|
|
—
|
|
|
Repayment of debt
|
|
(3,750
|
)
|
|
|
(6,142
|
)
|
|
Repayment of capital lease obligations
|
|
(269
|
)
|
|
|
(594
|
)
|
|
Net cash provided by financing activities
|
|
9,330
|
|
|
|
12,637
|
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
127
|
|
|
|
317
|
|
|
Net increase in cash and cash equivalents
|
|
22,767
|
|
|
|
24,406
|
|
|
Cash and cash equivalents
|
|
|
|
|
|
|
|
|
Beginning of period
|
|
137,588
|
|
|
|
113,182
|
|
|
End of period
|
$
|
160,355
|
|
|
$
|
137,588
|
|
|
|
|
TABLE 4
RINGCENTRAL, INC.
RECONCILIATION OF OPERATING INCOME (LOSS)
GAAP MEASURES TO NON-GAAP MEASURES
(Unaudited, in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Year Ended
|
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Software subscriptions
|
|
$
|
97,952
|
|
|
$
|
76,532
|
|
|
$
|
355,850
|
|
|
$
|
271,245
|
|
|
Other
|
|
|
6,551
|
|
|
|
6,907
|
|
|
|
23,874
|
|
|
|
24,983
|
|
|
Total revenues
|
|
|
104,503
|
|
|
|
83,439
|
|
|
|
379,724
|
|
|
|
296,228
|
|
|
Cost of revenues reconciliation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Software subscriptions cost of revenues
|
|
|
19,363
|
|
|
|
16,851
|
|
|
|
73,470
|
|
|
|
66,354
|
|
|
Stock-based compensation
|
|
|
(810
|
)
|
|
|
(586
|
)
|
|
|
(3,048
|
)
|
|
|
(2,054
|
)
|
|
Amortization of acquisition intangibles
|
|
|
(151
|
)
|
|
|
-
|
|
|
|
(603
|
)
|
|
|
-
|
|
|
Non-GAAP Software subscriptions cost of revenues
|
|
|
18,402
|
|
|
|
16,265
|
|
|
|
69,819
|
|
|
|
64,300
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Other cost of revenues
|
|
|
5,289
|
|
|
|
6,011
|
|
|
|
18,741
|
|
|
|
20,917
|
|
|
Stock-based compensation
|
|
|
(31
|
)
|
|
|
-
|
|
|
|
(117
|
)
|
|
|
-
|
|
|
Non-GAAP Other cost of revenues
|
|
|
5,258
|
|
|
|
6,011
|
|
|
|
18,624
|
|
|
|
20,917
|
|
|
Gross profit and gross margin reconciliation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Subscriptions
|
|
|
81.2
|
%
|
|
|
78.7
|
%
|
|
|
80.4
|
%
|
|
|
76.3
|
%
|
|
Non-GAAP Other
|
|
|
19.7
|
%
|
|
|
13.0
|
%
|
|
|
22.0
|
%
|
|
|
16.3
|
%
|
|
Non-GAAP Gross profit
|
|
|
77.4
|
%
|
|
|
73.3
|
%
|
|
|
76.7
|
%
|
|
|
71.2
|
%
|
|
Operating expenses reconciliation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Research and development
|
|
|
17,417
|
|
|
|
15,312
|
|
|
|
65,514
|
|
|
|
52,924
|
|
|
Stock-based compensation
|
|
|
(1,805
|
)
|
|
|
(1,642
|
)
|
|
|
(7,296
|
)
|
|
|
(5,387
|
)
|
|
Amortization of acquisition intangibles
|
|
|
-
|
|
|
|
(151
|
)
|
|
|
-
|
|
|
|
(480
|
)
|
|
Acquisition related matters
|
|
|
(309
|
)
|
|
|
(244
|
)
|
|
|
(1,411
|
)
|
|
|
(575
|
)
|
|
Non-GAAP Research and development
|
|
|
15,303
|
|
|
|
13,275
|
|
|
|
56,807
|
|
|
|
46,482
|
|
|
As a % of total revenues non-GAAP
|
|
|
14.6
|
%
|
|
|
15.9
|
%
|
|
|
15.0
|
%
|
|
|
15.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Sales and marketing
|
|
|
54,701
|
|
|
|
38,378
|
|
|
|
192,497
|
|
|
|
139,851
|
|
|
Stock-based compensation
|
|
|
(3,111
|
)
|
|
|
(1,867
|
)
|
|
|
(10,902
|
)
|
|
|
(7,200
|
)
|
|
Amortization of acquisition intangibles
|
|
|
(105
|
)
|
|
|
(105
|
)
|
|
|
(420
|
)
|
|
|
(105
|
)
|
|
Non-GAAP Sales and marketing
|
|
|
51,485
|
|
|
|
36,406
|
|
|
|
181,175
|
|
|
|
132,546
|
|
|
As a % of total revenues non-GAAP
|
|
|
49.3
|
%
|
|
|
43.6
|
%
|
|
|
47.7
|
%
|
|
|
44.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP General and administrative
|
|
|
14,339
|
|
|
|
12,883
|
|
|
|
55,454
|
|
|
|
47,114
|
|
|
Stock-based compensation
|
|
|
(2,480
|
)
|
|
|
(2,203
|
)
|
|
|
(9,477
|
)
|
|
|
(7,447
|
)
|
|
Acquisition related matters
|
|
|
-
|
|
|
|
(39
|
)
|
|
|
(59
|
)
|
|
|
(787
|
)
|
|
Non-GAAP General and administrative
|
|
|
11,859
|
|
|
|
10,641
|
|
|
|
45,918
|
|
|
|
38,880
|
|
|
As a % of total revenues non-GAAP
|
|
|
11.3
|
%
|
|
|
12.8
|
%
|
|
|
12.1
|
%
|
|
|
13.1
|
%
|
|
Income (loss) from operations reconciliation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP loss from operations
|
|
|
(6,606
|
)
|
|
|
(5,996
|
)
|
|
|
(25,952
|
)
|
|
|
(30,932
|
)
|
|
Stock-based compensation
|
|
|
8,237
|
|
|
|
6,298
|
|
|
|
30,840
|
|
|
|
22,088
|
|
|
Amortization of acquisition intangibles
|
|
|
256
|
|
|
|
256
|
|
|
|
1,023
|
|
|
|
585
|
|
|
Acquisition related matters
|
|
|
309
|
|
|
|
283
|
|
|
|
1,470
|
|
|
|
1,362
|
|
|
Non-GAAP Income (loss) from operations
|
|
$
|
2,196
|
|
|
$
|
841
|
|
|
$
|
7,381
|
|
|
$
|
(6,897
|
)
|
|
Non-GAAP Operating margin
|
|
|
2.1
|
%
|
|
|
1.0
|
%
|
|
|
1.9
|
%
|
|
|
(2.3
|
%)
|
|
|
|
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
|
|
|
Year Ended
|
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
Net Income (loss) reconciliation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Net loss
|
|
$
|
(6,946
|
)
|
|
$
|
(6,941
|
)
|
|
$
|
(29,309
|
)
|
|
$
|
(32,099
|
)
|
|
Stock-based compensation
|
|
|
8,237
|
|
|
|
6,298
|
|
|
|
30,840
|
|
|
|
22,088
|
|
|
Amortization of acquisition intangibles
|
|
|
256
|
|
|
|
256
|
|
|
|
1,023
|
|
|
|
585
|
|
|
Acquisition related matters
|
|
|
309
|
|
|
|
283
|
|
|
|
1,470
|
|
|
|
1,362
|
|
|
Intercompany remeasurement loss
|
|
|
167
|
|
|
|
594
|
|
|
|
2,508
|
|
|
|
928
|
|
|
Tax benefit from release of valuation allowance
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,411
|
)
|
|
Non-GAAP Net income (loss)
|
|
$
|
2,023
|
|
|
$
|
490
|
|
|
$
|
6,532
|
|
|
$
|
(8,547
|
)
|
|
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
|
|
|
73,961
|
|
|
|
71,420
|
|
|
|
72,994
|
|
|
|
70,069
|
|
|
Effect of dilutive securities
|
|
|
3,606
|
|
|
|
3,612
|
|
|
|
3,414
|
|
|
|
-
|
|
|
Non-GAAP weighted average shares used in computing
non-GAAP net income per share
|
|
|
77,567
|
|
|
|
75,032
|
|
|
|
76,408
|
|
|
|
70,069
|
|
|
GAAP Net loss per share
|
|
$
|
(0.09
|
)
|
|
$
|
(0.10
|
)
|
|
$
|
(0.40
|
)
|
|
$
|
(0.46
|
)
|
|
Non-GAAP Net income (loss) per share
|
|
$
|
0.03
|
|
|
$
|
0.01
|
|
|
$
|
0.09
|
|
|
$
|
(0.12
|
)
|
|
|
|
TABLE 6
RINGCENTRAL, INC.
PRO FORMA2 STATEMENT OF GROSS MARGIN
UNDER AGENCY MODEL
(Unaudited, in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2015
|
|
|
2016
|
|
|
4Q'16
|
|
|
|
|
1Q
|
|
|
2Q
|
|
|
3Q
|
|
|
4Q
|
|
|
1Q
|
|
|
2Q
|
|
|
3Q
|
|
|
4Q
|
|
|
Q/Q
|
|
Y/Y
|
|
|
GAAP Software subscription revenue
|
|
$
|
59,951
|
|
|
$
|
64,441
|
|
|
$
|
70,321
|
|
|
$
|
76,532
|
|
|
$
|
79,978
|
|
|
$
|
86,067
|
|
|
$
|
91,853
|
|
|
$
|
97,952
|
|
|
|
7
|
%
|
|
28
|
%
|
|
GAAP Other revenue
|
|
$
|
5,367
|
|
|
$
|
6,250
|
|
|
$
|
6,459
|
|
|
$
|
6,907
|
|
|
$
|
6,560
|
|
|
$
|
5,777
|
|
|
$
|
4,986
|
|
|
$
|
6,551
|
|
|
|
|
|
|
|
|
|
Revised Agency Model adjustment
|
|
|
(2,222
|
)
|
|
|
(2,101
|
)
|
|
|
(2,278
|
)
|
|
|
(2,597
|
)
|
|
|
(1,436
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
Pro forma other revenue
|
|
$
|
3,145
|
|
|
$
|
4,149
|
|
|
$
|
4,181
|
|
|
$
|
4,310
|
|
|
$
|
5,124
|
|
|
$
|
5,777
|
|
|
$
|
4,986
|
|
|
$
|
6,551
|
|
|
|
31
|
%
|
|
52
|
%
|
|
Total pro forma revenue
|
|
$
|
63,096
|
|
|
$
|
68,590
|
|
|
$
|
74,502
|
|
|
$
|
80,842
|
|
|
$
|
85,102
|
|
|
$
|
91,844
|
|
|
$
|
96,839
|
|
|
$
|
104,503
|
|
|
|
8
|
%
|
|
29
|
%
|
|
GAAP Software subscription cost of revenue
|
|
$
|
15,914
|
|
|
$
|
16,505
|
|
|
$
|
17,084
|
|
|
$
|
16,851
|
|
|
$
|
16,723
|
|
|
$
|
18,173
|
|
|
$
|
19,211
|
|
|
$
|
19,363
|
|
|
|
|
|
|
|
|
|
Stock-based compensation
|
|
|
(457
|
)
|
|
|
(476
|
)
|
|
|
(535
|
)
|
|
|
(586
|
)
|
|
|
(634
|
)
|
|
|
(781
|
)
|
|
|
(824
|
)
|
|
|
(810
|
)
|
|
|
|
|
|
|
|
|
Amortization of acquisition intangibles
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(151
|
)
|
|
|
(151
|
)
|
|
|
(151
|
)
|
|
|
(151
|
)
|
|
|
|
|
|
|
|
|
Non-GAAP Software subscriptions cost of revenue
|
|
$
|
15,457
|
|
|
$
|
16,029
|
|
|
$
|
16,549
|
|
|
$
|
16,265
|
|
|
$
|
15,938
|
|
|
$
|
17,241
|
|
|
$
|
18,236
|
|
|
$
|
18,402
|
|
|
|
|
|
|
|
|
|
GAAP Other cost of revenue
|
|
$
|
4,633
|
|
|
$
|
5,024
|
|
|
$
|
5,249
|
|
|
$
|
6,011
|
|
|
$
|
5,017
|
|
|
$
|
4,191
|
|
|
$
|
4,244
|
|
|
$
|
5,289
|
|
|
|
|
|
|
|
|
|
Stock-based compensation
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(19
|
)
|
|
|
(32
|
)
|
|
|
(35
|
)
|
|
|
(31
|
)
|
|
|
|
|
|
|
|
|
Non-GAAP Other cost of revenue
|
|
$
|
4,633
|
|
|
$
|
5,024
|
|
|
$
|
5,249
|
|
|
$
|
6,011
|
|
|
$
|
4,998
|
|
|
$
|
4,159
|
|
|
$
|
4,209
|
|
|
$
|
5,258
|
|
|
|
|
|
|
|
|
|
Revised Agency Model adjustment
|
|
|
(2,222
|
)
|
|
|
(2,101
|
)
|
|
|
(2,278
|
)
|
|
|
(2,597
|
)
|
|
|
(1,436
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
Pro forma other cost of revenue
|
|
$
|
2,411
|
|
|
$
|
2,923
|
|
|
$
|
2,971
|
|
|
$
|
3,414
|
|
|
$
|
3,562
|
|
|
$
|
4,159
|
|
|
$
|
4,209
|
|
|
$
|
5,258
|
|
|
|
|
|
|
|
|
|
Total pro forma cost of revenue
|
|
$
|
17,868
|
|
|
$
|
18,952
|
|
|
$
|
19,520
|
|
|
$
|
19,679
|
|
|
$
|
19,500
|
|
|
$
|
21,400
|
|
|
$
|
22,445
|
|
|
$
|
23,660
|
|
|
|
5
|
%
|
|
20
|
%
|
|
Pro forma software subscriptions revenue gross profit
|
|
$
|
44,494
|
|
|
$
|
48,412
|
|
|
$
|
53,772
|
|
|
$
|
60,267
|
|
|
$
|
64,040
|
|
|
$
|
68,826
|
|
|
$
|
73,617
|
|
|
$
|
79,550
|
|
|
|
8
|
%
|
|
32
|
%
|
|
Pro forma other revenue gross profit
|
|
|
734
|
|
|
|
1,226
|
|
|
|
1,210
|
|
|
|
896
|
|
|
|
1,562
|
|
|
|
1,618
|
|
|
|
777
|
|
|
|
1,293
|
|
|
|
66
|
%
|
|
44
|
%
|
|
Total pro forma gross profit
|
|
$
|
45,228
|
|
|
$
|
49,638
|
|
|
$
|
54,982
|
|
|
$
|
61,163
|
|
|
$
|
65,602
|
|
|
$
|
70,444
|
|
|
$
|
74,394
|
|
|
$
|
80,843
|
|
|
|
9
|
%
|
|
32
|
%
|
|
Pro forma software subscriptions revenue gross margin
|
|
|
74
|
%
|
|
|
75
|
%
|
|
|
76
|
%
|
|
|
79
|
%
|
|
|
80
|
%
|
|
|
80
|
%
|
|
|
80
|
%
|
|
|
81
|
%
|
|
|
|
|
|
|
|
|
Pro forma other revenue gross margin
|
|
|
23
|
%
|
|
|
30
|
%
|
|
|
29
|
%
|
|
|
21
|
%
|
|
|
30
|
%
|
|
|
28
|
%
|
|
|
16
|
%
|
|
|
20
|
%
|
|
|
|
|
|
|
|
|
Total pro forma gross margin
|
|
|
72
|
%
|
|
|
72
|
%
|
|
|
74
|
%
|
|
|
76
|
%
|
|
|
77
|
%
|
|
|
77
|
%
|
|
|
77
|
%
|
|
|
77
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2In 1Q’16, RingCentral provided supplemental information
on a pro forma basis to provide a clear comparison of the Company’s
results with prior periods. The pro forma information reflects
results as-if the Company had transitioned to the new agency model
for the first quarter of 2016 and for all periods in 2015.
|
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20170213006068/en/
RingCentral
Investor Relations Contact:
Darren Yip,
650-641-2220
ir@RingCentral.com
or
Media
Contact:
Jennifer Caukin, 650-561-6348
Jennifer.caukin@ringcentral.com
Source: RingCentral, Inc.