Software Subscriptions ARR of $546 million up 32%
Q4’17 Software Subscriptions Revenue up 32%
RingCentral Office ARR up 36%
BELMONT, Calif.--(BUSINESS WIRE)--
RingCentral,
Inc. (NYSE: RNG), a leading provider of global enterprise cloud
communications and collaboration solutions, today announced financial
results for the fourth quarter and full year ended December 31, 2017.
Fourth Quarter Financial Highlights
-
Total revenue grew 34% year over year to $140.5 million.
-
Software subscriptions revenue grew 32% year over year to $129.7
million.
-
Software subscriptions annualized exit recurring software
subscriptions (ARR) grew 32% year over year to $546.4 million.
-
RingCentral Office® ARR grew 36% year over year to $466.2 million.
-
GAAP software subscriptions gross margin was 81.3%, up 1.1 points year
over year, while Non-GAAP software subscriptions gross margin was
82.1%, up 0.9 points year over year.
-
GAAP operating margin was (4.4%), up 1.9 points year over year, while
Non-GAAP operating margin was 3.9%, up 1.8 points year over year.
-
Net monthly subscriptions dollar retention: RingCentral Office over
100% and overall subscriptions over 99%
“The fourth quarter was an outstanding finish to a great year. This was
led by our mid-market and enterprise business and further supported by
continuing momentum from our channel partners. And we capped off the
year with a record 15 deals with total contract value (TCV) of more than
$1 million, up from 10 deals last quarter,” said Vlad Shmunis,
RingCentral’s Chairman and CEO. “We further extended our leadership
position in the UCaaS market driven by our relentless focus on
innovation and commitment to customer success. We believe we are well
positioned heading into 2018 and look forward to an exciting year ahead.”
Financial Results for the Fourth Quarter 2017
-
Revenue and Gross Margin: Total revenue was $140.5 million for
the fourth quarter of 2017, up from $104.5 million in the fourth
quarter of 2016, representing 34% growth. Total gross margin was 76.1%
for the fourth quarter of 2017, down 0.3% points compared to 76.4% in
the fourth quarter of 2016.
As of January 1, 2017,
RingCentral transitioned from an agency model to a direct phone sales
model, under which RingCentral is recognizing the full sale price and
cost of the product instead of receiving a commission for phone sales.
Adjusting for the direct phone sales model on a comparable basis,
total revenue in the fourth quarter grew 31% year over year and the
total gross margin would have been 1.5% higher year over year.
-
Net Income (Loss) Per Share: GAAP net loss per share was
($0.08) for the fourth quarter of 2017 compared with ($0.09) for the
fourth quarter of 2016. Non-GAAP net income per diluted share was
$0.07 for the fourth quarter of 2017, compared with $0.03 per diluted
share for the fourth quarter of 2016.
-
Balance Sheet: Total cash and cash equivalents at the end of
the fourth quarter of 2017 was $181.2 million, compared with $172.3
million at the end of the third quarter of 2017.
Financial Results for the Full Year 2017
-
Revenue and Gross Margin: Total revenue was $501.5 million for
the full year of 2017, up from $379.7 million in the full year of
2016, representing 32% growth. Total gross margin was 75.8% for the
full year of 2017, up 0.1% points compared to 75.7% in the full year
of 2016.
Adjusting for the direct phone sales model on a
comparable basis, total revenue for the full year of 2017 grew 29%
year over year and the total gross margin would have been 1.7% higher
year over year.
-
Net Income (Loss) Per Share: GAAP net loss per share was
($0.34) for the full year of 2017 compared with ($0.40) for the full
year of 2016. Non-GAAP net income per diluted share was $0.20 for the
full year of 2017, compared with $0.09 per diluted share for the full
year of 2016.
-
Balance Sheet: Total cash and cash equivalents at the end of
2017 was $181.2 million, compared with $160.4 million at the end of
2016.
Recent Business Highlights
-
Achieved compliance in security controls established by the Financial
Industry Regulatory Authority, Inc. (FINRA) for cloud service
providers. Through compliance with applicable FINRA cyber security
controls, RingCentral’s financial customers, including banks, brokers,
and traders, can trust that RingCentral Office® and RingCentral Glip®
products meet regulatory requirements for security and reliability.
-
Earned Certified status for information security by the Health
Information Trust (HITRUST) Alliance. Certified status indicates that
RingCentral Office and RingCentral Glip have a comprehensive framework
of prescriptive and scalable security controls for our healthcare
customers that met HITRUST requirements for protecting and securing
sensitive private healthcare information.
-
Announced Amazon® Alexa for Business integration that enables the use
of voice commands to join meetings, send text messages, listen to
voicemails, and make calls in an easy and intuitive way. In addition,
RingCentral users can join any meeting scheduled in other Amazon
Alexa–compatible third-party meeting applications without the need to
download those applications.
-
Added Latin America support to RingCentral Global OfficeTM
including Brazil, Peru, and Argentina. RingCentral Global Office is
now available in 37 countries.
Financial Outlook
Our guidance reflects the adoption of the new Topic 606 revenue
recognition standard that is effective for us beginning January 1, 2018.
The comparison period amounts used to calculate growth rates have been
restated from previously reported amounts to conform to the requirements
of Topic 606.
Full Year 2018 Guidance:
-
Software subscriptions revenue between $581 and $589 million or an
annual growth of 25% to 27%
-
Total revenue guidance between $629 and $639 million, or an annual
growth rate of 25% to 27%
-
GAAP operating margin between (4.5%) and (3.5%), and Non-GAAP
operating margin between 7.8% and 8.2%
-
Non-GAAP EPS between $0.56 to $0.60 based on 86.5 million fully
diluted shares
First Quarter 2018 Guidance:
-
Software subscriptions revenue between $134 and $135 million, or an
annual growth of 29% to 30%
-
Total revenue between $144.5 and $146.5 million, or an annual growth
of 29% to 31%
-
GAAP operating margin between (4.4%) and (3.2%), and Non-GAAP
operating margin between 7.0% and 7.6%
-
Non-GAAP EPS between $0.11 and $0.13 based on 85 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 impacted by the movement in various exchange rates
relative to the USD, 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 fourth quarter,
full year 2017 and outlook for the first quarter and full year of 2018.
-
When: Monday, February 12, 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: A replay of the call will be available via telephone
for seven days, following the completion of 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 13675598.
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 Global Office, RingCentral Glip and the RingCentral
logo are trademarks of RingCentral, Inc.
New Revenue Recognition Standard Under Topic 606
In May 2014, the Financial Accounting Standards Board issued a new
standard related to revenue recognition from contracts with customers
(Topic 606), which is effective beginning January 1, 2018. Topic 606
supersedes the prior revenue recognition standard (Topic 605). The
Company will adopt the requirements of the new standard in the first
quarter of 2018, using the full retrospective transition method.
Under the new standard, the Company expects in some cases to recognize
revenue earlier for subscription plans when the customer receives
services for no consideration during the initial months (i.e., initial
period is discounted) as a result of elimination of contingent revenue
guidance (i.e., amounts allocated to delivered items are limited to
amounts that are not contingent on the provision of future services) in
the new standard. The most significant impact of adoption the new
standard primarily relates to the deferral of incremental commission
costs of obtaining subscription contracts, which previously were
expensed as incurred. Under the new standard, the Company will defer all
incremental commission costs to obtain the contract and amortize them
over the expected period of benefit, which is estimated to be five years.
The financial information under the heading “Financial Outlook” above is
prepared in accordance with Topic 606, and the comparison period amounts
used to calculate growth rates are based on amounts that have been
restated from previously reported amounts to conform to the requirements
of Topic 606 (see Table 6). Unless otherwise indicated, all other
financial information in this release is prepared in accordance with
Topic 605.
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 strength in the mid-market and
enterprise segments, our growth from our channel partners, and our
leadership in the UCaaS market. 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, 2017, 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 net income (loss)
excluding stock-based compensation, intercompany remeasurement gains or
losses, acquisition related matters, amortization of acquisition
intangibles, and the related income tax effect of these adjustments.
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 software subscriptions annualized
exit monthly recurring subscriptions, RingCentral Office® annualized
exit monthly recurring subscriptions, and net monthly subscriptions
dollar retention. We define our software subscriptions annualized exit
monthly recurring subscriptions as our software subscriptions monthly
recurring subscriptions multiplied by 12. Our software subscriptions
monthly recurring subscriptions equal the monthly value of all software
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 software
subscriptions 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.
|
|
|
|
|
|
|
|
|
TABLE 1
RINGCENTRAL, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
|
2017
|
|
|
2016
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
181,192
|
|
|
$
|
160,355
|
|
|
Accounts receivable, net
|
|
|
45,339
|
|
|
|
30,243
|
|
|
Prepaid expenses and other current assets
|
|
|
21,512
|
|
|
|
15,313
|
|
|
Total current assets
|
|
|
248,043
|
|
|
|
205,911
|
|
|
Property and equipment, net
|
|
|
43,298
|
|
|
|
31,994
|
|
|
Goodwill
|
|
|
9,393
|
|
|
|
9,393
|
|
|
Acquired intangibles, net
|
|
|
1,462
|
|
|
|
2,244
|
|
|
Other assets
|
|
|
2,972
|
|
|
|
3,087
|
|
|
Total assets
|
|
$
|
305,168
|
|
|
$
|
252,629
|
|
|
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
7,322
|
|
|
$
|
7,810
|
|
|
Accrued liabilities
|
|
|
54,977
|
|
|
|
48,322
|
|
|
Current portion of capital lease obligation
|
|
|
—
|
|
|
|
181
|
|
|
Current portion of long-term debt
|
|
|
—
|
|
|
|
14,528
|
|
|
Deferred revenue
|
|
|
64,415
|
|
|
|
45,159
|
|
|
Total current liabilities
|
|
|
126,714
|
|
|
|
116,000
|
|
|
Long-term debt
|
|
|
—
|
|
|
|
312
|
|
|
Other long-term liabilities
|
|
|
6,252
|
|
|
|
6,276
|
|
|
Total liabilities
|
|
|
132,966
|
|
|
|
122,588
|
|
|
Stockholders' equity:
|
|
|
|
|
|
|
|
|
|
Common stock
|
|
|
8
|
|
|
|
7
|
|
|
Additional paid-in capital
|
|
|
434,840
|
|
|
|
366,800
|
|
|
Accumulated other comprehensive income
|
|
|
2,998
|
|
|
|
2,737
|
|
|
Accumulated deficit
|
|
|
(265,644
|
)
|
|
|
(239,503
|
)
|
|
Total stockholders' equity
|
|
$
|
172,202
|
|
|
$
|
130,041
|
|
|
Total liabilities and stockholders' equity
|
|
$
|
305,168
|
|
|
$
|
252,629
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TABLE 2
RINGCENTRAL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
|
Year Ended
December 31,
|
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Software subscriptions
|
|
$
|
129,662
|
|
|
$
|
97,952
|
|
|
$
|
463,163
|
|
|
$
|
355,850
|
|
|
Other
|
|
|
10,873
|
|
|
|
6,551
|
|
|
|
38,363
|
|
|
|
23,874
|
|
|
Total revenues
|
|
|
140,535
|
|
|
|
104,503
|
|
|
|
501,526
|
|
|
|
379,724
|
|
|
Cost of revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Software subscriptions
|
|
|
24,223
|
|
|
|
19,363
|
|
|
|
89,193
|
|
|
|
73,470
|
|
|
Other
|
|
|
9,397
|
|
|
|
5,289
|
|
|
|
32,078
|
|
|
|
18,741
|
|
|
Total cost of revenues
|
|
|
33,620
|
|
|
|
24,652
|
|
|
|
121,271
|
|
|
|
92,211
|
|
|
Gross profit
|
|
|
106,915
|
|
|
|
79,851
|
|
|
|
380,255
|
|
|
|
287,513
|
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development
|
|
|
20,362
|
|
|
|
17,417
|
|
|
|
75,148
|
|
|
|
65,514
|
|
|
Sales and marketing
|
|
|
73,310
|
|
|
|
54,701
|
|
|
|
260,069
|
|
|
|
192,497
|
|
|
General and administrative
|
|
|
19,428
|
|
|
|
14,339
|
|
|
|
72,313
|
|
|
|
55,454
|
|
|
Total operating expenses
|
|
|
113,100
|
|
|
|
86,457
|
|
|
|
407,530
|
|
|
|
313,465
|
|
|
Loss from operations
|
|
|
(6,185
|
)
|
|
|
(6,606
|
)
|
|
|
(27,275
|
)
|
|
|
(25,952
|
)
|
|
Other income (expense), net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
(5
|
)
|
|
|
(162
|
)
|
|
|
(99
|
)
|
|
|
(746
|
)
|
|
Other income (expense), net
|
|
|
178
|
|
|
|
(94
|
)
|
|
|
1,491
|
|
|
|
(2,375
|
)
|
|
Other income (expense), net
|
|
|
173
|
|
|
|
(256
|
)
|
|
|
1,392
|
|
|
|
(3,121
|
)
|
|
Loss before income taxes
|
|
|
(6,012
|
)
|
|
|
(6,862
|
)
|
|
|
(25,883
|
)
|
|
|
(29,073
|
)
|
|
Provision for income taxes
|
|
|
77
|
|
|
|
84
|
|
|
|
258
|
|
|
|
236
|
|
|
Net loss
|
|
$
|
(6,089
|
)
|
|
$
|
(6,946
|
)
|
|
$
|
(26,141
|
)
|
|
$
|
(29,309
|
)
|
|
Net loss per common share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
|
|
$
|
(0.08
|
)
|
|
$
|
(0.09
|
)
|
|
$
|
(0.34
|
)
|
|
$
|
(0.40
|
)
|
|
Weighted-average number of shares used in computing net loss per
share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
|
|
|
77,665
|
|
|
|
73,961
|
|
|
|
76,281
|
|
|
|
72,994
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TABLE 3
RINGCENTRAL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
|
|
|
|
|
|
|
|
|
Year ended December 31,
|
|
|
|
|
2017
|
|
|
2016
|
|
|
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(26,141
|
)
|
|
$
|
(29,309
|
)
|
|
Adjustments to reconcile net loss to net cash provided by operating
activities
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
16,214
|
|
|
|
14,663
|
|
|
Share-based compensation
|
|
|
42,060
|
|
|
|
30,840
|
|
|
Foreign currency remeasurement (gain) loss
|
|
|
(666
|
)
|
|
|
2,615
|
|
|
Provision for bad debt
|
|
|
1,674
|
|
|
|
648
|
|
|
Deferred income tax
|
|
|
(47
|
)
|
|
|
(36
|
)
|
|
Others
|
|
|
181
|
|
|
|
583
|
|
|
Changes in assets and liabilities
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
(16,770
|
)
|
|
|
(11,728
|
)
|
|
Prepaid expenses and other current assets
|
|
|
(6,199
|
)
|
|
|
(1,018
|
)
|
|
Other assets
|
|
|
1,533
|
|
|
|
76
|
|
|
Accounts payable
|
|
|
176
|
|
|
|
1,516
|
|
|
Accrued liabilities
|
|
|
9,918
|
|
|
|
15,165
|
|
|
Deferred revenue
|
|
|
19,256
|
|
|
|
8,502
|
|
|
Other liabilities
|
|
|
(24
|
)
|
|
|
(2,809
|
)
|
|
Net cash provided by operating activities
|
|
|
41,165
|
|
|
|
29,708
|
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|
Purchases of property and equipment
|
|
|
(19,497
|
)
|
|
|
(14,236
|
)
|
|
Capitalized internal-use software
|
|
|
(7,420
|
)
|
|
|
(2,162
|
)
|
|
Restricted investments
|
|
|
530
|
|
|
|
—
|
|
|
Net cash used in investing activities
|
|
|
(26,387
|
)
|
|
|
(16,398
|
)
|
|
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|
Proceeds from issuance of stock in connection with stock plans
|
|
|
25,495
|
|
|
|
15,104
|
|
|
Payment of holdback from Glip acquisition
|
|
|
—
|
|
|
|
(1,500
|
)
|
|
Repayment of debt
|
|
|
(14,840
|
)
|
|
|
(3,750
|
)
|
|
Repayment of capital lease obligations
|
|
|
(181
|
)
|
|
|
(269
|
)
|
|
Taxes paid related to net share settlement of equity awards
|
|
|
(3,691
|
)
|
|
|
(255
|
)
|
|
Net cash provided by financing activities
|
|
|
6,783
|
|
|
|
9,330
|
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
|
(724
|
)
|
|
|
127
|
|
|
Net increase in cash and cash equivalents
|
|
|
20,837
|
|
|
|
22,767
|
|
|
Cash and cash equivalents
|
|
|
|
|
|
|
|
|
|
Beginning of period
|
|
|
160,355
|
|
|
|
137,588
|
|
|
End of period
|
|
$
|
181,192
|
|
|
$
|
160,355
|
|
|
|
|
|
|
|
|
|
TABLE 4
RINGCENTRAL, INC.
RECONCILIATION OF OPERATING INCOME (LOSS)
GAAP MEASURES TO NON-GAAP MEASURES
(Unaudited, in thousands)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
|
Year Ended
December 31,
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Software subscriptions
|
$
|
129,662
|
|
|
$
|
97,952
|
|
|
$
|
463,163
|
|
|
$
|
355,850
|
|
|
Other
|
|
10,873
|
|
|
|
6,551
|
|
|
|
38,363
|
|
|
|
23,874
|
|
|
Total revenues
|
|
140,535
|
|
|
|
104,503
|
|
|
|
501,526
|
|
|
|
379,724
|
|
|
Cost of revenues reconciliation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Software subscriptions cost of revenues
|
|
24,223
|
|
|
|
19,363
|
|
|
|
89,193
|
|
|
|
73,470
|
|
|
Stock-based compensation
|
|
(849
|
)
|
|
|
(810
|
)
|
|
|
(3,552
|
)
|
|
|
(3,048
|
)
|
|
Amortization of acquisition intangibles
|
|
(150
|
)
|
|
|
(151
|
)
|
|
|
(602
|
)
|
|
|
(603
|
)
|
|
Non-GAAP Software subscriptions cost of revenues
|
|
23,224
|
|
|
|
18,402
|
|
|
|
85,039
|
|
|
|
69,819
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Other cost of revenues
|
|
9,397
|
|
|
|
5,289
|
|
|
|
32,078
|
|
|
|
18,741
|
|
|
Stock-based compensation
|
|
(65
|
)
|
|
|
(31
|
)
|
|
|
(183
|
)
|
|
|
(117
|
)
|
|
Non-GAAP Other cost of revenues
|
|
9,332
|
|
|
|
5,258
|
|
|
|
31,895
|
|
|
|
18,624
|
|
|
Gross profit and gross margin reconciliation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Subscriptions
|
|
82.1
|
%
|
|
|
81.2
|
%
|
|
|
81.6
|
%
|
|
|
80.4
|
%
|
|
Non-GAAP Other
|
|
14.2
|
%
|
|
|
19.7
|
%
|
|
|
16.9
|
%
|
|
|
22.0
|
%
|
|
Non-GAAP Gross profit
|
|
76.8
|
%
|
|
|
77.4
|
%
|
|
|
76.7
|
%
|
|
|
76.7
|
%
|
|
Operating expenses reconciliation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Research and development
|
|
20,362
|
|
|
|
17,417
|
|
|
|
75,148
|
|
|
|
65,514
|
|
|
Stock-based compensation
|
|
(2,751
|
)
|
|
|
(1,805
|
)
|
|
|
(9,550
|
)
|
|
|
(7,296
|
)
|
|
Acquisition related matters
|
|
-
|
|
|
|
(309
|
)
|
|
|
(443
|
)
|
|
|
(1,411
|
)
|
|
Non-GAAP Research and development
|
|
17,611
|
|
|
|
15,303
|
|
|
|
65,155
|
|
|
|
56,807
|
|
|
As a % of total revenues non-GAAP
|
|
12.5
|
%
|
|
|
14.6
|
%
|
|
|
13.0
|
%
|
|
|
15.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Sales and marketing
|
|
73,310
|
|
|
|
54,701
|
|
|
|
260,069
|
|
|
|
192,497
|
|
|
Stock-based compensation
|
|
(4,459
|
)
|
|
|
(3,111
|
)
|
|
|
(16,015
|
)
|
|
|
(10,902
|
)
|
|
Amortization of acquisition intangibles
|
|
-
|
|
|
|
(105
|
)
|
|
|
(180
|
)
|
|
|
(420
|
)
|
|
Non-GAAP Sales and marketing
|
|
68,851
|
|
|
|
51,485
|
|
|
|
243,874
|
|
|
|
181,175
|
|
|
As a % of total revenues non-GAAP
|
|
49.0
|
%
|
|
|
49.3
|
%
|
|
|
48.6
|
%
|
|
|
47.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP General and administrative
|
|
19,428
|
|
|
|
14,339
|
|
|
|
72,313
|
|
|
|
55,454
|
|
|
Stock-based compensation
|
|
(3,432
|
)
|
|
|
(2,480
|
)
|
|
|
(12,760
|
)
|
|
|
(9,477
|
)
|
|
Acquisition related matters
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(59
|
)
|
|
Non-GAAP General and administrative
|
|
15,996
|
|
|
|
11,859
|
|
|
|
59,553
|
|
|
|
45,918
|
|
|
As a % of total revenues non-GAAP
|
|
11.4
|
%
|
|
|
11.3
|
%
|
|
|
11.9
|
%
|
|
|
12.1
|
%
|
|
Income (loss) from operations reconciliation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP loss from operations
|
|
(6,185
|
)
|
|
|
(6,606
|
)
|
|
|
(27,275
|
)
|
|
|
(25,952
|
)
|
|
Stock-based compensation
|
|
11,556
|
|
|
|
8,237
|
|
|
|
42,060
|
|
|
|
30,840
|
|
|
Amortization of acquisition intangibles
|
|
150
|
|
|
|
256
|
|
|
|
782
|
|
|
|
1,023
|
|
|
Acquisition related matters
|
|
-
|
|
|
|
309
|
|
|
|
443
|
|
|
|
1,470
|
|
|
Non-GAAP Income from operations
|
|
5,521
|
|
|
|
2,196
|
|
|
|
16,010
|
|
|
|
7,381
|
|
|
Non-GAAP Operating margin
|
|
3.9
|
%
|
|
|
2.1
|
%
|
|
|
3.2
|
%
|
|
|
1.9
|
%
|
|
|
|
|
|
|
|
|
|
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,
|
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
Net Income (loss) reconciliation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Net loss
|
|
$
|
(6,089
|
)
|
|
$
|
(6,946
|
)
|
|
$
|
(26,141
|
)
|
|
$
|
(29,309
|
)
|
|
Stock-based compensation
|
|
|
11,556
|
|
|
|
8,237
|
|
|
|
42,060
|
|
|
|
30,840
|
|
|
Amortization of acquisition intangibles
|
|
|
150
|
|
|
|
256
|
|
|
|
782
|
|
|
|
1,023
|
|
|
Acquisition related matters
|
|
|
-
|
|
|
|
309
|
|
|
|
443
|
|
|
|
1,470
|
|
|
Intercompany remeasurement loss (gain)
|
|
|
50
|
|
|
|
167
|
|
|
|
(820
|
)
|
|
|
2,508
|
|
|
Income tax expense effects *
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Non-GAAP Net income
|
|
$
|
5,667
|
|
|
$
|
2,023
|
|
|
$
|
16,324
|
|
|
$
|
6,532
|
|
|
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
|
|
|
77,665
|
|
|
|
73,961
|
|
|
|
76,281
|
|
|
|
72,994
|
|
|
Effect of dilutive securities
|
|
|
6,356
|
|
|
|
3,606
|
|
|
|
5,925
|
|
|
|
3,414
|
|
|
Non-GAAP weighted average shares used in computing non-GAAP net
income per share
|
|
|
84,021
|
|
|
|
77,567
|
|
|
|
82,206
|
|
|
|
76,408
|
|
|
GAAP Net loss per share
|
|
$
|
(0.08
|
)
|
|
$
|
(0.09
|
)
|
|
$
|
(0.34
|
)
|
|
$
|
(0.40
|
)
|
|
Non-GAAP Net income per share
|
|
$
|
0.07
|
|
|
$
|
0.03
|
|
|
$
|
0.20
|
|
|
$
|
0.09
|
|
* The non-GAAP adjustments do not have an impact on our income tax
provision due to our 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)
|
|
|
|
|
|
|
|
|
|
|
|
Q1 2018
|
|
|
FY 2018
|
|
|
|
|
Low Range
|
|
|
High Range
|
|
|
Low Range
|
|
|
High Range
|
|
|
GAAP revenues
|
|
|
144.5
|
|
|
|
146.5
|
|
|
|
629.0
|
|
|
|
639.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP loss from operations
|
|
|
(6.3
|
)
|
|
|
(4.7
|
)
|
|
|
(28.3
|
)
|
|
|
(22.2
|
)
|
|
GAAP operating margin
|
|
|
(4.4
|
%)
|
|
|
(3.2
|
%)
|
|
|
(4.5
|
%)
|
|
|
(3.5
|
%)
|
|
Stock-based compensation
|
|
|
15.3
|
|
|
|
14.7
|
|
|
|
72.6
|
|
|
|
69.8
|
|
|
Amortization of acquisition intangibles and acquisition related
matters
|
|
|
1.1
|
|
|
|
1.1
|
|
|
|
4.8
|
|
|
|
4.8
|
|
|
Non-GAAP income from operations
|
|
$
|
10.1
|
|
|
$
|
11.1
|
|
|
$
|
49.1
|
|
|
$
|
52.4
|
|
|
Non-GAAP operating margin
|
|
|
7.0
|
%
|
|
|
7.6
|
%
|
|
|
7.8
|
%
|
|
|
8.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TABLE 7
RINGCENTRAL, INC.
FORECASTED GUIDANCE UNDER TOPIC 606
(In millions, except per share data)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q1 2018 Guidance
|
|
|
Q1 2017
Actual
|
|
|
Growth rates
|
|
|
|
|
Low
|
|
|
High
|
|
|
Adjusted for
ASC 606
|
|
|
Low
|
|
|
High
|
|
|
Software subscriptions revenue
|
|
|
134.0
|
|
|
|
135.0
|
|
|
|
104.1
|
|
|
|
29
|
%
|
|
|
30
|
%
|
|
Total revenues
|
|
|
144.5
|
|
|
|
146.5
|
|
|
|
112.2
|
|
|
|
29
|
%
|
|
|
31
|
%
|
|
GAAP operating margin
|
|
|
(4.4
|
%)
|
|
|
(3.2
|
%)
|
|
|
(2.0
|
%)
|
|
|
|
|
|
|
|
|
|
Non-GAAP operating margin
|
|
|
7.0
|
%
|
|
|
7.6
|
%
|
|
|
6.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FY 2018 Guidance
|
|
|
FY 2017
Actual
|
|
|
Growth rates
|
|
|
|
|
Low
|
|
|
High
|
|
|
Adjusted for
ASC 606
|
|
|
Low
|
|
|
High
|
|
|
Software subscriptions revenue
|
|
|
581.0
|
|
|
|
589.0
|
|
|
|
465.3
|
|
|
|
25
|
%
|
|
|
27
|
%
|
|
Total revenues
|
|
|
629.0
|
|
|
|
639.0
|
|
|
|
503.6
|
|
|
|
25
|
%
|
|
|
27
|
%
|
|
GAAP operating margin
|
|
|
(4.5
|
%)
|
|
|
(3.5
|
%)
|
|
|
(1.1
|
%)
|
|
|
|
|
|
|
|
|
|
Non-GAAP operating margin
|
|
|
7.8
|
%
|
|
|
8.2
|
%
|
|
|
7.5
|
%
|
|
|
|
|
|
|
|
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20180212006196/en/
RingCentral, Inc.
Investor Relations Contact:
Paul
Thomas, 650-458-4462
Paul.Thomas@RingCentral.com
Media
Contact:
Jennifer Caukin, 650-561-6348
Jennifer.Caukin@ringcentral.com
Source: RingCentral, Inc.