Q1 2024 key metrics above high end of
guidance
Raising 2024 revenue outlook
Share repurchase authorization increased by
$250 million
RingCentral, Inc. (NYSE: RNG), a leading provider of AI-driven
cloud business communications, contact center, video, and hybrid
event solutions, today announced financial results for the first
quarter ended March 31, 2024.
First Quarter Financial Highlights
- Total revenue increased 9% year-over-year to $584 million.
- Subscriptions revenue increased 10% year-over-year to $557
million.
- Annualized Exit Monthly Recurring Subscriptions (ARR) increased
10% year over year to $2.37 billion.
- Mid-market and Enterprise ARR increased 11% year over year to
$1.48 billion.
- Enterprise ARR increased 13% year over year to $1.02
billion.
- GAAP operating margin of (1.9%), compared to (10.2%) in the
prior year.
- Non-GAAP operating margin of 20.7%, up 350 basis points
year-over-year.
“We had a solid start to the year, and exceeded the high end of
our revenue and non-GAAP operating profit margin guidance," said
Vlad Shmunis, RingCentral’s Founder and CEO. "We also landed a
40,000 seat deal with a Fortune 500 retailer, which is the largest
UCaaS win in our history. And in another first, I am especially
proud of RingSense AI winning the Best Overall Award at Enterprise
Connect in March. This is a clear testament to the strength of our
product portfolio and industry leading innovation.”
"While investing for growth, we remain laser focused on
delivering increased profitability, reducing stock based
compensation and creating shareholder value," said Sonalee Parekh,
RingCentral's CFO. "We are raising our 2024 revenue and free cash
flow outlook as we deliver on our growth and efficiency
initiatives."
Financial Results for the First Quarter 2024
- Revenue: Total revenue was $584 million for the first
quarter of 2024, up from $534 million in the first quarter of 2023,
representing 9% growth. Adjusted for constant currency, total
revenue rose 9%. Subscriptions revenue of $557 million increased
10% year-over-year and accounted for 95% of total revenue. Adjusted
for constant currency, subscriptions revenue rose 9%.
- Operating Income (Loss): GAAP operating loss was ($11)
million, compared to ($55) million in the same period last year.
Non-GAAP operating income was $121 million, or 20.7% of total
revenue, compared to $92 million, or 17.2% of total revenue, in the
same period last year.
- Adjusted EBITDA: Adjusted EBITDA was $143 million, or
24.4% of total revenue, compared to $112 million, or 21.0% of total
revenue, in the same period last year.
- Net Income (Loss) Per Share: GAAP net loss per share was
($0.31), compared to ($0.57) in the same period last year. Diluted
non-GAAP net income per share was $0.87, compared to $0.76 per
share in the same period last year. The first quarters of 2024 and
2023 reflected an approximately 22.5% non-GAAP tax rate.
- Cash Flow: Net cash provided by operating activities for
the first quarter of 2024 was $96 million, or 16.4% of total
revenue, compared to $109 million, or 20.3% of total revenue, for
the first quarter of 2023. Free cash flow for the first quarter of
2024 was $77 million. This includes cash paid for interest of $23
million, restructuring and other payments of $15 million, and cash
received from certain strategic partners of $10 million. This
compares to free cash flow for the first quarter of 2023 of $87
million. This includes cash paid for interest of $0.1 million,
restructuring and other payments of $7 million, and cash received
from certain strategic partners of $33 million.
- Cash and Cash Equivalents: Total cash and cash
equivalents at the end of the first quarter of 2024 was $203
million. This compares to $222 million at the end of the fourth
quarter of 2023. Our cash balance reflects the repurchase of $80
million in shares during the first quarter of 2024 under the plans
authorized by our Board in 2023 and February 2024.
- Share Repurchase: Recently our board increased our
repurchase authorization by $250 million. We currently have
approximately $375 million remaining on our total
authorization.
Financial Outlook
Full Year 2024 Guidance:
- Raising subscriptions revenue range to $2.267 to $2.287
billion, representing annual growth of 8% to 9%.
- Raising total revenue range of $2.379 to $2.399 billion,
representing annual growth of 8% to 9%.
- Updating GAAP operating margin range to (1.6%) to (0.9%).
- Maintaining non-GAAP operating margin of 21.0%.
- Maintaining non-GAAP tax rate assumption of 22.5%. No material
cash taxes expected given net operating loss carryforwards.
- Raising non-GAAP EPS to $3.59 to $3.67 based on 97.0 to 96.0
million fully diluted shares. This compares to $3.50 to $3.58 based
on 99.0 to 98.0 million fully diluted shares previously.
- Maintaining share-based compensation range of $380 to $390
million.
- Maintaining amortization of acquired intangibles of $140
million.
- Maintaining restructuring costs of $5 to $7 million.
- We are now reporting and will guide to free cash flow, defined
as net cash provided by operating activities less capitalized
expenditures. On this basis, we expect free cash flow of $385 to
$390 million, up from $324 million in 2023. This guidance includes
cash paid for interest of $60 million and restructuring and other
payments of $20 million, as well as $25 million of cash received
from certain strategic partners. Excluding these items, our updated
free cash flow would be $440 to $445 million, above our prior
outlook of $415 to $420 million.
Second Quarter 2024 Guidance:
- Subscriptions revenue range of $558.0 to $561.0 million,
representing year-over-year growth of 9%.
- Total revenue range of $584.5 to $587.5 million, representing
year-over-year growth of 8% to 9%.
- GAAP operating margin range of (2.7%) to (1.9%).
- Non-GAAP operating margin of 20.7%.
- Non-GAAP tax rate assumption of 22.5%. No material cash taxes
expected given net operating loss carryforwards.
- Non-GAAP EPS of $0.87 to $0.88 based on 96.0 to 95.5 million
fully diluted shares.
- Share-based compensation range of $98 to $100 million.
- Amortization of acquired intangibles of $35 million.
- Restructuring costs of $0 to $2 million.
Additional Highlights
- Announced new transformative AI for its rebranded flagship
solution, RingEX. By infusing RingSense™ AI into RingEX,
RingCentral is empowering its customers' employees with
personalized and context-aware interactions that make every
conversation smarter and everyday work more efficient.
- At Enterprise Connect in March, RingCentral won Best Overall
Award for RingSense AI, a personal AI helper that provides
real-time note-taking, enhances detail recall with GPT's semantic
search, and unlocks insights from all conversations.
- Announced that its native, AI-powered contact center, RingCX™,
now touts more than 1,000 features, has extended global
availability, increased adoption, and added new CRM
integrations.
- Announced new platform capabilities that re-envision how
customers build workflows within their enterprises. These
capabilities allow non-technical users and developers to embed
RingSense AI, video, and social messaging into workflows, automate
alerts and notifications, and develop intuitive customer
experiences without writing a single line of code.
- Announced it has added Optus, Australia's second largest
telecommunications provider, as a new Global Service Provider (GSP)
partner. Optus now joins RingCentral's growing GSP family, which
includes AT&T, BT, Charter Communications, Deutsche Telecom,
Telus and Vodafone, amongst others.
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 its respective forecasted GAAP measure
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), gain (loss) associated with investments,
gain (loss) on early debt conversions, 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 gain (loss) associated with investments as it is based on future
share prices, which are difficult to predict and subject to
inherent uncertainties. We do not provide guidance on gain (loss)
on debt early conversions as it is based on future conversion
requests, future share prices, and interest rates, which are
difficult to predict and are subject to inherent uncertainties. 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 2024, 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 first
quarter of 2024 and outlook for the second quarter and full year of
2024.
- When: Tuesday, May 7, 2024 at 2:00PM PT (5:00PM
ET).
- Dial-in: 1-844-274-3686 from the United States;
1-412-317-5645 internationally
- Webcast: RingCentral Q1 2024 Earnings Webcast (live and
replay).
- Replay: Following the completion of the call through
11:59 PM ET on May 14, 2024, a telephone replay will be available
by dialing 1-844-512-2921 from the United States or 1-412-317-6671
internationally with recording access code 10023429.
Investor Presentation Details
An investor presentation providing additional information and
analysis can be found at https://ir.ringcentral.com.
About RingCentral
RingCentral is a leading provider of AI-driven cloud business
communications, contact center, video and hybrid event solutions.
RingCentral empowers businesses with conversation intelligence, and
unlocks rich customer and employee interactions to provide insights
and improved business outcomes. With decades of expertise in
reliable and secure cloud communications, RingCentral has earned
the trust of millions of customers and thousands of partners
worldwide. Visit ringcentral.com to learn more.
© 2024 RingCentral, Inc. All rights reserved. RingCentral,
RingCentral Contact Center 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 results of
the pace of our innovation and our partner networks, our
expectations regarding our profitability and our non-GAAP free cash
flow, our expectations around the contribution of our new products,
our estimates and expectations regarding third parties, and our
ability to execute and lead in the UCaaS digital transformation
market, our expectations around the demand for our products and the
growth of the markets in which we compete. 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 realize the anticipated benefits of our strategic
relationships; our expectations regarding our strategic
acquisitions, including acquisition of select assets from Hopin;
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, including RingEX (formerly RingCentral MVP™), and
RingCentral Video®; our ability to compete successfully against
existing and new competitors; our ability to enter into and
maintain relationships with resellers, carriers, channel partners
and strategic partners; 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 most recent
Form 10-K 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
subscriptions gross margin, Non-GAAP other gross margin, Non-GAAP
operating margin, Non-GAAP income (loss) from operations, Non-GAAP
adjusted EBITDA, Non-GAAP net income (loss), Non-GAAP net income
(loss) per diluted share, Non-GAAP free cash flow, Non-GAAP free
cash flow margin, and constant currency revenue. Non-GAAP
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 income (loss) from operations is
defined as GAAP income (loss) from operations excluding share-based
compensation which includes related employer payroll taxes,
amortization of acquisition intangibles, third-party relocation
costs tied to the conflict between Russia and Ukraine and other
costs including acquisition-related transaction costs and retention
payments, certain litigation-related costs, net impact of amended
agreements with strategic partners, and restructuring costs.
Non-GAAP operating margin is defined as Non-GAAP income (loss) from
operations divided by total GAAP revenue. Non-GAAP adjusted EBITDA
is defined as Non-GAAP income (loss) from operations excluding
depreciation and amortization. Non-GAAP net income (loss) is
defined as GAAP net income (loss) excluding share-based
compensation which includes related employer payroll taxes,
amortization of acquisition intangibles, third-party relocation
costs tied to the conflict between Russia and Ukraine and other
costs including acquisition-related transaction costs and retention
payments, certain litigation-related costs, net impact of amended
agreements with strategic partners, restructuring costs, non-cash
interest expense associated with amortization of debt discount and
issuance costs related to our long term debt, loss (gain)
associated with investments, loss (gain) on early extinguishment of
debt, intercompany remeasurement gains or losses, 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.
Non-GAAP free cash flow is defined as GAAP net cash provided by
(used in) operating activities adjusted for capital expenditures
including purchases of property and equipment and capitalized
internal-use software. We believe information regarding Non-GAAP
free cash flow provides useful information to investors in
understanding and evaluating the strength of liquidity and
available cash. Non-GAAP free cash flow margin is defined as
Non-GAAP free cash flow divided by total GAAP revenues.
We have included Non-GAAP subscriptions gross margin, Non-GAAP
other gross margin, Non-GAAP operating margin, Non-GAAP income
(loss) from operations, Non-GAAP adjusted EBITDA, Non-GAAP net
income (loss), Non-GAAP net income (loss) per diluted share,
Non-GAAP free cash flow, Non-GAAP free cash flow margin, and
constant currency revenue 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 and cash flow items
in calculating Non-GAAP subscriptions gross margin, Non-GAAP other
gross margin, Non-GAAP operating margin, Non-GAAP income (loss)
from operations, Non-GAAP adjusted EBITDA, Non-GAAP net income
(loss), Non-GAAP net income (loss) per diluted share, Non-GAAP free
cash flow, and Non-GAAP free cash flow margin provide useful
measure for period-to-period comparisons of our business.
The Company has provided certain revenue-related information
adjusted for constant currency to provide a framework for assessing
how the Company's underlying business performed excluding the
effect of foreign currency rate fluctuations. To present this
information, current period results in currencies other than United
States dollars are converted into United States dollars at the
average exchange rate prevailing for the quarter being compared to
for growth rate calculations presented, rather than the actual
exchange rates in effect during that period.
Although Non-GAAP subscriptions gross margin, Non-GAAP other
gross margin, Non-GAAP operating margin, Non-GAAP income (loss)
from operations, Non-GAAP adjusted EBITDA, Non-GAAP net income
(loss), Non-GAAP net income (loss) per diluted share, Non-GAAP free
cash flow, Non-GAAP free cash flow margin, and constant currency
revenue 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, mid-market and enterprise annualized exit
monthly recurring subscriptions, enterprise annualized exit monthly
recurring subscriptions and net monthly subscriptions dollar
retention rate. 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 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 define our Net Monthly
Subscription Dollar Retention Rate as (i) one plus (ii) the
quotient of Dollar Net Change divided by Average Monthly Recurring
Subscriptions. We calculate 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)
March 31, 2024
December 31, 2023
Assets
Current assets
Cash and cash equivalents
$
203,130
$
222,195
Accounts receivable, net
371,357
364,438
Deferred and prepaid sales commission
costs
184,816
184,620
Prepaid expenses and other current
assets
71,728
77,396
Total current assets
831,031
848,649
Property and equipment, net
182,736
184,390
Operating lease right-of-use assets
39,615
42,989
Deferred and prepaid sales commission
costs, non-current
381,175
395,724
Goodwill
66,903
67,370
Acquired intangibles, net
358,850
393,767
Other assets
12,793
12,024
Total assets
$
1,873,103
$
1,944,913
Liabilities, Temporary Equity, and
Stockholders’ Deficit
Current liabilities
Accounts payable
$
24,030
$
53,295
Accrued liabilities
312,405
325,632
Current portion of long-term debt, net
180,923
20,000
Deferred revenue
246,690
233,619
Total current liabilities
764,048
632,546
Long-term debt, net
1,360,457
1,525,482
Operating lease liabilities
25,616
28,178
Other long-term liabilities
45,901
61,827
Total liabilities
2,196,022
2,248,033
Temporary equity
Series A convertible preferred stock
199,449
199,449
Stockholders’ deficit
Common stock
9
9
Additional paid-in capital
1,210,366
1,204,781
Accumulated other comprehensive loss
(5,113
)
(8,223
)
Accumulated deficit
(1,727,630
)
(1,699,136
)
Total stockholders’ deficit
$
(522,368
)
$
(502,569
)
Total liabilities, temporary equity and
stockholders’ deficit
$
1,873,103
$
1,944,913
TABLE 2
RINGCENTRAL, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(Unaudited, in thousands,
except per share data)
Three Months Ended
March 31,
2024
2023
Revenues
Subscriptions
$
557,487
$
508,294
Other
26,724
25,395
Total revenues
584,211
533,689
Cost of revenues
Subscriptions
143,650
136,425
Other
26,829
24,251
Total cost of revenues
170,479
160,676
Gross profit
413,732
373,013
Operating expenses
Research and development
80,528
85,241
Sales and marketing
272,730
260,212
General and administrative
71,373
82,091
Total operating expenses
424,631
427,544
Loss from operations
(10,899
)
(54,531
)
Other income (expense), net
Interest expense
(16,254
)
(2,212
)
Other income
1,944
5,429
Other income (expense), net
(14,310
)
3,217
Loss before income taxes
(25,209
)
(51,314
)
Provision for income taxes
3,285
3,085
Net loss
$
(28,494
)
$
(54,399
)
Net loss per common share
Basic and diluted
$
(0.31
)
$
(0.57
)
Weighted-average number of shares used in
computing net loss per share
Basic and diluted
93,142
95,720
TABLE 3
RINGCENTRAL, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited, in
thousands)
Three Months Ended
March 31,
2024
2023
Cash flows from operating
activities
Net loss
$
(28,494
)
$
(54,399
)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization
56,651
57,518
Share-based compensation
88,168
98,191
Unrealized loss on investments
—
1,646
Amortization of deferred and prepaid sales
commission costs
38,599
32,211
Amortization of debt discount and issuance
costs
1,003
1,119
Reduction of operating lease right-of-use
assets
5,074
5,053
Provision for bad debt
1,562
2,732
Other
534
(175
)
Changes in assets and liabilities:
Accounts receivable
(8,481
)
(6,749
)
Deferred and prepaid sales commission
costs
(35,937
)
(19,403
)
Prepaid expenses and other assets
6,397
(10,289
)
Accounts payable
(28,732
)
(18,936
)
Accrued and other liabilities
(9,935
)
15,013
Deferred revenue
13,071
10,208
Operating lease liabilities
(3,386
)
(5,207
)
Net cash provided by operating
activities
96,094
108,533
Cash flows from investing
activities
Purchases of property and equipment
(6,133
)
(8,723
)
Capitalized internal-use software
(13,276
)
(12,596
)
Net cash used in investing activities
(19,409
)
(21,319
)
Cash flows from financing
activities
Proceeds from issuance of stock in
connection with stock plans
—
95
Payments for taxes related to net share
settlement of equity awards
(2,020
)
(1,736
)
Payments for repurchases of common
stock
(80,468
)
(74,501
)
Payments for fees on long-term debt
(1,867
)
(5,191
)
Repayments of principal on long-term
debt
(5,000
)
—
Repayments for financing obligations
(1,224
)
(1,393
)
Payments for contingent consideration
(4,086
)
—
Net cash used in financing activities
(94,665
)
(82,726
)
Effect of exchange rate changes
(1,085
)
332
Net increase (decrease) in cash, cash
equivalents, and restricted cash
(19,065
)
4,820
Cash, cash equivalents, and restricted
cash
Beginning of period
222,195
269,984
End of period
$
203,130
$
274,804
TABLE 4
RINGCENTRAL, INC.
RECONCILIATION OF OPERATING
INCOME (LOSS)
GAAP MEASURES TO NON-GAAP
MEASURES
(Unaudited, in
thousands)
Three Months Ended
March 31,
2024
2023
Revenues
Subscriptions
$
557,487
$
508,294
Other
26,724
25,395
Total revenues
584,211
533,689
Cost of revenues reconciliation
GAAP Subscriptions cost of revenues
143,650
136,425
Share-based compensation
(6,324
)
(6,951
)
Amortization of acquired intangibles
(34,083
)
(36,640
)
Third-party relocation and other costs
(39
)
—
Restructuring costs
(235
)
(405
)
Non-GAAP Subscriptions cost of
revenues
102,969
92,429
GAAP Other cost of revenues
26,829
24,251
Share-based compensation
(2,059
)
(2,119
)
Amortization of acquired intangibles
(22
)
(22
)
Restructuring costs
(326
)
(13
)
Non-GAAP Other cost of revenues
24,422
22,097
Gross profit and gross margin
reconciliation
Non-GAAP Subscriptions
81.5
%
81.8
%
Non-GAAP Other
8.6
%
13.0
%
Non-GAAP Gross profit
78.2
%
78.5
%
Operating expenses
reconciliation
GAAP Research and development
80,528
85,241
Share-based compensation
(19,993
)
(23,930
)
Third-party relocation and other costs
(1,068
)
(59
)
Restructuring costs
(1,450
)
(1,434
)
Non-GAAP Research and development
58,017
59,818
As a % of total revenues non-GAAP
9.9
%
11.2
%
GAAP Sales and marketing
272,730
260,212
Share-based compensation
(34,847
)
(38,042
)
Amortization of acquired intangibles
(812
)
(561
)
Third-party relocation and other costs
(294
)
—
Restructuring costs
(2,162
)
(2,599
)
Non-GAAP Sales and marketing
234,615
219,010
As a % of total revenues non-GAAP
40.2
%
41.0
%
GAAP General and administrative
71,373
82,091
Share-based compensation
(27,793
)
(30,253
)
Third-party relocation and other costs
(72
)
(3,087
)
Restructuring costs
(409
)
(424
)
Non-GAAP General and administrative
43,099
48,327
As a % of total revenues non-GAAP
7.4
%
9.1
%
Income (loss) from operations
reconciliation
GAAP loss from operations
(10,899
)
(54,531
)
Share-based compensation
91,016
101,295
Amortization of acquired intangibles
34,917
37,223
Third-party relocation and other costs,
net
1,473
3,146
Restructuring costs
4,582
4,875
Non-GAAP Income from operations
121,089
92,008
Non-GAAP Operating margin
20.7
%
17.2
%
Depreciation and amortization
21,734
20,294
Non-GAAP Adjusted EBITDA
142,823
112,302
As a % of total revenues non-GAAP
24.4
%
21.0
%
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
March 31,
2024
2023
Net income (loss)
reconciliation
GAAP net loss
$
(28,494
)
$
(54,399
)
Share-based compensation
91,016
101,295
Amortization of acquired intangibles
34,917
37,223
Third-party relocation and other costs,
net
1,473
(363
)
Restructuring costs
4,582
4,875
Amortization of debt discount and issuance
costs
1,003
1,119
Loss (gain) associated with
investments
—
1,646
Intercompany remeasurement loss
262
15
Income tax expense effects
(21,025
)
(18,177
)
Non-GAAP net income
$
83,734
$
73,234
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 basic net loss per share
93,142
95,720
Effect of dilutive securities
2,807
1,163
Non-GAAP weighted average shares used
in
computing non-GAAP diluted net (loss)
income per share
95,949
96,883
Diluted net income (loss) per
share
GAAP net loss per share
$
(0.31
)
$
(0.57
)
Non-GAAP net (loss) income per share
$
0.87
$
0.76
TABLE 6
RINGCENTRAL, INC.
RECONCILIATION OF CASH FLOWS
FROM OPERATING ACTIVITIES
GAAP MEASURES TO NON-GAAP FREE
CASH FLOW MEASURES
(Unaudited, in
thousands)
Three Months Ended
March 31,
2024
2023
Net cash provided by operating
activities
$
96,094
$
108,533
Capitalized expenditures
(19,409
)
(21,319
)
Non-GAAP free cash flow
$
76,685
$
87,214
Non-GAAP free cash flow margin
13.1
%
16.3
%
TABLE 7
RINGCENTRAL, INC.
RECONCILIATION OF FORECASTED
OPERATING MARGIN AND FREE CASH FLOW
GAAP MEASURES TO NON-GAAP
MEASURES
(Unaudited, in
millions)
Q2 2024
FY 2024
Low Range
High Range
Low Range
High Range
GAAP revenues
584.5
587.5
2,379.0
2,399.0
GAAP loss from operations
(16.0
)
(11.4
)
(37.4
)
(21.2
)
GAAP operating margin
(2.7
%)
(1.9
%)
(1.6
%)
(0.9
%)
Share-based compensation
100.0
98.0
390.0
380.0
Amortization of acquired intangibles
35.0
35.0
140.0
140.0
Restructuring costs
2.0
—
7.0
5.0
Non-GAAP income from operations
121.0
121.6
499.6
503.8
Non-GAAP operating margin
20.7
%
20.7
%
21.0
%
21.0
%
FY 2024
Low Range
High Range
GAAP net cash provided by operating
activities
$
470.0
$
475.0
Capitalized expenditures
(85.0
)
(85.0
)
Non-GAAP free cash flow
$
385.0
$
390.0
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240507869127/en/
Investor Relations Contact: Will Wong, RingCentral
650-450-4826 ir@ringcentral.com
Media Contact: Mariana Leventis, RingCentral 650-562-6545
Mariana.Leventis@ringcentral.com
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