|By Business Wire||
|July 29, 2014 04:06 PM EDT||
Second Quarter Highlights:
- Revenue increased 40% year-over-year to $52.8 million.
- Total annualized exit monthly recurring subscriptions were up 38% year-over-year to $203.7 million.
- RingCentral OfficeTM annualized exit monthly recurring subscriptions were up 58% year-over-year to $139.2 million.
- Net monthly subscription dollar retention was over 99%.
“Our market-leading, cloud-based offering continues to disrupt the business communications market and drove our strong revenue growth in the quarter,” said Vlad Shmunis, RingCentral’s Chairman and CEO. “In addition, our plans to expand our presence with larger businesses are paying off. Our biggest customer deployment has now exceeded 1,200 users, further validating the robustness of our platform and go-to-market strategy. We are also proud to announce an agreement with BT to distribute our solutions in the UK. This is yet another strong testament to the unique value provided by RingCentral and our ability to deliver our cloud service internationally. This relationship with one of the world’s top telecommunications companies has expanded our lead in the carrier market, as we are the only pure-play cloud communication solutions provider serving carriers in three different countries.”
Financial Results of the Second Quarter 2014:
- Revenue: Total revenue was $52.8 million for the second quarter of 2014, up 40% from the second quarter of 2013. Service revenue was $47.9 million for the second quarter of 2014, up 39% from the second quarter of 2013. Product revenue was $4.9 million for the second quarter of 2014, up 52% from the second quarter of 2013.
- Net Income (Loss): Net income (loss) per diluted share was ($0.20) for the second quarter of 2014 compared with ($0.60) for the second quarter of 2013. Non-GAAP net income (loss) per diluted share was ($0.14) for the second quarter of 2014, compared with ($0.36) per diluted share for the second quarter of 2013.
- Balance Sheet: Total cash and cash equivalents at the end of the second quarter of 2014 were $151.4 million, compared to $166.8 million at the end of the first quarter of 2014 and $116.4 million at the end of the fourth quarter of 2013.
Second Quarter 2014 and Recent Business Highlights:
- Announced an agreement with BT, one of the world’s leading telecommunications service providers, to resell RingCentral’s cloud based business communications solutions in the UK market.
- Signed a new alliance with Imago Group PLC, Europe’s largest video solutions distributor, to distribute RingCentral’s cloud business phone solutions through its reseller network in the UK market.
- Dycom, a leading provider of specialty contracting services to the telecommunications and infrastructure industry, has expanded their deployment to more than 1,200 users.
- TMC named RingCentral Office Enterprise Edition as a 2014 Unified Communications Product of the Year Award winner.
- Received the “The Big Idea Award” at IBF’s Ventures Capital Investing Conference, an award that recognizes the most disruptive business model in the past 12-18 months.
- Earned the Strategy Innovation Award at the San Francisco Chief Strategy Officer Summit for having the most Disruptive Strategy, recognizing RingCentral for pioneering the strategic initiative “Mobile First”.
- RingCentral CEO and Founder Vlad Shmunis received the Ernst and Young Entrepreneur of the YearTM 2014 Award in the Software category in Northern California.
Conference Call Details:
- What: RingCentral financial results for the second quarter of 2014 and outlook for the third quarter and full year of 2014.
- When: Tuesday, July 29, 2014 at 2PM PT (5PM 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 13586010 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 (877) 870-5176 from the United States or (858) 384-5517 internationally with recording access code 13586010.
RingCentral, Inc. (NYSE: RNG) is a leading provider of cloud business communications solutions. Easier to manage and more flexible than on-premise communications systems, RingCentral’s cloud solution meets the needs of modern distributed and mobile workforces, while eliminating the expense and complications of on-premise traditional hardware-based systems and software. RingCentral is headquartered in San Mateo, California.
This press release contains “forward-looking statements”, including statements regarding the ability of our technology and services to continue to disrupt the business communications market, drive our revenue growth, expand our presence with larger customers and our lead in the carrier market, and enable our international growth. 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 customers and enter new geographies and markets; our ability to continue to release, and gain customer acceptance of, new and improved versions of our services; our ability to compete successfully against existing and new competitors; our ability to enter into and maintain relationships with carriers and other resellers; our ability to manage our expenses and growth; and general market, political, economic, and business conditions; as well as those risks and uncertainties included under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in our Form 10-Q for the quarter ended March 31, 2014, 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 results include certain Non-GAAP financial measures, including Non-GAAP operating income (loss) and Non-GAAP net income (loss) per share. We define Non-GAAP operating income (loss) as operating income (loss) excluding share-based compensation, legal settlements and other one-time items. We define Non-GAAP net income (loss) per share as net income (loss) per share assuming all preferred stock converted into common stock at the later of the start of the period or the date of issuance.
We have included Non-GAAP operating income (loss) and Non-GAAP net income (loss) per 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) and Non-GAAP net income (loss) per share can provide a useful measure for period-to-period comparisons of our core business.
Although Non-GAAP operating income (loss) and Non-GAAP net income (loss) per 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.
We have not reconciled Non-GAAP operating income (loss) to operating income (loss) guidance or Non-GAAP net income (loss) per share to net income (loss) per share guidance because we do not provide guidance for share-based compensation expense, provision for income taxes, interest income, interest expense, and other income and expenses, which are reconciling items between Non-GAAP operating income (loss) to operating income (loss) guidance or Non-GAAP net income (loss) per share to net income (loss) per share. As items that impact net income (loss) are out of our control and/or cannot be reasonably predicted, we are unable to provide such guidance. Accordingly, reconciliation to net income (loss) is not available without unreasonable effort. For a reconciliation of historical Non-GAAP financial measures to the nearest comparable GAAP measures, see the reconciliation tables included in this press release.
Our reported results also include our total annualized exit monthly recurring subscriptions and RingCentral Office annualized exit monthly recurring subscriptions. We define our total annualized exit monthly recurring subscriptions as our total monthly recurring subscriptions multiplied by 12. Our total monthly recurring subscriptions equals 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 services revenues. 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.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands)
|Cash and cash equivalents||$||151,418||$||116,378|
|Accounts receivable, net||5,118||3,045|
|Prepaid expenses and other current assets||9,125||5,214|
|Total current assets||167,835||126,748|
|Property and equipment, net||24,515||16,660|
|Liabilities and Stockholders’ Equity|
|Current portion of capital lease obligation||920||347|
|Current portion of long-term debt||9,105||9,871|
|Total current liabilities||60,253||51,743|
|Sales tax liability||3,939||3,988|
|Capital lease obligation||699||247|
|Other long-term liabilities||3,193||1,336|
|Additional paid-in capital||262,447||193,574|
|Accumulated other comprehensive loss||(640)||(310)|
|Total stockholders’ equity||105,825||63,515|
|Total liabilities and stockholders’ equity||$||194,403||$||145,185|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands, except per share data)
Three Months Ended
Six Months Ended
|Cost of revenues:|
|Total cost of revenues||19,543||14,662||37,446||28,399|
|Research and development||10,874||8,606||20,547||16,110|
|Sales and marketing||25,688||16,324||49,645||33,466|
|General and administrative||9,492||11,231||18,459||17,781|
|Total operating expenses||46,054||36,161||88,651||67,357|
|Loss from operations||(12,810)||(13,119)||(25,048)||(22,527)|
|Other income (expense), net||(383)||(632)||(1,021)||(1,474)|
|Loss before provision (benefit) for income taxes||(13,193)||(13,751)||(26,069)||(24,001)|
|Provision (benefit) for income taxes||137||(132)||165||(120)|
|Net loss per common share:|
|Basic and diluted||($||0.20)||($||0.60)||($||0.40)||($||1.05)|
|Weighted-average number of shares used in computing net loss per share:|
|Basic and diluted||67,295||22,766||65,557||22,699|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
Six Months Ended
|Cash flows from operating activities:|
|Adjustments to reconcile net loss to net cash used in operating activities:|
|Depreciation and amortization||4,590||4,351|
|Non-cash interest expense related to debt||122||158|
|Loss on disposal of assets||24||—|
|Deferred income tax||82||(45)|
|Changes in assets and liabilities|
|Prepaid expenses and other current assets||(3,911)||(2,055)|
|Net cash used in operating activities||(10,982)||(12,357)|
|Cash flows from investing activities:|
|Purchases of property and equipment||(10,506)||(5,951)|
|Net cash used in investing activities||(10,506)||(6,081)|
|Cash flows from financing activities:|
|Net proceeds from secondary offering of common stock||57,167||—|
|Net proceeds from debt agreements||—||3,655|
|Repayment of debt||(4,751)||(3,961)|
|Repayment of capital lease obligations||(123)||(206)|
|Proceeds from issuance of preferred stock warrants||—||265|
|Payment of offering costs||(1,219)||(232)|
|Proceeds from exercise of stock options and common stock warrants||5,476||429|
|Net cash provided by (used in) financing activities||56,550||(50)|
|Effect of exchange rate changes on cash and cash equivalents||(22)||(10)|
|Net increase (decrease) in cash and cash equivalents||35,040||(18,498)|
|Cash and cash equivalents:|
|Beginning of period||116,378||37,864|
|End of period||$||151,418||$||19,366|
RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES
(In thousands, except per share data)
Ended June 30,
Ended June 30,
|Cost of Revenues reconciliation:|
|GAAP Services cost of revenues||14,792||11,389||28,506||22,098|
|Non-GAAP services cost of revenues||14,444||11,302||27,862||21,930|
|GAAP Product cost of revenues||4,751||3,273||8,940||6,301|
|Gross margin reconciliation:|
|Non-GAAP Gross margin||63.6%||61.3%||63.6%||61.4%|
|Operating expenses reconciliation:|
|GAAP Research and development||10,874||8,606||20,547||16,110|
|Non-GAAP research and development||10,026||8,364||19,047||15,593|
As a % of total revenues Non-GAAP
|GAAP Sales and marketing||25,688||16,324||49,645||33,466|
|Non-GAAP sales and marketing||24,383||16,099||47,380||33,062|
As a % of total revenues Non-GAAP
|GAAP General and administrative||9,492||11,231||18,459||17,781|
|Legal related matters||-||(4,257)||-||(4,257)|
|Non-GAAP general and administrative||8,062||6,306||15,760||12,277|
As a % of total revenues Non-GAAP
|Loss from operations reconciliation:|
|GAAP loss from operations||(12,810)||(13,119)||(25,048)||(22,527)|
|Legal related matters||-||4,257||-||4,257|
|Non-GAAP loss from Operations||(8,879)||(7,640)||(17,940)||(15,934)|
|Net loss reconciliation:|
|GAAP Net loss||(13,330)||(13,619)||(26,234)||(23,881)|
|Legal related matters||-||4,257||-||4,257|
|Non-GAAP Net loss||$||(9,399)||$||(8,140)||$||(19,126)||$||(17,288)|
|Basic and diluted net loss per share|
|Shares used to compute basic and diluted GAAP and Non-GAAP net loss per share||67,295||22,766||65,557||22,699|
SYS-CON Events announced today that delaPlex will exhibit at SYS-CON's @CloudExpo, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. delaPlex pioneered Software Development as a Service (SDaaS), which provides scalable resources to build, test, and deploy software. It’s a fast and more reliable way to develop a new product or expand your in-house team.
Feb. 21, 2017 07:30 PM EST Reads: 1,124
For organizations that have amassed large sums of software complexity, taking a microservices approach is the first step toward DevOps and continuous improvement / development. Integrating system-level analysis with microservices makes it easier to change and add functionality to applications at any time without the increase of risk. Before you start big transformation projects or a cloud migration, make sure these changes won’t take down your entire organization.
Feb. 21, 2017 07:30 PM EST Reads: 261
SYS-CON Events announced today that IoT Now has been named “Media Sponsor” of SYS-CON's 20th International Cloud Expo, which will take place on June 6–8, 2017, at the Javits Center in New York City, NY. IoT Now explores the evolving opportunities and challenges facing CSPs, and it passes on some lessons learned from those who have taken the first steps in next-gen IoT services.
Feb. 21, 2017 06:30 PM EST Reads: 1,212
Updating DevOps to the latest production data slows down your development cycle. Probably it is due to slow, inefficient conventional storage and associated copy data management practices. In his session at @DevOpsSummit at 20th Cloud Expo, Dhiraj Sehgal, in Product and Solution at Tintri, will talk about DevOps and cloud-focused storage to update hundreds of child VMs (different flavors) with updates from a master VM in minutes, saving hours or even days in each development cycle. He will also...
Feb. 21, 2017 06:30 PM EST Reads: 2,366
Extreme Computing is the ability to leverage highly performant infrastructure and software to accelerate Big Data, machine learning, HPC, and Enterprise applications. High IOPS Storage, low-latency networks, in-memory databases, GPUs and other parallel accelerators are being used to achieve faster results and help businesses make better decisions. In his session at 18th Cloud Expo, Michael O'Neill, Strategic Business Development at NVIDIA, focused on some of the unique ways extreme computing is...
Feb. 21, 2017 06:30 PM EST Reads: 7,537
The explosion of new web/cloud/IoT-based applications and the data they generate are transforming our world right before our eyes. In this rush to adopt these new technologies, organizations are often ignoring fundamental questions concerning who owns the data and failing to ask for permission to conduct invasive surveillance of their customers. Organizations that are not transparent about how their systems gather data telemetry without offering shared data ownership risk product rejection, regu...
Feb. 21, 2017 06:15 PM EST Reads: 870
SYS-CON Events announced today that WineSOFT will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Based in Seoul and Irvine, WineSOFT is an innovative software house focusing on internet infrastructure solutions. The venture started as a bootstrap start-up in 2010 by focusing on making the internet faster and more powerful. WineSOFT’s knowledge is based on the expertise of TCP/IP, VPN, SSL, peer-to-peer, mob...
Feb. 21, 2017 06:15 PM EST Reads: 1,524
The Internet of Things can drive efficiency for airlines and airports. In their session at @ThingsExpo, Shyam Varan Nath, Principal Architect with GE, and Sudip Majumder, senior director of development at Oracle, discussed the technical details of the connected airline baggage and related social media solutions. These IoT applications will enhance travelers' journey experience and drive efficiency for the airlines and the airports.
Feb. 21, 2017 05:30 PM EST Reads: 1,137
With billions of sensors deployed worldwide, the amount of machine-generated data will soon exceed what our networks can handle. But consumers and businesses will expect seamless experiences and real-time responsiveness. What does this mean for IoT devices and the infrastructure that supports them? More of the data will need to be handled at - or closer to - the devices themselves.
Feb. 21, 2017 05:15 PM EST Reads: 1,738
SYS-CON Events announced today that Dataloop.IO, an innovator in cloud IT-monitoring whose products help organizations save time and money, has been named “Bronze Sponsor” of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Dataloop.IO is an emerging software company on the cutting edge of major IT-infrastructure trends including cloud computing and microservices. The company, founded in the UK but now based in San Fran...
Feb. 21, 2017 04:30 PM EST Reads: 2,284
Big Data, cloud, analytics, contextual information, wearable tech, sensors, mobility, and WebRTC: together, these advances have created a perfect storm of technologies that are disrupting and transforming classic communications models and ecosystems. In his session at @ThingsExpo, Erik Perotti, Senior Manager of New Ventures on Plantronics’ Innovation team, provided an overview of this technological shift, including associated business and consumer communications impacts, and opportunities it m...
Feb. 21, 2017 04:00 PM EST Reads: 6,874
The financial services market is one of the most data-driven industries in the world, yet it’s bogged down by legacy CPU technologies that simply can’t keep up with the task of querying and visualizing billions of records. In his session at 20th Cloud Expo, Jared Parker, Director of Financial Services at Kinetica, will discuss how the advent of advanced in-database analytics on the GPU makes it possible to run sophisticated data science workloads on the same database that is housing the rich inf...
Feb. 21, 2017 03:30 PM EST Reads: 1,246
It is one thing to build single industrial IoT applications, but what will it take to build the Smart Cities and truly society changing applications of the future? The technology won’t be the problem, it will be the number of parties that need to work together and be aligned in their motivation to succeed. In his Day 2 Keynote at @ThingsExpo, Henrik Kenani Dahlgren, Portfolio Marketing Manager at Ericsson, discussed how to plan to cooperate, partner, and form lasting all-star teams to change the...
Feb. 21, 2017 03:15 PM EST Reads: 4,507
In his keynote at @ThingsExpo, Chris Matthieu, Director of IoT Engineering at Citrix and co-founder and CTO of Octoblu, focused on building an IoT platform and company. He provided a behind-the-scenes look at Octoblu’s platform, business, and pivots along the way (including the Citrix acquisition of Octoblu).
Feb. 21, 2017 03:15 PM EST Reads: 797
"delaPlex is a software development company. We do team-based outsourcing development," explained Mark Rivers, COO and Co-founder of delaPlex Software, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
Feb. 21, 2017 03:00 PM EST Reads: 5,961