Welcome!

News Feed Item

RingCentral Announces Revenue Increase of 40% for Second Quarter 2014

RingCentral, Inc. (NYSE: RNG), a leading provider of cloud business phone systems, today announced financial results for the second quarter ended June 30, 2014.

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.

About RingCentral

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.

Forward-Looking Statements

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.

       

RINGCENTRAL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited, in thousands)

 
June 30,
2014
December 31,
2013
Assets
Current assets:
Cash and cash equivalents $ 151,418 $ 116,378
Accounts receivable, net 5,118 3,045
Inventory 2,174 2,111
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
Other assets   2,053   1,777
Total assets $ 194,403 $ 145,185
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable $ 4,253 $ 4,414
Accrued liabilities 25,804 20,559
Current portion of capital lease obligation 920 347
Current portion of long-term debt 9,105 9,871
Deferred revenue   20,171   16,552
Total current liabilities 60,253 51,743
Long-term debt 20,494 24,356
Sales tax liability 3,939 3,988
Capital lease obligation 699 247
Other long-term liabilities   3,193   1,336
Total liabilities 88,578 81,670

Stockholders’ equity:

Common stock 7 6
Additional paid-in capital 262,447 193,574
Accumulated other comprehensive loss (640) (310)
Accumulated deficit   (155,989)   (129,755)
Total stockholders’ equity   105,825   63,515
Total liabilities and stockholders’ equity $ 194,403 $ 145,185
 
     

RINGCENTRAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited, in thousands, except per share data)

 
Three Months Ended
June 30,
Six Months Ended
June 30,
2014     2013   2014     2013
Revenues:
Services $ 47,867 $ 34,471 $ 91,717 $ 66,744
Product   4,920   3,233   9,332   6,485
Total revenues   52,787   37,704   101,049   73,229
Cost of revenues:
Services 14,792 11,389 28,506 22,098
Product   4,751   3,273   8,940   6,301
Total cost of revenues   19,543   14,662   37,446   28,399
Gross profit 33,244 23,042 63,603 44,830
 

Operating expenses:

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 $ (13,330) $ (13,619) $ (26,234) $ (23,881)
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
 
   

RINGCENTRAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, in thousands)

 
Six Months Ended
June 30,
2014     2013
Cash flows from operating activities:
Net loss

$

(26,234)

$ (23,881)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 4,590 4,351
Share-based compensation 7,108 2,336
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
Accounts receivable (2,073) 728
Inventory (63) (318)
Prepaid expenses and other current assets (3,911) (2,055)
Other assets (666) (58)
Accounts payable (504) 133
Accrued liabilities 5,116 3,254
Deferred revenue 3,619 2,416
Other liabilities   1,808   624
Net cash used in operating activities   (10,982)   (12,357)
Cash flows from investing activities:
Purchases of property and equipment (10,506) (5,951)
Restricted investments     (130)
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
 
               

RINGCENTRAL, INC.

RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES

(In thousands, except per share data)

(Unaudited)

 

Three Months
Ended June 30,
2014

   

Three Months
Ended June 30,
2013

Six Months

Ended June 30,
2014

    Six Months

Ended June 30,

2013

Revenues:
Services $ 47,867 $ 34,471 $ 91,717 $ 66,744
Product   4,920   3,233   9,332   6,485
Total Revenues   52,787   37,704   101,049   73,229
Cost of Revenues reconciliation:
GAAP Services cost of revenues 14,792 11,389 28,506 22,098
Stock-based compensation   (348)   (87)   (644)   (168)
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 Services 69.8% 67.2% 69.6% 67.1%
Non-GAAP Product 3.4% -1.2% 4.2% 2.8%
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
Stock-based compensation   (848)   (242)   (1,500)   (517)
Non-GAAP research and development   10,026   8,364   19,047   15,593

As a % of total revenues Non-GAAP

19.0% 22.2% 18.8% 21.3%
 
GAAP Sales and marketing 25,688 16,324 49,645 33,466
Stock-based compensation   (1,305)   (225)   (2,265)   (404)
Non-GAAP sales and marketing   24,383   16,099   47,380   33,062

As a % of total revenues Non-GAAP

46.2% 42.7% 46.9% 45.1%
 
GAAP General and administrative 9,492 11,231 18,459 17,781
Stock-based compensation (1,430) (668) (2,699) (1,247)
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

  15.3%   16.7%   15.6%   16.8%
Loss from operations reconciliation:
GAAP loss from operations (12,810) (13,119) (25,048) (22,527)
Stock-based compensation 3,931 1,222 7,108 2,336
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)
Stock-based compensation 3,931 1,222 7,108 2,336
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
GAAP $ (0.20) $ (0.60) $ (0.40) $ (1.05)
Non-GAAP $ (0.14) $ (0.36) $ (0.29) $ (0.76)
Shares used to compute basic and diluted GAAP and Non-GAAP net loss per share 67,295 22,766 65,557 22,699
 

More Stories By Business Wire

Copyright © 2009 Business Wire. All rights reserved. Republication or redistribution of Business Wire content is expressly prohibited without the prior written consent of Business Wire. Business Wire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
When shopping for a new data processing platform for IoT solutions, many development teams want to be able to test-drive options before making a choice. Yet when evaluating an IoT solution, it’s simply not feasible to do so at scale with physical devices. Building a sensor simulator is the next best choice; however, generating a realistic simulation at very high TPS with ease of configurability is a formidable challenge. When dealing with multiple application or transport protocols, you would be...
As businesses adopt functionalities in cloud computing, it’s imperative that IT operations consistently ensure cloud systems work correctly – all of the time, and to their best capabilities. In his session at @BigDataExpo, Bernd Harzog, CEO and founder of OpsDataStore, presented an industry answer to the common question, “Are you running IT operations as efficiently and as cost effectively as you need to?” He then expounded on the industry issues he frequently came up against as an analyst, and ...
SYS-CON Events announced today that App2Cloud will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct. 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. App2Cloud is an online Platform, specializing in migrating legacy applications to any Cloud Providers (AWS, Azure, Google Cloud).
In his session at @DevOpsSummit at 20th Cloud Expo, Kelly Looney, director of DevOps consulting for Skytap, showed how an incremental approach to introducing containers into complex, distributed applications results in modernization with less risk and more reward. He also shared the story of how Skytap used Docker to get out of the business of managing infrastructure, and into the business of delivering innovation and business value. Attendees learned how up-front planning allows for a clean sep...
Blockchain is a shared, secure record of exchange that establishes trust, accountability and transparency across supply chain networks. Supported by the Linux Foundation's open source, open-standards based Hyperledger Project, Blockchain has the potential to improve regulatory compliance, reduce cost and time for product recall as well as advance trade. Are you curious about Blockchain and how it can provide you with new opportunities for innovation and growth? In her session at 20th Cloud Exp...
IoT is at the core or many Digital Transformation initiatives with the goal of re-inventing a company's business model. We all agree that collecting relevant IoT data will result in massive amounts of data needing to be stored. However, with the rapid development of IoT devices and ongoing business model transformation, we are not able to predict the volume and growth of IoT data. And with the lack of IoT history, traditional methods of IT and infrastructure planning based on the past do not app...
To get the most out of their data, successful companies are not focusing on queries and data lakes, they are actively integrating analytics into their operations with a data-first application development approach. Real-time adjustments to improve revenues, reduce costs, or mitigate risk rely on applications that minimize latency on a variety of data sources. Jack Norris reviews best practices to show how companies develop, deploy, and dynamically update these applications and how this data-first...
Intelligent Automation is now one of the key business imperatives for CIOs and CISOs impacting all areas of business today. In his session at 21st Cloud Expo, Brian Boeggeman, VP Alliances & Partnerships at Ayehu, will talk about how business value is created and delivered through intelligent automation to today’s enterprises. The open ecosystem platform approach toward Intelligent Automation that Ayehu delivers to the market is core to enabling the creation of the self-driving enterprise.
"At the keynote this morning we spoke about the value proposition of Nutanix, of having a DevOps culture and a mindset, and the business outcomes of achieving agility and scale, which everybody here is trying to accomplish," noted Mark Lavi, DevOps Solution Architect at Nutanix, in this SYS-CON.tv interview at @DevOpsSummit at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
Internet-of-Things discussions can end up either going down the consumer gadget rabbit hole or focused on the sort of data logging that industrial manufacturers have been doing forever. However, in fact, companies today are already using IoT data both to optimize their operational technology and to improve the experience of customer interactions in novel ways. In his session at @ThingsExpo, Gordon Haff, Red Hat Technology Evangelist, shared examples from a wide range of industries – including en...
In IT, we sometimes coin terms for things before we know exactly what they are and how they’ll be used. The resulting terms may capture a common set of aspirations and goals – as “cloud” did broadly for on-demand, self-service, and flexible computing. But such a term can also lump together diverse and even competing practices, technologies, and priorities to the point where important distinctions are glossed over and lost.
"We're here to tell the world about our cloud-scale infrastructure that we have at Juniper combined with the world-class security that we put into the cloud," explained Lisa Guess, VP of Systems Engineering at Juniper Networks, in this SYS-CON.tv interview at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
Enterprise architects are increasingly adopting multi-cloud strategies as they seek to utilize existing data center assets, leverage the advantages of cloud computing and avoid cloud vendor lock-in. This requires a globally aware traffic management strategy that can monitor infrastructure health across data centers and end-user experience globally, while responding to control changes and system specification at the speed of today’s DevOps teams. In his session at 20th Cloud Expo, Josh Gray, Chie...
Consumers increasingly expect their electronic "things" to be connected to smart phones, tablets and the Internet. When that thing happens to be a medical device, the risks and benefits of connectivity must be carefully weighed. Once the decision is made that connecting the device is beneficial, medical device manufacturers must design their products to maintain patient safety and prevent compromised personal health information in the face of cybersecurity threats. In his session at @ThingsExpo...
All organizations that did not originate this moment have a pre-existing culture as well as legacy technology and processes that can be more or less amenable to DevOps implementation. That organizational culture is influenced by the personalities and management styles of Executive Management, the wider culture in which the organization is situated, and the personalities of key team members at all levels of the organization. This culture and entrenched interests usually throw a wrench in the work...