Click here to close now.

SYS-CON MEDIA Authors: Roger Strukhoff, Pat Romanski, Elizabeth White, Liz McMillan, Kelly Murphy

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
Most companies hope for rapid growth so it's important to invest in scalable core technologies that won't demand a complete overhaul when a business goes through a growth spurt. Cloud technology enables previously difficult-to-scale solutions like phone, network infrastructure or billing systems to automatically scale based on demand. For example, with a virtual PBX service, a single-user cloud phone service can easily transition into an advanced VoIP system that supports hundreds of phones and ...
Since 2008 and for the first time in history, more than half of humans live in urban areas, urging cities to become “smart.” Today, cities can leverage the wide availability of smartphones combined with new technologies such as Beacons or NFC to connect their urban furniture and environment to create citizen-first services that improve transportation, way-finding and information delivery. In her session at @ThingsExpo, Laetitia Gazel-Anthoine, CEO of Connecthings, will focus on successful use c...
The recent trends like cloud computing, social, mobile and Internet of Things are forcing enterprises to modernize in order to compete in the competitive globalized markets. However, enterprises are approaching newer technologies with a more silo-ed way, gaining only sub optimal benefits. The Modern Enterprise model is presented as a newer way to think of enterprise IT, which takes a more holistic approach to embracing modern technologies.
DevOps Summit, taking place Nov 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 17th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait for long developmen...
Security can create serious friction for DevOps processes. We've come up with an approach to alleviate the friction and provide security value to DevOps teams. In her session at DevOps Summit, Shannon Lietz, Senior Manager of DevSecOps at Intuit, will discuss how DevSecOps got started and how it has evolved. Shannon Lietz has over two decades of experience pursuing next generation security solutions. She is currently the DevSecOps Leader for Intuit where she is responsible for setting and driv...
The explosion of connected devices / sensors is creating an ever-expanding set of new and valuable data. In parallel the emerging capability of Big Data technologies to store, access, analyze, and react to this data is producing changes in business models under the umbrella of the Internet of Things (IoT). In particular within the Insurance industry, IoT appears positioned to enable deep changes by altering relationships between insurers, distributors, and the insured. In his session at @Things...
“Oh, dev is dev and ops is ops, and never the twain shall meet.” With apoloies to Rudyard Kipling and all of his fans, this describes the early state of the two sides of DevOps. Yet the DevOps approach is demanded by cloud computing, as the speed, flexibility, and scalability in today's so-called “Third Platform” must not be hindered by the traditional limitations of software development and deployment. A recent report by Gartner, for example, says that 25% of Global 2000 companies will b...
Software-driven innovation is becoming a primary approach to how businesses create and deliver new value to customers. A survey of 400 business and IT executives by the IBM Institute for Business Value showed businesses that are more effective at software delivery are also more profitable than their peers nearly 70 percent of the time (1). DevOps provides a way for businesses to remain competitive, applying lean and agile principles to software development to speed the delivery of software that ...
Big Data is amazing, it's life changing and yes it is changing how we see our world. Big Data, however, can sometimes be too big. Organizations that are not amassing massive amounts of information and feeding into their decision buckets, smaller data that feeds in from customer buying patterns, buying decisions and buying influences can be more useful when used in the right way. In their session at Big Data Expo, Ermanno Bonifazi, CEO & Founder of Solgenia, and Ian Khan, Global Strategic Positi...
JFrog on Thursday announced that it has added Docker support to Bintray, its distribution-as-a-service (DaaS) platform. When combined with JFrog’s Artifactory binary repository management system, organizations can now manage Docker images with an end-to-end solution that supports all technologies. The new version of Bintray allows organizations to create an unlimited number of private Docker repositories, and through the use of fast Akamai content delivery networks (CDNs), it decreases the dow...
More organizations are embracing DevOps to realize compelling business benefits such as more frequent feature releases, increased application stability, and more productive resource utilization. However, security and compliance monitoring tools have not kept up and often represent the single largest remaining hurdle to continuous delivery. In their session at DevOps Summit, Justin Criswell, Senior Sales Engineer at Alert Logic, Ricardo Lupo, a Solution Architect with Chef, will discuss how to ...
Thanks to Docker, it becomes very easy to leverage containers to build, ship, and run any Linux application on any kind of infrastructure. Docker is particularly helpful for microservice architectures because their successful implementation relies on a fast, efficient deployment mechanism – which is precisely one of the features of Docker. Microservice architectures are therefore becoming more popular, and are increasingly seen as an interesting option even for smaller projects, instead of bein...
Over the last few years the healthcare ecosystem has revolved around innovations in Electronic Health Record (HER) based systems. This evolution has helped us achieve much desired interoperability. Now the focus is shifting to other equally important aspects - scalability and performance. While applying cloud computing environments to the EHR systems, a special consideration needs to be given to the cloud enablement of Veterans Health Information Systems and Technology Architecture (VistA), i.e....
17th Cloud Expo, taking place Nov 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy. Meanwhile, 94% of enterprises a...
One of the biggest impacts of the Internet of Things is and will continue to be on data; specifically data volume, management and usage. Companies are scrambling to adapt to this new and unpredictable data reality with legacy infrastructure that cannot handle the speed and volume of data. In his session at @ThingsExpo, Don DeLoach, CEO and president of Infobright, will discuss how companies need to rethink their data infrastructure to participate in the IoT, including: Data storage: Understand...