Slide 1: Q2 2023 Earnings Presentation
Q2 2023 Earnings Presentation August 7, 2023 ©2023 RingCentral
Slide 2: Safe Harbor and Non-GAAP Measures
Safe Harbor and Non-GAAP Measures This presentation includes forward-looking statements within the meaning of the federal We do not provide guidance on forecasted GAAP EPS because of the inherent securities laws. These statements relate to, among other things, our business strategy uncertainty and c
Slide 3: Q2 2023 Highlights
Q2 2023 Highlights Total Revenue ARR Operating Margin(1) Adj. unlevered FCF $539M $2.22B 19.4% $81M Up 11% Y/Y Up 12% Y/Y Quarterly Record Quarterly Record ©2023 RingCentral 1) Non-GAAP Operating Margin
Slide 4: Near Term Focus
Near Term Focus Healthy Increasing Innovation Growth Profitability ©2023 RingCentral
Slide 5: Why We Win: Trust, Innovation, Partnerships
Trust Built on World-class Security and Reliability Why We Win Innovation Leading Innovation in Integrated UCaaS + CCaaS Platform Partnerships Unmatched Partner Ecosystem ©2023 RingCentral
Slide 6: Commitment to Trust
Commitment to Trust 100x Better Reliability vs Three Nines 20 straight quarters Annual of 99.999% 99.9% 99.99% 99.999% downtime performance allowed 8.8 hours 52.6 minutes 5.3 minutes ©2023 RingCentral
Slide 7: Product Innovations
Product Innovations UPDATE NEW NEW RingSense RingSense RingCX for Sales for Phone Native Intelligent Contact Center 7 ©©2023 2 0 2 2 Ring Ce ntra l RingCentral
Slide 8: RingSense for Sales
RingSense for Sales WHAT’S NEW • Integrations: Salesforce, Hubspot, Microsoft Dynamics, Zoho, Gmail, Outreach, Connect & Sell, Outlook Calendar • Deal Scoring: See how deals are progressing and pipeline health • AI Coaching: Help agents improve interactions • AI Win/Loss Analysis: Automate reporting
Slide 9: RingSense for Phone
Ring Sense Enables organizations to apply AI to their voice conversations and leverage deep insights to boost for Phone productivity and collaborate more efficiently. Highlights Live transcription & Actionable Sentiment closed captioning insights analysis 9 © 2 0 2 3 Ring Ce ntra l
Slide 10: RingCX
Ring CX Native, intelligent contact center Highlights Native Integrated Easy to use AI powered Omnichannel and deploy 10 © 2 0 2 32 Ring Ce ntra l
Slide 11: Expanding Video Offerings With Acquisition of Hopin Product Lines
Expanding Video Offerings With Acquisition of Events and Session Product Lines From Hopin
Slide 12: Hopin Events
Hopin Events The world’s leading virtual event platform. ● Best-in-class user experience including full event marketing, ticketing, and registration capabilities ● The most event branding customization on the market ● Largest event technology App Store ● Multi-track conferencing venue with Lobby, St
Slide 13: Unmatched Partner Ecosystem
Unmatched Partner Ecosystem 15,000+ Channel Partners ©2023 RingCentral
Slide 14: Financial Update
Financial Update
Slide 15: Overall Average Revenue per User (ARPU)
Overall Average Revenue per User (ARPU) Remains $30 Steady >$30 $20 $10 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 ©2023 RingCentral
Slide 16: Non-GAAP Subscriptions Gross Margin
Non-GAAP Subscriptions Gross Margin 80% Above 80% 60% 40% 20% Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 ©2023 RingCentral
Slide 17: Expanding Operating Margin
Expanding Operating Margin(1) Quarterly Record 19.4% Drivers of margin expansion Operating leverage 17.2% Actively managing workforce Lowering costs of acquiring new customers 14.0% 13.5% Vendor rationalization 11.3% 10.5% 10.5% 10.4% Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 ©2023 Rin
Slide 18: Q3 2023 Guidance
Q3 2023 Guidance Q3 2023 Subscriptions Revenue Growth Y/Y 9% to 10% Total Revenue Growth Y/Y 8% to 9% Non-GAAP Operating Margin 18.0% to 18.5% Non-GAAP EPS $0.75 - $0.78 ©2023 RingCentral
Slide 19: FY 2023 Guidance
FY 2023 Guidance Prior Current Subscriptions Revenue Growth Y/Y 11% 11% Total Revenue Growth Y/Y 10% – 11% 10% – 11% Non-GAAP Operating Margin At least 18.5% 18.5% to 19.0% Non-GAAP EPS $3.19 - $3.25(1) $3.11 - $3.25 Adj. Unlevered Free Cash Flow N/A $270 - $290 mil. (1) Outlook does not include exp
Slide 20: Appendix
Appendix
Slide 21: Total ARR
Total ARR $2,219M $2,161M $2,100M $2,047M $1,981M Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 ©2023 RingCentral
Slide 22: Q2 2023 Financial Highlights
Q2 2023 Financial Highlights $ Metric Y/Y Growth Revenue Subscriptions Revenue $514M 11% Other Revenue $26M 7% Total Revenue1 $539M 11% ARR Total $2,219M 12% Customer ARR by Size Mid-Market and Enterprise2 $1,371M 13% Enterprise3 $935M 13% 1) May not sum due to rounding. 2) Mid-market and Enterprise
Slide 23: Q2 2023 Results vs Guidance
Q2 2023 Results vs Guidance Q2 Guidance Q2 Results Subscriptions Revenue $511M - $513M $514M Subscriptions Revenue Growth Y/Y 10% – 11% 11% Total Revenue $535M – $537M $539M Total Revenue Growth Y/Y 10% 11% GAAP Operating Margin (10.0%) - (8.9%) (8.4%) Non-GAAP Operating Margin 17.5% 19.4% Non-GAAP
Slide 24: Q3 2023 Guidance
Q3 2023 Guidance Q3 2023 Subscriptions Revenue $526M – $530M Subscriptions Revenue Growth Y/Y 9% - 10% Total Revenue $552M – $556M Total Revenue Growth Y/Y 8% - 9% GAAP Operating Margin (9.1%) - (7.3%) Non-GAAP Operating Margin 18.0% - 18.5% Non-GAAP Tax Rate 22.5% Non-GAAP EPS $0.75 - $0.78 ©2023 R
Slide 25: FY 2023 Guidance
FY 2023 Guidance Prior Current Subscriptions Revenue $2,086M - $2,104M $2,086M - $2,104M Subscriptions Revenue Growth Y/Y 11% 11% Total Revenue $2,187M - $2,205M $2,187M - $2,205M Total Revenue Growth Y/Y 10% - 11% 10% - 11% GAAP Operating Margin (7.9%) - (6.6%) (8.0%) - (6.3%) Non-GAAP Operating Ma
Slide 26: Reconciliation of Operating Income (Loss)
RINGCENTRAL, INC. RECONCILIATION OF OPERATING INCOME (LOSS) GAAP MEASURES TO NON.GAAP MEASURES (Cnaudited, in thousands) ‘Three Months Ended Six Months Ended Sune 30, June 30, 2035 3022 2023 20 Revenues Subscriptions $ 513632 $ 462984 $1,021,926 $ So2911 Other 25,673 23912 51,068 51,641 Total revenu
Slide 27: Reconciliation of Operating Income (Loss)
RINGCENTRAL, INC. RECONCILIATION OF OPERATING INCOME (LOSS) GAAP MEASURES TO NON-GAAP MEASURES Income (loss) from operations reconciliation GAAP loss from operations Share-based compensation Amortization of acquired intangibles ‘Third-party relocation and other costs Restructuring costs Non-GAAP Inc
Slide 28: Reconciliation of Net Income (Loss)
RINGCENTRAL, INC. RECONCILIATION OF NET INCOME (LOSS) GAAP MEASURES TO NON-GAAP MEASURES mn thousands, except per share data) (Unaudited) Three Months Ended ‘Six Months Ended June 30, June 30, 2023 2022 2023 2022 Net income (loss) reconciliation GAAP net loss $ (21,482) $ (159,515) $ (75,881) $ (310
Slide 29: Reconciliation of Cash Flows from Operating Activities
RINGCENTRAL, INC. RECONCILIATION OF CASH FLOWS FROM OPERATING ACTIVITIES GAAP MEASURES TO NON-GAAP ADJUSTED, UNLEVERED FREE CASH FLOW MEASURES (Unaudited, in thousands) Three Months Ended Six Months Ended Tune 30, Tune 30, 2023 2022 2023 2022 ‘Net cash provided by operating activities $ 90,691 $ 50,
Slide 30: Reconciliation of Forecasted Operating Margin
RINGCENTRAL, INC. RECONCILIATION OF FORECASTED OPERATING MARGIN GAAP MEASURES TO NON-GAAP MEASURES (Unaudited, in millions) Q3 2023 FY 2023 Low Range __HighRange _ LowRange _ High Range _ GAAP revenues 552.0 356.0 2,187.0 2,205.0 GAAP loss from operations (50.1) (40.6) (174.1) (138.8) GAAP operating