RingCentral (RNG) 6 Nov 232023 Q3 Earnings call transcript

Good afternoon, and welcome to the RingCentral Third Quarter 2023 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Will Wong, Vice President of Investor Relations. Please go ahead.

Thank you. to Quarter welcome Call. Earnings and afternoon, RingCentral's XXXX Third Conference Good

me CEO; Sonalee Chairman; Robbiati, are Parekh, Shmunis, Joining Tarek Executive Vlad today Founder and CFO. and

Sonalee, remarks format Tarek, Our include Q&A. prepared will Vlad today and followed by by

on at We website Investor ir.ringcentral.com. call, you that also the under today's Relations can with our find presentation coincide financial have slide which a available will results section

outlook. and forward-looking are operations, our are beyond and our guarantees these statements discussion performance. control of responses materially update forward-looking statements and to statements and Actual differ financial the results statements, of from after obligation questions some our not may contain to this to Some future no undertake we will of subject call. business regarding company's performance uncertainties, risks These are your and which

otherwise today's and and discussion For business, with refer indicated, to all a complete our GAAP release. of are Commission information the Exchange the our provided as please results of filings is deck. related our the in as year-over-year non-GAAP earnings contained earnings reconciliation the Securities to all with uncertainties with risks well slide follow Unless and A to in comparisons. measures that release non-GAAP

to the of With that, in I'll corresponding as financial discussed our Relations website. For the on Tarek. Investor over guidance, a in slide is now not certain forward-looking the reconciliation guidance the detail measure to non-GAAP GAAP available deck call posted turn

metrics. excited had our exceeded I'm across to my our earnings We we profit a and afternoon. Good as CEO. on operating revenue as quarter first call be good RingCentral's guidance

innovate because a continues the an mission-critical key product we to that many competitive shortly, market. provide will win is takeaway but win Sonalee that customers. financial have to is industry-leading We details RingCentral in and more

throughout product verticals, innovation. since of apparent our partners CEO consumer-facing de theme This customers In our reliability, It was choice leading I've growth. why businesses, is about and the profitable the within the SMB, in August. sustainable, many and also with facto I integrations commitment for is goal mid-market many RingCentral role the given driving took particular, optimistic conversations and had on am to I

I CEO, Today, to targeting and few share and as observations be realize as drive like help opportunities on us of will delivering As be areas goal. I a I'd productivity my to growth a that to plan initial focused increased profits. well unlock will

First, regarding business around observation my initial our operations.

an AI leader. team As innovation over entire Lab the I been are AI leveraging platform to now infuse RingCentral out R&D we have alluded earlier, is last busy portfolio. an the that years building and our few across

leadership UCaaS, in Combined into areas and XX going webinars forward. the years, with CCaaS, company transforming an our now multiproduct in will product Vlad and more detail meetings. and we discuss sales with UCaaS our recent AI-first events, conversation are past proprietary intelligence, built over developments analytics offering focus

Additionally, her team increased great profitability XXXX. job and of Sonalee a in have done delivering

further and have can disciplined build I Our spans retention as driving to down we're doing strong. believe costs. through well organizational foundation many increased over consolidating such growth unlock RingCentral's and acquisition vendors year-to-date key dollars foundation is XX% that operating spending, more customer actions we profit on is The and takeaway and layers, and productivity. that things reducing

four, partnerships; build two, number number to I a three, and potential. deliver a will business; multiproduct and expanding segments finally, number focusing and on customer areas few internationally; number productivity. include: focused number innovate one, continuing five, key on verticals; deeply on more to increasing growing forward, Moving this be operational They

core. are AI CX, strong a to build a are as our level, and traction high starting multiproduct business. with gain let our RingSense share me of Events our First, you platform they to In a RingCentral natural on extension plan

MVP Fortune example, its with purchase a RingCX employees over company this involved that critical case XX,XXX use For X,XXX the partnered for of to RingCentral internal quarter a and communications solve licenses. XXX

drivers a other help Using RingCX connect just factors technology integrating seamlessly while combination RingCX, we're a to one workflows. product their into recently of RingCentral and able reliably is new them example MVP of introduced. we've

be our forward, they we continuing will rollouts invest to focused Going on be as go-to-market to products their ensure in well as new related will successful.

new expand In customers, new existing our an to addition to provide attracting opportunity products customers. footprint also they within will these

think today can more is have particularly XXX% be net we sell. retention Our below to I now because it at roughly where

likely customer. Additionally, more our differentiated also as adopts a they new products create more remain the more offerings, customer will the stickiness

customer Second, XX% regarding and was of focus in one QX. in our investing is more I'm a area deeper SMB verticals, which business mid-market, on developing segmentation key and the

our leadership have market, communication been the larger underserved voice. thus cloud cohorts by By These bundling largest provides primary these on of to are decisions. clear influence driving remains and within not this voice tools. it given focus incremental businesses, significant mid-market, with and by us a the our may SMB and Also for RingCentral dynamics suite method of encumbered full traditionally in communication vendors they opportunity pick customers' sell that a

seen We health and and professional progress such key services have education, public also good as in care, verticals financial sector.

other commitment organization integrations have innovation. on proven our and service dental organizations selected X to top the for care RingCentral. also of run health example, us deep reliability, For Thousands

and Medical largest both their This UCaaS business New provider System joint Central which Health Boston their offering, quarter, patient improve With Health communications. modernize net external Medical the in safety center hospital and and busiest RingCentral integrated communications, platform CCaaS one and selected RingCentral's System, experiences. will have Center to should for Austin England internal trauma voice

can SMB on our verticals. by bold solutions the to way we more capitalize enterprise in There One these our is tailoring both do mid-market. is success more in even and

attaining specific for and For sector strategies other and mission-critical. certification government developing certain is example, we which in go-to-market the for for continue invest are to integrations public industries voice

segment specific enterprise bifurcate we are go-to-market the motions customer address can better with There also to ways needs. many

Teams our offerings. customers us deployment, example, allows Teams as X.X. potentially For enterprise RingCentral to center attach for such motion This products provide sell a we other contact to and functionality voice for with

partnerships. to moving Now

service providers Our such with and strategic are and current key us partners, broadest industry provide differentiator. with and NICE, partnerships a AT&T, BT, reach Avaya and Vodafone TELUS the in Mitel as Unified global the

focus us also partnership on expand More come in ecosystem, will opportunities and that this with We quarters. our other on relationships that partners our further help partnership to reach. service other can new including ISVs expand

and remained X relationships. the how the for potential we with has partners outside focused network U.S. grow to have to I'm on XX% geographic of and several much where It particular channels leverage our on be a operations Europe, International Moving the has years. higher. GST can expansion. our roughly business last focus go-to-market to we partner distribution and

by not stock-based my far Last, area focus least, materially on productivity. on One compensation. increasing that is but is radar is my high

stock-based to are materially already steps reducing compensation. committed and fully tangible towards taking are We

key marketing is sales area Another for expense. me and

We and revenue marketing X% subscription has have XX%. seen sales spend year-to-date, grown increased only while

and there costs, ensure they a create. this should think a customer our the is align during that sales sale better is environment. marketing such maintaining are our and tail, as optimized. and opportunities a of before, be some reviewing that motions, longer I where value acquiring as in still revenue, while to realize investments residuals, it above have of I to go-to-market the However, the both percent current cost to I after the am

and good productivity has such on is with reallocating marketing of resources sales impact as There we new lowering taking route additional aimed and and on costs. to the sales an cost initiatives direct across some and initiatives. been company program adjust at channel has dependence early step operationalize overall productivity the market RingCentral's few over improving Ignite our our We're traction to This own structure, as reducing that these resellers force. next now optimize months

focus I well my helpful are RingCentral's initial as for understanding key as hope in observations opportunities advancement. and to you areas differentiators

an had clear solid our believe execute that business, priorities. the on new and There's must that are products well we the plan, a these has strong macro combination core, there the future. exciting also areas control for and and I in disruptive are our on of can enhance. While team us our now positions and we impact

a at plan, over innovation delivering Vlad, that, in to turn call to more I of everyone products. to this With the also I detail, our for and thank discuss want will opportunity want pillars to who take QX. solid key one RingCentral new the of

Thanks, Tarek.

ensure before, new this entire portfolio to I RingCentral AI, more remains era. infuse before, agent is the megatrends, to color, in on service industry customer each at My work interaction. our focus As now Tarek With during said leader mother and now AI is and after an can Board, of teams product with closely to improve all our employee across experiences even I day-to-day

the be to is commitment communications and vision Our business leader.

AI have our platform with made the towards good progress launch earlier year. vision this of We this RingSense

to have products. RingCentral rapidly center platform, Events. and RingSense; includes acquired July and our as and We intelligence RingCX; which RingSense in infuse platform, conversation innovated AI-first This our AI Sales; all for RingSense native Hopin, omnichannel into we our contact

multiproduct Events RingCentral a Webinars AI-first turning Contact Meetings into be cloud solution, RingCX and Center, true RingCentral company. and will MVP thus RingCentral industry-leading RingCentral's joining RingCentral and PBX Sales, RingCentral

more me detail making let of new those progress on we some you some about give So the are products.

before, and into to now our is generally availability RingCX we technologies during after and this embedded conversations quarter. enable which be RingCX, In and is later available First, each to expected in interaction. AI market QX, controlled RingSense other

RingCentral In of being trust, values openness and to our brand and reliability, AI-first, deployment, ease addition use to adheres core of ownership.

limited SMB are and be or measured RingCX in and strictly not short mid-market. not To quarters. the weeks days or with months clear, is RingCX deployments

that at also up In are what complex particular Tarek deployments. a company well fact, includes to cash our Contact RingCentral XXX cases offer. more RingCX and Fortune use a from mentioned cases a whose Center complement larger good win there X,XXX-plus-seat earlier. to This with is aimed generally line larger is that offering use RingCX customers

have availability, we have customers RingCX. While still in approximately who selected XX already control

also Reddit of recognizable many includes are world's world's most already brands, internal we and other RingCX, at reintroducing working of to Spotify, events. as most addition names. some RingCentral In Events the This recognizable This the product Hopin powers external Events. and hard

provide RingCentral will more details place Events upcoming Innovation both XX. take will at We November RingCentral our and on that on event RingCX

as about such how hear hosted well for hope us extensive built products. the In We RingCentral an can Events. be before these virtually latest conclusion, portfolio. on course, has innovation from own of customers very will, our never more they're you directly It fully about and to from benefiting RingCentral as out learn our join

bending turn let We the more future. great call our that, in With our excited portfolio, I entire could about are progress the for value creating Sonalee. me customers. to making even more AI not over into be

revenue Subscriptions from up of $XXX provide outlook and fourth discuss $XX third the now and ARR highlights basis, on full I'll last the quarter guidance then business above was XX% for billion, $X.XX a and currency Vlad. year. was quarter was year-over-year million, Thanks, up XX% the of headwind. a our year-over-year tailwind, currency range. a a sequential roughly was million basis, versus year. but modest our On

center by the contact Growth more again we million-dollar-plus continue the was our attach where including deals enterprise XX% recent strong UCaaS rates. with Giants. to of CCaaS, large We led and TCV win include San see Francisco segment, than a both UC saw

moving profitability. otherwise non-GAAP results, be Now referring to I'll to noted. unless

margin subscription Overall quarter. again with gross was last above ARPU XX%, Our consistent $XX. was

pricing products, accretive our over be time. market, new should while to relative in ARPU to disruptive overall Our the

continued driven basis by margin. XX.X%, ARPU solid year our operating supports efficiencies. XXX last margin Operating rose strong points Our and to gross leverage versus

third operating outlook quarter our was Our above to margin XX.X%. XX% for solidly

invested to in additional productivity support hiring from of our marketing headcount, able business our back to new were products, the instead into current resulted line. the and savings drive to through primarily workforce of the we that through flow sales increased which we While initiatives, bottom

in into $XX increasing flow million, free million from QX Our $XX profitability unlevered translated cash adjusted quarterly up 'XX. of

convertible sheet. balance August, consisting this and of our convertible notes. notes used our million of million issuance million our $XXX debt, $XXX of notes to We issued XXXX. of million we X.X% due $XXX to senior In Moving $XXX $XX XXXX XXXX million from in unsecured in repurchase

draw approximately discount. sizable have a A. $XXX cash from to RingCentral million million XXXX loan free to recent proceeds notes. months to XX capturing we utilize over notes the current convertible portion of unsecured offering, before and plan The year, address an of flow to Including commitment additional they a XXXX repurchase we last the within $XXX our next XXXX of $XXX million we that will have high-yield have notes X go this of the next remaining of $XXX the in addressing I was sheet transaction, loan and balance plus a A the $XX our approximately remaining key original notes, option our term upon million, XXXX of our joined of which priority. We billion I Since the noted million the the term expect months the used from cash to generate to $X due

XXXX balance carry the X% amount our and note with repurchase maturity able a are earning are as notes to we and will disciplined a solid we the remain cash, of on return Importantly, we coupon will to capture. discount prior

in addition to In third to current based is continue our net converts, the leverage XX-month outlook, upcoming quarter leverage Xx to Based we trailing ratio healthy. our XQ. Xx. very below results, XXXX addressing our on remains And on be our expect

with you seeing remain buying trends through the approval. the our Before additional are of largely I'd year last full additional versus fourth elevated continue with to macro Macro go last today. guidance, on quarter. are we Sales consistent customer details provide to I market quarter cycles and and in provide layers trends decisions year like

Linearity close quarter, has have week of to also or quarter deals. back-end we the on become including in And customers until more X many waiting last seen this enterprise loaded. the transactions,

and seeing upsell count. within rationalize hiring have existing also customers are our less base as We our slowed employee

Importantly, marketing-driven conversion. remains continued strong, demand cloud for consistently on-prem lead demonstrating to flow

me backdrop, now turn guidance. that let to With

EPS XXXX, the non-GAAP X% $X.XX total For and of growth X%, expect to quarter to revenue $X.XX. fourth margin to X% growth of of of XX% revenue non-GAAP operating X%, we subscription of

currency incremental basis versus revenue of For XXX up We the non-GAAP margin the year revenue expect outlook. operating growth XX our of of outlook. last and despite XX%. the growth midpoint are revenue we our above raising subscriptions XXXX, of operating headwind, and prior year XX%, full points basis This margin now is points total XX%,

of EPS non-GAAP $X.XX. expect we to Lastly, $X.XX

QX, related million $XXX as to driven better-than-expected $XX in $XXX well million in Additionally, we million $XXX free better capital or $XXX excludes restructuring flow of other expect given million working million as unlevered incur. and our to up cash management, to by Note, XXXX, from now profitability adjusted this $XX that primarily previously. payments have to to we conversion cash expect million

expect million we of or $XXX Lastly, $XXX stock-based XX.X% compensation XXXX to in revenue. million of approximately

that While this this management higher undertook in our is guidance, related than recent we is changes prior to August. the

These prior stock stock-based this and attribution incentives performance in year expense place under versus compared to restricted alignment are an demonstrate resulted management for and accounted in stock put to compensation model accelerated we Additionally, units our between thus company outlook. performance. units higher in XXXX

the would We been our of these have prior range, excluding at midpoint items.

As going months. and the is to implementing priority, a actions stock-based over materially reducing compensation stock-based key reduce materially are Tarek forward stated, XX compensation next we

more on quarter. and share will these We next actions targets

guidance. quarter. In summary, We our QX good delivered a on was

continue approach. We invest to allocation we and for a proactive growth, demonstrated capital

the to profitability. let's executing for open call While the growth economic that, focused will sustainable priorities of delivering environment and and remains committed remain against With uncertain, we our questions.

is Matt Bank. Niknam with first [Operator question Instructions] Deutsche Our from

Maybe question for Tarek. a

been for CEO underserved markets, for opportunity executing or front? couple know see a out maybe where little X that's underserved you where operating you a against? But whether the priorities. the see sets you start immediate And on seat customer Now it's untapped you can maybe around I key to of do in bit laid the months, RingCentral, talk more greatest the that you've opportunity

I've on of our partners, good I'd opportunity since taken and Matt, you, days on and And of for with past spent I XXXX, I Thank the the business. talking believe to understanding I shareholders customers, Board had question, call. the I've a since the serve role. CEO welcome have XX the employees to the December since most say

there the our provide customers RingCentral, is do and opportunities as to are verticals tremendous believe a I certain there building solid And products quality on foundation of UCaaS. for more core particularly SMB in and in opportunity such mid-market. to big

infusing in position industry investing number given installed We of base. We've to size in platform a our are in of at doing. the years. of everything junction a unique the power We're AI this AI an harness of the we're for also been AI

And as we critical is you if CCaaS whole, share. that when have, disruptive to of us scale. again, capture reputation AI, to you're and innovate of And competitive that very considering we increasingly in and really of being this have a perspective maintain leadership are And industry. opportunities the a a that taken these by our us with presents and strong industry UCaaS, which disrupted plenty allows quality, in put

to and sustain So at scale profitable growth to that's add forward to to looking what RingCentral. continue is do long-term I'm continue

is from question Jefferies. Samana next Samad The with

Samad. existing only to seats can contracted less were customer buying or by if X,XXX remind for trimming either if for customer can reduce seats? is reduce XX%? even the to Put pay customers, they're a with if seats This you XXX allow differently, Certainly, headcount, headcount contracts for they

Thanks the question. for

customers So in for. length customer seats. to that the average our for full typically, be Customers over contract a is X -- the any for contracts, just original there typically terms of signed And would years, flexibility of and no. reduce they our contracted contract not is seats typically amount

seats. flexibility Of we to always offer them course, for add

that hopefully, your answers question. So

next America. The Bank Michael with is from Funk of question

priorities. you your laid Tarek, out So

is One of productivity. them

benchmark materially or marketing? marketing target sales You a said for should think Is with a expense. steps to taking and reduce metric and there good sales your about we

understand marketing has and need Look, partners this growth the acquisition benchmarks a and see And to go that the to percentage of are cost cost of them. as flexibility really and the customers. of why what we acquiring effectively wouldn't important growth mindful And of sales reason level customer to you come to channel with and as the retain of for it's our and capture you revenue. use and spend to force determining opportunities sales see and that of I always calories, of the extent these percentage retention is to driver down productivity our is,

And a more is delivering. when in the you my short liking, So becoming do we efficient really it growth own at the effective in there of high and for too today, our term in marketing. believe upside considering percentage revenue we're sales and as look is spend

that's or growth of a need So as for part important very have spend we the determine we that look not And higher whether we same we our can it, P&L. reduce reflection this you at growth. ask or to keep ourselves that but

MacWilliams question next The is from Ryan Barclays. with

any enterprise of since end the with customers Have the you there are seen any compared how to your the mid-market material customers are dealing changes macro front? on your macro third current the SMB quarter differences And into environment?

question. our payback that macro looking it it what and we standpoint and know get is a it's the is Look, you customer change measured read There RingCentral Yes, no a that is where good mission-critical and Obviously, weeks not to particular to the about customer through and you prior all from with is relative news. product quarters Ring, months, feedback customers the the for save is business. their are look But really in years. to at ways money. is,

is generated put the for things for north is from months and to XXX%. UC of being CC payback period customer just standpoint, you, below And a plus is that ROI them in X perspective

last driven enterprise continued The moderated, remained sales year. quarter macro elongated and this growth certainly XXXX, So the SMB is uncertainty. segment by specifically has for of versus third cycle

in about more on rationalization in our past, cost we headcount and scrutiny in impacted the general. is upsell by IT their slower customers, spend being As spoke of at growth

out softness with we're time. upsell believe our help to a do with of the introductions macro exactly we this why strength that new ourselves with portfolio. product will But multiproduct now positioning emerge And over is

have your macro of would I stable, not terms we in seen question. is any answers conditions. so Hopefully, easing And and say change this

The is from with question Kash Rangan Sachs. next Goldman

here Tarek, Good maybe well. Vlad to one can jump stability results. you, see the for as in

what make retention prospects AI you -- That's the how for and think do cetera? economics will do you also functionality, mean slower, et it me. will for of growth As the it And it cycles, therefore, the change does of sales you think introduced the company? and sale, ARPU the it faster, it

steps you with at a very examples is call I after them perspective would our the of the add offerings is call, fairly conversation of of say and during do And we the CCaaS we you can can value look you're our before the to the integrated this a So Kash. to big easy customers all what call. and intuitive that And at if UCaaS, take question and asking, are understand.

is make you the call in placed. the Before context you being understand the can call, sure which

can the During that. of summaries, but can than call do much call, course, do you you more

place, of in way spearheading a which add the add, lot really tone been said the has can post-call moving of of understanding different You what call value call, actions forward. the in a took number

and So AI, AI their there are that are a there. infusing is productivity of to a our can we things time unleash ton of our we competitiveness, opportunity and enhance offerings we as precisely this an customers lot to spending customer, be because incredible for own is why thanks and our throughout see AI for

in efforts ask time the Vlad of to issue spending right and behind deploying here, will we're on we're the a that now. Vlad? this spending power lot he's AI he's because and I chime

the would part longer let part now it at generated thus access to engagement Look, insights. retention stickier in a insights that become think should the have would from customers' question. a different fantastic whole Kash, least One mean way because meaningful own Tarek. that me these or think one of generated are address system to data. platform being that improve no in retention would moving Therefore, the that question. those Thanks, because they would

for I empirical any talk cycle. sales to It been get know on way. that after call And example, a calls made. of comment it don't people our hell. It's very and has looking say as demo. quick insights at theory, questions and s*** way. obviously in can their type to data. it's it about early, show work early the the just of and Also just how a should But RingSense, that makes other great It's we too type the When

it's for people. whatever emotional For reason,

"Oh, go, They I didn't know this.

I what it. by prepared said going world. in is revolutionize It's megatrends it mother called and of AI, I stand truly So great it the to next the a remarks, that megatrend. the

industry and be excited. more to Couldn't Our RingCentral it. of part is

there just might something well. add as I Kash,

asking about on were the in You our excited we impact products. will these still to significantly but from ARPU. ARPU these Clearly, disruptive be a pricing about manner, accretive overall they very new are

you in additive talked significant So expect about this don't terms I my be remarks, heard around prepared we of ARPU incremental being any anticipate stable. investments. investment to And go-to-market, We in that. would actually incremental to

So it to forward. we be CAC LTV should also look accretive as to

question is James. from The Raymond Peterson Brian next with

the in vectors mentioned the you there? opportunity there. as I'd love And we to partners into XXXX, how think ramp efforts about on Tarek, color of and should think partnership some we that. to expand more in get your growth potential about So call about

build. both terms are Mitel, do there also We is that a partnerships of well and a a global working do can BT, for we like such and reach, of these AT&T, thanks Avaya, service new in I believe right inContact, partnerships question. strategic also as partners Thanks now, Vodafone, these Unify, TELUS, et cetera, and NICE number very the of additional for now us have partnerships we have that upside from partnerships. to number great that Mitel providers

offerings, a on vertical to and we opportunities selectively. to so reach industry continue of there verticals of a lot focus our that particularly where on we do is will things a that expand our those we can product partnership to basis ensure particular, broader penetrate can that on partnership ecosystem also connected that verticals focusing build ecosystem, ISVs our So more with expand in is value-added

can one you set of this the it partnerships time, to are my ramp, there volume But up. is full areas in And They motion, they considerable. the we expect in future. how focus know will key of are. when that So the take these but take be for time terms

why is area is so this And a critical me. focus it for

question Marshall Morgan next Stanley. from is The Meta with

just that Maybe on following up question.

made in you revisions a of get guys to earlier sell to the the were direct year where direct, kind some trying that them blend partnerships a incorporate feel is of the as rough just the Just to kind versus as kind business sense a channel just more through percentage the to of versus direct of coming of you there there to just the certain channel any the sales And you'd that's partnerships a of like come is model? channel to guide? certain to see given through of conflict percentage about come allow changes forms some

is it. asking than across about of this blend, thanks for to market. I'd question, rather and great a on talking Meta, is So think offering focus say penetration a need we the I what our

is my a space, in lot are have the concentrated, to the that If but which overall if really show at a player, we that UCaaS, you XX%, bit remains roughly fragmented. look you it's little upside of at and there we largest look comment in pretty still the only And about XX% same. market goes more share CCaaS, is market

in NICE market new penetrate both offering, that offering, that RingCX lots our There there of CCaaS are availability inContact to was to we our but also for ramping up in controlled and the today opportunities us is with upcoming the up days.

if to I is -- are that you there we still the a at Internationally, want the international we do internationally. So dimension, that, say. can also would to lot add beginning,

partners, or and with a we Asian those basis they revenue rely the on different as mechanism you really the think the a or direct set of fabric penetrate capability-wise indirect to only us distribution and if on. markets what be a markets, the either international of are different And need ready focused economy a of is total about European distribution that on for Our and XX%. go different to basis is capabilities, percentage with tiers. Hence,

is with question from next Mizuho. The Siti Panigrahi

sequential versus see saw more growth now subscription X% last revenue the It's than good quarters. X% in to we X

And So stabilizing? something what sustainable could how enterprise? that that in is on something Is of improvement the talk we upsell about of forward? growth? that key growth? you churn What's Or drivers any could going even expect it are or kind it driving

so making Look, year. I the with to progress I that would we're say -- into and for but fiscal days far, think me, the way months the I'm like so pretty early X far, executing pleased it's we're

quarter focused year we build which a to we multiproduct pretty on a strong. We are innovate on priorities, that. will, fiscal where and 'XX focus have in good just execute and doing QX to continue about finishing We my whole have And continue And started, we feel X business. we it. to so, is on to

existing where This right really critical energy, both upselling offerings. is new is and and portfolio our really, in growth multiproduct center, is to This to fuel Vlad all customers his top left, boosting spending productivity customer segments. customers. internationally. I partnerships. growing And key deeper on an keep penetration certain verticals We're We're have driving yes, to We're moving building on into eye also focused and forward.

for the I it's days. put -- feel early So the forward you way are and real. demand CCaaS UCaaS growth. that like We attach is

playing, as particularly of as this If we're you UCaaS, competitive integrated market. There We're and this traction. share. There of losing X.X portion which exploiting you when intensity subset out is Microsoft some some is the our a where fastest the gaining rolled look we is that whole, plug-in, and competitive a with with intensity is subscale the displacements, Teams. market, take Teams CCaaS vendors growing competitive just a at are quite that likely

integration. enterprise also customers continue will with best-in-class we And this to target

now that a term, we finish the short would but QX lot energy to being is unpack say on. which is here, on is very to there's and focused are So our focused where all strong, I

is from Matt question next The BTIG. with VanVliet

feel direct that little of the the then you from a a well? current more to for you do markets? have? growth. to you channel in do more of those do number you build the about out side? as dig distribution or Or to And goals enablement broaden reach your bit in you secondarily, have you in partners of wanted How either place, already headcount on need you like feel plans a international with the the both I need team stable can network Do

access think the true In Germany, I market France, new And GDP. it's about do north XX% these are and chunk economic really businesses In acquire and you example, with the various ours. enterprises, really of small sweet a of the large the to the When decide routes you at, and way to function look you GDP. fabric to spot. that you for most to for geographies, XX% of therefore, segments. our international up is these method, the what of like look, of best about in the softwares is effective customer career, how services and So which really the your Europe, to having businesses a particularly of go in my for think customers a market Spain, if and in weight Italy have medium go these market run method ramp of you it's particular think

internationally. I'd capture to an And particular, is in that we extensive share partnerships, sales to direct build force say and there need don't through there large opportunity really an going by

our favor market large new Vlad in build in cloud and be the MVPs We not because offerings, will that I'm about also, are offerings to in existing now provider they developing philosophically a of is, leverage need very right here the think pragmatic with is the come. there or whether first opportunity our the and we approach partners view, I the are us that become and these for team. to global with

Terry is Tillman question Truist. next The from with

is This for Dee Bobby on Terry.

story one quick at the this is CEO for Since slot, do about point? one you most the what being Just think Tarek. in misunderstood

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next Will with Power from The is question Baird.

for more curious I comments of Also, I viewed area Tarek, think, competitive know as on you all. I a the in focusing area. that's was a SMB. heritage some often on

just on on investment are the or refocusing a kind kind of there SMB? low-hanging Are more color for maybe And fruit of of the where that? some focusing much the of kind of little areas more rationale you So opportunities? respects key any in kind evaluate as that

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is that reliable leading differentiated offering with XX.XX% have We is the that UCaaS availability.

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little mix core Teams on durable as had got bit. And upsell? a more exact but offering? you've you of a follow-up a Are can't on I Center Contact kind seems over a new on year seeing want reflect ask just you transpired toward customer little I us what's that the give can it's space. terms give of know shift can than more UCaaS Centers? to us of It the you product growth, obviously, in metrics, any about like the X.X product opportunity, past Contact feedback you if

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seeing few in even seat that Fortune Contact as but renewed now, is RingCX, via What Center. our the multi-thousand approaches. some oriented here the speak remarks, we're is, way, is with for now we softwares that deployments seeing now literally I think, some and of interest by there now wins. And is which, have only And prepared controlled in in and AI-first deployments. what shared towards seeing we're offering very choosing easier would in We that companies self-service larger a RingCentral years I of XXX importantly, we we availability faster we're saw already white-label more a that's our say,

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Oppenheimer. from Horan with is question Tim next The

Microsoft and clear. CCaaS you ton launched, make point? it charging UCaaS you of And the just but guess their and know you partnership? was they're improve the questions question can it. and is seems Does their there's mean, I Office you your guess Does a a to it a for guess $XX it AI like on, Are is it's I And the like questions a to Teams? a ability better? industry that important study meaning improvement But does what to really have on large dozen think for it? opens had you guys. time? Copilot questions to it I your charge chance saying month not I I Or guys at key is Copilot for of over one this most integrate the

soon. one, not if aggressive, Microsoft, It's not you prepared Look, pricing right? We pricing, we be disruptive. on are to Right. disclose stay tuned. additional have ask Well, to coming number yet RingCX details do to expect this

patience just, would urge that. on I little bit of again, So a

what Microsoft. leveraging this, said having are we not with We're Now Microsoft has. competing

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a Copilot Teams? on think Well, is on that do improvement major point, you

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I for more one time, we And question. have think,

And Turrin the with question final is Michael Wells Fargo. from

of macro towards? points factors how about there Are unpack and any much you you'd any -- of way versus the to you see is to point had execution-related retention company us tied that around there external thinking capable remarks below and in there? just and primary commented for coming think just focus rates prepared of. you Is you key Tarek, contributors where is the in is opportunities us

QX. asking And retention help combination of simply Really, single to on it when have we're the to higher in a because conversations portfolio, XXX% sales retention. tremendously focused Yes. certainly Look, here you and upsell good will you our have is and multiple rate what upsell way a right? you it's a multiproduct retention does with drive really customer finish a customers, upwards net have motion from going up put, can factors. But Thanks forward, this, around take conversation for today. our is it

helps way, retention. stickier our the provide RingCX, in RingSense, products, you, when our net opportunities Ring then which more also Events from customer And by customer new new so a that the buys over customers. time, And is

the opportunities we exactly in capitalize why think of new help our need the is this differently value. reason see portfolio. be to motions to this on products the are customers innovating terms So product able We to of to sales and new

But how dialing this innovation therefore, emphasis optimistic retention journey given the feel placing over about long is I team. up the -- And much we're the net Thank time. with be in of for a going you. on term RingCentral, prospects to the

our and has for also question-and-answer presentation. concluded. you concludes today's attending the conference now session, This Thank

now You disconnect. may