RingCentral (RNG) 7 Nov 242024 Q3 Earnings call transcript

Hello, and welcome to the RingCentral Third Quarter 2024 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to hand the call to Will Wong, Vice President of Investor Relations. Please go ahead.

Thank you. Good afternoon, and welcome to RingCentral's Third Quarter 2021 Earnings Conference Call.

Vlad Vice Chairman Chief President are Vaibhav CEO; Accounting today Senior Agarwal, of me Shmunis, and Founder, and Officer. Joining FP&A and

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

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

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

provided is to discussed detail reconciliation our financial our on results in to non-GAAP website. slide of complete as indicated, Unless information is our contained business, comparisons. GAAP guidance, risks related and For of with non-GAAP the Securities as with Certain in as Commission GAAP all in the A please. earnings that release a corresponding the deck posted well guidance the today's not the reconciliation slide year-over-year uncertainties otherwise deck. and please of available to a all to discussion measures Exchange non-GAAP follow refer are the measure filings and forward-looking with the our in Investor Relations earnings

With that, I'll turn to call the over Vlad.

our Good third earnings and afternoon, quarter everyone, welcome conference to call.

Bentley he welcome of as In software Abhey Building seasoned Chief joins we roles, for Amazon want from Global sell-side start for engineer leadership Prior President to a Officer. has is years leader where technology various us his to driven at of new investments. he is Systems, from Infrastructure, he to quarter, his a from Web XX experience. businesses. UBS, warm multibillion-dollar like other and growth with as covered profitability Abhey his systems over Vice XX served SaaS Group Finance a over Abhey Mizuho held as and I Services to and finance including Amazon, a results at Financial he Gen provide management highlights for AI and final I he will desk. the Previously, a Wall who our update. announced Abhey analyst Lamba, our years, roles hardware and new the technology, at and discuss ISI join enterprise coming Before Securities. today companies in on extend I'd role weeks. Street in where

leadership Vaibhav sincerely would and partner our that as SVP company scale his Accounting ensured Abhey during miss the contributions the and in also thank for to of Chief we company a FP&A we period. I to like with transition outstanding His valuable will the selfless our beat dedication did transition. Vaibhav stage this Officer, during Agarwal, not next myself of growth. and

guidance had Now a third results. Revenue range. our We was above moving to quarter. solid

new products, was our strength particular, traction combined our in market, strong in outperformance UCaaS Our with continued from RingCX. by core driven

share in via delivered profitability in reduction The this a in and GAAP including also of increase return We combination SBC year-over-year profitability cash achieving the growth free expansion material flow operating on a quarter. goals, of operating our margin has and the strong capital driven XX% quarter. buybacks per

new by TAM third, hybrid nurturing diverse into and our native AI-powered solidifying our includes by are, partner initiatives. portfolio results entire priorities. large UCaaS reach broadening strategic RingCX, events executing our geographies. platform. RingSense, Events, CCaaS growing network new RingCentral our our and and AI-powered our solution; one, AI and offering; and expanding expanding our intelligence infusing our through They amongst And Two, against conversation virtual This products. are Our we demonstrate other leadership across

We retention improved logo and believe drive efficient acquisition. more these growth will new share, profitable wallet long-term increased through priorities

priority more and performed share about it against me let how Now during we each the quarter.

First, UCaaS solidifying leadership. our

We TIP, nines for stands have On Innovation been or business Partnerships reliability, We've some all us delivering and sizes for five global secure, world's the on deployment of highly platform X best-known built which Customers Trust. communications scalable compliant Trust, use including of our grounded feature better and our a platform. of over choose in and leading set standards reliability brands of robust years. because and ease built carrier-grade all

phone voice be leadership communication leadership concluded in Teams a calling will where in messaging our to with complement historical user continues that agree choosing mission-critical. and with This business monitoring, a which Quadrant voice, base, tenth for and and include, analytics not center advantage recognition our the named a the reach, centering and management, This competitive global Core customers rich platform employee for major broader been with voice, see are "XX% and phone UCaaS queue capabilities integrations why reporting. communications by CRMs organizations interactions." Given that native year our priority us have robust limited in customer continues to are not is Gartner remains call their to that remain of available differentiator in key Voice as call to report. their RingCentral's leader to a of use consecutive Teams. video. a we for voice SMS, be APIs, consistent by for We recent advanced enterprises These survey, which Teams Magic mode maintenance is but XXXX in are this this trends. IVR, Microsoft base IDC of supported is fax,

we integration will a is This advantages win who care teams, a booked deep million-plus TCV a with across provider, quarter, XX-plus these large offices European Europe. on Teams health their and this deploy customer. $X also in with our Based customer

at of and announced This RingCentral and why Assistant, that mode Voice AI Businesses voice decisions. communication resource data now the we of a more their voice primary for summarize and all more call for which RingEX recently is freeing the mundane voice. insights customers. detailed critical unlock work. included AI can is his on texts and tasks, for of write action meetings up real-time and is cost tailwind additional no notes create items, to at AI the type is employees Assistant business helps enables a now spent generated for power RingCentral conversations smarter time reducing magically translate

crucial has competitive AI-powered that has communication significantly insight significant allows ensuring seamlessly fully enhanced circles cloud solutions business further we making and country. by receiving pregame strategy ability customer, meetings telecommunication valuable fast-paced the of XX their with the long-time Indian Omdia It facilitating all the Telecommunications.This Indian to efficient already UCaaS across can our isn't Research details, deliver aligned. Raiper, changer license RingCentral Assistant operate in branches, game a and achieved us a a by for Pistons, organizations offices through competitive falls Previously, It subscription we first multinational milestone to our key said throughout operations. us by of A authorization Department giving strategy technology noticing is their or edge India preparations. cracks." To session. the malt, the the during recently collaboration. "It recently cited no a amazingly as for accurate. pan-India compliant RingCentral global connect implementing now IT, AI to us Paul improving Detroit been providers the CCaaS administrative and the to especially is organized our just efficiency. and about stay worried missing This VP

let's Now products. the new move on to

that CCaaS is XX% UCaaS First, important improved organizations rest call experience that overall and highlighted experience, collaboration our all their UCaaS uniform center communications. user benefits product, unified capabilities and include joint administrative integrated resulting CCaaS solution over RingCX. CCaaS the and SLAs agents intelligence, for analytics, believe a between of usage of customer new native and it IDC and solution of includes recently organization, in improved the internal overall a external better conversation

omnichannel AI-powered seamlessly with offering ease platform to native conversation on platform, with It industry-leading in our our of integrated is differentiates modern of a deployment depth intelligence is and quality management in reliability addition combining digital and use and and and SMS. RingCX functionality, channels RingEX security. voice CCaaS

of be RingCX tires Based automotive footprint. on booked quarter, trends, with million-plus RingEX, a their of this and America's RingSense international across will manufacturers replacement TCV one North deal entire these that deploying we $X largest

scale, proof additional RingCX's advanced more of an As to use ability including cases. point

agents We support This have in the over without also recently disruption. done moved efficiently cost of to the entire X,XXX RingCX. RingCentral service customer weeks short team and was few

over We now sequentially. have over the customers platform, on XXX up XX%

strong a bookings key sequentially. expansion ARPU driver we has add-on In up in ARPU AI The quality nearly been to XX% quarter. was strong which attach customer to a expansion with rate also of are addition management this seeing new the growth, RingCX

savings time AI RingCX success for loan a migrated auto to due we an estimate specialist, to AUTOPAY, technology we XX% RingCX, "Since reps said that delivers." sophisticated customer

which the and strategic partnership efficiency enhance of solutions, operational proposition This to a value mid-market and with this leading employee advantage customers Through to RingCX the partnership, CX WEM RingCX announced complement competitive to leverage improve and Verint. enterprise To customers. able will RingCentral's Today, ultimately customer experiences, capabilities. productivity is native be automation enhance and AI Verint's in we've further driving our segments,

full strong RingCX a validated to be value market. ability native platform, in we with The CCaaS of prioritizing the we are our has the range With seeing cases, use its address proposition will traction RingCX.

TAM to capture a economics has share As for the owner RingCX growth CCaaS it is with potential meaningful based, multibillion-dollar the of RingCentral.

that up RingSense over our Sales, use platform sequentially. customers, intelligence conversation diverse. base was cases RingSense now formerly and are over Second, RingSense XX% X,XXX has customer for called The

care to specific as approximately a REE a month. are firms month able health using calls For versus hundred manually only to previously keywords automatically example, management legal such to simplify and for Medical review organizations being XX,XXX few case using are it per review calls it

our new Trimble its production a the picturing [ Fortune quality added included through and solution, central for branded event technology events ], over to virtual easily third, high hybrid quarter. create XXX RingCentral customers company, ability Events This XXX events. And during

eBay, amongst as others. and We with relationships NYU, RingCentral TELUS also DHL, customers events Rodgers key such renewed Block,

million of our this at a achieving by ARR We way on XXXX. In we results far our by from to of this of year, target. February are so are products our set least end new believe well of exit encouraged we target achieving and $XXX

partnerships. to on Now

network. access GSPs that partner and geographies multiproduct Our our verticals. This reseller differentiated force, go-to-market is of top the global multiple competitive and allows to or important to large moat large and our groups, us to an customer a allow service us It have scale part includes successfully sales providers direct business.

Let you from highlights some me the give quarter.

GSP. First,

our and and wireless unmatched this again, GSP A XX-year on the CC This business. provider, recently and deep premier faster fixed of peers. both with Our UC that go-to-market our example built than we engagement which partnership nation's network are overall them grew have GSP we and business, our partners with great by the plus of wireless renewed. design AT&T, fiber, product is

added not also large in to provider service leading leveraging and GSP traction early our We're seeing together. We network Optus, internationally. recently Australia a are grow

We internationally. as also continue Vodafone British as success well see to Telecom and TELUS with

RingCX is of shorter have progress bases, a customer Leveraging and to and chosen differentiator we're a our with these the this solution growth. to and unique network on and partners Vodafone, CCaaS Cox other of diverse also as GSP opportunity RingCX Zayo bring front. key already optimistic

And in early had showing CCaaS, summary, remains Events our against proven are and good AI RingCentral leader large. opportunity new in we traction. where a delivering the UCaaS is strategic strong In quarter products a priorities. their

free is initiatives, and resulting We reducing flow on in as cash expanded well are also which profitability executing as efficiency SBC. our

confident We we quarters exciting an are and in ahead. can continue I'm to the and execute that then path on years

over our contributions discuss him will would outstanding his again With detail. to that, turn Vaibhav thank financial like call now the and results more in to for I to

Thanks, Vlad.

our for from highlights year. provide I'll then quarter discuss quarter Now business and and the fourth the third full outlook

financial profit, million solidly we end cash and year-over-year, the metrics. revenue guidance. our was and our all SPC range. and reduction free guidance high count XX% of operating full XQ, executed well share In key In year up $XXX revenue flow of our are growth, raising across above subscription Revenue QX,

business X% up a basis, tailwind. a versus was on up currency ARR ARR XX%, year. X% constant currency reported basis. both mid-market was and of billion with rose sequential last On group, customer a a small year-over-year $X.XX and enterprise By moderate

with XQ with new growth particular, perform ARR As well XQ. Vlad to RingCX, noted, products, in in consistent continue sequential

penetration ARPU from remained we invest new new results our ARPU. to Over be within with Subscription the and margin down we sequentially to as ARPU overall expect products higher non-GAAP to gross of support contribution to our as was profitability. overall unless new be will slightly over otherwise grows they new Moving as accretive $XX product infrastructure to its products time, referring product increases, scale. large ARPU. growth strong XX%, Overall noted. and meaningfully than I in the base

The rose Operating drive costs expansion to and XXX sales Overall, efficiency. conjunction free as increase the basis as to margin for drive X in compensation discipline margin and and market. as with revenue declined year-over-year operating cash driven down in points higher-margin operating percent continue organization of on spending to XX%. focus per flow is view routes marketing marketing points flow reducing approximately higher free cash optimize we share. and year-over-year a we by both ultimately total XX% to Sales expense and continued stock-based

basis XXX XX% year-over-year. free last quarter, third was the During million, we year. up generated versus cash flow margin up flow of Free XX.X%, points $XXX cash

capital free cash has also working to In from spending, flow leverage continued disciplined benefited addition efficiencies. and operating

are levels. stock-based the down XXX new The quarters shares total of important number more in values XXXX million track points last granted forward. reduction by lower are is to share Stock-based first and in lower we compensation. result grants last Through to XX% $XX improvement grant our compensation XX% revenue, reduce and versus XX% the to of continued Moving versus exceed year. XXXX, was goal SBC will share down of on basis year. of or in going grants as X net grants than

cash flow of reducing Importantly, while SPC free and free again growing is discipline compensation reflection cash in flow. meaningfully a significantly our stock-based exceeded

and capital sheet to allocation. our balance on Moving

cash shared profitability. invite we and Consistent last of our shareholders to and cash plan year and what to repayment last adjusted with disciplined XXXX to X.Xx, from share flow. available both repurchase. Xx EBITDA to continue as returning Net we cash with we increased address to notes a meaningfully debt will We balanced convertible to debt approach down million our through quarter, improved $XXX

A, [indiscernible] In commitments QX, to commitment an Loan bringing Trim to we secured $XXX our additional million $XXX million. delay total

notes May draw to XXXX. have plan expect We this plus to until due March between the on March We cash flow in coming and to convertible free now we our XXXX generate commitment. this down XXXX with commitment address

to liquidity million, $XXX a comprised of stands the capital target gross of our more approach, billion $X.X on of dynamic As $X a undrawn the commitments QX deploying end part cash XXXX. to continue on reducing Note, plus before today debt allocation no loan we of our as than is A from hand at billion which term and revolver.

we repurchase We QX, provide returns. an continues believe that to shares share attractive relative for X.X million repurchased million. $XX In

XX, XXXX, So our have million far in at $XXX approximately September X.X we shares remaining and for on $XXX million have XXXX. authorization million repurchased

further. count, stock-based buybacks, on fully share we continued decline in Our compensation will discipline share diluted combined result our continuing to with

We sequentially are making good year. X% last diluted fully versus progress count declining with share by X% and

with respect to at flexibility financial all buybacks, offset preserving continue SPC excess plan to fully Going forward, we to via dilution while from least cash.

demonstrate from this ability balanced paydown. new compensation a core our expand growth and margins approach spend believe are allocation our strengthen to execute quarter believe profile reduced can this we well-positioned that repurchase capital efficiencies results financial deploy through future. and plan stock-based debt to for strategy, our continue the share includes on to deliver and and we continued Overall, our products, With we our

current of our of in no deterioration to guidance fourth trends or turn the that conditions. stable and relatively is based revenue me the guidance. further Embedded for a let growth business on operating we $X.XX to X%, X% With expectation X% count macro fully XXXX, XX environment backdrop, share material shares. margin Now EPS with that the million quarter in million of of and of XX.X $X.XX improvement the growth of approximately XX% revenue non-GAAP remained to diluted non-GAAP to total expect subscription and

For of and growth revenue total of our to raising expect X% the $X.XXX subscription We revenue to year, full billion, annual $X.XXX revenue of now are growth $X.XXX we of billion X%. representing outlook. representing billion, $X.XXX billion

expect margin into of We back XX% profitability the we operating balance reinvesting business. a continue to as non-GAAP with

to of million, down million compensation $XXX previously. now $XXX from million $XXX $XXX to we expect million Importantly, stock-based

from We part in $X.XX, now diluted in EPS shares outlook up also as million million count from XX we $X.XX, lower fully expect non-GAAP to XX share $X.XX XXXX, million down expect shares of to outstanding our driven XX.X by previously.

free Regarding expect free million we of cash flow, $XXX to million up now million. cash $XXX million, flow $XXX $XXX to from

restructuring cash $XX of of Our $XX million certain from other interest for includes strategic and $XX cash payments $XX million, of capitalized of outlook partners. million, million well expenditures received as paid as

a a given long-term profile prioritizing noted, with driver economics. better be growth will key Vlad As margin owner significantly its RingCX

excited for needs. allow solution. native UC+ and to meet us opportunity our are that innovate technology better to our will is CC fully RingCX serve our demand the about proprietary customer the We faster emerging customer own scaled

it's over that meet bookings of those its or will believe RingCentral levels. we Center exceed While at still early for peak bookings time, eventually Contact RingCX, its

had good we summary, In quarter. a

strategy addressable our a in will that of products this We against maximize profile free executing our driving reducing will flow for through strategy for while are financial and from the shareholders. generation, strong core, count. believe on delivering continued while share our materially competencies, reliance new growth expanding We lowering result our third our core parties cash returns our markets all

let's call open questions. up that, With the for

[Operator Goldman. Instructions] with first comes Today's Rangan question from Kash

guy, a people known a great hire for pension long with Mitesh. hiring in A have starting for looks former you It sell-side time. great them Abhey, like

job. great So

the better how business would get as to strategy. On you understanding evaluate AI own to your just itself, I a wanted

of best are where it point the is out introduction test inflection have the dear when a a develop we which AI things of to is you products, develop enough, including could prediction the hypotheses it reacceleration of have into something that of your of we bunch we portfolio, that that to term But an the a we from that and you AI What market. RingCX, good respect and . marketplace? intimated that is you to near hit that's ultimately. near is growth the we growing that AI know your And the with I as be these get et positive rate, products So good is learned and your parts and and is what you've out in top for plan how cetera, business? all playing line could how your sort very

Yes, run a as will be hopefully, it very him good of well.

engineer So your me the is hear. says probably real, let but good that's Look, you AI if it's want question, all so to indeed good the that. in is never me It is transformative. to of megatrends, you that mother not enough, what say

are that real It's seeing real traction, early. firsthand is demand We there now a real usage.

This So of we're not yet. that not ready just going new is is our customers. not to and a majority share certainly, growing everything but many technology quarter-over-quarter, day-over-day. people probably most, numbers people, is literally to if affect vast But all

a experimenting monetizing. started now to but at are with not we've we're We AI, stage where just

look our there AI a of think that corporate specifically if but that's some that AI-specific are at are first deck, I even monetized. that of you being number one you'll out newer RingSense them, are available entrants. is already or we calling products online, see

For Agent some comes related for example, Assist mind RingCX technologies. RingCentral and to

this signs. very an also because number likely that contact space, agencies, agents pulling will major where come value have person-to-person very, only and AI, with by it. does we our boom, it's augments deflecting lot it are high AI driver more the already we our for a replace some major very but AI will is be into play. a but in are certainly, RingEX we revenue communications. extremely will it's rate, of it And driver not more the center detractor because And calls. agencies while ARPU of solidifier, even effect okay? enhances in expect can ARPU case, that lot we maybe all ARPU but on up and and think it's growth early, over in bring It automating a a positive have said we those the So attach And a and I time,

develop ourselves. will we Some

small well I'm very offering enterprise-grade sure you Verint world-class with management relationship very accounts the a noticed, it. That companies automation. is to are largest Only contact have on and it arose Verint, about center some believe solution strategic serious in spanning on we've few announced accounts the I the and because now we and between of from new wide-based RingCX workforce a globe actually of our lead. Verint. way very a is

positive promising can look, It's very Quantitatively, this needle rate, happen the have time. the is which we move XXX% simply it to very, takes entity our very of it to really we almost, revenues. qualitatively, run the is So right. business, so billion have, and very, on recurring an $X.X size, what's And sizable.

absolutely So be it contributing. will

early ARPU. to over but I our is point. cycle. overall ready they time, as very not quite think to par and then will very, into then you see, first the And contributions guide growth, at will translate in it this

comes next Panigrahi Siti with Mizuho. The question from

to Great CFO. Abhey us joining new as see

partnership, looks CCaaS Vlad, lot on a of few What and kind market? are you solution position position and the you trends how How questions. you on now And A emphasis about going Verint. SMB this versus nice? the of seeing in talked have with are are against partner to the enterprise? you Verint you going RingCX CCaaS that to Now like versus -- RingCX

businesses. initially an SMB you It Sure. Abhey. Look, and in indeed on is we're very it thank quarter-over-quarter. showing RingCX realizing that solution doing strong as than growth. But Great and now very is question, SMB what it much well just for a [indiscernible] we've wider is is smaller product. again,

with which as to and migrated contact. customer. And is half, a thousands great closer direct know, from getting we proof we great and have a of was RingCX. hundreds and we of quarters, migration becoming X our And to over indeed point center are well as RingCC, seats nice now contact actually this own internal as accounts all We and are our

a and productivity. took went loss So and few without this in seamlessly transition weeks

can only And and also actually that but firsthand know cases use not is smaller -- now case businesses. we cases that So RingCX simple. use it's for simpler our handle not internally, for enterprises.

have upon of we're hundreds optimize. to hundreds managing We that cues

and okay, have visible lots We X,XXX, of over a well agents now over center call RingCX count loss and processing as are are well. well and the running traffic X,XXX with on of agent

user [indiscernible] So being think to little Only entire basically with control. with in very UCaaS, product. to answer that our be course, share, be CCaaS will expect top-level the UCaaS fair question, of in years, that is UC economics, Cloud prepared or overall all PBX and we high-end which that CCaaS second CCaaS, or eventually a it remarks maybe owner positioned the a time with look, space. But been is RingCX unique top-level I combining which but we your well, with winning our this okay? part I more a all pure-play together. in I and our Over experience under this packaging pricing maybe to now the point, almost believe CC bit the be in can market such uniquely in will this Contact RingCentral fray, we is good And in all of at our get and is, has around, cloud product, said of future. top as have level my we've Center, RingCX unique combining experience say, with leader context worldwide

our a clear. still is there. to our RingCentral in-context will never they've We it's at replicate, customers is what for AI-first be even and want still are So have trying is do RingCC it RingCX I'm that set, product, on are will with who trying, not and are the optimistic. trying not look, not never. out what time we product. that not particular good go-forward Perhaps just Contact sure there it AI-driven are we Center, solution. space say to which but we saying been while, relationship. -- very because is I'm and CCaaS knows, or we the doing we're it to extended, may disrupt left entire be feature new a who will very RingCX

here, small my partner, very, cases finish from believe very address entire can long new really with sentence to our we very to use stack do large. as just strategic And that very Verint of we

think thanks for follow-up. X We forward? we how about that that? gross last margin see And Vlad, that color. What I'm downtick quick a drive quarters. the going wondering should in

for the question. Siti, Thanks,

margin very XX%. So strong look, at overall gross about is still

Our ARPUs continue be cost are stable, we benefits from to and scale base. seeing our

particularly things our fixed base. we transport as our up costs slight sequential costs is like over So ramping a are new There spreading bigger and headwind a are products, RingCX.

in investing to ramp. that are we So and products the some of infrastructure these is expected rationalize that

comes MacWilliams Ryan with The next question from Barclays.

next on from $XXX This to hear remain hit Ryan end is to [indiscernible] that new guys on Great of you track year. MacWilliams. the million from products the by

was if starting point. I rate think in the a growth begin should to we about curious total puts and other takes for XQ Any keep revenue just would As XXXX, be good mind? we that

Yes.

not this good little will yet stages, for maybe Let we course, it's QX To that of ready provide point, are are in honest, a at be me part Look, a one, take color. having relatively more bit on guide question, first maybe XXXX. the more here. to planning we and qualitatively And number early. but of Vaibhav we laser-focused are

stake as all is building He hand have certainly a in. like So top ready to have you yet, has of CFO. in his the just not on to know, we not And him we're this, new announced guide.

is happening we I'm prepared of our very Again, all see what some in of positives is our remarks. in there. this, here about many inside Now Look, here out earnings the site

and where minutes base the steady updated Some third-party we refer us. sign use are lately. has see our our a with to which are growth but been We I for is fundamentally, per also the deck, of voice. overall our least very at see it of we investor community, strong positive keeping pace points it, proof user is from would own what voice to continued in analyst you user of company. But This see

would huge In to okay still greenfield space. a news And us, left to leverage is Center new we've doing CCaaS there that number bit for know are contact this it good a the in logos say, of better opportunity. lot RingCX nice Contact show But reality of I technology. also there and we with adding is well, combined been product -- -- We space, UC in the with a the based UCaaS, maybe is that than also expected. years, selling a

a We in is and combined. trained force outside well channel sales that our have selling channel

in way, however, in a Contact OEM part indicated, the term. where and it know just peak. to its This I on at of operative to may of will foot create headwind of What having word, portfolio, potentially not we in it be be for RingCX hard RingCC the on level bit -- or a maybe was as sure, but way could our solution but forward, is create the and Moving will well quantify. RingCentral of we we is near bit result that It there Center, the the to will our but a forward. their bookings friction, be that with are still leading may RingCX not address quite be

in It's as addressing is is businesses But well smaller a larger some this as enterprises. of because net some wider replacement. it it needs And is of product. of new [indiscernible]

what would give to I do is So of time. a bit little urge you us

information XXXX have at and we next be, that time. will our call, more of at substantially outlook full course, earnings providing for should We

Teams helping How is RingCX? with compared perform center XQ And contact larger the this one pull And helping XQ? more land I to Microsoft more. with you is in it customers? Also, opportunities through if just could deals did

customers players. generally larger Look, are team Most customers. of questions. Good for is Teams our so larger itself

seeing enterprise our industry limited my company is this this in digits. unique double level is in digits. is growing understanding, that be growth are You the still ahead point double still of From and to at this maybe in anything actually our growth at

super So about we feel that.

why of very I in be an deck, that top actually especially people need RingCentral that It to on I they're people we investor not an of, to teams our choosing customers, [indiscernible] you with in is want where we Again, system information reiterate, channel customers, enterprise still will choosing a mind, have added RingCX many are and So on specific add-on to exactly ecosystem refer to as part our to some use like Teams. to and similar okay? of yes, competitor this particular a an our if operating on have we that potential it's just us. And Teams, really it's simply call again, Teams.

Teams. more contrary, far As historically, and but not is where included, which some is as RingCX, examples the so to RingCentral historically, for smaller notable being with businesses, much there is slated itself

that would I integration point, what needle RingCX this mover. at and not it's a Teams say So is

RingCX become portfolio. to Teams have that Teams tell We expect to time. add like to the that that over in it have we expect we And for for RingEX foreseeable can to you I just future the

[Operator Michael The Fargo. question Turrin Instructions] from next comes from Wells

newer How much the I of drivers from the Or just selling appreciate on to spend leverage in and I far. of Vlad, line? focusing continue continue had Can that And price you are to focus in all that you to also as the to you color expansion the newer as sales cross-sell products marketing ARPU you're that? on time some on of seeing drive speak well? comment you the this products -- on? wanted you improvements can base is a some on,

Look, okay.

several So it guises. comes in

cross-sell. word You used the

So registering don't numbers me have into at the maybe RingCX that. I products overall is entire is in new base. would look, it's give is driving for absolutely product. RingCX but how selling overall cross-sell of me, already such on up the base. new ARPU, believe for exact honest ARPU the one look front I I And

Okay.

it I but it upsell call products, than AI-based newer more our move we look particular, also I products, in at that the maybe, then, cross-sell, needle. have beginning can you Now also guess, are to

quality we management we Contact for shortened sales. Centers it it for Why of or RingSense are for RingSense So sales used use general to seeing call RingSense. just all the . not right? It that is have the based, above we're renamed We is denominations, cases necessarily to Sales. name much

are have competencies our native from relationships. our own, To would core as is we can replace out This assistance AI time, as our some ecosystem much through the with as have over there, OEM as be we far looking technology. concerned. We are be that some to we OEM clear,

is ARPU. to. now. been just So you anyone well, the time these at you person things actually for deliver go crash. than accretive and because deck surely, hear, is And refer And not you this again, say, search point there can argument we our quite is more to and many are person the you look $XX about competitive with the okay? that all to probably below we've think be that -- we if must What I strategy you look, web. you can some ARPU holding pricing, how can I below that is that at go hear buck we times, times, bang many sometimes and that And out and

that of up This PDX -- ARPU gets our all already its is bundle many to have period used and analytics, delivering that don't is We offering what up in it. value, offering price driving Contact we a or small are full good it reporting So RingCX even people right $XX, for are okay? delivering is are this in many lost cases, for charge high-end in. outside we in midsized extra translation own up, Center. a as We

for before it things can on forms call. can that But are the call, charge. that opens new is we do as AI completely because which bots, our we some various of possibilities we building know while it AI, offer with stakes, no think Now that at things table us. so during up assistant [indiscernible], which have of AI are AI I for now the

quality call management. So Agent it, post and Assist

to guide is All at the gas very respect guide, from match going anyone is But that revenue-generating And are say of hard opportunities I'm with very, to RingCentral what industry. gets even these from I'm user to to company a $XX us, value not will not revenue opportunities. I in a again, going ARPU. that for the

Microsoft's there of out okay? into $XX, standalone stack. is, examples for Copilot of the some that example, is our And interesting And parts we're incorporating

forward. So money intend for the to we so and value again, do deliver moving

And on be quarter, XXX in now the percentage basis in XXXX. sales to XX% as about back it marketing, a of used the revenue, Yes. points the declined so Michael, and by it's has then total in

by and we an are to X significantly a continuously -- it has be this past that improved the So continues which routes and of cap, years. sales we of to that a business market the a are over costs, are lowering unit are area have to economics. our And ways. by for on in focus we shifting us, couple of that very driving It's disciplined we doing productivity different doing are remaining mindful we taking favorable higher

Samad Samana question from Jefferies. comes with The next

to on I [indiscernible] the Samad. and quarter-over-quarter vertical back could macro demand? for on those then quarter? in in I terms at is if progress And any and implied of of demand? in some If of negative end cited positive strengths deals second were material or go-to-market the how versus fourth kind dynamics with changes in SMB the do quarter in print, quarter high of material double-click Any And maybe third softness what's This changes the guide? go the enterprise upsells dynamics. customer terms Maybe as relative the some large

What was results QX we QX, in in is with look, pleased ARR are in digits. that we levered. quite So saw double we the growing

provided add of of buying duration and customers products contracts. and couple to continue We examples larger longer customers multiple a for

as of in terms subsides, and are the but of be us. that, of early be macro could the there back-end improve in signs the the in for though, growth stabilization showing deals. SMB to some seeing positive us. segment and for a Having continues enterprise headwinds is macro, macro that trend some loaded, is timing be still of we higher we this expect that conditions kind said continues a more So variability to

of in our are are considering we early products, terms very commentary that In especially terms the strong of Vlad traction And of of see momentum rationalizing from new in encouraged early XX%. upsells some to there count we provided terms the be seeing. the be continues to economics. an to improved margins churn are but stable, be new growth. head as the downsell NRR seats above companies We continues opportunity for and owner potential

other And be for area our and to making investments with opportunity So of we are are an that us. enable continues phone they onboard buying products some to new will seamlessly. revenue particularly as cloud be impacted to customers, adoption,

So together, trends of incorporated terms I those in all that's are seeing of the what's the when today. we think things guidance put we in and

[indiscernible] last Today's question from comes Rosenblatt Securities.

additional on how relationship with insight Could is observing And are revenue this progressing? AWS you guys partnership? the from please some provide you

theirs. to from end, seeing Yes. is a theirs. some And technology and are in live Relationship certainly, of we big the to our them flow is we in addition customer healthy. deal are that, But complementary as

is of someone will, And out your are and in many we to on We to they're cases, are on and numbers part side, able have helpful break this AWS the by sources our these like it's on together, the call. certainly you of but have they side. reason way, working referral, that, if multiple all

well. And very AWS there. do as have actually happy we're making our base. teams can more we tell they customer the do I relationship. very, And working Hopefully, as that our large a yet there with are So to we more to believe solutions you is that on appealing

attending you concludes our for presentation. This today's today. for call Thank

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