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8-K - FORM 8-K - RingCentral, Inc.d487249d8k.htm

Exhibit 99.1

 

LOGO

RingCentral Announces Second Quarter 2018 Results

Total Revenue up 34%

Total ARR crosses $600 million milestone

Enterprise business ARR up over 110%

Belmont, Calif. – August 6, 2018 – RingCentral, Inc. (NYSE: RNG), a leading provider of global enterprise cloud communications and collaboration solutions, today announced financial results for the second quarter ended June 30, 2018.

Second Quarter Financial Highlights

 

   

Total revenue increased 34% year over year to $161 million.

 

   

Software subscriptions revenue increased 32% year over year to $146 million.

 

   

Annualized Exit Monthly Recurring Subscriptions (ARR) increased 32% year over year to $630 million.

 

   

RingCentral Office® ARR increased 37% year over year to $548 million.

 

   

Enterprise ARR increased over 110% year over year to $122 million.

 

   

GAAP operating margin was (2.9%), down 0.7 points year over year, while non-GAAP operating margin was 8.8%, up 1.8 points year over year.

“We had an outstanding second quarter, led by continuing strength in our mid-market and enterprise businesses and momentum from our channel partners. Our enterprise business again grew triple digits with significant wins from landing new logos and expanding into existing enterprise accounts.” said Vlad Shmunis, RingCentral’s founder, chairman and CEO. “We believe our relentless focus on product innovation continues to differentiate us in the marketplace and it underpins our broad-based momentum. With our growing lead in the cloud communications industry and the large underpenetrated market opportunity in front of us, we believe we are well positioned to achieve our goal of exceeding $1 billion in revenue in 2020.”

New Accounting Standard

The Company adopted the new standard related to revenue recognition (Topic 606) effective January 1, 2018. The financial information in this press release is prepared in accordance with Topic 606, and the comparison period amounts used to calculate growth rates are based on amounts that have been adjusted from previously reported amounts to conform to the requirements of Topic 606.

Financial Results for the Second Quarter 2018

 

   

Revenue and Gross Margin: Total revenue was $161 million for the second quarter of 2018, up from $120 million in the second quarter of 2017, representing 34% growth. Total GAAP gross margin was 76.3% for the second quarter of 2018, up 1.0 points compared to 75.3% in the second quarter of 2017.

 

   

Net Income (Loss) Per Share: GAAP net loss per share was ($0.10) for the second quarter of 2018 compared with ($0.03) for the second quarter of 2017. Non-GAAP net income per diluted share was $0.19 for the second quarter of 2018, compared with $0.10 per diluted share for the second quarter of 2017.


   

Balance Sheet: Total cash and cash equivalents at the end of the second quarter of 2018 was $567 million, compared with $555 million at the end of the first quarter of 2018.

Recent Highlights

 

   

RingCentral was added to the Russell 1000 index after equity markets closed on June 22, 2018. The Russell 1000 index is comprised of the largest 1,000 companies across various Russell indexes. The Russell Indexes are widely used by investment managers and institutional investors as index funds and benchmarks for both active and passive investment strategies. Approximately $8.6 trillion in assets are benchmarked against the Russell indexes.

 

   

RingCentral added Japanese and Brazilian Portuguese language support to its end points and admin portal. This provides fully localized experience for end users and administrators located in global offices in Japan and Brazil.

 

   

Announced RingCentral has been ranked #1 in IHS Markit’s 2018 North American Unified Communications as a Service (UCaaS) Scorecard. Named the leader for the second consecutive year, RingCentral achieved this recognition due to its market share position, business growth, product capabilities, and continued traction among mid-market and large enterprise businesses.

 

   

RingCentral Glip® was recognized as an industry leader in the 2018 Aragon Research Globe for Mobile Collaboration report. Glip was chosen as an industry leader because of its mobile first design, best-in-class user experience and ability to serve as a digital communications hub and increase workforce productivity.

 

   

RingCentral won the 2018 API Award for best in communication APIs, given by API World. RingCentral was recognized for technical innovation and adoption by the developer community.

Financial Outlook

Full Year 2018 Guidance:

 

   

Raising software subscriptions revenue range to $595 to $600 million, representing annual growth of 28% to 29%. This is up from our prior range of $588 to $594 million and annual growth of 26% to 28%.

 

   

Raising total revenue range to $649 to $656 million, representing annual growth of 29% to 30%. This is up from our prior range of $638 to $647 million and annual growth of 27% to 28%.

 

   

Raising GAAP operating margin range to (3.5%) to (2.9%), up from the prior range of (4.0%) to (3.4%).

 

   

Raising non-GAAP operating margin range to 8.2% to 8.4%, up from the prior range of 8.1% to 8.3%.

 

   

Raising non-GAAP EPS range to $0.66 to $0.70 based on 86.0 million fully diluted shares. This is up from our prior range of $0.61 to $0.65.


Third Quarter 2018 Guidance:

 

   

Software subscriptions revenue range of $152.0 to $154.0 million, representing annual growth of 27% to 28%

 

   

Total revenue range of $165 to $168 million, representing annual growth of 27% to 29%

 

   

GAAP operating margin range of (4.5%) and (3.5%)

 

   

Non-GAAP operating margin range of 8.0% and 8.2%

 

   

Non-GAAP EPS range of $0.15 to $0.17 based on 86.0 million fully diluted shares

For a reconciliation of our forecasted non-GAAP operating margin, see “Reconciliation of Forecasted Operating Margin GAAP Measures to Non-GAAP Measures.” We have not reconciled our forecasted non-GAAP EPS to GAAP EPS because we do not provide guidance on it. We do not provide guidance on forecasted GAAP EPS because of the inherent uncertainty and complexity involved in forecasting the intercompany remeasurement gain (loss), which could be a significant reconciling item between the non-GAAP and respective GAAP measure. The intercompany remeasurement gain (loss) is affected by the movement in various exchange rates relative to the US Dollar, which is difficult to predict and subject to constant change. Accordingly, a reconciliation of the non-GAAP financial measure guidance to the corresponding GAAP measure is not available without unreasonable effort.

Conference Call Details:

 

   

What: RingCentral financial results for the second quarter of 2018 and outlook for the third quarter and full year of 2018.

 

   

When: Monday, August 6, 2018 at 2:00PM PT (5:00PM ET).

 

   

Dial-in: To access the call in the United States, please dial (877) 705-6003, and for international callers, dial (201) 493-6725. Callers are encouraged to dial into the call 10 to 15 minutes prior to the start to prevent any delay in joining.

 

   

Webcast: http://ir.ringcentral.com/ (live and replay).

 

   

Replay: Following the completion of the call through 11:59 PM Eastern Time on August 13, 2018, a telephone replay will be available by dialing (844) 512-2921 from the United States or (412) 317-6671 internationally with recording access code 13681614.

Investor Presentation Details

An investor presentation providing additional information and analysis can be found at http://ir.ringcentral.com/.

About RingCentral

RingCentral, Inc. (NYSE: RNG) is a leading provider of global enterprise cloud communications and collaboration solutions. More flexible and cost-effective than legacy on-premises systems, RingCentral empowers today’s mobile and distributed workforce to communicate, collaborate, and connect from anywhere, on any device. RingCentral unifies voice, video, team messaging and collaboration, conferencing, online meetings, and integrated contact center solutions. RingCentral’s open platform integrates with leading business apps and enables customers to easily customize business workflows. RingCentral is headquartered in Belmont, California, and has offices around the world.

©2018 RingCentral, Inc. All rights reserved. RingCentral, RingCentral Office, RingCentral Glip and the RingCentral logo are trademarks of RingCentral, Inc.


Forward-Looking Statements

This press release contains “forward-looking statements,” including but not limited to, statements regarding our future financial results, our GAAP and non-GAAP guidance, our revenue growth and our expectation of exceeding $1 billion in revenue by the end of 2020, our strength in the mid-market and enterprise segments, and our channel partner momentum, our growing lead in the cloud communications industry and our market opportunity. Forward-looking statements are subject to known and unknown risks and uncertainties and are based on assumptions that may prove to be incorrect, which could cause actual results to differ materially from those expected or implied by the forward-looking statements. Among the important factors that could cause actual results to differ materially from those in any forward-looking statements are: our ability to grow at our expected rate of growth; our ability to add and retain larger and enterprise customers and enter new geographies and markets; our ability to continue to release, and gain customer acceptance of, new and improved versions of our services; our ability to compete successfully against existing and new competitors; our ability to enter into and maintain relationships with carriers and other resellers; our ability to manage our expenses and growth; and general market, political, economic, and business conditions, as well as those risks and uncertainties included under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in our Form 10-Q for the quarter ended March 31, 2018, filed with the Securities and Exchange Commission; and in other filings we make with the Securities and Exchange Commission from time to time.

All forward-looking statements in this press release are based on information available to RingCentral as of the date hereof, and we undertake no obligation to update these forward-looking statements, to review or confirm analysts’ expectations, or to provide interim reports or updates on the progress of the current financial quarter.

Non-GAAP Financial Measures

Our reported financial results and financial outlook include certain Non-GAAP financial measures, including Non-GAAP software subscriptions gross margin, Non-GAAP other gross margin, Non-GAAP operating margin, Non-GAAP operating income (loss), Non-GAAP net income (loss) and Non-GAAP net income (loss) per diluted share. Non-GAAP software subscriptions gross margin is defined as Non-GAAP subscriptions gross profit divided by GAAP subscriptions revenue. Non-GAAP other gross margin is defined as Non-GAAP other gross profit divided by GAAP other revenue. Non-GAAP operating income (loss) is defined as operating income (loss) excluding share-based compensation, amortization of acquisition intangibles, and acquisition related matters. Non-GAAP operating margin is defined as Non-GAAP operating income (loss) divided by total GAAP revenue. Non-GAAP net income (loss) is defined as GAAP net income (loss) excluding share-based compensation, intercompany remeasurement gains or losses, acquisition related matters, amortization of acquisition intangibles, non-cash interest expense associated with amortization of debt discount and issuance costs related to our convertible senior notes, and the related income tax effect of these adjustments.

Non-GAAP diluted shares outstanding include the impact on shares used in per share calculations of our outstanding capped call transactions. Our outstanding capped call transactions are anti-dilutive in GAAP earnings per share but are expected to mitigate the dilutive effect of our convertible notes and therefore will be included in the calculations of non-GAAP diluted shares outstanding.

We have included Non-GAAP software subscriptions gross margin, Non-GAAP other gross margin, Non-GAAP operating margin, Non-GAAP net income (loss) and Non-GAAP net income (loss) per diluted share in this press release because they are key measures used by us to understand and evaluate our operating


performance and trends, to prepare and approve our annual budget, and to develop short and long-term operational plans. In particular, the exclusion of certain expenses in calculating Non-GAAP software subscriptions gross margin, Non-GAAP other gross margin, Non-GAAP operating margin, Non-GAAP net income (loss), and Non-GAAP net income (loss) per diluted share provide useful measure for period-to-period comparisons of our business.

Although Non-GAAP software subscriptions gross margin, Non-GAAP other gross margin, Non-GAAP operating margin, Non-GAAP net income (loss), and Non-GAAP net income (loss) per diluted share, are frequently used by investors in their evaluations of companies, these non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP. Because of these limitations, these non-GAAP financial measures should be considered alongside other financial performance measures.

Reconciliations of the Company’s non-GAAP financial measures to their most directly comparable GAAP measures has been provided in the financial statement tables included in this press release.

Other Measures

Our reported results also include our annualized exit monthly recurring subscriptions, RingCentral Office® annualized exit monthly recurring subscriptions, enterprise annualized exit monthly recurring subscriptions and net monthly subscriptions dollar retention. We define our annualized exit monthly recurring subscriptions as our monthly recurring subscriptions multiplied by 12. Our monthly recurring subscriptions equal the monthly value of all recurring charges in effect at the end of a given month. We believe this metric is a leading indicator of our anticipated subscriptions revenue. We calculate our RingCentral Office® annualized exit monthly recurring subscriptions in the same manner as we calculate our annualized exit monthly recurring subscriptions, except that only customer subscriptions from RingCentral Office® customers are included when determining monthly recurring subscriptions for the purposes of calculating this key business metric. We calculate enterprise annualized exit monthly recurring subscriptions in the same manner as we calculate our annualized exit monthly recurring subscriptions, except that only customer subscriptions from customers generating $100,000 or more in monthly recurring revenue are included, We define Dollar Net Change as the quotient of (i) the difference of our Monthly Recurring Subscriptions at the end of a period minus our Monthly Recurring Subscriptions at the beginning of a period minus our Monthly Recurring Subscriptions at the end of the period from new customers we added during the period, (ii) all divided by the number of months in the period. We define our Average Monthly Recurring Subscriptions as the average of the Monthly Recurring Subscriptions at the beginning and end of the measurement period.

Investor Relations Contact:

Paul Thomas, RingCentral

(650) 458-4462

Paul.Thomas@RingCentral.com

Media Contact:

Jennifer Caukin, RingCentral

(650) 561-6348

Jennifer.Caukin@ringcentral.com


TABLE 1

RINGCENTRAL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited, in thousands)

 

     June 30,
2018
    December 31,
2017

*As Adjusted
 

Assets

    

Current assets

    

Cash and cash equivalents

   $ 567,280     $ 181,192  

Accounts receivable, net

     67,015       46,690  

Deferred sales commission costs

     19,140       15,424  

Prepaid expenses and other current assets

     24,643       21,512  
  

 

 

   

 

 

 

Total current assets

     678,078       264,818  

Property and equipment, net

     55,076       43,298  

Deferred sales commission costs, noncurrent

     47,085       37,871  

Goodwill

     9,393       9,393  

Acquired intangibles, net

     21,128       1,462  

Other assets

     2,569       2,972  
  

 

 

   

 

 

 

Total assets

   $ 813,329     $ 359,814  
  

 

 

   

 

 

 

Liabilities and Stockholders’ Equity

    

Current liabilities

    

Accounts payable

   $ 6,366     $ 7,322  

Accrued liabilities

     76,382       54,977  

Current portion of capital lease obligation

     943       —    

Deferred revenue

     73,240       62,917  
  

 

 

   

 

 

 

Total current liabilities

     156,931       125,216  

Convertible senior notes, net

     356,788       —    

Capital lease obligation

     2,829       —    

Other long-term liabilities

     5,757       6,252  
  

 

 

   

 

 

 

Total liabilities

     522,305       131,468  

Stockholders’ equity:

    

Common stock

     8       8  

Additional paid-in capital

     508,728       434,840  

Accumulated other comprehensive income

     2,795       2,998  

Accumulated deficit

     (220,507     (209,500
  

 

 

   

 

 

 

Total stockholders’ equity

   $ 291,024     $ 228,346  
  

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 813,329     $ 359,814  
  

 

 

   

 

 

 

 

*

Prior-period information has been adjusted for the adoption of ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which we adopted on January 1, 2018.


TABLE 2

RINGCENTRAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited, in thousands, except per share data)

 

     Three Months Ended
June 30,
    Six Months Ended
June 30,
 
     2018     2017
*As Adjusted
    2018     2017
*As Adjusted
 

Revenues

        

Software subscriptions

   $ 145,959     $ 110,896     $ 282,919     $ 215,026  

Other

     14,873       9,023       28,256       17,127  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     160,832       119,919       311,175       232,153  
  

 

 

   

 

 

   

 

 

   

 

 

 

Cost of revenues

        

Software subscriptions

     26,716       21,795       51,242       42,058  

Other

     11,350       7,766       22,498       14,809  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total cost of revenues

     38,066       29,561       73,740       56,867  
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     122,766       90,358       237,435       175,286  

Operating expenses

        

Research and development

     24,814       18,617       47,465       35,704  

Sales and marketing

     79,023       56,361       150,943       110,626  

General and administrative

     23,583       18,007       45,032       33,812  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     127,420       92,985       243,440       180,142  
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss from operations

     (4,654     (2,627     (6,005     (4,856

Other income (expense), net

        

Interest expense

     (4,836     (9     (6,247     (88

Other income, net

     1,338       578       1,411       700  
  

 

 

   

 

 

   

 

 

   

 

 

 

Other income (expense), net

     (3,498     569       (4,836     612  
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss before income taxes

     (8,152     (2,058     (10,841     (4,244

Provision for income taxes

     139       57       166       108  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss

   $ (8,291   $ (2,115   $ (11,007   $ (4,352
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss per common share

        

Basic and diluted

   $ (0.10   $ (0.03   $ (0.14   $ (0.06
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted-average number of shares used in computing net loss per share

        

Basic and diluted

     79,089       75,867       78,717       75,278  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

*

Prior-period information has been adjusted for the adoption of ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which we adopted on January 1, 2018.


TABLE 3

RINGCENTRAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, in thousands)

 

     Six months ended June 30,  
     2018     2017
*As Adjusted
 

Cash flows from operating activities

    

Net loss

   $ (11,007   $ (4,352

Adjustments to reconcile net loss to net cash provided by operating activities

    

Depreciation and amortization

     11,476       7,842  

Share-based compensation

     30,864       19,562  

Amortization of deferred sales commission costs

     8,673       5,543  

Amortization of debt discount and issuance costs

     6,154       —    

Foreign currency remeasurement (gain) loss

     778       (463

Provision for bad debt

     1,137       1,003  

Deferred income taxes

     11       (12

Other

     210       113  

Changes in assets and liabilities

    

Accounts receivable

     (21,462     (4,711

Deferred sales commission costs

     (21,603     (14,605

Prepaid expenses and other current assets

     (2,795     (2,623

Other assets

     (626     501  

Accounts payable

     (499     (1,427

Accrued liabilities

     17,736       3,136  

Deferred revenue

     10,323       7,969  

Other liabilities

     (495     (24
  

 

 

   

 

 

 

Net cash provided by operating activities

     28,875       17,452  
  

 

 

   

 

 

 

Cash flows from investing activities

    

Purchases of property and equipment

     (11,856     (8,814

Capitalized internal-use software

     (5,367     (3,488

Cash paid for acquisition of intangible assets

     (18,470     —    

Restricted investment

     —         530  
  

 

 

   

 

 

 

Net cash used in investing activities

     (35,693     (11,772
  

 

 

   

 

 

 

Cash flows from financing activities

    

Proceeds from issuance of convertible senior notes, net of issuance costs

     449,457       —    

Payments for capped call transactions and costs

     (49,910     —    

Repurchase of common stock

     (15,000     —    

Proceeds from issuance of stock in connection with stock plans

     11,729       17,449  

Taxes paid related to net share settlement of equity awards

     (2,986     (1,118

Repayment of debt

     —         (14,840

Repayment of capital lease obligations

     (741     (181
  

 

 

   

 

 

 

Net cash provided by financing activities

     392,549       1,310  
  

 

 

   

 

 

 

Effect of exchange rate changes

     357       (330

Net increase in cash, cash equivalents and restricted cash

     386,088       6,660  

Cash, cash equivalents and restricted cash

    

Beginning of period

     181,192       160,355  
  

 

 

   

 

 

 

End of period

   $ 567,280     $ 167,015  
  

 

 

   

 

 

 

 

*

Prior-period information has been adjusted for the adoption of ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which we adopted on January 1, 2018.


TABLE 4

RINGCENTRAL, INC.

RECONCILIATION OF OPERATING INCOME (LOSS)

GAAP MEASURES TO NON-GAAP MEASURES

(Unaudited, in thousands)

 

     Three Months Ended
June 30,
    Six Months ended
June 30,
 
     2018     2017
*As Adjusted
    2018     2017
*As Adjusted
 

Revenues

        

Software subscriptions

   $ 145,959     $ 110,896     $ 282,919     $ 215,026  

Other

     14,873       9,023       28,256       17,127  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     160,832       119,919       311,175       232,153  
  

 

 

   

 

 

   

 

 

   

 

 

 

Cost of revenues reconciliation

        

GAAP Software subscriptions cost of revenues

     26,716       21,795       51,242       42,058  

Stock-based compensation

     (1,136     (997     (2,012     (1,722

Amortization of acquisition intangibles

     (150     (150     (301     (301
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP Software subscriptions cost of revenues

     25,430       20,648       48,929       40,035  
  

 

 

   

 

 

   

 

 

   

 

 

 

GAAP Other cost of revenues

     11,350       7,766       22,498       14,809  

Stock-based compensation

     (165     (41     (299     (73
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP Other cost of revenues

     11,185       7,725       22,199       14,736  
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit and gross margin reconciliation

        

Non-GAAP Subscriptions

     82.6     81.4     82.7     81.4

Non-GAAP Other

     24.8     14.4     21.4     14.0

Non-GAAP Gross profit

     77.2     76.3     77.1     76.4

Operating expenses reconciliation

        

GAAP Research and development

     24,814       18,617       47,465       35,704  

Stock-based compensation

     (3,906     (2,342     (7,000     (4,201

Acquisition related matters

     —         (178     —         (443
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP Research and development

     20,908       16,097       40,465       31,060  
  

 

 

   

 

 

   

 

 

   

 

 

 

As a % of total revenues non-GAAP

     13.0     13.4     13.0     13.4

GAAP Sales and marketing

     79,023       56,361       150,943       110,626  

Stock-based compensation

     (7,189     (3,926     (12,230     (7,451

Amortization of acquisition intangibles

     (1,099     (76     (2,015     (180
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP Sales and marketing

     70,735       52,359       136,698       102,995  
  

 

 

   

 

 

   

 

 

   

 

 

 

As a % of total revenues non-GAAP

     44.0     43.7     43.9     44.4

GAAP General and administrative

     23,583       18,007       45,032       33,812  

Stock-based compensation

     (5,201     (3,321     (9,323     (6,115
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP General and administrative

     18,382       14,686       35,709       27,697  
  

 

 

   

 

 

   

 

 

   

 

 

 

As a % of total revenues non-GAAP

     11.4     12.2     11.5     11.9

Income (loss) from operations reconciliation

        

GAAP loss from operations

     (4,654     (2,627     (6,005     (4,856

Stock-based compensation

     17,597       10,627       30,864       19,562  

Amortization of acquisition intangibles

     1,249       226       2,316       481  

Acquisition related matters

     —         178       —         443  
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP Income from operations

     14,192       8,404       27,175       15,630  
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP Operating margin

     8.8     7.0     8.7     6.7

 

*

Prior-period information has been adjusted for the adoption of ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which we adopted on January 1, 2018.


TABLE 5

RINGCENTRAL, INC.

RECONCILIATION OF NET INCOME (LOSS)

GAAP MEASURES TO NON-GAAP MEASURES

(In thousands, except per share data) (Unaudited)

 

     Three Months Ended
June 30,
    Six Months Ended
June 30,
 
     2018     2017
*As Adjusted
    2018     2017
*As Adjusted
 

Net Income (loss) reconciliation

        

GAAP net loss

   $ (8,291   $ (2,115   $ (11,007   $ (4,352

Stock-based compensation

     17,597       10,627       30,864       19,562  

Amortization of acquisition intangibles

     1,249       226       2,316       481  

Acquisition related matters

     —         178       —         443  

Amortization of debt discount and issuance costs

     4,784       —         6,154       —    

Intercompany remeasurement loss (gain)

     749       (435     1,023       (478

Income tax expense effects **

     —         —         —         —    
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP net income

   $ 16,088     $ 8,481     $ 29,350     $ 15,656  
  

 

 

   

 

 

   

 

 

   

 

 

 

Basic and diluted net income (loss) per share

        

Reconciliation between GAAP and non-GAAP weighted average shares used in computing basic and diluted net income / (loss) per common share:

        

Weighted average number of shares used in computing net loss per share

     79,089       75,867       78,717       75,278  

Effect of dilutive securities

     6,579       6,192       6,604       5,579  
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP weighted average shares used in computing non-GAAP net income per share

     85,668       82,059       85,321       80,857  
  

 

 

   

 

 

   

 

 

   

 

 

 

GAAP Net loss per share

   $ (0.10   $ (0.03   $ (0.14   $ (0.06
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP Net income per share

   $ 0.19     $ 0.10     $ 0.34     $ 0.19  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

*

Prior-period information has been adjusted for the adoption of ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which we adopted on January 1, 2018.

**

The non-GAAP adjustments do not have an impact on our income tax provision due to our continued history of non-GAAP losses and full valuation allowance.


TABLE 6

RINGCENTRAL, INC.

RECONCILIATION OF FORECASTED OPERATING MARGIN

GAAP MEASURES TO NON-GAAP MEASURES

(In millions, except per share data)

(Unaudited)

 

     Q3 2018     FY 2018  
     Low Range     High Range     Low Range     High Range  

GAAP revenues

     165.0       168.0       649.0       656.0  

GAAP loss from operations

     (7.5     (5.9     (22.8     (18.9

GAAP operating margin

     (4.5 %)      (3.5 %)      (3.5 %)      (2.9 %) 

Stock-based compensation

     19.4       18.4       71.0       69.0  

Amortization of acquisition intangibles

     1.3       1.3       5.0       5.0  
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP income from operations

   $ 13.2     $ 13.8     $ 53.2     $ 55.1  

Non-GAAP operating margin

     8.0     8.2     8.2     8.4