Revenue and EPS above guidance
Q4 2020 and FY 2020 Earnings Presentation
Initiating FY 2021 guidance
Safe Harbor and Non-GAAP Measures
This presentation includes forward-looking statements within the meaning of the federal securities laws. These statements relate to, among other things, our business strategy and goals, growth of the market for our services, our future financial and operating results, including our GAAP and non-GAAP guidance, the assumptions underlying our guidance, and the effects of the COVID-19 pandemic.
Although we believe the assumptions upon which these forward-looking statements are based are reasonable, any of these assumptions could prove to be inaccurate and the forward-looking statements based on these assumptions could be incorrect. Our operations involve risks and uncertainties, many of which are outside our control, and any one of which, or a combination of which, could materially affect our results of operations and whether the forward-looking statements ultimately prove to be correct.
Actual results and trends in the future may differ materially from those suggested or implied by the forward-looking statements depending on a variety of factors including those that are described in greater detail in our Form 10-Q for the quarter ended September 30, 2020 and in our other filings with the Securities and Exchange Commission from time to time. All future written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the previous statements. We undertake no obligation to update any forward-looking statements that may be made to reflect events or circumstances that occur, or that we become aware of, after the date of this presentation.
In this presentation, we provide historical certain non-GAAP financial measures, which are reconciled to their directly comparable GAAP financial measures.
These reconciliations are presented in the Appendix at the end of this presentation.
We also provide guidance on forecasted non-GAAP operating margin, non-GAAP tax rates, and non-GAAP EPS. Reconciliations of our forecasted non-GAAP operating margin to the most directly comparable GAAP financial measure is presented in the Reconciliation slides at the end of this presentation. We have not reconciled the forecasted non-GAAP EPS to its respective forecasted GAAP measures 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), gain (loss) associated with investments and strategic partnerships, gain (loss) on debt early conversions, and provision (benefit) from income taxes, which could be significant reconciling items 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 USD, which is difficult to predict and subject to constant change. We do not provide guidance on gain (loss) associated with investments and strategic partnerships as it is based on future share prices, which are difficult to predict and subject to inherent uncertainties. We do not provide guidance on gain (loss) on debt early conversions as it is based on future conversion requests, future share prices, and interest rates, which are difficult to predict and are subject to inherent uncertainties. We do not provide guidance on forecasted GAAP tax rates as we do not forecast discrete tax items as they are difficult to predict. The provision (benefit) from income taxes, excluding discrete items, is expected to have an immaterial impact to our GAAP EPS. We utilized a projected long-term tax rate in our computation of the non-GAAP income tax provision. For fiscal 2021, we have determined the projected non-GAAP tax rate to be 22.5%. Accordingly, a reconciliation of the non-GAAP financial measure guidance to the corresponding GAAP measure is not available without unreasonable effort.
We also provide other measures such as software subscriptions annualized exit monthly recurring subscriptions (ARR), RingCentral Office® ARR, mid-market and enterprise ARR, enterprise ARR and channel partner ARR and bookings.
Outstanding Q4 Across the Board
► Standout growth for integrated UCaaS and CCaaS solutions
• RingCentral Office(1) ARR up 39% Y/Y to $1.2 billion, an acceleration of 3 points sequentially
• Enterprise(2) ARR up 55% Y/Y; Channel(3) ARR up 55% Y/Y
• TCV deals over $1 million were a new record, up over 50% sequentially, with 60%+ including Contact Center
• Two TCV deal wins over $10 million
► Strong contributions from our key partners led by Avaya, AT&T, and Atos
• Avaya: Strong early growth momentum in seat count, transaction volume, and deal size
• AT&T: Increased traction with large customers
• Atos: Expanded to new geographies and good pipeline growth
• Vodafone Business: RingCentral to be lead UCaaS offer for installed base of 30M+ business customers
► Expanding product portfolio on MVP platform
• RingCentral Glip: Introduced free, unlimited(4) Smart Video Meeting solution with integrated team messaging
• RingCentral Office: Released new video innovations including virtual backgrounds, closed captions, and Embeddable for Video
(1) RingCentral Office includes customer subscriptions from RingCentral Office and RingCentral customer engagement solutions
(2) Enterprise business is defined as RingCentral Office customers that generate $100,000 or greater annualized recurring revenue (ARR)
(3) Channel partner ARR is defined in the same manner as we calculate our ARR, except that only customer subscriptions generated from channel partners are included
(4) Maximum meeting duration is 24 consecutive hours
A Leader in the 2020 Gartner Magic Quadrant for Unified Communications as a Service, Worldwide.
6 years in a row
This graphic was published by Gartner, Inc. as part of a larger research document and should be evaluated in the context of the entire document. The Gartner document is available upon request from RingCentral. Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner's research organization and should not be construed as statements of fact. Gartner disclaims all warranties, express or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose. Gartner, Magic Quadrant for Unified Communications as a Service, Worldwide, Rafael Benitez, Megan Fernandez, Daniel O'Connell, Christopher Trueman, Pankil Sheth; 12 November 2020. GARTNER is a registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and internationally, and is used herein with permission. All rights reserved.
Source: Gartner (November 2020)
Q4 2020 Financial Highlights at-a-Glance
Revenue | Subscriptions Revenue | $306 million, 34% Y/Y growth |
Other Revenue(1) | $28 million, 20% Y/Y growth | |
Total Revenue | $335 million, 32% Y/Y growth |
ARR | Total ARR | $1,300 million, 35% Y/Y growth |
RingCentral Office(2) | $1,215 million, 39% Y/Y growth | |
Mid-Market & Enterprise(3) | $713 million, 49% Y/Y growth | |
Enterprise(4) | $454 million, 55% Y/Y growth | |
Channel Partners(5) | $465 million, 55% Y/Y growth |
(1) | Other Revenue is primarily comprised of product revenue from the sale of pre-configured phones, phone rentals, and professional services |
(2) | RingCentral Office includes customer subscriptions from RingCentral Office and RingCentral customer engagement solutions |
(3) | Mid-market and enterprise business is defined as RingCentral Office customers that generate $25,000 or greater ARR |
(4) | Enterprise business is defined as RingCentral Office customers that generate $100,000 or greater ARR |
(5) | Channel partner ARR is defined in the same manner as we calculate our ARR, except that only customer subscriptions generated from channel partners are included |
5 | | © 2021 RingCentral, Inc. All rights reserved. |
Q4 2020 Guidance vs Q4 2020 Results
Q4 Guidance | Q4 Results | |
Subscriptions Revenue | $290.5M - $292.5M | $306M |
Subscriptions Revenue Growth Y/Y | 27% - 28% | 34% |
Other Revenue(1) | $24.5M - $25.5M | $28M |
Other Revenue Growth Y/Y(1) | 4% - 9% | 20% |
Total Revenue | $315M - $318M | $335M |
Total Revenue Growth Y/Y | 25% - 26% | 32% |
GAAP Operating Margin | (9.8%) - (9.2%) | (8.6%) |
Non-GAAP Operating Margin | 10.0% - 10.1% | 10.1% |
Non-GAAP EPS | $0.26 - $0.27 | $0.29 |
(1)
Other Revenue is primarily comprised of product revenue from the sale of pre-configured phones, phone rentals, and professional services. Other Revenue guidance is implied based on Total Revenue guidance less Subscriptions Revenue guidance © 2021 RingCentral, Inc. All rights reserved.
Subscriptions Revenue
Q4'19
Q3'20
Total Revenue
Q4'19
Q3'20
RingCentral Office ARR
Q4'19
Q3'20
Total Subscriptions ARR
Q4'19
Q3'20
Annual Results Summary FY 2020 vs FY 2019
FY 2019 | FY 2020 | Y/Y | |
Subscriptions Revenue | $818M | $1,086M | 33% |
Other Revenue(1) | $85M | $97M | 15% |
Total Revenue | $903M | $1,184M | 31% |
GAAP Operating Margin | (5.1%) | (9.6%) | (4.5) pts |
Non-GAAP Operating Margin | 9.2% | 9.7% | 0.5 pts |
Non-GAAP EPS | $0.82 | $0.98 | $0.16 |
(1)Other Revenue is primarily comprised of product revenue from the sale of pre-configured phones, phone rentals, and professional services © 2021 RingCentral, Inc. All rights reserved.
RingCentral Platform
Q1 2021 and FY 2021 Guidance
Q1 2021 and FY 2021 Guidance
Q1 2021 | FY 2021 | |
Subscriptions Revenue | $311.5M - $313.5M | $1.365B - $1.375B |
Subscriptions Revenue Growth Y/Y | 28% - 29% | 26% - 27% |
Implied Other Revenue(1) | $25.5M - $26.5M | $110M - $115M |
Implied Other Revenue Growth Y/Y(1) | 5% - 9% | 13% - 18% |
Total Revenue | $337M - $340M | $1.475B - $1.490B |
Total Revenue Growth Y/Y | 26% - 27% | 25% - 26% |
GAAP Operating Margin | (15.1%) - (13.8%) | (21.7%) - (20.4%) |
Non-GAAP Operating Margin | 8.6% - 8.8% | 10.0% - 10.1% |
Non-GAAP Tax Rate | 22.5% | 22.5% |
Non-GAAP EPS | $0.24 - $0.25 | $1.20 - $1.24 |
(1)
Other Revenue is primarily comprised of product revenue from the sale of pre-configured phones, phone rentals, and professional services. Other Revenue guidance is implied based on Total Revenue guidance less Subscriptions Revenue guidance © 2021 RingCentral, Inc. All rights reserved.
Reconciliation GAAP to Non-GAAP
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RingCentral Inc. published this content on 16 February 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 16 February 2021 21:45:01 UTC.