EX-99.1 2 rng-20210930x8kxex991.htm EX-99.1 Document

Exhibit 99.1
rnglogoa.jpg
RingCentral Announces Third Quarter 2021 Results
RingCentral Total ARR of $1.6 billion, up 39%
Mid-Market and Enterprise ARR achieves approximately $1 billion, up 53%

Belmont, Calif. – November 9, 2021 – RingCentral, Inc. (NYSE: RNG), a leading provider of global enterprise cloud communications, video meetings, collaboration, and contact center solutions, today announced financial results for the third quarter ended September 30, 2021.
Third Quarter Financial Highlights

•Total revenue increased 37% year over year to $415 million.
•Subscriptions revenue increased 38% year over year to $385 million.
•Total Annualized Exit Monthly Recurring Subscriptions (ARR) increased 39% year over year to $1.64 billion.
•RingCentral Office® ARR (UCaaS + CCaaS) increased 42% year over year to $1.55 billion.
•Mid-market and Enterprise ARR increased 53% year over year to $971 million.
"Third quarter results were outstanding, with accelerating growth driven by ramping contributions from our key partners and momentum from our upmarket customers," said Vlad Shmunis, RingCentral's founder, chairman and CEO. "Our success is rooted in our commitment to cultivating trust with our customers, our relentless pace of innovation, and our differentiated partner network with industry leaders. With our award-winning RingCentral Message Video Phone (or MVP) platform, our seamless integration with an industry-leading cloud contact center solution, and our unparalleled market access with strategic partners, we believe we are uniquely positioned to meet the rising global demand for cloud-based communications solutions."
Financial Results for the Third Quarter 2021
•Revenue: Total revenue was $415 million for the third quarter of 2021, up from $304 million in the third quarter of 2020, representing 37% growth. Subscriptions revenue of $385 million increased 38% year over year and accounted for 93% of total revenue.
•Operating Income (Loss): GAAP operating loss was ($83) million, compared to ($30) million in the same period last year, primarily driven by higher share-based compensation. Non-GAAP operating income was $44 million, compared to a non-GAAP operating income of $31 million in the same period last year.
•Net Income (Loss) Per Share: GAAP net loss per share was ($1.60), compared to ($0.24) in the same period last year, primarily driven by higher share-based compensation and mark-to-market losses associated with investments. Non-GAAP net income per diluted share was $0.36, compared to $0.26 per diluted share in the same period last year. The third quarters of 2021 and 2020 reflected a 22.5% non-GAAP tax rate. There were no material cash taxes given our net operating loss carryforwards.
•Cash and Cash Equivalents: Total cash and cash equivalents at the end of the third quarter of 2021 was $345 million. This compares to $325 million at the end of the second quarter of 2021.
Financial Outlook
Full Year 2021 Guidance:
•Raising total revenue range to $1.580 to $1.581 billion, representing annual growth of 33% to 34%. This is up from our prior range of $1.539 to $1.545 billion and annual growth of 30% to 31%.
•Raising subscriptions revenue range to $1.466 to $1.467 billion, representing annual growth of 35%. This is up from our prior range of $1.424 to $1.430 billion and annual growth of 31% to 32%.
•Raising GAAP operating margin range to (18.7%) to (18.5%). This is up from our prior range of (19.2%) to (18.3%).


•Raising non-GAAP operating margin to 10.1%. This is up from our prior range of 10.0% to 10.1%.
•Non-GAAP tax rate assumed to be 22.5%. No material cash taxes expected given net operating loss carryforwards.
•Raising non-GAAP EPS to $1.32 based on 93.5 million fully diluted shares. This is up from our prior range of $1.28 to $1.30 based on 93.0 to 93.5 million fully diluted shares.
•Share-based compensation range of $378 to $380 million, amortization of debt discount and issuance costs of $64 million, amortization of acquisition intangibles of $68 million, and acquisition related and other matters of approximately $7.6 million.
Fourth Quarter 2021 Guidance:
•Total revenue range of $433.5 to $434.5 million, representing annual growth of 30%.
•Subscriptions revenue range of $404.5 to $405.5 million, representing annual growth of 32%.
•GAAP operating margin range of (22.3%) to (21.7%).
•Non-GAAP operating margin range of 10.4% to 10.5%.
•Non-GAAP tax rate assumed to be 22.5%. No material cash taxes expected given net operating loss carryforwards.
•Non-GAAP EPS of $0.37 based on 94.5 to 95.0 million fully diluted shares.
•Share-based compensation range of $108 to $110 million, amortization of debt discount and issuance costs of $16 million, and amortization of acquisition intangibles of $32 million.
CFO Transition Plan
RingCentral announced today that Mitesh Dhruv will be stepping down from his role as Chief Financial Officer. Mr. Dhruv will remain in his current role through the end of 2021.
“On behalf of everyone at RingCentral, I would like to thank Mitesh for his valuable contributions to our Company over the past decade. And especially since stepping in as a CFO nearly 5 years ago, Mitesh has been instrumental in driving consistent profitable growth and outsized shareholder results. We wish Mitesh all the best in all of his future endeavors,” said Vlad Shmunis, RingCentral’s founder, chairman and CEO. “Mitesh established a strong foundation and we have an exceptional finance and accounting team in place. We are confident that our ability to execute and lead in the $100 billion-plus UCaaS digital transformation market will continue unabated.”
In selecting our next CFO, RingCentral will consider internal and external candidates.
“It has been a privilege to be the CFO of RingCentral. The Company’s track record of trust, innovation, and partnerships is exceptional, and I am proud to have contributed,” said Mr. Dhruv. “RingCentral is a well-oiled execution machine that I am confident should continue to operate at a high level. With the company firing on all cylinders, now is the right time for me to take some time off as I consider the next chapter of my life.”
Additional Highlights
Recognition
•Recognized as a Leader in the 2021 Gartner Magic Quadrant for Unified Communications as a Service (UCaaS), Worldwide report, making this RingCentral's seventh year in a row being named to the Leaders quadrant. RingCentral was positioned furthest for completeness of vision in the Leaders quadrant.
•Ranked highest in three out of four use cases among 14 total vendors in the 2021 Gartner Critical Capabilities for Unified Communications as a Service (UCaaS), Worldwide report.
Partnerships
•Introduced RingCentral Rise, a new platform designed exclusively for service providers around the world. By leveraging Resources, Innovation, System integration, and Experiences (Rise) from RingCentral, service providers can now offer their own unique, co-branded unified cloud communications solutions including team messaging, video meetings, cloud phone system, and contact center solutions to businesses around the world in a fast, flexible, and scalable manner.
•Announced that MCM Telecom will offer a co-branded solution called RingCentral for Symphony, which will be the lead MCM Unified Communications as a Service offering to all business customers. MCM and


RingCentral have joined forces to bring together all the essential elements of hybrid work into a single app for video conferencing, mobile collaboration, and advanced business phone capabilities enhanced by MCM’s leading fiber network and expertise in serving the Mexican enterprise market.
•Announced new partnerships with three leading healthcare Independent Software Vendors (ISVs) - Ascom, ChronicCareIQ, and ELLKAY - to bring new capabilities to RingCentral MVP and RingCentral Contact Center. The partnerships enable providers to transform point of care workflows managed via ruggedized VoIP wireless devices. It also helps enhance patient engagement with data-driven interaction during outbound and inbound patient calls.
Platform
•Received a Unified License that will enable RingCentral to provide its Unified Communications as a Service (UCaaS) and Contact Center as a Service (CCaaS) solutions in India, which will make RingCentral the first global cloud provider to offer fully compliant voice and other unified cloud communications in the country.
•Announced new capabilities that will help organizations to bring together their preferred apps and services with a cloud-based business communications platform. Incremental developments include APIs for call performance analytics and audit trail recording, new RingCentral Add-ins integrations, and new ISV partnerships.
•Announced new innovative features for RingCentral MVP, including live meeting transcription, meeting summaries, infinite whiteboard, and next-gen analytics. Also introduced new capabilities for RingCentral Rooms, including mobile to room meeting switch, Rooms as softphone, Rooms proximity sharing, and Room Connector, as well as several new Room appliances.
•Announced a range of new innovations enabling employees to communicate and collaborate effectively, securely, and productively from anywhere. New capabilities include Dynamic End-to-End Encryption (E2EE), C5:2020 certification, RingCentral Add-ins, RingCentral for Microsoft Teams embedded dialer, and Mobile Heads Up Display, as well as RingCentral Video innovations including presentation mode, touch-appearance capabilities, auto-framing, and breakout rooms.
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 its respective forecasted GAAP measure 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, gain (loss) on early debt conversions, and provision (benefit) from income taxes, which could be significant reconciling items between the non-GAAP and respective GAAP measures. The intercompany remeasurement gain (loss) is affected by the movement in various exchange rates relative to the U.S. Dollar, which is difficult to predict and subject to constant change. We do not provide guidance on gain (loss) associated with investments 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.
Conference Call Details:
•What: RingCentral financial results for the third quarter of 2021 and outlook for the fourth quarter and full year of 2021.
•When: Tuesday, November 9, 2021 at 2:00PM PT (5:00PM ET).
•Webcast: RingCentral Q3 2021 Earnings Webcast (live and replay).
•Replay: Following the completion of the call through 11:59 PM ET on November 16, 2021, a telephone replay will be available by dialing (844) 512-2921 from the United States or (412) 317-6671 internationally with recording access code 10161263.


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 business cloud communications and contact center solutions based on its powerful Message Video Phone™  (MVP™) global platform. More flexible and cost effective than legacy on-premises PBX and video conferencing systems that it replaces, RingCentral® empowers modern mobile and distributed workforces to communicate, collaborate, and connect via any mode, any device, and any location. RingCentral offers three key products in its portfolio including RingCentral MVP™, a Unified Communications as a Service (UCaaS) platform including team messaging, video meetings, and cloud phone system; RingCentral Video®, the company’s video meetings solution with team messaging that enables Smart Video Meetings™; and RingCentral cloud Contact Center solutions. RingCentral’s open platform integrates with leading third-party business applications and enables customers to easily customize business workflows. RingCentral is headquartered in Belmont, California, and has offices around the world.
© 2021 RingCentral, Inc. All rights reserved. RingCentral, Message Video Phone, MVP, RingCentral Office, RingCentral Video, Glip, Smart Video Meetings, RingCentral Rise, 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, the results of the pace of our innovation and our partner networks, and our ability to execute and lead in the UCaaS digital transformation market, our expectations around the demand for our products and the growth of the markets in which we compete. 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: the future effects of the COVID-19 pandemic; our ability to realize the anticipated benefits of our strategic relationships; our expectations regarding our strategic acquisitions; 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, including RingCentral Office®, RingCentral MVP™, and RingCentral Video®; our ability to compete successfully against existing and new competitors; our ability to enter into and maintain relationships with resellers, carriers, channel partners and strategic partners; our ability to successfully and timely integrate, and realize the benefits of any significant acquisition we may make; 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 June 30, 2021, 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 subscriptions gross margin, Non-GAAP other gross margin, Non-GAAP operating margin, Non-GAAP income (loss) from operations, Non-GAAP net income (loss), Non-GAAP net income (loss) per diluted share, Non-GAAP net cash provided by (used in) operating activities, and Non-GAAP free cash flow. Non-GAAP 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 income (loss) from operations is defined as GAAP income (loss) from operations excluding share-based compensation which includes related employer payroll taxes, amortization of acquisition intangibles, and acquisition related and other matters including transaction costs, integration costs, restructuring costs, acquisition-


related retention payments, as well as changes in the fair value of contingent consideration obligations and certain litigation related costs. Non-GAAP operating margin is defined as Non-GAAP income (loss) from operations divided by total GAAP revenue. Non-GAAP net income (loss) is defined as GAAP net income (loss) excluding share-based compensation which includes related employer payroll taxes, intercompany remeasurement gains or losses, acquisition related and other matters, amortization of acquisition intangibles, non-cash interest expense associated with amortization of debt discount and issuance costs related to our convertible senior notes, gain (loss) associated with investments, loss on early extinguishment of debt, tax benefit from release of valuation allowance, 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 are included in the calculations of non-GAAP diluted shares outstanding.
Non-GAAP net cash provided by (used in) operating activities is defined as net cash provided by (used in) operating activities plus cash paid for repayments of convertible senior notes attributable to debt discount and cash paid for strategic partnerships. Non-GAAP free cash flow is defined as Non-GAAP net cash provided by (used in) operating activities reduced by purchases of property and equipment and capitalized internal-use software. We believe information regarding free cash flow provides useful information to investors in understanding and evaluating the strength of liquidity and available cash.
We have included Non-GAAP subscriptions gross margin, Non-GAAP other gross margin, Non-GAAP operating margin, Non-GAAP income (loss) from operations, Non-GAAP net income (loss), Non-GAAP net income (loss) per diluted share, Non-GAAP net cash provided by (used in) operating activities, and Non-GAAP free cash flow 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 and cash flow items in calculating Non-GAAP subscriptions gross margin, Non-GAAP other gross margin, Non-GAAP operating margin, Non-GAAP income (loss) from operations, Non-GAAP net income (loss), Non-GAAP net income (loss) per diluted share, Non-GAAP net cash provided by (used in) operating activities, and Non-GAAP free cash flow provide useful measure for period-to-period comparisons of our business.
Although Non-GAAP subscriptions gross margin, Non-GAAP other gross margin, Non-GAAP operating margin, Non-GAAP income (loss) from operations, Non-GAAP net income (loss), Non-GAAP net income (loss) per diluted share, Non-GAAP net cash provided by (used in) operating activities, and Non-GAAP free cash flow 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, mid-market and enterprise annualized exit monthly recurring subscriptions, enterprise annualized exit monthly recurring subscriptions, channel Office partner annualized exit monthly recurring subscriptions, direct and partner Office 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 customer recurring charges contracted 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® and RingCentral customer engagement solutions customers are included when determining monthly recurring subscriptions for the purposes of calculating this key business metric. We calculate mid-market and enterprise annualized exit monthly recurring subscriptions in the same manner


as we calculate our RingCentral Office® annualized exit monthly recurring subscriptions, except that only customer subscriptions from customers generating $25,000 or more in annual recurring revenue are included. We calculate enterprise annualized exit monthly recurring subscriptions in the same manner as we calculate our RingCentral Office® annualized exit monthly recurring subscriptions, except that only customer subscriptions from customers generating $100,000 or more in annual recurring revenue are included. We calculate channel Office annualized exit monthly recurring subscriptions in the same manner as we calculate our annualized exit monthly revenue subscriptions, except that only customer subscriptions generated from channel partners are included. We calculate direct and partners Office annualized exit monthly recurring subscriptions in the same manner as we calculate our annualized exit monthly revenue subscriptions, except that only customer subscriptions not generated from channel partners 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.

*Disclaimer
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, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.
Gartner., “Critical Capabilities for Unified Communications as a Service, Worldwide” Christopher Trueman, Megan Fernandez, Daniel O’Connell, Rafael Benitez, Pankil Sheth, October 19, 2021.
Gartner, Magic Quadrant for Unified Communications as a Service, Worldwide, By Rafael Benitez, Megan Fernandez, Daniel O'Connell, Christopher Trueman, Pankil Sheth, 18 October 2021
GARTNER and Magic Quadrant are registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and internationally, and are used herein with permission. All rights reserved.

Investor Relations Contact:
Ryan Goodman, RingCentral
(650) 918-5356
Ryan.Goodman@ringcentral.com

Media Contact:
Mariana Leventis, RingCentral
(650) 562-6545
Mariana.Leventis@ringcentral.com




TABLE 1
RINGCENTRAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands)
 
September 30, 2021December 31, 2020
Assets
Current assets
Cash and cash equivalents$345,152 $639,853 
Accounts receivable, net216,126 176,034 
Deferred and prepaid sales commission costs91,948 63,726 
Prepaid expenses and other current assets40,371 46,516 
Total current assets693,597 926,129 
Property and equipment, net158,779 142,208 
Operating lease right-of-use assets48,038 51,115 
Long-term investments199,655 213,176 
Deferred and prepaid sales commission costs, non-current709,347 667,779 
Goodwill56,012 57,313 
Acquired intangibles, net92,346 118,313 
Other assets7,729 8,564 
Total assets$1,965,503 $2,184,597 
Liabilities, Temporary Equity, and Stockholders' Equity
Current liabilities
Accounts payable$46,831 $54,043 
Accrued liabilities259,380 210,654 
Current portion of convertible senior notes, net— 31,148 
Deferred revenue169,399 142,223 
Total current liabilities475,610 438,068 
Convertible senior notes, net1,382,406 1,375,320 
Operating lease liabilities34,176 38,722 
Other long-term liabilities28,050 20,241 
Total liabilities1,920,242 1,872,351 
Temporary equity— 3,787 
Stockholders' equity
Common stock9 9 
Additional paid-in capital673,422 673,950 
Accumulated other comprehensive income2,029 6,806 
Accumulated deficit(630,199)(372,306)
Total stockholders' equity$45,261 $308,459 
Total liabilities, temporary equity and stockholders’ equity$1,965,503 $2,184,597 



TABLE 2
RINGCENTRAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands, except per share data)
 
Three Months Ended
September 30,		Nine Months Ended
September 30,
 2021202020212020
Revenues
Subscriptions$385,440 $279,639 $1,061,866 $779,781 
Other29,189 23,985 84,392 69,340 
Total revenues414,629 303,624 1,146,258 849,121 
Cost of revenues
Subscriptions84,229 60,531 236,719 169,685 
Other26,220 21,783 75,634 62,710 
Total cost of revenues110,449 82,314 312,353 232,395 
Gross profit304,180 221,310 833,905 616,726 
Operating expenses
Research and development84,121 48,481 222,958 132,910 
Sales and marketing225,111 152,986 607,758 421,931 
General and administrative78,083 49,513 201,716 146,381 
Total operating expenses387,315 250,980 1,032,432 701,222 
Loss from operations(83,135)(29,670)(198,527)(84,496)
Other income (expense), net
Interest expense(15,977)(12,680)(48,197)(32,780)
Other income (expense)(47,062)21,824 (9,742)36,910 
Other income (expense), net(63,039)9,144 (57,939)4,130 
Loss before income taxes(146,174)(20,526)(256,466)(80,366)
Provision for income taxes577 431 1,427 803 
Net loss$(146,751)$(20,957)$(257,893)$(81,169)
Net loss per common share
Basic and diluted$(1.60)$(0.24)$(2.83)$(0.92)
Weighted-average number of shares used in computing net loss per share
Basic and diluted91,811 89,173 91,213 88,259 



TABLE 3
RINGCENTRAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
Nine Months Ended
September 30,
20212020
Cash flows from operating activities
Net loss$(257,893)$(81,169)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization78,223 53,563 
Share-based compensation254,749 137,410 
Amortization of deferred and prepaid sales commission costs53,307 33,060 
Amortization of debt discount and issuance costs47,980 32,613 
Loss on early extinguishment of debt1,736 12,323 
Repayment of convertible senior notes attributable to debt discount(10,131)(32,640)
Reduction of operating lease right-of-use assets13,320 11,478 
Unrealized loss (gain) on investments14,346 (41,453)
Provision for bad debt5,384 3,909 
Other1,463 (1)
Changes in assets and liabilities:
Accounts receivable(45,476)(27,502)
Deferred and prepaid sales commission costs(125,181)(183,745)
Prepaid expenses and other assets7,849 (14,291)
Accounts payable(4,472)5,180 
Accrued and other liabilities55,971 49,449 
Deferred revenue27,176 20,128 
Operating lease liabilities(13,851)(11,019)
Net cash provided by (used in) operating activities104,500 (32,707)
Cash flows from investing activities
Purchases of property and equipment(21,787)(33,992)
Capitalized internal-use software(30,932)(28,049)
Purchases of intangible assets and long-term investments(10,463)— 
Net cash used in investing activities(63,182)(62,041)
Cash flows from financing activities
Proceeds from issuance of convertible senior notes, net of issuance costs— 1,627,209 
Payments for repurchase or redemption of convertible senior notes(333,632)(1,019,813)
Payments for capped calls and transaction costs— (102,695)
Proceeds from issuance of stock in connection with stock plans21,738 24,123 
Payments for taxes related to net share settlement of equity awards(16,995)(27,698)
Payment for contingent consideration for business acquisition(3,600)(3,548)
Repayment of financing obligations(2,804)(1,215)
Net cash provided by (used in) financing activities(335,293)496,363 
Effect of exchange rate changes(726)337 
Net increase (decrease) in cash, cash equivalents, and restricted cash(294,701)401,952 
Cash, cash equivalents, and restricted cash
Beginning of period639,853 343,606 
End of period$345,152 $745,558 


TABLE 4
RINGCENTRAL, INC.
RECONCILIATION OF OPERATING INCOME (LOSS)
GAAP MEASURES TO NON-GAAP MEASURES
(Unaudited, in thousands)
Three Months Ended
September 30,		Nine Months Ended
September 30,
2021202020212020
Revenues
Subscriptions$385,440 $279,639 $1,061,866 $779,781 
Other29,189 23,985 84,392 69,340 
Total revenues414,629 303,624 1,146,258 849,121 
Cost of revenues reconciliation
GAAP Subscriptions cost of revenues84,229 60,531 236,719 169,685 
Share-based compensation(6,337)(2,871)(16,168)(7,623)
Amortization of acquisition intangibles(10,998)(7,577)(32,618)(22,950)
Non-GAAP Subscriptions cost of revenues66,894 50,083 187,933 139,112 
GAAP Other cost of revenues26,220 21,783 75,634 62,710 
Share-based compensation(2,403)(976)(6,406)(2,796)
Amortization of acquisition intangibles(4)— (4)— 
Non-GAAP Other cost of revenues23,813 20,807 69,224 59,914 
Gross profit and gross margin reconciliation
     Non-GAAP Subscriptions82.6 %82.1 %82.3 %82.2 %
     Non-GAAP Other18.4 %13.2 %18.0 %13.6 %
     Non-GAAP Gross profit78.1 %76.7 %77.6 %76.6 %
Operating expenses reconciliation
     GAAP Research and development84,121 48,481 222,958 132,910 
     Share-based compensation(25,779)(10,679)(62,808)(27,918)
Non-GAAP Research and development58,342 37,802 160,150 104,992 
     As a % of total revenues non-GAAP14.1 %12.5 %14.0 %12.4 %
     GAAP Sales and marketing225,111 152,986 607,758 421,931 
     Share-based compensation(40,986)(17,552)(104,371)(45,165)
     Amortization of acquisition intangibles(959)(959)(2,900)(2,819)
     Acquisition related and other matters— — — 4 
Non-GAAP Sales and marketing183,166 134,475 500,487 373,951 
     As a % of total revenues non-GAAP44.2 %44.3 %43.7 %44.0 %
     GAAP General and administrative78,083 49,513 201,716 146,381 
     Share-based compensation(32,510)(19,488)(80,455)(53,908)
     Acquisition related and other matters (6,705)(420)(7,642)(2,576)
Non-GAAP General and administrative38,868 29,605 113,619 89,897 
     As a % of total revenues non-GAAP9.4 %9.8 %9.9 %10.6 %
Income (loss) from operations reconciliation
     GAAP loss from operations(83,135)(29,670)(198,527)(84,496)
     Share-based compensation108,015 51,566 270,208 137,410 
     Amortization of acquisition intangibles11,961 8,536 35,522 25,769 
     Acquisition related and other matters6,705 420 7,642 2,572 
Non-GAAP Income from operations43,546 30,852 114,845 81,255 
Non-GAAP Operating margin10.5 %10.2 %10.0 %9.6 %


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
September 30,		Nine Months Ended
September 30,
2021202020212020
Net income (loss) reconciliation
GAAP net loss$(146,751)$(20,957)$(257,893)$(81,169)
     Share-based compensation108,015 51,566 270,208 137,410 
     Amortization of acquisition intangibles11,961 8,536 35,522 25,769 
     Acquisition related and other matters6,705 420 7,642 2,572 
     Amortization of debt discount and issuance costs15,898 12,595 47,980 32,613 
Loss (gain) associated with investments45,660 (26,447)6,201 (47,805)
Loss on early extinguishment of debt— 5,116 1,736 12,323 
Intercompany remeasurement loss (gain)699 (121)1,509 416 
     Income tax expense effects(9,045)(6,575)(24,298)(17,857)
Non-GAAP net income$33,142 $24,133 $88,607 $64,272 
Reconciliation between GAAP and non-GAAP weighted average shares used in computing basic and diluted net income (loss) per common share:
Weighted average number of shares used in
computing basic net loss per share		91,811 89,173 91,213 88,259 
     Effect of dilutive securities1,314 3,751 1,792 4,577 
Non-GAAP weighted average shares used in
computing non-GAAP diluted net income per share		93,125 92,924 93,005 92,836 
Diluted net income (loss) per share
GAAP net loss per share$(1.60)$(0.24)$(2.83)$(0.92)
Non-GAAP net income per share$0.36 $0.26 $0.95 $0.69 



TABLE 6
RINGCENTRAL, INC.
RECONCILIATION OF CASH FLOWS FROM OPERATING ACTIVITIES
GAAP MEASURES TO NON-GAAP FREE CASH FLOW MEASURES
(Unaudited, in thousands)
Nine Months Ended
September 30,
20212020
Net cash provided by (used in) operating activities$104,500 $(32,707)
Strategic partnerships— 100,000 
Repayment of convertible senior notes attributable to debt discount10,131 32,640 
Non-GAAP net cash provided by operating activities114,631 99,933 
Purchases of property and equipment(21,787)(33,992)
Capitalized internal-use software(30,932)(28,049)
Non-GAAP free cash flow$61,912 $37,892 


TABLE 7
RINGCENTRAL, INC.
RECONCILIATION OF FORECASTED OPERATING MARGIN
GAAP MEASURES TO NON-GAAP MEASURES
(Unaudited, in millions)
Q4 2021FY 2021
Low RangeHigh RangeLow RangeHigh Range
GAAP revenues433.5 434.5 1,579.8 1,580.8 
GAAP loss from operations(96.8)(94.5)(295.3)(293.0)
GAAP operating margin(22.3 %)(21.7 %)(18.7 %)(18.5 %)
Share-based compensation110.0 108.0 380.2 378.2 
Amortization of acquisition intangibles32.0 32.0 67.5 67.5 
Acquisition related and other matters— — 7.6 7.6 
Non-GAAP income from operations45.2 45.5 160.0 160.4 
Non-GAAP operating margin10.4 %10.5 %10.1 %10.1 %