EX-99.1 2 rng-20220630x8kxex991.htm EX-99.1 Document

Exhibit 99.1
rnglogo.jpg
RingCentral Announces Second Quarter 2022 Results
Q2'22 results exceed high end of guidance across key metrics
Raises 2022 operating margin outlook; Maintains 2022 revenue outlook


Belmont, Calif. – August 2, 2022 – 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 second quarter ended June 30, 2022.
Second Quarter Financial Highlights

•Total revenue increased 28% year over year to $487 million.
•Subscriptions revenue increased 32% year over year to $463 million.
•Annualized Exit Monthly Recurring Subscriptions (ARR) increased 31% year over year to $2.0 billion.
•Mid-market and Enterprise ARR increased 38% year over year to $1.2 billion.
•Net cash provided by operating activities was $51 million and non-GAAP free cash flow was $29 million. Free cash flow represented 6.0% as a percent of total revenue, up 220 basis points year over year.

“Our second quarter key metrics exceeded the high end of our guidance range and demonstrated our consistent execution,” said Vlad Shmunis, RingCentral’s founder, chairman and CEO. “We continue to see the benefits of scale, with solid top line contributions complemented by increasing bottom line profitability. The market opportunity in front of us is large, and customers continue to gravitate to RingCentral because of our industry leading UCaaS and integrated CCaaS solution, proven reliability and broad geographic reach.”

“We achieved a record quarterly non-GAAP operating margin,” said Sonalee Parekh, RingCentral's CFO. “This showcases our ability to drive strong growth while increasing profitability. All while providing our customers with a leading product and a strong ROI.”
Financial Results for the Second Quarter 2022
•Revenue: Total revenue was $487 million for the second quarter of 2022, up from $379 million in the second quarter of 2021, representing 28% growth. Adjusted for constant currency, total revenue rose 30%. Subscriptions revenue of $463 million increased 32% year over year. Adjusted for constant currency, subscriptions revenue rose 33%.
•Operating Income (Loss): GAAP operating loss was ($108) million, compared to ($73) million in the same period last year, primarily driven by higher amortization of acquired intangibles. Non-GAAP operating income was $55 million, compared to a non-GAAP operating income of $39 million in the same period last year.
•Net Income (Loss) Per Share: GAAP net loss per share was ($1.68), compared to ($1.22) in the same period last year, primarily driven by higher amortization of acquired intangibles, and mark-to-market losses associated with investments. Diluted non-GAAP net income per share was $0.45, compared to $0.32 per share in the same period last year. The second quarters of 2022 and 2021 reflected an approximately 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 second quarter of 2022 was $306 million. Our cash balance reflects $25 million in cash paid for the share repurchases under the plan announced in December 2021.



Financial Outlook
Full Year 2022 Guidance:
•Maintaining subscriptions revenue range of $1.882 to $1.898 billion, representing annual growth of 27% to 28%.
•Maintaining total revenue range of $1.990 to $2.015 billion. This represents annual growth of 25% to 26%.
•GAAP operating margin range of (19.2%) to (18.3%) compared to the prior range of (20.1%) to (19.0%).
•Raising non-GAAP operating margin to 12.0%. This is up from our prior outlook of 11.5%.
•Non-GAAP tax rate assumed to be 22.5%. No material cash taxes expected given net operating loss carryforwards.
•Raising non-GAAP EPS to $1.91 to $1.95 based on 96 to 97 million fully diluted shares. This is up from our prior range of $1.83 to $1.87 based on 96 to 97 million fully diluted shares.
•Share-based compensation range of $415 to $425 million. As a percent of revenue, this represents over 250 basis points of improvement at the midpoint versus last year.
•Amortization of acquired intangibles of $173 million, third-party relocation and other costs of $19 million, and acquisition related and other matters of $4 million.
Third Quarter 2022 Guidance:
•Subscriptions revenue range of $473.5 to $476.5 million, representing year-over-year growth of 23% to 24%.
•Total revenue range of $500.0 to $504.0 million, representing year-over-year growth of 21% to 22%.
•GAAP operating margin range of (18.3%) to (17.1%).
•Non-GAAP operating margin of 12.5%.
•Non-GAAP tax rate assumed to be 22.5%. No material cash taxes expected given net operating loss carryforwards.
•Non-GAAP EPS of $0.50 to $0.51 based on 96 to 97 million fully diluted shares.
•Share-based compensation range of $105 to $110 million.
•Amortization of acquired intangibles of $44 million.

Additional Highlights
•Announced the launch of ‘Vodafone Business UC with RingCentral’ in Germany. This enables RingCentral’s flagship offering RingCentral Message Video Phone™ (MVP™) with Vodafone’s mobility and 5G capabilities. The solution gives companies more choice, flexibility and simplicity in how their employees communicate and collaborate - in the office, at home or on the go.
•Announced an expansion of the RingCentral Rooms hardware ecosystem and associated feature enhancements. With return to office becoming a focus for many organizations, 76% of respondents in a recent survey reported that technological improvements and upgrades to conference rooms is a key priority.
•Recognized by Frost & Sullivan as a Growth and Innovation leader in the Frost Radar™: North American Unified Communications-as-a-Service Market, 2021. Frost & Sullivan highlighted RingCentral's strong position in North America by leveraging creative partnerships. RingCentral's unwavering commitment to innovation and comprehensive–yet tiered service bundles were also highlighted.
•Comparably recognized RingCentral's CEO Vlad Shmunis as a top ten Best CEO for Women and Best CEO for Diversity. Additionally, the company earned a top 10 ranking for Best Leadership Team and Best Company for Career Growth.

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 2022, 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 second quarter of 2022 and outlook for the third quarter and full year of 2022.
•When: Tuesday, August 2, 2022 at 2:00PM PT (5:00PM ET).
•Dial-in: 1-888-349-0093 from the United States; 1-412-317-5201 internationally
•Webcast: RingCentral Q2 2022 Earnings Webcast (live and replay).
•Replay: Following the completion of the call through 11:59 PM ET on August 9, 2022, a telephone replay will be available by dialing 1-844-512-2921 from the United States or 412-317-6671 internationally with recording access code 10168368.
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, 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 allows customers to customize business workflows easily. RingCentral is headquartered in Belmont, California, and has offices worldwide.
© 2022 RingCentral, Inc. All rights reserved. RingCentral, Message Video Phone, MVP, RingCentral MVP, RingCentral Video, Smart Video Meetings, 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: 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 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 March 31, 2022, 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, Non-GAAP free cash flow, and constant currency revenue. 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 acquired intangibles, third-party relocation and other costs tied to the conflict between Russia and Ukraine, and acquisition related and other matters including transaction 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 acquired intangibles, third-party relocation and other costs tied to the conflict between Russia and Ukraine, 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 (gain) on early extinguishment of debt, 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, Non-GAAP free cash flow and constant currency revenue 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.
The Company has provided certain revenue related information adjusted for constant currency to provide a framework for assessing how the Company's underlying business performed excluding the effect of foreign currency rate fluctuations. To present this information, current period results in currencies other than United States dollars are converted into United States dollars at the average exchange rate prevailing for the quarter being compared to for growth rate calculations presented, rather than the actual exchange rates in effect during that period.
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, Non-GAAP free cash flow and constant currency revenue 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, mid-market and enterprise 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 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 mid-market and 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 $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 annualized exit monthly recurring subscriptions, except that only customer subscriptions from customers generating $100,000 or more in annual recurring revenue are included. We define our Net Monthly Subscription Dollar Retention Rate as (i) one plus (ii) the quotient of Dollar Net Change divided by Average Monthly Recurring Subscriptions.We calculate 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:
Will Wong, RingCentral
ir@ringcentral.com

Media Contact:
Brett Smith, RingCentral
brett.smith@ringcentral.com




TABLE 1
RINGCENTRAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands)
 
June 30, 2022December 31, 2021
Assets
Current assets
Cash and cash equivalents$306,497 $267,162 
Accounts receivable, net253,571 232,842 
Deferred and prepaid sales commission costs126,854 102,572 
Prepaid expenses and other current assets52,376 48,165 
Total current assets739,298 650,741 
Property and equipment, net178,240 166,910 
Operating lease right-of-use assets40,515 47,294 
Long-term investments113,220 210,445 
Deferred and prepaid sales commission costs, non-current758,687 723,448 
Goodwill53,780 55,490 
Acquired intangibles, net628,559 716,606 
Other assets7,122 8,105 
Total assets$2,519,421 $2,579,039 
Liabilities, Temporary Equity, and Stockholders' Equity
Current liabilities
Accounts payable$96,647 $70,022 
Accrued liabilities318,272 279,798 
Deferred revenue207,044 176,450 
Total current liabilities621,963 526,270 
Convertible senior notes, net1,636,175 1,398,489 
Operating lease liabilities25,436 31,812 
Other long-term liabilities74,087 84,052 
Total liabilities2,357,661 2,040,623 
Temporary equity
Series A convertible preferred stock199,449 199,449 
Stockholders' equity
Common stock9 9 
Additional paid-in capital937,119 1,086,870 
Accumulated other comprehensive income (loss)(9,600)644 
Accumulated deficit(965,217)(748,556)
Total stockholders' equity$(37,689)$338,967 
Total liabilities, temporary equity and stockholders’ equity$2,519,421 $2,579,039 



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,
 2022202120222021
Revenues
Subscriptions$462,984 $351,203 $902,911 $676,426 
Other23,912 28,070 51,641 55,203 
Total revenues486,896 379,273 954,552 731,629 
Cost of revenues
Subscriptions131,022 79,243 260,711 152,490 
Other27,168 25,680 52,953 49,414 
Total cost of revenues158,190 104,923 313,664 201,904 
Gross profit328,706 274,350 640,888 529,725 
Operating expenses
Research and development96,518 76,161 186,792 138,837 
Sales and marketing265,398 203,398 519,853 382,647 
General and administrative74,554 68,172 145,549 123,633 
Total operating expenses436,470 347,731 852,194 645,117 
Loss from operations(107,764)(73,381)(211,306)(115,392)
Other income (expense), net
Interest expense(1,203)(15,942)(2,435)(32,220)
Other income (expense)(49,500)(21,223)(94,719)37,320 
Other income (expense), net(50,703)(37,165)(97,154)5,100 
Loss before income taxes(158,467)(110,546)(308,460)(110,292)
Provision for income taxes1,048 410 2,027 850 
Net loss$(159,515)$(110,956)$(310,487)$(111,142)
Net loss per common share
Basic and diluted$(1.68)$(1.22)$(3.27)$(1.22)
Weighted-average number of shares used in computing net loss per share
Basic and diluted95,130 91,181 94,854 90,909 



TABLE 3
RINGCENTRAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
Six Months Ended
June 30,
20222021
Cash flows from operating activities
Net loss$(310,487)$(111,142)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization122,201 50,724 
Share-based compensation198,119 150,323 
Amortization of deferred and prepaid sales commission costs50,068 33,398 
Amortization of debt discount and issuance costs2,232 32,082 
Loss on early extinguishment of debt— 1,736 
Repayment of convertible senior notes attributable to debt discount— (10,131)
Reduction of operating lease right-of-use assets9,857 8,778 
Unrealized loss (gain) on investments98,045 (34,361)
Provision for bad debt7,103 3,743 
Other1,736 70 
Changes in assets and liabilities:
Accounts receivable(27,832)(26,589)
Deferred and prepaid sales commission costs(108,349)(86,378)
Prepaid expenses and other assets(1,984)6,562 
Accounts payable28,494 3,490 
Accrued and other liabilities20,147 24,912 
Deferred revenue30,594 23,359 
Operating lease liabilities(10,271)(9,105)
Net cash provided by operating activities109,673 61,471 
Cash flows from investing activities
Purchases of property and equipment(15,489)(14,385)
Capitalized internal-use software(26,232)(19,600)
Purchases of intangible assets and long-term investments(3,990)(9,623)
Net cash used in investing activities(45,711)(43,608)
Cash flows from financing activities
Payments for repurchase or redemption of convertible senior notes— (333,632)
Payments for repurchase of common stock(25,004)— 
Proceeds from issuance of stock in connection with stock plans10,889 18,857 
Payments for taxes related to net share settlement of equity awards(3,182)(11,566)
Payment for contingent consideration for business acquisition(1,538)(3,600)
Repayment of financing obligations(3,092)(2,295)
Net cash used in financing activities(21,927)(332,236)
Effect of exchange rate changes(2,700)(183)
Net increase (decrease) in cash, cash equivalents, and restricted cash39,335 (314,556)
Cash, cash equivalents, and restricted cash
Beginning of period267,162 639,853 
End of period$306,497 $325,297 


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,
2022202120222021
Revenues
Subscriptions$462,984 $351,203 $902,911 $676,426 
Other23,912 28,070 51,641 55,203 
Total revenues486,896 379,273 954,552 731,629 
Cost of revenues reconciliation
GAAP Subscriptions cost of revenues131,022 79,243 260,711 152,490 
Share-based compensation(6,648)(5,853)(13,844)(9,831)
Amortization of acquired intangibles(42,758)(11,002)(85,859)(21,620)
Third-party relocation and other costs(1,155)— (1,155)— 
Acquisition related and other matters(156)— (156)— 
Non-GAAP Subscriptions cost of revenues80,305 62,388 159,697 121,039 
GAAP Other cost of revenues27,168 25,680 52,953 49,414 
Share-based compensation(2,231)(2,347)(4,639)(4,003)
Amortization of acquired intangibles(19)— (31)— 
Non-GAAP Other cost of revenues24,918 23,333 48,283 45,411 
Gross profit and gross margin reconciliation
     Non-GAAP Subscriptions82.7 %82.2 %82.3 %82.1 %
     Non-GAAP Other(4.2)%16.9 %6.5 %17.7 %
     Non-GAAP Gross profit78.4 %77.4 %78.2 %77.2 %
Operating expenses reconciliation
     GAAP Research and development96,518 76,161 186,792 138,837 
     Share-based compensation(23,761)(22,380)(48,159)(37,029)
     Third-party relocation and other costs(12,541)— (16,092)— 
     Acquisition related and other matters(89)— (339)— 
Non-GAAP Research and development60,127 53,781 122,202 101,808 
     As a % of total revenues non-GAAP12.3 %14.2 %12.8 %13.9 %
     GAAP Sales and marketing265,398 203,398 519,853 382,647 
     Share-based compensation(39,697)(38,618)(81,610)(63,385)
     Amortization of acquired intangibles(915)(971)(1,852)(1,941)
     Third-party relocation and other costs(14)— (14)— 
     Acquisition related and other matters(737)— (937)— 
Non-GAAP Sales and marketing224,035 163,809 435,440 317,321 
     As a % of total revenues non-GAAP46.0 %43.2 %45.6 %43.4 %
     GAAP General and administrative74,554 68,172 145,549 123,633 
     Share-based compensation(29,982)(30,502)(56,413)(47,945)
     Third-party relocation and other costs(694)— (1,469)— 
     Acquisition related and other matters (1,534)(499)(2,558)(937)
Non-GAAP General and administrative42,344 37,171 85,109 74,751 
     As a % of total revenues non-GAAP8.7 %9.8 %8.9 %10.2 %
Income (loss) from operations reconciliation
     GAAP loss from operations(107,764)(73,381)(211,306)(115,392)
     Share-based compensation102,319 99,700 204,665 162,193 
     Amortization of acquired intangibles43,692 11,973 87,742 23,561 
     Third-party relocation and other costs14,404 — 18,730 — 
     Acquisition related and other matters2,516 499 3,990 937 
Non-GAAP Income from operations55,167 38,791 103,821 71,299 
Non-GAAP Operating margin11.3 %10.2 %10.9 %9.7 %


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,
2022202120222021
Net income (loss) reconciliation
GAAP net loss$(159,515)$(110,956)$(310,487)$(111,142)
     Share-based compensation102,319 99,700 204,665 162,193 
     Amortization of acquired intangibles43,692 11,973 87,742 23,561 
     Third-party relocation and other costs14,404 — 18,730 — 
     Acquisition related and other matters2,502 499 3,976 937 
     Amortization of debt discount and issuance costs1,116 15,882 2,232 32,082 
Loss (gain) associated with investments48,769 20,138 94,245 (39,459)
Loss (gain) on early extinguishment of debt— 1,078 — 1,736 
Intercompany remeasurement loss456 75 484 810 
     Income tax expense effects(10,986)(8,320)(21,286)(15,253)
Non-GAAP net income$42,757 $30,069 $80,301 $55,465 
Reconciliation between GAAP and non-GAAP weighted average shares used in computing basic and diluted net income (loss) per common share:
Weighted average number of shares used in
computing basic net loss per share		95,130 91,181 94,854 90,909 
     Effect of dilutive securities932 1,714 1,002 2,032 
Non-GAAP weighted average shares used in
computing non-GAAP diluted net income per share		96,062 92,895 95,856 92,941 
Diluted net income (loss) per share
GAAP net loss per share$(1.68)$(1.22)$(3.27)$(1.22)
Non-GAAP net income per share$0.45 $0.32 $0.84 $0.60 



TABLE 6
RINGCENTRAL, INC.
RECONCILIATION OF CASH FLOWS FROM OPERATING ACTIVITIES
GAAP MEASURES TO NON-GAAP FREE CASH FLOW MEASURES
(Unaudited, in thousands)
Three Months Ended
June 30,		Six Months Ended
June 30,
2022202120222021
Net cash provided by operating activities$50,678 $24,516 $109,673 $61,471 
Repayment of convertible senior notes attributable to debt discount— 5,419 — 10,131 
Non-GAAP net cash provided by operating activities50,678 29,935 109,673 71,602 
Purchases of property and equipment(8,637)(5,664)(15,489)(14,385)
Capitalized internal-use software(12,641)(9,843)(26,232)(19,600)
Non-GAAP free cash flow$29,400 $14,428 $67,952 $37,617 


TABLE 7
RINGCENTRAL, INC.
RECONCILIATION OF FORECASTED OPERATING MARGIN
GAAP MEASURES TO NON-GAAP MEASURES
(Unaudited, in millions)
Q3 2022FY 2022
Low RangeHigh RangeLow RangeHigh Range
GAAP revenues500.0 504.0 1,990.0 2,015.0 
GAAP loss from operations(91.5)(86.0)(381.9)(368.9)
GAAP operating margin(18.3 %)(17.1 %)(19.2 %)(18.3 %)
Share-based compensation110.0 105.0 425.0 415.0 
Amortization of acquired intangibles44.0 44.0 173.0 173.0 
Third-party relocation and other costs — — 18.7 18.7 
Acquisition related and other matters— — 4.0 4.0 
Non-GAAP income from operations62.5 63.0 238.8 241.8 
Non-GAAP operating margin12.5 %12.5 %12.0 %12.0 %