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RingCentral reveals strong financial results for Q4

RingCentral, a leading provider of global enterprise cloud communications, collaboration, and contact center solutions, today announced financial results for the fourth quarter ended December 31, 2019.


Fourth Quarter Financial Highlights

  • Total revenue increased 34% year over year to US$253 million.
  •  Subscriptions revenue increased 33% year over year to $229 million.
  • Annualized Exit Monthly Recurring Subscriptions (ARR) increased 32% year over year to $960 million.
  • RingCentral Office® ARR increased 36% year over year to $877 million.
  •  Mid-market and Enterprise ARR increased 59% year over year to $479 million.
  •  Enterprise ARR increased 71% year over year to $293 million.
  • Channel ARR increased 63% year over year to $300 million.

“Fourth-quarter results were outstanding, driven by continued momentum in mid-market and enterprise markets,” says RingCentral founder, chairman and CEO Vlad Shmunis. 

“We are very excited to have surpassed our previous goal of a $1 billion annual revenue run-rate ahead of schedule.

“Our success is rooted in our deep commitment to product excellence and a culture of strategic partnerships, as evidenced by our unique relationships with AT&T, Avaya, and now Atos," says Shmunis.

“These partnerships are a strong validation of our industry leadership and provide additional opportunities for our long-term growth.”
 

Financial Results for the Fourth Quarter 2019

  • Revenue: Total revenue was $253 million for the fourth quarter of 2019, up from $189 million in the fourth quarter of 2018, representing 34% growth.
     
  • Operating Income (Loss): GAAP operating loss was ($20) million, compared to a GAAP operating loss of ($3) million in the same period last year, primarily driven by higher share-based compensation, amortization of intangibles, and acquisition-related matters. 
    Non-GAAP operating income was $24 million, compared to a non-GAAP operating income of $17 million in the same period last year.
     
  • Net Income (Loss) Per Share: GAAP net loss per share was ($0.30), compared to ($0.07) in the same period last year, primarily driven by higher share-based compensation, amortization of intangibles, and acquisition-related matters. 
    Non-GAAP net income per diluted share was $0.22, compared to $0.23 per diluted share in the same period last year. 
    The fourth quarter of 2019 reflected a 22.5% non-GAAP tax rate, compared to nearly 0% non-GAAP tax rate in our 2018 reporting. 
    There were no material cash taxes given RingCentral's net operating loss carryforwards.
     
  • Balance Sheet: Total cash and cash equivalents at the end of the fourth quarter of 2019 was $344 million, which reflects one-time payments related to our recent strategic partnerships. 
    This compares with $583 million at the end of the third quarter of 2019.
     

Financial Results for the Full Year 2019

  • Revenue: Total revenue was $903 million for 2019, up from $674 million in 2018, representing 34% growth.
     
  •  Operating Income (Loss): GAAP operating loss was ($46) million, compared to a GAAP operating loss of ($16) million in 2018, primarily driven by higher share-based compensation, amortization of intangibles, and acquisition-related matters. 
    Non-GAAP operating income was $83 million, compared to a non-GAAP operating income of $59 million in 2018.
     
  • Net Income (Loss) Per Share: GAAP net loss per share was ($0.64), compared to ($0.33) in 2018, primarily driven by higher share-based compensation, amortization of intangibles, and acquisition-related matters. 
    Non-GAAP net income per diluted share was $0.82, compared to $0.77 in 2018. 2019 reflected a 22.5% non-GAAP tax rate, compared to a nearly 0% non-GAAP tax rate in 2018 reporting. 
    There were no material cash taxes given RingCentral's net operating loss carryforwards.
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