RingCentral, Inc. (RNG) Tops Q1 EPS by 2c, Revenues Beat; Raises FY21 EPS Outlook, 2Q & FY21 Revenues Guidance Below Consensus

RingCentral, Inc. (NYSE: RNG) reported Q1 EPS of $0.27, $0.02 better than the analyst estimate of $0.25. Revenue for the quarter came in at $352 million versus the consensus estimate of $339.93 million.

First Quarter Financial Highlights

• Total revenue increased 32% year over year to $352 million.
• Subscriptions revenue increased 34% year over year to $325 million.
• Total Annualized Exit Monthly Recurring Subscriptions (ARR) increased 37% year over year to $1.4 billion.
• RingCentral Office® ARR (UCaaS + CCaaS) increased 40% year over year to $1.3 billion.
  • Direct and Partners Office ARR(1) increased 33% year over year to $817 million, an acceleration of 8 points year over year.
  • Channel Office ARR increased 53% year over year to $505 million.

“First quarter results were exceptional, with meaningful contributions from key partners including Avaya, Atos, AT&T, BT, and Telus,” said Vlad Shmunis, RingCentral’s founder, chairman and CEO. “We believe we are witnessing the intersection of two megatrends of digital transformation and hybrid workforce adoption, which is creating a structural shift in awareness and demand for cloud communications solutions. RingCentral has always been about work from anywhere. With our proven UCaaS platform and a comprehensive CCaaS portfolio, RingCentral continues to win as a trusted communications partner of choice for businesses of all sizes in their digital transformation journeys.”

GUIDANCE:

RingCentral, Inc. sees Q2 2021 EPS of $0.27-$0.28, versus the consensus of $0.27. RingCentral, Inc. sees Q2 2021 revenue of $332-334 million, versus the consensus of $354.42 million.

RingCentral, Inc. sees FY2021 EPS of $1.24-$1.27, versus the consensus of $1.23. RingCentral, Inc. sees FY2021 revenue of $1.388-1.396 billion, versus the consensus of $1.49 billion.

Second Quarter 2021 Guidance:

• Subscriptions revenue range of $332 to $334 million, representing annual growth of 29% to 30%.
• Total revenue range of $356.5 to $359.5 million, representing annual growth of 28% to 29%.
• GAAP operating margin range of (23.2%) to (21.6%).
• Non-GAAP operating margin of 9.3%.
• Non-GAAP tax rate assumed to be 22.5%. No material cash taxes expected given net operating loss carryforwards.
• Non-GAAP EPS range of $0.27 to $0.28 based on 93.0 million fully diluted shares.
• Share-based compensation range of $99 to $104 million, amortization of debt discount and issuance costs of $16 million, and amortization of acquisition intangibles of $12 million.

Full Year 2021 Guidance:

• Raising subscriptions revenue range to $1.388 to $1.396 billion, representing annual growth of 28% to 29%. This is up from our prior range of $1.365 to $1.375 billion and annual growth of 26% to 27%.
• Raising total revenue range to $1.500 to $1.510 billion, representing annual growth of 27% to 28%. This is up from our prior range of $1.475 to $1.490 billion and annual growth of 25% to 26%.
• GAAP operating margin range of (21.3%) to (20.1%).
• Non-GAAP operating margin 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 range to $1.24 to $1.27 based on 93.5 to 94.0 million fully diluted shares. This is up from our prior range of $1.20 to $1.24 based on 94.0 to 94.5 million fully diluted shares.
• Share-based compensation range of $410 to $420 million, amortization of debt discount and issuance costs of $64 million, amortization of acquisition intangibles range of $46 to $49 million, and acquisition related matters of approximately $0.4 million.

For earnings history and earnings-related data on RingCentral, Inc. (RNG) click here.

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