RingCentral: Latest Financial Results for 2017
The latest fiscal developments for RingCentral – it’s looking good
RingCentral, one of the world’s most popular and well-renowned providers of collaboration and communication services, recently announced their resounding success for the financial quarter ending on the 31st of March 2017. The company discovered significant growth in their organisation, which included a boost in software subscriptions at no less than 30% per year-over-year calculations. That took the value of their software subscribers to $103.7 million.
The Highlights of the Latest Report
It’s not just software subscriptions that have seen a rise for RingCentral lately. According to the chairman and CEO of Ring Central, Vlad Shmunis, the first quarter represented an exceptional start to the year for the company, with dollar retention at over 100% for RingCentral Office, and overall subscriptions measuring at more than 99%. The company feels that their amazing results are thanks, in part, to the incredible growth they’re seeing with their enterprise reseller partners and enterprise customers.
Currently, the enterprise-level and mid-market customer segments represent over $115 million in business opportunity, with a growth of around 85% each year. RingCentral are focusing on distinguishing themselves from the competition as the fastest-growing and largest pure-play solution for cloud communications and collaboration. They believe that their revenue will be worth no less than $1 billion by 2020. Other positive highlights for the report include:
- Total growth in revenue to $111.8 million – a boost of 29% year-over-year
- Annualised recurring software subscriptions grew by 39% to a value of $373 million
- The gross margin for GAAP software subscriptions was up by 1.4 points year over year, at 80.5%, while non-GAAP subscriptions rose by 1.2 points, with a margin of 81.3%.
- Operating margin for GAAP was up by 0.4 points year-over-year, at 6.5%, while the Non-GAAP operating margin rose by 0.4 points, to 1.9%.
The Results Look Great
Ultimately, it’s clear to see that RingCentral are continuing to grow and development with significant strength. The total revenue for the first quarter of 2017 was announced to be around $111.8 million, which was a boost of no less than $86.5 million during the first quarter of 2016. That means, year-over-year, the company has seen 29% growth. What’s more, the total gross margin was 75.6% for the 2017 first quarter, which is 0.7% higher compared to the 74.9% achieved in the first quarter of 2016.
As per the 1st of January 2017, RingCentral saw a significant transition from an agency model, into a direct sales model. Now, RingCentral will be able to offer the full sale price and cost of their products, rather than having to receive only a commission for their phone sales. Adjustments for the new direct model need to be made on a comparable basis, but total revenue grow by around 27% year over year.
In terms of balance sheets, the total cash and cash equivalent for RingCentral was around $149.7 million for the first quarter of this year, compared to around $160.4 million at the end of the fourth quarter of 2016. However, if that seems bad, remember that the company paid off its full debt in the first quarter of this year, equalling $14.8 million.