RingCentral Right on Target for $1 Billion Revenue
RingCentral aiming to hit $1 billion
Over the last couple of years, we’ve seen constant evidence of how disruptive the cloud can be to the communications environment. RingCentral, a market leader in the UC environment, is now taking advantage of the $56 billion global UC space, with a quest to achieve a $1 billion revenue.
In a world where companies are increasingly searching for more agile and flexible communication solutions, the worldwide market for UC is expanding at a record pace. Between 2019 and 2025, experts predict that the demand for replacement systems for legacy PBX in the US alone will be worth $15 billion.
RingCentral’s leading product, “RingCentral Office,” is providing the company with endless ways to expand its revenue and earnings potential, pulling customers away from legacy PBX providers. In Q1 of 2019, RingCentral revealed that its annual recurring revenue for Office had risen 36% to $694 million. This puts RingCentral right on track to achieve its $1 billion earning goals.
Making the Most of a Growing Market
Like other companies in the expanding unified communication space, RingCentral knows that if it wants to stay ahead of the competition, it needs to become a pioneer. That’s why the Office platform constantly releases new features and functionality to enhance the day-to-day operations of today’s companies. We’ve seen the arrival of exciting new opportunities in recent years, such as real-time features for assistants and managers who want to tap into calls and support reps without disrupting the conversation.
The RingCentral team is also turning to strategic acquisition to improve its technology offerings too. In 2015, the group purchased “Glip,” and now rely on the solution to deliver collaboration and team messaging tools in a world where team collaboration is one of the hottest terms in the industry. RingCentral also purchased Dimelo in 2018, a cloud-based customer engagement platform that forms the heart of RingCentral’s “Engage” product. The Engage solutions use intelligent routing technology to help agents manage conversations across multiple channels at once.
In January 2019, RingCentral also announced their acquisition of Connect First, a cloud-based solution for outbound customer engagement designed to target enterprise and mid-sized companies.
Looking Forward to the Future
Aside from internal innovations and strategic acquisitions, RingCentral also stays ahead of the curve in the UC market because it knows how to play well with others. Many of its cloud-based solutions integrate well with third-party business apps like Dropbox, Zendesk, and Box. This means that companies can rely on RingCentral for a full end-to-end strategy for collaboration and communication.
The unique approach that RingCentral has taken to digital transformation in the cloud has allowed the company to thrive in the current environment. In Q1, the company’s total revenue rose to $201.5 million, crushing the census estimate. Additionally, software subscription revenue rose by an exceptional 33%. In the March quarter, enterprise and mid-market ARR rose by an amazing 70% to $346 million. These two segments accounted for over half of the Q1 bookings made by RingCentral this year.
What’s more, in Q1 this year, enterprise ARR for customers with more than $100,000 increased by 95%, to a value of $200 million. The RingCentral enterprise unit is now setting records in growth and industry success. In the most recent quarter, RingCentral signed the largest contract (according to seat count) in history with Waitrose & Partners.
RingCentral’s open and flexible platform, combined with it’s dedication to innovation, growth, and exceptional customer service has helped it to carve out a path to ongoing future growth, and huge revenue wins. Additionally, channel partners have proven to be a massive help in RingCentral’s growth, accounting for about $203 million in revenue during Q1 of this year. The channel revenue is growing by an average of 75% year over year.