RingCentral’s aggressive continued expansion into the enterprise was highlighted this week with the release of our first quarter 2018 financial results.
Not only did our Q1 total revenue reach to $150 million, up 34 percent for the same period in 2017, but our enterprise business is now worth more than $100 million and continuing to exhibit triple-digit growth. Our upmarket business is over 200M and growing at 77% YOY.
New enterprise solutions
The innovation continues with the launch of a range of new solutions and capabilities tailored for the midmarket and enterprise customers, with next-generation communications and collaboration solutions set to play a major part in their digital transformation plans.
RingCentral Collaborative Contact Centre
Transforming the way organisations manage customer engagement, this solution combines RingCentral Contact Centre™ with RingCentral Glip™ team messaging to enable agents and supervisors to communicate and collaborate across their organisations in real time and resolve customer issues efficiently.
This feature is a part of our Collaborative Contact Centre solution and provides intelligent bots that monitor critical call centre metrics in real time. It provides automated alerts and notifications to key stakeholders directly within team messages via RingCentral Glip. This empowers organisations to deliver superior quality service to their customers.
Leader in cloud unified communications and collaboration
Demand for cloud-based unified communications and collaboration continues to grow, with the market expected to be worth $28.69 billion by 2021. As a pure cloud service provider, RingCentral continues to welcome customers that recognise the benefits of migrating their on-premises solutions to the cloud, a welcome alternative to legacy hardware companies that have been forced to shoehorn the cloud into their businesses.
RingCentral topped the list of unified communications as a service (UCaaS) providers in IHS Markit’s 2018 North America Vendor Scorecard Click To Tweet
Our recent financial results underline our continued success in providing our customers with the very best in cloud services.
- Software subscriptions revenue increased 32 percent year over year to $137 million.
- Annualised Exit Monthly Recurring Subscriptions (ARR) increased 31 percent year over year to $589 million.
- RingCentral Office® ARR increased 37 percent year over year to $509 million.
- GAAP software subscriptions gross margin was 82.1 percent, up 1.6 points year over year, while non-GAAP software subscriptions gross margin was 82.8 percent, up 1.4 points year over year.
- GAAP operating margin was (0.9 percent), up 1.1 points year over year, while non-GAAP operating margin was 8.6 percent, up 2.2 points year over year.
- Net monthly subscriptions dollar retention: RingCentral Office over 100 percent and overall subscriptions over 99 percent.
Further, in the second quarter of 2018, we expect software subscriptions revenue of between $142.5 to $143.5 million, representing an annual growth of 28 to 29 percent. We expect a total revenue range of $154.5 to $156.5 million, representing an annual growth of 29 to 31 percent.
In addition, our market growth has been recognised by industry experts. RingCentral topped the list of unified communications as a service (UCaaS) providers in IHS Markit’s 2018 North America Vendor Scorecard, which notes our above average market growth and market share leadership position.
IHS Markit pointed to the expansion of our customer base, and our continual move upmarket with a focus on servicing larger businesses as well as our investment in professional services and customer care.
Other financial highlights:
Revenue and gross margin
Total revenue was $150 million for the first quarter of 2018, up from $112 million in the first quarter of 2017, representing 34% in growth. Total GAAP gross margin was 76.3% for the first quarter of 2018, up 0.6 points compared to 75.7% in the first quarter of 2017.
Net income (loss) per share
GAAP net loss per share was ($0.03) for the first quarter of 2018 compared with ($0.03) for the first quarter of 2017. Non-GAAP net income per diluted share was $0.16 for the first quarter of 2018, compared with $0.09 per diluted share for the first quarter of 2017.
Total cash and cash equivalents at the end of the first quarter of 2018 was $555 million, compared with $181 million at the end of the fourth quarter of 2017.