RingCentral, Inc.

Greetings and welcome to the RingCentral second quarter 2020 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during this conference, please press star zero on your telephone keypad. Please note that this conference is being recorded. I will now turn the conference over to our host, Ryan Goodman, Head of Investor Relations. Thank you. You may begin.

Thank you. Good afternoon and welcome to RingCentral's second quarter 2020 earnings conference call. I am Ryan Goodman, RingCentral's Head of Investor Relations. Joining me today are Vlad Shmunis, Founder, Chairman, and CEO, Anand S. Warne, President and Chief Operating Officer, and Mitesh Dhruv, Chief Financial Officer. Our format today will include prepared remarks by Vlad, Anand, and Mitesh, followed by Q&A. Some of our discussions and responses to your questions will contain forward-looking statements, including our third quarter and full year 2020 financial outlook and our assumptions underlying that outlook. These statements are subject to risks and uncertainties. Actual results may differ materially from our forward-looking statements. The discussion of the risks and uncertainties related to our business is contained in our fire lines with the Securities and Exchange Commission and is incorporated by reference into today's discussion. In particular, our business is currently being impacted by the COVID-19 pandemic. The extent of its continued impact on our business will depend on several factors, including the severity, duration, and extent of the pandemic, as well as actions taken by governments, businesses, and consumers in response to the pandemic, all of which continue to evolve and remain uncertain at this time. RingCentral assumes no obligation and does not intend to update or comment on forward-looking statements made on this call. Unless otherwise indicated, all measures that follow are non-GAAP with year-over-year comparisons. A reconciliation of all GAAP to non-GAAP results is provided with our earnings release and in the slide deck. I encourage you to visit our investor relations website. to access our earnings release, slide deck, our gap to non-gap reconciliations, our periodic SEC reports, a webcast replay of today's call, and to learn more about RingCentral. For certain forward-looking guidance, a reconciliation of the non-gap financial guidance to the corresponding gap measure is not available as discussed in detail in the slide deck posted on our investor relations website. With that, let me turn the call over to Vlad.

Good afternoon, and thank you for joining our second quarter earnings conference call. We hope all of you are safe and in good health. The pandemic has created unprecedented global challenges. and is heading a transformative impact on how businesses operate now and in the future. Crowd transformation of business communications platforms has become a priority as companies adapt to a work-from-anywhere environment. Businesses of all sizes now require communication solutions where employees can work productively with customers, partners and peers from anywhere, on any device, and in any mode. We embarked on this journey of enabling cloud migration of business communications over a decade ago. RingCentral is now uniquely positioned to meet these demands with our enterprise proven, global, and trusted unified message, video, phone, or MVE platform. The results We delivered a strong second quarter as we continue to benefit from strong contributions from mid-market, enterprise, and our channel partners. Let me highlight some recent key events. First, we announced an expansion of our strategic partnership with Ados. Second, together with Avaya, we announced a further global rollout of Avaya Cloud Office by RingCentral. Third, we saw good uptake on our new RCT offering, which we launched in early April. We'll talk more about this later. And lastly, we were humbled to learn last quarter that RingCentral has been named to the Forbes Global 2000 list, putting us alongside the biggest and most valuable companies in the world. As to our financial performance, revenue and non-GAAP EPS exceeded our guidance. Key drivers continue to be mid-market, enterprise, and junk. We delivered a record number of 7-figure TQV wins this quarter. Several of these large wins were in our targeted verticals of health care, financial services, and education, and also included multiple international wins. Key metrics for Q2 were solid across the board. Total revenue grew to $278 million. This is a 29% increase year-over-year and is above the high end of our guidance range. Importantly, total annual recurrence revenue, or ARR, grew 36% year-over-year to $1.1 billion. The difference between overall revenue growth and higher ARR growth is driven by higher adoption of RingCentral apps relative to sale of new desktop devices. We believe the strong P2 results serve to validate RingCentral as the Inc. leading platform in the global UCAP market. We look forward to building on this momentum and expanding our market reach