RingCentral, Inc.

Greetings. Welcome to the RingCentral first quarter 2021 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 the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Ryan Goodman. You may begin.

Thank you. Good afternoon, and welcome to RingCentral's first quarter 2021 earnings conference call. I'm Ryan Goodman, RingCentral's Head of Investor Relations. Joining me today are Vlad Shmudis, Founder, Chairman, and CEO, Anand Aswaran, 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 second quarter and full year 2021 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. A discussion of the risks and uncertainties related to our business is contained in our filings 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, the success of vaccination efforts, 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 at ir.ringcentral.com 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 first quarter earnings conference call. We hope all of you are safe and in good health. First quarter was an exceptional start to 2021. RingCentral Office ARR, which includes both UCAS and CCAS, grew 40% year-over-year to $1.3 billion. We last saw similar growth five years ago on a base that was sub-$300 million, or less than one-quarter of our current level. and we're seeing the strong performance on all fronts. Avaya and Atos are continuing to gain momentum. RingCentral Office ARR with direct and partners, including all of our key partnerships, grew 33% year-over-year to $817 million. This is an acceleration in growth of three points sequentially and eight points year over year. As the work environment turns hybrid for many businesses, RingCentral's Any Device, Any Mode, Anywhere message video phone or MVP platform continues to gain steam. RingCentral was always about work from anywhere. And with our recent performance and accelerating pipeline, we see clear evidence that our solution is right for the emerging post-pandemic world. We saw this manifest in our strong Q1 performance across the board. We saw exceptional strength in our enterprise business with a record number of Q1 $1 million plus TCV wins and two $10 million plus TCV deals. Also, I'm pleased to share a new milestone. Our global 2000 and Fortune 1000 enterprise business now stands at over $100 million ARR and has close to have tripled year over year. So why do we win? RingCentral business successes are underpinned by our industry-leading modern Pure cloud, mobile first, global unified communications as a service platform. It all starts with trust. High reliability, security, data privacy, and regulatory compliance are essential to establishing a relationship of trust with enterprises worldwide. First, reliability. Business communication solutions are the heartbeat of any organization. In a hybrid work environment, reliability of business communications platform is more critical than ever before. RingCentral's consistent delivery of five-nines uptime continues to be an important differentiator. This translates to less than 30 seconds per month of downtime. Very few cloud competitors can consistently provide this level of reliability. Another key requirement is security and data privacy. Our security and customer data privacy track record is a meaningful differentiator between us and some of our competitors. And this continues to be a focus area of our investments. For example, in Q1, we acquired Kindight, a developer of leading cryptographic technologies. This provides us with enhanced security capabilities such as end-to-end encryption that we intend to roll out later this year. Additionally, enterprises demand full regulatory compliance and centralized connectivity management across their entire global footprint. RingCentral allows our customers to concentrate on their business, with RingCentral taking care of their global connectivity needs in a centralized manner. regulatory compliance manner. This continues to be a strong competitive differentiator for us. Sometimes we get the question, who even needs a phone system? Why don't companies just rely on video and mobile phones for their employees? The answer begins with the fact that there must be a clear, well-defined way for people to reach a business and its employees. While video is clearly very important for meetings, most people use phone and voice to reach companies. This means that on the company side, there is a need for centralized business identity combined with sophisticated workflows and call flows, auditability, enterprise-wide analytics, and, of course, security and regulatory compliance for all of their internal and external communications. And this is where traditional PBXs that are now being replaced by modern cloud-based phone systems like RingCentral came into play. As for mobile phones, they are an important endpoint to RingCentral, similar to soft phones and traditional desktop phones. And now, with ever more distributed mobile and remote workforces, and the new work-from-anywhere paradigm, use of mobile phones and soft phones connected via RingCentral is growing at approximately 60% year-over-year. This outpacing use of mobile phones as endpoints on RingCentral proves our original thesis that mobile phones are our friends, not a foe. Doubling down with this trend and further extending our technology leadership RingCentral has recently collaborated with AT&T to deliver office and hand wireless, a pioneering native integration between a pure cloud PBX and a major mobile carrier's network. This enables fixed mobile convergence whereby users can use their mobile phone number with their desktop phones as well and with full access to cloud PBX capabilities. We believe this new technology will further supercharge AT&T's momentum in converting their mobile business users to UCaaS. Along with supporting a variety of endpoints, it is more important than ever to provide a seamless user experience across various communications modes of messaging, video, and phone, or MVP. With the introduction last year of RingCentral Video, We're incredibly proud of our pace of innovation with over 100 new features delivered since the launch. And we recently announced new capabilities such as breakout rooms, video virtual background, presenter overlay, and picture-in-picture. At this point, all of our new customers and key partners are delivered only RingCentral Vidya as part of MVP. We have a rich roadmap ahead and are committed to meeting all of our customers' and partners' needs through outpaced innovation and product excellence. Further complementing our MVP UCaaS product is the RingCentral Contact Center portfolio. By adopting an integrated UCaaS and CCaaS solution from a single leading provider, our customers can drive higher employee and agent productivity and improved customer satisfaction. In Q1, we saw exceptional demand for our CCAS solutions across the entire portfolio. Contact center was included in over 60% of our $1 million plus TCV wins, including our largest contact center win to date of over 10 million TCV. In closing, We believe work from anywhere is here to stay. The global pandemic has pulled forward years of UCAS structural awareness, and RingCentral is in the pole position with our differentiated trusted platform, accelerating pipeline, and the unique partnership network that we believe will be getting even stronger. Stay tuned for upcoming exciting news on that front. With this backdrop, We're confident that we can continue to lead in this $50 billion-plus global market. With that, I will now turn the call over to our President and Chief Operating Officer, Anand Eswaran, for additional color on our recent progress.