RingCentral, Inc.

and in the slide deck. For certain forward-looking guidance, a reconciliation of the non-GAAP financial guidance to the corresponding GAAP measure is not available, as discussed in detail in the slide deck posted on our investor relations website. With that, I'll turn the call over to Vlad.

Good afternoon, and thank you for joining us today. We had a strong start to the year and are excited about the opportunity ahead. We exceeded expectations $2.5 billion in ARR, delivered revenue at the upper end of our guidance, expanded operating margin, generated record quarterly free cash flow, and reduced debt and share count year over year and quarter over quarter. Our AI-powered multi-product strategy is clearly working, and we continue to see strong proof points that our new products are resonating with customers. We achieved total revenues of $612 million. Our operating margin was 21.8%, exceeding our guidance range. This marks our third consecutive quarter of GAAP operating profitability. and we're committed to maintaining GAAP operating profitability going forward. We generated record free cash flow of $130 million, up 70% year over year, putting us well on track to achieve our 2025 goal of over $500 million. Additionally, we pay down $166 million of debt during the quarter, reducing our net leverage ratio to 2x. Our robust free cash flow generation enables us to invest in growth while simultaneously strengthening our balance sheet. Our success continues to be grounded in the values that have guided us from day one, trust, innovation and partnerships or TIP. These principles shaped our rise from a startup to a market leader and now guide us as we expand into a multi-product company with AI at the core. We continue to lead in the $30 billion UCaaS market with a steady 20% market share. Now we're leveraging our leadership position by supercharging our platform with AI and expanding our portfolio to enable us to expand our TAM and grow our market share. We're investing over a quarter billion dollars in innovation annually, with a significant and growing portion dedicated to our emerging AI-led new products. This underscores a continued commitment to a best-in-class and complete product portfolio focused on AI-powered employee and customer experiences, which includes our flagship Ring EX, Ring CX, and our emerging portfolio of voice-centric agentic AI solutions. The early results of these new products are promising. Kira will provide additional details, but here are some quick proof points. At the core of our new product portfolio is RingCX, our modern, AI-powered, omnichannel cloud contact center solution that is delivering strong double-digit sequential growth. The success of RingCX is further validated this past quarter by leadership recognition from key industry analysts, including Aragon Research, ISG, and GigaOM. They cited seamless capabilities, ease of deployment at use, and AI throughout the customer interaction lifecycle. RingSense. Our AI-powered insights and coaching tool also saw a strong double-digit sequential increase in the number of customers this quarter. RingSense is integrated with and is being sold alongside Ring EX and Ring CX for sales, customer care, and other quality management use cases. I'm also extremely excited about the early progress that we are seeing with our latest innovation, RingCentral AI Receptionist, or AIR, which launched last quarter. AIR is a category-defining AI phone agent that augments and replaces human receptionists, resulting in major productivity improvements and substantially better customer experience. We activated more than 400 AIR customers within just six weeks of the launch and now have over 1,000. These are early but meaningful proof points that our AI-led multi-product strategy is working. And this gives us continued confidence in our ability to achieve over $100 million in ARR from new products by the end of 2025. Our Q1 results reflect our performance as a unified multi-product enterprise. However, I'd like now to dive deeper into some specific customer cohorts that are integral to our success. Please note, that while we're sharing these details today, we may not update them regularly. Our company is trusted by over 400,000 businesses as their mission critical communications provider. We proudly count some of the world's largest companies as our customers. The majority of our customers, however, are smaller businesses. In fact, Approximately 30% of our overall ARR comes from customers with fewer than 100 employees. Small business is a backbone of the U.S. economy, contributing over 40% of our nation's GDP. RingCentral is positioned extremely well in this cohort, as many of these businesses are in consumer-facing sectors, such as health care, financial services, retail and travel and transportation. Voice communication remains an important mode of interaction in these industries, and as a leader in business voice solutions, we are well positioned to meet their needs. Importantly, we are seeing strong adoption of our AI-based products, in particular, Air and DrinkSense, with these customers due to strong product fit. the numbers speak for themselves. In Q1, ARR from these smaller customers grew by double digits, marking an acceleration over the past two quarters and reaching a two-year high. Moreover, these customers generate higher ARR pool and deliver good ROI with a time to break even of under 18 months. Another key customer cohort for us is telecom carriers and multiple system operators, MSOs collectively referred to as global service providers or GSPs. Our GSP partnerships are not merely transactional. They're strategic alliances that amplify our market presence. By collaborating with GSPs, we leverage their extensive networks and customer relationships to deliver our innovative products and services more effectively while allowing them an opportunity to deliver world-class modern innovation to their vast customer bases. This symbiotic relationship enables us to tap into new markets and customers that might otherwise be challenging to reach directly. And importantly, Most of our major GSP partners, including but not limited to AT&T, BT, Charter, Optus, Telus, Vodafone, and now Cox Communications, are now signed up to resell many of our new products, including RingCX, RingSense, and now Air. This is a critical validation of our multi-product platform strategy, and global go-to-market reach. The overall GSP opportunity is substantial, with an estimated over 40 million seats worldwide, approximately half of which are in North America. GSPs account for over 10% of our ARR, delivering double-digit growth, with a time to break even of under 18 months. Our success is a testament to our position as a known and trusted provider to GSPs. The competitive landscape is favorable. Other vendors are either too small and unproven or too large and directly competitive with the GSPs, making RingCentral uniquely positioned in this space. Between our smaller customers and the GSPs, we have cultivated sizable cohorts with over $1 billion in ARR. These cohorts are growing in double digits and both impressive ROI metrics with time to break even of under 18 months. These cohorts also provide strong competitive modes as we continue to innovate and expand our offerings. Our remaining customer cohort comprises larger businesses with over 100 employees. While the competitive environment in this cohort is more challenging, particularly with some larger enterprises emphasizing alternative communication modalities, we continue to perform strongly. Voice remains an important communications modality, especially for customers in B2C verticals such as healthcare, insurance, professional and consumer services, retail, and manufacturing. And we are the preferred choice for those. As a proof point, in Q1, we saw a year-over-year increase in $1 million-plus total contract value or TCV deals. We continue to displace legacy on-prem providers due to our leading enterprise-grade cloud voice capabilities, reliability, global reach, and our unique channel partner network that is best in class. Another important factor in our success with larger customers is our open platform, that offers superior integrations into Microsoft Teams, Google, and Salesforce, which now includes our new integration of RingCX with Salesforce Service Cloud Voice. In fact, we now have over 500 integrations in our app gallery, which is a key competitive advantage for us. Of particular importance with larger enterprises is our strong Microsoft Teams integration. It is a key differentiator as enterprises look to pair our best-in-class voice with the Teams collaboration suite. Simply put, for enterprises seeking to augment their Teams chat and video with the best-of-breed cloud voice solution, Ring ES for Teams is the answer. Consequently, our Teams integration, monthly active users, or MAUs, grew by 30% year over year, which is outpacing our overall growth. Looking forward, our competitive positioning is now greatly aided by the introduction of RingCX and our emerging AI product portfolio. In fact, over half of our 1 million plus TCV deals were with customers who bought multiple products from us. Larger enterprises continue to be a growth driver and a profit generator for us. And we're optimistic about this cohort, given the depth and breadth of our product portfolio and GTM strength. In closing, RingCentral is a pioneer and a breakaway leader in driving the shift from on-prem to cloud communications. The next phase in our growth will be driven by leveraging AI throughout our growing portfolio with increased addressable market and wallet share. RingCentral was always about helping businesses succeed by saving them time and money. And now with voice-centric agentic AI at the core of our product portfolio, we are uniquely positioned to provide further efficiency and productivity gains to businesses of all sizes worldwide. The opportunity I had is bigger than ever, and we're just getting started. With that, I'll turn this call over to Kira. Thank you.

Thank you, Vlad. I'm energized by the momentum we are seeing across the business. Lean Central has built a category-leading business cloud communications platform for voice remains mission critical. AI is fundamentally reshaping how people communicate and work, presenting a significant opportunity. Our voice-centric, agentic AI solutions are resonating with customers and we're well positioned to capitalize on the shift by aligning our product innovation and go-to-market strategy to lead in this evolving landscape. Last quarter, I outlined three strategic priorities, and I'm pleased to report measurable progress across all of them. So let's go through each. First, build upon our UCaaS leadership in fusing AI across our entire portfolio. Customers consistently choose Incentral for our market-leading cloud business phone system, especially In key B2C verticals, our platform strengths with leading integrations and our expanding AI-powered multi-product portfolio. Let me give you an example of a new customer win in UCaaS. We won an iconic 150-year-old consumer food brand. They selected 3DX for its enterprise-grade voice capabilities to meet the requirements of connecting their global and distributed workforces. Our reliability, ease of administration, teamless integration with Microsoft Teams, and global reach were key differentiators. This company anticipates substantial cost savings by moving away from their incumbent legacy solution to the RingCentral Cloud Platform while enhancing employee and customer experience. In addition to our leadership in UCaaS with our RingEX platform, we're uniquely positioned to transform the industry with AI. Our vision centers on the voice-first agentic AI platform that harnesses RingCentral's two decades of expertise in advanced voice kit technology and our massive global communications network. We are delivering measurable value throughout the entire communication lifecycle, before, during, and after every interaction, making work dramatically faster, significantly easier, and fundamentally more intelligent for our customers. This AI-driven approach isn't just enhancing our existing offerings. It's creating entirely new possibilities for how businesses communicate and operate. Let's start with before the interaction. We launched AIR in Q1. AIR creates a new category with an AI phone agent that uses a generative AI to automatically answer customer inquiries and transfer calls. AIR is easy to set up for businesses of any size and delivers measurable ROI by driving efficiency, reducing spam, and strengthening customer opportunities. We're seeing early success across healthcare, accounting, transportation, and financial services, demonstrating AIR's ability to deliver targeted and impactful business outcomes. As proof points of AIR's impact, Olin Security said that they're seeing massive efficiency gains and that AIR saves each agent two to four hours per day, which is a 50% decrease in time spent on inbound calls. Now with the time saved, Owen Security is able to spend more time on outbound calls and focus on client follow-ups, all without adding headcount. Integral Recruiting said that they used to have hundreds of calls every month with around 90% of them being spam or irrelevant. Now with AIR, They can filter out irrelevant calls and focus on the 10% which are relevant customer opportunities. The value here isn't just time saved. It's the focus on the real customer leads to help grow their businesses.