RingCentral, Inc.

Greetings and welcome to the RingCentral Second Quarter 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief 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. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Devon Shaw, SVP of Growth. Thank you. You may begin.

Thank you. Good afternoon, and welcome to RingCentral's second quarter 2025 earnings call. Joining me today are Vlad Smunis, founder, chairman, and CEO, Kira Macagon, president and COO, and Vaibhav Agarwal, CFO. Our format today will include prepared remarks by Vlad, Kira, and Vaibhav, followed by Q&A. We also have a slide presentation available on our investor relations website that will coincide with today's call. which you can find under the financial results section at ir.linkcentral.com. Some of our discussions and responses to your questions will contain forward-looking statements regarding companies' business operations, financial performance, and outlook. These statements are subject to risks, uncertainties, some of which are beyond our control and are not guarantees of future performance. Actual results may differ materially from our forward-looking statements, and we undertake no obligation to update the statements after this call. For a complete discussion of risks and uncertainties related to our business, please refer to information contained in our filings with Securities and Exchange Commission, as well as today's earnings release. 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. With that, I turn the call over to Vlad.

Good afternoon and welcome to our second quarter conference call. Before we get into operational details, I have a few important announcements. I want to start by announcing Vaibhav Agarwal as our new Chief Financial Officer. I also want to thank Abhay Lamba for his contribution and I look forward to working with him in his new role as an executive advisor. Vaibhav has been a key leader at RingCentral for over nine years and has played an instrumental role in our financial transformation, including prior roles as chief accounting officer, chief transformation officer, and deputy chief financial officer. Vaibhav has played a critical role in helping scale the company from $400 million in revenue to a $2.6 billion run rate business, while meaningfully increasing profitability. As CFO, his deep understanding of our business and proven financial leadership sets us up well for our next phase of profitable growth. Now, on to additional important news. Today, we announced a multi-year extension of our long-standing partnership with NICE. Under this extended agreement, we will continue to sell and support RingCentral Contact Center powered by NICE TX1 Empower. RingCentral Contact Center customers will continue to benefit from the deep integration between two recognized Gartner Magic Quadrant leaders for UCaaS and CCaaS. We look forward to working with a nice team offering a best-in-class integrated AI-powered cloud telephony and contact center suite that is the ideal choice for enterprises with complex and advanced use cases. We are also thrilled to have announced yesterday that AT&T is expanding its decade-long relationship with RingCentral. In addition to AT&T Office at Hand powered by RingCentral, AT&T will now be adding two of our new AI-sourced products to their portfolio, RingSense and RingCX. This enables AT&T to start offering RingCentral's cloud contact center and conversational intelligence to their customers, thus elevating customer engagement and experiences through AI-enabled technologies. Moving on to the financial results. Q2 was another solid quarter with all key metrics coming in at or above the high end of our guidance. We are executing on our strategy of accelerating innovation while delivering sustainable profitable growth. Total revenue grew 5% year-over-year to $320 million, which is at the high end of our guidance. Our performance was driven by strong execution in our core business combined with continued momentum in our new product portfolio. which includes AI Receptionist, or AIR, RingCentral Conversational Intelligence, and RingCX Cloud Contact Center. Delivering on our commitment to profitable growth, we delivered another quarter of record free cash flow while materially reducing stock-based compensation and debt. Most notably, we achieved both positive GAAP operating income, and GAAP net income for the first time in RingCentral's history. Given our financial strength, our board has approved an increase to our stock repurchase authorization to $500 million. Our success is rooted in our strong leadership in business voice. With the advent of AI, it has been said that voice is a new UI. and we see strong proof points of that in our own business. Voice is the fastest, most expressive, and natural way to engage with AI, making those interactions feel seamless and intuitive. It also remains the most preferred channel for customers to connect with businesses. As a global leader in voice, RingCentral is uniquely positioned to benefit. We process tens of billions of minutes per year on our platform, with average voice usage per user remaining stable year over year and SMS usage growing. While our traditional UCaaS and CCaaS markets are large and robust, the new outside growth opportunity lies with AI-powered customer experiences. RingCentral services are often the first point of contact between businesses and their customers. As such, we are in a unique position to deploy AI agents from the very onset and throughout the customer journey. With a proven robust global platform to leverage and a significant portion of our R&D now dedicated to our new AI products, we are well positioned to play a leadership role in this rapidly emerging market. we're investing over a quarter billion dollars annually in innovation with a significant and growing share now dedicated to AI. As a proof point, our new AI first products, RingCX, RingSense, and our newest AI receptions are already contributing meaningfully to our ARR growth. We are well on our way to meeting the $100 million ARR new products goal for this year. And we expect these new products to comprise a meaningful portion of our overall revenues in a few years. Kira will share additional details on our product portfolio and progress. Now, let me share some insights on our key customer cohorts. While we are providing these details again today, To highlight progress and performance, please note that we may not be updating them regularly going forward. We continue to see particularly strong momentum with small business customers defined as businesses with under 100 employees, as well as with global service providers. Between these two, we now have a billion-dollar-plus ARR business growing in double digits with average time to break even in under 18 months. Speaking of GSPs, this particular quarter, we're very excited about a couple marquee customer wins. RingCentral and Vodafone Ireland have secured Ryanair, the largest European airline, planning to deploy across 172 locations in 25 countries. In addition, RingCentral and Vodafone have won a top 10 European bank with seats in excess of 10,000 across their organization. These monkey wins underscore the value of our differentiated service provider partnerships as well as our ability to serve even the largest global enterprises. In general, in larger businesses with more than 100 employees, we continue to hold our own as we add new logos and our retention patterns remain stable. We also see continuous demand from larger customers with $1 million plus TCV deals remaining stable quarter over quarter. Of note is our particularly strong traction in our golden verticals that include healthcare, financial services, retail, travel and hospitality, and professional services. where voice is the key mode of communications. Importantly, many of these large customers are adopting multiple products from RingCentral, thus proving the value of our multi-product platform approach. Kira will share more details and customer examples. Additionally, our Microsoft Teams integration remains a key differentiator for larger businesses. Our RingEF for Teams embedded app seamlessly integrates RingCentral's best-in-class cloud PBX into the Teams environment. RingEX for Teams accounts are growing in strong double digits with monthly active users doubling year-over-year. In conclusion, our core business remains strong and our new AI-first products are gaining momentum with double-digit growth quarter-over-quarter. We are innovating rapidly while driving profitable growth and expanding free cash flow, all while lowering SBC, paying down debt, and improving operating margins. Our success is rooted in our robust platform, a talented and talented team, and unique deep partnerships that are growing and expanding. I am very excited about what lies ahead as we continue to lead in the new era of AI communications and customer experiences. We will share more details on our product and our strategy at our upcoming Innovation Day at the New York Stock Exchange on November 5th. A formal invitation will be extended soon, and we look forward to seeing you there. With that, I'll turn this call over to Kira. Thank you.