Ringcentral, Inc. (NYSE: RNG) reported Q2 EPS of $0.24, $0.04 better than the analyst estimate of $0.20. Revenue for the quarter came in at $257 million versus the consensus estimate of $263.78 million.

Second Quarter Financial Highlights

• Total revenue increased 29% year over year to $278 million.
• Subscriptions revenue increased 32% year over year to $257 million.
• Total Annualized Exit Monthly Recurring Subscriptions (ARR) increased 33% year over year to $1.1 billion.
• RingCentral Office® ARR increased 36% year over year to $1.0 billion.
• Mid-market and Enterprise ARR increased 50% year over year to $581 million.
• Enterprise ARR increased 58% year over year to $363 million.
• Channel ARR increased 60% year over year to $375 million.

“We delivered solid Q2 results driven again by strong contributions from mid-market and enterprise customers, as well as our channel partners,” said Vlad Shmunis, RingCentral's founder, chairman and CEO. “We are seeing a high level of adoption and engagement with our Message Video Phone (MVP) solution as businesses adapt to a work from anywhere environment. The ongoing global pandemic has elevated digital transformation of enterprise communications platforms to a top IT priority. Our strategic partnerships are broadening our global market reach, and we remain committed to delivering cloud solutions that enable our customers’ workforces to productively communicate and collaborate from anywhere, on any device, in any mode.”

GUIDANCE:

Ringcentral, Inc. sees Q3 2020 EPS of $0.24, versus the consensus of $0.24. Ringcentral, Inc. sees Q3 2020 revenue of $283.5-289.5 million, versus the consensus of $283.01 million.

Ringcentral, Inc. sees FY2020 EPS of $0.92-$0.94, versus the consensus of $0.92. Ringcentral, Inc. sees FY2020 revenue of $1.043-1.048 million, versus the consensus of $1.12 million.

Third Quarter 2020 Guidance:

• Subscriptions revenue range of $263 to $265 million, representing annual growth of 25% to 26%.
• Total revenue range of $283.5 to $289.5 million, representing annual growth of 21% to 24%.
• GAAP operating margin range of (12.0%) to (11.0%).
• Non-GAAP operating margin of 10.0% to 10.2%.
• Non-GAAP tax rate assumed to be 22.5%. No material cash taxes expected given net operating loss carryforwards.
• Non-GAAP EPS of $0.24 based on 94 million fully diluted shares.
• Share-based compensation range of $53 to $54 million, amortization of debt discount of $12 million, and amortization of acquired intangibles of $8.5 million.

Full Year 2020 Guidance:

• Raising subscriptions revenue range to $1.043 to $1.048 billion, representing annual growth of 28%. This is up from our prior range of $1.024 to $1.030 billion and annual growth of 25% to 26%.
• Raising total revenue range to $1.135 to $1.143 billion, representing annual growth of 26% to 27%. This is up from our prior range of $1.116 to $1.125 billion and annual growth of 24% to 25%.
• GAAP operating margin between (10.8%) and (10.1%).
• Non-GAAP operating margin between 9.6% and 9.7%.
• Non-GAAP tax rate for 2020 assumed to be 22.5%. No material cash taxes expected given net operating loss carryforwards.
• Raising non-GAAP EPS range to $0.92 to $0.94 based on 93.5 million fully diluted shares. This is up from our prior range of $0.91 to $0.94, and reflects a $0.01 impact from lower other income assumptions.
• Share-based compensation range of $190 to $195 million, amortization of debt discount of $44 million, amortization of acquired intangibles of $35 million, and acquisition related matters of approximately $2.2 million.

For earnings history and earnings-related data on Ringcentral, Inc. (RNG) click here.