Ringcentral, Inc. (NYSE: RNG) reported Q3 EPS of $0.26, $0.02 better than the analyst estimate of $0.24. Revenue for the quarter came in at $304 million versus the consensus estimate of $287.33 million.

Third Quarter Financial Highlights

• Total revenue increased 30% year over year to $304 million.
• Subscriptions revenue increased 33% year over year to $280 million.
• Annualized Exit Monthly Recurring Subscriptions (ARR) increased 34% year over year to $1.2 billion.
• RingCentral Office® ARR increased 36% year over year to $1.1 billion.
• Mid-market and Enterprise ARR increased 49% year over year to $633 million.
• Enterprise ARR increased 55% year over year to $401 million.
• Channel ARR increased 59% year over year to $419 million.

“We delivered a solid third quarter driven by strong new logo momentum across SMB, mid-market, and enterprise sized businesses and continued contributions from channel partners,” said Vlad Shmunis, RingCentral’s founder, chairman and CEO. “We are excited to add Alcatel-Lucent Enterprise and expand our relationship with BT as we further expand and deepen our unique global distribution network. We believe our customers and partners are embracing RingCentral’s differentiated Message Video Phone (MVP) cloud platform as a go forward staple of their digital transformation journeys.”

GUIDANCE:

Ringcentral, Inc. sees Q4 2020 EPS of $0.26-$0.27, versus the consensus of $0.24. Ringcentral, Inc. sees Q4 2020 revenue of $290.5-292.5 million, versus the consensus of $287.33 million.

Ringcentral, Inc. sees FY2020 EPS of $0.96, versus the consensus of $0.93. Ringcentral, Inc. sees FY2020 revenue of $1.164-1.167 billion, versus the consensus of $1.14 billion.

Fourth Quarter 2020 Guidance:

• Subscriptions revenue range of $290.5 to $292.5 million, representing annual growth of 27% to 28%.
• Total revenue range of $315 to $318 million, representing annual growth of 25% to 26%.
• GAAP operating margin range of (9.8%) to (9.2%).
• Non-GAAP operating margin range of 10.0% to 10.1%.
• Non-GAAP tax rate assumed to be 22.5%. No material cash taxes expected given net operating loss carryforwards.
• Non-GAAP EPS range of $0.26 to $0.27 based on 93 million fully diluted shares.
• Share-based compensation range of $53 to $54 million, amortization of debt discount and issuance costs of $16 million, and amortization of acquisition intangibles of $8.5 million.

Full Year 2020 Guidance:

• Raising subscriptions revenue range to $1.070 to $1.072 billion, representing annual growth of 31%. This is up from our prior range of $1.043 to $1.048 billion and annual growth of 28%.
• Raising total revenue range to $1.164 to $1.167 billion, representing annual growth of 29%. This is up from our prior range of $1.135 to $1.143 billion and annual growth of 26% to 27%.
• GAAP operating margin range of (9.9%) to (9.8%), up from our prior range of (10.8%) to (10.1%).
• Non-GAAP operating margin of 9.7%, up from our prior range of 9.6% to 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 to $0.96 based on 93 million fully diluted shares. This is up from our prior range of $0.92 to $0.94.
• Share-based compensation range of $190 to $191 million, amortization of debt discount and issuance costs of $49 million, amortization of acquisition intangibles of $34 million, and acquisition related matters of approximately $2.6 million.

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