RingCentral(RNG) - 2025 Q1 - Quarterly Results

Financial Performance - Total revenue for Q1 2025 was $612 million, representing a 5% year-over-year growth from $584 million in Q1 2024[3] - Subscription revenue was $590 million, accounting for 96% of total revenue, with a 6% year-over-year increase[3] - GAAP operating income was $10 million, compared to a loss of ($11) million in the same period last year[3] - Non-GAAP operating income was $133 million, or 21.8% of total revenue, up from $121 million, or 20.7% of total revenue, year-over-year[3] - Adjusted EBITDA for Q1 2025 was $155 million, or 25.3% of total revenue, compared to $143 million, or 24.4% of total revenue, in the same period last year[3] - Total revenues for Q1 2025 were $612,056,000, an increase of 4.8% compared to $584,211,000 in Q1 2024[27] - Subscription revenues reached $590,112,000, up from $557,487,000, reflecting a growth of 5.8% year-over-year[27] - Non-GAAP net income for Q1 2025 was $92.791 million, compared to $83.734 million in Q1 2024, reflecting a 10.4% year-over-year growth[33] - Non-GAAP free cash flow for Q1 2025 was $130.176 million, significantly up from $76.685 million in Q1 2024, representing a 69.9% increase[34] - Non-GAAP operating margin improved to 21.8% in Q1 2025, compared to 20.7% in Q1 2024[31] - GAAP net loss for Q1 2025 was $10.328 million, an improvement from a loss of $28.494 million in Q1 2024[33] Cash Flow and Debt Management - Free cash flow for Q1 2025 was $130 million, or 21.3% of total revenue, compared to $77 million in Q1 2024[5] - The company reduced debt by $166 million and plans to achieve approximately $600 million in operating cash flow for 2025[2] - Cash and cash equivalents decreased to $154,436,000 from $242,811,000 at the end of Q4 2024, a decline of 36.4%[25] - The total liabilities decreased to $1,973,340,000 from $2,131,343,000, a reduction of 7.4%[25] - The company reported a net cash provided by operating activities of $149,662,000, an increase from $96,094,000 in the prior year[29] Customer Metrics and Product Performance - The company achieved over $2.5 billion in Annual Recurring Revenue (ARR) and has over 1,000 paying customers for both RingCX and AI Receptionist (AIR)[1][2] - RingCentral's AI Receptionist (AIR) is generating significant customer interest, with over 1,000 activated customers and notable efficiency improvements reported[2][5] - The Net Monthly Subscription Dollar Retention Rate was not explicitly stated, but the company defines it as a key metric for subscription revenue growth[21] Guidance and Future Outlook - Full year 2025 guidance includes total revenue growth of 4% to 6% and non-GAAP EPS range of $4.13 to $4.27[5] - The forecast for Q2 2025 indicates a non-GAAP operating margin range of 22.0% to 22.5%[35] - The company expects non-GAAP free cash flow for FY 2025 to be between $500 million and $510 million[35] Operating Expenses and R&D - Operating expenses totaled $421,266,000, slightly down from $424,631,000 in Q1 2024, showing cost management efforts[27] - The company continues to invest in research and development, with expenses of $81,983,000 in Q1 2025, compared to $80,528,000 in Q1 2024[27] - Research and development expenses as a percentage of total revenues were 10.1% in Q1 2025, slightly up from 9.9% in Q1 2024[31] Profitability Metrics - The company reported a gross profit of $431,606,000, compared to $413,732,000 in the same quarter last year, indicating a gross margin improvement[27] - The company reported a gross profit margin of 76.9% for Q1 2025, down from 78.2% in Q1 2024[31]