preloder

2017 Q3 – RingCentral

Strong growth in revenues but profitability remains illusive

Earnings Report Summary

RingCentral (NYSE: RNG) reported Q3 revenues of $129.9M, up 34% from the same quarter one year earlier.  The all-important subscription category was also up, with 30% annual growth to $119.4M.  (The other element of the company’s revenue pie consists largely of telephone handsets (made by third parties).

The company’s flagship product, RingCentral Office, exited the quarter with an annual run rate of $433.7M.  GAAP earnings were a negative $5.7M; a figure the company reported as a loss of $0.07 per share, which is an improvement over the per share loss of $0.11M one year earlier.

The company has a long history of quarterly losses (see below) and reported an accumulated deficit of $259.6M.

Approximately 90% of Ring’s revenues are US based, although this is likely to change in short order as the company is in the process of expanding in Europe and South America.  70% of revenues are collected by credit card payments, reflecting the company’s historical focus on SMB.