RingCentral Inc at Morgan Stanley Technology, Media & Telecom Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Meta Marshall - Morgan Stanley - Analyst : <_ALACRA_META_ABSTRACT>Maybe Vlad, just starting with you, great to have the team here at you're transitioning from a single product to kind of multiproduct company. Just how do you see the core value proposition with customers changing over the next couple of years?

Question: Meta Marshall - Morgan Stanley - Analyst : With you Vlad just kind of laid out this going from product to platform. How does that change kind of how you think about the growth algorithm of the company just in terms of how much comes from core markets versus kind of new products versus new customers?

Question: Meta Marshall - Morgan Stanley - Analyst : Got it. Kira, maybe turning to you. RingCentral has always had this very good go-to-market kind of master agent channel, a lot of partnerships. Just how does go-to-market change? Or how does -- who you rely on for kind of the preponderance of the growth change as you expand the portfolio?

Question: Meta Marshall - Morgan Stanley - Analyst : Okay. Perfect. I may be back to you. You've talked about kind of already getting $50 million towards this kind of $100 million ARR target. Just what were kind of the most important steps to getting to the $50 million? And then just what kind of gets you to that $100 million either from a getting people trained up or macro, just kind of what gets you -- what got you to $50 million and what gets you to $100.

Question: Meta Marshall - Morgan Stanley - Analyst : Got it. Either later Kira, just how does the move towards platform and kind of incorporation of more products. Does that change who the ideal RingCentral customer is? Is it smaller or larger than it used to be? And are all of kind of current RingCentral customers today ideal for adopting more products from RingCentral?

Question: Meta Marshall - Morgan Stanley - Analyst : Okay. So with such a valuable kind of value proposition, what are kind of specific efforts to sell that into the installed base or to kind of circle back with the existing customers to kind of upsell them? And is that opportunity just when the contract is up? Or like when are you finding that opportunity to touch that customer?

Question: Meta Marshall - Morgan Stanley - Analyst : Okay. Got it. With so many platform extensions possible and even more everyday kind of with different AI capabilities, just how are you determining what to build versus buy versus partner on? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 04, 2025 / 11:20PM, RNG.N - RingCentral Inc at Morgan Stanley Technology, Media & Telecom Conference

Question: Meta Marshall - Morgan Stanley - Analyst : How -- I mean, you've done a relatively -- or you've done a pretty good job of incorporating those acquisitions. Has there been any kind of key to identifying what made the right target and kind of integrating those acquisitions?

Question: Meta Marshall - Morgan Stanley - Analyst : Got it. Maybe turning to you on the 2025 outlook. It's contemplated 5% to 7% subscription growth rate. What are kind of the key drivers that could accelerate this? Or could -- what would kind of drive performance to the lower end of the range?

Question: Meta Marshall - Morgan Stanley - Analyst : Can you just outline again just for those who might not have been on the earnings call, just kind of what that transition from RingCX to your own product kind of?

Question: Meta Marshall - Morgan Stanley - Analyst : Okay. Got it. Kira, maybe activity in the SMB space has been muted for a lot of kind of '23 and '24, but you recently called out seeing some signs of stabilization. To what extent do you expect to see improvement in 2025? Or did you embed any sort of improvement into kind of how you looked at 2025?

Question: Meta Marshall - Morgan Stanley - Analyst : Yes. The UCaaS market has obviously faced scrutiny from investors over the last couple of years. However, you noted kind of on the earnings that you've held share relatively stable at around 20% for the past few years. Just how do you maintain that position? And where do you see kind of the most compelling opportunities from a core UCaaS perspective?

Question: Meta Marshall - Morgan Stanley - Analyst : Got it. I mean who makes up that kind of idea on just kind of the core telephony side? Who is that kind of ideal customer to kind of maintain and grow share within that either vertical size of customer, who kind of makes up that ideal customer? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 04, 2025 / 11:20PM, RNG.N - RingCentral Inc at Morgan Stanley Technology, Media & Telecom Conference

Question: Meta Marshall - Morgan Stanley - Analyst : Got it. I mean in terms of where you see the most opportunity there, is it international, is it domestic?

Question: Meta Marshall - Morgan Stanley - Analyst : Okay. Turning to profitability. You guys have driven impressive margin expansion over the past couple of years. What areas of the cost structure could see incremental leverage over the next couple of years? And just where are you kind of focused around investments?

Question: Meta Marshall - Morgan Stanley - Analyst : Got it. And maybe kind of conversely on cash flow performance. Just what underpins kind of the confidence towards growing the free cash flow another almost 25% to the $500 million to $510 million range. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 04, 2025 / 11:20PM, RNG.N - RingCentral Inc at Morgan Stanley Technology, Media & Telecom Conference

Question: Meta Marshall - Morgan Stanley - Analyst : Got it. And just kind of thoughts on capital allocation.

Question: Meta Marshall - Morgan Stanley - Analyst : Got it. And Kira, maybe turning to you. You've been RingCentral a very long time. You've held a lot of roles kind of within the company. Just -- what are you excited about stepping into kind of the COO and President role?

Question: Meta Marshall - Morgan Stanley - Analyst :

Question: Meta Marshall - Morgan Stanley - Analyst : Perfect. A question that we're kind of ending all these sessions with -- this week is just kind of how are you guys using? You talked about selling AI products, but how are you using AI internally?

Question: Meta Marshall - Morgan Stanley - Analyst : Yes. Perfect. All right. Well RingCentral team. We have one question in the back. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 04, 2025 / 11:20PM, RNG.N - RingCentral Inc at Morgan Stanley Technology, Media & Telecom Conference Yes. So go ahead. Last question. Unidentified Participant Just I'd love to just follow up on Vlad's comments on capital allocation because you obviously have -- extra important perspective as a founder and a large owner given your cash flow has continued to grow, is there any reason you want it to buy back at least that much this year? And if not, kind of where would you be looking to allocate the capital?

Question: Meta Marshall - Morgan Stanley - Analyst : All right. Perfect. With that, I think RingCentral team, thanks so much for being here today and tell us a little bit more. Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 04, 2025 / 11:20PM, RNG.N - RingCentral Inc at Morgan Stanley Technology, Media & Telecom Conference