RingCentral Inc at UBS Global Technology and AI Conference Summary

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

Question: Taylor McGinnis - UBS AG - Analyst : <_ALACRA_META_ABSTRACT>Of course. Vlad, maybe a great place to start is over the last few years, RingCentral has embarked on a significant transformation. So you started in the unified communications space. You've been evolving the product to encompass customer experience in the contact center, more recently, artificial intelligence. So maybe you can just give the audience an update on where you are in that transition. Is 2026 going to be the breakout year for some of these emerging products? And what specific initiatives you and the team are putting in place to chase after a lot of these broader growth opportunities? Vladimir Shmunis - RingCentral Inc - Chairman of the Board, Chief Executive Officer, Co-Founder Great. Wonderful question. For the record, we only got 27 minutes left. I have a very long answer. We probably have more questions. Yeah. Look, RingCentral, we are one of the original SaaS companies. The company is over 25 years old. I'm the founder. So we started out by moving business communications from on-prem to the cloud, okay? We call it RingCentral 1.0. We were rather successful coming up from approximately zero revenue to approximately $2.5 billion in revenue in that amount of time. LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 01, 2025 / 8:35PM, RNG.N - RingCentral Inc at UBS Global Technology and AI Conference RingCentral 2.0, as we viewed is when we went to become a multiproduct portfolio company. So that's when we stopped viewing ourselves as a single product or service provider and more as a platform with multiple apps and now engaging into customer engagement, a.k.a., the contact center, video, video events, messaging. So that's RingCentral 2.0. And it contributed to our growth and our success and really set us up for where we are now, which is RingCentral 3.0. 3.0 is one that's going to overshadow everything we've done prior. And this is where we are not just making it easier for people to communicate more devices, more locations, cheaper, more self-service. But we're fundamentally changing how they communicate. So now 3.0 is about embedding AI into human interaction. Some of it will be replacing humans. But a lot of it, and certainly, that's where the industry and where we are now is less about replacing maybe just yet and a lot more about enhancing. So we've introduced a not one or two but three products just recently, the three As as we call them, AIR for AI Receptionist, AVA for AI Virtual Assistant, and ACE AI Conversation Expert. And between these three, we cover every stage of an interaction. Before the call, AIR; during the call, AVA; and after the call, ACE. And it's super early, but these products are growing in triple digits, not annually, but sequentially. So gives us every confidence that the equation is '26 is going to be a breakout year. Yeah, so will '27 over '28. There is a lot to cover here. We believe that we are extremely well positioned to be one of the main beneficiaries of this AI revolution.

Question: Taylor McGinnis - UBS AG - Analyst : Yeah. That was a great background on the competitive differentiation, and I'd love to dive into that a little bit deeper. So in terms of the competitors that RingCentral runs into frequently on the AI side, what does that look like? There's a number of players in the space. You have the CRM players trying to offer some solutions in the space. There's the contact players entering it, other -- you see competitors. So who do you see more most frequently? And how is RingCentral trying to position itself in this industry?

Question: Taylor McGinnis - UBS AG - Analyst : Perfect. Vaibhav, over to you. So you've set a goal of achieving $100 million in ARR from these emerging products. So could you break down that $100 million could potentially look like across these individual products? And then just any additional color in terms of the growth trends you're seeing by product as well, too, I think, would be helpful for the audience.

Question: Taylor McGinnis - UBS AG - Analyst : Perfect. And then in terms of the remaining 95%, 90% going into next year, it still sounds like a lot of the core business is in the RingEX business. So could you give a little bit of an update in terms of the performance of that business, the underlying demand trends that you're seeing, and what the catalyst of that business look like going forward? So is it really a function of improvement of demand environment? Are there any interesting initiatives that you guys have underway to spark further growth in that business? How should we think about the underlying drivers there?

Question: Taylor McGinnis - UBS AG - Analyst : Perfect. We've talked a lot about the growth trajectory that you're seeing by product, but I'd love to touch on the growth trajectories that you're seeing by customer segment. So there's been a big focus down market. You've seen a nice reacceleration in the business back up to double-digit growth. I think there's some more challenging dynamics embodying the enterprise space. So could you just talk through what demand trends you're seeing amongst those two customer bases, how RingCentral is trying to position the company and how you think about those customer segments going forward?

Question: Taylor McGinnis - UBS AG - Analyst : Yeah. And on that latter point that you made, you talked about there's been a little bit of a mix shift from the NiCE partnership than to your newer CX offering. And I think that has had a little bit of an impact to ARPU because I think the RingCX offering is lower ARPU than what you see with a NiCE partnership. So could you talk about how you see that evolving over time? And are we largely through the impact that that might be having to growth? And how do you think about that going into next year and beyond?

Question: Taylor McGinnis - UBS AG - Analyst : Perfect. And I'd love to shift gears to the free cash flow improvement in profitability, which has been a bright spot in the RingCentral story. So Vaibhav, maybe you could just talk about the runway that's still left there and the opportunities for continued leverage both on the free cash flow side and also on the EBIT margin side.

Question: Taylor McGinnis - UBS AG - Analyst : Perfect. And I'd love to talk a little bit about the investments in AI and then also how you're using AI internally. I think you've made comments in the past that the big focus of R&D today is going into your AI product. So one, can you talk about that, how that is being allocated internally? And then secondly, you mentioned using AI, right, as an area to save costs and improve efficiency. So maybe you can example -- give some examples of the initiatives that are underway there.

Question: Taylor McGinnis - UBS AG - Analyst : Perfect. So that makes Steven's job easier. So I'm sure he's excited about that, that use of AI. Maybe a last question for both of you. We're wrapping up 2025, headed into 2026. So Vlad, first for you, what are you hearing in terms of customer conversations? What are your customers' spending plans potentially looking like going into next year versus what we saw this year? And then Vaibhav for you, curious on capital allocation and how you're thinking about that strategy headed into 2027?

Question: Taylor McGinnis - UBS AG - Analyst : Perfect. Well, we'll leave that there. Thank you all for joining and let's give Vlad and Vaibhav a round of applause.