According to a Mordor Intelligence report published recently, the global telecom cloud market is estimated to grow 20% annually over the next five years to become a $34.6 billion industry by 2023. The researcher pegged the market at $12.5 billion in 2017. The growth in the market is expected to be driven by the demand for unified and virtualized communication and collaboration solutions. Billion Dollar Unicorn RingCentral (NYSE: RNG ) recently announced its third-quarter results that surpassed all market expectations.
RingCentral’s Financials
Revenues for the quarter grew 33% over the year to $173.8 million, ahead of the market’s forecast of $166.7 million. It ended the quarter with a GAAP net loss of $0.12 per share or $9.5 million, compared with a break-even quarter a year ago. The higher losses were attributed to an increase in stock-based compensation, amortization of debt discount and issuance costs, and acquisition-related expenses. On an adjusted basis, it reported a net income of $0.19 per share, ahead of the Street’s forecast of $0.16 per share.
By segment, software subscription revenues grew 32% over the year to $158 million. Revenues from other sources grew 52% to $15.8 million.
For the current quarter, RingCentral expects revenues of $179-$182 million with non-GAAP EPS of $0.17-$0.19. It expects to end the year with revenues of $664-$667 million and an EPS of $0.71-$0.73. The market was looking for revenues of $175.4 million with an EPS of $0.17 for the quarter and revenues of $653.7 million with an EPS of $0.68 for the year.
RingCentral was privately held till 2013. In 2013, it went public by raising $97.5 million in an IPO that valued it at $790 million. Prior to the listing, the company had raised $45 million from investors including Akkadian Ventures, Hermes Growth Partners, RTP Ventures, Scale Venture Partners, Khosla Ventures, Silicon Valley Bank, DAG Ventures, Cisco, and Sequoia Capital.
