RingCentral Inc

Previous wording

We are a leading provider of AI-driven cloud business communications, contact center, video, and hybrid event solutions. We believe that our innovative, cloud-based communication and contact center solutions disrupt the large market for business communications and collaboration by providing flexible and cost-effective solutions that support mobile and distributed workforces. We enable convenient and effective communications for organizations across all their locations and employees, enabling them to be more productive and more responsive.

Current wording

We are a leading provider of AI-powered cloud business communications, contact center, video, and hybrid event solutions. We believe that our innovative, cloud-based communication and contact center solutions disrupt the large market for business communications and collaboration by providing flexible and cost-effective solutions that support mobile and distributed workforces. We enable convenient and effective communications for organizations across all their locations and employees, enabling them to be more productive and more responsive.

Previous wording

•RingEX (formerly RingCentral MVP), an AI-driven Unified Communications as a Service (“UCaaS”) platform, which features an industry-leading cloud phone system, enhanced business SMS, efax, team messaging, and video meetings. It includes advanced telephony capabilities such as Interactive Voice Response (“IVR”), advanced call queues and management, along with a broad set of telephony integrations as well as numerous APIs to create custom communication workflows. Additionally, the platform offers robust IT and business analytics, plus a comprehensive suite of cloud migration solutions like RingCentral Cloud Connector for simplified hybrid deployments;

Current wording

•RingEX (formerly RingCentral MVP), an AI-powered Unified Communications as a Service (“UCaaS”) platform, which features an industry-leading cloud phone system, enhanced business SMS, efax, team messaging, and video meetings. It includes advanced telephony capabilities such as Interactive Voice Response (“IVR”), advanced call queues and management, along with a broad set of telephony integrations as well as numerous APIs to create custom communication workflows. Additionally, the platform offers robust IT and business analytics, plus a comprehensive suite of cloud migration solutions like RingCentral Cloud Connector for simplified hybrid deployments;

Previous wording

•Contact Center as a Service (“CCaaS”), a set of cloud-based customer experience solutions that includes RingCentral Contact Center, an OEM solution, and RingCX, a native omnichannel contact center with generative AI capabilities and conversation analytics launched in August 2023;

Current wording

•Contact Center as a Service (“CCaaS”), a set of cloud-based customer experience solutions that includes RingCentral Contact Center, an Original Equipment Manufacturer (“OEM”) solution, and RingCX, a native omnichannel contact center with generative AI capabilities and conversation analytics launched in August 2023;

Previous wording

•RingCentral Events, launched in November 2023 following the acquisition of Hopin Events and Session Platforms, offers a comprehensive suite of features for hosting virtual, hybrid, and in-person events of all sizes from single-session gatherings to multi-day, multi-session conferences. It includes advanced personalization options and AI-driven capabilities to enhance attendee experience; and

Current wording

•RingCentral Events, launched in November 2023 following the acquisition of Hopin Events and Session Platforms, offers a comprehensive suite of features for hosting virtual, hybrid, and in-person events of all sizes from single-session gatherings to multi-day, multi-session conferences. It includes advanced personalization options and AI-powered capabilities to enhance attendee experience; and

Previous wording

Our portfolio of cloud-based offerings are subscription based and made available at different rates varying by the specific functionalities, services, and number of users. We primarily generate revenues from the sale of subscriptions to our offerings. Our subscription plans have monthly, annual, or multi-year contractual terms. We believe that this flexibility in contract duration is important to meet the different needs of our customers. For each of the three and six months ended June 30, 2024 and 2023, subscriptions revenues accounted for 90% or more of our total revenues. The remainder of our revenues are primarily comprised of product revenues from the sale of pre-configured phones and professional services. We do not develop or manufacture physical phones and only offer them as a convenience to our customers. We rely on third-party providers to develop and manufacture these devices and fulfillment partners to successfully serve our customers.

Current wording

Our portfolio of cloud-based offerings are subscription based and made available at different rates varying by the specific functionalities, services, and number of users. We primarily generate revenues from the sale of subscriptions to our offerings. Our subscription plans have monthly, annual, or multi-year contractual terms. We believe that this flexibility in contract duration is important to meet the different needs of our customers. For each of the three and nine months ended September 30, 2024 and 2023, subscriptions revenues accounted for over 90% of our total revenues. The remainder of our revenues are primarily comprised of product revenues from the sale of pre-configured phones and professional services. We do not develop or manufacture physical phones and only offer them as a convenience to our customers. We rely on third-party providers to develop and manufacture these devices and fulfillment partners to successfully serve our customers.

Previous wording

•Global Service Providers and strategic partners who market and sell our RingEX or other solutions, including co-branded solutions.

Current wording

•Global Service Providers and strategic partners who market and sell our RingEX, RingCX or other solutions, including co-branded solutions.

Previous wording

Our revenue growth has primarily been driven by our flagship RingEX, RingCentral contact center solutions, and recurring license and other fees. Our revenue is derived from sales through our direct and indirect sales channels, including resellers and distributors, strategic partners and global service providers. As of June 30, 2024, we had customers from a range of industries, including financial services, education, healthcare, legal services, real estate, retail, technology, insurance, construction, hospitality, and state and local government, among others. For each of the three and six months ended June 30, 2024 and 2023, the vast majority of our total revenues were generated in the U.S. and Canada.

Current wording

Our revenue growth has primarily been driven by our flagship RingEX, RingCentral contact center solutions, and recurring license and other fees. Our revenue is derived from sales through our direct and indirect sales channels, including resellers and distributors, strategic partners and global service providers. As of September 30, 2024, we had customers from a range of industries, including financial services, education, healthcare, legal services, real estate, retail, technology, insurance, construction, hospitality, and state and local government, among others. For each of the three and nine months ended September 30, 2024 and 2023, the vast majority of our total revenues were generated in the U.S. and Canada.

Previous wording

In 2023, pursuant to our approved reduction-in-force plan as part of broader efforts to optimize the Company's cost structure, we are actively implementing various measures to enhance operational efficiencies. These include disciplined spending, increased productivity, efficiency gains, and optimizing our go-to-market strategies.

Current wording

Beginning in 2023, pursuant to our approved reduction-in-force plan as part of broader efforts to optimize the Company’s cost structure, we have been actively implementing various measures to enhance operational efficiencies. These include stricter discipline in spending, increased productivity, efficiency gains, and optimizing our go-to-market strategies.

Previous wording

We are subject to risks and exposures caused by the current macroeconomic environment. Macroeconomic factors include persistent inflation, higher interest rates, supply chain disruptions, decreased economic output, geopolitical conflict and fluctuations in currency exchange rates, all of which can cause uncertainty. The overall macroeconomic environment may affect buying behavior from larger customers that could have an adverse impact on our results. We have in the past and may in the future experience lower upsell of additional RingEX (formerly Ring MVP) services within our existing base as customers slow hiring and rationalize their employee counts. We continuously monitor the impact of these circumstances on our business and financial results, as well as the overall global economy and geopolitical landscape. The implications of macroeconomic conditions on our business, results of operations and overall financial position, particularly in the long term, remain uncertain.

Current wording

We are subject to risks and exposures caused by the current macroeconomic environment. Macroeconomic factors include persistent inflation, higher interest rates, supply chain disruptions, decreased economic output, geopolitical conflict and fluctuations in currency exchange rates, all of which can cause uncertainty. The overall macroeconomic environment may affect buying behavior from larger customers that could have an adverse impact on our results. We have in the past and may in the future experience lower upsell and increased downsell of additional RingEX (formerly Ring MVP) services within our existing base as customers slow hiring and rationalize their employee counts. We continuously monitor the impact of these circumstances on our business and financial results, as well as the overall global economy and geopolitical landscape. The implications of macroeconomic conditions on our business, results of operations and overall financial position, particularly in the long term, remain uncertain.

Previous wording

We believe that our Annualized Exit Monthly Recurring Subscriptions (“ARR”) is a leading indicator of our anticipated subscriptions revenues. We believe that trends in revenue are important to understanding the overall health of our business, and we use these trends in order to formulate financial projections and make strategic business decisions. Our ARR equals our Monthly Recurring Subscriptions multiplied by 12. Our Monthly Recurring Subscriptions equals the monthly value of all customer recurring charges at the end of a given month. For example, our Monthly Recurring Subscriptions at June 30, 2024 was $202.3 million. As such, our ARR at June 30, 2024 was $2.43 billion compared to $2.22 billion at June 30, 2023.

Current wording

We believe that our Annualized Exit Monthly Recurring Subscriptions (“ARR”) is a leading indicator of our anticipated subscriptions revenues. We believe that trends in revenue are important to understanding the overall health of our business, and we use these trends in order to formulate financial projections and make strategic business decisions. Our ARR equals our Monthly Recurring Subscriptions multiplied by 12. Our Monthly Recurring Subscriptions equals the monthly value of all customer recurring charges at the end of a given month. For example, our Monthly Recurring Subscriptions at September 30, 2024 was $206.7 million. As such, our ARR at September 30, 2024 was $2.48 billion compared to $2.26 billion at September 30, 2023.

Previous wording

Subscriptions revenue. Subscriptions revenue increased by $53.4 million, or 10%, for the three months ended June 30, 2024, and $102.6 million, or 10%, for the six months ended June 30, 2024, as compared to the respective prior year periods. The increase was primarily due to the acquisition of new customers, sale of new products, upsells of RingEX and additional offerings to our existing customer base, derived from sales through our direct and indirect sales channels, including resellers, distributors, and global service providers. Although we expect to continue to add new customers and increase the usage of our product for existing customers, we will monitor the impact of macroeconomic factors that could have an impact on customer buying behavior and demand, including contract duration, timing of customer purchases, churn, upsell and down-sell, renewals, payment terms, and credit card declines, all of which could cause variability in our revenue.

Current wording

Subscriptions revenue. Subscriptions revenue increased by $51.9 million, or 10%, for the three months ended September 30, 2024, and $154.6 million, or 10%, for the nine months ended September 30, 2024, as compared to the respective prior year periods. The increase was primarily due to the acquisition of new customers, sale of new products, upsells of RingEX and additional offerings to our existing customer base, derived from sales through our direct and indirect sales channels, including resellers, distributors, and global service providers. Although we expect to continue to add new customers and increase the usage of our product for existing customers, we will monitor the impact of macroeconomic factors that could have an impact on customer buying behavior and demand, including contract duration, timing of customer purchases, churn, upsell and down-sell, renewals, payment terms, and credit card declines, all of which could cause variability in our revenue.

Previous wording

Subscriptions cost of revenues and gross margin. Cost of subscriptions revenues increased by $12.0 million, or 9%, for the three months ended June 30, 2024, as compared to the respective prior year period. The higher cost of subscription revenues was primarily due to an increase in third-party costs of $11.0 million to support our solution offerings and an increase in infrastructure support costs of $3.0 million, partially offset by $2.9 million decrease in the amortization of our intangible assets.

Current wording

Subscriptions cost of revenues and gross margin. Cost of subscriptions revenues increased by $9.7 million, or 7%, for the three months ended September 30, 2024, as compared to the respective prior year period. The higher cost of subscription revenues was primarily due to a $6.6 million increase in third-party costs to support our solution offerings, a $5.4 million increase in infrastructure support costs, and a $3.0 million increase in personnel and contractor costs, partially offset by a $5.7 million decrease in the amortization of our intangible assets.

Previous wording

Cost of subscriptions revenues increased by $19.3 million, or 7%, for the six months ended June 30, 2024, as compared to the respective prior year period. The higher cost of subscription revenues was primarily due to an increase in third-party costs of $19.8 million to support our solution offerings and an increase in infrastructure support costs of $4.6 million, partially offset by $5.4 million decrease in the amortization of our intangible assets.

Current wording

Cost of subscriptions revenues increased by $29.0 million, or 7%, for the nine months ended September 30, 2024, as compared to the respective prior year period. The higher cost of subscription revenues was primarily due to a $26.3 million increase in third-party costs to support our solution offerings, a $10.1 million increase in infrastructure support costs, and a $3.3 million increase in personnel and contractor costs, partially offset by an $11.1 million decrease in the amortization of our intangible assets.

Previous wording

For the three and six months ended June 30, 2024, as compared to the respective prior year period, our subscription gross margin remained relatively consistent period over period. We expect to continue investing in our infrastructure and capacity to improve the availability of our subscription offerings, supporting the growth of both our new and existing customers.

Current wording

For the three and nine months ended September 30, 2024, as compared to the respective prior year period, our subscription gross margin remained relatively consistent period over period. We expect to continue investing in our infrastructure and capacity to improve the availability of our subscription offerings, including new products, supporting the growth of both our new and existing customers.

Previous wording

Cost of other revenues increased by $2.8 million, or 5%, for the six months ended June 30, 2024, as compared to the respective prior year period, primarily due to increase in costs associated with phones sales.

Current wording

Other cost of revenues and gross margin. Cost of other revenues increased by $1.5 million, or 5%, for the three months ended September 30, 2024, and $4.3 million, or 5%, for the nine months ended September 30, 2024 as compared to the respective prior year period, primarily due to an increase in costs associated with phone sales.

Previous wording

Research and development expenses decreased by $0.5 million, or (1)%, for the three months ended June 30, 2024, as compared to the respective prior year period, primarily driven by a $2.5 million reduction in professional fees, partially offset by a $1.8 million increase in personnel and contractor costs.

Current wording

Research and development expenses decreased by $1.3 million, or (2)%, for the three months ended September 30, 2024, as compared to the respective prior year period, primarily driven by a $1.4 million reduction in professional fees.

Previous wording

Research and development expenses decreased by $5.2 million, or (3)%, for the six months ended June 30, 2024, as compared to the respective prior year period, primarily attributed to a $4.9 million decrease in professional fees.

Current wording

Research and development expenses decreased by $6.5 million, or (3)%, for the nine months ended September 30, 2024, as compared to the respective prior year period. This decline was primarily due to a $6.3 million reduction in professional fees.

Previous wording

We believe that continued investment in our products is important for our future growth, and our research and development expenses may fluctuate as a percentage of our total revenues from period to period depending on the timing of these expenses.

Current wording

We believe that investment in our products is important for our future growth, and our research and development expenses may fluctuate as a percentage of our total revenues from period to period depending on the timing of these expenses.

Previous wording

Sales and marketing expenses increased by $5.0 million, or 2%, for the three months ended June 30, 2024, as compared to the respective prior year period. This increase was primarily due to a $12.1 million increase in third-party commissions and $6.8 million in amortization of deferred sales commission costs. These increases were partially offset by a $9.9 million reduction in personnel and contractor costs, largely due to headcount reductions and decrease in share-based compensation due to disciplined stock grants to employees. Additionally, we experienced a $2.6 million decrease in professional fees and a $1.2 million reduction in advertising and overhead costs during the three months ended June 30, 2024.

Current wording

Sales and marketing expenses increased by $6.2 million, or 2%, for the three months ended September 30, 2024, as compared to the respective prior year period. This increase was primarily due to a $13.9 million increase in third-party commissions and a $6.0 million increase in amortization of deferred sales commission costs. These increases were partially offset by a $7.8 million reduction in advertising and marketing costs, and a $5.0 million decrease in personnel and contractor costs, primarily due to headcount reductions and decrease in share-based compensation due to reduced stock grants to employees.

Previous wording

Sales and marketing expenses increased by $17.6 million, or 3%, for the six months ended June 30, 2024, as compared to the respective prior year period. This increase was primarily driven by a $23.0 million increase in third-party commissions, $12.4 million in amortization of deferred sales commission costs, and a $1.2 million increase in advertising and marketing costs. These increases were partially offset by a $16.9 million decrease in personnel and contractor costs, largely due to headcount reductions and decrease in share-based compensation due to disciplined stock grants to employees, as well as a $1.9 million reduction in professional fees.

Current wording

Sales and marketing expenses increased by $23.8 million, or 3%, for the nine months ended September 30, 2024, as compared to the respective prior year period. This increase was primarily driven by a $36.9 million increase in third-party commissions and an $18.4 million increase in amortization of deferred sales commission costs. These increases were partially offset by a $21.9 million decrease in personnel and contractor costs, primarily due to headcount reductions and decrease in share-based compensation due to reduced stock grants to employees, a $6.8 million reduction in advertising and marketing costs, and a $2.9 million reduction in professional fees.

Previous wording

General and administrative expenses decreased by $2.9 million, or (4)%, for the three months ended June 30, 2024, as compared to the respective prior year period, primarily due to a $5.3 million reduction in personnel and contractor costs, driven by decrease in share-based compensation due to disciplined stock grants to employees, partially offset by increases in professional fees of $1.7 million.

Current wording

General and administrative expenses decreased by $23.0 million, or (26)%, for the three months ended September 30, 2024, as compared to the respective prior year period, primarily due to a $20.2 million reduction in personnel and contractor costs driven by a decrease in share-based compensation due to headcount reductions and reduced stock grants to employees, and a $4.0 million reduction in professional fees, partially offset by a $1.3 million increase in overhead costs.

Previous wording

General and administrative expenses decreased by $13.6 million, or (9)%, for the six months ended June 30, 2024, as compared to the respective prior year period, primarily due to a $7.5 million reduction in professional fees and $7.3 million decrease in personnel and contractor costs, driven by decrease in share-based compensation due to disciplined stock grants to employees, partially offset by $1.5 million increase in overhead costs.

Current wording

General and administrative expenses decreased by $36.6 million, or (15)%, for the nine months ended September 30, 2024, as compared to the respective prior year period, primarily due to a $27.5 million reduction in personnel and contractor costs driven by a decrease in share-based compensation due to reduced stock grants to employees and $11.5 million reduction in professional fees, partially offset by $2.8 million increase in overhead costs.

Previous wording

Interest expense. Interest expense increased by $10.9 million, or 213%, for the three months ended June 30, 2024, and $24.9 million, or 340%, for the six months ended June 30, 2024, as compared to the respective prior year period. This increase was mainly attributable to interest incurred under our Credit Agreement and the 2030 Senior Notes.

Current wording

Interest expense. Interest expense increased by $4.2 million, or 35%, for the three months ended September 30, 2024, and $29.2 million, or 150%, for the nine months ended September 30, 2024, as compared to the respective prior year period. This increase was mainly attributable to interest incurred under our Credit Agreement and the 2030 Senior Notes.

Previous wording

Other income. Other income decreased by $25.8 million, or (73)%, for the three months ended June 30, 2024, as compared to the respective prior year period. This decrease was primarily due to a $31.1 million reduction in gains from the early extinguishment of debt during the three months ended June 30, 2023, partially offset by a $7.7 million gain recognized from our amended agreement with a strategic partner during the three months ended June 30, 2024.

Current wording

Other income. Other income decreased by $19.4 million, or (95)%, for the three months ended September 30, 2024, as compared to the respective prior year period. This decline was primarily due to an $11.8 million reduction in gains from the early extinguishment of debt, and a $7.0 million gain from our amended agreement with a strategic partner during the three months ended September 30, 2023.

Previous wording

Other income decreased $29.3 million, or (71)%, for the six months ended June 30, 2024, compared to the respective prior year period, primarily due to a $31.1 million reduction in gains from the early extinguishment of debt during the three months ended June 30, 2023.

Current wording

Other income decreased $48.7 million, or (79)%, for the nine months ended September 30, 2024, compared to the respective prior year period. This decline primarily due to a $42.9 million reduction in gains from the early extinguishment of debt during the three months ended September 30, 2023, and a $3.8 million decrease in gains related to our amended agreement with a strategic partner.

Previous wording

Net loss decreased by $6.7 million for the three months ended June 30, 2024, as compared to the respective prior year period. The decrease was largely due to $39.7 million reduction in loss from operations, driven by higher subscription revenues and lower operating expenses as a percentage of total revenue. The reduction in operating expenses as a percentage of total revenue was achieved through continued disciplined spending, including a $17.9 million decrease in share-based compensation and a $5.7 million decrease in professional fees. These reductions in operating expenses were partially offset by a $31.1 million gain from the early extinguishment of debt recorded during the three months ended June 30, 2023 that did not recur, and a $10.9 million increase in interest expense during the three months ended June 30, 2024, related to our Credit Agreement and 2030 Senior Notes. Additionally, in the second quarter of 2024, we recognized a non-operating gain of $7.7 million related to our amended agreement with a strategic partner.

Current wording

Net loss decreased by $34.3 million for the three months ended September 30, 2024, as compared to the respective prior year period. This decrease was largely due to a $57.5 million reduction in loss from operations, driven by higher subscription revenues and lower operating expenses, both in absolute dollars and as a percentage of total revenue. The reduction in operating expenses was achieved through continued disciplined spending, including a $28.0 million decrease in share-based compensation and a $6.0 million reduction in professional fees. These reductions in operating expenses were partially offset by non-operating factors, including an $11.8 million decrease in gain from the early extinguishment of debt, a $7.0 million decrease in gains from our amended agreement with a strategic partner recognized during the three months ended September 30, 2023, and a $4.2 million increase in interest expense related to our 2030 Senior Notes during the three months ended September 30, 2024.

Previous wording

Net loss decreased by $32.6 million for the six months ended June 30, 2024, as compared to the respective prior year period. The decrease was largely due to a $83.3 million reduction in loss from operations, driven by higher subscription revenues and lower operating expenses as a percentage of total revenue. The reduction in operating expenses as a percentage of total revenue was achieved through continued disciplined spending, including a $27.9 million decrease in share-based compensation and a $17.7 million reduction in professional fees. These reductions in operating expenses were partially offset by a $31.1 million gain from the early extinguishment of debt recorded during the six months ended June 30, 2023, and a $24.9 million increase in interest expense during the three months ended June 30, 2024, mainly related to our Credit Agreement and 2030 Senior Notes.

Current wording

Net loss decreased by $66.9 million for the nine months ended September 30, 2024, as compared to the respective prior year period. This decrease was largely due to a $140.8 million reduction in loss from operations, driven by higher subscription revenues and lower operating expenses, both in absolute dollars and as a percentage of total revenue. The reduction in operating expenses was achieved through continued disciplined spending, including a $55.9 million decrease in share-based compensation and a $23.7 million reduction in professional fees. These reductions in operating expenses were partially offset by non-operating factors, including a $42.9 million decrease in gains from the early extinguishment of debt, a $29.2 million increase in interest expense related to our Credit Agreement and 2030 Senior Notes, and a $3.8 million decrease in gains from our amended agreement with a strategic partner.

Previous wording

We finance our operations primarily through sales to our customers, which could be billed either monthly or annually one year in advance. For customers with annual or multi-year contracts and those who opt for annual invoicing, we generally invoice only one annual period in advance and revenue is deferred for such advanced billings. We also have access to additional liquidity from our term loan and revolving credit facility. As of June 30, 2024 and December 31, 2023, we had cash and cash equivalents of $199.3 million and $222.2 million, respectively.

Current wording

We finance our operations primarily through sales to our customers, which could be billed either monthly or annually one year in advance. For customers with annual or multi-year contracts and those who opt for annual invoicing, we generally invoice only one annual period in advance and revenue is deferred for such advanced billings. We also have access to additional liquidity from our Term Loan and Revolving Credit Facility. As of September 30, 2024 and December 31, 2023, we had cash and cash equivalents of $212.7 million and $222.2 million, respectively.

Previous wording

Our outstanding principal debt as of June 30, 2024 was comprised of $161.3 million from our 2025 Convertible Notes due on March 1, 2025, $609.1 million from our 2026 Convertible Notes due on March 15, 2026, $380.0 million under our Term Loan with due on February 14, 2028, as well as $400.0 million under our 2030 Senior Notes due on August 15, 2030. As of June 30, 2024, we have $75 million remaining under our delayed draw-down Term Loan and $225.0 million remaining under our Revolving Credit Facility. On August 2, 2024, we entered into the Third Amendment to our Credit Agreement to extend the remaining $75.0 million tranche of our Term Loan from August 2, 2024 to May 2, 2025. On August 6, 2024, we entered into the Fourth Amendment to our Credit Agreement to increase the Term Loan by $275.0 million in accordance with the incremental loan provisions of the Credit Agreement. Following the Fourth Amendment, the aggregate principal amount of available term loan commitments under the amended credit agreement equaled $350.0 million. Refer to Note 6, Long-Term Debt, in the accompanying notes to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information regarding our Credit Agreement, the 2030 Senior Notes and the Convertible Notes. We were in compliance with all debt covenants as of June 30, 2024.

Current wording

Our outstanding principal debt as of September 30, 2024 was comprised of $161.3 million from our 2025 Convertible Notes due on March 1, 2025, $609.1 million from our 2026 Convertible Notes due on March 15, 2026, $375.0 million under our Term Loan due on February 14, 2028, as well as $400.0 million under our 2030 Senior Notes due on August 15, 2030. As of September 30, 2024, we have $350.0 million available under our delayed draw-down Term Loan and $225.0 million available under our Revolving Credit Facility. Refer to Note 6, Long-Term Debt, in the accompanying notes to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information regarding our Credit Agreement, the 2030 Senior Notes and the Convertible Notes. We were in compliance with all debt covenants as of September 30, 2024.

Previous wording

Under our share repurchase programs, share repurchases may be made at our discretion from time to time in open market transactions, privately negotiated transactions, or other means, subject to a minimum cash balance. The programs do not obligate us to repurchase any specific dollar amount or to acquire any specific number of shares of our Class A Common Stock. The timing and number of any shares repurchased under the programs will depend on a variety of factors, including stock price, trading volume, and general business and market conditions. During the six months ended June 30, 2024, we repurchased and settled approximately 4.8 million shares of our Class A Common Stock, by paying an aggregate amount of approximately $162.0 million under the plans previously authorized by our Board. As of June 30, 2024, approximately $326.0 million remained authorized and available under our share repurchase programs for future share repurchases. Refer to Note 11, Stockholders’ Deficit in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information.

Current wording

Under our share repurchase programs, share repurchases may be made at our discretion from time to time in open market transactions, privately negotiated transactions, or other means, subject to a minimum cash balance. The programs do not obligate us to repurchase any specific dollar amount or to acquire any specific number of shares of our Class A Common Stock. The timing and number of any shares repurchased under the programs will depend on a variety of factors, including stock price, trading volume, and general business and market conditions. During the nine months ended September 30, 2024, we repurchased and settled approximately 7.5 million shares of our Class A Common Stock, by paying an aggregate amount of approximately $245.0 million under the plans previously authorized by our Board. As of September 30, 2024, approximately $242.8 million remained authorized and available under our share repurchase programs for future share repurchases. Refer to Note 11, Stockholders’ Deficit in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information.

Previous wording

Net cash provided by operating activities was $223.2 million for the six months ended June 30, 2024. The cash flow from operating activities was primarily driven by timing of cash receipts from customers and global service providers, offset by cash payments for personnel-related costs and payments to vendors along with interest payments on our debt obligations.

Current wording

Net cash provided by operating activities was $350.4 million for the nine months ended September 30, 2024. The cash flow from operating activities was primarily driven by timing of cash receipts from customers and global service providers, offset by cash payments for personnel-related costs and payments to vendors along with interest payments on our debt obligations.

Previous wording

Net cash provided by operating activities for the six months ended June 30, 2024 increased by $24.0 million as compared to the respective prior year period. This change reflects working capital impacts resulting from the timing of payments and collections as well as interest payments on our debt obligations.

Current wording

Net cash provided by operating activities for the nine months ended September 30, 2024 increased by $64.6 million as compared to the respective prior year period. This change reflects working capital impacts resulting from the timing of payments and collections as well as interest payments on our debt obligations.

Previous wording

Our primary investing activities consist of our capital expenditures and expenditures for internal-use software, and intellectual property assets, and cash paid for business acquisitions.

Current wording

Our primary investing activities consist of our capital expenditures and expenditures for internal-use software, intellectual property assets, and cash paid for business acquisitions.

Previous wording

Net cash used in investing activities was $64.0 million for the six months ended June 30, 2024 driven by $37.7 million in capital expenditures including personnel-related costs associated with the development of internal-use software, and $26.3 million in cash paid to acquire certain assets from Mitel.

Current wording

Net cash used in investing activities was $88.3 million for the nine months ended September 30, 2024. This was primarily driven by $59.5 million in capital expenditures, including personnel-related costs associated with the development of internal-use software, and $26.3 million in cash paid for the acquisition of certain assets from Mitel.

Previous wording

Net cash used in investing activities for the six months ended June 30, 2024 increased by $24.9 million as compared to the respective prior year period. The increase was primarily driven by $26.3 million in cash paid for the acquisition of certain assets from Mitel, partially offset by $1.4 million reduction in capital expenditures and costs associated with the development of internal-use software.

Current wording

Net cash used in investing activities for the nine months ended September 30, 2024 increased by $17.8 million as compared to the respective prior year period. This increase was primarily driven by $11.6 million for business acquisitions, and $3.7 million in capital expenditures, including personnel-related costs associated with the development of internal-use software.

Previous wording

Our primary financing activities includes utilizing cash to repurchase Class A Common Stock under our share repurchase programs, servicing and repaying debt, paying contingent consideration, raising capital through stock issuance under our stock plans, paying taxes related to these plans, and meeting our existing financing commitments.

Current wording

Our primary financing activities include utilizing cash to repurchase Class A Common Stock under our share repurchase programs, servicing and repaying debt, paying contingent consideration, raising capital through stock issuance under our stock plans, paying taxes related to these plans, and meeting our existing financing commitments.

Previous wording

Net cash used in financing activities was $180.9 million for the six months ended June 30, 2024. This was primarily driven by $162.0 million paid to repurchase and retire approximately 4.8 million shares of Class A Common Stock as part of our share repurchase program. Additionally, cash outflows included $12.2 million for debt service costs and debt repayments, $10.3 million for contingent consideration, $4.1 million for taxes associated with our stock plans, and $2.2 million to meet our existing financing commitments. These expenditures were partially offset by $10.0 million in proceeds from issuance of stock in connection with our stock plans.

Current wording

Net cash used in financing activities was $273.1 million for the nine months ended September 30, 2024. This was primarily driven by $245.0 million paid to repurchase and retire approximately 7.5 million shares of Class A Common Stock under our share repurchase program. Additionally, cash outflows included $19.3 million for debt service costs and debt repayments, $10.3 million for contingent consideration, $5.3 million for taxes associated with our stock plans, and $3.1 million to fulfill our existing financing commitments. These expenditures were partially offset by $10.0 million in proceeds from issuance of stock in connection with our stock plans.

Previous wording

Net cash used in financing activities for the six months ended June 30, 2024, decreased by $24.0 million as compared to the respective prior year period. The decrease was primarily due to $32.9 million net financing cash outflow during the six months ended June 30, 2023, as a result of issuance of new debt and repurchase of convertible notes. Net cash used in financing activities also decreased by $12.6 million due to reduction in payments for the repurchase and retirement of our Class A Common Stock. These decreases were partially offset by a $12.2 million increase in debt service costs and repayments as well as a $9.4 million increase in payments for contingent consideration.

Current wording

Net cash used in financing activities for the nine months ended September 30, 2024, increased by $221.3 million as compared to the respective prior year period. This increase was primarily due to a $205.4 million net financing cash inflow during the nine months ended September 30, 2023 as a result of issuance of new debt and repurchase of convertible notes. The increase in net cash used in financing activities also included $14.3 million for debt service costs and repayments, as well as an $8.7 million increase in contingent consideration payments. These increases were partially offset by a $4.6 million reduction in payments for the repurchase and retirement of our Class A Common Stock.

Previous wording

We have generally signed new customer contracts with typical subscription term ranging fromone month tofive years. At any point in the contract term, there can be amounts allocated to services that we have not yet contractually performed, which constitute our remaining performance obligations. Until we meet our performance obligations, we do not recognize them as revenues in our condensed consolidated financial statements. Given the variability in our contract length, our remaining performance obligations exclude contracts with an original expected length of less than one year. We believe that our remaining performance obligation is not a reliable indicator of future revenues as it is influenced by several factors, including contract renewal timing, average contract terms and foreign currency exchange rates. We do not utilize remaining performance obligation as a key management metric internally.

Current wording

We have generally signed new customer contracts with typical subscription term ranging from one month to five years. At any point in the contract term, there can be amounts allocated to services that we have not yet contractually performed, which constitute our remaining performance obligations. Until we meet our performance obligations, we do not recognize them as revenues in our condensed consolidated financial statements. Given the variability in our contract length, our remaining performance obligations exclude contracts with an original expected length of less than one year. We believe that our remaining performance obligation is not a reliable indicator of future revenues as it is influenced by several factors, including contract renewal timing, average contract terms and foreign currency exchange rates. We do not utilize remaining performance obligation as a key management metric internally.

Previous wording

Except as set forth below, and in Notes 3, 6, 9 and 10 in the accompanying notes to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q, there were no significant changes in our commitments under contractual obligations, as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023.

Current wording

Except as set forth below, and in Notes 3, 6, 9 and 10 in the accompanying notes to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q, there were no significant changes in our commitments under contractual obligations, as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023, as amended on April 24, 2024.