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☒
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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94-3322844
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(State or other jurisdiction
of incorporation or organization)
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(I.R.S. Employer
Identification No.)
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Class A Common Stock
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RNG
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New York Stock Exchange
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par value $0.0001
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Large accelerated filer
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x
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Accelerated filer
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¨
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Non-accelerated filer
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¨
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Smaller reporting company
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☐
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Emerging growth company
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☐
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our progress against short-term and long-term goals;
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our future financial performance;
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our anticipated growth, growth strategies and our ability to effectively manage that growth and effect these strategies;
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our success in the enterprise market;
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anticipated trends, developments and challenges in our business and in the markets in which we operate, as well as general macroeconomic conditions;
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our ability to scale to our desired goals, particularly the implementation of new processes and systems and the addition to our workforce;
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the impact of competition in our industry and innovation by our competitors;
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our ability to anticipate and adapt to future changes in our industry;
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our ability to predict subscriptions revenues, formulate accurate financial projections, and make strategic business decisions based on our analysis of market trends;
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our ability to anticipate market needs and develop new and enhanced solutions and subscriptions to meet those needs, and our ability to successfully monetize them;
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maintaining and expanding our customer base;
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maintaining, expanding and responding to changes in our relationships with other companies;
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maintaining and expanding our distribution channels, including our network of sales agents and resellers;
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our success with our carrier partners;
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our ability to sell, market, and support our solutions and services;
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our ability to expand our business to larger customers as well as expanding domestically and internationally;
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our ability to realize increased purchasing leverage and economies of scale as we expand;
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the impact of seasonality on our business;
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the impact of any failure of our solutions or solution innovations;
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our reliance on our third-party product and service providers;
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the potential effect on our business of litigation to which we may become a party;
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our liquidity and working capital requirements;
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the impact of changes in the regulatory environment;
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our ability to protect our intellectual property and rely on open source licenses;
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our expectations regarding the growth and reliability of the internet infrastructure;
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the timing of acquisitions of, or making and exiting investments in, other entities, businesses, or technologies;
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our ability to successfully and timely execute on, integrate, and realize the benefits of any acquisition, investment, strategic partnership, or other strategic transaction we may make or undertake;
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our capital expenditure projections;
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the estimates and estimate methodologies used in preparing our consolidated financial statements;
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the political environment and stability in the regions in which we or our subcontractors operate;
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the impact of economic downturns on us and our customers;
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our ability to defend our systems and our customer information from fraud and cyber-attack;
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our ability to prevent the use of fraudulent payment methods for our solutions;
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our ability to retain key employees and to attract qualified personnel; and
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the impact of foreign currencies on our non-U.S. business as we expand our business internationally.
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Location Independence. Our cloud-based solutions are designed to be location independent. We seamlessly connect distributed and mobile users, enabling employees to communicate with a single identity whether working from a central location, a branch office, on the road, or at home.
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Global. Our RingCentral Global Office capabilities support multinational enterprise workforces. RingCentral Global Office connects multinational workforces globally, while reducing the complexity and high costs of maintaining multiple legacy PBX systems with a single global cloud solution.
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Device Independence. Our solutions are designed to work with a broad range of devices, including smartphones, tablets, PCs, and desk phones, enabling businesses to successfully implement a “bring-your-own” communications device strategy.
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Instant Activation and Easy Account Management. Our solutions are designed for rapid deployment and ease of management. Our intuitive graphical user interfaces allow administrators and users to set up and manage their business communications system with little or no IT expertise, training, or dedicated staffing.
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Scalability. Our cloud-based solutions scale easily and efficiently with the growth of our customers. Customers can add users, regardless of their location, without having to purchase additional infrastructure hardware or software upgrades.
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Lower Cost of Ownership. We believe that our customers experience significantly lower cost of ownership compared to legacy on-premise systems. Using our cloud-based solutions, our customers can avoid the significant
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Seamless and Intuitive Integration with Other Applications. Applications are proliferating within businesses of all sizes. Integration of these business applications with legacy on-premise systems is typically complex and expensive, which limits the ability of businesses to leverage cloud-based applications. Our platform provides seamless and intuitive integration with multiple popular cloud-based business applications such as Microsoft productivity tools, Google G-Suite, Salesforce CRM, Oracle, Okta, Zendesk, Box, and Workday, as well as customer lines-of business applications.
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Cloud-Based Business Communications Solutions. We offer multi-user, multi-extension, cloud-based business communications solutions that do not require installation, configuration, management, or maintenance of on-premise hardware and software. Our solutions are instantly activated and deliver a rich set of functionalities across multiple locations and devices.
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Collaboration. We offer team messaging and collaboration solutions which allow diverse teams to stay connected through multiple modes of communication. In addition to team messaging and communications, teams can share tasks, notes, group calendars, and files.
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Mobile-Centric Approach. Our solution includes smartphone and tablet mobile applications that customers can use to set up and manage company, department, and user settings from anywhere. Our applications turn iOS and Android smartphones and tablets into business communication devices. Users can change their personal settings instantly and communicate via voice, text, team messaging and collaboration, HD video and web conferencing, and fax. Personal mobile devices are fully integrated into the customer’s cloud-based communication solution, using the company’s numbers, and displaying one of the company’s caller ID for calls made through our mobile applications.
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Easy Set-Up and Control. Our user interfaces provide a consistent user experience across smartphones, tablets, PCs, and desk phones, making it intuitive and easy for our customers to quickly discover and use our solution across devices. Among other capabilities, administrators can specify and modify company, department, user settings, auto-receptionist settings, call-handling, and routing rules, and add, change, and customize users and departments.
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Flexible Call Routing. Our solution includes an auto-attendant to easily customize call routing for the entire company, departments, groups, or individual employees. It includes a robust suite of communication management options, including time of day, caller ID, call queuing, and sophisticated routing rules for complex call handling for the company, departments, groups, and individual employees.
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Integrated Voice, HD Video and Web Conferencing, Text and Fax Communications with One Business Number. By eliminating the need for multiple business numbers, users are able to easily control how, when, and where they conduct their business communications through routing logic with one number. Employees can stay connected, thus increasing efficiency, productivity, and responsiveness to their customers. Having one business number also enables users to keep personal mobile numbers private. RingCentral Rooms and Rooms Connector bring a cloud web conferencing solution to meeting rooms and support for large meetings and Webinars for a monthly per license add-on fee.
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Cloud-based Business Application Integrations. Our solution seamlessly integrates with other cloud-based business applications such as Salesforce CRM, Google Cloud, Box, Dropbox, Office365, Outlook, Oracle, Okta, Zendesk, Jira, Asana, and others. For example, our integration with Salesforce CRM brings up customer records immediately based on inbound caller IDs, resulting in increased productivity and efficiency. Our open platform is supported by APIs and software developers’ kits (“SDKs”) that allows developers to integrate our solution with leading business applications or with other custom applications to customize their own business workflows.
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RingCentral Global Office. Our solution includes RingCentral Global Office, a single global Unified Communications as a Service (“UCaaS”) solution designed for multinational enterprises that allows these companies to support distributed offices and employees globally with a single cloud solution. With RingCentral Global Office, multinational enterprises can operate in other countries while also acting as one integrated business, with capabilities including local phone numbers, local caller ID, worldwide extension-to-extension dialing, and included minute bundles for international calling.
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RingCentral CloudConnect. RingCentral CloudConnect is a service that allows enterprises to leverage their dedicated and secure connections to exchange data directly with the RingCentral cloud. Customers use their preferred network service provider to connect to the RingCentral cloud through a secure data exchange enabling lower latency, greater network reliability and availability, and added security.
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Marketing. Our marketing efforts include search engine marketing, search engine optimization, affiliates, list buys, shared leads, content leads, appointment setting, radio advertising, online display advertising, sports sponsorships, billboard advertising, tradeshows and events, and other forms of demand generation. We track and measure our marketing costs closely across all channels so that we can acquire customers in a cost-efficient manner.
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Direct Sales. We primarily sell our solutions and subscriptions through direct inbound and outbound sales efforts. We have direct sales representatives located in the U.S. and internationally.
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Indirect Sales. Our indirect sales channel consists of global and regional networks of resellers, carriers including AT&T, TELUS and BT. Our indirect sales channels help broaden the adoption of our solutions without the need for a large direct sales force.
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Customer Support and Services. While our intuitive and easy-to-use user interface serves to reduce our customers’ need for support and services, we provide online chat and phone customer support, as well as post-sale implementation support, as an option to help customers configure and use our solution. We track and measure our customer satisfaction and our support costs closely across all channels to provide a high level of customer service in a cost-efficient manner.
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Strategic Partnerships. We have strategic partnerships with several third parties including Avaya and Atos.
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subscription features and capabilities;
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system reliability, availability, and performance;
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speed and ease of activation, setup, and configuration;
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ownership and control of the underlying technology;
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open platform;
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integration with mobile devices;
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brand awareness and recognition;
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simplicity of the pricing model; and
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total cost of ownership.
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traditional on-premise, hardware business communications providers such as Alcatel-Lucent Enterprise, Avaya Inc., Cisco Systems, Inc., Mitel Networks Corporation, NEC Corporation, and Siemens Enterprise Networks, LLC, any of which may now or in the future also host their solutions through the cloud;
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software providers such as Microsoft Corporation and Cisco Systems, Inc. that generally license and/or host their software solutions, and their resellers including major carriers and cable companies;
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established communications providers that resell on-premise hardware, software, and hosted solutions, such as AT&T, Verizon Communications Inc., Sprint Corporation, and Comcast Corporation in the United States, TELUS and others in Canada, and BT, Vodafone Group Plc, and others in the U.K., all of whom have significantly greater resources than us and do now or may in the future also develop and/or host their own or other solutions through the cloud;
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other cloud companies such as 8x8, Inc., Amazon.com, Inc., DialPad, Inc., Fuze Inc., StarBlue, Inc., Intermedia.net, Inc., J2 Global, Inc., LogMeIn, Inc, Microsoft Corporation, Nextiva, Inc., Twilio Inc., Vonage Holdings Corp., West Corporation, and Zoom Video Communications, Inc.;
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other large internet companies such as Alphabet Inc. (Google Voice), Facebook, Inc., Oracle Corporation, and salesforce.com, Inc., any of which might launch its own cloud-based business communication services or acquire other cloud-based business communications companies in the future;
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providers of communications platform as a service solutions and messaging software platforms with APIs such as Twilio Inc., Vonage Holding Corp., and Slack Technologies, Inc., on which customers can build diverse solutions by integrating cloud communications into business applications;
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contact center and customer relationship management providers such as Amazon.com, Inc., Aspect Software, Inc., Avaya Inc., Five9, Inc., NICE InContact, Genesys Telecommunications Laboratories, Inc., Serenova, LLC, Talkdesk, Inc., Vonage Holdings Corp., Salesforce.com, Inc., and Twilio Inc.; and
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Digital engagement vendors such as Brand Embassy Ltd, eGain Corporation, Lithium Technologies, LLC, LivePerson, Inc., SparkCentral Inc., among others named above that may offer similar features.
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our ability to retain existing customers, resellers, and carriers, and expand our existing customers’ user base, and attract new customers;
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our ability to introduce new solutions;
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the actions of our competitors, including pricing changes or the introduction of new solutions;
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our ability to effectively manage our growth;
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our ability to successfully penetrate the market for larger businesses;
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the mix of annual and multi-year subscriptions at any given time;
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the timing, cost, and effectiveness of our advertising and marketing efforts;
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the timing, operating cost, and capital expenditures related to the operation, maintenance and expansion of our business;
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our ability to successfully and timely execute on, integrate, and realize the benefits of any acquisition, investment, strategic partnership, or other strategic transaction or partnership we may make or undertake;
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service outages or actual or perceived information security breaches and any related impact on our reputation;
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our ability to accurately forecast revenues and appropriately plan our expenses;
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our ability to realize our deferred tax assets;
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costs associated with defending and resolving intellectual property infringement and other claims;
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changes in tax laws, regulations, or accounting rules;
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the timing and cost of developing or acquiring technologies, services or businesses, and our ability to successfully manage any such acquisitions;
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the impact of foreign currencies on our business as we continue to expand our business internationally; and
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the impact of worldwide economic, political, industry, and market conditions.
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cause a reduction in revenues or delay in market acceptance of our subscriptions;
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require us to pay penalties or issue credits or refunds to our customers, resellers, or carriers, or expose us to claims for damages;
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cause us to lose existing customers and make it more difficult to attract new customers;
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divert our development resources or require us to make extensive changes to our software, which would increase our expenses and slow innovation;
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increase our technical support costs; and
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harm our reputation and brand.
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our ability to comply with differing and evolving technical and environmental standards, telecommunications regulations, and certification requirements outside the U.S.;
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difficulties and costs associated with staffing and managing foreign operations;
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our ability to effectively price our subscriptions in competitive international markets;
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potentially greater difficulty collecting accounts receivable and longer payment cycles;
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the need to adapt and localize our subscriptions for specific countries;
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the need to offer customer care in various native languages;
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reliance on third parties over which we have limited control, including those that market and resell our subscriptions;
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availability of reliable broadband connectivity and wide area networks in targeted areas for expansion;
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lower levels of adoption of credit or debit card usage for Internet related purchases by foreign customers and compliance with various foreign regulations related to credit or debit card processing and data protection requirements;
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difficulties in understanding and complying with local laws, regulations, and customs in foreign jurisdictions;
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restrictions on travel to or from countries in which we operate or inability to access certain areas;
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export controls and economic sanctions;
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changes in diplomatic and trade relationships, including tariffs and other non-tariff barriers, such as quotas and local content rules;
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U.S. government trade restrictions, including those which may impose restrictions, including prohibitions, on the exportation, re-exportation, sale, shipment or other transfer of programming, technology, components, and/or services to foreign persons;
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our ability to comply with different and evolving laws, rules, and regulations, including the European General Data Protection Regulation (the “GDPR”) and other data privacy and data protection laws, rules and regulations;
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compliance with various anti-bribery and anti-corruption laws such as the Foreign Corrupt Practices Act and U.K. Bribery Act of 2010;
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more limited protection for intellectual property rights in some countries;
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adverse tax consequences;
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fluctuations in currency exchange rates;
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exchange control regulations, which might restrict or prohibit our conversion of other currencies into U.S. Dollars;
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restrictions on the transfer of funds;
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new and different sources of competition;
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political and economic instability created by the U.K.'s departure from the EU ("Brexit"); and
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deterioration of political relations between the U.S. and other countries in which we operate, particularly Russia, Ukraine, China, and the Philippines; or
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political or social unrest, economic instability, conflict or war in such countries, or sanctions implemented by the U.S. against these countries, all of which could have a material adverse effect on our operations.
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the potential failure to achieve the expected benefits of the acquisition, investment, strategic partnership, or other strategic transaction;
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unanticipated costs and liabilities;
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difficulties in integrating new solutions and subscriptions, software, businesses, operations, and technology infrastructure in an efficient and effective manner;
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difficulties in maintaining customer relations;
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the potential loss of key employees of any acquired businesses;
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the diversion of the attention of our senior management from the operation of our daily business;
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the potential adverse effect on our cash position to the extent that we use cash for the transaction consideration;
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the potential significant increase of our interest expense, leverage, and debt service requirements if we incur additional debt to pay for an acquisition, investment, strategic partnership, or other strategic transaction;
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the potential issuance of securities that would dilute our stockholders’ percentage ownership;
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the potential to incur large and immediate write-offs and restructuring and other related expenses;
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the potential liability or expenses associated with new types of data stored, existing security obligations or liabilities, unknown weaknesses in our solutions, insufficient security measures in place, and compromise of our networks via access to our systems from assets not previously under our control; and
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the inability to maintain uniform standards, controls, policies, and procedures.
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changes in the valuation of our deferred tax assets and liabilities;
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expiration of, or lapses in, the research and development tax credit laws;
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expiration or non-utilization of net operating loss carryforwards;
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tax effects of share-based compensation;
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expansion into new jurisdictions;
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potential challenges to and costs related to implementation and ongoing operation of our intercompany arrangements;
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changes in tax laws and regulations and accounting principles, or interpretations or applications thereof; and
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certain non-deductible expenses as a result of acquisitions.
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result in the loss of a substantial number of existing customers or prohibit the acquisition of new customers;
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cause us to pay license fees for intellectual property we are deemed to have infringed;
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cause us to incur costs and devote valuable technical resources to redesigning our subscriptions;
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cause our cost of revenues to increase;
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cause us to accelerate expenditures to preserve existing revenues;
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cause existing or new vendors to require pre-payments or letters of credit;
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materially and adversely affect our brand in the marketplace and cause a substantial loss of goodwill;
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cause us to change our business methods or subscriptions;
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require us to cease certain business operations or offering certain subscriptions or features; and
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lead to our bankruptcy or liquidation.
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our operating and financial performance and prospects and the performance of other similar companies;
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our quarterly or annual earnings or those of other companies in our industry;
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conditions that impact demand for our subscriptions;
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the public’s reaction to our press releases, financial guidance, and other public announcements, and filings with the SEC;
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changes in earnings estimates or recommendations by securities or research analysts who track our Class A Common Stock;
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market and industry perception of our success, or lack thereof, in pursuing our growth strategy;
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strategic actions by us or our competitors, such as acquisitions or restructurings;
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changes in government and other regulations;
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changes in accounting standards, policies, guidance, interpretations, or principles;
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arrival and departure of key personnel;
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sales of common stock by us, our investors, or members of our management team; and
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changes in general market, economic, and political conditions in the U.S. and global economies or financial markets, including those resulting from natural disasters, telecommunications failure, cyber-attack, changes in diplomatic or trade relationships, civil unrest in various parts of the world, acts of war, terrorist attacks, or other catastrophic events.
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authorize our board of directors to issue, without further action by the stockholders, up to 100,000,000 shares of undesignated preferred stock;
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require that, once our outstanding shares of Class B Common Stock represent less than a majority of the combined voting power of our common stock, any action to be taken by our stockholders be effected at a duly called annual or special meeting and not by written consent; specify that special meetings of our stockholders can be called only by our board of directors, the Chairman of our board of directors, or our Chief Executive Officer;
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establish an advance notice procedure for stockholder proposals to be brought before an annual meeting, including proposed nominations of persons for election to our board of directors;
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prohibit cumulative voting in the election of directors;
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provide that our directors may be removed only for cause, subject to such amendment as provided in our current proxy statement;
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provide that vacancies on our board of directors may be filled only by a majority of directors then in office, even though less than a quorum;
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require the approval of our board of directors or the holders of a supermajority of our outstanding shares of capital stock to amend our bylaws and certain provisions of our certificate of incorporation; and
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reflect two classes of common stock, as discussed above.
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ITEM 1B.
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UNRESOLVED STAFF COMMENTS
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ITEM 2.
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PROPERTIES
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ITEM 3.
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LEGAL PROCEEDINGS
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ITEM 4.
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MINE SAFETY DISCLOSURES
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ITEM 5.
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MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
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|
Year ended December 31,
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||||||||||||||||||
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2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
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||||||||||
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(in thousands, except per share amounts)
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||||||||||||||||||
Consolidated Statements of Operations
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|
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||||||||||
Revenues
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|
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|
|
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||||||||||
Subscriptions
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$
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817,811
|
|
|
$
|
612,888
|
|
|
$
|
465,254
|
|
|
$
|
356,562
|
|
|
$
|
271,245
|
|
Other
|
85,047
|
|
|
60,736
|
|
|
38,363
|
|
|
23,874
|
|
|
24,983
|
|
|||||
Total revenues
|
902,858
|
|
|
673,624
|
|
|
503,617
|
|
|
380,436
|
|
|
296,228
|
|
|||||
Loss from operations
|
(45,675
|
)
|
|
(16,436
|
)
|
|
(5,338
|
)
|
|
(12,868
|
)
|
|
(30,932
|
)
|
|||||
Net loss
|
$
|
(53,607
|
)
|
|
$
|
(26,203
|
)
|
|
$
|
(4,204
|
)
|
|
$
|
(16,225
|
)
|
|
$
|
(32,099
|
)
|
Net loss per common share
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic and diluted
|
(0.64
|
)
|
|
(0.33
|
)
|
|
(0.06
|
)
|
|
(0.22
|
)
|
|
(0.46
|
)
|
|||||
Weighted-average number of shares used in computing net loss per share
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic and diluted
|
83,130
|
|
|
79,500
|
|
|
76,281
|
|
|
72,994
|
|
|
70,069
|
|
|
As of December 31,
|
||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
Consolidated Balance Sheet Data (in thousands)
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
343,606
|
|
|
$
|
566,329
|
|
|
$
|
181,192
|
|
|
$
|
160,355
|
|
|
$
|
137,588
|
|
Working capital surplus
|
$
|
254,826
|
|
|
$
|
508,155
|
|
|
$
|
139,602
|
|
|
$
|
100,220
|
|
|
$
|
90,472
|
|
Total assets
|
$
|
1,450,747
|
|
|
$
|
894,326
|
|
|
$
|
359,814
|
|
|
$
|
286,296
|
|
|
$
|
214,813
|
|
Deferred revenue
|
$
|
107,372
|
|
|
$
|
88,527
|
|
|
$
|
62,917
|
|
|
$
|
44,618
|
|
|
$
|
36,657
|
|
Debt and financing obligations
|
$
|
389,718
|
|
|
$
|
370,324
|
|
|
$
|
—
|
|
|
$
|
15,021
|
|
|
$
|
19,040
|
|
Total stockholders' equity
|
$
|
745,700
|
|
|
$
|
317,609
|
|
|
$
|
228,346
|
|
|
$
|
164,248
|
|
|
$
|
110,132
|
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
December 31, 2019
|
|
September 30, 2019
|
|
June 30, 2019
|
|
March 31, 2019
|
|
December 31, 2018
|
||||||||||
Net Monthly Subscription Dollar Retention Rate
|
>99%
|
|
|
>99%
|
|
|
>99%
|
|
|
>99%
|
|
|
>99%
|
|
|||||
Annualized Exit Monthly Recurring Subscriptions
|
$
|
960.1
|
|
|
$
|
881.4
|
|
|
$
|
830.8
|
|
|
$
|
776.7
|
|
|
$
|
725.8
|
|
RingCentral Office Annualized Exit Monthly
Recurring Subscriptions |
$
|
876.8
|
|
|
$
|
800.3
|
|
|
$
|
749.2
|
|
|
$
|
694.0
|
|
|
$
|
644.1
|
|
|
Year ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Revenues
|
|
|
|
|
|
||||||
Subscriptions
|
$
|
817,811
|
|
|
$
|
612,888
|
|
|
$
|
465,254
|
|
Other
|
85,047
|
|
|
60,736
|
|
|
38,363
|
|
|||
Total revenues
|
902,858
|
|
|
673,624
|
|
|
503,617
|
|
|||
Cost of revenues
|
|
|
|
|
|
||||||
Subscriptions
|
160,320
|
|
|
109,454
|
|
|
89,193
|
|
|||
Other
|
70,723
|
|
|
47,675
|
|
|
32,078
|
|
|||
Total cost of revenues
|
231,043
|
|
|
157,129
|
|
|
121,271
|
|
|||
Gross profit
|
671,815
|
|
|
516,495
|
|
|
382,346
|
|
|||
Operating expenses
|
|
|
|
|
|
||||||
Research and development
|
136,363
|
|
|
101,042
|
|
|
75,148
|
|
|||
Sales and marketing
|
439,100
|
|
|
329,116
|
|
|
240,223
|
|
|||
General and administrative
|
142,027
|
|
|
102,773
|
|
|
72,313
|
|
|||
Total operating expenses
|
717,490
|
|
|
532,931
|
|
|
387,684
|
|
|||
Loss from operations
|
(45,675
|
)
|
|
(16,436
|
)
|
|
(5,338
|
)
|
|||
Other income (expense), net
|
|
|
|
|
|
||||||
Interest expense
|
(20,512
|
)
|
|
(16,102
|
)
|
|
(99
|
)
|
|||
Other income, net
|
9,247
|
|
|
6,475
|
|
|
1,491
|
|
|||
Other income (expense), net
|
(11,265
|
)
|
|
(9,627
|
)
|
|
1,392
|
|
|||
Loss before income taxes
|
(56,940
|
)
|
|
(26,063
|
)
|
|
(3,946
|
)
|
|||
Provision for (benefit from) income taxes
|
(3,333
|
)
|
|
140
|
|
|
258
|
|
|||
Net loss
|
$
|
(53,607
|
)
|
|
$
|
(26,203
|
)
|
|
$
|
(4,204
|
)
|
|
Year ended December 31,
|
|||||||
|
2019
|
|
2018
|
|
2017
|
|||
Revenues
|
|
|
|
|
|
|||
Subscriptions
|
91
|
%
|
|
91
|
%
|
|
92
|
%
|
Other
|
9
|
|
|
9
|
|
|
8
|
|
Total revenues
|
100
|
|
|
100
|
|
|
100
|
|
Cost of revenues
|
|
|
|
|
|
|||
Subscriptions
|
18
|
|
|
16
|
|
|
18
|
|
Other
|
8
|
|
|
7
|
|
|
6
|
|
Total cost of revenues
|
26
|
|
|
23
|
|
|
24
|
|
Gross profit
|
74
|
|
|
77
|
|
|
76
|
|
Operating expenses
|
|
|
|
|
|
|||
Research and development
|
15
|
|
|
15
|
|
|
15
|
|
Sales and marketing
|
49
|
|
|
49
|
|
|
48
|
|
General and administrative
|
16
|
|
|
15
|
|
|
14
|
|
Total operating expenses
|
79
|
|
|
79
|
|
|
77
|
|
Loss from operations
|
(5
|
)
|
|
(2
|
)
|
|
(1
|
)
|
Other income (expense), net
|
|
|
|
|
|
|||
Interest expense
|
(2
|
)
|
|
(2
|
)
|
|
—
|
|
Other income, net
|
1
|
|
|
1
|
|
|
—
|
|
Other income (expense), net
|
(1
|
)
|
|
(1
|
)
|
|
—
|
|
Loss before income taxes
|
(6
|
)
|
|
(4
|
)
|
|
(1
|
)
|
Provision for (benefit from) income taxes
|
—
|
|
|
—
|
|
|
—
|
|
Net loss
|
(6
|
%)
|
|
(4
|
%)
|
|
(1
|
%)
|
|
|
Year ended December 31,
|
|
Year ended December 31,
|
||||||||||||||||||||||||||
(in thousands, except percentages)
|
|
2019
|
|
2018
|
|
$
Change
|
|
%
Change
|
|
2018
|
|
2017
|
|
$
Change
|
|
%
Change
|
||||||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Subscriptions
|
|
$
|
817,811
|
|
|
$
|
612,888
|
|
|
$
|
204,923
|
|
|
33
|
%
|
|
$
|
612,888
|
|
|
$
|
465,254
|
|
|
$
|
147,634
|
|
|
32
|
%
|
Other
|
|
85,047
|
|
|
60,736
|
|
|
24,311
|
|
|
40
|
%
|
|
60,736
|
|
|
38,363
|
|
|
22,373
|
|
|
58
|
%
|
||||||
Total revenues
|
|
$
|
902,858
|
|
|
$
|
673,624
|
|
|
$
|
229,234
|
|
|
34
|
%
|
|
$
|
673,624
|
|
|
$
|
503,617
|
|
|
$
|
170,007
|
|
|
34
|
%
|
Percentage of revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Subscriptions
|
|
91
|
%
|
|
91
|
%
|
|
|
|
|
|
91
|
%
|
|
92
|
%
|
|
|
|
|
||||||||||
Other
|
|
9
|
|
|
9
|
|
|
|
|
|
|
9
|
|
|
8
|
|
|
|
|
|
||||||||||
Total
|
|
100
|
%
|
|
100
|
%
|
|
|
|
|
|
100
|
%
|
|
100
|
%
|
|
|
|
|
|
|
Year ended December 31,
|
|
Year ended December 31,
|
||||||||||||||||||||||||||
(in thousands, except percentages)
|
|
2019
|
|
2018
|
|
$ Change
|
|
% Change
|
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
||||||||||||||
Cost of revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Subscriptions
|
|
$
|
160,320
|
|
|
$
|
109,454
|
|
|
$
|
50,866
|
|
|
46
|
%
|
|
$
|
109,454
|
|
|
$
|
89,193
|
|
|
$
|
20,261
|
|
|
23
|
%
|
Other
|
|
70,723
|
|
|
47,675
|
|
|
23,048
|
|
|
48
|
%
|
|
47,675
|
|
|
32,078
|
|
|
15,597
|
|
|
49
|
%
|
||||||
Total cost of revenues
|
|
$
|
231,043
|
|
|
$
|
157,129
|
|
|
$
|
73,914
|
|
|
47
|
%
|
|
$
|
157,129
|
|
|
$
|
121,271
|
|
|
$
|
35,858
|
|
|
30
|
%
|
Percentage of revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Subscriptions
|
|
18
|
%
|
|
16
|
%
|
|
|
|
|
|
16
|
%
|
|
18
|
%
|
|
|
|
|
||||||||||
Other
|
|
8
|
%
|
|
7
|
%
|
|
|
|
|
|
7
|
%
|
|
6
|
%
|
|
|
|
|
||||||||||
Gross margins
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Subscriptions
|
|
80
|
%
|
|
82
|
%
|
|
|
|
|
|
82
|
%
|
|
81
|
%
|
|
|
|
|
||||||||||
Other
|
|
17
|
%
|
|
22
|
%
|
|
|
|
|
|
22
|
%
|
|
16
|
%
|
|
|
|
|
||||||||||
Total gross margin %
|
|
74
|
%
|
|
77
|
%
|
|
|
|
|
|
77
|
%
|
|
76
|
%
|
|
|
|
|
|
|
Year ended December 31,
|
|
Year ended December 31,
|
||||||||||||||||||||||||||
(in thousands, except percentages)
|
|
2019
|
|
2018
|
|
$
Change
|
|
%
Change
|
|
2018
|
|
2017
|
|
$
Change
|
|
%
Change
|
||||||||||||||
Research and development
|
|
$
|
136,363
|
|
|
$
|
101,042
|
|
|
$
|
35,321
|
|
|
35
|
%
|
|
$
|
101,042
|
|
|
$
|
75,148
|
|
|
$
|
25,894
|
|
|
34
|
%
|
Percentage of total revenues
|
|
15
|
%
|
|
15
|
%
|
|
|
|
|
|
15
|
%
|
|
15
|
%
|
|
|
|
|
|
|
Year ended December 31,
|
|
Year ended December 31,
|
||||||||||||||||||||||||||
(in thousands, except percentages)
|
|
2019
|
|
2018
|
|
$
Change
|
|
%
Change
|
|
2018
|
|
2017
|
|
$
Change
|
|
%
Change
|
||||||||||||||
Sales and marketing
|
|
$
|
439,100
|
|
|
$
|
329,116
|
|
|
$
|
109,984
|
|
|
33
|
%
|
|
$
|
329,116
|
|
|
$
|
240,223
|
|
|
$
|
88,893
|
|
|
37
|
%
|
Percentage of total revenues
|
|
49
|
%
|
|
49
|
%
|
|
|
|
|
|
49
|
%
|
|
48
|
%
|
|
|
|
|
|
|
Year ended December 31,
|
|
Year ended December 31,
|
||||||||||||||||||||||||||
(in thousands, except percentages)
|
|
2019
|
|
2018
|
|
$
Change
|
|
%
Change
|
|
2018
|
|
2017
|
|
$
Change
|
|
%
Change
|
||||||||||||||
General and administrative
|
|
$
|
142,027
|
|
|
$
|
102,773
|
|
|
$
|
39,254
|
|
|
38
|
%
|
|
$
|
102,773
|
|
|
$
|
72,313
|
|
|
$
|
30,460
|
|
|
42
|
%
|
Percentage of total revenues
|
|
16
|
%
|
|
15
|
%
|
|
|
|
|
|
15
|
%
|
|
14
|
%
|
|
|
|
|
|
|
Year ended December 31,
|
|
Year ended December 31,
|
|||||||||||||||||||||||||
(in thousands, except percentages)
|
|
2019
|
|
2018
|
|
$
Change
|
|
%
Change
|
|
2018
|
|
2017
|
|
$
Change
|
|
%
Change
|
|||||||||||||
Interest expense
|
|
$
|
(20,512
|
)
|
|
$
|
(16,102
|
)
|
|
$
|
(4,410
|
)
|
|
27
|
%
|
|
$
|
(16,102
|
)
|
|
$
|
(99
|
)
|
|
$
|
(16,003
|
)
|
|
nm
|
Other income, net
|
|
9,247
|
|
|
6,475
|
|
|
2,772
|
|
|
43
|
%
|
|
6,475
|
|
|
1,491
|
|
|
4,984
|
|
|
nm
|
||||||
Other income (expense), net
|
|
$
|
(11,265
|
)
|
|
$
|
(9,627
|
)
|
|
$
|
(1,638
|
)
|
|
17
|
%
|
|
$
|
(9,627
|
)
|
|
$
|
1,392
|
|
|
$
|
(11,019
|
)
|
|
nm
|
|
Year ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Net cash provided by operating activities
|
$
|
64,846
|
|
|
$
|
72,130
|
|
|
$
|
41,165
|
|
Net cash used in investing activities
|
(296,780
|
)
|
|
(83,448
|
)
|
|
(26,387
|
)
|
|||
Net cash provided by financing activities
|
9,042
|
|
|
397,255
|
|
|
6,783
|
|
|||
Effect of exchange rate changes
|
169
|
|
|
(800
|
)
|
|
(724
|
)
|
|||
Net (decrease) increase in cash, cash equivalents, and restricted cash
|
$
|
(222,723
|
)
|
|
$
|
385,137
|
|
|
$
|
20,837
|
|
|
Payments due by period
|
|||||||||||||
|
Up to
1 year |
|
1 to 3 years
|
|
3 to 5 years
|
|
More than
5 years |
|
Total
|
|||||
Operating lease obligations
|
16,164
|
|
|
19,812
|
|
|
6,551
|
|
|
5,883
|
|
|
48,410
|
|
Financing obligations
|
2,956
|
|
|
5,912
|
|
|
—
|
|
|
—
|
|
|
8,868
|
|
Long-term debt
|
—
|
|
|
—
|
|
|
460,000
|
|
|
—
|
|
|
460,000
|
|
Purchase obligations
|
55,755
|
|
|
16,220
|
|
|
7,595
|
|
|
17,649
|
|
|
97,219
|
|
Total
|
74,875
|
|
|
41,944
|
|
|
474,146
|
|
|
23,532
|
|
|
614,497
|
|
ITEM 8.
|
CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
|
Page
|
|
December 31,
2019 |
|
December 31,
2018 |
||||
Assets
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
343,606
|
|
|
$
|
566,329
|
|
Accounts receivable, net
|
129,990
|
|
|
94,375
|
|
||
Deferred and prepaid sales commission costs
|
36,589
|
|
|
23,038
|
|
||
Prepaid expenses and other current assets
|
25,354
|
|
|
23,772
|
|
||
Total current assets
|
535,539
|
|
|
707,514
|
|
||
Property and equipment, net
|
89,230
|
|
|
70,205
|
|
||
Operating lease right-of-use-assets
|
39,269
|
|
|
—
|
|
||
Long-term investments
|
132,188
|
|
|
—
|
|
||
Deferred and prepaid sales commission costs, non-current
|
462,344
|
|
|
55,735
|
|
||
Goodwill
|
55,278
|
|
|
31,238
|
|
||
Acquired intangibles, net
|
127,338
|
|
|
19,480
|
|
||
Other assets
|
9,561
|
|
|
10,154
|
|
||
Total assets
|
$
|
1,450,747
|
|
|
$
|
894,326
|
|
Liabilities and Stockholders' Equity
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Accounts payable
|
$
|
34,612
|
|
|
$
|
10,145
|
|
Accrued liabilities
|
138,729
|
|
|
100,687
|
|
||
Deferred revenue
|
107,372
|
|
|
88,527
|
|
||
Total current liabilities
|
280,713
|
|
|
199,359
|
|
||
Convertible senior notes, net
|
386,889
|
|
|
366,552
|
|
||
Operating lease liabilities
|
28,516
|
|
|
—
|
|
||
Other long-term liabilities
|
8,929
|
|
|
10,806
|
|
||
Total liabilities
|
705,047
|
|
|
576,717
|
|
||
Commitments and contingencies (Note 9)
|
|
|
|
|
|
||
|
|
|
|
||||
Stockholders' equity
|
|
|
|
||||
Class A common stock, $0.0001 par value; 1,000,000 shares authorized at December 31, 2019 and 2018; 75,901 and 69,445 shares issued and outstanding at December 31, 2019 and 2018
|
8
|
|
|
7
|
|
||
Class B common stock, $0.0001 par value; 250,000 shares authorized at December 31, 2019 and 2018; 11,039 and 11,601 shares issued and outstanding at December 31, 2019 and 2018
|
1
|
|
|
1
|
|
||
Additional paid-in capital
|
1,033,053
|
|
|
551,078
|
|
||
Accumulated other comprehensive income
|
1,948
|
|
|
2,226
|
|
||
Accumulated deficit
|
(289,310
|
)
|
|
(235,703
|
)
|
||
Total stockholders' equity
|
745,700
|
|
|
317,609
|
|
||
Total liabilities and stockholders' equity
|
$
|
1,450,747
|
|
|
$
|
894,326
|
|
|
Year ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Revenues
|
|
|
|
|
|
||||||
Subscriptions
|
$
|
817,811
|
|
|
$
|
612,888
|
|
|
$
|
465,254
|
|
Other
|
85,047
|
|
|
60,736
|
|
|
38,363
|
|
|||
Total revenues
|
902,858
|
|
|
673,624
|
|
|
503,617
|
|
|||
Cost of revenues
|
|
|
|
|
|
||||||
Subscriptions
|
160,320
|
|
|
109,454
|
|
|
89,193
|
|
|||
Other
|
70,723
|
|
|
47,675
|
|
|
32,078
|
|
|||
Total cost of revenues
|
231,043
|
|
|
157,129
|
|
|
121,271
|
|
|||
Gross profit
|
671,815
|
|
|
516,495
|
|
|
382,346
|
|
|||
Operating expenses
|
|
|
|
|
|
||||||
Research and development
|
136,363
|
|
|
101,042
|
|
|
75,148
|
|
|||
Sales and marketing
|
439,100
|
|
|
329,116
|
|
|
240,223
|
|
|||
General and administrative
|
142,027
|
|
|
102,773
|
|
|
72,313
|
|
|||
Total operating expenses
|
717,490
|
|
|
532,931
|
|
|
387,684
|
|
|||
Loss from operations
|
(45,675
|
)
|
|
(16,436
|
)
|
|
(5,338
|
)
|
|||
Other income (expense), net
|
|
|
|
|
|
||||||
Interest expense
|
(20,512
|
)
|
|
(16,102
|
)
|
|
(99
|
)
|
|||
Other income, net
|
9,247
|
|
|
6,475
|
|
|
1,491
|
|
|||
Other income (expense), net
|
(11,265
|
)
|
|
(9,627
|
)
|
|
1,392
|
|
|||
Loss before income taxes
|
(56,940
|
)
|
|
(26,063
|
)
|
|
(3,946
|
)
|
|||
Provision for (benefit from) income taxes
|
(3,333
|
)
|
|
140
|
|
|
258
|
|
|||
Net loss
|
$
|
(53,607
|
)
|
|
$
|
(26,203
|
)
|
|
$
|
(4,204
|
)
|
Net loss per common share
|
|
|
|
|
|
||||||
Basic and diluted
|
$
|
(0.64
|
)
|
|
$
|
(0.33
|
)
|
|
$
|
(0.06
|
)
|
Weighted-average number of shares used in computing net loss per share
|
|
|
|
|
|
||||||
Basic and diluted
|
83,130
|
|
|
79,500
|
|
|
76,281
|
|
|
Year ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Net loss
|
$
|
(53,607
|
)
|
|
$
|
(26,203
|
)
|
|
$
|
(4,204
|
)
|
Other comprehensive income (loss)
|
|
|
|
|
|
||||||
Foreign currency translation adjustments, net
|
(278
|
)
|
|
(772
|
)
|
|
261
|
|
|||
Comprehensive loss
|
$
|
(53,885
|
)
|
|
$
|
(26,975
|
)
|
|
$
|
(3,943
|
)
|
|
|
|
|
|
Additional
Paid-in
Capital
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Accumulated
Deficit
|
|
Total
Stockholders'
Equity
|
|||||||||||
|
Common stock
|
|
|
|
|
|||||||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|||||||||||||||
Balance as of December 31, 2016
|
74,383
|
|
|
$
|
7
|
|
|
$
|
366,800
|
|
|
$
|
2,737
|
|
|
$
|
(205,296
|
)
|
|
$
|
164,248
|
|
Issuance of common stock in connection with Equity Incentive and Employee Stock Purchase plans, net of tax withholdings
|
3,594
|
|
|
1
|
|
|
21,803
|
|
|
—
|
|
|
—
|
|
|
21,804
|
|
|||||
Issuance of common stock for achievement of Glip related matters
|
77
|
|
|
—
|
|
|
3,560
|
|
|
—
|
|
|
—
|
|
|
3,560
|
|
|||||
Share-based compensation
|
—
|
|
|
—
|
|
|
42,677
|
|
|
—
|
|
|
—
|
|
|
42,677
|
|
|||||
Changes in comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
261
|
|
|
—
|
|
|
261
|
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,204
|
)
|
|
(4,204
|
)
|
|||||
Balance as of December 31, 2017
|
78,054
|
|
|
$
|
8
|
|
|
$
|
434,840
|
|
|
$
|
2,998
|
|
|
$
|
(209,500
|
)
|
|
$
|
228,346
|
|
Issuance of common stock in connection with Equity Incentive and Employee Stock Purchase plans, net of tax withholdings
|
3,231
|
|
|
—
|
|
|
13,449
|
|
|
—
|
|
|
—
|
|
|
13,449
|
|
|||||
Shares repurchased
|
(239
|
)
|
|
—
|
|
|
(15,000
|
)
|
|
—
|
|
|
—
|
|
|
(15,000
|
)
|
|||||
Share-based compensation
|
—
|
|
|
—
|
|
|
68,876
|
|
|
—
|
|
|
—
|
|
|
68,876
|
|
|||||
Equity component of convertible senior notes, net of issuance cost
|
—
|
|
|
—
|
|
|
98,823
|
|
|
—
|
|
|
—
|
|
|
98,823
|
|
|||||
Purchase of capped calls
|
—
|
|
|
—
|
|
|
(49,910
|
)
|
|
—
|
|
|
—
|
|
|
(49,910
|
)
|
|||||
Changes in comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(772
|
)
|
|
—
|
|
|
(772
|
)
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(26,203
|
)
|
|
(26,203
|
)
|
|||||
Balance as of December 31, 2018
|
81,046
|
|
|
$
|
8
|
|
|
$
|
551,078
|
|
|
$
|
2,226
|
|
|
$
|
(235,703
|
)
|
|
$
|
317,609
|
|
Issuance of common stock in connection with Equity Incentive and Employee Stock Purchase plans, net of tax withholdings
|
3,723
|
|
|
1
|
|
|
15,160
|
|
|
—
|
|
|
—
|
|
|
15,161
|
|
|||||
Issuance of common stock in connection with investments
|
2,171
|
|
|
—
|
|
|
361,000
|
|
|
—
|
|
|
—
|
|
|
361,000
|
|
|||||
Share-based compensation
|
—
|
|
|
—
|
|
|
105,815
|
|
|
—
|
|
|
—
|
|
|
105,815
|
|
|||||
Changes in comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(278
|
)
|
|
—
|
|
|
(278
|
)
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(53,607
|
)
|
|
(53,607
|
)
|
|||||
Balance as of December 31, 2019
|
86,940
|
|
|
$
|
9
|
|
|
$
|
1,033,053
|
|
|
$
|
1,948
|
|
|
$
|
(289,310
|
)
|
|
$
|
745,700
|
|
|
Year ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Cash flows from operating activities
|
|
|
|
|
|
||||||
Net loss
|
$
|
(53,607
|
)
|
|
$
|
(26,203
|
)
|
|
$
|
(4,204
|
)
|
Adjustments to reconcile net loss to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
37,870
|
|
|
23,273
|
|
|
16,214
|
|
|||
Share-based compensation
|
101,354
|
|
|
68,088
|
|
|
42,060
|
|
|||
Amortization of deferred sales commission cost
|
30,134
|
|
|
19,754
|
|
|
12,623
|
|
|||
Amortization of debt discount and issuance cost
|
20,337
|
|
|
15,918
|
|
|
—
|
|
|||
Reduction of operating lease right-of-use assets
|
13,256
|
|
|
—
|
|
|
—
|
|
|||
Loss (gain) and other related costs on investments
|
3,369
|
|
|
—
|
|
|
—
|
|
|||
Foreign currency remeasurement (gain) loss
|
(105
|
)
|
|
951
|
|
|
(666
|
)
|
|||
Provision for bad debt
|
2,949
|
|
|
3,091
|
|
|
1,674
|
|
|||
Deferred income taxes
|
(737
|
)
|
|
(303
|
)
|
|
(47
|
)
|
|||
Tax benefit from release of valuation allowance
|
(3,210
|
)
|
|
—
|
|
|
—
|
|
|||
Other
|
240
|
|
|
614
|
|
|
181
|
|
|||
Changes in assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable
|
(37,163
|
)
|
|
(47,877
|
)
|
|
(17,903
|
)
|
|||
Deferred and prepaid sales commission costs
|
(102,303
|
)
|
|
(45,232
|
)
|
|
(32,469
|
)
|
|||
Prepaid expenses and other current assets
|
(1,575
|
)
|
|
(342
|
)
|
|
(6,199
|
)
|
|||
Other assets
|
764
|
|
|
279
|
|
|
1,533
|
|
|||
Accounts payable
|
21,753
|
|
|
2,783
|
|
|
176
|
|
|||
Accrued liabilities
|
27,095
|
|
|
33,695
|
|
|
9,918
|
|
|||
Deferred revenue
|
18,845
|
|
|
24,780
|
|
|
18,298
|
|
|||
Operating lease liabilities
|
(13,830
|
)
|
|
—
|
|
|
—
|
|
|||
Other liabilities
|
(590
|
)
|
|
(1,139
|
)
|
|
(24
|
)
|
|||
Net cash provided by operating activities
|
64,846
|
|
|
72,130
|
|
|
41,165
|
|
|||
Cash flows from investing activities
|
|
|
|
|
|
||||||
Purchases of property and equipment
|
(27,767
|
)
|
|
(27,123
|
)
|
|
(19,497
|
)
|
|||
Capitalized internal-use software
|
(16,526
|
)
|
|
(11,421
|
)
|
|
(7,420
|
)
|
|||
Cash paid for business combination, net of cash acquired
|
(27,870
|
)
|
|
(26,434
|
)
|
|
—
|
|
|||
Purchases of long-term investments
|
(135,557
|
)
|
|
—
|
|
|
—
|
|
|||
Cash paid for acquisition of intangible assets
|
(89,060
|
)
|
|
(18,470
|
)
|
|
—
|
|
|||
Restricted investments
|
—
|
|
|
—
|
|
|
530
|
|
|||
Net cash used in investing activities
|
(296,780
|
)
|
|
(83,448
|
)
|
|
(26,387
|
)
|
|||
Cash flows from financing activities
|
|
|
|
|
|
||||||
Proceeds from issuance of convertible senior notes, net of issuance costs
|
—
|
|
|
449,457
|
|
|
—
|
|
|||
Payments for capped call transactions and costs
|
—
|
|
|
(49,910
|
)
|
|
—
|
|
|||
Repurchase of common stock
|
—
|
|
|
(15,000
|
)
|
|
—
|
|
|||
Proceeds from issuance of stock in connection with stock plans
|
29,827
|
|
|
20,621
|
|
|
25,495
|
|
|||
Taxes paid related to net share settlement of equity awards
|
(14,666
|
)
|
|
(7,172
|
)
|
|
(3,691
|
)
|
|||
Payment of contingent consideration for business combination
|
(5,176
|
)
|
|
—
|
|
|
—
|
|
|||
Repayment of financing obligations
|
(943
|
)
|
|
(741
|
)
|
|
(181
|
)
|
|||
Repayment of debt
|
—
|
|
|
—
|
|
|
(14,840
|
)
|
|||
Net cash provided by financing activities
|
9,042
|
|
|
397,255
|
|
|
6,783
|
|
|||
Effect of exchange rate changes
|
169
|
|
|
(800
|
)
|
|
(724
|
)
|
|||
Net (decrease) increase in cash, cash equivalents, and restricted cash
|
(222,723
|
)
|
|
385,137
|
|
|
20,837
|
|
|||
Cash, cash equivalents, and restricted cash
|
|
|
|
|
|
||||||
Beginning of year
|
566,329
|
|
|
181,192
|
|
|
160,355
|
|
|||
End of year
|
$
|
343,606
|
|
|
$
|
566,329
|
|
|
$
|
181,192
|
|
Supplemental disclosure of cash flow data:
|
|
|
|
|
|
||||||
Cash paid for interest
|
$
|
189
|
|
|
$
|
40
|
|
|
$
|
116
|
|
Cash paid for income taxes, net of refunds
|
$
|
996
|
|
|
$
|
433
|
|
|
$
|
216
|
|
Non-cash investing and financing activities
|
|
|
|
|
|
||||||
Cash held for future indemnity claims and other potential future payments
|
$
|
7,148
|
|
|
$
|
971
|
|
|
$
|
—
|
|
Equipment and capitalized internal-use software purchased and unpaid at period end
|
$
|
5,215
|
|
|
$
|
4,785
|
|
|
$
|
1,699
|
|
Common stock issued for acquisition of intangible assets
|
$
|
16,450
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Common stock issued for prepaid and deferred sales commission cost
|
$
|
345,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Reclassification from intangible assets to prepaid services
|
$
|
—
|
|
|
$
|
8,223
|
|
|
$
|
—
|
|
Equipment acquired under financing obligations
|
$
|
—
|
|
|
$
|
4,513
|
|
|
$
|
—
|
|
Earnout related matters, including issuance of common stock for milestone achievements
|
$
|
—
|
|
|
$
|
5,375
|
|
|
$
|
3,560
|
|
|
Balance at
beginning of
year
|
|
Provision,
net of
recoveries
|
|
Write-offs
|
|
Balance at
end of
year
|
||||||||
Year ended December 31, 2019
|
|
|
|
|
|
|
|
||||||||
Allowance for doubtful accounts
|
$
|
2,506
|
|
|
$
|
2,949
|
|
|
$
|
3,097
|
|
|
$
|
2,358
|
|
Year ended December 31, 2018
|
|
|
|
|
|
|
|
||||||||
Allowance for doubtful accounts
|
$
|
712
|
|
|
$
|
3,091
|
|
|
$
|
1,297
|
|
|
$
|
2,506
|
|
Year ended December 31, 2017
|
|
|
|
|
|
|
|
||||||||
Allowance for doubtful accounts
|
$
|
434
|
|
|
$
|
1,674
|
|
|
$
|
1,396
|
|
|
$
|
712
|
|
Computer hardware and software
|
3 to 5 years
|
Internal-use software development costs
|
3 to 5 years
|
Furniture and fixtures
|
1 to 5 years
|
Leasehold improvements
|
Shorter of the estimated lease term or useful life
|
•
|
identification of the contract, or contracts, with a customer;
|
•
|
identification of the performance obligations in the contract;
|
•
|
determination of the transaction price;
|
•
|
allocation of the transaction price to the performance obligations in the contract; and
|
•
|
recognition of revenue when, or as, the Company satisfies a performance obligation.
|
•
|
assets increased by $33.5 million, representing the recognition of ROU assets; and
|
•
|
liabilities increased by $33.5 million, primarily representing the recognition of lease liabilities.
|
|
Year ended December 31,
|
|||||||
|
2019
|
|
2018
|
|
2017
|
|||
Primary geographical markets
|
|
|
|
|
|
|||
North America
|
93
|
%
|
|
95
|
%
|
|
96
|
%
|
Others
|
7
|
%
|
|
5
|
%
|
|
4
|
%
|
Total revenues
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
December 31,
2019 |
|
December 31,
2018 |
||||
Cash
|
$
|
46,295
|
|
|
$
|
80,457
|
|
Money market funds
|
297,311
|
|
|
485,872
|
|
||
Total cash and cash equivalents
|
$
|
343,606
|
|
|
$
|
566,329
|
|
|
December 31,
2019 |
|
December 31,
2018 |
||||
Accounts receivable
|
$
|
114,745
|
|
|
$
|
82,740
|
|
Unbilled accounts receivable
|
17,603
|
|
|
14,141
|
|
||
Allowance for doubtful accounts
|
(2,358
|
)
|
|
(2,506
|
)
|
||
Accounts receivable, net
|
$
|
129,990
|
|
|
$
|
94,375
|
|
|
December 31,
2019 |
|
December 31,
2018 |
||||
Prepaid expenses
|
$
|
16,249
|
|
|
$
|
14,805
|
|
Inventory
|
401
|
|
|
199
|
|
||
Other current assets
|
8,704
|
|
|
8,768
|
|
||
Total prepaid expenses and other current assets
|
$
|
25,354
|
|
|
$
|
23,772
|
|
|
December 31,
2019 |
|
December 31,
2018 |
||||
Computer hardware and software
|
$
|
120,841
|
|
|
$
|
103,766
|
|
Internal-use software development costs
|
48,419
|
|
|
29,886
|
|
||
Furniture and fixtures
|
7,690
|
|
|
5,896
|
|
||
Leasehold improvements
|
11,327
|
|
|
6,863
|
|
||
Property and equipment, gross
|
188,277
|
|
|
146,411
|
|
||
Less: accumulated depreciation and amortization
|
(99,047
|
)
|
|
(76,206
|
)
|
||
Property and equipment, net
|
$
|
89,230
|
|
|
$
|
70,205
|
|
|
December 31,
2019 |
||
Balance at December 31, 2018
|
$
|
31,238
|
|
Connect First acquisition
|
24,465
|
|
|
Foreign currency translation adjustments
|
(425
|
)
|
|
Balance at December 31, 2019
|
$
|
55,278
|
|
|
|
|
December 31, 2019
|
|
December 31, 2018
|
||||||||||||||||||||
|
Estimated
Lives
|
|
Cost
|
|
Accumulated
Amortization
|
|
Acquired
Intangibles,
Net
|
|
Cost
|
|
Accumulated
Amortization
|
|
Acquired
Intangibles,
Net
|
||||||||||||
Customer relationships
|
2 to 5 years
|
|
$
|
21,245
|
|
|
$
|
8,178
|
|
|
$
|
13,067
|
|
|
$
|
20,121
|
|
|
$
|
4,460
|
|
|
$
|
15,661
|
|
Developed technology
|
3 to 5 years
|
|
123,547
|
|
|
9,276
|
|
|
114,271
|
|
|
6,098
|
|
|
2,279
|
|
|
3,819
|
|
||||||
Total acquired intangible assets
|
|
|
$
|
144,792
|
|
|
$
|
17,454
|
|
|
$
|
127,338
|
|
|
$
|
26,219
|
|
|
$
|
6,739
|
|
|
$
|
19,480
|
|
2020
|
$
|
34,274
|
|
2021
|
34,016
|
|
|
2022
|
28,416
|
|
|
2023
|
16,477
|
|
|
2024 and thereafter
|
14,155
|
|
|
Total estimated amortization expense
|
$
|
127,338
|
|
|
December 31,
2019 |
|
December 31,
2018 |
||||
Accrued compensation and benefits
|
$
|
30,541
|
|
|
$
|
20,932
|
|
Accrued sales, use, and telecom related taxes
|
25,757
|
|
|
19,609
|
|
||
Accrued marketing
|
17,505
|
|
|
12,291
|
|
||
Operating lease liabilities, short-term
|
14,249
|
|
|
—
|
|
||
Other accrued expenses
|
50,677
|
|
|
47,855
|
|
||
Total accrued liabilities
|
$
|
138,729
|
|
|
$
|
100,687
|
|
Level 1:
|
Observable inputs that reflect unadjusted quoted prices in active markets for identical assets or liabilities.
|
Level 2:
|
Other inputs, such as quoted prices for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability.
|
Level 3:
|
Unobservable inputs that are supported by little or no market activity and that are based on management’s assumptions, including fair value measurements determined by using pricing models, discounted cash flow methodologies or similar techniques.
|
|
Fair Value at December 31, 2019
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
297,311
|
|
|
$
|
297,311
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Noncurrent assets:
|
|
|
|
|
|
|
|
||||||||
Long-term investments
|
132,188
|
|
|
—
|
|
|
—
|
|
|
132,188
|
|
|
Fair Value at December 31, 2018
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
485,872
|
|
|
$
|
485,872
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Noncurrent assets:
|
|
|
|
|
|
|
|
||||||||
Long-term investments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Cash and cash equivalents
|
$
|
1,427
|
|
Other tangible assets acquired
|
2,266
|
|
|
Acquired intangible assets
|
13,300
|
|
|
Goodwill
|
24,465
|
|
|
Total assets acquired
|
41,458
|
|
|
Liabilities assumed
|
(5,013
|
)
|
|
Total consideration
|
$
|
36,445
|
|
Cash and cash equivalents
|
$
|
4,225
|
|
Other tangible assets acquired
|
3,289
|
|
|
Acquired intangible assets
|
12,208
|
|
|
Goodwill
|
21,995
|
|
|
Total assets acquired
|
41,717
|
|
|
Liabilities assumed
|
(5,646
|
)
|
|
Total consideration
|
$
|
36,071
|
|
|
December 31, 2019
|
||
Principal
|
$
|
460,000
|
|
Unamortized discount
|
(67,350
|
)
|
|
Unamortized issuance cost
|
(5,761
|
)
|
|
Net carrying amount
|
$
|
386,889
|
|
|
December 31, 2019
|
||
Proceeds allocated to the conversion option (debt discount)
|
$
|
101,141
|
|
Issuance cost
|
(2,318
|
)
|
|
Net carrying amount
|
$
|
98,823
|
|
|
Year ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Amortization of debt discount
|
$
|
18,920
|
|
|
$
|
14,872
|
|
|
$
|
—
|
|
Amortization of debt issuance cost
|
1,417
|
|
|
1,046
|
|
|
—
|
|
|||
Total interest expense related to the Notes
|
$
|
20,337
|
|
|
$
|
15,918
|
|
|
$
|
—
|
|
|
December 31, 2019
|
||
Operating leases
|
|
||
Operating lease right-of-use assets
|
$
|
39,269
|
|
|
|
||
Accrued liabilities
|
$
|
14,249
|
|
Operating lease liabilities
|
28,516
|
|
|
Total operating lease liabilities
|
$
|
42,765
|
|
|
Year ended December 31,
|
||||||
|
2019
|
|
2018
|
||||
Lease Cost
|
|
|
|
||||
Operating lease cost (a)
|
$
|
17,584
|
|
|
$
|
—
|
|
Year Ending December 31,
|
|
||
2020
|
$
|
16,164
|
|
2021
|
12,162
|
|
|
2022
|
7,650
|
|
|
2023
|
5,197
|
|
|
2024
|
1,354
|
|
|
2025 onwards
|
5,883
|
|
|
Total future minimum lease payments
|
48,410
|
|
|
Less: Imputed interest
|
(5,645
|
)
|
|
Present value of lease liabilities
|
$
|
42,765
|
|
|
December 31, 2019
|
|
Lease Term and Discount Rate
|
|
|
Weighted-average remaining operating lease term (years)
|
4.2
|
|
Weighted-average operating lease discount rate
|
5
|
%
|
|
Year ended December 31, 2019
|
||
Supplemental Cash Flow Information
|
|
||
Operating cash flows resulting from operating leases:
|
|
||
Cash paid for amounts included in the measurement of lease liabilities
|
$
|
15,709
|
|
|
|
||
New ROU assets obtained in exchange of lease liabilities:
|
|
||
Operating leases
|
$
|
18,584
|
|
|
December 31, 2019
|
|
Preferred stock
|
100,000
|
|
Class B common stock
|
11,039
|
|
2013 Employee stock purchase plan
|
3,919
|
|
2013 Equity incentive plan:
|
|
|
Outstanding options and restricted stock unit awards
|
5,505
|
|
Available for future grants
|
15,529
|
|
|
135,992
|
|
|
Year ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Cost of revenues
|
$
|
8,741
|
|
|
$
|
4,982
|
|
|
$
|
3,735
|
|
Research and development
|
23,132
|
|
|
14,975
|
|
|
9,550
|
|
|||
Sales and marketing
|
38,325
|
|
|
27,324
|
|
|
16,015
|
|
|||
General and administrative
|
31,156
|
|
|
20,807
|
|
|
12,760
|
|
|||
Total share-based compensation expense
|
$
|
101,354
|
|
|
$
|
68,088
|
|
|
$
|
42,060
|
|
|
Year ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Options
|
$
|
986
|
|
|
$
|
3,433
|
|
|
$
|
6,803
|
|
Employee stock purchase plan rights
|
4,176
|
|
|
3,094
|
|
|
2,177
|
|
|||
Restricted stock units
|
96,192
|
|
|
61,561
|
|
|
33,080
|
|
|||
Total share-based compensation expense
|
$
|
101,354
|
|
|
$
|
68,088
|
|
|
$
|
42,060
|
|
|
Number of
Options
Outstanding
(in thousands)
|
|
Weighted-
Average
Exercise Price
Per Share
|
|
Weighted-
Average
Contractual
Term
(in Years)
|
|
Aggregate
Intrinsic
Value
(in thousands)
|
|||||
Outstanding at December 31, 2016
|
7,384
|
|
|
$
|
10.59
|
|
|
5.3
|
|
$
|
74,065
|
|
Granted
|
25
|
|
|
23.99
|
|
|
|
|
|
|||
Exercised
|
(1,722
|
)
|
|
10.39
|
|
|
|
|
|
|||
Canceled/Forfeited
|
(401
|
)
|
|
16.04
|
|
|
|
|
|
|||
Outstanding at December 31, 2017
|
5,286
|
|
|
$
|
10.30
|
|
|
4.2
|
|
$
|
201,480
|
|
Granted
|
—
|
|
|
—
|
|
|
|
|
|
|||
Exercised
|
(1,138
|
)
|
|
8.17
|
|
|
|
|
|
|||
Canceled/Forfeited
|
(17
|
)
|
|
18.79
|
|
|
|
|
|
|||
Outstanding at December 31, 2018
|
4,131
|
|
|
$
|
10.86
|
|
|
3.3
|
|
$
|
295,921
|
|
Granted
|
—
|
|
|
—
|
|
|
|
|
|
|||
Exercised
|
(1,742
|
)
|
|
8.53
|
|
|
|
|
|
|||
Canceled/Forfeited
|
(132
|
)
|
|
2.73
|
|
|
|
|
|
|||
Outstanding at December 31, 2019
|
2,257
|
|
|
$
|
13.13
|
|
|
2.5
|
|
$
|
351,428
|
|
Vested and expected to vest as of December 31, 2019
|
2,259
|
|
|
$
|
13.13
|
|
|
2.5
|
|
$
|
351,362
|
|
Excercisable as of December 31, 2019
|
2,243
|
|
|
$
|
13.10
|
|
|
2.5
|
|
$
|
349,002
|
|
|
Year Ended
|
||
|
December 31, 2017
|
||
Expected term for employees (in years)
|
4.4
|
|
|
Expected term for non-employees (in years)
|
4.6
|
|
|
Expected volatility
|
44
|
%
|
|
Risk-free interest rate
|
1.78
|
%
|
|
Expected dividend yield
|
0
|
%
|
|
Grant date fair value of employee options
|
$
|
9.08
|
|
|
Year ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Expected term (in years)
|
0.5
|
|
|
0.5
|
|
|
0.5
|
|
|||
Expected volatility
|
47
|
%
|
|
42
|
%
|
|
34
|
%
|
|||
Risk-free interest rate
|
2.01
|
%
|
|
2.31
|
%
|
|
1.20
|
%
|
|||
Expected dividend yield
|
0
|
%
|
|
0
|
%
|
|
0
|
%
|
|||
Offering grant date fair value of ESPP rights
|
$
|
33.66
|
|
|
$
|
18.07
|
|
|
$
|
9.52
|
|
|
Number of
RSUs
Outstanding
(in thousands)
|
|
Weighted-
Average
Grant Date Fair
Value Per Share
|
|
Aggregate
Intrinsic
Value
(in thousands)
|
|||||
Outstanding at December 31, 2016
|
3,554
|
|
|
$
|
18.01
|
|
|
$
|
73,261
|
|
Granted
|
3,005
|
|
|
30.20
|
|
|
|
|||
Released
|
(1,680
|
)
|
|
19.54
|
|
|
|
|||
Canceled/Forfeited
|
(598
|
)
|
|
20.91
|
|
|
|
|||
Outstanding at December 31, 2017
|
4,281
|
|
|
$
|
25.51
|
|
|
$
|
207,197
|
|
Granted
|
1,746
|
|
|
67.64
|
|
|
|
|||
Released
|
(1,971
|
)
|
|
30.50
|
|
|
|
|||
Canceled/Forfeited
|
(495
|
)
|
|
34.99
|
|
|
|
|||
Outstanding at December 31, 2018
|
3,561
|
|
|
$
|
42.09
|
|
|
$
|
293,523
|
|
Granted
|
2,069
|
|
|
122.35
|
|
|
|
|||
Released
|
(1,906
|
)
|
|
50.99
|
|
|
|
|||
Canceled/Forfeited
|
(475
|
)
|
|
60.38
|
|
|
|
|||
Outstanding at December 31, 2019
|
3,249
|
|
|
$
|
85.39
|
|
|
$
|
548,145
|
|
|
Year ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
United States
|
$
|
(64,822
|
)
|
|
$
|
(29,584
|
)
|
|
$
|
(5,883
|
)
|
International
|
7,882
|
|
|
3,521
|
|
|
1,937
|
|
|||
Total net loss before provision for (benefit from) income taxes
|
$
|
(56,940
|
)
|
|
$
|
(26,063
|
)
|
|
$
|
(3,946
|
)
|
|
Year ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Current
|
|
|
|
|
|
||||||
Federal
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
State
|
150
|
|
|
61
|
|
|
49
|
|
|||
Foreign
|
464
|
|
|
382
|
|
|
256
|
|
|||
Total current
|
$
|
614
|
|
|
$
|
443
|
|
|
$
|
305
|
|
Deferred
|
|
|
|
|
|
||||||
Federal
|
$
|
(2,765
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
State
|
(445
|
)
|
|
—
|
|
|
—
|
|
|||
Foreign
|
(737
|
)
|
|
(303
|
)
|
|
(47
|
)
|
|||
Total deferred
|
(3,947
|
)
|
|
(303
|
)
|
|
(47
|
)
|
|||
Total income tax provision
|
$
|
(3,333
|
)
|
|
$
|
140
|
|
|
$
|
258
|
|
|
Year ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Federal tax benefit at statutory rate
|
$
|
(11,957
|
)
|
|
$
|
(5,473
|
)
|
|
$
|
(1,341
|
)
|
State tax, net of federal tax benefit
|
(233
|
)
|
|
48
|
|
|
32
|
|
|||
Research and development credits
|
(5,312
|
)
|
|
(3,284
|
)
|
|
(707
|
)
|
|||
Share-based compensation
|
(58,780
|
)
|
|
(25,170
|
)
|
|
(18,154
|
)
|
|||
Other permanent differences
|
3,149
|
|
|
1,325
|
|
|
814
|
|
|||
Change in U.S. federal Tax Rate
|
—
|
|
|
—
|
|
|
33,254
|
|
|||
Foreign tax rate differential
|
(799
|
)
|
|
(288
|
)
|
|
(445
|
)
|
|||
Net operating (gains) losses not recognized
|
73,364
|
|
|
32,982
|
|
|
(13,195
|
)
|
|||
Release of valuation allowance associated with acquisitions
|
(2,765
|
)
|
|
—
|
|
|
—
|
|
|||
Total income tax provision
|
$
|
(3,333
|
)
|
|
$
|
140
|
|
|
$
|
258
|
|
|
Year ended December 31,
|
||||||
|
2019
|
|
2018
|
||||
Deferred tax assets
|
|
|
|
||||
Net operating loss and credit carry-forwards
|
$
|
196,930
|
|
|
$
|
109,812
|
|
Research and development credits
|
24,452
|
|
|
16,380
|
|
||
Sales tax liability
|
157
|
|
|
258
|
|
||
Share-based compensation
|
5,937
|
|
|
5,435
|
|
||
Accrued liabilities
|
6,612
|
|
|
5,135
|
|
||
Gross deferred tax assets
|
234,088
|
|
|
137,020
|
|
||
Valuation allowance
|
(180,090
|
)
|
|
(94,118
|
)
|
||
Total deferred tax assets
|
53,998
|
|
|
42,902
|
|
||
Deferred tax liabilities
|
|
|
|
||||
Convertible debt discount
|
(16,701
|
)
|
|
(21,035
|
)
|
||
Deferred sales commissions
|
(28,601
|
)
|
|
(18,253
|
)
|
||
Acquired intangibles
|
(3,857
|
)
|
|
(2,670
|
)
|
||
Property and equipment
|
(6,731
|
)
|
|
(3,573
|
)
|
||
Net deferred tax (liabilities) assets
|
$
|
(1,892
|
)
|
|
$
|
(2,629
|
)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Unrecognized tax benefits, beginning of the year
|
$
|
6,029
|
|
|
$
|
3,004
|
|
|
$
|
2,460
|
|
Increases related to prior year tax positions
|
—
|
|
|
1,050
|
|
|
—
|
|
|||
Decreases related to prior year tax positions
|
(48
|
)
|
|
—
|
|
|
(3
|
)
|
|||
Increases related to current year tax positions
|
2,984
|
|
|
1,975
|
|
|
547
|
|
|||
Unrecognized tax benefits, end of year
|
$
|
8,965
|
|
|
$
|
6,029
|
|
|
$
|
3,004
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Numerator
|
|
|
|
|
|
||||||
Net loss
|
$
|
(53,607
|
)
|
|
$
|
(26,203
|
)
|
|
$
|
(4,204
|
)
|
Denominator
|
|
|
|
|
|
||||||
Weighted-average common shares for basic and diluted net
loss per share
|
83,130
|
|
|
79,500
|
|
|
76,281
|
|
|||
Basic and diluted net loss per share
|
$
|
(0.64
|
)
|
|
$
|
(0.33
|
)
|
|
$
|
(0.06
|
)
|
|
Year Ended December 31,
|
|||||||
|
2019
|
|
2018
|
|
2017
|
|||
Shares of common stock issuable under equity incentive plans outstanding
|
6,832
|
|
|
8,943
|
|
|
10,806
|
|
Convertible senior notes
|
1,905
|
|
|
79
|
|
|
—
|
|
Potential common shares excluded from diluted net loss per share
|
8,737
|
|
|
9,022
|
|
|
10,806
|
|
|
Dec 31, 2019
|
|
Sep 30, 2019
|
|
Jun 30, 2019
|
|
Mar 31, 2019
|
|
Dec 31, 2018
|
|
Sep 30, 2018
|
|
Jun 30, 2018
|
|
Mar 31, 2018
|
||||||||||||||||
Consolidated Statements of Operations Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Revenues
|
$
|
252,865
|
|
|
$
|
233,352
|
|
|
$
|
215,152
|
|
|
$
|
201,489
|
|
|
$
|
188,624
|
|
|
$
|
173,825
|
|
|
$
|
160,832
|
|
|
$
|
150,343
|
|
Gross profit
|
185,992
|
|
|
173,647
|
|
|
161,522
|
|
|
150,654
|
|
|
144,509
|
|
|
134,551
|
|
|
122,766
|
|
|
114,669
|
|
||||||||
Operating loss
|
(20,369
|
)
|
|
(10,663
|
)
|
|
(7,180
|
)
|
|
(7,463
|
)
|
|
(3,404
|
)
|
|
(7,027
|
)
|
|
(4,654
|
)
|
|
(1,351
|
)
|
||||||||
Net loss
|
(25,257
|
)
|
|
(12,749
|
)
|
|
(9,243
|
)
|
|
(6,358
|
)
|
|
(5,678
|
)
|
|
(9,518
|
)
|
|
(8,291
|
)
|
|
(2,716
|
)
|
||||||||
Net loss per share, basic and diluted
|
$
|
(0.30
|
)
|
|
$
|
(0.15
|
)
|
|
$
|
(0.11
|
)
|
|
$
|
(0.08
|
)
|
|
$
|
(0.07
|
)
|
|
$
|
(0.12
|
)
|
|
$
|
(0.10
|
)
|
|
$
|
(0.03
|
)
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
ITEM 9A.
|
CONTROLS AND PROCEDURES
|
ITEM 9B.
|
OTHER INFORMATION
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
ITEM 11.
|
EXECUTIVE COMPENSATION
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
|
|
Equity Compensation Plan Information
|
||||||||
Plan Category
|
|
Number of
securities to
be issued
upon exercise
of outstanding
options,
warrants and
rights
|
|
Weighted
average
exercise
price of
outstanding
options,
warrants and
rights
|
|
Number of
securities
remaining
available for
future issuance
under equity
compensation
plans (1)
|
||||
Equity compensation plans approved by security holders
|
|
5,580,627
|
|
|
$
|
57.06
|
|
|
19,447,435
|
|
(1)
|
Includes shares reserved for issuance under the 2013 Plan and the ESPP. The number of shares reserved for issuance under the 2013 Plan automatically increases on January 1st of each year by the lesser of (i) 6,200,000 shares, or (ii) five percent (5%) of the number of shares of our common stock outstanding on the last day of the immediately preceding fiscal year. During the year ended December 31, 2019, a total of 4,052,295 shares of Class A common stock were added to the 2013 Plan in connection with the annual automatic increase provision. In addition, the number of shares reserved for issuance under the 2013 Plan is increased from time to time in an amount equal to the number of shares subject to outstanding options under the 2003 and 2010 Plans that are subsequently forfeited or terminate for any other reason before being exercised and unvested shares that are forfeited pursuant to the 2003 and 2010 Plans. The number of shares reserved for issuance under the ESPP automatically increases on January 1st of each year by the lesser of (i) 1,250,000 shares, or (ii) one percent (1%) of the number of shares of our common stock outstanding on the last trading day of the immediately preceding fiscal year. During the year ended December 31, 2019, a total of 810,459 shares of Class A common stock were added to the 2013 ESPP Plan in connection with the annual increase provision.
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
|
ITEM 14.
|
PRINCIPAL ACCOUNTANT FEES AND SERVICES
|
Item 15.
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
Exhibit
Number
|
Description
|
|
|
3.1
|
|
|
|
3.2
|
|
|
|
4.1
|
|
|
|
4.2
|
|
|
|
4.3
|
|
|
|
4.4
|
|
|
|
4.5
|
|
|
|
10.1+
|
|
|
|
10.2+
|
|
|
|
10.3+
|
|
|
|
10.4+
|
|
|
|
10.5+
|
|
|
|
10.6+
|
|
|
|
10.7+
|
|
|
|
10.8+
|
|
|
|
10.9+
|
|
|
|
10.10+
|
|
|
|
10.11+
|
|
|
|
10.12+
|
|
|
|
Exhibit
Number
|
Description
|
10.13+
|
|
|
|
10.14+
|
|
|
|
10.15+
|
|
|
|
10.16
|
|
|
|
10.17
|
|
|
|
10.18
|
|
|
|
10.19
|
|
|
|
10.20
|
|
|
|
10.21
|
|
|
|
10.22
|
|
|
|
10.23
|
|
|
|
10.24*
|
|
|
|
21.1
|
|
|
|
23.1
|
|
|
|
24.1
|
|
|
|
31.1
|
|
|
|
31.2
|
|
|
|
32.1
|
|
|
|
32.2
|
|
|
|
101.INS
|
Inline XBRL Instance Document.
|
|
|
101.SCH
|
Inline XBRL Taxonomy Extension Schema Document.
|
|
|
101.CAL
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document.
|
Exhibit
Number
|
Description
|
|
|
101.DEF
|
Inline XBRL Taxonomy Extension Definition Linkbase Document.
|
|
|
101.LAB
|
Inline XBRL Taxonomy Extension Label Linkbase Document.
|
|
|
101.PRE
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
|
104
|
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).
|
(b)
|
Financial Statements. Our consolidated financial statements are included under Part II, Item 8 of this Annual Report on Form 10-K.
|
(c)
|
Financial Statement Schedules. All financial statement schedules are omitted because they are not applicable or the information is included in the Registrant’s consolidated financial statements or related notes.
|
|
RINGCENTRAL, INC.
|
|
|
Date: February 26, 2020
|
/s/ Vladimir Shmunis
|
|
Vladimir Shmunis
|
|
Chairman and Chief Executive Officer
(Principal Executive Officer)
|
|
|
Date: February 26, 2020
|
/s/ Mitesh Dhruv
|
|
Mitesh Dhruv
|
|
Chief Financial Officer
(Principal Financial Officer)
|
|
|
Date: February 26, 2020
|
/s/ Vaibhav Agarwal
|
|
Vaibhav Agarwal
|
|
Chief Accounting Officer
(Principal Accounting Officer)
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Vladimir Shmunis
|
|
Chairman and Chief Executive Officer
|
|
February 26, 2020
|
Vladimir Shmunis
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
/s/ Mitesh Dhruv
|
|
Chief Financial Officer
|
|
February 26, 2020
|
Mitesh Dhruv
|
|
(Principal Financial Officer)
|
|
|
|
|
|
|
|
/s/ Vaibhav Agarwal
|
|
Chief Accounting Officer
|
|
February 26, 2020
|
Vaibhav Agarwal
|
|
(Principal Accounting Officer)
|
|
|
|
|
|
|
|
/s/ Michelle McKenna
|
|
Director
|
|
February 26, 2020
|
Michelle McKenna
|
|
|
|
|
|
|
|
|
|
/s/ Robert Theis
|
|
Director
|
|
February 26, 2020
|
Robert Theis
|
|
|
|
|
|
|
|
|
|
/s/ Allan Thygesen
|
|
Director
|
|
February 26, 2020
|
Allan Thygesen
|
|
|
|
|
|
|
|
|
|
/s/ R. Neil Williams
|
|
Director
|
|
February 26, 2020
|
R. Neil Williams
|
|
|
|
|
|
|
|
|
|
/s/ Kenneth A. Goldman
|
|
Director
|
|
February 26, 2020
|
Kenneth A. Goldman
|
|
|
|
|
|
|
|
|
|
/s/ Godfrey Sullivan
|
|
Director
|
|
February 26, 2020
|
Godfrey Sullivan
|
|
|
|
|
•
|
1,000,000,000 shares are designated as Class A common stock;
|
•
|
250,000,000 shares are designated as Class B common stock; and
|
•
|
100,000,000 are designated as preferred stock.
|
•
|
if we propose to amend our second amended and restated certificate of incorporation (i) to increase or decrease the par value of the shares of any class of our capital stock or (ii) to alter or change the powers, preferences or special rights of the shares of a class of our common stock so as to affect them adversely;
|
•
|
if we propose to treat the shares of a class of our common stock differently with respect to any dividend or distribution of cash, property or shares of our stock paid or distributed by us;
|
•
|
if we propose to treat the shares of a class of our common stock differently with respect to any subdivision or combination of the shares of a class of our common stock; or
|
•
|
if we propose to treat the shares of a class of our common stock differently in connection with a change of control with respect to any consideration into which the shares are converted or any consideration paid or otherwise distributed to our stockholders.
|
•
|
before such date, the board of directors of the corporation approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder;
|
•
|
upon completion of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction began,
|
•
|
on or after such date, the business combination is approved by the board of directors and authorized at an annual or special meeting of the stockholders, and not by written consent, by the affirmative vote of at least 66 2/3% of the outstanding voting stock that is not owned by the interested stockholder.
|
•
|
any merger or consolidation involving the corporation and the interested stockholder;
|
•
|
any sale, transfer, pledge or other disposition of 10% or more of the assets of the corporation involving the interested stockholder;
|
•
|
subject to certain exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder;
|
•
|
any transaction involving the corporation that has the effect of increasing the proportionate share of the stock or any class or series of the corporation beneficially owned by the interested stockholder; or
|
•
|
the receipt by the interested stockholder of the benefit of any loss, advances, guarantees, pledges or other financial benefits by or through the corporation.
|
1)
|
temporary housing, air travel and ground transportation in the San Francisco Bay Area beginning on your Start Date and ending on the earlier of the Relocation Date or the date you satisfy the Relocation Condition,
|
2)
|
two relocation round-trip visits for you and your family prior to April 30, 2020 ((1) and (2) together, the “Transition Expenses”), and
|
3)
|
other moving-related expenses (but excluding any costs or other expenses to the sale or purchase of your permanent residence) (the “Moving Expenses” and, together with the Transition Expenses, the “Relocation Expenses”). For clarity, Transition Expenses are separate from Moving Expenses.
|
(b)
|
You must submit written documentation (e.g., itemized receipts) of the Relocation Expenses within 45 days after the Relocation Expenses are incurred in order to receive any reimbursement for such Relocation Expenses. Reimbursements will be paid to you, grossed up for applicable tax withholding, within 30 days after the Company receives written documentation of the Relocation Expenses in accordance with the previous sentence.
|
(c)
|
In the event that you are terminated by the Company for Cause or you voluntarily resign (without Good Reason) from your employment with the Company, in either case, within a year of your Start Date, you agree to reimburse the Company for the total amount actually received by you as reimbursement made to you by the Company under this provision within 30 days following your employment termination date.
|
•
|
Execution by you of the Company’s standard Confidential Information and Invention Assignment Agreement on or as soon as possible following the date you sign this letter, but in no event later than your Start Date; and
|
•
|
Execution by you of the Company’s standard Arbitration Agreement on or as soon as possible following the date you sign this letter, but in no event later than your Start Date; and
|
•
|
Successful completion of a background investigation, consistent with applicable law.
|
Sincerely,
|
|
|
ACCEPTED
|
|
|
|
|
/s/ Vlad Shmunis
|
|
|
/s/ Anand Eswaran
|
Vlad Shmunis
|
|
|
Anand Eswaran
|
Chief Executive Officer
|
|
|
|
RingCentral, Inc.
|
|
|
|
1.
|
2019 Performance Periods and Performance Goals. For the calendar year 2019, there are four quarterly Performance Periods, ending on March 31, June 30, September 30 and December 31, 2019 (each, a “2019 Performance Period”). For each of the four 2019 Performance Periods, there are two equally weighted (50% each) performance goals (each, a “2019 Performance Goal”): Revenue and Operating Margin (each as defined below). The chart below set forth the Revenue and Operating Margin Performance Goals for the four 2019 Performance Periods.
|
2019 Performance Period
|
Revenue Performance Goal
(in millions)
|
Operating Margin Performance Goal
|
Q1
|
$199.5
|
8.1%
|
Q2
|
$211.7
|
8.3%
|
Q3
|
$227.3
|
9.6%
|
Q4
|
$243.2
|
10.8%
|
2.
|
Funding of 2019 Bonus Pool. Subject to the terms of the Plan, including but not limited to Section 3(d) of the Plan, following the end of each of the 2019 Performance Periods, the Committee will determine the extent to which each of the 2019 Performance Goals are achieved in accordance with the following guidelines.
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a.
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If the Company achieves Revenue in the 2019 Performance Period that is lower than the amount of Revenue expected by analyst consensus estimates after the Company has released its guidance for such 2019 Performance Period (“Revenue Floor”), the 2019 Bonus Pool related to the Revenue Performance Goal for such 2019 Performance Period will not fund.
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b.
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If the Company achieves Operating Margin in the 2019 Performance Period that is lower than the Operating Margin expected by analyst consensus estimates after the Company has released its guidance for such 2019 Performance Period (“Operating Margin Floor”), the 2019 Bonus Pool related to the Operating Margin Performance Goal for such 2019 Performance Period will not fund.
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c.
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If the Company achieves Revenue that is at least equal to the Revenue Floor, the 2019 Bonus Pool related to the Revenue Performance goal for the 2019 Performance Period will fund as follows based on the achievement relative to the applicable Performance Goal.
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d.
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If the Company achieves Operating Margin that is at least equal to the Operating Margin Floor, the 2019 Bonus Pool related to the Operating Margin Performance goal for the 2019 Performance Period will fund as follows based on the achievement relative to the applicable Performance Goal.
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Performance Goal Achievement
Revenue
|
2019 Bonus Pool Funding Multiple for Revenue*
|
Performance Goal Achievement
Operating Margin
|
2019 Bonus Pool Funding Multiple for Operating Margin*
|
97%
|
.70x
|
1.5% below Goal
|
.85x
|
97.5%
|
.75x
|
1.0% below Goal
|
.90x
|
98%
|
.80x
|
0.5% below Goal
|
.95x
|
98.5%
|
.85x
|
At Goal
|
1.00x
|
99%
|
.90x
|
0.5% above Goal
|
1.05x
|
99.5%
|
.95x
|
1.0% above Goal
|
1.10x
|
100% - 101%
|
1.00x
|
1.5% above Goal
|
1.15x
|
101.5%
|
1.05x
|
2.0% above Goal
|
1.20x
|
102%
|
1.10x
|
--
|
--
|
102.5%
|
1.15x
|
--
|
--
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103%
|
1.20x
|
--
|
--
|
•
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50% on achievement of the Revenue 2019 Performance Goal (50% weighted target * 1.00x)
|
•
|
56.5% on achievement of the Operating Margin 2019 Performance Goal (50% weighted target * 1.13x)
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3.
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Timing of Bonus Payments. Quarterly bonuses earned under this 2019 Bonus Plan shall be paid in the quarter following the quarter in which earned.
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Period
|
Monthly Base Rent
|
08/1/2021 - 7/31/2022
|
$78,676.34
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08/01/2022 - 12/31/2022
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$81,036.63
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4.
|
Security Deposit. Landlord acknowledges that it currently holds a Security Deposit in the amount of Forty Five Thousand Seven Hundred Thirty Eight and No/100 Dollars ($45,738.00) as security for the full and faithful performance by Tenant of its obligations under the Lease, and that no increase to the Security Deposit is required in consideration of this Second Amendment.
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5.
|
Tenant Improvements. Landlord agrees to provide Tenant with an allowance for the making of improvements to the roof and gutter of the Premises in accordance with the plans and specifications attached hereto as Exhibit A, or such other plans and specifications as may be reasonably approved by Landlord (the “Roof Project”). Tenant shall be responsible for the construction of the Roof Project. The parties shall mutually agree upon the schedule for performance of the Roof Project. Landlord will provide an allowance of Seventy One Thousand Forty Seven and No/100 Dollars
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6.
|
No Brokers. Each party hereby represents and warrants to the other party that neither party has entered into any agreement or taken any other action which might result in any obligation on the part of the other party to pay any brokerage commission, finder's fee or other compensation with respect to this Second Amendment and each party making this representation agrees to indemnify and hold the other party harmless from and against any losses, damages, costs or expenses (including, without limitation, attorneys' fees) incurred by reason of any breach or inaccuracy of such representation or warranty.
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7.
|
Miscellaneous.
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A.
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RingCentral is a cloud communications provider;
|
B.
|
Avaya is a provider of unified communications and contact center solutions and services;
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C.
|
RingCentral and Avaya Holdings Corp., a Delaware corporation (“Avaya Holdings”) have entered into (i) an Investment Agreement, dated as of the Execution Date (as may be amended, modified, or supplemented from time to time, the “Investment Agreement”), pursuant to which, and subject to the terms and conditions thereof, RingCentral shall purchase, and Avaya Holdings shall sell to RingCentral, certain shares of Series A Convertible Preferred Stock, par value $0.01 per share, of Avaya Holdings (“Avaya Series A Preferred Stock”), and (ii) an agreement, dated as of the Execution Date (as may be amended, modified or supplemented from time to time, the “Holdings Agreement”), pursuant to which Avaya Holdings agreed to issue the Shares (as defined below) pursuant to Section 5.4(h) and certain other restrictions in connection with the transactions contemplated by this Agreement;
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D.
|
the Parties entered into the Original Agreement as part of a broader relationship among the Parties, including in connection with RingCentral’s significant equity investment in Avaya Holdings, with the objective of RingCentral and Avaya efficiently commercializing an Offering (as defined below) with an enhanced Subject Functionality (as defined below) to complement their then-existing activities;
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E.
|
the Parties now wish to make changes with respect to, among other things, certain representations made by Avaya; and
|
F.
|
the Parties have agreed to amend and restate the Original Agreement to reflect the foregoing changes.
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1.
|
Definitions
|
2.
|
Commercial Relationship
|
(RingCentral)
|
|
(Avaya)
|
||
RingCentral, Inc.
|
|
Avaya Inc.
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||
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By:
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/s/ John Marlow
|
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By:
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/s/Shefali Shah
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|
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Name:
|
John Marlow
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Name:
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Shefali Shah
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|
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Title:
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General Counsel
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Title:
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EVP, Chief Administrative Officer
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Date:
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February 10, 2020
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Date:
|
February 10, 2020
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|
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Name
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Jurisdiction of Incorporation
|
|
|
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RingCentral International, Inc.
|
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Delaware
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|
|
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RCLEC, Inc.
|
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Delaware
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|
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RCVA, Inc.
|
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Virginia
|
|
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Connect First, Inc.
|
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Delaware
|
|
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RingCentral Florida, LLC
|
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Florida
|
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RingCentral Canada Inc.
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Canada
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RingCentral Brasil Soluções em TI LTDA
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Brazil
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RingCentral UK LTD
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United Kingdom
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RingCentral CH GmbH
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Switzerland
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RingCentral B.V.
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Netherlands
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RingCentral Ireland Limited
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Ireland
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|
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RingCentral Espana SL
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Spain
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RingCentral Italy S.R.L.
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Italy
|
|
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RingCentral France
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France
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RingCentral Hong Kong Limited
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Hong Kong
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RingCentral Xiamen Software Co., Ltd.
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China
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RingCentral Singapore Pte. Ltd.
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Singapore
|
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RingCentral Australia Pty Ltd
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Australia
|
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RingCentral Japan K.K.
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Japan
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RingCentral Korea, Ltd.
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South Korea
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RingCentral Holdings I, Inc.
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Delaware
|
|
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RingCentral IP Holdings, Inc.
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Delaware
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|
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RingCentral Estonia OÜ
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Estonia
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|
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RingCentral South Africa Pty Ltd
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South Africa
|
1.
|
I have reviewed this Annual Report on Form 10-K of RingCentral, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
/s/ Vladimir Shmunis
|
|
Vladimir Shmunis
Chief Executive Officer and Chairman
(Principal Executive Officer)
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|
|
Date: February 26, 2020
|
|
1.
|
I have reviewed this Annual Report on Form 10-K of RingCentral, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
/s/ Mitesh Dhruv
|
|
Mitesh Dhruv
Chief Financial Officer
(Principal Financial Officer)
|
|
|
Date: February 26, 2020
|
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: February 26, 2020
|
/s/ Vladimir Shmunis
|
|
Vladimir Shmunis
Chief Executive Officer and Chairman
(Principal Executive Officer)
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: February 26, 2020
|
/s/ Mitesh Dhruv
|
|
Mitesh Dhruv
Chief Financial Officer
(Principal Financial Officer)
|