RingCentral’s Revenue by Segment (2016-2022)

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This statistic highlights RingCentral’s Revenue by Segment from Q1 2016 onwards, split between Subscriptions and Others segments.
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This statistic highlights RingCentral’s Revenue by Segment from Q1 2016 onwards, split between Subscriptions and Others segments.

RingCentral’s Revenue by Segment

The following table shows the company’s revenue by segment is as follows:

Revenue by Segment Q3 2020 Q2 2021 Q3 2021 Contribution in Q3 2021
Subscriptions $279.64 $351.20 $385.44 92.96%
Other $23.98 $28.07 $29.19 7.04%
Total $303.62 $379.27 $414.63 100.00%

(All figures in millions, except percentages)

RingCentral Inc’s total consolidated revenue marked an upsurge of about 9.32% on a quarter-on-quarter basis, amounting from $379.27 million in Q2 2021 to $414.63 million in Q3 2021. It also increased by approximately 36.56% compared to $303.62 earned in Q3 2020. The growth was driven by the company’s flagship RingCentral customer engagement solutions and RingCentral MVP product offerings, which subsequently grew the number of customers, average subscription revenue per customer, and retention of the existing user base. As of December 31, 2021, most of the company’s total revenues were generated in markets of the U.S. and Canada. It assists a wide range of customers operating in the industries of healthcare, legal services, financial services, education, insurance, construction, hospitality, real estate, retail, technology, and state and local government, among others.

The company operates through a single reportable segment which is divided into subscriptions and other revenues as explained below:

Subscription Revenue

Revenue from this division is generated from fees levied on customers to avail access to the Company’s software applications and related services. These arrangements contain contractual terms that generally vary from one month to five years. It comprises recurring fixed plan subscription fees, one-time fees, recurring licenses, variable usage-based fees (for usage in addition to plan limits), and other fees. These sales are driven through the company’s direct and indirect sales channels, including strategic partners, resellers and distributors, and carriers.

These contracts do not result in the direct possession of the company’s software by any customer at any time. Instead, customers are provided continuous access to the services over the term of the contract. The company provides subscriptions to the consumers in accordance with either “click-through” online agreements for service terms up to one year or written agreements for service terms more than one year or longer.

Bills associated with subscription fees are generally recorded in advance. The company recognizes subscription revenue over the period of the contract. Amounts that are billed in excess of total revenue recognized for the term are recorded as deferred revenue on Consolidated Balance Sheets.

Other Revenues

This division primarily comprises product revenues generated from the sale of pre-configured phones and service revenue derived from professional services rendered. Revenue from product sales is recognized as the transfer of ownership to the customer takes place, which is generally executed upon shipment from the Company’s or its assigned agents’ warehouse.

The professional services are offered by the company primarily to assist its users in the implementation and deployment of its subscription services. These services do not result in any kind of customization in the Company’s software at any time and are generally short-term arrangements. A major part of the company’s professional services agreements is on a fixed price basis. Revenues arising from these services are recognized as and when the services are provided to the associated customer.

About the Company

Founded in 1999 by Vlad Shmunis and Vlad Vendrow, RingCentral is a prominent provider of international enterprise cloud communications, collaboration, video meetings, and contact center software-as-a-service (“SaaS”) solutions. It is headquartered in Belmont, California, and has over 3,919 full-time employees located in 12 countries as of December 31, 2021. The company’s ingenious, cloud-based contact center and communication solutions disrupt a wide market for business communications and collaboration by delivering adaptable and cost-effective solutions that support mobile and dispersed workforces. The company portfolio’s three key products are RingCentral MVP (formerly RingCentral Office), RingCentral customer engagement solutions, RingCentral Video (formerly Glip). It operates through a single operating segment which is divided into Subscription and Other revenues. Its common stock is publicly traded on the “NYSE” i.e. New York Stock Exchange under the trading symbol “RNG”.

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