RingCentral, Inc (RNG) saw its loss widen to $7.98 million, or $0.11 a share for the quarter ended Sep. 30, 2016. In the previous year period, the company reported a loss of $6.34 million, or $0.09 a share. On an adjusted basis, net profit for the quarter was $2.03 million, when compared with $0.26 million in the last year period.
Revenue during the quarter grew 26.13 percent to $96.84 million from $76.78 million in the previous year period. Gross margin for the quarter expanded 487 basis points over the previous year period to 75.78 percent. Operating margin for the quarter stood at negative 7.29 percent as compared to a negative 7.59 percent for the previous year period.
Operating loss for the quarter was $7.06 million, compared with an operating loss of $5.83 million in the previous year period.
However, the adjusted operating income for the quarter stood at $2.20 million compared to $0.51 million in the prior year period. At the same time, adjusted operating margin improved 161 basis points in the quarter to 2.27 percent from 0.67 percent in the last year period.
“In the third quarter, we executed well by balancing revenue growth, investments in enterprise, and expanding margins to drive results at the high-end or above our outlook,” said Vlad Shmunis, RingCentral’s chairman and chief executive officer. “Growth in our enterprise pipeline has accelerated meaningfully over the past three quarters, which we believe demonstrates the success of our focus on innovation and the investments we have made with our comprehensive go-to-market strategy. We were also honored to once again be placed in the leader’s quadrant and furthest to the right on vision in Gartner’s 2016 Magic Quadrant for UCaaS, further extending our leadership position.”
Operating cash flow improves significantly
RingCentral, Inc has generated cash of $22.44 million from operating activities during the nine month period, up 916.12 percent or $20.23 million, when compared with the last year period.
The company has spent $11.15 million cash to meet investing activities during the nine month period as against cash inflow of $8.25 million in the last year period
Cash flow from financing activities was $3.56 million for the nine month period, down 42.85 percent or $2.67 million, when compared with the last year period.
Cash and cash equivalents stood at $152.39 million as on Sep. 30, 2016, up 17.22 percent or $22.39 million from $130 million on Sep. 30, 2015.
Working capital increases marginally
RingCentral, Inc has recorded an increase in the working capital over the last year. It stood at $84.18 million as at Sep. 30, 2016, up 1.82 percent or $1.50 million from $82.68 million on Sep. 30, 2015. Current ratio was at 1.78 as on Sep. 30, 2016, down from 2.04 on Sep. 30, 2015.
Cash conversion cycle (CCC) has decreased to 4 days for the quarter from 5 days for the last year period. Days sales outstanding were almost stable at 17 days for the quarter, when compared with the last year period.
At the same time, days payable outstanding was almost stable at 21 days for the quarter, when compared with the previous year period.
Debt comes down
RingCentral, Inc has recorded a decline in total debt over the last one year. It stood at $15.96 million as on Sep. 30, 2016, down 20.46 percent or $4.10 million from $20.06 million on Sep. 30, 2015. Total debt was 6.68 percent of total assets as on Sep. 30, 2016, compared with 9.68 percent on Sep. 30, 2015. Debt to equity ratio was at 0.13 as on Sep. 30, 2016, down from 0.20 as on Sep. 30, 2015.
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