Hello, welcome to the RingCentral's second quarter 2021 earnings conference call and webcast. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Ryan Goodman, Head of Investor Relations. Please go ahead, sir. Thank you. Good afternoon, and welcome to RingCentral's second quarter 2021 earnings conference call. I'm Ryan Goodman, RingCentral's Head of Investor Relations. Joining me today are Vlad Shmunis, Founder, Chairman, and CEO; Anand Eswaran, President and Chief Operating Officer; and Mitesh Dhruv, Chief Financial Officer. Our format today will include prepared remarks by Vlad, Anand, and Mitesh, followed by Q&A. Some of our discussions and responses to your questions will contain forward-looking statements, including our third quarter and full year 2021 financial outlook and our assumptions underlying that outlook. These statements are subject to risks and uncertainties. Actual results may differ materially from our forward-looking statements. A discussion of the risks and uncertainties related to our business is contained in our filings with the Securities and Exchange Commission and is incorporated by reference into today's discussion. In particular, our business is currently being impacted by the COVID-19 pandemic. The extent of its continued impact on our business will depend on several factors, including the severity, duration, and extent of the pandemic, the success of vaccination efforts, as well as actions taken by governments, businesses, and consumers in response to the pandemic, all of which continue to evolve and remain uncertain at this time. RingCentral assumes no obligation and does not intend to update or comment on forward-looking statements made on this call. Unless otherwise indicated, all measures that follow are non-GAAP with year-over-year comparisons. A reconciliation of all GAAP to non-GAAP results is provided with our earnings release and in the slide deck. I encourage you to visit our investor relations website at ir.ringcentral.com to access our earnings release, slide deck, our GAAP to non-GAAP reconciliations, our periodic SEC reports, a webcast replay of today's call, and to learn more about RingCentral. For certain forward-looking guidance, a reconciliation of the non-GAAP financial guidance to the corresponding GAAP measure is not available, as discussed in detail in the slide deck posted on our investor relations website. With that, let me turn the call over to Vlad. Good afternoon, thank you for joining our second quarter earnings conference call. We have established a track record of consistent quarter-over-quarter growth for 30 quarters and counting. Q2 2021 was no exception. RingCentral delivered another great quarter with RingCentral Office ARR growing 41% year-over-year to $1.4 billion. This is our highest level of growth in five years. It is also an acceleration in growth of five points year-over-year off a base of over $1 billion. We also delivered a record number of 1 million + TCV wins, including one with over $10 million. What is driving this performance? Customers are looking for cloud solutions to manage two things, their communications needs and their collaboration needs, each with distinct characteristics. For businesses, it all begins with communications capabilities, the central nervous system of any enterprise. Market opportunity is massive, with over 400 million legacy PBX users in play. Table stakes to deliver in this space are exceptionally high. Rich functionality, security, five- nines reliability, quality of service, platform analytics, enterprise apps integrations, and regulatory compliance are staples of an enterprise-grade PBX system. Businesses require all of these core capabilities, but also require them on a mobile-friendly platform. Selecting a communications platform is a critical enterprise-wide decision. Just as companies have a single corporate-wide email platform, companies usually choose one communications platform for the entire company. The communications platform may not be a disparate, siloed line of business decision. A purchasing decision requires a rigorous proof of concept and analysis, which is where RingCentral excels based on our proven industry leadership and track record of excellent delivery. With over 3/4 of on-premise sales historically done through channels and global carrier partners, the customer buying preference for cloud solutions continues to be through these trusted partners. RingCentral leads here with our unique go-to-market partnership network. As a definitive proof point, over 2/3 of our seven-figure TCV wins were brought in by the channel and partners. As for collaboration, there is team messaging and video conferencing. Team messaging improves internal message interactions and file sharing. Use of these capabilities has increased with modern mobile distributed and hybrid working environments. As we've all learned over the past 18 months, video conferencing provides a viable alternative to in-person meetings. Users require an easy and reliable way to connect with high-quality video, audio, and screen share, along with core features like waiting rooms, breakout rooms, virtual backgrounds, etc. Additionally, as the world returns back to the office, video conference room solutions that support hybrid meetings are a must-have. RingCentral is well-positioned to address both communications and collaboration needs of modern enterprises with our differentiated Message Video Phone or MVP platform. This is complemented by our unique GTM strategy that now includes some of the world's best-known incumbent PBX providers and leading carriers amongst our strategic partners. Why do we win? Well, here is the tip. It's about trust, innovation, and partnerships. First, trust. Trust with enterprises is established over multiple years with consistent delivery of reliability, security, and data privacy. RingCentral has delivered a track record of five- nines uptime over the last 12 quarters. This equates to around five minutes of downtime a year, with no exclusions for maintenance windows. This track record is simply unmatched in the industry, and it is literally 100 x better than the three- nines, or close to nine hours of downtime that many of our competitors offer. As for security and data privacy, we will let our clean multi-year record speak for itself. Through continual investment in security, reliability, and data privacy, we have built one of the world's most trusted global communications platforms. Next, innovation. RingCentral has always been committed to a rapid pace of innovation. Our years of outsized R&D investing in a modern, scalable, cloud-based architecture have enabled us to meet the stringent requirements expected of a leading enterprise communications system. Crucially, in addition, we have a complete portfolio of cloud contact center solutions that includes our proprietary digital-first Engage platform, as well as solutions from our partnership with NICE inContact. Recently, we expanded our relationship with NICE inContact to include additional WFO and WFM capabilities, which is contributing now to our significant contact center win momentum in large enterprises. On the topic of collaboration. We now have the next-generation award-winning video conferencing solution, RingCentral Video, with over 250 new features introduced since launch in April last year. This includes virtual backgrounds, waiting rooms, closed captioning, and many more. We are now beginning to leapfrog with innovative new capabilities like team huddles, advanced web browser support, and live switching between devices, with more to come on this front soon. Rooted in this innovation and product strength, momentum for RCV is picking up across multiple fronts. All new customers get the integrated MVP platform with RingCentral Video, and customer response has been excellent. Customers choose us for the integrated MVP platform, and many of the $1 million-plus TCV wins cited RCV as a key influencing capability in their decision to go with RingCentral MVP. Second, we are making solid progress on migrating our install base accounts of MVP customers from prior generation video to RingCentral Video. We recently crossed the halfway mark in this transition. As a case in point, C&S Wholesale, the largest wholesale grocery supply company in the U.S. is now in the process of upgrading its user base of over 5,000 RingCentral MVP users to RCV. Third, our partners. Early in Q2, Atos announced a video solution based on RCV, and later in Q2, Deutsche Telekom selected RingCentral Video for its own co-branded video solution for its customers. We're optimistic that this trend will continue and additional strategic partners will line up and endorse RCV. On that note, our partnerships. Our partnership-oriented go-to-market is enabling us to quickly and efficiently scale our global market reach. In Q2, our direct and partner ARR, which includes contributions from Avaya, Atos, AT&T, British Telecom, and Telus, grew 34% year-over-year to $860 million. This is a strong acceleration in growth of 9 points year-over-year. We're confident that this is just the beginning of a multiyear successful journey. Our unique go-to-market network continues to expand. We have had several exciting partner updates in recent months. First, we announced a new strategic partnership with Verizon Business. Verizon Business has already launched RingCentral with Verizon, a co-branded cloud-based UCaaS solution for their enterprise customers. This also speaks to our unique ability to onboard major carriers quickly and efficiently. Second, Alcatel-Lucent Enterprise launched Rainbow Office, powered by RingCentral, in the U.K. Third, we announced a partnership with Deutsche Telekom, where we'll introduce a standalone co-branded video solution based on RingCentral Video. Of course, all of these partnerships are based on their collective recognition of RingCentral's industry-leading standards of trust and innovation. In closing, we delivered an exceptional Q2, and with our speed of innovation, along with the fact that most of our strategic partnerships are in the early or pre-launch phases, we feel confident that the cloud is winning and RingCentral will continue to be winning in the cloud. With that, I will now turn the call over to our President and Chief Operating Officer, Anand Eswaran, for additional color on our recent progress. Thank you. Thank you, Vlad. Good afternoon, everyone. Q2 results and execution were exceptional across the board. Before I dive in here, I want to talk about the foundation of RingCentral, our people and our products. On the product side, we've just been named as the best UC platform and best UCaaS provider, as well as a top two collaboration platform as part of the UC Awards 2021. As a matter of fact, RingCentral has been named the best UC platform three years in a row now. Our top two finish on the collaboration side is exceptionally gratifying, given that we have entered this area relatively recently. Most importantly, as for the people, Comparably's annual survey for large companies recently ranked RingCentral as the number one engineering team and the number two sales team for a total of 11 awards. Vlad was named amongst the top two CEOs for diversity and amongst the top six CEOs for women. We are incredibly proud and humbled by these awards. A core strength which has contributed to the exceptional success at RingCentral are our people and our exceptional leadership bench strength. I'm proud to share three new Executive Vice President promotions recognizing exceptional performance and a proven record of success in addition to the top talent we have attracted to RingCentral. Carson Hostetter is being promoted to Executive Vice President and Chief Revenue Officer. Carson has been with the company for over five years, in which time he has built our enterprise business from the very beginning to over half a billion dollars today. Faiza Hughell is being promoted to Executive Vice President and our first Chief Customer Officer. Faiza, who has been with RingCentral for over ten years, has a strong track record of building the SMB business for RingCentral with a customer obsession that makes her the ideal candidate for RingCentral's first ever Chief Customer Officer. Homayoun Razavi is being promoted to Executive Vice President and Head of Global Service Providers. In 18 months with RingCentral, Homayoun has accelerated our partnerships with AT&T, BT, and Telus, as well as established new strategic relationships with top-tier providers including Vodafone Business, Verizon Business, and Deutsche Telekom, amongst others. All three will be directly reporting to me. We thank Phil Sorgen for his contributions and wish him well as he embarks on a new chapter in his life working with nonprofits and the venture community. We are also excited that Phil will be joining RingCentral's advisory board. Now, on to Q2. I will highlight five key areas of our exceptional quarter. First, partners, where we saw contributions continue to ramp across our strategic and carrier partners. Second, our channel community, which delivered another strong quarter. Third, our upmarket customers, where we are winning a higher volume of large deals, the wins are getting bigger, and the sales cycles are improving. Fourth, increasing traction with our integrated UCaaS and CCaaS offering with both new customers and our install base. Fifth, accelerating momentum for RingCentral MVP integrated with Microsoft Teams Direct Routing, which is effectively opening up incremental upmarket opportunities. Let me now dive into some details. I will begin with our strategic partners, where we saw great momentum with multiple million-dollar-plus wins across our strategic and carrier partners. This contributed to our record-breaking number of seven-figure wins, a notable accomplishment to achieve in a Q2. In Q2, Avaya Cloud Office by RingCentral had another strong quarter of solid growth in new seats, new accounts, and transaction volume. ACO is seeing solid traction with businesses of all sizes and from both new and existing customers, including a notable win for over 12,000 seats with a Fortune 500 freight transportation company, who moved from an Avaya on-premise solution to Avaya Cloud Office. Atos also delivered a solid Q2 with strong ARR growth in our upmarket segment. We are pleased with how this partnership is progressing and look for contributions to continue to ramp. As for Alcatel-Lucent Enterprise, Rainbow Office powered by RingCentral launched in the U.K., and we will be launching additional countries in the coming quarters. As for global service providers, we see a generational opportunity here as many top providers are now looking for their next-generation UCaaS platform. This is especially urgent as GSPs are introducing revolutionary 5G technology to the world. Given our recent successes with top-tier providers like Verizon Business, Vodafone Business, and Deutsche Telekom, amongst others, as well as a strong pipeline of new deals, we believe RingCentral is emerging as the preferred UCaaS platform for this important strategic community. As to AT&T, BT, and Telus, they have all had strong quarters led by upmarket traction and strength in key verticals, including retail, healthcare, and manufacturing. An example of our momentum is our win through BT with the Ardonagh Group, the U.K.'s largest independent insurance distribution platform, where we will together provide integrated UCaaS and CCaaS for over 3,500 users and 800 contact center agents. We also continue our long-standing momentum with the channel community. Our channel partners delivered another great quarter, resulting in robust ARR growth of 52% year-over-year and reaching $571 million. These strategic and channel partnerships provide RingCentral with an important and effective go-to-market motion that may also prove difficult for others to replicate. They are also essential in reaching our rapidly expanding mid-market and enterprise customers, where we delivered 51% year-on-year growth to $877 million in ARR. We are seeing large deal strength in verticals with the most stringent platform requirements, like financial services and healthcare. They accounted for about one-quarter of the million-dollar-plus TCV wins. Looking ahead, we enter the second half with our enterprise pipeline at a high level, fueled by strong demand for both our UCaaS and CCaaS solutions. On that note, continued traction for our integrated UCaaS and CCaaS platforms contributed to triple-digit new logo growth for our RingCentral Contact Center and RingCentral Engage solutions. We have recently extended and expanded our partnership with NICE inContact. Our partnership is rooted in years of joint development, integration, and market learnings. RingCentral continues to be uniquely positioned to offer customers the world's only deep integration of Gartner Magic Quadrant leading UCaaS and CCaaS solutions. Based on these trends, in Q2, we had a great contact center-driven win with AmeriSave, a leading mortgage lender. AmeriSave selected RingCentral to provide a more scalable, integrated UCaaS and CCaaS platforms across nearly 4,000 users, including 2,000 contact center agents. Building on this momentum from Q2, the month of July has been a very strong start for our contact center business for Q3. In fact, we have closed multiple deals over $1 million in TCV just in the last two weeks. Another area of strength for Q2 was our integration with Microsoft Teams Direct Routing. Direct Routing is proving to be an effective go-to-market motion that is creating incremental opportunities, particularly in upmarket, where customers require enterprise-grade cloud communications and contact center capabilities, and has contributed to multiple million-dollar- plus TCV wins last quarter. In conclusion, Q2 was simply a fantastic quarter. With our continued commitment to trust, innovation, and partnerships, we feel confident in our ability to continue leading in this unique $50 billion + market opportunity. With that, I will turn the call over to our Chief Financial Officer, Mitesh Dhruv. Thank you, Anand. Good afternoon, everyone. We had a great Q2, and all key metrics came in above the high end of our guidance. Subscription revenue grew 37% year-over-year, up 5 points from the prior year, and non-GAAP operating margin was about 10%, 90 basis points above our guidance, demonstrating the leverage in our model, especially as our partnerships start to scale. This again puts us well above the Rule of 40, which is particularly rewarding at our $1.5 billion revenue run rate. We've consistently achieved this metric for the last several years, and it continues to provide an important measure of our profitable growth success. Our positive growth trends are the result of robust win rates with new customers, as well as strong retention rates with our existing customers. On the new logo front, we had multiple vectors. First, enterprise new logo strength. This contributed to our enterprise ARR base getting close to $600 million and growing 60% year-over-year. Accelerating strategic partner contributions. Direct and partner Office ARR grew 34%, an acceleration of 9 points versus prior year, and we are just getting started. Avaya is still in its early days. Atos is just starting to ramp. Alcatel-Lucent Enterprise is in the process of training and rollout. Verizon just launched in the last two weeks. Vodafone and Deutsche Telekom are still pre-launch. Strictly speaking, many of our unique growth vectors have yet to play out. Third, our momentum with international is ticking up. We had a record number of international over a million-dollar TCV wins this quarter. Several of these wins were joint wins with our key partners, which is a testament to the effectiveness of our partner-oriented strategy. Fourth, contact center, where we continue seeing strong traction for our deeply integrated best-of-breed UCaaS and CCaaS platform. Our new logo strength, along with contributing to a standout Q2, also seeds future expansion opportunities. As for some latest retention trends, cohorts of up-market customers that we've added over the past completed year have already expanded by greater than 50%. This positive net retention was driven by more seats, more products, and low churn. On that note, gross churn across our entire business was at a multiyear low. This is a result of our stronger focus on customer success, product stickiness, as well as implementation of AI-enabled tools, which provide predictive analytics on customer health metrics across the entire customer base. In addition to accelerating revenue growth, profitable growth remains a core tenet of our financial model to drive healthy long-term margins. We saw several robust underlying trends in Q2 on that front. First, ARPU held steady across the business. Second, sales and marketing efficiency improved. This was a result of higher sales rep productivity as well as lower cost of book tied to the strategic partner ramps. Third, we benefited from efficiencies of scale in other operating expense items. These levers provide us the ability to invest in innovation and growth, as well as have a clear path to margin expansion in the long term. Putting it all together, we are landing more large customer wins, customers are expanding at a high velocity, and the churn is at a multiyear low. The strong and improving unit economics are enabling us to deliver both revenue growth acceleration as well as margin expansion, defying the typical growth versus margin trade-off associated with SaaS models. With this backdrop of positive momentum, increasing visibility, and higher confidence, we are raising our 2021 outlook. We are increasing total revenue growth to 30%-31%, up from 27%-28%. We are increasing subscriptions revenue growth to 31%-32%, up from 28%-29%. We expect non-GAAP operating margin of 10%-10.1%, and we are raising our non-GAAP EPS to $1.28-$1.30, up from $1.24-$1.27. We are benefiting from the intersection of a massive opportunity, a structural acceleration in global demand, and a SaaS model with attractive, improving unit economics. Case in point, one year ago, we were slightly over the rule of 40. Today, with subscription revenue growing at 37% and operating margins over 10%, we are operating at nearly a Rule of 50 on a much higher base. Looking ahead, with new growth drivers and multiple margin levers still to come, we believe that we are well-positioned to become a multi-billion dollar revenue company with profitable growth. Before I turn the call back to the operator, I'd also like to give a big thanks to all of the employees at RingCentral. Your exceptional work and consistent execution make this all possible. With that, let's open the call to Q&A. Ladies and gentlemen, we do apologize for the technical difficulties. Please stand by. One moment, ladies and gentlemen. Please stand by. We do apologize for technical difficulties. Lines are now live. Hello, Kevin. Can you poll for Q&A? Yes. Ladies and gentlemen, we'll now be conducting a question and answer session. Our first question today is coming from Brian Peterson from Raymond James. Your line is now live. Thanks for taking the question, and congrats on the really strong results. The first one may be for Mitesh Dhruv. You're operating close to the Rule of 50 now. You just raised your implied outlook for the back half of 2021 versus your prior outlook. Can you maybe unpack what's given you that confidence to raise the outlook in the back half of the year? Thanks, Brian. Yeah. Overall, if you look at the guidance, there's no change to our guidance philosophy. We've always kept a healthy dose of prudence and optionality in the guide, no different this time as well. In terms of the bullishness and the upside drivers to the guidance, maybe I'll break it out in two buckets. A roll forward from the strength we saw in Q2, which is natural given the recurring revenue model, increased visibility we have for the second half. On Q2, our enterprise business, if you look at it, is now the fastest piece of our business, around $600 million, and it's growing at 60%. It's growing of all the pieces we have. We are seeing large deal momentum driven by seats and products. This deal momentum is coming across the board from Avaya, Atos, Contact Center, International, and all our GSPs. This momentum we expect to continue going forward in the back half. In terms of the second half visibility, which has also increased for us, we are seeing a stronger pipe, we are seeing stronger conversions, and we are seeing stronger retention trends. We'll see this benefit even beyond 2021. On the heels of a strong Q2 performance, along with the increased visibility we have for the second half, it does give us confidence to raise our guide for Q3 and Q4, and hopefully perform even better. It sounds like a lot of good things going on there, Mitesh. Anand, maybe just one for you on the channel. We did see the ARR kind of incrementally pick up versus what we've seen in prior quarters. Any way to kind of unpack or just kind of describe what's going on there on the channel? Thanks, guys. Yeah, absolutely, Brian. I would probably say three quick things. One is, the velocity of onboarding new channel partners has continued. Our channel base is getting larger. The second thing I would say is, Mitesh talked about this large deal momentum. Over two-thirds of them actually came from our channel and partners. We are seeing larger deals come through the channel in a meaningful way. The third thing I would say, which is sort of the icing on the cake, is that there's meaningful improvement in velocity and conversion rates. That is also helping how they're showing up in quarters. That's what I'd probably offer. Kevin, can you poll for the next question? Hey, Kevin? Ryan, is there a way for us to look at callers? Seems like the system on their side is crashing, is the notification I'm getting. Just have to wait. Time to switch to RingCentral systems for them as well, at the moment. Thank you. Our next question comes from Bhavan Suri with William Blair. Please proceed with your question. Thank you. Can you guys hear me okay? Yeah. Now we can, Bhavan. Yes, sir. Great. Maybe it is time to switch to RingCentral. We did that for a while with a video offering. I do not know why you guys did not keep that going. Anyway, maybe next time. Let me echo my congrats. Obviously, great numbers across the board. I am going to be quick here, obviously, because we have had a couple issues. Mitesh, really quickly for you, I think you mentioned that the higher end, the core analysis of your larger customers, net dollar retention rate was 150%. That is amazing, given sort of the product you sell and things like that. It is rare. We have not seen that at all in the space, even from you guys in the early days. Help me sort of understand what is driving that 150%, and sort of how customers are sort of driving that growth. That would be great to get a little color on. Sure, Bhavan. Definitely a very encouraging sign to have an expansion rate of 150% on the most recent cohorts we are seeing. A couple of things. We are seeing more upsells of seats, more cross-sell of UCaaS and CCaaS together, and lower churn. In fact, if I unpack it even one more click, the 2020 cohort, in that cohort, we've added nearly the same dollar expansion as the combined cohorts for 2018 and 2019. Almost 2x expansion there. There are, I would say, a couple of three reasons for this. one is, these new customers who have come onto our system in the last year, they have experienced the full power of the platform, MVP, message, video, phone, and there's tight integration across all modes. These customers are using all modes, they're upselling more, and they're stickier. That's point one. Point two is, these customers who came on during COVID, they have sort of survived the COVID onslaught. The businesses naturally are healthier and tend to have a much higher lifetime value, naturally, because they survived this whole thing. As you project forward these cohorts, as they assimilate in our overall ARR fabric, it should have a positive impact on our net retention going forward. I do expect that newer cohorts that will come on will be similar. If you think of it like, the green shoots we planted last year will hopefully turn into tall trees in a dense forest. For some imagery there for you. Understood. Helpful. Thanks for the color there. You touched on people buying multiple products, so UCaaS, CCaaS. You touched on sort of the integrated offerings. Maybe I'll turn this to all three of you. Obviously you saw Zoom acquire Five9, and sort of the space, we've talked about consolidation space, we've talked about sort of ARR, net dollar retention rates being driven by cross-sell and up-sell. I'd love to get sort of your thoughts, whatever you're willing to share, A, about that acquisition, its competitive pressures, and kind of how you see yourself sitting in the space vis-a-vis the Zoom-Five9 combination. Thank you. I'll take that. This is Anand. Hey, Bhavan, good to talk to you. This is what I would say. See, Zoom and Five9 have been partners for 2+ years, and we are actually pretty thrilled about our win rates against them over the last 2.5 years. The other thing that I would probably offer up is, if you just look at our strategy, we've been working with NICE inContact for 6+ years. We saw this UC + CC trend long before it has become fashionable as it is right now. We have a deep integration with inContact. In fact, what you see is there's no other Gartner Magic Quadrant leading deeply integrated UCaaS and CCaaS solution outside of RingCentral Contact Center. That is what is making a difference. As you know, we just extended our partnership for a long time to come with NICE inContact. We have seen great buys. You heard Mitesh talk about our contact center performance. We actually closed multiple million-dollar TCV contact center wins in July, in the last two weeks after these announcements. We're feeling pretty good about the value we bring to our customers with our solution. Got it. That's really helpful. Thanks, guys. Congrats. Thank you. Our next question today is coming from Terry Tillman from Truist Securities. Your line is now live. Yeah. Good afternoon and congrats from me as well. Hopefully, the rest of the call we can get to some four- nines / five- nines. Anand, maybe for you. You talked about Microsoft. That's interesting in terms of what's going on there. I'm curious, is it sporadic and opportunistic, or are you able to create plays here or something programmatic going forward that you have good visibility in terms of maybe the Microsoft opportunity actually growing from what you've seen so far? I'd love to hear a little bit more about that, and then I had a follow-up for Mitesh. That's a great question, Terry. Your question has many layers of answers to it, Terry. The first thing is, when we compete with them head-to-head on UCaaS opportunities, our win rates have been holding very good and very stable. That's 1. The second thing I would say is, obviously Microsoft has a huge Teams install base, as we all know, and with the ability to integrate with Microsoft Teams via Direct Routing, that's a tailwind for us. We had multiple million-dollar-plus TCV wins using Direct Routing, we view that, the base, the Teams install base as an incremental opportunity. It opens up a new segment of the market. That's very good. The third thing is, as important, once we get in, it also gives us the opportunity to upsell, to CCaaS, to contact center. Those are the three layers, which is actually making us feel pretty good about how we compete with them when we compete head-to-head, and how we integrate with them and open further upsell opportunities when we connect with them on their install base. Got it. Thank you for that. I guess, Mitesh, just a follow-up question. As it relates to this accelerating growth at scale that you've been exhibiting here over a number of quarters, I would love to unpack a little bit more in terms of the drivers, particularly international, and so that's real time on what you've seen recently and going forward, how important is international on this continued high growth at scale? Thank you. Yeah, sure. If you take a look at it in this overall cloud on-premise market of 400 million seats, half of them are international. It becomes a very, very important growth vector for us. Right now, international for us is, call it, over 10%. With all the partnerships we have with Alcatel-Lucent, Atos, Vodafone, Deutsche Telekom, I think over time, it would be not unreasonable to expect that our mix of the international piece will be in the high teens over the next couple of years. We feel very positive and bullish about the overall international opportunity because there's a lot of momentum we have there. We had multiple wins this quarter as well, over $1 million in the international front, and there's a lot of work we are doing internationally to increase the mix there and grow rapidly. Operator? Sorry about this, folks. I think this service provider we are using is having some technical difficulties. It seems like some other companies are having it too, so apologies for this. Hopefully, these guys get the systems back on track in the next couple of minutes here. Apologies about this. Unfortunately, we don't control the queue or anything, otherwise we would have just done it directly. Ladies and gentlemen, please excuse the technical difficulties. Our next question is coming from Sterling Auty from JPMorgan, and we ask you please limit yourselves to one question and return to the queue at this point. Thanks. Hi, guys. Mitesh, yeah, my team's on other calls. They're having the same problem. Actually, I only did have one question that I was going to ask, and it's more of a high-level, longer-term question. I'm getting it from a number of investors wondering, given the explosion in the use of video solutions, RingCentral Video, Zoom, et cetera, there's a question as to whether we're going to see contraction in the number of business telephony users. We often talk about over 400 million business phone users that would shift to the cloud. Are you concerned that that number may end up being a fraction of that over time? Yes or no, how do you think that impacts your business over the long term? I'll take that. Short answer is no. We're not concerned about business contraction by any stretch of imagination because if you look at the number of seats we have in the cloud, we are still talking about pick your favorite analyst, 14 million, 15 million seats in the cloud right now, and compare that to the opportunity at hand, 400 million, 450 million. There's still a long way to go before we see any sort of contraction. That's number one. Number two, what we also see is as companies return to the office, it is about having a way to meaningfully work in a hybrid manner. This is where the power of a unified app across multiple modes, message, video, and phone, is making a huge difference. That's number two. Number three, we do see the same momentum and velocity of. This is reflected in our pipe. Our pipe is the strongest it has ever been as we exited Q2. That tells us that the amount of companies who are looking at making a communications solution for the future is increasing at the same rate and the same velocity. All the early trends we see, how it reflects in our pipe and our customer conversations, we feel pretty bullish about the opportunity ahead of us. Sterling, if I just may add, Anand, if I can just add two simple points here. It's excellent commentary you gave. Overall, Sterling, if you think about what video conferencing is doing here, in a way, it's replacing audio conferencing in a pre-planned manner. This conference call, for example, we are having, which is a pre-planned call. Next time, we'll probably do it on RingCentral Video. It's a pre-planned call. That does not change the need for customers to communicate with businesses. If I were to reach JPMorgan, how would I reach that? I cannot just do a video call to JPMorgan or with Sterling Auty. The central nervous system, like an email system, it's a very different need to have a communication system versus a collaboration tool, which is replacing audio conferencing, which is very transitory. It's two different markets. It's not either/or. It's not instead of. It's in addition to. That makes sense. Thank you. Thank you. Next question is coming from Meta Marshall from Morgan Stanley. Your line is now live. Great. Thanks. Maybe building on Sterling's question of just the other investor deep dive that investors have been wanting to do over the past couple of quarters is just on pricing. If you could just give any commentary on what you're seeing in pricing in the market, that would be helpful. Thanks. Sure, Meta. I will take that. Thank God that there's been no hiccups here between you and Sterling here in conference. Perfect. Pricing overall, I did call out in our script that the pricing overall trends, ARPU, have held steady. If I were to further disaggregate that, in the enterprise side, of course, there's volume discounting fact of life. On the other side, we are seeing enterprises take on more upper-end bundles along with contact center. What we're seeing is a deal ticket, ARPA, average revenue per account, is actually going up. That's helping our overall lifetime value to CAC ratios. In terms of the SMB side, pricing is holding very steady. Net-net, if I look at the ARPU trend, it's holding very steady despite some of the rhetoric you may be hearing outside. We don't see that. Great. Thanks. Yep. Thank you. Next question is coming from Samad Samana from Jefferies. Your line is now live. Hi, good afternoon. Mitesh, I think during the quarter, you might have mentioned a range of the number of seats that Ring has. I was just wondering if you could maybe give us an update on maybe more precisely how many seats the company has, because if I do the math, I think it implies you've had about 2 million over the last two years yourselves, and I think that may be underappreciated. Just how many seats does the company have, and how does that compare to the, I think the 2 million-ish or so you had when you first signed the partnership with Avaya? Sure. Samad, ultimately in my mind, yes, we did give a disclosure in the quarter last time between 3.5 million and 4 million seats. Here's the thing, right? I understand, and I totally understand the spirit of your question here about the seats, because other companies are giving out seats. Ultimately, we don't quite manage our business to seats. We do manage our business to ARR, and it's just not about the seats, right? It's about the dollars you get for seats and the value you can extract from the seat. As I was telling Meta, our ARPU has been holding flat, and what I can tell you is that we have added more seats than last year with our differentiated platform. Which has led to a strong performance for us. If you just take a click up and the big picture here, there's 400 million seats here. Whether it's 3.5 or four, the entire cloud market is 15 million seats, and we have a straight shot at 180 million preferred access with the Three A's. I feel, seats aside, we feel really good about how we will compete in the market and gain market share. Great. Great to see the strong acceleration again this quarter. Thanks for taking my question. Yep. Thank you. Next question is coming from George Sutton from Craig-Hallum. Your line is now live. Thank you. You talked earlier about wanting to add even more partners, and obviously, I assume part of it is the letters B and beyond. I'm curious how broad you're thinking about the partner opportunities outside of specifically the telcos. When we look at partners, this is Anand, and good to talk to you, George. When we look at partners, we look at it in three layers. The first is the channel community, which I spoke about early in the call with Terry's question. The second is the global service providers. You have carrier partners, but you also have MSOs. You have different flavors of service providers. You know that we announced Verizon Business, we announced Deutsche Telekom, we announced several regional carrier partners, and we feel that's just the beginning. You're going to see that as a key focus for us, global service providers. The third is what we've talked about, which is Avaya, Alcatel-Lucent Enterprise, and Atos Unify. With these three layers of partners, we feel there's a huge amount of opportunity in the years to come to convert their on-premise base to the cloud. The exclusive path to the cloud is RingCentral for them. Great. Thank you. I just want to add to that, George. Vlad here. To what Anand said, if you just look at the GSP opportunity, look, there are about 700 service providers in the world. BroadSoft, a few years ago, ended up licensing their software stack to many of them, maybe most of them. But since then, they really have not been successful in the cloud with their cloud offering, and obviously that ended up selling to Cisco, et cetera. At this point, given the momentum we have and the pipes we have, we are pretty optimistic that what we've announced so far, which is frankly pretty remarkable with Vodafone Business, right? Business Deutsche, like Anand mentioned, a few regionals. That's tip of the iceberg. We think there is a lot more there. As far as moving beyond the letter A, well, I do feel that we have exhausted letter A, but there are other letters in the alphabet. Obviously, it's a much shorter list than with the GSP. Again, I would not necessarily assume that we are done with traditional on-prem PBX providers as far as being a platform of choice for them moving forward. More to come here. As you all know, we have promoted Homayoun, we've announced today, to an EVP, extremely well deserved, and she's assembled a team that really is one-of-kind in the industry. Very bullish there. Thank you. Next question is coming from Michael Turrin from Wells Fargo. Your line is now live. Hey. That might be three in a row. Actually three, four in a row. It's a strong showing. Happy to make it on. Mitesh, the metrics here look pretty clean. The one question I do have is just given the uptick in growth you're seeing, maybe the direct and partner ARR split you've broken out, maybe surprised it isn't kicking in even a touch more given the number of partnerships we've layered on. Maybe you can just remind us and help level set what's in that metric and where we are from a timing perspective with some of those partnerships as well. Thank you. Yeah. Sure, Michael. The direct and partnership includes our direct business, obviously, and all the partnerships we have, which is the Three A's and the GSPs, which George was also asking earlier. Look, if you take a look at the numbers there, we accelerated nine points year-over-year on that metric. All our turbo engines are yet to even fire, in a way. Right now, what are we seeing here? We have got Avaya in the early days. Atos just about ramping. Alcatel-Lucent yet to show up in 2022. Verizon just launched, so again, a 2022 story. Vodafone and Deutsche Telekom will also be in 2022 and beyond. I think this metric over time, this is the upshot, right? We have access to this 180 million seats exclusively. This is the gift that's going to keep on giving in the long term because it's not one and done. We will keep ramping and adding more and more momentum and putting more and more wood behind these arrows. More to come here. That's good context. Thank you. Yep. Thank you. Our next question is coming from Matt Niknam from Deutsche Bank. Your line is now live. Hey, thanks for taking the question. Can you shed some more light on the change at the Chief Revenue Officer level? What drove this? Maybe secondarily to that, what was the impetus for creating the Chief Customer Officer role, and what do you hope to achieve from that new position? Thanks. That's a great question, Matt. First thing, Phil has just decided to move on to the next chapter of his life journey, and he's going to focus on nonprofits and the venture community. What we're excited about is we have been very intentional about succession planning and building a leadership bench. If you look at the quality of people we have promoted, Carson Hostetter has been here for five years. He has tens of years of depth in our domain, and he launched our enterprise business literally from scratch, from zero. As we shared today, it's growing 60%, it's going to cross $600 million. Carson comes in with that gravitas and experience, and we're excited to have him as the new CRO. Now Faiza literally did the same thing. She stood up our SMB business. She comes in with that depth of the customer obsession and the attention to detail, which is going to be the right fit for the Chief Customer Officer. As you know, with any SaaS business, one of the most critical things is net retention. Now, how do you make sure that we have churn to the lowest levels possible? How do we make sure that NPS is something every employee lives and dies by. How do we make sure that net retention is constantly proceeding in the right direction? That is what Faiza is going to be accountable for, leveraging the organizations of customer support, professional services and customer success. That is a very important role in the new world. Vlad already talked about Humayun. Humayun, in the last 18 months, he accelerated our existing partnerships with AT&T, BT, and Telus. He has also brought in an incredible team with deep relationships across the service provider community, where in 18 months we have Vodafone, Verizon, Deutsche Telekom, several regional partners, carrier partners, and many more to come. We feel really good about the depth of bench we have in the company to actually take this to the next level. That's great. Thank you. Thank you. Our next question is coming from Matthew VanVliet from BTIG. Your line is now live. Yeah, guys, thanks for taking the question. Nice job on the quarter. You highlighted particular success in financial services and healthcare. I know it's been an area that you've been investing in vertical teams. I guess, do you need more? Are you looking at more vertical teams out there? Are there additional investments? Are you comfortable with where you're at now in terms of that specialization, and it's really just about execution and efficiency from here? That's a great question, actually. We've talked about financial services and healthcare. Obviously, we have also focused on education. We have focused on retail. Verticals is a continually evolving focus for us. The reason we also called it out in different places is it's not just the direct teams and our vertical focus which is making a difference. We see vertical traction across every partner. That's where we called out the vertical traction we have with AT&T, with BT, with Telus, with Avaya, with Atos. We are seeing this come across in every single partnership we have, and so it compounds. That's where success compounds itself in terms of the vertical wins we were able to announce as part of this cycle and going forward. Great. Thank you. Thank you. Our next question is coming from Ryan Koontz from Needham & Company. Your line is now live. Thanks for the question. I want to ask about your applications integrations there, and obviously, it's a competitive advantage you have against most of your peers. Can you maybe walk us through a couple of the simple use cases on the integrations where you feel like you're differentiated and you can really flex your muscles there? Thank you. Yeah. Vlad, feel free to chime in as well. When we look at integrations, we look at it in two different ways. One, we have a very vibrant ecosystem of developers and integrations. We have 5,500 integrations, 55,000 developers and growing, and that essentially is self-accelerating momentum. That's making a difference. Obviously you have the usual suspects, which is well known, like our deep integrations with Microsoft and Google and Salesforce and Slack and so on and so forth, but many more. There's one there. The second thing I would call out, which is not so evident, is relating back to the last question on vertical strength. This is where we are also starting to integrate with specific vertical applications, which are systems of record for each of these verticals. Like when you look at education and we are looking at Smarts, we are looking at the healthcare-specific applications and systems of record and integrating there. Those are the two layers of integrations we are doing, one through the platform and open ecosystem, and second through a vertical veneer. So yeah [crosstalk]. What would I add to that is, look, our integration capability, and our ecosystem of integrations is, numbers are there, second to none, leading in some areas. Most important thing about our integration is not who we integrate with, but what we integrate. What we integrate is RingCentral. What makes RingCentral interesting to integrate with is the fact that we are world's only five-nines, fully global, fully distributed, and redundant platform that has been at five- nine for, I think, 13 quarters now. For those of you who are not aware, or haven't recently, there is an independent service called the Downdetector, downdetector.com, which tracks outages across a good number of major providers. I would simply urge people to do your own checking. You can compare RingCentral to some of our competitors, some other people in the industry. You can guess your own names, I suppose. I have to say that when you type in RingCentral, you're not unlikely to get a complaint that my doorbell stopped working, obviously people are confusing us with Ring. Beyond that, we have not had a noted issue since last February, okay? That one was minor. This tracker is simply unparalleled. When we talk about, again, integrations, RingCentral standalone, but as you all know, we are all about partnerships, including partnerships with ISVs and other applications vendors. This is what we are uniquely positioned to provide. Five- nines reliability, unquestioned security, and world's largest global footprint. That, by the way, is being fortified and extended in real-time through our most recent partnerships with companies like Verizon, like Vodafone, Deutsche Telekom. You can only imagine the type of reach and quality of service that we will be able to provide over and above what we already do as we get further integrated with and into their networks. Super helpful, Vlad. Thank you. Our next question is from Catharine Trebnick with Colliers. You may proceed with your question. Yes. Excellent quarter. Thanks for taking my question. This is probably pretty much a softball question. Can you discuss how often you really see Zoom Phone in some of the channels? It would speak to the maturity of their channel partners and maturity of how well you're really doing. I know because everybody's always asking us on the sales side what the seat count is. I'm just trying to get another way to zero in on that. Thanks. No, it's a great question, Catharine. When we look at UCaaS opportunities in the channel, we don't see them too often. They're there. We are really happy with our current position and our win rates in these head-to-head UCaaS opportunities. When these opportunities expand, as we just shared, over 60% of our large deals includes the contact center. When these opportunities expand to be a UCaaS + CCaaS conversation, we just don't see them at all. At that point, the combination of inContact and RingCentral, you get two Gartner MQ leading companies as the foundation for RingCentral Contact Center. We are really thrilled with our win rates across the entire industry when it comes to a UCaaS + CCaaS play. We are pretty thrilled about where we are. When we compete, we are really good, and when it expands, we don't see them at all. All right. Thank you. Thank you. Our next question today is coming from Taz Koujalgi from Guggenheim Partners. Your line is now live. Hey, guys, can you hear me? Hello? Yes, we can hear you, Taz. Yeah. Hey, guys. Thanks for taking my question. I have a question about your combined UC and CC strength. You sounded very positive on the strength you saw with contact center and then combined UC and CC deals. Can you provide some more color on what kind of ASP or I guess per-seat pricing uplift you get when you have a CC deal versus UC, or when you have a combined UC and CC deal versus a pure UC deal? Mitesh, you want to take that on pricing? Sure. Yeah, I can take it. It's hard to provide you exact specific, Taz. Think of the rough math as CC market is about 10% of the UCaaS market, and the ARPU on the seat itself is 2 x- 3x higher. It's deal specific. It's hard to use one common denominator of what the exact uplift is. Needless to say, this combination, if you look at the market from a market share point of view, this combination is definitely yielding us a lot of wins. The CC alone is growing much faster for us than the overall install base. Got it. Have you provided any kind of data points on the mix today of, I guess CC revenues or CC seats versus your overall numbers? Sure. I think last quarter when we extended our partnership with inContact, we said that the CC business is over 10% of our overall business. That's the last data points we provided. Got it. That's very helpful, Mitesh. Thank you. Yep. Of course. Kevin, who do we have next? I think, because of these technical difficulties, I apologize. I think we just have to call it a wrap here. It's close to 3:15 P.M here. We will definitely follow up one-on-one with everybody else who didn't get a chance to ask the call in. This is an opportunity for all these service providers to use platforms like RingCentral. Sorry about this. Stay tuned and we'll talk soon. Goodbye, everybody. Ladies and gentlemen, we do apologize for the technical difficulties. That does conclude today's teleconference and webcast. You may now disconnect your lines.