Greetings. Welcome to the RingCentral Q4 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Ryan Goodman. You may begin. Thank you. Good afternoon, and welcome to RingCentral's Q4 2020 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 Q1 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, 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 the investor relations website. With that, let me turn the call over to Vlad. Good afternoon. Thank you for joining our Q4 Earnings Conference Call. I would like to start this call with a warm welcome to our newest Board member, Secretary Arne Duncan. Arne is the former U.S. Secretary of Education. Prior to his federal government service, Arne was CEO of Chicago Public Schools for eight years, and he's currently a senior fellow at the University of Chicago Harris School of Public Policy. Welcome, Arne. To RingCentral. 2020 was a transformational year. The global pandemic is fundamentally changing how businesses operate. The vaccine now being distributed, many businesses are preparing for a hybrid work environment. They're planning for some workers in the office and some at home for the foreseeable future. Companies adapt to this new work from anywhere norm, digital transformation of business communications will become more critical. Enabling this transformation are cloud-based communication solutions. This is essential to enabling employees to productively engage with customers, partners, and peers from anywhere on any device and in any mode. According to Gartner, by 2024, 74% of the new unified communications licenses purchased by organizations will be cloud-based, up from 48% in 2019. Businesses are increasingly turning to RingCentral as a trusted partner in their transition to a cloud-based communications platform. This growing customer demand is evident in our strong and standout Q4 results. Total revenue grew 32% year-over-year to $335 million, an acceleration of two points sequentially. RingCentral Office ARR grew 39% year-over-year to $1.2 billion, an acceleration of three points sequentially. We delivered a record number of $1 million TCV wins, up over 50% sequentially, and we had strong contributions from our key partners, led by Avaya, AT&T, and Atos. As we look to 2021 and beyond, we are increasingly confident in the size of the opportunity and market receptivity to our differentiated Message Video Phone, or MVP as we call it, and cloud contact center solutions. This together enable us to address the full range of business communications needs for most enterprises worldwide. Now, with the recent addition of RingCentral Glip, our free unlimited smart video meeting solution, we can help even more businesses or their individual departments to communicate in any mode on any device from anywhere. Please visit glip.com to experience it for yourself. Our leading UCaaS solution, RingCentral Office, is an enterprise-proven, carrier-grade, global trusted Message Video Phone or MVP solution. It offers a seamlessly integrated multi-mode user experience, five nines reliability, world-class global coverage, and an open platform, all of which we believe are important competitive differentiators. We're also proud to once again be recognized as a leader in the latest Gartner Magic Quadrant for Unified Communications as a Service Worldwide report for the sixth year in a row. In addition, RingCentral ranked highest in all five use cases of the 2020 Gartner Critical Capabilities for Unified Communications as a Service Worldwide report. Leveraging all the strengths of our industry-leading cloud PBX platform, we have recently added RingCentral Video, a new core component of our MVP solution. RingCentral Video is built on the modern WebRTC industry standard framework with numerous proprietary enhancements. We continue to innovate here at a rapid pace. Some of the recent enhancements include virtual backgrounds, closed captions, third-party virtual camera support, and waiting rooms. Earlier this month, we introduced RingCentral Embeddable for RingCentral Video, enabling developers to quickly embed video into business applications. In Q4, we acquired certain technology assets of a company called DeepAffects, a pioneer in AI-powered conversational intelligence. DeepAffects will enable us to provide RingCentral Video with new capabilities such as emotional sentiment recognition and multi-speaker identification. To help businesses transition to cloud communication solutions, we recently introduced RingCentral Glip, our free smart video meeting solution available through our glip.com website. Glip provides unlimited RingCentral Video meetings seamlessly integrated with team messaging capabilities, all at no cost. This smart meeting solution provides users with a persistent platform for communications before, during, and after meetings. This is an important differentiator from other single-mode video solutions available today. Of course, all of this with RingCentral's carrier-grade quality, security, reliability, and global footprint. Complementing our UCaaS solutions is the RingCentral CCaaS product portfolio. We are seeing strong cloud adoption trends with many customers choosing integrated UCaaS and CCaaS from a single leading provider. Contact center was included in over 60% of our 1 million TCV wins in Q4, including multiple wins for our native RingCentral Engage cloud contact center platform. We are particularly proud of a recent 2,000 user win that combined RingCentral Office with RingCentral Engage. This major NGO customer will leverage the full power of RingCentral to help people displaced by COVID-19 find new employment. In conclusion, we have a strong, well-differentiated portfolio of industry-leading cloud communication solutions. Over the past several years, we focused on finding new, innovative ways to efficiently bring these solutions to global markets. On that note, I'd like to extend my warm welcome to Vodafone Business as our newest key partner. Vodafone is the largest mobile and sixth network operator in Europe. RingCentral will be the lead UCaaS offer for Vodafone Business' install base of over 30 million customers. Vodafone Business will also offer RingCentral's CCaaS customer engagement solutions. RingCentral believes in winning through partnerships. Over the past several years, we've established a unique go-to-market ecosystem of direct channel and strategic partnerships. RingCentral is the lead UCaaS provider for Avaya, Atos, Alcatel-Lucent Enterprise, AT&T, BT, Telus, and now Vodafone Business. This gives us preferred access to over 200 million potential users worldwide. We're humbled and grateful to find ourselves in this unique position, and we're committed to driving a pace of rapid innovation and GTM expansion to continue delivering world-class cloud communication solutions for years to come. With that, I will now turn the call over to our President and Chief Operating Officer, Anand Eswaran, for additional details on our progress and some recent achievements. Thank you, Vlad. Good afternoon, everyone. Operationally, Q4 was an outstanding quarter across the board. ARR growth was solid in all customer segments. Both new customer wins and install base expansions contributed to the strong performance. We are seeing a high level of demand across our integrated portfolio of cloud-based unified communications and customer engagement solutions. Modern cloud communication solutions are becoming a top priority for companies of all sizes. We are privileged to be a key partner in their journey to the cloud. We continue rapidly innovating, and we are scaling our operations and platform to effectively meet the needs of our growing customer base. Let me share some highlights. First, our people. We further strengthened our leadership team throughout the year. We appointed a new EVP of Products and Engineering, Nat Natarajan, Chief Marketing Officer, Jaya Kumar, Chief Digital Officer, Matthew Bishop, Chief Information Security Officer, Heather Hinton, and Chief Privacy Officer, Paola Zani. These industry leaders bring invaluable operational and technology expertise. Second, our channel partners. We continue to expand our presence in the channel community, a key driver of our upmarket success. In Q4, our channel ARR increased 55% year-over-year to $465 million. Third, our service provider partners. We are seeing positive momentum with service provider partnerships. We expanded our relationships and became a lead offer for industry leaders like AT&T and BT. We are excited to welcome Vodafone Business as a strategic partner. Fourth, our strategic partners. In Q4, we expanded our rollout with Avaya and Atos in several new geographies. Alcatel-Lucent Enterprise is on track for a Q1 launch. We are seeing early go-to-market traction with our strategic partners contributing multiple million-dollar-plus TCV wins in Q4. Fifth, with our proven upmarket traction, we signed two $10-million-plus TCV deals, along with a record number of million-dollar-plus large TCV wins in Q4, up over 50% sequentially. Finally, our growing product portfolio was a key driver of our strong Q4 results. Our integrated portfolio of UCaaS and CCaaS solutions is a key differentiator. Looking ahead with RingCentral Glip, we are reimagining smarter meeting solutions with integrated team messaging and video for persistent collaboration in a work-from-anywhere environment. Let me now dive into some detail. I'll begin with the exceptional Q4 contributions of the channel. Channel contributed over three-quarters of the million-dollar-plus TCV wins with a mix of UCaaS and CCaaS wins across both new customers and upsell to existing customers. One of the marquee wins from channel in Q4 was a Fortune 500 specialized staffing firm. This customer needed to replace aging on-premise systems with a highly reliable global cloud platform. With RingCentral, this customer can now manage its 6,000-plus users across over 20 countries on a single global communications platform. As for service providers, we had another exciting quarter with strong results and new partnerships. First, Vodafone Business. This partnership provides RingCentral an opportunity to further scale our international go-to-market reach to a complementary enterprise and mobile user base. Vodafone Business will deliver a new co-branded cloud-based communication service based on our leading MVP platform, as well as our portfolio of CCaaS solutions. For AT&T, we continue to see solid momentum as their lead UCaaS solution. We are seeing increased traction with large customers and excited at the opportunity to broaden our partnership in new verticals like state and local education customers. For BT, on the heels of becoming their lead UCaaS provider, we had a strong UCaaS quarter in Q4. As for the strategic partnerships, let me start with Avaya. We expanded our ACO rollout, launching in five new European countries in Q4. We are seeing adoption across customers of all sizes in multiple geographies, with particular strength in our enterprise segment. This includes a 7,000-plus user Microsoft direct routing win with a large, diversified insurance vendor. We are encouraged with the strong early growth momentum in seat count, transaction value, volume, and deal size. With Atos, we've also hit the ground running. Since initial European launch in August, we've expanded to the U.S., U.K., and Australia. The pipeline is growing well. We are also excited to have Atos begin its own implementation of Unify Office by RingCentral for their 30,000-plus employees in over 20 countries. As businesses embrace working from anywhere, our integrated platform of UCaaS and CCaaS solutions drove strong customer wins during the quarter. In Q4, we won a deal with a Fortune 500 financial services provider. This customer required a highly reliable, trusted, FINRA-compliant communication system. Our deep enterprise cloud phone system expertise and vertical market integrations were key differentiators in this 4,000-user win. We have a bigger opportunity to expand our footprint over time, not only for users, but also with other products. We also saw strength in the quarter with our contact center solutions. Contact center was included in over 60% of our million-dollar-plus TCV wins in Q4, including nearly 100 wins for our native RingCentral Engage cloud contact center platform. We are seeing positive momentum with existing customers. For example, Path Forward, a provider of IT and technology solutions for medical practices and a longstanding RingCentral UCaaS and CCaaS customer, tripled its Engage voice seat count to 450. Wins like these demonstrate our ability to land and expand and illustrate our significant opportunity ahead with larger customers. I joined RingCentral a little over a year ago, and I am so proud of the accomplishments of the team in 2020. We strengthened our leadership team with six new CXOs and top talent added throughout the organization. We deepened our portfolio of product capabilities with RingCentral Video, Glip, and RingCentral Cloud PBX for Microsoft Teams, which enables direct routing integration. We launched Avaya Cloud Office and Atos Unify Office and added new key partners, including Alcatel-Lucent Enterprise and Vodafone Business. We had numerous industry accolades for diversity, leadership, and culture, and we broke through the Glassdoor Technology Top 10 Best Places to Work. Last but not the least, we delivered consistent and strong results for the year. We continue to execute with a clear vision and strong discipline. I'm incredibly grateful and humbled to be a part of this journey. With that, I will turn the call over to our Chief Financial Officer, Mitesh Dhruv. Thanks, Anand, good afternoon, everyone. 2020 was a standout year for our financial performance, driven by many of the tailwinds that Vlad and Anand highlighted. Subscriptions revenue grew 33% year-over-year and surpassed $1 billion, a significant milestone for RingCentral. Non-GAAP operating margin improved 50 basis points to 9.7%. For several consecutive years, we've been executing above the rule of 40, demonstrating profitable growth. Q4 capped the year with strong performance on key financial fronts. Here's a quick snapshot. RingCentral Office ARR grew 39% year-over-year to over $1.2 billion. Total ARR grew 35% to $1.3 billion. Subscriptions revenue grew 34%, above the high end of our guidance. Non-GAAP operating margin was over 10% at the high end of our guidance, and non-GAAP free cash flow margin of 6.5% improved about 120 basis points sequentially. These robust trends reflect RingCentral's growing customer mindshare, both with new and existing customers, as well as contributions from our partnerships at favorable unit economics. To that end, we yet again saw strong new logo momentum in Q4. Our ability to land new logos validates the strength and value of our MVP platform as enterprises look to transform their entire business communications stack to the cloud. Traction with our existing customers has never been better. Three key things there. First, upsell represented over 40% of new Office bookings. Second, churn hit a record low exiting the year. Third, trends stabilized in those verticals most impacted by COVID-19 earlier in the year. As to our partnerships, we are pleased to see contributions from Avaya and Atos as they begin to ramp. We are also seeing strong results from our carrier partners, most notably from AT&T. Looking ahead in 2021, we have a healthy pipeline across all our segments as each facet of our global sales ecosystem is providing growth opportunities. As more users from our partners come online throughout the year, we expect strong incremental contributions. Beyond 2021, we layer on more growth from partners like Alcatel-Lucent Enterprise and Vodafone Business. With these structural tailwinds, we feel confident in the momentum into the new year. With that, the 2021 outlook numbers. We expect total revenue growth of 25%-26%. We expect subscription revenue growth of 26%-27%, with similar revenue linearity between the first half and the second half as we saw in 2020. We expect non-GAAP operating margin between 10% and 10.1%. We expect non-GAAP EPS of $1.20-$1.24. In summary, 2020 truly was a transformational year for RingCentral. New logo momentum was strong, expansion within the base is ticking up, churn continued to improve throughout the year, global partnerships have started to contribute, we expanded our product portfolio, and we've added new catalysts for future growth. Our technology moat, combined with a differentiated distribution moat with our unique partnerships, positions us for long-term durable growth. We continue to invest in R&D, growth partnerships, and core data carrying resources. This will enable us to drive further product innovation and build pipeline to capture this large opportunity ahead of us. We are confident in our ability to thrive in this $50 billion-plus addressable market, and we believe 2021 could be a very exciting year ahead for RingCentral. With that, let me turn the call to the operator for Q&A. Our first question is from Brian Peterson with Raymond James. Please proceed with your question. Brian, please make sure your line is on mute. Sorry. A little bamboozled by the mute button there. Apologies, guys. Can you hear me? Just on the enterprise strength, I know you mentioned a record number of seven-figure deals. Sounds like there were a lot of contributing factors there. Is there any way to kind of unpack that a little bit? Sure, Brian. I'll take that. I'll give some more financial color on the $1 million TCV deals here. You're right, we did have a banner year on the $1 million TCV wins. It was up 50% sequentially. We also were able to squeeze in two deals over $10 million. What I'll do is provide some color on two or three dimensions, Brian. One is on the quality of the deals themselves, on the go-to-market motion, and then some product color on where the deals came from. On the deals themselves, the deals are getting larger, the wins are getting larger, and customers are committing to longer durations. Hello? Hey, Vlad. Hey, Vlad, can you go on mute? On Q4 itself, it was a record quarter, right? The total TCV value we booked for $1 million deals was over $100 million. It was unprecedented for us, and this was up 70%. On the go-to-market side, it was really broad-based. Three-quarters of the wins came from channel partners, and we also had very good representation from all the three As. We had Avaya, Atos, AT&T, all had million-dollar representations. We also had about half the deals were from our targeted verticals, like financial, education, healthcare. Now if you move on to the product side, over 60% of our million-dollar wins included a contact center element. Really good pull-through. Overall, if you just pull this all together, net, we are clocking in higher lifetime value deals. They're coming in from all facets on GTM product and verticals, some established factors, but also some that are still ramping. No, that's great color, Mitesh, and congrats on that. Maybe a follow-up. You guys have made a lot of investments internationally over the last 12 months. I know it's kind of hard to paint all international markets with a broad brush, but I'd be curious what you've seen in terms of demand signals for some of these markets. Is there a tipping point, and how should we think about the adoption curve relative to the strength that you've seen in the U.S.? Thanks, guys. No, that's a great question. This is Anand. I'll take that. You're right in your question. If I look at Avaya, if I look at Atos, we've added multiple international geographies, in Q4. In line with that, we've had one of the stronger international quarters as well, both in terms of growth and in terms of percentage of revenue. The progress is exactly as we expected because we are layering in many facets of growth, primarily through our partners, all contributing to significant international expansion. Great. Thank you. Our next question is from Bhavan Suri with William Blair. Please go see with your question. Great. Thanks for taking my question, guys, and congrats. The million-dollar deals number is great. Obviously the color you just gave was phenomenal. I just want to follow up on the previous question, but now looking forward. As you think about the guide you gave, and it's one of the higher ranges that you have given for a forward guide historically, I'd love to understand maybe from Mitesh initially, what's behind that? What are the tailwinds that you're building in, and what are you not building in that could potentially be upside? Help us think about how to unpack that guide given the tailwinds of the 3A partners, obviously, the BT partnership, Vodafone, the natural move to cloud, et cetera. Love to understand that. Yeah. Can I just request everybody to just go on mute, Vlad, if you are on mute, because we're all in different locations, Bhavan. Yeah. Yeah, I would say that. It's understandable. What we'll do is, Bhavan, I'll quickly take it a click below on the planning process itself, how we do planning, and then I'll hit the punchline so we can give you some good color on what we are baking in or not. Ryan, Thank you, Ryan. From an annual planning perspective, we combine two inputs, Bhavan. One is the extrapolation of trends we witness. That's one. We then marry those to a bottoms-up view from our various go-to-market product motions. From a trends point of view last year, COVID definitely raised the priorities for, as you said, business communication solutions. It's a structural change. It's a more strategic purchase. We saw elements of that play out throughout the year. Our new logos were strong, and we saw incremental improvement on churn and retention metrics as we progressed throughout the year. Enterprise is kicking in high gear. Those are trends we are seeing. Now, looking at bottoms-up 2021, we evaluated multiple aspects. First, on the go-to-market side, direct channel, the 3A service providers. Then also we layered on a go-to-market, a product motion from an office, Glip, video messaging, and contact center. Combining these two trends, call it tops-down and bottoms-up, usually, and as usual, even for 2021, we always take a prudent approach to our guidance. We've assumed a reasonable ramp for Avaya and Atos. For Alcatel-Lucent and Vodafone, we've baked in minimal contributions as they ramp. It'll take about six to nine months to ramp from the launch date, so it's more of a 2022 driver for us. Overall, if you just send it out, we feel really good about what we saw in Q4 and the visibility we are seeing with the early trends here. Got you. That's helpful. Maybe one maybe to Anand here. You guys have offered from a product perspective, a solid set of APIs, right? To voice customers sometime. Along with purchase of RCO, you've added some CPaaS capabilities, bulk messaging. Some of the primary UCaaS competitors have made investments in full CPaaS offerings. I guess I'd just love to think strategically about the importance of this functionality as part of the ability to differentiate your UCaaS contact centers as a service offering. Do you kind of see the full CPaaS ownership that's having benefits from a competitive perspective? Do you think that right now it's kind of a focus on the core integrated functionality of what you have today? I'd love to understand how you think about that strategically. Thanks. That's a great question, actually. I would basically say our core focus remains the same, which is UCaaS across message, video, phone, deep integration with contact center, bringing that AI element to it. You saw the DeepAffects acquisition, which Vlad called out. That remains the core strategy. Now, when customer demands come through, we are absolutely open to exploring specific CPaaS use cases. You saw us do that with a high-volume SMS use case, which we basically talked about last quarter. That's very specific, and that's customer-driven. That's been our strategy. It's consistent, and we are going down the same path. Thanks, Anand. I appreciate the color and the candor. Again, guys, just really consistently, what a great job. Thank you. Thank you. Our next question is from Sterling Auty with JPMorgan. Please proceed with your question. Hey, thanks, guys. I think you got the audio issues, because for a while, it sounded like Darth Vader was on the call with us. Maybe, Mitesh, can you give us a sense, you added a number of geographies through the fourth quarter with Avaya. Help us understand how these big five partnerships will ramp in terms of the additional geographies, and at what quarter would you anticipate all of the partners to be fully ramped in all of the geographies that they want to compete in? Yeah, sure. Look, we've got three partners right now, strategic partners, Avaya, Atos, and Alcatel. Avaya is in 12 countries. Atos is in 11, and Alcatel will launch in 10, 11 countries coming on. If you look at the size of the market and the addressable market we have, we'll be able to address a lot of this opportunity in the next couple of years. I don't think there's going to be any dearth of what we can attack in terms of these seats, because we are going after the biggest geographies first and where the most of the seats are. I feel over time, as I mentioned earlier, Avaya is ramping really nicely. Atos is off to a good start, and it'll keep on providing incremental contributions throughout the year. Alcatel Lucent is going to be more of a 2022 driver. One thing is that these partnerships, I don't think you can think of them as a one and done. They provide you a continual benefit for several years to come. That's the way we think about these partnerships. Sounds good. Then one follow-up. In terms of the Avaya wins in the quarter, you mentioned the 7,000-seat win. Where are you hitting in terms of the sweet spot, and is there a cap on the size of the organization where you think the product is going to resonate moving forward, specifically through Avaya? That's a great question. Let me take that. A couple of things. You said, where are we hitting the sweet spot? What I see is, across all fundamentals, we feel that the Avaya team, their channels are firing on all cylinders. That's the customer transactions, that's seat expansion, that's large deals closed, and that's geo expansion. We saw in line with the fact that we have now 12 countries online, for ACO. We actually saw a good bit of geo expansion broadly, and we also see the last layer, which is specific traction on verticals like financial services and manufacturing. What I would say is it's actually broad. It's broad and we see strength everywhere as we expand our relationship with Avaya. Got it. Thank you. Our next question is from Terry Tillman with Truist Securities. Please proceed with your question. Yeah, thanks for taking my questions. I'll echo the congratulations. Great quarter. I guess, maybe, Mitesh, this question's for you. There's been a lot of chapters to the AT&T book. Over time, it ramped, from basically nothing to well over 10% of revenue. In fact, I think it was in the teens as a percentage of revenue. Then it started to kind of trend lower. What I would love to get a perspective on is, was that still a headwind, though, in 2020 from some of the dynamics going on with AT&T a couple of years ago? How do we look at AT&T into 2021 in terms of tailwind, specifically around that relationship? Sure, Terry. I love the way you phrased it. There are a lot of chapters in the AT&T storybook. I will say the greatest chapter is being written right now. That's of course tongue in cheek here. If you harken back memory lane, we did at the trough couple of years ago, AT&T was about a five-point headwind to growth. Now fast-forward to the end of 2020 with our new relationship underway, these headwinds are dissipating. 2020, in fact, was one of the best bookings year in our history with AT&T. The contributions are strong across the board, upmarket and downmarket. We recently have launched new packages to open up new verticals like SLED. For 2021, looking beyond, to answer your question, we don't expect this AT&T relationship to be a headwind anymore to overall growth. I'll wrap it by saying this, that, with our new expanded relationship, with new markets, I think in the next couple of years, AT&T could become a larger business, definitely than the previous go-around we had. Yep. That's great to hear. I don't usually talk about or ask about stock comp, but it looks like it's going to double. Could you just quickly describe some of the dynamics that's causing the significant stock comp? Again, congrats. Sure. Thanks, Terry. Yeah, stock comp, I would say there are two or three main reasons for the stock comp increase. The first one is our strengthening of the executive team. Anand did mention that we've been hiring a seasoned C-suite bench. The market opportunity is just too large for us not to scale to become a multi-billion dollar company. We are hiring ahead of that. We've hired several C-suite executives there. That's part one. Second is our overall headcount increase, which is RingCentral is a great place to work, and people are seeing our vision. We are adding headcount in the normal course of business. That's sort of the second reason with the headcount increase. Third one is the increase in stock price. While it's great for the market cap and the stock price increase is good, it also puts pressure on the stock comp. Having said all of that, Terry, net, if you look at the dilution in the share count, we are adding about 1.5 million shares. There's going to be lower dilution than we've had in the previous years. We get to combine the best of all elements. We get to hire a top talented team, and we get to reduce dilution for our shareholders. I think it's a win-win there. Our next question is from George Sutton with Craig-Hallum. Please proceed with your question. Thank you. Mitesh does the best job I've ever heard taking a large stock comp and turning it into a positive, so congratulations. You're next. I wanted to look at 2020, which I completely agree was a transformational year when we look at all the partners and the new offerings. I wonder if we look forward a full year from here, judging on your pipeline that you're looking at right now, are we going to see additional partners? Are we going to see additional offerings that expand the platform in ways that we might not be considering today? I'll take that. Part of I think we've always talked about this. RingCentral's success is founded on the basis of partnerships. You can expect that we are constantly looking to expand our relationships with our partners and thinking through partnerships across all dimensions, which is our channel and large partners, our strategics, and our GSPs. That is absolutely something which we are focused on. Got you. One other thing relative. You brought up Microsoft in a direct routing win. I wondered if you could go into a little more detail on what you're seeing out of that Microsoft opportunity. When I think of Microsoft, I literally think about it in three different ways. The first is the UCaaS solution. We feel really good about where we are because one, it's about integrating across message, video, and phone, like Vlad called out, which is the reason you see Ring is the leader in the Magic Quadrant for the sixth year in a row now with Gartner. We're still expanding our innovation mode every single day, which is what you see reflected in the large deal wins. We feel really good about the UCaaS solution. The second thing I would call out is the integration with CCaaS. One of the things Mitesh just mentioned is over 60% of our large deal wins actually had contact center in it. We have the deep integration with CCaaS is a very unique differentiator. The final thing I talked through is for customers who are a big Microsoft shop, that's where the direct routing comes in because they've made their decision to standardize on Microsoft and hence, Teams is in play. With direct routing for Teams, it still gives them the opportunity to leverage the best cloud-based business phone such as RingCentral, which is where we are seeing the traction, and that's the example of the 7,000-plus Teams direct routing win we talked about. We feel really good when we compete, and we feel really good when we can actually just work with Teams and integrate with it as well. Great. Thanks, guys. Due to the interest of time, we do ask anyone who's asking a question to please limit yourself to only one question. Again, with the interest of time, please limit yourself to only one question. Our next question is from Michael Turrin with Wells Fargo Securities. Please proceed with your question. Hey there. Thanks. Good afternoon. Mitesh, ARR picked up here in Q4. We had to go back to 2015 to find 35% growth in our model. Is there anything you can add in terms of contribution from those strategic partnerships you're calling out? It sounds like the likes of Avaya and Atos are likely the furthest along. Anything you can add, both in terms of Q4 contribution and anything that might be embedded there in framing the initial outlook for the coming year is helpful. Sure, Michael. Q4 ARR was strong across the board, every chip in a way fell our way. Also, we did have very strong contribution from our partnerships there. We are extremely pleased with the progress with Avaya. It's been a heavy lift to make it a reality. It's really cross-functional with both companies, it's been working really well. We saw seats double quarter-over-quarter with Avaya, and we had multiple million-dollar deals there. Avaya will serve as a blueprint for future partnerships. The first one is Atos, which is again, off to a great start. The product is now offered in 11 countries now. More international companies are coming, countries are coming in 2021. We are activating the partner ecosystem. In Q4 for Atos, we had three times the number of partners in Q4, quarter-over-quarter. I think Atos will start to incrementally add on to growth rates in 2021. Overall, the key thing to note, Michael, is that with the size of the opportunity we are and the penetration level being so low, I think this will be a multi-year drumbeat for us to provide an opportunity to grow at a solid rate for years to come with these partnerships. Great. That's all clear. Thanks, guys. Thank you, Michael. Our next question is from Meta Marshall with Morgan Stanley. Please proceed with your question. Great, thanks. Maybe just a question. Given kind of the success of the homegrown RingCentral Engage contact center platform and obviously the success of RingCentral Video, just any recent thinking about either transitioning kind of existing customers that may be on your kind of Zoom video product as well as just kind of status of the inContact relationship as your kind of homegrown products kind of continue to develop. Thanks. Yeah, Meta, this is Anand. I'll take that. Good question. Let me start from the last question you asked. Engage was a good quarter. Our partnership with inContact is really strong, and that continues as well. No change in strategy. We continue to work closely with inContact. They had a big part of our large TCV wins where contact center was embedded while we make progress on Engage. On the second part of your question, which was Zoom and RCV. Right now, every customer who we acquire new defaults to RingCentral Video, and we've had good traction, and we've got good feedback. As for the install base, we are going through the process of getting them on, it's not a forced migration, but we're getting them on our RCV platform because the benefit of a tightly integrated experience across message, video, and phone is very strongly resonating with our customers, and we are on that journey as well right now. Is there a timeline for that as far as when you would expect that migration to be complete? No timeline, but the journey and the process is pretty strong. Great. Thanks. Our next question is from Samad Samana with Jefferies. Please proceed with your question. Hi, good evening. Great quarter. I'll jump to the question for the sake of time. Mitesh, if I look at the channel partner ARR, it actually, on a percentage of net added dollars, was the smallest contribution that it's had in several quarters, even looking back the last couple of years. I'm just curious, how should we think about maybe the percentage of channel ARR dollars as a percentage of total ARR added going forward? Was there anything in the Q4 that where direct was particularly strong that might have driven that mix shift lower for the contribution from the channel? Look=, I mean, yeah. Everything was really strong in Q4, particularly direct, and the enterprise was really strong. If you look at the growth rate for the channel, again, the mix is driven by both components, right? The channel and the overall. The overall was very strong. If you look at, Samad, the channel growth rate of, I think, about 55%-ish, it's tracking in line with the overall enterprise growth rate. There was nothing really to call out. In fact, channel, we are seeing increased momentum in terms of number of partners we are signing, and some of the initiatives we are working on where we can help channel close the deals faster, that's underway as well. Nothing noteworthy there. Great. I figured it was direct strength. Anand, maybe just one for you on Glip Pro. Any early reads on download data or activity or early engagement from customers or trends that are worth calling out to the extent you've seen conversion? I know it's only been just around 60 days, give or take, but just given that it's an exciting opportunity, anything you can share would be helpful. No, Samad, good question. It is too early. 61 days to be precise. The progress is as we expected, and it's just too early to share any trends or any other details. Great. Gotcha. Thanks for taking my questions, guys, and congrats on a strong finish to 2020. Thank you. Our next question is from James Fish with Piper Sandler. Please proceed with your question. Hey, guys. You highlighted a number of very impressive wins with large entities, really we only heard a few thousand seats across them. Is it just the initial rollout to the broader enterprise? Was it more departmental at this point and that we're looking to upsell kind of over the next year to two, even extend that to Office? Obviously, impressive 30,000 employee addition, they obviously have about 3x more than that in terms of the overall. Just trying to understand, is it just the initial win and we should expect the next year to two to see additional adds? Not really. If I just look at the record million-dollar plus TCV wins we had, it was actually pretty healthy, and it was a good mix of UCaaS and CCaaS. I actually thought it was pretty healthy as we look at the number of seats going forward as well. I'm not sure where you picked that up from. We've also had a fairly good upsell, as Mitesh called out as well. We are also not just getting in new customers, but we are reaching back into our installs and giving a very good upsell expansion motion, which is bearing fruit as well, which is reflected in the seats as well. We see good progress across all of them, not just the number of large deals, but also the seats across them. Frost & Sullivan just published their report for 2020, where they called out RingCentral as not just the highest in terms of users and seats, but also in terms of growth for users and seats as well. We feel pretty good about it. Thank you. Our next question is from Ryan Koontz with Rosenblatt Securities. Please proceed with your question. Hi. Thanks for the question. Thanks for all the color on the channels. Some terrific progress there. As we think about the channel mix increasing over time, any headwinds we should consider on the model to gross or operating margins? Thanks. No, channel, in fact, it's an accretive motion, right? The channel themselves as well as the strategic partners, they are accretive to unit economics because we don't get to pay the upfront sales and marketing costs for these motions. Over time, as the channel takes share, it would be neutral or at best neutral or slightly accretive to the model. Our next question from Will Power with Baird. Please proceed with your question. Hey, this is actually Charlie Erlikh on for Will. Thanks for taking the question. Congrats on the really strong results. I'll ask a quick one, just maybe on the pricing environment you're seeing. With a lot of competitors and some coming at the market at a bit of a lower price point, I'm wondering if you would maybe comment on any changes you're seeing in the pricing environment at all, if anything. Thanks. Yeah. I'll take that, Mitesh. No, not a whole lot of change. We see the trend sort of be the same across the year, so no material change. Our next question is from Rich Valera with Needham. Please proceed with your question. Thank you. Congratulations on the strong results. Question on the SMB performance. Looked like you saw another nice quarter-over-quarter acceleration in the SMB growth rate. Wondered if that was due to improving churn, if that was a factor, and if in fact, SMB churn was back to pre-COVID levels. Thank you. Hey, Rich. It's a good call-out on the SMB. There's a couple of things happening under the cover on the SMB side. I would say there are three or maybe four trends to call out. The first thing is, we are seeing stronger traction with our e-commerce motion, which is more of the self-service motion. That's accelerating, which is pulling up the SMB growth. Second one is the benefit we are getting from our recent branding efforts. We now have the optionality for Glip Pro as well. That overall branding halo does fall through to the SMB side. The third one, as you called out, the net retention or churn, definitely an improvement in churn in the SMB side. It stabilized. It kept on getting better throughout the year. We are almost there at the pre-COVID level on the SMB churn front there as well. I think the uber driver I feel in this COVID world, no one is really deploying on-premise equipment, right? People are only going to the cloud to stay productive. I think that definitely helps the SMB space for us. Our next question is from Matt VanVliet with BTIG. Please proceed with your question. Yeah, thanks for taking my question, and nice job on the quarter. I guess from a bigger picture standpoint, you mentioned the number of countries that you're in with a bunch of the bigger partnerships now. Wondering if you have much of an update in terms of the number of partners kind of within those geographies or kind of across their entire systems. How well penetrated at some of these bigger ones? I presume Avaya is a little further along, but just kind of how do you feel overall about the potential for sort of organic growth within these partnerships as you move through the year? I'll give the first part of the subjective color, which is, I'm assuming you're talking about partnerships like Avaya and Atos and their partners, right? Yes. Yeah. As we look at it, every country we bring on, we basically are able to activate all the partners in their channel who exist in those countries. As of now, we have activated almost somewhere in the 90s on Avaya partners in the countries we operate in. As Mitesh said, Avaya is now, ACO is now available in 12 countries. Atos is now available in 11 countries. We feel really good about the percentage of partners in those countries we've activated and we are working with to train, enable, and build pipe jointly. Great. Thank you. Our next question is from Siti Panigrahi with Mizuho. Please proceed with your question. Hey, guys. Congratulations. Most of my questions are asked, just a follow-up to the SMB question earlier. Mitesh, what's your expectation backed into 2021 in terms of SMB growth? Should we expect a similar kind of trend that we saw in Q4? Yeah. Look, SMB, we always internally model SMB, call it high teens, like that. Mid to high teens. It used to be low to mid-teens, now it's mid to high teens. I think that's the reasonable level to model. You just never know, SMB is easy come, easy go. I think a more prudent way to dial in expectations is call it like high teens growth rate in 2021. Our next question is from Catharine Trebnick with Colliers. Please proceed with your question. Well, thank you for sneaking me in. Congratulations on a good quarter. This is back to the contact center. Could you parse perhaps to go a little bit deeper into where you're using inContact versus your internal in Engage? What's the gap, you would say, in capabilities between inContact and Engage? It does seem like you're moving yourselves directly into the contact center, even though you said earlier you still have a tight relationship with inContact. I'm just trying to parse the capabilities and where you use one versus the other. Thank you. Yeah. Catharine, hopefully we will have a follow-up with you on that. That'll take a bit of time. I would say at a 30,000-foot level, essentially, it depends, one, on the specific use cases which the customer is looking at. It also depends on the size of the customer and the number of agents they want. All of that comes in together to help us understand which product we lead with. As I said, again, I'll go back to saying it again, our partnership with inContact is really strong and further strengthening, and we see huge momentum as part of that. We also see Engage pick up momentum in specific use cases in smaller customers as well. It's working across the board with our customers directly and also with our channel. Our next question is from Matt Niknam with Deutsche Bank. Please proceed with your question. Hey, guys. Thank you for taking the question. Just to follow up on the million-dollar deal. We got some good color on the fourth quarter. Any color you can share in terms of how those size deals have been trending thus far during the quarter in 1Q? Thanks. Yeah. Yes, please. Let me answer that. In 1Q, we are still in 1Q. What I will say is Q4 is a seasonally strong quarter. It's the strongest quarter. That said, I'll just broaden out the question here. If you look at the trends we are seeing, early trends in Q1, we are seeing our trends of Q4 continue into Q1 overall. We have reached the end of the question and answer session, and this also concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.