Good afternoon, and welcome to the RingCentral third quarter 2023 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad. To withdraw your question, please press star then two. Please note, this event is being recorded. I would now like to turn the conference over to Will Wong, Vice President of Investor Relations. Please go ahead. Thank you. Good afternoon, and welcome to RingCentral's third quarter of 2023 earnings conference call. Joining me today are Tarek Robbiati, CEO, Vlad Shmunis, Founder and Executive Chairman, and Sonalee Parekh, CFO. Our format today will include prepared remarks by Tarek, Vlad, and Sonali, followed by Q&A. We also have a slide presentation available on our investor relations website that will coincide with today's call, which you can find under the Financial Results section at ir.ringcentral.com. Some of our discussion responses to your questions will contain forward-looking statements regarding the company's business operations, financial performance, and outlook. These statements are subject to risks and uncertainties, some of which are beyond our control and are not guarantees of future performance. Actual results may differ materially from our forward-looking statements, and we undertake no obligation to update these statements after this call. For a complete discussion of the risks and uncertainties related to our business, please refer to the information contained in our filings with the Securities and Exchange Commission, as well as today's earnings release. 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. 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, I'll now turn the call over to Tarek. Good afternoon. I'm excited to be on my first earnings call as RingCentral's CEO. We had a good quarter as we exceeded our guidance across our revenue and operating profit metrics. Sonali will provide more financial details shortly, but the key takeaway is that RingCentral continues to win and innovate in a competitive market. We win because we have an industry-leading product that is mission-critical to many customers. In particular, within the SMB mid-market and consumer-facing verticals, RingCentral is the de facto choice for many businesses, given our leading reliability, product integrations, and commitment to innovation. This theme was apparent throughout the many conversations I've had with customers and partners since I took on the CEO role in August. It is also why I am optimistic about our goal of driving sustainable, profitable growth. As CEO, I will be focused on delivering a plan to help us realize that goal. Today, I'd like to share a few of my initial observations, as well as areas I will be targeting to unlock growth opportunities and drive increased productivity and profits. First, regarding my initial observation about our business operations. As I alluded earlier, RingCentral is an innovation leader. Vlad and the R&D team have been busy over the last few years, building out an AI platform that we are now leveraging to infuse AI across our entire portfolio. Combined with our UCaaS leadership built over the past 20 years, we are now transforming into an AI-first, multi-product company with proprietary offerings in UCaaS, CCaaS, conversation intelligence, sales analytics and events, webinars, and meetings. Vlad will discuss in more detail our recent product developments and focus areas going forward. Additionally, Sonali and her team have done a great job of delivering increased profitability in 2023. Our operating profit dollars have increased over 70% year to date through actions such as more disciplined spending, reducing organizational spans and layers, consolidating vendors, and driving down customer acquisition and retention costs. The key takeaway is that we're doing many things well, and RingCentral's foundation is strong. I believe we can build on that foundation to unlock further growth and productivity. Moving forward, I will be focused on a few areas to deliver on this potential. They include, number one, continuing to innovate and build a multi-product business. Number two, focusing more deeply on customer segments and key verticals. Number three, expanding partnerships. Number four, growing internationally. And finally, number five, increasing operational productivity. First, let me share with you on a high level our plan to build a multi-product business. RingCX, our RingSense AI platform, and RingCentral Events are starting to gain strong traction as they are a natural extension of our core. For example, a Fortune 500 company partnered with RingCentral this quarter to solve a critical internal communications use case for its employees that enabled the purchase of over 25,000 MVP and 1,000 RingCX licenses. Using a combination of RingCentral MVP and RingCX, we're able to help them reliably connect drivers to dispatchers while integrating seamlessly into their other technology workflows.... RingCX is just one example of a new product we've recently introduced. Going forward, we'll be focused on continuing to invest in our new products, as well as their related go-to-market rollouts to ensure they will be successful. In addition to these new products attracting new customers, they will also provide an opportunity to expand our footprint within existing customers. Our net retention at roughly 100% today is below where I think it can be, particularly because we now have more to sell. Additionally, new products also create more stickiness, as the more a customer adopts our differentiated offerings, the more likely they will remain a customer. Second, regarding developing a deeper focus on customer segmentation and key verticals, one area I'm investing more in is the SMB and mid-market, which was 57% of our business in Q3. These cohorts have traditionally been underserved by largest vendors, and thus are not encumbered by the bundling dynamics that may influence larger customers' decisions. Also, within this market, voice remains a primary method of communication for these businesses, and they pick RingCentral, given our clear leadership in cloud voice. By driving incremental focus on the SMB and mid-market, it provides us with a significant opportunity to sell our full suite of communication tools. We have also seen good progress in key verticals such as healthcare, education, financial and professional services, and public sector. For example, the top four dental service organizations run on RingCentral. Thousands of other healthcare organizations have also selected us for our proven reliability, deep integrations, and commitment to innovation. This quarter, Boston Medical Center Health System, the largest safety net hospital and busiest trauma center in New England, selected RingCentral to modernize their business communications. With RingCentral's joint UCaaS and CCaaS offering, Boston Medical Center Health System will have one integrated voice platform for both internal and external communications, which should improve their provider and patient experiences. There is more we can do to capitalize on our success in these bold verticals. One way is by tailoring our solutions even more in both the enterprise and SMB mid-market. For example, we continue to invest in attaining certain government certifications for the public sector, and are developing other specific integrations and go-to-market strategies for industries for which voice is mission-critical. There are also many ways we can bifurcate the enterprise segment with specific go-to-market motions to better address customer needs. For example, for enterprise customers with a Teams deployment, we can sell RingCentral for Teams 2.0. This motion allows us to provide voice functionality and potentially attach other products, such as contact center, to our offerings. Now, moving to partnerships. Our current partnerships with global service providers such as AT&T, BT, Telus, and Vodafone, and strategic partners, NICE, Avaya, and Mitel Unify, provide us with the broadest reach in the industry and are a key differentiator. We will also focus on other partnership opportunities that expand our partnership ecosystem, including new relationships with other service partners and ISVs that can help us expand our reach. More to come on this in further quarters. Moving to geographic expansion, international has remained roughly 10% of our business for the last two years. It has the potential to be much higher. I am focused on how we can leverage our distribution channels and partner network to grow outside the U.S., with a particular focus on Europe, where we have go-to-market operations and several partners and GSP relationships. Last, by far not least, is my focus on materially increasing productivity. One area that is high on my radar is stock-based compensation. We're fully committed to, and are taking tangible steps already towards materially reducing stock-based compensation. Another key area for me is sales and marketing expense. We have seen sales and marketing spend increase only 2% year- to- date, while subscription revenue has grown 12%. However, as a% of revenue, this is still above where I think it should be in the current environment. I am reviewing our go-to-market motions both before, during, and after the sale to ensure that the cost of acquiring and maintaining a customer is optimized. I realize that while some costs, such as residuals, have a longer tail, there are opportunities to better align our sales and marketing investments to the value they create. There has been some good early traction with initiatives such as our new channel program, Ignite, that is aimed at reducing dependence of resellers on RingCentral's own sales force. This has direct impact on improving overall productivity and lowering sales and marketing costs. We're now taking an additional step to adjust and optimize our cost structure, reallocating resources across the company and routes to market over the next few months as we operationalize these productivity initiatives. I hope my initial observations and focus areas are helpful to you in understanding RingCentral's key differentiators, as well as opportunities for advancement. While the macro has had an impact on our business, there are also areas that are in our control and that we can enhance. There's a clear plan, and we must now execute on these priorities. I believe the combination of our solid core, strong team, and exciting and disruptive new products positions us well for the future. I also want to take this opportunity to thank everyone at RingCentral for delivering a solid Q3.... With that, I want to turn the call over to Vlad, who will discuss in more detail one of the key pillars of our plan, innovation and new products. Thanks, Tarek. As I said before, AI, the mother of all megatrends, is upon us. With Tarek on board, I can now work even more closely with our product teams to ensure RingCentral remains an industry leader in this new era. My day-to-day focus is now to infuse AI across our entire portfolio to improve caller, employee, and customer service agent experiences before, during, and after each interaction. Our vision and commitment is to be the AI-first business communications leader. We have made good progress towards this vision with the launch of our RingSense AI platform earlier this year. We have rapidly innovated to infuse RingSense AI into all our products. This includes our native AI-first omnichannel contact center platform, RingCX, our conversation intelligence platform, RingSense and RingSense for Sales, and Hopin, which we acquired in July and are rebranding as RingCentral Events. RingCX and RingCentral Events will be joining RingCentral's industry-leading cloud PBX MVP solution, RingCentral Contact Center, RingCentral Video Meetings and Webinars, and RingCentral Sales, thus turning RingCentral into a true multi-product AI-first company. Let me give you some more detail about the progress we are making on some of those new products. First, RingCX, which is now in controlled availability and is expected to be generally available later this quarter. In Q3, we embedded our RingSense AI and other technologies into RingCX to enable smarter conversations before, during, and after each interaction. In addition to being AI-first, RingCX adheres to our core brand values of trust, reliability, openness, and ease of deployment, use, and ownership. RingCX deployments are measured in days or short weeks, and not months or quarters. To be clear, RingCX is not strictly limited to the SMB and mid-market. In fact, there are also larger customers whose particular use cases line up well with what RingCX has to offer. This includes a 1,000+ seat win from a Fortune 500 company that Tarek mentioned earlier. RingCX is a good complement to our RingCentral Contact Center offering that is generally aimed at more complex use cases and larger deployments. While still in controlled availability, we already have approximately 50 customers who have selected RingCX. In addition to RingCX, we are also working hard at reintroducing Hopin events as RingCentral Events. This product already powers some of the world's most recognizable brands, internal and external events. This includes Spotify, Reddit, and many other of the world's most recognizable names. We will be providing more detail on both RingCX and RingCentral Events at our upcoming RingCentral innovation event that will take place on November fourteenth. It will, of course, be hosted on our very own RingCentral Events. We hope you can join us virtually to learn more about our latest innovations, as well as hear directly from customers about how they're benefiting from these products. In conclusion, never before has RingCentral had such an extensive and fully built-out product portfolio. We're making great progress in embedding AI into the entire portfolio, creating even more value for our customers. I could not be more excited about our future. With that, let me turn the call over to Sonali. Thanks, Vlad. I'll now provide highlights from the third quarter and then discuss our business outlook for the fourth quarter and the full- year. Subscriptions revenue of $531 million was up 10% year-over-year and above our guidance range. ARR of $2.26 billion was up 11% versus last year. On a year-over-year basis, currency was a modest tailwind, but on a sequential basis, currency was a roughly $10 million headwind. Growth was led by the enterprise segment, where we continued to see strong contact center attach rates. We again saw more than 60% of our large million-dollar-plus TCV deals include both UCaaS and CCaaS, including a recent UC plus CC win with the San Francisco Giants. Now, moving to profitability. I'll be referring to non-GAAP results unless otherwise noted. Our subscription growth margin was 82%, consistent with last quarter. Overall, ARPU was again above $30. Our new products, while disruptive in pricing relative to the market, should be accretive to our overall ARPU over time. Our solid ARPU supports our strong growth margin. Operating margin rose 560 basis points versus last year to 19.1%, driven by operating leverage and continued efficiency. Our third quarter operating margin was solidly above our outlook for 18%-18.5%. While we invested back into the business to support our new products, primarily through sales and marketing initiatives, we were able to drive increased productivity from our current workforce instead of hiring additional headcount, which resulted in savings that flowed through to the bottom line. Our increasing profitability translated into quarterly unlevered adjusted free cash flow of $87 million, up from $33 million in Q3 2022. Moving to our balance sheet. In August, we issued $400 million of 8.5% senior unsecured notes due in 2030. We used $154 million from this issuance to repurchase $166 million in debt, consisting of $125 million of our 2025 convertible notes and $41 million of our 2026 convertible notes. Including this transaction, we have used approximately $546 million of cash from our Term Loan A, the unsecured notes due in 2030, and our balance sheet to repurchase $586 million of the original $1 billion of 2025 notes, capturing a sizable discount. Since I joined RingCentral last year, I have noted that addressing the 2025 convertible notes before they go current was a key priority. We plan to utilize the remaining approximately $240 million of proceeds from our recent high-yield offering, plus an additional commitment to our Term Loan A of $75 million, which we will have the option to draw upon within the next nine months, and a portion of the free cash flow we expect to generate over the next 15 months to address the remaining $414 million of the 2025 notes. Importantly, as the 2025 notes carry a 0% coupon and we are earning a solid return on our cash, we will remain disciplined and will balance note repurchase prior to maturity with the amount of discount we are able to capture. In addition to addressing the upcoming 2025 converts, our leverage remains very healthy. Based on our third quarter results, our trailing 12-month leverage ratio is three times, and based on our current outlook, we continue to expect to be below three times in Q4. Before I provide our fourth quarter and full- year guidance, I'd like to provide you with additional details on the macro trends we are seeing in the market today. Macro trends are largely consistent with last quarter. Sales cycles remain elevated versus last year, and customer buying decisions continue to go through additional layers of approval. Linearity has also become more back-end loaded, and in many enterprise transactions, including this quarter, we have seen customers waiting until the last week or two of the quarter to close on deals. We are also seeing less upsell within our existing base as customers have slowed hiring and rationalized their employee counts. Importantly, marketing-driven lead flow remains consistently strong, demonstrating continued demand for on-prem to cloud conversion. With that backdrop, let me now turn to guidance. For the fourth quarter of 2023, we expect subscriptions revenue growth of 8%-9%, total revenue growth of 8%-9%, non-GAAP operating margin of 20%, and non-GAAP EPS of $0.82-0.83. For the full- year 2023, despite the incremental currency headwind, we are raising our revenue and operating margin outlook. We now expect subscriptions revenue growth of 11%, total revenue growth of 11%, non-GAAP operating margin of 19%. This is up 660 basis points versus last year and 25 basis points above the midpoint of our prior outlook. Lastly, we expect non-GAAP EPS of $3.19-3.20. Additionally, given our better-than-expected profitability as well as cash conversion in Q3, primarily driven by better working capital management, we now expect adjusted unlevered free cash flow of $290- 300 million in 2023, up from $270- 290 million previously. Note, this excludes $20- 25 million related to restructuring and other payments that we have or expect to incur. Lastly, we expect stock-based compensation of $426- 431 million in 2023, or approximately 19.5% of revenue. While this is higher than our prior guidance, this is related to the recent management changes that we undertook in August. Additionally, we put in place performance stock units this year to demonstrate alignment between management incentives and company performance. These PSUs are accounted for under an accelerated expense attribution model compared to restricted stock units, and thus resulted in higher stock-based compensation in 2023 versus our prior outlook. ... we would have been at the midpoint of our prior range, excluding these items. As Tarek stated, materially reducing stock-based compensation going forward is a key priority, and we are implementing actions to materially reduce stock-based compensation over the next twelve months. We will share more on these actions and targets next quarter. In summary, Q3 was a good quarter. We delivered on our guidance, we continued to invest for growth, and we demonstrated a proactive capital allocation approach. While the economic environment remains uncertain, we will remain focused and committed to executing against our priorities of delivering sustainable growth and profitability. With that, let's open the call for questions. We will now begin the question and answer session. To ask a question, you may press Star, then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press Star, then two. In the interest of time, please limit yourselves to one question. Our first question is from Matt Nicknam with Deutsche Bank. Please go ahead. Hey, guys. Thank you for taking the question. Maybe a question for Tarek. Now that you've been in the CEO seat for a couple months, can you maybe talk a little bit more on where you see the greatest opportunity that's untapped for RingCentral, whether it's underserved markets, underserved customer sets or on the operating front? And I know you laid out five key priorities, but where do you see maybe the most immediate opportunity to start executing against? Thanks. Well, thank you, Matt, for the question, and welcome to our call. I'd say since I had the opportunity to serve on the board since December 2022, I believe I have a good understanding of the business, and I spent most of the past 60 days talking with customers, partners, employees, and shareholders since I've taken on the CEO role. I do believe there are tremendous opportunities for RingCentral, building on the solid, quality foundation of our core products in UCaaS, and there is a big opportunity to provide more to customers, and particularly in certain verticals such as SMB and mid-market. We are also, at this junction of the industry, in a unique position to harness the power of AI, given the size of our installed base. We've been investing in an AI platform for a number of years. We're infusing AI in everything we're doing. If you really put that in perspective of the UCaaS, CCaaS industry taken as a whole, these are being disrupted by AI, and this presents us with plenty of opportunities to innovate and capture share. That is very critical when you're considering that we have scale, and we have, again, a strong reputation of quality, which allows us to maintain our leadership in a competitive and increasingly disruptive industry. So that's what I'm looking forward to do, is to continue to add scale and continue to sustain long-term profitable growth at RingCentral. Thanks, Tarek. The next question is from Samad Samana with Jefferies. Please go ahead. Hey, everyone, this is Billy Fitzsimmons on for Samad. Sonali, with existing customers either buying less seats or trimming headcount, do you know if contracts allow a customer to reduce seats? Put differently, can a customer pay for only 900 seats, even if they're contracted for 1,000, if they were to reduce headcount by 10%? Hi, thanks for the question. In terms of our contracts, no, customers, typically our average contract length is just over three years, and customers typically would be contracted for the full amount of seats that they you know sign the original contract for, and there is not typically any flexibility for a customer to reduce seats. Of course, we always offer flexibility for them to add seats. Hopefully that answers your question. Perfect. Thank you very much. The next question is from Michael Funk with Bank of America. Please go ahead. Yeah, thank you all for the time and the question tonight. So, Tarek, you laid out your priorities. One of them was productivity. You said taking steps to materially reduce sales and marketing expense. Is there a good benchmark or metric we should think about with your target for sales and marketing? Look, I wouldn't use benchmarks for really determining an end percentage of sales and marketing spend as percentage of revenue. The reason why this is, is that you need to retain flexibility to go and capture opportunities as you see them. It's always important to understand productivity down to the driver level of our sales force and our channel partners and see to what extent we are acquiring growth effectively, and that the growth has to come with calories, mindful of the cost of customer acquisition and the cost of retention of these customers. We do believe there is upside in the short term in becoming more effective and efficient in sales and marketing, and, you know, when you relook at our spend as percentage of revenue today, it is too high for my own liking, considering the growth we're delivering. You can determine whether or not, you know, we reduce that spend for the same growth or keep it, but we need higher growth. That's a reflection that we have to ask ourselves as we look at this very important part of our P&L. ... Great. Thank you very much. The next question is from Ryan McWilliams with Barclays. Please go ahead. Thanks for taking the question. Have you seen any material changes since the end of the third quarter on the macro front? And are there any differences into how your SMB customers, compared to your mid-market enterprise customers, are dealing with the current macro environment? Thanks. Look, it's a good question. Obviously, the macro is what it is, and you all know and read through the news. There is no particular change relative to prior quarters, and the customer feedback that we get about RingCentral is that our product is mission-critical to their business. Yes, customers are looking for ways to save money, but where you really look at the payback from a customer standpoint with Ring, it is measured in weeks and months, not years. Just to put things in perspective for you, from a customer standpoint, UC plus CC payback period is below six months, and the ROI that is being generated for them is in north up to 100%. So specifically for the third quarter of 2023, SMB growth has moderated, and this is certainly driven by continued macro uncertainty. The enterprise segment sales cycle remains elongated versus last year. As we spoke about in the past, upsell is being impacted by slower growth in headcounts at our customers, rationalization of their spend, and more scrutiny on IT costs in general. But we do believe that our new product introductions will help with upsell over time, and this is exactly why we're positioning ourselves now to emerge out of the macro softness with strength, with a multi-product portfolio. And so I would say macro goal is stable, and we have not seen any change in in terms of easing conditions. Hopefully, this answers your question. That's perfect. Appreciate the color. Thanks. The next question is from Kash Rangan with Goldman Sachs. Please go ahead. Hey, thank you very much. Good to see the stability and results. Tarek, one for you, maybe Vlad can jump in here as well. As you introduce the AI functionality, do you, do you think it will... How do you think it will change sales cycles, make it faster, slower, the economics of the sale, et cetera? And also, what does it mean for ARPU and retention, and therefore, the growth prospects of the company? Thank you so much. That's it for me. So this is a very big question you're asking, Kash. I would say, if you take the perspective of our customers, and you look at what we can do with our integrated UCaaS, CCaaS offerings, we can add value to them at all steps of a conversation, before the call, during the call, and after the call. The examples of that are fairly intuitive and easy to understand. Before the call, you can make sure you understand the context in which the call is being placed. During the call, of course, you can do call summaries, but you can do much more than that. You can add a lot of value add, a way of understanding what has been said in the call, the tone in which the call took place, really spearheading, post-call, a number of different actions, moving forward. So there is a ton of things that can be unleashed for our customer, thanks to AI, and we are infusing AI throughout our offerings, precisely because we see AI as a incredible opportunity for our customers to enhance their own productivity and competitiveness. And this is why we are spending a lot of time there. I will ask Vlad to chime in on this issue because he's spending and we're spending a lot of time here, and he's the power behind the AI efforts that we're deploying right now. Vlad? Thanks, Tarek. Yeah, Kash, fantastic question. Look, let me address the retention part of the question. One would think that it should improve retention in a meaningful way because these insights that are being generated are, you know, at least in part, generated from customers' own data. Therefore, one would think that the whole system engagement would just become stickier, because now moving to a different platform would mean that they no longer have access to those insights. It's obviously very early and, you know, it's too early to talk about empirical data, but in theory, it should work, it should work that way. Also, just a quick comment on the sales cycle, and I don't know how to say it any other way. It's just sexy as hell, you know? It makes for a great demo, yeah. When you know, we show our RingSense, for example, and the type of insights and type of questions that people can get looking at their calls, you know, after the call has been made. You know, for whatever reason, it's, it's, it's, it's emotional for people. They go, "Oh, I didn't know this," you know? So AI, what I said in the prepared remark, it truly is the next great mega trend. I call it mother of all mega trends, and I stand by it. It's going to revolutionize you know, the world, our industry, and RingCentral, you know, is part of all of this. Couldn't be more excited. ... Kash, I might just add something there as well. You were asking about the impact on ARPU from these new products. Clearly, we are very excited about, you know, pricing these in a disruptive manner, but they will still be significantly accretive to our overall ARPU. So you heard in my prepared remarks, I talked about ARPU being stable. We would expect this to be additive to that. And in terms of incremental investment around go-to-market, we actually don't anticipate any significant incremental investments, so it should also be accretive to LTV to CAC as we look forward. Thank you so much. The next question is from Brian Peterson with Raymond James. Please go ahead. Hi, thanks for taking the question. So Tarek, you mentioned on the call about partners and potential opportunity to expand there. I'd love to get more color on that. And as we think about growth vectors into 2024, how should we think about the ramp in some of your partnership efforts there? Thank you. Thanks for the question. We do have a number of partnerships that are working very well for us right now, both in terms of global service providers such as AT&T, Telus, BT, Vodafone, et cetera, and also strategic partners like NICE inContact, Avaya, Mitel, now Mitel Unify. We have a great reach, thanks to these partnerships. I do believe that there is a number of additional upsides from these partnerships, and also new partnerships that we can build. So in particular, we focus on partnership opportunities that will expand our partnership ecosystem, focusing on ISVs, so that we can continue to expand our reach and also build more value-added offerings, particularly on an industry vertical basis, where there is a lot of things that we can do to ensure that our product is connected with a broader ecosystem of verticals to penetrate those verticals selectively. So this is one of my key focus areas for the future. And, you know, in terms of the ramp, it will take time, but you know how these partnerships are. They take time to set up, but when they are in full motion, the volume that we expect there can be considerable. And so this is why it is a critical focus area for me. The next question is from Meta Marshall with Morgan Stanley. Please go ahead. Great, thanks. Maybe just following up on that question, just trying to get a sense of, you know, as you guys incorporate more direct, versus channel, versus some of the revisions that were made to the partnerships earlier in the year to allow them to kind of sell direct. Just, is there a blend of the business where you feel, you know, you'd like to see a certain percentage come direct, a certain percentage come through the channel, through partnerships, as that just forms as a rough guide? And is there any kind of channel conflict that's kind of coming about, just given some of the changes to the sales model? Thanks. So this, this is a great question, Meta, and thanks for asking it. I'd say, you know, rather than talking about a blend, I think what we need to focus on is penetration of our offering across the, the market. You know, if you relook at UCaaS, we are the largest player, and we still have only about 10%-12% market share in that space, which goes to show that there is a lot of upside, and the market remains pretty fragmented. And if you look at CCaaS, it's a little bit more concentrated, but my overall comment is roughly the same. There is lots of opportunities there for us to penetrate the, the CCaaS market with both our NICE inContact offering, but also, our RingCX new offering, that was in controlled availability up to today, and that we are ramping up in the upcoming days. So, if you also wanna add to that, the international dimension, there is a lot that we can do internationally. Internationally, we are still at the beginning, I would say. Our international revenue as a percentage of total is only 10%. And if you really think about the, fabric of the European economy or the, Asian, markets, they rely on a different, distribution, mechanism and different distribution tiers. Hence, the need for us to be ready, capability-wise, to go and penetrate those markets with a different set of capabilities, either on a direct basis or indirect basis with partners, and that is what we are, we are focused on. Great, thanks. The next question is from Siti Panigrahi with Mizuho. Please go ahead. Thanks for taking my question. It's good to see the sequential growth now more than 3% in subscription revenue, versus 1% we saw last two quarters. So could you talk about what are the key drivers of that growth? Is it something, you know, upselling enterprise or is it something churn stabilizing? What's driving that growth, and how sustainable or even we could expect any kind of improvement on that, going forward? Look, I think, so far I would like to say that it's early days for me, but I'm pretty pleased with the progress we're making and the way we're executing so far, nine months into the fiscal year. We are focused on finishing fiscal year 2023 strong. We have a whole quarter, Q4, where we just started, and we have to continue to execute on it. We feel pretty good about that. We will, in doing so, focus on my five priorities, which is to continue to innovate and build a multi-product business. This is top, left, right, and center, where Vlad is spending all his energy boosting our multiproduct portfolio offerings. This is really, really critical to fuel growth in both new customers and upselling to existing customers. We've also focused on driving deeper in penetration into certain key verticals and customer segments. We're building partnerships, we're growing internationally, and yes, I have to keep an eye on productivity moving forward. So, it's early days. I like the way you put forward the growth. We feel that demand for UCaaS and CCaaS attach are—is real. If you take integrated UCaaS, CCaaS as a whole, as a subset of the market, this is where we're playing, and this is the fastest growing portion of the market. There are some competitive displacements, particularly when you look at subscale vendors losing shares. There is a lively competitive intensity with Microsoft Teams. We're exploiting that competitive intensity with our Teams 2.0 plugin, which we just rolled out, and that is gaining quite some traction. We will continue also to target enterprise customers with this best-in-class integration. So there's a lot to unpack here, but I would say, you know, we're focused now on the very short term, which is to finish Q4 strong, and that is where all our energy is being focused on. Thank you. The next question is from Matt Van Vliet with BTIG. Please go ahead. Yeah, good afternoon. Thanks for taking the question. Wanted to dig in a little bit more on the plans for international growth. How do you feel about your current headcount in a number of those markets? Do you need to build out more of a team, from both either the direct or the channel enablement side? And then secondarily, with the stable of partners you already have in place, do you feel like you can reach the goals you have, or do you need to broaden that distribution network as well? So look, having run international businesses for a large chunk of my career, I think the way you decide to go in a particular new market is really a function of the economic fabric of that market. Particularly true for softwares and services businesses like ours. When you really look at, for example, in Europe, the weight of small and medium enterprises, which are our sweet spot, in Germany, it's about 87% of the GDP. In France, Italy, and Spain, it's north of 90% of the GDP. Therefore, if you really think about how do you go and acquire these customers in these geographies, you really have to think what is the best method, the most effective method to ramp up your access with the various routes to market to these customer segments. And, I'd say that there is an opportunity there, by going through partnerships in particular, and we don't need to really build an extensive, large direct sales force to capture share internationally. I think, you know, philosophically also, I'm not in favor of the approach that is about build and they will come. We need to be very pragmatic here and leverage existing partners in the market because there is, in our view, a large opportunity for us to become the first global cloud provider, with our offerings, whether these are MVPs or the new offerings that we are right now developing with Vlad and the team. Great, thank you. The next question is from Terry Tillman with Truist. Please go ahead. Great. Thanks for taking the question. This is, Bobby Dion for Terry. Just one quick one for Tarek. You know, since being in the CEO slot, what do you think is most misunderstood about the story at this point? Thank you. What is the least understanding point about RingCentral? I think I would say to you, look, not every UCaaS is created equal. And the strength of the foundation that we have built is there to stay, and the numbers do the talking. I mean, just look at the ARPU's. You had Sonali commenting on our ARPU's and where they stand. Look at the number of seats. We have more than 400,000 customers worldwide. We're growing faster than the rest of the UCaaS market. And even when you have, I would say, periods of economic uncertainty, there is a flight for quality in these circumstances, and we're seeing that, and we feel good about our position. Now, of course, Vlad and I are not happy with just that. We want to continue to dial up growth and expand our portfolio. Expanding our portfolio over a quality foundation is a lot easier, believe me, than to worry about the core. There's a lot that is going to be unlocked over the next few days. We have telegraphed a, if I take this opportunity, we have telegraphed a, marketing event, on November 14, to show that we are going to be expanding our core products of RingCX and Ring Events, to become available generally or general availability. And as you can see, that our goal here is to build on the foundation that we have to emerge out of this period of economic uncertainty with strength, and this is why we're making all the investments we're making in innovation. The next question is from Will Power with Baird. Please go ahead. Great, thank you. Yeah, Tarek, I was curious, in some of the comments on, focusing on SMB. I know that's a, you know, a heritage area, you know, for you all. Also, I think often viewed as, you know, a more competitive area. So, you know, maybe just a little more color on you know, the rationale for, you know, kind of refocusing in some respects or focusing that much more on SMB, and where are the, the kind of the key investment opportunities? Are there any kind of areas of low-hanging fruit as you kind of evaluate that? So look, SMB has always been our, our sweet spot, and it's not that we are refocusing on, on SMB for the first time. Our SMB business is over $850 million. It is still growing at about 8%, which is much more than many of our competitors are growing overall. We have the leading UCaaS offering that is differentiated, that is reliable with 99.999% availability. We are rolling now out RingCX and RingSense for Sales, and we're seeing great traction, particularly for this segment of the market. Because for small and medium businesses, our new offerings are really around adding value to the businesses in question and making them more competitive over time. And we feel there is a lot more to do and are confident about our position in that segment of the market. Thank you. The next question is from Ryan Koontz with Needham & Company. Please go ahead. Hi, thanks. I want to ask about product mix a little bit. I know you can't give us exact metrics, but can you kind of reflect on, you know, what's transpired over the past year in terms of, you know, contact center upsell? Are you seeing more of a shift toward contact center? It seems like it's got a little more durable growth, obviously, than the core UCaaS space. And just as a follow-up on the Teams 2.0 opportunity, if you can give us any customer feedback you've had on that new product offering. Thanks. Yeah, maybe I'll take that, Vlad here. Look, contact center is, you know, it's less penetrated than UCaaS. To be clear, UCaaS, UC to UCaaS, it's still relatively early even there as well. I mean, if you take our numbers and Microsoft and Zoom's and put it all together, you know, we're probably still easily under 20%, you know. But contact center, I would say, is earlier in that migration. Interestingly enough, contact center offers interesting opportunities in AI. There are some puts and takes there. So traditional contact center vendors who are relying on enabling agent seats, you know, that could be a little bit of a headwind, as there will be less reliance on humans and more reliance on virtual agents and bots. But, for people who are innovating in the area and coming in, you know, from the perspective of an AI-first approach, and, you know, this crowd definitely includes ourselves, at this point, we are seeing this as a major tailwind, to, you know, to really take share. Contact center tends to be yet more sticky than UCaaS. You know, those are more considered decisions generally. And, you know, your question was over the last year. Look, we've seen a robust demand for contact centers, and especially for contact center that's closely integrated with UCaaS solution. We saw that for a few years now, you know, via our white label offering- Mm-hmm. of RingCentral Contact Center. What we're seeing now is that there is I would say renewed interest in AI-first approaches, and very importantly, in software that's more oriented towards self-service with easier and faster deployments. And what we're seeing is even some of the larger deployments now, and I think in our prepared remarks, we shared that we have some literally Fortune 500 companies choosing RingCX, which, by the way, is only in controlled availability, you know, as we speak here now, but we're already seeing multi-thousand seat wins. Frankly, it's been a pleasant surprise. You know, we thought that it would skew lower, but for now, we're seeing good traction across the board and expect it to continue. One thing I would just add there is that we are still seeing very, very strong UCaaS, CCaaS attach in our larger deals. So, more than 60% of our $1 million-plus TCV deals, again, included a CCaaS component, and we continue to grow well above the overall CCaaS market. Got it, certainly. Thank you. The next question is from Tim Horan with Oppenheimer. Please go ahead. Thanks, guys. I know the Microsoft Office Copilot was just launched, but have you had a chance to study it? And, you know, it seems like it opens like a, you know, a dozen questions to you guys. You know, I guess, is it a large improvement to their teams? Does it make, you know, their ability to integrate UCaaS and CCaaS better? You know, does it improve your partnership or... You know, on and on. I mean, there's a ton of questions. And, you know, one of the key questions is they're charging $30 a month for it, and I guess it's not really clear. Are you saying you guys think you can charge for your AI over time? I guess the most important question is: What does Copilot mean for the industry at this point? Right. Well, number one, you'll have to ask Microsoft, right? Look, we are not prepared yet to disclose additional details on RingCX pricing. Stay tuned, it's coming... and coming soon. We do expect this pricing to be aggressive, if not disruptive. So I would just, again, urge a little bit of patience on that. Now, having said this, we are not competing with Microsoft. We're leveraging what Microsoft has. We are participating in the ecosystem that they're creating. We are both using core innovation from OpenAI and other companies in our case, okay? And we certainly expect, and they're building our product to be an open platform. And, again, not to pre-announce anything, but expect that every innovation that Microsoft has, that Microsoft chooses and decides to make open and interoperable with other platforms, we will be on that bandwagon. Okay? So again, I would just say stay tuned, and you can also assume, just in closing, that our early customers for RingCX, that they are also well aware of other advances in the industry, including the Copilot. And given what they know of our roadmap and what we have today and, you know, Microsoft, they're choosing to do business. So more to come. Well, on that point, do you think Copilot is a major improvement on Teams? Look, it depends. It depends. I mean, it's a great idea. Devil is in the detail, right? I mean, devil is, will it, you know... How accurate will it be? You know, it's not just the price point. How accurate will it be? Will it or will it not, you know, hallucinate? And, you know, data is going to be trained on and so forth. I'm not personally prepared to opine one way or another. I do think that it's a really good idea. It's a timely idea. It's an idea that makes sense. Yeah. Copilot is for during call, Tarek said, in this, you know, way that we classify things before, during, and after. I can tell you that there is a lot of interest in the during the call experience enhancements, which Copilot addresses. So when you have an agent, you know, online with a customer, getting real-time hints, you know, data feeds, maybe even call scoring, all of the things that, you know, Microsoft is talking about, appointment making, for that matter, in real time. All of those are timely ideas. Customers are looking at it, but it's very early, and people are just, in general, trying to figure out what to do with this new capability. Operator, we have time, I think, for one more question. That final question is from Michael Turrin with Wells Fargo. Please go ahead. Hey there. Appreciate you squeezing me on. Tarek, you had a comment in the prepared remarks around retention rates and those coming in below where you think the company is capable of. Is there any way for us to just help unpack how much of that is tied to macro and external factors versus just execution-related opportunities you see? And thinking about key contributors there, are there any primary points of focus you'd point us towards? Thank you. Yeah. Thanks for asking this, and it's certainly a good way to finish up our conversation today. Look, our retention rate is around one hundred percent in Q3. Really, what will take it upwards from here is a combination of factor, but going forward, we're really focused on upsell and customer retention to drive higher net retention. And when you have a multi-product portfolio, it does help tremendously the upsell sales motion, because simply put, you have multiple conversations you can have with a single customers, right? And so our new products, RingCX, RingSense, our new Ring Events, provide opportunities customers. And by the way, when a customer buys more from you, then that customer is stickier over time, which helps also the net retention. So this is exactly the reason why we are innovating. And, to be able to capitalize on the opportunities of this new product portfolio, we need to think differently in terms of our sales motions to help customers see the new product's value. And, therefore, this is gonna be a journey over time, but I feel optimistic about the prospects of net retention in the long term for RingCentral, given how much emphasis we're placing on dialing up innovation with the team. Thank you. This concludes our question and answer session, and the conference has also now concluded. Thank you for attending today's presentation. You may now disconnect.