All right. You guys hear me okay? Excellent. I'm Ryan McGinnis, mid-cap front office here at Wells Fargo, here for The 9th Annual Wells Fargo TMT Conference. With me today from RingCentral, the CFO, Vaibhav Agarwal. Vaibhav, thanks for being here. Thank you. Thanks for inviting us here. The joke I was making is, like, I feel like we should just open the back doors and maybe we can do, like, an ocean view fireside. Yeah. The view, view is fantastic. This is my first time at the Wells Fargo conference as CFO. The view is just amazing. The attendance is just, great. Yeah. Happy to be here. This should have been a part of my pitch to come over. It's like, yeah, you know, bring the whole family. Anyway, I'm glad that we're able to do this. Look, we've known each other for a long time and, you know, we've been around, different, you know, environments for UCaaS and, you know, 2020 and 2021 was an amazing time. You know, a lot has changed from a product and technology standpoint. Maybe just to start off, for those, you know, maybe revisiting RingCentral or just trying to, you know, look at the store for the first time, can you just talk about this year for RingCentral and kind of what led up to the most recent earnings? Yeah. Absolutely. I think 2025 so far has been a really good year for us on multiple different fronts. We, in our Q3 earnings, came out at, you know, all the metrics came in, from a revenue standpoint at the top end of the guidance. We had record operating margins. We continued with Free cash flow expansion and, more importantly, Free cash flow per share expansion while reducing SBC debt and continuing to buy back stock. From a financial standpoint, it was a great quarter, on track to finish the year kind of in line with where we guided. From a business standpoint, there's lots of excitement. I think the fundamentals remain strong. On the core UCaaS side, we are continuing to grow. We are the market leader with a steady 20% market share. We are operating at scale with over 500,000 customers that we serve, 8 million digital lines, and tens of billions of minutes of traffic that's flowing through the platform. The excitement continues. We recently concluded our product day and Vlad, our Co-founder and CEO, laid out the vision for our agentic voice AI product portfolio. I highly encourage everybody to go through the presentation and the webcast on our website. Vlad laid out the vision for the end of the product portfolio and that's very exciting for us. You know, the proof is in the numbers. These products are already out in the market. We are monetizing them. We are on track to exceed $100 million in new products within a matter of two years, which is a great accomplishment for us. Then kind of as you go down, you know, our business, our small business continues to do well. We have a very unique and differentiated GSP practice, which is growing in the double digits and has strong profitability, higher than the corporate average. We raised our Free cash flows to over $525 million. We reduced SBC, which is now closer to 10% of revenues. Then from a capital allocation standpoint, we've done a lot of work over the years. Our leverage ratios on debt are now under 2x. We've committed to reducing our gross debt to $1 billion by the end of 2026, which will get us closer to being investment grade. We continue to buy back stock, reduce share count, which is now at 2020 levels. Both from a business standpoint as well as a financial standpoint, you know, there's lots to be excited about, a lot to look forward to. What gives us or gives me the confidence is three things. It's our recurring business model. It's our diversified and large customer base and our exciting suite of AI portfolio products. I remember in an earnings call, a few quarters ago. Mm-hmm. You know, Vlad really drove home the point that RingCentral's a multi-product company now and how that's important for a number of ways in terms of your go-to-market or even just to go back to your existing customers and try to upsell new things. As we think about, like, RingCentral in 2026, you know, you have a really fast-growing AI portion. It seems like stability more on, on the UCaaS side, I guess. Like, how do you think RingCentral starts to change or what do you think starts to become more of a theme for you guys next year? Yeah. It comes back to the AI product portfolio and the vision that Vlad laid out. Look, for us, voice continues to be mission-critical. When we look at, especially in our B2C verticals, voice continues to be a predominant mode of communication. Case in point, when you have to call your physician's office, you're calling. You're not videoing. You know, you're calling a plumber. You're calling your credit union. You're calling your bank. You are calling them, you know, or texting them. You're not videoing them. There are a lot of use cases, and voice and text usage on our platform continues to grow. We have 30 billion minutes flowing through the platform, 10 billion calls. We have 1 billion SMS traffic flowing through the platform. That puts us in a very, very unique and differentiated position to apply AI. A lot of people asked at the product day, "How are you differentiated?" The way we are differentiated is, we are simply top of the funnel. We field the first call. When When a consumer calls on their provider, they happen to call or text their provider, and in many cases, that goes through our platform. We are in the best position to apply AI from the get-go and during the, you know, every life cycle of the conversation, whether it is before, during, or after. That is where our product portfolio is, and as Vlad coined the name, three A's, Air, Ava, and Ace comes into play. It is applying AI at every phase of the consumer interaction. Again, a point of differentiation for us also is we are investing materially in innovation. The pace of innovation has been ex, you know, very rapid. The pace at which we've come out with these new products in 2025 has been super exciting. We have over 2,000 engineers. We have over 2,000 direct sales force. Overall, I feel we have the, you know, the core competency in terms of people, you know, engineering as well as GTM talent. We have the right product portfolio, and then we have the right processes in terms of our unique and differentiated go-to-market motions to take these products to the market. Yeah. Voice is, you know, mission-critical for many of your smaller customers. They are not just gonna trust the new startup with something like voice when, like, the voice AI thing is fancy and people wanna use it, but, like, we gotta get the calls to book the appointments and, you know, do our normal course of business first. With that in mind, I think folks kind of always underestimate the resiliency of, like, the voice market. I think you mentioned that, like, voice minutes are growing year over year. Is that what you're seeing? Like, you're still seeing phone calls on the RingCentral platform do well, or, you know, growing on a year-over-year basis because you hear so much about, like, how, you know, things like chat or, you know, voice AI is gonna impact voice minutes. Yeah. Voice, to my earlier comment, voice continues to be mission-critical, especially in B2C communications. I would say about half of our business comes from, we coined this term called the golden verticals, and those are healthcare, financial services, retail, professional, and consumer services. These are industries, again, where voice continues to be the primary mode of communication. Some of the examples I gave out earlier. In addition to the volume of the usage, the usage is growing on the platform. That just, you know, is the most richest and the purest form of data that's available and the most ripe on which you can put AI to drive more revenues for customers and to drive more efficiencies for our customers. I love that. That's where I wanted to go next. I mean, those are highly regulated use cases, and, you know, I think you definitely have strong barriers to entry there and, you know, long-term relationships with those customers. On the Air product and some of the other new products you mentioned, I was surprised to hear that, like, half of the new, or half the customers using those products are new logos. And, like, that seems, like, almost counterintuitive to me 'cause I expected it to be like, "Oh, you're, you know, a long-time RingCentral customer. It makes it easy upsell." What do you think's resonating will bring in new customers onto RingCentral with those products? Yeah. We are seeing strong demand for the products, including Air and Ace. The demand is coming on both sides. There is demand in our installed base, which we happen to have a large installed base, and it's coming from new customers as well. When we make a new sale now, we offer the full suite of products to our customers. What's really driving the demand is, you know, the ROI is very, very clear. Like, take Air as an example. What does Air do? Air is fielding the calls. When you are calling your physician's office, before a human gets involved, Air is picking up the call. It's answering basic questions. It's getting you leads. It's setting up appointments. It's doing those types of things. Now, a human agent can only work a certain number of hours a day. It can only field as many calls during the day. Air is working 24/7, and it's replacing a human agent, which could be $3,000 - $5,000 a month, with a product that is in the tens of dollars a month. The ROI from a financial standpoint is very clear. It is allowing customers to drive more revenues. Case in point, I think you attended our product day. There was a customer on the panel, and she is running a mental health clinic. The use case for Air for them was there are thousands of calls coming into the system every day. With a human receptionist, they're just not able to field all the calls. With Air now, there are fewer missed calls. What that is resulting in is higher patient intake. As a result of that, with patient intakes going up, and I think there was a number of 60%, they are able to generate about $1.7 million of more revenue annually. For that business, that's a big kind of big deal, generating that amount of revenue that can be reinvested back in the business. There was another example I think we had given out on earnings of a customer again in the healthcare space wherein they're using Air for appointment setting. Their CSAT score has now gone up substantially as a result of them being able to set appointments in a timely manner. I think, overall, to summarize, the ROI is very clear. It's resulting in more efficiencies for our customers. It's resulting in more top-line dollars. Overall, the value proposition just works. Absolutely. Yeah. Your first example, like, trying to staff, like, a light contact center for that use case would be really expensive and would be difficult to, you know, schedule where you have a 24/7 agent, right, that can handle any amount of capacity. I was initially surprised because when I think about, like, setting up a voice AI agent, that seems more technologically complex, right, that, like, an SMB customer or a new customer to RingCentral might be capable of. I was surprised when I was, you know, demoing Air that you can just put in your company website and what you do, and then it instantly populates, like, you know, a voice IVA, but we may consider, like, an IVR route tree, but instantly for the AI agent. It seems like setup times can be pretty fast, even for small businesses, for the AI agent. Yeah. I think that's the beauty of the product. It's very easy to deploy, simple to use, and there is practically no intense implementation, if you will. Customers are able to do it by themselves. They don't need to either use our professional services or outside professional services. That's the other kind of benefit of the product. I think that makes more sense to me than, like, trying to tie, like, an API into your knowledge base and, like, come out with, like, your own voice do-it-yourself voice agent than. Mm-hmm. buying it from a vendor like RingCentral. Just for folks that might be newer to the story, can you just go, you went over Air. Great. Just Ava and Ace, in terms of new products. Yeah. So Ava stands for AI Virtual Assistant. So think of it as a copilot. Air fields the initial call. If for whatever reason Air needs to transfer the call to a human, what Ava does is during the conversation, it takes notes. It takes action items. It can, you know, take certain actions on your behalf, like scheduling meetings, etc., from a RingCentral, from a UCaaS standpoint. And from a contact center standpoint, in addition to that, you have functionalities such as agent assist and supervisor assist. It is, in simple words, it'll help the agents and supervisors on a real-time basis. We had another customer on the panel from Detroit Pistons, which is a customer of ours. They talked about using AI note-taking as a game changer during their strategy sessions. You don't need a scribe. You don't need people to be taking notes and comparing notes. AI is doing that automatically for you, which is embedded in our Ava product. Now, once the call, once the human interaction finishes, the Ace product comes into play. Ace stands for AI Conversational Expert. It's a conversational intelligence product. You know, the simple way that I'd describe it is in the prior kind of world, before AI, you know, if you were in a contact center and you were getting, let's say, 500,000 calls, as a supervisor, you could only kind of listen to a sample of 5% or 10% of the calls. Now, with AI and with our Ace product, you can review 100% of the calls. There was an ex customer example we gave wherein historically the customer was listening to 300 calls, and now they're listening to, like, hundreds of thousands of calls. It's giving you conversational intelligence. It's giving you sentiment analysis. It's giving you call scoring, so that you get better insights and you kind of, you know, get better intelligence on how the calls went. The beauty of all of these products is, these products are all working in tandem with each other. They're all kind of sharing information, and the idea is to drive better outcomes as the models kind of mature over time. That's super additive if you're a contact center manager or if you're, like, the team that does the analysis on your inbound call volumes. Folks may know, but I worked in a contact center in college, and then I got one call created a month. Mm-hmm. Right? So of the, you know, 25-30 calls I did a day, and I always got 90 scores on the call, so I never pitched the survey at the end. So. But now you can either pitch a survey at the end with AI. Sure. Or you can do the recaps all on your own. It makes sense that, like, you know, now through accessing these, you know, voice or data streams, you can build a lot more products off there. It seems like the development for RingCentral has increased a lot over the last. Yeah. Six months or to a year. Like, when you think about AI internally, we've been asking, you know, each company so far, the Firesides, is there a way you guys are utilizing internally either in R&D to build products faster or, you know, in finance? Yeah. There is an increasing use of AI across the board within the company, and that's been partially a driver of our operating margin expansion as well. Yeah. It's early on, but it's, you know, we are increasingly using AI across functions. In R&D, it's used for code development and quality assurance. Within our sales organization, we are using Ace. Now 100% of our account executives and sellers are now trained on AI. What that has resulted in is better efficiency, better productivity, and we are seeing 10% more quotas. Eventually, if quotas go up, what it means is you don't need to hire more sellers. You're doing more with less. Within our customer support organization, they are using all the products now. They are on RingCX. They are on Air. They are using Ava and Ace. Some of the metrics that we are looking at is 15% average handling times going down, meaning the agents are able to answer customer questions faster. With Air, we are able to deflect about 20% of the calls. Air has a 20% deflection rate. Overall, we are a large contact center organization ourselves. We have about 2,000 agents, which we migrated on all of these products, and WFM, which we recently acquired. Overall, it is driving more efficiencies, and we have not added customer support agents over the last year or so. These are all examples of how we are doing more with less and also how we are driving better customer outcomes by answering questions faster, being more accurate, and training our agents and salesforce. Just tying into how these new products can fit into, like, your existing customer base and the growth that you've seen, as you think about, like, the RPUs across UCaaS and contact center, like, you know, those have slightly changed over the year. At this point, as you think about, like, you know, some higher-priced SKUs for some of the new products you mentioned, like, how does, like, these help RPU across your customer base? Yeah. So these are all products that are separately monetized. These are all separate SKUs and being separately monetized. RingCX, as an example, sells for $65 a seat. When you tack on Ace and Ava as an example, you know, the RPUs are going up to almost $100 a seat. Air is a separately priced product. We charge about $40 a seat for the first 100 minutes, and then it becomes usage-based after that. Ace is being separately priced at $60 a user per month. Net-net point being that, I think there'll be three impacts of new products. A, it gives us the ability to cross-sell into our customer base. We are getting a bigger wallet share of the customer. Secondly, it helps us get an uplift on our pools. Now, again, these products are in their early innings, but as these products scale, it'll help grow our pools. Number three, you know, when you become a multi-product company and when you are selling multiple products into the base, the base becomes stickier and net retention gets better. As you think about, like, your GSP ecosystem, and that's been a big, you know, advantage for RingCentral in the past, how are they starting to adopt some of these new products? I know it's early and, you know, I think many of the classic UCaaS channel partners are gonna take some time to, you know, get their hands around AI, but some of the AT&T commentary around the new products is interesting. How is that developing so far? Yeah. We are super excited about that. Look, we have a very unique and a differentiated go-to-market motion, which I believe is a competitive moat for us. We have over 2,000 direct sellers. We have over 15,000 channel partners, and we have 15 global carriers with the likes of AT&T, Charter, Cox, Vodafone, and others. When you put all of these together, these equate to kind of more than 100,000 kind of feet on the street, if you will. There are a lot of advantages that we have in terms of the go-to-market reach. The GSPs are particularly exciting because more than half of our GSPs are now enabled to sell new products. AT&T was the latest addition, which we announced at earnings. The reason we are excited is just the reach. Like, they have hundreds of thousands of customers in their base to which they can resell the product. You know, you can have all the good products in the world, but you need to have the reach to be able to sell them. GSPs give us that unique advantage, and it'll help us just expand and get the products in the hands of a lot of customers. Yeah. And they know how to deploy RingCentral for years. It takes a long time to train the trainers, as I call it. Look, we have a CFO on stage, so I have to ask, you know, financial questions. You know it was coming. It was just how long was it gonna be? Just on the Free cash flow, you raised your outlook for the year, now 21% margin. I guess, like, what are some of the things that you feel better now at this point versus the start of the year? Yeah. I think, look, one of the North Stars for me as a CFO is driving Free cash flow per share expansion. I think I'm looking at that as the Uber metric, for us and for external shareholders. And Free cash flow per share has three components. Number one is the growth. We talked about growth, and certainly the new products, the new AI products, the usage and the adoption on the platform is driving the growth. That's gonna contribute to Free cash flow. The second kind of component of that is Operating Margins. We've done a tremendous amount of work over the last three years. We've doubled our Operating Margins. We've, like, 5X'd our Free cash flow, and that has come as a result of a lot of discipline. Like, we are maniacal about revenue growth outpacing expense growth or OPEX growth. The way that's coming is we are very disciplined in terms of our hiring. We are hiring in offshore locations, low-cost locations. There's a lot of vendor consolidation. I talked about AI getting implemented within Ring. All of those things are helping kind of expand Operating Margins. The quality of the Free cash flow is also going up with working capital improvements. The last thing we also look at, which is the third leg of the stool, is SBC and share count. We've done tons of work to rationalize our SBC expense, which is now at roughly 11% of revenues. You know, stock continues to be a key way we incentivize our employees. We'll continue to use it, but we are very thoughtful in terms of the use of stock as a means of compensation. From a capital allocation standpoint, we've been paying down our debt. We've been buying back stock, and now our stock count is back at the 2020 levels. When you put the three components together of revenue growth, operating margin expansion, and reducing share count, our Free cash flow per share has been growing at 35%. We are producing $5.70 per share, which, when I looked at it last, was best in class amongst our peers, both from an absolute dollar as well as a growth rate standpoint. Excellent. You beat me to my next question, but just for consistency or maybe if investors are newer to the story, we'd love to hear if you could double-click on, you know, both of your buyback and then how you feel about, you know, you've done a tremendous amount of debt payback over the last couple of years, but how that is currently. Yeah. Look, from a capital allocation standpoint, you know, the idea is to optimize the business for Free cash flow, which is what we are doing. We raised our guidance to $525 million. Now, from there, the first use of cash always is investing back in the business. Case in point, we talked about, you know, our R&D spend is over a quarter billion dollars, a majority of which, over half of which, is going into the new products with a greater proportion going to AI. So that's about four or five percentage points of margin that we are reinvesting back in the business versus taking it to the bottom line. We are also opportunistic about M&A. We recently acquired Community WFM, to accelerate our product portfolio with the product. We are opportunistic with M&A. From there, we look at debt paydown. You're right. We've paid down a lot of debt. We've brought our leverage down from 4X to now under 2X over the last three years. We have a convert coming to you, in March, and we've addressed that proactively. We further committed to bringing our gross debt down to $1 billion by the end of 2026, at which point our leverage would be under 1.5X, very close to investment grade. We then also buy back stock, I believe, at the current valuation levels. Buying back stock is an attractive use of cash. We bought back $200 million of stock this year. We have about $385 million remaining on our authorization, which we'll continue to execute. The overall kind of Uber level point again comes back to improving Free cash flow, paying down our debt, strengthening the Balance Sheet, putting money back in the business to continue to grow, and reducing share count with buybacks. A combination of all of that will result in Free cash flow per share growth. Excellent. Just on the competitive landscape, I mean, we've seen, you know, people come in and out of this market and, you know, focus from larger and smaller vendors, you know, become more prevalent and less prevalent the last couple of years. Anything to call out there? Any opportunities you think are to take share or maybe some stability overall in the market with a better macro? Look, I think there's a couple points. On the UCaaS side, we continue to hold our market share. We are the market leader with a steady 20% market share, based on revenues. These are reports not published by us but published by Synergy and industry research analysts. We continue to hold our own. We are continuing to grow. We are adding seats at a decent clip, and we continue to capture the on-prem to the cloud migration as well as the migration from subscale cloud players on the UCaaS side. I think on the contact center side, RingCX is playing particularly well. We've added over 1,000 customers in a matter of a couple of years or under a couple of years, and that's been pretty staggering. I think that's been the fastest addition I think that Vlad talks about on a contact center solution. When it comes to AI, look, we are uniquely differentiated in agentic voice AI. You know, there was an interesting statistic that Gartner published wherein it said that 90% of agentic AI fails because it's not associated with a platform. The differentiation we have is that we built a very large, reliable, and feature-rich platform over the course of our history with over 500,000 customers and 8 million digital lines. You know, we are at a different size and scale when it comes to—you talked about startups. Like, we just have a scale advantage. I mean, we have the network. We have the platform to be able to deliver solutions at scale, and therefore you are seeing that manifest itself in the numbers. Like, we have now over 6,000 customers on Air within a matter of a few months. We have 4,300 customers on Ace as an example. Just the scale, the depth, and being able to invest a quarter billion dollars in innovation, having 2,000 engineers, 2,000 salespeople, and having the, you know, the large and a differentiated go-to-market motions is all helping create that differentiation. Yeah. And you've built out a platform to handle some of the most complicated, like, Cisco call manager digital transformations that, I think that it's a good point, you know, Gartner, like, people need a platform because no matter how good a voice AI agent is, like, you're still gonna want to have failover to a human agent no matter what. I think, like, that's kind of the missing piece that people forget about is, like, there's a lot of attention around voice AI agents, right? But, like, you still need to talk to a human if things go wrong. Yeah. You need the foundation of the traffic. You need the foundation of customers. You need the roots, as Vlad called it in the product day. The one thing I thought about over the last couple of years is, like, people do not wake up every day like, "Let's change from on-prem to the cloud," right? Mission-critical, digital transformation, you know, can take, you know, a number of months, and it is just not something you want to do every year. There are some customers you talk to, and it feels like they, like, were set on on-prem forever. Does AI start to change that calculus as you are sitting there? You are like, "Okay, we know we need transcription. We know we need to tie these things into our CRM. Like, we need to get more insights from our voice calls that people are more coming around to, like, okay, as I think about, like, where I could start my AI journey, like, this might actually make more sense now to start shifting, like, a lot of these workloads to the cloud. Yeah, absolutely. I think the on-prem solutions just don't enable you to use AI. I mean, they're rigid. They're inflexible. I think for you as a customer to be able to use the power of AI, which is becoming a must to have rather than a good to have at this point, I think you've got to transition. I think, yeah, our expectation is that those migrations should continue and should continue at an accelerated pace. That, that's just what I want in my work life, right? Like, how many of us are calls that I wish, just wish I had notes from? For those in the room, Vaibhav, I'll just say thanks to RingCentral for being here. Really appreciate the time. Thank you. Thanks for having me. Okay.