Greetings and welcome to the RingCentral Second Quarter 2025 Earnings C onference Call. At this time, all participants are in a listen-only mode. A brief 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. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Devang Shah, SVP of Growth. Thank you. You may begin. Thank you. Good afternoon and welcome to RingCentral's Second Quarter 2025 Earnings Call. Joining me today are Vlad Shmunis, Founder, Chairman and CEO, Kira Makagon, President and COO, and Vaibhav Agarwal, CFO. Our format today will include prepared remarks by Vlad, Kira, and Vaibhav, 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 discussions and 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 risks and uncertainties related to our business, please refer to 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. With that, I'll turn the call over to Vlad. Good afternoon and welcome to our second quarter conference call. Before we get into operational details, I have a few important announcements. I want to start by announcing Vaibhav Agarwal as our new Chief Financial Officer. I also want to thank Abhey Lamba for his contribution, and I look forward to working with him in his new role as an Executive Advisor. Vaibhav has been a key leader at RingCentral for over nine years and has played an instrumental role in our financial transformation, including prior roles as Chief Accounting Officer, Chief Transformation Officer, and Deputy Chief Financial Officer. Vaibhav has played a critical role in helping scale the company from $400 million in revenue to a $2.6 billion run-rate business, while meaningfully increasing profitability. As CFO, his deep understanding of our business and proven financial leadership sets us up well for our next phase of profitable growth. Now, on to additional important news. Today, we announced a multi-year extension of our long-standing partnership with NICE. Under this extended agreement, we will continue to sell and support RingCentral Contact Center, powered by NICE CXone. RingCentral Contact Center customers will continue to benefit from the deep integration between two recognized Gartner Magic Quadrant leaders for UCaaS and CCaaS. We look forward to working with the NICE team, offering a best-in-class integrated AI-powered cloud telephony and contact center suite that is the ideal choice for enterprises with complex and advanced use cases. We are also thrilled to have announced yesterday that AT&T is expanding its decade-long relationship with RingCentral. In addition to AT&T Office@ Hand, powered by RingCentral, AT&T will now be adding two of our new AI-first products to their portfolio: RingSense and RingCX. This enables AT&T to start offering RingCentral's Cloud Contact Center and Conversational Intelligence to their customers. That is elevating customer engagement and experiences through AI-enabled technologies. Moving on to the financial results. Q2 was another solid quarter with all key metrics coming in at or above the high end of our guidance. We are executing on our strategy of accelerating innovation while delivering sustainable, profitable growth. Total revenue grew 5% year-over-year to $320 million, which is at the high end of our guidance. Our performance was driven by strong execution in our core business, combined with continued momentum in our new product portfolio, which includes AI Receptionist or AIR, RingCentral Conversational Intelligence, and RingCX Cloud Contact Center. Delivering on our commitment to profitable growth, we delivered another quarter of record free cash flow while materially reducing stock-based compensation and debt. Most notably, we achieved both positive GAAP operating income and GAAP net income for the first time in RingCentral's history. Given our financial strength, our board has approved an increase to our stock repurchase authorization to $500 million. Our success is rooted in our strong leadership in business voice. With the advent of AI, it's been said that voice is a new UI, and we see strong proof points of that in our own business. Voice is the fastest, most expressive, and natural way to engage with AI, making those interactions feel seamless and intuitive. It also remains the most preferred channel for customers to connect with businesses. As a global leader in voice, RingCentral is uniquely positioned to benefit. We process tens of billions of minutes per year on our platform, with average voice usage per user remaining stable year-over-year and SMS usage growing. While our traditional UCaaS and CCaaS markets are large and robust, the new outside growth opportunity lies with AI-powered customer experiences. RingCentral services are often the first point of contact between businesses and their customers. As such, we are in a unique position to deploy AI agents from the very onset and throughout the customer journey. With a proven robust global platform to leverage and a significant portion of our R&D now dedicated to our new AI product, we are well positioned to play a leadership role in this rapidly emerging market. We're investing over a quarter billion dollars annually in innovation, with a significant and growing share now dedicated to AI. As a proof point, our new AI-first products, RingCX, RingSense, and our newest AI Receptionist are already contributing meaningfully to our ARR growth. We are well on our way to meeting the $100 million ARR new products goal for this year, and we expect these new products to comprise a meaningful portion of our overall revenues in a few years. Kira will share additional details on our product portfolio and progress. Now, let me share some insights on our key customer cohort. While we are providing these details again today to highlight progress and performance, please note that we may not be updating them regularly going forward. We continue to see particularly strong momentum with small business customers defined as businesses with under 100 employees, as well as with global service providers. Between these two, we now have $1+ billion ARR business growing in double digits, with average time to break even in under 18 months. Speaking of GSPs, this particular quarter, we're very excited about a couple of marquee customer wins. RingCentral and Vodafone Ireland have secured Ryanair, the largest European airline, planning to deploy across 172 locations in 25 countries. In addition, RingCentral and Vodafone have won a top 10 European bank, with seats in excess of 10,000 across their organization. These marquee wins underscore the value of our differentiated service provider partnerships, as well as our ability to serve even the largest global enterprises. In general, in larger businesses with more than 100 employees, we continue to hold our own as we add new logos and our retention patterns remain stable. We also see continuous demand from larger customers with $1+ million TCV deals remaining stable quarter over quarter. Of note is our particularly strong traction in our golden verticals that include healthcare, financial services, retail, travel and hospitality, and professional services, where voice is a key mode of communications. Importantly, many of these large customers are adopting multiple products from RingCentral, thus proving the value of our multi-product platform approach. Kira will share more details and customer examples. Additionally, our Microsoft Teams integration remains a key differentiator for larger businesses. Our Ring EXPert Teams embedded app seamlessly integrates RingCentral's best-in-class Cloud PBX into the Teams environment. Ring EXPert Teams accounts are growing in strong double digits, with monthly active users doubling year-over-year. In conclusion, our core business remains strong, and our new AI-first products are gaining momentum with double-digit growth quarter over quarter. We are innovating rapidly while driving profitable growth and expanding free cash flow, all while lowering SBC, paying down debt, and improving operating margin. Our success is rooted in our robust platform, a talented internal team, and unique deep partnerships that are growing and expanding. I am very excited about what lies ahead as we continue to lead in the new era of AI communications and customer experiences. We will share more details on our product and our strategy at our upcoming Innovation Day at the New York Stock Exchange on November 5th. A formal invitation will be extended soon, and we look forward to seeing you there. With that, I'll turn this call over to Kira. Thank you. Thank you, Vlad. Let me start by congratulating Vaibhav on his appointment as CFO. Vaibhav is a trusted partner, and I look forward to working with him as we execute on our AI-driven growth strategy. I'm also excited about our extended partnerships with NICE, as well as AT&T broadening their portfolio with additional products from RingCentral. Both of these developments represent new opportunities for RingCentral, and I look forward to working closely with each of these partners. At RingCentral, we're not just adapting to this new era of AI, we are shaping it. Our AI-first platform is redefining customer communications by enabling smarter, faster, and more intuitive interactions. Our priorities are to extend our leadership in voice with AI and expand our AI-powered customer experiences. Let's start with AIR. AI Receptionist has seen strong momentum, now used by over 3,000 customers, tripling the number since our last earnings report. The rapid adoption is driven by its core value proposition. AIR leverages powerful AI to ensure no important call is missed, yet it's very easy for everyone to deploy and use regardless of their technical expertise. Today, as part of our AIR Everywhere announcement, we launched new capabilities. AIR Everywhere brings AI-powered call handling beyond RingCentral RingEx to third-party telephony systems, both on-premises and cloud. Additionally, RingCentral AIR now includes appointment booking with Google Calendar and Microsoft Outlook and supports British and Australian English, Spanish, and French to cater to a wider customer base. RingCentral AIR will also be available in the U.K. and Australia later this quarter. The top vertical categories where AIR is seeing the most traction include healthcare, professional services, construction and real estate, financial services, and retail. For example, by leveraging AIR, Axis Mental Health grew new patient intakes by 60%, resulting in projecting $1.7 million in incremental revenue. AIR success is not limited just to our golden verticals. The Detroit Pistons are an early adopter, and they expect to see significant improvements in their customer support response time. I am excited about where we are taking AIR next. It represents a foundational step toward our vision for agentic AI, enabling businesses to deploy multimodal AI agents that can reason, act autonomously, and drive outcomes. Now, let's talk about RingSense. RingSense improves business outcomes by using AI to analyze conversations, score calls, identify coaching opportunities, and deliver performance insights across both employee and customer experiences. We now have more than 3,600 customers using RingSense, up from 2,800 last quarter, reflecting solid sequential growth and customer demand. As an example, Endeavor Capital, a leading financial services company, saw a 40% increase in sales using RingSense. They saved 50 hours per agent monthly through AI-generated follow-up emails and boosted contact center visibility by 100x. This is a clear example of how RingSense is driving both efficiency and performance. RingSense also transformed operations for Brookstone Windows and Doors, cutting 600 hours of manual call listening down to minutes and enabling 100% analysis of customer interactions. We are making AI central to how businesses serve their customers, and RingCX is at the heart of that strategy. Our native AI-first contact center, RingCX, helps businesses engage customers across any channel and create immersive agent experiences. Customers are choosing RingCX for its powerful AI features, rich omnichannel capabilities, and numerous integrations. One example of a key integration we introduced this past quarter is the newly launched RingCX for Salesforce Service Cloud Voice, which empowers businesses to deliver a unified and streamlined experience for agents by integrating RingCentral's digital channels and voice capabilities into Salesforce. In Q2, we surpassed 1,200 RingCX customers, and once again, half of our $1+ million TCV deals included RingCX, underscoring strong demand. One standout customer win this quarter is a leading restaurant chain with 850 locations across the U.S. They selected RingCX with our AI quality management solution and thousands of RingEx seats as part of their digital transformation. With their ambitious growth plans, we're proud to be their customer communication platform of choice. Another great example is a top private university already using RingCX to support 5,500 employees and 35,000 students. They recently added RingCX to modernize their contact center and are already seeing 52% perceived cost savings compared to their previous provider, alongside new operational efficiencies driven by AI. In the second quarter, the rapid innovation of RingCX continued. We launched the controlled availability of customer journey analytics, providing real-time visibility into full customer journeys across RingEx and RingCX, a key capability in delivering unified experiences. We also made AI agent assist generally available. For example, Claim Solutions Inc reduced call handling time by 50%, doubled agent productivity, and improved first contact resolution by 35%, all driven by surfacing relevant knowledge-based content in real time. With the beta of AI interaction analytics, we are enabling real-time sentiment analysis and predictive CSAT, helping businesses understand customer satisfaction in real time and resolve issues quickly. To sum up, we're rapidly expanding our portfolio with many new AI capabilities. These allow us to deliver tangible outcomes for our customers and contribute to monetization for RingCentral. In closing, we're proud of the rapid AI innovation underway at RingCentral and the real, measurable success our customers are already seeing. As the leader in cloud business voice communications, we are in a unique position to apply AI to every customer interaction before, during, and after a call. We are supercharging voice with AI and delivering solutions like AIR, which give businesses AI-powered customer experiences at scale. We're just getting started as we execute on our vision of an agentic AI future. With that, let me hand it over to Vaibhav. Thank you, Kira, and good afternoon, everyone. I'm honored to step into the role of CFO at RingCentral. Over the past nine years, I've had the privilege of working alongside an exceptional team as we have transformed into an AI-powered multi-product company. My tenure begins with RingCentral in a strong financial position, with approximately $2.6 billion in ARR, expanding margins, and record free cash flow. I want to thank Vlad and the board for the opportunity and Abhey for his contribution. Before turning to the results, let me briefly outline my focus areas to support our priority. First, drive sustainable, profitable growth through our market-leading UCaaS product and scaling our CCaaS and AI-based offerings through targeted investments in new product innovation. Second, expand margins and free cash flows through cost discipline, particularly in sales and marketing, AI-driven operational transformation, vendor spend consolidation, and prudent stock-based compensation management. Third, execute a balanced capital allocation strategy focused on debt repayment, share buybacks, and reducing share count. These focus areas support continued growth in free cash flow per share while positioning the company for long-term value creation. With that, let me turn to our Q2 highlights. We delivered solid results and executed well across our key metrics. Total revenue was $620 million, up 5% year-over-year, and at the high end of our guidance. Subscription revenue grew 6% to approximately $600 million, and ARR increased 7% to approximately $2.6 billion. We have a number of growth drivers that contribute to our top-line growth. As Vlad noted, our small business customers and GSPs continue to drive above-market growth and healthy unit economics. Our new products are contributing to overall growth, reflecting strong execution of our AI-led multi-product strategy. Now moving to profitability. Subscription growth margin remains strong at over 80.5%. Operating margin was 22.6%, above the high end of our guidance, up 160 basis points year-over-year. Second quarter non-GAAP EPS grew 16% to $1.06 per diluted share. We continue to generate year-over-year margin expansion, driven by continued spending discipline and focus on operating efficiencies. Sales and marketing expenses as a percent of total revenue declined 170 basis points to 37.8%, reflecting continued improvements in GPM efficiency. We reduced SBC by 450 basis points year-over-year as a percent of revenue, with net new grants down 45% in the first half. As a result, we achieved positive GAAP operating income for the fourth consecutive quarter and also delivered positive GAAP net income. Overall, we view expanding operating margins in conjunction with reducing stock-based compensation as both ultimately driving higher free cash flow per share. In Q2, we generated $144 million of free cash flow, up 33% versus last year. This was driven by continued focus on efficiency and working capital optimization. Free cash flow per share was $1.57 per diluted share, up 37% year-over-year. Moving to our balance sheet and capital allocation. From a capital allocation perspective, we repaid $105 million of our debt, bringing the remaining gross debt down to $1.27 billion and net debt to $1.1 billion. Our net leverage is now at 1.8x. With our strong free cash flow and access to capital, we have sufficient liquidity to meet our near-term and long-term obligations. Both Fitch and Moody's recently upgraded our credit ratings, recognizing our improving leverage and free cash flow profile. We believe that share repurchases continue to provide an attractive relative return. In the first half of 2025, we have repurchased a total of approximately 3 million shares under previously authorized plans. Given our strong financial profile, the board has now increased our total buyback authorization to $500 million. Improving free cash flow per share is a key priority for us. With our strong performance in the first half of 2025, we are raising our full-year free cash flow outlook to $515 million - $520 million, or a 20.5% margin, 50 basis points above prior guidance. We are also improving our stock-based compensation outlook to $285 million - $295 million, which is 11.5% of revenue, down 50 basis points from prior guidance. Of note, we remain disciplined in our stock grants. Our annual grants this year are expected to be approximately $150 million, or 6% of revenue. We expect for overall SBC to trend lower over time towards these levels as the impact of the prior year grants rolls off. We are reducing our share count projections to 92.5 million- 93 million shares for 2025, down from our previous guidance of 93.5 million- 94.5 million shares. Our free cash flow per share for 2025 is now expected to be approximately $5.54- $5.62 per diluted share, which is up 31% year-over-year at the midpoint. Now moving to guidance. For the full year 2025, we are reiterating our prior guidance for subscription revenue, total revenue, and operating margin, raising our full-year free cash flow outlook to $515 million - $520 million, improving stock-based compensation range to $285 million - $295 million, raising non-GAAP EPS to $4.20 - $4.32 per diluted share based on 92.5 million- 93 million shares. For the third quarter, we expect subscription revenues of $611 million - $619 million, with year-over-year growth of 5%- 6%, total revenue of $631 million- $639 million, with year-over-year growth of 4% - 5%, non-GAAP operating margin of approximately 22.6%, up 160 basis points year-over-year, stock-based compensation range of $72 million- $78 million, non-GAAP EPS of $1.06 - $1.08 based on 93 million fully diluted shares. In summary, let me conclude with key takeaways. We delivered strong Q2 results and are executing well on our key priorities. We continue to lead in business voice with mission-critical products, serving over 500,000 customers while gaining strong traction in our AI-led product portfolio, which are contributing to growth, expanding our TAM, and increasing wallet share. We believe we have the building blocks in place for sustainable long-term growth. We are making solid progress on expanding margins, generating record free cash flows, and meaningfully reducing SBC. Our strong profile gives us the flexibility to reduce debt, return capital through share repurchases, and invest in innovation. This year, we expect to deliver over $5.50 in free cash flow per diluted share, which is a compelling yield for our shareholders. Overall, we have the foundation for long-term sustainable and profitable growth, and I am truly excited about what lies ahead. With that, let's open up the call for questions. Thank you. We will now conduct a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in a question queue. You may press star two if you would like to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Once again, that's star one to ask a question at this time. One moment while we poll for our first question. Our first question comes from Meta Marshall with Morgan Stanley. Please proceed. Hey, this is Jamie on for Meta. I appreciate you taking the question and congrats on the quarter. I think maybe just to start off, it'd be great to just get any additional color you can provide as to how the renewed agreement with NICE compares to the legacy arrangement. Hi, Vlad here. Thanks for the question. Look, it's an extension of that original agreement. We've been doing business for a good number of years. I think, what, 6+ years, something like that. I know that there was a bit of noise in the community about the partnership coming to an end. That is clearly not the case, as we've been flagging all along. To be clear, that original agreement never expired. We were still engaged and doing deals and upselling customers, signing up some new deals. We hope that with this new development, it dispels all kinds of myths and hearsay about where this is going. As I think we said in the prepared remarks, it is an absolutely unique integration, unique in the industry to this day, between two clear leaders in our respective segments: RingCentral for UCaaS and NICE and Contact for CCaaS. They are extremely well received throughout, especially in higher-end enterprises with more complicated needs. Their combination with RingCentral just continues this product, which was really very, very successful since the get-go. I believe our first integration actually even predates NICE's acquisition of InContact, and it has done even better under NICE's ownership. We're very optimistic. We think that there is a long runway ahead. It continues to be well differentiated and a very strong choice for enterprises who are looking to combine their telephony UCaaS and their customer engagement CCaaS needs under one umbrella. Great. Thank you so much. I'll jump back in queue. The next question comes from Kash Rangan with Goldman Sachs. Please proceed. Kash, your line is live. Hi. Thank you. Sorry about that. Vlad, I'm just wondering if you could talk about what's driving new product traction at RingCentral. One for you, Vaibhav. Congrats on becoming CFO. Free cash flow generation has been already quite robust. How do you see the sustainability of this going forward? Okay, I guess we'll do in order. Hi, Kash. What's driving new products is outstanding demand and the fact that we are a very strong leader in business telephony, and we are a very natural choice for people to go to when they're looking to start leveraging AI in their workflows. If you think about it, RingCentral, we are as upstream as it gets in customers interacting with their business providers. We're the ones fielding that phone call. We're the ones terminating this text message. These are the two primary modes of communications between customers, consumers, and businesses. We are the ones that are the first line of defense. It is very natural for us to be adding AI in the form of IVA or AI Receptionist, or a little bit down the line from that, conversational analytics. We are in a unique position to be able to AI-ify the entire workflow before, during, and after the call. Given our position in the industry, given our brand, the fact that now we have a pretty complete AI portfolio to ride on top of our well-known platform, you know, that is what's allowing us to grow these products double, if not triple digits quarter over quarter. This is very early. I mean, it's just the beginning. There will be a lot more of that. Thank you, Kash. This is Vaibhav. Thanks for the congrats and debut question. In terms of free cash flow, we are very, very proud of what we've delivered over the past three years. Free cash flow has increased 5x over the last three years from $100 million - $500 million. It comes with durability and sustainability. Here are some of the reasons why. Number one, we now have a track record of delivering improvements year-over-year. I guided to about over $500 million in free cash flows today, which is 30% year-over-year. The reason you are seeing the improvements is really due to the operating leverage in the business, the strong gross margins that we have, and the continued cost discipline. Also, the quality of the free cash flows is improving as operating margins and free cash flows are now converging due to working capital efficiencies. The last point is when we look at free cash flows, we also look at SBC in conjunction with that. We've taken meaningful steps, which I outlined in the prepared remarks around SBC, which combined with buybacks will result in a lower share count. When you put all of these things together, our free cash flow guide for the year is now above $5.5, 30% up year-over-year, which is a very compelling return from a shareholder standpoint. Overall, I feel like we have a strong foundation to sustain and improve our free cash flows over time. Thank you so much, Vlad and Vaibhav. The next question comes from Samad Samana with Jefferies. Please proceed. Hey guys, this is Billy Fitzsimmons for Samad. Maybe expanding on that free cash flow question. When I look at the guide, the thing that stands out to me is the reduction in SBC expenses that you just mentioned. Over the last couple of years, SBC's percent of revenue has declined and is kind of continuing to, expect is continuing to decline. Can you just walk through some of the internal changes you've made to drive that reduction? What's changed on that line specifically since you provided SBC guidance at the start of the year? Yeah. Thank you, Billy. This is Vaibhav. I'll address that. Look, reducing SBC is a key priority for us. I think we outlined that on the prior earnings calls. We've made a lot of progress on this over the years. SBC as a percent of revenue has come down by almost half. It used to be around 20% of revenue. We are now tracking to about, call it, 11% based on the guidance we provided. Stock grants continue to be a key tool for us to incentivize employees. We'll continue to use it. We want to make sure that the employees' interests are aligned with shareholders. It'll be a key tool for us to incentivize people. However, having said that, we remain disciplined in terms of our net new grant, which in our prepared remarks I mentioned will be around $150 million or about 6% of revenue. As you know, SBC has two components. It has the tail from the prior grants, which were higher and granted at higher prices, and it has the impact of the in-year grant. Over time, as the older grants roll off, our SBC run rate will increasingly reflect just a new grant activity, just significantly. Thank you. If I could sneak in one more, there was upside on second quarter revenue, but the full-year revenue guide was kept flat. The guide implies similar expectations around the subscription revenue dollars added in both 3Q and 4Q. Can you just level set for us what assumptions went into the back half guide and what are you thinking around macro deal activity and renewals in the back half? Yeah, look, in terms of the guide, there is no fundamental change in the overall philosophy or the approach, if you will. It's consistent with how we've guided in the past, which is we provide prudent guidance around the visibility that we have and based on what we know. There are always puts and takes in a business of this size. Overall, from a Q2 standpoint, we had a good, strong quarter. The business is fundamentally strong. We have a number of growth drivers. Vlad, in his prepared remarks, had talked about SV and GSP growing in the double digits. They are showing good demand trends. In terms of our enterprise business, we continue to sign million-dollar plus PCV wins. When you take all of those things together and overlay some prudence on top of it, that's how we ended up on the guide. Overall, we reiterated the guidance on the top line while raising free cash flow and operating margins and reducing SVC in a material way. Overall, NetLed feels good about the guidance range that we provided. Perfect. Thank you. The next question comes from Peter Levine with Evercore. Please proceed. Great. Thank you for my question and for the appointment of the CFO. For Vlad, maybe share with us how are you thinking about RingCX? You did allude to the fact that you want to go to market around the RingCX, but obviously that's not going away. Explain to us, how are you going to go to market with RingCX? How are your sales reps going to delineate between the RingCX versus NICE? Just walk us through some of those dynamics. Yeah, hi, Peter. No, fair question. Look, it's actually not that hard. I think we've been fairly clear about this all along, but I'll reiterate. There are different products, you know, and they are fundamentally aimed at different audiences. Our CCC, NICE and Contact base, it's a high-end enterprise product. Sky's the limit. No limit on the number of seats. Best-in-class capabilities are able to address any and every complicated use case one can think of. It's a raw source of a product. We perceive that our enterprise product is that for cloud PBXs. Just now this quarter, we've announced Ryanair. I don't know about you all. I see the planes all the time and definitely put in Europe anyway too. They're pretty big. I think the largest in Europe. This top 10 bank, which is a household name, I wish I could tell you the name, but what did we say? 10,000+ seats, right? We know we can scale up. We know firsthand that in many of those cases, people actually have a preference of purchasing from a single vendor. There does not exist a single vendor on the planet today that has its native, both high-end Rolls-Ro yce UCaaS and Rolls- Royce CCaaS, homegrown. Today does not exist. This is the next best thing, and there is nothing else even remotely close. No other pair of vendors have anything like this level of integration, starting for the covering the entire customer journey, sign-up, billing, care, support, network, etc. That's where CC is. CX is a wonderful product. It does really, really well, but it is fundamentally aimed at smaller and simpler use cases. It will most likely always have more logos, but much lower average agent count than CC. We know that in certain cases, you can have a very large company that is a good match for CX. They exist, and we've noted some wins with those, but they're rather specific. It's not kind of your, it's not right down the middle, which CC through NICE and Contact, they cover, they cover the whole gamut. CX just scales well, way more down, more self-serve, AI-native product. Guess what? Even a better integration with RingCentral, with RingEx than anything else. That's how it's going to bifurcate. We think that there is absolutely room for the two to coexist, and hopefully we'll be proven right. We know we were able to grow both very effectively until people started questioning the partnership. Hopefully, that's getting resolved as of today, and the channel will be reactivated. We are pretty optimistic on both fronts. Thank you for the color. Maybe I have just one for you. If you're thinking about the durability of growth here, longer term, how sustainable would you call mid-single-digit growth with increasing profitability? Maybe walk us through your mindset in terms of managing growth versus profitability. Are you more focused on kind of sustaining growth here, like low to mid-single digits, and just really focused on profitability? Maybe walk us through, give us a kind of like a framework to think about the model here longer term if you can, please. Thank you. Yeah, I think in terms of the framework, you know, we are a growth company, so we'll continue to grow. You know, there are multiple growth drivers that are durable. In the UCaaS space, look, we continue to be the market leaders with steady market share. There are pockets of the business like SMBs and GSPs that are growing in the double digits. In terms of our enterprise space, we are continuing to add million-dollar TCV wins. We are adding logos at a decent clip as customers move from on-prem to the cloud. In addition to that, our new AI-powered solutions are now gaining traction. Vlad and Kira in their prepared remarks talked about the multi-product portfolio and the strong traction that we are seeing there. Our new products combined are growing in the double digits, and we are well on track to hit the $100 million target by the end of the year that we had laid out. In my mind, these will all be drivers for sustainable long-term growth. In terms of profitability, the framework that I called out in my prepared remarks was to continue to expand both free cash flow as well as operating margin. That'll come from two places. There will continue to be operating leverage in the business. Plus, we'll be disciplined in terms of our cost management. Together, we will continue to be on that path of margin and free cash flow expansion. When you take that together with SBC reduction and share count dilution, our goal is to maximize free cash flow per share, which we think is a key metric to track for shareholders on a go-forward basis. Thank you very much. The next question comes from Catharine Trebnick with Rosenblatt. Please proceed. Oh, hi. Two quick ones. One, last quarter you noted that Microsoft grew 30% year after year. You talked today about RingCX. Now, a piece of it, you know, can you talk about the size of the deals that you're seeing through the Microsoft partnership? Thank you. I'm not sure how you got RingCX in there. We have an integration with Microsoft Teams. We use a number of APIs that they provide, and we actually have a very good integration. Our embedded client, with their terminology, makes it seem quite seamless for a Teams user to be using RingCentral and RingCentral's capabilities, which are meaningfully over and above what Microsoft phone provides. It is a strong double-digit growth. It's aimed at larger enterprises, by the token that most of Teams, they skew larger. SMB customers, there is meaningfully less Teams usage. There we will stand alone. I think we noted that half of our enterprise deals include this integration, and it's a big differentiator for us. It's a good asset. That will continue. All right. The follow-on quick question is, with this knocking down some debt, what's your capital allocation strategy going forward? Are you looking to do some more acquisitions? How are you planning to, or are you planning for some of the cash you have? Thanks. Thank you, Catharine, for the question. In terms of capital allocation, the benefit of generating over $500 million in free cash flow is that we'll have a lot of flexibility and we can be opportunistic. I laid out in my prepared remarks that we'll continue to look at delevering the balance sheet and strengthening our profile. Case in point, in Q2, we paid about $100 million of debt. Our net debt is already at $1.1 billion now. We'll be opportunistic about paying down the debt, and we'll strive to get it to under $1 billion. Our net leverage is already improving. It's under 2x. This past quarter, given the strength of our EBITDA margins, which is growing in excess of revenues, and the net debt position, both Fitch and Moody's upgraded our ratings. We are now one notch below investment grade, which was a pretty good outcome for us. I continue to feel that at these current stock prices, stock buybacks will continue to be an attractive opportunity for us. We will continue to honor stock buybacks under our current authorization. Also, our board, given the strength of our financial profile, increased our stock authorization to $500 million. The other uses of cash would, of course, be we'll continue to invest in innovation. You heard Vlad talk about us spending $250 million in R&D. A lot of that is going towards new products, which is where we are seeing good traction and which will be an important growth driver for us. From an M&A standpoint, we will also be allocating capital there to the extent we have assets or opportunities that kind of make sense. I think overall, our approach will be flexible. We'll be opportunistic based on the return on investment. Thank you very much. Thank you. Our next question comes from Michael Funk with Bank of America. Please proceed. Thank you for taking the questions. I wanted to go back to the NICE and the AT&T extensions, and whether or not they've signaled a strategic shift for you in terms of your go-to-market. I'm getting some feedback, and I apologize. Both, like you say, both are extensions. I don't know that it signifies, you know, strategic shift, but let's take them one by one. With NICE and Contact, we've just regained a tool that we've had for a number of years that we knew was a very powerful tool, which is this combined high-end UC combo. Again, to reiterate, we were always under contract and within our rights to continue selling that product. Given all of the noise and FUD in the market, frankly, it was hard to convince people that this product has lagged. Now it's a multi-year extension. You're hearing it from me directly that we consider this to be a strategic relationship and are very happy for it to continue. We think that there is a lot of juice still left in that bucket, and hopefully you hear the same from Scott and their management team. A little bit back to the future on NICE and Contact. As far as AT&T, it's very momentous. AT&T has been a strong partner of ours for about a decade, if not more. I think that's unique, certainly for us, but maybe even for AT&T. I don't want to speak for them. The fact that they're choosing to extend their engagement with us by now offering our newer products into their portfolio is hugely significant. AT&T is obviously one of the top brand names globally. It's a major shareholder in U.S. telecom, but it's not just U.S. It's a wonderful channel, wonderful brand, and now they chose our technology to bring their customer base into this new era of AI. This is momentous. It's not necessarily a change in our GTM, but certainly we hope it will open up major opportunities for our new products, which, as we all know, include RingCX, RingSense, and hopefully others as they mature. Vlad, when I met with John Stankey recently, he highlighted they want to actually lean in a little bit further to SMB. They felt they'd given up market there too much in the last few years. As part of the agreement, will this be more of a push by AT&T and their sales force incorporating your functionality, or will it be an add-on where a customer can elect it, but will it necessarily be part of the core offering? Final question, if I could, please. Can you call out any FX benefit or maybe just isolate the constant currency growth during the quarter and then what you have in your expectations for the remainder of the year for FX, just given the movements in the rates recently? I'll take the first part of the question. As far as AT&T's GTM philosophy or tactics, you'll have to ask them. I can tell you that it's a deal that we believe is a fair deal. Everyone wins. It's good for us, it's good for AT&T financially, and of course, it's very good for the customer because remember, these products are about saving people time and money and saving leads and letting calls not drop on the floor, but instead, resolving positive business outcomes. How exactly they're going to do and package it, you would need to talk to them directly. What John said about them wanting to regain a bit of share in SMB, certainly we could not be happier to hear that because it is definitely a strength of us and our offering. Vaibhav will take the rest of the question. Yeah, in terms of FX, look, there was some benefit in the quarter. Nothing meaningful. Nothing specifically to call out there. Overall, look, we had a good, strong quarter. We had sales bookings coming in at a healthy clip. Overall, we called out the strength of the business in terms of SMBs and GSPs growing in the double digits. Overall, you know, we ended strong and reiterated our guide for the year. Great. Thank you both very much. Thank you. At this time, we have time for one more question. The next question comes from Brian Peterson with Raymond James. Please proceed. Hi, thanks for taking the question. This is John on from Brian. On the AIR receptivity there, it's great to hear about the early success with AIR, and I know it's still really early. You got into some of the prepared remarks, but just curious where you're seeing the most success so far. It sounds like larger customers are really the early adopters there, but are you also seeing positive adoption across mid-market and SMB? Said in another way, is AIR adoption running? How is it running versus expectations across customers of various sizing? Thanks. Hi, this is Kira. I think the rate of adoption is very positive. Going from 1,000- 3,000 in a short period of time, just customers, indication of strong demand. In terms of customer cohorts and how they're buying, a lot of the customers are buying, actually smaller customers with some very large customers buying as well. The use cases are all similar in a way that it's routing calls. It's essentially providing you with this digital employee that never misses a call. All sizes need that, especially acute when you're a small business and you need a receptionist and you just don't have one, or you have after-hour calls and nobody to mind to show up. In a large business, the use cases that we see have to do more with routing calls and figuring out across the organization without having complex IVR rules to be imposed in the middle of the flow. The value is the same. Essentially, it saves you cost. It increases your opportunity for monetization of those incoming calls. It also controls spam. It's a much better customer experience across the board. The reason customers are adopting this so easily is because it's really fit to purpose. You don't have to have a complex implementation. You don't have to have technical expertise. Any size, no IT required. You can get going by essentially configuring it for a specific use case. Thank you very much. Thank you. At this time, I would like to thank everyone for joining the teleconference. You may now disconnect your lines and have a great day.