Greetings, and welcome to RingCentral's First Quarter 2014 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to our host, Mr. Clyde Hosein, CFO and Executive Vice President for RingCentral. Thank you, Mr. Hosein, you may begin.

Thank you. Good afternoon, and welcome to RingCentral's First Quarter of 2014 Earnings Conference Call. I am Clyde Hosein, RingCentral's Chief Financial Officer. Joining me on today's call are Vlad Shmunis, Founder, Chairman and CEO; and David Berman, President. Our format today will include prepared remarks by Vlad, David and I, followed by Q&A. The primary purpose of today's call is to provide you with information regarding our performance for the first quarter of 2014, our financial outlook for second quarter and an update for the full year 2014. Some of our discussion and responses to your questions may contain forward-looking statements, including statements regarding our expected financial results for the second quarter and full year 2014; our future plans, prospects and opportunities; trends in the business communication market; our expectations regarding our current and future strategic relationships; our growth strategies, future market position, expected growth; our estimates about the current and potential future markets in which we may compete; and our expectations about current and future service offerings. These statements are subject to risk and uncertainties. Actual results may differ materially from our statements and projections for a variety of reasons, including but not limited to, general economic and market conditions, the effects of competition and technological change and matters specific to our business, such as customer demand for and acceptance of our products and services. A discussion of the risk and uncertainties related to our business is contained in our 10-K for the year ended December 31, 2013, and filed with the Securities and Exchange Commission and is incorporated by reference into today's discussion. Should any of these risks or uncertainties materialize or should any of our assumptions, as outlined in our earnings release and the documents referred to in that release, prove to be incorrect, actual company results could differ materially from these forward-looking statements. We disclaim any obligation to update information contained in our forward-looking statements, whether as a result of new information, future events or otherwise. I encourage you to visit our Investor Relations website at ir.ringcentral.com to access our first quarter 2014 earnings press release, our non-GAAP to GAAP reconciliation, our periodic SEC reports, a webcast replay of today's call and to learn more about RingCentral. With that, let me turn the call over to Vlad.

Thanks, Clyde. Welcome, everyone, and thank you for joining us today for our first quarter 2014 earnings call. I am pleased to report that we had another strong quarter with total revenues growing 36% year-over-year to a record $48.3 million. Most importantly, our flagship product, RingCentral Office, continued to lead the way with annualized exit monthly recurring subscriptions up 64% year-over-year to about $126 million. As Dave will outline for you in a moment, our growth initiatives continue to pay dividends. Our mobile-first approach to this market is resonating with customers. We are continuing to disrupt the large business communications market. We believe that our first -- that our mobile-first approach is a key differentiator for our business. As you may have seen yesterday, we released the latest update to RingCentral Office, including a new version of our Mobile App. This release includes improvements to the user interface, along with enhanced security and upmarket administrative tools. The release also includes a new Presence feature that shows on the Mobile App the status of other employees regardless of which device they're using. This further enhances our value proposition of connecting users across devices and locations. We expect to continue to add functionality to the product and increase the value our customers receive from our leading platform. Last quarter, as you know, we launched RingCentral Meetings as part of our Enterprise Edition, bringing to market the industry's first mobile-centric integrated cloud communications platform with HD video and web conferencing. The advanced functionality, integration, ease of use and attractive price point of RingCentral Meetings was well received by our customers and prospects. As a result of the successful introduction of RingCentral Meetings, we will be expanding its availability to the rest of our RingCentral Office additions. Going forward, we will continue to push ahead on our strategic initiatives and invest in growth, given the strong results we are seeing. We continue to address the rapidly changing needs of modern workers through a full function mobile-centric solution that is easy to buy, use and manage. We believe that this value proposition is very difficult for our competition to match. The market for cloud-based business communications is very large and under-penetrated. RingCentral remains the largest and fastest-growing pure-play cloud business communications player. You can see the trend continuing in our first quarter results. I believe that we have just begun to capitalize on our market opportunity. I'll now turn the call over to Dave to provide additional color on our growth strategy and some of our recent wins.

Thanks, Vlad. As we've discussed in past quarters, we have a 3-pronged growth strategy: we're focused on continuing to move upmarket to reach larger enterprises; we're adding additional distribution channels to scale our reach more quickly; and we're expanding globally through direct and indirect channels. We continue to make progress on all 3 fronts as demonstrated by the strong results Vlad outlined. Let's dive into each one. First, moving upmarket. On our last earnings call, I mentioned that we were making changes to the sales organization to further drive our move upmarket. Typically, the implementation of an upmarket strategy would take multiple quarters to implement. I'm pleased to report that this effort is substantially complete and was accomplished while our business continued to grow rapidly. We made specific enhancements to our sales, marketing and support organization to better focus on the needs of business customers of varying sizes, particularly larger customers. We targeted programs and marketing efforts aimed at each group. We are seeing meaningful proof points from these programs, as the bookings from enterprises with 50 users and above showed growth well above that of our overall Office bookings growth rate. Second, distribution channels. We're making progress with our TELUS relationship and are continuing to work closely with them to bring our solutions to the Canadian market later this year. In addition, AT&T and our reseller network will remain a key focus for us going forward. Earlier this month, we participated in the Ingram Micro Cloud Summit, the largest dedicated cloud services event for the IT channel where RingCentral is showcased as one of the leading partners before hundreds of value-added resellers who are in attendance. Third, global expansion. Our efforts in the U.K. continue to gain traction. As we announced recently, we expanded our partnership with Ingram Micro…

Thanks, Dave. For the quarter, we posted revenues of $48.3 million, up 36% year-over-year and 6% sequentially from Q4. This result exceeded our earlier guidance of $46.5 million to $47.5 million. Within total revenues, service revenues grew 36% year-over-year to $43.9 million and 6% sequentially, while product revenues grew 36% year-over-year and 10% sequentially to $4.4 million. Total company annualized exit monthly recurring subscriptions grew to about $188 million, up 39% year-over-year and 8% sequentially. Driving service revenue was the success of our flagship offering, RingCentral Office, which remains over 90% of our net new recurring subscription bookings. Annualized exit monthly recurring subscriptions for our Office product grew to about $126 million, up 64% year-over-year and 12% sequentially. Our overall net monthly subscription dollar retention rate was consistent with the results in both Q4 and Q1 of last year, coming in at just over 99%. Before I move further down the income statement, I want to remind you that my commentary will be focused on non-GAAP results. A reconciliation of our non-GAAP to GAAP results is provided with our earnings press release issued earlier today. Service gross margins were 69.4% in the quarter, up more than 2 points from Q1 of last year and slightly up from Q4. The underlying service gross margin demonstrated leverage and improved quarter-over-quarter. However, consistent with what Dave discussed earlier, we are investing in several areas of the business, including the U.K., enhanced customer support for larger customers and moving some of that support to Denver, closer to our main customer base in North America. Consolidated gross margins, including phones, were 63.5%, up about 2 points from Q1 of last year and up about 1 point from Q4. This is the first time in a few years we were able to deliver a sequential increase…

[Operator Instructions] Our first question comes from the line of Greg Dunham from Goldman Sachs.

I think I want to start with the Office and the move upmarket. Again, that exit monthly recurring revenue of north of 60% despite the larger base, this is happening when you're making changes to kind of the sales and support function within the organization. Can you remind us what changes you made and the timing of those changes? And maybe could you talk about was this a significant headwind to the business, because by the numbers, it doesn't look like there's a slowing down or any sort of disruption.

Yes, Greg, this is Dave. The changes we made, first, was we aligned our sales, marketing and support organizations around different customer tiers so that we could focus and have more accountability around those tiers. We also increased our investments upmarket and we've been doing this for some time, but the changes we made in Q1 were much more substantive. So we're comfortable that we're going to be continuing to grow that -- the upmarket piece of the business.

Okay. And then a follow-up maybe for Vlad. You mentioned the release -- the recent release of Office and having new upmarket capabilities and administrative functionality. Can you maybe dig in a little bit, what is new in this release? And perhaps where does this take you from a profile of customers? You did mention the growth in 50-user-plus accounts was well over Office, but where can this take you?

Yes, Greg, Vlad here. So yes, very fair question. So first, where it can take us. As we've been maintaining all along, we don't really see any type of a glass ceiling for this type of an approach that we are doing. We do believe that cloud communications, cloud business communications, is fundamentally able to address needs of businesses of any size without limitation. Now as far as our latest release is concerned, it's just one step in our continuing quest of making it easier and more -- well, easier for larger customers to onboard and to -- with RingCentral and to continue using our product and technology. In particular, to the changes in our -- in this particular release, we did modify and enhance our upmarket administrative capabilities. And fundamentally, at a high level, it has to do with making it easier for administrators, who are generally IT personnel working for these larger customers, to administer accounts with many users, all right? So whereby our smaller customers, many times, you will have each individual administrating their own account, with larger companies it's not the case. And as you know, our largest customers are now just shy of 1,000. So these are pretty significant user bases and lists that need to be managed, and we just continue improving the product to make it easier for those situations to be handled. And additionally, as I think I also just mentioned, is we did beef up some of the security characteristics of our product, which, again, tend to be areas most of interest to larger customers.

Okay. One more for me, if you allow one more in, and this is for Clyde. The gross margins, we see -- this is the biggest kind of year-over-year growth and expansion we've seen in gross margins. How should we think about modeling gross margins going forward? And that's it for me.

Thanks, Greg. We had a pretty good quarter. In terms of going forward, I think we've described many times our target margins, which is overall 70% to 75%. This demonstrates a continued track towards that. I wouldn't expect every quarter similar increases, but I think we're on track to hit our target margin of 70% to 75%, and 75% to 80% for overall service. So a good leverage in the model, and as I've described earlier, we did that in spite of increasing the support for larger customers out of Denver.

Our next question comes from the line of Kash Rangan from Bank of America Merrill Lynch.

When I look at the business, good quarter, obviously, and Office is off to a really good start, showing pretty solid growth. Maybe it's just the law of big numbers, but I'm curious if you could talk about the exit Office MRR growth rate. Seems to have been a little bit slower than the previous quarter. Are we just facing the tough comparisons because it's off to a good start, but nonetheless tough comparisons? And also if you could comment on growth versus leverage. SaaS stocks seemed to have taken a bit of a beating, including yours, and not sure if that has changed your mentality as to how you want to run the business for growth? Or do you want to steer a little bit more towards margin expansion at the expense of growth?

Thanks, Kash. I'll take the first part -- the second part. I don't know about law of big numbers. Of course, it's law of big numbers. And as we get bigger, you've got to grow faster. But our overall revenue growth, 36%. I think, overall exit MRR grew 39%. And Office grew a whopping 64%. That's still significant numbers. I'd remind you that, that is about 3x better than most of the competitors in the space from Office growth rate. So it's fairly significant and we're very proud of it. And as Dave mentioned, we are doing some very interesting things in the sales team to address bigger customers. As Vlad mentioned, we're enhancing the product. So I think, on all fronts, we expect to improve from a product point of view, from a sales point of view, a customer support point of view. The news we delivered is enhancement in those areas. We're already the largest pure player in the space, growing the fastest so we intend to continue that. As to valuations, you're the bigger expert in that than I am. But to your -- of course, we're disappointed, but we understand. We understand it's a broader market. To the best of our knowledge, there is nothing company-specific as to the trends in the last month. If there were, we'd be a lot more worried. I think most people we've talked to understands the business model and what we're trying to attract. So it hasn't changed what we're looking at. We have a big market we're addressing. We have a competitive environment we are comfortable with. So it doesn't change any of that. We have very good unit economics. So when you combine very good unit economics with a large market, a good competitive position -- and a prudent person wouldn't change tactically just based on 1 month's worth of trading. We believe, and in my discussions with both buy side and sell side, the model -- they still believe in the model. It's still intact. We intend to continue that. And as you can see, in Q1 results, we are delivering those returns that people expect -- better than, actually, people expect.

Our next question comes from the line of Terry Tillman from Raymond James.

I guess, the first question I'll just throw it out there and then you all can decide who's best suited to answer it. But in terms of the Enterprise Edition with the Meetings product or the Meetings functionality, could you give us any kind of quantification on how that's coming along in terms of impacting new bookings?

Terry, it's still early. As you know, we announced it last quarter. And you and many on this call knows, Enterprise usually takes a little bit longer from a sales cycle time than our -- certainly, our traditional. So it's still early. We are very happy with it and I think Vlad mentioned some of the successes we saw in the large, over 50, segment has grown significantly faster than, certainly, overall Office. So the early results are very good, but it's still early to have meaningful numbers out there.

As it relates to the Meetings functionality, if I wasn't mistaken, it sounded like there's going to be some new packaging where it's going to be included in other SKUs, other Office product SKUs. And if that's the case, are there pricing changes or pricing lifts that's going to occur because of that added functionality?

Yes, Dave, Vlad here. So we are not planning on price adjustments at this point. We did -- we were very pleased with the way that Enterprise Edition and Meetings, in particular, was received. And we simply see quite a good opportunity in making it available to a larger customer base.

Okay. And I guess with the move upmarket, I mean, it's obviously one of the key growth pillars and you talked a lot about 50 users and above in terms of going after that market. Maybe just for my education, could -- I have a couple of kind of sub-questions to this topic. But typically, is that always a replacement of some sort of legacy PBX? Or is that also, are you seeing greenfield opportunities for fast-growing businesses that have just outgrown nothing? And maybe any kind of commentary about the sales cycles? And lastly, what's the profitability like on one of those bigger customers versus the average?

Yes, this is Dave. I'll start out with the sales cycles. And we haven't seen anything meaningfully change in the sales cycles. We have very fast sales cycles down -- below 50, above 50. We do see a little bit longer sales cycle, but because of the unit economics and lifetime value, we see much, much larger deals as part of that.

Okay. And then I was also asking, I don't know if, Dave, you could help me on this, but in the 50-user and above opportunities, is that always a replacement? Or is some of that even greenfield because it's just a fast-growing small business that just hadn't had anything before? What is typically going on there in terms of replacement or greenfield?

It's primarily replacement in the upmarket. We're seeing these boxes that are depreciating over time. Our customers are really resonating to strong value prop of the cloud, the mobile capabilities. And we also do get a bunch of greenfield opportunities as well, so it's both.

Okay. And sorry for the multipart questions. It's hard to keep up with all my questions here. But I think I've asked about 8 questions so far as part of 2. But the last part of this just relates to -- and I don't know if Clyde, this would be for you, but what about the average or the profitability on one of these bigger upmarket opportunities in relationship to, let's call it, 5 to 10 users or something that may have been more traditional for Office?

I think, overall, our profitability should be consistent. Obviously, with larger customers, as they buy more seats per, they get the benefit of pricing, but the support and sales to do it is less. So it still comes down to those unit economics that I think you'll see overall for us. So we'll see as we get there, but I wouldn't expect any differential change.

Okay. And just my last question and this is just a one-part question so it should be a lot easier now. Just for the full year guidance, good to see it increase. Obviously, you had some upside in the first quarter so some of that's carry-through, and then, I guess, maybe some of the other growth initiatives just progressing a little bit faster than expected. But you're maintaining the bottom line loss assumptions, so you're not really pulling through some of that revenue upside into smaller losses. And I guess if you're piling the money back into investments, is one of these areas getting a greater share of the revenue upside for investment? Is it the international or the channels or maybe the move upmarket or is it something else?

So -- thanks, Terry. Look, this is a typical SaaS model. You've got to invest in sales and marketing to generate customers. And the payback on this is about 12 to 18 months. So obviously, as we raise numbers, you have to raise the sales and marketing, that's exactly what you see here in that case. I should remind everyone that our unit economics, as we reiterated earlier, is very compelling with $1 sales get -- of sales and marketing investment gets $8 of lifetime revenue and $5 of lifetime profit, which implies, over time, essentially at the unit base, it's about 30% or more of margin. So I think that makes sense for us to do that. We are investing upmarket, as you saw in our Q1 results, and obviously that's going to continue throughout the year, which is part of that investment. I wouldn't exactly say plow it back. I think we've been prudent about investing and demonstrating results associated with it. In terms of -- by channels, Dave described, I think, all channels are doing very well for us, both the direct channel, as well as the indirect channel. And within that, the distributors like Ingram and carriers are doing very well. So we feel really good about where we're investing and the returns on each one of those areas.

Our next question comes from the line of Bhavan Suri from William Blair.

If we just go back to the sales approach for a second, when you look at the larger customers, is that generally a direct sale today? And then do you envision the partners being able to execute some of these larger sales themselves? Or does that remain direct, at least for the foreseeable future?

Yes, Bhavan, this is Dave. We see both. We've got a substantial direct sales force that we've been ramping up nicely and we're going to continue to grow that piece. We also have carrier partners such as AT&T and TELUS that we'll be bringing online later this year. We've also got value-added resellers and we're real pleased with the Ingram relationship that I mentioned in our opening remarks. So the answer is yes, we're seeing traction upmarket with both channels.

Great, great. And then as you look at what you did with the sales force, I'd love to know sort of, A, what is your natural attrition in the sales force? And then sort of what's your sort of forced attrition because there's a certain level of just sort of making sure that the underperformers get weeded out. And so just some color around that would be great.

Yes, we manage our sales force to heavy metrics. We manage them very closely and we look at the major metrics. And we do have performance and we manage it very closely. We don't disclose those numbers.

Okay, okay. And then just turning to the Enterprise offering. You sort of have the high-def videoconferencing. I just want to clarify, is that the Meeting product or are those separate?

Yes, Vlad here. So Enterprise Edition includes a portion of it, which we call RingCentral Meetings, which is comprised of videoconferencing and web conferencing.

Great. And then, obviously, it feels like, at least, when we've talked, you're charging a little more for those capabilities of video and web conferencing. And so maybe this is more for Clyde. But did you see sort of some improvement in ASP through the period? And should we count on that or should we think of ASPs remaining roughly flat for at least over the rest of this period -- or over the rest of this year?

No, for the rest of this year, we'll see how it goes. As Vlad indicated earlier, I think, in the Q&A is that we aren't planning any meaningful price changes. But ASP has been -- obviously, as you add Meetings, you'll have the revenue per customer, for those customers that engage it, obviously would go up if that's what you mean by ASP. But the average price, itself, wouldn't change. The revenue per customer for those that engage in that product, not everybody does, obviously, the ARPU would increase.

Okay. And then one last one for me. When you're selling to a larger account, are they looking at the broader functionality on the initial deal? Or are they buying sort of the subset today and then that's part of the potential future upsell?

Yes, let me address that, Vlad here. Look, we make it a point to really provide fully functional bundles. And this actually is differentiated approach, we believe, in the industry. So we tend to not provide an à la carte menu and let people just choose a feature at a time because, frankly, it gets very confusing for everyone involved. And then we much prefer the situation to where we deliver a fully functional solution. People know exactly what they're paying for. There are no surprises month-over-month. Now we do have feature-rich product and I can't tell you that every customer uses every feature. What I can tell you is that our feature set, currently, as well as the road map, is very heavily driven by actual customer demand. So we feel very comfortable in that we're delivering the right functionality at the right price to the target user base. And again, our growth speaks for itself. We tend to win. Frankly, a majority of the deals in the space tend to be going our way at this point, from what we can tell.

Yes -- no, that's great and we certainly are seeing in the market more vendors start to bundle as opposed to the Chinese menu of pricing, so I certainly think it's the right way.

Our next question comes from the line of Brad Zelnick from Macquarie.

Listen, the metrics all seem to validate the success you're having upmarket. It's great to hear the anecdotes that you shared with us of some of the wins and the expanded relationships in your prepared remarks. But just looking at the flip side and what you need to do to get there and continue moving further up, can you maybe just talk about the obstacles in moving upmarket? And specifically, if you can just talk about the incumbents in the market, the Ciscos, the Avayas, I can't imagine that they're willingly letting you come into their turf and take these relationships from them. What are they doing and what are you seeing competitively from them in the field?

Yes, so Vlad here. So a few things. So one thing that we see them not doing, as opposed to doing, is we see them not coming out with a cloud-based mobile-first approach like we are. So we continue -- we believe we continue having a very strong edge vis-à-vis being able to deliver a purely cloud-based solution to businesses of various sizes and to be able to deploy our solution across multiple offices, fully embracing BYOD as we go. This is differentiated positioning. It is not something that a traditional hardware manufacturer like Cisco or like -- or Avaya have historically been able to deliver and we continue winning on those points. Now having said that, we also see both of these suppliers really concentrate in what we would call the true enterprise segment. Not to say that there aren't exceptions, but fundamentally, their installations tend to be sort of sales of lines and above, maybe 500 lines and above. And based on some published industry research, we believe that there is a huge opportunity -- as well as from some data, by the way, I should say. But we believe that there continues to be a very meaningful opportunity in the sub-1,000 range so we're still talking about hundreds of users on the platform per customer, but not necessarily 1,000. And we just don't see them, Cisco or Avaya, playing in that space very effectively at this point.

That's actually very helpful. And just one other for me. I appreciate hearing the update on TELUS, to hear that, that's moving forward. But as we think about the broader opportunity with carriers, can you just give us maybe some sense of how much time you're spending on building that carrier pipeline? And can we -- a year from now or 18 months from now, can there be half a dozen such relationships like you have with AT&T and what you're developing with TELUS?

Well, it's a 2-part question, so let me take it one-by-one. So look, I think we've been consistent for -- really from day one now as a public company that we consider carrier channel and carrier relationships to be a strategic asset and a strategic differentiator. We continue to be the only pure-play cloud provider with a sizable direct user base, as you know, obviously, 100,000 business accounts, as well as proven carrier traction. So we think it's a very good position to be. We believe it helps us on both sides. It helps us on the indirect side to be able to bring all of the know-how of actually having to serve live customers like we do. And on other side, of course, our customers feel much better about going with us, knowing that AT&T made the same choice. So net-net is we continue investing into both our existing relationships, namely, AT&T and TELUS. We are absolutely -- don't see that these 2 will be the limit as far as our ability to partner with other similar companies. I can't sit here today now and tell you that, yes, we will have 9 more in 12 months. It would be a good thing to have, but frankly, I think these are very, very long cycles. But you've got to remember, there are only so many incumbents per country and for now we seem to be the ones winning what business is available from there. So we do feel good about the strategy.

Our next question comes from the line of Mike Latimore from Northland Capital Markets.

As you move upmarket, one of the benefits potentially is improved retention rate. You already have a great retention rate. But maybe can you talk a little bit about what kind of retention rates you would expect as you kind of move upmarket here, versus the historic rate?

Mike, typically, larger customers have a higher retention rate they churn over less. If you recall, the biggest reason for churn in us is business mortality, what the business do. It's our field as opposed to something company-specific or product-specific. As we move upmarket to larger customers and you can see that as we demonstrated from our results, the churn rate on larger customers tend to be much better.

And then, obviously, the channel's doing well. Do you -- can you kind of break out what percent of revenue comes from the channel at this point?

We do not break that out, Mike. [indiscernible].

Yes, yes, got it. And then the growth rate, obviously, you're lining a lot of new customers. I guess, can you talk a little bit about what you're seeing from the current customer base? Is there a fair amount of a -- are you seeing a fair amount of growth, add-ons or seat expansions from the current customer base, and how impactful that might be?

Yes, this is Dave. We're seeing nice growth from the base. Not only are they adding new locations and new lines, but we're pretty excited about the Meetings' capability and the ability to upsell more into the base. So we've got 300,000-plus customers and it's a very good opportunity for us to keep growing them.

And just last, you mentioned a little bit of seasonality in the first quarter. Can you qualitatively or quantitatively describe kind of what the effects of seasonality is in first quarter?

Could you repeat the question, Mike?

You just mentioned a little bit of seasonality in the first quarter. Can you talk just qualitatively or quantitatively what that effect is?

Sure. Typically, in Q1, in costs and expenses, you usually have an uptick because you've got to reset payroll taxes and the like and so pretty much every company deals with this. So that tends to hurt margins a little bit, although as you saw, our operating margin declined a little bit primarily because of that. Our gross margin, however, improved and that demonstrates leverage in the platform and the model in spite of that and in spite of funding some new things. So I won't describe it quantitatively, but qualitatively, that's probably the biggest impact. From a top line point of view, Q1 tends to be a little bit more subdued than Q4, coming off Q4 holidays. We also plowed through that. So net-net, we were able to manage through most of that other than the OpEx increase and a fair amount of that was adding people to move upmarket.

I guess just the last question, you have a number of applications in your various suite of package -- suite of applications. Are there any that are of particular interest or growing interest like SMS or I think you mentioned video, but any applications that are worth noting of high interest right now?

Yes, Vlad here. So again, we don't really view it as a basket of applications. It really is an integrated product. So business SMS, for example, is -- it happens to be a fairly unique differentiator for our offering versus competition. But it's not something that we make available on stand-alone basis. It's yes, [ph] that you get a single business number, phone number, that people can call and fax and text and as well as now use for video and audio conferencing as well. So we do believe that the value -- so the total is much stronger than all of the individual components treated on a one-to-one basis, which is the big competitive point of differentiation for us. But as far as what use is concerned, look, it's across-the-board. And we just told you that, for example, our latest offering with video and web conferencing was received so well that we decided to make it available to the entire user base. But -- albeit, to be clear, we'll have certain limitations. So our higher-end customers will get sort of slightly better capability than our lower-tier customers, but everyone will be able to experience this new functionality. And I think you can view this as our philosophy moving forward as we execute on our road map. Okay. Well, if there are no more questions, then I'd like to thank everyone for joining us today in our first quarter earnings call. We are quite proud and pleased to have posted strong growth and in our ability to meet our guidance and to actually raise our guidance once again. We very much appreciate your interest in our company, and we do look forward to providing you further updates in the future.

Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation. You may disconnect your lines at this time, and have a wonderful day.