Greetings and welcome to RingCentral Second Quarter 2014 Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. (Operator Instructions) As a reminder, this conference is being recorded. I’d now like to turn the conference over to your host, Mr. Clyde Hosein, Chief Financial Officer for RingCentral. Thank you. Mr. Hosein, you may begin.

Thank you. Good afternoon and welcome to RingCentral second quarter of 2014 earnings conference call. I’m 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 second quarter of 2014, our financial outlook for our third quarter and an update on our full-year 2014 forecast. Some of our discussion and responses to your questions may contain forward-looking statements including statements regarding our expected financial results for the third quarter and full-year 2014. Our future plans, prospects, and opportunities trends in the business communications market. Our expectations regarding our current and future carry and other reseller relationships, our growth strategy, future market position on expected growth. These statements are subject to risks and uncertainties. Actual results may differ materially from our forward-looking statements and projections for a variety of reasons including but not limited to general economic and market conditions, the effects to competitive competition on technological change and customer demand for an acceptance of our products and services. A discussion of the risk and uncertainties related to our business is contained in our 10-Q for the quarter ended March 31, 2014 and filed with the Securities and Exchange Commission and is incorporated by reference into today’s discussion. 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 Web site at ir.ringcentral.com to access our second quarter of 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 second quarter 2014 earnings call. Our financial results showed continued strength in the quarter, as we delivered both strong top line growth as well as significant margin improvements. Total revenue came in $52.8 million, up 40% year-over-year. And we improved our non-GAAP operating margin by 3.5 point compared to Q2 of last year. Our flagship product RingCentral Office continue to grow rapidly with annualized exit monthly recurring subscriptions growing 58% year-over-year to over $139 million. In addition, we made further progress with both our plan to expand our presence with larger customers and with partners through a new carrier relationship with BT. As you can imagine, this deal was highly contested and we’re incredibly proud to have been chosen for this strategic program. Both our team and BT are working together to launch in 2015. With the addition of BT this expanse the lead we have over our competition. We remain the only pure-play cloud provider with multiple carrier relationships attesting to the carrier grade robustness of our platform. Dave will provide an overview of our growth initiatives in a moment, but the results continue to be encouraging. Our platform remains at the forefront of the market and our value propositions continues to resonate with customers. Our cloud-based model provides significant course and functionality benefits when compared to the legacy hardware providers in the business communications market. When we compete with other cloud service providers, we believe that our mobile-centric approach advanced functionality, ease of use and carrier grade performance provide us with significant differentiation. These advantages are helping to drive our financial results. We also received some strong external recognition during recent months. The RingCentral Office addition was named as the 2014 unified communications product of…

Thanks, Vlad. As we have discussed previously, our growth strategy is focused on three main components, expanding up market to larger enterprises, adding additional distribution channels and growing our international presence. We made progress on all three fronts in the past quarter. Let me dive into each one. First, moving up market. We’ve implemented several enhancements to our sales organization to help expand our presence with larger customers over the past few quarters. The additional resources targeted programs and focus applied to this effort showed further progress in Q2. Our bookings from enterprises with 50 users and greater grew faster than our overall office bookings growth rate once again in the quarter. In fact, our exit monthly recurring subscriptions or MRS run rate from this customer tier continued to grow by more than 100% year-over-year. Importantly, they have also been able to sustain meaningful growth with our customers with a user count below 50, while concurrently adding larger customers. We are still in the early stages of our plans and expect to see continued benefits from the approach we’re taking to accelerate our growth with larger customers, while continuing to grow our business with smaller customers. In addition, we are seeing our higher tier premium in Enterprise Editions comprise a bigger percentage of our bookings mix. This is driven by both our success with larger customers with more complex needs as well as the decision we made last quarter to add different tiers RingCentral Meetings, our fully integrated high definition video and Web Conferencing Solution to all of our Office editions. Second, distribution channels. Our indirect channels posted strong growth again in the quarter. The major highlight in the segment from Q2 was with our win with BT, one of the world’s largest telecommunications providers. As Vlad noted earlier, having…

Thanks, Dave. We reported total revenues of $52.8 million in the second quarter, up 40% year-over-year and 9% sequentially from Q1. This was above our guidance of $50.5 million to $51.5 million. Within total revenues, service revenues grew to $47.9 million, up 39% year-over-year and 9% sequentially, while product revenues grew to $4.9 million, up 52% year-over-year and 12% sequentially. Total Company annualized exit monthly recurring subscriptions grew to about $204 million, up 38% year-over-year and 9% sequentially. Annualized exit monthly recurring subscriptions for our Office product grew to about $139 million, up 58% year-over-year and 11% sequentially. Our overall net monthly subscription dollar retention rate improved slightly on a sequential basis and was over 99% in the second quarter. As the mix of our business continues to shift towards bigger customers, we’re seeing some benefit to this metric due to the higher retention characteristics of larger enterprises. Before I move further down to 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 $69.8 million -- 69.8% in the quarter, up more than 2.5 points from Q2 of last year, and up slightly from Q1 of this year. The leverage we’re getting from prior infrastructure investments on Telco savings is offsetting the additional expenditures related to our growth initiatives in the U.K. and support for larger customers. Consolidated gross margins, including phones, were 63.6%, up over 2 points from Q2 of last year and up slightly from Q1 of this year. Sales and marketing expenses were $24.4 million for the quarter or 46% of revenues. This compares to $16.1 million or 43% of revenues in Q2 of last year and $23…

Thank you. (Operator Instructions) Our first question comes from the line of Greg Dunham from Goldman Sachs. Please proceed with your question.

Hi. Yes, thanks for taking my question. I want to start with the BT announcement. I guess, first off is this British Telecom, can you confirm that?

Yes. Hi, Greg. This is Vlad. Yes, it is indeed. The BT, it stands for British Telecom.

Okay. And this with the AT&T relationship that you have in place, its co-branded and it’s a go-to-market out of their mobile division. Can you give us a little background in terms of how this relationship is structured? Is it co-branded RingCentral, what kind of capacity does this had from a distribution standpoint in the U.K.? Any sense of quantifying that would be helpful.

It is a co-branded product just like AT&T and the forthcoming TELUS offering that we’ve announced last quarter. So it is indeed co-branded. It is not limited to mobility or any other segment or platform that we have. It is our understanding that it is generally going to be promoted throughout their entire business, BT business organization. And as through the details of their go-to-market strategy, I think it will not be appropriate for me to comment at this time. But I can say that there is involvement and engagement and quite a bit of excitement at the executive level of both companies with this offering. Its going to be a well differentiated cloud-based offering, which would define a leadership position we think for both companies in that particular geography.

Okay, great. And then, switching gears a little bit, the -- I mean obviously, revenue accelerated and then if I look at the Office annualized exit monthly recurring revenue that’s still very high that at 58%. Are we seeing the early returns of some of these efforts in Denver and the inside sales force in the more aggressive investment or is that more on to come?

Greg, this is Clyde. Yes, early and on the line early last quarter we outlined a couple of initiatives. One is, expand enough market. Two is, put in some support in Denver as we go up market. So we began to see the early results of that, but to be fair these things take multiple of quarters. So, I’d like to say -- I think this is the early stages of that. So, very good positive results so far what we just began.

Okay, great. (Indiscernible). Thanks guys.

Thanks, Greg.

Our next question comes from the line of Kash Rangan from Bank of America Merrill Lynch. Please proceed with your question.

Hi. Thanks guys. Congrats on your BT win. I’m also wondering if you could shed some light on what seems to be pretty strong performance on the product side. I think the product side has moved up almost $1 million in the last two quarters or so. Just wondering if you can give me some insights into what might be driving that, and also it probably is the case that you’re investing pretty aggressively in sales and market that number, common shared with your revenue bid also seems to be moving up very nicely. I’m wondering if you are planning to accelerate sales headcount growth rate as evidenced by your sales and marketing numbers that seem to move along. And finally, how are you balancing the move up market where you’re clearly signing and turning on some big customers versus keeping the consistent growth track on the low end? Thank you.

I’ll take that, Kash. So, I appreciate it. The things are working on many of the cylinders, but we obviously have a long way to go. So, good results in office. We are very pleased with our growth rate in Office which is growing about 3X our nearest competitor. We are the largest and fastest grow on pure-play cloud providing in the industry. And to your question, to a couple of questions. We’ll grow sales headcount consistent with our revenue growth. Now obviously as you very well know Kash, we invest ahead and so some time from time-to-time there will be timing and quarter-to-quarter fluctuations none of which should bother the people, but as we grow year-over-year we will increase sales investment concurrent with that. But we are focused on a number of events concurrently right now. I think this is important for you and other investors to understand. First, we are expanding our presence with larger customer. And you can see some of the indications, metrics we gave, that customers with 50 seats and above more than doubled last quarter. So that’s one example. We added carrier partnerships. You heard about BT today, and that makes us the only pure-play cloud provider with three carriers -- carrier relationships right now, and we think there is more in our future. But to do both of those, it requires investments in the short-term but they have strong long-term payback both in the up market larger customers and with carriers. Third, we continue to progress towards breakeven and cash flow positive, and eventually towards our long-term model we obviously focused on that. So, as you expand up market, as you add carriers we still have to be cognizant of our projections to get cash flow positives and breakeven. So we’ve got to do all of those things, at the same time it means in, in an healthy growth rate. And I think what you saw today was the management team and employees creating a very good balance of doing all of those things concurrently and doing it very well. So, we’re very pleased with that.

Our next question comes from the line of Terry Tillman from Raymond James. Please proceed with your question. Brian Peterson - Raymond James & Associates Inc.: Hi, this is Brian Peterson filling in for Terry. I just wanted to get back to the BT opportunity and maybe any color that you could provide on the potential size of that relative to some of your other carrier relationships. And any more detail on if that will be maybe a first half of second half 2015 opportunity?

Sure, Vlad here. So, although as you well know BT is one of the largest and best known carriers in the world. This is going to be a -- as I already mentioned a differentiated cloud based offering that they from what we understand are planning to throw quite a bit of weight behind, it has buying at the highest levels in the company. As far as exact projections, I think it’s a little bit too early for that as with any cloud business it takes time for significant revenues to accumulate. Of course the good news is that, assuming that we can demonstrate similar retention patterns, and as a reminder our retention here in the U.S. is over 99% overall and better than that for Office. So assuming that the same success can be replicated there, we of course expect for this to make a significant contribution over the time. Now having said this, we have not yet made public our projections for year 2015, but again given that this is a 2016 launch which will be basically a brand new launch in the UK market. We would not project too much revenue in the next 12 months. Brian Peterson - Raymond James & Associates Inc.: Okay. And a follow-up on that. Can you potentially give us an update on the size of the AT&T relationship as it relates to this quarter?

So, we haven’t disclosed the size of that, Brian. It’s -- I would say it’s doing very well for us and continues to do well. Brian Peterson - Raymond James & Associates Inc.: Okay. Thank you.

Thank you.

Our next question comes from the line of Bhavan Suri from William Blair. Please proceed with your question. Bhavan Suri - William Blair & Company: Hi, Vlad, Dave, Clyde, congrats. Nice quarter. Just a few questions. First obviously the move up market has been nice and you’ve got sort of the set of customers above 500. Can you give us some color how big that is or how much that contributes as a part of revenue?

Bhavan, good question. But we haven’t -- have not disclosed how much that is as yet. Hopefully that might come in the future. But right now we have not disclosed that. Bhavan Suri - William Blair & Company: Okay. And then, as you move upstream one of the investments you’re making in the product was more administrative functions, loading in lots of users and administrative functions. Sort of when you look at what the customers want from the larger customers, where would you say you are in terms of those R&D investments? Obviously they always want new features and functionality, but are you through the bulk of that investment or is there still ways to go to get fully functional administrative capabilities there?

Well, I mean we do have fully functional administrative capabilities as evidenced by our continual penetration up market. Our largest customer now standing meaningfully over a 1,000 users and growing. So there’s very clear adoption up market and now in the true enterprise space. So, having said this, we are -- its always work in progress. There are always things to improve. There are systems that are particular or peculiar to this larger customers that we are always working on integration with. We do have a roadmap, [ph] [with a service full]. If you look at our financials you will see that we continue having a very meaningful investment into R&D. It is substantially larger than that of the nearest competitor. We believe the results speak for themselves. What we’re able to gain with this investment is superior performance, carrier grade quality as it’s evidenced by us being able to announce a major carrier win for two quarters in a row now and the of course prior to that our AT&T relationship. So, we’re trying to feel were we good, where we are with all of this, but there’s definitely more to do. If you remember what we’re doing is, we really are re-imagining the entire business communications opportunity given the reality of cloud and mobility and smartphones. And that’s a very right field for innovation, so we’ll continue in that. Bhavan Suri - William Blair & Company: Thanks Vlad. That’s helpful. And then as you look at the BT relationship and you look at your investments prior to the BT relationship in the UK. Is there a chance that over time your investments in that market kind of reduces a little bit because BT obviously takes on some of the role of the go-to-market and so on so forth in the United Kingdom?

Very fair question. So, I just want to remind you and everyone of our strategy which is quite differentiated. We don’t view this as an either or game to where we are either a direct to the customer business or partner with an incumbent. We really feel strongly that one feeds and supports the other. The reason we are being chosen by the likes of BT, by the likes of TELUS, prior to that AT&T is exactly -- has a lot to do with the fact that we have a sizable direct user base, that we have a direct unimpeded line of communications to these customers. We have a pre-sales, sales, post-sales, customer service organizations and processes in place that allow us to capture an incredible amount of data and input from these customers, and all of this we’re able to channel that into the product and back into the processes that go along with it, and all of this in the end gets to be enjoyed by our carrier partners and other retailers. So, that’s a differentiated position. I can tell you with 100% certainty that if we were not on the ground in the UK with a direct product, I don’t think we would be sitting here announcing a BT win today. So, we feel that this dual pronged strategy is exactly the right one and hopefully both direct and indirect channels will prove -- continue proving to be profitable on unit economic basis in the long-term which means that we should be continuing and even accelerating our investments into both of those. Bhavan Suri - William Blair & Company: Yes, agreed. I think that’s pretty clear given the results of AT&T and the U.S. numbers to date. But one quick last one for me guys. When you look at the competitive win you had in the quarter, the [ph] [500 C plus] win. Can you give us a real color on who you displaced and sort of who is involved in the competitive process? Thanks.

Sure. I believe you’re referring to CAPREIT, they had multiple locations, actually multiple on-premise vendors that we’re able to displace because of our Mobile-First and our ability to serve all vendors, all offices from one location. So, it was a great win in the quarter and we’re building a meaningful pipeline in the future with our larger customer base. Bhavan Suri - William Blair & Company: Great. Thank you.

Thanks, Bhavan.

Our next question comes from the line of Mike Latimore from Northland Capital. Please proceed with your question.

Great. Congratulations on the quarter. Again on BT here, are you replacing any system that you currently have in place or is this more of a Greenfield opportunity?

Well, look I mean BT is a very large company and because they have all kinds of offerings just like AT&T for example. Having said this, we do believe that this is a renewed focus for BT business and this is from what we understand really the first time that they are planning to put as much sort of muscle and fire power behind a cloud based offering. But it’s really more of a question to BT; they’re the ones responsible for the go-to-market.

Okay. And then, just as we think about the third quarter here, August can sometimes be able to little bit soft just generally, I mean is there seasonality in your business in third quarters or not really?

Mostly during Q4, of course August, Mike has some lazy days of summer, but that’s contemplated in the forecast we provided you.

Okay. And then, what are you thinking about in terms of CapEx as a percent of revenue for the year?

I think we’re probably in a run rate to about $20 million, $25-ish million for the year which a plus or minus, and that includes a couple of things. One is, investments in the platform as well as what you saw in Q2. As we expand the business we had some real estate or facilities, building expenses and you might see maybe another one of those before the end of the year. But probably in the $20 million, $25 million range per year.

Yes. And just back on the product itself. So, a lot of things in R&D it sounds like I guess, could you highlight maybe one or two top priorities there. Is it administrative functions for large customers or is it on broader feature set, maybe just little bit more on that would be helpful.

Sure. Well, generally we tend to not pre-announce, but directionally each and every one of these carrier wins or carrier relationships takes some cycles. So, we’re still working hard on ensuring a successful TELUS launch. Of course with this new BT relationship that’s going to require some R&D cycles as well. So this is one area we’re looking at. There was a number of up market features that’s still outstanding on the roadmap. We will be closing that was down in the further short order but there is still items outstanding. You already mentioned administrative improvements and as I mentioned already now that’s going to be an ongoing effort for us. So, it’s all along this lines, but we continue staying committed to our status strategy which is profitable growth with emphasis on outpaced up market growth and continue to push internationally both directly as well as through various channel partners including carriers. So that’s where our engineering cycles are going into.

All right. Thank you.

Thank you very much.

Thanks everyone for joining us today for our second quarter earnings call. We are pleased to deliver strong results once again. We are making consistent progress across all over our strategic initiatives and believe we have a bright feature ahead of us. We appreciate your interest in our company and look forward to providing you with further updates in the future. Thank you.

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.