RingCentral: A Big Idea
02/11/2015 7:00 am EST
As the name of his newsletter suggests-The Buyback Letter-David Fried focuses exclusively on stocks that are actively repurchasing their shares. One such recommendation is a provider of cloud-based phone systems for small businesses.
RingCentral (RNG) offers cloud-based phone systems that make it easier to manage and more flexible than on-premise traditional hardware-based phone systems, and serves today's mobile workforces better. It's based in San Mateo, California and has more than 300,000 customers.
RingCentral is also useful as a way to streamline communications among different locations and scale up efficiently as business grows.
An example from a real-world business might help explain it best: Pacific BMW, one of the largest BMW dealerships on the West Coast, replaced an antiquated on-site PBX system that had only basic desktop voice service and which crashed several times a year.
With RingCentral, the dealership has smartphone support, text, and video (HD video meetings, conferencing) to improve efficiency. The mobile app keeps employees accessible to customers and colleagues.
Calls made to employee business numbers can be automatically routed to their mobile phones, for example (without having to give out a personal cell number).
Last year, the company received "The Big Idea Award," given to the most disruptive business model in the past 12-18 months at the International Business Forum Venture Capital Investing Conference in San Francisco.
Q3 2014 revenue increased 36% year-over-year to $56.9 million. Total annualized exit monthly recurring subscriptions were up 37% year-over-year to $219.8 million.
RingCentral Office annualized exit monthly recurring subscriptions were up 53% year-over-year to $153.7 million and net monthly subscription dollar retention was over 99%. RNG reduced shares outstanding by 9.13% in the past 12 months.
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