Financial Analysis

Note 7. Business Combinations On February 6, 2026, the Company acquired a messaging platform company adding to our global messaging and communications capabilities. Total consideration of $15.2 million comprised of $8.0 million cash paid at closing, net of $1.3 million cash acquired, a $4.0 million indemnity holdback payable in August 2026, and $1.9 million representing the acquisition-date fair value of contingent consideration. The maximum amount payable under contingent consideration is $6.0 million. The transaction was accounted for as a business combination. The preliminary purchase price allocation, based on estimated fair values, included $11.0 million of identified intangible assets, comprising customer relationships and developed technology, $5.7 million of goodwill, and $1.6 million of net liabilities assumed. The acquired intangible assets have a weighted-average useful life of four years.

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Note 9. Commitments and Contingencies Legal Matters The Company is subject to certain legal proceedings and from time to time may be involved in a variety of claims, lawsuits, investigations, and proceedings relating to contractual disputes, intellectual property rights, employment matters, regulatory compliance matters, and other litigation matters relating to various claims that arise in the normal course of business. The Company determines whether an estimated loss from a contingency should be accrued by assessing whether a loss is deemed probable and can be reasonably estimated. The Company assesses its potential liability by analyzing specific litigation and regulatory matters using reasonably available information. The Company develops its views on estimated losses in consultation with inside and outside counsel, which involves a subjective analysis of potential results and outcomes, assuming various combinations of appropriate litigation and settlement strategies. Actual claims could settle or be adjudicated against the Company in the future for materially different amounts than the Company has accrued due to the inherently unpredictable nature of litigation. Legal fees are expensed in the period in which they are incurred.

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"Note 5. Long-Term Debt The following table sets forth the net carrying amount of the Companys long-term debt (in thousands): Debt Instrument Maturity Date June 30, 2026 December 31, 2025 2030 Senior Notes Aug 15, 2030 $ 250,000 $ 350,000 Term Loan under Credit Agreement (1) Sep 11, 2030 879,115 302,250 Revolving Credit Facility under Credit Agreement (2) Sep 11, 2030 2026 Convertible Notes (3) Mar 15, 2026 609,065 Total principal amount 1,129,115 1,261,315 Less: unamortized debt discount and issuance costs on long-term debt (8,469) (7,519) Less: current portion of long-term debt, net (4) (46,269) (624,216) Net carrying amount of long-term debt $ 1,074,377 $ 629,580 (1) The Company has $50.0 million available for drawdown under the Term Loan as of June 30, 2026. (2) The Company has $305.0 million available for borrowing under the Revolving Credit Facility as of June 30, 2026. (3) The Company settled the remaining $609.1 million principal of the 2026 Convertible Notes in cash on the original maturity date in March 2026. (4) As of June 30, 2026, the current portion of long-term debt, net, consists of the $46.3 million in expected principal payments due on the Term Loan. The Term Loan requires quarterly principal payments of approximately 1.27% of the refinanced $910.0 million principal amount drawn, with balance due at maturity. The following table sets forth the future minimum principal payments for long-term debt as of June 30, 2026 (in thousands): Term Loan 2030 Senior Notes …

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The following table provides information about disaggregated revenue by primary geographical markets: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Primary geographical markets North America 88 % 88 % 88 % 89 % Others 12 12 12 11 Total revenues 100 % 100 % 100 % 100 %

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Note 11. Share-Based Compensation A summary of share-based compensation expense recognized in the Condensed Consolidated Statements of Operations is as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Cost of revenues $ 2,782 $ 4,243 $ 5,911 $ 10,403 Research and development 15,133 14,003 29,324 31,575 Sales and marketing 23,298 25,411 46,866 60,595 General and administrative 15,918 19,812 29,695 38,777 Total share-based compensation expense $ 57,131 $ 63,469 $ 111,796 $ 141,350 A summary of share-based compensation expense by award type is as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Employee stock purchase plan rights (ESPP) $ 1,811 $ 1,415 $ 3,506 $ 2,819 Performance stock units (PSUs) 4,327 5,623 9,779 15,729 Restricted stock units (RSUs) 50,993 56,431 98,511 122,802 Total share-based compensation expense $ 57,131 $ 63,469 $ 111,796 $ 141,350 Equity Incentive Plans As of June 30, 2026, a total of 15,399,414 shares remained available for grant under the Companys Amended and Restated 2013 Equity Incentive Plan (the 2013 Plan). Employee Stock Purchase Plan The Companys ESPP allows eligible employees to purchase shares of the Companys Class A Common Stock at a discounted price through payroll deductions. As of June 30, 2026, there was a total of $2.3 million of unrecognized share-based compensation expense, net of estimated forfeitures, related to the ESPP, which will be r …

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Note 4. Fair Value of Financial Instruments The Company measures and reports certain cash equivalents, including money market funds, derivative interest rate swap agreement, and contingent consideration at fair value in accordance with the provisions of the authoritative accounting guidance that addresses fair value measurements. This guidance establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. The hierarchy is broken down into three levels based on the reliability of the inputs as follows: Level 1: Observable inputs that reflect unadjusted quoted prices in active markets for identical assets or liabilities. Level 2: Other inputs, such as quoted prices for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability. Level 3: Unobservable inputs that are supported by little or no market activity and that are based on managements assumptions, including fair value measurements determined by using pricing models, discounted cash flow methodologies or similar techniques. The financial instruments carried at fair value were determined using the following inputs (in thousands): Fair Value at June 30, 2026 Level 1 Level 2 Le …

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Note 12. Income Taxes The provision for income taxes was $3.1 million and $2.5 million for the three months ended June 30, 2026 and 2025, respectively, and $6.6 million and $8.4 million for the six months ended June 30, 2026 and 2025, respectively. Beginning in 2022, the U.S. Tax Cuts and Jobs Act (Tax Act) enacted on December 22, 2017 eliminated the option to deduct research and development expenditures for tax purposes in the period the expenses were incurred and instead required all U.S. and foreign research and development expenditures to be amortized over five and fifteen tax years, respectively. The One Big Beautiful Bill Act (or OBBB Act), enacted on July 4, 2025, revised these rules, permitting the deduction of certain U.S. research and development expenditures incurred in tax years beginning on or after January 1, 2025 but expenditures attributable to research and development conducted outside the U.S. must continue to be capitalized and amortized over fifteen years. The OBBB Act also provides the option to accelerate the amortization of any remaining unamortized U.S. research and development expenditures incurred in tax years beginning on or after January 1, 2022, and before January 1, 2025, over a one or two year period beginning with the first taxable year beginning after December 31, 2024. Based on the initial review of the OBBB Act, the Company expects 2025 US cash taxes will decrease without any material impact on its effective tax rate. The Company is continui …

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Note 8. Leases The Company primarily leases facilities for office and data center space under non-cancelable operating leases for its U.S. and international locations. As of June 30, 2026, non-cancelable leases expire on various dates between 2026 and 2031. Generally, the non-cancelable leases include one or more options to renew, with renewal terms that can extend the lease term from one to six years. The Company has the right to exercise or forego the lease renewal options. The lease agreements do not contain any material residual value guarantees or material restrictive covenants. As of June 30, 2026 and December 31, 2025, the balance sheet components of leases were as follows (in thousands): June 30, 2026 December 31, 2025 Operating lease right-of-use assets $ 40,518 $ 30,855 Accrued liabilities 20,577 21,293 Operating lease liabilities 23,468 14,372 Total operating lease liabilities $ 44,045 $ 35,665 As of June 30, 2026, maturities of operating lease liabilities were as follows (in thousands): 2026 (remaining) $ 12,724 2027 15,895 2028 8,681 2029 4,561 2030 3,671 2031 onwards 2,141 Total future minimum lease payments 47,673 Less: Imputed interest (3,628) Present value of lease liabilities $ 44,045 The supplemental cash flow information related to operating leases for the six months ended June 30, 2026 and 2025 were as follows (in thousands): Six Months Ended June 30, 2026 2025 Operating cash flows resulting from operating leases: Cash paid for amounts included in the mea …

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Recent Accounting Pronouncements Not Yet Adopted In November 2024, the FASB issued Accounting Standards Update No. 2024-03: Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (ASU 2024-03) , which requires disaggregation of certain costs in a separate note to the financial statements, such as the amounts of employee compensation, depreciation and intangible asset amortization, included in each relevant expense caption in annual and interim financial statements. This ASU also requires disclosure of the total amount of selling expenses and our definition of selling expenses. ASU 2024-03 is effective for annual periods beginning after December 15, 2026 and for interim periods beginning after December 15, 2027 on a retrospective or prospective basis, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2024-03 on its financial statement disclosures. In September 2025, the FASB issued Accounting Standards Update No. 2025-06: Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software , which simplifies the capitalization guidance by removing all references to software development project stages so that the guidance is neutral to different software development methods. The amendments in this ASU are effective for annual reporting periods beginning after December 1 …

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Note 14. Restructuring Activities During the three and six months ended June 30, 2026, the Company incurred restructuring costs of $7.5 million and $10.4 million, respectively, as part of the broader efforts to optimize the Companys cost structure. The restructuring costs primarily consisted of severance payments, employee benefits, contract termination costs, exit charges associated with the closure of facilities and related costs. The Company expects to substantially complete these actions in 2026, subject to local law and consultation requirements in certain countries. The Company may incur other charges or cash expenditures not currently contemplated due to unanticipated events that may occur as a result of or in connection with the implementation of these actions. The following table summarizes the Companys restructuring costs that were recorded as an operating expense in the accompanying Condensed Consolidated Statements of Operations during the three and six months ended June 30, 2026 and 2025 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Cost of revenues $ 2,026 $ 149 $ 2,554 $ 1,684 Research and development 480 1,202 1,037 2,896 Sales and marketing 4,182 925 4,824 3,913 General and administrative 820 537 1,936 1,410 Total restructuring costs $ 7,508 $ 2,813 $ 10,351 $ 9,903 The following table summarizes the Companys restructuring liability that is included in accrued liabilities in the accompanying Condensed Consolidated B …

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Note 2. Revenue The Company derives its revenues primarily from subscriptions, sale of products, and professional services. Revenues are recognized when control is transferred to the customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services or products. Disaggregation of revenue Revenue by geographic location is based on the billing address of the customer. The following table provides information about disaggregated revenue by primary geographical markets: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Primary geographical markets North America 88 % 88 % 88 % 89 % Others 12 12 12 11 Total revenues 100 % 100 % 100 % 100 % The Company derived over 90% of subscription revenues from RingEX and RingCentral contact center solutions for the three and six months ended June 30, 2026 and 2025. For the three and six months ended June 30, 2026 and 2025, RingCentral contact center solutions represented over 10% of total revenues. Deferred revenue During the three and six months ended June 30, 2026, the Company recognized revenue of $55.5 million and $212.2 million, respectively, that was included in the corresponding deferred revenue balance at the beginning of the year. Remaining performance obligations The typical subscription term ranges from one month to five years. Contract revenue as of June 30, 2026 that has not yet been recognized was approximately $2.7 billion. This excludes contracts w …

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Note 15. Segment Information The Chief Executive Officer, who functions as the chief operating decision maker (CODM), oversees the Companys business activities at the consolidated level as a single operating and reportable segment. The factors used to identify the Companys single operating segment include the organizational structure of the Company and the financial information available for evaluation by the CODM. The CODM uses consolidated net income (or loss) and operating margin to evaluate financial performance and make decisions regarding resource allocation, including setting target revenue growth and distributing the budget across cost of revenues, research and development, sales and marketing, and general and administrative expenses. The following table presents selected financial information for the Companys single operating segment for the three and six months ended June 30, 2026 and 2025 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Revenue $ 657,011 $ 620,398 $ 1,301,210 $ 1,232,454 Less: Share-based compensation expense 57,131 63,469 111,796 141,350 Depreciation and amortization 57,086 54,921 113,997 109,982 Other segment items (1) 492,509 465,045 975,104 933,819 Income from operations 50,285 36,963 100,313 47,303 Operating margin as % of revenue 7.7 % 6.0 % 7.7 % 3.8 % Other income (expense), net Interest expense (18,672) (16,466) (33,477) (32,581) Other income (expense) (2) 10,638 (4,820) 9,524 (3,418) Other income ( …

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Note 10. Stockholders Deficit Share Repurchase Programs Under the Companys share repurchase programs, share repurchases may be made at the Companys discretion from time to time in open market transactions, privately negotiated transactions, or other means, including under plans complying with Rule 10b5-1 under the Securities Exchange Act of 1934. The programs do not obligate the Company to repurchase any specific dollar amount or to acquire any specific number of shares of its Class A Common Stock. The timing and number of any shares repurchased under the programs will depend on a variety of factors, including stock price, trading volume, and general business and market conditions. The following tables summarize the share repurchase activity of the Companys Class A Common Stock for the three and six months ended June 30, 2026 and 2025 (in thousands): Three Months Ended June 30, 2026 2025 Shares Amount Shares Amount Repurchases under share repurchase programs 2,237 $ 92,052 1,256 $ 32,185 Amounts for excise tax withholdings and brokers commissions (1) 235 Total repurchases of common stock (2) 2,237 $ 92,287 1,256 $ 32,185 Six Months Ended June 30, 2026 2025 Shares Amount Shares Amount Repurchases under share repurchase programs 4,809 $ 174,156 3,078 $ 82,149 Amounts for excise tax withholdings and brokers commissions (1) 495 72 Total repurchases of common stock (2) 4,809 $ 174,651 3,078 $ 82,221 (1) The amounts are included in additional paid-in capital as part of the repurcha …

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