RingCentral, Inc. Q4 FY2025 Earnings Call

Good afternoon, and welcome to the RingCentral Fourth Quarter 2025 Earnings Conference Call. Please note, this event is being recorded. I would now like to turn the conference over to Steven Horwitz, Vice President of Investor Relations. Please go ahead.

Thank you. Good afternoon, and welcome to RingCentral's Fourth Quarter and Full Year 2025 Earnings Conference Call. Joining me today are Vlad Shmunis, Founder, Chairman, and CEO; Kira Makagon, President and Chief Operating Officer; and Vaibhav Agarwal, Chief Financial Officer. Our remarks today include 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. If the call is replayed after today, the information presented may not contain current or accurate information. For a complete discussion of the risks and uncertainties related to our business, please refer to the 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 presentation, which you can find under the financial results section at ir.ringcentral.com. With that, I'll turn the call over to Vlad.

Good afternoon, and thank you for joining us. Before I begin, let me welcome Mahmoud ElAssir to our Board of Directors. As Senior Vice President and Chief Technology Officer at UnitedHealth Group, Mahmoud leads technology infrastructure, platforms, and services, including corporate systems. Previously, Mahmoud held senior leadership roles at Google and Verizon, where he led major AI and cloud network and platform transformation initiatives, powering global enterprise and consumer services. Mahmoud brings deep expertise in AI native platforms, cloud infrastructure, real-time data systems, security, and large-scale product engineering. This perspective will be invaluable as we scale RingCentral through the next phase of our AI-led evolution. Moving on to the results. We had a strong Q4, capping a solid 2025, in which we met or exceeded all our key operating metrics. Total revenue for the year grew nearly 5% and subscription revenue grew just over 5.5%. Of particular note, we generated record free cash flow of more than $0.5 billion, up 32% versus 2024. This translates to over $5.80 of free cash flow per share in 2025. I am also pleased with the progress we have made in meaningfully reducing the value of new shares granted by over 35% year-over-year. Managing SBC is a key priority. Our steady-state SBC target is 3% to 4% of annual revenue as we expect to achieve it in the next 3 to 4 years. Improving profitability, combined with the reduction in SBC, translated to our full year of positive GAAP operating margin. We achieved nearly 5% GAAP operating margin in 2025, which we expect to approximately double in 2026. We are targeting to achieve approximately 20% GAAP operating margin in the next 3 to 4 years. With this in mind, we are now in a position to expand and diversify our overall capital allocation strategy. I'm happy to share that, today, we announced our first-ever quarterly dividend of $0.075 per share. We believe that these strong results are not an aberration but an early sign of good things yet to come, as RingCentral transforms itself into an agentic voice AI company. Here is why. RingCentral is an acknowledged leader in cloud-based business communications. We have built a $2.5 billion business from scratch by making human connections simpler, cheaper, and more reliable. Our global platform is carrier grade, secure, and regulatory compliant. It is trusted by 0.5 million businesses and over 8 million end users worldwide and supports tens of billions of minutes and billions of calls and SMS messages annually. Critical technical requirements are low latency and bullet-proof reliability, with the system designed to avoid any downtime even during maintenance windows. Scratchy voice or worse, no dial tone, are simply not acceptable. With a multibillion-dollar cumulative investment and thousands of highly specialized real-time communication specialists, expanding and improving our cloud-native platform over the last two decades, this asset is a strong differentiator as the world gets transformed by AI. Simply put, RingCentral's investment and know-how serve a mission-critical need, and they're very hard and likely not cost-effective to replicate. Far from being outdated by forthcoming AI agents, RingCentral's platform is a natural bedrock for emerging agentic voice AI. Looking forward, consumers communicate with their providers predominantly via voice and text, and these interactions are growing. When a consumer calls or texts their business provider, it can be answered by a human or AI agent. In either case, it is RingCentral's platform that makes this interaction possible. And as workflows gradually incorporate more AI agents, RingCentral is in a strong position to provide additional value by incorporating agentic voice AI at the very top of the B2C communications funnel. At the recent Investor Product Day, I laid out our vision for RingCentral 3.0, whereby RingCentral is well on its way to transforming itself into a leading agentic voice AI platform. With agentic voice AI, we are now in a position to not only make connections but also to add significant value to those interactions themselves, before, during, and after every call or text messaging, thus, enabling businesses to answer more calls more efficiently, garner more leads, and process more inquiries at a higher quality. This makes our service substantially stickier and more valuable to our customers as we are able to answer questions, provide insights, and analyze conversations for better customer experience and outcomes. While it is still early, recent results are encouraging. Firstly, our pure AI ARR revenues have almost tripled year-over-year and have contributed significantly toward us meeting our stated goal of $100 million ARR from new products in 2025. But even more importantly, ARR from customers who utilize at least one of our monetized AI products, which we refer to as RCAI utilizing customers, has now more than doubled year-over-year and is now approaching 10% of our overall ARR. With new logo acquisitions, AI attach rate is meaningfully higher, making it a long-term tailwind. Importantly, our RCAI utilizing customers average significantly better ARPU, and they're stickier with net retention rates exceeding 100%. This is another strong tailwind. Looking forward, I could not be more excited about 2026 and beyond. We are leveraging a scaled, cloud-native, real-time communications global platform and are able to spend over $250 million on innovation annually. AI is a natural tailwind to our business. The majority of this ongoing investment is now directed towards our new AI-led product portfolio. Our investments are showing good early results. Our brand is strong, competitive moat is wide and increasing, and our GTM is well established and differentiated. We are embedding intelligence across every interaction and creating new monetization and differentiation opportunities to further widen our moat and increase wallet share. Our financial performance is strong and improving, allowing us multiple avenues to return capital to our shareholders. With a proven team and the rapidly expanding portion of our revenue attributable to AI, we are in a unique position to revolutionize business communications yet again, now through AI. With that, I'll turn it over to Kira.

Thank you, Vlad. Let me now expand on a few points. Agentic voice AI is our strategic priority that is delivering clear ROI. RCAI utilizing customers are driving tangible value. They have higher usage, increased spend, and stronger retention. As Vlad highlighted, approximately 10% of our ARR now comes from customers using at least one AI product, and that adoption more than doubled over the last year. AI is driving structural improvements, making every customer more valuable. Our AI solutions, AIR, AVA, and ACE, deliver measurable outcomes at every stage of a conversation, before, during, and after, respectively. Each plays a distinct role in driving automation, productivity, and insights. Built upon our proven mission-critical communications platform, our agentic voice AI portfolio extends a durable moat grounded in scale, reliability, and over two decades of customer trust. Our AI Receptionist, or AIR, is a virtual receptionist that ensures businesses never miss an important call or lead. It can handle multiple calls simultaneously, is multilingual, and is able to answer questions, schedule appointments and meetings, and route calls. AIR is easy to set up with no professional services required in most cases. As a matter of fact, we have proof points of AIR being set up by human receptionists who are not technically savvy. AIR is our fastest-growing agentic voice AI offering, and it is helping us capture greater wallet share from our customers. In Q4, AIR customer count reached 8,300, up 44% sequentially, with customers adding usage-based minute bundles to drive more efficient front-office operations, higher call intake, and ultimately, more revenue. With a usage-based model, AIR revenue scales directly with our customers' business activity and is not subject to potential reduction in seat counts. If and when a call is connected to a human, that is where our AI Virtual Assistant, or AVA, steps in to assist in real time. AVA captures notes and surfaces recommendations, accelerating workflows for our RingEX and RingCX customers. After the call, our AI Conversation Expert, or ACE, closes the loop, analyzing every recorded interaction for insights that improve coaching, quality, and performance across the organization. ACE has been well received, with customer count now exceeding 4,800, up 144% year-over-year. Together, AIR, AVA, and ACE create a layer of intelligence at every point of interaction, automating upfront, assisting in the moment, and analyzing for ongoing improvement, helping customers drive better performance, stronger customer experiences, and more informed decision-making. Let me now provide some real-world examples. A large multi-specialty health care provider in Tennessee deployed AIR in Q4 to address persistent challenges with long wait times, inefficient routing, and schedule appointments with integrated SMS. After a three-month trial, which enabled them to route 100% of incoming calls properly, they expanded AIR minutes from 30,000 to 0.5 million minutes per quarter. Destination Pet, a nationwide premium pet care provider, purchased RingEX and AIR in Q2 2025, and shortly after in Q4, they added ACE. They are leveraging AIR and ACE across 180-plus locations to capture every call and monitor call quality across every site, demonstrating the tangible ROA customers look to drive as they expand adoption of our AI portfolio. PM Pediatrics, the largest specialized pediatric urgent care provider in the United States, is leveraging AIR, AVA, and ACE to enable faster routing, higher first contact resolution, and richer patient engagement across their 80-plus locations. In particular, AIR is enabling them to handle 30% more patient calls. This integrated AI approach modernizes operations, reduces friction, and enhances patient experience. The key point is that AIR, AVA, and ACE are designed to automate, assist, and analyze across the entire conversation journey. With RingCentral sitting at the very top of the B2C funnel and serving hundreds of thousands of businesses and millions of end users globally, we now have tangible early proof points of our ability to deliver significant customer value via agentic voice AI. The compounding flywheel of AIR, AVA, and ACE is building upon the strength of our carrier-grade secure global business communications platform and sets us apart from point solutions contributing to ARPU extension and higher retention. In November, alongside our agentic voice AI suite, we introduced Customer Engagement Bundle, or CEB for EX. CEB is a purpose-built solution for businesses with non-dedicated agents who don't need the complexity of a full-scale contact center. Just months after launch, we crossed 1,000 customers, confirming strong demand. CEB is also quickly becoming another vector for RingCentral agentic voice AI growth. For customers with dedicated agents that require formal contact centers, RingCX provides an AI-powered customer experience suite, including WEM. Momentum with RingCX remains strong with adoption by more than 1,500 customers, nearly doubling year-over-year, while revenue and ARR also more than doubled. In Q4, over half of our $1 million-plus TCV deals included RingCX, and more than 50% of overall RingCX deals included AI. For example, Patient Connect, a specialized health care call center and scheduling provider, uses RingCX with AVA agent assist to surface patient insights, cutting handle times by 50%. They also use ACE quality management to replace time-consuming spot checks of call recordings, reducing escalations by 40%. Patient Connect reflects a broader pattern. Our agentic voice AI is delivering transformative results across customers of all sizes and industries, ourselves included. RingCentral customer support runs the full RingCX suite with WEM and agentic voice AI, resolving more interactions upfront, cutting queue volumes by over 50%, accelerating resolution times, and elevating customer experiences. This is reflected in our latest Gartner Peer Insights ranking, where service and support scored a new high, placing us in the top tier of communications members. In summary, we're executing on our agentic voice AI vision, where AIR, AVA, and ACE create an intelligence layer across every conversation. RCAI utilizing customers spend more, stay longer, and represent a growing share of our business. This sets RingCentral up for durable growth, expanding profitability, and meaningful long-term value creation. With that, I will hand it over to Vaibhav now.

Thank you, Kira, and good afternoon, everyone. As Vlad noted in his comments, we have a durable TAM, well-established competitive moat, a rapidly emerging agentic voice AI portfolio, and a well-established GTM. Our AI, while early, is making a meaningfully positive impact on our performance and is already contributing to all key financial metrics. Let me provide more details on our performance and outlook. Q4 was a strong finish to a good year, reflecting our strong position in a growing market and disciplined execution across the board. Over the course of 2025, we meaningfully strengthened our financial profile across all key metrics. Our business is robust, growing, and poised to further benefit from agentic voice AI. We believe we are well positioned to continue strengthening our balance sheet and enhancing capital returns, thus positioning the company for sustained long-term value creation. As Vlad noted, in 2025, we surpassed $2.5 billion in revenue, achieved $100 million in ARR from new products, delivered record free cash flow of over $0.5 billion, achieved full year GAAP profitability, reduced net leverage in SBC, and returned our absolute share count to 2019 levels. These milestones enabled us to drive record free cash flow per share while continuing to invest in innovation at a world-class level. Based on our strong financial performance and the outlook that I will be sharing with you shortly, I am now incredibly excited to announce our first-ever quarterly dividend of $0.075 per share. This strategic enhancement to our capital return strategy is reflective of our confidence in the future of our business and our ability to drive long-term cash flows. More details of this dividend are available in our press release. Turning to Q4. Subscription revenue was $622 million, up 5.5% year-over-year; and total revenue was $644 million, up 4.8%, both in line with guidance. Our core business remained durable in Q4 with stable monthly net retention rates above 99%. Within our customer cohorts, small business and global service provider businesses totaling over $1.1 billion in ARR, both grew in double digits with strong unit economics. As Vlad indicated, a key metric moving forward is performance from customers using at least one of our AI products. We refer to these as RCAI utilizing customers. This is currently approaching 10% of our overall ARR, more than doubling year-over-year. As these RCAI utilizing customers come from all cohorts, this metric better reflects how we manage our business. We plan to report on our progress with RCAI utilizing customers periodically instead of previously disclosed cohort-based metrics. Moving to profitability. Q4 subscription gross margin remained above 80%. Non-GAAP operating margin reached 22.8%, up more than 140 basis points year-over-year, driven by operating leverage and improved sales and marketing efficiency. Our disciplined approach to equity management resulted in an SBC reduction of over 300 basis points as a percentage of revenue year-over-year. This contributed to us delivering a GAAP operating margin of 6.6%, up about 4 points year-over-year and GAAP EPS of $0.26. Non-GAAP EPS increased more than 20% to $1.18, above the high end of our guidance. In Q4, we generated $126 million of free cash flow, up 13% year-over-year. During the quarter, we also repurchased approximately 5 million shares for $135 million. For the full year 2025, subscription revenue grew 5.6% to $2.43 billion, and total revenue increased 4.8% to $2.52 billion. Subscription gross margin was 80.5%, and non-GAAP operating margin improved 150 basis points to 22.5%, or $566 million of operating profit. Revenue growth again outpaced operating expense growth, reflecting disciplined hiring, expanded offshoring, vendor consolidation, increased internal use of AI, and investments in higher return products and go-to-market efforts. Our strong operating performance, combined with working capital improvements, drove a record $530 million in free cash flow, up 32% year-over-year, representing a 21% margin. New equity grants declined 36% to approximately $160 million or 6% of revenue, driving a 340 basis points reduction in SBC as a percent of revenue. As a result, we achieved a full year of GAAP operating profitability with a GAAP operating margin of 4.8% and GAAP EPS of $0.48. Non-GAAP EPS grew 18% to $4.36, above the high end of guidance. Weighted average fully diluted shares were approximately 91 million. Free cash flow per share increased 36% to $5.81. Expanding free cash flow per share as well as our GAAP profitability remain core priorities. Turning to our balance sheet. We reduced debt by more than $275 million, ending the year at 1.7x net leverage. We have $955 million of undrawn credit facility, which we expect to use to address the $609 million convertible maturity in March 2026. After that, we have no maturities until 2030. We also used $334 million towards the repurchase of shares in 2025. Before I get into specific guidance for Q1 and 2026, let me highlight a few key pillars that are foundational to our long-term strategy. First, we remain committed to investing in durable growth rooted in world-class ongoing innovation. We are spending over $250 million in innovation, with the majority going towards our new AI-led products. Second, improving GAAP and non-GAAP profitability and free cash flow. We expect free cash flow of $590 million in 2026 at the midpoint. As Vlad noted, we also expect GAAP operating margins of 9% in 2026 at the midpoint with a goal of reaching 20% over the next 3 to 4 years. Third, we remain focused on reducing SBC to drive improvements in EPS and free cash flow per share. We expect annual grants in dollars to decline further to approximately $150 million in 2026 with further reductions over time. Our goal is to reach a steady state of 3% to 4% SBC as a percentage of revenue over the next 3 to 4 years. Fourth, continued deleveraging with a near-term goal of achieving investment-grade credit rating. To that end, we remain committed to reducing our gross debt to $1 billion by the end of 2026. Fifth, returning additional capital in the form of dividends and share buybacks. On the latter note, our Board has approved a $250 million increase in our share repurchase plan, bringing the total authorization to $500 million. With that context, let me turn over to guidance. For the full year 2026, we expect subscription revenue growth of 4.5% to 5.5%; total revenue growth of 4% to 5%, GAAP operating margin of 8.6% to 9.6%, expanding approximately 430 basis points at the midpoint; non-GAAP operating margin of 23% to 23.5%, expanding approximately 75 basis points at the midpoint; free cash flow of $580 million to $600 million, up 11% at the midpoint; SBC of $240 million to $250 million, down about 2 points to approximately 9% of revenue at the midpoint; in-year new stock grants of $145 million to $155 million; free cash flow per share of $6.67 to $6.94, up 17% at the midpoint based on 86.5 million to 87 million shares; non-GAAP EPS of $4.76 to $4.97, up 11% at the midpoint. For Q1 '26, we expect subscription revenue of $622 million to $625 million; total revenue of $640 million to $645 million; GAAP operating margin of 7.1% to 8.2%; non-GAAP operating margin of 22.8% to 22.9%, up approximately 100 basis points year-over-year; non-GAAP EPS of $1.16 to $1.19; SBC of $60 million to $65 million. In closing, I would like to thank our customers and employees for a strong 2025, and now we look forward to another strong year of execution with agentic voice AI, providing a durable tailwind to our business. With that, we will open the call for questions.

The first question today is from Brian Peterson with Raymond James.

Congrats on that above consensus free cash flow outlook for '26. Just maybe double-clicking on that, and with that cash flow, I'd love to understand what are your capital allocation priorities as we think about 2026 and beyond and maybe the longer-term strategy with the opportunity, both for debt payback or the dividends. Would love to get more perspective there.

Thanks, Brian, for the question. So yes, on free cash flows, we are very proud of what we've accomplished over the last three years. If you look at our trajectory, we've gone from $100 million to $500 million in free cash flow, and this year, at the midpoint, we are guiding to $590 million, so up 11% year-over-year. So we are very happy with the progress there. Now with those levels of free cash flows and the consistency with how we are producing them, we have a lot of optionality in terms of our capital allocation priorities. So clearly, the first priority is investing in the growth of the business. So as you read probably in the transcript, we are spending over $0.25 billion of R&D spend, the majority of which is going into our AI-led products. So think of that as 4% to 5% of margin that is getting invested in growth. From there, we are looking to strengthen the balance sheet by reducing our leverage to being investment grade. So we remain committed to bringing our gross debt down to $1 billion by the end of 2026. And also as a reminder for people, we have a $609 million convertible bond due in March, and we expect to refinance that with the undrawn Term Loan A facilities. So once we pay down the debt, there are no debt maturities until 2030. So net-net, we've taken care of any near-term debt maturities. After deleveraging, we are returning additional capital through a balanced combination of buybacks and we are very excited to announce our first quarterly dividend. So we repurchased about $300 million of stock. Our Board has authorized an incremental $250 million, which takes our available share repurchase balance to $500 million, and we've lowered the share count to 2019 levels. Dividends will just complement share buybacks. It's an incremental way of returning capital to our shareholders. And the reason we are very excited about that and the reason we initiated it now is because of the confidence that we have in our business as well as the strong free cash flows that we are generating. So overall, look, with our recurring revenue model as well as growing portfolio of AI products and improving profitability profile, we feel comfortable in our capital allocation strategy.

Great to hear. And maybe just following up. I would love to understand how you would characterize the demand environment versus enterprise, mid-market, and SMB. Any color you can kind of share on the various customer segments?

Repeat the question, please.

Yes, Vlad. I'm just going to get some perspective on what you're seeing in terms of demand. Kind of enterprise, mid-market, SMB, just by customer size, what are you seeing in the environment out there?

Yes. You know what, great question. So demand continues to be very strong across all segments. And we're doing well with new logos, and we're actually doing pretty well with upsells as well across all segments. We are seeing more pricing pressure in the enterprise than in SMB, and in particular, in small business, where contracts are shorter duration, and we don't have any COVID lapping contracts at this point in those segments. Because of that, they are growing in double digits and have actually accelerated year-over-year. By the way, this was not always the case. Okay? So that seems to be very much an area of strength. And as a reminder, between small business and global service providers, in total, there is a bit over $1 billion, closer to $1.1 billion of combined revenue, and that's growing in double digits and performing well above the Rule of 40 if it were standalone. So we are seeing that. With enterprise, there are still pricing pressures, mostly having to do with COVID lapping contracts. And I think as we've indicated on some of the past calls, we expect that headwind to subside over this current year, so entering '27 with a clean slate from that perspective.

The next question is from Siti Panigrahi with Mizuho.

Great. I want to dig into a little bit on your profitability. That's impressive, seeing the GAAP profitability and the target for further expansion. So Vaibhav, could you talk about the levers that you're seeing to get there? Is it more like gross margin expansion with your own product mix or you're expecting some kind of operating leverage on any particular line? And also in the same context, where do you see this stock-based compensation come down in the next few years?

Thank you for the question, Siti. Let me break down your three-part question. Regarding operating margins, over the last three years, we’ve doubled our operating margins from 12% to 24%. This year, we are aiming for an expansion of 75 basis points while continuing to invest in innovation. This expansion is driven by several factors. First, our gross margins are strong, remaining above 80%. Second, we are disciplined with our spending, and we have operating leverage in our business, consistently driving revenue growth that outpaces our expense growth. We are being careful with our hiring practices, offshoring, and consolidating vendors. Additionally, we are increasing our use of AI internally, all of which contribute to operating margin expansion. We define operating margin broadly, considering reductions in stock-based compensation (SBC) and its conversion into free cash flow per share. We are actively reducing SBC, and our guidance shows a decrease from nearly 11% to 9%, marking a 200 basis point improvement. In the medium term, we aim for SBC to be between 3% and 4% over the next 3 to 4 years. We also look at operating margin in relation to free cash flow conversion. In previous years, there was more of a gap between our operating margins and free cash flow, but that has narrowed significantly, improving the quality of our operating margin conversion. We’ve provided guidance for $590 million in free cash flow this year, reflecting an 11% increase. Overall, we have strong operating leverage in our model, and while we can drive higher margins, we’re balancing that with reinvestment in innovation and growth. From a long-term perspective, we are confident in the sustainability of both operating margins and free cash flows due to several structural drivers: a revenue model that generates recurring income and high net retention rates, embedded operating leverage, and disciplined cash deployment. Therefore, we believe we have a solid foundation to continue improving both operating margins and free cash flows.

Okay. That's helpful. And then a quick follow-up on AIR that grew to 8,000 customers plus. So that's pretty good. But what's the average contract value for those AIR customers? Are you seeing the ARPU for AI-related customers different? I mean, anything, changes? How do you compare that versus non-AI customers? Basically, I'm trying to understand if you're seeing any kind of meaningful dollar expansion and ARPU per seat with AI.

Yes, I'll take that. Vaibhav can provide additional details. To start with your last question, are we seeing growth? Absolutely. It's important to note that we have reached a $100 million annual recurring revenue exit rate with new products, having started two years ago with no revenue. We promised to hit that $100 million mark, and we have delivered. Additionally, pure AI makes up a significant portion of that revenue. To remind you, our new product initiatives encompass three AI products: AIR, AVA, and ACE, along with our contact center solution, RingCX. Together, AIR, AVA, and ACE contribute to the $100 million figure. Furthermore, we have introduced a new metric that we suggest you use to evaluate us moving forward: the percentage of total revenue derived from customers who use at least one of our paid AI products. This distinction is made because while nearly all our customers utilize some form of AI, only a subset pays for it. The paid AI revenue contributes to the $100 million total. Currently, it represents almost 10% of our annual recurring revenue, indicating around $250 million to date. This directly affects our performance and shows a significant indirect impact, amounting to approximately $250 million in both annual recurring revenue and notably improved customer retention. Overall, our retention rates are strong and world-class, with net retention remaining above 100% across the board, including small businesses. I hope that answers your question.

Your next question is from Elizabeth Porter with Morgan Stanley.

This is Jamie on for Elizabeth. Would be great to just get a sense of how you're seeing the different uptake of AI across different go-to-market channels, maybe thinking about the GSP space or sort of verticals, whether it's enterprise versus SMB.

Kira, do you want to take that?

Yes, the uptake has been strong across both direct and channel segments. Our product AIR has shown particularly good adoption among smaller customers because it's easy to set up. This is especially beneficial for small businesses that have limited resources to manage incoming calls. It has really helped customers improve their lead management and, ultimately, their revenue. The AVA product performs well with mid-sized customers, while ACE, which focuses on post-call analysis, is gaining traction overall. We also noted last quarter that AT&T is now taking our GSP product to market, and TELUS is also on board, along with other GSPs promoting our AI products. There's consistent interest in these AI offerings within the GSP sector. We shared some measurable results that demonstrate why customers are using our products, including improvements in their revenue profiles, expansion capabilities, quality monitoring, and achieving strategic objectives, such as one customer we highlighted who attained their rating classification to attract more providers.

Next question is from Andrew King with Rosenblatt.

Just wanted to get some extra color on how you might have adjusted your partner program in order to reflect the company's new AI priorities?

That's a great question. We have a strong and well-defined partner network and a solid understanding of which partners serve specific audiences. We are aware of our key verticals, with health care and financial services standing out right now. Additionally, SLED is performing well for us. At a high level, we're focusing on those partners, and they are crucial for us. In the long run, we expect that AI will be leveraged across all sectors, but these are the ones that come to mind first. Moreover, GSPs generally have their own SMB user bases, which shows how effective our AI and AIR, in particular, are in the SMB space. It's not only benefiting us but also many of our GSP partners are now preparing to deploy or are in the process of deploying our solutions.

The next question is from Ryan MacWilliams with Wells Fargo.

This is Cyrus on for Ryan. With the recent announced integration with OpenAI's 5.2 voice model, what are OpenAI's models bringing specifically to the Ring platform that are enhancing your voice offering?

In the press release, we discussed the 5.2 model. Generally, we use the models that are most appropriate for the transaction being analyzed and the most cost-effective. We always test all the models. The 5.2 model is the latest and shows excellent results. Our focus is on accuracy and latency, and we aim to optimize processing while applying the best model for each specific scenario. Additionally, our platform is model agnostic, which allows us to use other models as needed for the specific requirements of what's being processed, whether it's a real-time transaction or a post-processing transaction. Different models are applicable, and we continuously perform arbitrage between them.

This concludes our question-and-answer session. I would like to turn the conference back over to Steven Horwitz for any closing remarks.

Thank you, everyone, for joining us today. We look forward to seeing you next quarter and also seeing you at Enterprise Connect in March. Please contact the Investor Relations at ir@ringcentral.com if you'd like to attend. I will be also sending out an invitation soon. Thank you very much.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.