Shares in RingCentral Inc. dropped in late trading today after the cloud communications company missed on revenue and gave a lower-than-expected revenue outlook in its latest quarterly earnings report.

For the fourth quarter that ended Dec. 31, RingCentral reported net income before costs such as stock compensation of $58.1 million, or 60 cents per share, up from $36.6 million, or 39 cents per share, in the same quarter of last year. It recorded a net loss of $284.1 million, up from $118.4 million a year ago, thanks to an asset writedown charge of $180.4 million.

Revenue rose 19% from a year ago, to $525 million. Analysts had expected adjusted earnings per share of 59 cents on revenue of $527.43 million.

RingCentral’s improving revenue numbers were driven by subscriptions which rose 19% in the quarter, to $502 million, while other revenue fell 18%, to $23 million. Annual recurring revenue rose 17%, to at $2.1 billion.

Recent company highlights included RingCentral signing a new strategic collaboration agreement with Amazon Web Services Inc. The multiyear deal includes AWS offering RingCentral Message Video Phone and RingCentral Contract Center solutions to its customers.

RingCentral also extended and expanded its strategic partnership with Avaya Inc. The partnership now includes minimum seat commitments and a better-aligned incentive structure to drive accelerated migration to Avaya Cloud Office.

The company has also announced two rounds of layoffs since the beginning of the fourth quarter — a 10% layoff in November and a further layoff of about 30 employees in January. According to Channel Futures, the most recent layoffs were part of an effort to “tidy up the books” ahead of RingCentral’s possible acquisition of voice-over IP provider 8×8 Inc.

For its full fiscal year 2022, RingCentral reported adjusted earnings of $1.99 a share, up from $1.34 the year prior, on revenue of $1.99 billion, up 25%.

“We are in a select category of SaaS companies with over $2 billion of recurring revenue, and our Q4 results reflect our ability to deliver healthy growth and increasing profitability as we continue to scale,” Vlad Shmunis, RingCentral’s founder, chairman and chief executive officer, said in a statement. “We are executing well in the current environment given our product leadership, which provides customers with the market’s leading UCaaS platform, as well as an integrated CCaaS solution.”

For the quarter ahead, RingCentral predicts adjusted earnings of 69 to 70 cents a share on revenue of $526 million to $530 million. Like the quarterly earnings, the outlook was mixed, with analysts having expected 62 cents and $545 million.

For the full year 2023, the company expects adjusted earnings of $3.04 to $3.10 a share on revenue of $2.18 billion to $2.2 billion. Analysts were expecting $2.82 and $2.34 billion. The hat trick of revenue misses caused RingCentral shares to drop over 10% in late trading.

Image: RingCentral