- GAAP and non-GAAP gross margins at multi-year highs
- Cash flow from operations increased 353% year-over-year to $26.5 million
- Powerful Conversational AI Self-Service capabilities added to XCaaS contact center
8×8, Inc. (NASDAQ: EGHT), a leading integrated cloud contact center and unified communications platform provider, today reported financial results for the first quarter of fiscal 2024 ended June 30, 2023.
First Quarter Fiscal 2024 Financial Results:
- Total revenue decreased 2% year-over-year to $183.3 million.
- Service revenue decreased 2% year-over-year to $175.2 million.
- GAAP operating loss was $1.4 million, compared to GAAP operating loss of $26.8 million in the first quarter of fiscal 2023.
- Non-GAAP operating profit was $26.4 million, an increase of 161% compared to non-GAAP operating profit of $10.1 million in the first quarter of fiscal 2023.
- GAAP net loss was $15.3 million compared to GAAP net loss of $26.0 million in the first quarter of fiscal 2023.
- Non-GAAP net income was $15.5 million, compared to non-GAAP net income of $11.6 million in the first quarter of fiscal 2023.
- Adjusted EBITDA was $33.8 million, or 18% of revenue, compared to Adjusted EBITDA of $18.9 million, or 10% of revenue, in the first quarter of fiscal 2023.
“Our first quarter results reflected our decision to prioritize profitability and cash flow while increasing investment in innovation,” said Samuel Wilson, Chief Executive Officer at 8×8, Inc. “We delivered record operating income and cash flow.”
“We are proud that customers are embracing our vision and innovation roadmap. We expanded the number of contact center users on our 8×8 XCaaS platform, increased the number of 8×8 Voice for Microsoft Teams seats, and closed the largest total contract value transaction in our history. Many of our recent innovations, including digital 8×8 Intelligent Customer Assistant and enhancements to our 8×8 Supervisor Workspace, were based on feedback we received through our Customer Labs program,” added Wilson.
First Quarter Fiscal 2024 Financial Metrics and Recent Business Highlights:
Financial Metrics
- Annual Recurring Subscriptions and Usage Revenue (ARR):
- Total ARR was $703.0 million, an increase of 2% from the end of the same period last year.
- Enterprise ARR was $404.0 million and represented 58% of total ARR.
- GAAP gross margin was 70%, compared to 64% in the same period last year. Non-GAAP gross margin was 73%, compared to 69% in the same period last year.
- GAAP service revenue gross margin was 74%, compared to 70% in the same period last year. Non-GAAP service revenue gross margin was 76%, compared to 73% in the same period last year.
- Cash provided by operating activities was $26.5 million for the first quarter of fiscal 2024, compared to $5.8 million in the first quarter of fiscal 2023.
- The Company voluntarily repaid $25.0 million in aggregate principal of the senior secured Term Loan during the quarter.
- Cash, cash equivalents, restricted cash and investments were $139.2 million on June 30, 2023, compared to $139.0 million on March 31, 2023.
A reconciliation of the non-GAAP measures to the most directly comparable GAAP measures and other information relating to non-GAAP measures is included in the supplemental reconciliation at the end of this release.
Recent Business Highlights:
Product Innovation
- Enhanced 8×8 Intelligent Customer Assistant for 8×8 Contact Center, a powerful, user-friendly conversational AI self-service solution that enables businesses to create simple to complex self-service experiences across all channels.
- Announced the 8×8 Technology Partner Ecosystem, a new program that allows customer-first organizations to enhance their customer experience by deeply embedding cutting-edge technologies from third parties, including leading artificial intelligence (AI) capabilities, into the 8×8 platform with native-feeling integrations and persistent data to enhance business intelligence, insights, and analytics.
- Enhanced 8×8 Supervisor Workspace for 8×8 Contact Center based on feedback from early adopter customers. Supervisor Workspace delivers a personalized, performance-centric workspace that helps contact center supervisors and their teams build exceptional customer journeys, enhance productivity, and empower leaders with advanced real-time insights. Since its launch in March, Supervisor Workspace has already been accessed by nearly 60% of 8×8 Contact Center customers and is currently on track to rival 8×8 Agent Workspace as one of the company’s fastest new product adoptions.
- Delivered the latest customer and employee experience enhancements to the 8×8 XCaaS cloud platform, including improvements to contact center analytics tools, agent performance tracking capabilities, and streamlined customer journey mapping. Further, 8×8 Global Reach has extended to 59 countries with the addition of South Korea.
- Enhanced the 8×8 Voice for Microsoft Teams solution, including new automated processes to simplify user onboarding and reduce time to value.
Industry Recognition
- Ranked as a top 5 provider in the Metrigy 2023 Contact Center-as-a-Service MetriRank Report, based on market share, financials, market share momentum, product mix, customer sentiment, and customer business success.
- Earned awards for 8×8 CCaaS and UCaaS across 12 different categories in the G2 Summer 2023 Awards.
- Won Silver Stevie® Awards for Customer Service Executive of the Year and Customer Service Department of the Year in The 21st Annual American Business Awards®.
- Received TrustRadius 2023 Top Rated Awards for 8×8 Contact Center in the categories of Contact Center and Call Center Workforce Optimization.
- Won TrustRadius 2023 Top Rated Awards for 8×8 Work in the VoIP and Unified Communications as a Service (UCaaS) categories.
Corporate Highlights and Leadership Updates
- Appointed Samuel Wilson as Chief Executive Officer and member of the Company’s Board of Directors. Previously 8×8’s Interim CEO, Wilson brings more than 25 years of executive experience in the technology sector, including extensive expertise in cloud-based communications, collaboration platforms, and enterprise software solutions.
- Appointed Kevin Kraus as Chief Financial Officer. Previously 8×8’s Interim CFO, Kraus brings a wealth of financial expertise and a strong track record in strategic growth to the role, demonstrating his commitment to building both successful and sustainable businesses.
- Appointed Lisa Martin as Chief Revenue Officer. Martin is a recognized sales executive with over 15 years in the contact center and communications sector, and has successfully led teams in achieving double-digit, year-over-year growth through existing customer, new logo, and geographic expansion strategies.
- Voluntarily prepaid $25 million of principal amount on the Term Loan due in 2027, reducing the principal amount outstanding on the adjustable-rate loan to $225 million.
Second Quarter and Updated Fiscal 2024 Financial Outlook:
Management provides expected ranges for total revenue, service revenue and non-GAAP operating margin based on its evaluation of the current business environment. The Company emphasizes that these expectations are subject to various important cautionary factors referenced in the section entitled “Forward-Looking Statements” below.
Second Quarter Fiscal 2024 Ending September 30, 2023
- Service revenue in the range of $173 million to $178 million.
- Total revenue in the range of $180 million to $186 million.
- Non-GAAP operating margin in the range of 10.5% to 11.5%.
Fiscal Year 2024 Ending March 31, 2024
- Service revenue in the range of $701 million to $711 million.
- Total revenue in the range of $732.5 million to $742.5 million.
- Non-GAAP operating margin in the range of 12% to 13%.
The Company does not reconcile its forward-looking estimates of non-GAAP operating margin to the corresponding GAAP measures of GAAP operating margin due to the significant variability of, and difficulty in making accurate forecasts and projections with regards to, the various expenses it excludes. For example, future hiring and employee turnover may not be reasonably predictable, stock-based compensation expense depends on variables that are largely not within the control of nor predictable by management, such as the market price of 8×8 common stock, and may also be significantly impacted by events like acquisitions, the timing and nature of which are difficult to predict with accuracy. The actual amounts of these excluded items could have a significant impact on the Company’s GAAP operating margin. Accordingly, management believes that reconciliations of this forward-looking non-GAAP financial measure to the corresponding GAAP measure are not available without unreasonable effort. All projections are on a non-GAAP basis. See the Explanation of GAAP to Non-GAAP Reconciliation below for the definition of non-GAAP operating margin.
Conference Call Information:
Management will host a conference call to discuss earnings results on August 8, 2023, at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time). The conference call will last approximately 60 minutes. Participants may:
Register to participate in the live call at https://register.vevent.com/register/BIdf64e879ef4842ce8657e0cb7f2fa0f8.
Access the live webcast and replay from the Company’s investor relations events and presentations page at https://8×8.gcs-web.com/news-events/events-presentations.
Participants should plan to dial in or log on 10 minutes prior to the start time. The webcast will be archived on 8×8’s website for a period of at least 30 days. For additional information, visit http://investors.8×8.com.
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