8X8 Inc (EGHT) 10-Q Quarterly Report July 2022

CAMPBELL, CA. - July 27, 2022 - 8x8, Inc. (NYSE: EGHT), a leading integrated cloud communications platform provider, today reported financial results for the first quarter of fiscal 2023 ended June 30, 2022.

First Quarter Fiscal 2023 Financial Results:

•Total revenue increased 26% year-over-year to $187.6 million, including Fuze revenue of $29.5 million.

•Service revenue increased 30% year-over-year to $179.2 million, including Fuze revenue of $29.3 million.

•GAAP operating loss was $26.8 million, compared to operating loss of $38.8 million in the first quarter of fiscal 2022.

•Non-GAAP operating profit was $10.1 million, compared to non-GAAP operating profit of $1.3 million in the first quarter of fiscal 2022. Non-GAAP operating profit in the first quarter of fiscal 2023 was increased by approximately $3 million in unusual items.

"Our first quarter results reflect our increased emphasis on profitability and cash flow generation, as well as strength in XCaaS, 8x8 Voice for Teams, high retention of Fuze customers, and continued global expansion of the enterprise base," said Dave Sipes, 8x8 CEO. "Our progress on these strategic initiatives, combined with our focus on driving operational efficiency, creates the foundation for sustainable growth and increasing profitability in the future. We believe this will deliver value to all our stakeholders – customers, partners, employees, and shareholders."

First Quarter Fiscal 2023 Financial Metrics and Recent Business Highlights:

Financial Metrics

•Annual Recurring Subscriptions and Usage Revenue (ARR):

◦Total ARR grew to $688 million, an increase of 28% from the end of the same period last year.

◦Enterprise ARR of $403 million increased 54% year-over-year and represented 59% of total ARR.

◦1,277 customers generated ARR greater than $100,000, compared to 824 at the end of the first quarter of fiscal 2022.

•GAAP gross margin was 64%, compared to 60% in the same period last year. Non-GAAP gross margin was 69%, compared to 63% in the same period last year.

•GAAP service gross margin was 70%, compared to 67% in the same period last year. Non-GAAP service gross margin was 73%, compared to 69% in the same period last year.

•Cash provided by operating activities was $5.8 million for the first quarter, compared to $4.0 million in the first quarter of fiscal 2022.

•Cash, restricted cash, and investments were $143.0 million on June 30, 2022 and $148.2 million on March 31, 2022.

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:

Partner and Product Innovation Highlights

•Launched the 8x8 Elevate MP Program for Microsoft Gold Partners together with the exclusive 8x8 XT Direct Routing as a Service offering that enables enterprises adopting Microsoft Teams to reduce communication costs and improve employee productivity with a highly resilient global telephony solution.

The following information was filed by 8X8 Inc (EGHT) on Wednesday, July 27, 2022 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Inside 8X8 Inc's 10-Q Quarterly Report:

Revenue - Product Highlight
(Dollars in thousands) Revenue Service revenue Service revenue increased for the three months ended as of June 30, 2022, as compared to the three months ended as of June 30, 2021, primarily due to a net increase in our installed base of mid-market and enterprise customers, expanded deployments by existing customers, growth in related telecom usage by our customers, and our acquisition of Fuze, Inc., which contributed approximately $29.3 million in service revenue for the three months ended June 30, 2022.

Financial - Expense Highlight
We expect our focus on reducing unit costs and improving sales and marketing efficiency will result in improved operating margins and increased cash flow from operations.
Financial - Earnings Highlight
We believe that this approach of balancing increased investment in innovation with improved efficiency in other areas will enable the Company to achieve sustained growth and increasing profitability and cash flow.
Financial - Expense Highlight
Cost of Service Revenue Cost of service revenue consists primarily of costs associated with network operations and related personnel, technology licenses, amortization of capitalized internal-use software, other communication origination and termination services provided by third-party carriers and outsourced customer service call center operations, and other costs such as customer service, and technical support costs.
Revenue - Product Highlight
23 Table of Contents Sales and Marketing Sales and marketing expenses consist primarily of personnel and related costs, sales commissions, including those to the channel, trade shows, advertising and other marketing, demand generation, promotional expenses, and allocated IT and facilities costs.
Financial - Expense
General and administrative General and...Read more
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While we expect to continue...Read more
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We plan to continue to...Read more
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We expect to continue improving...Read more
Other - Other
As discussed in the section...Read more
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Additionally, we plan to reduce...Read more
Revenue - Product
We have focused our sales...Read more
Financial - Expense
Operating Expenses Research and development...Read more
Revenue - Product
Excluding $29.5 million from the...Read more
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SUMMARY AND OUTLOOK In the...Read more
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Other Expense, Net Other expense,...Read more
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We expect sales and marketing...Read more
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The increase in service revenue...Read more
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24 Table of Contents Cost...Read more
Revenue - Product
Other revenue Other revenue decreased...Read more
Revenue - Product
Research and development as a...Read more
Revenue - Product
These adjustments for non-cash charges...Read more
Other - Other
In an effort to contain...Read more
Other - Other
In fiscal 2023, we remain...Read more
Financial - Expense
We plan to continue our...Read more
Revenue - Product
Annualized Recurring Subscriptions and Usage...Read more
Revenue - Product
Sales and marketing 25 Table...Read more
M & A - Other
The acquisition of Fuze, Inc....Read more
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Financial Statements, Disclosures and Schedules

Inside this 10-Q Quarterly Report

Material Contracts, Statements, Certifications & more

8X8 Inc provided additional information to their SEC Filing as exhibits

Exhibit 31.1: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 31.2: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 32.1: Section 1350 Certification

Exhibit 32.2: Section 1350 Certification

Ticker: EGHT
CIK: 1023731
Form Type: 10-Q Quarterly Report
Accession Number: 0001023731-22-000169
Submitted to the SEC: Fri Jul 29 2022 9:04:16 PM EST
Accepted by the SEC: Mon Aug 01 2022
Period: Thursday, June 30, 2022
Industry: Computer Processing And Data Preparation