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

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

Second Quarter Fiscal 2023 Financial Results:

•Total revenue increased 24% year-over-year to $187.4 million, including Fuze revenue of $28.4 million.

•Service revenue increased 25% year-over-year to $178.6 million, including Fuze revenue of $27.9 million.

•GAAP operating loss was $25.0 million, compared to operating loss of $37.2 million in the second quarter of fiscal 2022.

•Non-GAAP operating profit was $9.1 million, an increase of 368% compared to non-GAAP operating profit of $1.9 million in the second quarter of fiscal 2022.

"Our second quarter results reflected our increased emphasis on profitability and cash flow generation. Non-GAAP gross margin was above 70% and non-GAAP operating profit and operating cash flow exceeded our expectations," said Dave Sipes, 8x8 Chief Executive Officer. "As a result, we are once again raising our non-GAAP operating margin targets for the year and believe we have line of sight to double-digit operating margins on a non-GAAP basis in fiscal 2024."

"We believe we can achieve these results while continuing to invest in innovation on our XCaaS platform and providing an outstanding customer experience that enables our customers to make every interaction an opportunity to delight. Our unified XCaaS platform delivers this advantage to customers at a lower total cost of ownership," added Sipes.

Second Quarter Fiscal 2023 Financial Metrics and Recent Business Highlights:

Financial Metrics

•Annual Recurring Subscriptions and Usage Revenue (ARR):

◦Total ARR grew to $692 million, an increase of 25% from the end of the same period last year.

◦Enterprise ARR of $401 million increased 42% year-over-year and represented 58% of total ARR.

◦1,291 customers generated ARR greater than $100,000, compared to 871 at the end of the second quarter of fiscal 2022.

•GAAP gross margin was 67%, compared to 61% in the same period last year. Non-GAAP gross margin was 70%, compared to 64% in the same period last year.

•GAAP service revenue gross margin was 71%, compared to 67% in the same period last year. Non-GAAP service gross margin was 74%, compared to 69% in the same period last year.

•Cash provided by operating activities was $13.8 million for the second quarter, compared to $5.1 million in the second quarter of fiscal 2022.

•Cash, cash equivalents, restricted cash and investments were $132.3 million on September 30, 2022, compared to $145.6 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.

The following information was filed by 8X8 Inc (EGHT) on Thursday, October 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 and six months ended September 30, 2022 as compared to the three and six months ended September 30, 2021, primarily due to a net increase in our installed base of mid-market and enterprise customers, expanded deployments by existing customers and growth in related telecom usage by our customers, including from our acquisition of Fuze, Inc., which contributed approximately $27.9 million and $57.2 million in service revenue for the three and six months ended September 30, 2022, respectively.

Financial - Expense Highlight
Cost of service revenue increased in dollars but decreased as a percentage of service revenue for the six months ended September 30, 2022 as compared to the six months ended September 30, 2021, due to an increase in sales of our services, resulting in an increase of $5.3 million in communication infrastructure costs incurred to deliver our services, including those in connection with CPaaS, a $4.5 million increase in employee and consulting related costs, including $0.8 million related to stock compensation expenses, and a $1.9 million increase in depreciation and amortization.
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 - Expense Highlight
25 Table of Contents 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.
Financial - Expense Highlight
Cost of Revenue Cost of service revenue 27 Table of Contents Cost of service revenue increased in dollars but decreased as a percentage of service revenue for the three months ended September 30, 2022 as compared to the three months ended September 30, 2021, due to an increase in sales of our services, resulting in an increase of $2.0 million in communication infrastructure costs incurred to deliver our services, including those in connection with CPaaS, a $1.6 million increase in employee and consulting related costs, including $0.1 million related to stock-based compensation expenses, and a $0.8 million increase in depreciation and amortization.
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While we expect to continue...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: 0001023731-22-000214
Submitted to the SEC: Thu Nov 03 2022 4:22:45 PM EST
Accepted by the SEC: Thu Nov 03 2022
Period: Friday, September 30, 2022
Industry: Computer Processing And Data Preparation