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For Immediate Release
8x8, Inc. Reports First Quarter Fiscal 2019 Financial Results
— Service revenue increased 20% year-over-year to $78 million
— Adjusting for constant currency and excluding DXI revenue, service revenue increased 21% year-over-year,
compared to a 20% year-over-year increase in the previous quarter
SAN JOSE, CA. - July 26, 2018 -- 8x8, Inc. (NYSE:EGHT), a leading provider of cloud phone, meeting, collaboration, and contact center solutions, today reported financial results for the first quarter of fiscal 2019 ended June 30, 2018.
First Quarter Fiscal 2019 Financial Results:
- Service revenue increased 20% year-over-year to $78.1 million. Adjusting for constant currency and excluding DXI revenue, service revenue increased 21% year-over-year, compared to a 20% year-over-year increase in the previous quarter.
- Total revenue increased 20% year-over-year to $83.2 million. Adjusting for constant currency and excluding DXI revenue, total revenue increased 21% year-over-year, compared to a 19% year-over-year increase in the previous quarter.
- GAAP net loss was $15 million or ($0.16) per diluted share.
- Non-GAAP net loss was $3.5 million or ($0.04) per diluted share.
"Accelerating bookings growth from our mid-market and enterprise customers, increasing sales velocity from our channel partners, and strong customer demand for integrated solutions enabled 8x8 to deliver solid first quarter results that exceeded both top and bottom line expectations," said Vik Verma, Chief Executive Officer at 8x8, Inc. "These results are a great indicator of how well-positioned 8x8 is to disrupt the $40 billion enterprise communications market with the new X Series, the industry's first cloud solution to integrate voice, conferencing, collaboration and contact center on a single platform. Now available, X Series simplifies overly complex communications and contact center systems into a unified cloud system of intelligence. X Series provides enterprises with one set of data, one workflow engine, and one analytics engine inside an integrated solution for voice, meeting, team collaboration and contact center. Customers such as Applebee's and large public sector clients like Brent and Lewisham Councils in the U.K. have purchased X Series to transform their employee and customer engagement."
Additional Business Metrics and Highlights:
- Margins: GAAP gross margin was 74%, compared with 76% in the same period last year. Non-GAAP gross margin was 76%, compared with 78% in the same period last year. GAAP service margin was 81%, compared with 82% in the same period last year. Non-GAAP service margin was 83%, compared with 84% in the same period last year.
- Cash generated from operating activities was $0.8 million. Cash, restricted cash and investments were $153 million at June 30, 2018.
- Service revenue from mid-market and enterprise customers billing greater than $1,000 in monthly recurring revenue (MRR) increased 28% over the prior year and represents 61% of total service revenue compared with 57% in the year ago quarter.
- Adjusting for constant currency and excluding DXI revenue, service revenue from mid-market and enterprise customers billing greater than $1,000 in monthly recurring revenue (MRR) increased 30% year-over-year and represents 60% of total service revenue.
- Adjusting for constant currency and excluding DXI revenue, service revenue from mid-market and enterprise customers billing greater than $10,000 in monthly recurring revenue (MRR) increased approximately 58% year-over-year and represents 27% of total monthly recurring revenue.
- New monthly recurring revenue (MRR) booked from mid-market and enterprise customers increased 25% year-over-year and comprised 57% of total bookings.
- Average monthly service revenue by business customer (ARPU): ARPU per mid-market and enterprise customers was $4,953, compared with $4,592 in the same period last year, an 8% year-over-year increase. ARPU per business customer grew to $480, compared with $432 in the same period last year, an 11% increase year-over-year.
- 8x8 has been awarded a total of 163 patents through June 30, 2018.
- Announced general availability of 8x8 X Series - the industry's first cloud solution to integrate voice, conferencing, collaboration and contact center on a single platform - in the U.S. and U.K.
- 8x8 was awarded the "Most Revenue Potential in 2018" and "Easiest to do Business With" at channel partner AVANT Communications Special Forces Summit Awards.
On April 1, 2018, 8x8 adopted Accounting Standards Codification (ASC) 606 using the modified retrospective transition method. The guidance below includes the expected impact of the adoption of this new revenue standard, which replaced ASC 605.
Full Year Fiscal 2019 Financial Outlook under ASC 606:
- Service revenue in the range of $333 million to $338 million, representing approximately 19% to 21% year-over-year increase.
- Excluding DXI revenue, service revenue growth in the range of 21% to 22%.
- Total revenue in the range of $347 million to $352 million, representing approximately 17% to 19% year-over-year increase.
- Non-GAAP pre-tax loss in the range of $13 million to $17 million.
Second Fiscal Quarter 2019 Financial Outlook under ASC 606:
- Service revenue in the range of $80 million to $81 million, representing approximately 18% to 19% year-over-year increase.
- Excluding DXI revenue, service revenue growth in the range of 20% to 21%.
- Non-GAAP pre-tax loss in the range of $4 million to $5 million.
We do not reconcile our forward-looking estimates of non-GAAP net income to the corresponding GAAP measures of GAAP net income (loss) due to the significant variability of, and difficulty in making accurate forecasts and projections with regards to, the various expenses we exclude. For example, although future hiring and retention needs may 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 8x8 common stock, and may also be significantly impacted by events like acquisitions, the timing
and nature of which are difficult to predict with accuracy. Similarly, impairments and other non-recurring items are difficult to predict as they may depend on future events and external factors outside the Company's control. The actual amounts of these excluded items could have a significant impact on the Company's GAAP net income (loss). Accordingly, management believes that reconciliations of this forward-looking non-GAAP financial measure to the corresponding GAAP measure are not available without unreasonable effort.
We also announced today that 8x8 had granted awards of restricted stock units representing the right to acquire up to 229,629 shares of the Company's common stock and stock options exercisable for up to 44,656 shares of common stock, to a total of 72 new employees. Of these awards, a small portion of the RSUs (representing the right to acquire 9,130 shares of common stock) vest in full approximately one year after the date of grant. The remaining awards have vesting schedules and other terms and conditions substantially the same as those previously disclosed for RSU and option awards granted to non-executive employees. The awards were approved by a majority of the Company's independent directors, as material inducements to the hiring of new employees, in accordance with New York Stock Exchange Rule 303A.08 and the Company's 2017 New Employee Inducement Incentive Plan.
Conference Call Information:
Management will host a conference call to discuss earnings results on July 26, 2018 at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time). The call is accessible via the following numbers and webcast links:
(866) 393-4306 Domestic or (734) 385-2616 International; Conference ID #2393019
(855) 859-2056 Domestic or (404) 537-3406 International; Conference ID #2393019
Participants should plan to dial in or log on ten minutes prior to the start time. A telephonic replay of the call will be available until August 16, 2018. The webcast will be archived on 8x8's website for a period of 30 days. For additional information, visit http://investors.8x8.com.
About 8x8, Inc.
8x8, Inc.(NYSE:EGHT) is a leading provider of cloud phone, meeting, collaboration and contact center solutions with over a million business users worldwide. 8x8 helps enterprises engage at the speed of employee and customer expectations by putting the collective intelligence of the organization in the hands of every employee. For additional information, visit www.8x8.com, or follow 8x8 on LinkedIn
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