8×8, Inc. Reports Third Quarter Fiscal 2022 Financial Results

By AIT News Desk On Feb 3, 2022

Service Revenue Increased 18% and Total ARR Increased 16% Year-over-Year

8×8, Inc. a leading integrated cloud communications platform provider, reported financial results for the third quarter of fiscal 2022 ended December 31, 2021.

Third Quarter Fiscal 2022 Financial Results:

Total revenue increased 15% year-over-year to $156.9 million.
Service revenue increased 18% year-over-year to $149.4 million.
GAAP operating loss was $37.6 million; Non-GAAP operating profit was $3.1 million.

“We delivered revenue above the high end of our guidance range and achieved non-GAAP operating profitability and positive cash flow from operations for the fourth consecutive quarter. Channel contribution, growth in Enterprise ARR, growth in XCaaS ARR, and adoption of 8×8 Voice for Microsoft Teams demonstrated continued strength in the third quarter,” said Dave Sipes, Chief Executive Officer at 8×8, Inc. “Our investments in XCaaS, channel, and global coverage have us well positioned to achieve our long-term goals of revenue growth and increased profitability.”

Third Quarter Fiscal 2022 Financial Metrics and Business Highlights:

Financial Metrics

Annualized Recurring Subscriptions and Usage (ARR):
- Total ARR of $572 million, an increase of 16% from the same period last year.
- 907 enterprise customers with ARR greater than $100,000, compared to 734 customers in the same period last year, an increase of 24% year-over-year.
- Enterprise ARR growth of 30%, accounting for 54% of total ARR compared to 48% of total ARR at the end of the third quarter of fiscal 2021.

GAAP gross margin was 62%, compared to 56% in the same period last year. Non-GAAP gross margin was 65%, compared to 60% in the same period last year.
GAAP service revenue gross margin was 67%, compared to 63% in the same period last year. Non-GAAP service revenue gross margin was 70%, compared to 66% in the same period last year.
Cash provided by operating activities was $9.0 million, compared to cash used by operating activities of $1.8 million in the third quarter of fiscal 2021.
Cash, restricted cash, and investments of $260.5 million at December 31, 2021, compared to $161.5 million at March 31, 2021.

Product Innovation Highlights

Delivered the industry’s first integrated cloud phone and contact center solution that supports the communications and customer engagement requirements of multinational organizations in the Philippines. Increased full PSTN replacement services to 48 countries and territories.
Announced general availability of 8×8 Work for Web, a browser-based solution for a secure, unified communications and collaboration experience across almost any device and operating system.
Released advanced enterprise video meeting capabilities, including breakout rooms and detailed meeting summaries.

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Industry Recognition

Named a Leader in the IDC MarketScape: Worldwide Unified Communication and Collaboration 2021 Vendor Assessment.
Awarded the 2021 CRN Tech Innovator Award for 8×8 XCaaS.

Corporate and Leadership Updates

Completed the acquisition of Fuze, a leader in cloud-based communications for the enterprise. The acquisition expands the base of enterprise customers, creates incremental cross-selling opportunities for contact center capabilities, and increases engineering resources focused on XCaaS platform innovation.
Completed private placement of an additional $137.5 million in aggregate principal amount of the 0.50% Convertible Senior Notes due 2024 and repurchased approximately $45 million of common stock, resulting in net proceeds of approximately $89 million.
Appointed Stephanie Garcia as Chief Human Resources Officer. Garcia is a well-known HR executive in the cloud and Software as a Service industry, leading and scaling high-performing global HR operations at dynamic, fast-growth companies.
Appointed Lisa Del Real as Global Channel Chief. Del Real is a recognized channel executive in the cloud communications industry with a strong track record building successful global channel programs.

Fourth Quarter and Updated Fiscal 2022 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.

The acquisition of Fuze, Inc. closed on January 18, 2022. Fourth quarter and fiscal year 2022 results, when reported, will include Fuze revenue and expenses from the closing date.

Outlook for Fourth Quarter Fiscal 2022 Ending March 31, 2022:

Service revenue in the range of $173.5 million to $175.5 million, including estimated Fuze revenue of approximately $20 million. At the midpoint, this represents year-over-year growth of 30% inclusive of estimated Fuze revenue.
Other revenue in the range of $6 million to $7 million.
Total revenue in the range of $180 million to $182 million, including estimated Fuze revenue of approximately $20 million. At the midpoint, this represents year-over-year growth of 25% inclusive of estimated Fuze revenue.
Positive non-GAAP operating margin.

Updated Outlook for Full-Year Fiscal 2022 Ending March 31, 2022:

The range for service revenue is increased to $603 million to $605 million, including estimated Fuze revenue of approximately $20 million, from the prior range of $572.5 million to $576.5 million. At the midpoint, this represents year-over-year growth of 22% inclusive of estimated Fuze revenue.
Other revenue in the range of $33 million to $34 million.
The range for total revenue is increased to $636.8 million to $638.8 million, including estimated Fuze revenue of approximately $20 million, from the prior range of $611 million to $615 million. At the midpoint, this represents year-over-year growth of 20% inclusive of estimated Fuze revenue.
Positive non-GAAP operating margin.

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