Service Revenue Growth of 18% Year-over-Year; Total ARR Increased 18% Year-over-Year
8×8, Inc. , a leading integrated cloud communications platform provider, reported financial results for the second quarter of fiscal 2022 ended September 30, 2021.
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Second Quarter Fiscal 2022 Financial Results:
- Total revenue increased 17% year-over-year to $151.6 million.
- Service revenue increased 18% year-over-year to $142.4 million.
- GAAP Operating Loss was $37.2 million; Non-GAAP Operating Profit was $1.9 million.
“Our second quarter results demonstrated growing adoption and enterprise demand for our integrated 8×8 XCaaS™ (eXperience Communications as a Service™) solution, as well as significant contribution from our channel partners,” said Dave Sipes, Chief Executive Officer at 8×8, Inc. “We introduced two significant industry advancements. Frontdesk is our first composed experience that transforms the receptionist role by delivering a tailored experience and user interface that uniquely blends traditional UCaaS and CCaaS capabilities. We also announced the industry’s first integrated cloud phone and contact center solution for multinational organizations operating in Russia, which expands our Global Reach™ to 46 countries and territories.”
“Our leadership has been recognized by industry analysts. We were named a Leader in the 2021 Gartner Magic Quadrant for Unified Communications as a Service, Worldwide, for the tenth consecutive year and we were named a Challenger in the Gartner Magic Quadrant for Contact Center as a Service for the seventh consecutive year,” added Sipes.
Second Quarter Fiscal 2022 Financial Metrics and Business Highlights:
Financial Metrics
- Annualized Recurring Subscriptions and Usage (ARR):
- Total ARR of $553 million, an increase of 18% from the same period last year.
- 871 customers with ARR greater than $100,000, compared to 670 customers in the same period last year, an increase of 30% year-over-year.
- GAAP gross margin was 61%, compared with 56% in the same period last year. Non-GAAP gross margin was 64%, compared with 61% in the same period last year.
- GAAP service revenue gross margin was 67%, compared with 63% in the same period last year. Non-GAAP service revenue gross margin was 69%, compared with 67% in the same period last year.
- Cash provided by operating activities was $5.1 million.
- Cash, restricted cash, and investments of $166.5 million at September 30, 2021, compared to $161.5 million at March 31, 2021.
Product Innovation Highlights
- Introduced 8×8 Frontdesk, a new XCaaS composed experience that provides a great first impression for organizations as they adapt to the hybrid workplace. Frontdesk empowers the receptionist with advanced contact center and UC capabilities within a personalized experience for high volume interactions.
- Delivered the industry’s first integrated cloud phone and contact center solution that supports the communications and customer engagement requirements of multinational organizations in Russia. Increased full PSTN replacement services to 46 countries and territories.
- Announced enhancements and rapid adoption of the 8×8 Voice for Microsoft Teams solution, surpassing more than 100,000 business users globally.
- Added dedicated cloud PBX and storage in Canada to further enhance quality of service and provide Canadian organizations with superior business resilience and data sovereignty adherence.
- Released advanced enterprise capabilities for large video meetings, including enhanced moderation, polling, and emoji reactions.
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Strategic Partnerships
- Formed a strategic distribution agreement with SYNNEX Corporation, a leading provider of distribution, systems design, and integration services for the technology industry. SYNNEX will provide XCaaS to Resellers in North America.
- Verified 8×8 Contact Center as a Google Chrome Enterprise Recommended (CER) Solution for Chrome OS, making it easy for contact center agents using Chromebooks to quickly deploy and manage end-to-end customer experiences.
Industry Recognition
- Named a Leader in the 2021 Gartner® Magic Quadrant™ for Unified Communications as a Service, Worldwide, for the tenth consecutive year.
- Named a Challenger in the 2021 Gartner Magic Quadrant for Contact Center as a Service, for the seventh consecutive year.
- Recognized as an innovation leader in the Frost Radar™: Communications Platforms as a Service Industry, 2021.
- Won Comms Business Awards 2021 UC Vendor of the Year.
- Named Comms National Awards Best UC Collaboration Platform.
Leadership Updates
- Appointed Alison Gleeson to the Board of Directors. Gleeson is a globally recognized sales executive who was previously Senior Vice President of Cisco Americas, overseeing a $25 billion revenue organization.
Third 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.
Outlook for the Third Quarter Fiscal 2022 Financial Ending December 31, 2021:
- Total revenue in the range of $152.7 million to $154.2 million, representing approximately 12% to 13% year-over-year growth.
- Service revenue in the range of $144 million to $145 million, representing approximately 13% to 14% year-over-year growth.
- Positive non-GAAP operating margin.
Updated Outlook for the Full-Year Fiscal 2022 Financial Ending March 31, 2022:
- Total revenue increased to a range of $611 million to $615 million from the prior range of $604 million to $612 million. The updated outlook represents year-over-year growth of approximately 15% to 16%.
- Service revenue increased to a range of $572.5 million to $576.5 million from the prior range of $564 million to $572 million. The updated outlook represents year-over-year growth of approximately 15% to 16%.
- Positive non-GAAP operating margin for the remainder of fiscal 2022, exiting the year with non-GAAP operating margin of approximately 2%.
Conference Call Information:
Management will host a conference call to discuss the second fiscal quarter earnings results and the outlooks for fiscal Q3 and full year 2022 on November 2, 2021 at 2 p.m. Pacific Time (5 p.m. Eastern Time). The call is expected to last approximately 60 minutes and is accessible by webcast from the company’s investor relations website at investors.8×8.com/events-and-presentations or via the following numbers:
- 1-844-200-6205 Domestic
- 1-646-904-5544 International
- Passcode 907919
Participants should dial in or log on ten minutes prior to the scheduled start time of the call. An archive of the webcast will be available from the company’s investor relations website within 24 hours following the conclusion of the call.
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