Executive Summary
In Q1 2025, 8x8 Inc demonstrated resilience amid a challenging competitive landscape, posting a total revenue of $178.15 million, which represents a slight decline both year-over-year and quarter-over-quarter. Despite these pressures, management successfully maintained cash flow from operations at $18.1 million, attributing this achievement to carefully managed costs alongside ongoing investments in innovation and platform enhancements. The continued focus on contact center solutions and the burgeoning growth of CPaaS marked notable strategies influencing performance and future profitability. Management emphasized their commitment to reducing debt, exemplified by the repayment of a $225 million term loan, which aims to strengthen their balance sheet further and enhance investor confidence.
Key Performance Indicators
Key Insights
**Revenue Performance:** 8x8 reported total revenue of $178.15 million, reflecting a year-over-year decline of 2.80% and a quarterly decline of 0.71%.
**Gross Profit:** Decreased to $120.96 million for a gross margin of 67.9%, down from previous quarters, signaling slight pressure on profitability.
**Net Income:** Reported net loss of $10.29 million (-$0.0817 EPS), though an improvement in losses was noted year-over-year. Management reiterated confidence around adjusted margins on a non-GAAP ba...
Financial Highlights
Revenue Performance: 8x8 reported total revenue of $178.15 million, reflecting a year-over-year decline of 2.80% and a quarterly decline of 0.71%.
Gross Profit: Decreased to $120.96 million for a gross margin of 67.9%, down from previous quarters, signaling slight pressure on profitability.
Net Income: Reported net loss of $10.29 million (-$0.0817 EPS), though an improvement in losses was noted year-over-year. Management reiterated confidence around adjusted margins on a non-GAAP basis, with operating cash flow managed at $18.1 million.
Debt Management: Effective debt reduction strategy reflected through loan repayment and cost management, enhancing liquidity.
Income Statement
Metric |
Value |
YoY Change |
QoQ Change |
Revenue |
178.15M |
-2.80% |
-0.71% |
Gross Profit |
120.96M |
-5.95% |
-1.21% |
Operating Income |
-1.37M |
2.55% |
90.34% |
Net Income |
-10.29M |
32.86% |
56.38% |
EPS |
-0.08 |
37.15% |
57.00% |
Key Financial Ratios
operatingProfitMargin
-0.77%
operatingCashFlowPerShare
$0.14
freeCashFlowPerShare
$0.12
Management Commentary
Market Trends and Competition: Samuel Wilson noted, "The market has become incrementally more competitive... These competitors' actions have made us think about getting more creative to push our competitive advantage."
Growth in New Products: On new products, Wilson commented, "Sales of new products increased more than 40% year-on-year," showcasing a positive trajectory despite overall revenue declines.
Focus on Customer Engagement: Wilson emphasized the pivotal role of innovation stating, "Innovation remains key... we are seeing momentum in our enterprise contact center business... 15 of our top 20 new logo deals included contact center and enterprise accounts."
"We achieved these results even though the market has become incrementally more competitive... we also achieved an important milestone in our stated objective to return value to shareholders by reducing debts."
â Samuel Wilson
"Service and total revenue were both near the midpoint of our guidance ranges... we expect to show year-over-year growth in service revenue as we exit fiscal 2025."
â Samuel Wilson
Forward Guidance
Management has adjusted their revenue outlook for the fiscal year 2025, now targeting total revenue between $710 million and $732 million, citing the expected increase of potential churn related to moving customers from legacy Fuze systems to 8x8's advanced platforms. They anticipate service revenue will grow year-over-year, provided they successfully retain long-term Fuze customers and further capitalize on platform usage, especially in CPaaS. Operating margins are expected to remain around 10%-11%, with consistent cash flow achieved in the next quarters.