8x8's Q3 2025 Earnings Call: Contradictions in AI Adoption, Fuze Migration, and Customer Churn

These are the key contradictions discussed in 8x8's latest 2025Q3 earnings call, specifically including: AI Adoption and Customer Behavior, Fuze Migration Impact on Growth, Customer Churn Rates and Churn Mitigation Strategies, and Impact of Economic Conditions on Customer Purchasing Behavior:



Revenue and Profitability Milestones:
- 8x8 reported total revenue of $178.9 million for the third quarter of fiscal 2025, near the midpoint of the guidance range, with service revenue exceeding the midpoint by $1 million.
- The company achieved an operating margin of 10.7%, slightly above the midpoint of their guidance.
- Revenue growth was attributed to strong performance in communications platform usage revenue and solid execution across the business, despite foreign exchange headwinds.

Customer Engagement and Product Adoption:
- New product MRR increased more than 60% year-over-year, reflecting strong growth in AI-based intelligent customer assistance, secure payments, and Video Elevation solutions.
- The number of customers with 3 or more products increased, with the average monthly recurring revenue of these customers more than 3x the MRR of customers with 2 products.
- The increase in product adoption was driven by the expansion of cross-selling strategies and the success of integrated AI solutions that enhance customer experiences.

International Expansion and Strategic Acquisitions:
- 8x8 expanded its presence internationally, particularly in the Asia-Pac region, closing its largest deal in the region with a well-known auto manufacturer.
- The company completed the acquisition of Fuze, which played a key role in jump-starting the CX transformation journey.
- These strategic moves were aimed at expanding platform offerings and enhancing market penetration, especially in regions with high growth potential.

Operational Efficiency and Cost Management:
- 8x8 generated $27.2 million in operating cash flow for Q3, a record for the company, and reduced their debt by $33 million during the quarter and another $15 million in January.
- The company shifted towards cash compensation for employees, reducing shareholder dilution and strengthening their financial position.
- This focus on cost management and debt reduction was part of a broader strategy to improve operational efficiency and support long-term growth.