8X8 (EGHT) 7 Aug 24 2025 Q1 Earnings call transcript

In 8x8's Q1 2025 earnings call, Senior Vice President of Investor Relations, Kate Patterson, and CEO, Samuel Wilson, provided an update on the company's financial performance and strategic initiatives. Here's a summary of the key takeaways from the call.

Financial Highlights and Challenges

8x8 reported solid financial results for Q1 2025, with service and total revenue both within the guidance ranges. Cash flow for the quarter exceeded expectations, coming in at $18 million. The company also made a significant stride in reducing debt by repaying a $225 million term loan. However, the competitive landscape and uncertain macroeconomic conditions remain challenges.

Innovation and Platform Advancements

Samuel Wilson emphasized the importance of innovation in driving sustainable growth. The company has been investing in its platform, particularly in Contact Center as a Service (CCaaS) and communications platform as a service (CPaaS). These efforts have led to new product launches, such as Engage and voice and digital intelligent customer assistant, as well as enhancements to customer interaction data platform and composable agent and supervisor interfaces.

Customer Focus and Market Trends

8x8 has seen significant momentum in its enterprise contact center business, with larger customers showing the highest growth. The company's strategy of focusing on integrated platform solutions has been resonating with customers, especially in the mid-market and small to medium-sized enterprises (SMEs). There's also a notable increase in the use of self-service bots, digital messaging, and video in the contact center.

Competitive Landscape and Strategic Moves

Competition remains a significant challenge, with companies like NICE making marketing splashes with lower-priced UCaaS offerings. 8x8 is responding by focusing on its competitive advantage and exploring opportunities to expand its CPaaS capabilities globally. The company has also been building a fortress balance sheet by managing costs and returning value to investors.

Looking Ahead

For the remainder of 2025, 8x8 expects to show year-over-year growth in service revenue, although there are uncertainties due to the potential impact of attrition from the Fuze acquisition. The company remains committed to generating cash and returning value to investors.

Investor and Analyst Questions

During the Q&A session, analysts asked about usage-based revenue trends, the strength of the CPaaS business in APAC, the impact of the Fuze acquisition, and average revenue per customer (ARPU) trends in CCaaS. Samuel Wilson provided detailed responses, highlighting the company's focus on innovation, customer engagement, and strategic moves to accelerate growth.

Overall, 8x8's Q1 2025 earnings call painted a picture of a company that's navigating challenges but also making strategic moves to drive growth. The focus on innovation, customer experience, and strategic partnerships positions 8x8 well for the future. However, the competitive landscape and macroeconomic uncertainties remain factors to watch.