|SAN JOSE, Calif. - Jan. 21, 2016 - 8x8, Inc. (NASDAQ:EGHT), a provider of cloud-based unified communications and contact center solutions, today reported financial results for the third quarter of fiscal 2016 ended December 31, 2015.|
Third Quarter Fiscal 2016 Financial Highlights:
"8x8 executed another solid quarter, posting a 94% increase in new monthly recurring revenue sold to mid-market and enterprise customers and by channel sales teams. We continued to demonstrate the effectiveness of our global and multi-channel growth strategies, capturing larger customers and demonstrating our leadership position in the fast-growing UCaaS industry," said 8x8 CEO Vik Verma. "I am extremely pleased with how our team is executing across the board, from the increasing productivity of our sales organization to the dedication and success of our global deployment teams."
- Total revenue of $53.2 million increased 29% year-over-year; service revenue of $48.9 million increased 29% year-over-year.
- GAAP net loss for the third quarter of fiscal 2016 was ($1.7 million), or ($0.02) per diluted share, compared with GAAP net income of $444,000 or $0.01 per diluted share, in the third quarter of fiscal 2015.
- Non-GAAP net income was $4.3 million, or $0.05 per diluted share, compared with $4.1 million, or $0.04 per diluted share, for the same period last year.
- Service revenue from mid-market/enterprise customers grew 53% year-over-year and now represents 50% of the Company's total service revenue.
- New monthly recurring revenue (MRR) sold to mid-market/enterprise customers and by channel sales teams increased 94% year-over-year and accounted for 58% of total MRR booked in the quarter, compared with 43% of total MRR booked in the same period last year.
- Average monthly service revenue (ARPU) per business customer increased 21% to $369, compared with $305 in the same period last year.
"Our service revenue from the mid-market and enterprise segment grew 53% year-over-year and now constitutes 50% of our total service revenue," Verma continued. "Given our continued progress moving upmarket, we are once again revising our fiscal 2016 revenue outlook upward to a range of $205 million to $207 million, which represents a 26%-27% year-over-year increase, from our previous outlook of $204 million to $206 million. Due to the strong growth in our service revenue, we are also increasing our guidance for non-GAAP net income as a percentage of revenue to approximately 6%-7% for the full fiscal year.
Additional Third Quarter and Year-to-Date Highlights:
Conference Call Information:
- GAAP gross margin was unchanged from the year ago period at 72%; non-GAAP gross margin was 75%, compared with 73% in the same year ago period.
- GAAP service margin was unchanged from the year ago period at 80%; non-GAAP service margin was 83%, compared with 81% in the same period a year ago.
- Gross monthly organic business service revenue churn was 1.2%, compared with 1.0% in the same period last year.
- Cash, cash equivalents and investments were $155 million in the third quarter of fiscal 2016, compared with $149 million in the previous quarter; cash flow from operating activities was $8.3 million.
- Repurchased approximately 66,000 shares of the Company's common stock during the quarter at an average price of $8.27 per share.
- Completed integration of UK Solutions and DXI sales teams under one 8x8 UK umbrella organization.
- Awarded two new U.S. patents related to contact center and communication technologies contributing to a total of 114 awarded patents.
Management will host a conference call to discuss these results and other matters related to the Company's business today, January 21, 2016 at 4:30 pm ET. The call is accessible via the following numbers and webcast links:
Participants should plan to dial in or log on ten minutes prior to the start time. A telephonic replay of the call will be available three hours after the conclusion of the call until midnight January 28, 2016. The webcast will be archived on 8x8's website for a period of one year. For additional information, visit http://investors.8x8.com.
| Dial In: ||(877) 843-0417, domestic |
(408) 427-3791, international
| Replay: ||(855) 859-2056, domestic (Conference ID #12488963) |
(404) 537-3406, international (Conference ID #12488963)
| Webcast: ||http://investors.8x8.com/ |
8x8 also announced that on January 19, 2016, it awarded restricted stock units (RSUs) representing an aggregate of 71,063 shares of the Company's common stock and options to purchase a total of 37,172 shares to 11 new non-officer employees under the 8x8 "2013 New Employee Inducement Incentive Plan." The equity awards were approved by the 8x8 Board of Directors Compensation Committee and were granted as an inducement to the new employees entering into employment with 8x8, in accordance with Nasdaq Market Place Rule 5635(c)(4). Each of the awards are subject to vesting pursuant to the terms of the award agreements, which include that the recipient be employed through each vesting date.
About 8x8, Inc.
8x8, Inc. (NASDAQ:EGHT) is the trusted provider of secure and reliable enterprise cloud communications solutions to more than 40,000 businesses operating in over 100 countries across six continents. 8x8's out-of-the-box cloud solutions replace traditional on-premise PBX hardware and software-based systems with a flexible and scalable Software as a Service (SaaS) alternative, encompassing cloud business phone service, contact center solutions, and conferencing. For additional information, visit www.8x8.com, www.8x8.com/UK or connect with 8x8 on LinkedIn, Twitter, Google+ and Facebook.
The Company has provided in this release financial information that has not been prepared in accordance with Generally Accepted Accounting Principles (GAAP). Management uses these non-GAAP financial measures internally in analyzing our financial results and believes they are useful to investors, as a supplement to GAAP measures, in evaluating the Company's ongoing operational performance. Management believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating 8x8's ongoing operating results and trends and in comparing financial results with other companies in the industry, many of which present similar non-GAAP financial measures to investors.
Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures. This reconciliation has been provided in the financial statement tables included below in this press release.
Non-GAAP Net Income and Non-GAAP Net Income Per Share
We have defined non-GAAP net income as net income for GAAP plus gain on patent sale, non-cash tax adjustments, stock-based compensation, amortization of acquired intangible assets, acquisition-related costs and impairment of long-lived assets. Non-cash tax adjustments represent the difference between the amount of taxes we expect to pay and our GAAP tax provision each period. We have excluded stock-based compensation expense because it relies on valuations based on future events, such as the market price of our common stock, that are difficult to predict and are affected by market factors that are largely not within the control of management. Amortization of acquired intangible assets is excluded because it is a non-cash expense that we do not consider part of ongoing operations when assessing our financial performance, as it relates to accounting for certain purchased assets. We have excluded gain on patent sale and impairment of long-lived assets because we consider them to be isolated transactions and believe they are not reflective of our ongoing operations, and it reduces comparability of periodic operating results when it is included. We have excluded acquisition-related expenses because these expenses are difficult to predict and are often one-time. We define non-GAAP net income per share as non-GAAP net income divided by the weighted-average diluted shares outstanding. We define non-GAAP net income percentage of revenue as non-GAAP net income divided by revenue. The GAAP and non-GAAP weighted average number of diluted shares to calculate GAAP and non-GAAP earnings per share are the same. We believe that such exclusions facilitate comparisons to our historical operating results and to the results of other companies in the same industry, and provides investors with information that we use in evaluating management's performance on a quarterly and annual basis.
Forward Looking Statements