8x8(EGHT) - 2025 Q3 - Quarterly Results

Financial Performance - Total revenue for Q3 FY2025 was $178.9 million, a decrease from $181.0 million in Q3 FY2024, while service revenue was $173.5 million, down from $175.1 million in the same period [8]. - GAAP net income for Q3 FY2025 was $3.0 million, compared to a net loss of $21.2 million in Q3 FY2024, indicating a significant turnaround in profitability [8]. - Cash flow from operations reached $27.2 million, an increase from $22.4 million in Q3 FY2024, marking the 16th consecutive quarter of positive cash flow [8]. - Service revenue for Q3 2024 was $173,459,000, a decrease of 0.35% from $175,069,000 in Q3 2023 [37]. - Total revenue for Q3 2024 was $178,882,000, down 0.63% from $181,006,000 in Q3 2023 [37]. - Net income for Q3 2024 was $3,022,000, a significant improvement from a net loss of $21,222,000 in Q3 2023 [37]. - Non-GAAP operating profit for Q3 2024 was $8,979,000, compared to a loss of $9,391,000 in Q3 2023 [37]. - GAAP net income for Q4 2024 was $3,022,000, representing 1.7% of total revenue, compared to a loss of $21,222,000 (11.7%) in Q4 2023 [45]. - Non-GAAP net income for Q4 2024 was $14,471,000, or 8.1% of total revenue, slightly down from $14,759,000 (8.2%) in Q4 2023 [45]. - Adjusted EBITDA for Q4 2024 was $23,913,000, accounting for 13.4% of total revenue, compared to $30,657,000 (16.9%) in Q4 2023 [45]. - Basic GAAP net income per share for Q4 2024 was $0.02, recovering from a loss of $0.17 per share in Q4 2023 [45]. Cash Flow and Assets - The company made an additional $15 million term loan prepayment in January 2025, enhancing its balance sheet and financial flexibility [5]. - Total current assets decreased to $219,090,000 as of December 31, 2024, down from $247,836,000 as of March 31, 2024 [39]. - Cash and cash equivalents were $104,165,000 as of December 31, 2024, down from $116,262,000 as of March 31, 2024 [39]. - Net cash provided by operating activities for the nine months ended December 31, 2024, was $57,681,000, compared to $66,332,000 in 2023, reflecting a decrease of approximately 13.5% [42]. - Cash, cash equivalents, and restricted cash at the end of the period was $104,627,000, down from $169,331,000 at the end of the previous year [42]. - The company reported a net cash used in financing activities of $59,097,000 for the nine months ended December 31, 2024, compared to $22,635,000 in 2023 [42]. Operational Highlights - New product adoption increased by 60% year-over-year, reflecting strong demand for AI-powered customer experience solutions [3]. - The company launched new features including 8x8 Secure Pay and AI-powered payment solutions to enhance customer experience and operational efficiency [9]. - 8x8 expanded its Technology Partner Ecosystem with CallCabinet, enhancing compliance call recording for Microsoft Teams users [10]. - The company appointed Joel Neeb as Chief Transformation and Business Operations Officer to drive strategic alignment and operational excellence [18]. - The company plans to continue focusing on market expansion and new product development to drive future growth [46]. Liabilities and Expenses - Total liabilities decreased to $585,198,000 as of December 31, 2024, compared to $654,021,000 as of March 31, 2024 [39]. - Total depreciation and amortization expenses for the nine months ended December 31, 2024, amounted to $30,899,000, compared to $36,547,000 in 2023 [42]. - Stock-based compensation expense for the nine months ended December 31, 2024, was $31,710,000, a decrease from $46,835,000 in 2023 [42]. - Total stock-based compensation expense for Q4 2024 was $9,769,000, down from $14,890,000 in Q4 2023 [45]. - Interest expense for Q4 2024 was $5,415,000, a decrease from $8,878,000 in Q4 2023 [45]. - The company incurred acquisition and integration costs of $244,000 in Q4 2024, compared to $102,000 in Q4 2023 [45]. Margins and Profitability - For Q4 FY2025, the company expects total revenue in the range of $175.0 million to $181.0 million and service revenue between $170.0 million and $175.0 million [19]. - Non-GAAP operating margin is projected to be between 9% and 10% for Q4 FY2025, with a full-year projection of 10.7% to 11.0% [19]. - GAAP service revenue margin for the nine months ended December 31, 2024, was 71.2%, down from 72.7% in 2023 [44]. - Non-GAAP gross margin for the nine months ended December 31, 2024, was 70.1%, compared to 72.1% in 2023, indicating a decline of 2% [44]. - Operating loss for the nine months ended December 31, 2024, was $14,774,000, an improvement from a loss of $13,384,000 in 2023 [44]. - The GAAP cost of service revenue as a percentage of service revenue for the nine months ended December 31, 2024, was 28.8%, up from 27.3% in 2023 [44].