8x8(US:EGHT)2025-11-05 22:07Revenue Performance - Service revenue for the three months ended September 30, 2025, increased by $4.0 million, or 2.3%, compared to the same period in 2024, driven by an increase in platform usage revenue in the Asia-Pacific region [120]. - For the six months ended September 30, 2025, service revenue rose by $7.5 million, or 2.2%, primarily due to a $20.1 million increase in platform usage revenue, also mainly from the Asia-Pacific region [121]. - The service revenue for the three months ended September 30, 2025, was $179.1 million, representing 97.3% of total revenue [119]. - Other revenue decreased by $0.9 million, or 15.6%, for the three months ended September 30, 2025, compared to the same period in 2024, primarily due to lower product revenue of $0.8 million [123]. - For the six months ended September 30, 2025, other revenue decreased by $1.2 million, or 10.8%, compared to the same period in 2024, driven by a $1.6 million decline in product revenue [124]. Profitability and Expenses - Gross profit for the three months ended September 30, 2025, was $119.3 million, with a gross profit margin of 64.8% [108]. - The company reported a net income of $767,000 for the three months ended September 30, 2025, which is 0.4% of total revenue [108]. - Cost of service revenue increased by $7.4 million, or 14.8%, for the three months ended September 30, 2025, mainly due to a $10.1 million rise in costs to deliver subscription and platform usage services [126]. - For the six months ended September 30, 2025, cost of service revenue rose by $11.8 million, or 11.8%, primarily due to a $17.3 million increase in subscription and platform usage service costs [127]. - Research and development expenses decreased by $3.4 million, or 10.8%, for the three months ended September 30, 2025, mainly due to a $2.1 million reduction in stock-based compensation [132]. - General and administrative expenses increased by $2.4 million, or 12.0%, for the three months ended September 30, 2025, primarily due to a $3.6 million rise in legal and regulatory costs [138]. - Sales and marketing expenses decreased by $1.0 million, or 1.6%, for the three months ended September 30, 2025, primarily due to a $3.3 million decline in channel commissions [135]. - Cost of other revenue decreased by $0.5 million, or 6.8%, for the three months ended September 30, 2025, primarily due to lower product costs associated with IP telephone hardware [129]. Strategic Focus and Initiatives - The company is focusing on retaining existing customers and expanding its mid-market, enterprise, and public sector customer base as part of its long-term strategy [105]. - The company plans to increase service revenue through new customer acquisition, cross-selling additional products, and strategic acquisitions of technologies and businesses [109]. - The company is committed to maintaining a high level of investment in research and development to drive innovation across its Platform for CX [105]. - The company is enhancing its platform with AI-based capabilities and expanding its Technology Partner Ecosystem to provide tailored solutions [106]. - The company has expanded its reseller partner programs to increase market reach and improve sales efficiency [107]. Cash Flow and Financial Position - Cash and cash equivalents totaled $75.9 million as of September 30, 2025, down from $88.1 million on March 31, 2025 [151]. - Net cash provided by operating activities decreased by $9.8 million to $20.7 million for the six months ended September 30, 2025, compared to $30.5 million in 2024 [155]. - Cash used in investing activities increased to $8.7 million for the six months ended September 30, 2025, up from $7.2 million in 2024 [155]. - The company repurchased 1.0 million shares of common stock for approximately $1.8 million at an average price of $1.83 per share during the six months ended September 30, 2025 [153]. - The outstanding principal of the 2024 Term Loan is $127.0 million as of September 30, 2025, after a reduction of $25.0 million during the fiscal year [160]. - The company has a material cash requirement of $527.1 million as of March 31, 2025, with a significant increase in a non-cancellable hosting service contract commitment from $24.1 million to $54.0 million [165]. - The 2024 Term Loan bears interest at an effective rate of 8.65% as of September 30, 2025 [159]. - The company anticipates that existing cash and cash flows from operations will be sufficient to meet working capital and contractual obligations for at least the next twelve months [150]. Accounting and Risk Management - The company's consolidated financial statements are prepared in accordance with U.S. GAAP, with no significant changes to critical accounting policies during the six months ended September 30, 2025 [168]. - There have been no material changes in the company's exposures to market risk since March 31, 2025, including interest rate and foreign currency exchange risks [170]. - The preparation of financial statements requires estimates and judgments that affect reported amounts of assets, liabilities, revenue, and expenses [167]. Other Income and Taxation - Other income increased to $0.5 million for the three months ended September 30, 2025, compared to a loss of $12.7 million in the same period of 2024, primarily due to a decrease in loss on debt extinguishment by $12.0 million [144]. - The provision for income taxes decreased by $0.9 million for the three months ended September 30, 2025, representing an 81.1% decline compared to the same period in 2024 [147]. - Interest expense decreased by $3.1 million, or 38.7%, for the three months ended September 30, 2025, primarily due to a lower interest rate on the 2024 Term Loan compared to the 2022 Term Loan [141]. - The percentage of total revenue attributed to research and development was 15.2% for the three months ended September 30, 2025, down from 17.3% in the same period of 2024 [131].