8x8(US:EGHT)2022-02-02 16:00Revenue Growth - Service revenue for Q3 fiscal 2022 grew approximately 18% year-over-year to $149 million, up from $127 million in Q3 fiscal 2021[83] - Total Annualized Recurring Subscriptions and Usage (ARR) increased to $572 million in Q3 fiscal 2022, a 16% rise from $494 million in the same period of fiscal 2021[83] - ARR from mid-market and enterprise customers represented 72% of total ARR in Q3 fiscal 2022, growing 24% compared to the same period in fiscal 2021[83] - The company anticipates continued growth in service revenue driven by global expansion and deeper penetration into customer categories[99] - Service revenue for the nine months ended December 31, 2021, was $429.6 million, an 18.6% increase from $362.2 million in the same period of 2020[99] Acquisitions and Investments - The company completed the acquisition of Fuze, Inc. for approximately $211.9 million, expected to enhance research and development and expand the customer base[82] - The company plans to invest in marketing, sales capacity, and research and development to acquire more customers[85] - The company expects to continue investing in research and development to enhance platform capabilities and user experience, anticipating an increase in expenses in absolute dollars[106] - The company plans to continue investing in sales and marketing to attract and retain customers, expecting expenses to increase in absolute dollars in future periods[107] Revenue and Expense Analysis - Other revenue for Q3 fiscal 2022 decreased by 21.9% to $7.5 million, primarily due to a shift towards hardware rental and supply chain shortages[100] - Other revenue for the nine months ended December 31, 2021, increased by 7.1% to $27.2 million, driven by growth in professional services revenue[102] - Cost of service revenue for the three months ended December 31, 2021, was $48.763 million, an increase of 3.7% from $47.044 million in the same period of 2020[103] - Cost of other revenue decreased by 17.2% for the three months ended December 31, 2021, totaling $11.071 million compared to $13.364 million in 2020[104] Operating Expenses - Research and development expenses increased by 17.8% for the three months ended December 31, 2021, amounting to $27.911 million, up from $23.702 million in 2020[106] - Sales and marketing expenses rose by 20.0% for the three months ended December 31, 2021, reaching $76.797 million compared to $63.986 million in 2020[107] - General and administrative expenses increased by 25.6% for the three months ended December 31, 2021, totaling $29.950 million, up from $23.844 million in 2020[108] - Other expense, net for the three months ended December 31, 2021, was $5.866 million, a 25.6% increase from $4.669 million in 2020[111] - Provision for income taxes for the three months ended December 31, 2021, was $87, a decrease of 71.1% from $301 in 2020[112] Cash Flow and Financial Position - As of December 31, 2021, the company had $251.8 million in cash, cash equivalents, and investments, compared to $152.9 million as of March 31, 2021[113] - Net cash provided by operating activities for the nine months ended December 31, 2021, was $18.2 million, compared to a net cash used of $14.9 million in the same period of 2020[116] - The net loss for the nine months ended December 31, 2021, was $129.8 million, with stock-based compensation expense amounting to $106.2 million[116] - Net cash used in investing activities was $30.1 million for the nine months ended December 31, 2021, primarily due to capitalized internal-use software development costs of $15.6 million[116] - Net cash provided by financing activities was $100.0 million for the nine months ended December 31, 2021, significantly up from $5.9 million in the same period of 2020[116] - As of December 31, 2021, the company had cash, cash equivalents, restricted cash, and investments totaling $260.5 million[119] - The company had $500.0 million in aggregate principal amount of convertible senior notes outstanding, with an estimated fair value of $495.8 million[121] Risk Management - The company is exposed to foreign currency risks primarily related to revenue and operating expenses denominated in currencies other than the U.S. dollar, particularly the British Pound[122] - A hypothetical 10% decrease in all foreign currencies against the U.S. dollar would not result in a material foreign currency loss for the three and nine months ended December 31, 2021[122] - The company may consider entering into financial instruments in the future to hedge foreign currency exchange risk as its foreign operations expand[122]