8x8(US:EGHT)2021-08-05 00:40Financial Data and Key Metrics Changes - Total revenue for Q1 2022 was $148.3 million, an increase of 22% year-over-year, exceeding guidance of $142 million to $143.5 million [21] - Service revenue reached $137.8 million, up 21% year-over-year, also above guidance of $132.5 million to $133.5 million [22] - Total ARR was $536 million at quarter end, reflecting a 24% year-over-year increase [22] - Non-GAAP gross margin improved sequentially from 61.2% to 62.6% [16][23] - Non-GAAP operating margins were positive at 0.9% for the quarter [24] Business Line Data and Key Metrics Changes - XCaaS now accounts for one-third of 8x8's ARR, growing over 30% year-over-year [9] - The CPaaS portfolio performed strongly, with significant wins in Southeast Asia [12] - The enterprise customer segment grew 40% year-over-year, now representing 49% of ARR [14] Market Data and Key Metrics Changes - U.S. revenue was $103.7 million, while international revenue was $44.7 million [42] - Public and government sectors showed strong growth, with notable wins in the U.S. and UK [10][11] Company Strategy and Development Direction - The company focuses on four major areas: expanding platform advantage, winning with partners, driving operational excellence, and expanding the customer base [7] - The launch of XCaaS aims to integrate UCaaS and CCaaS, enhancing customer and employee engagement [8] - The company is exiting the CPaaS wholesale business to concentrate on core market opportunities [22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in exceeding financial goals and raising guidance for fiscal year 2022 [19] - The company anticipates continued growth in service revenue and overall gross margins [26][28] - Management highlighted the importance of customer demand for integrated solutions as a driver for future growth [45] Other Important Information - The company has made strategic hires, including a new Chief Customer Officer, to enhance customer experience [18] - Deferred revenue increased to nearly $25 million, up 133% year-over-year [25] Q&A Session Summary Question: What areas are seeing the most success in channel bookings growth? - Management noted strong momentum in XCaaS across all customer segments, particularly in the UK and enterprise sectors [31] Question: Are investments in growth initiatives nearing completion? - Management indicated that investments will continue to support revenue growth, with a gradual increase in operating margins expected [33] Question: What is the impact of exiting the wholesale business on ARR? - Management clarified that the exit had a minimal impact on ARR, with only a small headwind noted [36] Question: What are the plans for improving service gross margins? - Management aims to increase service gross margins over time, with a focus on higher-margin business [39] Question: How is the company responding to competitive pricing pressures? - Management stated that they do not see significant pricing pressure from competitors, emphasizing their value proposition [57] Question: What are the key drivers for bundling UCaaS and CCaaS? - Management highlighted benefits in IT management, simplicity, and enhanced integrations as key drivers for customer interest [59]