This year was a relatively successful one for 8×8, the provider of the very first Communications Cloud. They expanded their cloud communications partnership with Regus to cover another 13 countries, launched the “ContactNow” solution for teams in the US, and announced their acquisition of “LeChat”, an interoperability platform for enterprise collaboration and messaging. If that wasn’t enough, 8×8 also announced their next-generation Communications Cloud, combining UC, team collaboration, real-time analytics, and contact centre solutions in a single platform.
During 2017, 8×8 expanded their leadership team, and were awarded a leadership position in the Gartner Magic Quadrant (MQ) for UC as a Service for the fifth consecutive year. They were also named a challenger in the MQ for Contact Centre as a Service for the second year. 8×8 even received 13 new communications patented in 2017, leading to a total of 131 patents overall.
The Results for the Fourth Financial Quarter
For the fourth quarter of the fiscal year 2017, 8×8 saw:
- An increase in total service revenue of 20% year-over-year, to $62.7 million.
- An increase in service revenue from enterprise and mid-market customers of 32% year-over-year. These markets represented 56% of the customer’s total service revenue, compared to 50% last year.
- Total revenue increased 16% year-over-year to $66.5 million
- GAAP net loss of $2.9 million and non-GAAP income of $5.1 million, at 8% of revenue.
- GAAP gross margin of 77% compared to 72% in 2016, and non-GAAP gross margin of 79% compared to 74% in 2016.
- GAAP service margin of 83% compared to 81% in 2016, and non-GAAP service margin of 84% compared to 83% in 2016.
- Cash generated from operating activities of $6.3 million.
Full Fiscal Results for 2017
The full fiscal results for 2017 were equally impressive for 8×8, with:
- A total service revenue of $235.8 million with an increase of 23% year-over-year
- A service revenue increase of 37% year-over-year for enterprise/mid-market customers.
- Total revenue increase of 21% year-over-year to $253.4 million
- GAAP net loss of $4.8 million, with non-GAAP net income of $21.6 million.
- GAAP gross margin of 75% compared to 73% in 2016 and non-GAAP gross margin of 77% compared to 74% in 2016.
- GAAP service margin of 82% compared to 81% in 2016, and non-GAAP service margin of 84% compared to 83% in 2016.
- Investments, cash equivalents, and cash of $175 million on March 31st 2017, compared to $163 million on March 31st, 2016.
The Outlook for 8×8
For the fiscal year of 2017, 8×8 continued to show some significant leadership in the enterprise and mid-market segments with nearly 3,000 enterprises in their client roster, with 10 Fortune 500 companies. Looking into fiscal 2018 and beyond, the company are increasingly excited about the opportunities available to transform the brand for communications for businesses of any shape and size. Guidance for 2018 includes:
- Service revenue of around $280 million to $285 million – a 19-21% year-over-year increase.
- Total revenue of around $296 million to $300 million – a 17-19% year-over-year increase.
- Non-GAAP pre-tax net income of $21 million to $26 million – 7-9% of revenue.
- Non-GAAP effective tax rate of around 36%.
- Cash taxes of less than $1 million.