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Dec 31, 2022
8x8 Q3 2023 Earnings Report
Reported an increase in service and total revenue, with improved margins and cash flow.
Key Takeaways
8x8, Inc. reported an 18% year-over-year increase in both service and total revenue for Q3 2023. The company's GAAP and non-GAAP gross and operating margins reached multi-year highs, and cash flow from operations increased significantly. They repurchased $21.8 million in convertible senior notes.
Total revenue increased 18% year-over-year to $184.4 million, including Fuze revenue of $26.5 million.
Service revenue increased 18% year-over-year to $175.8 million, including Fuze revenue of $26.5 million.
GAAP operating loss was $18.1 million, improved from an operating loss of $37.6 million in the same quarter last year.
Non-GAAP operating profit was $18.3 million, a 485% increase compared to $3.1 million in the third quarter of fiscal 2022.
8x8
8x8
Forward Guidance
The company provided financial outlook for Q4 2023 and fiscal year 2023, including service revenue, total revenue, and non-GAAP operating margin.
Positive Outlook
- Service revenue is expected to be in the range of $175 million to $178 million, representing year-over-year growth of approximately 2% at the midpoint.
- Total revenue is expected to be in the range of $184 million to $187 million, representing year-over-year growth of approximately 2% at the midpoint.
- Non-GAAP operating margin of approximately 10% is expected for Q4 2023.
- Service revenue for fiscal year 2023 is expected to be in the range of $708.5 million to $711.5 million, representing year-over-year growth of 18% at the midpoint.
- Total revenue for fiscal year 2023 is expected to be in the range of $743.4 million to $746.4 million, representing year-over-year growth of approximately 17% at the midpoint.
Challenges Ahead
- The expectations are subject to various important cautionary factors.
- Foreign currency exchange fluctuations may negatively impact guidance.
- Future hiring and employee turnover may not be reasonably predictable.
- Stock-based compensation expense depends on variables that are largely not within the control of nor predictable by management.
- The actual amounts of excluded items could have a significant impact on the Company's GAAP operating margin.