8x8 Inc · NASDAQ:EGHT

8x8 — Q3 FY2019 Earnings Presentation

28 slides from 8x8's earnings presentation, Jan 29, 2019

  1. Slide 1: Third Quarter Fiscal 2019 Earnings

    Third Quarter Fiscal 2019 Earnings January 29, 2019

  2. Slide 2: Forward Looking Statements; Non-GAAP Measures

    Forward Looking Statements This presentation includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934. These statements relate to the release of new products, market demand for products, chan

  3. Slide 3: One cloud technology platform

    One cloud technology platform phone x meetings x collaboration x contact center NYSE: EGHT Headquarters in San Jose, CA ~1,500 employees in 5 countries 1m+ business users in 150+ countries 7 year Leader UCaaS Gartner Magic Quadrant 175+ patents awarded 3

  4. Slide 4: Financial Overview

    Financial Overview Quarterly Results

  5. Slide 5: Q3 Fiscal 2019 Results Highlights

    Q3 Fiscal 2019 Results Highlights SERVICE REVENUE GAAP NON-GAAP $85.9 $(23.8m) Pre-tax Net Loss** ($4.2m) 22% million INCREASE* 75.1% Gross margin 77.4% 30% INCREASE* 62% 80.2% Service 82.5% mid-market/ margin of monthly enterprise recurring service revenue revenue *Adjusting for constant currency a

  6. Slide 6: Q3 Fiscal 2019 Business Highlights

    Q3 Fiscal 2019 Business Highlights ▪ Continued Revenue Growth in Mid-Market and Enterprise: – 25 Large Enterprise Deals (>$10,000 in MRR) – increased ~14% year-over-year – Service Revenue from customers billing (>$1,000 in MRR) grew 30% year-over-year and represents 62% of monthly recurring revenue,

  7. Slide 7: Q3 Fiscal 2019 Business Highlights (Cont.)

    Q3 Fiscal 2019 Business Highlights (Cont.) ▪ Channel Momentum: – Channel Bookings grew 23% year-over-year – 8 of Top 10 Deals Channel Driven – 400+ partners participating in the Channel Enablement Program – New partners included Vertical Communication and Workair in Ireland ▪ 8x8 Technology Platform

  8. Slide 8: Total Revenue

    Total Revenue $ in millions $89.9 Q3 FY 2019 Adjusted Growth $85.7 +21% yoy* $83.2 Reported Growth $79.3 +19% yoy $75.6 3Q18 4Q18 1Q19 2Q19 3Q19 * Year-over-year growth rate adjusted for constant currency and excludes DXI revenue 8

  9. Slide 9: Service Revenue

    Service Revenue Solid organic service revenue year-over-year growth of +200 bps 22% $ in millions Q3 FY 2019 $85.9 Adjusted Growth +22% yoy* 20% $81.3 20% 20% Reported Growth $71.9 $78.1 +20% yoy $75.3 3Q18 4Q18 1Q19 2Q19 3Q19 Service Revenue Organic Y/Y Growth Reported Y/Y Growth * Service revenue

  10. Slide 10: Increasing Average Monthly Service Revenue Per Customer (ARPU)

    Increasing Average Monthly Service Revenue Per Customer (ARPU) Mid-Market/Enterprise Customers All Customers YOY Growth YOY Growth 11% 9% $506 $5,211 $490 $4,988 10% $480 8% $4,953 $469 $4,899 $454 $4,765 3Q18 4Q18 1Q19 2Q19 3Q19 3Q18 4Q18 1Q19 2Q19 3Q19 10

  11. Slide 11: Increasing Service Revenue from Mid-Market/Enterprise Customers

    Increasing Service Revenue from Mid-Market/Enterprise Customers Year-over-year growth from customers billing Year-over-year growth from customers billing >$1,000 in monthly recurring revenue (MRR) * >$10,000 monthly recurring revenue (MRR) * 61% 30% 30% 30% 60% 29% 28% 58% 3Q18 4Q18 1Q19 2Q19 3Q19 1

  12. Slide 12: Consistently Strong Non-GAAP Margins

    Consistently Strong Non-GAAP Margins Gross Margin Service Margin 84.5% 83.2% 82.7% 82.6% 82.5% 79.1% 76.7% 77.2% 77.4% 76.2% 3Q18 4Q18 1Q19 2Q19 3Q19 12

  13. Slide 13: Ample Cash While Investing in Growth

    Ample Cash While Investing in Growth $161 $160 $153 $ in millions $137 $123 $8.2 -$2.1 $2.7 $0.8 -$5.3 3Q18 4Q18 1Q19 2Q19 3Q19 Cash Flow From Operations Cash & Investments 13

  14. Slide 14: Fourth Quarter Fiscal 2019 Non-GAAP Financial Outlook

    Fourth Quarter Fiscal 2019 Non-GAAP Financial Outlook Service Revenue $88.6m - $89.6m Growth Y/Y 18% - 19% Growth Y/Y excluding DXI revenue, CC 22% - 23% Pre-Tax Loss (Non-GAAP) * ($7m – $8m) * Excludes ~ $0.6 million of expenses related to Jitsi 14

  15. Slide 15: Full-Year Fiscal 2019 Non-GAAP Financial Outlook

    Full-Year Fiscal 2019 Non-GAAP Financial Outlook Service Revenue $334m - $335m Growth Y/Y 19% - 20% Growth Y/Y excluding DXI revenue, CC ~22% Total Revenue $351m - $352m Growth Y/Y 18% - 19% Pre-Tax Loss (Non-GAAP)* (~$19m) * Excludes ~$2 million of expenses related to Jitsi 15

  16. Slide 16: Business Overview

    Business Overview

  17. Slide 17: 8x8: The Only 3rd Wave of One Cloud Engagement Solution

    8x8: The Only 3rd Wave of One Cloud Engagement Solution in Market Today Wave 1 Wave 2 Wave 3 FT On-Premise Point Cloud Products One Cloud Engagement Solution All Customer & Employee Interactions Ventrica Switchboard One System of Intelligence or other Avaya One System of Engagement Systems of Record

  18. Slide 18: Uniquely Qualified with Single Technology Platform

    Uniquely Qualified with Single Technology Platform Telephony Collaboration Conferencing Contact Center OWNED OWNED OWNED OWNED Integrated Communications Data/Analytics Platform, Security and Compliance Telephony Collaboration Video/Meetings Contact Center OWNED MIXED Competition PARTNERED PARTNERED

  19. Slide 19: Anticipated Market and Built Technology Platform to Capture It

    Anticipated Market and Built Technology Platform to Capture It Analytics & Launched Introduced Acquired Quality Introduced Acquired Integration internal Big VO Analytics Software (QM / Script8 MARIANAIQ Data initiative (incl QoS) speech) Introduced chat, Fully integrated Acquired Acquired Collaborat

  20. Slide 20: X Series – One Technology Platform for One Unique Engagement Experience

    X Series – One Technology Platform for One Unique Employee and Customer Engagement Experience 20

  21. Slide 21: Driving Employee and Customer Interactions, Data & Analytics

    Driving Employee and Customer Interactions, Data & Analytics From One Technology Platform Robust Reporting & Cloud Quality Omni-Channel Solution Data Analytics Management ● Voice ● Chat ● Speech analytics ● Easy, out-of-the-box reporting ● Collaborative user experience ● Multi-channel coverage ● Ema

  22. Slide 22: Appendix

    APPENDIX

  23. Slide 23: Reconciliation of Selected GAAP Measures to Non-GAAP Measures

    Reconciliation of Selected GAAP Measures to NON-GAAP Measures (In Thousands, Unaudited) Three Months Ended Cost of Service Revenue: December 31, 2018 2017 GAAP cost of service revenue $17,043 $12,318 Amortization of acquired intangible assets ($1,344) ($714) Stock-based compensation expense ($680) (

  24. Slide 24: Reconciliation of Selected GAAP Measures to Non-GAAP Measures

    Reconciliation of Selected GAAP Measures to NON-GAAP Measures (In Thousands, Unaudited) Three Months Ended Sales and Marketing: December 31, 2018 2017 GAAP sales and marketing $60,717 $48,830 Amortization of acquired intangible assets ($351) ($466) Stock-based compensation expense ($5,590) ($3,362)

  25. Slide 25: Reconciliation of Selected GAAP Measures to Non-GAAP Measures

    Reconciliation of Selected GAAP Measures to NON-GAAP Measures (In Thousands, Unaudited) Three Months Ended Reconciliation of GAAP Net Loss to Non-GAAP Net Income (Loss): December 31, 2018 2017 GAAP net loss ($23,771) ($88,520) Adjustments: Amortization of acquired intangible assets $1,695 $1,180 Imp

  26. Slide 26: Full-Year Fiscal 2019 Outlook – Impact from ASC606

    Full-Year Fiscal 2019 Outlook – Impact from ASC606 • No restatement of prior year information under modified retroactive method Financial Statement • Quarterly disclosures are provided for FY19 comparing results under ASC606 versus ASC605 Total Revenue • No material differences expected on total rev

  27. Slide 27: Reconciliation of ASC 605 to ASC 606 Statement of Operations

    Reconciliation of ASC 605 to ASC 606 Statement of Operations 27

  28. Slide 28: From EX to CX

    From EX to CX The experience is everything © 2018 8x8, Inc. All Rights Reserved

8x8 — Q3 FY2019 Earnings Presentation on 6ix