Slide 1: Second Quarter FY 2023
Second Quarter FY 2023 Ended September 30, 2022 October 27, 2022 The eXperience Communications Platform © 8x8, Inc. Copyright and confidential.
Slide 2: Forward looking statements
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 our future operating performance and outlook, financial outloo
Slide 3: Strategic priorities
Strategic priorities Expanding Platform Winning Together Expanding Driving Operational Advantage With Partners the Base Excellence Integrated Channel Partner Upsell, Cross-sell, Tailored GTM to Drive UCaaS & CCaaS Engagement Retention Scale and Efficiency Copyright 2022 8x8, Inc. or its affiliates. Al
Slide 4: Q2 FY 2023 Financial Highlights
Q2 FY 2023 Financial Highlights ■ Continued strong performance in enterprise and XCaaS ARR1 ● XCaaS ARR growth >35% YoY ● Enterprise ARR growth >42% YoY ■ Service revenue grew 25% YoY; total revenue increased 24% YoY ■ Non-GAAP operating margin exceeded guidance range ■ Generated operating cash flow
Slide 5: Q2 FY 2023 Product Innovation Highlights
Q2 FY 2023 Product Innovation Highlights ■ Released an update to the 8x8 XCaaS™ (eXperience Communications as a Service™)platform. Highlights included: ○ A new 8x8 phone app for Microsoft Teams, providing customers with additional options for enabling cost-effective PSTN calling in the Teams apps. ○
Slide 6: Q2 FY 2023 Industry Recognition
Q2 FY 2023 Industry Recognition ■ Recognized in the 2022 Gartner® Magic Quadrant™ for Contact Center as a Service for the eighth year in a row. ■ Awarded a Gold Stevie® Award in the Customer Service Executive of the Year category and a Silver Stevie® Award in the Customer Service Department of the Y
Slide 7: Q2 FY 2023 Results vs. Guidance
Q2 FY 2023 Results vs. Guidance Q2 F2023 Guidance Results (as of July 27, 2022) September 30, 2022 Service Revenue $177 – 180m $178.6m1,3 % Growth Y/Y 24 – 26% 25% Total Revenue $185 – 188m $187.4m2,3 % Growth Y/Y 22 – 24% 24% Non-GAAP Operating Margin3,4 2.5 – 3.0 % 4.8% 1. Includes $27.9 million o
Slide 8: 8x8 By the Numbers - Q2 2023
8x8 By the Numbers - Q2 2023 $692M >35% One platform Global coverage 8x8 Voice for MS Teams Total ARR(1)(3) YoY XCaaS ARR growth(1) 2.5M+ >40% 200K+ Paid business users YoY Enterprise ARR growth(1)(2) 60K+ >65% Single, all-in-one Full PSTN Industry-leading platform for replacement in integration for
Slide 9: Q2 FY 2023 Financial Metrics
Q2 FY 2023 Financial Metrics* Service Revenue1,7,8 $178.6 million, 25% Y/Y growth Q2 F2023 Other Revenue2,7 $8.8 million, (4)% Y/Y growth Revenue Total Revenue7,8 $187.3 million, 24% Y/Y growth Total ARR3 $692 million, 25% Y/Y growth Enterprise ARR4 $401 million, 42% Y/Y growth 3 ARR Mid-Market5 $12
Slide 10: Revenue Growth
Revenue Growth Fiscal Q2 Total Revenue1,3 Fiscal Q2 Service Revenue2,3 ($ in millions) ($ in millions) 26% Y/Y 24% Y/Y 30% Y/Y 25% Y/Y $188 $187 $179 $179 17% Y/Y 18% Y/Y $152 $142 $145 Q2'22 Q1’23 Q2'23 Q2'22 Q1'23 Q2’23 1. Q2’23 and Q1’23 Total revenue includes revenue from Fuze customers of $28.4
Slide 11: Enterprise Customers >$100K ARR
Enterprise Customers >$100K ARR Fiscal Q2 Enterprise ARR1,2 Fiscal Q2 Enterprise Customers2 ($ in millions) 1,291 54% Y/Y 42% Y/Y 1,277 $403 $4013 $496 871 $282 $145 Q2'22 Q1'23 Q2’23 Q2'22 Q1'23 Q2’23 1. Enterprise ARR is defined as ARR from customers that generate > $100K ARR. 2. Includes Fuze ente
Slide 12: Increasing Non-GAAP Gross Margins
Increasing Non-GAAP Gross Margins* Non-GAAP Total and Service Gross Margins as a % of Revenue 74.1% 73.4% 69.4% Non-GAAP Total Gross Margin* 70.1% Non-GAAP 68.5% Service Revenue Gross Margin* 64.2% Q2'22 Q1'23 Q2’23 * See Appendix for a reconciliation of Non-GAAP metrics to the nearest GAAP metric.
Slide 13: Non-GAAP Operating Expenses and Total Costs
Non-GAAP Operating Expenses and Total Costs* As a % of Total Revenue 98.7% 94.6%3 95.2% Non-GAAP Operating Expenses as a % of revenue 1 65.3% Non-GAAP Total 63.1%3 Costs as a % of 62.9% revenue2 Q2'22 Q1'23 Q2’23 * See Appendix for a reconciliation of GAAP to Non-GAAP metrics. 1. Non-GAAP Operating
Slide 14: Non-GAAP Operating Income and Margin
Non-GAAP Operating Income and Margin Fiscal Q2 Operating Income1 Fiscal Q2 Operating Margin1 ($ in millions) (% of revenue) Normalized Normalized $10.12 Benefit from unusual items $9.1 Benefit from unusual items 5.4%2 ~$3 4.8% 1.6% $496 $7.1 $414 3.8% $1.9 1.3% $145 Q2'22 Q1'23 Q2’23 Q2'22 Q1'23 Q2’23
Slide 15: Q3 2023 Guidance
Q3 2023 Guidance1 Q3 FY 2023 (as of 10/27/22)1 Service Revenue $178 – 180m2,3 % Growth Y/Y 19 – 21% Total Revenue $185 – 188m2,3 % Growth Y/Y 18 – 20% Non-GAAP Operating Margin 5.0 – 5.8% 1. Guidance as of October 27, 2022. Refer to Forward Looking Statement for a discussion of factors that could ca
Slide 16: Updated FY 2023 Outlook
Updated FY 2023 Outlook FY 2023 Prior Prior Updated1 as of 5/10/22 as of 7/27/22 as of 10/27/22 Service Revenue $740 – 755m $720 – 730m $712 – 720m2 % Growth Y/Y 23 – 25% 20 – 21% 20 – 21% Total Revenue $775 – 790m $747.5 – 762.5m $745 – 755m2 % Growth Y/Y 21 – 24% 17 – 19% 17 – 18% Non-GAAP Operati
Slide 17: Channel and industry recognition
Channel and industry recognition Customer Service UK Vendor of the Year, 2022 UC Vendor, 2021 Best UC Collaboration Channel Partners and Best ITSP Large Executive of the Year, International Vendor Platform, 2021 Channel Futures Enterprise, 2022 Gold Stevie, 2022 Influencer of the Year, Best Innovatio
Slide 18: Analyst recognition
Analyst recognition Gartner UCaaS Magic Quadrant Strong Performer in the Forrester IDC Worldwide Unified Metrigy MetriStar Top Provider: Leader, 2012–2021 Wave: UCaaS, 2019 Communication and Collaboration Cloud Phone Systems, 2022 MarketScape Leader, 2021 Gartner CCaaS Magic Quadrant, 2015–2022 IDC W
Slide 19: Appendix
Appendix © 8x8, Inc. Copyright and confidential.
Slide 20: ARR
ARR © 8x8, Inc. Copyright and confidential.
Slide 21: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations © 8x8, Inc. Copyright and confidential.
Slide 22: Non-GAAP Measures and Guidance
Non-GAAP Measures and Guidance Non-GAAP Measures This presentation contains certain financial information that has not been prepared in accordance with Generally Accepted Accounting Principles (GAAP). Management uses these non-GAAP financial measures internally in analyzing the Company’s financial resu
Slide 23: Reconciliation of Cost of Service Revenue
Reconciliation of GAAP to Non-GAAP Cost of Service Revenue ($ in thousands, Unaudited) Fiscal Quarter Cost of Service Revenue: Q2'22 Q1’22 Q2'23 GAAP cost of service revenue $47,198 $53,547 $51,038 Amortization of acquired intangible assets (1,044) (2,369) (2,140) Stock-based compensation expense an
Slide 24: Reconciliation of Cost of Other Revenue
Reconciliation of GAAP to Non-GAAP Cost of Other Revenue ($ in thousands, Unaudited) Fiscal Quarter Q2’22 Q1'23 Q2'23 Cost of Other Revenue: GAAP cost of Other Revenue $12,269 $13,126 $11,000 Stock-based compensation expense and related (1,372) (1,147) (937) employer payroll taxes Severance, transit
Slide 25: Reconciliation of Gross Profit and Gross Margin
Reconciliation of GAAP to Non-GAAP Gross Profit and Gross Margin ($ in thousands, Unaudited) Fiscal Quarter Q2'22 Q1’23 Q2’23 Gross Profit: Non-GAAP Cost of Service Revenue $43,571 $47,585 $46,160 Non-GAAP Cost of Other Revenue 10,709 11,446 9,819 Non-GAAP Cost of Revenue $54,280 $59,030 $55,979 Non-G
Slide 26: Reconciliation of Sales and Marketing Expense
Reconciliation of GAAP to Non-GAAP Sales and Marketing Expense ($ in thousands, Unaudited) Fiscal Quarter Sales and Marketing Expense: Q2’22 Q1’23 Q2’23 GAAP sales and marketing $76,726 $83,527 $80,487 Amortization of acquired intangible assets (221) (3,106) (3,107) Stock-based compensation expense
Slide 27: Reconciliation of Research and Development Expense
Reconciliation of GAAP to Non-GAAP Research and Development Expense ($ in thousands, Unaudited) Fiscal Quarter Q2'22 Q1'23 Q2'23 Research and Development Expense: GAAP research and development $28,498 $34,955 $36,019 Stock-based compensation expense and related (10,086) (8,193) (7,773) employer payr
Slide 28: Reconciliation of General and Administrative Expense
Reconciliation of GAAP to Non-GAAP General and Administrative Expense ($ in thousands, Unaudited) Fiscal Quarter General and Administrative Expenses: Q2'22 Q1'23 Q2'23 GAAP general and administrative $24,023 $29,219 $33,835 Stock-based compensation expense and related (10,423) (7,923) (6,763) employ
Slide 29: Reconciliation of Operating Expenses
Reconciliation of GAAP to Non-GAAP Operating Expenses ($ in thousands, Unaudited) Fiscal Quarter Operating Expenses: Q2'22 Q1'23 Q2'23 Non-GAAP Sales and Marketing $62,386 $71,750 $70,167 Non-GAAP Research and Development 18,370 26,725 28,139 Non-GAAP General and Administrative 14,584 19,979 24,031
Slide 30: Reconciliation of Total Costs
Reconciliation of GAAP to Non-GAAP Total Costs ($ in thousands, Unaudited) Fiscal Quarter Q2'22 Q1'23 Q2'23 Total Expense: Non-GAAP Cost of Revenue $54,280 $59,030 $55,979 Non-GAAP Operating Expenses 95,340 118,454 122,337 Non-GAAP Total Costs $149,620 $177,484 $178,316 Non-GAAP Total Costs (% of re
Slide 31: Reconciliation of Income (loss) from Operations and Operating Margin
Reconciliation of GAAP to Non-GAAP Income (loss) from Operations and Operating Margin ($ in thousands, Unaudited) Fiscal Quarter Operating Income (loss): Q2'22 Q1'23 Q2'23 GAAP loss from operations ($37,157) ($26,754) ($24,990) Amortization of acquired intangible assets 1,265 5,475 5,246 Stock-based
Slide 32: Reconciliation of Other income (expense), net
Reconciliation of GAAP to Non-GAAP Other income (expense), net ($ in thousands, Unaudited) Fiscal Quarter GAAP Other Income (expense), net Q2'22 Q1'23 Q2'23 GAAP Other Income (expense), net ($4,934) $1,116 $13,950 Amortization of debt discount and 4,462 $831 1,169 Issuance costs1 Gain on debt exting
Slide 33: Reconciliation of Net Income (Loss)
Reconciliation of GAAP to Non-GAAP ($ in thousands, Unaudited) Net Income (Loss) Fiscal Quarter Net Income (Loss): Q2'22 Q1'23 Q2'23 GAAP Net loss ($42,324) ($26,043) ($11,639) Amortization of acquired intangible assets 1,265 5,475 5,247 Stock-based compensation expense and related employer 37,995 2
Slide 34: For tips, updates and the latest information.
For tips, updates and the latest information. 8x8.com @8x8 facebook.com/8x8Inc linkedin.com/company/8x8 youtube.com/8x8Inc instagram.com/8x8inc © 8x8, Inc. All rights reserved. Unless otherwise specified, all trademarks identified by the ®, ™, or SM are registered trademarks, trademarks, or services m