Slide 1: Third Quarter FY 2023
Third Quarter FY 2023 Ended December 31, 2022 February 1, 2023 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: 8x8 By the Numbers - Q3 2023
8x8 By the Numbers - Q3 2023 $698M >25% One platform Global coverage 8x8 Voice for MS Teams Total ARR(1) YoY XCaaS ARR growth(1) 2.5M+ >30% 300K+ Paid business users YoY Enterprise ARR growth(1)(2) 60K+ >60% Single, all-in-one Full PSTN Industry-leading platform for replacement in integration for UC
Slide 4: Q3 FY 2023 Financial Highlights
Q3 FY 2023 Financial Highlights ■ Continued strong performance in enterprise and mid-market ARR1 ● Enterprise ARR growth 30% YoY; mid-market ARR growth 27% YoY ● XCaaS ARR growth >25% YoY ■ RPO up $35M sequentially to $750M, largest sequential organic increase in 8 quarters2 ■ High customer retentio
Slide 5: Q3 FY 2023 Product Innovation Highlights
Q3 FY 2023 Product Innovation Highlights 8x8 continued to drive innovation and improve customers’ experiences on the company’s modern microservices-based XCaaS platform. In the third quarter of fiscal 2023, the company ■ Launched new Mobile Admin composed experience allowing system administrators to
Slide 6: Q3 FY 2023 Product Innovation Highlights (continued)
Q3 FY 2023 Product Innovation Highlights (continued) ■ Launched the 8x8 Customer Labs open beta program, an innovative new early-access program that engages customers to guide 8x8 XCaaS product direction, deliver feedback, and measure usability of new products and features before release. ■ Added ac
Slide 7: Q3 FY 2023 Industry Recognition
Q3 FY 2023 Industry Recognition 8x8 continues to be recognized for its leadership and innovation worldwide. Awards and recognition in the third fiscal quarter of 2023 included: ■ Named a Leader in the 2022 Gartner® Magic Quadrant™ for Unified Communications as a Service, Worldwide. This is the elevent
Slide 8: Q3 FY 2023 Leadership Updates
Q3 FY 2023 Leadership Updates ■ Appointed Samuel C. Wilson, most recently the Company’s Chief Financial Officer, as interim Chief Executive Officer. ■ Appointed Kevin Kraus, most recently the Senior Vice President of Finance at the Company, as interim Chief Financial Officer. ■ Appointed Laurence Denny
Slide 9: Q3 FY 2023 Results vs. Guidance
Q3 FY 2023 Results vs. Guidance Q3 F2023 Guidance Results as of October 27, 2022 December 31, 2022 Service Revenue $178 – 180m $175.8m1 % Growth Y/Y 19 – 20% 18% Total Revenue $185 – 188m $184.4m2 % Growth Y/Y 18 – 20% 18% Non-GAAP Operating Margin2 5.0 – 5.8% 9.9% 1. Includes $26.5 million of reven
Slide 10: Q3 FY 2023 Financial Metrics
Q3 FY 2023 Financial Metrics* Service Revenue1,7 $175.8 million, 18% Y/Y growth Q3 F2023 Other Revenue2,7 $8.6 million, 15% Y/Y growth Revenue Total Revenue7 $184.4 million, 18% Y/Y growth Total ARR3 $698 million, 22% Y/Y growth Enterprise ARR3,4 $400 million, 30% Y/Y growth 3 ARR Mid-Market3,5 $130
Slide 11: Revenue Growth
Revenue Growth Fiscal Q3 Total Revenue1 Fiscal Q3 Service Revenue2 ($ in millions) ($ in millions) 24% Y/Y 18% Y/Y 25% Y/Y 18% Y/Y $187 $184 $179 $176 15% Y/Y 18% Y/Y $157 $149 $145 Q3'22 Q2’23 Q3'23 Q3'22 Q2'23 Q3’23 1. Q3’23 and Q2’23 Total Revenue includes revenue from Fuze customers of $26.5 mil
Slide 12: Enterprise Customers >$100K ARR
Enterprise Customers >$100K ARR Fiscal Q3 Enterprise ARR1,2 Fiscal Q3 Enterprise Customers2 ($ in millions) 1,309 42% Y/Y 31% Y/Y 1,291 $401 $400 $496 907 $307 $145 Q3'22 Q2'23 Q3’23 Q3'22 Q2'23 Q3’23 1. Enterprise ARR is defined as ARR from customers that generate > $100K ARR. 2. Includes Fuze enter
Slide 13: Increasing Non-GAAP Gross Margins
Increasing Non-GAAP Gross Margins* Non-GAAP Total and Service Gross Margins as a % of Revenue 75.7% 74.1% 69.6% Non-GAAP Total Gross Margin* 72.1% Non-GAAP 70.1% Service Revenue Gross Margin* 64.7% Q3'22 Q2'23 Q3’23 * See Appendix for a reconciliation of Non-GAAP metrics to the nearest GAAP metric.
Slide 14: Non-GAAP Operating Expenses and Total Costs
Non-GAAP Operating Expenses and Total Costs* As a % of Total Revenue ~8 pts improvement 98.0% 95.2% 90.1% Non-GAAP Operating Expenses as a % of revenue 1 Non-GAAP Total 65.3% Costs as a % of 62.7% 62.2% revenue2 Q3'22 Q2'23 Q3’23 * See Appendix for a reconciliation of GAAP to Non-GAAP metrics. 1. No
Slide 15: Non-GAAP Operating Income and Margin
Non-GAAP Operating Income and Margin* Fiscal Q3 Operating Income1 Fiscal Q3 Operating Margin1 ($ in millions) (% of revenue) $18.3 9.9% $496 $414 $9.1 4.8% $3.1 2.0% $145 Q3'22 Q2'23 Q3’23 Q3'22 Q2'23 Q3’23 * See Appendix for reconciliation of Non-GAAP metrics to nearest GAAP metric. . © 8x8, Inc. C
Slide 16: Cash Flow from Operations
Cash Flow from Operations Fiscal Q3 Cash Flow from Operations Fiscal Q3 YTD Cash Flow from (3 months, $ millions) Operations (9 months, $ millions) $15.5 $35.2 $9.0 $496 $18.2 $414 $145 ($1.3) ($14.9) Q3'21 Q3’22 Q3’23 YTD YTD YTD FY’21 FY’22 FY’23 © 8x8, Inc. Copyright and confidential.
Slide 17: Q4 2023 Guidance
Q4 2023 Guidance1 Q4 FY 2023 as of February 1, 20241 Service Revenue $175 – 178m2 % Growth Y/Y 1 - 3% Total Revenue $184 – 187m2 % Growth Y/Y 1 – 3% Non-GAAP Operating Margin ~10% 1. Guidance as of February 1, 2023. Refer to Forward Looking Statements for a discussion of factors that could cause act
Slide 18: Updated FY 2023 Outlook
Updated FY 2023 Outlook FY 2023 Prior Prior Prior Updated1 as of 5/10/22 as of 7/27/22 as of 10/27/22 as of 2/1/23 Service Revenue $740 – 755m $720 – 730m $712 – 720m2 $708.5 - 711.5M % Growth Y/Y 23 – 25% 20 – 21% 20 – 21% 18% Total Revenue $775–790m $747.5–762.5m $745–755m $743.4 - 746.4M % Growth
Slide 19: Appendix
Appendix © 8x8, Inc. Copyright and confidential.
Slide 20: 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 21: Analyst recognition
Analyst recognition Gartner UCaaS Magic Quadrant Strong Performer in the Forrester IDC Worldwide Unified Metrigy MetriStar Top Provider: Leader, 2012–2022 Wave: UCaaS, 2019 Communication and Collaboration Cloud Phone Systems, 2022 MarketScape Leader, 2021 Gartner CCaaS Magic Quadrant, 2015–2022 IDC W
Slide 22: ARR
ARR Selected operating metrics presented in this table have not been derived from financial measures that have been prepared in accordance with US Generally Accepted Accounting Principles. 8x8 provides these selected operating metrics to assist investors in evaluating the Company's operations and ass
Slide 23: Outstanding Convertible Notes and Term Loan
Outstanding Convertible Notes and Term Loan For more detailed disclosures on the terms of the Company’s convertible senior notes and term loan, see the Company’s most recent 10Q filing. © 8x8, Inc. Copyright and confidential.
Slide 24: Reconciliation of Debt Outstanding
Reconciliation of Debt Outstanding As profitability and cash flow increase, more cash is available to further reduce debt $ 250.0 ● In August 2022, the company extended the weighted average Additional maturity of outstanding debt by Repurchases extinguishing the majority of $ 201.9 of 2024 Notes 2024
Slide 25: Interest Expense Detail - Convertible Senior Notes & Term Loan
Interest Expense Detail - Convertible Senior Notes & Term Loan For more detailed disclosures on the terms of the Company’s convertible senior notes, term loan and detachable warrants, see the Company’s most recent 10Q filing. © 8x8, Inc. Copyright and confidential.
Slide 26: Other income (expense), net
Other income (expense), net © 8x8, Inc. Copyright and confidential.
Slide 27: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations © 8x8, Inc. Copyright and confidential.
Slide 28: 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 29: Reconciliation of GAAP to Non-GAAP
Reconciliation of GAAP to Non-GAAP Cost of Service Revenue ($ in thousands, Unaudited) Fiscal Quarter Cost of Service Revenue: Q3'22 Q2’23 Q3'23 GAAP cost of service revenue $48,763 $51,038 $47,335 Amortization of acquired intangible assets (858) (2,140) (2,125) Stock-based compensation expense and
Slide 30: Reconciliation of GAAP to Non-GAAP
Reconciliation of GAAP to Non-GAAP Cost of Other Revenue ($ in thousands, Unaudited) Fiscal Quarter Q3’22 Q2'23 Q3'23 Cost of Other Revenue: GAAP cost of Other Revenue $11,071 $11,000 $10,176 Stock-based compensation expense and related (1,286) (937) (902) employer payroll taxes Severance, transitio
Slide 31: Reconciliation of GAAP to Non-GAAP
Reconciliation of GAAP to Non-GAAP Gross Profit and Gross Margin ($ in thousands, Unaudited) Fiscal Quarter Q3'22 Q2’23 Q3’23 Gross Profit: Non-GAAP Cost of Service Revenue $45,460 $46,160 $42,629 Non-GAAP Cost of Other Revenue 9,887 9,819 8,757 Non-GAAP Cost of Revenue $55,347 $55,979 $51,386 Non-GAA
Slide 32: Reconciliation of GAAP to Non-GAAP
Reconciliation of GAAP to Non-GAAP Sales and Marketing Expense ($ in thousands, Unaudited) Fiscal Quarter Sales and Marketing Expense: Q3’22 Q2’23 Q3’23 GAAP sales and marketing $76,797 $80,487 $79,021 Amortization of acquired intangible assets (221) (3,107) (3,106) Stock-based compensation expense
Slide 33: Reconciliation of GAAP to Non-GAAP
Reconciliation of GAAP to Non-GAAP Research and Development Expense ($ in thousands, Unaudited) Fiscal Quarter Q3'22 Q2'23 Q3'23 Research and Development Expense: GAAP research and development $27,911 $36,019 $38,791 Stock-based compensation expense and related (8,711) (7,773) (7,183) employer payro
Slide 34: Reconciliation of GAAP to Non-GAAP
Reconciliation of GAAP to Non-GAAP General and Administrative Expense ($ in thousands, Unaudited) Fiscal Quarter General and Administrative Expenses: Q3'22 Q2'23 Q3'23 GAAP general and administrative $29,950 $33,835 $27,158 Stock-based compensation expense and related (10,193) (6,763) (4,354) employ
Slide 35: Reconciliation of GAAP to Non-GAAP
Reconciliation of GAAP to Non-GAAP Operating Expenses ($ in thousands, Unaudited) Fiscal Quarter Operating Expenses: Q3'22 Q2'23 Q3'23 Non-GAAP Sales and Marketing $64,640 $70,167 $66,911 Non-GAAP Research and Development 19,076 28,139 26,712 Non-GAAP General and Administrative 14,678 24,031 21,062
Slide 36: Reconciliation of GAAP to Non-GAAP
Reconciliation of GAAP to Non-GAAP Total Costs ($ in thousands, Unaudited) Fiscal Quarter Q3'22 Q2'23 Q3'23 Total Expense: Non-GAAP Cost of Revenue $55,347 $55,979 $51,386 Non-GAAP Operating Expenses 98,394 122,337 114,685 Non-GAAP Total Costs $153,741 $178,316 $166,071 Non-GAAP Total Costs (% of re
Slide 37: Reconciliation of GAAP to Non-GAAP
Reconciliation of GAAP to Non-GAAP Income (loss) from Operations and Operating Margin ($ in thousands, Unaudited) Fiscal Quarter Operating Income (loss): Q3'22 Q2'23 Q3'23 GAAP loss from operations ($37,618) ($24,990) ($18,081) Amortization of acquired intangible assets 1,079 5,247 5,231 Stock-based
Slide 38: Reconciliation of GAAP to Non-GAAP
Reconciliation of GAAP to Non-GAAP Other income (expense), net ($ in thousands, Unaudited) Fiscal Quarter GAAP Other Income (expense), net Q3'22 Q2'23 Q3'23 GAAP Other Income (expense), net ($5,866) $13,950 ($7,912) Amortization of debt discount and 4,9241 1,169 1,136 Issuance costs Gain on debt ext
Slide 39: Reconciliation of GAAP to Non-GAAP
Reconciliation of GAAP to Non-GAAP Net Income (Loss) ($ in thousands, Unaudited) Fiscal Quarter Net Income (Loss): Q3'22 Q2'23 Q3'23 GAAP Net loss ($43,571) ($11,639) ($26,030) Amortization of acquired intangible assets 1,079 5,247 5,231 Stock-based compensation expense and related employer 34,390 2
Slide 40: 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