Slide 1: Earnings Results Third Quarter Fiscal 2020
EARNINGS RESULTS Third Quarter Fiscal 2020 (Ended December 31, 2019) February 4, 2020 1 | © 8x8, Inc. All Rights Reserved.
Slide 2: Voice x Video x Chat x Contact Center x APIs In the Cloud
Voice x Video x Chat x Contact Center x APIs In the Cloud. ü NYSE: EGHT ü Headquarters: Campbell, CA ü ~1,800 employees in 8 countries ü 1m+ business users in 150+ countries ü 8-year Leader UCaaS Gartner Magic Quadrant ü 200+ patents awarded ü $60B+ TAM on-premise market migrating to cloud 2 | © 8x8
Slide 3: Financial Results vs. Guidance | Q3 Fiscal 2020
Financial Results vs. Guidance | Q3 Fiscal 2020 Q3 F2020 GUIDANCE RESULTS (October 30, 2019) (February 4, 2020) TOTAL REVENUE $113.5 - 114.5m $118.6m % Growth Y/Y 26-27% 31.9% SERVICE REVENUE $109 - 110m $113.6m % Growth Y/Y 27-28% 32.2% PRE-TAX LOSS (Non-GAAP) (~$16.5m) ($16.3m) 3 | © 8x8, Inc. All
Slide 4: Q3 Fiscal 2020 | Business Highlights
Q3 Fiscal 2020 | Business Highlights Strong and Growing Large Deals With Annual Recurring Revenue (ARR) Greater than $100,000: • 592 customers with Annual Recurring Revenue (ARR) greater than $100,000, 57% year-over-year growth • Closed record 40 new customer deals with ARR > $100,000. These deals r
Slide 5: Q3 Fiscal 2020 | Business Highlights (continued)
Q3 Fiscal 2020 | Business Highlights (continued ...) Continued Contact Center Traction with Customers: • All top 10 deals were bundled deals • Contact center bookings represented 33% of total new bookings and grew 90% year-over-year Channel Momentum: • Channel Bookings grew 62% year-over-year and re
Slide 6: New Bookings | Customers >$100K ARR
New Bookings | Customers >$100K ARR (Annual Recurring Revenue*) # of Customers (cumulative) % of New Bookings 41% 592 536 35% 33% 31% 29% 449 408 376 3Q19 4Q19 1Q20 2Q20 3Q20 3Q19 4Q19 1Q20 2Q20 3Q20 *Annual Recurring Revenue (ARR) = annualized subscription revenue and the annualized platform usage
Slide 7: Annual Recurring Revenue (ARR) | By Customer Size
Annual Recurring Revenue (ARR*) | By Customer Size Total ARR Growth of +34% YOY with Strong Growth & Contribution From Mid-Market & Enterprise Customers +85% yoy growth 18% COMBINED MID-MARKET AND ENTERPRISE +18% ENTERPRISE yoy growth +59% yoy growth 56% +44% SMALL yoy growth 26% BUSINESS ARR By Cus
Slide 8: Revenue | Strong Continued Increases
Revenue | Strong Continued Increases ($ in millions) Total Revenue Service Revenue $118.6 $113.6 $109.5 $104.5 4% $96.7 5% $89.1 $92.4 $89.9 $93.8 $85.9 5% 4% 4% 96% 95% 96% 95% 96% 3Q19 4Q19 1Q20 2Q20 3Q20 3Q19 4Q19 1Q20 2Q20 3Q20 Service Revenue Product Revenue 8 | © 8x8, Inc. All Rights Reserved.
Slide 9: Revenue Per Customer | Increasingly Attractive Economics
Revenue Per Customer | Increasingly Attractive Economics Consistent Increases in Unit Level Customer Economics ... With Particular Strength in Larger Customers Mid-Market Enterprise $182 $44 $172 $41 $38 $34 $36 $155 $142 $142 3Q19 4Q19 1Q20 2Q20 3Q20 3Q19 4Q19 1Q20 2Q20 3Q20 Average Annual Service
Slide 10: Gross Margin | Recurring Non-GAAP Margins
Gross Margin | Recurring Non-GAAP Margins 71.2% 70.9% 66.6% 68.7% 66.2% 64.2% 62.6% 60.9% 58.4% 56.7% 3Q19 4Q19 1Q20 2Q20 3Q20 Gross Margin Service Margin 10 | © 8x8, Inc. All Rights Reserved.
Slide 11: R&D | 8x8 Single Technology Platform Innovation
R&D | 8x8 Single Technology Platform Innovation Strong Continued Innovation With Large Total R&D Investment ($ in millions) 18.2% $21.7 $21.7 TOTAL R&D $21.4 $21.5 INVESTMENT $20.1 $7.3 $6.6 $8.4 E:R RATIO $7.4 $6.8 34% 34% 34% 31% 39% 7.1% 34% CAPITALIZED COSTS 36% (% Revenue) $13.3 $14.3 $14.5 $14
Slide 12: Guidance | Q4 and Full-Year F2020
Guidance | Q4 and Full-Year F2020 Q4 F2020 FULL-YEAR F2020 PRIOR UPDATED GUIDANCE (February 4, 2020) GUIDANCE GUIDANCE (October 30, 2019) (February 4, 2020) TOTAL REVENUE $118.9 - 119.4m ~$440m ~$444m % Growth Y/Y 27% ~25% ~26% SERVICE REVENUE $114.4 - 114.9m ~$422m ~$425m % Growth Y/Y 28-29% ~26% ~
Slide 13: Investment Highlights
Investment Highlights Compelling TAM Attractive Economics $60+ billion market in early innings of solid customer land and expand cloud migration Unique Tech Platform Strong SaaS Model single cloud technology platform subscription revenue and visibility Complete Cloud Offering Multiple Growth Drivers
Slide 14: Appendix
APPENDIX 14 | © 8x8, Inc. All Rights Reserved.
Slide 15: Reconciliation of GAAP to Non-GAAP | COR
Reconciliation of GAAP to Non-GAAP | COR ($ in thousands, Unaudited) Three Months Ended December 31, Cost of Service Revenue: 2019 2018 GAAP cost of service revenue $49,326 $27,632 Amortization of acquired intangible assets ($1,803) ($1,342) Stock-based compensation expense and related employer payr
Slide 16: Reconciliation of GAAP to Non-GAAP | R&D
Reconciliation of GAAP to Non-GAAP | R&D ($ in thousands, Unaudited) Three Months Ended December 31, Research & Development Expense: 2019 2018 GAAP research and development $19,870 $16,886 Stock-based compensation expense and related employer payroll taxes ($6,236) ($3,570) Acquisition and integrati
Slide 17: Reconciliation of GAAP to Non-GAAP | S&M
Reconciliation of GAAP to Non-GAAP | S&M ($ in thousands, Unaudited) Three Months Ended December 31, Selling and Marketing Expense: 2019 2018 GAAP selling and marketing $63,099 $46,276 Amortization of acquired intangible assets ($519) ($352) Stock-based compensation expense and related employer payr
Slide 18: Reconciliation of GAAP to Non-GAAP | G&A
Reconciliation of GAAP to Non-GAAP | G&A ($ in thousands, Unaudited) Three Months Ended December 31, General and Administrative Expenses: 2019 2018 GAAP general and administrative $22,547 $18,038 Stock-based compensation expense and related employer payroll taxes ($7,010) ($3,605) Acquisition and in
Slide 19: Reconciliation of GAAP to Non-GAAP | Net Loss / Per Share
Reconciliation of GAAP to Non-GAAP | Net Loss / Per Share GAAP Net Loss: ($ in thousands, Unaudited) 2019 2018 GAAP net loss ($47,071) ($23,771) Adjustments: Amortization of acquired intangible assets $2,322 $1,694 Stock-based compensation expense and related employer payroll taxes (1)(2) $21,382 $1
Slide 20: 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 the release of new products, market demand for products, chan
Slide 21: 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 © 8x8, Inc. All rights reserved. All trademarks identified by the ®, ™, or SM are registered trademarks, trademarks, or service marks of 8x8, Inc.