8x8 Inc · NASDAQ:EGHT
8x8 — Q4 FY2019 Earnings Presentation
28 slides from 8x8's earnings presentation, May 14, 2019
Slide 1: Earnings Results: Fourth Quarter and Full-Year Fiscal 2019
EARNINGS RESULTS Fourth Quarter and Full-Year Fiscal 2019 May 14, 2019 1 | © 8x8, Inc. All Rights Reserved.
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 the release of new products, market demand for products, chan
Slide 3: Non-GAAP Measures
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 results and believes they are us
Slide 4: One Cloud Technology Platform: Voice x Video x Chat x Contact Center
One Cloud Technology Platform Voice x Video x Chat x Contact Center UNIFIED COMMUNICATIONS 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 183 patents awarded CONTACT VIDEO $50B+ TAM on-premise ma
Slide 5: Financial Results vs. Guidance | Q4 Fiscal 2019
Financial Results vs. Guidance | Q4 Fiscal 2019 Q4 F2019 GUIDANCE RESULTS (January 29, 2019) (May 14, 2019) SERVICE REVENUE $88.6m - $89.6m $89.1m % Growth Y/Y 18% - 19% 18.2% % Growth Y/Y (excluding DXI revenue, CC) * 22% - 23% 22% PRE-TAX LOSS (Non-GAAP) ** ($7m – $8m) ($7.8m) * Going forward the
Slide 6: Financial Results vs. Guidance | Full-Year Fiscal 2019
Financial Results vs. Guidance | Full-Year Fiscal 2019 FULL-YEAR F2019 GUIDANCE RESULTS (January 29, 2019) (May 14, 2019) SERVICE REVENUE $334m - $335m $334.4m % Growth Y/Y 19% - 20% 19.3% % Growth Y/Y (excluding DXI revenue, CC) * ~22% 22% TOTAL REVENUE $351m - $352m $352.6m % Growth Y/Y 18% - 19%
Slide 7: Q4 Fiscal 2019 | Business Highlights
Q4 Fiscal 2019 | Business Highlights Continued Revenue Growth in Mid-Market & Enterprise: • 29 Large Enterprise Deals (>$10,000 in MRR) increased 38% year-over-year • Service Revenue from customers billing (>$1,000 in MRR) grew 29% year-over-year and represents 63% of total service revenue, excludin
Slide 8: Q4 Fiscal 2019 | Business Highlights (continued)
Q4 Fiscal 2019 | Business Highlights (continued ...) Bundled UCaaS & CCaaS Continues to Resonate: 52% of new MRR from mid-market/enterprise were combination deals including 5 of the top 10 deals X Series: Launched in Australia and New Zealand. Now available to small, mid-market and enterprise busine
Slide 9: New Bookings | Customers >$100K ARR
New Bookings | Customers >$100K ARR (Annual Recurring Revenue*) # of Customers (cumulative) % of $ Bookings 408 35% 35% 376 332 29% 299 26% 1Q19 2Q19 3Q19 4Q19 1Q19 2Q19 3Q19 4Q19 *Annual Recurring Revenue (ARR) = annualized (MRR x 12) recurring revenue (includes software subscription and prepaid us
Slide 10: Revenue | Continued Increases in Growth Rate
Revenue | Continued Increases in Growth Rate ($ in millions) Total Revenue Service Revenue* $89.9 $93.8 22% $83.2 $85.7 5% $79.3 4% 6% 5% 5% $89.1 $85.9 96% 95% 19% $81.3 94% 95% 95% $78.1 $75.3 4Q18 1Q19 2Q19 3Q19 4Q19 4Q18 1Q19 2Q19 3Q19 4Q19 Y/Y Growth Service Revenue Product Revenue * Year-over-
Slide 11: Annual Recurring Revenue (ARR) | By Customer Size
Annual Recurring Revenue (ARR*) | By Customer Size Strongest Growth Coming From Mid-Market & Enterprise Customers +54% yoy growth 13% ENTERPRISE +13% yoy growth 23% 64% SMALL +34% MID-MARKET BUSINESS 8x8 Revenue By Customer Size** (based on company $ revenue) yoy growth <$50m $50m - $1b >$1b * Annua
Slide 12: Increasingly Attractive Customer Economics
Increasingly Attractive Customer Economics Consistent Increases in Unit Level Customer Economics ... With Particular Strength in Larger Customers All Customers Mid-Market/Enterprise $5,364 $516 $506 $490 $5,211 $480 $469 $4,988 $4,953 $4,899 Q4 F2018 Q1 F2019 Q2 F2019 Q3 F2019 Q4 F2019 Q4 F2018 Q1 F
Slide 13: Single Technology Platform | 8x8 R&D Innovation
Single Technology Platform | 8x8 R&D Innovation ($ in millions) Strong Continued Innovation in Capitalized R&D Meaningful Total R&D Investment 23.2% 78% YOY $75.4 $21.7 E:R ratio growth $25.6 $20.1 $7.4 $17.5 $6.8 $16.0 34% 7.9% 34% E:R ratio $6.3 $5.1 36% $42.3 32% $12.5 $14.3 15.3% $49.8 $13.3 $10
Slide 14: Gross Margin | Consistent Recurring Non-GAAP Margins
Gross Margin | Consistent Recurring Non-GAAP Margins* 71.3% 71.2% 70.8% 70.9% 70.9% 71.7% 71.1% 66.6% 66.0% 66.2% 66.4% 65.5% 66.1% 64.9% 4Q18 1Q19 2Q19 3Q19 4Q19 FY 2018 FY 2019 Gross Margin Service Margin * Margin numbers reflect expense reclassification in Q4 F2019 … see Appendix for reclassifica
Slide 15: Guidance | Q1 Fiscal 2020
GUIDANCE | Q1 Fiscal 2020 Q1 F2020 TOTAL REVENUE $95.3m - $96.3m % Growth Y/Y 15% - 16% SERVICE REVENUE $91.0m - $92.0m % Growth Y/Y 16% -18% PRE-TAX LOSS (Non-GAAP) (~$17m) 15 | © 8x8, Inc. All Rights Reserved.
Slide 16: Guidance | Full-Year Fiscal 2020
GUIDANCE | Full-Year Fiscal 2020 F2020 TOTAL REVENUE ~$418m % Growth Y/Y ~19% SERVICE REVENUE ~$400m % Growth Y/Y ~20% PRE-TAX LOSS (Non-GAAP) (~$50m) 16 | © 8x8, Inc. All Rights Reserved.
Slide 17: Investment Highlights
Investment Highlights Compelling TAM Attractive Economics $50+ billion market in early innings of solid customer land and expand cloud migration Unique Tech Platform Strong SaaS Model single cloud technology platform subscription revenue and visibility Complete Cloud Offering Multiple Growth Drivers
Slide 18: Appendix
APPENDIX 18 | © 8x8, Inc. All Rights Reserved.
Slide 19: Q4 F2019 Expense Reclassification | Overview
Q4 F2019 Expense Reclassification | Overview The Company reclassified certain expenses on its Consolidated Statement of Operations effective for the fourth quarter of fiscal 2019. The Company believes these classifications provide additional clarity and insights into the Company’s go-to-market, dema
Slide 20: Expense Reclassification | Q4 F2019 (GAAP)
Expense Reclassification | Q4 F2019 (GAAP) 20 | © 8x8, Inc. All Rights Reserved.
Slide 21: Expense Reclassification | Q4 F2019 Margin % (GAAP)
Expense Reclassification | Q4 F2019 Margin % (GAAP) 21 | © 8x8, Inc. All Rights Reserved.
Slide 22: Expense Reclassification | Q4 F2019 (NON-GAAP)
Expense Reclassification | Q4 F2019 (NON-GAAP) 22 | © 8x8, Inc. All Rights Reserved.
Slide 23: Expense Reclassification | Q4 F2019 Margin % (NON-GAAP)
Expense Reclassification | Q4 F2019 Margin % (NON-GAAP) 23 | © 8x8, Inc. All Rights Reserved.
Slide 24: Reconciliation of GAAP to Non-GAAP | COR and R&D
Reconciliation of GAAP to Non-GAAP | COR and R&D ($ in thousands, Unaudited) Three Months Ended March 31, Cost of Service Revenue: 2019 2018 GAAP cost of service revenue $28,809 $23,833 Amortization of acquired intangible assets ($1,310) ($708) Stock-based compensation expense ($1,560) ($1,044) Non-
Slide 25: Reconciliation of GAAP to Non-GAAP | S&M and G&A
Reconciliation of GAAP to Non-GAAP | S&M and G&A ($ in thousands, Unaudited) Three Months Ended March 31, Sales & Marketing Expense: 2019 2018 GAAP sales and marketing $49,525 $40,422 Amortization of acquired intangible assets ($314) ($330) Stock-based compensation expense ($3,549) ($1,916) Non-recu
Slide 26: Reconciliation of GAAP to Non-GAAP | Net Loss / Per Share
Reconciliation of GAAP to Non-GAAP | Net Loss / Per Share ($ in thousands, Unaudited) Three Months Ended March 31, GAAP Net Income (Loss): 2019 2018 GAAP net loss ($28,131) ($13,262) Adjustments: Amortization of acquired intangible assets $1,624 $1,038 Impairment of equipment, intangible assets, and
Slide 27: Reconciliation of ASC 605 to ASC 606
Reconciliation of ASC 605 to ASC 606 ($ in thousands, Unaudited) Three Months Ended March 31, 2019 Statement Of Operations: ASC 605 Adjustments ASC 606 Service revenue $89,641 $(581) $89,060 Product revenue 3,748 959 4,707 Total revenue $93,389 $378 $93,767 Operating expenses: Sales and marketing $5
Slide 28: 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.