Slide 1: Third Quarter FY 2024
Third Quarter FY 2024 Ended December 31, 2023 January 31, 2024 One platform. Every communications experience. Copyright 2024 8x8, Inc. or its affiliates. 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. Any statements that are not statements of historical fact may be deemed to be forward-lo
Slide 3: Today's Presenters
Today’s Presenters Watch the video interview with CEO Samuel Wilson discussing Q3 2024 Updates Samuel Wilson Kevin Kraus 8x8 Chief Executive Officer 8x8 Chief Financial Officer Copyright 2023 8x8, Inc. or its affiliates. All rights reserved.
Slide 4: Contents
Contents ■ Overview and recently introduced innovations ■ Customer Stories ■ Recent Awards and Recognition ■ Q3’24 Financials ■ Appendix ● ARR ● Supplemental Disclosure on Other income (expense), net ● Debt outstanding, maturity schedule and and interest expense ● Net Debt to TTM Adjusted EBITDA Lev
Slide 5: Overview
Overview Copyright Copyright 2024 2023 8x8, Inc. or its affiliates. All rights reserved.
Slide 6: 8x8 Q3 Fiscal 2024
8x8 Q3 Fiscal 2024 Integrated Global Continuous $707M 42% platform Presence Innovation Total ARR(1) XCaaS(2) as a % of total ARR(1) 3M+ 58% Paid business licenses Enterprise ARR as a % of total ARR(1)(3) AI-powered Full PSTN Product line for cross- modern replacement in 59 organization CX 400K+ 61%
Slide 7: Communications for the Customer Obsessed
Communications for the Customer Obsessed Copyright 2024 8x8, Inc. or its affiliates. All rights reserved.
Slide 8: Recent product innovation highlights
Recent product innovation highlights ● Announced a new product line to deliver cross-organization customer engagement, empowering end-to-end CX orchestration for all customer touch points across the entire organization. The new capabilities further bridge the gap between UCaaS and CCaaS, transformin
Slide 9: 8x8 is empowering all employees to deliver exceptional customer experiences
8x8 is empowering all employees to deliver exceptional customer experiences A new product line to deliver cross-organization customer engagement and empower end-to-end CX orchestration for all customer touchpoints across the entire organization. Delivered to CX professionals outside the contact cent
Slide 10: 99% of business leaders plan more contact center spending
99% of business leaders say their organization plans to dedicate more spending on the contact center this year Source: 2023 Hanover Research survey of 325 contact center and IT leaders Copyright Copyright 2024 2023 8x8, Inc. or its affiliates. All rights reserved.
Slide 11: Nearly 30% of those outside the Contact Center help those inside
Nearly 30% of those outside the Contact Center help those inside the CC Source: Metrigy Customer Experience Optimization: 2023-24 Copyright 2024 8x8, Inc. or its affiliates. All rights reserved.
Slide 12: 46% of companies give contact center licenses to non-agents
46% of companies are giving contact center licenses to employees who aren’t full-time agents Source: 2023 Metrigy Technology Spending Forecast Copyright Copyright 2024 2023 8x8, Inc. or its affiliates. All rights reserved.
Slide 13: Because customer engagement is everyone's job
Because customer engagement is everyone’s job Knowledge Workers Billing Account Management Customer Service & Support Shop Floor Worker Front Line Workers Field Service Sales HR & Recruiting Shipping and Receiving IT Service Desk Legal Internal Collaboration “Crossover” CX Tools & Visibility Omnicha
Slide 14: Q3'24 Customer Stories
Q3’24 Customer Stories One platform. Every communications experience. Copyright 2024 8x8, Inc. or its affiliates. All rights reserved.
Slide 15: Yakima Valley Farm Workers Clinic
Yakima Valley Farm Workers Clinic has over 40 health centers and clinics that serve more than 180,000 patients across Washington and Oregon, offering affordable, high- quality healthcare for the whole family since 1978. 8x8 Solutions 8x8 XCaaS with Contact Center & Voice for Microsoft Teams Why 8x8?
Slide 16: The Museum of Science, Boston
The Museum of Science, Boston is a nature and science museum and indoor zoological establishment located in the Boston, Massachusetts area. With over 700 interactive exhibits and daily presentations, the museum is also home to New England’s only domed IMAX theater. 8x8 Solutions 8x8 XCaaS supporting
Slide 17: Teradata
Teradata (NYSE: TDC) believes that people thrive when empowered with better information, and offers the most complete cloud analytics and data platform, including for AI. By delivering harmonized data and trusted AI/ML, Teradata enables more confident decision-making, unlocks faster innovation, and
Slide 18: Walsall Housing Group
Walsall Housing Group in the UK is a social housing landlord with around 22,000 homes across Walsall and the wider region, providing complementary support services to customers if and when they need it, spanning health and wellbeing, jobs and training, life skills and money advice. 8x8 Solutions 8x8
Slide 19: Doo Group
Doo Group is a multi-faceted financial services group with financial technology at its core. With six major business lines strategically positioned in global markets, including Brokerage, Wealth Management, Payment Exchange, FinTech, Financial Education and Health Care. 8x8 Solutions 8x8 UCaaS Why 8
Slide 20: Bank Aladin Syariah
Bank Aladin Syariah is the first Shariah Digital Bank in Indonesia, committed to developing trustworthy banking products and providing a seamless banking experience to enhance financial inclusion. 8x8 Solutions 8x8 SMS API for one-time passwords and multi-factor authentication Why 8x8? ● Robust and
Slide 21: Recent Awards and Recognition
Recent Awards and Recognition One platform. Every communications experience. Copyright 2024 8x8, Inc. or its affiliates. All rights reserved.
Slide 22: Recent awards and recognition
Recent awards and recognition Recognized as a Leader Won 2023 CRN Product Named Best Enterprise Named a FrontRunner in in the 2023 Gartner® of the Year Awards in Service at the 2023 the Software Advice Best Magic Quadrant for the Unified Comms Council UK IVR Software list of 2023, Unified Communicat
Slide 23: Recent awards and recognition cont.
Recent awards and recognition cont. Won TrustRadius’ 2023 Recognized in Best Of Awards in the 38 different categories categories of Best in the Feature Set, Best Value G2 Winter 2024 Awards for the Price, and Best Relationship in VoIP Copyright 2024 8x8, Inc. or its affiliates. All rights reserved.
Slide 24: Q3 Fiscal 2024 Financial Performance
Q3 Fiscal 2024 Financial Performance Copyright Copyright 2024 2023 8x8, Inc. or its affiliates. All rights reserved.
Slide 25: Financial Strength
Financial Strength As of 12/31/23 KEY FINANCIAL STATS KEY BUSINESS STATS $170M 12 >1,200 Cash and investments1 Consecutive quarters of non-GAAP Enterprise customers, Operating Profit3 and positive cash >3M paid business licenses flow from operations $99M +138% >90% TTM non-GAAP Operating YoY increas
Slide 26: Q3 FY 2024 Financial Highlights
Q3 FY 2024 Financial Highlights ■ Service revenue of $175M and total revenue of $181M ■ 12th consecutive quarter of non-GAAP Operating Profit1 and positive operating cash flow ● Non-GAAP operating margin of 13.4%1, above guidance range of 11-12% ● Cash flow generated by operations of $22.4M, up 45%
Slide 27: Q3 FY 2024 Results vs. Guidance
Q3 FY 2024 Results vs. Guidance Q3 F2024 Guidance Results As of 11/8/23 12/31/23 Service Revenue $173 – 178M $175.1m % Growth Y/Y (2) - 1% (0.4%) Total Revenue $180 – 186M $181.0m % Growth Y/Y (2) – 1% (1.8%) Non-GAAP Operating Margin1 11 - 12% 13.4%1 1. See Appendix for a reconciliation of Non-GAAP
Slide 28: Q3 FY 2024 Financial Metrics
Q3 FY 2024 Financial Metrics* Service Revenue1 $175.1 million, (0.4%) Y/Y growth Q3 F2024 Other Revenue2 $5.9 million, (31%) Y/Y growth Revenue Total Revenue $181.0 million, (1.8%) Y/Y growth Total ARR3 $707 million, 1% Y/Y growth Ending Enterprise ARR3,4 $409 million, 2% Y/Y growth ARR3 Mid-Market3
Slide 29: Revenue Growth
Revenue Growth Fiscal Q3 Total Revenue Fiscal Q3 Service Revenue ($ in millions) ($ in millions) 18% Y/Y (1)% Y/Y (2%) Y/Y 18% Y/Y (0)% Y/Y (0)% Y/Y Copyright 2024 8x8, Inc. or its affiliates. All rights reserved.
Slide 30: Q3 2024 Ending ARR
Q3 2024 Ending ARR1 Fiscal Q3 ARR by Customer Size* Fiscal Q3 ARR by Product* ($ in millions) ($ in millions) $698 $707 $707 $698 $707 $707 2 3 4 * Amounts may not sum to total due to rounding. 5 1. Annualized Recurring Subscriptions and Usage Revenue (ARR) (A) equals the sum of the most recent mont
Slide 31: Non-GAAP Gross Margins
Non-GAAP Gross Margins1 Non-GAAP Total and Service Gross Margins as a % of Revenue 75.7% 74.6% 74.5% Non-GAAP Total Revenue Gross Margin1 72.1% Non-GAAP 71.6% Service Revenue 71.5% Gross Margin1 Q3'23 Q2'24 Q3’24 1. See Appendix for reconciliation of Non-GAAP metrics to nearest GAAP metric. . Copyri
Slide 32: Non-GAAP Operating Expenses and Total Costs
Non-GAAP Operating Expenses and Total Costs1 As a % of Total Revenue ~3.5 pts improvement improvement 90.1% Non-GAAP Operating Expenses as a % of 87.2% revenue 2 Non-GAAP Total Costs as a % of 62.2% revenue 3 58.7% 58.2% Q3'23 Q2'24 Q3’24 1. See Appendix for reconciliation of Non-GAAP metrics to nea
Slide 33: Non-GAAP Operating Income and Margin
Non-GAAP Operating Income and Margin1 Fiscal Q3 Operating Income Fiscal Q3 Operating Margin ($ in millions) (% of revenue) +32% +3.5 pts $24.3 $23.8 13.4% $496 12.8% $414 $18.3 9.9% $145 Q3'23 Q2'24 Q3’24 Q3'23 Q2'24 Q3’24 1. See Appendix for reconciliation of Non-GAAP metrics to nearest GAAP metric
Slide 34: Cash Flow from Operations and Cash Interest Paid
Cash Flow from Operations and Cash Interest Paid Fiscal Q3 Cash Flow from Operations YTD Cash Flow from Operations and and Cash Interest Paid Cash Interest Paid (3 months, $ millions) (9 months, $ millions) $24.7 $12.9 $6.9 $496 $66.3 $9.0 $22.4 $5.6 $17.5 $35.2 $1.0 $15.5 $18.2 Q3'23 Q2’24 Q3’24 $1
Slide 35: Q4 2024 Guidance
Q4 2024 Guidance1,2 Q4 FY 2024 as of January 31, 2024 Service Revenue $171 – 175M % Growth Y/Y (3) - (1)% Total Revenue $176 – 181M % Growth Y/Y (5) – (2)% Non-GAAP Operating Margin2 ~10% 1. Refer to Forward Looking Statements for a discussion of factors that could cause actual results to differ fro
Slide 36: Updated FY 2024 Guidance
Updated FY 2024 Guidance1,2 FY 2024 Prior Prior Prior UPDATED as of May 11, 20231 as of Aug. 8, 2023 as of Nov. 1, 20231 as of Jan. 31, 20241 Service Revenue $725 – 732m $701 – 711m $701 – 711m $699.1 - 703.1 % Growth Y/Y 2 - 3% (1) - 0% (1) - 0% (2) - (1)% Total Revenue $755 – 763m $732.5 – 742.5m
Slide 37: Appendix
Appendix Copyright 2024 8x8, Inc. or its affiliates. All rights reserved.
Slide 38: Annualized Recurring Subscriptions and Usage Revenue (ARR)
Annualized Recurring Subscriptions and Usage Revenue (ARR)1 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
Slide 39: Supplemental Details on Other (Expense) Income, Net
Supplemental Details on Other (Expense) Income, Net Copyright 2024 8x8, Inc. or its affiliates. All rights reserved.
Slide 40: Outstanding Convertible Notes and Term Loan
Outstanding Convertible Notes and Term Loan On January 30, 2024, the Company deposited funds (from cash-on-hand) with the loan administrator to redeem the remaining $63.3 aggregate principal of the 2024 Notes upon maturity on 2/1/24. For more detailed disclosures on the terms of the Company’s conver
Slide 41: Interest Expense Detail - Senior Notes & Term Loan
Interest Expense Detail - Senior Notes & Term Loan Amounts may not sum to total due to rounding. 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. Copyright 2024 8x8, Inc. or its affiliat
Slide 42: History of Outstanding Debt
History of Outstanding Debt Reduced Principal Amount of Debt by >22% in since August 2022. $ 250.0 $ (403.8) Repaid $121.1M of Aggregate Principal Retired 2024 Notes Term Loan 2027 ~$33M Additional Early Repay 2024 $ 201.9 Repurchases Repayment Notes w/ Cash of 2024 Notes Term Loan At maturity Conve
Slide 43: Debt Maturity Schedule - Aggregate Principal Outstanding
Debt Maturity Schedule - Aggregate Principal Outstanding 2024 Converts Matures Feb. 1, 2024. Term Funds for repayment Loan 2028 already on deposit with Converts loan administrator to repay with cash (drawn from cash & equivalents on balance sheet) Copyright 2024 8x8, Inc. or its affiliates. All righ
Slide 44: Net Debt to TTM Adjusted EBITDA
Net Debt to TTM Adjusted EBITDA Steady improvement in leverage ratio Net Debt to Adjusted EBITDA due to increased operational efficiency and early debt retirement Net Debt and Ratio of Net Debt to TTM Adjusted EBITDA1 $ millions except debt ratios Q3'23 Q2'24 Q3'24 $ Millions except ratio Aggregate
Slide 45: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Copyright 2024 8x8, Inc. or its affiliates. All rights reserved.
Slide 46: 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 r
Slide 47: Copyright 2024 8x8, Inc. or its affiliates. All rights reserved.
Copyright 2024 8x8, Inc. or its affiliates. All rights reserved.
Slide 48: Copyright 2024 8x8, Inc. or its affiliates. All rights reserved.
Copyright 2024 8x8, Inc. or its affiliates. All rights reserved.
Slide 49: Copyright 2024 8x8, Inc. or its affiliates. All rights reserved.
Copyright 2024 8x8, Inc. or its affiliates. All rights reserved.
Slide 50: Copyright 2024 8x8, Inc. or its affiliates. All rights reserved.
Copyright 2024 8x8, Inc. or its affiliates. All rights reserved.
Slide 51: 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