Slide 1: First Quarter FY 2023
First Quarter FY 2023 Ended June 30, 2022 July 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 the release of new products, market demand for products, impa
Slide 3: Today's Speakers
Today’s Speakers Dave Sipes, 8x8 Chief Executive Officer Hunter Middleton, 8x8 Chief Product Officer Samuel Wilson, 8x8 Chief Financial Officer © 8x8, Inc. Copyright and confidential.
Slide 4: 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 5: Q1 2023 Financial Highlights
Q1 2023 Financial Highlights ■ Strength in enterprise ARR and XCaaS adoption ○ XCaaS ARR growth >40% YoY ○ Enterprise ARR growth >50% YoY ■ Non-GAAP Gross margin increased 590 basis points YoY to 68.5%1 ■ Fuze integration going well, accretive to non-GAAP operating income1 ■ Non-GAAP operating incom
Slide 6: Q1 2023 Business Highlights
Q1 2023 Business Highlights Product Innovation ■ Launched the 8x8 Elevate MP Program for Microsoft Gold Partners together with the exclusive 8x8 XT Direct Routing as a Service offering that enables enterprises adopting Microsoft Teams to reduce communication costs and improve employee productivity w
Slide 7: Q1 2023 Results vs. Guidance
Q1 2023 Results vs. Guidance Q1 F2023 Guidance Results (as of May 10, 2022) June 30, 2022 Service Revenue $177 – 180m $179.2m1 % Growth Y/Y 29 – 31% 30% Total Revenue $185 – 188m $187.6m2 % Growth Y/Y 25 – 27% 26% Non-GAAP Operating Margin3 Positive 5.4%4 1. Includes $29.3 million of Fuze revenue. 2
Slide 8: 8x8 By the Numbers - Q1 2023
8x8 By the Numbers - Q1 2023 $688M >40% One platform Global coverage 8x8 Voice for MS Teams Total ARR(1)(3) YoY XCaaS ARR growth(1) 2.5M+ >50% 200K+ Paid business users YoY Enterprise ARR growth(1)(2) 60K+ >70% Single, all-in-one Full PSTN Industry-leading platform for replacement in integration for
Slide 9: Q1 2023 Financial Metrics
Q1 2023 Financial Metrics* Service Revenue1,7 $179.2 million, 30% Y/Y growth Q1 2023 Other Revenue2,7 $8.5 million, (21)% Y/Y growth Revenue Total Revenue7 $187.6 million, 26% Y/Y growth Total ARR3 $688 million, 28% Y/Y growth ARR3 Enterprise4 $403 million, 54% Y/Y growth Mid-Market5 $125 million, 2
Slide 10: Revenue Growth
Revenue Growth Fiscal Q1 Total Revenue1 Fiscal Q1 Service Revenue2 ($ in millions) ($ in millions) 26% Y/Y 30% Y/Y $188 $179 25% Y/Y 29% Y/Y $181 $173 $148 $138 $414 $145 Q1'22 Q4’22 Q1'23 Q1'22 Q4'22 Q1’23 1. Q1’23 and Q4’22 Total revenue includes Fuze revenue of $29.5 million and $24.1 million, re
Slide 11: Enterprise Customers >$100K ARR
Enterprise Customers >$100K ARR Fiscal Q1 Enterprise ARR1,2 Fiscal Q1 Enterprise Customers2 ($ in millions) 54% Y/Y 1,277 55% Y/Y $403 1,2583 $393 $496 $262 824 $145 Q1'22 Q4'22 Q1’23 Q1'22 Q4'22 Q1’23 1. Enterprise ARR is defined as ARR from customers that generate > $100K ARR. 2. Includes Fuze ente
Slide 12: Increasing Non-GAAP Gross Margins
Increasing Non-GAAP Gross Margins* Non-GAAP Total and Service Gross Margins as a % of Revenue 73.4% 72.2% 68.9% Non-GAAP Total Gross Margin* 68.5% Non-GAAP 66.7% Service Revenue Gross Margin* 62.6% Q1'22 Q4'22 Q1’23 * See Appendix for a reconciliation of Non-GAAP metrics to the nearest GAAP metric.
Slide 13: Non-GAAP Operating Expenses and Total Costs
Non-GAAP Operating Expenses and Total Costs* As a % of Total Revenue 99.1% 97.7% 94.6% Non-GAAP Operating Expenses 1 Non-GAAP Total Costs2 64.4% 63.1% 61.7% Q1'22 Q4'22 Q1’23 * See Appendix for a reconciliation of GAAP to Non-GAAP metrics. 1. Non-GAAP Operating Expenses include R&D, Sales and Market
Slide 14: Non-GAAP Operating Income and Margin
Non-GAAP Operating Income and Margin Fiscal Q1 Operating Income1 Fiscal Q1 Operating Margin1 ($ in millions) (% of revenue) 655% Y/Y $10,1352 5.4%2 $496 636% Y/Y $4,175 $414 2.3% $1,343 $1,343 $145 0.9% Q1'22 Q4'22 Q1’23 Q1'22 Q4'22 Q1’23 1. See Appendix for reconciliation of Non-GAAP metrics to nea
Slide 15: Q2 2023 Guidance
Q2 2023 Guidance1 Q2 FY 2023 (as of 7/27/22) Service Revenue $177 – 180m2 % Growth Y/Y 24 – 26% Total Revenue $185 – 188m2 % Growth Y/Y 22 – 24% Non-GAAP Operating Margin 2.5 – 3.0 % 1. Guidance as of July 27, 2022. Refer to Forward Looking Statement for a discussion of factors that could cause actu
Slide 16: Updated FY 2023 Outlook
Updated FY 2023 Outlook FY 2023 Prior UPDATED1 as of 5/10/22 as of 7/27/22 Service Revenue $740 – 755m $720 – 730m % Growth Y/Y 23 – 25% 20 – 21% Total Revenue $775 – 790m $747.5 – 762.5m % Growth Y/Y 21 – 24% 17 – 19% Non-GAAP Operating Margin 2 – 3% ~4% 1. Guidance as of July 27, 2022. Refer to th
Slide 17: Industry recognition
Industry recognition UC Vendor, 2021 Best UC Collaboration UK Vendor of the Year, 5-Star Partner Program, Top New Provider, 2021 Platform, 2021 2022 2021-2022 Top Overall Supplier, 2021 Tech Innovator Award International Vendor for 8x8 XCaaS, 2021 of the Year, 2020 UK Cloud Services Special Forces S
Slide 18: Analyst recognition
Analyst recognition Gartner UCaaS Magic Quadrant Strong Performer in the IDC Worldwide Unified Metrigy MetriStar Top Provider - Leader, 2012–2021 Forrester Wave: UCaaS, 2019 Communication and Collaboration Cloud Phone Systems, 2022 MarketScape Leader, 2021 Gartner CCaaS Magic Quadrant Challenger, 201
Slide 19: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations © 8x8, Inc. Copyright and confidential.
Slide 20: Non-GAAP Measures; Non-GAAP Guidance
Non-GAAP Measures This presentation contains certain financial information that has not been prepared in accordance with Generally Accepted Accounting Principles (GAAP). Management uses these non-GAAP financial measures internally in analyzing the Company’s financial results and believes they are usefu
Slide 21: Reconciliation: Cost of Service Revenue
Reconciliation of GAAP to Non-GAAP Cost of Service Revenue ($ in thousands, Unaudited) Fiscal Quarter Cost of Service Revenue: Q1'22 Q4’22 Q1'23 GAAP cost of service revenue $46,010 $53,938 $53,547 Amortization of acquired intangible assets (1,066) (2,159) (2,369) Stock-based compensation expense an
Slide 22: Reconciliation: Cost of Other Revenue
Reconciliation of GAAP to Non-GAAP Cost of Other Revenue ($ in thousands, Unaudited) Fiscal Quarter Q1’22 Q4’22 Q1'23 Cost of Other Revenue: GAAP cost of other revenue $13,746 $14,563 $13,126 Stock-based compensation expense and related (1,135) (1,253) (1,147) employer payroll taxes Legal and regula
Slide 23: Reconciliation: Gross Profit and Gross Margin
Reconciliation of GAAP to Non-GAAP Gross Profit and Gross Margin ($ in thousands, Unaudited) Fiscal Quarter Q1'22 Q4’22 Q1’23 Gross Profit: Non-GAAP Cost of Service Revenue $42,909 $48,068 $47,585 Non-GAAP Cost of Other Revenue 12,595 12,414 11,446 Non-GAAP Cost of Revenue $55,504 $60,482 $59,030 Non-
Slide 24: Reconciliation: Sales and Marketing Expense
Reconciliation of GAAP to Non-GAAP Sales and Marketing Expense ($ in thousands, Unaudited) Fiscal Quarter Sales and Marketing Expense: Q1’22 Q4’22 Q1’23 GAAP sales and marketing $75,915 $84,785 $83,527 Amortization of acquired intangible assets (219) (2,529) (3,106) Stock-based compensation expense
Slide 25: Reconciliation: Research and Development Expense
Reconciliation of GAAP to Non-GAAP Research and Development Expense ($ in thousands, Unaudited) Fiscal Quarter Research and Development Expense: Q1'22 Q4'22 Q1'23 GAAP research and development $25,392 $30,586 $34,955 Stock-based compensation expense and related (9,073) (6,243) (8,193) employer payro
Slide 26: Reconciliation: General and Administrative Expense
Reconciliation of GAAP to Non-GAAP General and Administrative Expense ($ in thousands, Unaudited) Fiscal Quarter General and Administrative Expenses: Q1'222 Q4'22 Q1'23 GAAP general and administrative $26,091 $38,039 $29,219 Stock-based compensation expense and related (10,904) (9,324) (7,923) emplo
Slide 27: Reconciliation: Total Operating Expenses
Reconciliation of GAAP to Non-GAAP Total Operating Expenses ($ in thousands, Unaudited) Fiscal Quarter Operating Expenses: Q1'22 Q4'22 Q1'23 Non-GAAP Sales and Marketing $60,374 $71,258 $71,750 Non-GAAP Research and Development 16,258 23,516 26,725 Non-GAAP General and Administrative 14,848 21,941 1
Slide 28: Reconciliation: Total Costs
Reconciliation of GAAP to Non-GAAP Total Costs ($ in thousands, Unaudited) Fiscal Quarter Q1'22 Q4'22 Q1'23 Total Expense: Non-GAAP Cost of Revenue $55,504 $60,482 $59,030 Non-GAAP Operating Expenses 91,480 116,715 118,454 Non-GAAP Total Costs $146,984 $177,197 $177,484 Non-GAAP Total Costs (% of re
Slide 29: Reconciliation: Income from Operations and Operating Margin
Reconciliation of GAAP to Non-GAAP Income (loss) from Operations and Operating Margin ($ in thousands, Unaudited) Fiscal Quarter Operating Income (loss): Q1'22 Q4'22 Q1'23 GAAP loss from operations ($38,827) ($40,539) ($26,754) Amortization of acquired intangible assets 1,285 4,688 5,475 Stock-based
Slide 30: Reconciliation: Other income (expense), net
Reconciliation of GAAP to Non-GAAP Other income (expense), net ($ in thousands, Unaudited) Fiscal Quarter Q1'22 Q4'22 Q1'23 GAAP Other Income (Expense), net GAAP Other Income (Expense), net ($4,823) ($6,006) $1,116 Amortization of Debt Discount and $4,394 $6,628 $831 Issuance costs1 Sub-lease Income
Slide 31: Reconciliation: Net Income (Loss)
Reconciliation of GAAP to Non-GAAP Net Income (Loss) ($ in thousands, Unaudited) Fiscal Quarter Net Income (Loss): Q1'22 Q4'22 Q1'23 GAAP Net loss ($43,906) ($45,583) ($26,043) Amortization of acquired intangible assets 1,285 4,688 5,475 Stock-based compensation expense and related employer 37,852 2
Slide 32: 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