Slide 1: First Quarter Fiscal 2019 Earnings
First Quarter Fiscal 2019 Earnings July 26, 2018
Slide 2: Forward Looking Statements and Non-GAAP Measures
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: One cloud solution
One cloud solution phone x meetings x collaboration x contact center 1M+ business users 15 global data centers serving customers in 150+ countries Global 24/7/365 follow-the-sun customer support 160+ patents 3
Slide 4: Q1 Fiscal 2019 Financial Results
Q1 Fiscal 2019 Financial Results SERVICE REVENUE GAAP NON-GAAP Million $78.1 $(15.4) Million Net loss Pre-tax Net ($3.4) 21% million INCREASE* Income ** 74% Gross margin 76.2% 30% NOW INCREASE* 60% 81% Service 82.7% mid-market/ margin of total enterprise service service OPERATING Cash generated reve
Slide 5: Q1 Fiscal 2019 Business Highlights
Q1 Fiscal 2019 Business Highlights ● Continued Success in Mid-Market and Enterprise: ○ 21 Large Enterprise Deals (>$10,000 in MRR) representing 61% increase in new large deals closed year-over-year ○ Service revenue from customers billing (>$1,000 in MRR) grew 30% year-over-year and represents 60% o
Slide 6: 8x8 Market Recognition
8x8 Market Recognition 5 Star Channel Rating Magic Quadrant Leader UCaaS Gartner 6x CRN 2018 Partner Program Guide 2013 to 2018 Superior Voice Quality Best Communications Provider Tolly Group 2017 #1 2018 Winner Call & Contact Center Expo Midmarket & Enterprise Global Leader UCaaS seats 13 consecuti
Slide 7: Enterprise Communication: The Third Wave
Enterprise Communication: The Third Wave WAVE 1 WAVE 2 WAVE 3 On-Premise Point Cloud Products One Cloud Engagement Solution All Customer & Employee Interactions Collaboration Contact Center One System of Intelligence Contact Phone Center One System of Telephony Engagement Meetings Systems of Record
Slide 8: Anticipated this Market and Built our Company to Capture it
Anticipated this Market and Built our Company to Capture it Analytics & Launched Introduced Acquired Quality Introduced Acquired internal Big VO Analytics Software (QM / Integration speech) Script8 MARIANAIQ Data initiative (incl QoS) Introduced chat, Fully integrated Acquired Collaboration video an
Slide 9: Exceptional Customer Experience Determined by the Employee Experience
Exceptional Customer Experience Determined by the Employee Experience
Slide 10: X Series
X Series More intelligent customer interactions One System of Intelligent ● Integrated voice, email, webchat and social Engagement ● ● Advanced speech and interaction analytics Predictive outbound campaigns ● Quality, collaborative performance mgmt Speed to resolution ● One-click subject matter expe
Slide 11: Investment Summary
Investment Summary • $40+ billion market cloud opportunity according to IDC • Market entering 3rd wave of enterprise communications – moving beyond efficiencies to accelerating revenue growth • Uniquely qualified to capture this opportunity – own core technology – cloud phone, contact center, confer
Slide 12: Q1 Fiscal Year 2019 Financials
Q1 Fiscal Year 2019 Financials
Slide 13: Strong Revenue Growth
Strong Revenue Growth Total Revenue Growth Non-GAAP Pre-Tax Income ($ in millions) as % of Total Revenue ($ in millions) $4.2 $3.3 $83.2 $79.3 5.8% $75.6 $69.1 $72.5 $1.6 4.8% 2.0% 1Q18 2Q18 3Q18 4Q18 1Q19 -3.7% -4.1% ($2.9) 1Q18 2Q18 3Q18 4Q18 1Q19 ($3.4) 13
Slide 14: Increasing Average Monthly Service Revenue per Customer
Increasing Average Monthly Service Revenue per Customer All Customers Mid-Market/Enterprise Customers $4,953 $480 $4,899 $469 $4,765 $454 $4,697 $442 $432 $4,592 1Q18 2Q18 3Q18 4Q18 1Q19 1Q18 2Q18 3Q18 4Q18 1Q19 14
Slide 15: Consistently Strong Non-GAAP Margins
Consistently Strong Non-GAAP Margins Gross Margin Service Margin 83.9% 84.5% 83.0% 83.2% 82.7% 79.1% 77.8% 77.0% 76.7% 76.2% 1Q18 2Q18 3Q18 4Q18 1Q19 15
Slide 16: Strong Balance Sheet
Strong Balance Sheet Cash Flow from Operations Cash & Investments $177.8 $167.0 $161.0 $160.4 $ in millions $152.6 $6.2 $5.0 $8.2 $2.7 $0.8 1Q18 2Q18 3Q18 4Q18 1Q19 16
Slide 17: Fiscal Full-Year 2019 Non-GAAP Financial Outlook
Fiscal Full-Year 2019 Non-GAAP Financial Outlook Service Revenue $333M - $338M Service Revenue Growth Y/Y 19% - 21% Service Revenue Growth Y/Y excluding DXI revenue 21% - 22% Total Revenue $347M - $352M Total Revenue Growth Y/Y 17% - 19% Non-GAAP Pre-Tax Loss ($13M - $17M) 17
Slide 18: Second Quarter Fiscal 2019 Non-GAAP Financial Outlook
Second Quarter Fiscal 2019 Non-GAAP Financial Outlook Service Revenue $80M - $81M Service Revenue Growth Y/Y 18% - 19% Service Revenue Growth Y/Y excluding DXI revenue 20% - 21% Non-GAAP Pre-Tax Loss ($4M – $5M) 18
Slide 19: GAAP to Non-GAAP Reconciliation Tables
GAAP to Non-GAAP Reconciliation Tables
Slide 20: Reconciliation of Selected GAAP Measures to Non-GAAP Measures
Reconciliation of Selected GAAP Measures to NON-GAAP Measures (In Thousands, Unaudited) Three Months Ended Co s t o f S e rv ic e Re v e nue : June 30 2018 2017 GAAP cost of service revenue $15,079 $11,662 Amortization of acquired intangible assets ($1,110) ($797) Stock-based compensation expense ($
Slide 21: Reconciliation of Selected GAAP Measures to Non-GAAP Measures
Reconciliation of Selected GAAP Measures to NON-GAAP Measures (In Thousands, Unaudited) Three Months Ended Sales and Marketing: June 30 2018 2017 GAAP sales and marketing $53,305 $41,110 Amortization of acquired intangible assets ($322) ($725) Stock-based compensation expense ($3,845) ($2,647) Non-r
Slide 22: Reconciliation of Selected GAAP Measures to Non-GAAP Measures
Reconciliation of Selected GAAP Measures to NON-GAAP Measures (In Thousands, Unaudited) Three Months Ended Reconciliation between GAAP and non-GAAP Net Income (Loss) 30-Jun 2018 2017 Net loss ($15,355) ($2,169) Adjustments: Amortization of acquired intangible assets $1,432 $1,522 Stock-based compens
Slide 23: ASC 606 Reconciliation
ASC 606 Reconciliation
Slide 24: Fiscal 2019 Outlook – Impact from ASC606
Fiscal 2019 Outlook – Impact from ASC606 • No restatement of prior year information under modified retroactive method Financial Statement • Quarterly disclosures will be provided for FY19 comparing results under ASC606 versus ASC605 Revenue • No material differences expected • Large portion of sales
Slide 25: From EX to CX: The experience is everything
From EX to CX The experience is everything © 2018 8x8, Inc. All Rights Reserved