8x8, Inc. Announces Second Quarter Fiscal 2013 Results

8x8, Inc. (Nasdaq: EGHT), provider of innovative cloud-based business communications and computing solutions, today announced financial operating results for the second quarter of fiscal 2013 ended September 30, 2012.

Second Quarter Fiscal 2013 Financial Highlights:

• Total revenue for the quarter increased 33% year over year to a record $26.4 million from $19.8 million in the same period of fiscal 2012.
• Revenue from business customers comprised 96% of total revenue for the quarter.
• Overall gross margin increased to 68% compared with 67% in the prior quarter and 66% in the same period last year. Service gross margin was 76%, compared with 75% in the prior quarter and 77% in the same period last year.
• Non-GAAP net income (as outlined in the reconciliation table below) was $3.7 million, or $0.05 per diluted share, compared with $1.7 million, or $0.02 per diluted share, in the same period a year ago.
• GAAP net income was $1.7 million, or $0.02 per diluted share, compared with $0.8 million, or $0.01 per share, for the same period last year.
• Ended the quarter with $40.1 million in cash, cash equivalents and investments compared with $19.1 million on September 30, 2011.

“I am pleased to announce another outstanding quarter marked by solid revenue and profit growth alongside increased gross margins which we expect will continue to improve as a result of the operational efficiencies of our cloud-based, monthly recurring revenue business model,” said 8x8 Chairman & CEO Bryan Martin.

Second Quarter Fiscal 2013 Operating Metrics and Other Business Highlights:

• Average monthly revenue per business customer was $256, compared with $207 in the same period last year and $250 in the prior quarter.
• Average number of services subscribed to per business customer grew to 10.6 from 9.0 in the same period last year and 10.1 services in the prior quarter.
• For new customers added during the September quarter, the average number of services subscribed to grew to 14.7 from 12.4 in the same period last year.
• Business service revenue churn was 1.0%, compared with 1.9% in the same period last year and 2.3% in the prior quarter.
• Ended the quarter with 30,498 business customers, up from 29,913 business customers in the prior quarter; net company additions for the quarter were affected by the departure of approximately 400 ‘one-number access’ customers representing approximately $9,000 per month in recurring revenue that were previously acquired in 2008 from Avtex Solutions.
• Awarded two new patents related to contact/call center technologies; company has been awarded 83 U.S. patents since inception.
• Received the 2012 North American Frost & Sullivan Award for leadership in Hosted IP Telephony and Unified Communications in July.
• Introduced an enhanced smartphone and tablet app that incorporates video calling, presence, call recording, expanded PBX features and advanced audio compression technology.

“Our operating metrics for the second quarter of fiscal 2013 demonstrate the continued adoption of a greater number of 8x8 services by both small and mid-market customers, many of whom have multiple geographic locations and mobile workforces that are no longer served or supported by legacy premise-based or hybrid approaches,” Martin continued. “According to recent Frost & Sullivan data, 84% of companies have remote workers who spend at least 25% of their time away from their desks. To support this growing trend, we have significantly enhanced our core Virtual Office hosted PBX offering with upgraded smartphone and tablet apps that extend the communications capabilities and productivity advantages of our services onto the most popular telephony, video and mobile devices used in today’s business environments. We look forward to delivering these and other new applications as the business communications market continues to evolve.”

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