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8x8, Inc. Announces Financial Results For Second Quarter Fiscal 2014

Stocks in this article: EGHT

8x8, Inc. (NASDAQ:EGHT), provider of cloud communications and collaboration solutions, today announced operating results for the second quarter ended September 30, 2013.

The Company posted record revenue of $30.8 million for its second quarter of fiscal 2014, excluding $0.7 million in revenue related to the Company’s dedicated server hosting business that was divested on September 30, 2013. This represents an increase of 22% from comparable revenue for the second quarter of fiscal 2013. The divested business has been classified as discontinued operations.

GAAP net income for the second quarter of fiscal 2014 was $2.2 million, or $0.03 per diluted share. Non-GAAP net income for the quarter was $4.1 million, or $0.05 per share, an increase of 10% compared with the second quarter of fiscal 2013.

Second Quarter Fiscal 2014 Financial Results:

  • Revenue from business customers increased 25% year-over-year to a record $30.3 million and represented 98% of total revenue.
  • GAAP net income was $2.2 million, or $0.03 per diluted share, compared with $1.7 million, or $0.02 per diluted share, for the same period last year.
  • Non-GAAP net income (as outlined in the reconciliation table below) was $4.1 million, or $0.05 per diluted share, compared with $3.7 million, or $0.05 per diluted share, in the same period last year.
  • Service margin was 81%, compared with 77% in the same period a year ago; overall gross margin was 71%, compared with 69% in the same year ago period.
  • Average number of subscribed services per new business customer added during the quarter grew to 17.7 from 14.7 in the same period last year.
  • Average number of subscribed services per business customer over 8x8’s entire customer base grew to 12.2 from 10.8 in the same period last year.
  • Average monthly service revenue per business customer was $268, compared with $247 in the same period last year.
  • Channel and mid-market sales comprised 33% of new monthly recurring revenue sold in the quarter, compared with 21% in the same period last year, an 80% year over year increase.
  • Monthly business customer churn was a 1.5%, compared with 2.4% in the second quarter of fiscal 2013; monthly business service revenue churn was 1.2%, compared to 0.9% in the same period last year.
  • Cash, cash equivalents and investments increased $3.4 million in the second quarter of fiscal 2014 to $61.3 million, without including $3 million in proceeds from the sale of the dedicated hosting business during the quarter which was received on October 1, 2013.

“8x8 delivered a solid quarter with a record 25% increase in revenue from business customers, a record 22% increase in overall revenue and a record $30.8 million in total revenue,” said 8x8 CEO Vik Verma. “Our mid-market and channel teams set a new quarterly record comprising 33% of our new revenue sold during the quarter, an 80% increase compared with the same period last year. At the same time, we saw further improvements in our customer operating metrics as our existing customers continue to subscribe to increasing numbers of services each quarter.”

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