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8x8, Inc. Announces Third Quarter Fiscal 2014 Financial Results

Stocks in this article: EGHT

8x8, Inc. (NASDAQ:EGHT), a provider of cloud-based unified communication and collaboration solutions, today announced operating results for the third quarter of fiscal 2014 ended December 31, 2013.

The Company generated record revenue of $32.7 million for the third quarter of fiscal 2014, an increase of 24% over revenue of $26.4 million for the third quarter of fiscal 2013. The number of new services sold during the quarter was a record 61,286, an increase of 38% from 44,366 new services sold in the same period last year.

GAAP net income for the third quarter of fiscal 2014 was $89,000, or $0.00 per diluted share, with $3.2 million of stock-based compensation expense in the quarter, approximately half of which is related to management transitions. Non-GAAP net income for the quarter was $2.5 million, or $0.03 per diluted share, representing 8% of revenue.

“8x8’s results for the third quarter of fiscal 2014 displayed continued momentum, with a 24% increase in total revenue and a significant uptick in the number of new services sold during the quarter,” said 8x8 CEO Vik Verma. “Mid-market adoption of cloud-based communication and collaboration solutions is accelerating, and 8x8’s comprehensive suite of services is resonating well with these customers.”

Third Quarter Fiscal 2014 Financial Results:

  • Revenue from business customers increased 26% year-over-year to a record $32.3 million and represented 99% of total revenue.
  • Number of new services sold during the third quarter was a record 61,286 vs. 44,366 in the same period last year.
  • Average number of subscribed services per new business customer added during the quarter grew 20% to a record 20.4 from 17.0 in the same period last year.
  • Average monthly service revenue per business customer was a record $274, compared with $252 in the same period last year.
  • Channel and mid-market sales comprised a record 35% of new monthly recurring revenue sold in the quarter, a 57% increase compared with the same period last year.
  • Service margin was 81%, compared with 80% in the same period a year ago; overall gross margin was 71%, compared with 69% in the same year ago period.
  • Monthly business service revenue churn was 1.5%, compared with 2.3% in the same period last year; monthly business customer churn was 1.6%, unchanged from the third quarter of fiscal 2013.
  • Cash, cash equivalents and investments were $174.0 million in the third quarter of fiscal 2014, compared with $46.5 million in the same period last year.

“With the acquisition of Voicenet now complete, our Global Reach initiative moving forward with data center infrastructure deployed in London and Hong Kong, and a successful stock offering, 8x8 remains favorably positioned to capture the increasing worldwide demand we see for our cloud communication and collaboration services,” Verma continued. “As we continue to expand domestically and internationally, we will maintain our increased investment in R&D, sales and marketing while targeting non-GAAP net income as a percentage of revenue in the high-single digit range.”

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