8×8 Inc’s Earnings Call Highlights Growth Amid Challenges

8×8 Inc ((EGHT)) has held its Q4 earnings call. Read on for the main highlights of the call.

8×8 Inc’s recent earnings call painted a picture of both progress and challenges. The company showcased significant strides in core revenue growth, cash flow, and product adoption, particularly with CPaaS and Microsoft Teams integrations. However, these positive developments were tempered by the ongoing impact of the Fuze transition and broader macroeconomic challenges that have been affecting sales cycles and product growth.

Strong Growth in Core 8×8 Revenue

8×8 Inc reported a notable year-over-year growth in its core revenue, excluding Fuze customers, which accelerated to 4.6% from 2.7% in the previous quarter. This marks the highest growth rate in standalone service revenue for the company in the past ten quarters.

Record Cash Flow from Operations

The company achieved a record cash flow from operations for fiscal years 2024 and 2025, which together accounted for over half of its market capitalization. This milestone underscores 8×8’s financial strength and operational efficiency.

Rapid Adoption of Communications APIs

8×8 continues to experience rapid adoption of its communications APIs (CPaaS), with a surge in interactions driving robust growth. This trend highlights the increasing demand for flexible and scalable communication solutions.

Growth in Multi-Product Customers

The number of customers utilizing three or more of 8×8’s products increased by 13% year-over-year, surpassing 700 customers. This growth reflects the company’s success in cross-selling and expanding its product ecosystem.

Strong Sales of Microsoft Teams Integrations

Sales of Microsoft Teams integrations have been particularly strong, with new license sales up 72% in the fourth quarter of 2024. The cumulative number of licenses sold grew by 30% year-over-year, indicating a strong market demand for these integrations.

Impact of Fuze Transition

The transition away from legacy Fuze customers continues to impact 8×8’s overall revenue growth. Revenue from Fuze-related services has been reduced to under 5% of total service revenue, reflecting the company’s strategic shift.

Macroeconomic and Market Challenges

8×8 faces challenges from economic shifts, tariff actions, and global uncertainty, which have added complexity to its business environment. These factors have affected deal sizes and extended sales cycles.

Slight Slowdown in New Product Growth

There has been a slight slowdown in the growth rate of new products compared to previous quarters, attributed to macroeconomic factors. This indicates a cautious market environment impacting new product adoption.

Forward-Looking Guidance

Looking ahead, 8×8 has set ambitious goals for the future. The company expects high single-digit revenue growth and double-digit operating margins by fiscal 2028, despite the ongoing transition from Fuze platforms. For fiscal 2026, service revenue is projected to be between $682 million and $702 million, with total revenue forecasted between $702 million and $724 million. Operating margins are expected to range from 9% to 10%, and cash flow from operations is anticipated to be between $40 million and $50 million. These projections reflect 8×8’s commitment to platform innovation, AI capabilities, and a strategic focus on mid-market and enterprise customers.

In summary, 8×8 Inc’s earnings call highlighted a blend of robust growth and strategic challenges. While the company has made significant progress in revenue growth and product adoption, it continues to navigate the complexities of the Fuze transition and macroeconomic headwinds. The forward-looking guidance suggests a positive trajectory, with expectations of continued growth and operational improvements.