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8X8 Inc (EGHT)
NASDAQ:EGHT
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8X8
(NASDAQ:EGHT)
51Neutral
Positive Factors
Product Innovation
8x8 is experiencing some success with new products, evidenced by 60% growth in new products and 84% growth in AI-based solutions.
Revenue Growth
8x8's CPaaS segment grew over 20% year-over-year, a key driver of revenue.
Negative Factors
Financial Performance
EGHT shares are currently trading at a discount to peers given slowing organic growth, a debt overhang, and challenged competitive positioning.
Market Competition
Aggressive price actions from competitors are impacting deal cycles.
8X8 (EGHT) vs. S&P 500 (SPY)
Market Cap
$230.46M
Dividend YieldN/A
Average Volume (3M)1.24M
Price to Earnings (P/E)―
Beta (1Y)2.06
Revenue Growth-2.23%
EPS Growth19.48%
CountryUS
Employees1,948
SectorTechnology
Sector Strength66
IndustrySoftware - Application
Share Statistics
EPS (TTM)0.11
Shares Outstanding131,693,660
10 Day Avg. Volume1,093,064
30 Day Avg. Volume1,240,845
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap2.97
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit1.36
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$2.03Price Target Upside10.93% Upside
Rating ConsensusModerate Sell
Number of Analyst Covering4
8X8 Business Overview & Revenue Model
Company Description8x8, Inc. provides voice, video, chat, contact center, and enterprise-class application programmable interface (API) Software-as-a-Service solutions for small and mid-size businesses, mid-market and larger enterprises, government agencies, and other organizations worldwide. The company offers unified communications, team collaboration, video conferencing, contact center, data and analytics, communication APIs, and other services. It provides 8x8 Work, a self-contained end-to-end united communications solution that delivers enterprise voice with public switched telephone network connectivity, video meetings, and unified messaging, as well as direct messages, public and private team messaging rooms, and short and multimedia services; 8x8 Contact Center, a multi-channel cloud-based contact center solution; and 8x8 CPaaS, a set of global communications Platform-as-a-Service. The company also offers and X1 through X4 and X5 through X8, which provide enterprise-grade voice, unified communications, and video meetings and team collaboration, and contact center solutions. It markets its services to end users through search engine marketing and optimization, third-party lead generation sources, industry conferences, trade shows, Webinars, and digital advertising channels, as well as direct sales organization. The company was incorporated in 1987 and is headquartered in Campbell, California.
How the Company Makes Money8x8, Inc. generates revenue primarily through its subscription-based model. Customers pay recurring fees for access to its cloud communication services, which include voice, video, messaging, and contact center solutions. The company offers tiered pricing plans, which vary based on the size of the business and the specific features they require. Additional revenue streams include professional services, such as implementation and training, as well as hardware sales like phones and other communication devices. Strategic partnerships with telecom providers and technology companies further enhance 8x8's market reach and revenue potential, while continuous investment in R&D ensures the company remains competitive in the evolving cloud communications market.
8X8 Financial Statement Overview
Summary
8X8 demonstrates strong gross profitability and improving cash flows, but struggles with profitability and high leverage pose risks. While some financial metrics are trending positively, consistent revenue growth and debt management are critical for future stability.Income Statement
8X8 shows modest improvement in revenue growth but still struggles with profitability. The TTM gross profit margin is strong at 68%, indicating effective cost management. However, negative net profit margins due to ongoing losses point to challenges in achieving profitability. Revenue growth is inconsistent, with a decline in the latest annual period.―
Balance Sheet
The company has significant debt, with a high debt-to-equity ratio of 2.44 in the latest TTM period, indicating high leverage. Stockholders' equity has decreased over time, reducing the equity ratio to 16.2%. The return on equity remains negative due to continued net losses, posing a risk to financial stability.45
Cash Flow
Cash flows are improving, with positive operating cash flow and free cash flow in the TTM period. The operating cash flow to net income ratio is strong at -1.55, reflecting better cash generation despite net losses. Free cash flow growth is positive, but high financing outflows show reliance on external funding.―
| Breakdown | ||||
| Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 | Mar 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 728.71M | 743.94M | 638.13M | 532.34M | 446.24M | Gross Profit |
| 503.80M | 502.46M | 390.57M | 302.19M | 245.01M | EBIT |
| -27.60M | -66.29M | -154.14M | -146.15M | -159.82M | EBITDA |
| 23.06M | 14.82M | -102.68M | -100.91M | -118.69M | Net Income Common Stockholders |
| -67.59M | -73.14M | -175.38M | -165.59M | -172.37M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 117.31M | 137.63M | 136.05M | 152.87M | 170.85M | Total Assets |
| 755.98M | 840.88M | 910.27M | 678.41M | 700.64M | Total Debt |
| 477.63M | 568.87M | 537.46M | 403.83M | 389.86M | Net Debt |
| 361.37M | 457.47M | 446.25M | 291.30M | 252.47M | Total Liabilities |
| 654.02M | 740.98M | 727.90M | 517.90M | 509.91M | Stockholders Equity |
| 101.96M | 99.91M | 182.37M | 160.50M | 190.73M |
| Cash Flow | Free Cash Flow | |||
| 62.05M | 33.90M | 10.17M | -49.31M | -161.31M | Operating Cash Flow |
| 78.98M | 48.79M | 34.68M | -14.07M | -93.91M | Investing Cash Flow |
| 8.55M | 6.05M | -159.98M | -36.32M | -106.29M | Financing Cash Flow |
| -83.41M | -37.78M | 105.42M | 13.19M | 72.09M |
8X8 Technical Analysis
Neutral
1.83
Price Trends
1.97
Negative
2.38
Negative
2.35
Negative
Market Momentum
-0.05
Negative
50.16
Neutral
55.46
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EGHT, the sentiment is Neutral. The current price of 1.83 is above the 20-day moving average (MA) of 1.72, below the 50-day MA of 1.97, and below the 200-day MA of 2.35, indicating a neutral trend. The MACD of -0.05 indicates Negative momentum. The RSI at 50.16 is Neutral, neither overbought nor oversold. The STOCH value of 55.46 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for EGHT.
8X8 Risk Analysis
8X8 disclosed 40 risk factors in its most recent earnings report. 8X8 reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
8X8 Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
64 Neutral | $364.87M | ― | -0.32% | ― | 18.51% | 97.57% | |
63 Neutral | $241.89M | 16.46 | 9.33% | 3.88% | -1.13% | 61.49% | |
60 Neutral | $10.83B | 10.47 | -6.71% | 2.99% | 7.73% | -12.97% | |
51 Neutral | $230.46M | ― | -40.78% | ― | -2.23% | 19.48% | |
50 Neutral | $198.08M | ― | -24.47% | ― | -8.39% | 7.79% | |
49 Neutral | $173.28M | ― | -22.66% | ― | -25.43% | -135.09% | |
47 Neutral | $362.96M | ― | -26.43% | ― | -16.95% | -2.47% |
* Technology Sector Average
Performance Comparison
EGHT
8X8
1.83
-0.98
-34.88%
AUDC
Audiocodes
8.44
-1.15
-11.99%
BAND
Bandwidth
13.86
-7.66
-35.59%
NVTS
Navitas Semiconductor
1.90
-2.79
-59.49%
ONTF
ON24
4.73
-1.59
-25.16%
SMRT
SmartRent
0.88
-1.51
-63.18%
8X8 Earnings Call Summary
Earnings Call Date:Feb 04, 2025
(Q3-2025)
| % Change Since: -35.56%|
Next Earnings Date:May 19, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a company in transition with strong financial discipline and cash flow generation, offset by challenges like FX headwinds and the ongoing Fuze platform transition. Positive strides in product innovation, customer satisfaction, and debt reduction highlight potential for future growth despite current market challenges.Q3-2025 Updates
Positive Updates
Record Operating Cash Flow
Achieved record cash flow from operations of $27.2 million, marking the 16th consecutive quarter of positive cash flow and non-GAAP operating profit.
Service Revenue and Operating Margin Success
Service revenue exceeded the midpoint of guidance by $1 million, and operating margin was slightly above the midpoint, demonstrating resilience despite a $2.2 million FX headwind.
Debt Reduction
Reduced total debt from $548 million in August 2022 to approximately $354 million, a 35% decrease, with $33 million repaid in the quarter and $15 million in early January.
AI and New Product Growth
New product MRR increased more than 60% year-over-year, driven by growth in AI-based intelligent customer assistance and secure payments.
Customer Satisfaction and Industry Recognition
Customer satisfaction scores in the mid- to high-90% range and recognition in Newsweek’s annual Excellence 1000 Index.
Negative Updates
Foreign Exchange Headwinds
Approximately $2.2 million FX headwind impacted revenue, and a $4.5 million reduction in annual revenue guidance due to FX changes.
Fuze Platform Transition Challenges
Ongoing revenue headwinds from Fuze customer upgrades, with remaining Fuze base accounting for approximately 5% of service revenue.
Market Dynamics and Uncertainty
Challenging market conditions, particularly in the UCaaS space, with aggressive pricing and competition.
Company Guidance
During the third quarter of fiscal 2025, 8x8, Inc. demonstrated strong financial performance and strategic progress, achieving service revenue of $173.5 million, which exceeded the midpoint of their guidance by $1 million despite facing a foreign exchange headwind of approximately $2 million. The company maintained a gross margin of 69.5% and recorded an operating margin of 10.7%, slightly above guidance expectations. Additionally, 8x8 generated a record $27.2 million in operating cash flow, marking their 16th consecutive quarter of positive cash flow from operations. The company continued to prioritize debt reduction, lowering their total debt by $33 million during the quarter and an additional $15 million in early January, resulting in a 35% decrease in total debt from a peak of $548 million in August 2022 to approximately $354 million. The strategic focus on multi-product customers led to an over 60% year-over-year increase in New Product Monthly Recurring Revenue (MRR), driven by AI-based intelligent customer assistance and secure payment solutions. The company is on track to complete the transition of Fuze customers to their platform by the end of 2025, with remaining Fuze service revenue reduced to 5%. Looking forward, 8x8 anticipates service revenue for the fourth quarter of fiscal 2025 to range between $170 million and $175 million, while total revenue is expected to be between $175 million and $181 million, incorporating a $2.3 million impact from foreign exchange rates.8X8 Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
8×8 Strengthens Board with New Director Appointment
Positive
Nov 18, 2024
8×8, Inc. has appointed John Pagliuca, CEO of N-able, to its Board of Directors, bringing extensive leadership experience in the SaaS industry. Pagliuca’s expertise in driving revenue and business growth is expected to be a valuable asset to 8×8, which focuses on enhancing customer experience through integrated communication solutions. With this appointment, 8×8 aims to strengthen its board as it continues to innovate and expand in the business communications market.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.