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8X8 Inc (EGHT)
NASDAQ:EGHT
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8X8
(NASDAQ:EGHT)
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Rating:48Neutral
Price Target:
$2.00
▲(3.09% Upside)
8X8's overall stock score reflects strong revenue growth and innovation in AI, but is weighed down by financial instability, high leverage, and profitability challenges. Technical indicators and valuation metrics further contribute to a cautious outlook.
Positive Factors
Revenue Growth
Consistent revenue growth indicates strong demand for 8X8's services, suggesting a robust market position and effective business model.
AI and Innovation
AI integration enhances product offerings, potentially increasing customer retention and attracting new clients, supporting long-term growth.
Debt Reduction
Significant debt reduction improves financial stability and flexibility, allowing for potential reinvestment in growth initiatives.
Negative Factors
High Leverage
High leverage poses financial risks, limiting the company's ability to invest in growth and increasing vulnerability to economic downturns.
Profitability Challenges
Ongoing profitability issues indicate operational inefficiencies, which could hinder long-term financial health and shareholder returns.
Gross Margin Decline
Declining gross margins could pressure profitability, impacting the company's ability to sustain competitive pricing and invest in innovation.
8X8 (EGHT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$267.58M
Dividend YieldN/A
Average Volume (3M)600.93K
Price to Earnings (P/E)―
Beta (1Y)1.61
Revenue Growth0.25%
EPS Growth92.10%
CountryUS
Employees1,948
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)0.09
Shares Outstanding138,640,370
10 Day Avg. Volume592,603
30 Day Avg. Volume600,928
Financial Highlights & Ratios
PEG Ratio0.15
Price to Book (P/B)2.12
Price to Sales (P/S)0.36
P/FCF Ratio5.18
Enterprise Value/Market Cap2.26
Enterprise Value/Revenue0.84
Enterprise Value/Gross Profit1.25
Enterprise Value/Ebitda13.19
Forecast
1Y Price Target
$2.25Price Target Upside15.98% Upside
Rating ConsensusHold
Number of Analyst Covering4
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
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 generates revenue primarily through subscription-based models where customers pay for access to its cloud communications services. Key revenue streams include monthly subscription fees from businesses using its VoIP, video, and messaging services, as well as additional charges for premium features and usage-based services. The company also benefits from long-term contracts with enterprise clients, which provide a steady income stream. Significant partnerships with technology providers and integrations with popular business applications enhance its service offerings, attract new customers, and drive additional revenue through cross-selling opportunities.
8X8 Earnings Call Summary
Earnings Call Date:Nov 04, 2025
(Q2-2026)
| % Change Since: |
Next Earnings Date:Feb 04, 2026
Earnings Call Sentiment Neutral
The earnings call highlighted positive aspects such as revenue growth, AI innovation, and significant debt reduction. However, it also addressed challenges like the decline in gross margin, potential revenue decline in Q3, and pricing pressures in the U.S. market. Overall, the positive developments in AI and usage revenue are balanced with the financial and market challenges.Q2-2026 Updates
Positive Updates
Revenue Growth
Q2 marked the second consecutive quarter of year-over-year revenue growth. Total revenue was $184.1 million, and service revenue was $179.1 million, both exceeding the high end of guidance by roughly $4 million. Service revenue grew nearly 6% year-over-year, excluding revenue from Fuze customers.
AI and Innovation
8x8 is embedding AI throughout its platform, including real-time call summarization and AI-powered transcription. The company launched 8x8 Workforce Management for free, marking their first product-led growth launch, and plans to add more applications to the 8x8 App Store.
Usage Revenue Surge
Usage revenue, which includes CPaaS communication API, saw another record performance, totaling approximately 19% of service revenue compared to 13% in Q2 '25.
Debt Reduction
The company continues to allocate capital to debt reduction. They reduced their debt principal by $224 million or 41% since August 2022 peak debt of $548 million.
Negative Updates
Gross Margin Decline
Gross margin was 65.7%, down sequentially due to the mix shift toward usage revenue, which carries a lower margin profile.
U.S. Market Challenges
The U.S. business is not performing as well as the international business, with price compression and competition affecting performance.
Potential Revenue Decline
Revenue guidance for Q3 reflects a sequential decline due to record usage revenue in Q2 and the ongoing wind down of Fuze-related revenue.
Pricing Pressure
There is pricing pressure in the market, particularly from competitors, affecting renewals and potentially impacting revenue.
Company Guidance
During the 8x8 Inc. Second Quarter 2026 Earnings Conference Call, the company provided updated guidance for fiscal Q3 and the full fiscal year 2026. For Q3, 8x8 anticipates service revenue between $172 million and $177 million, with total revenue expected to be between $177 million and $182 million. Gross margins are projected to range from 64% to 66%, while operating margins are forecasted between 9% and 10%. The company expects fully diluted non-GAAP earnings per share to be in the range of $0.08 to $0.09, with cash flow from operations estimated between $10 million and $14 million. For the full fiscal year 2026, service revenue is anticipated between $692 million and $706 million, with total revenue ranging from $712 million to $726 million. Gross margins are expected to be between 65% and 66%, and operating margins are projected to be between 8.5% and 9.5%. The company expects non-GAAP earnings per share to be in the range of $0.31 to $0.33, with cash flow from operations estimated between $38 million and $42 million. These projections reflect a cautious approach given potential variability in usage-based revenue and the ongoing wind-down of Fuze-related revenue.8X8 Financial Statement Overview
Summary
8X8 shows strong revenue growth but struggles with profitability and financial stability. High leverage and low margins indicate financial risk, despite efficient cash flow management.Income Statement
8X8's income statement shows a mixed performance. The company has achieved a positive revenue growth rate of 43.1% in the TTM, indicating strong sales momentum. However, the net profit margin remains negative at -0.82%, reflecting ongoing profitability challenges. The gross profit margin is healthy at 66.67%, but the EBIT and EBITDA margins are relatively low at 1.51% and 2.41%, respectively, suggesting limited operational efficiency.Balance Sheet
The balance sheet reveals a high debt-to-equity ratio of 2.06, indicating significant leverage and potential financial risk. The return on equity is negative at -17.95%, highlighting profitability issues. The equity ratio stands at 19.85%, suggesting a moderate level of equity financing. Overall, the balance sheet reflects financial instability and a need for improved capital structure management.Cash Flow
Cash flow analysis shows a decline in free cash flow growth by -4.69% in the TTM, indicating potential cash generation issues. However, the operating cash flow to net income ratio is positive at 0.29, suggesting some ability to convert earnings into cash. The free cash flow to net income ratio is strong at 0.91, indicating efficient cash flow management relative to net income.| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 718.65M | 715.07M | 728.71M | 728.71M | 638.13M | 532.34M |
| Gross Profit | 482.02M | 485.27M | 503.80M | 503.80M | 390.57M | 302.19M |
| EBITDA | 45.82M | 44.01M | 23.06M | 23.06M | -102.68M | -100.91M |
| Net Income | -11.01M | -27.21M | -67.59M | -67.59M | -175.38M | -165.59M |
Balance Sheet | ||||||
| Total Assets | 683.18M | 683.18M | 755.98M | 841.81M | 910.27M | 678.41M |
| Cash, Cash Equivalents and Short-Term Investments | 88.05M | 88.05M | 117.31M | 137.63M | 136.05M | 152.87M |
| Total Debt | 410.26M | 410.26M | 477.63M | 568.87M | 537.46M | 403.83M |
| Total Liabilities | 560.97M | 560.97M | 654.02M | 741.90M | 727.90M | 517.90M |
| Stockholders Equity | 122.20M | 122.20M | 101.96M | 99.91M | 182.37M | 160.50M |
Cash Flow | ||||||
| Free Cash Flow | 61.32M | 50.09M | 62.05M | 33.90M | 10.17M | -49.31M |
| Operating Cash Flow | 72.18M | 63.55M | 78.98M | 48.79M | 34.68M | -14.07M |
| Investing Cash Flow | -16.66M | -16.42M | 8.55M | 6.05M | -159.98M | -36.32M |
| Financing Cash Flow | -101.27M | -75.11M | -83.41M | -37.78M | 105.42M | 13.19M |
8X8 Technical Analysis
Negative
1.94
Price Trends
1.98
Negative
1.99
Negative
1.92
Negative
Market Momentum
-0.02
Positive
41.55
Neutral
25.93
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EGHT, the sentiment is Negative. The current price of 1.94 is below the 20-day moving average (MA) of 2.03, below the 50-day MA of 1.98, and above the 200-day MA of 1.92, indicating a bearish trend. The MACD of -0.02 indicates Positive momentum. The RSI at 41.55 is Neutral, neither overbought nor oversold. The STOCH value of 25.93 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for EGHT.
8X8 Risk Analysis
8X8 disclosed 41 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
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $3.27B | 33.08 | 6.51% | ― | 1.47% | 1077.70% | |
66 Neutral | $637.89M | 97.93 | 6.53% | ― | 3.62% | -20.45% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
55 Neutral | $2.47B | 205.51 | ― | ― | 5.45% | ― | |
48 Neutral | $351.11M | -5.00 | ― | ― | -0.14% | 21.60% | |
48 Neutral | $267.58M | -43.11 | -4.88% | ― | 0.25% | 92.10% |
* Technology Sector Average
EGHT
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1.91
-0.68
-26.25%
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.