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8x8 (NYSE:EGHT) Reports Q4 In Line With Expectations, Growth To Accelerate Next Year


Adam Hejl /
2022/05/10 4:41 pm EDT
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Business communications software company 8x8 (NYSE:EGHT) reported results in line with analyst expectations in Q4 FY2022 quarter, with revenue up 25.3% year on year to $181.3 million. However, guidance for the next quarter was less impressive, coming in at $186.5 million at the midpoint, being 0.07% below analyst estimates. 8x8 made a GAAP loss of $45.5 million, down on its loss of $45 million, in the same quarter last year.

Is now the time to buy 8x8? Access our full analysis of the earnings results here, it's free.

8x8 (EGHT) Q4 FY2022 Highlights:

  • Revenue: $181.3 million vs analyst estimates of $180.8 million (small beat)
  • EPS (non-GAAP): $0.05 vs analyst estimates of $0 ($0.05 beat)
  • Revenue guidance for Q1 2023 is $186.5 million at the midpoint, roughly in line with what analysts were expecting
  • Management's revenue guidance for upcoming financial year 2023 is $782.5 million at the midpoint, missing analyst estimates by 0.49% and predicting 22.6% growth (vs 19.8% in FY2022)
  • Free cash flow of $10.5 million, up 24.2% from previous quarter
  • Customers: 1,320 customers paying more than $100,000 annually
  • Gross Margin (GAAP): 62.2%, up from 57.7% same quarter last year

“We improved non-GAAP operating profitability in every quarter of fiscal 2022 and achieved a non-GAAP operating profit for the year,” said Dave Sipes, Chief Executive Officer at 8x8,

Founded in 1987, 8x8 (NYSE:EGHT) provides software for organizations to efficiently communicate and collaborate with their customers, employees, and partners.

Work is becoming more distributed, both across geographies and devices. In order for businesses to keep functioning efficiently, they need to be able to communicate as well as they did when the teams were co-located, which drives the demand for integrated communication platforms.

Sales Growth

As you can see below, 8x8's revenue growth has been solid over the last year, growing from quarterly revenue of $144.7 million, to $181.3 million.

8x8 Total Revenue

This quarter, 8x8's quarterly revenue was once again up a very solid 25.3% year on year. On top of that, revenue increased $24.4 million quarter on quarter, a very strong improvement on the $5.31 million increase in Q3 2022, which shows re-acceleration of growth, and is great to see.

Guidance for the next quarter indicates 8x8 is expecting revenue to grow 25.7% year on year to $186.5 million, improving on the 21.7% year-over-year increase in revenue the company had recorded in the same quarter last year. For the upcoming financial year management expects revenue to be $782.5 million at the midpoint, growing 22.6% compared to 19.8% increase in FY2022.

In volatile times like these we look for robust businesses with strong pricing power. Unknown to most investors, this company is one of the highest-quality software companies in the world, and their software products have been the default standard in critical industries for decades. The result is an impressive business that is up an incredible 18,152% since the IPO. You can find it on our platform for free.

Large Customers Growth

You can see below that at the end of the quarter 8x8 reported 1,320 enterprise customers paying more than $100,000 annually, an increase of 413 on last quarter, which includes enterprise customers from the recent acquisition of Fuze.

8x8 customers paying more than $100,000 annually

Key Takeaways from 8x8's Q4 Results

With a market capitalization of $952.5 million 8x8 is among smaller companies, but its more than $136 million in cash and positive free cash flow over the last twelve months put it in a very strong position to invest in growth.

We were glad to see that the revenue guidance for the next year indicates acceleration, although it did miss analyst's expectations. Overall, this quarter's results seemed ok, showing the company is staying on target. The company is flat on the results and currently trades at $7.74 per share.

Should you invest in 8x8 right now? It is important that you take into account its valuation and business qualities, as well as what happened in the latest quarter. We look at that in our actionable report which you can read here, it's free.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

The author has no position in any of the stocks mentioned.