8x8, Inc. — Second Quarter Fiscal 2027 Earnings Summary

Financial Performance:

• Total revenue increased 4% year-over-year to $192.0 million for the quarter ended September 30, 2026, compared to $184.1 million in the prior year period.
• Service revenue increased 5% year-over-year to $187.8 million, compared to $179.1 million in the prior year period.
• GAAP gross margin was 60%, down from 65% in the second quarter of fiscal 2026; Non-GAAP gross margin was 60%, down from 66% in the prior year period.
• GAAP operating income was $6.9 million, up from $5.3 million in the prior year period.
• Non-GAAP operating income was $20.7 million, up from $17.3 million in the prior year period.
• GAAP net income was $3.4 million, compared to $0.8 million in the prior year period.
• Non-GAAP net income was $17.6 million, up from $13.1 million in the prior year period.
• Cash provided by operating activities was $13.1 million for the quarter, compared to $8.8 million in the prior year period.
• Cash, cash equivalents, and restricted cash totaled $102.6 million as of September 30, 2026, compared to $95.0 million at the end of fiscal 2026.
• Total principal debt outstanding was $309.4 million as of September 30, 2026, down from $323.9 million at the end of fiscal 2026.

Guidance and Future Outlook:

• Management raised full-year fiscal 2027 outlook for revenue, profitability, and cash flow from operations following second quarter outperformance.
• Third Quarter (ending December 31, 2026) Service revenue guidance is $184 million to $188 million; Total revenue guidance is $188 million to $192 million.
• Third Quarter Non-GAAP gross margin guidance is 58.0% to 60.0%; Non-GAAP operating margin guidance is 8.0% to 10.0%.
• Third Quarter Non-GAAP net income per share (diluted) guidance is $0.08 to $0.09.
• Third Quarter Cash flow from operations guidance is $11 million to $13 million.
• Fiscal Year 2027 Service revenue guidance is $732 million to $752 million; Total revenue guidance is $750 million to $770 million.
• Fiscal Year 2027 Non-GAAP gross margin guidance is 59.7% to 60.2%; Non-GAAP operating margin guidance is 9.1% to 10.1%.
• Fiscal Year 2027 Non-GAAP net income per share (diluted) guidance is $0.36 to $0.40.
• Fiscal Year 2027 Cash flow from operations guidance is $49 million to $54 million.

Business Segments and Product Lines:

• 8x8 Agent Workspace now includes Customer 360, providing agents with full interaction history, AI sentiment insights, and topic insights.
• 8x8 AI Studio enables agents to run across voice, SMS, WhatsApp, 8x8 Work, and web with a single build, recognizing returning callers instantly.
• 8x8 JourneyIQ is available on the 8x8 App Store, visualizing voice interactions across 8x8 Engage, Work, Contact Center, and AI Studio.
• The 8x8 for Salesforce Chrome Extension maintains functionality as Salesforce phases out Open CTI, ensuring screen pop and interaction logging continue without extra licenses.
• Call as Company feature allows users to display the company number instead of individual work numbers for consistent caller ID.
• 8x8 offers RCS Business Messaging in Singapore through Singtel, supporting verified messages with images, video, carousels, and action buttons.
• 8x8 AI Studio supports GDPR compliance and HIPAA-readiness through privacy-by-design practices and applicable Data Processing Addendums.
• 8x8's session border controller technology earned Microsoft certification for Direct Routing and Operator Connect, allowing external calling into Microsoft Teams without third-party gateways.

Market and Competitive Landscape:

• Recognized as a Leader in the Omdia Universe: Contact Center as a Service (CCaaS), 2026.
• Named a Major Player in the IDC MarketScape: Worldwide Agentic Contact Center-as-a-Service Platforms 2026 Vendor Assessment.
• Recognized as a Leader in the Metrigy UCaaS + CCaaS MetriRank 2026.
• Won four Stevie Awards in The 2026 International Business Awards, including Gold for Technology Team of the Year.
• Named a winner in TMCNet's 2026 Communications Solutions Product of the Year awards for 8x8 Work.

Risks and Challenges:

• Forward-looking statements are subject to risks including lower-than-anticipated customer adoption and demand.
• Potential impacts from economic downturns, political volatility, and debt market worsening.
• Competitive dynamics in cloud communication markets and competitor use of AI may change unexpectedly.
• Risks regarding third-party intellectual property ownership assertions limiting core technology use.
• Potential for higher customer churn rates than anticipated.
• Investments in new products and acquisitions may not generate expected revenue or efficiencies.
• GAAP margin and net income per share forecasts are excluded from guidance due to the difficulty in predicting stock-based compensation, hiring, and acquisition-related expenses.

Management Commentary and Tone:

• CEO Samuel Wilson highlighted the sixth consecutive quarter of year-over-year revenue growth and expressed confidence in building on the growing business.
• Management stated that AI is increasing the value of conversations powered by the platform and that their global voice network, unified platform, and native AI development environment position them to capture this opportunity.
• CFO Kevin Kraus emphasized a financial model designed for long-term value creation, focusing on cash generation and disciplined capital allocation.
• Management noted progress in reducing debt to support ongoing refinancing efforts ahead of the August 2027 term loan maturity.

Other Key Points:

• In early October, the company repaid $12.5 million of term loan principal, reducing the remaining term loan principal to $95.0 million.
• Leadership appointments include Jamie Snaddon as Chief Strategy Officer, Nerea Gandarias as Managing Director, EMEA, and Boris Grinshpun as Global Vice President, Product Management.
• The company plans to host a conference call on November 4, 2026, at 2:00 p.m. Pacific Time to discuss results.
• The company does not reconcile forward-looking non-GAAP gross margin, operating margin, or net income per share to GAAP measures due to the variability of excluded items like stock-based compensation and transaction costs.