8×8 has finished the financial year 2023 with a strong fourth quarter, with revenue growing two percent to $184.5 million.

The company’s $250 million acquisition of Fuze has started paying off, with $26.9 million of the total quarterly revenue and $111.3 million of revenue for the financial year.

8×8 can continue paying off its debts, reward its shareholders, and plough money into technological innovations.

Samuel Wilson, 8×8 Interim Chief Executive Officer, reflected on the past year:

“Fiscal 2023 was a year of milestones for 8×8 as we continued to invest in innovation while increasing our profitability and cash flow.

“We achieved record service and total revenue, completed the integration of Fuze operations, extended the global coverage of our communications platform, and introduced platform-wide integration of generative AI from OpenAI.”

Despite a couple of blips, such as its lower-than-expected total revenue last quarter, the year has ended on a high with a strong fourth quarter.

It is a far cry from FY 2020, Wilson reminded us, in which the company reported a non-GAAP operating loss of $61 million.

The 8×8 CEO has not been in the job long, taking over from Dave Sipes at the end of November last year.

The reasons for Sipes’ exit and, indeed, Wilson’s entry to the position were never publicised, but no doubt the board will be pleased with the latest quarterly results under Wilson’s stewardship.

Q4 in Review

Overall traffic for unified communications (UC) and contact centre (CC) has been increasing with a global network of carriers and an efficient traffic allocation model for carriers.

Wilson cast doubt on the findings of a U.S.-based wholesale carrier, which blamed a decline in voice traffic on a lack of demand from UCaaS Gartner Magic Quadrant leaders.

In March, 8×8 integrated AI across its products, including OpenAI’s Whisper model.

Intelligent Customer Assistant, Supervisor Workspace, and 8×8 Contact Center have also been integrated with AI/ML natural language tools.

Wilson commented on its work with AI and machine learning: “Artificial intelligence and machine learning have catapulted into the public eye with ChatGPT, but 8×8 has been preparing for this moment, building our experience and talents back along this potentially evolutionary technology lead.

“We are pursuing an ecosystem path and have partnered with a number of players, including most of the companies in the leaders of various quadrants with Gartner.”

AI and machine learning represent part of the offering underlying its “customer obsessed” branding that it launched in the past quarter, alongside agile workforce capabilities and customer experience solutions.

Agile workforce capabilities include the 8×8 work app, integration with Microsoft Teams, extending voice services to work-from-home users, enabling movement across devices and locations, and more.

Customer experience solutions that build into the customer obsessed branding come through 8×8’s unified platform, which combines UC and CC.

The market size for a combined solution, according to Wilson, is at least twice the size of either the UC or CC stand-alone market.

Wilson said in February this year that opportunities on stand-alone products are increasingly rare, which coincides with 8×8’s move to using its UC customer base to drive its CCaaS offerings.

Fuze

Fuze was acquired last year to bolster 8×8’s eXperience Communications as a Service (XCaaS) strategy by expanding operations and extending its global presence.

Early into the acquisition of Fuse, it was already driving growth for 8×8 and bringing more customers to the company. It also achieved the milestone of 50 countries with sales operations.

At the Q4 2022 earnings call, the former CEO, Dave Sipes, said that the acquisition of Fuze had already led to nearly 300 new customers

It is now celebrating its first anniversary under 8×8 and, from here on, its results will be grouped together with the company’s earnings results.

Executing Future Plans

Kraus shared the company’s revenue predictions going forward, with the total Q1 2024 revenue predicted to be in the range of $186 million to $188 million.

The total revenue of 2024 is expected to be in the range of $755 million to $763 million.

Wilson said the company is planning to spend $100 million a year in research and development for the future.

He told analysts that it will allocate $250 million to benefit investors through debt repayment and, if possible, share repurchases.

This decision is reflective of the Board of Directors’ confidence in the company’s future, the 8×8 CEO said.

Since August 2022, the company has made voluntary prepayments, which total $58 million, including a $25 million pre-payment earlier this week.

Wilson was optimistic about the future, concluding that although there is a lot of work ahead, they have a plan. As this quarter goes to show, he said, they know how to execute it.

 

 



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