CCaaS and CPaaS take centre stage for 8×8 in its latest earnings call, as it suggests it is “migrating” away from being “UC-led”.
8×8 met or exceeded estimates for total revenue for FY24 Q2 ($185 million), with Samuel Wilson, CEO at 8×8, saying that 8×8’s CPaaS business was “a significant driver of the quarter-on-quarter growth” for the company, highlighting its new Omni Shield product, which intends to safeguard organisations from fraudulent SMS activity.
Wilson also underlined that the adoption of 8×8’s recently launched CCaaS product portfolio continues to accelerate, stressing the impact of its new AI-powered intelligent customer assistant. The AI assistant facilitated 50 percent quarter-over-quarter growth in self-service conversations. There was also the enhanced 8×8 Contact Center, featuring native secure video interaction functionality, which improved the product.
The significant impact of its CCaaS and CPaaS arms towards 8×8’s Q2 results also reflects the adjusted influence of its UCaaS services as the company looks to move away from UC as its business nucleus. Although the company released several UC-based updates last quarter, including “Conversational IQ” for UCaaS, bringing contact centre-level speech analytics into unified communications frameworks, there has been an apparent change in strategic direction.
Lisa Martin, Chief Revenue Officer at 8×8, articulated this point during the call:
We are transforming our organization as our go-to-market motions, migrating from UC-led to contact center-led, and from a single product focus to a portfolio of products.”
Martin herself arrived at 8×8 in June, bringing extensive experience with contact centre businesses. 8×8’s new Chief Marketing Officer, Bruno Bertini, also has an experienced contact centre background.
The ambition to tweak 8×8’s core focus from UC to being a contact centre-led organisation and to expand beyond 8×8’s XCaaS solution to a more holistic ecosystem of products was echoed in the call by Wilson.
“8×8 is in the early stages of transforming our XCaaS communications and contact centre platform into a complete AI-powered customer engagement platform and ecosystem,” Wilson said. “We are seeing early success with increasing customer adoption of multiple products in our portfolio and higher customer satisfaction.”
Other aspects of product innovation include the arrival of the 8×8 Phone App for Microsoft Teams and the company surpassing 400,000 user licenses of 8×8 Voice for Teams.
Key financial findings include 8×8’s total revenue of $185 million, which fell short of FY23 Q2’s $187.4 million but still met or surpassed estimates for the quarter. Cash flow from operations grew 26 percent year-over-year to $17.5 million, while non-GAAP operating profit was recorded at $23.8 million, an increase of 162 percent compared to FY23 Q2’s $9.1 million.
While total revenues and operating margins met or surpassed estimates for the quarter, the earnings call wasn’t entirely positive. Wilson noted continued downsell and a decline in Fuze’s customer base. “The number of lost Fuze customers decreased significantly measured by logos quarter-on-quarter, and we are accelerating the pace of customer upgrades on the 8×8 platform,” Wilson explained.
A Year of Change at the Top for 8×8
Wilson was appointed as 8×8’s CEO in May, having acted as interim CEO since November 2022, assuming the role after 8×8 terminated the contract of then-CEO Dave Sipes with immediate effect. Wilson performed the CEO duties while the company underwent a widespread candidate search following Sipes’ departure, but Wilson was entrusted with the position permanently just before this summer.
This appointment was swiftly followed with the arrivals of Martin, Bertini and new CFO, Kevin Kraus.
Kraus had served as 8×8’s interim CFO since November, replacing Wilson in the role after Wilson was promoted to interim CEO. Before that position, Kraus was 8×8’s Senior Vice President of Finance under Wilson, responsible for financial planning, analysis, and procurement functions.
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