8x8 (EGHT) Q1 2025 earnings summary

Executive summary

• Q1 FY25 total revenue was $178.1 million, with service revenue at $172.8 million, both declining year-over-year by 2.8% and 1.4% respectively, but net loss narrowed to $10.3 million from $15.3 million.

• Achieved 14 consecutive quarters of non-GAAP operating profit and positive operating cash flow, with non-GAAP operating margin at 11.3%.

• Early repayment of $225 million term loan, replaced by a $200 million credit facility at a lower interest rate, reflecting lender confidence.

• Continued innovation in AI-powered communications, platform enhancements, and new product launches, driving adoption among enterprise customers.

• Transformation initiatives and multi-product adoption are driving momentum, especially in contact center and CPaaS segments.

Financial highlights

• Service revenue was $172.8 million (97% of total), down 1.4% YoY; total revenue was $178.1 million, down 2.8% YoY.

• Gross profit margin (GAAP) was 67.9%, down from 70.2% YoY; non-GAAP gross margin was 70.6%.

• Adjusted EBITDA was $25.8 million (14.5% margin); non-GAAP operating profit was $20.1 million.

• Operating cash flow for the quarter was $18.1 million; cash and equivalents at quarter end were $130.8 million.

• Stock-based compensation expense was $13.6 million, under 8% of revenue, with a shift to more cash compensation.

Outlook and guidance

• FY2025 service revenue guidance: $685M–$707M; total revenue: $710M–$732M; non-GAAP operating margin: 10%–11%; non-GAAP EPS: $0.32–$0.35.

• Q2 FY25 service revenue expected between $170M and $174M; total revenue between $175M and $181M.

• Operating cash flow for the year projected at $59M–$64M.

• Guidance reflects macroeconomic headwinds, customer churn, and variability in contract terms.

• ARR metric discontinued due to shift toward usage-based revenue.