EGHT - Earnings call transcript Q1 2019

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Operator

Good afternoon. My name is Chris and I will be your conference operator today. At this time, I would like to welcome everyone to the 8x8 Fiscal Q1 2019 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. you. Thank Instructions] [Operator of you Head conference. begin Investor Hyde-Dunn, may Relations, the Victoria

Victoria Hyde-Dunn

are Executive you, welcome Chief conference XXXX today and Good Financial call. Verma, XxX’s me Thank afternoon quarter Officer. to operator. Ellen and Officer Mary first fiscal With Vik Genovese, Chief earnings

to at The GAAP in Our today website reconciliations would be this of this are available answers. that Investor of prepared release, Relations presentation, our by questions remarks website accompany A format press followed and the call section on include posted I and like variety results Reform could for XXXX. performance, will replay earnings XxX.com. result These non-GAAP to to participants call days. XX will our pursuant the actual conference this Safe guarantees a of and a statements Harbor our are Act call of not factors. the during of Litigation any remind provision future materially statements Securities made all forward-looking as are of of differ that Private

those concerning available our now XX-Q, recent on find risk is information With and of turn Investor I’d to Additional over call website. the Vik. most Relations on and that, you can the section Forms which SEC's like in reports to website XX-K our the factors

Vik Verma

you, earnings everybody Thank Victoria. and afternoon our conference call. Good welcome to

report and it to pleased in product, ongoing happy validation made broad are expansion. business strategic go-to the seeing based believe I'm investments the market quarter returns at on also and represents have We this of very strength strong talent, across past we the plan. early our we're

who $XX.X year. excluding was the service results for the bottom was call exceeded top detail. Ellen results loss in constant currency XX% XXX pretax to is year over Non-GAAP growth expectations over the quarter Adjusting and primary Our will from grew Mary observations line. cover a financial reviewing will sequentially. spend revenue This a million. was $X.X before improvement Service point revenue and turning quarter few both over million minutes I XX%. three and basis DXI, the first on greater

quarterly solid Integrated sales channel revenue velocity growth by In bookings customer for than was monthly and for constant revenue over year our our year. particular, enterprise led bookings greater in our our billing First, excise. recurring driven midmarket partners for the over service mid-market performance and customers. demand XX% and Solutions. was over strong over Increasing from This from which by XX% part customers and $X,XXX grew in adjusting excluding currency grew year channel enterprise year

also monthly deals closed customers our enterprise represented XX of deals increase quarter. team This closed of year. number XX% greater over $XX,XXX year new large large during enterprise large as improved from the sales a performance the new with Our recurring in revenue or

increased With cloud enterprise for contact which monthly Regarding of customers bookings, booked and respect market both to recurring we new where year as deals owning mid suite to over year. our strategy continue of communications see deals, customers and center combinations resonating. we refer purchased a to complete revenue XX% integrated

five of was platform, on-premise unified including top incumbent One an analytics, quarter, with win a in customer our notable provider. to and deals company. ability software is deals jira truly customizable first deciding the enterprise were deals the During ten API, XX global The combination replacing factor integration provide about overall. Austrian a

existing and customers customer The expanded approximately including rates several add-on and They that a over unified attention revenue annual eye pleased XXX% One cloud solutions segments. communications evaluated booked across and after We XxX will healthy ultimately sells from of ability provider exams. to originally expansion a provide XxX experience adding deliver upsell of base were from provides eyeglasses because chose needing quarter, and locations. new turned than to efficient We center with to current from order replace the recent communication an significantly example which customer all past retail to more customer contact better was us are relationship of retail our member their new a also and on-premise upsell providers. installed and enterprise our seats addition their more by our mid-market customers, monthly and continued and strong operation. XX% recurring a X,XXX optometrist new and by XXX to legacy customer the store retail logos. This

to engagement solutions. as complete our integrated partners continues cloud more Turning for channel with to fully look accelerate the channel, partners

to X,XXX leading A In Cloud fact, recent locations states. “easiest honored partners. an role provider business seven deals to existing complex, who a XXX We to partner win this the be another XX was operates in channel vendor Their with our large revenues which of and factor. top were as channel communication. transportation channel outdated, ability both Contact seat and which RFP process the do “grow a within after played Cloud deciding in a cloud to with” instrumental Center a prohibitive. partner ten is solution as company was deal the distributor key XXX were over also competitive advanced platform won on-premise our and by cost communications PBX awarded in platform by assisted overly U.S. provide with” U.S. single

move engagement more third analytics. video series. system with Customers and XxX our described now the system one have of stage center, together the as natural strategy cloud. messaging, brings delivering of This communications. conferencing, enterprise intelligent of is what one cloud engagement contacts we voice, live that wave evolution next Second, of into The want communications is as collaboration, of

data own that Each out Now helps is including one and it X market. customer system sell of UK, incremental as and process simplifies It analytics, the box. customers cloud across on customers of and to purchasing when engagement technology, which solution will is development now XXcountries provides X platform calling the users that customers and engagement with release sophisticated channel own plan available model and entire of evolve. result companies or Series capabilities X cloud and across call continuous we and needs can in capabilities is across allows new over from mobile, heaven. of all natural our the a user components. efforts integrations platform. I solution that XXX to each Since X hundreds core their sales countries. from the XxX delivers means transformation we multiple acquisitions. support our research and within offering the X will pure the sale in the Series The subscription layers experience is dedicated of or years global XX the on devices only team That add this our ensure they a features, its XX a hardware. available interface the improvement works new X will on Series integrated solution a direct a for more US progression integration, for the provider functionality, because true unlimited enables benefit of XxX that through a believe complete of desktop, with game be end business We in for Series to suite changer Series tiered stairway employee to

and the the X Councils including and U.S. in “as industries intelligent communication, Okta we technology, Microsoft and manufacturing, adoption of Series UK. NetSuite, wide Zendesk, mid-market As IDC on available focus future”. and G experience Brent now has Salesforce, in integrated retail, and health Office. Applebee's already X have digitally the the Lewisham an with customer X across platform. Suite, customer the engagement care, variety Series is organizations transform Series gained adopting enterprise success saying, across Series collaboration, and in organizations X and the integrates early public of the and Integration solution has endorsed a example, particularly also sector wave an more including

more video enterprise X X Series teams a than ever. call, or connect share collaboration conference an to into teams and wide chat with room. In can a in for phone easy it turn a makes fact, ways

With collaboration and Stride. be only integrated is our solution. marketplace powerful small a open and this which More third business to customers forefront Series technology enterprise as room in offered collaboration our including importantly, are team mid-market integration fiscal both the and excited messaging same through market of XxX different on differentiator platforms to well X application migrate the in fully and follow This the customers our native future team messaging is beginning we're XX a to the provides an to Plans quarters. our integration will quarter. as in in today Slack, over approach. provider underway

for a environment is working and partners. clients, New and their conferences and can recently and planning XX and Silicon hosted time XxX. meetings better that these June no the The final at we recurring New cover event themes. an IT, prospects, communications VPs is and excited my of and engagement you outstanding, clients channel to moment hosted our spent everyone opening shape It for experience their opportunity create defining Series. a four ringing. for become the Chicago, experience. are a are York, clear during continue X event was future Valley, continue learnings and on about the I very employees we to and and customers. to was will I bell have it's for an further to innovations throughout with conferences very provide I user wanted customer with In London. Stock Through These partners CIOs to the point year speaking the exciting Exchange prospects user we customers personalized based creating as me tell conversation As the testimonials in towards frictionless offerings. doubt hear XxX from Feedback We York

a of require customers from engagement First, system the single cloud.

any enterprise remotely cloud evolve workforces experience across requires and globally device. seamless a As

have like with quality table because globe wins seen we Second, where Southeast across competitive superior stakes. deployments includes and other quality. Asia call providers markets voice the international difficulty This have is

These of infrastructure course at XX/X/XXX exceptional an that resolve analytics, require base. data, single that to XxX one be for can me employee is technology of center, contact is phone, level set the have and for team only already comprehensive imperative. truth years a and source enabled pure the core right and platform needs customer one taken confirm provider seeing what data, the mid-market affecting customer these for my opportunities meetings have a that and Fourth, clients product and forefront communications support requirements strategic one other to the are I headed. and customers discussions These our initiatives. to vision for customer the where we roadmap validate workflows, applications video and with are cloud of who messaging, partner several of to looking expertise service. serve reaffirm customer addressing collaboration. delivers their cloud want or with issue needs there them provide enterprise also over Third, XxX owned become investments believe of global any They customer four technology belief conferencing,

deliver a billion are qualified cloud. to unified We solution marketplace to as uniquely to XX to inflecting which is a we disrupt the customers continue

me invest to in revenue close decision additional growth fiscal to saying action XXXX that the XXXX and correct accelerate remains of our capital course for Let the with fiscal for company. beyond

talent, to innovation, invest drive and during pleased X to Series. Ellen. company to about Series. We awareness, that, year. engagement excited X the experiences customers the fuel and global With our the in new product I'll the the results brand continue of Mary customer of with achieved am the revenue proud exceptional over and growth, the turn to headed call start direction successful I the and expansion quarter our employee We're and through our launch deliver to we're has fiscal

Mary Ellen Genovese

a standard detailed provide results fiscal first our of revenue you, Thank ASC to will XXX. more I financial according recognition quarter review new XXXX Vik. the

We under X, method. the starting ASC retrospective have XXX April adopted modified XXXX

first included we release. as ASC press items, For the have XXXX with old results XXX statement certain a earnings and would XXX. of XXX the provide quarter Reconciliation results our been income will under standard are the ASC ASC also

was reconciliation of In all measures addition, year PowerPoint year to with non-GAAP comparison. over provided release presentation are press GAAP and indicated with A follow our earnings unless that non-GAAP back. otherwise

and mentioned continue we As fiscal our in conference deemphasizing decline expect fiscal quarter we selling approximately call, the revenue XX% are XXXX. during to standalone ContactNow product fourth to by earnings DXI

grew fourth service Gross of year This to for earnings was DXI, This service Total last for represents greater a recurring greater XX.X% prior and adjusting the enterprise in and XX%. constant the related revenue basis were and customers DXI, quarter customers of start monthly recurring telegraphed year and XX.X constant XX% year XX.X% year currency capitalized revenue previously currency grew of results guidance came in year. XXXX. with in above of currency the than and XX% compared excluding from $XX,XXX year $X,XXX of XX.X quarter XX% margin the and over million, represents sequential Adjusting quarter adjusting mid-market bill period and revenue call. fiscal improvement was recurring increased mid-market in XX% the XXX increase XX.X% revenue total Adjusting margin monthly year First excluding revenue quarter million was which growth and a DXI, excluding an over revenue. revenue increased over service range. over year. software in excluding XX.X% the over end Service for currency conference over Service our XX% compared Also bill and year. was of high to DXI. we same in fiscal Service amortization than revenue total a total revenue in our for grew constant was XX% for points. in with enterprise year constant strong from monthly in represents revenue. our XX% and in

customer XX.X the on XX.X compared fiscal which million were year or of expenses Moving with sales revenue XX% include quarter, marketing of ago same costs XX% or and first expenses operating and the revenue for million the deployment period. in also to service

was of our million commissions. As Research capitalized impact million, software expenses increased support we over our of which and development team last of of the we XX% XXX year capitalization of to approximately from development demand we loss quarter, revenue sales negative $X.XX revenue than quarter range product compared at of XX, million million X.X into generation. spend approximately share. and increasing million activities net ASC capacity X sales same of revenue. expenditures Pretax was represented platform. our are XXX expenses X.X or million flow XX.X sales from or from XXX period. operating with million XXX,XXX was of restricted and the better reclassified adding were were million and loss increase year. We Cash software X% fiscal approximately the or and Series and cash, investments new capital X.X and marketing in Net The to year-ago loss. X% June was X including mentioned XXXX XX% net and management research from and the in development quarter X million our guidance net per X.X were in capitalized first Cash, the

$XXX ago. in operating Turning quarter. revenue per compared and same average period. the up Average improvements with per year a to key to customer XX% $X,XXX grew The $X,XXX we customer ago X% enterprise in mid-market revenue saw solid $XXX the business grew compared year metrics, was and during to period same the when

total comprised over New in revenue monthly quarter. of XX% increased booking and recurring enterprise mid-market for year XX% first customers booked and year the

we in ASC over not the Before fiscal material I expect rate and year growth XXXX, our remind revenue to that everyone difference XXX. a between would do for reviewing XXX ASC like and guidance year

that rather between a continue XX our expense earnings due of the XXX of retained sale. X, XXXX than operating increased will to be as of fiscal significant $XX We XXX XX years. million lower under non-GAAP ASC commissions The due recording million from of at it time XXXX of adoption commission to and to the by prior approximately expenses capitalization estimate portion ASC million capitalization April of the

impact accounting this flow. and an or reminder, free on only operating cash a new no our standard change As is has

outlook. Now our moving financial to

XXX. which XXXX million XXX under increase. range year ASC XXX for We outlook are to XX% the to the our revenue year approximately in of million fiscal represents full reaffirming Service year financial XX% over

year of service still to range in year pretax XXX Excluding the DXI we our increase. XX%. over non-GAAP to range revenue will the growth revenue, approximately Total XX% $XX XX% of range million the loss of XX% $XX And to revenue million. be in in approximately XXX million million to anticipate representing

full-year addition new introduces the guidance, guidance. In quarterly company to

ASC of representing expect revenue we quarter under XXX, approximately second million XXXX year range year to XX% increase. service XX in the XX% the XX million to of over For

expect Excluding in to in XX%. million the our service to color fiscal non-GAAP And we the of $X the range pretax XX% revenue DXI revenue, million. some with additional the I'll of growth $X help range loss models for add year. to full

the pilot XX%. the year, a current plan in fiscal second We We expect margins thereby approximately half to that margins. second program quarter in gross phone run should improving non-GAAP of gross be subsidies reduce the to

revenue as to expenses to percentage operating approximately XX%. a non-GAAP be of expect We XX%

expect We be a as development approximately percentage expenses XX%. of capitalized software of to research revenue net and

We of XXX XX% to a net expenses expect revenue Commission to sales credits and approximately of ASC marketing be percentage XX%. as

a deployment. marketing expense customer our As support, and reminder, and sales includes professional services,

expect of percentage approximately a as We general and administrative be revenue XX%. expense to

valuation our interest cash quarter of our closer expense current estimate expect quarter. as in summary, with to income certain US $XXX,XXX the to pleased allowance We our foreign revenue and assets, against X%. jurisdictions. less performance. are Due a states we than be We full approximately to tax tax reflects be first to very tax expense deferred taxes slightly percentage each the In

service fourth quarter on our XXXX focused excluding executing and revenue revenue goal plan growth remain we fiscal the our XX% of in are We on DXI exit of XXXX. fiscal

questions. make growth that operator, to for XXXX to continue fiscal into accelerated With beyond. we enable are we addition, In ready investments and

Operator

Power first Instructions] with comes Will question Your from [Operator Baird.

Your line is open.

Charlie Erlikh

for Will. question congrats the Erlikh Hi, on and on Thanks results. solid the Charlie taking this is for

transition customers for from and sales any there help? the what early going kind you the there, feedback of any would would there be disruption on Thanks. Series, is potential hearing comments that how and question is are Just any X

Vik Verma

as extreme And know, years of converging. has of it's is multiple positive. one in making. the been All forms the So, been you communication feedback

X stairway don't together where and and/or video, game to changing. the text, then you I promote to ability to XX needs So the that going collaboration, and this think coming the all heaven on can any contact be center, to is depending We literally something customers then voice, XX is something in customer how a from I demote additions like really we everything go disruption the our been per anticipate became from towards. of is it of platform build we've continue towards. is this kind initially quarter. generally been again, were because available actually that think X migrate products And evolution to they what of natural of Series. to core se has we’ve July will That’s what XXth to working that

Charlie Erlikh

XX% how just enterprise And think to do And comps from really mid-market for bookings that forward about something good item? Is accelerate solid can that going one further? me. number, more that see. you

Mary Ellen Genovese

is three and goal fiscal we approximately a retention fiscal expect actually year place we in do growth our through on in continue us but XX% as We is Those are our beyond. will detailed for a focused beyond see this which is again, have achieve three We and rates; fourth that the XX% booking the things quarter. completely exit number, help time factors are this to will revenue. focusing we rate. in new there that we're - that One and acceleration mid-markets two is bookings; XX% we key our won’t on three set plan of are

Operator

with question Horan next Oppenheimer. Our Tim from comes

open. line Your is

Tim Horan

about features know do drive is a per With you bit new about you have issues? of you they're as indication of what are Should mix little surprising maybe but any using people early, bundles, more just like X just know know the up what it you. Series you what Thanks. customer, I them, think ARPU and the

Vik Verma

this we’ve long I One, finding of are working a I something for towards said, we couple things. time. as So been has been think

type We we'll the the same different will X. find customer of versions get on depending user of

something between IT may gravitating which the seamlessly receptionist support an all and or the department we're that video an The customers them an are integrate customer of XX. is finding XX XX, So have helpdesk The engineering may XX have have an conferencing to. really you ability with to an wants may XX. will have team

The like room”. other with and out ability that game is tools Stride there basically everybody same all have done changing leading connect collaboration that Slack we into the are “bring this the thing and basically to industry

gravitated gravitated So of that been X that's data a is one common people next from model. things I this have The thing to. concept key people the think that to really of have

in text, a dashboards So two really create that you real is X in can other to every have basically every found all improve in to the employees two time drivers things to available vendors, customers that and in where has available where and company happens have one where disruptive every voice, form call platform every you essence people are Those seen capabilities. according every the operations. interaction video, this management available partners, go are have that basically we for that

Tim Horan

you do this for think And will overall drive [indiscernible]. spending up

Mary Ellen Genovese

We don't know still days. to that It's early be honest. yet

early there would but customers is upsell we in them winning add per itself business. ARPU customer increase we and whether Our to larger our monthly two and increase revenue is again that A, Series ARPU, customers. would existing time. That’s quite continue the of recurring And our ARPU XX% expect expect that About But of you to to and is will that from would larger on over continue. continue path indication and tell our new growing for coming customers nicely. of to too an is we’re X to a

Vik Verma

built to to able would the find capabilities, conferencing suddenly but more of may you people increase add you would more be will start additional We up not it's over you're making video easy to an through I and in. because Tim. model time ARPU, for heaven that go not logical were model if want stairway people I it in you

same up-selling And go company. So ability to XX. every from capabilities many it's in you have to the of progression the those start XX function available to very natural also because so for

anticipate that happening, just but shouldn’t and that do we model we see yet. So do possibilities we

Tim Horan

How is user the degradation on in for quality there is any integration, customers? lastly usage then or experience? collaboration And

Vik Verma

to we have it's or Phenomenal, vendors interactions now within may I that be with is Slack, well mean it as everything X ensure using team you as they the certain happen - using here something allows all our seamless the that example is it's the available able what and XX basically and our to for in that in completely integrate because completely the XX room our room”. interaction same Series “available And become seamless. Slack same are

Operator

next comes Craig Your Hallum. with from Sutton question George

Your line is open.

George Sutton

Vic, I wondered if you could be couple a little things. more of specific on a

You you you specific. returns increased more mentioned strong channel, early the from wondered spending just be with mentioned velocity the and I could if

Vik Verma

I think with you're metrics, you look a start starting quick see know few to right. let's

channel channel of XXX; enablement out came well deals quarter channel from north the top increase. deals of our bookings, of number of Seven from three where out partners XX%, versus ten of north XX% top So ten of north in channel four.

New recurring XX%. mid-market to revenue enterprise and from up customers monthly

kind then the to and X, it's into evolve look the up been positive. of and said, continuing right is extremely right So, in has as when everything you the direction reaction

putting a in our seeing are the candidly board. the ability the winning, up logos to of w piece the we that you're together all seeing are over starting finally to been years parts together. lot it reflected in world-class So talent the have you're the fact new ability we're across it come And you’re all seeing and having hire it in basically just that sell to

I'm better business. and better about So perspective, from the that feeling

George Sutton

curious. long of put platforms, curious, And center with it partners, you just a very a were that related that contact out list. unified to be Just not list curious AI communications integrated contact had I'm may your this and center yesterday there's probably behind on story Google

Vik Verma

closely a there Look, Google we're an lot the alliance partner. awesome the talking about are Google with tuned, AI is a few of ML, integrated things some interesting over Google and we with a our doing next working technology of on tightly the very will be months. will be stuff stuff is stay lot We're - There them. we're company with AI very

Operator

from comes question Matt next with Stifel. Your VanVliet

is Your line open.

Matt VanVliet

the we acquisition I to guess that talk when contribute acquisition. of some can about to is expect could tech jumping in there But a little then to how see platform also advanced last question the relative there. what to partners and out more build recent the expected into there, bit MarianaIQ that you most with features other in should

Vik Verma

add of buyer MarianaIQ with folks, is we’re is a is complete by whole your to group in to buyer being a able capabilities. and a you we’ve very what calling be of response this and very having context the and you been to picture complete impressed persona They get phenomenal that. their persona, information able whoever all do tailored have can

ML You'll start applications very value to AI show with see of we'll corporations. along to a makes quarters over one the platform able next where difference this and be two very having interesting why integrated can be significant for

quarters, X why Series it but X the couple a next more that's we in more Series. any real see the of company. aggregation over all as So, is of and to said data you'll or interactions three time start I the built

personas vision what to we've and add in the essentially working That’s Now powerful. you the that's towards. becomes as start suddenly well context extremely of company as been it

Matt VanVliet

announced a here. quarter deals good you’ve quite this a and few And obviously bookings large lot momentum of

Series quarter just additions July. over just to customers bought book customers mid you Series of X the few last As or those the on sort and the knowing weeks now. have they go of they'll ahead Will even and the time have migrate product was implement that X over coming the

Vik Verma

That’s going the migration on I is onboard going deployment came Series. are The get on be what seamless a starting, going new on are lot But starting the starting a when Series board the of be right Series. customers that are going logos X is lot the X towards. last are quarter to new X of they on customers go. mean if depending from the deployed towards forward, So, X relatively already the of to And to majority end to the working new - the of the additions implement we've been the on Series.

Matt VanVliet

how Series, that question, sort do then just long just X And supporting existing to that will lastly your customer up that take it move eventually to you're the on think one platform. so a follow base you of

Vik Verma

of start our where customers. Series next which a have started it I very eighteen X additions twelve which and we these most this the customers and all the happen to then two effort done will process - be most we've why significant as a it was that's for together. So, with will to The seamless step off for completely months is brings of make of change and over various to think will the be we idea done technologies smaller it

a will there's executing. we plan, long-term start So

some think customers migrate migrating our executing X. customers, already months, will will I mid-market but and we’ve eighteen the we'll then customers start platform quarters all and twelve over the to small next start over and next business to enterprise quarter be subsequent all our there started one

Operator

from question Netis Your Blair. William next with comes Dmitry

is line Your open.

Dmitry Netis

you’re for a So One roughly delivered XX%, service guiding revenue, That’s questions. couple growth. of down the you when QX, XX%. XX% from actually

is market to bookings good Your to XX%. accelerating see mid are which

of booking there secondary in help if that away we Is growth when your difference that's I'm if us the you will trying bookings square is, what of service kind you you side to sort why in the here. kind to and service bigger of mid-market So match maybe in aren't maybe a something seeing of business just could business that is, enterprise. what with this not help there revenue yet SMB conversion of the the the side bookings add is or see the reconcile to growth can see revenue that revenue. us And the ramp to part

Mary Ellen Genovese

have reaffirmed for the basically year. So, full guidance we our

quarter there some be always to to expecting quarter, of we're again, business, be but anything from unusual, to are not going there's going normal So fluctuations. fluctuations course

the key we time second on half of couple One absolutely kick acceleration of year. we that’s the to things to past, over the we're the really us. in the the to of are next expect that start in working as see mentioned to initiative is because And quarters for revenue had in we going do and a

have we with pretty consistent forecast. think I been that

Dmitry Netis

to try it's quite side have in drive the because revenue through, this the acceleration of question spent business. the raising mean showing to just yet but bit I'm I you I not a service guess

Mary Ellen Genovese

Actually, I last quarter. for revenue showing. our instance, without to XX% show did this currency think constant DXI I it is compared a it mean service is on XX% quarter up

a over up not core would approximately rate So, which points. we quarter the Also take out you - anymore course, basis look we say our are the at if DXI point XXX to is, than basis and XX%. we at investing saying of been out it quarter, of that XXX continuing we more take which decline we are have micro business,

core is at than today over Our greater business year XX% year. growing

acceleration some business definitely the acceleration. to see in would is there So, to and we expect continue

of rate by are at phone as know, don't that a On to the XXX our think quarter XX executing bookings segment. but the deals year accelerating detailed putting the to announce up not XX business have continuing the small same small starting And reaffirming that plan continuing team disclose perform. to now. in continuing close Last that side, and seats and the year and growth, XXX our we're business basis full we fact we in point points a the showed growth they to we're pieces you again from executing all And guidance over but and the together, Dmitry plan. actually extremely. are We are we're improvement year to XXX moving is we we we're a revenue way to is for we're we XXX over basis pleased

Dmitry Netis

period, Maybe about said going Is is the somewhere DXI just estimate quarter last $X XX% it's you year. what contribution my was versus us year's so And fiscal then or a that my million range, the in in about assumption? XXXX. expectation down XXXK last quarter remind this fair

Mary Ellen Genovese

What had we we running quarter in was talked $X approximately actually quarter. last fiscal XXXX, million per last in about year our were that

ago we're year XX% quarter and our So decline a in have fiscal first we $X.X quarter million year over expecting at year. a

that was million, quarter year so are XX% quarter fourth would And particular running de we're decline minimis. that approximately – by fiscal our it we this year to exactly over we and X expect may continue. So on

Operator

question Josh Nichols B. with Riley. next from Your comes

is line open. Your

Josh Nichols

that you rate. to year service and Difficulty] beyond growth spend the revenue XX% [Technical operating look maintain level leverage as fiscal

Vik Verma

Josh, I we don't heard question. think your

Mary Ellen Genovese

cut first off. part question of was the Your

Josh Nichols

Sorry.

we the this and obviously rate achieve to operating service was, said is about model. growth the I the operating operating this investment, what spend should and the revenue of So, leverage XX% year as the a company think that how but as beyond tries far inherent maintain as leverage in

Mary Ellen Genovese

revenue a XX% go but the We're beyond expect XX%. we're XX% goals angle, our not to growth as the beyond seeing do we really milestone the XX%. So the is accelerate that investing

this at away. fiscal leverage. our growth give We're on time would for of to but and expect right year initiatives expect until XXXX point pipeline fiscal focus wouldn't build to see XXXX, see leverage to to guidance to truly to into towards or end or in the don't of not key a leverage XXXX some I fiscal obviously accelerate this We are going XXXX. expect XXXX. execute And I

Josh Nichols

are now, revenue the good over And only see some but that then evolving next How couple is small do grow of international percentage a that. right a there to as revenue? piece of you years opportunities

Vik Verma

it's Actually and it will now to so I around or I right there. from grow think anticipate XX% continue

we're on for You're international we a very world. intent opportunity interesting very and wins right I And globally in seeing but have large resonates so go building these solution Canada, said country can by us. methodology the you over over country. you to France, time, getting We're to continue as X already that think I the a is that Austria, as UK, differentiated evolve is and of know continuing significant together now and the all some

Josh Nichols

on just slightly from then heading angle. a question different previous a And

there XX%. then guide revenue what So XXX two to service growth quarters and bps think service Are revenue QX do is specific drive QX you is or next the of offerings at that going the over specifically. growth

Vik Verma

enterprise, seen time of decided and step entire a of we we basically cloud towards all that I migrate adoption. different baseline. product is to very a DXI, X forward in and a as just place, think me we're I it’s end of kind step mean have But The have and she you've that to inflecting plan kind industry away. Series to mid-market X Series got goes. certain we've steady greater primarily but and by over solution. of life moving

Josh Nichols

to you that burn? this transition and question from to me the I accelerate the in positive priority to seeing cash question continues well near-term to at potentially target, to mentioned guess on response investment that company's it's company just but believe cash whenever that. be this, the looking I’m fair XX% from to track earnings year based last and my the service previous the is, looking the I that you’re willing say on burning we're a past And is and revenue stay accelerate was growth

Mary Ellen Genovese

would say Yes, actually I yes.

We package one from are mentioned before, as unique we like technology perspective. a situation very has do a has Vik in no else a

number We others have to of over beginning vision are innovating been follow. the are We've had years a fall. and others and beginning to

is very and real We're a in a uniquely than for of like think becoming position the one. game are it's capture intelligence strong We ourselves CCaaS XX% less find and now. changer. mentioned system opportunity is that. billion out it’s positioned an market, and system game a $XX of to the a we of in - on UCaaS we absolute This it's we're taking changer, One friction the inflecting, right call, We engagement, XxX one the the market it's penetrated.

going strong in go it. a team for to have and We place we're

Operator

comes Your with from Meta next question Stanley. Marshall Morgan

open. is line Your

Meta Marshall

of expect you channel or this wanted to kind with talk of on or for. speed. really to of impartial X and meaningful just adding partners you getting kind margin just of shortening then any just could whether see quarter by decides to any difference Series are kind to of and kind that see a maybe Thanks. metrics traction meaningful the guys second the And you're gross channel revenue you up about time customer we to I if whatever opts starting know should

Vik Verma

change. So one, while. anticipated and so I’ll it, do X planned been one for I'll been the a first, no second second has answer

than change you it just can rate up but no other quarter. from change. Channel growth now in the XXX XX% just let's any from pure real the see already up no quarter. or see this perspective, to sell we definitely just say and margin last in opportunity an Even do to just mean just was channel is I meaningfully So it accelerating. enablement we material partners channel bigger

offsite I built out. the up I built are was us XX last team and their we his I Bill team think core April over actually the already literally yesterday. his something Bill entire quarter. has been and think mid Corbin team, joined course. I at mean we've

been we So CCaaS to extent centers. some makes see it are to solution them do partners a the you're bit complexities and quite contact waking to a that X and starting have channel have sell very to to both having I very the and we of of think differentiated UCaaS easy acceleration all fact for without

significantly is we very will and we've we and be huge happy there be investing with traction in to going the So been us the for channel feel channel.

Meta Marshall

came helpful. sense I versus of that this kind just in kind of of year the something those the deals last or guess were the any gave kind of follow a you data, partners maybe just that. give ten channel seven mean of on they would channel of new top the from I a partners up the channel or mature be added

Vik Verma

mix. I it's a think

added I last think were year. the of several probably them in

with So coming board bringing we're larger in us seeing the mind they on. are already actually actually partners channel the that on coming table to deals in are

that we us that a forward. It's on few quarters I the business see significant is us have fruit to And we have this think to and I to so, easiest the from huge partners recently most the start with, by Avant contribute recognition that seen they going think with last newer do for going definitely bear over are done the channel focus start and channel opportunities that perspective, we to

Operator

of Beliov next Lynch. question Nikolay with America from Bank comes Your Merrill

line is open. Your

Unidentified Analyst

actually is on this Hi, Nikolay. Jacqueline for

of rate first my year. the rate XX% to think question the growth growth is MMR we XXXX, So, fiscal exiting about during get the to how new revenue the should remainder

Mary Ellen Genovese

expected. we we had nice QX some and as between QX mentioned had I acceleration As earlier, very had

companies detailed continue over is will bookings of accelerate. the side to there. are in end the on and ways earlier, of plans right, we revenue, mentioned for huge quarter can number system get And that have on had about but us. SaaS that I necessarily I there deployed executing well And number Also, no number initiatives working very sooner the running up to tied as retention, as a there's to on that course, [indiscernible] But that want and we're is, not well. to last That's we a put for out front. is that again, the on that quarter. question that and and expect billable, to retention. that retention, don't the place better we're and least We very doing that and three acceleration we

three focuses we that the to the those So have will us are XX%. that key get

Unidentified Analyst

how - In headcount terms to regards in last hiring XX% are increase the progressing of quarter. plans announced

Vik Verma

and management. house, board. make If orientation presentation all to have an in I XX we all need talent but dinner new have runs recruiting. may we on-boarding Amelia session HR. between terms Right have a on-boarded, coming and we hires who she's we hired this people go part where have as then at a do on XX of of been actually our our new house averaging Generalis on top continues, thing my phenomenal, a people, where target. She's monthly being even where We on-boarding through

some yeah, we're and people. amazing So, getting

we're track, better indicated celebrating, about well down. is So the that as that’s core as Ellen as retention revenue getting things three time were Mary to on coming talking bookings is

step approach. a step it's by So

Unidentified Analyst

the Sameroom maybe if do has new progressing, could last one. How opportunities. see then opening of the And you I ask integration

Vik Verma

messaging to do rooms, persistent and see can can rooms and what chat all on team to where a as is you that's happening other ensure Somebody collaboration, is essence general and video, give the in just about is have is part somebody it, to you and it on engine voice, ability is X have such have ability so Stride, one other you to of whatever collaboration center, collaboration combination and come key going huge native and text, which between the communicates contact permission everybody all of three Slack, the be three. you've also one you've Absolutely, collaboration integrate you XX think thing to done you basically then combine long and on somebody in they common us can room the said you but X. engines that to on you that core Because the if chats is a collaboration chat, as have all can allows be room, together and chat XXX all to persistent

acquired So that phenomenally we're great guys. a very we pleased is those technology and

Operator

comes Chase Dougherty. from Your Bunnell next question with

Your line is open.

Chase Bunnell

question planning kind plan your how productivity to partner. is And you with drive partners how channel just This channel and a quick of you channel continue through acceleration each We wondering we Chase on for improving partners. sales had about were Catharine on guys are Trebnick. in to further

Vik Verma

been and doing, is big you you're to end, that world-class I have channel, in talent. talent get this in said in class Look, as the genesis really we assembled. if got I go something think has but was going the the We channel brought team world before general done

there's seeing We’re the place which that [indiscernible] all channel accelerate channel I fruit of completely best channel it's bear brought the putting together, some enablement. that put all about a series and programs think will putting a do going a on of companies together board primarily forward. huge is quickly And emphasis big and from that very for in us team what them we're in allow them fact But known whole on partners. that essence will to the we're big with us we've

Chase Bunnell

revenue, your by partners channel on that of is, portion one what contributed is Last currently? international

Vik Verma

growing I combination channel in because we're finding what finding mean that it's we're have significantly is is international, we quite to growing direct. channel than significantly and approaches the direct actually of a faster international

to going more but primarily be channel. and and we'll more time, to channel able that basically And with resources, to we so XxX our international it's support them be going is over expect some play be

Mary Ellen Genovese

some especially growth us happen. more really more significant In are Asia partners seeing to bringing and things We're right starting channel now, deals. Australia in our

mid-market deals then which France of a the enterprise But multinational really other As of accelerating grow in launched area. the to continues success U.K. just Australia fact in there the countries. we're throughout that is And we having and matter course, we're in world

Operator

session turn Q&A to conference. the it now back I’d for like concludes Vik Verma to This for closing remarks. any the

Vik Verma

for pleased thank progress I our to strong the everybody towards this with very to to fiscal into I take want time very employees. to do I'm all quarter do XXXX and been want of call. opportunity you it's listen targets. our our - Thank taking a our earnings

make X,XXX seeing very make upcoming to In of over about difference. next day say some end, and Thank every people several best. always fortunate come I we're to the people awesome of is have We the have that companies a the what you at look forward few and conferences and months. again you very

Operator

may conference concludes disconnect. today's call, now This you

8x8 (EGHT) 26 Jul 182019 Q1 Earnings call transcript