EGHT - Earnings call transcript Q3 2019

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Operator

Good afternoon. My name is Sheryl and I will be your conference operator today. At this time, I would like to welcome everyone to the 8x8 Inc. Fiscal Q3, 2019 Earnings Conference Call. All lines will be placed on mute to prevent any background noise. there a remarks, session. speakers' the will question-and-answer be After [Operator you. Instructions] Thank begin Relations, Investor Hyde-Dunn, your you Victoria may conference.

Victoria Hyde-Dunn

operator. to quarter call. XxX's you, third Thank Good fiscal XXXX afternoon earnings and welcome conference

Steven Verma, Executive Vik are today Financial Officer. me Officer; Joining and Gatoff, Chief Chief

begin call, of our business today's performance. During with quarter highlights will Vik third

Following questions. financial look After and these remarks, provide we guidance full for our will this, and XXXX. on our to year your taking forward Steven details results fiscal QX prepared

that reminder Safe during conference we variety a the as get not a Before future and made of the factors. just forward-looking of guarantees any to Private Act performance differ are a are our Harbor this result statements These Reform started, call of statements actual of XXXX. of materially Securities results pursuant Litigation provision could

section concerning SEC's information Forms on find and Additional in available risk and is website recent the our on those our you reports most Relations XX-Q, of will the website. which XX-K factors Investor

As adopted the recognition XXXX. in revenue a reminder, XXX we standard April ASC new

For provided fiscal as XXX have results XXX ASC XXXX been Reconciliation included the would are our earnings XXX. statement with release. certain results have ASC quarter the they items, under and third of press old income standard we

accordance addition, non-GAAP in of year-over-year over me measures is on with this call that reconciliation which U.S. comparisons Principle are Relations available that, website. the In some to Accepted Investor press Vik. to GAAP. with were deck, turn the presentation could comparable with A prepared PowerPoint release closest measures GAAP measures Generally let and earnings provided on our our call and cases together With financial be discussed not in or some Accounting

Vik Verma

the us. of you large that afternoon to ahead quarter opportunity the four Good I highlights us. about points and joining Victoria. you, like business our and to Thank performance share would for everyone thank

our increase year. saw growth year-over-year case quarter, every First, fiscal the outlook in third has our been sequential financial exceeded another rate, we as our in and in service this high-end of quarter revenue

cloud and cloud collaboration into integrates capabilities. Second, integrated address video which offers analytic current adopting increasing seeking positioned one robust These X platform are which are to conferencing, customers Series the voice, product, customers our solutions. platform, market a technology unique strongly data as technology is single platform, contact center and

Third, our we came in the expected. enterprise midmarket bookings new performance in weaker and than U.S.

deals Our enterprise to business a pushing of with solid continues quarter. the lumpy large a but be business few out

making changes. however a execution and Our am These had organizational and U.S. I are midmarket specific process already changes issues, business specific a showing result as impact. positive

expect sequential we quarter revenue means from we our year-over-year original XX revenue growth a constant DXI increases Finally, the per about to are approximately two quarter rate growth for points XX expectation. to foreseeable approximately future. continue service in excluding currency XX and reaching basis with service This of anticipating revenue delay

me Let these points a of detail. in bit more touch on each

value communications revenue and to platform service continue continue center accelerate in we growth. revenue, $XX.X exceeded showing quarter technology DXI that million see our constant the our to and quarter Service revenue was cloud high-end business XX% was third to the for for the financial XX% Adjusting illustrate First, revenue for outlook. compared fundamental second and currency growth the our results the Customers our in XX% business contact we of solutions. as of single quarter strength grew year-over-year. third excluding

chose employees One locations marquee experience lack XX of solution assisted XX their were top is United enterprise during of customer X data of XX% management monthly cell of year-over-year. and closed recurring deals, using outside me customer limited connecting mid-market an homegrown new transfers. approximately involved by masters let highlight phone that process an allows multiple this for states and sales that won last international customer supporting developing contact XX properties examples. ultimately X and or a up contact States. of challenges packages on were our Also logos. recurring XXX a voice rental monthly XxX's To the XX% customer of them answer has our vacation to increase competitive business and single XX after managing deals technology. rate XX platform XX to take and enablement quarter. program expertise channel They X U.S. XxX cloud booked had partners, greater and focus Series of Their functionality our win channel in than in greater to quarter, revenue enterprise remote enterprise to company tracking deals XX call the and advantage and rather from XXX with grown providers. very couple provide strategic included adoption, countries. our new our of their top $XX,XXX partners X proven and new with Our center from voice our team deal and over RFP into solution XX of partners XX and deals We revenue include center top insight

that decision care Another requirements employee that a contact This customer center solution and system their twofold. notable outgrown with based combine legacy customer The win administrators, Southwest for premise is unified were true U.S. buying third-party benefit provider administration a health has of and communications a drove their capabilities. services needed service on plans. overarching

of selected HIPAA Series their and technology takes is platform, billion video take contract center CCaaS X best solutions cloud second a Series point conferencing, provider First, compliance. hybrid our needs. from My user strongly and single away was base a which robust fulfill platform cloud this This mix that as collaboration voice, the the an incumbent off. $XX competitive includes is overall a second, X and UCaaS across and customer positioned to market

single on technology is see even market based our We from what to customers platform suite a continue cloud from full a the that solution validation and competitors wants.

and video conferencing, in development us collaboration, one the invested and intelligence today. The required years for owns pure positions new with as the contact is and voice, leading past deliver center the platform we sold seeing acquisitions provider technology value the Over system and becoming only center in and XX% full to cloud that that marketplace four both research seats of we're our being contact XX% customers capabilities. of higher X XxX new to solution the collaboration Series have

mid-market last all XX% the with up commitment platform, now We extend in X the of driven that analytics have insights smarter. something with companies businesses X UK of on our to continued U.S. base cannot the connect voice segments customer our out Series be small customers enterprise is experience demonstrate help include enhance faster to data Series decisions, Approximately rolled and installed X and our capabilities enabling and quarter. from provide XX% Series optimize which business through to announcements, done customer stitch Upcoming the solutions. speech that together of to

recognition addition, recent and TechTarget innovation In leadership competitive UCaaS. Frost and & award from Sullivan in a highlight strategy,

discussed call source an experts last team we our video technology Atlassian. Jitsi, acquired collaboration quarter last open we from As on and of technology video

quarter offering. leading today. mobile full integrating clients be the solution competitive XxX's will market team piloted with in We the this feature a meeting Jitsi on general Series set integrated, XxX X meeting with of into process with solutions Once new and availability infrastructure, will mid-year. cloud based The and stack the our leveraging desktop are be that while on public global is expertise the run Jitsi audio in

bookings mid-market our The fiscal new our many across that, around quarter third U.S. by point QX third we encouraged of are expectations. short while performance fronts, is internal progress our fell

increased year-over-year in and monthly recurring New and Total the XX% grew total revenue year-over-year. customers XX% XX% from book of channel approximately comprise enterprise mid-market bookings quarter. bookings

the to delivering and on meeting the capabilities velocity with high Series, be we that enabling effect bookings did mid-market the the we and in in match Where value first direct happy mix this have to mid-market from year. strong side previously and had that With have industry was three response received quarters execute analysts introduction execution XX% mentioned, Series short X we in am platform. believe The available. immediate with While this opportunities as customers our the to value enterprise our X technology averaging rapidly for of to need and to our single Series are major enterprise a solutions however paths based we at regard channel not mid-market over transitions expanding we two positive are sell and well-defined been drive cloud team. sales We X managing. a still I relative of a close quarter go-to-market force cycles. not growth to sales new new of to

in the large of see enabling early QX deal improve of field and existing steps early number specific not we regard We starting team. sales Unfortunately, results and our have in enablement channel we in both over channel quarter and both are new very talented process this and have taken to professionals. course adequately the we with and and the taken processes seeing execution. this our immediate experienced enough them did velocity execution already late immediate integrating of sales brought to success. focus tightly to steps are sales issues, signs in a With team execution Again, to to QX, high accelerated improve

we positive that mid-market booking combination discrete these issues is a two issues these U.S. are that While are the identified have addressing. and execution unfortunate tactical of into The translated shortfall. news

remains More that demand we high to from win remains deliver continue our solutions differentiate market us importantly, strong, rate and peers.

growth regards growth basis we we plenty single strategy. believe strength to confident year-over-year expect market. future. technology To of platform for We room per $XX business, SaaS long-term my point, quarter billion rate points in delivering our to sequential XX the underlying remain We winning as increases our a in remains the continue to XX grow opportunities a addressable as service in cloud of of ever have to the revenue final foreseeable approximately

our first QX in to Over service and quarter. year-over-year this of adjusting increased XX% growth, quarters from currency have year, XX% constant DXI revenue excluding three the this fiscal for XXXX fiscal we

growth about exit in approximately to than reach growth milestone constant currency. XX% quarters revenue the And two a approximately expect rate XX% DXI and originally later XX% service quarter to to with We now the revenue we of fourth anticipated. excluding service expect rate revenue of

partners. I'm value I It turn over in in that. up committed I tremendous execute thank Stephen, and to Before front our Steven. us have opportunity to conviction and to the is to and the to market customers channel Over I technology and of of you, our call to confident platform like employees, would us. the doing

Steven Gatoff

opportunity questions. the three through you our Good glad bullishness drove this appreciate to around part guidance some model you my and revenue our We path of in the and on color provide financial afternoon, walk everyone. Vik. us. driving details growth that areas solid for Thanks, results unmet stockholder increases the business financial that's joining We're large QX compelling front XxX our your is of and this disruption QX With XxX inaugural improving year discussion to of uniquely the the personal at financial XXXX. by monetizing. to SaaS course increasing of cloud and drive wrap the sequential and three, We'll that opening continued full wanted and and Two, here call year-over-year revenue I growth. quarterly largely frame into One, fiscal value. being up out to my operational call And us note. earnings

started. I'm opportunity join more of First the XxX billion by than the TAM. here team days off, One that at to owns have penetrated on integrated I'm or a XxX I us XX% first and job that so when is cloud thrilled a in platform after the disrupt global front less us single position technology XX sitting offerings. was $XX and can I I uniquely bullish that's on Vik than say to

revenue let's onboarding organizational and quarter strong market SaaS forward contracts large in capitalize achieving In business the our execution to operating contributing look customer we're drivers move pipeline to a of greater revenue scale performance our the at evolutions to terms service lead in capture make and our leverage and I'm our a to around orientation model driving execution well and XxX delivered positioned we're driving and managing how to both of leading customer QX our margins. solid around a we excited these strong this, we increasing on As about efficiencies where conversion, gen From funnel P&L, continued gross the and in focus sure run and our indicators and we and market bridging opportunity. returns.

comment get though, me observed we the Before dynamics into quarter. third that bookings details let in the on briefly we the

expected we begun return numbers numbers we're and told from with you'd growth such the our concrete We're improvement shortcomings productivity be. us lower to in due creation, our and and in looking bookings spend, what already that go-to-market on came these I'm actions channel about that pipeline U.S. motions. driving and we've talked channel web to to expect correct Vik an mid-market and registrations at encouraged operating metrics new specific As than new focused on these issues It's us execution as we're the partner on organization gen logo our and leading are was lead there around. focused closings. metrics that issue indicators furiously weekly and it's

the results. to QX P&L turn Let's fiscal

model of deliver to guidance our ability recurring our service revenue the the revenue. of of we solid for subscription Our demonstrated strength base SaaS ahead QX where built

year-over-year the the above and XX% You of high in at for in constant higher DXI. service outlook $XX.X growth our end million coming financial of and see adjusting currency rate excluding this revenue at

revenue growth important mid-market currency monthly the On constant in service enterprise XX% revenue than represented greater also revenue greater primarily for mid-market increased for expansion growth, a monthly in excluding revenue recurring Kingdom. a drive by to a of revenue. increase XX% from at strong On recurring investments international revenue in monthly and our basis XX% United we fronts, continuing and $XX,XXX XX% Service enterprise revenue and growth grew global DXI. larger represented customer consistent customers monthly key year-over-year incremental recurring from international continued are than on the recurring more deals, year-over-year, from adjusting $X,XXX contribution revenue billing driver. Looking QX, both of as business billing from our contributions to basis, and in XX% and than of

existing business The enterprise per $XXX, Looking to and revenue both year-over-year. at revenue basis, XXX% include which was customer service our our impact and strong dollar both a up mid-market segments. customer per within rates, overall, average relatively all grew roughly reflects continues that on XX% customer be and continued continue we our service QX, growing revenue $X,XXX. sells to and and average business support Customer to and the metrics with logos of of economics, contribute teams. customer mix balance customer over sells cross more In and additional monthly some This annual deployment of dollar churn base retention XX% to business customer growing across X% had customer upsells monthly each. satisfaction modest account the well than new favorable

model key revenue lion strong the gross The of our One is the attributions XX% of our non-GAAP SaaS of our of seven quarters XX%. has consistent to financial and margins past share margins. seen consistent service

driving operating at channel, and to marketing. amount as approach non-GAAP managing we in invest similar lead execution with perspective, start also we conversion higher had high spend. sales continue logo Importantly, a our From revenue. customer and QX drive sales our QX top taking we're a in effective that productivity gen, of channel continue increases of to and marketing go-to-market looking and continued continued growth where and penetration. lead level a sales of to more to disciplined we're perspective, new looking and we funnel XX% pipeline expenses, gens, spend additions With with at let's through rep expense rates in invest Sequentially, in

of expenses increase and anticipate we QX, current the marginally year-over-year marketing about non-GAAP sales in a lower For XX%.

revenue marginally single in our expenses has tech OpEx, X% continued our advantage of as rates. product Talent we're quarters Turning with four we non-GAAP costs X% our to approximately expense of to past this investment platform G&A QX the revenue, R&D, and Finishing R&D competitive year-over-year was seeing investment been manage and continue building we the in were features strategy central appropriately win consistent and functionality. out as our leadership XX% in business. X QX to platform innovation, and we up and scale as in

to in on U.S. reminder $X.X a QX As million obligations our GAAP related customers' of a charge basis G&A on a behalf. sales tax includes

let's we operating a operational million of committed approximately and XxX a our results related loss Jitsi out to QX current loss. the expect $X.X net to and better Pulling on charge. QX $X million QX, expect a of drive was that, continued similar excluding expenses point non-GAAP in October We're model and drive sales the would to million this to for growth. financial to financial and With of turn compelling outlook all continuing $X.X GAAP value. pre-tax than million, front QX, increasing of For together, is tax third coming our stockholder which growth path we that us revenue $X

points between we're we XX revenue year-on-year basis that forward. and sequential going quarter of noted Vik expect adding every to in XX continue and growth As improvement

adjusted as We about albeit we on be. also continue service we'd path, an revenue thought two to achievable see admittedly growth XX% our we're behind quarters where growth milestone

And a as revenue is financial million XXXX fiscal of so and outlook considering our year-over-year of growth million. to equates $XX.X anticipate to $XX.X to in This the all this range XX% between be for follows. We service XX%. QX

Excluding DXI to in the be be range Jitsi non-GAAP $X to related of of XX% and QX $XXX,XXX growth million, $X excluding and XX% operations. we expect we approximately range loss to million pre-tax currency to to service in for constant revenue the anticipate

quarters million expect, math actual year is revenue as XXXX XXXX We fiscal million, of would XX% to year range of $XXX of XX% to our fiscal the year-over-year to outlook simply the full plus outlook for full follows. and in results QX be outlook service you first As the representing growth. anticipate $XXX our three implies

for approximately be million XX%. Excluding of full again service be range $XXX in We year currency growth anticipate revenue we and to XXXX constant expect basis, DXI revenue finally, XXXX year growth. to total to fiscal the full pre-tax approximately fiscal revenue including million we representing the Jitsi. expenses loss non-GAAP the related to $XX to for to million not XX% $XXX XX% anticipate million, be approximately And in $X for year-over-year

to which fourth you fiscal on refining begins all on consistent forward and with XXXX, of now earnings that that X, XXXX to we look call QX the As relates timeframe. our historical with mid-May April quarter our it in in we're working XXXX, practice the sharing our

go our the introduce time we're addressing we our continue execution and we confidence and the we and spend We're SaaS issues some We call. call us next revenue earnings responsibly which that Operator? the have also front forward. In confident and discuss expect in to business, to driving sequential managing to oriented of your and operating our that going we're glad to open market in any closing, plan at monetizing time new business quarterly more and support, quickly on around our to effectively. and growth metrics for of opportunity we continued appreciate that, With path questions. are

Operator

go Please Instructions] [Operator the of line of Power comes question The Baird. ahead. first Will from

Your line open. is

William Power

I growth. maybe Great. taking Vik Thanks to couple. for outlook back just revenue guess the the the question. coming XX% with in I services guess, a change

lot investor course that you'd like the think achieved the over the and based meetings a at the you on of of that quarter through confidence were seeing I quarters. conferences trends the that

you mid-market now of really I'm to Series get investors that. accelerate guess to I that investors into have and the are in changed the - of channel, still X later. those XX% key place the the know color And to growth quarters go about talked channel bit drivers understand how trajectory that impact two on think when confidence to I more little do bookings pieces a you that. that and just and just maybe I So trying

Vik Verma

impact. is a question. Yes, knowing most Yes, look that the important

basically as to About correct had very it. November simple frankly the less of and well job how think found et early we up cetera. stellar enterprise to pretty material, down I into we bring And it much So tools, into time underestimated it X on the questions, then, came to to that's as late as well as takes collateral as the team I good. all the speed the start did packaged it we an it most, into we entire out mid-market, politically to just solution. And still than tune a a with Series more to introduced something basically feel started sales we December sell faster say we guess, the And channel much and the enabling received. would way was introduce

the top became team brought mid-market And And we I one. of we just So on do then a that grafted ability brand then the obvious a too direct customers as the generating of channel. board what said, on few very channel to that deal well on than pretty quite velocity, a a new And job. combining folks we basics the the deals, amazing the new introduction. of with a brand is in that team biggest of impact that, channel as was the a lose and just to brought on getting product was stellar in ability as but them as these hands selling partners simple partners, to stuff the we less I quote, team, did process didn't in in channel and

it's take a was it self-inflected easy address relatively wound, us that a completely one will is time. to it but just - So

Will Power

in getting place, - full you that's does are in part growth leadership are you maybe progress? where people channel key to maybe where number and I need help of the you have that the I now that on rate. So to confidence sit? guess, the of the us you accelerating you that team just side, have then mean and

Vik Verma

have Yes, no brought actually onboard.

is clear all that I X. game biggest a told think channel the is just been the other and tools And is it us think interesting pent in to a changer, part but north from up has have they've demand not They course our and the there. And we've they more that go over people of that and that is were not there, have they became to half. of been the is had bring XX well it to level they channel was of takeaway love the there. quarter relationship. we've that, about on brought The of relevant the most problem more information then partners market onboard top

and the leadership the business processes And and for the our the as as said unfortunately channel will literally of that that But we to front partners tackling motion the mid-market, as It's I training as to not it we is drive basic timeframe new business a a right the in for tackling made relevant changes we partners I is, is take well make as product job in months' case in our just in six as and it's think interested the blocking good this as sure the did customers flow, structural. it. the and place, - the team So on brand comes have always is particular quickly is not is blocking which simple bring channel right to market, and it of the business selling enablement the and channel in they to four are do partners like for place possible. right creating We fix. execution. us

Will Power

Okay, you. thank

Operator

Your next comes go line of Horan is Tim ahead, open. Please line Oppenheimer. from your of the question

Tim Horan

your sales existing those not sales are Thanks. material. to complex where team? a Great. sorry just channel sales Vik, what just you're not from Or to a and more if where right the you examples get or just little outside, able provision quotes confusing could the little between you're just you have just not did able you you your bit marketing mean give me you of detailed having

Vik Verma

more on much of X relevant the you our probably up all board product. bit the material, the little simpler used much is that an sales all them the than the way above. to brought much that we way The - that manner. packet than of selling and it's that know then, ideal. of the has as the build enabled Frankly is we all velocity channel And so more motion we And a and less channel was team a basically relevant collateral The a our original updated products brand various team on amalgamation X in could so integrated coding happen new high portals relationships. And solution.

of a of played things All those part. kind

a the a do blocking It So we actually literally tone. did. and was not stubbed it bump, of needed than directional not basic just better it fundamentally science. the we tackling We our speed to was And was change. business rocket that again,

Tim Horan

and it Got kind take and fruit it. are the will like And in correct another low yet? what's the months you what's any hanging six improving to - that why of results seeing that

Vik Verma

and Actually, we I the see it humming won't are have But But it's that way will the to to the so now. their to and it it, that it how mean, - does their six or to a starting then It that everything with. People so should, months to how fast get to do. XxX prevalence. how take needed it, know you subs clear easy like do train purpose. it's engine. on sales train quote they I masters it, And checks think we it, to forces train they partners think you'll is people moving for that want business on the sure make made channel to think do. channel much They pretty it very I the on they to do exactly fit X. us same guys to what find just think exactly same results X, how

takes about and of been should gets complexity probably the have We will happened. with, take that to unfortunately did ideal not - had levels board. addressed months to things six it that make And those we've with not four past. sure are do it They to just confusion business the in have across

Tim Horan

side, have think you you you launched Intelligence any you then are might? the - or on product Great. when And Artificial shed

Vik Verma

it then of the you couple that a as brand X voice, launched need there's to things for Intelligence. packaged initial shop in see Yes, way is the we very channel as and partners underlying team for new weeks as very all products. interesting it one legacy is love stop simple it easy said, the about completely to that We that for I fact we People focus to seen. one have upcoming our announcements. mean, of on is get increasing start next video X center. them wins to announcements they contact seeing our make systems support. My our to purpose. and they things over used very, though to solution well opposed good fact is decision data logo can sell some our product, this is fit the Artificial which and a they make And you'll the We're there to that sales on like the them, be a trained I as few that packaged, leverage sell as quote

Tim Horan

you. Thank

Operator

of comes next is Marshall line question go the open. ahead, tour Please line Your Morgan Stanley. of from Meta

Meta Marshall

Great.

question on constant and of currency? the now, of was that big pound weaker for constant is DXI currency though DXI the is a how DXI? to shrinking be headwind year-over-year. levels like how I kind drag. But kind big the just understand you can us seems that Just - What and was expanding that versus DXI It for

Vik Verma

want or can Steven, way. to do either it take you I

of in to a a be used couple million FYXXXX now. million it's per of as quarter quarter DXI $X So under

down. And so it's continuing to dip

QX of $X said, dropped of to FYXXXX quarter from it FYXX. under well million million I as approximately as a by $X So

Meta Marshall

less the rest of it than was - constant just kind than And then as because that it's seem different currency, year. pound doesn't so XX% on last of

in currency the ex-DXI seems services very a kind it like big of headwind. - headwind DXI discrepancy just the So constant between

consequently the of any drag? Just level

Steven Gatoff

it's this smaller different year the No, math roughly - was it point current and valuation at is amounts much in a Vik's prior there's at there revenue in more a the much Stephen. you have Hey, to period. candidly point question half a

year impact… the So prior

Meta Marshall

guess than currency just year a No, piece, different seems DXI doesn't constant just piece, ago? the I I like pound to it seem much that was haven't the the - said

Steven Gatoff

- through I we mean offline. the calculate and can it go

Meta Marshall

Yes, through. follow-up we that can

Steven Gatoff

Yes. The [indiscernible] through the put is and to happy easily go traceable it. we numbers just to out

Meta Marshall

July. And period. since detecting of Series Okay. been just November kind has X in I then mean kind on December of out things

and released of surprised of four Series seeing I'm X So through, I to wouldn't started it is it on guess to up kind you deals just I work like months sales. guess kind initial that you have was when picked take six

that coming kind channel to X Just of between is the of it. difference of have kind enough out partners materials and detecting for don't Series what sell the you and then timing

Vik Verma

I'll one. take that

the is et sale, a you've news enterprise launched know got well as we high and good you've good adoption. had very you for X we touch initially very SEs, So about very, trained got and AEs, Series it's the enterprise cetera

Series out self-evident training, been. it cetera As channel material, mid-market of and to to level have we as X where was et that was as migrated we then find the not started should that

come. us deals took And started close had we to to so them the anticipated. longer see It than just we

quarter what So by the we just the was started of started progress, impact the had to velocity they end the but as didn't close deal us so deals to anticipated.

Meta Marshall

follow And think ahead. like there - yes, do I a guess are - you go as those deals

Vik Verma

Yes, no, so I'll address in two ways.

know I you're that one. with think I where heading

they see points. kind these The all despite has a progressing that between we're clear sales high to execution So, it much et channel it as to one, tools you into perspective better deals way, were of been rate the growth enterprise been higher saw from cetera sales touch so all so every and think quarter of model less that's are of XX XX trending velocity much and about an right the been and be quarter a can why more our kind our growth by as up our challenges feeling model. I our I has mid-market was to all off not to should have hands rate velocity look basis for rate be designed it materials of win when needed went this

taking I view what that as I was close was not as to don't these deals longer so, just anticipated. these deals and gone, view And

in, much closing is through go because X lot you all faster everything's don't bundled then model Our of have machinations. to a

And to the everything in price so from and was X go versus customize it that it whole menu perspective other. for to with of purpose having it all this almost or like job fix think makes their of bundled customer do that that the a in the necessary

it So was it issue part. And it our wasn't. much should been an have on execution frankly faster,

Meta Marshall

Great. Thanks, guys.

Operator

comes Your of the your go next is Stephens. Please of from line open. question line Netis Dmitry ahead,

Unidentified Analyst

[indiscernible] is this on guys, Hi Dmitry. for

the quarters? do changes the coming mid-market have one how to in do sales down recent - partners adding you slow And you the platform, channel in of expect the pace I and With follow-up.

Vik Verma

some on we the I said good them a and not that. place. been which way how now sell to problem other essentially to we around. And channel will pace and job essentially channel my well down channel to provide of slow portals I has But that go more as partners because automation to it exactly that partners, extent didn't added adding didn't handled. the have to not in our No, the enabling we was X, mean transition expect a accelerate required do of sell tools X them from we I team regular actually lot our products

As and think they've been course training channel and through XX I the half all onboard people and XX, they brought partners. the managers have of a of gone over we quarter course said the got the process, relevant I channel about

I job, board so the bringing and but motion pace did on as selling of very of been able of recruiting you being whole We solution good to X not of The that perfect and together do idea a I was continue enterprise. increase kind to and was idea provide package the XxX we good that's that will the at of X channel keep accelerating as for pace of where the packaging, a whole everything had think dramatically complete pace partners we think accelerates.

Unidentified Analyst

two Great. And ones. then quick

versus the and Thanks. the moving And there. Sorry should I customers of timing with this, quantifying How then X% we in there do the rate is quarter-over-quarter. moving competitors? win would up the but expect base an over you you opportunity upscale installed mind missed only think quarter

Vik Verma

both. So

our against personally three rate three. let's like we're with will out head that's in basis. and we to competitors on monitor it two So it's and start chances weekly is two a deal and And in I out I win our primary win credible deal of a something of head if a we're

efficient we at our channel just I enough partners necessary are been sure has problem the to telling have stuff said quote best. didn't are as manner. all making that tools us Our They an have in the enough at there best and

not with is very, we the And number the doing very will of probably So it's base. now the systematically absolutely essence major to came which have to as in installed I of different from think and item to gradations we of to the quarters yet than on our six doing over move four XX% base that's our capabilities. XxX started we able to regard we're six have migration was everybody trend core Series will X installed up, process base additional installed one. course from upsell can installed XX% the XX% are next it of more the where an the of entire quarters then capabilities What seats are telephony, base. than And approximately the X And from. you have as X because be opportunity, represents see where Series you

non-trivial that opportunities from upsell So perspective, we see X. with

Operator

is question comes line B. Josh line next Please your Your Nichols Riley. of ahead, of open. the from go

Josh Nichols

more to company's growth trajectory the I the on for you're are just did lag that those coming my OpEx guide I'm of trying taking side, the two want looking looking row increase the up I of your see the a to quarter likely hitting continue And that come the over a ask just fact should couple or quarters. that think question. on to the the at expect fiscal about given for thanks to year. we targets, a to pre-tax in Yes, quarters losses non-GAAP OpEx

Steven Gatoff

Sure, it's Steven.

result a investments like will bit I around little our modest base the a up a lead lower we're of channel revenue see uptick right in we gen. about bit making of a as as than are QX about that Aggregate and So anticipated. percentage revenue big we as from talked talked a mostly go dollars two

So that meaning rate. short basis at expect we period we're next but dollar that, decreasing in driving for to in leverage a that to increasing start expect quarters, continuing invest the to we start

Josh Nichols

bit probably And destination. potential XX% further station I before, case that talked I but know it that of that's target? discussed as as kind of kind mean a if the still to acceleration continue is assume, not would would right, need little is assume you've And of the you'd about like just revenue a the that to being still services growth way to a see fair was final assumption? longer and I company's but growth, I term any a invest

Steven Gatoff

quarter-over-quarter, in model invest point leverage sequentially aggregate the meaning Yes but and yes, increase. but a we to marginal garner important the the lower at is we will more dollars expect

as as really our the with bookings drive and with milestone targeting up several that the to so, we now quarters SaaS and growth XX% model way about point to - bookings that not hit a will rate is bookings that's it level. well the you that over And the next look oriented that if that. a call we're your will the come around sustainable the But hit on revenue really XX% end at on result And overtime. talked trajectory our as SaaS till you importantly XX% growth revenue expect model pretend would a rate, we've absolute that increase growth model

Josh Nichols

and broad-based historically sales Series had the hiccups company then good regarding X more verticals, just that for a type some after some retail bit has that of were like or these. issues, specific bit whenever success in particularly that you're we the causing more or you But the weak trying of get seeing? And the couple drag healthcare any handle or a was on were of Or better the just there specific that. little areas little a to

Vik Verma

take Okay, one. that I'll

high size is got the started laid and broad-based toward to well an and we to as continues tick continuing managers, to do And has businesses it that's the of reverse right basically idea velocity it's our been that of almost really in did Enterprise channel is X on. change. not up X vertical small in starting kind execute of there where received enabling egg got see [ph] there. gushing the our we curve, channel it's in direction the we've tools So there. other level that It's the people or the with of has probably mid-market. sales been by good terms we where that well, fact and like sales to velocity the and sale And with leverage X that motion we the to to channel, do the higher mid-market, partners a self-service job and well whole and do done is our automation which not

motion around more the selling it's than anything So else.

Josh Nichols

it Thank That's you. me. for

Operator

[Operator Instructions] Jonathan of the open. Please comes Summit is line next line go question your from Insights. Your ahead, Kees of

Jonathan Kees

commend earning I guess going issue blaming from a taking I'm shutdown. Great. throughout this so China about sales tact. season this companies And you to everything different take far ownership guys to execution, government the the hearing of for we're lot

execution currency this saying issues bothering horizon What's market still And there of - exposed you with said market, mid-market on Now there's issues terms you - headwinds? you have be too. is not mentioned so - could strong. that's anything Brexit. are trends the anything in though, the you Now indeed haven't there's have what You to you're already concerned? in now here, terms issues if macro or you are macro there's terms bothering of that of UK, right

macros? I horizon So what could in the be terms in there on me terms talk guess of of to

Vik Verma

to looked in Jonathan is we to in actually somewhat of But able gallows was blame China And government hoping because pretty kind a else. way because be or to funny taking easy or was literally with humorous simple when enough. of the shutdown blocking I that channel the Fair unfortunately, mirror, brand making new something them up and bringing tackling a our product, channel and sell. brand a on it team, combining screwed and basic for to we it it partners new it

to macro was So issue view, ourselves. unfortunately, any blame, there's I'm not nobody a point change. of the and but that From seeing

and we deals that and need And out finding instances, be two not think a we're up matter we from of product I as macro to the I been, now X in able for don't the to a to of and other we with any on and you are have always We're selling When heard together think all of do demand case. noise, there, three I some win with sources that the there issues. are velocity that that. deals common is refrain about market thing those better - we're that a from have view, more of bullish better. it. has to identify some the I act continues with fit channel own As all me kind fine, the foot fundamentals purpose. to We feel is out goal keep is ability think just the in in fix damn it. our is point Brexit as fine, view we there where anticipate demand degree deal, of as work I our shot the seeing But ourselves of pretty to we were partners X areas it, been why the get high I that large the getting a particularly fact, it, get just

Jonathan Kees

can one in in can stock especially more squeeze here. Can program? I you buyback any If us your terms of you Okay. here, pullbacks stock update with -

Steven Gatoff

on we and million. and I of capacity we year of past not now total approximately have program the had Sure, right done million $XX in a believe anything we that $X have authorize

Jonathan Kees

guys. luck, Good thanks. Great,

Vik Verma

Jonathan. more, one add I'll And

buyer window the do time-to-time, will my appropriate and to And a over right time this. it to a years our a the I stock to intent net you know, been buyer I've As from that share, anymore. the I in is single and sold not continue be of not subject have open at

Jonathan Kees

noticed that, too. That's Actually I noticing people and Vik, good. that are

Operator

go Your line open. comes of ahead, of next is Please America of Lynch. Nikolay Merrill Bank your line question from Beliov

Unidentified Analyst

X on actually Chong base Series? win rate Series? you X couple to This [ph] Are process seeing I a Series. of for And with the disruptive questions a regarding your upgrading Nikolay. have Jacqueline change the installed X is how the is in the Hi.

Vik Verma

of So X to two three out against two things, of competitors. with out the we three rate have win major Series from seen go one our

for installed anticipate base Series. the additional Because me give today what disrupted comparable is, idea the than So have our for X I capabilities that all the exactly them telling to be fit with they X don't at of is transition will purpose. is prices. we

easily, seamless as no we rolled on, X four out to Nita we impact. to this And completely a think asked so And goal out everything initially systematic way and and where X, But so selling worked was it do enterprise in some where I cetera I had because the and with But was small weaknesses very it when was it said, channel. just relatively get. did had question we a what training, enablement, been et We the four early frankly, touch that's got is addressing what evolve it's rolled are motion, business with to sales X to we we is we et quarter, exactly it not manner. in right small then enterprise, is an high have make there's last to positive, the years issue cetera, our over relatively business, and And discovered mid-market but over environment with six it's to simple. we now. starting that

So is to to to actually we're and need a and rate - dramatically the to it's the that X our of But going motion, which change tools is the of perspective increase the win address mid-market the velocity selling can sales. everything from seeing. win what whole we purpose rate, more that we channel do that is

Unidentified Analyst

most and Are in the customers features the new can one. I any are Series X what If it. like quick that there they? Got squeeze a in

Vik Verma

fully the is center. bigger and you to The together, a everything make ability fact the biggest the to Because see contact center. So I push you'll what's bigger have frankly - mean us in and thing contact particularly start that with integrated have and all a leaders contact evident all a bundle we advantage. give becoming except as us today in the and presence essentially telephony have competitive pretty is that is contact center should contact significant space complete that the we of in center and X part formed

conferencing. state introducing lot integrated data conferencing contact or analytics, the X. Jitsi, with and Atlassian, essentially with the state center of the in is in to out analytics reporting to video have it'll to be so introducing to that addition of we're have be In art we and of of end with job think of we of from video data underlying combined brought conferencing combined generally This telephony now channel of we is and tightly art four getting a is we'll of bundles a will with be state the will think the Connect video June, just be timeframe. off Enterprise the into X it at the the market, our August by brilliance July, We whole that I end hands again ability that And and a enabling them. Series And and getting available good I March of do the that to team have unveiled partner art races. -

Unidentified Analyst

you. thank Okay,

Operator

Your go of Needham comes Valera next Company. open. from your and Please question line line of is ahead, Rich

Rich Valera

prior a you from was rapid you see the about enable lot quarter that had hit bogey closed that some we backlog when XX% of Vik, going already do talked business. in to of was had you. of sort going orders of ease been that enable of kind deployment you acceleration you'd said that the Thank already one what quarterly X to to Series fourth seats into and to of to sort of the deployment the

dynamic is soft that So it's see out two slip sort quarters on given And of still things some to that true? just bookings. surprising

that. on you comment So I could if Thanks. just wondered

Vik Verma

mid-market matter bit in But for a basis a seeing in the out I whole was move to disappointment. the major the X bookings mid-market than you because start but lighter one where pace and no very as it of and XX% true. it's things to come Despite to That XX quickly what you're think faster I better about. deploy you to happiness. self-inflicted so of The of XX% fix X. of of a other And XX that those you we and obviously is blip And bookings sequential enterprise is purpose still again a approximately of get I'm collect because fact than of deployment which annoyed boom, out temporary on expected and are a look, the this increase ease slipped continuing bookings, the ability think of I revenue on. even quarter it's less can a quarter the little QX points. had a Yes, you end mean it's that really is will side.

Rich Valera

Vik. Okay. Thanks that, for

Operator

George next comes ahead, Please is Sutton of Your from question the of go line open. line Craig-Hallum. your

George Sutton

Hi.

the little just that Vik, more some call, told indicators were there mentioned curious about indicators you're you you those Sorry you you to that you've angle. belabor be made but granular if the mentioned, a could are I'm leading the issues. what leading had changes the curious And indications the early issues leading have give that from us I'm improved you that were? things. seeing if can

Vik Verma

that's Yes. have just back coding been and progression like No, about saw stage coding deals executives. up that going a our a would a to We as I and And lot of well job on have have we questions say of forth questions done stages and been different and multiple going was there thought should and from deal deal sales our in it started start channel that the we - we and forth antenna progression. obvious was good self-evident kept think to enabling that meetings. fit and not monitor back our various when go features as necessitated we team

and - the to basis started around lot mid-December and where was questions have late longer should And see very late and forth of November a obvious, were deals that that stuff. and been very so, was back us there we what probably taking

the was one issue. that number So

own honest the this look, And sell have early harder with us, listening that and didn't they it, of about with were January purpose partners, I'd velocity all missing. timeframe. And to just hear our phenomenal partners, tools channel thing And got did were with was one they great our to some thought team hard tools team tour necessary we to our and was hear is business all hear, the said we product. a late the to that and not second capabilities of excess partners. rather it. channel our our the always fit The aware to embarrassing do totally but some December for all they they channel started - our very extent, we That's

have going And on. easy made for of to able We've kind in. process the and made so, org because go brought made some folks than what address we're right get in the said, address partners essence been to head get you more dramatically And it if We changes. we'll us we it would you'd they it we channel were clear to business you. able it

self-inflicted you but so go those. can wound, you is the And news well good address

George Sutton

that. at as quick Are channel any of up Just as a other a vendors looking potential follow issues? to result these those of partners

Vik Verma

market. viewing around. the lot the to answer of a X as turmoil that actually way in Other is are They happening the

know as part sent of as a basically note towards you as ago their right how me some years means one have time and ago of and you contact Gartner part we UCaaS just order vision gotten center, converge think as platform. two, well four about to the category I And is full videoconferencing, CCaaS together. CCaaS, mainstream. picked rid three in that of UC telepathy that, is UCaaS to everything has solutions only bundled now going have stack a to recently of is which you most cloud be and

So own and of guys we to your one that shifting few channel bet here all the partners turmoil they're because you're basically us stay. are technology own and alliances viewing with happening as going, safe the the are know

necessary deal ability in think information we're them were in deals should been candidly to not disappointed And we all those were have in that like quote, they so And our the once chances. give in. we our but I I therefore to

George Sutton

Got you. you. Thank

Operator

Matt from Your ahead, line is Please VanVliet of your line go of question the comes open. Stifel. next

Matt VanVliet

question. Thanks but their some mid-market or made guess, do? you taking enable at that, you on, briefly the but existing organizational especially was looking think conflict sales that have Yes. to for my force what touched to also the jobs your I changes shifts I issues sort of understand channel of around that has curious

Vik Verma

direct common team combining essentially common leadership goals, channel the simple, tight team quotas, sales a with the common and rhythm Very the top. and basically very at

channel channel is very compensation processes or well partners as And in as do which of creating blocking annoying tackling. top integrated said about on managers this, drives reviews so basic it's essentially Again, tightly deals channel by very is executive that behavior et cetera. and and the visit very, then as together sales a together, our I part that this

toe, And have is did. our the should reality stubbed we not but so we

not starting kind stubbed were different see So organization. got And and what to I'm made the to some on. we'll needed being telling of we a of team it And that. we about as we blunt we and and very amazing And our few as the and to the goal partners I toe were are as to where we to benefits I an us with folks job processes our we get said changes we a it. well have honest address the way better. the completely at of for grateful is organization head as do us good and channel had we opportunity doing like about they have, the address levels

Matt VanVliet

a targeted maybe a type versus the even you've us added that curious, of just quite size and the bit in to quarter. And I'm of quarter of you the if last could customer had partners it obviously more then you a or community what mix before? give geographic mix system this few partners added little recently

Vik Verma

Increasingly deals, way our focus is the on seats. X,XXX-X,XXX channel seats is all that bring partners which mid-market to from up XXX anywhere us can

bring large a relatively to have self-service, we customer et we they all can deals and high which mid-market successful. for them those or our done so channel And is was have that and to kind to deals, means goal lower get really that The large the touch. a because winning product targeted base the but automation win that partners cetera. be We model and very really goal X,XXX the and very, configurable, area the ultimately we accelerating that's great enable is are keep enterprise on who large is with can touch those we seats job the engine of XXX deals who have need as which much

Matt VanVliet

All you. Thank great. right,

Operator

go question the of is Mike Northland from Capital open. Latimore next ahead, Your comes line Please Markets. line of your

Mike Latimore

lot. a Thanks Great.

of migration that? with the terms In the would any there incremental of sort costs notable that base, is of go

Vik Verma

the it get top very cetera, huge do we able at to more entire any mean, every will et that X would quarters. it to was about minimis, then lot that, don't will so goal to And And they designed, that's a major we've have comparable to more over six existing today. self-service be for of that on systematically, to it the automation, I what The them automate ability as been is why possible. de is a have is is base. pay it. a our be anticipate it goal four idea and as installed they cost. systematic whole that enhancement but be stretch Relatively to customer than what migrated out price to much The

Mike Latimore

said? in All right, just then deals the And that is track you quarters, terms what those got few the larger on of that past generally the won guys. of it in deployments are you've

Vik Verma

got of the the the are better, going deployments right. company platform, of across newer board, deployments the are Yes, because faster look has - gotten element every we've

I'm you settling think points, in very about I quarter. light what off you you me, said, much increase to to growth growth to ultimately company grow as XX what between I particularly percentage that basis deploy the XX XX to can as you're you in but - by I bookings that's of increases extra right to start sustainable growth if is rate if now the was to get So two opposed which by it bookings, mid-market seeing is because to for which now. can races and the in And rate sustainably I targeting continuing bookings QX, faster. because then every And for because the consider despite points primarily basis the quarter, then see execution. sequentially one And want XX points

Mike Latimore

are relatively to rate back of here? in XX% get revenue the you you soon that that growth that implied assuming bookings growth sort kind of And improvement

Vik Verma

I'm not too sure that's months sustainable. it's don't bookings, future the stubbing intent terms yes. shot, I systemically In mean, in And of one that one gets great. myself is six a right. addressed just it's I again, unfortunately did been of we to so make of have four And kind that distant the to buying quarter us the that toe

great by quarter. so-so followed great followed followed by a quarter, have quarter, by We so-so quarter,

and that's goal keep X to that's that that towards, is create. sustainably we're how getting And And the do the behind which cooking is the Series the behind we're purpose whole so selling the the trying purpose bookings target motion so sustainable increasing is whole growth. you that bookings quarter-over-quarter that's XX% engine and the

Mike Latimore

Okay, thanks.

Operator

Your of line Please next question [indiscernible] Zack comes ahead, from open. Dougherty. is go of your line

Unidentified Analyst

for Catherine guys. Trebnick. Hey, on Zack,

two Just quick questions.

could presence you roadmap selling secondly, penetration And your current a your more little international internationally? X if Series your APAC? in First, progress with or into build specifically what's

Vik Verma

Pacific. then and timeframe available UK Europe both Zealand it as Asia U.S. and by as Continental is the in not X is available intent in as the Australia, well well available future well X be is the end distant make everywhere. in in currently ANZ will and as ANZ available already It's of it UK But basically QX QX. as as too New to available think I

only so, I then, next install be get that the we get our And quarters, said sell over shifted under over everything And X product and will will to will base we four six X. subsumed basically will to as the X. entire

so And what that's essentially we're targeting.

Steven Gatoff

bookings. roughly north so it's just XX% new Xx our talked our financial being revenue, that a international probably And of far and standpoint, we've is of about from

And so we're seeing nice overseas. growth

expect would to we becomes larger edge so, portion as a the and larger continue that up to of base overtime. And that

Unidentified Analyst

it, Got thanks.

Operator

this Vik remarks. There turn at call Verma are no time. like for further to questions I'd to closing the over

Vik Verma

call. you our So FYXX QX earnings for thank folks attending

several will I at we're support and few around have. you any Thank of your And on an be March significant we look think why Connect, which is I months and forward have guys forward presence again. Enterprise you I continued so to Series Steve announcements opportunity to an see its so look to may next weeks think excited we answering a will all some will have you, of timeframe a to opportunity interface that road and in get about in it. with glory We X both over the and you. big the Orlando. to And that the questions have sense

Operator

today's This call. concludes conference

now may You disconnect.

8x8 (EGHT) 29 Jan 192019 Q3 Earnings call transcript