EGHT - Earnings call transcript Q2 2020

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Operator

Good evening. My name is Rishey, and I’ll be your conference operator today. At this time, I would like to welcome everyone to the 8x8, Inc. Fiscal Second Quarter 2020 Earnings Conference Call.

I will now turn the call over to Victoria Hyde-Dunn, Head of Investor Relations.

Victoria Hyde-Dunn

you. Thank welcome quarter and conference XXXX XxX’s call. to afternoon, fiscal second earnings Good

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

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

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

described pursuant Harbor we started, statements cause just results and this and today of that duty risks about factors statements of forward-looking business, to update materially the Securities in our get no uncertainties reports Act a product discussion involve Litigation Safe to we these filed Before of as our caution XxX’s or strategies Any undue reflect growth to to the today Private are on our XXXX. actual made forward-looking and that and includes on forward-looking they reliance provision statements have you reminder with that risk the put from future may as Reform vary analysis as SEC. our call statements not the them. forward-looking We plans

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

over the me turn let that, Vik. call With to

Vik Verma

on We financial results quarter traction high performance, and year-over-year, internationally. with enterprise CPaaS continued revenue delivered good channel and end year-over-year, up the focus early afternoon thank XX.X% mid-market customers, and second our were service Good of and for results XX.X% contributions, you us Victoria. our upmarket by accelerating These you, today. total joining strong driven outlook. Thank revenue exceeding up strong

across improved our go-to-market These business. execution results reflect

of and direct good growth sales We all by in our in have channel sizes. both teams execution customers and pipeline seen solid all for creation, and geographies

Our to disrupt a video massive contact global, now, strategy as-a-service. platform technology cloud to communications, markets: faster center, enables unified us of communications four single, meetings, owning platform and innovate

remarks performance, and like topics: would to competitive three on environment, bookings platform focus I my innovation. Today,

grew QX and year-over-year new grew grew enterprise total bookings record. First, board, our XX% strong on reached results growth XX% ARR contributions in enterprise a across mid-market CPaaS, organic was were year-over-year. quarterly Based from ARR and strong year-over-year XX% particularly and bookings and these mid-market encouraging. Bookings the and

about grew bookings XXX% with including was deals, total quarter represented center business more X-figure geographies quarter, bookings growth closed but with this global UK number than We XX,XXX particularly year-over-year. our of bookings of new All large our a and in record TCV excess had notable a bookings Contact deal XX% a strong year-over-year. growth of seats.

We including to We Group. Converged were bookings of and organic quarter. contribution channel program strategic and Network deals. from strong Consulting expanded important bookings year-over-year performance came significant involved of the our A channel this accomplishments our Group our top had XX global several Channel Telecom XX% Services channel addition to partners seven channel in XX masters grew our partners.

now partners. XXX program over channel Our has active

Europe value Choice named event was partners. of level Award Intelisys week. Overall sales dedication, its XxX Forces highest Intelisys Summit to was with XxX excellence, honored Vendor Top Award the at honored be Partners’ to Avant’s for by the last also the and demonstrating – Supplier Special and Sales Top support

channel We know our to partners together. critical our on ongoing success, and we are winning focused remain

quarter channel firm seat market leading deployment to Indeed, platform an technology presence been A XxX. job that replace growth confirm this have rapidly legacy, search win a expanding with U.S. partners for They and offices is X,XXX deploy countries. to technology on-premise Our were and and global that is business the their tremendous great a our global over fully-owned could a with driving solutions in looking over scale ShoreTel provider experiencing XX a system.

center. other XxX X,XXX-plus center. systems libraries, XxX replace X the the government and and the several local government providers with seat including in want including secured education a supports XxX the to services in local cloud also authority. highlight win end X considered I which vertical. momentum legacy we able Indeed UK, chose contact with recent In service, a was social Series to a contact Series

a the Procurement these cloud cloud organizations process. partners a NASPO, and to They SLED channel from purchase the procurement In education chat, video now cooperative are market This able on adoption. XxX. simplified state, including National work empowers for State solutions, voice, that U.S., agencies, is ValuePoint the contact through team a place ripe contract SLED indicate of districts, channel NASPO local, directly for awarded with and Early government Officers. we communications to meetings, by XxX Association messaging, special conversations been have center, contract

their in an our more XxX contributor A number well. Express this future in during in driver e-commerce launching bookings the be Another major offering for growth UK small near communications as logos expansion the self-service of businesses XX% of an to result the that was new the Express, was of added than to provides to path will XxX of move easy instantly launch cloud. the quarter. the

standardize enterprise the see the As a with example with eight delighted great continues on to deployments mid-market they final XX,XXX see be globally ago and seats, of initial signed for land-and-expand another customer am and X A on year XxX immediate norm our look platform. is value seats X,XXX a This to from as Series comment us they this that figure started I customers, earlier. with quarter mentioned bookings, to globally. the I TCV deal this and

UCaaS the announcing I space. a in with arms There provider, the with a competitive UCaaS address in cloud weeks, number provider to cloud developments vendor The vendor video meetings past a want over to competitive topic linking landscape competitive interesting legacy offer the partners that environment. few that is been second a UCaaS evolving from the a same have of

We have of $XX headwinds opposite. answer asked changes market to anything, the the changes billion The are XxX’s create is been available quite these ecosystem any our short If these of disruption us. whether opportunity. accelerating for

Let me explain why.

It were legacy to number a choice. we large of anytime installed opportunity brings customers on-premise with of and pushes with just for announces are to cloud in Anytime customers at-bats it future increasing a to make cloud us the the First, provider a their is Pushing to more moving more that change, begin cloud is customers with. getting. those who change, the more that want into change evaluations a XxX. they a is customers base

cloud other. horses your and confident It We contact a with shift race, platform are would How will its center helps purchase? cloud to integrate is after business? it and that change a technology former other the platform. partner partners video single clear. benefits compete you your of communication considering changes? just consistent other you technology roadmap sure when strategy you made Second, like well begin your a mid can a if when us consistent providers you Are from want have Do services? be optimize so with can UCaaS cloud changed provider you model your each a for meetings customers that you data across How a to protected unified technology your future

every cloud for we Third, migrating unified what platform. to solutions announcements partners. something to Mitel close sometime provider’s customers than XXX product to is to to a the between cloud a there, legacy smoothly This cloud other provider, have and seats them cloud. No the on-premise million day, is available else we channel know maybe do we turn the today migrating the wait in future. our are requires Avaya, that to customer, out more There ShoreTel, need from solutions into Cisco, migrate partnership and and

while Finally, we Poly center. with This two named proven a process leaders, their communications more ensuring will unified to can help we to cloud This announced and all joint accelerate meet the strategic morning, customers industry organizations ScanSource. move legacy, of and these partnership successfully needs replacing solutions. program, even to global have collaboration technology infrastructure CloudFuel, contact do communications, on-premise across of

first the program frictionless will comprehensive, offered replacement community. hardware cloud the a migration to and is VAR be time This

going to the continue to addition regardless In we strongly important the legacy the major efforts as installed that have focus original serve advisors to as forward, of community customers believe cloud, and VARs shifts and agent are equipment an our base. VARs of with their developed which to end remains a the world long-term relationships vendor. trusted The path distinct

more of best-in-class access of communications and contact than platform, Poly will unified customers solutions CloudFuel globe. an and technology resellers, awardwinning of with ScanSource single XxX’s to on across extensive network Using XxX’s equipment from the XX,XXX hundreds thousands provide along center

way to sell program Importantly, will this the they to allow are to VARs selling. used continue

for For the in funds, to the bringing and alongside Since communications various and this solutions, migration XxX tools. services. equipment begin with services accelerate this includes true the December. resources, and Poly leverage model into move partnership migration to familiar help able customers offering solutions, today in programs, range cloud. natural tools This and partner first of sales we be and exist invest a forms of way. industry standalone full and VAR already is under X dedicated time we a our honored are to deployment with ScanSource This ScanSource in development incentives, through will the the and the to products program Series XxX cloud both joint game-changer teams the will frictionless to are partners, XxX, buyback selling intends

the the business Since built future ever innovation like platform, technology have to I topic deliver a cloud innovate last would we faster own than of single the The into we of is much on can pace our now single accelerating and it highlight platform. communications. to

touch high points. me on few Let recent a

their Series Video completely solution, Meetings, available September, complimentary all meetings reimagined we X launched subscriptions. a and of as In XxX customers Express part and provided service for

well. early Video and customers recently rolled-out have received to very We customer feedback Meetings Classic all XxX positive as

access We are also many to installation and partners VAR directly room working technology The with XxX video customers businesses to as be easy equipment This smart cloud every yet especially conferencing huddle another by solution. our with and video prefer our bring provider. have pairing our community, partners, is and reseller intuitive collaboration an to working space Meeting handled communications with interface a connected Rooms opportunity their on-site goal and launch early conference devices. to for will to

Next will audio for Meetings any to from and customers. allows software. XxX device launching be users conferencing need also HD stand-alone join service easily and service schedule, to register or month This new the room download and audio Video start, or a we stand-alone new video without

IDs meeting remote we via it to this keyboard our collaboration offerings plan softphones, will initial adoption. and platform. expansion rooms, meeting tools, personalized provide to In to and participants and meetings of participants, opportunity customers duration. the for any free center voice, XxX new screen contact chat, solutions meeting will to offer control, Video support The host then Meetings and meetings and controls mouse sharing, or phase, natural video sell customers same those is X-Series on all encourage

integration is am the Turning that schedule. ahead of to pleased I acquisition CPaaS, Wavecell of

fact, In faster cross-sell expected. directions, than opportunities, in seen have materialize we we both

our is contact discussions APIs customer video, CPaaS This UK and who interested voice, and the leveraging center new our in extend of pre-packaged capabilities in enable our of in line and chat, customers contact several are We engagement. to XxX with CPaaS in center capabilities U.S. with their with a tightly large customize coupling both solutions across businesses. strategy to are level

stickiness, land announced opportunity the further and in our is us this discussed acquisition, of customization we value becomes we and why increases installed which our a huge both market the base. As expand when such part for customer

services. continue one and with the directions, cities. over experiences that also platform customer over enhance hospitality confirmations, exciting of and the global XXX cancellations, provides growing customer to as XX,XXX customers sign onto fastest new We is locations their differentiate in This booking to payment companies such with CPaaS messaging our platform, using

in that Today am Gartner Also, for Provider named year XXXX which America. North Magic consecutive the unique Cloud in named named I a a as was further our in Contact UC Service, row, as leader were industry Magic XxX’s innovation. success for the have continue boundaries validates a fifth the highlight to Worldwide, a in pleased for Unified market leadership. Finally, a year recognition XxX industry. the Center organizations also Quadrant Best and eighth Communications Challenger Quadrant that Service, XxX proven We XXXX Communications Gartner was the to the push recognizes by of for

global, transform These of the platform approximately for helps to platform, to to strategy on technology quarter. of XX% cloud is installed a communications success Overall, both the the our customer workforce of awards how of and needs companies last unify Series and employee up and single our engagement. speak productivity XxX innovation X our base from enhance mobile XX%

summary, am In our I results. pleased QX with

technology to that platform and driving see cloud for and us execution are our available business. to customers turning today. more results cloud Our solutions across are strong go-to-market We looking

CloudFuel, We our are fiscal year. forward our platform. we Poly. the momentum, am look pace of innovation excited of this to about with half second excited and the partnership ScanSource our about Building on I on accelerating

continued for hard this opportunity and Steven. want for also our well and our support. global and their to On as partners employees their dedication, take work as thank I to to loyalty X,XXX customers

Steven Gatoff

afternoon, Thanks, everyone. Good Vik.

financial Let the fiscal call QX remainder QX, of and results me by opening the wrap-up discuss outlook reviewing and XXXX. for questions. of course the then to start I’ll your for first by We’ll our

QX Starting strong across for technology XxX demand our results, environment in platform. cloud the we with fronts executed number financial a of very a well

centered is platform and growth bolstered very-strategic capabilities, go-to-market our execution, focus is on multi-product and driving improving with our now efficiencies. around and differentiated operating Our CPaaS

elements these solid of compelling a path and in financial All and came QX together forward. generated results

in acquisition. and data-points by across One, go-to-market million, our and UCaaS were customers. QX generation with strong from with These from Service execution existing root and organic XX.X% Wavecell Three, our drove continuing factors: the up to geographies, offerings. CCaaS organic initiatives, of both and revenue sequential channel execution our take our $XXX.X our This results strength strong More includes around primary million, bookings at of growth. and channel the product business particularly the Total an activities XX.X% sizes, revenue that and growth pipeline guidance grew XX% exceeded And increase to offerings investments came-in and execution across of CPaaS customers. Two, contributions for and partners. four, drive pipeline new high-end are generation $XXX.X top-line that year-over-year. driven continued our mid-market solid four year-over-year. in large-enterprise customer

to of and UCaaS where came in briefly million like included I’d quarter, our CPaaS continued that, driver ARR bookings, in at new organic business, and our of year. solid of QX came growth XX the growth. and This With from ARR A address in closing had $XXX a prior year-over-year in contributions growth new total the for XX% September quarter in that deals combination from solid a up growth represented meaningful $XXX,XXX in ARR our XX% ARR offerings. the that XX% from CCaaS excess of

than we greater XX% had total, generating a In $XXX,XXX in ARR growth. year-over-year XXX QX, strong customers

XX% XX% above-market growth quarter customer by in ARR that grew XX% higher we XX% of enterprise at mid-market and far the saw so with business drive focus to customers year-over-year, growth our lower solid another in value and XX% year-over-year, ARR ARR And on up continue QX. churn. and grew size, mid-market sequential year-over-year and customers. enterprise growth Combined QX.We enterprise lifetime small sequentially in mid-market, in from

QX expenses, marketing from operating line we to the QX of and on operating Non-GAAP that committed XX.X% QX. to key to item on revenue is both in improvement delivered take-away Turning our expense sales individual in we in-total efficiency an and improved basis. that XX.X%

from improved R&D to in improved XX% in to from in XX% of G&A in of QX XX.X% revenue QX. QX XX.X% QX revenue and

$XX.X second our both by OpEx Finishing out-performance than quarter non-GAAP revenue and net guidance, efficiencies. on QX, better for and approximately things pre-tax the out million, loss was driven

turn of the outlook rest our let’s the for that, financial With year. fiscal to

the on-prem momentum. systems execute we in legacy and channel more displacing with as traction are gain to continue We

we’re offerings bolstered Our are UCaaS with and from new expanded and open strategic actively API and CPaaS CCaaS the numerous engaged customers existing our being and and capabilities on with very high-growth fronts. technology framework;

our space platform unique in on-prem we untapped to announcement, UCaaS single-technology offerings are provide market. to stated As this aggressively the going after this and compelling morning’s

the customer and heard to, the you access prop with partnered from the Vik, deliver key community. who value unique have the and direct and VAR own, to Poly, ones just a actually As space players compelling ScanSource to we relationships and in

and Avaya, legacy next reiterate services. To spend approximately investment run with profile and it we’re that change over and baked other is migration quarters accelerate on-prem our tools This be speeds one-time and fiscal path not does rate customer is QX XXXX that’s campaigns, a fiscal million not drive customers XxX our million our this of $X readiness, two cover go-to-market profitability exiting non-recurring. CISCO, QX rather XxX our of to activities $X deployment new execution It migration of to making into this moment. In bringing I’ll onto and launch, investment It partnership, the tools, marketing Mitel enablement the that and XXXX. important expense should in platform. a to training

and This growth, both we’re our data legacy revenue conversion bookings platform our the on XxX operating to and point on-prem strategic on drive efficiencies. to another continued partnership is bullish why ability accounts of our and

to in for we’re revenue to million range Pulling million. to increased anticipate an fiscal We to million, pre-tax as year-over-year be to together, the XX% establishing revenue XX%. representing this XX% anticipate service $XXX non-GAAP the XX% of of $XXX million million, QX be $XX.X revenue sequential guidance be $XXX.X representing anticipate XXXX, And follows: range growth in year-over-year approximately to loss we of to our $XXX.X growth. total We

to revenue are full representing total anticipate revenue over or at be growth. million, growth fiscal guidance. now million to raising we approximately XXXX, revenue $XXX fiscal anticipate we XX% and be approximately We service year-over-year $XXX XX% year the XXXX, issued Looking our previously

million our in $X $XX support expense that XXXX of ScanSource/Poly new non-recurring million million. to to partnership brings for approximately our $XX of guidance fiscal pre-tax of On investments pre-tax our year full we’re existing non-GAAP non-GAAP loss adding loss,

ARR In strong overhaul beginning QX. continues expense at the mid-market momentum. drove we We to and summary, combinations saw we’re that and in year and revenue, performance very enterprise pleased and the with operating from businesses, and our of channel the our show contributions perform

trajectory We’re and growth and that’s equally benefitting operating revenue encouraged improvements. efficiency driving from we’re acceleration with that on both continuing the

We non-GAAP communicated. profitability to on path end year our track March to we follow achieve continue fiscal as previously and XXXX break-even next exiting we’re to

communications enterprise-grade $XX market of contact and We remain well API platform. chat, positioned an leading provider cloud center, in a billion as voice, team-messaging, the video-meetings,

from differentiate continue expect other we business from and legacy, on-prem winning We to solutions cloud continue providers. to ourselves

appreciate we call your that, Operator? any With we’ll support, for open the and now questions.

Operator

Instructions] first with Your [Operator Stanley. line question from Marshall of Morgan comes the Meta

Erik Lapinski

for congrats Hi, Thanks team. quarter, deals help or or us just was on in can growth drove margins, contribution and the just just on better better understand our the there? driver Meta. look decrease? for the at a but off it larger Maybe would anything sequential gross start tough help us get question. from a you taking of This one Whether is that what taking the you Erik with to the a CPaaS sense

Vik Verma

of equal really bit margin almost Thanks. product One, have things which it It’s from and on sure. three piece lower measure. offerings Sure, was you the bit in the little revenue a was the outperformed CPaaS business what profile more. that a the said contribution

third, and bit nice as since probably And more as in higher bit a Two, of a moving in you little had our OpEx of comes that a we the delay, little we have XX-day probably that some both delay a done to – revenue basis side. So but margin. with little We’ve on that of And had lower structure that had also a gross well margin those product offshoring a contributed we of cost cost COGS saw some then some on revenue. been growth bit structure. offshore. that, we

Erik Lapinski

market may kind then anything competition Thank entering just pricing there? some And you. the be there is around end, the is newer mindful That’s or smaller helpful. should we be on you’re particularly increased seeing competitors is anything of

Vik Verma

no. and Yes

which And no part July better much completely automated. e-commerce time the launched completely actually, self performed around So the than and one is we expected. to that’s service which has nine for seats, is frame

support, – automated So think involved. and in get order you with the cetera. range. And provision can priced it’s and et completely I that’s so of limited effort X,XXX And or amount

entry given e-commerce. So for the very for that. essence us using point is that not a any in because salespeople edge because has that’s completely huge It’s you’re idea think us I competitive a attractive

that that’s and logos, So on And addressed And series as that drove quite two others which in a X the quarter. months sequential frankly keep new end of lower that e-commerce contributor. upgrading only time over it a new and we increase key for market. XX% the a of saw to logos of was mind in bit

Erik Lapinski

congrats And you. Thank awesome. That’s again.

Steven Gatoff

Thanks, Meta.

Vik Verma

Thank you.

Operator

comes Sutton Your George the line next Craig question from of with Hallum.

George Sutton

obviously you I Vik, the different. Poly could of people sales partners. the it today. go-to-market And with ScanSource. if walk context. spoke I wondered was They through other Thank a what I and the the this couple of with have Poly in really you. uniqueness explain couldn’t They ask actually

through that you So love walk to if you I’d could?

Vik Verma

recommend he highly and of the partnership. Joe should because able excited he reach out the Poly about be you Burton CEO very explain to I he’s and was to

of that the the our to the the on obviously and master agent the lot What that. premise subs relationships a So guys, address have continue of and for with of power. is, at luck level learnings in legacy accelerate community macro macro the is a we VARs lot and most and have level. it kind had let a The we expand me is of frankly,

who sell I XX and basically Avaya’s buy in – XX,XXX to has equipment. million ScanSource’s controlled million or distributor it through are VARs seats of XX a through is approximately ScanSource believe Avaya neighborhood largest the VARs resellers. And in

all the customers. of have knowledge they the So

where to and will Avaya Poly make program is called subsidize able we ScanSource be move available CloudFuel going the program this and a to phone. us, Poly through from

basically phones. have said other folks will Avaya Some try obsolete they and support

buyback that and basically modern to and Poly able a a We program. will will create subsidize provide be phone

have unified VARs a know, ScanSource their sell we and reason the traditional is to interesting providing train customers. it end because go VARs them fact, added be This and to a have as services have out sell and hugely with their comes to user value They relationship we The will train platform, will able they but VARs. they their allows you degree selling. contact by can to the sell cloud and has wholesale meeting also also a market opportunities which UCaaS to this the offering then them with one can enable can is been they and to to which we start used ScanSource will exactly provides rooms used controlled way and sell basically they’re center. And services for been will Scansource train value makes telco down added to large relevant.

we been great else, investment and the process. the a we’ve as why for opposed this such for we who anybody a to that’s control in of it’s the to of end So think deal us, users, original fraction which long a gotten is equipment VARs think manufacturer, time be

George Sutton

could if is did that wondered time? this the is also of from size wanted How that a walk sense the deal. seats? How along? I through come Great. migrate how X,XXX deal, did replicable which a you over significant Just XX,XXX seat

Vik Verma

and entire primarily in a they A seats. things essentially was local do We were it the transformation and they’ve here. with And a key. of about Headquarters happy a with rolled their seats complete to XX,XXX they’re headquarters, office and very of and it, of They’ve out is business. land globally everywhere it’s America X,XXX to is one deployed business out started element expanded It’s this we and off rolled approximately loved about a heard the key North our very expand. it key service the that company and it we using large headquarters essentially it.

services go And the a of to idea unified – more so business, additional in office probably Once but from center of the whatever. I of also concept everything SaaS this to you’re provide to globally add and add we’ve importantly platform. able initial to you’re services seats largest set particular this you’re geography, a able one and meetings with in is order one one it’s and had. started in great U.S. is instance, to context ever said, And XX,XXX expanded the local off and we as able the

George Sutton

deal. One give Steven thing the That’s you quarter? a impact great for Wavecell the I Did if revenue in could.

Steven Gatoff

We how we consistent haven’t. didn’t product break with out don’t others. the that We out break line

George Sutton

Thanks guys.

Steven Gatoff

Thanks.

Operator

from comes the question MacWilliams Ryan with line Inc. of next Your Stephens

Ryan MacWilliams

on guys, quarter. the congrats Hey

question one Just and Looks particularly sales me picking anything that with force? today. contact the with like from up. or Is been bookings channel center either sales resonating there have direct here

Vik Verma

two things. Yes,

and to you this this all to it So we metric from emphasize terms bookings reason want – bookings, we total give part. sense the XX% bookings of is not the of the disclosed, business in total I is one seat one, up top XX,XXX wanted core traditionally chose disclose health of to organic business. new to the A From bottom, growth seats. but guys have of way a which is organic the a we to total

bookings about represented a center contact grew total Second, and that quarter XX%. of that

contact its new tell the see than our telling center the center we relatively it’s starting our center as contact starting overall own well up. into and the standalone is company. a what it’s mean to we now come faster is What I to and quarter So that as been growing growing were bookings bookings as total it’s obviously accelerating. you and of about represents of deals combo contact late into has you both

Ryan MacWilliams

my for Thanks question. Great. taking

Vik Verma

Thanks, Ryan.

Operator

VanVliet of line comes question the with from next Stifel. The Matt

Matt VanVliet

taking the it’s are you been position more to going Yes. generally new I Thank how available? to for dig reaction in when first you perspective to the Video guess go-to-market question. what Meetings I wanted early product has the terms the of that and from

Vik Verma

Got it.

it So I’ll into two parts. break

I And comparable series is a web very can to from WebRTC, think high without It’s an actually the it browser view X is we was basis. complimentary it’s the there is having did you industry as reaction it’s to download so good leading, actually initially meeting enter our to it what the definition. app. So because solution folks all of we offered a

have You high well sharing, are of content control, we obviously the for and known definition basic, voice. participant all

board, the across So the good. reaction is

our well access meetings. so We legacy all everybody rolled to out it then had that users to classic as

initial around product. to using we Our will you goal to goal able to be key be provided no duration. meetings and website, of will get a our for for where the all and middle the literally of The meeting in into involved start us. number is is would standalone There November one meetings launching drive get the free terms have will register for not when standalone Remember limits be initially us about even And us, the it’s adoption. it. platform. That’s be

one Meeting meeting it you and the will various as November. of all we’ll gives do when will phones, information and customer upsell, us the said, voice, contact platform. I to us logical guys the I comparison make meetings find sure soft and cetera et is base. continue part more But between a features to other more we way And then that mid have to products that us very valuable. this time, Meetings you over then more for that make part center, to of and a add even think all you and of

top of get we’ve the got sense to close very line in a the You’ll is what industry. the

leverage is launched able us is thing Rooms. are This commodity we’ve Second rooms. that conference part is essentially Meeting to access And about also to hardware. we the is unique an early

you So touch. complete room a and TV, and can can you use simple And you’ve iPad have use now do meetings you turned you high yourself you conference where can a these cameras an can into one definition room. conference can use

of the a all in all go VARs. the they to and because and customers opportunity create We limited amongst and for There a excitement they’ll go and and key few viewed as for rooms we did conference et cameras, the TV the number a provide of of of an has VAR about particularly where this that, community early their they’ll software. lot customers been access cetera, in install

that we a And see well. for one service. obviously be adoption it as opportunities there big paid will So

us. for and than less ago So it’s a phenomenal this year acquisition did been we

Matt VanVliet

turning and opens as you’re looking to into international any those traction your the if the of you is turn a obviously in. or in upsell Wavecell seeing penetrated like as that opportunities, selling a terms cross-sell, pipeline in to existing existing customers relationships what historically then up been early platform you opportunity? any And haven’t maybe Curious Wavecell the market

Vik Verma

into I Wavecell context way as I how enhances was much actually or coming your huge a up is for contact have which That been why within There pleasantly a customers center. earlier center the there remarks, it’s question has well mentioned center center this particularly we install demand of both base, And how surprised is customer an because in picked contact in with there to my contact own. a of by quickly think and add lot Wavecell’s very customizing customers for engagement. together because essence its pull and about go interactions CPaaS actually

uptick want a have anticipated. and the But over and the center. and the exactly as the few we contact of And few the to that U.S. over fact, with UK. more announcements and tight our been capability happen They have and than seeing extent accelerating integration CPaaS between contact bringing matter move actually to has added CPaaS next Wavecell UK of we in actually months. that same quickly a the thing much center into We’re our customers will the are the that the of U.S very some we largest

Matt VanVliet

you. Thank Great.

Operator

comes Blair. line question with of William Breen from James next Your the

James Breen

use mentioned give – talk you talking about that some other of could business drove saw additionally Thanks offerings? that just for Wondering a you for thought overlap you and you of with what taking quarter. CPaaS the the the better cases question. that this you’re any little Can that Thanks. within how if does if segment, And seeing to you’re customers. examples you’ve

Vik Verma

So – I more I think the it’s were use for for think CPaaS. Wavecell. I cases you asking mean

of So let’s larger our start talking customers. about some

the in does the and know in One largest bookings and the well somebody a now where use is enough confirmation clean et keys everything of as bookings do to want close information alerts also rental they of geographically of and CPaaS the to units, when go our They want customers send from area. capability as ability are cetera. to

homeowner, alert go they So the et cetera. can

what of kind people the want. that’s So applications

to using technology an billing basically we – gave CPaaS in able which hospitality all are chain, directions to and phone. via today to do of a We being is example major from everything mobile go do

And applications for center. contact we’re then finally, seeing chat

one and to people contact tightly chat customers that applications UK and U.S. into tight a and seeing contact that. cetera, We’re what enables and and and contact on how WeChat has is integrated communicate enabled is WhatsApp, want are center centers by as And WhatsApp the CPaaS et with integrate that center to been enables want CPaaS that. other actually CPaaS chat is increasingly focusing WeChat, integration to those that applications and with customers where finding center contact an capabilities and we’re interesting that –

James Breen

And segment of is existing good little or new your ahead it in you expectations, the directly maybe from growth the in logo? customers the some was mentioned a that quarter, of

Vik Verma

existing Yes, adding from of so growth bit usage adding It’s a customers, of geographies. little and it’s everything. a customers

three. it’s all So really

James Breen

Great. Thank you.

Vik Verma

Yes, sure. Thanks.

Operator

King comes from open. response Baird. question from of Andrew’s Andrew next with the Erlikh is line No & question Andrew, the next from The Charlie with Your Dougherty line line of your line. comes Company.

Charlie Erlikh

Yes. for on congrats and guys. question Thanks quarter. the Hey, the taking

is going channel numbers play XX% really growth, is those So seems of guidance into well. kind we not excellent forward? strong guide really as and for can by the expect bookings and why organic how bookings mean, that those strong what numbers I wondering question which with are those more. My and it like raise continued bookings

Steven Gatoff

Thanks. Charlie. Hey, Yes.

So, I very mean quarter. we’re pleased the candidly, with

it one playing as organically We’re And growing candidly, expectations And seeing. like get CPaaS out the internally pleased very business externally. and go to watching and the skis silly really trajectory. we managing out and we’re about and no quarter candidly, we’re on one thoughtfully We be are or wants inorganically what things both. their just with over

Vik Verma

I one fluctuations this had And and quite you as world. this don’t that seeing I but we beat over your quarter about all what been happen fascinating currency all mean, has of because add it, think know are, I’ll currency you’re the thoughts more. despite some

So that the comfortable perspective, provided. with guidance have we from pretty feel we

Charlie Erlikh

Fair enough. Thanks, guys.

Vik Verma

thanks. Yes,

Operator

the from Valera And comes & line Company. with your Rich of Needham question next

Unidentified Analyst

Hi, guys.

Vik Verma

Rich. Hey,

Unidentified Analyst

Rich. my question. taking This for for on is Thanks [indiscernible]

look more. to want center at a Just bit contact little

XX% of I you start MME last XX%, then and any of and total I and quarter yes, the up you this quarter. standalone was additional if contacts So know standalone there were then was there provide CCAAR metric enterprise guys But bookings wondering, wondering metrics could XX% was guess. we’ll the bookings I regarding provide now gave for you

Vik Verma

Yes.

faster approximately, skews So starting essentially remember board. I make for the quarter platform market, point is the center this We permeate that And applies to mean by XX% of is every says are our of we percent XX%, total about quarter that that a odd one you our bookings. think grew center Contact I to news total so the was is segment coming great all than that XX mean if go after. the that geographies. would bookings. enterprise segment it now every us center said we reason across contact because with That’s basically our of bookings up strength I can’t I and total provided, we contact midmarket approximately bookings.

pleased can’t So with I mean, be I contact center. more

in It over you fruit. made bear sense our that contact one do the the collaboration. ability And we a it APIs that essentially you has replacement. center investments model platform have meetings, And one contact also has to has have of it years center, a tells of it to gives it starting because the it and is has platform we the has strength PBX

pony those to can you are where market match we And things able flexible the different not compete in when of starts that partner to. can things we’re rates leverage. are if we particular way, be And to things different we’re one-trick add by able to where all or each enters this this somebody need we these market, all that and of in together, mix somebody stuck. has so growth so we particular And we

We’re able of parts different customers. to and and value our move portfolio to around different add grow

Unidentified Analyst

great. you. Okay, Thank

looking and any revrec additional look that for duration little then can TCV at I X-figure into thinking guess really and deal helpful. more deal bit gears some, So a the how context that’d switching little that a to the and there anything about how be at the around or provide you

Vik Verma

the SaaS It piece and being services subscription subscription duration far the some it’s in consistent ratably. begins Zip obviously, pretty as three kicks so a the is the but so with magic model, contracts, of years there Yes, on does code revrec, portion and amount is enterprise immediately. in no it basically include taken

Unidentified Analyst

you. Okay, Thank great.

Vik Verma

sure. Yes,

Operator

Kees from of comes Insights question Jonathan Group. next Your Summit line the with

Jonathan Kees

taking my also new about to the ScanSource to wanted for Thanks ask my and Great. with and Poly. congrats I questions the numbers. partnerships

solution there terms versus tenor kind for for not guess talked solution in Avaya’s that training You the on that partners have the the financial even sell in getting make and some incentives providing to resellers the noticed the of getting where you’re going a terms the Poly, I I Avaya speed are about purchasing phones, or video partnership. what of And ScanSource investment your all of resellers, a – up you’re and new was that to like also of guess the terms you in of to cloud I partner.

video, else’s? financial have happens asking they a what a a also Poly there you is for incentive for If your And who’s sell solution someone there customer there? versus

Vik Verma

of Yes, a couple things. so

So We understand let’s a for – been who’s Burton other I reason resellers to came fully I unclear needed on that the seems the as bit Joe be main paper the of us spending confusion some offering What exactly it ScanSource up. is and ScanSource that us neither and what model do and to to macro Avaya we don’t this think sold it’s on. this. are time Mike have doing and and is being quite Baur,

some used be community to value of That their in selling sell by on wholesale is ScanSource to that manufacturer right to like to selling used industry. their and being competitors. the is their are that our feel with paper, the wants model some now they they paper essentially changes buying able contemplated that The the essentially being and services. believes currently selling idea VAR of way disrupted on way then is added is the original not they the and equipment The it from providing is

the analytics, data entire center, built own doing we platform. because the all have everything from one voice, is I So way into it collaboration, we’re video, contact platform.

a We have created also is instantly. exchange distributor BizApps’ the or and their to And end tools. then spend wholesale a essentially called paper user a money provision a quote VAR customer us over on partner gets years everything on buy provide where something idea and we’ve their lot of from the can

of benefit it their VAR gets paper. us, end the providing get clouds for But is literally you place it So the on an the they with instantly provision user. the moment order

a From years in we of we not customer the do intimacy have. can energy. has because level we our essence time it of years love it’s and and recreate nor VAR that because perspective, ever And it

resell seats can services. through end users is And Avaya’s VAR a so of that that largest provide get millions Their way that a controlled has been distributor. value to again, Avaya, more added frictionless And are has solution we tens their of I it ensure for at they a distributor of as that. for I and seats us ScanSource that’s are much is clamoring believe VAR said channel ScanSource why and channel.

But contact added value is on you services center. logical provide

You provided and rooms. are huddle in rooms These capabilities. meeting all

is ScanSource current the their to of business customers. VARs create go their on-premise of VARs, all that train collateral enable setting centers, where migrate our VAR user then the they part – end materials their business. training train help So which do as their to basically But of we’re VARs, is doing they’ll they’ll training to their up all

way new has but the used have power enabling moving that to the was they’re this but the they’re VARs been had been and advisor go-to-market equipment felt with on we often a think than the selling. for and the to way more VARs traditional real not better we trusted we’re the have customer. The not we it, way used felt deal the We VARs manufacturer some monitored original Avaya because to the control it’s misnomer thoughts it, have selling. time And way we because control it’s sell does way was the are some So obviously go-to-market, big the over about that quite to that using obviously VARs. to

Jonathan Kees

you All question talk of at right. The the for contribution, you’re disclose want Thanks certainly growth growth business? Vik. Wavecell’s least for about next CPaaS revenue that, is in Steve. to saying I you That’s don’t – terms what for but makes Okay. can the sense. get year-over-year

Steven Gatoff

we’ll it come Every as give strong business of Yes, sense. out and sure. really for XX% a as people north we the time with additional operating it metrics was look quarter to And the more in seasoned, we’ve candidly becomes more on have. provide get we to more business metrics

days what to in well. provide direction. XX more. growing we’ll and as strong so And seen. been in out we’ve with there have about people No either continues known is We’re and But surprises or so the business so definitely it’s perform and consistent what

Jonathan Kees

to you guys. Thank forward look I very Great. it. much

Steven Gatoff

Yes, sure. Thank you.

Operator

of Instructions] B. Riley FBR. the next Josh Nichols with question line [Operator comes Your from

Josh Nichols

APAC? Since taking me Yes, a question. and yet, UK give could between Q not U.S., for thanks the the breakout is you my revenue for just split

Vik Verma

our different out than bookings likely revenue speaking, The Q will tomorrow. be tonight, Right. Generally is and may contribution. hit the contribution, which most

out – Zip For is revenue roughly of it’s the in the of example, of U.S. outside XX% a XX% our code, bookings. whereas

Josh Nichols

from revenue is last historically But that outside said – correct? so but the UK like you’re U.S. you right? like quarter, now XX% XX%, And Okay. has been bookings of XX%, saying the

Vik Verma

That’s right.

Josh Nichols

I to better guess a handle. a I little just bit of then And want get it. Got

So business. faster the for Wavecell grown CPaaS

QX margin is I with a going that assumption about So forward? Is business. relatively since maybe down little further probably bit and the of CPaaS or margin faster generally level lower fair there’s is a that growing come guess think for this Wavecell going to fair outlook, margins associated to assume

Vik Verma

materially. not No,

not that To time. margin be more, down that’s expect. to And gross globally the the a come CPaaS and what might so the bit, profile why business we margin expect increase over could extent but reason we a performs accelerates that even

Josh Nichols

targets We like targets? about marketing. talk and any have R&D, size to sales you used – the do then common And for operating

quarters targets Now as out percentage XQ may or a for that little be this basis? a few for on a acquisition has been those done, look the we what what bit you’re thinking

Vik Verma

not to have communicated but deliver have and our candidly and targets, to in on and to committed operating we quarter laid improvement So this numerical out is we delivered specific efficiencies. expect continue

business the the so efficiency whole line them, through areas, improvement forward. three and G&A model most line every improve all to on delivered quarter as in and but quarter. we we OpEx and each continue to of big for R&D And to should marketing, should the through items improve we notion QX every expect net-net year, move something a see improvements sales and continue line on it efficiency Not is

Josh Nichols

expect this a once from items, the increased burn It trying lot. to just non-GAAP, see factor other like kind stock and guide $XX free this like a a then peak is quarter add-back a a And Is you flow G&A, to that to items of to like rate. comp the burns fair have going that million. on where $XX you probably for are like items of cash going cash in back of GAAP accelerated in towards the the amortization, run looks Then all million forward level add-back rate?

Vik Verma

quarter run recurring some a on for next non-cash materially items. those of different Probably rate be base fair depreciable shouldn’t the

Josh Nichols

more a before. someone last then And kind of clarity, I bit question, get just wanted little asked to

the that being one Wavecell. companies potentially only with understand I So quarter

company’s $X a not all launching the month And But partnership, those you’re new then front? materially that bit history. top big guidance had little three, on that’s but you kind taking win besides in to Wavecell that, partnership the of on only being so just in be triangulating another conservative largest or that surprised you and guidance that just year. revenue very this and up the in I’m XX,XXX for So million potentially for investing of taking going you’re have explanation this what’s given that modestly feet up that’s and like really the

Steven Gatoff

growth. we XX% a largest been and after delivering the guiding generating our being a XX% revenue effectively platform committed board product addition for about to revenue stockholders and similar levels growth now And nicely. of revenue raised and that growing our last Zip the strategic to we integrated quarter growth company just terrifically quarters. to that’s from of good The and has important feel code explanation we’re guidance posting in We revenue. is several did revenue the XX%, pretty We And and the that.

don’t issue we an have So with that.

Vik Verma

And is odd revenue ScanSource time on a one. invest I’ll to enterprise From the you turns more the add is and customers. one the you nine Right. to month ScanSource time timeframe.

well. does As UK we’re about starting had is keep did more. Steven very well. company, need increasingly continues of happier have a to just quarter centers develop guidance And it raising to solid I’m all And together. one keep keep it. come muscle then a make, to We and to going. of but beating said, continuing platform much not geography trend then – The perform their concept guidance, performed comfortable contact with to much one performing ever. best bullish the well, quarter Wavecell every ANZ the pretty very

Josh Nichols

guys. Thanks, Okay.

Steven Gatoff

Thanks.

Vik Verma

much. very you Thank

Operator

And questions at there this are no other time.

Vik Verma

Thanks, Thanks, operator. everyone.

Steven Gatoff

Thank you, everybody.

Operator

Ladies this today’s and Thank for conference concludes participating. gentlemen, call. you

now You disconnect. may

8x8 (EGHT) 30 Oct 192020 Q2 Earnings call transcript