EGHT - Earnings call transcript Q1 2021

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Operator

Good evening. My name is David, and I will be your conference operator today. At this time, I would like to welcome everyone to the 8x8, Inc. Fiscal First Quarter 2021 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 First Earnings Good

are Executive Verma, Wilson, me Vik Joining today Chief Officer. Chief Officer; Financial Samuel and

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

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

product including we started, risks just as today impact about statements forward-looking financial COVID-XX get and statements as of forward-looking caution a or them. performance discussion filed call our uncertainties pandemic. strategies, materially on they Before you put reports duties analysis XxX's actual as forward-looking well described and of made the vary business not reflect involve its the includes update our as factors statements to from the undue statements Any SEC. reminder no on that in growth that these future with We our the have reliance plans to this forward-looking may in cause today, results as our we and risk to

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

Vik Verma

for everyone, Good us Victoria. you today. afternoon, you, Thank joining thank and

are your I and We staying unprecedented hope continue times, experience safe healthy. and and families you to

support including XxX Wilson, of like CFO, would new Sam the for leadership in three I begin, years the almost has roles, to and Customer executive sales, our various Sam months small been we welcome Services, six spending implementation call. in to cost Sam part initiatives team also Before mid-market business XxX's automation Professional Officer. led functions. has previous as and customer through transforming structure self-service Chief our the

in see, As his role, today's Sam as you and we four core And will growth has to financial will speed business. phase pleased we on operational accelerate have focus I next come are leadership my profitability. and now and acumen up topics. the CFO to a into of remarks quickly to

results, quarter fully path our finally, First XxX, fiscal resilient profitability support mission At businesses workplace. execution, requires today platform to is leverage digital help remote to go-to-market to workforces. strategy communications our and communication XXXX. enterprise the systems of distributed to new Business increasingly create exiting

cloud new the is ever, more the campus, shaping than fundamentally new and the new communications Now work office. group

challenging service solid strong fiscal ARR across improved Our grew performance, XX% cloud We performance transformation and year the in our platform today's team of offerings. high the the with quarter. our financial exceeding each had our year-over-year end growth XXXX accelerating guidance for execution operating total environment. opportunity strong consistent revenue against started first and with Total

pre-tax XX% of bookings profitability, loss sequential and reducing quarter. by achieved toward year-over-year, excluding bottom second beating non-GAAP line We million to CPaaS. previous accelerated solid quarter our our New the $X from our guidance progress

cash we result, quarter. as non-GAAP prior the delivering the and half usage continues cash quarter, from our reaffirm a As cut fiscal to fourth path pre-tax XXXX breakeven we exiting our our than by to improve more burn

years in investments have now have past previously over are we bearing fruit. we our As that two go-to-market discussed, the made substantial

overall. continued pipeline strength customer deal This quarter, acquisition cost with robust we growth saw significantly improved lower channel execution, and

bookings new grew a year. delivered XX% channel overall, that our grew mid-market compared and base our from led bookings enterprise bookings QX and with XX than year-over-year of quarter by including new greater expanded XX customer enterprise as deals in of XX% deal. record total ARR high $XXX,XXX, XX% ARR fiscal We growth year-over-year. value nine contract partners. deals channel came we a overall to X-figure Combined last Specifically, new top XX%

ramping ScanSource join to CloudFuel eight pleased Technologies. with Our who focused markets. VARs seats. U.S. and Cloud VAR notable include Stack Media to ScanSource ahead Technology, CloudFuel we Lantana sign launched newly multiple deals on Shamrock are value our notable and Program. seeing partnership enterprise with pipeline. which high-value million added the improvement of of ScanSource are marketing Globally, to primarily increased U.K., Program. production. and expectations, CAC improved joined and Teams XxX with and developed website the Other They Partner and partners VAR Business overall awareness, impressed Poly new Allegiant Virgin Communications Avaya One Year, provides proposition our on-premise Poly Voice mid-market the were XX the have Communications also addition and upper in accessing is the access We're is CloudFuel Program reseller Gage in particularly continue our new integration, Avaya's Microsoft new to for value-added XXXX a the In pipeline unique we already have them a Telecom, that

is prior of our XX% last now have more to we platform, our ahead the customer the base expect on XX% of customer than base Series by the target the And of on X quarter. of XX%. Finally, our calendar platform of end XX% up year, from

customers. to Turning

up public key from in in new Customers bookings, XX% year financial markets. dynamics purchasing We in as such June and XX% economies to and our saw and reopen New sector and responded customer verticals pandemic services ago. business healthcare, in an a the channel as improvement logos gradually X began to of performance quarter the represented Series. in May global by domestic manufacturing,

and and were from other top seat a win in X,XXX-plus a suite. a a after these examples. and included partner-led highlight the global a solution XxX of firm win our software channel with who UCaaS selected X,XXX-plus in X with new manufacturing U.K. our Both a with include seat the financial notable noteworthy Series bundled providers. deals company replacements U.S. XX customers deals six competitive few CCaaS of were conducting RFPs me Two Avaya examples Let cloud

newly safely to One and XxX global Teams example Secure Europe deals. solution was how U.S. able debut a City the strong needed to strong residents Our Teams in We and education impacts. sales a number Series, UCaaS the Microsoft manufacturing state, interconnected solution million these, Microsoft momentum in enhance Council We of COVID-XX for experience. Voice with to agencies X.X local, in Manchester is running won company made and its increasing CCaaS keep than that our more headquartered with is vital a the their both one that known last announced throughout as in a X U.K. also Pay. XxX example service with district quarter suite SLED, and special lockdown. responded of and as of prime a for U.K.'s segments, saw services

also We two won U.S. this in major contact quarter. state center deals

America days, partner, more X-figure was who critical new with led with LetsGetChecked's we especially deal an time. at in win contract agents continue North Within Series. X enable than healthcare, kit LetsGetChecked, services contact This of COVID-XX the uninterrupted support an customer a the largest impact a XxX the XX,XXX to provider. We with centers of were contact are in XX COVID-XX important with provider mitigating work providing remote center value win employees working this to we total and on healthcare replacement test pleased seats included Continuing a channel experience assist and Our on-premise providers proud remotely home to U.S. pandemic. Europe. and

XX,XXX for based within UCaaS Series offices Finally, X has a last throughout quarter, X,XXX over months. I in EMEA. employees another work-from-home customer customer's This and center over to contact financial This deployed spoke to with we XxX Enterprise CCaaS in America rapidly quarter, services operation nine enabled and South global seats past We scale a seats about X,XXX relationship who weekend. needed a expanded India. seats

witnessed ongoing our that have wins direct these result communication legacy to go-to-market Enterprise systems ability work-from-home adapts strategy and the have tailor not we in on-premise the of COVID-XX center a of have capabilities. All a a do investments are contact to that environment. made

position to this Open to will further continue and we deliver of we the As believe and reap sustainable, Platform growth Communications our profitability. benefits long-term us strategy,

penetration complete the is Now move uniquely enterprise essential advancement shared intelligent enterprise workplace communications. the It strategy. by communications, solutions chat, to XxX platform team a Communications let's most AI-driven, communication operate-from-anywhere for all single and arguably digital combining voice, meetings, market elements of Platform required and together The routing services fueled API video and platform. like on expert all contact portfolio applications industry's brings on our center analytics, predictive Open

benefits required end Teams Other with first Teams' telephony global that fully to Voice the not with and a no and from accentuated solution or of and when experience Microsoft requires Microsoft is both organization contact is desktop with solution exists communications Teams cloud Team world-class changing the mobile works an every Microsoft do is integrated experience the users. that and telephony changed The center further integrations cloud applications Teams provide in with is collaboration Microsoft either it download It XxX. for global without end-user solution. virtually enterprise-class coverage. integrate natively the for Our

existing of partners. revenue Due solution largest business, U.K. investment and their for all we with of sustainable driving of us registered are a channel continued pipeline seeing essential X,XXX Microsoft growth. with those webinar, thousands elements we on resulting are customers. opportunities own the the a volume One to bring program three already an integrated in partners In platform, on-ramp Microsoft's nearly strong a the of this product partners U.S., for to to XxX channel is in kickoff our working that

and increased this have contact SMS pandemic, centers integrates chatbot and new the that automation CCaaS Amazon the platform and bookings or XXX% same CCaaS. see to of of from that more many offering that The XX% with automated total selected expanded our customers for delivered seen bookings handle from technology platform. bundled in with quarter. UCaaS have and conversational offers an the communication. we and from AI call the key, UCaaS is benefits mobile is this Throughout bundled grew captures Contact IVR new Artificial Aurora volumes. core and year-over-year receive bookings of all to and having increasingly first $XX,XXX center ability intelligence on-ramp of more send offerings. and into our and XX% we represented new More were communications instant ARR intent challenge customers messages

human believe real-time communications America and North into to EMEA. CPaaS, Platform API. Jitsi, Communications by the Last be programmable new, our is We Service, we that corporate a BXC The core are includes APIs and these applications. This competency CPaaS we believe of as application. the BXB ability years XxX today's to second powered experience on-ramp Meetings of user the or worldwide, ISV the announced expansion is and redefining add coming month, and a of applications developers will millions delivering that and There interaction globally. of our

Our in partner, more network top IT office applications customize voice to APIs video XXX and HR world building of these and and customer, front solutions. SMS, by XXX both than countries businesses and communications powering an workflows carriers the around and into tier back enabling is

in U.K. cases into U.K. including and security pipeline more the for cross-sell than and that PINs. including within This signed and CCaaS for mobile to we onetime messages X-factor verification, text and call text-to-speech opportunities a dozen CPaaS turn deals and globally, new customer a customers the quarter, in enhance software customer authentication adding Our XX U.S. Use UCaaS notification our number ramping, more is than just using past clients many SMS base. include CPaaS voice new

and a America expand network signed mobile also voice our and for Europe partnership Latin carrier We with Telefonica SMS to new connectivity.

will large here as an of we partnerships a have Web to and be both developer developers who Amazon Services, worldwide, Our the community ramp asset portfolio this share each Oracle with worldwide.

U.S., Our platform businesses fully alone, on-ramp and of Australia small there tens businesses. for is the groups. U.K. as In point volume of e-commerce our millions self-service entry are a work and third small

self-service, to address Express consists XXX% Our and e-commerce in Since doubled online running XxX the we business, and and To E-commerce and a buying, have buy quarter. Pro portfolio is provisioning of this inception more created up gaining with low-friction remind every Meetings e-commerce the than was everyone, customers and solution these card is e-commerce traction to revenue doubled a be e-commerce enabling products. our products logos experience. a provisioning customers credit with support of minutes. and our

customers of are thousands quarter. adding new We now per

of XxX Our growth to mid-teens of have in monthly stabilized millions now Meetings Jitsi Video and the users. active terms

do returns expect activity session we to increased in September. Although as school

Meetings and the Jitsi also of API. Meetings most We we With announced Pro growth there important monetization to our ahead in to X a that long path increasingly, expect optimistic base our XxX our will millions platform. developer to have of Series from ramp one of automating through investments portfolio. made, I user our of runway newly discuss significant business want tens our XxX companies continue we and segment, this of our this to products which migration is are that the is legacy of

progress vast base. base, pleased to and Series legacy you improvements quarter. As make satisfaction, represents last we now Series of all churn X on X our with this very our continue rates that are I'm today support XX% to infrastructure our customer share from customer transition, up from XX%

of original our our result platform base migration and quarter in our the have of automated We have ahead go-to-market the discuss final than I'd differentiated largest Series a returns by like path to now XX% plan. our These is engineering were calendar and fiscal X of direct first completed platform year this more to XXXX. the end quarter innovation. continued year, expect our the of customer The on our to profitability exiting for strong investments, the topic

Over and XXXX. VoIP infrastructure. channel offering the March invested breakeven The that's developing to company track platform on mainly years, We pre-tax in two to our market. we've small non-GAAP from transitioned cloud go-to-market a and last achieve a our platform fiscal full-featured our up business building moving communications exiting fourth quarter engine has remain fiscal

Platform become in increasingly our and fundamental go-to-market capabilities our are investments types achieving delivering scale gross requirement Communications operating evidenced sales, a steadfast multiyear and and are by of all and we results remain operations of optimize year-over-year. aligned Our efficiencies. that improved work-from-anywhere for marketing operating for that confident will We assertion we discipline and XxX the improving businesses margins well is as our market sizes, global our as on our with direction. We're economies Open

and this We are focused made quarter the pleased accelerating with execution remain the our plan. progress of we on strategic

my to their to XxX commitment to gratitude my and of hard all want Finally, express continued mission. I work colleagues for our

over Now let call to Sam. additional QX, on for color some the turn me

Samuel Wilson

the are Thanks, afternoon. echo your want We results. I in be speaking as call first my hope for Vik's Vik, and Board XxX. comments that safe. Vik abilities. this families we well joining you and having you earnings I'm afternoon to excited with Thank good report to quarter of and I us financial appreciate a as confidence during CFO first you staying my you to and

walk color For for through the second you today's I will QX our then year. results fiscal financial and on of call, provide the guidance quarter some the and remainder

I results. like share to initial opening before the call and Lastly, Starting your the observations with my first priorities questions. ongoing over days XX our quarter answer would to last

Total million guidance. to to was better-than-expected UCaaS, service revenue was Professional XX% our We bundled have above million, of and our from an that are driven million performance our revenues. better-than-expected by the Overall guidance. pleased increase year-over-year by revenue $XXX quarter results offerings. beat delivered and CCaaS Services $XXX for and Total were performance $XXX.X driven

we at the excludes we service XX% reclassification and generated of Services note would been that service Services XX% service revenue, million, revenue. now action revenue $XXX.X million, increase an year-over-year. Professional revenue, reflects Looking Including year-over-year. Professional increase revenue last implemented specifically have Please of $XXX.X an quarter

be a of quarter. As this historic not will reporting disclosing Professional after Services reminder, the we

driver at an continued XX% to This and million Turning enterprises. CCaaS Enterprise our markets. upmarket in was and also ARR business growth behind year-over-year increasing across Mid-Market essential growth our solid UCaaS, to was quarter reach larger Channel $XXX by offerings. Total movement metrics. and our end, was driven the up CPaaS

pay continuing investments product last the the two in As over are invention to channel years Vik our off. and discussed,

Our for offerings is and UCaaS our CCaaS customers' fit needs. of bundled

expanded the During and our into the giving a advantage. further CPaaS multiproduct we markets, quarter, U.S. us offerings largest markets, further U.K. our platform

Direct Teams Microsoft the been very solution early the our and interests. announced final we quarter have month Lastly, Routing receiving during positive of

deals lap previously X-figure than large, including XX,XXX seats we've deal discussed. Over some more going the to are with we several channel-led last year, closed next TCV quarters, we've an

and in July bounce channel growth segments, expect will various them We XXXX will Wavecell. cause our which around. lap impact These will rates also customer our to of acquisition we

non-GAAP Our service driven on percentage gross to improves Non-GAAP last product quarter Services quarter, in end mix our pandemic program, lower-than-expected Services grow margin gross with was Professional minus revenue Non-GAAP continued quarter. point the have executed during engagement but XX.X%. customers' by We large margin the revenue. from several first Professional response over in mainly deployments XX.X%, minus revenue. rebound COVID-related in toward came by our which a rapid rental improvement one margin had quarter ago. improved needs, Services at quarter early better-than-anticipated other better by We driven and of to XX.X% the we to for which revenue a Asia, CPaaS year margin. to started us hardware usage the quarter, evolving giving continued in began slowdown Also, the the XX.X% Professional

margin world the UCaaS margin are product trend in quarter have mix lower the verticals entrance lower markets markets. as three and see previously patterns and expect we profile influence usage and as our U.S. CPaaS our increased gross business. in currently will CCaaS usage into improved This mentioned, gross that reverse reopened July, margins. first in could we CPaaS slightly the U.K. margins We of than reopening the certain and with to are sequentially. overall As second significantly come In for weeks gross

expenses. operating at Looking QX

combination to A spending the virtual on XX.X% efficiency. last Non-GAAP in spend are marketing from to revenue efficiencies. QX, improved and media driven sales global than optimizing X% both events our goal and physical aligning and lower of expenses webinars events execution and quarter. moving improved of our delivering have of drive We business to

Non-GAAP sales came at versus X.X% QX continued expenses quarter. also last XX.X% in of capacity. R&D have in to We revenue add

We not X were point advantages expenses each further continue revenue up quarter on due gain return Non-GAAP XX.X% fashion. sign year-over-year legacy differentiated timing XX% year-over-year, to to total profitability. certain improved a G&A like that are and revenue necessarily and linear would operations. technology of while quarter. to migration making completing to the advantage to We scale platform Series. each to X% G&A to QX prioritize in of hope expense operating we metric investing of our from that progress in Total grew we will expenses customers improve out clear revenue the as last XX.X% related in a I expenses, our non-GAAP

we However, expect to percentage and trend year-over-year improvement we of basis. have delivering efficiency begun a returns a combined revenue continue operating on expenses in as

Importantly, including our starting rates improved. our we margin generation the reap relatively results demand our funnel channel. pipeline These and high, remain top are previous to and to coverage returns rates show in the improve, of metrics, continue growth profile investments of

improvement further see to in unit optimize motions. as economics our expect We we go-to-market

materially provided and a some margin combination Our the and improvement, benefit. non-GAAP result May our $X.X the revenue, operational June as of and expenses such in better-than-expected for quarter refinance of $XX than loss XX. million timing travel million was pre-tax to a total ending better guidance This items was reduced related currency

will guidance. when are how not that timing being proud I'm each of very assuming are diligent team we the about We is spent. extremely giving dollar items recur

million million This improvement cash. Turning of at of a quarter witnessed quarter-over-quarter, cash balance decline approximately million $XX last an from and investments $XX sheet. ended first $XX including of to quarter. million cash, the million, is sequential the $XXX.X the restricted Total $XX restricted decline

of operational cash on both reducing are collections. and further economies our focused through scale We efficiencies, improved burn,

experienced in timing-related We some and quarter. onetime benefits the also

over and quarter. For the which from jurisdictions, cash deferrals million usage example, saved credits tax us we in $X various availed for of certain

during final QX full trend from $XX to quarter For to in roughly QX lower We which cash would item COVID-related million a and good the I to over the the sign want the is better-than-expected we revenue, manageable. slightly expect quarter. usage deferred again $X collections risks One previous are in discuss the million increased liabilities is and that QX. under year, increase believe

and of grow the to expect on journey deferred advance the revenue billing toward continue of started moving contracts will in have service sheet. balance We delivery

started Additionally, a deal reducing cash. on operational have and of we the programs number focused receiving booking time a the between

outlook. to the Turning

in representing this year-over-year base. for as $XXX.X metrics, we XXXX, and in in enter a our like fiscal account, quarter, $XXX.X as be we QX to revenue and we environment ending pandemic usage to uncertainty growth. offerings. growth. the million, million the of to pre-tax all CPaaS We be have more anticipate XX% establishing additional are non-GAAP improved XXXX September approximately July, As a products is are MS We continued to macroeconomic into of installed second We representing sales million, market, this CPaaS anticipate be $XXX.X $X.X our of seen a in which follows: range result Pro service XX% $XXX.X we our increased loss anticipate to guidance revenue affects year-over-year to XX% Offsetting the new primary in range adversely Teams, million offering total funnel XX, business the to U.S. XX% small Taking Meetings million.

not revenue full guidance color for we we year, growth the While have to provide do formal wanted service some profile. on the

XX% rates QX move out service lap our global come As and through in expect we continued on to growth of rate continue anniversary earnings the QX service down to we for fiscal to the Wavecell we full as and impacts continue macro XX%. the mentioned the of call, economy, in acquisition. area as see we we COVID-XX of Considering revenue May to XXXX revenue the year growth QX

are range we conservatively know a in of on factoring outcomes-based today. We what

before priority help is capital some and solicit of amount with assets of feedback a XxX to days a my pleasure that, clarify misconceptions. the questions. and the my with turn considerable many CFO their top the had our topic as last I Therefore, final my to me initial have priorities company of speaking institutional let so and for discuss shareholders strong allocation. call monetization and with and is opening ongoing over observations XX And analysts potential.

shareholders the are performance. essential. in future As such, operating spending return optimizing speed between is business overall as a are I must. investing to growth, direct we the improvements improve forward, and And Operational look balance to

Additionally, focused on This our the I you, is on fiscal our QX XXXX exiting pre-tax and our our remain March employees to breakeven important commitment non-GAAP for delivering XXXX, quarter. shareholders. customers,

have more million $XXX and cash equivalents or on Additionally, in approximately balance year-end. at cash to the we intend sheet fiscal

Our after. provide models impression clear, of and reporting to created we breakeven of time, many the point believe has to the We This three suggest simplify vast case. this that will sheet, financial we flow detail free quarters in be financial fiscal moving results adequate cash the our loud true supplemental at our is cash positive the get not business forward. And two which investors moving the flow have IR IR has of we view, heard pieces. a cash XXXX. From level an I've in metric

last business. is measure to the As business, excluding bookings it UCaaS It It as metric this rate relevant precise core CPaaS. a excluding growth, a and health integrated meaningful will our have other this a of growth referred not our of fully year, anniversaried first the forward, we step process, more include a was is ARR it and longer CCaaS acquisition When to provide has new the overall fees until the bookings we we that and and the longer business, acquisition. we the been usage metric now subset growth of contracts in does CPaaS have for no metric. quarter, and next introduced to we total We believe metric we believe no renewals. lapped going CPaaS measure bookings

time. In introducing refine this parameters. to to look instead, at addition, continue we metrics new contemplating not we are And our

input. to business committed simplify to seek performance will we to our manage your we accelerating deliver positioned remain efforts up, questions. to take term To report the wrap shareholder your to long well are and are better ready with Operator, enhanced financial and the value. We we what for

Operator

& [Operator from Valera line Needham with question Instructions] of Your comes the Rich Company. first

open. Your line is

Rich Valera

That's thanks in healthy you a September for the just afternoon your growth the Good question. XX% to Appreciate taking see quarter number. guidance and XX% suggests reaffirming the you quarter. need in revenue that of uptick relative service pretty to It service incremental you. number. Thank the revenue would seems what to kind significant added per a

of could So quarters? the half of that should that add the year? of about just maybe talk service of in sort acceleration you And we thinking how two us add? that think drives between about through what revenue How the you're incremental back incremental

Samuel Wilson

All right.

is this we our It's is one, what gave driven It's modeling XQ and year. for So on take model. our I'll you forecasted Rich. in and fiscal color Sam. bookings currently that We based straightforward. by and have the what our the guidance the

over rate, you'll I third what in see quarter fourth right the rate growth we're what think quarter. is a now. growth higher year-over-year the But pretty confident the shows model

Rich Valera

with there. a on you of quarter, any on going gave fair churn? disclosure Last color us could you what's then just And it. give Got bit

quarter that's forward? XXX% your or and about over of below about should being talk think churn churn. sort talked You that higher of trended because SMB DD&E accelerated how Can about last SMB going we how you the

Samuel Wilson

Yes.

we that with year fiscal sorry, quarter QX, did churn see quarter, higher or exited year I quarter the XXXX with fiscal fourth said think best slightly our We quarter. churn we we in XXXX just last reported. the

based mean, I quarter. in at segment. see number, we bit think say, to small were the look in flow you a increase very the business if on solid our I collections cash have did COVID, of little mainly I though,

like just right it's of manageable. on fiscal very like feels the it's we're kind expecting think now, I everything So for XXXX. plan that And

Just one more thing I'll add. And then as NDR you mentioned, stuff. the

that are as numbers less to seeing over one. X than significantly one, quarter but NDR we think of overall And said was those NDR you types hold. X migrate So was I last customers Series we Series,

Operator

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

line is Your open.

Ryan MacWilliams

Thanks.

question. Just piggyback off to Rich's

consider that growth you you And of this XX% the that per first talked about about of year, expectation where given talk quarter fiscal Can for guidance, included this rebound year. COVID-related like this the revenue would the to third service quarter? versus XXX and end for full bps the forward, this quarter the XXX the For to XX% in saw you churn bps May quarter then June? you was a conservative going from

Samuel Wilson

right. All

I those So the order. reverse I'll do forecast take consider in conservative.

get that As diverse regards but the function, you no is have point churn, the can imagine, our really advantage fact having the the make down to There the to that a to are given an I'm surprising anything in was quarter. being expectations. guidance of with trying so COVID nothing On level. I'm we base our basis in guy, severe it's we global, going I'll into modelable and you, surprises. to I in sure be just tell have easily not giving with to new conservative churn like numbers line there's you

Ryan MacWilliams

one for Vik. then And Great.

of checks that Microsoft how point, fits over at XxX XX of highlighted do for like And interesting Teams With best active the this do with? million this my opportunity? an seems you Voice Teams have of think integration. Some the think type you about that having size daily users customer what

Vik Verma

Yes.

interesting. been it's quite So

the deals. couple profile is customer finding voice already the multinational Microsoft deployed sense you of win global over centers. and with which was, uptick What potentially it all customers world customers us contact quick Teams, a very large offices that the essentially, gives So of of on are the global got we've and large, we a actually how need helped

And makes It's Teams get you us Microsoft which Microsoft the so piggybacks completely out of experience, truly very unique thing that the collaboration that environment. a well primarily is to don't Teams the And with have experience. native. is

interesting anything download had XxX. You It's together. events. tightly integrated don't all have to a of We couple very very from

think, in had then I just distributors which I a think webinar. highest it. addition and one we've attended had, for of to we X,XXX that, webinar did the a on webinar, U.K. jumped said I largest they here, partners they channel the in has up was it really signed and out over Microsoft's think And

we're decent And to us. it's So demand. good, for think growth strong driver be seeing a going I

Operator

Marshall of next the Meta Our comes Morgan from with question line Stanley.

Your line is open.

Karan Juvekar

is This on question. the for for Thanks Karan Hi. Meta.

transition progressed So Series ahead you the noted your has be, so X question of would first plan. that

to of would or to that one that to And just customers of incentives be, kind giving then guess question bring I part to to two would what wanted So savings supporting know what you accelerate channel you're from kind just transition. the maybe product?

Vik Verma

team one. tag we'll this So

years we the a that the is can you it, to think XX is providing people. incentives Actually, XX are old. to not company as this So about

have And early customer so We've XXXXs stretching platforms. the on been base that legacy we to back have a done multiple various acquisitions.

accelerating the are and we indicated checks we is we channel way figured X What frankly, all finding Series that So customer completely it's NPS to out to the done, automate with industry-leading a satisfaction. which, process. have

more customers in for gather of is much go then and experience so functions customer of which more etc. it's a And Monday, in, weekend, various and on automation, data of you're comes morning a all and experience, where more over we now in user better usage integrated, the the the much the seamless a new literally, in self-service, interface, etc.,

incentives. remain trying make So do essentially two What costs sure same. to providing essentially we're the is not we're that the

and address. customer. us, there's With in will leakage to cost overall real as is Sam you guess, regard the that no for no revenue the cost for savings, can there's something extra overall So

Samuel Wilson

take this I'll one. So

as can I So from to we imagine, XX%. number you mean, just the right now, XX% raised

So seems or next is we next whichever And reassess we'll down the year, either migrations, and go fiscal calendar to even Probably our and point. resources as do we'll the decision we're finish that it into the year, people at into roll maybe to next we'll bring and we at efforts year we'll line, attached as the right support it. high ROI we the engineering we'll time. still fiscal projects as have still expecting, what enter bottom

Karan Juvekar

more could And I you partnership ask more. and contribute your think meaningfully when revenue? provide on if you just detail it. some that could to just team's one Could Got

Vik Verma

contribute to of the XXX It's UC, I starting CC platform the revenue. active growth pipeline. to for drivers believe there's It business. our one another is just in deals

to I see differentiator in So we traction us. And that. for becomes that, another continue think,

So far, so good.

Operator

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

open. is line Your

James Breen

question. my taking for Thanks

on side. the couple sales a Just

about there small, those gross the or new you of [indiscernible] are segments? look long year-over-year different your do over be to? talked between channel the at can term? margins businesses breakout XX% you growing bookings that the go it by and think You And of any that XX% Will mid when enterprise, so? across How in be about then bookings. three customer, Where XX% eventually and

Samuel Wilson

these. guess I'll I All I'll of right. take both take I'll these.

big to But that are leave very be and deals, as want our We will jumpy. continue expect bookings, generally won't at of we're time. over lot channel, percentage that channel-led, will close to I channel larger the a be to TCV A clear, that overall thing, X-year of point. trend deals, higher working you very it our a linear

over investing will we're there would We're channel. from lumpiness it's benefits always cycle. investment. a love seeing channel becoming our time, the and expect virtuous channel But So partners, some there. We the very in I be

or in customers have On difference to in of the gross the direct? There's a versus Costs I any those channel deal, end we real The bit our while is is partner a presume, value-added no. margin, basically But answer a economics. cost services little out. difference itself same. the second it compensation also of equalizes and sort from question, customers to remember, that channel serve give does may providing roughly incentive a they're a channel savings with to we tremendous close benefit

James Breen

Thank you. Great.

Operator

Markets. comes Your with Northland the Latimore question of from line Mike next Capital

open. is line Your

Mike Latimore

quarter Yes, thanks. quarter bookings Very June just throughout talk little even and and you about flow can the a nice Maybe in bit like there. July.

fluid You obviously environment. in were of kind a

building frame? it great. would of Just July it played there time kind has sort throughout? May, some Or April, have bookings Has June, be Just of elevated color how been curious been throughout? out

Vik Verma

We have throughout. been generally strong

I've our definitely I think little think by been picked particularly bookings, May overall and But up. slower then April and I the was channel. pleased and June a

me always the enough we're bats. one think guys I heard of not have say you getting that is at refrains

getting for checks customers. our and getting are that. which about that have We channel more thank from being definitely are now channel of the lot are than we you think end-user interest we showing bats, a of several share I done And

where, we that, trend and more And and company. to the channel. And is continues. it the been, to seems will past, which in continuing give bats, think getting has continue weaknesses this the that like of more It one us presence so that at more we hope I in think the of increasingly, more we're

Samuel Wilson

abnormal. I'll throughout linearity of seen the noise take was if the quarter we've bookings, level what And years. on I over would pace of of question nothing in was the say the it the last couple

Mike Latimore

Is just cycles then kind phenomenal environment? quarter. coming on Or the of growth of for guys? center, is you to And kind sales close just was contact of COVID-XX result that a that Great. this

Vik Verma

mean communication things center. pretty is one about of are that unified is both. made we half the I one unique the that which and all we contact and all about until always have know, is you year, one then now, to Actually, centers, as bet platform, years our And the communication of unified trend center. would centers. lot because contact deals lead And contact started a ability and we That has seeing in contact rapidly ago, with big of deploy we're in to drag very the particularly reverse.

think I made city of the to, reference think, we I Manchester.

our that similar that Let's with were also just there were of contact size others went say that center.

days. LetsGetChecked contact center deployed XX a in

the seen contact is part is about in that want right fact but they that, essence, I surge that, And it after think a deployable reason in So rapidly platform. people of growth pulled in a of you all contact center center. now big have the the UCaaS,

Mike Latimore

you. Okay. Thank

Operator

next question comes the Horan of from Your Tim line with Oppenheimer.

open. is Your line

Tim Horan

It very, the of just I'm not the just point, cloud about well as seems of positioned bookings just little the given Thanks, the talk maybe of guys. surprised July? very a it's economy. on are communications. pace Can building itself companies kind at like shock you this initial you're putting in

Samuel Wilson

can no and I we July, clear, factored earnings everything quarter. in as best sorry, the and our guidance. June is everything I'm an this but comment the into on quarter. But your I there's tell July loud surprises can't hear I we is question expected, on you call is

Tim Horan

Great. And you VAR the point? can about like developing are with the Kind for opportunity? at VARs then competition you just there what looks out maybe this where that? talk of And

Vik Verma

two you umbrella, ScanSource, seeing I'll that. of Yes. actually, sense know, that Poly is the very on. good VAR No, resellers and continue which take about the we to And in and opportunities, opportunity, CloudFuel it we're feel sets more one that joining more as Avaya the

I we're think we seen first the we the of U.K., Virgin bit Avaya a know, close, Allegiant they've and talked this we've are quite pipeline as to got to start they're cloud about few develop see you deals and basically exposure, pipeline public now starting there XXXX, they relationship to starting on Media, already of was build the of lot a as in standardized quite which we are the seeing VAR and we're and in year have with a for our on sector Technology, that see partner considerably. Similarly well.

Softcat. continuing we In addition, Computacenter those with expand. in Charterhouse, to relationships have are as the U.K., as know, also as VAR you well And

So in we're to to that in we folks the to view to way and installed enable base, are go VAR as used the go where able unique way exact to sell a them way. selling after a particular very the same

And so far, so good.

Operator

Matt the of BTIG. question comes next line VanVliet with from Your

open. is line Your

Matt VanVliet

of and mix, just bit overall two should X help overall the ticking down sort implying quarter. But see of even in per and guess revenue sort Enterprise little of bookings down started bundled a Yeah, Mid-Market I us the channel kind a the looking and question. overall? larger with on those Series Maybe the growing that here and this to more latter in of attach hi. sizes. little size metrics bit my it Thanks deals reconcile customer, average lot percentage growth the at a as strong for hearing just deal deal rate taking enterprise we're a tick you with

Samuel Wilson

and between and mean bit. Yes, $XX,XXX $XX,XXX question, just kind context, I $XXX,XXX one. $XXX,XXX. this it's to of mid-market, we've last right? I let's put in quarters, think little take fair Over a been I'll ticked the but $XX,XXX it a I four it in Yes. down the

right deal of bit a combination COVID customers I placing now the more little saw through think a it's good very a the volume, are about we orders system cautious very given large environment. but

velocity, number deal terms of of had land-and-expand and order upfront. in partners bit kinds we active a But larger So a more type of we things. of are all channel seeing of a philosophy other a those little of instead record

question your around So channel. your second of was part

wouldn't I the I anything very think per customer segment. read revenue positive there. into we're average

around bit it I a marketplace. of the noise think was just little

Matt VanVliet

the more channel much your of four you package then, a a what in book our working lot you the get are some lead I that deals, of certainly longer, instead winning competitors of do what have mindshare talking partners been how business guess, larger what's Yes. start specifically mindshare maybe you've as about. to most though of channel, And overall? in or from been here, their like select you they've that Curious or indicate guess, present checks guys I with

Vik Verma

there. indicate checks and have have offering seen X customer think channel and of our community, guys done comprehensive and is viewed out when within NPS most that several Series, of similar we've surveyed to you So as I checks, the else the consulting well overall satisfaction anybody some channel best reports and channel the

very It's we simple. And begets seen is what have so success success.

bigger deal. partners bigger I about And see X-figure so you're channel And using to deals that starting seeing you're talked TCV and product. mean, we win our

more they're make some seeing that sure the more deals. them Teams, to offering with that as the that our of more X of for our we deals allow etc., such with more that us the other Sam? deals Series have, activities they and win so that we're differentiated it's And Microsoft and

Samuel Wilson

I momentum we've sustained sides have the instrumental deals. fantastic. said, now true allows thing. begets we add platform of that heart, it's, the got success. offer contact the that channel, their together, as success transactions. and them CCaaS just think that is is that has of lot these functionality for channel Look, if and mindshare Vik UCaaS higher center And partner I fact economics we And could fact house, becoming combo cost leverages in product right? just plus the both we And And maybe at a center every per-seat a Contact a more in one offer with

Vik Verma

I And to number to materially for add think quite think the has channel increased partners saw you of that, us. I

active number channel partners of And growing. so keeps the

ago. X,XXX. was think I I I think, QX XXX, it's in now, think a year And it right

look in our to marketplace. up as see, more So are you're pick success momentum with again, products starting a level more to the get and people of

Operator

line Our of next with question Erlikh the Baird. from Charlie

open. line Your is

Charlie Erlikh

March. about on wondering guess, And increase I'm off in traffic levels of network hoping of traffic normalized they've then Did you or I'm levels leveled if levels to maybe elevated. at just your and, the months over talk April? I that couple all the March maybe can and since past maybe kind remained

Samuel Wilson

side So I'm and I'm to side. center going the going to CPaaS side, break it two into break traditional that into the pieces. more contact telephony

saw in reversed we lost pick as other Asia, solid business start starting of because on no some back segments, we in So picking right? And usage. particularly in etc., these We was situation slightly. then contact our back was that our retail, to some down what see cities, hospitality, have ride-sharing, in levels in decline we just would increased companies that July, retail little side, quickly, presence, presence mentioned then where a CPaaS space, the saw SLED, in A to those January, government, types the as the CPaaS seen it all February. a was offset usage usage has type all bit script, flat side I And trends a So UCaaS it in of two I in usage. next-generation ramping in center, definitely strong by in net, the did we a of down really up. of in saw in itself our Also we healthcare, economies usage, June, telephony, tale customers lowered say COVID-related. May, up, opening that up of back of and of lot

As of pick increase. things those some up, to see and that ride start start back to we sharing

been conclusion on So a depending a I too really big to vertical has of want two don't draw the because what was. it cities of tale

Operator

Andrew of line Securities. with the Colliers from comes question next King Your

open. line is Your

Andrew King

Hi, taking my guys. for question. Thanks

had? talk of be the the investments that ramp CPaaS that how If And any that, on great. would had the closed, on that So further initial you expectations the CloudFuel what fast you on you many also, you've and the Virgin XX just of Media APAC your region? that strategic given outside you see then given can than partnerships, just do mentioned were those you

Vik Verma

So the call, earnings closed we in we CPaaS my is term part, And few U.S. I I think, the I used the the closed, U.K. first dozen, over in a in our think

we're and Asia starting this reasons one we interest see in exactly a very interest to quite why the acquisition. So is of outside Pacific, made for pipeline healthy bit which CPaaS of of

you question of question? second think the sorry. I'm second part the your I part the Could of repeat

Andrew King

further Yes. just given strategic their Can your talk on expectations your investments ramps? you fast partnerships, in about

Samuel Wilson

on of across the we have I the company. guess mean, side, Just is a I VAR partnerships clarification the strategic number

just I'm get trying clarity. to some So

Andrew King

you Virgin also the focus Can on partnership? partnership Yes. then and the Media CloudFuel

Samuel Wilson

it. Got Okay.

it. Got side. VAR the on So

let's far, as been, ramp, Virgin already On a it They way. it put moving those just lot. Much solid in fully well the And pipeline. this we're CloudFuel. forward, Virgin, a place, like and fantastic in Really the that with with deals funded, partner. the into road So working guys same map impressed are really world-class. it's so for

map road again, funded, in once So fully place.

revenue That's Vik partners, up right produced As mentioned, of pipeline, just matter scaling now. it in deals the a there. VAR signing

the of it. deals both partners on house. We there done really are the innings sides are early The the have are scale is effectively place, now in to And both scale and everything with just operations. just

Operator

of line Sutton with from the next George [Operator comes Instructions] Your question Craig-Hallum.

line is open. Your

George Sutton

some looks to doing It wrong. looks here's you're representative you program. your as and which marketing where the is me that branding that of you've to the be bit try of channel, doing looking the less making you're could outside, breakdown working. like referral it looks like Vik, It spending on we spend, side? looks spend. wondered search And you're I'm It what breakdown and the fairly Thank less correct like I understand concluded, obviously changes the spending spend. a a Is you. up if quite always a from of I've more you're trying like on been ramping

Samuel Wilson

this Vik, deep I'm side. I'm in going since the to one take spending

I of saying. level, you're what macro a agree roughly at So with sort

on, optimization. you that areas just the very focused we're what think cited I on is

maximizing what spend. on we're So each focused dollar is really

really closed so deals. marketing got now, and really your dollar right with very place question, very focused on on we've got now it's enough You spend R&D. why to why creation substantial we're in improvement we optimization pipeline and now grew substantial maximizing And both good improvement in operating bats a seeing a margin we've drive in focused marketing place and It's process. you saw and you're analytics marketing as that in quarter-on-quarter, to of each one spend even year-over-year, sales

Vik Verma

website, up And one add before. that in our past We our the to We to brand really year able you think a purpose or of the a see because in and significant historic. because stack. to made was lot we're George, ramp campaigns stack martech because pretty had etc. lack martech this needed recognition people, so whole lot over customer are our investment on that a coming different of a down and and that I'll acquisition And last costs of we're drift, to can up, starting to do I very that was the more brought we we get tailor to people it interesting

that, evolution brand of see one our So we great has Meetings to the also our credible starting is it. what We've we very increasing job three that's costs seeing down that on-ramps the is into second, in one awareness. addition done And a to of whole are of now onto we're are what level product. finally, got kind of system. is aspect product driving another the e-commerce of then And

got we're includes know, then able a center; And unified much the Video you the we've more got coupled said, contact system. really e-commerce. stack, to we've start we've and which drive martech got brand-new CPaaS, As and as Meetings, to with into API; I our communication efficiency

George Sutton

ask, other to process Great. kind you geek of That's to contract can thought that? in starting build the Sam, of needs the explain of mentioned side you're behind delivery, you One helpful. thing, just advance contracts accounting me

Samuel Wilson

Yes.

prepaid. for more, really we're months more mean I we become businesses, I company have starting our a we us balance. historically business prepaid. it's capital prepaid can think build to why and working the either very a as like even basically most commonly working moving like XX more to I annual SaaS-sify have But or time. it's not we're think haven't contracts. something SaaS to was negative to much that referred X we're that But get as And to where we a capital-efficient SaaS and So balance have over capital I'd done, pure we

I think it's doable.

I started that think the need right we're capital very we cash it's at in achievable. raise results. and in and now. to the expect sheet seeing think It's already the good all free why to is flow any don't place, we we balance position become plans positive a We've why

Operator

Koontz Your next question of comes the Ryan of from Securities. Rosenblatt line

Your line is open.

Ryan Koontz

maybe far. Are pricing that comments a the perspective, bigger Hi. incumbents? to about what's against you you great disruptor this back circle Can here legacy more little you your of How your and in to kind Appreciate a from do want market? bit? strategy contact as you approach so Thanks. of I center coming metrics talk a it.

Vik Verma

the our that platform a really over is years. four what last three, of very we contact the I'm center done in proud completely But has the about team work So business. revamping are

one conferencing, what underlying platform of an we've got communication, unified analytics. with we've layer is got contact video chat, all So where center,

different match to what allows and is customers. us So that for mix do

Premier win two were center. went is mind. comes center center, center. with also over in competes large that us customers U.K. basically City's Some that them governments contact the with on the can very with to with big Manchester sister the League, city what U.K. seeing City There in the lead contact U.S. went with we're Manchester and our very some contact state contact deals we on

a that differentiated become So the into unified communication and it the a we brings see center into you're in way asset to as starting lead mix. contact very then business,

are to may advantage. in. platform entire you cost So do to Sam, able the jump significant want whole, on is for a we able to we're the what provide And

Samuel Wilson

They really that more large when center features one providers, we're and it want the you the When not add all providing UCaaS, very want at to can the mid-market And where across someone someone running not small becomes segment. want infrastructure. CPaaS opportunity focused and to else a compelling spread functionality. they a We're market. value mid-market proposition the that we have There's just else thing. that's I I especially for very focused. legacy XX,XXX maybe high-end agent guys, tendency think and X,XXX, contact where talk a about of

Operator

questions no and call. Thank are Ladies there participating. time. for further concludes gentlemen And this at you this conference today’s

You may now disconnect.

8x8 (EGHT) 31 Jul 202021 Q1 Earnings call transcript