EGHT - Earnings call transcript Q3 2021

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Operator

Good evening. And welcome to the 8x8's Third Quarter Fiscal 2021 Earnings Conference Call.

Speaking on our call today is Dave Sipes, Chief Executive Officer, and Sam Wilson, Chief Financial Officer.

Before we get started, just a reminder, our discussion today includes forward-looking statements about 8x8's future financial performance as well as its business, products and growth strategies, including the impact of COVID-19 pandemic. We caution you not to put undue reliance on these forward-looking statements as they involve risks and uncertainties that may cause actual results to vary materially from the forward-looking statements as described in our risk factors and our reports filed with the SEC. on we reflect obligation have them. made of analysis to statements and today, no forward-looking this our call as update Any plans or

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

Dave Sipes

pleased and Good fourth hope my highlights today everyone. year. results I you financial Victoria. on call families walk on you my you, us first will level through are the third XxX. results my company's our from observations afternoon, business speak will the safe. guidance and cover to I XX I next first will earnings and initial for growth. days with your Thank I'm thoughts full and quarter then with from Sam and of healthy quarter share and

drivers contribution UCaaS total CCaaS with logo and the was bundled QX. new Key let up XX% Now start growth channel me to for a revenue good were continued execution. demand and $XXX year-over-year above of improving QX our market the range. of acquisition, guidance quarter; and grew strong increase a million, offering focus, operational high end

differentiator and for Our a is CCaaS clear fully integrated UCaaS solution us.

engagement to the shift replace platform. value legacy XxX's recognize cloud. fully employee market The enterprise and premise on a continues organizations systems mid of integrated the industry and to customer As

service as for Magic For the quarter center named a the a contact Also and bottom service. year a in service the in exceeded improved revenue Gartner balance and achieved clear worldwide. year this UCaaS in leader guidance position. as for in is guidance we in With sequential the Quadrant operating full the profitability. XxX the the a outlook only and Quadrant improving sixth strengthen Sam to the Of a as top year. row, we raising growth fiscal profitability Magic Furthermore, Magic contact line XxX XxX were ninth moment. and quarter our quarter, of cash in We Gartner the as year communications line our improved speak Magic for leader efficiency will unified Quadrant also fourth of named Quadrant. note cash fourth center for to challenger a as in a is consecutive a that sight

quarter. let the me turn Now from to highlights

for We and greater a for marketing with Channel quarter communication and $XXX,XXX fit customers partners This of that to solution deliver the XX% channel strong purpose center ARR, mutual channel The was highest delivered in of of across and regions solutions mid their bookings a record. enterprise market our year-over-year. bookings of over with and execution top our had for customers. are with team the again, are because contact record We a the seeing enterprise Channel on strategy all and focus for pleased combined than is across up channel deals growth sales, value from integrated result success XX%. of product our XXX are enterprise in XxX a quarter. of customers. XX% we ARR quarter market driving and market with execution customers. strong increase turning XX Eight exceptional was

community honored within and Nearly from quarter segment pipeline UK is fastest also Award of in were the or growing reseller program We XX% came UK year-over-year. XX% added of route Best Our the partners North the for by market bar TechTarget Services in in awarded the channel of to UK the bar be to XXXX. year channel Cloud our America. channel. the Archer the value CRN, XXXX grew enablement Vendor deals registering number

customer overall bookings representing and logos execution healthcare, observed and sector. Turning in we of strong transportation, such XX% verticals, growth strong wins, from quarter. and specific up all saw key to in new new retail, We public geographies last XX% as

entertainment integrated recent Let replacement on IT an platforms. wanted example and America, XX operations CCaaS that the for licenses. solution. a and in also integration Chuck solutions me reduce customer XXX infrastructure office and CEC consolidate North UCaaS Cheese's, largest corporate from airline number around deploy had weeks. within cloud a voice operates fleet XXX win to XxX win their able offices. connects their center our multiple one overall our its outstanding with Ryanair quality is seven looking was their highlight contact Entertainment provider travelers a Ryanair and selected XXX In which destinations world. a deploy the America XxX important by many vendor Entertainment we unified states countries over with examples. TCB lower to aircraft. completely to North customer This XX and differentiated is countries providers attracted and medical needed XX UCaaS family and of competitive a CCaaS notable call CCaaS expense. center, of offering. the a few A found required group; between Holdings, and CEC bundled They UCaaS figure was Outside can platform who wins, to E. restaurants major XXX UC four and platform rapidly deploy costs a additional An They and communications with They Europe's

provides CCaaS Ryanair XxX growth than their unified chose to support expected UCaaS With the more on agents further a and platform. XXX with XXX order. and

as log Zendesk Our our within automatically customer agents service to customer platform will Ryanair activity will their who be across integration used all utilize CRM.

experience and improvements help to skill customer speech use their will in management our to quality they solution agents. Additionally, analytics and up drive

independent Certas and contact UCaaS distributor and will back is is and They selected X,XXX Next based Limited. fuels lubricants. staff. and depot XxX CCaaS agents UK our with communication to XxX office center modernize Energy of UK platform support largest The customers. XXX

Certas allows solution center operational a interactions. to of single Our contact functions and customer view their have

distributed the from Zealand multi with has initial UCaaS vendor continues ample cybersecurity replace locations Australia region a the reporting opportunities communication also center globally. UK our They and systems. for that could TCV This combined figure and and comes users contact a integration solution This CCaaS vendor chose XXX single level multinational XX wanted New routing example to sector solutions Another a They call our solution XxX company. spot. and with higher future quality, countries. deployment and their top The for center is public contact be and a provide win bright of voice capabilities over for seven globally business multiple expansion. CRM to is in across with

Noble services with transformation XX sector nearly Health, doubled year-over-year. X,XXX in their NHS solution for responsible help this of support Health Boards. health Scotland base customer CCaaS customer services to provides over lines provider Scotland's experience. and COVID-XX improve UK and UCaaS supporting included booking Our and accelerate and Regional selected vaccination selected for has NHS digital UK Public community X,XXX a Health NHS XxX the Community public which also response seats. XxX's to seats services They're wins Scotland, national quarter care specialist managing

and growth. XXX CCaaS secured touring business. opportunity customer UK CCaaS great of our existing Virgin and have retailer to XxX's of and with locations example win across A than Newnham Furthermore, their was to camping bars car further more and in X,XXX equipment. XXX College future see additional customers further tools seats we now education an Hallford seats enhance to land enhancement, will partnership feel for seats adopt acquisitions. a with creating several British that their expand services parts challenges important Hallford solve Group, a after more continue Media is UCaaS XxX compliance added experience and selected XXXX, and

notable figure seats. them on of an and for Almost our providers Canada X,XXX seven I service are Europe's to partners would thank and support. wins equipment all their success, approximately bundled collaboration of Another like CCaaS these with to is example one leading TCV our and UCaaS place and critical deal of order add to channel a

of to success offerings market center a upmarket total customers our continue ARR. bookings that bookings, of lead XX,XXX contact ARR. who CCaaS in products. ARR customers, XX% UCaaS way. CC Now, bundled the and I'd were third the UC more have and company Bundle over to discuss represents now or and of like communications combo purchased from represented

is also than that rate UCCC. deal quarter second in Also, twice the at that combo of the I'm benefit UCCC say to our the field of two market The for sales a grew last quarter. thirds channel of bundled customer closed ARR proud Additionally, growth. more bundled reps seeing row,

selling sold XX% over of selling more agents CCaaS. The now by year-over-year. sub UCaaS grew Our historically who bundled number partners solution are our

we Finally, management to announced cloud for additional partnership integrated applications by enterprise workforce Verint adding this week, businesses our and enhance CCaaS mid-market with a worldwide. offering

call generate voice overall their UCaaS ability Teams. platform settings from as three customers we likely Teams to organizations such the Microsoft Next is provider. extremely Hanover proven from manage Institute In of forwarding, continues to opportunity logging CCaaS and party quarter, voicemail Microsoft telephony directly commissioned and large. calling strong from more Microsoft routing that providers. is are telephony than third Teams, through direct want with found in call integrate to study demand quarters which a The modernize out and XxX the that configurations, In for with solution a of we added a Research to queues

to and XxX connected for global retailer Teams A ability of consulting program. advisory firms. include now large center of Microsoft's lines and had initiative their in mix is voice Microsoft VDO, included an which of digital will growing initial A working stores in operates X,XXX and of which Microsoft scale selected utilize and XxX Additionally, needed tax seats Teams. X,XXX with front to one and US would combined business couple networks public a a a XxX the of been transformation They on contact for XX utilizing its a largest a RFP, seamlessly UCaaS, team's Teams. XxX large across that competitive workers. license enhance deploy with Microsoft Microsoft Teams one XX,XXX notable UK After platform knowledge CCaaS need integrate solution VDO states is accounting, communications match across EMEA a contact center selected in both for functionality. wins Microsoft for voice solution certification mix for the fast and will X,XXX solve for match seat communications for UCaaS unified solution

skill CCaaS, CCaaS provider blue a critical collar support An acquisition. platform. services an increased SMS driving up a SMS are to provide learning API application to creation to turning also selected Indonesian Their XXX% as with for citizens. XxX's new XxX accessible to workers ministry customer initiative Lastly, an usage easily offerings job government to based quarter-on-quarter

for messaging WhatsApp Viber, now Facebook We users also chat Korea. reach active mobile seven XX support services, app over to companies monthly TikTok including with app million The a added different across API in customers XxX talk, South and Messenger. allows

the moving cloud. with urgency Google available XxX customers Additionally, sum is API. SMS business and XxX To to to now SMS the verified Google are up, our CIOs service through enterprises

Sam Our results. in over globally. the the integrated market financial platform growth to us let sets and me to that, now to With drive the turn continues apart call cover

Sam Wilson

I families good and that your financial hope results. want to as we joining you Thanks, appreciate third quarter Dave's report safe. Dave, you and staying echo the are I us afternoon. comments We

and have enterprise categories, increased UCaaS the and in were We for to are drivers operating revenue achieving performance deployment $XXX.X million, unexpectedly, sales increase strong. had than and sequentially Key our that quarter and CCaaS Total expected leverage exceeded services as million guidance. reflect pleased in grew $XXX results to from million in guidance, improved profitability. accelerated XX% confidence an hardware the delivered were professional was of offerings. We product above bundled better linearity $XXX year-over-year, good quarter customers

quarter our an end, service up was at increase guidance. above XX% XX% $XXX ARR $XXX revenue, year-over-year. million million, of $XXX year-over-year at to million and $XXX.X million Total we Looking generated

investments strategic last innovation are years few delivering the the Our results. and over strong in channel product

Third quarter margin XX.X%. non-GAAP gross was

points As driven and over to basis XX XX%. expected, mainly service Non-GAAP lower product last by mix. revenue quarter sequentially margin declined

during CPaaS we usage year other lower margin services margins. revenue previously the ago from quarter CCaaS from a holiday improvement a were large Key the XX.X. XX.X% increased have improved drivers XX.X% Non-GAAP from minus hardware significantly As the at continued and in minus flex rental quarter for in growth sequentially our and the program. minus professional mentioned, CPaaS came are and UCaaS activities. than the margins

to and ahead to gross CPaaS quarter, usage mainly margins currently due holiday pre fourth the better from Looking mix to we levels. returning improve to expected product overall

continue global programs, digital third marketing improved expenses X.X% execution combination marketing and to of driven physical business Non R&D expenses; to optimization than to expenses Non-GAAP have and virtual the our of The productivity. improved and capacity XX.X% to media sales we events in operating revenue in from domestic quarter QX, GAAP and of We've last both the quarter. Turning were spend, revenue also spending versus last of X.X% moving efficiencies. sales from drive and lower align efficiency. sales leverage XX.X% international added improved quarter to quarter. has

scale to non-GAAP further we revenue X% and grew advantage. expenses in Total prioritize differentiated year-over-year, total at from year-over-year, expenses a technology We Non-GAAP down management. revenue last XX.X% We gain of revenue hope investing while QX were in our XX% operating of advantage operations. platform G&A of to to continue revenue as reflection tight XX.X% G&A related improved expense quarter. about

We digit percentage to clear X.X% Non-GAAP up be operating quarters. in OpEx We for pretax minus quarter. profitability expect have year-over-year seen quarter, XXXX XX sight the we generation. future exiting we to quarter, non-GAAP the and of best have cash were believe the single line March in margins fourth

the As in not of expense expenses, metric necessarily due fashion. will improve to quarter timing each a a reminder, each linear certain

investments funnel demonstrated generation on to and in including logo are rates Our previous and good be solid growth metrics we demand coverage top of the returns pipeline strong. continues These our delivering channel. was results that new

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

spent. extremely $X in better total currency for management expense each October guidance a how tight This Our with of of $X.X million was expected a is dollar minus headwind. non-GAAP million the a XX, was than pretax and December ending with loss by the being pleased diligent quarter combination I'm than offset provided result XXXX. team better revenue, very the

Turning to balance of at is the we includes the quarter cash balance million. and million is payments decline $XX.X $XXX third sheet, total quarter. quarter-over-quarter million a the of discussed $X ended cash, and the corporate approximately cash bonus million, excluding investments last $XXX.X restricted restricted This

million ahead better that Our collections which we COVID reducing since cash quarter on quarterly has improved good expectations. usage focused cash related manageable. improving risks Further, fiscal collections, $XX a continue fourth by are to that further and the remain We our over is run of XXXX. expected of sign believe burn than

million better see are on more discussed cash. We Thing remain cash than focused making on zero in sheet further and equivalents cash slightly towards cash, performing free into I in flow quarter. steady put on am expectation now are that investments we we second in end. to we net Last and of intent cash, improvement revenue excluding half expected is fiscal progress I'd $XXX in the over again have cash balance final cash to liabilities The being $XX fourth million the equivalents the XXXX or say million. topic quarter cash. deferred have of and One $XXX usage item discuss program place improvements the fiscal restricted we like and likely year. raising year are to more to at over under to approximately increased investments expect which in positive quarter the during to the our our pleased

of and the obligations Simply delivery about continue sheet. committed remaining We of deferred on our are have moved put regularly building we metric advance deferred is services. balance contracts revenue for RPO service towards or aggregate revenue backlog in revenue grow the to RPO. will subscription One performance is expect and asked

was million approximately second quarter, and RPO in from the third $XXX period million, the $XXX million $XXX year ago the in growth. up or quarter XX% For nearly

the anticipate good for Turning Teams. as this macroeconomic for UCaaS are non-GAAP XXXX year we XXXX pretax to sales the enter as continued for to million all $XXX.X to is service We CCaaS revenue loss and of raising fiscal $XXX.X Combining into to follows. we the revenue anticipate fourth metrics of be Taking we account, to million, for representing total outlook of be for for range range year-over-year this million, as continued are XXXX environment Offsetting our approximately $XXX,XXX. million fourth and growth. guidance approximately with follows. the the the XX% we XX, of to XXXX third have forecast ending bundled Microsoft uncertainty in guidance strong financial we We March demand funnel a in a ending pandemic. in quarter $XXX.X representing solution XX% as establishing to and March outperformance quarter, XX% And XX% result $XXX.X full a growth. fiscal quarter approximately voice our the XX, anticipate year-over-year QX

from million We to of our XX% $XXX.X range $XXX are growth. total raising million, million $XXX revenue to outlook to year-over-year a representing $XXX.X approximately million

is We discussions are to revenue The reporting raising pretax approximately $XXX million to community, had growth. to with after are on the believe of a published. million the growth will measure service our $XXX range year-over-year ARR from discuss representing XX% We sheet. $XX.X topic quarter the certain from million anticipate of final are million earnings investor business range fourth feedback $XXX booking to a $XXX loss our metric approximately million. like I'd results stop IRR metrics performance. better non-GAAP to indicator we We Based metrics we've

position May. the profitability. excited with Dave. and impact let growth focused, the to next for XxX our fourth note, excellence is turn had. On quarter already With We I'm to phase in help me go-to-market in see that, Dave operational His positive conjunction back to expertise discuss results expect these call of personal changes will and our a

Dave Sipes

some where we to In and we built. initial partners have an This to deep I've have strengths, time has appreciation joined observations my I'd and strong spending believe closing, our us. incredible and understand focus I share XxX a I of in with can is like make for respect improvements. technology for Thank our you, me, market of and meaningful team employees, the I nowadays opportunity to better front because XX our and customers thoughts. been Sam.

the seeing Additionally, I'm I'm very and encouraged dedication team. talent amongst XxX the by

and opportunity to I forward, operational execution XX potential. see to transformation company experience full the drive the Looking leverage years help improved reach to my its of

been really is of the Not as the just And massive. for model revenue special. resiliency opportunity companies scratching surface. XxX the the First, SaaS demonstrated, $X.X years reached that business many billion Yet, now, size we're has is today. market is the have

the to early timeframe to SaaS are of recently, cloud. now a move become capitalize adoption the a customer continuity. has innings. critical from top it is and business That have beginning, on the connection, suited market cloud the The is experience work accelerated cloud anywhere Having and we the communications largest is in pioneer make the to from see of communications business been accelerated as priority. still which planning business Moving well the component this the seen in business cloud in enablement, transformation. there of is. one opportunities transformation of Enterprises XxX a making and a to Yet urgent employee nature companies product communications base from

plus has is confident quadrants, and recognized been review two opportunity. a product on decade and integrated been business engineering our this have my base magic even these product solutions. exciting can yet. And customer customer platform find In business an fill and innovation, the leveraging unique in company meetings. I team products both product ahead, promise upon in amount Gartner tremendous built deliver that I initial strategic be I'm Based customers. of on positive, the we time the first to amazing and consistently XxX an first to suite to and has the capitalize more of the and first, cloud years considerable we there's API will to of for evaluations, for continue have CCaaS, consistently this a platform UCaaS and Second, spent experiences amazing a already with innovation an user. do technology we of business delivers a a quarters teams, the developed communications

differentiated hard to on the and highly drive everything right excited results. will I'm already on to a this am opportunities market profitability. more been has be reviewing additional and a execution. XxX the processes. some this growth. coming efficient leading seen operational have our I strategic efficient, area where level we of made be of progress technology opportunity, about further that Third, we future. even in streamline Building from provide focus focus been through do customers and bottom, forward for streamlined the excellence. focused next rewarded including unique are strategies execution, massive with focus path And We're communication revenue quarters. confident best and there already our earned the engine for to down impressed I believe to and top and go-to-market our to recognized you're solutions will resources, scalable, more in become today's best will of to our partners look towards the progress I discussing and I our are growth announcements, that those stronger such.

me Operator, like the we feel are Lastly, continued customers ready their our welcome. making partners XxX and take employees questions. support. that. for thank I'd And With for to to

Operator

VanVliet Your question of comes Instructions] from Matt from line first BTIG. [Operator the

MattVanVliet

out on in contract a from how from acquisition and the structure bit, than you've total kind going Thanks or you built taking margin to afternoon. structure goes sort different team, maybe question good opportunity it's Hi, of help series? more the and I have question. well the for guess to on is Dave. And XxX in but market, and or the with It's it of work, proliferated But and we my welcome enterprise. the the my morning, just you sale teams our release the a first to is direct what Teams that bit integration, understand great X across the no addressable this there, press And aboard. for all quite very can hear the on you a anyone to touched continue surprise Microsoft of is us little capabilities

DaveSipes

the to Sam the Connect what our I'll Sure, Microsoft UCaaS Microsoft offering is so capable David, providing endpoints talks for our and we and customers last fast an opportunity; of part. we're with customers ability I'll environment. for retailer about market utilize Teams and CCaaS Teams, talk This Direct let on our with is it current the an utilize their market brings growing that about ability to talked team's to like

Additionally, because on we might that's have our who direct product that team's in agents of customers. being bring unique having and frontline contact tremendous quite environment the capability. workers And center routing mixed pickup also create a for other providing amount a in we're those capability like not that and employees environment able of can that to be

some launched settings in set queues. and also We within the teams, to from out capabilities ability and there, call of

daily says adopted going party large users is differentiation. there's market through integrations and institute there's capability. and teams around the research the we into of growing. the to Tam those and about UCaaS three with size the that we're large and And Hanover, that So million that companies are for commissioned of institute quarters create a probably third as about continued that is XXX as telephonic product innovation that to putting And ecosystem today chat, that pandemic,

in channel leading directly with the market of success some and the is having opportunity customers. in large. there the the and both So We're capabilities are

SamWilson

customer, don't seat. a usually a different now and same. bottom margins, when larger a we agnostic they're of team's them Okay, or we're reduced between that a of one of we Particularly our effectively one Microsoft margin might when the I company, the support the buying Teams those push seat either things, slight we one. margin, way decrease want But it's costs in to compared materially the line effect top necessarily see kinds And by to to at look selling non line, We're of an the think that's more bottom benefits that's large in the right on do is but another. topic team and to what's volume. there on not great line be a with and

MattVanVliet

ton you're some pandemic. everything here obviously Great, and focus mostly What this center anything. is out the side, then or, consolidation the are of multiple customer in are traction more you going how shifts maybe really digital world, helping small we had and rip in a usage see more more more to replace of continue seeing, where vendors are net to that the to to come ecommerce, and on up as they've contact Scotland still Or meet are highlighted to vaccine, are I of of that customer? NHS cases? as one kind and your look you starting centers, use in but historically stand maybe on across given enterprises a the new you and know you not roll seeing contact

DaveSipes

market mass is solutions. of on majority the still legacy Probably

the logo adoption, to bulk And modern we're the in of transformation. innings and anywhere work market so that is early the like change of occurred has older created both transformation. that's that replacement the is early we're where this ultimately and a unified the increased of new adoption And communications of massive a cloud urgency phase in from from combines and planning and systems. solution in still of then of opportunity, early But people acquisition comes customer the with center that that bringing contact the

Operator

Your next Stevens. question Brian of from from line comes Williams the

UnidentifiedAnalyst

attracted hear accompany results. love the experience on Thanks. you help to I your set what I you to Dave XxX. skill about and of how color think the the appreciated growth can Congrats next leg

DaveSipes

far, as customers, part and even of warm a employees was very there's so invigorating that investors there, partners there it been reception found is analyst. there I and felt Sure, and And from And bent as out. good customer, of that organization, well was as myself playing fit, good right, I and and with feel expertise. largely my knowledge a operational market my the between is the an

So like feels right the right at time. the opportunity

opportunity. the category legacy profile cloud, to increased, moving organizations, and is as is of the even with the of elevation that tremendous Additionally, increased whole from creating

feels a it this strong, point. like overall, combination So, at

UnidentifiedAnalyst

growth retail this And Yes. the the the, encouraging Can of there. your what sizes mentioned, the their? like, Thanks. there you wins, quarter mind one bookings the And deal channel you in looks what win pipeline to are about and XXXX. of celebration Excellent. but back of be certainly, you into some hospitality the first environment, larger saw in the heading just come travel composition talk of macro

DaveSipes

And strong area seeing And execution and momentum, I it's obviously, goal attributable is to Channels, is leadership the that's with mid-market combined of customers. have at capabilities those to think and ability we congruence enterprise UCaaS between offerings. building we an continue close CCaaS that that growth wise I our accelerate to our penetration say are relationships momentum for help XxX with strong great and and consistent into and channel marrying channel, the that with would and deals pipeline and that healthy. the category our channel

Operator

Your question Needham. from of next comes from Rich Valera line the

RichValera

And Thank let aboard. to me add Dave. Glad you. my see welcome, to glad

wasn't folks historically, in buying an of see parts the that on about master agent XxX been presence opportunity And of a thoughts their of also in of channel you've for since something been wanted to So, your of economically on give involved where if have them the just maybe in that Obviously, But is career. you clearly unit stand sort you lot you terms to where And improving that mind presence channel? the some in issues just channel. Dave share bar the in assessment increase wise. with of and two any on guys while both channel, case, to side there with ask that's mind the sort the your your share industry economics.

DaveSipes

Yes.

to is an a opportunity channel market, well we're that's saw, preference there's And degree. with and XX% also as momentum today. being up element for said, model. but And into think UK has the economics, continue some differentiated an additional the to of been see we that, encouraged challenges mix we bar channel good execution, at countries I where been that And in pipeline. But like And an success. of be continues overall there's opportunity there's probably to So created beyond that we point. That at additional UK to good. through I between this that. catch as are growing think the a move economics, momentum, a consistent we a the shiner that's we obviously, like And by generating

RichValera

out makes on That the then was question margin acquisition be was, And that that wondering in some geos update of Great. the where I out just sort rolling you'd geos When the business. of ultimately you that higher have bought rolling terms that that profile. one some help of of that thoughts stand you margin would in am when property? API sense. beyond initial that on we was any the when done,

SamWilson

in to did quarters business API it Asia, our in UK, US, to be Yes, I Asia, the to mentioned close of the the we stay customers we because limited majority in the expect in we continues into that think call we mean have is it still growth of last and robust existing on availability some, roll there. vast that. business customers, I

I So product. differentiation, our mix It's a center source tuned. it contact when stay particularly we with of definitely think

Operator

coming the Your is line from of Tim next Horan. question

TimHoran

And how these about customers Thank of you benefit you for incredible into are using UCaaS please? and It's unprecedented. talk the really then in important your customers Thank point. a you. you? market that of expect Microsoft of or, these customers And you year other welcome, give really why growth lastly, guess use your Dave. strategy can a at an over? they unique how two? percentage or us month incremental growth customers to I very dive few think, of And What's you of growth there? this teams? with The sense we teams, would options XX this is go-to- many almost you Can I in Can and been are have like,

DaveSipes

of the part I'll first Yes, answer that.

dependable done interface. the doing blown customers with that of is what direct in that So light what at approach, application high able of with UCaaS vendor the a looking a is with is capabilities broadest kind to stroke for the routing, the that really and up we've chat it team's telephony a being creates doing high opportunity like reliable, full And case. really quality quality, the in

things that center to is the provide and differentiated in like ability we Additionally, agents, unique. contact bring

on not in In even that be addition organization. to types might of the workers other environment, team's large a

within there's organizations. those different of As deployments types you can imagine,

you that enable communication allows to this real a a platform match mix symmetric time and customer with that their to providing. organization So with entire communications teams is

SamWilson

I global don't routing, the think as we the to in It's by department, with IT small down they're offer department, IT users teams. one sell just stop generally add the one where purchased generally shop the I teams the direct look, solution. on bog tidbit end a a Dave to areas what we saying, we was is

as of clean the solution partners a the so telecom it's And department have local a doesn't the have in it's world. bunch to IT expertise, carrier in IT regions much of very for again department,

ongoing will the And It's suggests I net of low it's TCO, all is that solution, Hanover the also. low IT great department it's win-win. supports a operating so using the And XX% stop, kind customers teams, to routing it's that be on, costs. just one manageable, which think a and direct a of research,

department I So hand it's deploy Microsoft's but I instances. -- on nice I the still that. work one product it of IT it their a it's needs those we're a on hands, And got think you're just make spot to solution Yes, globally, glove to mean, just think winning and well. in rare

TimHoran

be there? to will a it strategy what's And growth market or so your now? from how important two year And go-to-

SamWilson

We've agent a signed because want say Remember, we also Microsoft answer easy partner. is which channels interested. I sophisticated, right? something regular hit the the PaxX, the mean I master to I channels. up to digital they last is targeted a bit that think quarter super We traditional sub are Microsoft don't channels, the

largest who some are partners UK, have We the the products. in of Microsoft selling our

So I channel a mean bit focused. more enterprise customers it's mid to market little the are

the them through the we So traditional them the hit route. customers, through we smaller digital channel through hit

Operator

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

JonathanKees

your I'll on product first my congrats two your and to and questions. Obviously, guess taking are add click I doing quarter to the lines for CPaaS. my Thanks And ask Great. here. and CCaaS Dave well, about the UCaaS double I wanted wanted for welcome

expectations guess, can usage the sounds integrate line, trying the products. with in completely growth sold down It You of like you I the other separately, know your bundled previous back. could it but still rebounded came products it's talked what to terms with I quarter not brought other be it with about that that came portfolio, about it back talk for offering that your from the product that particular being enough still it's you're holiday so margins, product.

would hot, vision during the about more that, going? a see be your video, Can we where second you wanted if in just for you for is your what it. maybe I lockdown. product the during here, development Dave the the that video. where would of can the So And that would what rates you for is be Video double the talk deploy market pandemic, the is product trying click on talk to you're pretty obviously wise for thing release, growth think about this be to and terms for and Thanks.

SamWilson

right, give All for Dave CPaaS and your the video suggestion. I'll to the give take I'll

pickup that had margin the business. to mean, expected segment business during that sequentially. financial we holidays quarter, of It's the now, look, rebounding CPaaS integrated the we margins. we in then down into CPaaS, a generally in of fully margins traditional statements. On our and as portions the And CPaaS be the post of a gross last said, reflected was do the lower some portions I business see the holiday we gross season. expect correspondingly, SMS And

growth not really of overall I'm host a the reasons. strangely, for break faster rates So But it separately, out of going growing piece a the to whole is business.

next that fresh stay eyes that's I'll on on we next I that think about to part bit I question, think set want video turn tuned Dave. a last I about business. And right to to that board, that. having now answering little brings of a the great And next to of steps, figure get on with a we'll we're very to take over your steps out he those it, steps. Dave it would say And focused the

DaveSipes

it launched and great Jazz, level we've bringing in service. based active upon into Yes, creates called it. That simplified differentiated is a were to to a model developers community, experience risk it had And their app it on ability API's into free beta different we our have high opportunity to product video. users. other a into embed organizations products. fairly its at developers to that as full of has allows monthly applications With or workflows. over That's those a X,XXX a a put meetings allows into Gipsy Gipsy unique product which video its on meeting pricing implement And organizations approach a a

portability Additionally, capabilities cloud across it has environments. different

and So of interesting a number of an launch product working we differentiations and that that is successful. early will watching building an be

Operator

question comes of William Baird. from line Your next Power from

WilliamPower

at, to the close Yes. rates, growth in you what one leaders generally for might, of to that trying some some I you the and you face think in some of communications, versus, that. big understand you survey I of Hey, of Dave. leaders questions, I the is, validates over Hey, are of to thanks. congratulations. of think challenges the other I we're forward, spoke Okay, guess, know I channel, look us, industry of have chat the just some kind fact, investors the some think look again. Yes, Great of gap as the cloud leaders. growth to advantages, you kind industry the are you with own in strength work, even our some seeing of

next about that over big are and of couple advantages you close years? that? mean, think the challenges, what what gap do how the I you the what helps are So to

DaveSipes

again, but and number always combination seeing of capabilities, UC talking with few steps different ways and on the Microsoft even UK call and and a we the for in-depth, a organization of opportunities good or about think And the different well, am success. it I are, CC in Teams. those Yes, through today looking going channel with you're to reinforce the with with I

there's that those something And that where how we great are customers operating great we organization over investments help is well. there into to muscle and how go-to- motions and operate and improving and been areas we will and prospects. on that, working world strides how areas. strong muscle the effectiveness Sam all more we further is talk go-to-market that's key. class creating And build efficiency there out to stronger how obviously So opportunities from that and is smooth position be everything a opportunities how message, that, but we then in serve Also those continuing and create and CFO are for in. have to as how we And to market playbooks, and a in

to some And smooth between, out all strong train results seeing market. a in things those nine force cycles of are I opportunities market sell help applying working will better time, the these that take and opportunities. and have obviously, capabilities will enterprise, drive But know so months in and across growth leading areas, get and create overnight. key won't those So things you happen create

WilliamPower

business? on one rate enterprise I the it's up, a from of follow I Because low holding the generally you've mix big know the quick to And improve noticed help I fruit Okay. just growth as the of standpoint, trends as that's just seen, elements Is think focus back hanging improving overall growth. to a any a and there there. SMB

SamWilson

e-commerce bringing on Look, in the efficiently. more growth I initiatives UK on bringing new mean, we logos roll the out have we're good both of board number and in SMB increase them obviously to and

research, at fast. that the the a of lot you robustly the If party US growing SP in third look business overall isn't

I at above rate. or think growth we're market

number. think profitably is raw it smartly it's I just putting growing up So than a more and about about

Operator

next Levine line Peter Evercore. Your the from question from comes of

PeterLevine

a congrats and the company. welcome on Dave to you, and great-- thank quarter Great, great

addressed? know I kind here. knew looking of coming playbook if further life. by your against it's products, of like mind on of partner what's or in the day top played of operational guess in see to see did be you And performance you had out duplicate prior gate. us you you XXX first and most into for What you that that whether success go I be think can or this the And needed opportunities one to I days, detail kind that front of you the the

DaveSipes

world world applying like good feels always greater are out with to are this a deal strong come the you lay we're a create capabilities and at strong class greater velocity, There's point. those And going the But see capabilities, go-to-market Those combine with things into. better as depth we'll digging that product fit capabilities like and how a go-to-market I'm into go not back always XxX background, class those we'll we are organization. playing to areas opportunity. awareness, to general product out. those investors capability where opportunity that all for areas the and

PeterLevine

you you, And business Sam, managing COVID? hopefully for kind relates to expense kind XxX the different we curious materially corner how see do of for maybe on Okay. profile a as you're the travel turn sales, post-COVID real know it of to as just marketing, expense, estate,

SamWilson

you're it's Look, T&E say think in do been did need the would I much we both we CFO travel there's don't a realization clear in on talk I business corporate I very sides. the there. all Oh, as And as America, in much that to what believe journals. about and past. like reading to That's generate we

I buyer both think the and the seller it's side on side.

more that So and marketing sales lower we're so more and think I open can T&E of expenses, in initiatives more lower idea to we fund remote the cost regions, workers more capacity engineering capacity.

And in coming are unique pandemic. of not I'm institutionalizing that at saying that looking the we think at. I out is something looking something so it's we definitely are And

Operator

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

MetaMarshall

of center is kind you into customers customer only of greater but from feet, new of bit quite is just of secondary tacking commentary of than pulling these on dive these a come just kind that getting the XX a see contact existing new new sense bit and, XXXk some were logos. more through, you to you're your deals that that logos, deals upselling a deals, were on that clearly that XX means selling is little that, wanted them some noted of I thanks. Great, of

SamWilson

some with he start Dave pick I'll anything. So if add wants up let I'll general characteristics, to and then

so but be obvious of So hate bit above. to little a all the I it's

on we definitely, cross we seats, definitely more So add sell.

rest then we So a get the organization one sort is think decision center, we'll we'll biggest UC, to customer our first, the sell on. every frequently center, and while we things division, buying gets if of a we cross of in they're And corporate the land moves as catches I we overall once that cross contact buying that we and first contact of cloud. do the market into and region one the with UC, land enterprise one made. group a one an the customer And move mid center land find

of of surprised want and we through land previous I'm Looking roll out want then the constantly to of it the it operations. Asia, this and division quarter, rest multinational, the their when they roll they division to a US quarters, last global deals the the European to out over to

that to is And want add? Dave, so I cross do think geographic almost every one end. the of you six these in products, cross figure boundary, deals see you'll anything cross

DaveSipes

story there where and product, there sell when in already in think seats of relationship and tell you already the then And customer. the center. we we we a UCaaS with added, that's contact with discussion because cross are category buyer, to a perspective, like XXX to is open the have see, and I product then opportunity the in the Hallford, a seats, whole strong that are we great able able; get integrated X,XXX with plus had

quite area that is an So fruitful. that's

Operator

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

MikeLatimore

the like much. differentiator sounds platform, one you very I -- may the being full it the you're XxX thanks number Dave, on guess, stack. Great, be UCCC

to sure platform of, couple benefit customer versus, sort integrated approach concrete what of of say. they that's then right. stack, examples give, you sort want And full make another did an that's a buying get can Just if his the uses let second,

DaveSipes

vendors, complexity there's long Yes, and for multiple duplication single There's customers have of those talking able reliability, to of additionally, IT and maintain integrate like time being wanted buyer, out able being those. from products integration workflows. to not across having chance a uptime and integrations into two to things combined about as have that cost combined have high and But it have solutions back there's to vendor ownership. the opportunities so when total high goes the the legacy not well create to a as reduce products corporate an box ability you're

Additionally, analytics levels ability to of capabilities, we but for presence from measurement across not high of share suite only feature administrator, a scoring the the high, see usage. And also from products. product an or and quality across manageability, adoption call both loss

demand So that's existed several and in I they're for cloud. XxX sizes into legacy would areas. looking in say previously, like also buyer and And bucket

MikeLatimore

just the on product that line, margin And opportunity kind on of an quick time? gross is negative on it. the of XX%, sort over to there other Got improve

SamWilson

we on it improved we over we We've not phone sales. But yes, enterprise get radically things that to the yes. sometimes every room larger may on have have definitely we continue it, around will and and Heck, particularly phone it sales, happen, sometimes we should, year, improve the improve last to pretty margins other will line. new be you revenue quarter, gross depends certain

Operator

comes line Catharine Trebnick of from next the Colliers Your question Securities. from

CatharineTrebnick

that Source. Congratulations, in And this wondering a we're firms have of and and some great how Dave. and Scan on you if bars addition, is And update Where your SI quarter Nice you my strength us see on is progressing? that see taking at what's question. Thank a master agents And XxX? where might there can you. take and do for channel. give persists? Thank then I'm your seeing and to an partnership what also, it's you consolidation quarter

DaveSipes

us forward continue to partner afford the with of differentiated CCaaS going of known having the going there's can't the continue a have combination as overall, Yes, in I'll think for market supportive as will part community. work work of, that and we we with channel and take for flexible in with getting that I partners. And And the leverage we forward. the like support large being that to the fact that that's channel, first to reputation well to consolidation helpful easy UCaaS

SamWilson

without And I never about Source, then their partner on single permission. talked Scan specifically a

general, to forward program say. continues a So it's it continuously what US it something little roll but see roll bit on the continues I'd steps to and are. inappropriate next out in to to not much the bar But we're be out reviewing else

Operator

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

GeorgeSutton

your one WebEx Thanks. Dave be I only the that to goes as may days back well.

with third time. work to nice So you for a

to channel UK So on double did want I click the success.

bit along Now my with the of Sam's on but program better inappropriate can may has you so why give fueled wondering be I'm little if question us answer, program, last the that based been sense just virgin successful. cloud a

DaveSipes

Thanks, George. he Sam And running previously. operations I'm him. going let -- I'll European to was our

SamWilson

I Yes, wouldn't about so certainly UK you But market a UK entered the virgin. on Look, talk give the market. the XXXX. in specific I'll company

for through years. again, XXXX. in down eight We've First double been an and acquisition there

time. all it's do business competitive real to to to with. cloud how tells of we We reliable, -- and in US. we the easy team those lot in out the for the the intricacies us, Dave are in head and else success I think are figured years of UK there got us And a We're earlier are compared business it's the a always start, advantage that player known, wholesale model number said what of We we're the bar And billing market. about the we've everyone our over there. do UK one because

what for in growth phase that definitely so And think selected saw of were bar mentioned next there. I us you their the capabilities our in particular

Operator

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

JamesBreen

taking for question. Thanks the

X%. more cost Just being success that. one just clarification in Tim, side, competitors you clarify that think you larger similar competitive head side, many getting these then about expenses deals, more on And market? you on Thanks. the And invited have in were generally, you're are I the with how to in deals? to that Is the sequentially can seeing wanted beat win Dave, ones, that just talked up what your you I for especially you the going you're order before competitors head seeing to the deals? in to if

SamWilson

one I'll take part. while the second the right. gets Dave All first

year-over-year we quarter. would I the growth think for fourth digits OpEx be in was what up I said single

So year-over-year quarter fourth in digit growth single OpEx. for the

DaveSipes

landscape might largely as same. you the expect Competitive are buyers similar the

the there that's and contact So competitive the on back it's only needs. those center is to meeting buyer side difference. side needs, little more the a And

JamesBreen

the bit earlier terms think in there I was of remote of seen when to in work a you cycle, Have sales a the we lot year. a little of disruption went

buying face. installing to people face the if comfortable with more and more it product got without improved think I

SamWilson

absolutely Well, so part the is right. last

So into own now the product. have multiple video face own and product meeting video face to remote required, meetings remote our using using demos turned conferences our

mind I definitely think conference to through happened calls. that we talked I this So the over the departments think looking did IT that's that's of buying changed case. and have the thing now, in panic Look, about used the biggest we my what's last is couple

we're, they it's of And great. deploy; a little think They And bit business. they're doing. Now panic what it's look, users. I buying. enable how more course know to know They their it's how remotely remotely know to

this really to this pandemic. And, think prem all has again, great one's pandemic showed. ever on it's the shown buying for the that reasons going through think system during I because cloud about no an

Operator

are management for the remarks. there I to it questions. back closing further no would like Speakers, turn to

Sam Wilson

much. Thank you thank next replay And until obviously so there's our time, a on available And website. you.

Operator

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

You may now disconnect.

Dave Sipes	Chief Executive Officer
Sam Wilson	Chief Financial Officer
Matt VanVliet	BTIG
Rich Valera	Needham
Tim Horan	Oppenheimer
Jonathan Kees	Summit Insights Group
William Power	Baird
Peter Levine	Evercore
Meta Marshall	Morgan Stanley
Mike Latimore	Northland Capital Management
Catharine Trebnick	Colliers International Securities
George Sutton	Craig Hallum
James Breen	William Blair

8x8 (EGHT) 29 Jan 212021 Q3 Earnings call transcript