EGHT - Earnings call transcript Q3 2025

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Operator

Hello, everyone, and welcome to the Third Quarter 2025 8x8, Inc. Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

Now it's my pleasure to turn the call over to the Vice President of Investor Relations, Kate Patterson. Please proceed.

Kate Patterson

you. Thank everyone. afternoon, Good Officer. include of of Wilson, fiscal and Chief Executive will the our results third Officer; Financial our Kraus, quarter XXXX Kevin a agenda our review for Chief Today's with Samuel

Following our prepared there will question-and-answer be a remarks, session.

growth statements and are I'll of With statements Wilson. me let Samuel on well these on business, financial vary accepted today in investors.XxX.com. GAAP which call to profitability in metric future and earnings they you that otherwise have comparisons plans XxX's this including reliance cases, as accounting our the at uncertainties non-GAAP the be our prepared some and analysis factors undue slides metrics are All We these is made we with not Investor focus will the as on and presentation website that, earnings together generally forward-looking accordance investments our in A with principles no available strategies. reports cash U.S. started, metrics, includes to the get in These or as were our the forward-looking and over that not statements GAAP. from slides, cause unless as or forward-looking non-GAAP, described forward-looking reconciliation update on statements presentation you discussed to call as that provided results on in metrics financial them. noted. today, this we year-over-year Relations regarding of non-GAAP obligations our to closest comparable involve turn risk release our with to products and in remind Before our actual flow, about call risks performance, reflect in statements discussion caution innovation and may filed materially SEC. Any put

Samuel Wilson

the future. and progress third pleasure my fiscal for afternoon, our and earnings to results, share for today's joining on quarter you us call. vision Good everyone, thank XXXX It's

quarter above results high, we of The was initiatives. generated third our We in than and headwind from from story quality million record delivered solid flow the and cash above broader reduce Our continued by midpoint. million used achieved with operations. range January. the guidance strategic the earnings in remained FX of of an We revenue our strides transformation. million quarter made also $X our $XX and cash the early in margin the more of quarter. Operating to further last service another $XX is even debt one excess executing We midpoint

show rapidly quarter as both transformation Signs and resilience navigate journey our well. as the for evident on we metrics results various a CX of opportunity in Our progress were operational evolving our landscape.

than year-over-year, video-enabled Video payments higher. or X more more with of product number for retention service reflecting our customers and X recurring New organizations. The is assistance, or MRR field customers XX% of products MRR more Elevation, in strong product customer is continue X and to increase. products secure intelligent customers of Xx with revenue AI-based increased growth solution the The than average more monthly

priority high a at cross-sell made we've XxX. reasons, these For

major largest as our a with We deal presence auto continue chose region a expand a in scores products. Customer the Asia-Pac show and in We Platform well-known our satisfaction when additional CSAT our of center customers. expanded in the retailer UCaaS customer satisfaction to evaluating range manufacturer. expand is XxX which their for their is own U.S. largest ever booked even our region surveys, especially process in high. enterprise reflected This remains to targeted commitment. high-XX% for mid- closed This customer internationally, its as deal offerings. new our The contact Service the in history we follow-on

with our platform rapidly customers are visibility CX an increased gaining in and innovator analysts. reputation as our and Finally, industry

insights reflect portfolio increase Gartner's on and the continue grown. of peer our scores as reviews Our to strong have number product review

X. Also, X list and of of score watch. market now a companies as to on to are short CC UC X.X scale both are Our presence our included the we continues frequently to on grow,

in Constellation of Research of Service in an within article of Zeus named as today, CX Center Liz as innovative Research example, global ZK XX For Contact Miller Kerravala the vendors XxX differentiating one space. and a

also XxX top vendors as API CPaaS a Platform a to players. pure-play XX Le the CPaaS know, Service Channel counted Futures In Forrester's Our are top among offerings its receiving of article Craig accolades. Clair

awards continue receive as recognition We included earnings well, to formal we and more our presentation. which in

annual and in customer and is Index. to criteria want to reviews on Newsweek's This call our I Inclusion R&D wide-ranging out ethical impact. based XXXX quarter, spending governance Excellence employee inclusion from to

be to to strategic leader disciplined and transform a social execution progress. a into and growth all, honored have progress XxX plan deep a ethics, commitment with sustainability. balances our All that CX and a as included in our results are We outlined and responsibility company awards made these We bold strategic huge initiatives. to highlight towards

Our our Fuze acquisition played key role of jump-starting in a journey.

and was investors We the model path debt Fuze the reduction. integration returned have fixing have quarter headway with to financial clear cash through our flow and and value a our building to platform increased We made balance also shutdown. Priority a sheet. costs, during strong substantial our reduced number one

from number million in reducing XX debt our $XXX repayments, We over been convertible debt, just quarters approximately of years. Priority X cash XXXX peak have was today, innovation. August accelerate have debt XX% less and including for to in $XXX made a two now XX total generating million

focus the This a doesn't size. flexible customers thousands and on feedback compliance investment our that market integration As of supervisors users concurrent small- and a our technology communication. We to seamless differentiate from CX to contact the Based and is delivering sharpened functionality investments we and mean by medium-sized center, drive our sights administrators, we in platform multichannel reducing this tools But we security only reliability, and platform in in customers' way technology R&D a burden. and enterprises. on segment We have company, this ease for of is increased CX our with can designing contact most can't complexity handle we agents, core plug-and-play to growth. and where risk. beyond on durable eliminating center system the use, prioritized going simplicity, reduce set that

that the for an native-like embedded with of platform enhance artificial summarizations platform intelligence tightly call also services. our applied technology curated host partners of best-in-class We platform analytics, AI core data to across other building carefully integrated user a to transcription, We meaning began experience. solutions, deliver solutions are and ecosystem

the contact of bot or few into outcomes, significantly AI-driven using that variants self-service improved agent-assisted of AI-based integrated our These the release XX and years. platform included our and We enhance most customers' security automation, to few payments XX and and have usability, agents goals. recent to announcements our assess languages allowed Our AI-powered has help directly to customers releases tools pressing month R&D our their winter enhancements content. secure increased sounding calls our quickly delivering share directly in exceptional knowledge-based leveraged deliver organization's us A supports route allowing directory over per accent center, hundreds achieve substantially work points. software voice business over quickly natural a better platform addressed pain past to

integration XxX Work With becomes across XxX only recording is our the the Operator add-on leader addition direct to tier. XxX offering. in the Contact SellWith and giving technology the partner CallCabinet, for for expand call ecosystem, choose We continue compliance, Microsoft recording and compliant our the to Teams flexibility CallCabinet most analytics a call customers Center, add-ons best their to within ecosystem recent Connect cases. use

Our platform approach is customers. with resonating

leader secure high-quality chose unified including fintech support. in insurance and service, solutions multichannel and built-in innovative support XxX's were SMS benefit solutions French leading For example, our and customer XxX Deciding a consulting Canadian-based business flexibility chose platform team quadrant platform-as-a-service for the security delivering XxX and Gartner CC competitors world for compliance language surfaces reach, and chose a over deep A MQ platform in expertise. leader WhatsApp several power payment of CCaaS. A CX factors for for sports and and its dedicated flooring to the upgrade Engage CX, global UC, with and engagement. company leaders' in shown

these we've strategies. progress the addition product to portfolio, show In wins highlighting strength transforming go-to-market significant our multiproduct made our of

green visibility. In brand a November, our are business has multiproduct ramping we capabilities in multiply, from and and adoption financial investing response the partners designed sales in increased earnings to customers, influence a to are next unveiled programs a industry refreshed customers, included overwhelmingly impact in and of social shoots in This our our posts selectively chapter evolution building and sampling positive. raise foundation the More marketing transformation. platform the we blocks and platform of than sales solid signals the feel. and deliver As brand. presentation. The of the We've been next launching for XxX's place. CX new feedback our look powerful The CX

will focus approach transformation. fiscal we solutions; way. clear, structures; successes; improve end know of be continue four, to plan linear, our execution; the As of year. Executing we along five, our our Fuze this, the two, optimize differentiate sales To transformations do 'XX, scale three, the our there and to: bumps our our we and by seldom cost the one, down accelerate shut proven calendar this platform are is magnitude

UCaaS. market headwinds to still customer the the We and revenue through especially fluid, are Fuze in upgrades of platform the working our are dynamics

in range our While success. widens of this outcomes, future confident I remain the near-term

As you. with us, express is a so XxX, our turn future investors gratitude customer look our partners problems. It Kevin. by to want my the new offices, progress over I time fueled world, for employees, all mission, and of to vision at strategy success visit partners to and customers to and see call I now our forward common all for around sharing powerful our I I our appreciation the and aligned and on energy exciting far. I solve an a a of

Kevin Kraus

Sam. and you for our earnings fiscal for thank afternoon, today quarter third Thanks, joining us Good call. everyone,

of of from operations. cash consecutive strong flow and non-GAAP profit Fiscal QX This 'XX flow quarter our business, execution record another quarter our communications from period profit. and platform marked record operations XXth operating revenue, cash solid including margins represents usage positive across

in the have I over of the approximately since a on debt our a fiscal Relations this performance, few loan $XXX but continued XX%, disciplined provide approach fourth an million our quarter. term our we XXXX. The financial today's debt trended our debt during release Including million million, value press points and quarter our view in of We August on $XX principal $XX detailed highlight XXXX prepayment, and of call. website by January our will repaying reduced additional results Investor peak or key now latest the to during reduction,

I I flow. noted, unless except be like discussing and Before revenue otherwise will non-GAAP cash continuing, would you metrics, to that remind for

sequentially the in and on near by the million, third of grow range. our the offset $XXX.X $XXX.X midpoint was For service Growth anticipated of revenue usage-based fiscal guidance million, XXXX, from Fuze customers the total revenue totaled platform midpoint still exceeding revenue our revenue quarter of XxX to $X on platform. and guidance million. Subscription year-over-year. the the was both decline continued Service by

progress During XX% strengthen QX, will to XxX base track upgrades and X% we on year engagement. to remaining operations end X% which compared revenue continued the We complete by to reducing quarter and platform, XXXX, 'XX. our customers the service calendar in Fuze these simplify of made to upgrading in Fuze customer QX of remain the approximately prior the

our of business of over range guidance continues the up of revenue revenue would end for XX% of our revenue fostering from platform was customer to XX% a it. Gross impacted usage X high guidance highlights This using revenue total by service where continues hedge, exceeded was margin monthly offering and benefit growth business fiscal the this and of foreign recurring Our deepen since multiproduct and opposite XX.X%, headwinds subscription-based the and to business. is strategy retention of quarter within the customer healthy Operationally, FX been drive resilience results solutions, our and effectiveness the and with the our underscore revenue natural at model expenses. business and exchange have lower-margin total FX quarters, corresponding a stronger spending consistent unlocking underlying beginning consistent increasing of The our headwind, our sequentially year-over-year. foreign remained impact on would the margin engagement by by start impact more to earlier for approximately quarter. our quarters. of as both recent or offset with mix with to customers largely revenue the range exchange the approximately the our gross remained These suite value additional strategy from near on products levels revenue, committed relative a despite comprehensive year. improving million our in facing Without our of relationships, underlying expectations have $X.X results customers

As above of to This margin dilution a of low revenue, of slightly QX X.X% multiyear last managing result, reducing midpoint our operating compensation time. total quarter. the quarter, we expense the responsibly delivered expense and during XX.X% an over this was of recorded reflects for the guidance. Stock-based our shareholder commitment X.X% near

this has focus GAAP consecutive milestone area operating in profitability the discipline. continued a for us achieve our Our to quarter, that allowed underscores financial second

part the is non-GAAP reflected this majority cash we income. effort, in primarily As of operating shifted for toward our of which have employees, compensation

loan in Turning unamortized $XX million I million, a balance and cash cash in liability, $XX.X and million cash, of $XXX.X payments to required loan cash, the million minimum costs. QX the issuance QX to term current XX and The million mentioned with term the flow. from due sheet balance months. next ended approximately down discounts We repayment This balance equivalents restricted earlier. represents sheet of for the $XX QX net includes principal $XX

the in January, remaining million we million. liability made just is $X With effectively current our $XX prepayment

XX to QX strategic fiscal from has EBITDA approximately giving 'XX, us Xx trailing decreased Our greater flexibility X.Xx, ratio months in pursue net down to to over opportunities. debt

Additionally, strengthening in consecutive stockholders' financial the progress our reflecting position. for quarter, equity increased continued third

for at obligation multiyear provides performance the strong X.X%. remained $XXX and contract steady representing customer backlog visibility. revenue strength increase of remaining a year-over-year a This Our reflects growth million, of our future foundation

this million operating quarter, while particularly returns efficient to disciplined record for proud maintaining flow in cash strong $XX.X and generating are our This of ability us. a operating demonstrates achievement generate We a model.

However, other long-term financial this sustain remain that prudent creation. and to value due our to reflects growth operational to is We cash performance recognize does and milestone factors. market timing while execution strong efficiency, fluctuate it dynamics, flow to important management committed and investment

our fiscal and following profitability. Please balance as we remains restart revenue includes revenue be and to our XX% look with in about of benefits prior million. investment $XXX and last between cost note is $XXX range guidance success. be Please right our providing revenue approximately structure the quarter. Operating the remember XXXX. Service XX% the that $XXX is provided marketing stable, XX% and total ahead, X% million. service gave the XX% million exchange drive revenue basis, approximately This expected in midpoint while and a revenue $X.X fiscal as to growth be foreign the we at the employer R&D that rates and service G&A since revenue, We our and remains in target currency guidance expected this million. midpoint guidance we expected taxes is are means is the to With revenue innovation context, our same on of we constant between provides XX%. Total for to customer reduction million continue range sales of maintaining due to believe As structure to expenses of and invest to guidance higher in revenue $XXX January. fourth QX to margin we between cost seasonally of quarter XX% certain of that and

$XXX revenue million is a million. between margin service revenue provided the full fiscal between guidance we on to Total year foreign translating as $XXX.X year year is full guiding income million. midpoint follows: that rate million to the we midpoint prior since total $XXX Please the remains million. operating of are service approximately gave is be $XX.X $XXX.X and and service we last For full revenue approximately operating our our at to the about year non-GAAP quarter. Full projected This and $X.X midpoint XX.X% between guidance million XX%, operating our that same revenue currency expected anticipated due exchange be to is and changes note as constant XXXX, guidance. guidance reduction margin basis, means of revenue the and revenue

interest and balance. $X.X be upon expense, debt QX to current including about our rates costs debt million in based We of outstanding issuance expect interest amortization

Note increased expenses cash in approximately assume employer 'XX we due $X.XX term of this X.X% cash the diluted $X.XX comments. on $XX paid be range our non-GAAP cash the earnings to semiannually. prior or amounts year expect to million We flow flow interest that in the and be decreases the for share for is to range of expect due These as approximately timing cash in year. QX fiscal $X million, anticipate paid convertible loan interest. to QX XXXX interest We of an debt from SOFR plus X%. Putting together, seasonally from be for to per full cash all $XX interest fully increased on and operations to typically operations between million compared the

that fiscal that are initiatives While make fiscal in guidance not want I to support XXXX, year. we point go-to-market to investments we for providing plan out strategic the next our

capabilities, strategy positioned confident to While strengthening are to these our that closing, the we growth. our expected remain will new capture profitable accelerating path over operating to revenue lower position time. In opportunities, navigate relationships our they drive sustainable non-GAAP fiscal a long-term I are well result improve be investments we commercial to growth market customer We enhancing XXXX, as compared essential margin and vision in in by to and believe and expansion.

I delivering we in forward ready our work ahead. Operator, their to now for these and take hard in to team sharing questions. goals. While progress and the belief my taking to are arise I achieve deeply progress to am challenges to we may right steps the long-term the along we that grateful way, reinforces are quarters continue dedication XxX the make our the strong look results,

Operator

our line Josh And [Operator Riley. of from with Nichols B. Instructions] the One question. moment it's first for

Josh Nichols

company the like some flow, growth. had making back getting good Great to On operating that it progress and question. just the record cash towards I front, see looks is a to

revenue bit? If impact, but the quarter-over-quarter, XQ little would material also of exclude includes a service that you be and a bit bit then Is that maybe that looks look flat effectively that have I take been up out year-over-year, year-over-year it a revenue would FX assume accurate? service little you it is a also that, it up FX that little -- more be maybe the guide, of would like headwinds at looking amount. if

Kevin Kraus

of guided see so $X.X Kevin. what we yes, do relative quarter. last FX -- we We Josh, Hey, to or QX our this headwind million in is

raise the imply quarter-over-quarter, that kind full a and the as to guidance roughly So would for of year, flat by you way, say.

Josh Nichols

Got it. touching good then of bit growth. the a little just some and on other offerings, And AI very

growth with mid-single seeing XX% I without accelerating that position Fuze in still digits. about the that back think runoff think to low talking Any low the year to the And towards guidance You're throughout year maybe beginning about the service when revenue up? half? -- to know you opportunity combined back a like of does get specifically, base that's I consistent mentioned growth ramp situation to and that quantify? was next there. you relatively fiscal Is remaining you or business pretty

Samuel Wilson

quite Josh, quarter. revenue, growing millions the question. overall. rapidly, very right, single-digit AI it's All not enough for great but needle It's the product stuff new is think the it's a I to move still The still

FX pieces. Our little around causing rounding the bit. in are tailwind, little dynamics That's of headwind, dealing the at I've the just by on is a bit things general. surprised been goal errors headwind going along of the some the phenomenon with some industry a next kind year of we've that, and a of moving throughout lot tailwind, year. point growth been There with

other customers growth continuing new So of and getting and guidance be to It a higher it's just all product into without return mix. those certainly add will multiproduct customers things. to having rates into growth, our new the retention combination goal to

Josh Nichols

then for me. And last question

be ex running to seems think that company to talked getting like mid-single-digit on for Fuze I the about It has transition any And conferences like other anymore? of to the What to platforms this parallel overall? else would like on before the low- track growth. potential each savings you X year. thoughts when at just runoff like to calendar done some be maybe you're and continues also that not end be

Samuel Wilson

Yes.

you didn't track sorry, a last apologize. run to Yes, me okay. really it, And job that I I we're So good answering on question. down I'm of still so asked do Fuze.

of at off year. turn It revenue. fiscal to X% as hard to the objective done. is end mandate the XX/XX, down platform shut And the Fuze this really we're XX:XX the pushing to p.m. on of trend, get can is we're think teams the you down see I My platform. to absolutely we that our Fuze

all of bit a and and In maintaining platform qualifications, dollars. hard whatever upgrades terms kinds that's savings which or is OS other cost harder than savings, bit quantify intangible for maintaining of savings to of compliance, of things just the the software mid-single-digit little AWS maintaining measure, a an probably harder little millions to upgrades There's the those security be. are savings that may running case HIPAA

rough guess, And Fuze don't want of take savings in a cost know, Fuze I year. behind in double us. growth getting off will that running terms in you is comes the mind next of my I help that hard to so think definitely once And platform probably to I'd terms if

Operator

question our next of the with it's Koontz from Ryan line for One & moment and Company. Needham

Ryan Koontz

prepared mentioned has feel Can been Sam, UC like? where your saturation, headed pricing competitive you expand kind kind in what been environment just the its you we has turbulence in of like where comments space. on that, of the you and some in are

Samuel Wilson

Yes.

say analysts, something while. little the about because more Obviously, the fiscal year-ends get end is companies at bit a pretty and last think UC, quarter fourth the it's aggressive calendar year a quarter going in question the been to of But could did your the always for we I of a financial not here have typical have you, of unheard bit some pricing, this little a the see of. aggressiveness I So second. I'm of on in they UC, on would quarter, broaden industry the on talking year. analysts,

say I or crazy. anything So it was wouldn't bizarre

is want a slightly more just led UC for because you condiment, CX the sale. matters as switch, viewing add-on last about that just if think for we I really contact more what us that us, I will, think an asked sort of broaden the the I quarter lot for you us, to were saw question a market. deals center are or to But

CX messaging X-plus in We're more land Our is things. platform is seeing really I deal wins. those And other a us And win resonating. typically to of with those. consider platform one products. with UC engaged those we've got

And so I anything that to positioned pricing around think deal with well UC in area. we're really around

think answer. good a I ask if And a I didn't, gave I me follow-up.

Ryan Koontz

Can days, on the your these that international are? was you opportunity, how That you up thoughts size great. comment what briefly

Samuel Wilson

I CPaaS fantastic. usage and the bringing the at The see the doing love international been business right? doing fantastic, that XxX, Man, mean I platform around we've opportunity we business world.

second. know Europe to we're less Our that. don't post-COVID, have that for United that a we I of struggling less ridiculous the some we're buyouts just honestly, for see States. other be want or sometimes throw going free pricing professional and willy-nilly There's -- just money, really or there's irrational we growing, words any behavior I of typically raised presence we to start-up, in here, bunch And a don't stuff services contract this in is love and I Brian, because or

Ryan Koontz

Western And in? plan is still expand Europe area still Yes. an you to

Samuel Wilson

Yes, sir.

Operator

question it's next of from Mizuho. our the Siti for and with Panigari One line moment

Unknown Analyst

] on It's for Citi. [ Chad

from what to these customers if hearing high agent? see and their to around share functions if agent appetite human whether differing products any are any talk and versus for updates using And the starting sort about existing can wondering can the you or in reduction end? you complement AI at of the guys you're low end AI that's Just

Samuel Wilson

Okay. Chad, quite a big question there.

So the may follow-ups ask along a way. couple I small of

when I customers talk you're at. where you or end, size customer or end you low presume by sort of versus high So mean

Unknown Analyst

Correct.

Samuel Wilson

give that what Okay, enterprise. would leading integrated like love what low-end competitors we into UC, offer. do center business capabilities. is We're Magic Quadrant that small natively of they contact our Gartner is And which target our into bots, Natively is natively market best-in-breed space, upper talking Engage. AI I integrated into our most to integrated not say our

works it role we're really do that, fantastic. AI when that. absolutely a solving on And inside focused CX those of So problems. plays pretty you And pivotal

using In see there's things, don't see let's we of terms a businesses, There's the appointment a small things. kinds the I like say, interest end, overlap of Where messaging, little much. -- it lot is contact and communications bit X-way digital interest of SMS, Where a a to those of going with of so those see I'm lot little cautious. the as things around between -- we WhatsApp, low reminders, bit center of kinds things. be

bring care, multiple starts overlap Now together. when the to occur where looking all starting at where to start is management you're health solutions for remote like fix, you at things our appointment

a and been bit mentioned talking speak a little little kinds getting fire. I start where And overlap center. said of bot our been grown. little see remarks. think that's businesses can that's XX amazing when I've it's bit. because large around on it prepared I between at we're voice to is bots starting self-service and my think things, I businesses super-important into in we But -- and fast And how particularly I just those small contact I that's about languages accents, a So mean XX-plus

were dealing there's high Chad, question compliance payment, if So Those you an asking, demand was of in things. problem really, we're around things, bot, PCI secure the kinds voice a doing self-service, for. Other about solutions a those with payments really, board, you Pay, horizontally XXX% where do stuff agent highly some kinds can agent counts. really the of across payments, Apple those through self-service amazing

cetera. What a of see. center, many I and And bit agents is our of people for bit a little x you us question et to I'm for how what to ask agents I asked get little see contact think. a hard number going I they what and of I mean of Okay. see tell have, it's this lot, I just

in absolutely what labor no time agents cases, everywhere? effectively. over AI today, real replace has time. career, so with few replace big here I will technology my done human AI nothing there In capability is trend. but select I It's And which machines a agent replacing and some sure, that see major, do entire well to in believe

think been so I case. absolutely that's the And

However, if seat per at few. next-generation reason at we the deploy actually they built up have the to a count substantially our our, the even revenue company flat down is deploy places is even the AI, places let's they is way average these per the our technologies we've say, customer

Operator

next question line of Our from is Evercore. with Levine Peter the

Peter Levine

maybe you, few, with A Kev. start I'll

help you like And the expecting? translates Your is for investing margin on outlook just to Can you Like -- of understand you the around you just that last calendar the would top there 'XX from the what then us opportunities lower maybe are think to 'XX, you're can maybe guys be maybe given caveat what go-to-market line? sorry, front. some calculated that translate strategic fiscal question that that a with ROI growth? will

Samuel Wilson

Yes.

supposed your to an really a out quite be maybe going put entire So points dodge spreadsheet. first as that, not I'll in also, finer question of some part to to. the fair, take don't front part want of And it I'm I'm when looks clean in give I guidance year of Kevin will in because and as because it's to

Absolutely. investments sharing it guy. to I do I share that nice Am not doing have going I'm I No, currently Because now, if that. on So operating operating with I'm right listening am not. a with it investments? to our this an I'm ROI or you? income competitor with every not you, and share call we

our separate XX back yes, is, if happy, of So up pay tell The and debt. are a you I'll ramping what right? on We've difficult debt investment 'XX, know on debt. The it to We you flows, happy. is to fine. thing have I variable, am 'XX debt. ton ratio there's timing with what sort we and paid focused in to of off through, the back XX% so payments off We've very Peter, carefully. a is financial monitor you we're hard focused that. and I the always -- calculation. time, of go part, made is the you fiscal And the been cash everyone and going EBITDA the really net aspect experience really off model timing We is paying 'XX banks for of go this,

X that that much so getting add decimal things. is about competitive to where we right and are will kind innovation that that? you bookings definitely and to impressed And making How we'll opportunity, the we're market of want do selective anything and or kinds really right focused now, or those the keep lead, sales now more quickly places to right on now. internal revenue to exactly of the thing us Kevin, investments, -- our position, back driving growth given really offense

Kevin Kraus

not the Yes. just I investments will say that on well. our improving of but we're it's doing things, about focused and we're efficiency various investment, also as

said, the but on call, operational things, in the our So as yes, we focused we're Sam which on to we're also do won't company. excellence internally divulge going more

that So long lever growth over another also term. the for is

the So colorâ€¦ that's

Samuel Wilson

great out. a put a Yes. point point, fine Kevin just And actually, raised really

AI in investing to are internally. use We

the I viewed think how efficient internally investments to these some That's improve we calls sells in across that absolutely get customer, how we internally. tend few our to cost us a the do how dollars. can and we that provide with we're also, a AI be CX, we company a see of rapidly. We're very buyer also actually AI, which company platform to growing as we making engage

Peter Levine

color. customers products the remarks, to number. the talk they versus customers Meaning I incremental said, massive like question, that uplift buying? Last what can for the Great X outline driving product maybe what to in are but what's the And like you maybe with product like forgot you that, X uptick like ARR exact products metric your that mentioned with X, like from like X is about andâ€¦ you customers? just Dan,

Samuel Wilson

problem. no Yes,

X the think products have I the products that look that customers products, customers and cohort of of isâ€¦ that X of have at I what cohort if the So exactly said you X have customers was cohort

Kate Patterson

size large. is deal as Xx average The

Samuel Wilson

size deal as large. average Xx The is

So of it sort translates.

some they when works on going is sell those What it of Okay, products. buckets. easier cross-sell a it's really it's I'm in things, to what couple to start tell to love do you business buy? these really you you -- you get of and outcomes do simple. put I'd to

course and and all is management. key and there's of Engage, messaging assistance, little odds all they ends. my all then say, And X. of So that, which for or and shapes. have of But bots. sort are, bucket mind kinds sorts the voice intelligent bots, After There's almost in workforce in I'd not contact kinds outreach proactive center of the the UC digital the big CC are categories. add-ons of kind of those And fantastic digital agents, product,

elevation you think really though, associated is it's digital selling I customer sell the way just it. the really in think rapidly management, turn a And cases problems. center, up They and we center, bot, Engage. solving with video use customers we want we it's something wrap nice sell contact do very end field a about about customer like we service to what's we contact we sell quickly. multiproduct problems sell If the messaging, up I sell to UC, solving key, into we

financial of thing to higher everything And get we the sort course want But products, of higher you a multiple itself. a about we problems better, better. problems we else those customer care solve really of sell we leave we are think get when I GRR, NRR, when is it's numbers better. with takes I solve customer

Operator

of line question the is Rosenblatt. next Our Catharine with Trebnick from

Catharine Trebnick

is at channel? partners messaging we that motions your should the terms really all? Anything the done well fine-tuned in in you've X. Sam, have or of at go-to-market or look You've products the else with you the what your tweaked go-to-market your X versus

Samuel Wilson

question There's know Catherine, a continue think sales because a you're we our that's evolve what such getting Number -- Yes. yes, overall. loaded to at. organization. things what I is, one doing we're I of couple

you over come gone reasons. various from guys we're fact circuit to time If the some company that industry cetera. that sellers looking LinkedIn, lot solution and people consultative for purveyors use more for vernacular, regular you will A have slingers, are by see our of et versus, of that driven is

just highly an about are really drive branding us thing the rebranding of we've cannot cetera. the And have I old paint work So evolve And marketplace. is around more these a That a an as et and is CX really truly it's that on and capabilities evolution. then that, we done will to as outside marketing around about sort on This we department are the side, as more building. is the we not speak the enough that's evolve. products of CX to continues company. solutions, to the I we has And company. launched highlighting think what continue as this partner the of

partners. We continue to our in invest

a We We are business company. channels. do a our through channel-centric of majority

-- majority to our so the mean, I of business And channels, be fair. new through

continue partners do kinds evolve terms success. capabilities we'll and of support so to we our those and And to and in and to the that, right of tools things continue their channel

Catharine Trebnick

you can that? in Can All give right. leader the a you And that us and detail? look you team transformational at details to on organization some specifically added then any

Samuel Wilson

Yes.

for So I've had now. I chance a known several years Joel --

does. pinged company. speak assume our really is going up to better So services this services, military you're but inside I'd familiar and into this to everybody lot with to call skills a phenomenal a Magazine. to intelligence right of familiar is heading Kate forum out customers, use capabilities intelligence to transform with and our phenomenal. former And using I'm as And me, and AI a of to -- insights leader. we CRM more being you're it's the brings language. fill But a I artificial thing and drive like is He's to inside ourselves But Joel's a for if we that of guy like recognized products because he by products is he deliver important. our for try Michelle work Chief super as build how Joel Paitich decision-making the the do. Joel's big should a just our common me, She company how second really he for what so Channel work, we me company. about is thing And for a and

chance And I question to use so as a Kate is. highlight what Channel get she your wonderful pings Chief me, to a

Catharine Trebnick

Yes, She year. I started know. last

Partners I [ I met her think ]. at Channel

Samuel Wilson

Yes, and been me, of, where think, she I hired phenomenal from for as channel if she's us, came us memory absolutely a serves Twilio, I to her out team.

can't hire that's no. a you all her, For competitors, the

Operator

is next from Stanley. our with Marshall And question Meta Morgan

Meta Marshall

on being commented internationally. Maybe strong CPaaS first, you

U.S. markets attractive kind get wanting over getting finding together. you that you've of to or traction a commented of wanted kind kind of Just the put more packages second, there. time, more you that then customers of of carte la in were a sense were where of on kind kind were And

wondering whether this consumption-based of like or of we've That's model stick people of kind you're kind [ or pricing seat carte that to whether it. Just ] more in? per any around if we'll kind want seeing want been a form la consistency whether they're

Samuel Wilson

the for question. you Meta, So thank

yes, regular mean but So I'm WhatsApp, at. We're States pains up. happy of our I small. this first as are we've we really CPaaS States, customers all huge it's having in Good customers. a scores, happy. is in U.S. S quarter, They're things. so where CPaaS we've voice, are United the not it's in got the kinds but now. States, those SMS, number [indiscernible] them, customers, And bugs capabilities regular those growing last They're got kinds the the referenceable. Still CSAT United of a the working quarter still the of business our we in United These outreach proactive pretty before ramp few

So right steps in the direction.

we basis, of technologies you one AI consumption and great question, lot a evolution of a packaging, right? how I certainly fundamentally we for charge stuff, CPaaS the on charge lot believe it's digital per our thinking In and of time look about. you per interaction, sold pricing things. a and terms the at kinds those message, bots, all that if they of some for the at of spend are a look these even charge it's So can for if charge we tokenization technologies, messaging OpenAI

some to customers from continue and it sort on work have people per models the ever pricing negative. grow. pretty not is basis. a universally those think I basis sure I I'm center know will of per a will on I've agent interaction types contact that tried heard certainly feedback that of

And so there is some fine line there.

of can the systems underlying sense. that of we customer where meet to the want be, where makes support and key any think I products kind the the them that not a is models are, that multitude building if they

Operator

for moment And of it's with line Barclays. MacWilliams Ryan question, One next our please. the from

Ryan MacWilliams

question, think short. earlier yourself an for a got Don't record I you're the for sell Sam, nice guy. to

the by the or any customer of macro smaller by since election in terms the larger on differences geo purchasing? customers differences election, presidential any since Just or

Samuel Wilson

to me this. answer this reason get I funny asked get don't question. I have a asked, question, say. to I this going wasn't I the good you hoping hoping the was is right It's And wasn't going to was I

let of smarter bit tell than me and guys you can be conclusions. So and what a we're seeing, draw some you me

in have high, a XX-year kinds to least And recognition we some of things cash to currently bankruptcies going 'XX I the of customers sorry, have XX-year there number the revenue bankruptcies. was number because States, move and in through think like United a seen in proceedings at of not the probably XXXX, was record because bankruptcy -- or they're a States record, things. but those at look sorry, you bankruptcies If record number United of the high

not but I'm by not a think. it's clear, like fazed material untouched. we're it's it, So not I It's number.

going other I've and of one sort small numbers the economics. there's rates credit really the basic in those use on Now hand, indicator of the on sensitive in that as I space a this our talked default something the business mom-and-pop about past, is is card

as No default unusual real goes. around been rates, et steady credit card it's there, cetera. stuff far so And she

indebted, to probably interest stuff more rates rate the but than interest because little bit, sensitive it like are feels which larger businesses, the a that in cash did they the of bit were more Fed bit more businesses So some smaller a driven. maybe

verticals. bit And reason I it's so want X the a cities, markets, a bit a didn't tale European see we by hence, specific little the I'd of really more say selectivity question. In of

those of U.K. example, for state NHS reduction why increase spending, seen a has in the So some seen in spending, in things. kinds has and local an

little guess. bit I by large bit in little versus think U.S., I small. a of the And best my so it's think And a That's vertical vertical. it's

Ryan MacWilliams

about industry. on clarification makeâ€¦ talking point card. of a rates customers. It's of from to We I a credit were rate got our of lot not want the credit Just just card customers. default We decline quick the

Samuel Wilson

Yes, -- when they the off yes, Yes, sorry, credit the cards. turn credit card the yes, ones

Ryan MacWilliams

do then, service Sam, how Yes. color. thinkâ€¦ do No, in partner I and And view space? the you customer appreciate potential Like that you as competitor Salesforce a

Samuel Wilson

currently I'm is now. on right Well, floor first the the on fifth floor and Salesforce

a really They're partner. a working they're good partner And like So we ours. with of them.

Ryan MacWilliams

other, you each each aside like just -- work aside other?

Samuel Wilson

Yes.

Ryan MacWilliams

Okay, like if that you elaborate Agentforce? like with how work on would that,

Samuel Wilson

customer like products, we're a wood. with Salesforce large et technologies We're to at, deal extensively our kinds communities things any on for We are that don't those But of we use things. customers those partner. reveal want Agentforce, cetera. future and I them Well, and looking knock

view future. Salesforce them a as and with I partner great really don't the in view do so a And competitor. would as them to like I more

Operator

Funk with of Michael the Bank Our America. of next from line question comes

Michael Funk

First clarification. a one is

platform? So reduction that going the how point in of Was that percentage Fuze of to all X%, core basis XXX of your much revenue to migrated from over X% lost?

Kevin Kraus

timing there's Michael. on Some effects of that migrated. And that, component well We that, a lost. do have gets as

the is Fuze revenue. over of we So our base the XX-plus I'll keep average, percent time that say, average

where of been, expect kind where we've that's to be. we So

Samuel Wilson

terrible number on guys And you going freak and out. let a a like XX% me to are that put because finer sounds point

that. me let then finer with them migrate is What corporate on typically when we step average. we their customers is we see down Fuze and a see put So point above substantially NRR a

a ends is through So going happening what generally they're up redeployment process.

really the down then it overnight. to need, like Fuze we're And in a XX% shrink revenue they So they'll and whatever adding not they of losing start size, it's to back rapidly. smaller

Kevin Kraus

do where is, -- life often extend the -- to when thing and extend to of almost that, that, we we And we the always other add the contract.

keep that longer. So for customer we

better long the in it's So a for deal XxX. term,

Michael Funk

Got it.

more philosophical. Sam, for one Second is you,

stabilizing cash different multiple, are operating from look it top is flow, If to at be very EV look market very what to model. line, cash the the flow thing. the free in very be my than we seems at in different So you than what EBITDA, seems about saying seems free cash different to forecasting improvement to own be activity, I'm than one

I guess, So could levers pull, how thinking mean you A that? repurchase, of right? about review. stock addressing strategic you are I number

valuation, likely is addressing So EBITDA what your the how flow cash do I think you believe to in what free believe is you us whether market or and outcome? and EV the about telling

Samuel Wilson

predictive capability having interesting, also, But there's back. me Michael, Wall that can time comments a sometimes. this I much about Wall some Street you spent take -- bring up, Street's it's Well, step So on right? let obviously make

I clear very really a with to investors. I've crystal think basic at be level, tried

value the optionality the a operate pure a sum of And flow if think And about -- of think you flows, future way present think a North share. holder. a reason Our and cash very that and the it's way Star per equity cash the was Graham flow how a to and is about company cash should about we operations from I I it's per its times. it flow during and generate that discounted that cash is think business of company uncertain the as Dodd

that So let me further bit. elaborate a on

lot that's when We've flow years a we've operations. our X obviously for started comments cash cash making of back flow, metrics, driven from go a of you that quarter things. I If the a record done lot

X/X or Our things. revenue, is is I those averages of or industry kinds of which our X.X% stock-based think compensation competitors

very so And we're focused.

in seen equity. increasing it equity, of declining see shareholder equity, shareholder I've seen some my You while the have fact competitors that shareholder

So what is I'm drive trying right to thing. the

debt, no. other in product in. Now I been cash business. to off cash chosen environment invest thereby run more our I've the the and can rewarding what want is yes, primarily it But if debt, equity. moment? to equity to market this flow given me stays market is continue maximum the this which value value pay flows excess back is of flow I companies. is of what Maybe unchanged, that do buy can we've all does, risk own further optionality I future any amount reduce the development, does enterprise with take reducing the those to What of And my that buy holders. me can the I maybe I into to buys driving company. can cash in actually

a really I've increased is debt one -- et is increased sheet, So out, flow, derisking competition, the thought in what we've what's market get the balance Let's fortress from been the of risk, company about out drive start-ups, have focus COVID really of cash to going coming cetera. AI, on future? a what's happen,

invest of in innovation and Let's areas right kinds those the things. in

it. We look invested leverage these the green of in shoots? right, eyes. amount It's as the it. the my its Now in The et less We it ratios, to cetera. we reduced built innovation company massively produced future, are has risky. debt reduced green It much shoots massively has. incredible It's What those has works. we've

market and have now We product fit, we're ramping.

kinds to flow so And pour growing those cash into of future actually it's that and some of growing now flows take back and cash and okay revenue it things. via revenues

part. to some the your it Your me to They'll recognize think question I reward figure it, last this? they'll is Wall part hard Street get is, always around going they'll at That's for out. I Ben of have Graham characteristics, it. of to back up stocks do. Ben go they to how to right? type said, when does go they are said Graham, going When Congress, just know these because Congress he what he asked point

profitable us I point, a in go future incredibly owning is fact stream to equity that an stock, of you what flow. XxX is realize right will want My the it's that they characteristic When Street some simple asset, answer. of things and all so a that valuable at It reward it the And business, holder. share back you an cash gets get our you capabilities. to a very of going our the gets you the

Operator

of line our Turrin Michael with please. moment from One Fargo. the Wells is And next for question, it

Richard Poland

Poland is Michael. This for Richard on

have as through kind pushback biggest Any around expanded what hear Fuze, breadcrumb they're you and like XxX of of that to decision-making of And So the near-term to Could shifting you platform? range you noted you that that over from expand that would gave helpful. going color process? XX%. potential around the that outcomes you the the what's on be there around base kind

Samuel Wilson

Yes.

around we're down I think to, you I been only do think, left it. it's and can of it's to migrate -- guys just track revenue, so X% -- maybe XXX customers our

for move, last Those out you down. a effort sports game are really don't I me X% ready and to coming not promise It it's things, for an price So take of just to at migrate? we if to discount? could those to right? cats Will So make it. want the extra Can the I be it's -- that any dogs the end. holding really

through a products, customer and interesting full most single upgrading exciting new is committed once onto and we'll They have and every single there, those get they buying We once thing of are they're every incredibly XxX this, happy. And they're migrating get the there. platform. to the portfolio -- they're

It So number. to the cetera, be timing pieces, to just happens tackling last think to over-rotate it. And it's and move don't really just those how about getting there's customers and XX% on there. the blocking of et

just Kevin think be wants specific it. about I so to of really And sort

Richard Poland

really around next growth just identified growth That's helpful. go specific We you those me. a accelerated hey, much going our Or in kind is are the from But forward. drive guess, too it opportunities place. there ROI one that Great. of more then better wanting And you've Okay. not generalized, another investments year. I more potential is want any to foundations understand that of to see after? divulge of just to some I super

So we're tap to going that. into

Samuel Wilson

Okay.

two gave listed. that you answer get opportunities drives That's right? do those with case. front a projects of invest invest to defined the couple future across general specific I I then specific don't then know ago. in of and compelling number I I on outcomes. back absolutely how So to to whatever, see don't and go make flows absolutely in ROI, Michael's which We us investments cash investments minutes

Operator

see questions I back final the further And turn remarks. no queue, to Samuel call will in for as Wilson I

Samuel Wilson

third you summary, fantastic call quarter you much, a for XxX. quarter solid operator, a the Thank so for In thank and today. was

value remain partners, our our to While to for innovation call. of thank committed And as future. experiences. and you the we to our every the the you to into our thank face to who customers We're on of delivering are transform platform, Thank and exceptionally love well, drive our communications we you customers, focus investors, excellence well strategic headwinds XxX transition for market dynamics our positions as differentiation, I business each you. my support. continued your to customer shareholders to Thank us employees. challenging, you disciplined intelligent continue Fuze the the lastly, on execution, you, one analysts and operational

Operator

And today's And participating, all that, call. disconnect. conference thank you. with you we for may conclude Thank and you now

8x8 (EGHT) 4 Feb 252025 Q3 Earnings call transcript