Business communications software company 8x8 (NYSE:EGHT) reported results in line with analysts' expectations in Q1 CY2024, with revenue down 2.8% year on year to $179.4 million. On the other hand, next quarter's revenue guidance of $178.5 million was less impressive, coming in 1.5% below analysts' estimates. It made a non-GAAP profit of $0.08 per share, down from its profit of $0.11 per share in the same quarter last year.
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8x8 (EGHT) Q1 CY2024 Highlights:
- Revenue: $179.4 million vs analyst estimates of $178.8 million (small beat)
- EPS (non-GAAP): $0.08 vs analyst estimates of $0.06 (23.7% beat)
- Revenue Guidance for Q2 CY2024 is $178.5 million at the midpoint, below analyst estimates of $181.2 million
- Management's revenue guidance for the upcoming financial year 2025 is $729 million at the midpoint, missing analyst estimates by 0.6% and implying 0% growth (vs -2% in FY2024)
- Gross Margin (GAAP): 68.2%, down from 70.1% in the same quarter last year
- Free Cash Flow of $62.05 million, up from $18.14 million in the previous quarter
- Market Capitalization: $290 million
Video ConferencingWork is becoming more distributed, both across geographies and devices. In order for businesses to keep functioning efficiently, they need to be able to communicate as well as they did when the teams were co-located, which drives the demand for integrated communication platforms.
Sales GrowthAs you can see below, 8x8's revenue growth has been unremarkable over the last three years, growing from $144.7 million in Q4 2021 to $179.4 million this quarter.
This quarter, 8x8's revenue was down 2.8% year on year, which might disappointment some shareholders.
Next quarter, 8x8 is guiding for a 2.6% year-on-year revenue decline to $178.5 million, a further deceleration from the 2.3% year-on-year decrease it recorded in the same quarter last year. For the upcoming financial year, management expects revenue to be $729 million at the midpoint, growing 0% year on year compared to the 2% drop in FY2024.
Cash Is KingIf you've followed StockStory for a while, you know that we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can't use accounting profits to pay the bills. 8x8's free cash flow came in at $62.05 million in Q1, up 658% year on year.
8x8 has generated $115.1 million in free cash flow over the last 12 months, a solid 15.8% of revenue. This strong FCF margin stems from its asset-lite business model, giving it optionality and plenty of cash to reinvest in its business.
Key Takeaways from 8x8's Q1 Results It was great to see 8x8 beat analysts' revenue and EPS expectations this quarter. On the other hand, its full-year revenue guidance missed Wall Street's estimates. Overall, this was a mediocre quarter for 8x8. The stock is flat after reporting and currently trades at $2.34 per share.