8X8 (NASDAQ:EGHT) Issues Quarterly Earnings Results, Beats Estimates By $0.08 EPS

8X8 (NASDAQ:EGHT) released its earnings results on Wednesday. The company reported $0.12 EPS for the quarter, beating analysts’ consensus estimates of $0.04 by $0.08, FiscalAI reports. 8X8 had a return on equity of 32.17% and a net margin of 0.98%. The business had revenue of $192.00 million for the quarter.

Here are the key takeaways from 8X8’s conference call:

• 8×8 posted its sixth consecutive quarter of year-over-year revenue growth, with Q2 total revenue up 4.3% to $192 million and service revenue up 4.9% to $187.8 million. Operating income, EPS, and cash flow also exceeded the high end of guidance.
• Platform usage revenue grew 51%, led by CPaaS in Asia Pacific and rising AI adoption; recurring revenue from AI solutions increased 58% year over year. The company raised its full-year revenue, operating income, EPS, and operating cash flow outlook.
• Growth in usage-based offerings is weighing on gross margin because those offerings carry lower margins; Q2 gross margin was 60.1%, and management expects the mix shift to continue pressuring the percentage. Executives said usage revenue is less predictable because it is not contracted, and forecast growth to moderate to 35%–45% in Q3.
• 8×8 has about $297 million of debt after an October repayment and said it is working on a refinancing solution for its term loan and 2028 notes ahead of the term loan’s August 2027 maturity. Management expressed confidence, but did not provide details of the refinancing.

8X8 Stock Performance

8X8 stock traded down $0.09 during mid-day trading on Friday, reaching $2.17. 1,254,487 shares of the stock traded hands, compared to its average volume of 1,663,867. 8X8 has a 12-month low of $1.57 and a 12-month high of $2.88. The business’s 50-day moving average is $2.05 and its 200-day moving average is $2.03. The company has a debt-to-equity ratio of 1.83, a current ratio of 1.05 and a quick ratio of 1.05. The stock has a market capitalization of $312.70 million, a PE ratio of 42.91, a price-to-earnings-growth ratio of 1.55 and a beta of 1.91.

Insider Activity

In other news, Director Andrew Burton sold 107,085 shares of the company’s stock in a transaction on Friday, September 11th. The stock was sold at an average price of $1.81, for a total value of $193,823.85. Following the completion of the sale, the director directly owned 151,615 shares in the company, valued at $274,423.15. This represents a 41.39% decrease in their position. The transaction was disclosed in a document filed with the SEC, which is available at this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders own 2.13% of the company’s stock.

Institutional Inflows and Outflows

Hedge funds and other institutional investors have recently added to or reduced their stakes in the business. BlackRock Inc. acquired a new stake in 8X8 in the second quarter valued at approximately $20,624,000. Bank of America Corp DE acquired a new position in shares of 8X8 during the second quarter worth $2,823,000. Hillsdale Investment Management Inc. increased its position in shares of 8X8 by 10.0% during the first quarter. Hillsdale Investment Management Inc. now owns 1,653,197 shares of the company’s stock worth $2,744,000 after purchasing an additional 149,800 shares in the last quarter. Dimensional Fund Advisors LP lifted its holdings in shares of 8X8 by 12.3% during the 1st quarter. Dimensional Fund Advisors LP now owns 1,503,539 shares of the company’s stock valued at $2,496,000 after purchasing an additional 164,335 shares during the last quarter. Finally, Algert Global LLC lifted its holdings in shares of 8X8 by 944.3% during the 2nd quarter. Algert Global LLC now owns 1,284,026 shares of the company’s stock valued at $2,196,000 after purchasing an additional 1,161,066 shares during the last quarter. 93.99% of the stock is currently owned by institutional investors.

Wall Street Analyst Weigh In

Several equities research analysts recently weighed in on the company. Rosenblatt Securities reaffirmed a “buy” rating and issued a $3.00 price target on shares of 8X8 in a research note on Thursday, September 10th. B. Riley Financial restated a “buy” rating and set a $3.25 target price (up from $3.00) on shares of 8X8 in a report on Wednesday, August 5th. Finally, Weiss Ratings reaffirmed a “sell (d)” rating on shares of 8X8 in a research report on Tuesday, September 1st. Two analysts have rated the stock with a Buy rating, one has given a Hold rating and one has assigned a Sell rating to the company. According to data from MarketBeat.com, the stock has a consensus rating of “Hold” and a consensus price target of $3.12.

About 8X8

8×8, Inc is a cloud communications and customer experience technology company that provides voice, video, chat, contact center and communications application programming interface (API) services. Its platform is designed to help businesses manage employee communications and customer interactions through integrated, cloud-based tools.

The company’s offerings include 8×8 Work, a unified communications service for business calling, messaging and meetings, and 8×8 Contact Center, which supports customer service operations across voice and digital channels.