8x8’s second quarter results were met with a negative market reaction, as the company’s revenue surpassed analyst expectations but future guidance lagged. Management attributed the return to year-over-year growth—after nine quarters of declines—to robust adoption of its communications platform-as-a-service (CPaaS) solutions and a growing preference for usage-based pricing models. CEO Samuel Wilson explained, “The headwinds from the Fuze upgrade continue to recede,” highlighting that the company’s transition away from fixed-seat licenses played a key role in driving performance this quarter.
Is now the time to buy EGHT? Find out in our full research report (it’s free).
8x8 (EGHT) Q2 CY2025 Highlights:
- Revenue: $181.4 million vs analyst estimates of $177.5 million (1.8% year-on-year growth, 2.2% beat)
- Adjusted EPS: $0.08 vs analyst estimates of $0.08 (in line)
- Adjusted Operating Income: $16.33 million vs analyst estimates of $16.38 million (9% margin, in line)
- The company reconfirmed its revenue guidance for the full year of $713 million at the midpoint
- Operating Margin: 0.3%, up from -0.8% in the same quarter last year
- Annual Recurring Revenue: $732.4 million vs analyst estimates of $732.4 million (7.9% year-on-year growth, in line)
- Billings: $185.7 million at quarter end, up 4.6% year on year
- Market Capitalization: $252.3 million
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From 8x8’s Q2 Earnings Call
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Michael Joshua Nichols (B. Riley) asked about the remaining Fuze migration headwind and customer retention. CFO Kevin Kraus detailed that only 4% of revenue is left on Fuze, with about half expected to convert, and described progress as “accelerating.”
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Nichols (B. Riley) also questioned the changing margin profile as usage-based revenue grows. CEO Samuel Wilson estimated usage-based revenue will continue rising 1–2% per quarter, with margin impact offset by broader adoption trends.
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Andrew King (Rosenblatt Securities) inquired about 8x8’s AI strategy—specifically buy versus build. CEO Wilson explained the company prefers a hybrid “build and partner” approach to retain flexibility in a rapidly evolving AI landscape.
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Michael James Turrin (Wells Fargo) asked about increased migration from legacy on-premises vendors. CEO Wilson described bankruptcies at competitors like Avaya and Mitel as a tailwind, with cloud-native platforms better positioned for AI integration.
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Meta A. Marshall (Morgan Stanley) questioned the balance between investing for growth and maintaining profitability. CEO Wilson and CFO Kraus emphasized reallocating expenses to optimize growth while keeping operating margins in check.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will be monitoring (1) the pace at which legacy Fuze customers complete migration and its effect on retention and growth, (2) the continued expansion and monetization of usage-based and AI-powered solutions, and (3) the impact of foreign exchange volatility and competitive pricing on overall margins. Execution on outcome-based selling and international expansion will also be critical to track.
8x8 currently trades at $1.84, down from $1.93 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it’s free).
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