8x8 (EGHT) 28 Oct 202021 Q2 Earnings call transcript

Good evening. My name is Simon, and I will be your conference operator today. At this time, I would like to welcome everyone to the 8x8, Inc. Fiscal Second Quarter 2021 Earnings Conference Call. I will now turn the call over to Victoria Hyde-Dunn, Head of Investor Relations.

you. Thank welcome quarter and conference XXXX XxX's call. to afternoon, fiscal second earnings Good

are Executive Verma, Wilson, me Vik Joining today Chief Officer. Chief Officer; Financial Samuel and

During highlights with performance. will today's second our quarter business call, Vik of begin

this, guidance. these taking and your Following financial forward we After will on prepared provide our Sam results look questions. remarks, to details

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

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

and all loved in hope thank across Good a joining Victoria. today. for ones safe. of I QX. strong delivered and you, board everyone, quarter you and your the We you Thank afternoon, are healthy us

integrated the integrated strategy. and play platform and pure market our validating UCaaS, in CCaaS only customers are the embracing today; provider CPaaS As

company's of platform represent grew least overall a twice third and are fact categories now market In customers nearly solution of ARR. at two rate with the at of three out the the flat

new of fastest-growing solution and sold tens Our thousands of teams our products. voice new of quarter this one seats Microsoft for is

series on the line and quarter in to and in Steadily platform. margins now costs, go We non-GAAP positive new significantly are executed well. fiscal X our our also conversion and and operating for profitability, of to channels. strong exceeded and expectations our summary, record our second pipeline returns exiting legacy with operating to logos non-GAAP from to significant half market registrations are XX% acquisition loss. our strongest than migrating the e-commerce breakeven base pretax leverage our customer as cash off our quarter on reduced In track expect importantly, due of the significantly per bottom surpassed be of flow more quarter guidance both exceptionally in third We and investments pretax improving XXXX. company. digital thousands strides base we lower and remain expanded management resulted of achieving we of better we achieve team accelerating customer In the Most higher execution the and made fourth our customer unlocking have sequential parallel, achieved ever top new improved partner acquisition delivers deal customers cash

of line had growth. Looking sight profitability ahead, we a continued clear both and to

position. strengthening for in significant guidance our but market go have more call, the As contribution details our later raising of cash made to the cover we year. financial and our investments full-year and the the establishing comfortable will margin, ending a optimizing improving our outlook a operating Sam are finance and fiscal result, he cash balance and team on

second and fiscal with $XXX,XXX and the Channel highlights greater we customers. including year quarter cross year. XXX record and includes from land enterprise total more midmarket for a our $XXX,XXX, with business We of sell We half than and XX strategy thoughts customers. win deals XX ago. to increase. We the seven globally, expand enterprise or of strong our up-market had and very platform leader up second deals, effectiveness my remarks the quarter three Let remaining contract pillars of the up-sell platform on greater strategies from that a ARR to illustrating seats. our a saw market the our global center contact deals First year-over-year on midmarket portfolio added me highlights, the of focus This quarter, than than With with a ARR XXX with go of improved particularly a total closed with growth XX customers new and figure the contact had our overall TCV end At strategy. a a XX% quarter quarter, center had value recruiting regard

included figure wins Channel several overall top teams XX add-on We logistics We Microsoft MSP community. the to that for Master of XX% Agent, eight significant partner is this This quarter suppliers order for accelerating of XXXX drove adoption XxX voice with Microsoft new our to TCV of teams. voice significant XX,XXX seats center teams further one channel also Microsoft contact of top and global our drive nine a deals bookings. move of the delivered and company including as from a seats. successes a international program

known of Intellisis CloudFuel qualified partners added with VAR the continues in We special purchasing dozens Com state, NHS of trust plus sell, program. voice and after Ashfield the exhaustive VARs to our the UCaaS District seeing sales healthcare, support Avant. local, consecutive VAR sum, and the and seats Media certification Wilshire over were and the Health number including sector with the the Council Spectrotel One in for Our pipeline In from needs. ramp new and healthy implement coverage from financial Customers in and top choosing cloud we XxX Mental and districts verticals wins CCaaS for honored domestic and services Vendor our included EMEA. for momentum UCaaS receive are are program very US completing and Avon year to UK, both of Award Microsoft public Partners and team Virgin X,XXX series acceleration business we markets. XXX supplier In and international manufacturing, to new bundled closed their seats growth across XxX International such Choice These communication several X in purchasing overall also key as second an as SLED. Year with education

notable wins. me Let a few highlight

experts customer integrated We Avaya solution. including needed This customer help with and deals seat with patient-facing TCV as is impacts. replace continue TCV center replace back deal were very on using spring. our several deployment a to COVID-XX Mytel plus We in them disparate communication ongoing this platform plus and business continued service. expertise to marquee of providers. seat in is seat contact other XXX including This seven government notable and example and was America resilience eight seven XXX clinical deal We legacy global builds global TCV operations figure contact consolidate center with North deployment RFP A UCaaS in X,XXX tightly selected SLED XXXX with contact legacy several is contact this seats systems seat XX,XXX a to in center with England. telephony and a channel practice. NHS in XxX community on-premise a deal systems communication won multiple this with a bundle successful earlier With initiatives. and XXX agents win manufacturing office were win health Asia-Pacific, which for momentum into enterprise. figure see location. across recovery cloud large A great plus competitive plus to after respond figure a and one They and cloud-based XxX platform agencies the support to veterinary providers disaster looking a center a largest solutions single

secured global contact we long-standing Lastly with their to in for communication upsell continue solutions. cloud and XxX trusted customer. seat center a deal enterprise plus business a financial partner turn X,XXX a to They as services,

my discussion. Moving second on for to topic

today platform in is includes CPaaS. the market play CCaaS As UCaaS, you open only pure the platform know, integrated communication our that technology and

strong want platform. advantage We each of that are integrated the seeing customers an these across from three pillars growth of

Microsoft strong for our CCaaS want modernize offerings success early our telephony to for solutions large enhanced natively to with different long calling with that global their Microsoft across integration, small mobile, platform. on phone with UCaaS Microsoft telephony see we XxX direct First, PSTN growth With team's that plans a Microsoft enterprises, web core UCaaS desktop business applications. that connects is and are are solution connectivity powered customers UCaaS works voice Microsoft solution to customers been cloud global that and customer's tenant by to the recently has teams XX that adoption. system, businesses XxX's providing for in and selecting continue we with team's has an customer routing voice seeing worldwide. customers Success been From e-commerce for teams, combination countries and strong growth looking solutions.

apps integrates enterprise Our solution third-party contact including center Salesforce. and also XxX

of shipping thousands signed company, MSC the we container and voice leading several companies quarter with sold This team one example A world's for seats. shipping hundred in Switzerland. customers Mediterranean of Geneva, headquartered of tens Microsoft great is

successful and call, May After global approximately include selecting XX and to Germany global is marketplace XX,XXX with on Microsoft our integration spoke to CCaaS using systems and similar previously about voice earnings believe XxX for in solution During overall. today. rollout team UCaaS differentiated footprint experience expertise. for I the teams that global our their expanded MSC global Microsoft our in customers, communication experiencing the prior MSC disparate with US, Based we highly deployment

this seen We accelerating all also have in channel geographies. with solution partners demand our for

remains groups. entry platform work self-service for point and small e-commerce our Additionally, exciting businesses an

launch e-commerce and Meet quarter customers and quarter to revenue nearly Express with thousands every have new Pro our We each XxX solutions. of since XxX have doubled continue

high capabilities We small with our as large for can easily through attractive to partners us the E-commerce channel web purchase offering on their UCaaS such small new leverage, Express way where quantities up set well our bring channel of as presence several and partners a affiliates series and our business businesses add customers and economically of services. as platform. X Wicks new other is they are to now XxX as

Moving bundled solution CCaaS deals. UCaaS, in for We see demand to our acceleration particularly CCaaS. second strong pillar,

new home from contact bookings bookings, grew XX% of that selected of our sharply. As help expansion to Nine the bundled XX% center base of to engage year shift and and center XX,XXX more employees. K outbound has We CC top support center quarter. were were contact total businesses in represented as fiend ago. demand deals bundled center contact cloud-based agents, wins increased anywhere customers UC XX% this large of more CCaaS a a from aggressively XX as or year-over-year UCaaS and embracing saw Overall, for ARR approach additional compared UC and to customers bookings out operate contact work deals. our new and well sales, new desk XX% as combined remotely,

contact also dialing started meet customers enhanced opportunities Version in together connection improve rolling Important release functionality, new evolving XxX's We and center maximize updates regulatory preview, out the X.XX. modes. helps rates, our and This progressive UK. requirements and predictive bringing and US include revenue

Africa capabilities our also East reach added in Europe, for an and and Central providing global six Asia, We support continents. XX countries with telephony solution organizations in across expanded Latin enterprise America,

improvement see of third UK. with the nearly US growth including applications CPaaS signs EMEA. quarter and programmable and deals and have Southeast North number where quarter total over continued our double-digit globally over quarter from APIs CPaaS and Our double-digit quarter the is of to wins doubled of revenue solution the scaled Asia. achieved We pillar closed We America in we expansion

our included APIs. or chat SMS, logistics, transportation customers businesses voice, and and using retail New e-commerce video

is upcoming ensure Europe X We CPaaS analytics communication unique also and as work from and the home ways to so they high positioned our is administrators added our monitoring One add to events, performance their find network customer related WebRTC saw insurance We Callstat to customers seeing quality number uniquely sign-ups carrier a a those of our are requirements. signed level capabilities SMS CCaaS UCaaS and to customers We're to They policyholders a and further mobile insights extend requirements customer account alert UK conductivity. to seeing that with to for platform experiences our network series about expirations. business demand quickly meet policy continue virtual to wanted for broker example voice SMS can easily information partnership service meetings We CPaaS leading any new for extend Callstats, with to solution. engagements Telia to expand provide of new open record address increase. issues. and their experience. enhance existing new the also real-time notifications our to provide to

have carriers coverage our businesses globally network CPaaS delivering We enable of more to than XXX with a solutions.

on service, secured beta we as and and shortly video website will service of as the the add Jitsi retail. to announcing which customize video in engagement Finally, Building and and areas the be real-time will a meeting open source scalable contactless solution be at their availability empowers market. Jitsi experience, a telehealth, education developers in meetings solution such to applications most reliable this

We have the online embed meetings and leveraging applications. service to a several customers video APIs and mobile at host, in already Jitsi customers to manage engage self

of year. expect the to before We at a Jitsi the calendar end service make generally available

and sales success. complete product As we the we organization continue to by expanded and our explore development platform, team growth our customer throughout in opportunities the including marketing, afforded multiple

welcome has for enterprise in cloud as also years second that revenue in leadership experience and as are I'd to final such we year. the companies experience XX topic prominent software Seeger believe we observations Xerox of of has than discuss half SAS, and the like Oracle. Steve quarter Officer. second he and more the technology The be and to progression Chief roles Software, Typical Steve deep He Revenue in our growth. instrumental will During

We XxX that is of communication cloud. digital a demonstrated to part customer's for fit open purpose have platform as transformation the the

and our and We messaging, are to uniquely video, customer positioned unified global center API demands phone, platform. meet with proven enterprise contact scalable

the by strategy market, solution single source having which of ensure value landscape is the a platform validated will While the been ongoing competitive has for XxX. an changing, always of

been the A and pleased X is market well customer ahead of and year initiatives very and platform financial success our with our has the year. innovation our tailwinds The plan of our remainder leverage of resources with fiscal will operational the operating are and automating calendar than steadily for unlocking migrations. go strong and continuing this more of our leverage of that end We on the beyond. migration customer component We've company. investing XX% exceeded goal having progress are of customer the base aligned provide and legacy base within series of in to improvement we by key are

In target platform end completing our and year. over our quarter, program in fact, and ahead of series is of schedule from base now on by remain the fiscal of last we XX% migration above up customer substantially focused X the XX% legacy

legacy have platform. churn from seen a like in the X our customer and decrease logos We thank business voice and validation and $XX significant channel billion expansion with market for now majority rates, solid such that their to importantly, the outstanding execution are financial and improved upsell. all already grabs. it a our with we and steadily reflected I'd on as a series migrated for and scores from is customers company partners, initiatives Microsoft a and of reduction across cost results. In of With the work. surface market platform satisfaction continued platform seats teams X scratching a only Most new in improving strength are the of for in base series strategy establishes seeing penetrating of summary, to rebounding engineering for team our millions accomplishment This the the CPaaS platform, hundreds up support

outcomes. March exiting strong would XXXX our I this these now of the clear thank over hard line in and pretax year to turn their growth Sam. will and fiscal beyond. employees dedication of call with a sight non-GAAP I for work breakeven have all to We continued to achieving like

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

full will today's and QX guidance walk For call, then I for through provide and the our financial results quarter third year.

and in improved results we'll profitability. reflects XX% performance above $XXX.X were was the answer and to operating our $XXX.X better-than-expected results across $XXX.X and driven Starting increase Total quarter open call was better-than-expected results, guidance, pleased bundled million, that delivering leverage deliver million your guidance. by our year-over-year million confidence of driven we're for our Total Overall have revenue board. exceeded in an by Lastly, performance quarter second CCaaS revenue offerings. to increased the with UCaaS, the to questions.

XX% mix, total was our international and of increase up the XX% of Looking at geographic revenue revenue year-over-year of XX% US XX% year-over-year. was revenue, an total

Our continue investments footprint pay benefits. in expanding our global to

movement our growth increasing larger behind up XX% year-over-year winning This $XXX.X growth and XX% across $XXX.X above continued several UCaaS, eight to was at Channel at an specifically deals. million, CPaaS revenue, into offerings. reach end, from service quarter's million generated million driver $XXX.X CCaaS driven customers. was and essential solid $XXX year-over-year ARR of we guidance. Looking including our was midmarket enterprise and figure to an Total enterprises, TCV and million by upmarket our also increase

and As the CPaaS and in teams Vik UK investment over years results promising. our innovation and store voice discussed, last the delivery into as our US for are is well two as expansion strategic recent Microsoft product channel

quarter the led deals Wavecell. channel some last lapped acquisition of closed we July year we and During XXXX large our

metrics longer various previously two discussed, sheet. large we and as we to provide terms. we IR growth change customer These did continue metrics impact rates the on enterprise metric will in these deals As with dynamics signed channel

and XX.X% XX last to professional Now margin the down anticipated moving points non-GAAP due quarter XX.X% services gross than driven over mix. product revenue P&L; by revenue. second of declined margin to mix service quarter product better was Non-GAAP basis primarily

are previously have UCaaS margins margins. CCaaS significantly CPaaS lower we than and mentioned, As

felt. of wave COVID as CPaaS overall effects quarter-over-quarter, increased in it second significantly than usage Although were Asia-Pacific lower was expected the

improvement up minus margin in Non-GAAP XX.X% While continued improvement hardware slightly of XX.X% currently minus the World and usage the holiday U.S. rental revenue We slower our a from quarter, XX% we at the expect Flex into margins was the nearly and CPaaS large our hoped, sequentially XX.X%, other key we margin. for gross will the came December has quarter that our driven sequentially, growth be initially improved in mix and influence at as business increased was a and the reopens, than ramps lower gross the a program. third product quarter. continued minus been with year-ago on expect rebound usage. driver because from flex revenue positive has overall in U.K.

QX to optimization added media leverage marketing, and aligning drive R&D revenue goal expenses delivering and last execution we’re sales came XX.X% sales improved QX, business Non-GAAP has sales The also both at efficiency. continued physical of last the of X.X% operating expense spending quarter. QX quarter. on Looking and XX.X% improved in improve of from from revenue lower versus in at than global marketing efficiencies. our moving combination expenses, digital spend to and Non-GAAP to of productivity. We've online event our to driven in capacity of X.X%

to prioritize We hope up making year-over-year clear progress year-over-year, operations. operating we're grew certain revenue G&A expenses to XX.X% Non-GAAP each customers a quarter, third a the non-GAAP XXXX. due I investing strong our of necessarily We quarter, our A expenses margins sight the of legacy to not to in completing improved Operating from of quarter XXXX improve will timing believe G&A differentiated and and in X% generation. the were XX.X% a have exiting pretax continue the quarter of for since clear X the further out each total of that in future while return we QX minus like metric March revenue to migration gain we technology advantage to related sign revenues last were would non-GAAP to profitability profitability. line platform seen scale we we linear of best on point fiscal as Series. return fashion. quarter, expenses, revenue the and expense advantage to to X.X% total have XX% cash

expect revenue have of a continued trend percentage basis. improvement efficiency in a begun returns and expenses year-over-year combined delivering we operating on However, as

our good, that profile of we in pipeline high channel. the continue improved. Importantly, the rates These to rates funnel show our be margin of top remain our and results are growth our returns metrics relatively investments including coverage previous and demand harvesting generation

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

items million This offset more pretax the expenses non-GAAP better the for revenue, total million than ending reduced quarter a the such operational efficient the refinements headwind. a provided XX. travel was and was expected Our better loss $X.X improvement, of margin currency by and of September results in customer combination as related $X.X guidance acquisition, than July, timing

with will very reoccur we’re pleased guidance. the extremely We’re has about team giving been assuming how spent. when diligent not timing each the dollar events I'm

ended total with restricted Turning to the and cash the cash, restricted at $XXX quarter second million million investments cash. balance of sheet, $XX.X

decline is approximately the $XXX.X cash, restricted million Excluding This balance a was quarter-over-quarter. million. of $X

quarter $XX the three team. was XXXX, million fiscal of XXXX. trend second quarter fourth of the fiscal $XX of Super used whole in in Our quarter proud the first fiscal in quarter usage used the million of $X million cash in used and XXXX

COVID cash burn collections manageable. economies ahead to than The further that We’re collections, sign related on are continue off our than collections Further, in have put reducing expected. a scale we operational faster is of improved are we better risks and expectations. improvements good through expected operational the run believe paying focused of efficiencies,

usage of cash the more expect balance discuss at last then quarter. using semiannual million or into cash, see to our In higher a equivalents cash, and on on as the corporate We the to cash We quarter. in mix intent fiscal cash year-end. approximately decided we in flow improvement have which further give to prior third sheet fourth investments timing quarter pay $XXX will XXXX, increase terms than our bonuses our a in of to cash compared fiscal stock quarters, basis we

over our $XXX this investments business excluding cash. understand raising We Given expected than financial million cash expectation better and equivalents cash, in jump. a our restricted performance, is and we’re large to

expected. we performing improvements better have said than I significantly in the put are program As place

XXXX year. positive revenue, focused of obtaining the million. deferred item to likely I'd liabilities discuss We’re half is free final the second $XX under fiscal which more One during in to the like quarter increased flow on over cash in

service our started in building sheet. delivery have will on the grow contracts expect revenue of and deferred We journey advance continue of to towards moving balance

booking metric get have focused we’re is the to programs operational more started time we on the a a and Additionally, asked starting deal number reducing Performance Obligations filings for or RPO. this our backlog Under of the services. and our SEC we is quarter. deferred GAAP U.S. accounting, disclose number receiving subscription Remaining about Simply, RPO One of cash. each in between revenue revenue aggregate

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

Turning to our financial outlook.

tougher large representing Voice As service growth. year, Microsoft XXXX continued seasonality have We we’re as environment We guidance and anticipate as a $XXX and million, anticipate some all to we uncertainty account, blend a to pretax into deals closed total $X from the usage the ending third QX comps $XXX the meetings XX% this is XX% We million. million to growth growth. in $XXX range loss Taking to revenue of range our of in approximately new representing million be funnel last $XXX revenue of non-GAAP XX% a million for establishing entered year-over-year macroeconomic the of anticipate revenue XX be result of quarter, CPaaS sales to fiscal follows. year-over-year in pandemic. good XXXX, XX% metrics, December to solutions and footprint. we as rebounding this global Teams expanding Offsetting such seen for

guidance. feel providing full-year comfortable also more We

revenue. on First service some color

channel down the the the rates growth anniversary comp year. tougher half the for will in of year, won the expected which the large of we second lap a of and creates fiscal deals as come balance Wavecell acquisition year As last

rate acceleration in remains an we XQ, to expect for a COVID-XX components base revenue. monitor the in and usage it as especially of situation We the continue in growth bottom XQ fluid, the

full-year our our of XX%. XX% to is revenue guidance an new importantly, More color service prior to increase

as from expect we XxX rental see to and revenue, mobile work continues anywhere to shift flex phones and devices continued home on apps from and norm. total laptops, the work sales at to customer Looking engagement be desktop hardwares new from

in reflected in We hardware revenue. expect slowdown be this to sales other

We growth. million in XXXX non-GAAP pretax we’re service in million. fiscal $XXX ending anticipate We a so revenue to range XXXX, of revenue year-over-year for XX% a $XXX be growth. of approximately year-over-year establishing be We And XX% to of $XXX million, loss follows. to range representing to as anticipate to million, guidance March $XXX million XX% representing full-year $XX to anticipate XX% XX total

reminder, As a witnessed fiscal loss from XXXX. this million represents improvement a $XX significant the in pretax non-GAAP

is business and to so me metric turn our our to goal had that, their program. with sheet. feedback, institutional many dynamic our And with topic and final speaking of model. report planning making Based this performance of on an IR discuss changes let the I've opportunity my shareholders, we’re The more analysts solicit to feedback. to effectively on IR key drivers for

results. quarter these discuss to changes in with conjunction expect fourth We

And enhance notice. confident our and growth long-term, to of accelerating manage continued and on customers our wrap business shareholder in second questions. the take commitment. To our remain for proud providing financial are have profitability, And and and flow thank cash to performance. committed ready the performance line sight quarter fiscal I'm XXXX. we partners we'd outlook to Operator, well financial to efforts positive value. our deliver better and our for feel of accelerating up, so ample we’re positioned we’re their like We to in delivering to

comes with the [Operator from Instructions] first line of Stephens Your Ryan Inc. question MacWilliams

Your open. line is

of the cash taking for collection. the some Nice the changes question. to like I And quarter. Thanks

purchasing talk changes are was new mid-market this customers? here that further recent to Can since pull of over booking deals enterprise thought of a ARR Solutions. any I Cloud seeing for any changes and about XXX,XXX you these forward you are you've up the Vik, from For larger seen sense XX telling of you like, urgency seeing market COVID. there And adoption

expand see, has revenue. XX% actually than of can is as and monthly significantly and greater follow-up land with of bookings people solution are people, also what is, with end of And our $XX,XXX CPaaS two solutions to our buying user contact up increasingly, for combination you our deals may where our also solution. immediately in center concept example, What been our whole and buy at experience. this UCaaS is seen the then they're Yes, customize interesting recurring starting ramped quite to buy solution, we've we out our three

trends also remarks, very deals, contact and interesting X,XXX an prepared contact large we XXX center the XXX several, of win if a contact I we my and talked some you center center saw from was remember, center wins. contact about win think One

seeing selecting unified platform just communications you're as so communication solution, the a enterprises, then a on. this contact starting And goes or global with more center trend towards adding rest large either and time more and a

engage And is on team maybe of you before? seen Lisa I XxX maybe game has And have add Teams, know here, early, customers Voice was still engaged Teams for interest seemed Thanks. but these with some integration for XxX Microsoft contact Teams like first any center? to you helps Perfect. enterprise direct the initial year. then larger how customers maybe that won it's on routing the Teams the XxX it head this and

we that a user's add we on, connectivity, XxX closed pulled is saw so centers. was Microsoft actually a for than deals would to Voice did that, from it initial it completely and in actually added Yes, perspective, more then lot And be Teams of like interest, a contact tendency our seamless because a experience. PSTN essentially we a we've seamlessly finding also people a

fast initiative very and it. growing think well for us, we're positioned this for So we as we view very a

the taking for Thanks question.

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

Your line is open.

have shifted to [ph] Good for Chad on just Thank base? Hey, you. migration. you I’m wondering the Rich. guys churn respect seen what you've Series X progress with this as it's

comes that is a this up so several question times. Okay,

I'll So hit it on. head just

So migrate them customer requests them they that migrate, go X it's see on the migrating and usually we know we a that on to on customers let we in not legacy the and Series rate way over customers. our And churn than customers weekend, advance. lower we

we rate. ramifications terms quarter, overall again But customers to a And the second we so definitely COVID. I Not continue given to that starting had rates down. migrations, in the the surprising, we quarter. witnessed the to churn lower compared settle migrated see in think, first have of are that Everything of churn trend lower

Your Michael your line Turrin next go Securities, open. with Fargo the comes Wells Securities, of from ahead. Michael question Turrin Wells with Fargo is line

Your open. line is

Appreciate Oh, afternoon. Thanks. waiting to That there second. start-off the for double function a with mute sorry, from level. highest apologies. apparently. Good was Maybe the your

more past You've for platform you're talked open the competitively the in since how understand of customers means around towards the owning approach? for what single the importance vendor you evolved somewhat platform, help us positioning The towards this just and partners can messaging open stack. given that and move has

don't the as API's. has I all And the stack, only the No, of message It's owning about part the evolved. provide we think stack. owning part that and

various and important more user end you're think people basically, the happen increasingly their We I change than for can customize seeing that it's experience So think needs. business everywhere.

If experience. Communication you the seeing people Unified becomes CPaaS and and end a the to user both you're at messaging, center look and together change increasingly, integrate way buy contact

important. having function one then video experience level, is end more reach one ability CPaaS gives can under and it's platform you well example, and common a because user we we across as informations for into that, or common have a user that on accessing control, a ensure various the experience environment common the to entire then security differentiated the view one of part the us all still all something platform. one and of The as way it compliance one add, SMS, go link data integrated like top at particularly that or and of a as of stack, you one and think increasingly as vendors common company. and common basically that so I layer, do part And hugely more

can just of to around And add what you few Sam to activity you delivered in saw as QX. I your on help guiding XX% to a one quantify the in Is mentioned follow-up the approach just for you anything a to mean, the in any guidance. Maybe versus selling of way the script. year? you But things XX% you're just prior-team? you setting change there of services XX%, some revenue deal there call-out Thank growth, maybe lapping mentioned for anything, last in there targets the here you. given is the

clean, trying a big in I of a the was ARR we from there all XX% was growth a and QX. comp left What tough, relatively so so those lapping was Wavecell XX% is service to Yes, growth, revenue call things last QX, was view. of point out QX and year's between kinds big surge

And rate. so we're QX’s seeing a little bit of growth that drop in

quick into XX% guidance service previously, we and a that you'll growth did realize And reacceleration overall, full-year. then up for do year we math, going XX%. the did there's expectation revenue we but the if QX, take had the from So to the out some put you

saying to XX%. XX% we're Now

something we And So overall, you're can we guidance, guidance how to for think to on looking the of at do. what give no, we we sort year XX% no around change give XX%.

Helpful, thank you.

question next of Matt comes with the VanVliet Your from BTIG. line

line Your open. is

going? as of it that at then is we the company talking the network. question. for looking channel how's some high Thanks couple bigger for more quite you're momentum, next but guess of the guidance of I next bookings high. the think pretty remains partners but lot outpacing channel growth and a brought partners about guess Hi, of the kind I taking quarter about and addition the you've mix lapping new still overall quarters, the The of into and deals, the

for of rate, the channel some So on on around especially that. I that announcements down channel models, maybe dynamic? a weighing the bit growth how's is is these the that And bunch on I VAR of or of reseller And the a partners little how of just kind more guess question are business? the part What's total guess then selling potentially two kind market third focus? second, that slowing around out on growth and in business? there a big quarter, then overall changing just than the that How

I'll the of to half question. the the the second it VAR of over part of metrics, first for Vik then part the to turn Okay, one I'm on going channel in I'm some take this Sam,

was what So on that way sheet I was on total script trying value. simply to metric the the works highlight it's in IR contract really bookings, my

they we of whatever, can concept or a tough create so large a a or if that very five-year deal, And deal, comp. book

quarter we've larger a you effect rate which I purest, deals, look the that, of pieces. enterprise see an closing can which business and big at have can was all to start a really these And to given encompasses we last still can think just year-over-year, our that whipsaw RPO, in larger as way been our an investors at a those deal growth looking mean quarter, ARR is XX% make you cleanest big company couple XX% aware so right. where number. And wanted CPaaS or I is a see to deals encompasses really I that growing growth, comp it and or

room put other active thing you is, effectively I we on grown that with partners, sheet channel to the partners. just lot if little monetizing I channel almost we're go two X we XXX would our XX the more there. active and The channel investments, have We've literally ago, had you metric piece years think we highlight over go X,XXX back if IR a look, a

we our we and like that initiative. have channel to like with have we Vik? good really run room stand. good channel. the momentum think we partners, But more where I We really definitely in traction

made both point one made had because an integrated Virgin them. I'll as partner that bookings and platform. is And that both platform one we VAR very you we large particular, to Virgin having VAR more bundle, important customers. at key addresses they Media And a to of part to of was a have plus we installed one for across easy we for our products, integrated a and mean, And to closed wins that a And part sell our Both effectiveness a API's which of into and to business. to it video Yes, have we us, brand to a of of in investment board all push of a contact do mix we VAR of an their see speaks bookings. that channel. recognition built and improve VAR made allows is want large this them our and center, are we we've I know, our opportunities is degree, we the echo increase business because do of the base respective two distribution resell large partners importantly, which as record to match it And that. Media I voice, a to the VAR their growth have that significantly. big and And part quite another on brand lot areas XX% it two resell is strategy. recognition about, portal, ability allows area The reach. ScanSource can our want significant is essentially what products. we And an which to pipelines talked our growing on a is because deals key

lot seen into still as for you the feel your right Are a overall of you finding deals of should more that efforts way you like lot of then success part like deals? get demand around you competitive in you for needing to or of most follow-up, performing now? you're a obvious pulled forward reasons maybe the And Thanks. feel be a a industry, has as companies. we've How do

about generation, I'm actually, feeling brand much performance. overall No, overall and recognition demand better

I think our have generation that our leverage to able and the see us we've when what is on we’re it a partners, now to we payoff, we're website for been more our major off more get. investments three-year infrastructure, all right our the major now, demand starting in seeing that terms made in I'm journey investments platform, in of and and engine, channel starting of see we're to also

all So we where like about execution. are. we It's

Thank All you. right, great.

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

Your line is open.

of SMS? bringing of as then kind you margin question you services more there for couple of have thanks. just to of wanted clearly the first, just ask moving areas you are product or role efficient efficiencies think kind to opportunities some versus Thanks. to the a CPaaS’s you’ve of Great, maybe a of organization within where business? products one question you months, where into in seeing success kind maintain. But second Vik, that are making in I sales generation have maybe for about Sam, other guys kind been talked you just just a there's the the higher opportunity of And

All in I first CFO, a but guess my defect believe improvement. take the this right, so I'll continuous Meta. one, as I is

areas are professional them So improve more can there you there's yes, on, improved we're services, couple areas of doing that did on, can on, improve a we we other we've highlight already better.

that continuing our it rental on just key those on kind that nearly hardware, focused structure, channel, and on of things. mentioned really are the piece, the dollar in it's I all continue growth I areas flex simple. kinds the to of XX%, marketing hanging each low it’s monetizing margin, script, fruit, simple, those saw in are investments so monetizing where As We're to cost quarter-on-quarter, hate make but we on a that focus continuous really improvement spent, we'll

board. they've Sam done as a give Sam the job entire kudos, great team, I'll finance across as And well the

the in also it of as saw margins. you margins team executed services, how has professional other think terms of well I terms in as improving, particularly overall

you've line You CAC also steadily. improvement, improve bottom seen saw

are in trends in we improvement the make sure is that were And underway. continuous all So across to there board. efforts place putting the all of those

UCaaS, we which is I of exactly rate on, that fact of our this been part, represents I an ARR. bookings XX,XXX ARR. other about at the And XX% and approximately company the a were talking you think, of talked about, now whole platform, than that's, The market that I which third we've which think overall actually greater represented integrated and twice CCaaS think growing the concept is is strategy the

part. one that's So

that company, customers go you can recruiting and increasingly user on of is gave a our a various it the experience, for I and center. second do become those The talked asking a to series all of they which be out can end click API's then which through part of who of contact and campaign so us one blasts added change to to can the then are candidates then CPaaS CPaaS example then

will shortly become Jitsi a link where significant over a a service application, in why calendar be of video add which by then this very somebody's minutes, making our seeing We’re literally available meeting is video to we’ll interest end as year. available on offering can in general embedded a availability that you

So significant for as video improvement, we're particularly great seeing as for opportunities a CPaaS. services view addition we margin overall our platform. and into And also move we CPaaS voice to

Great, thanks.

Thanks, Meta.

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

is open. line Your

for expanding quarter, you you the congrats my made a go-to-market traction good taking we Great, questions. towards on reacceleration, investments And here. thank internally ecosystem so revenue and the about as further think partner gaining

So or to confidence the looking at deliver what's in sales able your in being pipelines, last your your mile?

of and there And I Steve good executing to is mean, to opportunity there. our had a have lot continue very improve strong. the overall is was we've who from feel continue to CRO brought we Seger, a a confidence team on from last well, like board, bookings we've quarter a perspective

all that us. are pay-off. execution. where for all about to about And now think I the finally I is fact at. So starting the it's I investments it like execution like we’re

a And quarter, all have margins, total proof I the is, we add from had revenue, would everything great we right. revenue, cited right, service numbers, the

convert the we can confidence pipeline So future into yes, extreme that revenue. we have

I I they're we add year-ago, is bat, also fully the other can our system think market, I introduced literally off think the one means a low right I is Meet functioning which click and adding the which literally people a recognize, Pro. well a e-commerce, thousands of is logos team, quarter, which as as will a end e-commerce to which team, over thing, a want little UCaaS have on of

ramped becomes great platform. so on overall into Series our X a that And

also So sales has team strategies up free to our part allows larger of us focus been years. which it to our and the deals, larger over parcel and on

COVID Election sales that color fourth activity you're Great, changing corner, here have environment if more with and get here in globe. also conversation the around a help changes pipeline, little are or question, customers across quarter. the last me now any cases in seeing in your the And we quarter, spiking the throughout

changes, results in obviously last given but I So Thank and not impact be clear just all any color any is guidance year this us? would have incremental the any you the or having think uncertainty great. would your if of curious seeing if couple of you're by months you.

Last business it quarter, puts quarter of quarter I'd about and one actually, very see was that usual. it a good was was things to normal takes and the as with like last continue. normal

of comes Northland Your your Latimore next Capital Mike is from question the line line open. with Management,

said does of by Good more up you track here. as usual, bookings more the figure to of as of eight was Vik, echo booking I well, thanks. kind sort Great, in business linearity show to of sort see, guess just Interesting terms to and I month? see you deals guess it expected

take will a was one, than I was, expected. better it it little actually Actually this

that you So was balance the we are flat, just loaded on basically it And normally see less the DSOs right. backend than think I sheet have.

little So everything a expected, as was as said linearity actually was expected. Vik it kind fine. better of And than was

And to wanted as stack up as small to part, then customers serve the a sure journey to you of in Mike going able terms been were back But make comment about mid-market in a to very your we also we business in first manner. know, efficient is, higher higher the move enterprise this which we've and deals.

go enterprise and logos up team thousands adding of up deals. Our And lower at frees been end. sales e-commerce which to to then has the mid-market, the mid-market

matter and of can voice, be enterprise being now of you CPaaS to all contact portion going seen so seeing that plus very and video, allows we've is the mix it level And the ends our platform, have both API's also the which match, serviced. the you the driver deals you way through the you're and expand go significant got small acquisitions, deal growth forward. chat, to so center, you've And land one from deals fact of a

any and small category? change business, in churn on small business then in the Great, anything

them, earlier, on lower customers. migrating as churn mentioned been rates I We've so we're migrated seeing

is, second quarter, cash, the see for churn problem. than no expected our down quarter, was so and collections say right really can cash only the better I’d So it’s the fantastic, in is thing you we doing are the

you. thank Great,

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

is Your open. line

those as is how in think you're in channel wondering of seeing what's less, adoption this as the any happening, the COVID pandemic the of here, on et wondering sort you cetera the quarter just research companies adapt given seeing just potential as about Thanks, we're rolls to Thanks. channel? the and sort happening side, changes

we have channel. interactions the think I enjoyed No, our with

of As within our matter a fact, has quite been significantly. recognition I up going brand channel the think

also starting adopted channel also to that see We’re e-commerce that has engine. our

to deals, are So website. partners for low-end small now put starting channel that their on their

actually for So small and customers, in they them can service go there.

to much channel, channel, deals more TCV the XxX We’re folks go extremely And also also starting out the Blitz see to that's seen the from all coming of larger the world. come been is that partners deals means a lot doing large, channel reach them more starting days prospects we've received. channel from to the we out we’re these of which comfortable X-figure over and and well We're choice. feel and partner where call

just dispersion, geographic are just to sales talk how and expect? to can you where about coming respect with globally And from

I Yes, XX% so at international if look was mentioned activity, business, as up an our look you at it year-on-year.

I so don't we're in downplay, part a it's seeing to larger, much internationally mean, of markets really in general, the rate markets So made number Virgin, want get harder domestic growing the U.K. off in channel, growth the bigger growth it's our that than to especially paying mentioned investments are just we've but in we’re U.S. stronger we’re off it. U.S. But Vik previous I seeing both of it, growth

thanks. Great,

Your Siti next question comes Panigrahi of from Mizuho. the with line

open. is line Your

the Thanks see of Microsoft taking progress A in Good for on questions, see my to couple question. Teams. early success. And to good this first business.

of You XXXXs seats. talked XXs about of

successes, large? between U.S., segment U.S. certain And is small, in particular you midsize the this also do any or how So characterize geography? and outside more the the

No, actually, global. And it's it's broad based.

Microsoft talked deal It's you've you've even got mid think I customers, small XX,XXX customers, Teams market got we win. about

yes, based. global. it's And broad So it's

Okay, you're as and talked platform, on and side. making hearing on and pretty positive in keep progress good, your you technology feedback the a go-to-market about, then we

CRO, go-to-market wondering of should we sort as joined expect, changes I'm initiative? a in Now what that Steve

I'm And thrilled defensive on He's Seger, of to Steve board. that a kind have end. So mentality. he has former

of brings going that and essentially our of strong generally strong next I I see after one in that that, we brings as everybody efficient under very team, the forward. to intensity to in the roof. market a level, take think driver a e-commerce, we also manner. indicated, allows VAR And that Steve is go team it have growth a us And cost place low-end being very brought to Steve kind

as said, execution. So we’re at, I it's where I about all like

right. Thank you. Thanks Vik. All

Thank you.

King with Colliers next Your line Andrew the from your open. question comes line is Securities, of

taking accelerated One migration thanks outside questions. are that Hi, where originally really quick of idea get to just has expectations? want for any I Thanks. my if expecting, were one, migration factors we past your this COVID there accelerated past that an

engineering Biz a the I process. apps to factor the is and found look completely an biggest mean, automate awesome they way team,

last take do platform, than what is functionalities the think interface of was in where the essence, a alluded can very XXs to they platform. now on legacy to beforehand. quarters. And gets perspective, that the over of over a the new I prep was a teamwork, it they and it a is map you XXXXs literally customer their in phenomenal where past, couple switch a of they’re over on migrated a flipped, new from platform, feature It a Sam work you customers of way other the similar. weekend, do the all literally found customer And all and the user are

a that's So accomplishment. great

and whole on sure that develop, migrating, We opportunities here future some that automate you XxX also be other is not that goal the process. of the to may or has platform the for customers believe IP they make in

comes question of from next Will Your with Baird. the Power line

Your line open. is

in. for pieces contact to online, too. strong this could I coming UCaaS a and for your gross trends strongly, I Hey, on Erlikh center expectations would and you us just trend given is one, hoping long-term, video talk Will, margins thanks about of growing lot squeezing ask moving medium CPaaS Charlie was

all together margin? putting that So about we should how think gross that

you a articulate love It’s to super pieces two incredibly I'd moving there's fair question. And give answer, here. an really

margin, a As drives as same down that our influence gross up, perspective positive CPaaS a professional mix product flex scale and time the at gross margin. from that's services our grows to business

And to have say, updated quarters basis to it so. basis points, slightly larger by the over and I think down flat it we then four model a That's mean answer. CPaaS not I'll has or we roughly, after influence. XXs four So generally think that, give little let's about you reassess next, how bit And slightly of down, we percentage points. an

thanks. Great,

line next Your comes line from question Jonathan Summit the your Group, with of open. is Insights Kees

in get deeper In my the upsell XxX a Great, of you And interplay update UCaaS, using just on video and just Meetings thanks better Thanks. the questions. to more users that. And you want I terms offerings get you just kind a have. talked of little afterwards, is understanding the the past, quarter. in an congrats have than good terms in the for get for the of been the a to dig it and just more that taking that number Pro, of also on of sales, for video. of this try about CCaaS try established as lead understanding terms like a or between wanted to in

three Thanks, the Jonathan. you over to quarter, do as number XxX talked monetize very our there's one, Yes, become approaches overall on-ramp no The been as main well last CCaaS UCaaS, million as as on has video, increasingly has we’re the been platform. know, several that. you Express it how And at still video users. both we point good about

that's So extremely worked for us. well

own embed they applications this a way add essentially Service, like as Jitsi their a increasingly capability. and our been led, as video, video into has customer to second to The

And very on a well. Open to Source that customers innovate got so several as already community We've pilot robust is got that. continuing that we've also on

So literally a as customers indicated minutes. video we've for on an onto are allows we increasingly us, our essentially us where it differentiated on-ramp it's offering, Jitsi into bundle, has several way applets part by able else's Service where beta to it a become a of X they're monetize Series a as platform. already. And do as got developers in somebody larger app, in And putting to it's

Jitsi more a as going to now, Service? you're So more as a at keep non-rapper Meetings without monetize Pro

That is correct.

thanks. right, All great. Okay,

question next the from comes Rosenblatt with Your line of Ryan Securities. Koontz

open. is line Your

of with in the I take can for Thanks displace I term really you view your out prefer the piece UCaaS sizable typically label own there own to carrier Thanks. them sell your the question, Or is business the product? lines, them a white you channels? do wonder how to carrier opportunities brand,

Okay.

have large or Number So it. I approach two the sort would one traditionally VARs have we to a that is of sell answer of VAR component pronged have. a question carriers to lot that

that's obviously that So our discussed VAR Vik earlier. program

human is et labeling, that's it chooses The in we use cetera. and white if with But to are in occurred, self to to et carrier example, UCaaS tell our have zero-touch, move that don't as super a there, idea some you, the the we up with that. a Manager those for that read on-ramp will channel. white interested touch our the can zero carriers I we're seeing, progressively to service, then are sure, API's, we activity service, I to of and we ability when e-commerce what mentioned accessory of self anything even move involvement have into from a that's cetera, stuff. want And the that, Express, for stuff the to you no have second label ability with occur, type have occurring, discussions into of of we're lot being will starting capabilities selling one e-commerce

it can at They And of sell UCaaS, they offering. CPaaS. sell Virgin install they're business they their they can CCaaS, standardizing and they're essence, I sell Media our you customers the can e-commerce base, small sell can example platform, mean, to for through look on can going business. In our

to from one seeing by our increasingly fully products as becomes a it differentiated, carriers we’re to white So products and their way perspective, comprehensive, our multiple we platform hugely integrated is route because market offerings. labeling a co-labeling go-to-market them are our and essentially with believe vendor

Vik. thanks Sam, Thanks

you. Thank

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

is open. Your line

your versus Thank you an in that? don't cash pay behind I more is logic has is decision stock, the think that to addressed think which Can you. bonuses about interesting I thing the interesting move. of been One talk

Yes, I'll one. that take

when about I CFO, I lot became of look, in June, So May, came concerns cash. back heard a

cash, I that exiting million $XXX on in We're restricted the think to not profitability. really with in about the off cash We've, taken table. we've cash QX. flow including we're path talking latest the numbers, over

our that like to those it's things achieve, friendly compensation and types what shareholder to sure to make things stock time attention So we're right. to trying to and we're start turn based of very

we don't if you account the days. when your but this, much function that a cash checking in you're So these really that's not it have cash, know was I your of know fact earning

it's better at us issue at our stock less cash. that pay our out So for stock just bonuses is to and values in now trading the

current I’m I rates of it's but the interest move. well interesting aware think an Thanks.

become think about I Yes, just we not balances And more way we shareholder concerns is another have just do any this cash to that start now. right friendly.

portion Thank Ladies you of the well today’s for call. this concludes and Q&A all participating. conference call as the gentlemen, as

may you. disconnect You at this time. Thank