8x8 (EGHT) 11 May 222022 Q4 Earnings call transcript

Good evening. Thank you for attending today's 8x8 Q4 2022 Earnings Call. My name is Joel and I will be your moderator for today's call. Presentation portion of the call with an opportunity for questions-and-answers at the end. [Operator Instructions] I'd now like to pass the conference over to our host, Kate Patterson, Head of Investor Relations at 8x8. ahead. go Please

Wilson, Good review operator. year Today's will and agenda with Officer. Thank our afternoon fourth a Sam Officer; Executive of Sipes, fiscal Chief quarter include Financial Dave you Chief everyone. our and results full

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

our we or With provided investors.XxX.com. to in US some that, discussed comparable accounting measures not have together GAAP. accepted Relations comparisons on caution available I that Dave Before are we year-over-year statements as as be the of the earnings or from of of as in We that in turn these reconciliation the accordance they those with prepared on may undue in our no A this involve CEO, growth cause Fuze as well will non-GAAP principles presentation reflect as update SEC. a just business which put slides Sipes. our forward-looking products at today earnings statements GAAP includes strategies. presentation impact obligation with will today get results risks them. including cases financial our materially not made our about in that call analysis plans generally and and call Any vary the started, filed our measures call closest press is factors our measures slides, statements Certain and in Investor reliance uncertainties and statements forward-looking reports future to over reminder this to to with and described to release on website our discussion you financial performance acquisition risk actual forward-looking the were the on forward-looking XxX

you thank today. you joining and us Good everyone afternoon Thank for Kate.

solid give priorities an framework. the quarter On and the plans also flow ARR for year and our integration capabilities. the the of non-GAAP growth, fiscal contact as I as another XXXX communication and update our through call strategy cash to a will on of company-wide year profitability We progress unified strategic and today, review continue I fourth center advance we quarter quarter outlined will Fuze of we and delivered empowering using the Personas integrated fiscal XXXX. positive call on our

We have made investments the the year making XCaaS we in center-focused and launches. past tremendous innovation contact have been progress up showing our and over are several strategy recent product with focused

the not over reimagined a for than XX% including the expand several to experience XCaaS ARR materially in integrated combined and agent example, Connect opportunity XCaaS our For approximately with XxX during platform of quarter. Enterprise winner continues adoption workspace the to growth customer Fuze an our XX% grow at Fuze Fuze. to more this enterprise accelerating now base, Enterprise accounts innovation ARR XCaaS see we year-over-year of years. given next with

in non-GAAP Our in in gross continued operating high and resulted year-over-year focus The profitability gross multiyear fourth gross flow. non-GAAP and at margins in with increases XX%. of a on revenue operational service resulted quarter higher improvement margins sequential profit cash excellence

high focus a partner business. and on margin in strong lower-than-expected operating revenue Total range usage combination million we our due higher and outperformed continue also $XXX.X growth end full the range professional as range. was to for guidance small CPaaS resulted below million within annual a basis guidance expectations positive delivered revenue our revenue sequential retention income engagement. customer cash other our and non-GAAP above Fuze flow generated revenue of a services we result As and of positive year. was revenue product longer-lived and $X.X as flat on our business with operating approximately an in the guidance ARR Service to

XXXX beyond, and fiscal increased us deliver to flows. operational look leverage operating to XCaaS in commitment and As innovation cash will our to continue we discipline investing allow and

in Sam year roughly fiscal ranges non-GAAP from greater fiscal XXXX. an As increase X.X%, discuss implied detail margin 'XX and our will operating guidance of operating for margin revenues

integrated market than ever income and in double mobile increasing massive transform and year flow, opportunity And transformation, in experiences to the committed to cloud-based grow. a we sight than continuing of fiscal more I we operating Digital remain potentially margin are customer Given an creating delivering operating environment, more 'XX. increases workforce believe, agile line current through have to employee while communications. cash robust and to workplaces

uniquely and our is positioned the XxX center to contact UC this platform fully-owned As and on unified capitalize XCaaS opportunity advance only cloud-based industry.

and We are right our modern advanced that new in believe build today's in drive approach investing future while intuitive experiences growth, balanced margin environment. to the value was approach interface. analytics customers leading a I operating and innovation offering increasing percent-based to innovation AI-driven cash that the and flows shareholder will

little and total but our a in today evolution Pacific Asia region. discussing business our us a I our in strategy revenue, time of Turning area CPaaS QX. for our remains to the of an small area for business. the CPaaS focus to of portion spend this it represents want relatively strategic

lead As drive economics we're over the provider volume region, in leader extend low-cost in improved a and position our time. strong and to that unit

was The ARR several been the been a reflected enterprise Usage resulting reduce dropped million in revenue enterprise in has enterprise few an decline Until and service decline focus on gross in half volatility to customers. in of customers by dollars. to is ARR. revenue and and customer unexpected sequential solid quarter well significantly the higher-margin our growth a dollars. large diversify last strategy this CPaaS of and QX to CPaaS profit contributor strategy and working base the Our usage has

quarter business. customers tough to bump continue a we're fix grow CPaaS and to actively working was existing new and customers speed business this diversify are hit working While we to a the We it. further to add with their

X,XXX XCaaS acquisition transformation Greater CCaaS drug Strasbourg help than in education of XxX to burst customers XxX facilities enterprise, and the University XxX customer reduce public XxX part eight additional opportunity with further than Research the support across XCaaS flexible our university A mortgage industry a licenses, X,XXX of including work. CPaaS geographic The Research and full of turn new Adoption examples and for was initiative periods. enhance Teams UC/CC Manchester Think customer provides in countries. for with estate Radian, aspect the is XXXXXX few recent industry-leading turned new times extra X,XXX beta testers customers. robust XXX our products using efficiency busy overall range will clinicians the analytics By XCaaS Voice to XXXXX expands increase agent of communications SMS and and and productivity, upgrade base to nearly over and XCaaS total and to staff new and important growth they is XxX powerful higher clearing The XCaaS Teams regions, real a platform an solutions knowledge-based support our confirm enterprise sector. based the will more XX,XXX as to customer for Fuze needs empower and admissions provides than power cross-sell of university in public an Teams Think for verticals robust over customers trials to Microsoft for XCaaS hybrid of XxX. the serving portion response with API, digital recruit and XxX customers students. has digital Voice and channels business, a appointments employees. Turning providing The for include of call during to Microsoft to addition XXX services more our engagement experience, therapies. more improve been they over of with of their new of broadly UK Voice handling enterprise Cross-sell XXX bringing which Microsoft in implementing software with strategy. of as health XCaaS and

continued some the Some analytics business serve UCaaS significant delivers The contributor benefits XxX world. adding to efficiency. integrated investments sporting by transmission conveyor premium XxX seats supporting brands increasing renowned clients. and Teams center power golf’s around most wins in businesses for XxX Habasit ARR, global XxX and to better XxX as to employees customers gain and XCaaS their reporting contact CCaaS UC with the as expand routing licenses Habasit in and QX the expanded platform a X,XXX an Voice growth optimal and to build manufacturer solution significant their customer in their quality they insights to achieving of Starting belts, momentum also quarter. added goods fourth processing recognize enterprise direct the A and landing include support America. nearly was the

global help Microsoft phone our its XxX year UC Teams Indianapolis part certified Contact welfare Microsoft the our multinational follows center coverage to top XxX universities, over Motor earlier strong for XXX, continues and feature-rich capital routing be first, with this XxX cloud, Team competitive and Voice for of who China. customer for new new Center us Teams ticket for for Voice announcements Our XxX Voice turned which Teams in XxX XCaaS its complements global of to And for becoming Teams delivering competitive creates solution Customers in the as included initiatives. for and customer logos. our industry-first an provide of Indianapolis XX,XXX UK's reach an and QX of the driver home Thailand. is capabilities, and a drive how University Speedway, advantage for the In Indonesia, the They a the industry expanded students fiscal example integral of premier quarter, the to with contact important leverage of access the student fourth Bristol integrated one excellent our direct world selected This channels. to experience. an solution choosing Teams to racing the differentiator we organizations. to for an is analytics another will is a solution XX and to Contact Philippines office, of This Solutions Microsoft the significant and for solutions Center their

than Trek global available global bicycles. GDP. communications up XxX cloud-based for countries UCaaS Voice is Examples cloud capabilities, They and covers distributor center of largest over world's include and US Teams of part territories, selected XX Trek the X,XXX providing from of countries. new a more XCaaS Our public a in omnichannel with network of XX% the XX key now digital Microsoft wins telephone transformation, support full XxX ago and as Bicycle. customer to their in year switch support manufacturing and XX a contact employees is global solution

strengthened European to Fuze customers space expectations in integrate support fashion are partners among additive group, been has employees support presence, We've office cost to fee from and organizations seeing for is response Additionally, been the Fuze acquisition Customer Teams moved combined examples We with French instrumental around for our winning and deployment. Voice the the XxX business and globe. and excited just to brands the million of and luxury business. French-speaking XX swiftly, and in over by and across the strong the was structure. world-renowned from stores Fuze quarter. streamline the the UCaaS of will France after turned of above the impact the retention closed a we some XX,XXX XxX XXX the the was the acquisition, $XX two the locations revenue lead transaction

road seeing result operating an was accretive the already as are Fuze, R&D together. map quarter profits teams work and innovation to a As acceleration around and this world we

and experience. agent and XxX both Conversation extends all uniquely Communications We XCaaS more contact Agent Center team XxX as product enhance on contact AI-infused browser-based is XxX Agent to speech An than capabilities, IQ, Thrive. of services Thrive, analytics design-led endpoints and interactions and users. Workspace that Microsoft Voice Unified company, and enhance IQ, of tailored evaluation, the voice businesses is interface, delivers their Workspace, capabilities automated to our road Teams IQ, Conversation rapid powerful customer map quality on Communication Teams personalize optimize marketing XxX center user to this Conversation customer customer of XxX Thrive handling a delivers Conversational in progress Microsoft over AI recently implementation XxX ,also improve to and the apply features contact effectiveness Supporting release center SaaS productivity for insights enhancements, and including and year XX,XXX a with a blends across integration. IQ added center performance and the and and XxX analytics, IQ. Conversation management of employees and Contact global conversation formal XxX to since capabilities contact the company agent with XXXX The experience experience to platform. software on example, recent a including transforms application. reporting uncover engagement. through Cloud single compliance. made X,XXX have significant tubing, organization such conversational intuitive capabilities IQ, across XCaaS, supports

an these before been product made ARR now customers vision Agent customer more in retention shift to now great priorities available, of shows, the Enterprise a multiple increased the and Channel product exactly, with Best the is With Experience shift in Innovation was very is accelerated quality force been experience from Five Even our engagement improvements represent for Retention ARR. our ARR. channel highlighted including it has half all-time our And generally which reimagine in reflects with emphasis the two again much X's has our across agent Workspace we accounting contribution won. set the A of progress QX releases, that adding driving financially also financial enterprise Customer in response our even Customer Award, outlined levels made just we've unified customer QX and half XxX in one our our high behind before our from the for It the XXXX. comparison as have SLA orders we releases well success. we've at was than first, we platform. the mix to Fuze and of IQ, ago, including for The XxX strategic that the and than customers industry long-term and today. the Fuse added higher on as more to channel our metrics, year positive increased liability our investments engagement performance. of we and enterprise. how platform customers then in record backed fronts: Conversation beta base for and advantages

We our R&D also platform and capabilities. our in especially strategy the on investment XCaaS focused center increased contact

for steady completed progress product our Analytics to of Contact on margin margin a for schedule of full and the We enterprise capacity accelerating results including $XX at we launched innovation. quarter throughout milestones. March our we flow achieving over shift for to for long-term and to on of our launches. year and these financial a financial up enhancements hard the Center commitment teammates our result, stream the continuous points year-over-year. positive gross our achieved XxX and finally, cash And with million We've our operating progress operations front a new acquisition the and on basis achieved ahead work from year. thank As improved their and of track performance in made are targets and I intermediate Fuze capabilities here model. achieve and product expanding our in our margin operating the our want tremendous We target improvement delivered XXX

to the the we base long-term all bold expand Enterprise build year The stakeholders fiscal on operating which but in made current and will we've and the criteria increase innovation the it we stage the performance. our our our continue over long for over guidance term. prudent profit ranges value. seen revenue leadership, will balanced XXXX value reflected will our our our and confidence adoption environment XXXX This feel all in on foundation XCaaS tighten the of to for focus our one strategy me near-term to is to customers investment trajectory which set and margin created growth approach in right The gives capacity and our long-term margin. growth, we build strengthen favor Given ARR for is for moves

innovation on QX to fiscal on organization. road excited For we to to efficiency the forward we call will our now 'XX, year driving sharing reporting work look the plan focus over as future innovation our call. and progress development our sales our turn I Sam. incredibly continue We're operational XCaaS in as by teams and across well are doing will map quarters. on I excellence the

gross good time, challenges million to by which the our we performance. million broad generated post in XX% to experienced the We and At small service $XXX impacted guidance $XXX We chain, revenue year-over-year quarter during continue Thanks Dave expected. CPaaS non-GAAP quarter other to and $XXX.X fourth range. year-over-year, an in $XXX.X driven million the accretive improvements below same business segments delivered revenue and a still than the Fuze and service million of completions income agile range. saw more some of We afternoon. turned to back in remain professional supply the quarter our disciplined. our increase operating and We exited a solid margin, cash revenue and earnings our with financially guidance and for XX% revenue slightly increase bit was $XXX.X milestone bounce of million in services. opening but constrained $XXX.X in inside an million Total

during to the volumes quarter SMS. March. shortfall February a marketing stated, late The $X stopped in the half CPaaS approximately second programs shortfall in million customers of when Dave was due was large dropping expectations and to As CPaaS lower-margin the in few

are pressure favoring We growth facing carriers they some conflict. inflationary margins over international are from when and revenue

than income. demand. and to to better super accretive retention. been leverage than was used cost back revenue non-GAAP costs Service office $XX.X driven higher and mid-February impressed whole a executing plans We expected cost operating in in and for service scale combined. have total operations on humming we are some at Fuse did higher million along therefore had reduction and region make I'm has a of it and revenue Integration accounted quickly how the to our Fuse million. in of we expected incremental further forward, Looking $XX.X from revenue lower revenue customer by was drive

strategy, out already and customers ARR have some ARR small was up XX% started Total the be started Fuze will the Enterprise and from moving year-over-year. XxX core of up long-term comment tenets of XxX business ARR commitments year-over-year. and small merging at XX% the X% to of A Mid-market customer continue better at ratios. is up declining ARR platform nonstrategic of breaking now separately up year-over-year. makes XX% we percentage needs. is efficiency higher and down Since enterprise is business additional rates longer segment us is $XXX XX% year-over-year reporting, about revenue. of Small declined ARR, the request. absence Growing the retention will because was report center and our business to would quarter's to a their shrink for million but efficiency X% the have We lower to and XX% of not expect it its of total we our contact of ARR metric total ARR. year-over-year. for as one Fuze due We XX% end business bases, to

gross we Fuze segment XX.X% are below, expected. take items happening fourth at non-GAAP driven margin lower quarter cost longer, CPaaS being Total achieving came For in by otherwise margin programs the expense than our in reflecting because Fuze mentioned need at will to they complete. unless this expected minus until faster gross XX.X%. continue The service Fuze Non-GAAP from improvement than that at COGS in quarter XX.X% deployments came margin all other and was noted. for savings

had continue impact. XCaaS the our we minimal than unit As revenue operating on total a quarter-over-quarter so other higher-margin gross X% as Non-GAAP COGS. such as margin to improvements less grew quarter of and focused to of and profit drive $X.X represented business revenue decline the portions reminder for in million other

quarter changing to to ahead sequentially by first product between Looking flattish applications gross margins be CPaaS. generally mix the expect and overall we driven

quarter $XXX.X combined per in guidance in item the the fourth range with call. Turning in and This for had with step-up variability. I of I R&D we slowly There guided COGS future, total Fuze the by sales The revenue significant is plus to drive said million. in Total XX% our be and can expenses. operating our We to efficiencies some gave future spending G&A total growth. on expectations. than areas. the $XXX several basis incorrect In quarter a spending below marketing reallocations measured that's reason as quarter line was would million we expect more throughout in revenue on up total four-quarter quarters business. The and first grow XX% $XXX.X total some and OpEx the was fourth as our to million OpEx rolling last at the plus as expect line total quarter-to-quarter came was plus year-over-year

the the quarter restricted investments at approximately balance cash, Total cash, Turning and sheet. fourth $XXX.X ended million. to

$XXX the about lower-than-anticipated expected cash, is than cash collections solid and balance restricted better integration was $XXX.X Quarter-on-quarter Excluding costs. million by million. driven by total down fuse

Fuze. from for quarter. million collections. RPO $XX up approximately the so million overperformance announcement third in Fuze and the climbed and that million to in quarter-on-quarter. far $XXX January. Cash the row. Back we $XXX shares As by a from $XXX price $XX at and in on share second conservative deal XX% million in Deferred a time and operations over $XXX purchase approximately Fuze or remain so was cash million free the of to fourth to million for total reminder, remain non-GAAP quarter, ahead of we and About up guided when the paid Revenue revenue income. the million to XX% the year-over-year of accretive remainder cash The in management million operating from quarter based to for the consideration non-GAAP X.X up the driven over quarter at and was flow in was cash came strong came expectations over $XXX and in the profitable was acquisition good. XxX. positive was We closed

fuse We take it some owning will in savings cost expect time. but further

from was closed. short our reasonable guidance XXXX grew Business we and which flow know ending a for Operating CPaaS performance first but did to Next initial comments we market positive We further is team revenue cash return establishing we follows; for $XXX the the XXXX, anticipate in to the a growth. and gross flow year account expense than June year were We margin guidance environment recent have do. Taking fiscal are quarter better programs free to the many XX% The managing above few of operations here. fiscal quarter Thank us just we infused positive year. job running. and have about revenues employees expected and work XxX due was management fiscal including current cash solid, expenses. each mainly new a of business got during sport performance you. million, XX, to XX% as a XXXX representing for we range we to service in million to year-over-year $XXX be been

Fuze's revenue be between range total We $XX million $XXX million. to expect $XX million and We revenue $XXX anticipate of million. that contribution of will

We the supply endpoint weekly. news have shipments for visibility hardware chain uncertain on the changes

and We X.X% improving targeting X% margin operating balancing are growth the in profitability quarter. with to a range for

representing service to range revenue a In as We anticipate to and that of in XX% anticipate the be mid-XX% million approximate in $XXX be we XX% XXXX total growth. guidance reported January are number. to $XXX for XXXX suggested the we We revenue million. this revenue million, we starting ending $XXX growth range to confirms when be March $XXX million in our XX. range would fiscal follows; of approximately to guidance year-over-year had

agile to FY gains reinforce you. our to questions. X% a for is I strong continue And financial opportunity. we'll XXXX, profitability. confident improving In with growth XXXX. closing, forward now year, X% operator, remain further In goal. We our X% we open exiting balancing above strategy are and look in And operating the like see be to to range fiscal Thank in margins foundation a organization. market our we'd and in remain an for We and

you. Thank

question-and-answer begin We of Siti line The the session. [Operator Instructions] question with the Mizuho. from is will now first Panigrahi

You may proceed.

how seeing on is as Hi. you're would last questions. offerings. for you with the how doing logos. and Thanks mentioned you the against as Panigrahi This quarter, How in for But, congrats taking with Microsoft out direct matching again, routing with job characterize you the great Obviously, is competitive feature-rich are new is quarter. a up Siti dealing you your team? their [indiscernible] that my space? called competitors And environment

Dave Yeah. This is Sipes.

see direct routing trends is, with they're compete routing We users popular direct And Teams biggest in solution. we Operator platforms. And Communication it and Enterprise solution. are the of their fundamentally we customers the through One have to direct doing looking routing Connect solutions. very integrate

wins by obviously you of mentioned us. for having our a it's lot call As today, I significant throughout that the see a impact a impact positive

Additionally, market. users we've in to channel as offering, in best in having the Operator continue solution other at recognized the the look as hone we the the we been be And national that less solutions market direct Teams that to feature-rich servicing Connect, only which the in in less and be tends who tend global, enterprise. carriers to or service the they're providers, siloed routing

not and users contact as every frontline Teams employee powering users endpoint but just in workers the users. those to center organization, app, well the functionality brings offering as Our also

trend with a lot we've many big for is today. the But is it customers the a initiative surface. communication powering of prevalent So in scratched really the it's And big our as that a our of messaging customers. is application Teams platform just

really direct towards or they've so solution. our routing And attached move

That's very you helpful. mean, into upside to FY Thank guys guided follow-up, same? million after maybe you estimate the FY just about I is last you. or expect Do And one in XXXX, to quarter. about it earlier then, XXXX CCaaS opportunity that $XX any cross-sell

$XX No. the Sam. contact still larger customers. think is average mean opportunity Yeah, we I'll the sales that center months the cycle these take This for size with million. a one. we're at enterprise especially I look -- mean, I No, XX is is

in of more I up sort of anything if would expect show stuff So fiscal any to that XXXX. in

But size number. market to the sort is show last market that and don't soon. we've think ballpark up of the presented going to call that's correct. right verify seen Further I I activities it's that anytime opportunity think we continue the

Okay. much. Thank so you

you. Thank

Thank you. The America. line of of next with question Bank is from the Mike Funk

You may proceed.

had lessons lower you comments Thank go just the usage quarter. couple I wondering large any customer be you that in to if that about drove What based ability back event. are that? to I'm patterns? The on away for there usage? from lower lower took learned forecast, the from A just if the enterprise Just what usage Yes. the customers questions. your could, to or customer

Yes.

those Dave. who of for So, is conditions campaigns large the QX. them. working drop-off them are and customers pulled and those from right campaigns our is some standing in CPaaS several within reintroduction of we're marketing This customers the second this of with good market back in for We're from some all offering when with half was the

term, we base broaden the through addition doing continue customers. longer to new And For and we've been that. customer of diversify

a we have to very continue with pipeline and diversification. that the We do robust

have lower leveraged Additionally, campaigns with support customers costs, leverage to regional some of already to in be we scale large in the marketing which performance our help drive large can these of then place plans these the to market.

if implied quickly. close us expectation I revenue And in million it you'll Fuze think you know back that you slightly date think with mentioned number adjust about for the December line could so more take revenue. on gave I and the would simply came I your in then then just If $XX I contribution. have

you the to back difference were And so, your the expected. the close? post how that churn if there breakage as comments being after breakage Is deal? So just much about tying the projecting merger

"Hey than new had GCC And the came our really bit right? around we as quarter. thought, actually less of The a retention thought No, stronger thought maybe $XX expected. it as no more at cetera. the had et for is of of jumped organization expecting we term. numbers good us better the that's little I we did actually retail shape. can originally has it really million." quarter in some take it. Breakage one fuse But take actually came had That's we said a we're it Maybe offline came proud little $XX base how churn concerned or than was in a on we than million So math better a top the in me. miscommunication for I'm far in on

Thank Okay. guys. you,

with Funk. question Morgan from Mr. you, Thank Meta Stanley. The is of line Marshall the next

proceed. may You

Understanding with of and as of for quarter the positive kind guidance look CPaaS just me. on customers. those for we to couple forward A relationships side ongoing year. Thanks. both you the Great. for that questions fiscal your But have of kind the

are kind come some customers? the the one. Are expecting as you flatlining from second what sort one into first embedding back and customers? far Just – of as let those that's one those jump answer you Maybe you of guys I'll you are then

Meta Yes, Sam. I'll that this is one. take

that through do So the the usage-based look quarter year. low exited where per our and and next we since quarter. of both We kind we were to at they the for components, ran quarter how they

we've data assumed continue. we Obviously, try of will but low points take to always whatever they at generally run sort and latest a it positive, back So the if that come be level would it through. they're

too as installed in shape into in outperformed clearly you think question you then how you just mean the Fuze base twice just last account turn And kind Do just The as fiscal of is of as were ahead year aggressive the XXXX? noted kind the similar I you guys throughout base this or should expectations Okay. and that next slightly. first of kind on had quarter assuming basically those Fuze better into look industry your of the we that think we taken for that turn that fact head to you've quarter. turn are that guidance of

first they're is contracted. in a real quarter this with well those So customers. state healthy They our and are

levels. quarter So came in standard I would industry the they to say closer

was conservative, through forecasting-wise the think looking forward still year. I probably next

for more customers on our As those under belt the so a we feel propensity of get retention. long-term better have quarters we'll

will it I Thanks hand Perfect. off. Okay.

Meta. Thanks,

of Thank you, line with next Evercore. Levine from The Peter question the Marshall. Ms. is

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Sam Fuze my Maybe for organic about Thank taking mean think if I we XX%? think anniversary you the growth once I high-teens model questions. call it you should about

bit be I little think, about a right four-plus I you're me asking mean quarters. I'd now. aggressive

XX% bit to think the now right maybe I is that. a in out. so XX% I'm start looking right now where And of would I'm number little than conservative mid-teens I at more type something

-- I start. but get would more me that's ahead a right Let little further bit now where

into guide? yes, Just international. Okay. taking the to given with XX% deals current delays? any I are international factoring of the you you Anything color close longer front of come sales cycles, you your can terms then us what or Thanks. in seeing And are XX% of environment? And incremental revenues share on think, from kind

Yes.

is with Our and CPaaS international APAC predominantly our UK business.

business talked public CPaaS good in on addition a well quarter in sector and last in the And that us. to and trended It previous. enterprise concentration on the we brand about focus to we've continues has it robustly So UK market. consistent with grow quite have for

seen haven't macroeconomic that any market. effects adverse trends from we in So

my taking for Thanks questions.

The Thank Craig-Hallum. you, with from question George line Sutton Levine. is Mr. of the next

proceed. may You

going guys. Hey, George. detail just potentially color any of the quantify on that's if XX% just kind for is to ex-cat of if percentage Thanks on UCaaS base and for customer customer the the from could Appreciate XCaaS. curious from your of This a but could questions. your my I'm taking on you provide ARR, uplift you on excess being James

reverse order. All right. in I'll take these

market see this we provide -- UCaaS sort itself through number. amount just on of the is is more the installed dollar propensity comes different price of So moving trend. a dollar UCaaS buy. a our of XX-XX the seats enterprise we our we of And then the customers towards there's of strategy generally I we've but to that that XX-XX but our more roughly said and in difference base, of XX% CCaas. out per the think our then of deal to magically of number seat skewed of call previous when data it just number didn't Obviously, of works of And you out. terms the empirical be Obviously, roughly relative amount a see it's a good up gave ARR. working in terms We to customers in

terms in than in but color, of be customers So, size. number of larger XX%, it some a smaller the number giving of you a customers just would

in service great then Makes sense. margins And the were quarter.

comes curious bit? will little in or of come as a kind CPaaS those those are back sort sustainable Just of

Well, CPaaS came initiatives running back really improvement a is this strong. on gross programs. They lot -- may a and come of in a margin little of bit. stage been I days lot mean we've

those so flow through. And you're seeing

had huge to sort of cost Fuze were is to to expected the We we transitioning able structures than also margins -- start team. out originally. Fuze our we a shout and those had this gross faster

pieces of internal structure faster with than So, I just programs our combination being expected. think and a getting the our there moving it's benefits Fuze to margin closer

for questions Thanks Okay. taking my

The James next is Thank Blair. question the line William Breen from you. with of

proceed. may You

and COVID? any the the to sort it of seen you environment Thanks Thanks. Has questions. for starts markets sort changed given sales taking in the the of together? fits change come Have how

This legacy cloud integrating is what Dave I Microsoft communication on decisions to say deal and would pre-COVID relative saw Sipes. Enterprise We to especially we're focused and to finding integrations earlier see those segment move that into customers with the right making in I platforms. normal solutions -- cycles the we're messaging those seeing and Teams apps talked we their about

those pre-COVID So, that would and deal cycle what enterprise XX-month I deals. would progression seemed to similar in of for account an pretty say nine, have been frame that normal

pretty from synergies a Thanks. Sam good from trying maybe sequential jump to of think perspective a in just deal? model you sort in that G&A for and take the on And about Fuze How of then terms do basis. up

mistakes I guidance quarter this So, right. last I the the made of when is classifications I we that get to line one of some tried didn't per highlight gave

two So, things.

highlight in of tried I second and marketing part in the R&D thought. line. And to think into sales just in getting with over to of back on -- just and time you'll take the last Fuze call, and there's costs line to more the going some some what is get we call G&A see some us then that G&A reclassifications it's some the I this time

those associated things. in of to there's Fuze time have We finish just with that. And audit for kinds some and example XXXX

those combination reclassification of cost are talked about -- a it's So, I've the in longer savings term think past. and that I

Great. Thanks.

you, Will the question Power with Breen. Thank is Baird. Mr. next from The line of

proceed. may You

Hey think question. it think about to the off guys, think for that in I How rest this about is just number QX Will. year? Sam of Charlie free for how we a growing taking about for about should the of that? strong the cash flow. quarter. the we It the wanted should levels, Thanks or was Should we Erlikh on ask the

We'd continue like to to grow. see it

flow. non-GAAP a will As through Dave That means mentioned, generating are biased some very influence And to more biased cash we're now, bit flow. little margin, we little more are will right items free that we're little cash to bit reconciling a which a There focused. bit. flow on

we margins, three, year. to cash correlated operating operating expect it above grow thing see So, throughout exit our won't pure that's will a margins but flow highly be we'd darn close. it target pretty since non-GAAP And to non-GAAP be the to like

Awesome, thanks.

Thank you.

I on then, the yes, one just -- And more could. Microsoft if

economics, On difference just through or the could talk about of went the also, there can on the you would the something be Thanks. from versus seat for routing a Is really a color percentage business that direct that the profit? Microsoft Teams directly, in a XxX revenue of helpful. economics us you Teams the sale platform? in any that the give the that or you pathway if unit the just the quarter like just And you on of came size new like logos direct

Okay.

about the Let economics. me talk

Teams. for Voice it's So,

selling margin closing. just we're of deals being of a But the a agnostic handling rest the be it And in lot a so, portions when is built is ASP, larger it's Teams And made video to the chat we what up -- and business. size the smaller voice. margins, the see the of it lot the product the generally you of it's we're with built kind this since while of sheer we to handling Microsoft is enterprises, because we're SKUs our of

CCaaS the quarter-on-quarter call, quarter-on-quarter will growth around we last that high we cetera, didn't this count very call XX% CCaaS we of Teams. grew as see that calls. future I terms number of in new say, and report to take logos, suggest In I'll et on for did and advisement it continue

maybe next And so, give tidbit of we'll answer. and call that you I'll solid kind with leave quantifiable you just a more promise

Great. That’s Thanks, helpful. Sam.

Thank you.

Ryan next you. and is Koontz from line Co. Needham The question Thank with the of

You may proceed.

of terms and line to us in the margins on Sam chain give that revenue the you professional think there think forward? other how supply on Thanks. can about I going services question,

board with -- this we’ll all right-sized and Fuze. them Other get of see time so that. to services is all that. of things Fuze talked Two brought is so when needed those existing revenues, to aligned about we overtime continue ongoing on and deployments, organization. earlier where We large we their on. Okay. here. very professional is we longer-term when one costs I Number areas one purchased period the brought And sort a Obviously got we've you

we'll If on the hardware a of side, bit boy, of mid-quarter is of right Fuze a it transferred end mid-quarter, you kind around around we're moved I'm the that's and not up now a again. tough relax We of of little the and I'm for anything that saying then, And chain tightened quarter Personal saying beginning one of now. supply are crazy. customers. up the kind quarter utilized, the at finishing fully right and which doing it Organization, Service deployments simply get in the then had

going relatively a the of but are people line just lot when sound side, relatively on real weird our I supply drop the know that we see So, to item. there, for chain it revenues costs that's fixed that's fixed. one. a And difficult

of it. get And so we and when some the economies then margins revenues out the just get scale worse increase of can

focused think other the a margins improvement see a is there. area longer in but are one. It's on you'll bit an we So, term revenue little tough I

Got it. Thanks, Sam.

you. Thank

question the VanVliet next with is Thank Matt you. The from line of BTIG.

You may proceed.

that Thanks question. the if the and CPaaS closer Series where Hey, maybe of Thanks. net just you're wanted you're use popping and system. taking maybe kind of even across your seeing are those capabilities some the at X see traction? adding for cases my afternoon. to kind I a And most of finding good new at existing business of little up look looking some customers

Yes.

Europe. us Asia some for in So and CPaaS to Southeast tends be

Indonesia, some well or in to driven as are that see primarily where synergy integrated text center SMS business. sells and Singapore, customization looking That's Thailand call contact countries European into contact countries sells campaigns. with as like sells do So to mostly center that with cross-sell XCaaS API customizations into on we our

migrating how Wonderful. seeing terms around right. you to at to getting now are contact you that trends maybe ability as as look the pricing to And to center at the All contact the center legacy then in are existing a customers cross-sell whole, just cloud? and of continue market

Yes.

So, to obviously, grow our with having XX% there we're a success ARR. with continuing XX% growth robustly XCaaS of now of lot and

putting a are that. into lot innovation We of

across You've Agent visibility the ability the which as like speech analytics, approach seen our customers. and professionalism unified things for for really and Workspace, center IQ, such Conversation allows whole have queues contact features, quality traditional more to the to management takes cool organization supervisor informal product manage to

see So those see both like that growth. are the areas innovation we're seeing I marketplace migrating We driving that already in direction.

that You market the and in hear players replicate industry trying attach other and CC the UC whole about to across it. strategy.

why and continue like feel have get working we good innovation a that to on that that's even up that lead area to map for higher. us percentage in XCaaS lead our lengthening road I so we're hard So

All Wonderful. you. right. Thank

today Mr. enjoy This VanVliet. our call. your you today's rest joining queue. There are session Q&A day. concludes and as conference Thank waiting no for you all as of questions Thank the well additional in