8x8 (EGHT) 8 Aug 232024 Q1 Earnings call transcript

Good day, and thank you for standing by. Welcome to the Q1 2024 8x8, Inc. Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. advised conference be being Please Instructions] that is today's recorded. [Operator

the would of to like I call Investor to Patterson, And Kate hand over today, your Relations. speaker

review Today's you, Wilson, Sam Officer. Executive Kraus, will Thank afternoon, Kevin Chief first everyone. and Chief Good include results operator. our a our of Officer; with our quarter agenda Financial

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

from on forward-looking including our me strategies. in risk Before you slides to that as made the products focus plans includes started, our update forward-looking involve them. these today on and performance statements uncertainties reflect filed financial cause report let on business, obligation in remind undue we analysis to statements have and that put as Any may as factors statements this our get materially actual forward-looking We flow future risks in as we discussion presentation about the our not our vary cash well results they SEC. profitability with increased and our and statements forward-looking reliance or today caution call described as of you no growth and to

in will to comparisons, the measures generally closest comparable not measures be earnings this financial website measures with principles and on our or provided at year-over-year release Investor accounting accepted Relations that Certain in accordance together of investors.XxX.com. reconciliation in non-GAAP these call, were cases on U.S. some discussed prepared with GAAP. the is A GAAP

Wilson. over our Samuel turn I'll call With to the that, CEO,

earnings my of us thank today. appreciated CEO for is everyone the as and joining Kate, Much XxX. call first you to This

the at months, I've length investors employees, our the company. the of and direction to Over six future customers, spoken past about

allocation. strategy we recall, capital on a focus flow growth profitability with made year-ago will innovation-led through you and the disciplined cash balance improving a our to decision As

to as I today for we commentary In where will the headed financial remarks. this doing further journey how end our end, well path the it's add on plan To see a some is give investors the at transparent this my tomorrow. the business who you progress of company own and about you the of of as areas company QX results, long-term will our improvement. both view

let's Now QX into some highlights. get

investment has to introduction drove been increased solutions. The in the closed new increased of rates, and R&D We our positive. from reception new products win customers customers very significant enhancements The existing expanding solution XCaaS of remained Teams over seats choice base for users. contact our XxX routing direct year-over-year. for the our expanded Microsoft by XX% deploying and of We Voice Teams, center customers

We formally reach extended with U.S. operating and profit XX and global Lisa the we Chief of center contact our industry and partners, UK our delivered flow. record the to ecosystem expanded management cash of roadshows innovation in our hosted as hiring Revenue launched Martin strengthened countries, Officer team the and and number non-GAAP

with Our driving industry. innovation-led the be in business awareness and seems to strategy new resonating customers,

and and largest CPaaS also customer, multimillion value. with closing As Average customers, our an total business per Contact of we pipeline higher focus we and new all closed demonstrated high was win our integrated are Center-as-a-Service the a larger with enterprise the on contract lead a right we ever platform, at time excluding quality building value deals. ARR dollar

and on are while. strategic business continued customer a in The making year-over-year growth posted and mid-market, progress segments. for ARR best both three growth metrics increased all its all rates small increased our in we initiatives. year-over-year business demonstrated Ending sequentially These small the performance

churn These Our Fuze downsell about below million and and partially ranges. service total enterprise results sequential higher in a and than base. resulted the revenue offset installed revenue guidance decline were by revenue usage $X CPaaS headwinds expected in in

Fuze and are and brief a you tide doing each. give turn the to me Let what of in with we CPaaS explanation happened what

or First, had actions on QX during negative last quarter, stabilized SMS fiscal impact business decision customers higher carrier pricing CPaaS, We to along other between had margins. we negative margin lose forced accepting a to but traffic the business We move and the the negative price sound choose made forego traffic. some to channels. passing didn't to thought CPaaS prices increases to customers. caused We were

number usage but increased of In sequentially, fact, the CPaaS customers declined. enterprise

With our transitioning traffic a are from SMS intermediary in an to strategic business place, customers. new we to leadership partner

opportunities We to dynamic to and while have due authentication, our add cost volumes. value space routing, continuing fraud to with identified maintain white detection advantages

a the we innovation-led other believe in our business in areas model growth. result approach resilient will As more of business, durable and

increase Regarding downsell the base. Fuze and churn within the in

As we has outperformed the been our Fuze margins to last over and have flow. acquisition said gross has It margins, year, the cash expectations. operating on accretive calls

in subscriptions resulted the I did is However, a the smaller due sequential more metric. actually this churn platform, moving up customer in of This to ARR customer lower-than-expected was some but lost off in came they right-sizing platform renewal to we decrease for from of a in portion forward-looking as in as upgrades. see significant increase revenue the in QX downsell a as well believe due customers Fuze QX. ARR the for

above forecasts. To our clear, the of customers be retention original Fuze still is

all flow. quarters increased the our a enterprise cash expanded We focused customers, While major to and acquisition base, few operating may resources been our doubled the innovation, the on it margins us. success take customer for a has rightsize and

of infinitely quarters economic of Pegging spending exact of of shifting at service revenue for the the X% total run the caused is $X difficult reduce us revenue times. It best more the us CPaaS to full-year and performance during and the by another X%. three integrating fall to and complex company a guidance at for Fuze In revenue by tougher ranges revenue caused and revenue guidance our below QX ARR billion roll than rate beginning total times, from service less QX lowering is company operations of midpoint. combination, priorities. headwinds The and forward the

believe successes green growing and in forecasting the that have takeaways them. our our the the our seeing I achieve business revenue attention early in core shortfall results important from shoots and strategy. forward, The solid XxX heightened CC versus to the One, and aim moving are: UC we was and quarterly most our guidance, we resulted management is fixable, challenges on guidance are innovation-led of While

to Two, in fiscal we operating a to expect compared to margin fiscal XX% XX% Three, income the higher second. generate in year. operating to achieve on representing XX% we XXXX non-GAAP significantly still least to More growth last cash at year, from that compared of operations XXXX. expect for

of quick That's a review our results. QX

and workplaces; quarter. learning. an across enable great of we lanes empower agile and we to users One, machine three, we harness two, last we Let's talk about artificial the three organization deliver power experiences; presented the intelligence customer

are one, XX% and quickly be seats Teams of Microsoft continues total XX% more our for to us. For count Microsoft to stellar a I'll seat Teams. than integration We year-over-year say, connected product grew

to contact the believe continue to vendor are let's I we offers Teams teams evolve the were are capabilities believe value. we Last Microsoft Simply And the center. first speed integration. user to we leading put, cloud-to-cloud Further, quarter, product. far. not the still UCaaS We we uptime new best by certified forget, added onboarding that we true

users AI. two Turning and to three, empowering and harnessing Lanes

sales in greater drive promotional in durable activity to It is for the low creation, quarters, investments growth, our in to is discussed As ROI we innovation strategy execute. R&D reduce focus and organization in simple but to ROI investments increase difficult efficiency. prior high

even products activity While the and show R&D in in immediately, in our revenue new time promotional decline up in takes drive it on to shows more to up growth investments statement. for income time

new UX dynamic Contact Supervisor for our Take Workspace, Center.

First, work year acquired value week. feedback adopters this We we on enhancements again, organization. based it a last by product ago. on via released built transaction was started early engineering teams to of March, customer the added this We our we in showing and Fuze, released the

been influence process, has retention, workspace The rival meaningful ever. early a our track new resulting on sales It begin our on ultimately more now to in as adoption to and customers. agent customer have adoption cross-sell with fantastic product fastest should higher response

in the the The showing time revenue XX months. up could XX time be dollar to to long as from first as invested

a drive period. believe years. continue we our for we deliver value shareholders to competitive invest that innovation, last As will and our are I an extended building growth for and moat to revenue this customers in can

Let better customer couple deliver processes through of experiences. a are transforming walk examples to me customer how XxX solutions

CPaaS. first example improve can and The with how field customer their full plus transform XCaaS services customers the reduce to UC highlights CC their plus costs through capabilities of experiences processes

shown Group's before play triple case visual and slide a use is Housing case. study in the representation after this of Platform earnings

to plans Housing homes XXX,XXX using largest and For employee of Platform housing elevates Group every customers. and year. those Housing don't that build Platform over homes Midlands associations around one with is than more XX,XXX engagement has the And X,XXX customer new in ambitious the UK Group XxX. know,

Platform our service show problem which SMS including HQ video consultation so customer Housing's center, to can the is to SMS can When link, via runs personnel, representative. is a contact send needed, customer a calls the pictures, issue. the CSAT and SMS so a they Platform home their on XCaaS, the visit If messages are offered survey field Dynamics a XxX the videos to follow-up contact via in as are Microsoft the XXX and Reminders center interaction. notes as saved are concludes related automatically system. Housing's Details to well sent customers the

remotely is visits over Platform to of the able month and without XX% no This achieving an per industry savings visits visit of a Housing need of visit service Platform Further, diagnostic from mean a repair resolution speeding resolution. Group implementation, close Housing longer personnel. requiring £XXX to quarter per nearly total home Following time number times. can up over month and the calls faster been XXX field visit. per almost saving of calls realized a has average at £XXX,XXX repair cost reducing

solution businesses. customers to cross-sell integrated maintenance is across millions industries, replicated XxX healthcare, can large. CPaaS and annual insurance, Adding kinds half usage service our could repair center for of add contact type in opportunities think just This of all of be revenue. tens The

usage Assistant drive has subscriptions the product, potential introduced Another directly Customer digital or recently revenue ICA, increased through to Intelligent and fees.

chatbot, our digital finding effective to simple Early customers for resolution AI-enabled incredibly easy times are reducing generative inquiries. ICA deploy and at it is

month-to-month interactions growing the in phase. double We and adopter have we early quickly April are still gone and over XXX,XXX since digits are

case a were another use In case, more of SMS. cases case, deployment, pickups. major of being In than so weeks schedule ICA successful one PC handled that previously more were XX% they cases. via shuttle ICA for the more weeks, adding a call deployed adding the the center interaction. to and deployed went without manufacturer channels and that single around Within use to service taxi warranty use initially live within authentication agent UK-based was It

workflow. chatbot with of integration advantage beyond technology the ICA tight extends chatbot the center Our to the into the itself contact

even issues, trained AI issue. most simple resolving at good the advanced are resolve bots every While bots cannot best

meaning customer all live again agent. sometimes, meta a to wants happens, seamlessly transfer with just reauthentication, redoing steps agent And we to the the same data the more with attached, deal no can over frustration. live When the no customer customer no and the this

assist chatbot Further, the to feed if any vendor. into different given the from we can a information agent even it's product,

agent in prepared So less is a journey CSAT bot time. successfully The an the than fully issue better the can higher resolve retention. off site, of resulting rather live to and the in orchestrated part island customer and becomes

ICA amazing our early adoption voice with moving center. beta Our the into same version contact now phase of into integration is

experience. UI/UX live these agent delivering which them the approach to ROI is enable platform customer can great able increase effectively investments. existing the based or tools possibly through have open Further, In the leverage use our customer every superior APIs agent outcomes. We Our examples, can't Webhooks. on with is but better and on a widgets, case, build both integration prior can possible productivity capabilities we tools, for business

their With third-party orchestration, solutions intelligent bots customers analytics services use build the our providing specific reporting, own use build our to case. core can needs. They can like solutions or and purpose-built to apps, choose platform and routing, tailored deploy their for

technology is as with ease to a to it whole integrate integrations with partners with There be trade-off of the appears Our love partners them. other functionality life way versus making to loosely native don't stitch multiple feel use often because we new software. customer the together of for compete the case between center contact bring no and ways and

and early it partnership journey January July. started announced our formally We in in

companies doing more We today overwhelmed These recognizable, even things. have and more response than and the positive are XX funded amazing have been onboarding. partners highly with some

and lot functional have We coming. more fully integrations released a today

in naturally use for ecosystem Our will mature. as expand center the cases the AI contact

of their pace. they protects flexibility map For solutions and want adopt and the security, customers artificial of center, at may now, technologies but potential reliability, recognize that want intelligence their in use, own investment. contact new a to the ease They road the

Neuroskeletal platform. HealthFirst, some detailed Partners Hobby, Sotheby's, United our our Sovereign of Housing and Horizon are like approach These figures XxX to are Customers wins earnings TCVs deck. and seven the in committing embracing with

improve they into vary XxX geography size, to industry, outcomes the future. their by well Although customer customers chose today and and these

Don't Zoom. on the listeners product word July market Amazon, its share Guru, ahead and it. Metrigy success, mix, and based Dialpad, inaugural customer of business customer our MetriRank, Avaya, for UJET sentiment market XX, believe Contact Vonage, higher fifth, ranked momentum, Center-as-a-Service, take On guessed I Content and Talkdesk, share, financials, XxX most than would have released

Additionally, customer we ranked highest obsession. in We live customer sentiment.

constantly better. rocks and it's center getting Our contact

achieve of you, we and our innovation everything period Let's growth the cash Creating turn managing us is growth to revenue what financial and fundamental shareholders continuing for while for we excess investors. returned and in over customers value invest by company a within all extended this is do. to framework time I to an our exceeds will to a this means investors. where flow believe expense as

want financial period. This out XXXX fiscal we path is not guidance, year to lay to want the XXXX our fiscal through I rather on. time be for year path

debt expect period, We by year. XX% This than paydown committed our investors expansion, to growth. through operations flow by to mainly revenue We more million an cash driven and the over remain average retirement. increase be per a will $XXX margin from of returning combination debt of to

already $XX returned have million have $XXX to go. million and We

accrues value from taken to share the on pioneering Since have programs we the stock dilution a reduce over time. basis, employee per step our

to work through While be grants. the full benefit as of is realized expected vesting we previous years the to three take

XXXX. outstanding We be fiscal expect roughly through the in X% diluted annual per increases year to shares

with price ESPP. include excludes and aligns This will purchase stockholders any stock depend believers stock employee does on actual and remain well This the employees interest. acquisitions. having We or that shareholders'

I long-term, we combined from flow north X% growth the share, metric items cash operations shareholder per annual operations three want to increasing share the value, cash to be dilution while financial consider to from what star. less. drive reduce Over These is important reducing or most for will our

proof reported from is shares over is we the a while period. X As fully diluted point, flow quarters, are share not count service of four we have This by generated say not million down about over time our concerned operations last million revenue over cash to growth. $XX that

are. We

with in We expect to exit XXXX year fiscal XXXX with low single-digit growth growth getting and XX% and then fiscal XXXX possible. show as soon to to goal revenue as of acceleration a X% fiscal year-over-year

company. employees. but of doing doable of be to continue and building to sales While very recent is under our financial Growth future by innovative early we these Revenue the Martin. not will go-to-market products, may in Lisa road and all our our for in improvements believe expanding product developing invest response customer the that above, the we is the confidence This the linear, us. process or accelerated products, channel achieve come Chief smooth always on will and the of performance new pace My the new leadership of built the Officer, new introductions, our we

right So do, quarter not the plan. it was know and was more in while have step have the we a a and perfect, to direction, work we we

partners, journey investors, you, our customers, with want to our our our Lastly, going for on thank this I employees and us.

will over And with Kevin. turn that, call I to the

cash from the non-GAAP quarter, afternoon, for disciplined flow range and expectations operating Thank flow our fiscal and non-GAAP our Sam, margin exceeding gross XXXX delivered margin operating and you, cash We operations. remain exceeding for and good and everyone. first strong income financially in guidance

consecutive prepaid We balance cash XXXX. positive XX% income non-GAAP outstanding flow we and of for than operating and million more from XX operations have quarters, debt, delivered since have $XX of August total the

Total guidance range. revenue decreasing million, million, service our X% was and revenue $XXX.X for below $XXX.X slightly the quarter was and year-over-year both

above prior CPaaS the in was impacted by Pacific our higher-than-expected customer region and was Our base. our revenue and revenue challenges million, Other quarter quarter business Fuze for slightly with in expectations. performance the line in $X churn continued the Asia in

year-over-year quarter churn and ARR up base. $XXX X% was customer headwinds our million CPaaS inorganic reflecting Total at end, in and downsell

headwinds. our the the CPaaS given the aforementioned prior in the the ARR enterprise is CPaaS affect consequently, total segment. ARR, Excluding accounted did customers flat enterprise ARR approximately for flat ARR. Most usage, total And of ARR versus and CPaaS year-over-year. disproportionately grew enterprise and X% headwinds Enterprise year sequentially was XX%

to and are Turning sequentially basis QX XXXX. expenses XX otherwise points please points XX.X%, up than and margin, items Service noted. revenue gross all in operating non-GAAP operating basis higher remember came profit, gross margin at unless XXX that discussed

continuously been margins service healthy. to managing of our are has service goods of remain and Part have the cost sold in expect margin reduced portions in We we of that investments business. revenue gross increase year-over-year gross low-margin our

are and said, X.X% have to services and in in again, has sign this timing X% pure a Other of XXXX quarter quarters compared as positive revenue Other profitability gross gross growth, will due revenue again for improving growth. improved deployments came well that. we of negative and revenue the at the QX profitability we margin focused versus XXXX, in to mix. recent product As as over improved shows in currently professional vary on XX.X% QX margin quarter,

XXX Overall, XX fourth gross up XX%, an sequentially. year-over-year and basis margin quarter points basis points was increase of

on our approximately first products year-over-year, growth X% gross higher services. quarter the we value grew revenue as of and overall XXXX, improving of focused highest For significantly dollars than profit profitability

we investment product Research revenue, with making are development target expenses. XX% our in continued line the XX.X% indicative of operating to innovation. of was Turning and and in

quick a comment R&D. about Just

ROI generate to world-class it awareness that innovation making product these deals. We long-term investments investments will multiple for believe to takes of and not build quarters are sustainable we lead software, growth. as close show an will Some the making time

Sales revenue QX from XxX and efficiency. organizations marketing Fuze XX.X% target and of integration were XXXX. and expense our on improve was QX marketing markets Sales the in from marketing and million expenses revenue, $XX.X and as focus we XXXX down XX.X% and from resources of sales synergies realize of down realigned to

XX revenue we and benefits a sequentially compensation, $X.X of lower incurred taxes and employer General basis down costs. as administration million as was and percentage points

approximately more actions was or our than as marketing measured the At our Total non-GAAP prior of plus strategic it strategy. should plus realignment spending reflected COGS R&D, where cost fiscal and point, plus half is believe million structure year-over-year in the second drive sales we down our this $XX and by G&A year. overall to cost be XX%

expenses Our pay include guidance will for increases. step-up of the

The XX%. margins approximately achieved operating and non-GAAP sequentially. XXX% of and operating $XX.X over guidance improved to combination up million, up of and We XX.X% QX XX.X% lower resulted in in X% our margin profit of gross expense operating year-over-year versus fiscal

Starting press was a results we operating GAAP is XX.X% quarter, are our QX to which used this year-over-year. adjusted of release. up adding $XX.X million, revenue reconciled XXXX commonly QX XX% adjusted EBITDA in and metric, EBITDA, XXXX

$XXX Additionally, over of we four past quarters. EBITDA over the million well adjusted generated have

Cash payment from to driven timing flow and of collections from operations the positive strong than paid and been XX% strong interest dates. was the Cash has due record activities $XX.X quarters flow interest for million cash cash multiyear more consecutive quarter-over-quarter. XX A profitability, operating quarter. increased for by lower-than-expected

amount of reduce investments the principal debt. cash we plan using we will excess $XXX balance remaining In operations. our fiscal above convertible cash cash maintain and million notes of this to the million calls, XXXX $XX and the or earnings earlier from generated in the stated As XXXX, at to repay means use

impact fiscal interest significant rate by which move cash operating will the possible, immediate quickly adjustable will a flow reducing our we as XXXX, repaying term on loan we cash payments. and have As into a begin as

XXXX at debt to commitment was quarter value prepaying million from in the $XX to value cash sheet. ended repayment million restricted and return This million equivalents the Turning cash term principal of loan. approximately million, with our balance $XXX fiscal in fiscal Total flat despite to through the shareholders XXXX. prior installment $XXX quarter our on fourth the first $XX

cash future when notes Given our February the current XXXX do currently not remaining they any anticipate with XXXX. issues balance flows, cash we and expected cash mature repaying with convertible in

customer the $XX million $XXX approximately performance or RPO, million commitments. on Remaining obligation, increasing for quarter-over-quarter year-over-year healthy multiyear million quarter, and $XX was

Additionally, deferred prior $X.X the revenue increased from XX% quarter. or million

base, While highest has we the experienced our to retention be four-plus organic continues customer XxX retention years. customer been challenges in in it inorganic

we reduce earlier, changed noted mix for to future significantly employees cash our we grants. As equity compensation equity

so dilution appear years, programs. reduce three due take we typically this income to to is as we proceed the this stock in schedule But on expect time employee vesting statement. path, significantly will change Our to

the shareholder Sam very these financial to reducing value in way As our flow time. North are from is improvement while increasing stated and we his best dilution on cash over in commentary, driving Star, build metrics shareholder operations focused as

guidance, to to of today. want turning Before we some reiterate what I said

value a pay our if time we As focused for those shareholders take decisions even off. by making are company, creating very to on smart decisions

mix value are longer in with programs, we higher and small much pace are marketing new enterprise, drive For reducing innovation the durable which long-term sales stock equity-based are leading of shifting investment from example, which a with from we business goal to issuances to are and long-term share due the a which a we of has moderate we customer. potential cycle CCaaS, has employee investing will a sales to compensation, growth,

changes aim these a business. sustainable growth profitable to of and All build

reflected changes, guidance our throughout While is plan maintain in these XXXX, year. the we cash are making fiscal to flows which and we for strong profit

for early cash earlier, dilution in by As to I our higher investors in employees. The in cash raises as to significantly compensation future equity implemented we aims annual a expenses shareholders in quarter mentioned July. starting step-up will second borne exchange notice reduce compensation the

intended for this competitive talent and which compensation our have us will employees, ownership to reduce attract still stock-based of is employees shareholder the our dilution employee in plan, minimize over due many volatility through cash purchase time. we All to swings for compensation retain but compensation opportunity equity change and can help trading the equity market. By for stock market

and a operating new QX. the for structure giving I'll guidance for non-GAAP the factored step-down guidance is compensation This reason be primary margin in into is

sales For down operating of of fiscal fiscal appropriate from XX% of and XXXX. expenses, we be the revenue throughout in and revenue and sales in level XX% marketing expect plan to to investment marketing continue to making in XX% the of range XXXX,

our expect product to revenue on as contact we percent innovation R&D focus efforts as path and to R&D continued XX% plan strategy, We product and our a which center. investment on of of about continue the emphasizes in customer-focused remain

We as in extracting are areas. more work focused leverage improve efficiencies we on from our those time to G&A functions over operating

at establishing for as fiscal we approximately of $XXX guidance quarter service ending in QX follows: comparison revenue from XX, and minus million second and to XXXX, have in are We transition to for at the September midpoint challenging the year-over-year growth midpoint the representing remain $XXX range million, as in approximately we a other still areas. CPaaS, XXXX, X% of anticipate be flat the we

and approximately $XXX with $XXX flat quarter prior the the X% to in revenue million, representing to million total of range the anticipate midpoint. at the minus midpoint be at We growth year-over-year

Our guidance slight as implies midpoint of vary other customer-specific based deployment revenue can sequential other in revenue decline a schedules. on

margin between and We anticipate gross XX% XX%. be to

we are XX.X% and noted as between compensation XX.X% margin cash increased employee an We earlier. operating as targeting

and pay as compensation normalized flow more greater positive, operations from and but expenses to expect a We sequentially interest, we modeling we are cash amount down of cash cash collections. be

QX includes that but accrued was rate cash is and of that to term interest monthly payment XXXX QX million. $XX interest adjustments. million $X payments loan interest expense. subject note to cash related $X million expenses the expense in interest approximately that change paid We early anticipate of our can as interest Also XXXX July, interest Note approximately

share million vested purchase count of XXX increase a ESPP The through RSUs shares We weighting our full a well shares. that approximately of fully as quarter the as program. reflects June diluted estimate of in

updating service million, at XXXX XXXX, $XXX We million, range the We growth year-over-year low expect revenue first in the by X% revenue ending XX, the midpoint of total be growth million of to year-over-year the $XXX the March we negative less year. to than growth headwinds followed representing $XXX.X as fiscal second be we to are negative approximately for of single-digit in anticipate million X% range guidance in half to at midpoint. half as the the $XXX.X follows: anticipate representing

Similar to we of revenue margin and service rates to XX%. higher anticipate expect rates, gross XXXX. basis XX% on half to second total We be growth fiscal be in revenue year-over-year between growth a the

to headwinds. our fiscal continue we a margin year provided and revenue achieved between achieving for XX% guidance delivering healthy consistent the margin our in earnings delivering as operating shareholders margin We versus despite focus operating guidance on with the our to This X.X% solid is anticipate call operating a committed XXXX. prior current XX% we and the in are to

shares million, for shares averaging XXXX. anticipate debt that loan expense paid diluted in again, term interest monthly growth $XX We and interest million share other operating approximately rate We directionally flow interest operations count our to expect noting to the collections, cash million fully and cash QX interest $XX from per to be aligned adjustments. to timing from differences XXX payables. We of subject for guided quarter estimate with million is non-GAAP profit debt X trends, debt subject

on from that focus for we cash on Fiscal company from key operations continued while and At This revenue In as a fund in to transition. product in growth closing, time. our cash the expect us focused at on I focus us strategy to investments year margin per period building operating we are future. is very areas. time, operations re-acceleration financial enables XXXX, profitability, an strategy some show the fiscal And the metrics. continuing sustainable believe same flow and innovation-led this share a flow XXXX we of correct for is engine to remain

flow forward cash team strategy deliver our and like concert generation. our to customers to continued to to more look I to contact this cash our growth, on entire robust delight solid the to thank working would the center in of the market I profitability deliver flow profit and commitment capture for quarter's and XxX execution and to of

we are Operator, for ready questions.

will Instructions] first of Thank question Catharine Rosenblatt. coming from today our Trebnick you. for [Operator And be

Your open. line is

for taking question. Hi. Thanks my

job you nice of on from in today I the but guess reported? the what Microsoft your That's market, I And really, SME? a seeing are yesterday, had terms seeing Sam, buying So we in this really you have. RingCentral pull-through, what support you first patterns you target question, are the but and are pivot,

congratulations far and of hitting terms is, your they and are are CX in target five. top And the them Thanks. you the how what's being the now, in it the RingCentral second your your Ring product with following versus looks one on same Metrigy on market? like take lead

All right.

asked patterns market. buying crept see first target CFO, I smaller are the we've increase those Look, in an of what deal in deals, things. you think maybe on cautiousness a market. kinds bit POC, into We authority the that's signature longer a seen there's some little in sizes, order So our times longer the it

we think this also. I mentioned quarter last

bit further So of we've sales elongation a there. the seen in little cycle

increase availability. go promised. next as the customer And in nothing At expect I that that the the Workspace in of of exiting And are announcing, customers of interest same general amount beta early, here things in of to now generally absolutely site we the Intelligent probably Supervisor time, coming interest to is a month it's right? – lot a seeing of probably, beta new we've that's we shortly massive continue relatively that digital a mean, those seen in Assistant, but we or just we're that. we're and out – the lot two, we're usage have available,

generate lot money the lot them where of we continue products revenue, basis, transition on in a that go-forward yet but of to and in a new amount material generating we're aren't cash flow. a interest a So of there's

So some doing we're in think a think, I while target cautiousness the our economic things I company. some markets, as and headwinds, there's just all right

In XXXX. us, RingCentral terms following been themselves. guess we've them of they're I in up I'll I that market is the would in for It's say let XXXX. showing nice all speak since

right about we they'll by where be think I XXXX, today. are

Thank you.

Instructions] [Operator coming Stanley. Morgan our question. your next for you will Jamie be And of from Thank Reynolds question

open. is line Your

guys. Hey,

activity deal could AI they that You've guess the way Meta. looking And an think sales you are for for about Or is, they you're I guidance? it that seeing got for is just what do elongating customers they're uptick to to secondly, functionality, contextualize for cycles? yet? adding looking the are tied Jamie on still XCaaS? about know then I another in talking guess Thanks firstly, question. taking

Okay.

part, So looking in And they the first what for what was AI? are Kate?

It was deals. the uptick in XCaaS

deals. It's on XCaaS

We've So an in got got early the number ecosystem July. at talking We've for two the are we've space. example, fact Cognigy, integrations we that about So our got, related out out other, nearly We've the there. there to We've a out road each on open intelligent got been announced MLAI customer on XX. of partners the ecosystem. right? assistant our

lot of uptick. of That's And so there's the driving a a lot activity.

We World on the floor show to in tone year CCW, or much Contact would me. this Vegas. deploy two, the I Center were was say very at Las help in the And want I next

looking help. for I your And to answer first onto an think of looking not combined, itself. AI they're for make are part help island to they So second part and kind

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much. Right. Thanks so

Thanks, Jamie.

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quarter. taken trends specifically Funk. really trends, I'm those for price the going Hi. the some question, additional and be manifest Yes, CPaaS how you thanks appreciated quantification I'd color expect commentary Any the on on during on actions some forward? Michael appreciate would for incremental the carrier to

Matthew. Thanks,

say So business CPaaS we're would same look, say seen We've the I not one sort of the the seeing this. in only our commentary. some of also competitors

because raising The prices they've I moving quickly are prices and aggressively, away. of so a mistake I think and it's actually people very raised think so aggressively. the kind traffic are carriers

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Matthew. Thanks

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today, as for all session for Q&A well Thank the concludes as conference for you concludes this And the you. today. joining. Thank

may all You disconnect, good evening. and a have

Thanks, Lisa.

Thank you.

You are welcome.