Summary
8x8 posted its first year-over-year revenue increase in nine quarters. Total revenue reached $181.4 million in the first quarter of fiscal 2026, up 1.8% from the prior-year quarter. Management tied the turn to strong demand for CPaaS API solutions, wider platform adoption, and a steady shift toward usage-based consumption, plus a small foreign exchange tailwind. The headwind from former Fuze customers moving onto the 8x8 platform is starting to recede, and the company still expects to sunset the Fuze platform by fiscal year-end. The MD&A shows the mix at work: platform usage revenue climbed while subscription revenue, mostly tied to former Fuze accounts, declined.
Profitability improved on a GAAP basis. Operating income was $0.6 million, or 0.3% of revenue, compared with an operating loss of $1.4 million a year earlier; the operating margin moved up 1.1 points. Gross margin slipped to 66.4%, down 1.5 points, because usage-based platform revenue carries lower margins than subscriptions. Net loss narrowed to $4.3 million from $10.3 million, and diluted loss per share narrowed to $0.03 from $0.08. On a non-GAAP basis, operating profit was $16.3 million, down from $20.1 million, and adjusted EBITDA fell to $20.7 million from $25.8 million. Non-GAAP net income was $10.7 million, compared with $10.4 million a year earlier.
Cash generation softened. Operating cash flow was $11.9 million, down 34.6% from $18.1 million in the prior-year quarter, though the company logged an 18th consecutive quarter of positive cash flow from operations. Capital expenditures were $0.4 million. 8x8 ended the quarter with $82.2 million in cash, cash equivalents, and restricted cash. It repurchased 1 million shares for $1.8 million and prepaid $15.0 million of principal on the 2024 Term Loan during the quarter, then another $10 million after quarter-end. Total debt has fallen by $219 million since an August 2022 peak of $548 million. Current deferred revenue rose to $42.1 million, up 25.0%, while remaining performance obligations slipped to $755 million, down 3.2%.
Consumption-based revenue grew more than 30% year over year, and platform usage accounted for approximately 17% of total service revenue, up from 12% a year earlier. Sales of 8x8 Voice for Teams licenses grew more than 30% year over year. Adoption of the Intelligent Customer Assistant rose 75%, and messaging interactions on the company's communication APIs increased more than 200%. Revenue from customers using three or more products now makes up about one-third of annual revenue, and each of the top 10 new logo wins included multiple solutions. 8x8 also closed its first-ever seven-product customer.
Guidance points to a softer sequential quarter. For the second quarter of fiscal 2026, management guided non-GAAP operating margin to 8.0% to 9.0% and non-GAAP diluted earnings per share to $0.06 to $0.08. Cash flow from operations is forecast at $3 million to $5 million for the quarter. For the full fiscal year, 8x8 guided non-GAAP operating margin of 8.5% to 9.5%, non-GAAP diluted earnings per share of $0.28 to $0.33, and cash flow from operations of $35 million to $45 million.
Execution risk stays high. The installed base includes more than 50,000 small businesses that are disproportionately exposed to macroeconomic pressure, and management flagged tariffs, inflation, and currency swings as live variables. The CPaaS mix driving growth dilutes gross margin in the near term. Legacy vendors are answering with aggressive pricing and long-term lock-ins, and churn could run higher than expected. The Fuze transition has to finish cleanly by fiscal year-end. 8x8 also raised a three-year hosting service commitment from $24.1 million to $54.0 million. Management's own language is blunt: its push on profitability and cash flow may not work, and cutting costs as a share of revenue could hurt revenue.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2026 | Q4 FY2025 | QoQ | Q1 FY2025 | YoY |
|---|---|---|---|---|---|
| Revenue | $181.4M | $177.0M | +2.4% | $178.1M | +1.8% |
| Gross profit | $120.4M | $120.1M | +0.3% | $121.0M | -0.4% |
| Gross margin | 66.4% | 67.8% | -1.4 pp | 67.9% | -1.5 pp |
| Research & development | $28.4M | $29.9M | -5.3% | $32.1M | -11.7% |
| Sales & marketing | $68.2M | $66.8M | +2.0% | $67.1M | +1.6% |
| General & administrative | $23.3M | $22.8M | +2.1% | $23.1M | +1.0% |
| Total operating expenses | $119.9M | $119.6M | +0.2% | $122.3M | -2.0% |
| Operating income (loss) | $565.0K | $419.0K | +34.8% | -$1.4M | +141.1% |
| Operating margin | 0.3% | 0.2% | +0.1 pp | -0.8% | +1.1 pp |
| Net income (loss) | -$4.3M | -$5.4M | +20.1% | -$10.3M | +58.1% |
| Net margin | -2.4% | -3.0% | +0.7 pp | -5.8% | +3.4 pp |
| Diluted EPS | -$0.03 | -$0.04 | +$0.01 | -$0.08 | +$0.05 |
Risks
8x8 states adverse economic conditions, geopolitical instability, tariffs, inflation, interest rates, supply chain disruptions, and currency fluctuations could affect the business, and its installed base includes more than 50,000 small businesses that tend to be disproportionately impacted by macroeconomic headwinds.
The company monitors customer buying behavior, demand, contract duration, churn, upsell and down-sell, renewals, and payment terms, which have caused variability in results and may continue to do so as it focuses on retaining existing customers and expanding mid-market, enterprise, and public sector accounts.
Operating cash flow decreased 34.6% to $11.9 million in FY2026 Q1 from $18.1 million in FY2025 Q1, primarily due to working capital changes, timing of billings and customer collections, and vendor disbursements. Cash used in financing activities increased $17.0 million to $17.3 million mainly due to term loan principal repayments and share repurchases.
Gross margin declined to 66.4% in FY2026 Q1 from 67.9% in FY2025 Q1, a decrease of 1.5 percentage points, and cost of service revenue increased 8.7% to $53.8 million, representing 30.5% of service revenue, with the company expecting delivery costs to vary with service revenue and mix.
The 2024 Term Loan bears interest at Term SOFR plus a margin of 2.50% to 3.00%, with the margin at 3.00% as of June 30, 2025, and $137.0 million of principal remained after prepayments; the company also increased a non-cancellable three-year hosting service contract commitment from $24.1 million to $54.0 million.
The company's strategy depends on accelerating innovation, particularly AI-based capabilities for its platform and contact center, and it monitors the competitive environment; failure to execute could affect customer acquisition and retention.
SaaS KPIs
All quarters →Non-GAAP gross margin
Non-GAAP operating margin
Adjusted EBITDA Margin
Small business customers (installed base)
Summary, forecast, risks and KPIs are extracted from 8X8 INC /DE/'s SEC filings for Q1 FY2026 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 1, 2026.