Summary
8x8 reported total revenue of $181.0 million for FY2025 Q2, down 2.2% from the prior-year quarter. Gross profit was $123.2 million, down 3.7%, and gross margin slipped to 68.1%, down 1.1 percentage points. Operating income was $7.2 million, up 377.5% and a swing to a profit from a prior-year operating loss. Operating margin was 4.0%, up 5.4 percentage points. Net loss was $14.5 million, and the loss widened 95.2%. Diluted EPS was -$0.11, and the loss widened 83.3%. On a non-GAAP basis, operating profit was $21.5 million, adjusted EBITDA was $26.7 million, and non-GAAP operating margin was 11.9%.
On a year-to-date basis, revenue was $359.1 million, down 2.5%, and gross profit was $244.1 million, down 4.8%. Operating income was $5.8 million, up 245.2% and a swing to a profit, while net loss was $24.8 million, and the loss widened 9.0%. Diluted EPS was -$0.19, flat versus the prior-year period. Operating cash flow was $30.5 million year to date, down 30.7%. Capital expenditures were $1.6 million year to date, up 2.0%. The company reported its 15th consecutive quarter of positive cash flow from operations. Non-GAAP net income was $12.1 million, and non-GAAP net income per diluted share was $0.09.
Management pointed to sales of new products increasing more than 60% year over year, led by AI-based solutions. The company announced 8x8 Active Assessor, expanded Video Elevation capabilities for 8x8 Contact Center, extended AI-enabled interaction summarization across the 8x8 Platform, and advanced language support and real-time accuracy powered by the OpenAI Whisper model. It also doubled the number of supported languages for live web chats and expanded text-to-speech capabilities to over 40 languages. Partnerships with Regal.io and Descope were announced. 8x8 was named a Leader in the 2024 Gartner Magic Quadrant for Unified Communications as a Service for the thirteenth consecutive year and in the 2024 Gartner Magic Quadrant for Contact Center as a Service for the tenth consecutive year. Deferred revenue was $37.7 million, up 13.5%. Remaining performance obligations were $800.0 million, up 2.6%.
The company used a new $200.0 million delayed draw term loan plus about $29.0 million of cash to repay the entire $225.0 million outstanding on the prior term loan. Subsequent to quarter end, it retired another $33.0 million of principal value of term loan debt, reducing total debt principal to $369.0 million as of November 1, 2024. That represents a total debt reduction of over $173.0 million, or 32%, over the past two years. The 2024 Term Loan matures on August 15, 2027, and bears interest at Term SOFR plus a margin of either 2.50%, 2.75% or 3.00%, with an initial margin of 3.00% for the fiscal quarter ending September 30, 2024. Scheduled principal repayments include $22.5 million in fiscal year 2025, $37.5 million in fiscal year 2026, and $47.5 million in fiscal year 2027. For the third quarter of fiscal 2025, management guided service revenue to a range of $171 million to $174 million and non-GAAP operating margin to approximately 10% to 11%. For the full fiscal year 2025, it guided service revenue to a range of $690 million to $701 million and non-GAAP operating margin to 10.25% to 11%. Risks include macroeconomic headwinds, especially for the installed base of more than 52,000 small businesses, customer churn, competition, and the possibility that cost reductions as a percentage of revenue could hurt revenue. The company also flagged uncertainty around its increased emphasis on profitability and cash flow generation.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2025 | Q1 FY2025 | QoQ | Q2 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $181.0M | $178.1M | +1.6% | $185.0M | -2.2% |
| Gross profit | $123.2M | $121.0M | +1.8% | — | — |
| Gross margin | 68.0% | 67.9% | +0.1 pp | — | — |
| Research & development | $31.3M | $32.1M | -2.6% | $34.2M | -8.5% |
| Sales & marketing | $64.9M | $67.1M | -3.3% | $68.7M | -5.6% |
| General & administrative | $19.8M | $23.1M | -14.0% | $27.6M | -28.1% |
| Total operating expenses | $116.0M | $122.3M | -5.2% | $187.6M | -38.2% |
| Operating income (loss) | $7.2M | -$1.4M | +621.8% | -$2.6M | +377.5% |
| Operating margin | 4.0% | -0.8% | +4.7 pp | -1.4% | +5.4 pp |
| Net income (loss) | -$14.5M | -$10.3M | -41.3% | -$7.5M | -95.2% |
| Net margin | -8.0% | -5.8% | -2.2 pp | -4.0% | -4.0 pp |
| Diluted EPS | -$0.11 | -$0.08 | -$0.03 | -$0.06 | -$0.05 |
Risks
MD&A states adverse economic conditions are expected to continue to adversely impact the business, and the installed base of more than 52,000 small businesses continues to experience macroeconomic headwinds. Total revenue was down 2.2% in FY2025 Q2 versus FY2024 Q2 and down 2.5% year to date.
Service revenue decreased 1.5% in FY2025 Q2 and 1.5% year to date, driven by a $3.8 million quarterly decline in subscription revenue from customers on the Fuze platform, partly offset by $1.1 million higher platform usage revenue. Other revenue decreased 17.9% in FY2025 Q2 and 26.2% year to date.
Net loss widened to $14.5 million in FY2025 Q2 from $7.5 million in FY2024 Q2, and operating cash flow was down 29.5% in the quarter and 30.7% year to date. Gross margin was down 1.1 percentage points in FY2025 Q2 and 1.7 percentage points year to date.
The company drew $200.0 million under the 2024 Term Loan and repaid the 2022 Term Loan, recognizing a $12.0 million loss on debt extinguishment in FY2025 Q2. The 2028 Notes are trading at a substantial discount to principal, and the company may make prepayments or retire debt in amounts that may be material.
General and administrative expenses decreased 28.1% in FY2025 Q2 partly due to a $7.2 million decrease associated with Fuze, Inc. legal, regulatory and tax matters, including a $3.2 million benefit from adjusted accruals versus $4.3 million of expenses in FY2024 Q2. These matters remain a source of potential expense volatility.
MD&A says customer buying behavior and demand are subject to macroeconomic conditions, competitive environment, contract duration, churn, upsell and down-sell, renewals, and payment terms, all of which have caused variability in results and may continue to do so.
SaaS KPIs
All quarters →Non-GAAP gross margin
Non-GAAP Operating Profit
Adjusted EBITDA
Adjusted EBITDA Margin
Small business customers
Summary, forecast, risks and KPIs are extracted from 8X8 INC /DE/'s SEC filings for Q2 FY2025 (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.