Summary
8x8 reported total revenue of $184.4 million for the third quarter of fiscal 2023, up 17.5% from the prior-year quarter. Fuze continued to shape the top line. Excluding Fuze revenue, total revenue rose approximately 1%. For the first nine months of fiscal 2023, revenue was $559.4 million, up 22.5%. Annualized recurring revenue reached $698 million, up 22% from the end of the same period last year. Enterprise ARR of $400 million rose 30% year over year and represented 57% of total ARR. The company ended the quarter with 1,309 customers generating ARR above $100,000, compared with 907 at the end of the third quarter of fiscal 2022.
Profitability improved on a GAAP basis. The operating loss narrowed 51.9% to $18.1 million, and GAAP operating margin improved 14.2 percentage points to negative 9.8%. Net loss narrowed 40.3% to $26.0 million, and diluted loss per share narrowed 39.5% to $0.23. Non-GAAP operating profit was $18.3 million, up 485% from $3.1 million. For the nine months, net loss narrowed 50.9% to $63.7 million, diluted loss per share was $0.55, a 52.6% improvement, and operating margin improved 12.4 percentage points to negative 12.5%. Management said GAAP and non-GAAP operating margins were at multi-year highs.
Product work stayed busy. 8x8 shipped more than 1,000 updates through continuous integration and continuous deployment, reported near perfect XCaaS platform uptime with fewer than 10 customer-identified defects, added full PSTN support in Ecuador and Slovakia to reach 58 countries, and opened the 8x8 Customer Labs beta program. It was named a Leader in the 2022 Gartner Magic Quadrant for Unified Communications as a Service, Worldwide for the eleventh consecutive year.
Cash generation strengthened. Operating cash flow was $15.5 million for the quarter, up 71.6%, and $35.2 million for the nine months, up 93.7%. Capital expenditures were $0.84 million in the quarter, up 50.8%, and $2.68 million year to date, down 7.9%. Current deferred revenue of $34.21 million rose 45.3%, and remaining performance obligations were $750.0 million. The company repurchased and extinguished $21.8 million in aggregate principal of the 2024 convertible senior notes during the quarter, leaving about $68.3 million outstanding as of December 31, 2022. Two workforce reductions in October 2022 and January 2023 removed approximately 300 employees, mostly in sales and marketing and general and administrative roles.
Guidance anticipates a sharp slowdown. For the fourth quarter of fiscal 2023, management guided service revenue to $175 million to $178 million and total revenue growth to approximately 2% year over year at the midpoint, with non-GAAP operating margin of approximately 10%. For the full fiscal year 2023, service revenue was guided to $708.5 million to $711.5 million and total revenue growth to approximately 17% at the midpoint, with non-GAAP operating margin of approximately 7.5%. The company does not reconcile forward-looking non-GAAP operating margin to the comparable GAAP measure because the excluded items are hard to forecast.
Risks remain. Foreign currency exchange fluctuations may negatively impact guidance, and management cited economic downturns, inflationary pressures, rising interest rates, and competitive dynamics in the cloud communications market. Customer churn could run higher than anticipated. Spending on marketing, channel, e-commerce, new products, and Fuze may not produce the expected revenue growth, and the company may not hit its target service revenue growth or the amounts in guidance. The remaining 2024 notes and the term loan bring repayment and interest risk.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2023 | Q2 FY2023 | QoQ | Q3 FY2022 | YoY |
|---|---|---|---|---|---|
| Revenue | $184.4M | $187.4M | -1.6% | $156.9M | +17.5% |
| Research & development | $38.8M | $36.0M | +7.7% | $27.9M | +39.0% |
| Sales & marketing | $79.0M | $80.5M | -1.8% | $76.8M | +2.9% |
| General & administrative | $27.2M | $33.8M | -19.7% | $29.9M | -9.3% |
| Total operating expenses | $202.5M | $212.4M | -4.7% | $194.5M | +4.1% |
| Operating income (loss) | -$18.1M | -$25.0M | +27.6% | -$37.6M | +51.9% |
| Operating margin | -9.8% | -13.3% | +3.5 pp | -24.0% | +14.2 pp |
| Net income (loss) | -$26.0M | -$11.6M | -123.6% | -$43.6M | +40.3% |
| Net margin | -14.1% | -6.2% | -7.9 pp | -27.8% | +13.7 pp |
| Diluted EPS | -$0.23 | -$0.10 | -$0.13 | -$0.38 | +$0.15 |
Risks
The company disclosed that during Q2 FY2023 it detected malware that permitted an unauthorized third party to access certain data on its network, and in December 2022 during Q3 FY2023 it learned the intruder possessed approximately a terabyte of confidential information from several back-office servers. The intruder made ransom demands that the company did not pay, and the incident could lead to increased costs, liability claims, government investigations, fines, litigation, reduced revenue, or reputational harm.
Q3 FY2023 total revenue grew 17.5% year over year to $184.4 million, but excluding $26.5 million of revenue from the Fuze customer base, total revenue increased only approximately 1%; for the nine months ended December 31, 2022, total revenue grew 22.5% to $559.4 million, but excluding $84.4 million from Fuze, total revenue increased 4%. This indicates reported growth is heavily dependent on the January 2022 Fuze acquisition and its integration.
In October 2022 and January 2023, the company conducted two separate workforce reductions involving approximately 300 employees, primarily focused on sales and marketing and general and administrative functions, to improve operational efficiency. Execution risk and potential disruption could affect its ability to achieve expected cost savings and align resources to critical areas.
SaaS KPIs
All quarters →Non-GAAP gross margin
Total ARR
Non-GAAP Operating Profit
Enterprise ARR
Customers > $100K ARR
Non-GAAP service revenue gross margin
Non-GAAP operating profit (as a percentage of revenue)
Summary, forecast, risks and KPIs are extracted from 8X8 INC /DE/'s SEC filings for Q3 FY2023 (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 2, 2026.