Summary
8x8 closed fiscal 2026 with a fourth consecutive quarter of year-over-year revenue growth and its first GAAP-profitable full year since 2015. Total revenue for the quarter ended March 31, 2026 rose 4.6% to $185.2 million from $177.0 million a year earlier. Full-year revenue rose 2.9% to $735.8 million from $715.1 million. GAAP net income was $0.1 million in the quarter against a net loss of $5.4 million in the prior-year quarter, and full-year net income was $1.6 million compared with a net loss of $27.2 million. Full-year GAAP diluted earnings per share was $0.01, against a loss of $0.21 per share a year earlier.
The growth carries a real margin cost. Gross profit slipped 2.5% to $117.1 million in the quarter from $120.1 million, and gross margin fell to 63.2% from 67.8%. Full-year gross profit declined 2.1% to $475.0 million from $485.3 million, with gross margin of 64.6% against 67.9%. Mix explains most of it. Usage-based revenue, which spans communication APIs, digital channels, and AI solutions, grew more than 70% year over year in the quarter and accounted for roughly 23% of service revenue, up from about 14% a year earlier. Fiscal 2026 usage-based revenue grew more than 50%. Those offerings consume more network and carrier cost per dollar of revenue than subscription seats, and management said it is working to widen margins inside the usage portfolio as that business scales.
Operating leverage improved despite the mix drag. GAAP operating income was $3.3 million in the quarter versus $0.4 million a year earlier, and operating margin widened to 1.8% from 0.2%. It was the seventh straight quarter of positive GAAP operating income. Full-year operating income rose 24.6% to $18.9 million from $15.2 million, with a full-year operating margin of 2.6% against 2.1%. Non-GAAP operating income was $19.8 million, or 10.7% of revenue, compared with $17.7 million and 10.0%. Non-GAAP net income was $16.6 million, or $0.11 per diluted share, versus $11.3 million and $0.08. Full-year non-GAAP operating profit slipped 4% to $75.1 million, while non-GAAP net income rose to $57.5 million from $48.3 million.
Cash generation was uneven. Operating cash flow was $14.4 million in the quarter, up 145% from $5.9 million, and marked the 21st consecutive quarter of positive cash flow. For the full year, operating cash flow fell 12.2% to $55.8 million from $63.6 million. Capital expenditures were $0.6 million in the quarter and $3.7 million for the year, both up from a year earlier. Cash, cash equivalents, and restricted cash totaled $95.0 million on March 31, 2026, versus $89.3 million a year before. Total principal debt was $323.9 million at year end, down from $353.9 million at the end of fiscal 2025 after $30.0 million of term loan principal payments during the year. In April 2026 the company prepaid another $14.5 million, leaving $107.5 million of principal on the 2024 Term Loan and $309.4 million of total debt. Stockholders' equity rose to $146.6 million, and deferred revenue, current portion, was $36.7 million, down 2.8% from $37.8 million.
Management's fiscal 2027 plan keeps the usage mix shift in the outlook. For the first quarter of fiscal 2027, ending June 30, 2026, guidance calls for non-GAAP gross margin of approximately 63.5% to 64.5%, non-GAAP operating margin of approximately 8.5% to 9.5%, and non-GAAP diluted net income per share of $0.08 to $0.09 on roughly 147 million shares. Cash flow from operations is guided to $10 million to $12 million. For the full fiscal year ending March 31, 2027, guidance calls for non-GAAP gross margin of 62.5% to 63.5%, non-GAAP operating margin of 9.0% to 10.0%, and non-GAAP diluted net income per share of $0.33 to $0.38 on about 150 million shares, with cash flow from operations of $45 million to $52 million. The CFO tied the outlook to macro and geopolitical uncertainty and the continued shift toward usage-based revenue, the part of the business tied to AI adoption and communications APIs.
The risks here are company specific. Subscription revenue keeps shrinking through churn and down-sell, so the growth story rests on usage. International revenue climbed to roughly 39% of total revenue from about 33%, which adds currency exposure. Management also flags lower-than-expected customer adoption, competitive pressure including rivals' use of AI, inflation, and the possibility that product or acquisition spending fails to generate the revenue or efficiencies expected. Goodwill impairment is another disclosed risk if the stock price stays weak or growth slows. On the product side, 8x8 moved AI Studio into early availability after the quarter, took 8x8 Engage and its Integration SDK to general availability, and counted more than 5 billion digital interactions across its communication APIs in fiscal 2026.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2026 | Q3 FY2026 | QoQ | Q4 FY2025 | YoY |
|---|---|---|---|---|---|
| Revenue | $185.2M | $185.1M | +0.1% | $177.0M | +4.6% |
| Gross profit | $117.1M | $118.2M | -1.0% | $120.1M | -2.5% |
| Gross margin | 63.2% | 63.9% | -0.7 pp | 67.8% | -4.6 pp |
| Research & development | $29.5M | $27.2M | +8.5% | $29.9M | -1.5% |
| Sales & marketing | $59.9M | $60.5M | -1.1% | $66.8M | -10.4% |
| General & administrative | $24.3M | $20.8M | +16.9% | $22.8M | +6.6% |
| Total operating expenses | $113.7M | $108.5M | +4.8% | $119.6M | -4.9% |
| Operating income (loss) | $3.3M | $9.7M | -65.6% | $419.0K | +694.7% |
| Operating margin | 1.8% | 5.2% | -3.4 pp | 0.2% | +1.6 pp |
| Net income (loss) | $106.0K | $5.1M | -97.9% | -$5.4M | +102.0% |
| Net margin | 0.1% | 2.8% | -2.7 pp | -3.0% | +3.1 pp |
| Diluted EPS | $0.00 | $0.04 | -$0.04 | -$0.04 | +$0.04 |
Risks
The filing warns that as AI solutions perform an increasing share of interactions, seat-based license revenue from the installed base and new customers may decrease and may not be offset by consumption- and usage-based revenue (much of it from AI). The company notes it may be unable to replace lost seat-based revenue if customers use competitors' AI solutions, making revenue difficult to forecast.
Fiscal 2026 revenue mix shifted toward usage-based offerings, which carry higher network and carrier service provider costs per dollar of revenue than subscriptions. Consolidated gross margin fell to 64.6% for the fiscal year ended March 31, 2026 from 67.9% in fiscal 2025 (down 3.3 pp), and to 63.2% in the quarter from 67.8% (down 4.6 pp), while cost of service revenue rose 16.2% year over year, outpacing 3.2% service revenue growth.
Service revenue growth of 3.2% for fiscal 2026 was underpinned by a $51.4 million increase in platform usage revenue that was partly offset by a $29.1 million decline in subscription revenue tied to customer churn and down-sell. The filing repeatedly flags churn and potential churn rate increases as a driver of declining revenue growth and losses.
The filing names well-capitalized competitors including Microsoft, Alphabet, Amazon and Salesforce, as well as CRM vendors increasingly bundling or acquiring AI contact center capabilities. It warns competitors may spend more on AI development and that increased reliance on CRM integration and partnerships is critical, so any partnership reduction or termination could harm revenue.
As of May 8, 2026, the company had approximately $201.9 million of 2028 Notes and $107.5 million of the 2024 Term Loan outstanding, with a substantial maturity of the 2028 Notes due in fiscal 2028. The filing notes the 2028 Notes are 'significantly out of the money,' requires a large stock price increase to convert, and highlights covenant restrictions and refinancing risk.
The company states its increased emphasis on profitability and cash flow, primarily by lowering operating expenses, may not succeed and may have unintended consequences including a further reduction in revenue. Total operating cash flow fell 12.2% to $55.8 million for fiscal 2026 from $63.6 million in fiscal 2025.
The filing warns that if the stock price falls below Nasdaq's $1.00 minimum bid price for an extended period, the company could become non-compliant and face delisting. A delisting would trigger a fundamental change under the 2028 Notes Indenture, giving holders the right to require repurchase for cash at 100% of principal plus accrued interest, and the company states it may not have the funds to repurchase.
The company carries substantial goodwill, intangible and long-lived assets and performs annual impairment testing. It notes that a decline in market valuation of its common stock, lower than expected revenue growth, adverse profitability changes or unfavorable macro conditions could require an interim test and result in material impairment charges.
General and administrative expenses rose 10.1% for fiscal 2026, driven largely by an increase of $10.9 million related to regulatory and state and local tax matters. The filing discloses that several jurisdictions are conducting audits of the company, with potential tax payments, interest and penalties in excess of accrued amounts, plus evolving AI regulation such as the EU AI Act.
The filing states competitors are increasing compensation and paying more on average than the company for the same positions or offering more attractive equity. It warns of difficulty attracting and retaining senior management and engineering, sales and professional services talent, and that greater equity issuance to compete for talent would increase stockholder dilution.
International revenue grew from approximately 33% of total revenue in fiscal 2025 to approximately 39% in fiscal 2026, increasing foreign currency exposure, with significant engineering operations in Romania near the Ukraine conflict. The filing also flags EU data transfer restrictions and customer reluctance to use services hosted in the United States.
SaaS KPIs
All quarters →Non-GAAP gross margin
Non-GAAP operating margin
Adjusted EBITDA
Cash Flow from Operations
Summary, forecast, risks and KPIs are extracted from 8X8 INC /DE/'s SEC filings for Q4 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 2, 2026.