First Quarter of Fiscal Year 2027
Filed Aug 4, 20268x8, Inc. Reports Record Revenue in First Quarter of Fiscal Year 2027
Total revenue and service revenue each increased 5%, GAAP operating income and non-GAAP operating income increased, GAAP net loss narrowed, and cash provided by operating activities increased. GAAP and non-GAAP gross margins declined from the first quarter of fiscal 2026, while cash declined following a principal payment on the 2024 Term Loan.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total revenueother | $190.2 million | – | 5% |
| Service revenueother | $185.3 million | – | 5% |
| Gross marginGAAP | 61% | – | – |
| Gross marginnon-GAAP | 62% | – | – |
| Operating incomeGAAP | $4.4 million | – | – |
| Operating incomenon-GAAP | $18.9 million | – | – |
| Net lossGAAP | $1.2 million | – | – |
| Net incomenon-GAAP | $13.6 million | – | – |
| Cash provided by operating activitiesother | $17.0 million | – | – |
Second Quarter of Fiscal 2027 Ending September 30, 2026; Fiscal Year 2027 Ending March 31, 2027 outlook
- RevenueSecond Quarter of Fiscal 2027: Service revenue in the range of $180 million to $185 million; Total revenue in the range of $185 million to $190 million. Fiscal Year 2027: Service revenue in the range of $725 million to $745 million; Total revenue in the range of $745 million to $765 million.
- Gross marginSecond Quarter of Fiscal 2027: Non-GAAP gross margin in the range of approximately 60.5% to 61.5%. Fiscal Year 2027: Non-GAAP gross margin in the range of 60.5% to 61.5%.
- NoteSecond Quarter of Fiscal 2027: Non-GAAP operating margin in the range of approximately 8.0% to 9.0%.
- NoteSecond Quarter of Fiscal 2027: Interest expense of approximately $3.9 million.
- NoteSecond Quarter of Fiscal 2027: Cash interest of approximately $5.9 million.
- NoteSecond Quarter of Fiscal 2027: Non-GAAP net income per share, diluted, in the range of $0.07 to $0.08, based on a fully-diluted weighted-average share count of approximately 149 million shares.
- NoteSecond Quarter of Fiscal 2027: Cash flow from operations in the range of $9 million to $11 million.
- NoteFiscal Year 2027: Non-GAAP operating margin in the range of 8.8% to 9.8%.
- NoteFiscal Year 2027: Non-GAAP net income per share, diluted, in the range of $0.33 to $0.38, based on a fully-diluted weighted-average share count of approximately 150 million shares.
- NoteFiscal Year 2027: Cash flow from operations in the range of $45 million to $52 million.
What drove it
- Adoption of AI solutions accelerates as customers use AI Studio to build a wide variety of AI agents.
- 8x8 Pulse, 8x8 Resolve, and 8x8 AI Routing were available for select 8x8 customers.
- 8x8 AI Studio added support for multiple AI models, voice-powered agent building, and one-click connectors to third-party business applications.
- The company introduced a new 8x8 App Store and a native integration with Synthflow.
- 8x8 Workforce Management added automated assistive quality evaluations and enhanced forecasting and scheduling, available at no additional cost to existing 8x8 Contact Center customers.
Concerns
- GAAP gross margin was 61%, compared to 66% in the first quarter of fiscal 2026.
- Non-GAAP gross margin was 62%, compared to 68% in the first quarter of fiscal 2026.
- Cash, cash equivalents, and restricted cash were $92.3 million on June 30, 2026, compared to $95.0 million at the end of fiscal 2026.
- Total principal amount of debt outstanding on June 30, 2026 was $309.4 million.
- The company stated that usage-based communications and AI solutions carry a different gross margin profile than SaaS software subscriptions.
What to watch
- Second-quarter service revenue guidance of $180 million to $185 million and total revenue guidance of $185 million to $190 million.
- Second-quarter non-GAAP gross margin guidance of approximately 60.5% to 61.5% and non-GAAP operating margin guidance of approximately 8.0% to 9.0%.
- Second-quarter cash flow from operations guidance of $9 million to $11 million.
- Fiscal-year service revenue guidance of $725 million to $745 million and total revenue guidance of $745 million to $765 million.
- Fiscal-year non-GAAP operating margin guidance of 8.8% to 9.8% and cash flow from operations guidance of $45 million to $52 million.
- Customer adoption and scaling of usage-based communications and AI solutions.
Balance sheet and cash flow
- Cash provided by operating activities was $17.0 million for the first quarter of fiscal 2027, compared to $11.9 million in the first quarter of fiscal 2026.
- Cash, cash equivalents, and restricted cash were $92.3 million on June 30, 2026, compared to $95.0 million at the end of fiscal 2026.
- The balance on June 30, 2026 reflects a $14.5 million principal payment on the 2024 Term Loan made during the first quarter of fiscal 2027.
- Total principal amount of debt outstanding on June 30, 2026 was $309.4 million, compared to $323.9 million at the end of fiscal 2026.
Analysis
8x8 reported record total revenue of $190.2 million and record service revenue of $185.3 million in the first quarter of fiscal 2027. Both measures increased 5% from the first quarter of fiscal 2026. The company described this as its fifth consecutive quarter of year-over-year revenue growth and cited accelerating adoption of AI solutions.
Profitability improved in dollars despite lower gross margins. GAAP operating income was $4.4 million, compared with $0.6 million, while non-GAAP operating income was $18.9 million, compared with $16.3 million. GAAP net loss was $1.2 million, compared with $4.3 million, and non-GAAP net income was $13.6 million, compared with $10.7 million. GAAP gross margin declined to 61% from 66%, and non-GAAP gross margin declined to 62% from 68%.
Cash generation increased, with cash provided by operating activities of $17.0 million compared with $11.9 million. Cash, cash equivalents, and restricted cash ended the quarter at $92.3 million, compared with $95.0 million at the end of fiscal 2026. The company said the June 30 balance reflects a $14.5 million principal payment on the 2024 Term Loan. Total principal debt outstanding was $309.4 million, compared with $323.9 million at the end of fiscal 2026.
Management's outlook calls for second-quarter total revenue of $185 million to $190 million and service revenue of $180 million to $185 million, alongside non-GAAP gross margin of approximately 60.5% to 61.5%. The second-quarter outlook also calls for non-GAAP operating margin of approximately 8.0% to 9.0% and cash flow from operations of $9 million to $11 million. For fiscal 2027, management guided to total revenue of $745 million to $765 million, non-GAAP operating margin of 8.8% to 9.8%, and cash flow from operations of $45 million to $52 million.
The central operating issue is the revenue mix shift identified by the CFO. Management stated that usage-based communications and AI offerings have a different gross margin profile than SaaS software subscriptions, while also contributing operating profit and cash flow as they scale. Investors should monitor execution against the guided revenue, gross-margin, operating-margin, and operating-cash-flow ranges as the company expands AI Studio and related platform capabilities.
Management, verbatim
We delivered a strong start to fiscal 2027, exceeding our guidance for revenue, non-GAAP operating margin and operating cash flow, while continuing to build momentum across the business.
Samuel Wilson, Chief Executive Officer at 8x8, Inc.
As customers increasingly adopt our usage-based communications and AI solutions, revenue mix will continue to evolve. While those offerings carry a different gross margin profile than SaaS software subscriptions, they also expand our market opportunity and contribute meaningful operating profit and cash flow as they scale.
Kevin Kraus, Chief Financial Officer at 8x8, Inc.
Not in the filing
stated, not guessed- GAAP earnings per share for the first quarter of fiscal 2027 and first quarter of fiscal 2026.
- Non-GAAP earnings per share for the first quarter of fiscal 2027 and first quarter of fiscal 2026.
- GAAP operating margin for the first quarter of fiscal 2027 and first quarter of fiscal 2026.
- Non-GAAP operating margin for the first quarter of fiscal 2027 and first quarter of fiscal 2026.
- Operating expenses.
- Free cash flow.
- Share repurchases.
- Dividends.
- Reportable segment revenue and segment-level comparisons.
- Prior-quarter comparisons for reported financial metrics.
- Prior outlook, which is required for comparison with prior guidance.
- Guided operating expenses.
- Guided tax rate.
- Fiscal-year interest expense and cash interest guidance.
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.