8x8 Slips To Q4 Loss, Shares Up 6% On Strong Outlook

(RTTNews) - Cloud services provider 8x8, Inc. (EGHT) reported Wednesday a net loss for the fourth quarter compared to a profit last year, reflecting higher charges and lower gross margins. Adjusted earnings per share topped analysts' expectations, while quarterly revenues missed their estimates by a whisker. The company also revenues for the full-year 2015 to grow 25 percent from last year.

"8x8 posted another record quarter of accelerating, profitable growth, with a 29% increase in total revenue, record new revenue from our channel and mid-market segment, and record average monthly service revenue per business customer," CEO Vik Verma said in a statement.

The San Jose, California-based company reported a net loss of $1.95 million or $0.02 per share for the first quarter, compared to net income of $1.66 million or $0.02 per share in the prior-year quarter.

Excluding items, adjusted net income for the quarter was $3.28 million or $0.04 per share, compared to $3.81 million or $0.05 per share in the year-ago quarter..

On average, eight analysts polled by Thomson Reuters expected the company to report earnings of $0.03 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the quarter increased 29 percent to $35.79 million from $27.82 million in the same quarter last year, and missed eight Wall Street analysts' consensus estimate of $35.80 million by a whisker.

Service revenues grew to $32.55 million from $25.07 million, and product revenue improved to $3.24 million from $2.75 million last year.

During the fourth quarter, average monthly service revenue per business customer grew to a record $287 from last year's $256. Number of new services sold was a record 64,312, up from 50,670 in the same period last year.

Average number of subscribed services per new business customer added during the quarter grew to 19.6 from 18.1 in the year-ago quarter.

Total operating expenses for the quarter increased to $36.16 million from $24.41 million in the year-ago quarter. Gross margin contracted 100 basis points to 70 percent from last year.

"As we continue to expand both domestically and internationally in fiscal 2015, we plan to increase revenue by approximately 25% and maintain our non-GAAP net income as a percentage of revenue in the high-single digit range," Verma added.

Street is currently looking for dull-year 2015 revenues to grow 24.7 percent to $160.96 million.

EGHT closed Wednesday's regular trading session at $8.01, up $0.13 or 1.65% on a volume of 1.65 million shares. The stock gained a further $0.51 or 6.37% in after-hours trading.