A reconciliation of these non-GAAP metrics to the closest comparable GAAP metric is provided in our earnings press release and earnings presentation slides, which are available on 8x8's Investor Relations website at investors.8x8.com. We are continuing to execute against our priorities for the year, returning to growth, expanding our use of AI to improve both customer and employee outcomes. It is transforming how customers experience 8x8 and what is powering our growth. And I'm excited to share that Stephen Hamill has stepped into the role of Chief Revenue Officer to lead this next phase.
We're expecting strong demand for 8x8 Workforce Management, so we've begun a progressive rollout starting next week. Across the Atlantic, a multi-hundred-million-dollar software company using 8x8 is another powerful example of how our innovation drives measurable business outcomes. This software vendor exemplifies what we mean when we talk about long-term customer partnerships built on a comprehensive portfolio of products. And I also want to thank you for joining us for our fiscal Q2 2026 earnings call.
Unless otherwise noted, all figures other than revenue and cash flow are presented on a non-GAAP basis. Q2 marked our second consecutive quarter of year-over-year revenue growth, reflecting healthy usage trends and disciplined execution. Excluding revenue from Fuze customers, whether on the 8x8 Platform or not, service revenue grew nearly 6% year-over-year, higher growth than we achieved last quarter, and our fourth quarter of acceleration. Service revenue remaining on the Fuze platform declined to approximately 3% of total service revenue, down from approximately 7% in Q2 2025.
| Metric | Period | Current guidance |
|---|---|---|
| Service revenue | Q3 FY2026 | $172 million to $177 million |
| Total revenue | Q3 FY2026 | $177 million to $182 million |
| Gross margin | Q3 FY2026 | 64% to 66% |
| Operating margin | Q3 FY2026 | 9% to 10% |
| Fully diluted non-GAAP EPS | Q3 FY2026 | $0.08 to $0.09, on ~143.5 million fully diluted shares |
| Cash flow from operations | Q3 FY2026 | $10 million to $14 million |
| Contractual interest expense | Q3 FY2026 | approximately $4.2 million (cash interest payments of ~$2.2 million; term loan rate ~7%, SOFR plus 3%) |
| Service revenue | Full year FY2026 (updated) | $692 million to $706 million |
| Total revenue | Full year FY2026 (updated) | $712 million to $726 million |
| Gross margin | Full year FY2026 (updated) | 65% to 66% |
| Operating margin | Full year FY2026 (updated) | 8.5% to 9.5% (implying non-GAAP operating income of ~$65 million at midpoint) |
| Fully diluted non-GAAP EPS | Full year FY2026 (updated) | $0.31 to $0.33, on ~143 million average diluted shares |
| Cash flow from operations | Full year FY2026 (updated) | $38 million to $42 million |
| Metric | YoY | Note |
|---|---|---|
| Total revenue | +1.7% (to $184.1 million) | Continued strength in usage-based offerings; exceeded the high end of guidance by roughly $4 million. |
| Service revenue | +2.3% (to $179.1 million) | Healthy usage trends and disciplined execution; beat the high end of guidance by roughly $4 million. |
| Service revenue excluding Fuze | grew nearly 6% | Fourth consecutive quarter of acceleration, driven by growth outside the declining Fuze base. |
| Usage revenue as % of service revenue | approximately 19%, up from approximately 13% in Q2 FY2025 | Record performance driven by CPaaS communication APIs and AI-related consumption. |
| Fuze-platform service revenue as % of total service revenue | approximately 3%, down from approximately 7% in Q2 FY2025 | Ongoing migration of remaining Fuze customers onto the 8x8 Platform, on track to complete by calendar year-end. |
| Gross profit / gross margin | $120.9 million; gross margin 65.7%, down sequentially | Continued mix shift toward lower-margin usage revenue; about $2 million above implied guidance midpoint. |
| Operating income / operating margin | $17.3 million; 9.4% operating margin | Revenue outperformance and disciplined execution; above the high end of guidance. |
| Fully diluted non-GAAP EPS | $0.09 | A penny above the high end of the guidance range, on profitability outperformance. |
| Cash flow from operations | $8.8 million | Above the high end of guidance; company ended the quarter with $76.7 million in cash, cash equivalents, and restricted cash. |
| Stock-based compensation as % of revenue | 2.9%, another multi-year low | Ongoing focus on prudent equity management and minimizing dilution. |
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Fuze platform sunset | Fuze represented approximately 7% of total service revenue in Q2 FY2025. | Down to approximately 3% of total service revenue and on track to move the remaining Fuze customers onto the 8x8 Platform by calendar year-end; expected to be roughly a two-point headwind to next year's growth. | — |
| Usage-based / CPaaS revenue shift | Usage revenue was approximately 13% of service revenue in Q2 FY2025. | Record ~19% of service revenue; management models the exit run rate forward conservatively and views the shift to consumption-based pricing as an 'unstoppable force' across the SaaS industry. | — |
| AI | AI features embedded across the platform (call summarization, transcription, agent assist). | Positioned as the core growth driver and monetized on a consumption basis; expanded to agentless payments and digital channels (Viber, RCS), used internally to improve GTM efficiency, forecasting and right-size software spend, and enabling the first product-led-growth launch. | — |
| Debt reduction / capital allocation | Peak debt of $548 million in August 2022. | Cumulative principal reduction of $224 million (41%) after a $10 million in-quarter prepayment and a $5 million post-quarter payment; next required term loan payment of only $2 million not due until June 30, 2026; debt retirement remains a primary route to shareholder value alongside tuck-in M&A. | — |
| Gross margin vs. gross profit dollars | Management had repeatedly warned that margins would compress as the business scales toward usage. | Guiding to lower gross margins for the rest of the year but emphasizing absolute gross profit dollars, a light-OpEx model, higher LTV, and improving bottom-line and cash flow over time. | — |
| Go-to-market transformation | Legacy sales, marketing and partner motions. | New Chief Revenue Officer (Stephen Hamill), motions aligned around customer outcomes, improved pipeline quality (measured as stage-three-plus deals) driven by more SDRs and AI in the sales process, and a shift toward product-led growth via the 8x8 App Store. | — |