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 investor relations website at investors.8x8.com. We've delivered four consecutive quarters of year-over-year revenue growth, generated our first GAAP profitable full fiscal year since 2015, increased net income and earnings per share, and strengthened our balance sheet. That's what's accelerating demand for integrated platforms, not as a preference, but as a prerequisite. Usage-based revenue, including CPaaS communications APIs, AI solutions, digital channels, telecom usage grew more than 70% year-over-year and represented approximately 23% of service revenue, up from 14% a year ago.
This allows customers to adopt new AI capabilities quickly and deploy AI across voice, messaging, and customer engagement workflows without rebuilding infrastructure. AI Studio allows customers to build and deploy AI-powered voice and digital agents directly on the 8x8 Platform for CX using natural language prompts. At the same time, we are exploring new consumption-based pricing and deployment models that reduce decision risk and traditionally associated with enterprise software purchases and simplify trial and activation. Unless otherwise noted, all figures other than revenue and cash flow are presented on a non-GAAP basis.
Q4 was our fourth consecutive quarter of year-over-year revenue growth, capping a fiscal year that returned 8x8 to growth, achieved healthy operating profit, and meaningfully strengthened our balance sheet. We exceeded our guidance ranges for service revenue, total revenue, operating profit, earnings per share, and cash flow from operations. We had another record quarter for service revenue, we have had positive operating profit and cash flow from operations in every quarter for over five years. Total revenue was $185.2 million, and service revenue was $180.2 million, growing 4.6% and 5% year-over-year respectively.
| Metric | Period | Current guidance |
|---|---|---|
| Service revenue | Q1 FY2027 | $175M-$180M |
| Total revenue | Q1 FY2027 | $180M-$185M |
| Gross margin | Q1 FY2027 | 63.5%-64.5% |
| Operating margin | Q1 FY2027 | 8.5%-9.5% |
| Non-GAAP fully diluted EPS | Q1 FY2027 | $0.08-$0.09 (on ~147M diluted shares) |
| Cash flow from operations | Q1 FY2027 | $10M-$12M |
| Cash interest payments | Q1 FY2027 | ~$1.8M (term loan interest) |
| Service revenue | Full year FY2027 | $707M-$727M |
| Total revenue | Full year FY2027 | $727M-$747M |
| Gross margin | Full year FY2027 | 62.5%-63.5% |
| Operating margin | Full year FY2027 | 9%-10% (~$70M non-GAAP operating income at midpoint) |
| Non-GAAP fully diluted EPS | Full year FY2027 | $0.33-$0.38 (on ~150M avg diluted shares) |
| Cash flow from operations | Full year FY2027 | ~$45M-$52M |
| Term loan principal payments | Full year FY2027 | $39.5M (per amortization schedule) |
| Metric | YoY | Note |
|---|---|---|
| Total revenue | +4.6% | Fourth consecutive quarter of growth, driven by continued strength in usage-based offerings; Q4 total revenue was $185.2M. |
| Service revenue | +5% | Record quarter at $180.2M, led by usage-based offerings reaching ~23% of service revenue. |
| Usage-based revenue (CPaaS APIs, digital channels, AI) | >+70% | Generative and agentic AI drove a surge in communications API usage; set an all-time record and rose to ~23% of service revenue from ~14% in Q4 FY2025. |
| Gross profit | n/a | ~$118.9M, about $2M above the gross profit implied by the Q4 guidance midpoint. |
| Gross margin | n/a | 64.2% of revenue, modestly below Q3 due to the mix shift toward lower-margin usage-based offerings. |
| Operating income | n/a | $19.8M (10.7% margin), well above the high end of guidance, helped by operating expenses down 5% year-over-year. |
| Net income | +19% (full year) | $16.6M in Q4; full-year net income grew over 19% on higher revenue, lower operating expenses, and lower interest expense. |
| Fully diluted EPS | n/a | $0.11 per share, $0.03 above the high end of guidance. |
| Cash flow from operations | n/a | $14.4M in Q4, above the high end of guidance, reflecting operating overperformance and favorable timing of collections and payments. |
| Full-year operating expenses | -3% | Continued focus on the cost structure; Q4 operating expenses were down 5% year-over-year. |
| Trailing-12-month cash interest paid | -51% (FY2024 to FY2026) | Significant term-loan principal pay-downs reduced cash interest from ~$35.6M to ~$17.3M. |
| Principal debt outstanding | -43% from Aug 2022 peak | Ended Q4 at $323.9M; a $14.5M April payment brought it to ~$309.4M, down from the $548M peak. |
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Shift to usage- and consumption-based pricing | Per-seat pricing when every interaction needed a human; usage was ~14% of service revenue a year ago. | Usage-based revenue is ~23% of service revenue and growing >70% YoY; exploring new consumption-based pricing and deployment models with zero-commitment rates and discounts for higher commitments. | — |
| AI (agentic/generative) embedded in the platform | Early positioning of embedded AI within an open architecture. | General availability of native agentic AI via AI Studio (natural-language prompt-built voice/digital agents) and 8x8 Engage; open orchestration layer lets customers adopt AI without rebuilding infrastructure. | — |
| Integrated platform vs. closed ecosystems / point solutions | Positioned around a business communications platform but required a technology discount to win five years ago. | 67% of CFOs/CIOs want to consolidate vendors; walls between UC, CC and CPaaS are coming down; management says the technology discount no longer exists and cites world-class CPaaS (top 10-11 globally) and Engage. | — |
| Gross margin vs. operating discipline | Managed to operating income while offsetting mix impacts. | Gross margin compressing (64.2% in Q4, FY2027 guide 62.5%-63.5%) as usage grows, but usage carries lower OpEx cost and adds profit dollars; targeting sustained double-digit non-GAAP operating margin. | — |
| Debt reduction and capital allocation | Principal debt peaked at $548M in August 2022. | Down ~43% to ~$309.4M after an April $14.5M payment; FY2027 plan includes $39.5M of term-loan payments; capital priorities ranked acquisitions, debt paydown, then buybacks. | — |
| Fuze migration and tuck-in acquisitions | Multi-year restructuring, Fuze integration and hard operational decisions. | Completed the Fuze migration; acquisition engine restarted with Synthflow AI, Maven Lab and Callroute tuck-ins to round out the portfolio. | — |
| Partner and distribution ecosystem | Company viewed as significantly under-distributed relative to the opportunity. | Increasing investment in partner recruitment, enablement, onboarding, automation and deployment tools to scale distribution globally. | — |