8x8 Inc. (NASDAQ:EGHT) Q4 2018 Earnings Conference Call - Preliminary Transcript

May 24, 2018 • 04:30 pm ET

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8x8 Inc. (NASDAQ:EGHT) Q4 2018 Earnings Conference Call - Preliminary Transcript

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Presentation
Operator
Operator

Good afternoon. My name is Chantal, and I will be your conference operator today. At this time, I would like to welcome everyone to the 8x8, Inc. Fourth Quarter and Full Year Fiscal 2018 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. (Operator Instructions) Thank you.

Victoria Hyde-Dunn, Head of Investor Relations. Ma'am, begin your conference.

Executive
Victoria Hyde-Dunn

Thank you, operator. Good afternoon and welcome to 8x8's fourth quarter and fiscal full-year 2018 earnings conference call. With me today are Vik Verma, Chief Executive Officer; and Mary Ellen Genovese, Chief Financial Officer. Our format today will include prepared remarks followed by Q&A.

The earnings press release, presentation, and non-GAAP to GAAP reconciliations that accompany this call are available in the Investor Relations section of our website at 8x8.com. A replay of this call will be posted on our website for 30 days. I would like to remind all participants that during this conference call any forward-looking statements are made pursuant to the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995. These statements are not guarantees of future performance, and our actual results could materially differ as a result of a variety of factors. Additional information concerning those risk factors is available in our most recent reports on Forms 10-K and 10-Q, which you can find on the SEC's website and the Investor Relations section of our website.

With that, I'd now like to turn the call over to Vik.

Executive
Vik Verma

Thank you, Victoria. Good afternoon and welcome everyone to our fourth quarter and full-year 2018 earnings conference call. Our fourth quarter revenue results were a strong finish to a great year. Total revenue for the fourth quarter grew 19% to $79.3 million and for the full-year 2018 revenue was $296.5 million for annual year-over-year growth of 17%. We grew service revenue in the fourth quarter by 20% to $75.3 million and 19% year-over-year for the full-year to $280.4 million. Revenue came in higher than we guided to during last quarter's conference call.

Before I provide details on the quarter and our fiscal year, let me comment on how we see the market evolving. IDC estimates that the combined global communications, collaboration, and contact center as a service market opportunity exceeds $40 billion, and yet we believe the total share of this market that has gone to cloud is less than 10% penetrated. We are also seeing customers increasingly looking for seamlessly integrated solutions that span these different segments. Customers want a single system of engagement from the cloud, what we have described as the third wave of enterprise communications. The end result of this shift is that over the next few years, tens of billions of dollars in global spend are up for grabs.

We believe our strategy of owning the complete suite of technology required to deliver a single system of engagement is unique in our market, and we are aggressively investing