8x8 Inc

Good day, and welcome to the 8x8 Inc. Fourth Quarter and Full Year Fiscal 2020 Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touchtone phone. To withdraw your question from the queue, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Victoria Hyde-Dunn, Head of Investor Relations. Please go ahead.

Thank you, good afternoon, and welcome to 8x8's fourth quarter and full year fiscal 2021 earnings conference call. Today's agenda will include a review of our fourth quarter results with Dave Sipes, Chief Executive Officer, and Sam Wilson, Chief Financial Officer. Following our earnings discussion, Dave and Sam will share greater details on 8x8 strategic priorities for Fiscal 22 and the company's long-term financial framework. Following their prepared remarks, there will be a question and answer session. Before we get started, just a reminder that our discussion today includes forward-looking statements about 8x8's future financial performance, as well as its business, product, and growth strategies, including the impact of COVID-19 pandemic. We caution you not to put undue reliance on these four looking statements as they involve risks and uncertainties. They may cause actual results to vary materially from the four looking statements as described in our risk factors in our reports filed with the SEC. Any forward-looking statements made on this call and presentation slides reflect our analysis as of today, and we have no plans or obligation to update them. Certain financial measures that will be discussed on this call, together with year-over-year comparisons in some cases, were not prepared in accordance with U.S. generally accepted accounting principles or GAAP. A reconciliation of those non-gap measures to the closest comparable gap measures is provided in our earnings press release and with earnings presentation slides, which are available on 8x8's investor relations website at investors.8x8.com. Additionally, we posted a set of presentation slides we will refer to when discussing our strategic priorities titled Business Review. During today's call, we will introduce Fiscal 22 guidance and our long-term financial framework. These accompanying slides will be added to both presentation slides and reposted on the Investor Relations website following the conclusion of the call. And with that, I will now turn the call over to Dave.

Thank you, Victoria. Good afternoon, everyone, and thank you for joining us today. Our fourth quarter results exceeded expectations with both service revenue and total revenue growing above the high end of our guidance range at 19% year over year. Key drivers of growth were strong demand for our integrated UCaaS and CCaaS offering, continued upmarket focus on enterprise, and channel execution. We are driving operational excellence throughout the organization and culture that is committed to a CPT mindset, customer first, product first, team first. We strengthened our cash position and improved operating efficiency, becoming non-gap, pre-tax profitable in the fourth quarter and ahead of schedule. And we crossed an important milestone and have surpassed $500 million in ARR. Now let me turn to business highlights from the quarter. Let me begin with our channel first strategy and upmarket focus, which delivered strong results. We had a record quarter up market with over 760 customers with greater than 100,000 in ARR, a 25% increase year over year. Double clicking on this, customers with over 1 million in ARR grew over 70% year over year and contributed to enterprise ARR growth of 49% year over year. We ended the total fiscal year with a record number of seven-figure and eight-figure TCV deals versus the prior year, and these grew, in average, total contract value more than 60% year-over-year. These results reflect strong execution across global sales, marketing, and channel teams, and contributed to our largest quarter of new deal registrations and pipeline. Also, we formed a new strategic VAR partnership with Wescon, a global technology distributor. The partnership will enable Wescon to offer 8x8s UCAS and CCAS to their enterprise customers across the United Kingdom and Ireland. Our integrated UCaaS and CCaaS platform is a unique differentiator in the market, and we're seeing continuing success in the upmarket. Bundled contact center and communications were very strong, driving 9 out of our top 10 deals and 75% of upmarket bookings that were $12,000 or more in ARR. ARR from combo customers, that is customers who have purchased UC and CC, represents over 30% of total company ARR. Additionally, for the third quarter in a row, combo customer ARR grew at twice the rate of market growth. All of our seven-figure TCV deals in the quarter were integrated UCaaS and CCaaS offerings, and this illustrates the importance of having a single vendor for all integrated cloud communications needs. Second, turning to customer wins, new logos represented 52% of new bookings, and we saw good execution in key verticals such as healthcare, manufacturing, food and beverage, and public sector. Let me highlight a few recent examples. Integrated UCAS and CCAS offerings continue to lead the way with notable wins, including DH Pace, a U.S. provider of dock and door-related products, selected 8x8's integrated CCAS and UCAS product to bring all services under a single vendor. DH Pace can now provide over 2,000 employees with communications, collaboration, and engagement capabilities to enhance customer experience. Another 8x8 integrated UCaaS and CCaaS product to win this quarter is DataBank, a leading provider of enterprise-class co-location connectivity and managed services. They chose 8x8 to streamline and standardize their technology usage and provide more than 700 employees with an enhanced connectivity and customer engagement capabilities. In addition, we are seeing standalone contact center interest from upmarket customers. A great example is one of the world's leading reinsurers. They selected 8x8 CCAS for 500 contact center agents in the US due to 8x8's enhanced functionality, including advanced business insights, speech analytics, quality management, among other innovative features. The public sector continues to drive growth globally, building on strong momentum among municipal governments in the UK and the participation of new US states in our NASPO ValuePoint cloud solutions contract. Western Downs Regional Council, one of the top 20 largest councils in Queensland, Australia, chose 8x8's integrated UCaaS and CCaaS product to centralize previously disparate systems and information. By moving communications to the cloud for 400 employees, the public sector organization has the agility to work remotely without impacting customer or employee experience. NHS Public Health Scotland, which provides support to the 14 regional NHS health boards, further expanded 8x's integrated UCAS and CCAS product to now support over 3,500 employees. Their communication needs were critical to managing vaccination helplines and booking services for Scotland's COVID-19 response, and 8x8 rapidly moved them to the cloud. SLED government agencies in the U.S. are recognizing the need for an integrated cloud contact center and communications. The state of Washington recently joined Alaska as a second state to offer statewide participation in and access to the 8x8 NASPO ValuePoint cloud solutions contract, making it easy for SLED agencies to purchase cloud UCaaS and CCaaS directly from 8x8 or 8x8 channel partners. Additionally, we continue to see existing customers adopt more 8x8 services, creating a land and expand opportunity that will fuel future growth. A great land and expand example this quarter is VCA, an operator of more than 1,000 veterinary hospitals in the U.S. VCA's partnership with 8x8 continues to grow, now adding 8x8 CCAS to their 8x8 UCAS deployment to meet their diverse business needs. By adding contact center, including call center overflow management capabilities, VCA is providing its 28,000 employees with enhanced engagement capabilities. Black Country Healthcare NHS Foundation Trust provides mental health, learning disability, and community healthcare services for four metropolitan boroughs. This UK public sector organization selected 8x8's integrated UCAS and CCAS product to enhance the patient support and communication capabilities for more than 3,000 employees. Sefton Council is the local authority providing essential community services for more than 270,000 residents in the Liverpool City region. Following their original deployment of 8x8 CCAS in 2020, the Council is now deploying services that include UCAS and Secure Pay PCI Pal. These will allow Council employees to work freely from any location. Turning to voice for Microsoft Teams, we expanded our partnership with Microsoft on two fronts. In March, we launched 8x8 Contact Center for Microsoft Teams. We are the first vendor in the Gartner CCaaS Magic Quadrant to have a Microsoft Teams Certified Cloud Contact Center solution. We recently launched new 8x8 voice from Microsoft Teams app to further extend the Teams experience for users by adding new SMS, MMS, and fax capabilities. Customers appreciate our superior call quality, Microsoft certified contact center integration, and additional capabilities we provide to enhance the Teams experience. As examples, Beam Centauri, a premium spirits leader with world-renowned bourbons, whiskeys, single malt, scotches, tequila, and cognac, with brands such as Jim Beam, added more than 2,500 8x8 UCAS seats integrated with 8x8 voice for Microsoft Teams to support their hybrid workforce across the globe. Our quick implementation and continuous product innovation are why Beam Centauri continues to grow its international communications with 8x8. SilentAir, a hyperscale data center solutions manufacturer, turned to 8x8 UCaaS with 8x8 Voice for Microsoft Teams to ensure dependable global communications for offices in Canada, the US, and Europe. SilentAir chose 8x8's direct routing capabilities to provide nearly 400 employees with superior global voice communications from any Teams endpoint. Our CPaaS portfolio of APIs and embeddable applications, including SMS, chat apps, voice, video, and performance monitoring empowers organizations to extend and customize communications that reimagine workflows and customer interactions for enhanced employee-customer experiences. Our API offerings are also driving new customer acquisition. An example of CPaaS augmentation for contact center omnichannel was DMV Veterinary Center, a 24-7 provider of emergency and specialty veterinary services throughout Canada. They selected 8x8 because our contact center solutions, AI and intelligence features together with 8x8 CPaaS capabilities will enhance contact center call flow, analytics and reporting. Our SMS API will be used to notify customers who do not want to stay on hold to initiate a chat interaction. An additional purchase consideration was the fact that our contact center solution is Microsoft certified for Teams. Another CPaaS win was KVision, one of the largest TV networks in Indonesia, who selected 8x8 CPaaS to provide two-way customer service communication. With the 8x8 chat apps API, KVision is enabling customers to use WhatsApp to interact with support and service teams for quick and seamless customer support. Importantly, we placed a premium on innovation in Q4. We introduced the industry's first integrated cloud phone and contact center solution that supports the communications and customer engagement requirements of multinationals operating offices in China in partnership with China Mobile International. We announced 8x8 Work for web, which allows 8x8 users to securely communicate, collaborate, and engage across almost any device and operating system via an everyday browser without software downloads or plugins. We customized video meeting backgrounds, enabling participants to select an image or blur their background during meetings for maximum privacy control. And we launched the industry's only financially backed platform-wide four nines SLA across an integrated cloud UCaaS and CCaaS solution. Finally, we continue to receive industry recognition. We were recently recognized as a leader in the IDC market space worldwide UCaaS service providers for enterprise and SMB 2021 vendor assessment. We were also named a major player in the IDC's Worldwide CPAS Service Providers Report. And we were awarded a five-star rating by CRN in its 2021 Partner Program Guide. To summarize, fiscal 2021 was a milestone year from which we will leverage the solid foundation we have laid with integrated contact center and communications. We are well positioned to further extend our leadership position with our CPT culture, integrated platform advantage, and future growth drivers. I will speak more about this in a few minutes, but let me now turn the call over to Sam to cover the financial results.