8x8 Inc

Good day, everyone, and welcome to 8x8, Inc.' 's third quarter 2026 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To participate, you will need to press star 1-1 on your telephone. You will then hear a message advising your hand is raised. To withdraw your question, simply press star 1-1 again. Please note, This conference is being recorded. Now it's my pleasure to turn the call over to the Head of Investor Relations, Kate Patterson.

Thank you. Good afternoon, everyone. Today's agenda will include a review of our results for the third quarter of fiscal 2026 with Samuel Wilson, our Chief Executive Officer, and Kevin Krause, our Chief Financial Officer. Following our prepared remarks, there will be a question and answer session. In addition to our prepared remarks, we have posted a more detailed letter to shareholders in the quarterly results section of our investor relations website. Before we get started, let me remind you that our discussion today includes forward-looking statements about future financial performance, including investments in innovation and our focus on profitability and cash flow, as well as statements regarding our business, products, and growth strategies. We caution you not to put undue reliance on these forward-looking statements. as they involve risks and uncertainties that may cause actual results to vary materially from forward-looking statements as described in our risk factors in our reports files of the SEC. Any forward-looking statements made on this call and in the presentation slides reflect our analysis as of today, and we have no plans or obligations to update them. All financial metrics that will be discussed on this call are non-GAAP unless otherwise noted. These non-GAAP metrics, 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 these non-GAAP metrics to the closest comparable GAAP metric is provided in our earnings press release and our earnings presentation slides, which are available on 8x8's investor relations website at investors.8x8.com. With that, I'll turn the call over to our chief financial... Sorry. Yes. With that, I'll turn the call over to our Chief Executive Officer, Samuel Wilson.

Good afternoon, everyone, and thank you for joining us today. I'm excited to share the highlights of our third quarter results, which show our strategic investments across innovation, operational efficiency, and distribution are beginning to yield measurable results. More details are included in our letter to shareholders posted on the Investor Relations website. I can summarize our Q3 results and our outlook in a single sentence. We're seeing encouraging momentum across multiple dimensions of the business, though we remain focused on the execution work ahead. The most visible evidence of our growing momentum is our return to top line growth. This marks our third consecutive quarter of year-on-year service revenue growth and our 20th consecutive quarter of positive operating cash flow. We exceeded the high end of our guidance range for service revenue, total revenue, operating profit, and cash flow. I believe this shows our operating model is working. We're driving growth in strategic components of our service revenue while maintaining discipline on profitability and cash generation. A key driver of our growth was our increased consumption of our usage-based offerings, which grew nearly 60% year-over-year and now represents more than 20% of our service revenue up from mid-teens a year ago. Much of this growth comes from our CPaaS APIs. We are also seeing an acceleration in the adoption of digital channels and AI-based offerings as customers move beyond pilot projects into production at scale. This is clear from some of the metrics we shared in a separate press release. Customer contracts for our intelligent customer assistant increased 70% year-over-year. Voice AI interactions increased more than 200% and now represent a vast majority of all AI interactions on our platform. Voice remains the channel of choice and our core IP in voice communications is an increasingly valuable competitive advantage. We've built this capacity over decades and it positions us uniquely as voice becomes the preferred interface for AI-powered customer experiences. The increase in consumption of our usage-based solutions reflects a broader industry shift away from pure SaaS subscriptions to hybrid and tokenized pricing models. The pay-as-you-go approach appeals to customers because it reduces risk as they adopt new technologies. It also raises the bar for vendors. Revenue is linked directly to successful customer outcomes and business activity instead of long-term subscriptions that may or may not be implemented. We believe this is the way of the future. We are positioning ourselves ahead of the curve in multiple ways, with investments that enable simplified consumption-based pricing across our portfolio, process improvements that make it easier to do business with us, product-led growth initiatives that allow customers to try before you buy, and AI-driven automations that allow us to scale our customer success organization. We are customer zero as we reimagine every aspect of our business for the AI era. We are seeing the impact of these transformational initiatives across our business. Our multi-product strategy is gaining traction. All of our top 20 customers now have multiple products, and most have three or more. This matters because customers with multiple products see us as a strategic platform partner rather than a point solution. This results in substantially higher revenue, customer satisfaction, and retention. On average, customers with three or more products generate more than three times the revenue of customers with two products. We are seeing a reacceleration in sales of new products, reflecting our investments and innovations. Four of our strategic new products grew triple digits year over year, including 8x8 Engage. 8x8 Engage is one of the fastest-growing products in our history, and it continues to gain momentum across industries like healthcare, retail, and professional services. A substantial portion of customer interactions routinely occur outside the formal contact center in these industries, making Engage a compelling solution. Engage recently won gold at the London Design Awards for user experience a strong external validation of our product strategy and design focus. This is one of many awards won by Engage for its incredible user interface. We are seeing increased momentum in our revenue from our channel partners. We know we have work to do to expand our distribution globally, but we are seeing early traction from newly implemented partner programs and incentives. Importantly, Channel Source Pipeline is showing sequential improvement as new programs take root. Let me share three examples that bring the momentum we're seeing across the business to life. First, a regional healthcare system with over 850 employees selected eight by eight over both Zoom and RingCentral for a competitive UC and contact center deployment. We went on site when competitors didn't. We provided industry match references and demonstrated a deep understanding of their patient care operations. We won because we approached the sale as a strategic partner, not just a technology vendor. Next, a major national early education provider with over 43,000 employees chose us for a significant UC expansion. This complex sale required a flexible OpEx model aligned with their finance-driven process. We acted as a transformation partner, maintaining strong alignments across IT, procurement, finance, and professional services throughout their buying cycle. Finally, a large veterinary and pet hospital company expanded their contact center capacity with us. We earned this business through disciplined weekly engagement with their leadership team, aligning on roadmap priorities, and demonstrating how our solution supported their evolving initiatives. This is Land and Expand done right. These wins reflect a common theme. customers are choosing integrated platforms over point solutions, valuing strategic partnerships, and selecting vendors positioned for the future of AI-powered communications. These also reflect our internal commitment to leveraging AI across the organization. In our sales process, we're using AI to map customer journeys, tailor solutions to customers' requirements, and improve the quality and quantity of customer interactions. Over the last year, we've made huge progress in using AI to improve our go-to-market analytics and coaching, and it's starting to show up in our results. Beyond new customer wins, we reached a significant operational milestone in Q3 with the completion of the final upgrades of Fuse customers to the 8x8 platform. Every 8x8 customer is now on our modern integrated 8x8 communications platform. This sets the stage for improved customer interaction, better expansion opportunities, and higher satisfaction, and more meaningfully, more efficient operations across our network and back office. While the decommissioning of the FUSE platform has created a near-term revenue headwind, as not all the remaining FUSE customers elected to upgrade, resulting in higher churn in Q3 than will be reflected in Q4 and fiscal 27 revenue, the strategic benefit is clear. We can now focus 100% of our energy on growth and customer success rather than managing legacy infrastructure. To wrap up, we are seeing encouraging signs across the business. Usage-based revenue is scaling rapidly. Adoption of our AI-based solutions is accelerating. Multi-product customers are expanding. New products are gaining traction. and our outcome-focused platform strategy is resonating with customers and partners. As we look ahead, we're realistic about the competitive and the evolving marketplace. We know we need to accelerate installed base expansion and drive stronger channel momentum. Kevin's updated guidance ranges reflect this realism as we navigate through these market dynamics. We believe that Q3 marks a true inflection point. We have momentum for entering Q4 and strong confidence in our ability to deliver sustained profitable growth and shareholder value. With that, I will turn it over to Kevin for the financial details.