For the year of 2012, 8×8, Inc. (EGHT) stock was the “best performing [of any] high tech publicly traded company in Silicon Valley”. Assuming our audience is quite familiar with what they do, I'll move onto other juicy info. However, in the event you're not completely up to date on 8×8, they are a provider of one of the top business VoIP services – a company in their own league; developing patents over the years and being rewarded on what they sell. Yesterday, their Chairman and CEO (who is also an inventor, among other relevant skills that help 8×8, Inc. excel), took the stage alongside CFO, Dan Weirich. The event took place early in the afternoon at the Citi 2013 Global Internet, Media and Telecommunications conference, at the Bellaggio in Las Vegas, NV.
On average, 8×8's new customers in the September quarter acquired about 14.7 lines from the provider. Interestingly enough, in December, Gartner named 8×8 as a market “leader” in its 2013 Magic Quadrant for Unified Communications as a Service (UCaaS) – a distinction also shared by 3 of 8×8's competitors. Generally speaking, Gartner's client base tends to be large enterprises. The fact 8×8 were able to garner this award, shows a clear shift in the market toward hosted services, plus the impact of making big business integrations like Salesforce and CRM available to customers of all sectors. 8×8 have also noted a growing trend in sales from mid-market customers, averaging a little over $1000 per month on these subscriptions (roughly 50 seats). The implications are all there in black and white, as it seems 8×8 have successfully been able to market a product ideal for a wide range of businesses through intelligent market strategy and development.
Cloud-based communications are proving to be “fiscal cliff proof”, not to mention a mitigating factor . Bryan Martin made a powerful point, noting how businesses were able to stay open amidst Hurricane Sandy:
“We certainly saw, we did a press release or two on in the wake of the hurricane on the east coast, customers that were utilizing these types of services, both for future business continuity but actually some that were actually signing up in the days before the storm and even in the middle of the storm, again as a mechanism to maintain access to their communications, function. Most people had no fixed internet, they had no power, but they did have cellphones and tablets and if they could keep those charged at a coffee shop, they could keep their businesses open. At the very minimal you think about the incoming calls are hitting an auto attendant, a greeting that’s in my data center in California and so we’re not impacted by the hurricane at all. So people calling into your business, their calls are stilling getting answered and routed accordingly. And that’s a big advantage of these types of services.”
Returning to 8×8's growing appeal (and sales) to the mid-large business sector, the company noticed that contact center solutions were the only piece of technology they didn't own. Accordingly, 8×8 are reselling these solutions from a company called Contactual (purchased September 15th, 2011). 8×8 operates within their bounds, making prudent business decisions, applying even their own inventions to service only when necessary. They carry incredibly savvy business practices, and in Mr. Martin's words, developments that aren't a source of revenue for 8×8 per se, might still find themselves on the table in a deal to a firm that can turn a profit of it.
The presentation closed out with the fielding of questions from both of the 8×8 reps, mostly covering facets of service that avid followers of the industry would find to be rehash. Of course, this was mostly for the sake of investors, and one can empathize being the technology oft seems so simple, but requires clarification here and there. Dan & Bryan did an exceptional job at this, and threw in some insights here and there on where 8×8's headed in the future, along with what's been working for them. One merger of note, was one with AT&T back in November to bring low rates to international callers. 8×8 are all about innovation, mutual benefit, and in many cases, creating brilliant communications solutions that trickle down to the customer. Simply stated, they continue to affirm their status as market leaders and will undoubtedly uphold that status as we get deeper into 2013.
The next stop for 8×8 will be the 15th Annual Needham Growth Conference in New York City, kicking off in exactly one week's time.
Other Key Notes from Yesterday's Presentation:
- 8×8, Inc. have experienced a 30% annual growth average since 2006
- The provider is on a $100 million annual revenue rate, with about a $0.5 billion market cap
- Currently, 8×8 hosts more than 30,000 business customers
- In spite of a fragmented market, 8×8 holds about 8.1% of the revenue today.
- More than 50% of 8×8's research and development is currently devoted to mobile devices
- Despite the ailing economy, 8×8 have seen growth in revenue and a decline in churn for nearly half a decade