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Transcript Summary

8x8 delivered a strong finish to fiscal 2026, achieving its first year of GAAP profitability in over a decade. The company is successfully navigating a major shift in the communications market, transitioning from seat-based licenses to usage-based models as AI begins to handle routine interactions. This shift is evident in the numbers, with usage-based revenue growing 70% year-over-year to represent 23% of total service revenue. Key technological advancements like AI Studio and 8x8 Engage are driving this growth by enabling agentic AI and cross-departmental customer engagement. Financially, 8x8 has significantly improved its balance sheet, reducing debt by 43% from its peak and lowering interest expenses by 51% over two years. Despite a slight decline in gross margin percentage due to the mix shift toward usage-based products, the company remains focused on operating income and cash flow, guided by rigorous expense discipline. For fiscal 2027, management expects continued growth but maintains a cautious outlook due to the variable nature of consumption-based revenue. The company’s strategy revolves around being an open orchestration platform that bridges human and AI interactions at scale, positioning 8x8 as a strategic partner for enterprises modernizing their communications infrastructure.

5-year share-count history (top 10 holders by peak, incl. exited) + price

Revenue Segments

Filing Risk Scores

8x8, Inc.: SaaS Survival Strategy Straining Under Debt and Dilution

Full Earnings Call Transcript — Q4 • 2026-05-19

Operator: Good day, and thank you for standing by. Welcome to the 8x8 Q4 2026 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I would now like to hand the conference over to today, Kate Patterson, Head of Investor Relations.
Kate Patterson: Thank you. Good afternoon, everyone. Today's agenda will include a review of our results for the fourth quarter of fiscal 2026 with Samuel Wilson, our Chief Executive Officer; and Kevin Kraus, 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 our 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 filed with 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 the 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 earnings presentation slides which are available on 8x8 Investor Relations website at investors.8x8.com. With that, I'll turn the call over to our Chief Executive Officer, Samuel Wilson.
Samuel Wilson: Good afternoon, everyone, and thank you for joining us. Fiscal 2026 marked a turning point for 8x8. Our Q4 results demonstrated improving execution, operating discipline and a growing momentum across the business. We've delivered 4 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. Most importantly, I believe this year validated the strategy we've been building towards for several years. It is clear the business communications market is changing rapidly. The driver is straightforward. AI is beginning to handle low-level repetitive work that used to require people, routine inquiries, transactions, first-line support. We're still early, but the trajectory is clear. and customers are making architectural decisions today based on where this is going. As the market evolves, what customers buy and how they pay for it changes. Per seat pricing made sense when every interaction needed a human. As AI takes on more of the interactions, pricing needs to shift towards usage and outcomes. These shifts also change how customers buy. AI needs unified context to deliver real results. It doesn't work well in fragments. That's what's accelerating demand for integrated platforms, not as a preference, but as a prerequisite. We built 8x8 for this transition. Today, our platform combines carrier-grade, global voice infrastructure, programmable communications APIs, UCaaS, CCaaS, digital engagement and embedded AI into a single architecture designed to support both human and AI-driven interactions at enterprise scale. And that matters more than ever in an AI era. Voice is not a legacy channel in an AI-driven world. In many ways, it becomes more important. Voice is the bridge between automated execution and human judgment. As enterprises move towards human-to-agent and agent-to-agent interactions, communications infrastructure stops being utility and starts becoming a strategic control layer. Reliability, security, trust and orchestration matter more than ever. The challenge is no longer leveraging AI to generate responses or drive engagement, it's already happening. We are seeing both generative and genic AI drive a surge in communications APIs across voice, messaging and digital channels, and it is evident in our numbers. 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. The real challenge is delivering interactions that feel seamless, secure, intelligent and trustworthy. AI agents must be able to hear clearly, understand intent accurately, authenticate securely and know exactly when to hand interactions to a human. That requires more than another AI voice model. It requires a highly reliable communications infrastructure and a platform capable of orchestrating interactions seamlessly across both human and agentic layers. This requirement is redefining where value accrues in enterprise communications. Customers do not want another closed ecosystem or another AI model that needs to be tested and integrated them. They want platforms that can evolve as the AI landscape evolves. The new winners will be companies that combine carrier-grade infrastructure with orchestration across communications, workflows, APIs, analytics and customer engagement, and do it at scale. Our approach has been different from many of our peers. Instead of building around a single AI model or a closed ecosystem, we have focused on building an open integration and orchestration layer directly into the platform itself. This allows customers to adopt a new AI capabilities quickly and deploy AI across voice, messaging and customer engagement workflows without rebuilding infrastructure. More importantly, this approach carrier grade simplifying and programmable toward reducing operational friction, accelerating deployment and allowing them to adopt mission without constantly rebuilding infrastructure. That philosophy has shaped our innovation strategy, and we hit some important milestones in Q4. In March, we announced general availability of 8x8 Engage extended customer engagement beyond the traditional contact center to frontline sales and offers teams. Customer adoption has been strong with partners now fully enabled demand is building. We also added native agentic AI to our platform for CX with AI Studio. 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. It could not be easier. Check out the video demo on our website. During the quarter, we expanded platform capabilities across analytics, authentication, CRM integrations and orchestration workflows designed to simplify deployment and improve how AI-powered interactions move across human and digital engagement channels. Our outcome-focused platform strategy also shapes how we approach partnerships and technology acquisitions. Our partnership with Synthflow AI expands our capabilities for SMBs and strengthens our position in AI-powered agentic engagement. Maven Labs expanded our messaging and automation capabilities, while CallRoute strengthens our Microsoft Teams integration strategy and will simplify platform-to-platform migrations. Most importantly, our customer wins reinforced that our platform strategy is aligned with where the market is going. In the U.S., an insurance company replaced 2 competitors with a full UCaaS, CCaaS deployment after evaluating 6 competing vendors. A healthcare organization operating more than 100 locations implemented an omnichannel engagement solution, integrating voice, SMS, webchat and Salesforce to modernize patient communications. Internationally, a U.K. automotive retailer selected 8x8 to replace a legacy environment that combined UC and contact center deployment, and a bank in the Philippines selected 8x8 to strengthen authentication and fraud prevention capabilities ahead of new anti-fraud compliance requirements. Yes, we are a security company in places. Across these wins, customers constantly prioritize integrated workflows, trusted infrastructure, AI-ready engagement capabilities and flexible deployment models and securing over disconnected point solutions. As our markets evolve, we are sharpening our go-to-market strategies, adapting our pricing models and improving our processes. Partners have always played a central role in the communications and customer experience markets because they maintain trusted customer relationships and expanded geographic and commercial reach. We believe 8x8 remains significantly underdistributed relative to the size of the opportunity. As a result, we are increasing our investment in partner recruitment, enablement, on-boarding, automation and deployment tools that make it easier to business with 8x8 and easier for partners to deliver solutions to their customers. At the same time, we are exploring new consumption-based pricing and deployment models that reduced decision risk and traditionally associated with enterprise software purchases and simplifying trial and activation. By reducing decision risk and removing traditional barriers to adoption we can accelerate time to value and better align our go-to-market motions and sales cycles with product innovation cycles. Fiscal 2026 was also a year of operational discipline. We completed the Fuze migration process, integrated several financially immaterial but strategic acquisitions, reduce debt meaningfully and maintain disciplined operating expense management while continuing to invest in innovation, infrastructure and AI capabilities. The past several years has required focus, restructuring and hard operational decisions. This year, we begin to see the benefits of that work show up across the business. As we enter fiscal 2027, our overarching objective remains straightforward: drive sustainable growth, profitability and cash flow. Our priorities remain clear: expand our global communications infrastructure for AI-driven customer engagement, deliver innovation that enables seamless interactions that build trust at every stage of a customer journey, scale our partner and distribution ecosystems globally and continue to drive operational discipline and efficiency. Let me finish by saying that I believe 8x8 is operating from a position of strength, with a clear strategy, solid financial fundamentals and a growing confidence in our ability to compete aggressively in a rapidly evolving market. Thank you again to our customers, our partners, our employees, and our shareholders for your continued support. And with that, let me turn it over to Kevin.
Kevin Kraus: Thanks, Sam. Good afternoon, everyone, and thank you for joining us for our fiscal Q4 2016 earnings call. In addition to our shareholder letter, detailed financial results are available in our press release and on our Investor Relations website. Therefore, I'll focus my remarks on a few key highlights. 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, and we have had positive operating profit and cash flow from operations in every quarter for over 5 years. Total revenue was $185.2 million, and service revenue was $180.2 million, growing 4.6% and 5% year-over-year, respectively. These results reflect the continued strength in our usage-based offerings. Our usage-based offerings, which include our CPaaS communication APIs, digital channels and AI solutions set another all-time record and accounted for approximately 23% of service revenue in the quarter, compared to approximately 14% in Q4 '25. Gross profit was approximately $118.9 million, approximately $2 million above the gross profit implied by the midpoint of our Q4 guidance. Gross margin as a percent of revenue was 64.2%, modestly below Q3 due to the continued mix shift toward our usage-based offerings, which, in aggregate, carry a lower margin profile but can add meaningful profit dollars as the business scales. As we have noted in prior quarters, our usage-based offerings can fluctuate, which may introduce some quarter-to-quarter variability in gross margin. We are actively working to expand margins within the usage portfolio but as that part of the business grows, it does impact the consolidated gross margin percentage. Importantly, we are leaning into where the market is growing and not where the highest gross margin sits today. As we have articulated over the past few years, we managed the business to operating income, and we have consistently demonstrated the ability to offset gross margin mix impacts with disciplined operating expense management. Operating income came in at $19.8 million, resulting in a 10.7% operating margin, well above the high end of our guidance range and demonstrating our commitment to operating discipline. Operating expenses were favorable to expectations and down 5% year-over-year. For the full fiscal year, total operating expenses declined approximately 3%, reflecting our continued focus on cost structure. We have meaningfully reduced our debt service cost through significant paydowns of debt principal over the past 2 years. Trailing 12-month cash interest paid declined approximately 51% and from fiscal 2024 to fiscal 2026 from approximately $35.6 million to approximately $17.3 million. The combination of higher revenue, lower operating expenses and lower interest expense resulted in net income of $16.6 million and fully diluted EPS of $0.11 per share, $0.03 above the high end of our guidance range. Cash flow from operations was $14.4 million for the quarter, significantly above the high end of our guidance range. The strong Q4 result reflects both operating overperformance and favorable timing of collections and payments. And as a reminder, that cash flow from operations can vary meaningfully quarter-to-quarter based on timing. We ended the quarter with $93.3 million in cash and cash equivalents excluding restricted cash, an increase of approximately $6.4 million sequentially. We ended Q4 '26 with $323.9 million of principal debt outstanding. In early April, we made a $14.5 million principal payment on the term loan, bringing the principal balance down to approximately $309.4 million as we entered fiscal Q1 '27. This represents a reduction of approximately 43% from the August 2022 peak of $548 million. Turning to guidance. We are providing both first quarter and full year fiscal 2027 guidance. Our outlook reflects continued discipline and a measured view given the broader macro environment as we continue building a more diversified, durable business. We are leaning to where the market is growing fastest while protecting profitability through the operating discipline we have demonstrated quarter after quarter. For fiscal Q1 '27, we are providing the following guidance. Service revenue is expected to be between $175 million and $180 million. Total revenue is anticipated to be between $180 million and $185 million. We anticipate gross margin between 63.5% and 64.5%, reflecting the ongoing mix shift towards usage-based revenue. We anticipate operating margin between 8.5% and 9.5%. This results in a range for fully diluted non-GAAP earnings per share of $0.08 to $0.09 per share based upon approximately 147 million fully diluted shares outstanding. In fiscal Q1, we expect to make cash interest payments of approximately $1.8 million which reflects the term loan interest payment. The next semiannual interest payment, our 2028 convertible notes occurs in fiscal Q2. We anticipate cash flow from operations to be between $10 million and $12 million. For fiscal 2027 full year, we are providing the following guidance. Service revenue is anticipated to be between $707 million and $727 million. Total revenue is anticipated to be between $727 million and $747 million. We anticipate gross margin to be between 62.5% and 63.5%, noting the increasing amount of usage-based revenue in our revenue mix and potential variability in the proportion of usage-based revenue. Full year operating margin is projected between 9% and 10%, translating to non-GAAP operating income of approximately $70 million at the guidance midpoint. We expect fully diluted non-GAAP earnings per share to be in the range of $0.33 to $0.38 per share assuming approximately 150 million average diluted shares outstanding. For the full year fiscal 2027, we anticipate cash flow from operations of approximately $45 million to $52 million. Our fiscal 2027 cash flow outlook reflects the timing of certain nonrecurring items. We expect to make $39.5 million of principal payments on the term loan during fiscal 2027, in line with the loan's amortization schedule. Looking back, fiscal 2026 was a year of meaningful progress on the financial fundamentals of the business. We returned 8x8 to year-over-year revenue growth, expanded our usage-based offerings and delivered positive operating margins in every quarter, meeting or exceeding our guidance each time. We also significantly reduced our debt and cash interest costs, driving net income growth to over 19% for the year. The discipline we apply to managing the business gave us the flexibility to invest where the business needed it most, while still expanding profitability. Our forward planning reflects continued focus on the same priorities. We view the work ahead as a multiyear journey and the foundation we built in fiscal 2026 positions us well for what comes next. With that, I will turn the call over for Q&A.
Operator: [Operator Instructions] Our first question comes from Siti Panigrahi with Mizuho.
Charles Tevebaugh: This is Chad Tevebaugh on here for Siti. Good quarter. I just wanted to start on sort of the fiscal year '27 service revenue guidance. You're obviously coming off 4 consecutive quarters of good growth. Could you sort of walk us through the guidance range? And any puts and takes you're thinking about as you're entering the year, obviously, with the low end, implying slight slowdown in growth versus 2% growth at the high end?
Samuel Wilson: All right. So I'm going to just start by giving you some context and then I'll let Kevin fill in the details. I think the thing that you need to realize in sort of generically the Street and our investors need to realize is that usage is now 23% of our revenue and we don't have as good a visibility in usage when we go out 3, 4 quarters. And so we are naturally conservative in how we forecast usage revenue out that far because it's not contracted. And so what you'll see from us over time, and we've tried to highlight this last couple of years as usage has been growing steadily, is that we naturally will be slightly more and serve in our guidance because of those things.
Kevin Kraus: Sure. I think additionally, we -- look, our revenue geography is changing, too. We have about 40% international revenue there's a geopolitical environment that's a little bit unpredictable at times. So there's no reason for us to lean forward, as Sam said. And I just want to point out that with respect to the revenue mix, we've been navigating through this for quite some time, and we're fairly agile company, we can manage our business to continue to deliver the operating income and the cash flows that are healthy for us.
Charles Tevebaugh: Got it. Super helpful. And then just one follow-up here on the gross margin guidance. I understand there's a lot more usage revenue that's coming in and increasing as a percent of the mix. But wondering if you could break that down a bit for us. How much of that is driven by sort of more traditional CPaaS and messaging versus some of your newer AI solutions? And anything you can say on the gross margin profile of those newer solutions would be super helpful.
Samuel Wilson: Okay. So I'll start with this one. So let me break it into a couple of buckets. If you look at our traditional UC, CC business, those gross margins have been incredibly steady over the last couple of years with really no changes, except for a little bit of quarter-to-quarter variability. If you look at SMS messaging, I think it's kind of the question you're getting at, at the bottom of the stack, that commodity messaging. On a year-over-year basis, I would say the number of SMS messages we sent was not substantially larger. What's been changing is the mix of all the things in between. So we've done in our CPaaS business a higher percentage of more margin-rich products over the last years. That's been a positive, and that's offset by the new AI products. The new AI products when they launch, for example, AI studio for our new customers, we're giving us some credits to get them started. Those kinds of things, AI costs are very hard to predict. As you guys read the news as well as I do, Anthropic and OpenAI and others change pricing on a regular basis and those kinds of things. And so those products themselves as they start -- and I find this with any really new product. As the new product starts, it starts at a lower gross margin. And then as we scale it and get economies of scale out of it, we'll grow the gross margins over time.
Kevin Kraus: One thing I'd like to add on to the usage, we do have a variety of margin profiles for the variety of usage products that we have. I think that over time, that will also change perhaps a little bit as we expand some of our usage products geographic and not just focus in certain regions where maybe the pricing might be a little bit more competitive. The other thing I'll say about usage revenue is that it is very -- it is much lower cost from an OpEx perspective. And while you see the gross margin percentage might decline, we're focused on the dollars. And so the gross profit dollars is something that we look at, obviously, very closely and more can fall to the bottom line. So we're interested very much in scaling that part of the business. And that's actually where the market is moving. So we're going towards where the market is moving, and we're not focused on a particular gross margin profile at a given point in time.
Operator: Our next question comes from Peter Levine with Evercore.
Peter Levine: Congrats guys on the kind of close to the year. Maybe just a follow-up to the prior question. Sam, I know you said it's hard to get visibility, but maybe help us understand how these contracts are structured. In your prepared remarks, you kind of talked about outcome-based pricing, it's more usage-based, but are there kind of thresholds that these customers agree to in terms of usage? Maybe just help us understand like how -- I know visibility is light, but just help us understand how these contracts are structured and as we're actually committing to.
Samuel Wilson: Peter, no problem at all. Look, let me just take a step back and I swear to I'll answer your question in a excruciating detail in a second. But if you think about new and emerging technologies, right, I think it's completely fair on our part and we really think about the customer and put it at the center of our universe, going to a customer today and saying, "Hey, I need you to forecast how many voice AI interactions you're going to do a year from now or 2 years from now," is I believe, fundamental lunacy. And they think it's fundamental lunacy, too. So the way we structure the contract is this. we charge a reasonable rate on a per usage basis with zero commitment. And then as you raise your level of commitment, we will put a discount in to your rates on a per interaction basis, per outcome, per transaction per credit or however you want to think about it. So at a very basic level, if you give us a commitment for a year or even month-to-month, we will give you a 5% or a 10% discount. If you give it to us for a year, we'll give you a bigger discount those kinds of things. But what we find is even when we get commitments that customers just don't know a lot on the AI products and even on some of the messaging products, how many marketing campaigns are you going to run, how many authentications are going to come in, how much OTP is going to happen, those kinds of things. And so they always want to commit at a number that they is substantially below what they think they're going to actually use. And so they're willing to capture some discount, but they always want to really get away from this concept of shelfware or unused commitment. And it's why we've embraced the usage-based business model because it was obvious years ago to us, the CFOs were getting incredibly frustrated with unused seats and unused software. Trust me, my CIO is incredibly frustrated about it. And so that was why we were going to see more and more of this consumption-based pricing driven by credits or dollars or however you want to do it. But really, it's that notion. And so long-winded answer, Peter, to say, a fair price on a per interaction basis and a discount when you're willing to commit.
Peter Levine: No. I appreciate the detail. And then maybe for Kevin, maybe help us understand like what's the threshold then on gross margins? And then when can we see that kind of start to tick up? I know, again, to my prior question, it's hard to get the visibility and we're still trying to figure out the seasonality. But where is -- like what's the threshold for gross margin? Similar question on the OpEx side, where op margins, call it, sub -- call it, 9.5% this year. You talked about cutting costs out of the model. Just kind of help us the pull and take between the gross margin impact? And where is the cost coming out on the operating side?
Kevin Kraus: Sure, sure. Look, we don't have a precise answer on the gross margin threshold. This is about mix, right? And we talked about it being a little bit more difficult to predict. What I would focus on, on the cost side is cheaper routes to market, okay? So we're deploying AI internally to generate pipeline to have customer interactions and sales processes that are much cheaper than they were in the past. So we focus there on not only increasing the revenue from that, but doing it in a much cheaper way. other areas internally where we're deploying AI operational efficiencies across the entire org. We're covering more customers through the support systems that we have in place, and we're doing that more cheaply. So cost of delivery, cost to deliver should come down naturally over time as we deploy these operational agencies. And again, from my perspective, we have a multiyear track record of being agile enough to adapt to any margin percentage change to have an operating income and cash flow that delivers what we need to delever and strengthen our balance sheet. So it's difficult for me to have thresholds for you, Peter. But it's something we're constantly looking at, and I'd like to see us over the long term. Again, if the usage goes up at a lower OpEx cost, double-digit non-GAAP operating income percentages is really the target I have in mind, and I'd like for it to stay there and grow.
Samuel Wilson: Peter, one other thing I want to just add on kind of riffing on what Kevin is saying, I need you to kind of keep this in mind is forecasting token usage and cost is really hard right now, even for us as a software company, right? So we have our developers running on one of the coding by coding engines we have, our marketing department using automation for content delivery and all those kinds of things. And the costs associated with tokenization and what's happening is really hard. And I think we're still not even -- maybe even started the game yet or the top of the first inning around token optimization. I'm sure there will be some start-up companies that come about over the next few years that help demise token usage, but it's still early. And so it is really hard to sort of have these notional thresholds because something that's a low-margin product, that to rinse and repeat it through AI a bit can become a pretty nice margin product. once you get it up that curve.
Kevin Kraus: Yes. And I think some of the things that companies do and that we did Sam alluded to it earlier on the call, where you're seeing your customers with some free usage and so forth, that can really, really grow very, very rapidly and drive a whole lot of top line revenue with not a lot of operational costs. So I look forward to that happening for us at some point.
Operator: Our next question comes from Catharine Trebnick with Rosenblat Securities.
Catharine Trebnick: I have a question more on debt and free cash flow and capital allocation. So you reduced the debt 43% from 2022 peak. And consistently, you've done a good job of generating operating cash flow. So my question is, how do we look at '27? Are you prioritizing cash flow, further deleveraging investment in AI usage-based products? What do you -- anyway, can you help me out there? And then I have a follow on.
Samuel Wilson: I got it, Catharine. So look, I would say what's changed slightly for us is we did 2 acquisitions with 3 acquisitions last quarter. So the acquisition engine is sort of back in at 8x8, and we're really proud of the acquisitions we did. So we did 1 last year, and we did -- I think we did a total of 4 last year, sorry. We did 1 year ago and then we did 3 last quarter. So we're tucking in some really interesting technologies that we can use to sort of round out the portfolio and offer better solutions into our customers. So the base use of capital, we delevered another $14.5 million in April, that's the use of capital. And we did buy back shares a couple of quarters ago. Share buybacks were a little tougher because I got to work around covenants and bank things and other things. And so my preference is sort of a rank order, acquired things that help us improve our customer outcomes, pay off debt and then buy back stock number 3.
Kevin Kraus: And Catharine, we do -- we have like $39.5 million, $40 million of debt payback in this year's plan, including the $14.5 million.
Catharine Trebnick: Okay. And then just a little bit. You had a good quarter, Sam. So congratulations on that. And we do like your new color scheme, so you upsell your marketing like that. On the platform differentiation versus peers. So you've been -- your open orchestration centric platform versus more calls ecosystems occurs. Can you kind of explain to me why on a competitive takeaway today at how these win rates or average deal sizes for AI-enabled CX deployment, I mean how are they coming together? I'm kind of curious on that aspect?
Samuel Wilson: Sure. So 2 things. First off, outside of stat, right? 67% of CFOs and CIOs want to go to consolidate the number of vendors they have. And so first and -- and why, lower total cost of ownership. So what you're getting from us is if you consolidate your spending dollars with 8x8, you're getting a business communications platforms. I believe the walls are coming down with these categories of UC and CC and CPaaS, right? Our Engage product interactions was up 300% year-on-year. Is that a CC product? Is that a UC product as somewhere in the middle between those 2, right? And so the walls are coming down between these segments. Corporate America and corporate world wants to consolidate on the vendors and they want to pick a vendor where they can get economies of scale in terms of spending and discounts, contract simplification, worldwide support, single throat to choke, all the things that you've heard over the past, right? So when we -- I would say when we pitch that story 5 years ago, there was a pretty big technology discount you had to get from 8x8 to get that story. Today, I think that technology discount doesn't really exist. We have world-class CPaaS. I think we're #11 or #10 in the world in terms of CPaaS volumes, right? So we're way in front of most of our normal competitors. We've got great contact center. We've got Engage, which completely is differentiated from others. We've got UC and now on top of everything else, we've got AI Studio, which is absolutely amazing in the sense that it's prompted, et cetera, and you see it. And so I think when we go into a company -- sorry, when we go into a company, what we're trying to do is have a bus communications platform discussion and not have a UC, CC let me dive on pricing because that's what my competitors like to do conversation.
Operator: Thank you. I would now like to turn the call back over to Sam Wilson for any closing remarks. .
Samuel Wilson: Thank you, everyone. Thank you for joining us today. I'd just like to sort of end with this concept, right? We're operating from a position of strength. We have a clear strategy, which after 4 quarters of growth, which some of you doubted clearly in solid financial fundamentals and growing confidence in our ability to compete aggressively in a rapidly evolving market let's not forget, is somewhere between $70 billion, $80 billion, $90 billion in size depending on which third-party analysts use as a reference point. I think we're in a great position as a company to move forward. I thank you for a chance to sort of give you an update on where we are, and I look forward to talking to you again after the end of next quarter.
Operator: Thank you. This concludes the conference. Thank you for your participation. You may now disconnect.