8x8 Increases Sales but Misses Estimates on Earnings

Seth Jayson, The Motley Fool
Updated

8x8 (NAS: EGHT) reported earnings on May 22. Here are the numbers you need to know.

The 10-second takeaway
 For the quarter ended March 31 (Q4), 8x8 beat slightly on revenues and missed estimates on earnings per share.

Compared to the prior-year quarter, revenue grew significantly. Non-GAAP earnings per share grew. GAAP earnings per share shrank significantly.


Gross margins increased, operating margins grew, net margins dropped.

Revenue details
 8x8 notched revenue of $28.7 million. The seven analysts polled by S&P Capital IQ predicted revenue of $28.3 million on the same basis. GAAP reported sales were 18% higher than the prior-year quarter's $24.2 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
 EPS came in at $0.05. The seven earnings estimates compiled by S&P Capital IQ predicted $0.06 per share. Non-GAAP EPS of $0.05 for Q4 were 25% higher than the prior-year quarter's $0.04 per share. GAAP EPS of $0.02 for Q4 were 98% lower than the prior-year quarter's $0.87 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
 For the quarter, gross margin was 70.6%, 220 basis points better than the prior-year quarter. Operating margin was 9.3%, 40 basis points better than the prior-year quarter. Net margin was 5.8%, much worse than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
 Next quarter's average estimate for revenue is $29.5 million. On the bottom line, the average EPS estimate is $0.06.

Next year's average estimate for revenue is $126.1 million. The average EPS estimate is $0.28.

Investor sentiment
 The stock has a four-star rating (out of five) at Motley Fool CAPS, with 342 members out of 356 rating the stock outperform, and 14 members rating it underperform. Among 44 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 41 give 8x8 a green thumbs-up, and three give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on 8x8 is buy, with an average price target of $8.48.

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The article 8x8 Increases Sales but Misses Estimates on Earnings originally appeared on Fool.com.

Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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