8X8 INC /DE/ (EGHT)·Q3 2026 Earnings Summary
8x8 Posts Record Service Revenue as AI Adoption Surges, Stock Falls 3.5%
February 3, 2026 · by Fintool AI Agent
8x8 Inc (NASDAQ: EGHT) delivered a beat on both revenue and EPS for Q3 FY2026, posting record service revenue of $179.7M and achieving its 20th consecutive quarter of positive operating cash flow. Despite the operational strength, shares fell 3.5% to close at $1.66, as investors digested lower Q4 guidance related to the completion of the Fuze platform migration.
Did 8x8 Beat Earnings?
Yes — 8x8 beat on both metrics and exceeded the high end of guidance.
Key highlights from the quarter:
- Third consecutive quarter of YoY revenue growth — total revenue up 3.5% YoY, service revenue up 3.6% YoY
- Excluding Fuze customers, service revenue grew 6% YoY
- Usage-based revenue represented 21% of service revenue, up from 14% a year ago
- Debt reduced by 41% — total debt down by $224M since August 2022 peak
Ask Fintool AI AgentWhat Did Management Guide?
8x8 raised full-year FY2026 guidance but Q4 outlook showed sequential revenue decline due to Fuze migration completion.
Q4 FY2026 Guidance
Full-Year FY2026 Guidance (Raised)
Why Q4 is softer: The sequential decline reflects two factors: (1) expected seasonality in usage-based offerings, and (2) the final churn of Fuze customers following the December 31, 2025 end-of-life of the Fuze legacy platform.
CFO Kevin Kraus emphasized: "Our third quarter performance reflected improved execution across revenue, non-GAAP operating margin and cash flow, enabling us to raise our guidance for the fourth quarter and the full fiscal year."
What Changed From Last Quarter?
Fuze Migration Complete
The most significant operational milestone: 8x8 completed the final upgrades of all Fuze customers to the 8x8 platform. This sets the stage for:
- Improved customer retention and expansion opportunities
- Higher customer satisfaction
- More efficient operations across network and back-office systems
CEO Samuel Wilson noted: "While the final disposition of the remaining Fuze customers created a revenue headwind for the fourth quarter and fiscal 2027, the strategic benefit is clear. We can now focus 100% of our energy on growth and customer success rather than managing legacy infrastructure."
AI Adoption Acceleration
AI adoption is moving beyond pilot projects into production at scale:
- Intelligent Customer Assistant adoption: +70% YoY
- AI interactions on platform: 2x+ YoY (doubled)
- Voice AI interactions: +200% YoY
- Voice share of AI interactions: 80%+
- AI solutions revenue growth: 30%+ YoY
Usage-Based Revenue Mix Shift
A fundamental shift in the revenue model is underway:
Key drivers: CPaaS APIs, AI-based solutions, and contact center digital channels as customers move from experimentation to broad-scale implementation.
Multi-Product Strategy Gaining Traction
- All top 20 customers now have multiple products
- Most top 20 customers have 3+ products
- Customers with 3+ products generate 3x+ the revenue of customers with 2 products
Ask Fintool AI AgentHow Did the Stock React?
EGHT shares fell 3.5% on earnings day, closing at $1.66 — a concerning reaction to what was objectively a strong quarter.
Why the selloff despite the beat?
The likely culprits are:
- Q4 guidance implies sequential revenue and margin decline — Cash flow guidance of just $1-4M vs $20.7M this quarter is particularly stark
- Fuze migration headwinds extend into FY2027 — Management acknowledged continued revenue pressure
- Stock already down 53% from 52-week high — Limited buying conviction even on beats
Key Management Quotes
On strategic positioning:
"Across the industry, AI is reshaping how organizations think about customer engagement. Voice continues to be the preferred way to communicate when interactions are complex, time-sensitive, or high value... 8x8 is well positioned with a unified, secure platform designed to help organizations simplify their environments and modernize with confidence." — Samuel Wilson, CEO
On the business model shift:
"This 'pay-as-you-go' approach appeals to customers because it reduces risk as they adopt new technologies. It also raises the bar for vendors because revenue is now linked directly to successful customer outcomes." — Samuel Wilson, CEO
On execution momentum:
"When we look back a year from now, I believe we will see that Q3 marked the inflection point in our transformation." — Samuel Wilson, CEO
Q&A and Customer Win Highlights
Key Q&A Takeaways
On contact center seat trends (countering AI disruption fears):
"Total seats for contact center, up quarter-over-quarter and year-over-year... This notion that contact center seats are gonna go off a cliff any quarter is just a misnomer. We don't see it." — Samuel Wilson, CEO
CEO Wilson explained that while AI is handling more cases, agents are focusing on complex interactions with higher handle times. Customer satisfaction benefits as routine tasks get automated.
On FY2027 Fuze headwinds (CFO Kevin Kraus): The Fuze revenue drag will be "$4 million, $3 million, $3 million from Q1 to Q3, then we anniversary it in Q4." Even with this headwind, 8x8 expects to deliver service revenue growth in FY2027.
On Voice AI use cases in production: Specific examples include: appointment booking 24/7 (replaced 4 agents at a healthcare client), biometric identification and authentication, FAQ handling, and self-service bill payments via Apple Pay. Customers are moving from "micro use cases" to stacking multiple automations as they see ROI.
On operating margin path to double digits:
"When exactly we'll get back to double-digit sustained operating margins? I don't know. Is it a target? Absolutely." — Samuel Wilson, CEO
Management emphasized that usage-based revenue has "perfectly fine" operating margins despite lower gross margins, citing Twilio as a comparable model.
Notable Customer Wins
Healthcare - Strategic Partnership Over Point Solutions: A regional health system with 850+ employees selected 8x8 over both Zoom and RingCentral for unified communications and contact center. The differentiator: on-site meetings and industry-specific references for healthcare workflows.
Early Education - Complex Transformation: A U.S. early education provider with 43,000+ employees chose 8x8 for a significant UC expansion, attracted by the flexible OpEx model that aligned with their finance-driven approval process.
Veterinary Services - Installed Base Expansion: A large veterinary/pet hospital company with 35,000 employees expanded contact center capacity through consistent weekly engagement with their new leadership team.
Product Innovation
Key platform updates this quarter:
- Integrated Workforce Management — Now standard in every Contact Center seat at no extra cost
- 8x8 Retail Nationwide — Purpose-built for frontline retail with MDM integration
- Customer 360 — Unified customer intelligence hub with AI-driven sentiment and topic detection
- Native Mitel Support — SIP support for Mitel desk phones simplifies cloud migration
- ISO/IEC 27018 Certification — New privacy standard for personal data protection
- Maven Lab Acquisition — Small AI/technology tuck-in closed in January 2026; too small to impact financials
Recognition
- IDC MarketScape recognized 8x8 as a Major Player in AI-Enabled Contact Center Workforce Engagement Management 2025-2026
- 8x8 Engage won Gold at 2025 London Design Awards for User Experience Design
Forward Catalysts and Risks
Catalysts to Watch
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AI monetization acceleration — With AI solutions growing 30%+ and usage-based revenue now 21% of service revenue, continued AI adoption could drive re-acceleration
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8x8 Engage momentum — Management called it "one of the fastest growing products in Company history" with triple-digit YoY growth
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Channel partner expansion — Channel-sourced pipeline showing sequential improvement; revenue through partner channels is growing
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Post-Fuze operational efficiency — With the platform migration complete, the company can redirect resources from legacy maintenance to growth initiatives
Risks and Concerns
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Competitive pressure — RingCentral, Zoom, Microsoft Teams, and others continue to invest heavily in the UCaaS/CCaaS space
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Customer churn — Management acknowledged churn rate could be higher than anticipated
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Debt burden — Despite reducing debt by 41%, the company still carries convertible notes due 2028 and term loan obligations
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Gross margin pressure — Non-GAAP gross margin declined to 64.8% from 69.5% YoY due to higher mix of lower-margin usage-based revenue
Ask Fintool AI AgentThe Bottom Line
8x8 delivered a strong Q3 with record service revenue, accelerating AI adoption, and continued profitability. The company beat on all key metrics and raised full-year guidance. However, the stock's negative reaction reflects legitimate concerns about Q4 headwinds from the Fuze migration completion and the structural shift toward lower-margin usage-based revenue.
The bull case centers on: (1) AI as a growth catalyst with Voice AI interactions up 200%, (2) completed Fuze migration enabling operational focus, and (3) multi-product strategy driving higher customer lifetime value.
The bear case focuses on: (1) ongoing competitive pressure from better-capitalized rivals, (2) gross margin compression from revenue mix shift, and (3) valuation risk with the stock down 53% from 52-week highs but still facing execution uncertainty.
Management's confidence that "Q3 marked the inflection point in our transformation" will be tested in the coming quarters.
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