Hosted VoIP Featured Article

VoIP provider 8x8 (News - Alert) released information about its fiscal 2Q today, with increasing revenue and product penetration across all offerings. “I’m very pleased to report that 8x8 continued to generate all-time record revenue for the second quarter of fiscal 2011 ended September 30, 2010, as we saw strong metrics across all of our business service offerings,” said CEO and Chairman Bryan Martin (News - Alert).

The company’s total revenue for the second quarter of the 2011 fiscal year was up 8 percent by $17.4 million in comparison to the $16 million the company generated in the same period of 2010. Net income for the the fiscal 2011 quarter being reported on was $2 million, or $0.03 per share, up 47 percent from the net income of $1.3 million, or $0.02 per share, for the same quarter last year.

Martin said, "The second quarter of fiscal 2011 was 8x8's strongest quarter ever and a pivotal period for the company and its shareholders as our business voice and managed hosting services delivered the highest revenue and net income levels in the Company's history as a publicly traded entity."  The positive findings were partially attributed to an exceptionally low churn rate for the year as well as a partnership with Poly-Com focused on bring lower end IP gear to the market and pushing 8x8’s product margin to historic lows.

Martin also forecasted that the Hosted UC service the company released on October 4, which is designed to completely replace desk top IP equipment, will make waves in the coming quarter. He said, “We believe that many of these very small businesses will adopt software-only solutions to save on initial subscription costs as well as promote greater mobility, which would, in turn, further improve our product margins at the low end of the market.” The service requires only a flash enabled computer and input devices to run.

President and CTO Dan Weirich (News - Alert) added, “Gross margin was 68% in the quarter compared to 67 percent in the same period a year ago. Service margins were 78 percent and product margins were negative 57 percent. Average monthly service revenue per business customer was $209 in the September quarter, up from $201 in the September 2009 quarter.” Weirech added that the company has tremendous leverage in its model because a large percentage of each dollar made was  going to the bottom line.

With the widespread adoption of cloud and SaaS (News - Alert) platforms across most enterprise level tech markets 8x8’s stellar 2Q earnings are a trend likely to continue into the new year.

Chris DiMarco is a Web Editor for TMCnet. He holds a master's degree in journalism from Quinnipiac University. Prior to joining TMC (News - Alert) Chris worked with e-commerce provider Suresource as a contact center representative and development analyst. To read more of his articles, please visit his columnist page.

Edited by Stefania Viscusi