8×8 Prepares for Q3 Fiscal 2025 Earnings Announcement
8×8 (EGHT) is set to announce its third-quarter fiscal 2025 earnings on February 4.
Discover the latest EPS estimates and surprises on the Zacks Earnings Calendar.
For the upcoming third quarter, the company anticipates revenues between $177 million and $182 million.
The Zacks Consensus Estimate for these revenues is $179.18 million, indicating a projected decline of 1.01% compared to the same quarter last year.
8×8 Inc Price and EPS Surprise History
8×8 Inc price-eps-surprise | 8×8 Inc Quote
Projected earnings stand at 8 cents per share, which has remained the same over the last 30 days. This figure represents a 33.33% decline from the prior year’s earnings.
In the past four quarters, EGHT has consistently surpassed the Zacks Consensus Estimate, achieving an average earnings surprise of 11.70%.
Now, let’s consider the factors that may impact the upcoming earnings announcement.
Key Drivers for Q3 Performance
Expectations for 8×8’s third-quarter results are optimistic due to increases in service revenue, especially within the Communications Platform as a Service (CPaaS) and contact center as-a-service (CCaaS) segments.
Projected service revenues for this quarter are expected to reach between $171 million and $174 million.
The company has recorded strong performance in its CPaaS segment, particularly in the Asia-Pacific and European markets. This growth in platform usage revenue is anticipated to positively affect overall revenue for the upcoming reporting period.
8×8’s efforts to expand its product offerings and encourage adoption of its advanced solutions by both existing and new customers are likely to contribute to a favorable outcome.
Ongoing investments in artificial intelligence (AI), particularly the launch of the Intelligent Customer Assistant, are poised to drive additional growth. Since their debut, AI-based products have led to over 1 million interactions, suggesting continued sales momentum into the next quarter.
Recently, 8×8 shares have fallen 5.7% over the past six months, contrasting with a 13.2% gain in the Zacks Computer & Technology sector and a 36.9% rise in the Zacks Internet Software industry.
Compared to other major players in the Internet and cloud services sector, such as Amazon (AMZN) and Alphabet (GOOGL), which have seen stock returns of 30.5% and 14.8%, respectively, 8×8’s performance appears underwhelming.
EGHT Stock’s Performance Over Six Months
Image Source: Zacks Investment Research
Affordable Valuation for EGHT
The stock of 8×8 is currently viewed as undervalued, reflected by a Value Score of B.
With a forward 12-month Price/Sales ratio of 0.53, it is significantly lower than the industry average of 3.21.
Price/Sales (F12M)
Image Source: Zacks Investment Research
Growing AI Solutions Enhance EGHT’s Outlook
The future looks bright for 8×8 with its expanding AI-driven product range. During the second quarter of fiscal 2025, 8×8 introduced Active Assessor, an AI solution that helps landlords engage tenants and ensure housing standards are met.
They also improved AI-enabled interaction features within their platform, allowing contact center agents to deliver more personalized service and reduce completion times.
Recent advancements using the OpenAI Whisper model have enhanced translation capabilities and improved overall service efficiency, thereby boosting customer satisfaction.
Strong Partnerships to Foster Sales Growth
8×8 is well-positioned for growth thanks to an expanding partner ecosystem that includes technology collaborators like Descope and Regal.io, along with integrations with Microsoft (MSFT) Teams. This positions the company to attract new customers and broaden its offerings.
Particularly, the integration with Microsoft Teams has provided a significant boost. 8×8 boasts one of the most extensive enterprise voice integrations available, including 8×8 Operator Connect and 8×8 Voice for Microsoft Teams, supporting over 500,000 Teams users.
Is 8×8 a Smart Investment or a Risky Gamble?
With its innovative AI portfolio and a growing partner network, 8×8 indeed has several growth engines. However, the company may face challenges from tough economic conditions and intense competition that could affect revenue stability and customer retention.
In the forthcoming quarter, 8×8 might experience hurdles due to customer transitions from the Fuze platform and potential impacts from currency fluctuations.
Currently, 8×8 holds a Zacks Rank #3 (Hold), suggesting that investors might want to wait for a more favorable opportunity to invest in the stock. You can view the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Nasdaq, Inc.
