8x8 Q1 2026 slides: returns to revenue growth, margins compress amid AI push

Introduction & Market Context

Communications technology provider 8x8 Inc (NYSE:NASDAQ:EGHT) reported its first quarter fiscal 2026 results on August 5, 2025, marking a return to year-over-year revenue growth for the first time in nine quarters. The stock responded positively, closing up 2.14% at $1.91 during regular trading hours and surging 9.63% to $2.05 in after-hours trading.

The company’s presentation highlighted its strategic focus on AI-powered solutions and multi-product offerings, while continuing its debt reduction efforts. This represents a significant milestone for 8x8, which had previously missed revenue expectations in Q4 2025 according to earlier earnings reports.

Quarterly Performance Highlights

8x8 exceeded its guidance ranges for both service and total revenue in Q1 2026. Service revenue reached $176.3 million (2.0% year-over-year growth), while total revenue hit $181.4 million (1.8% year-over-year growth).

As shown in the following comparison of results versus guidance:

The company maintained profitability with a GAAP operating margin of 0.3%, marking the fourth consecutive quarter of GAAP operating profit. Non-GAAP operating margin was 9.0%, at the lower end of guidance (9.0%-9.5%), and down from 11.3% in the same quarter last year.

Cash flow from operations remained strong at $11.9 million, though down from $18.2 million in the prior year. The company continued its debt reduction strategy, repaying $10 million of its 2024 Term Loan and repurchasing 1 million shares of common stock for approximately $1.8 million.

Strategic Initiatives

8x8’s strategy focuses on innovation, scaling, and investment to drive durable growth and operating leverage, as illustrated in this circular diagram:

The company is seeing significant momentum across its product portfolio, particularly in AI-based solutions. Voice AI interactions increased more than seven times compared to Q1 2025, while the company reported strong year-over-year growth across multiple product categories:

A key element of 8x8’s strategy is its multi-product approach, with annual revenue from customers using three or more products now representing more than one-third of annual revenue (excluding consumption revenue). The company’s AI-powered customer experience platform continues to evolve with capabilities for supervisors, agents, customer-facing teams, and end customers.

Detailed Financial Analysis

While 8x8 has returned to revenue growth, the company’s revenue charts show the gradual nature of this recovery:

Despite the positive revenue trend, gross margins have been compressing due to a shift toward higher consumption revenue, primarily related to CPaaS APIs:

The company has maintained a strong focus on debt reduction, decreasing its outstanding debt by approximately $234 million since August 2022:

This debt reduction strategy has helped 8x8 improve its financial position, though interest expenses still impacted profitability with $4.0 million in GAAP interest expense for the quarter (down 60% year-over-year).

Industry Position & Recognition

8x8 highlighted its strong competitive positioning and industry recognition in its presentation. The company ranks #1 for Contact Center integrated with UCaaS according to 2024 Gartner (NYSE:IT) Critical Capabilities and has been recognized as a Leader in UCaaS 13 times and for CCaaS 10 times in the Gartner Magic Quadrant.

Recent accolades include ranking #69 on Newsweek’s Global Most Loved Workplaces 2025 (the only CCaaS provider on the list), winning Silver in the New York Product Design Awards for its Supervisor Workspace, and being recognized as a Strong Performer in The Forrester Wave for UCaaS Platforms in Q3 2025.

As shown in the following slide highlighting the company’s achievements and investments:

Forward-Looking Statements

For Q2 2026, 8x8 provided guidance ranges that suggest a potential sequential decline in revenue:

The company also updated its full-year fiscal 2026 guidance, slightly narrowing the revenue range while reducing expectations for operating margin and earnings per share:

The updated guidance reflects ongoing margin pressure as 8x8 continues to invest in AI capabilities while navigating the shift toward consumption-based revenue models. Despite these challenges, the company remains focused on its long-term strategy of innovation, scaling, and investment to drive durable growth.

Conclusion

8x8’s Q1 2026 results mark an important inflection point as the company returns to revenue growth after more than two years of decline. The strong market reaction suggests investors are encouraged by this development, despite margin compression and slightly reduced full-year guidance.

The company’s strategic focus on AI-powered solutions and multi-product offerings appears to be gaining traction, though execution in the coming quarters will be critical to maintaining the positive momentum. With continued debt reduction and strategic investments in innovation, 8x8 is positioning itself for sustainable growth in the competitive communications technology sector.

Full presentation:

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