8×8, Inc. (NYSE:EGHT) Q3 2023 Earnings Call Transcript

Samuel Wilson: Kevin, you should chime in. I think the biggest difference I see is our XCaaS messaging resonates in our Microsoft Teams messaging resonates really strongly in the U.K. market and the foreign market is a little bit better. In the U.S., there’s still a little bit of the Microsoft channel and the telecom channel being 2 separate channels. And so the — our channel team has done a tremendous yeoman’s work, building our Microsoft Teams channel, and that’s paying dividends. And so I think it’s just — I see economics less. It’s just 2 different structured markets, in particular. And it’s easier for us to gain that sweet traction in our foreign markets.

Josh Nichols: And then last question for me. I guess it sounds like the CPaaS business has been a little bit of a headwind. I know that’s a lower-margin offering, but likely stabilizing over the next couple of quarters here. One, I guess, like will the companies focus on deleveraging, like one, would you consider that like a core business or potentially not as you look at opportunities to kind of accelerate this deleveraging process? And are there any also like repayment restrictions that you have on your debt aside from the remaining notes that are due in ’24?

Samuel Wilson: I’ll let Kevin take the second one. Look, the CPaaS business is a great business. It’s got beautiful unit economics when it’s running right. Step 1 is to get it running right, and then we can talk about strategic options for it. But Josh, as you know me, I’m a seller from strength, not from weakness.

Kevin Kraus: Yes. On the debt question, we have February 1, 2024 is when the remaining 2024 converts are due.

Samuel Wilson: I think he’s asking, though, on the — on the term notes, we can pay back 10%.

Kevin Kraus: Starting in August. Yes, that’s what we have. And then there is a prepayment penalty for the succeeding year, small prepayment penalty. And then after that, there’s none.

Operator: There are no additional questions waiting at this time, so I will pass the conference back to Samuel Wilson, CEO, for any closing remarks.

Samuel Wilson: All right. Thank you, Matt. Thank you for your continued support. I hope we have conveyed some of the excitement about our opportunity and our future path tempered by the recognition that success will require commitment and hard work. I am confident we can do this. We are a vibrant and financially strong organization, and we are accelerating the pace of innovation. With a steady stream of new products coming this calendar year, including ML-AI based features and tailored experiences, we are well positioned for the future. Thank you so much, and I look forward to reporting our progress next quarter.

Operator: That concludes the conference call. Thank you for your participation.