8x8, Inc. Shares Surge 5% on Adequate Q1 Results and 2015 Guidance

Shares having dropped by 31% in three months, a solid first-quarter report was enough to trigger a 5% bounce.

Jul 23, 2014 at 7:20PM
Polycomvvx

A Polycom video phone, resold with 8x8 services. Source: 8x8.

Shares of Internet based telephony specialist 8x8 (NASDAQ:EGHT) jumped as much as 5.1% in after-hours trading on Wednesday, following the release of results for the first quarter of fiscal year 2015.

Sales jumped 30% year over year, landing at $37.9 million. Adjusted earnings came in at $0.03 per share, up from a $0.06 loss per share in the year-ago period.

The earnings figure was in line with analyst expectations, while 8x8 delivered a mildly positive revenue surprise.

Management issued full-year guidance, pointing to 25% year-over-year sales growth and adjusted net margins near 8% or 9%. These guidelines match up with current analyst projections.

8x8 added 1,400 net new business subscribers during the quarter, helped by low customer churn.

In a prepared statement, 8x8 CEO Vik Verma underscored the company's growing success in selling Internet telephony and video services to mid-sized and enterprise-level business customers.

"With a 94% year-over-year increase in new mid-market and channel sales and 41% of our service revenues coming from the mid-market, 8x8 is clearly expanding its leadership position in this valuable market segment," Verma said.

Coming into this report, 8x8 shares had plunged in recent months. Share prices declined by 31% over the previous three months.

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Anders Bylund has no position in any stocks mentioned. The Motley Fool recommends Apple and Polycom and owns shares of Apple. Try any of our Foolish newsletter services free for 30 days.

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