Good morning, and welcome to our virtual Product and Innovation Update 2024. Thank you all for joining us. Today's presenters include our CEO, Sam Wilson, our Global Head of Product Design and Operations, Dhwani Soni, our Chief Revenue Officer, Lisa Martin, our Chief Customer Officer, Walt Weisner, and our CFO, Kevin Krause. The times shown on this agenda are approximate. A few housekeeping items before we get started. We will host a Q&A session at the end of today's presentations, but you can email me your questions anytime at ir_questions@8x8.com. The slides and non-GAAP reconciliations will be posted to the Events page of our investor relations site after the event, and a video of the event will be archived on the Investor Relations playlist of our YouTube channel.
Before we get started, please note that today's presentations may include forward-looking statements about our future financial performance, investments in innovation, our focus on profitability and cash flow, and other financial performance metrics, as well as statements regarding our business, our products, and our go-to-market strategies. We caution you not to put undue reliance on these forward-looking statements, as they involve risks and uncertainties that may cause actual results to vary materially from forward-looking statements, as described in the risk factors in our reports filed with the SEC. Any forward-looking statements made during these presentations reflect our analysis as of today, and we have no plans or obligations to update them. Certain financial measures that we'll be discussing, together with year-over-year comparisons in some cases, were not prepared in accordance with the U.S. generally accepted accounting principles, or GAAP.
A reconciliation of these non-GAAP measures to the closest GAAP measures will be included in the slides. I'll now turn the event over to our CEO, Sam Wilson.
Thank you, Kate, and thank you, everyone, for joining us today. Our last financial analyst event was at the Nasdaq in New York about a year ago. That's where we laid out our new vision, where we wanted to take the company, and so today I wanna give you an update on what's happened in the last year and where we're going from here. Last year, we shared with you we were on a new path, to be a CX-led company, a customer engagement company. Why did we make that change? Looking back at the company, our core value proposition had been on-prem to cloud for collaboration. That remains, and we continue to innovate in the UC market, adding geographic regions where we're the market leader and other announcements that we believe will continue to unlock this market.
There remain hundreds of millions of on-prem UC seats still to be moved to the cloud. Why did we move to customer engagement? Two things. Number one, and it's best exhibited by the PricewaterhouseCoopers survey, one in three will leave a brand they love, yes, a brand they love, after one bad customer support experience. The margin of error for contact centers was becoming zero, and there was a tremendous opportunity to focus around customer retention and customer satisfaction. The venture capital community's picked up on this, investing over $100 billion around the CC space, specifically focused on that. So yes, we added focus on being a customer engagement-led company which sells UC. This allows all customer interactions to be captured on a single data platform. We've prioritized R&D and GTM for the contact center and our customer engagement initiatives over the last year.
Core, core to everything we're gonna talk about today is innovation, because we build products that solve customer problems around customer engagement. Okay, what are our guiding principles for this journey? First, innovation, which I just mentioned. As a software company, we are focused on building world-class software that specifically solves business problems. We focus on winning. Of course we do, but as part of focusing, that means being in specific markets. We are not trying to be all things to all people, and it's one of the most common questions we get from our investors: "How do you compare to this company?" or, "How do you compare to that company?" But just think about the journey we've been on. First, we were mainly a U.S.-based SMB company, or SB company, focused only on voice-over IP.
We've now transitioned into a multi-product company focused in major markets with a target customer profile. And lastly, as a business, we generate non-GAAP profits and cash flow, which we share with our investors. We share via debt retirement, share repurchases, and other means, and we've already started that sharing. As everyone knows, the market for UC plus CC plus CPaaS is large. There's a wide variety of estimates. This one, based on Gartner, we see at least a $58 billion market opportunity for just UC plus CC. Add in CPaaS, and we know the number will be even bigger. If we look at the market size of our target customer, we think this is at least $10 billion in size, so we have lots of greenfield opportunities to bring our innovations to a willing customer.
For simplicity, we say that our target audience is a customer between 250 and 20,000 employees. But let me be clear, our products are fit for use above and below these sizes, and we have deployments in organizations larger than 20,000 employees. But when we design products, the customer we have in mind is in that range, who want off-the-shelf technologies solving their business problems. Okay, so let's talk about how we chart our path to success in this large market opportunity. First, we're innovation-driven. Innovation is the key. Second, we focus on winning. So what does that mean now, taking it down one level? New customer acquisition, multi-product adoption, higher average revenue per customer, increased retention. This, in total, drives a greater lifetime value of a customer, and that, in turn, leads to overall growth of the company.
New products continue to grow quickly at the company, and shortly, we believe that will lead to overall growth at the company. Okay, so let me talk about this in real life. The City of Westminster is a great example of this. The contact center leader brought the contact center in-house after being outsourced for 22 years. She had the goal of saving GBP 1 million in 3 years at the same level of customer satisfaction. Instead, she saved GBP 1 million in the first year and has increased customer satisfaction significantly. How did she do that? She did it like this. First, the City of Westminster uses UC, CC, CPaaS, quality management, interaction analytics, workforce management, et cetera. They have about 135 contact center seats that are handling over 50,000 inbound calls a month, so they added ICA.
They're already getting 80% deflection rates with ICA, our Intelligent Customer Assistant, the AI-powered bot, and the initial use case was for frequently asked questions, but they're already expanding into new areas. Lastly, they're sending out over 80 campaigns per day, leveraging Proactive Outreach. That's SMS messaging, WhatsApp, and other omni-channel routes. This allows the city to be incredibly proactive to their constituency, the taxpayer. And with that, let me show you a video describing the use case at the City of Westminster.
We are Westminster City Council. We're in the heart of London, and our responsibility as a council is to look after our residents, look after people who visit, and do business in the city. I look after our online services, and our digital experience. Westminster went through a massive change. Our residents often wanted to speak to people who were actually living in their city and who understood them, and we went and made the decision to insource our contact center. It's been a massive success, and we worked with our partners, 8x8, to set that up, and so far, it's going really well.
We also looked at a lot of the data that we have coming into our contact centers and really learn what type of information residents are looking for when they are trying to be more self-sufficient.
We've just introduced a new target operating model that really centers around our user, so not just looking at solutions, but really drilling down into: What's the problem that our users are experiencing? How can we tackle those problems? And co-designing those with our users to make sure we really come up with the best solution for them. So the reporting and analytics of the dashboard have been really easy to access, really interactive. This has been great because it just means that we can have access to information whenever we need it.
We found that we were receiving many repetitive queries from our residents to the contact center, and we found that the Intelligent Customer Assistant was able to create efficiency and automation for our colleagues. The Intelligent Customer Assistant has really surpassed our expectations. We've gained around 80%, success rates, on an average day, and sometimes even reaching a 100%.
We're really, you know, happy to have such a high-performing piece of technology, and that we can really look to scale up now and improve our website experience.
So as Westminster shows, and as we believed in the past, there are large gaps in customer engagement across an organization. Last year, we talked about the fact that we thought 60% of customer interaction was in the contact center and 40% of the interactions were outside the contact center. You cannot have a complete view of what a company is doing with its customers without a view of UC, CC, and CPaaS. Not everyone that deals with the customer is in the contact center, so therefore, you need to capture all of these, and you need to have them in a single data layer. Okay, this year, we have even more data to show this. 30% of those outside the contact center support people inside the contact center.
This is billing, retail storefronts, field service, the various departments, and this doesn't even begin to count internal customers, the IT department supporting the employees, the HR department, et cetera. There is a large opportunity to have a single platform that does this. Having a solution to omni-channel, using bots, having Agent Assist, has traditionally been the realm of only very large enterprises, those with developers and large IT budgets. The complexity, the custom nature, the multi-product integration, and the lack of detailed knowledge, the blind spots, it's very difficult for contact center leaders to be able to do this when they're dealing with 40% employee attrition and a zero margin of error environment. Remember, one in three will leave a brand they love after one bad customer support experience. Okay, how would they handle this? There's really three ways to handle this.
Number 1, buy everything from one vendor, a forced, rigid approach that's going to give you non-best-in-breed solutions. Number 2, do it all yourself. Get a data warehouse, buy best-in-breed solutions, and try to stitch those things together, handoffs between bots and agents, a complex data layer, heavy resource allocation will be required, and, wow, tremendous training times. Or number 3, work with an integrated ecosystem. That's us. Customers will pay us to stitch together the technology that allows them to have an integrated ecosystem solution of best-in-breed providers on a single data layer, and that's what we're talking about. Our solution is one platform that allows data, partners, our software to come together. It's an intentionally engineered path to deliver business success to our customers. So what does this look like, taking it down one level? Okay, here's what we provide.
We provide the UC service, the CC service, the channels, routing, analytics, UI/UX, and common AI services. Here's a simple version shown on this chart. Now, below this are hundreds or thousands of features and capabilities, all driven by a modern CI/CD platform that can do 20 releases a week, further innovating at a very rapid pace. This is then surrounded by a set of curated, intentionally engineered, and highly integrated ecosystems to solve complete business problems. Okay, that's the key: complete business problems. It's not just us, it's us plus our ecosystem can solve things like CRM, analytics, workforce management, all these things combined. Okay, so let me show you an example of this in real life today, available to our customers. Shown on this chart is our interaction summarization widget, all right? That's part of Supervisor Workspace.
Now, what's important about this is this shows the interaction summarization, which is driven by an LLM partner, a large language model. Track the last customer interaction, that's driven by a CRM integration, a single user experience. This widget that's customizable is available. That's our technology. We measure customer sentiment via health scoring partner. We do all the speech analytics and metrics, and here's the best part: this is a customizable widget that you can drill down. Click on any of these, and we will link. So we're bringing together a single UI/UX of four different partners in front of a supervisor in real time today. I'm telling you, our competitors are not doing this, all from best-in-breed providers. Okay, so what am I trying to say? Business outcomes are a team sport. Last year, we talked about our TPaaS ecosystem.
We talked about being a platform that could solve business outcomes. Today, you're seeing it in real life. That carefully curated ecosystem has brought us ICA, Intelligent Customer Assistant. It has brought us workforce management and PCI compliance, but it also leverages our in-house technologies around CPaaS and other things to provide complete solutions. What is a complete solution? It's deeply integrated, and lastly, it's committed to customer success. Okay, let me give you another couple proof points. 360insights got game-changing agent experience using 8x8, plus our partner, Awaken. Dhwani will cover this later in her presentation, but absolutely amazing results. In the UK, 8x8 plus PCI Pal have a fully integrated solution called Secure Pay, allowing contact centers to accept payments. In this case, in 10 days, they went from non-payment to payments. That's a fast time to value.
OVO Energy uses 8x8 Contact Center plus Cognigy. That's the intelligent customer assistant. But remember, this is fully integrated, allowing bot handovers to live agents. In this case, the bots are getting 85% solved. However, that means 15% have to be taken care of by live agents. Remember, this is a zero margin of error solution, and they're expanding the number of use cases as we speak. So let's take what I just talked about and now bring it to the world of GTM. Last year, we shared a lot about our platform optimization and a deep dive into product enhancements and where we were going with this ecosystem. This year, we're talking about things that we've actually delivered to the marketplace and a retooled GTM engine. We're getting a very strong reception around this, the ecosystem plus the new products together.
Lisa Martin, our CRO, will be providing a lot more details shortly, but let me tell you where we're going. Analysts, both financial and industry, have a tendency to view this market as UC or CC or CPaaS, but these are specific technologies. Let me be really clear: This is not how our customers view the market. They want a solution to a specific business problem. They want results. In the future, you will see us market more solutions, not technologies. What does this look like in real life? It looks like this, composable experiences, weaving bundles, packages together, then integrations that solve specific problems.
A few weeks ago, we announced Remote Fix, a housing solution as a great example, and this is a great example, made up of CC, UC, Proactive Outreach, and Video Elevation with a CRM integration, reducing the number of truck rolls and saving customers a significant amount of money. How about remote medicine? Driven by our contact center, Engage, Proactive Outreach, Video Elevation, and Epic integration, all available today, all available off the shelf. These are packaged together and bring a fast time to value. We've done the integration. Our target customer doesn't need to hire developers or sign a big service contract. We bring it to them today as a bundled product. These mix-and-match solutions from both in-house and integrated partners create intentionally engineered solutions to specific customer problems. This is going from a highly commoditized point products to solutions. We sell the reduction of complexity and personalized experiences.
Instead of giving our customers puzzle pieces, like our competitors do, we're giving them the complete picture. This is where the customer is today, and this is where we are going. Okay, last year, we also laid out that it was a year about building the foundation, and that's what we did. The foundation of innovation, of a new financial model. We have accelerated our innovation, we've improved our financial model while improving our non-GAAP financial metrics and reducing our stock-based compensation. From here, it's about using that innovation and that new GTM motion to re-accelerate growth to capture that large opportunity that everyone on this call knows exists. Okay, let's try to bring this all together here before I turn it over to Dhwani. This is where we've gone, and this is where we're going: innovation, new financial model, retool GTM. We've launched the products.
We're moving ahead on this. We've already started returning cash to shareholders, reducing the amount of debt we have outstanding, all the while maintaining a $100 million spend in R&D, which drives this wheel to spin faster and faster and faster over time. As we scale and the flywheel continues to spin, we will generate cash to delever, potentially buy back equity, or under the right circumstances, do acquisitions to accelerate profit. Kevin Krause, our CFO, will provide more details later. Okay, we know if we eliminate product silos, deliver business solutions, and make our customers heroes, we will continue to grow the company and deliver value to our investors. We know because we've done it. We know because if we do it more, we'll continue to drive that flywheel faster and faster.
We know if we enable business outcomes and success and move away from transactional mindset and simple models, we will be more successful. Because enabling our customers to be heroes using next-generation AI solutions and communications technologies that transform their business is a winning strategy. It leads to higher revenue for them because happy customers renew and reorder, allowing our customers to deliver value to their investors. To our investors, let me say thank you for going on us with this journey. I will now turn the presentation over to Dhwani Soni, our Head of Product Management, Design, and Operations.
Native as well as third party, but at 8x8. Happy to be here with you today and share our vision and approach for product and innovation at 8x8. Sam shared how we are carving our own path and also spoke about our ideal customer profile. Last year, we launched Customer Labs and shared our approach to product innovation, with design and research at the heart of it. We also shared our journey of platform modernization last year. Today, I wanna share how we are progressing on the path and how our vision is actually coming along. As we chart our own path, these are the four foundational pillars. Laser focus on the mid-size enterprise, companies that compete with the big boys but don't have the resources to figure it out all on their own.
A solution approach to AI, customers that are comfortable integrating best-of-breed partner options, native as well as third party, but deliver with native-like integration support. Customer experiences that enable customer engagement across the organization and not just inside the contact center. One platform that creates true value at every customer touchpoint across the org. Let's talk about contact center for enterprise masses. We spoke about our ideal customer profile last year at Nasdaq, but I feel our focus on mid-size enterprises wasn't very prominent. We did share this slide during closing last time. Still feels quite relevant today and important to our journey. These are companies large enough to have a formal contact center, yet small enough to need engaged vendors and partners to do it well. I like to think of these as a segment of enterprise masses.
Leaning into our approach and what sets us apart, we ran in-depth focus group sessions with prospective contact center buyers that are lookalike to our ideal customer profile. As expected, they don't see much difference in the core feature capabilities between different CCaaS vendors. What they care about, having strong partners in their journey, and that's why they really value and love their resellers and VARs. They want no headaches, high reliability, high quality, robust integrations, quick time to ROI are top of their mind. They care a lot about usability. They are a conservative lot. They're waiting for new tech to prove best practices in the industry, waiting to learn from others' mistake, and waiting for their peers and friends to learn, but they're waiting to desperately adopt them.
They're aware of the best-of-breed tools, but only use it once it's tested and delivered native-like and like seamless solutions. It's a tough group, but we think we're on the right track. Let's take a look at the market opportunity. Gartner late last year indicated that the CCaaS market is accelerating growth. They are now forecasting an 18% CAGR for the next four years, almost doubling the total market with $8 billion of new CCaaS spend. This is the market that truly matters, the enterprise masses. We consciously pivoted to this laser-focused approach on our ICP base a few years ago, striving towards being a trusted partner to our customers. I am proud to say we are able to see the resonance from our customers today. 8x8 was recently ranked number one in customer sentiment and business success in Metrigy's Customer Experience MetriRank 2023 research report.
As we pivoted our attention to the space, we have been intentionally engineering our roadmap to make our customers successful and be a true partner in their digital transformation journey. They are not looking for all the features under the sun, but the right fit for the business value use cases, and this is where we carefully curate our roadmap to align for their journeys. These are the launches in just two quarters. 8x8 has shown clear focus, momentum, and dedication to deliver these solutions, and this output is only going to accelerate from here. Let's talk about communications embedded throughout the product. Ideal customers really care about the solutions from one vendor, no fuss, and it should all work together seamlessly. We recently launched Proactive Outreach.
You will continue to see a lot of momentum of bringing our CPaaS channels and tools together to our overall portfolio for delivering the business value to our customers. Let's talk a little bit about 8x8 and leadership with Microsoft Teams. Looking at the Microsoft base, Teams is driving a re-evaluation of telephony solutions in the base. Two-thirds of that customer base are evaluating Teams telephony or have a plan to adopt Teams telephony solution. 25% of them are unsure of what is the best solution for them while living in the MS Teams world. Fortunately, for 8x8, we have options. Let me walk you through our approach with Microsoft Teams. Almost four years ago, the business world changed how they collaborated overnight. Microsoft Teams took the collaboration industry by a storm.
8x8 took a conscious decision to not go against a Goliath, but actually tag-team them and their customers. While others went on defense, 8x8 saw this as an opportunity, and we introduced 8x8 Voice for Microsoft Teams. We viewed and led into this workplace shift as an opportunity. 8x8 is a different kind of UCaaS provider because we also offer CCaaS that was built on the same platform. We then secured the contact center solution certification for Microsoft Teams. Since then, we have surpassed 400,000 seats sold to date and are continuing to innovate our Microsoft-centric integrations. As we look at the market, it is still prime for adoption. Only 5% of the 320 million monthly active users in Microsoft Teams are licensed for Teams Phone.
That's over 300 million monthly active users that have not yet experienced the power of Teams Phone. With our previous and upcoming launches to support this market, we strive to support all personas and users within the organization and natively within the Teams UI, something Microsoft absolutely loves, and that's how we stand out as great partners and leaders with Microsoft. Let's talk about the technology partner ecosystem. Last year, we announced a CPaaS program, and now we have 9 new partners across all our categories. Like Sam said, 72% of our ICP base uses our TPaaS ecosystem. Now, you would ask, "So what's the big deal? Everyone has an ecosystem. What's different for 8x8?" It is carefully curated. It's a selection of independent software vendors, value-added resellers, and system integrators that have been carefully selected to solve and deliver high-value customer use cases.
Lisa will walk you through the partnership tiers and TPaaS ecosystem. What I want to share with you is a customer story. 360insights recently adopted 8x8 Contact Center with Awaken Intelligence. They were able to empower agents with AI for real-time guidance and next best action recommendations to better service customers with speed and accuracy. This way, agents don't have to navigate their way through the knowledge base or other systems. They save on customers' wait times. This has also led to reduction of over 2 weeks in overall training times, as agents have been able to quickly and easily ramp up with ease of this kind of solution. These are the kind of partnerships that Sell with 8 TPaaS program unlocks to deliver business value to customers. I also want to highlight our success with Intelligent Customer Assistant.
Built with Cognigy from our TPaaS ecosystem, we have been able to boast more than 80% of average containment rate over all our current ICA deployments. We also boast 100% referencability on all our intelligent customer assistant deployments with customers that have had ICA for longer than three months. Intentionally engineering for customer success is truly key to our vision. Last but not the least, market-leading usability. If you haven't noticed, building products with an approach to ease of use is key to our product design and usability principle. Design and research are key and foundational to how we build and design products. It always fills my heart to share the positive sentiment and high usability scores on our UIs. These are industry award-winning products that boast a high average usability score of 79 for desktop apps and 80 for mobile products.
Very, very proud of this. Ease of use, native-like integrations, these are the things that really matter to ideal customers and drive customer loyalty and happiness. Let's talk about our approach to AI. It is very straightforward. It is truly a team sport. We wanna, we wanna make our customers successful. It means bringing them a solution natively or from our ecosystem, delivering it with deep native-like integrations in the UI, and with interaction data in the backend, such that they can always have contextual awareness. Plus, having rich, holistic, and hygienic insights pervasive throughout the customer's journey's touchpoints. As a native AI solution layer, our ideal customers care about a set of out-of-box APIs to easily bring together the Customer Interaction data from any customer engagement and data source. This will be our Customer 360 interactions view.
Next will be AI-driven customer interactions intelligence trained over all customer data, including interaction data from integrations with our AI vendors as well. Easy consumption of customer intelligence data is top of mind for our customer base, which is why we always make it available contextually and as insights-based widgets. This data will be available as reports and even as a single endpoint for customer consumption in the choice of their BI tool, Tableau, Power BI, or whatever it might be. The very next horizon will deliver real-time and business optimization insights for our customers. As our approach to AI, along with native AI at solution layer, our TPaaS AI vendors are key to the success of this strategy. We have 17 market-leading AI TPaaS partners today, that complement our 8x8 portfolio and can deliver curated solutions to our ICP base for their use case.
This is our approach to solution AI, native at the solution layer and augmented use cases with TPaaS partners for business value solutioning. Let me share another case study with you. It's not just our direct customers seeing the benefits. Our partners are seeing value in leveraging our solution approach to AI, especially with TPaaS-driven solutions. This was Agilisys second customer deployment for our Intelligent Customer Assistant. In a matter of less than two weeks, our 8x8 professional services team brought Agilisys second use case to go live, proving ease of expansion and speed at which AI-powered self-service can be implemented when done right. We are enterprise-ready throughout with a solution approach to AI, whether native at the solution layer and augmented with TPaaS at the use case layer, to intentionally engineer customer success.
Let's talk about CX across the organization, because engagement doesn't just happen within the contact center, but also with customer-facing users sitting outside the contact center. To deliver platform-wide capabilities, you truly have to engineer it to be one across your UC, CC, and CPaaS portfolios. Common approach for endpoints, orchestration for all channels, a unified approach to app ecosystem, and the interaction data platform. Don't forget the front end, engineered to purposely build widgets once, but ready for reuse across multiple workspaces to be delivered via tailored innovation and data pervasiveness. This architecture is intentionally engineered to bridge the CX gaps and drive cross-organization engagement to deliver high-touch customer value. Let me bring your attention to the front end now. The power of an intentionally engineered platform means build once and reuse in multiple workspaces, always contextually and always intelligently.
As an example, call queue widget exposed in 8x8 Engage is the same widget as used in Agent Workspace within the contact center. It's not just the front end. It is as smart and as powerful in Engage as it in, as it is in the Agent Workspace, but autonomous to respect the persona's need and the context it shows up in. Driving reusability at scale includes widgets from our third-party vendors. Our first proof of concept, built around workforce management, took the vendor less than 2 hours to build and ready to use within 8x8 Workspace. That shows the power of a modern software architecture, front end and back end. The thing for these purpose-built widgets is, it's not just the front end. These widgets carry contextual information and rich data insights that stays pervasive and intelligent, no matter which workspace it shows up across the organization.
As an example, a sentiment analysis widget for the same customer only gets richer in information as it shows up in the multiple workspaces, but it always stays contextual for the workspace and its user. Our platform modernization work accelerated our ability to bridge the CX gaps and tailor the roadmap to deliver customer value across the organization. Our recent announcement of 8x8 Engage is truly a strategic launch. It brings the power of UC and CC together to deliver a right-fit, purpose-built solution for CX-facing users sitting outside the contact center. After all, driving customer satisfaction is not an individual department's job, but a cross-organization effort, and we'll dive into it a little bit later here. But this is why tailored innovation really matters.
With platform-wide capabilities, purpose-built widgets, and UIs, now scaling to deliver innovation tailored to the needs of the users is now very, very easy for 8x8. Whether is it scaling to a horizontal, in this case, pre- and post-sales persona, prevalent across industries, think account managers, sales executives, customer success managers, or it is tailoring to a specific industry vertical, like healthcare or retail, we can now, with one platform, build once and scale to many to deliver out-of-box, yet tailored use cases for driving CX across the organization. This market opportunity is real. According to Metrigy, 46% of companies surveyed for the CX Transformation Report say they offer contact center licenses to employees who aren't full-time agents. Within that TAM, we estimate an easy 1 million agent positions inside our ICP range.
Within our two key markets only, North America and UK, and that is a simple short-term goal. Let me now show you what happens when you put the customer at the center of your platform. The customer is empowered with all the services they need, traditionally CC, UC, or CPaaS from platforms. These services can be consumed by our customers when and where they need them. All channels are empowered with AI and all of the analytics to drive data-driven decisions. Exposed and purpose-built UIs, designed and delivered contextually across the organization, across all touchpoints, intentionally designed for the customer's needs. Contextually supported by our Customer Interaction Data Platform with AI at every touchpoint. Data stays pervasive through and through, combining every touchpoint with the shared interaction data, enriched by AI to deliver smart, contextual, augmented insights that convert the approach from reactive to proactive.
Driven from not only native, but also third-party data and insights, carefully curated, intentionally engineered for the business success of our customers. With our focus to deliver business value at every touchpoint with high ROI and a great customer's experience for both our customer and our customer's customer. Now, let's see what this unlocks.
8x8 has made great strides in modernizing its platform. With updated back-end services and micro-frontend widgets, we can now truly play across our platform. Imagine addressing all customer experience gaps with just one adaptable solution, tailored to each customer engagement team's needs. Built on our cross-organization customer engagement platform, incorporating unified communications, contact center, and CPaaS functionalities, is AI-enabled and provides context-aware insights leveraging our CIDP and ecosystem partners. This is now possible with our scalable customer engagement solution, allowing an autonomous workforce to leverage the call queuing capabilities of a contact center, enabling the sales team to have insights on and interact with customers through a single pane of glass, and empowering the customer support team to service customer needs through formally managed contact center functionality. One template scales to incorporate three panes: the object, the interaction, and the metadata panes.
The object pane allows delivery of real-time customer interactions or perhaps a list of ongoing sales opportunities. The interaction pane provides the full spectrum of communication methods to enable engagement with the customer. The metadata pane, ever adaptable through a range of our native or ecosystem components, displaying relevant contextual information to support the customer interactions. Here, we can see an autonomous worker handle web chat interactions. Basic customer information is displayed from the CRM ecosystem integration. We can enrich the available data about the customer with an insights component powered by our ecosystem partner, and we can also surface interaction history from our CIDP, bringing details about interaction sentiment, as well as AI-identified topics and summarizations. Ecosystem partner AI assistants can be delivered into the interface to provide support for our customer engagement worker.
This UI can be wrapped in formal contact center procedures, controlling customer interactions delivered to the user and also interaction disposition. This customer engagement template can also be leveraged to meet the needs of each of our key ICP verticals. Here, in this example for retail, we could deliver an interface for each of these customer engagement teams. In-store sales staff can take customer interactions from websites, elevating them to video to show in-store products. The global support team, supporting customer digital interaction, web orders, and inquiries, can leverage the help of an ecosystem-delivered AI assistant and CRM integration. The local retail store, providing support for regular customers, having access to all previous orders and interactions delivered from the CIDP. Let's take a look at another ICP vertical: healthcare.
Using our adaptable template and customer success platform, we can craft interfaces that meet the needs of each of these personas, each allowing access to only the necessary patient detail as required. The practice receptionist can sign themselves in and out of queues as required to see the patient calls. The nurse has greater visibility into patient information and is able to follow up with patients regarding their queries that couldn't be handled by the practice receptionist. Doctors are able to see upcoming appointments, as well as hold virtual video appointments, supported with AI summarized notes, with easy access to all patient data. No matter your role within the organization, 8x8 offers tailored solutions to engage with customers. Out-of-the-box persona-based solutions empower customer-facing employees to deliver exceptional customer experiences across the organization. This is not the future. This is the now at 8x8.
The opportunities for 8x8 are now endless. Last time, we talked tech and our journey to its modernization. This time, we showed you the proof of one platform…. The path we embarked upon last year is continuing to deliver our leadership in mid-size enterprise contact center. Our laser focus in our ICP customer base is helping us intentionally engineer our roadmap and deliver trusted partnership and lifetime customer value. Platform-wide capabilities, our solution approach to AI, and interaction data platform unlocks purpose-built, tailored innovations with data pervasiveness to bridge CX gaps across the entire organization. And this is 8x8 intentionally engineering the path to deliver business success to our customers. Now, let's take a look at our recent product launches and announcements. Very, very excited to share. Over the last few years, we have been moving towards bridging the gap between EX and CX or UC and CC.
Very apparent that there is a set of users that sit in customer-facing roles but do not sit in the contact center. They deliver high-touch, personalized customer touchpoints outside the contact center. These users are proactive, they're self-managing, and collaborative, like the internal knowledge worker, yet at the same time, with the needs of a CC agent for advanced AI customer engagement, support, and insights. It quickly became apparent that the engagement outside the contact center is high-touch and extremely valuable to the organization and plays a large part in the customer's experience, maybe even more meaningful. With that, we launched 8x8 Engage, a personalized, purpose-built workspace with the power of contact center technology combined with UC collaboration at the fingertips, empowering the CX-facing users with a superior communication tool. We conducted internal research to validate if there were indeed gaps and inconsistencies in the CX journey.
This is what we learned: 98% of the leaders agreed that customer experience is an organization-wide responsibility. 92% agreed that creating CX consistency across departments was a priority at their organization, yet only 6% said that CX was consistent across all the departments at this time. This is a big opportunity, and yet we, as the communication industry as a whole, hasn't made it easy for these users. Bringing together EX and CX or UC and CC just isn't enough, and this is where 8x8 Engage comes into play. It enables these SMEs, functional experts, or CX professionals outside the contact center with the tools, the data, the visibility, deep CRM integrations to have meaningful customer conversations with their customers. There is no right-size solution for these autonomous professionals. They spend 30%-60% of the day working with customers. They are their own boss.
Autonomy is their middle name. They decide when to engage with customers and when to get the rest of their work done. They are not tied to their desk. Flexibility is of utmost importance. Flexibility to hop on and hop off of queues, switch between desktop and mobile, even engage with the customers in the choice of their channel. They need the right tools at their fingertips, and they do not like to juggle between interfaces, and of course, in today's need and world, automation and AI to get their work done efficiently. Let's take a look.
Ensuring a five-star customer experience extends beyond service and support. Every interaction and every touchpoint across your organization matters. Introducing 8x8 Engage. Empower everyone outside the traditional contact center with the best tools and data to effectively engage with customers. 8x8 Engage brings together the worlds of UCaaS and CCaaS in an intentionally engineered interface for all customer-facing employees. Powered by advanced AI, 8x8 Engage democratizes tools and capabilities typically reserved for the contact center, making them available to every department. By integrating the right data, context, and automation, 8x8 Engage helps personalize every customer interaction, enabling your teams to bridge the CX gaps across the organization. Accessible even on mobile devices, it offers a truly on-the-go and flexible user experience. 8x8 Engage enables a single-pane view for real-time performance insights and proactive decision-making for team leaders, accessible anywhere and anytime.
Plus, robust analytics ensure you stay informed and have a pulse on your operations. Make a lasting impression at every stage of the customer journey, and elevate customer loyalty and business success with 8x8 Engage.
We asked our customers, and our research tells us two-thirds of these high-touch customer interactions take place outside the contact center. 8x8 Engage equips the employees that handle these interactions with the right fit tools, powered by both UC and CC platform. Rich data insights that is contextual and pervasive, that helps these CX professionals in delivering an exceptional level of service. 8x8 Engage gives users a single pane of glass for seamless customer interaction handling and internal collaboration in one UI. These are purpose-built out-of-box, AI-powered to support complex interaction handling. We have smart queue management from the contact center world, respecting user autonomy. It also comes with a mobile companion that enables and supports flexibility, by the choice of channel or ability to be on the go. 8x8 Engage breaks away from the traditional roles of customer handling and empowers this previously underserved user base.
We are truly enabling data democratization. Interaction data syncs across 8x8 and other enterprise apps and is surfaced to the user at the right time. 8x8 Engage empowers CX professionals and team leaders with AI-driven, rich data insights built over native and third-party data from deep integrations that enables informed and smart and proactive decision-making at every customer touchpoint. Team leaders for these CX professionals outside the contact center have centralized customer interaction journey analytics and supervisor capabilities for monitoring the system and their staff operations. Let's take a look at the demo.
Let's take a look at the demo for 8x8 Engage, a UI, which is a single pane of glass, purpose-built, powered by queues from the contact center. Don't miss the fact that this exists inside our 8x8 Work app, so the user has all internal collaboration tools, as well as customer service tools to engage with their customers. This smart queue management is easy, efficient, and seamlessly integrated within the UC products, allows transfers across the entire organization. Not just that, along with data and context, consistency and persistence across every touchpoint. Ooh, I see a call coming in! Switching between channels to personalize your engagement is weaved in throughout this product, so the user gets to define their customer touchpoints in the best way possible.
Talking about user autonomy, we provide the ability to hop on and hop off the queues to help them define their day, which is really key. As a CX user, you will have an option to get out-of-the-box powered-up Engage templates. These are purpose-built UIs and have consistent and contextual data available at your fingertips, whether native or from third party or the technology partner ecosystem. There is contextual account details, customer insights, including from third party or TPaaS partners, interaction history, notes from previous interactions. Even if you are servicing a customer as a team, you can see the notes, contextual customer data at your fingertips, and it is available out of the box for these users. You have the same smart queue management functionalities available here in one single UI.
Let's take a look at the mobile companion, available for the user, giving them the flexibility of hopping on and off the queues, all right in their 8x8 Work mobile app. They can stay on top of things on the go and get the job done. Of course, data is always synced between devices. Oh, look, another call coming in. Artificial intelligence is embedded throughout the journey. Quick wrap-up with auto notes and highlights that can be synced back to CRM. You can make your notes shareable with your team to reduce cognitive load, ensure effective customer handling with smart action items for an enhanced customer experience. Let's switch to mobile. Supercharged mobile UI, again, purpose-built to allow context and data to stay pervasive throughout.
It is multi-channel as well: voice, chat, video, whatever you need, with all the relevant opportunities tied to this account, as well as all the previous contextual history, empowering the user to personalize the conversation. The customer and user can select their preferred communication channel, in this use case, SMS, as well as email for document sharing and signing. This is the beauty of 8x8 Engage, a true context-aware, workflow-based, composed experience. Interaction data can be truly tied back to the other conversations happening inside and outside the contact center. 8x8's Engage leverages one platform, truly eliminating data silos across CX apps, and uncovers true, actionable business insights, providing predictive, proactive, and contextual customer metrics for all CX users to deliver exceptional customer experiences across an organization. This is 8x8 Engage.
So to sum it up, 8x8 Engage utilizes 8x8's single platform capabilities by uniquely combining UCaaS and CCaaS components to bridge an organization's CX journey gaps and provides underserved CX professionals outside the contact center with the right fit tool, data, context, and automation for delivering consistent and successful customer experiences. Let's take a look at our recent launch announcement of Proactive Outreach. Today, CX gaps also exist in the journey when a consumer receives a communication from an organization. There are limitations in how they may continue these conversations once a message is received. Consumers are expecting a level of convenience, personalization, and ease of doing business with. The unfortunate reality of today is that most consumers are forced to contact an organization for the information they need. Proactive outbound communication allows organizations to anticipate the need for their customers and reach out.
Proactive Outreach is 8x8's newest offering that augments our CC and UC solution, leveraging our CPaaS technology with a powerful solution to proactively engage with the consumers. Built on top of our CPaaS platform, providing an out-of-box, use-case-centric solution, scalable to send millions of messages. Just last year alone, our messaging platform delivered over 3 billion messages across SMS in Asia Pacific alone, ensuring our customer can be proactive in their engagement and deliver time-sensitive information in minutes for any business use case. We are now expanding this into EMEA and North America. Proactive Outreach is made up of three packages: Notify for one-to-many outbound-only communication, Interact for one-to-many outbound with two-way communication, and Alert, a time-sensitive messaging solution which is tailored to send mass and important communication in a single click. Let's talk about Notify.
Even though we are communicating en masse, Notify can be highly personalized, sending appointment reminders, promotions, or announcements. Let's take an energy provider use case for Notify. Notify can be used to remind a customer of an overdue bill payment. With Interact, in the same example of the energy provider, the customer could click a link to enter the meter reading into a website, engage with a bot to supply the information, or elevate to an agent for a more high-touch experience. With Alert, messages can be sent in a single click, ensuring important information is delivered within minutes, with a read response captured. Let's look at the same energy company. Alert could be used by them to send power outage alerts to a specific area or zip code to inform people of an issue in a proactive manner, reducing inbound volumes to their customer service center.
These packages are built with simple use cases in mind that can be leveraged by many different departments across the entire organization. Let's take a look at the demo.
When it comes to communicating with customers, we all want the process to be as simple and intuitive as possible. That's why we've made Proactive Outreach available from right within the 8x8 application. From here, a user can, in just a few clicks, decide to send a mass communication via their channel of choice. The first channels will be SMS and WhatsApp, with more channels being added imminently. Users have the option to segment the group of recipients based on the audience for the type of message. For example, modification of service reminders only being sent to those due in the coming week. The option to select a template makes the process streamlined for the user, meaning the communication can be sent in just a few clicks. Speed does not mean a compromise on customer experience.
Even though we are sending the message to hundreds or even thousands at once, it can still be personalized to include the person's names, account information, or any other relevant details. Timing of communication is key. You don't want to send a reminder of an appointment a week ahead or even after it has happened. That is why we give the option to schedule communications on a specific time or date. So now let's look at what the experience is like for the customer. The message is received, and what's better still, the person receiving it can respond immediately. In this scenario, we have sent the message on behalf of an energy provider. The customer can simply click the link and submit a meter reading online, or if they want support entering the information, they can be connected to the 8x8 Intelligent Customer Assistant bot.
The bot will guide and support them to enter the required information. Should the customer want to discuss another topic, they can be elevated to a live agent seamlessly. When connected to a live agent, all of the chat interaction history is passed on to the agent to provide context, avoiding repetition and allowing their inquiry to be handled as efficiently and effectively as possible. This solution comes with analytics to show the volume of messages sent and delivered, as well as providing the messages in the full customer journey analytics to allow for complete visibility on the customer experience. Proactively engaging with your customers provides a more seamless and effective customer experience.
So you can see we are using our CPaaS capabilities to augment our platform. Out-of-box solutions provide immediate ROI to our customers. They don't need internal developers to get true value out of the solution. Allowing for seamless elevation to an AI-powered bot or a live agent with all contextual information, providing an engaging customer journey. Now, the launch I want to talk about is a Customer Interaction Data Platform. Of course, the name is gonna change, but we wanted to share this innovation early and not wait for the right name. I spoke about blurring the lines between UC and CC and how this is gonna change the world. Well, we have been talking about it since 2019, while others are just catching on four years later. What truly brings together EX and CX is not just the platform. It is closing the CX gaps.
The common denominator between EX and CX is the customer and not the interaction, and we need to start thinking more about that instead of standalone interactions. It is the ability to unlock customer-level intelligence over all possible interactions, whether over native platform or third-party systems. Next is the ability to analyze this breadth of data with the right AI solution. That then enables the creation of more intelligent customer experiences and the ability to precisely tune and refine any customer interaction. Customer Interaction Data Platform, or CIDP, empowers the conversation from being reactive to proactive by using insights and analytics to define more personalized and consistent engagements across the customer touchpoints. A centralized but democratized interaction data platform strongly augments data from CDP and CRMs and is key to our customer success strategy and the digital transformation.
These rich, hygienic, and holistic contextual insights drive the conversation from being reactive to proactive and enables quick and smart contextual decision-making. CIDP enables the data pervasiveness through all our purpose-built workspaces, UIs, widgets, and is available platform-wide, so the customer-facing user always stays ahead of customers' need and is always aware and is always proactive. Let's take a look at a video.
When it comes to customer experience, we believe that knowledge is power.
Arm yourself with an easy-to-use solution that provides rich data analysis and AI-powered insights that can help you keep your customer at the heart of your business. 8x8's Customer Interaction Data Platform, CIDP for short, is a powerful engine bringing together everything you need for excellent customer experience. Built on the 8x8 platform, CIDP analyzes every interaction, consolidating data from both internal and external touchpoints to identify patterns, summarize information, and even predict changes around the corner. CIDP enables your organization to better understand customer experience as it relates to customer churn, health score, and so much more. With CIDP, you can empower your administrators, supervisors, and agents with the right intelligent, AI-driven data and actionable insights to better serve your customers. Customer Interaction Data Platform from 8x8.
As a proof point, I wanna show you guys this. This interaction summarization widget is now in beta with select customers. This pulls together data from multiple sources. As you can see, there is true summary of a conversation that covers information from various platform data sources on our site. It's got interaction summary, summarized actions, customer sentiment, topic analysis, speech intelligence, but most importantly, it is easily accessible, contextual, and is critical in taking decisions on the spot. This widget is available in Supervisor Workspace today to select customers and will be available in other workspaces very soon. To sum up, CIDP pulls data from all sources, native and third party. Customers always have contextual information and insights at their fingertips, and CIDP enables customer health, forecasting, and next best actions.
Announcements today reinforce our commitment to bridging the CX gaps that eventually show up when you truly bring EX and CX or UCaaS and CCaaS together. 8x8 Engage empowers the user sitting in customer-facing roles outside the contact center with the right set of tools and capabilities from our UC and CC platform. Proactive outreach, out-of-the-box messaging solution to notify, interact, and alert users, switching the conversation from reactive to proactive, and the Customer Interaction Data Platform, servicing customers with rich, contextual, AI-driven insights to drive smart and proactive decision-making. While others are just following the path we led four years ago, 8x8 is truly erasing silos, moving from products to solutions that are intentionally engineered to make our customers successful and showing up with integrity as a trusted partner in their digital transformation journey. And that is it from product strategy and latest announcement highlights.
I now pass it on to Lisa.
I came from a background in flight operations. It gives me a really unique appreciation for the operation, sort of an insight into the hows and the whys things happen that impact our customers and passengers. Most of the time, when a passenger reaches out to an airline, it's because there's been some sort of issue that's arisen, and they're looking for answers or resolution. One of the approaches that I've found is best to help resolve those issues is through honest, transparent answers, and having that background in technical operations has been allowed me to provide even more transparency into the operation. When we heard the ICA, the Intelligent Customer Assistant, was being developed by 8x8, and they were doing an early adopter program, it really piqued my interest. Our contact center, historically, has been very straightforward, very simple.
So if we have a significant event, like a weather disruption, it's very challenging to scale up quickly, and we see our hold times skyrocket because we can't handle the volume. But when we did an analysis of the questions or inquiries that our agents were receiving, we found that a vast majority, greater than three-quarters of them, were informational in nature only. They weren't looking for judgment calls. They weren't looking for a live agent to assist with modifying anything. They were purely looking for information from the airline, and that is exactly what AI systems are designed to do. They are designed to facilitate easy, quick access to that information, and so it's an improvement not only for the passengers but for our agents as well.
We are establishing API connections with ICA, with the three primary systems that we use to manage those, which means it will enable us to build off of those use cases as we grow and mature with the system.
I'm Lisa Martin, Chief Revenue Officer. I joined 8x8 almost eight months ago and have been focused on assessing our routes to market, our sales motions, and sales operations. As I mentioned on our earnings call two quarters ago, I'm focused on transforming our go-to-market organization to align with our expanded portfolio of products and our target customer profile. An important component of our strategy is creating stronger awareness of our brand in the customer experience market. Several years ago, as the UCaaS market expanded, 8x8 focused its go-to-market strategy on agency partners as our primary route to market. We nurtured these relationships, resulting in expansion of our installed base and significant growth. Fast-forward a few years, we are evolving as an organization and we need to maximize all of our routes to market to again accelerate growth.
Our agency partnerships have continued and will continue to be a top priority for us, but our expanded portfolio expands our opportunity, and we must leverage multiple routes to market to capture this opportunity. The entire 8x8 community benefits as we optimize multiple routes to market. We gain new insights into customer needs and opportunities through a strong direct sales capability. Our partner communities, including both agency and VAR partners, stand to benefit from the expertise and insights of our direct sales team, allowing us to work collaboratively and co-create value for our customers. We are evolving our partner program, Elevate, to deliver tailored benefits and support models that distinctly cater to agency, reseller, and system integrator partners. We've aligned our team within our channel organization to focus on agency partners, as well as a team focused on resellers and system integrators.
We are also aligning our global support teams and our customer success resources to support our specific partner types, and we are enhancing our partner portal to make it easier for all partners to onboard and transact with 8x8. Our partners want to grow their businesses with us, and these changes are in response to the feedback that they've given us. Now, as I mentioned earlier, we're extremely focused on expanding market awareness through multiple sales and marketing channels. Our biggest challenge is that our customers and the market generally are not aware of all the solutions that we offer and the robust features and functionality built with our target customer in mind. Historically, we've relied on our partners to advocate for our brand. Over the course of the coming months and quarters, you'll see us investing in direct sales and marketing that will amplify our awareness.
Now, last year, we launched our technology partner ecosystem. These are consciously curated relationships that allow us to deliver composable solutions tailored to the customer's needs based on best-of-breed technology. Our ecosystem directly addresses the needs of our target customers for outcome-focused solutions that are easy to buy and easy to deploy with rapid time to value. We've gone one step further and created multiple tiered partnerships within this ecosystem. Resell partners, which are OEM technology partners like Cognigy, Verint, and PCI Pal, that we have deep partnerships with and have them sold on our paper. Market with 8, this tier is like any other open ecosystem, easy to join and onboard. We have light integrations and light go-to-market motions. There's no shared monetization, and it is sold on our partner paper.
Finally, we have Sell with 8, highly curated, solution-centric use cases where we are monetizing the sell with motion. These are native integrations sold on our paper. Our first partner in this program is Awaken.io. As Sam mentioned earlier, this partnership delivers an extremely compelling solution for our Agent Assist use cases. These are all things that customers and partners have come to expect from us, a thriving partner ecosystem across multiple partner types and go-to-market motions that ensure customer success, innovation, and growth. Now, we're transforming ourselves as a company, both from a product perspective and also from a go-to-market perspective. We've shifted from a single product-focused sales motion to a portfolio solution-oriented sales motion. We know that customers that consume multiple product solutions have a higher level of satisfaction and loyalty, but that is a very different sales skill set and motion.
Now, we've been reengineering the team as well, building a high-performing go-to-market organization, which is not only about the tools and sales process we provide, but the culture we create. To that end, I've added senior leaders in the organization who know how to operate the channel and direct businesses at scale. In the past few quarters, we've gradually introduced vital metrics that we are managing the business to, which are building accountability and alignment for us across the company. These are metrics that are simple, visible, and measurable markers that keep our team aligned and on track. Additionally, we're investing in creating the sales playbooks, as well as hands-on enablement programs that can be used by both our direct sales team and our channel partners that align with where we're going as a company. Now, you hear us talk a lot about our ideal customer profile at 8x8.
Great brands deeply understand their product market fit and how to best meet their customers where they are. Apple with the iPhone, Uber with ride-sharing, and Airbnb with vacation rentals. These companies found a way to provide a solution that resonates with their target audience, resulting in explosive growth and success. Our ideal customer profile wants solutions that are fit for purpose, easy to deploy, integrate, and use. The fact of the matter is, the lines between UC and CC will continue to blur as customers seek to improve their customer's experience. If you think about a customer's journey, it begins long before they ever interact with a customer service agent and often has them engaging with people who are not part of a traditional contact center.
Now, with the new products we're bringing to market, we are bundling solutions for customers in a way that creates differentiated experiences along the entire continuum of a buyer's journey. I'd like to point to the example that Sam briefly touched on earlier with the housing authority in the U.K. The recipe was 1 part UC, 1 part CC, 1 part SMS, and 1 part video. Together, it transformed their business by allowing 900 staff members to collaborate and engage from anywhere, whether they were in the office or in the field. The reality is the housing authority didn't care if they were buying 1, 3, or 10 solutions. They needed to solve a problem. They needed to drastically transform how they were serving their customers at scale without drastically increasing the cost of doing so.
At the end of the day, they were more effectively able to triage property management calls, deliver a better tenant experience, and oh, by the way, they saved a bunch of money because they were able to resolve 40% of issues remotely. As we create more of these bundles, we will be able to pinpoint and deliver solutions for use cases throughout the customer journey, including ones that happen long before they reach a traditional customer service agent. Now, before I turn the presentation over to Walt Weisner, our Chief Customer Officer, to talk about the customer experience we deliver to our customers, let me summarize the steps we're taking that will transform our go-to-market so it is aligned with our goal of making our customers successful. We are investing in building awareness and optimizing multiple routes to market.
We see an enormous opportunity, and it cannot be served by a single sales motion. We are shifting from a transactional single-product sale to a portfolio approach, with product bundles and composable solutions that deliver successful business outcomes tailored to our customers' needs. We are partnering with a select group of technology partners to expand our portfolio and address a broader range of use cases that leverage our platform, and we are building a high-performance team, implementing new processes that will make it easier to partner with us. We're seeing the first signs of success across our sales metrics. All transformations take time, but I'm incredibly excited about the opportunity ahead of us and our ability to deliver the growth that 8x8 is capable of. Thank you.
Hi, I'm Michelle, Inside Sales Manager with the Kansas City Royals. We're here at Kauffman Stadium on our sales and service floor. That being said, it is game day here today, and so there's a lot going on, not only in our department, but also here at the stadium.
I've been with the Royals 14 years. I have two responsibilities. First one is running technology for the organization of about 575 people, and the second one is actually running business analytics. A lot of growth in that area over the last 3-5 years.
Before 8x8, we had a system that was really good at the basics, and so the functionality was great, but we didn't have a lot of the enhancements that we see currently with 8x8.
On the everyday employee side, it really creates a cleaner separation between your personal set of contact information and your business set of contact information. If you think about a prior world where it was just by phone and typically attached to the phone that was on your desk, really isn't leverageable outside the footprint of this office. And so what do we do as a result? We give our personal cell phone, and then we spend the rest of our career screening phone calls.
So we rolled out 8x8, right before COVID. I wanna say it was a couple months before, everything kind of shut down.
None of us had any idea what was coming, and, as we learned more about what was going on across the globe at that time, not only were we getting ready for the season, we had to be ready to send our entire workforce home for an undetermined period of time.
Had we been on our old system, we would've been really locked in our capabilities and ability to service our customers, but even to work remotely. 8x8 did give us a lot of freedom, a lot of flexibility. We were able to maintain our work week, our hours, without having to go into a complete shutdown, which was huge.
You know, we expected lots of phone calls. We expected, you know, lots of help and lots of support, but we really had a lot of confidence because of the detailed planning that we had done. We sent people home, and we heard nothing. Sometimes the best feeling in the world is hearing nothing. Sometimes the most terrifying feeling in the world is hearing nothing. You know, sometimes adoption happens through force of circumstance, but I think what we were just exceedingly pleased about is the ability of the staff to kind of pick up and kind of run from home just as they would've if they just showed up in the office the next day. I'm an 8x8 fan because it's reduced the work that my staff has to do on a day-to-day basis.
We've been able to turn over power and administration into the hands of our business owners. We've all got small teams. We all have challenges. We're all looking to apply our resources to the most impactful areas we can. So if we can turn what historically has been a very technical administration process over into the hands of our business owners to do some of their own control and configuration, then you've got a solution that really works.
Hello, I'm Walt Weisner, Chief Customer Officer of 8x8. I've been here for 3 years and have had similar roles at companies such as ServiceNow, Webex, BlueJeans, and ShoreTel. I've been in the technology space for 4 decades, the first 2 in product management roles, and the past 2 decades in customer service, care, and support. My team is also made up of seasoned leaders with more than a century of experience among us, improving customer support and success. Today, you're hearing about 8x8's innovation and transformation, and how the changes we are making in our solutions are helping our customers be successful. In my global customer care group, we too have been accelerating our customer care transformation through innovation and scale to create a differentiated customer experience. And what I mean by a differentiated customer experience is that it's consistent and it's world-class.
In SaaS, the customer experience, the technology, and the leadership need to be in concert to achieve consistently positive business outcomes for customers. We at 8x8 are committed to that and are now delivering a consistent world-class user experience that helps differentiate us as a company. Our experience strategy is supported by three key pillars: a unified experience end-to-end across all products and channels, regardless of complexity and geography; fast time to value by using a modular approach with frictionless onboarding and fast adoption; and our lifetime engagement model that is built to provide proactive engagement, long-term value, and return on investment. We are there to help our customers grow in size, complexity, and geographic scale, and underpinning all we do is our Voice of the Customer program. This ensures we have multiple channels of feedback and insights, and it drives our customer experience roadmap.
How do we know that we've been successful in our transformation? Well, our customer satisfaction scores for enterprise customers is now at 95%. For non-enterprise customers, it's at 90%. This has stayed consistent for 8 consecutive quarters. Our time to value is 52 days on average for project-based customer implementations. In my 4 decades of experience across enterprise organizations, I consider this world-class level, and our professional services and support organizations have been recognized accordingly, with multiple awards for outstanding leadership and performance. All of the improvements that we are leading are driving success among our customers. Implementations of new deployments are completed faster than ever. Time to value is accelerated. How? Transformation through innovation and scale. It's important to note that the transformation is based on a three-year vision marked by solid milestones for every year.
Organization-wide, we've gone from commitment to customer experience transformation, to a focus on optimization, to now creating a customer support program that is world-class and built to last. We've augmented our culture and human resources strategy with our innovation strategy to provide the greatest ROI without sacrificing the customer experience, and I'm very proud of our teams' and technology success, as well as that of our customers. Our global customer care team is now staffed by 600 GCC team members operating across 10 centers of excellence, all providing exceptional service and support. After our initial three years of transformation, 8x8 is providing a differentiated level of service to our customers. I'm very proud to say that in Metrigy's recent CCaaS and UCaaS vendor rankings, 8x8 received the highest possible scores in customer sentiment and customer business success, with the highest positive improvements in customer ratings.
This has all been achieved while continuing to improve efficiency and drive down operational costs. This is the fruit of our labor, the ultimate outcome we're looking to achieve. As we increase customer value through a personal experience, we improve customer loyalty and retention, which we've done consistently over several quarters. Now, that doesn't mean that we're stopping. Over the next three years, we'll continue to build the program. We're looking at both customer relationships and business needs with CSM expansion and business value optimization, as well as technical needs with technical account management coverage expansion. New services and training offerings will provide additional insights and guidance for the long-term success of our customers. It's our goal to delight every customer. During my years as Chief Customer Officer at ShoreTel, our secret and most powerful weapon was our customer base.
In fact, we gave every prospective client a list of our most recent customer deployments and encouraged them to call any one of them without advance notice. We're on a similar path here at 8x8. Bruno, Lisa, and I, everyone here in our organization are working together and relentlessly focused on customer business success. By delighting every customer with every interaction, we'll build an army of advocates and will unleash incredible growth potential. Thank you so much for your time.
Thank you, Walt, and thanks to everyone joining us virtually today. This is a great update on the progress we've made since we hosted the event at the Nasdaq MarketSite a year ago. It's clear we have made a lot of progress, and I hope we have been able to convey some of the excitement we feel about our future. After this presentation, we will open it up for questions. Please feel free to email your questions to ir_questions@8x8.com. Kate has been collecting questions during the presentations and will moderate the Q&A. Before I move on to my slides, let me repeat the forward-looking statement Kate read earlier. This presentation includes forward-looking statements. These statements reflect our analysis as of today, and we have no plans or obligations to update them.
Reconciliations of historical non-GAAP metrics to the nearest historical GAAP metrics are posted on our investor relations website in the Events and Presentation section. With that out of the way, let's get started. You have seen this flywheel in the earlier presentations as we reviewed our product strategy and expanding portfolio of solutions, and then again, when we discussed the transformation of our go-to-market and investments in customer success. With the customer at the heart of everything we do, we're pushing hard to get the flywheel moving. As the flywheel gains momentum, it drives the cycle of innovation and growth that delivers operating leverage and increased cash flow, which we can use to further accelerate our innovation, expand our partnerships, deliver value to our investors, and invest in high ROI projects.
We've been clear that our first priority for excess cash flow is paying down our term loan debt, but in the future, we may consider share repurchases or even opportunistic M&A transactions that expand our customer base, accelerate our time to market with new technologies, or increase our market presence. The opportunities to add value to all stakeholders multiply as the cycle continues. As a fellow shareholder, my commitment to you is that we will apply a rigorous value creation framework and financial analysis to every new opportunity, investing only when we see a clear path to value. 8x8 has proven its resilience over many years as we've evolved from a video chip company in the 1980s, 8 by 8 refers to a 64-bit chip, to a leader in enterprise-class UCaaS and an innovator in cloud contact center and customer experience.
I believe one of our greatest strengths is our ability to recognize new opportunities and anticipate market shifts. As the UCaaS market evolved, we recognized a parallel opportunity to migrate contact centers to the cloud and began development of our CCaaS offering and unified platform years ago. In early 2022, we saw the opportunity to expand our customer base by embracing Microsoft Teams and became the leader in direct routing solutions for Teams users. We embraced AI and machine learning early, and we were able to introduce GenAI-based core services, such as transcription, on our platform within weeks of ChatGPT's launch. As market dynamics shifted once again in the post-pandemic era, we further refined our strategy and took steps to accelerate our transformation across multiple fronts.
We are still early in the process, but we have done the heavy lifting to ignite our innovation engine and transform our financial model. We have achieved significant milestones along the way, and we enter fiscal 2025 with the vision, technology, and business model to capture our share of the large opportunity in front of us. It's hard to overstate the magnitude of our financial transformation. Four years ago, our cash flow from operations was negative $94 million. Fast-forward to today, and we are in a much different position. We have been cash flow positive and profitable on a non-GAAP basis since Q4 of fiscal 2022. We have generated positive cash flow the last 12 quarters, 13 if you count this quarter, and our operating margin is in the double digits on a non-GAAP basis.
We've increased non-GAAP gross margins from an industry-lagging 59% of revenue to about 72% of revenue in fiscal 2024. Non-GAAP operating expenses, excluding COGS, have declined from an eye-popping 73% of revenue in fiscal 2020 to an estimated 59% of revenue in fiscal 2024, based on the midpoint of our current guidance ranges. As a result, fiscal 2024 operating profit is expected to increase by 27 percentage points compared to fiscal 2020. Further, the quality of our operating profit is higher than it's ever been. Instead of increasing our reported non-GAAP operating margins by increasing the amount of capitalized software and diluting our shareholders with higher equity-based compensation, we are reducing the amount of engineering expense we capitalize and shifting compensation to cash in lieu of equity for many of our employees.
I know that 8x8's market valuation is not in my control, but I would like to point out that our enterprise value at the end of fiscal Q3 2020, the year when cash flow from operations was -$94 million, was 2.5 times what it is today. Our commitment to adding value to our investors has remained constant as we've gone through the transformation process. We are on track to meet or exceed the targets we set out for non-GAAP operating margin, operating cash flow, debt retirement, and stock-based compensation. We believe our progress on these metrics will deliver value to investors over time. The only miss is on revenue, and we now expect both service revenue and total revenue for fiscal 2024 to be about 4% less than we anticipated at the beginning of the year.
There were several contributing factors, including macroeconomic uncertainty and disruption to our sales motions as we restructured sales and marketing. We also saw some increased attrition, primarily with smaller customers in the Fuze customer base, and to a lesser extent, 8x8 small business customers. Although revenue is expected to decline slightly from fiscal 2023, I want to emphasize that business with enterprise customers has continued to grow, and XCaaS ARR continues to increase as a percentage of our total ARR. This slide illustrates the slight decline in revenue in fiscal 2024 as we proceed through the transformation process and took steps to realign our sales and marketing organization and optimize routes to market. We made a lot of changes very quickly, and the disruption, coupled with some macro uncertainty, created revenue headwinds in the near term.
As we've expanded our product portfolio, we've been seeing strong growth from new products. But given the length of enterprise sales cycles and the recurring revenue nature of most of our business, this tailwind is not yet strong enough to overcome the revenue headwinds we have been seeing. The good news is that our revenue decline is not structural. The market opportunity remains huge. Pricing has been relatively stable, and our products are competitive. Our core 8x8 enterprise business continues to grow. The mix of ARR from customers with both CCaaS and UCaaS is increasing. As we build the recurring revenue stream from our expanded portfolio, we expect to return to growth. I've overlaid our historical revenue growth with a trend line so you can see what I mean.
With our recurring revenue model and 6- to 9-month sales cycle, there is a lag before our revenue reflects the progress we've made. I'm not guiding to fiscal 2025 at this point, but to give you some color, our best estimate at the moment is that the headwinds to revenue persist through the early part of 2025, and that we inflect to growth sometime in the second half of the year. In other words, we think the first half of the fiscal year looks a lot like the second half of fiscal 2024. We expect to exit the year at a low single-digit growth rate. We expect the momentum to continue to build from there. As we move through this transition, we remain committed to the same operating principles that we believe will generate value for our stakeholders.
This includes investing in innovation, managing our business for profitability and cash flow, reducing shareholder dilution over time, and paying down debt. Over the past four years, we have gone from negative 14% non-GAAP operating margin to positive double digits. Going forward, we expect the curve for operating margin to follow the same general pattern as revenue. The quarters within each year may show some seasonality as our expenses have seasonality, but generally will balance out on a full year basis. As we return to growth, we intend to reinvest incremental profit generated by higher revenue to drive further revenue growth. As a result, we expect to remain within the current 12%-13% range for non-GAAP operating margin on an annual basis over Horizon 2, which is roughly fiscal 2025 and fiscal 2026.
I want to point out that we expect to deliver these margin results while absorbing incrementally higher cash compensation over a multi-year period, as we continue to shift compensation for the majority of our employees from equity to cash. You can see the impact this compensation shift has had on both the number of RSUs granted and the total value. As we shift to cash comp with above-market pay increases occurring over several years, our cash operating expenses will increase, but our employees' compensation will be less sensitive to market fluctuations. All employees still have the opportunity to participate in equity appreciation through our employee stock purchase plan.
To give you a more complete sense of how this delivers value to shareholders, the gray columns show how many shares we would have issued in fiscal 2024 if we had issued the same total value of RSUs in fiscal 2024 year to date as we did in fiscal 2023 year to date. The number of RSUs we would have granted would have been almost 19 million shares, 3 times as many shares as we've actually granted so far this fiscal year. Okay, that's the P&L. Now, let's look at our operating cash flow. Earlier this year, we said we expected to grow operating cash flow by an average of 20% over a 3-year period from fiscal 2024 through fiscal 2026. We are on track to achieve this, but we overperformed in fiscal 2024 on strong profitability and collections.
This overachievement in fiscal 2024 implies lower growth rates in fiscal 2025 and 2026. We still expect to generate somewhere in the range of $85 million of cash flow in fiscal 2026, the mathematical result of growing cash flow from operations an average of 20% per year. I would like to reiterate the magnitude of our financial transformation. Four years ago, our cash flow from operations was negative $94 million, and we expect to exceed $70 million of cash flow in fiscal 2024, a greater than $164 million annualized improvement. One thing I would like to point out is that our forward-looking cash flow from operations is generally aligned with our non-GAAP operating income, illustrating the high quality of our earnings.
Positive cash flow puts us on solid footing and gives us flexibility with respect to our capital structure. We repaid the remaining $63 million of outstanding debt on the 2024 convertible notes on February 1, reducing total debt outstanding to approximately $427 million. With more than $100 million in cash and investments on the balance sheet, plus our expectations for continued positive cash flow generation, we intend to begin paying down the term loan when the prepayment penalty expires in August of this year. This will begin to reduce our interest expense starting in the second half of the calendar year. Finally, a word about our path to durable growth and operating leverage and our long-term model.
Given the mix of our business and our growth opportunity, we have a long-term target for operating margin in the mid-teens, with leverage driven by revenue growth. We will continue to invest in innovation, so expect R&D to remain roughly 15% on a non-GAAP basis. With sales and marketing already close to a long-term target range, we expect much of the operating leverage to come from G&A. The increase in revenue and margin will flow through to cash flow, opening up new opportunities for investment and returning value to our investors. As I said, I feel more confident in our future than I ever have, and this slide summarizes why. We have transformed our financial model, creating a solid foundation for growth and opportunities to return value to investors through debt repayment and other means.
We have the differentiated technology, focused strategy, and product market fit to achieve durable growth over the long term. Turnarounds of this magnitude take time to manifest themselves in the financial statements, but we are well on our way. Thank you, everyone, for joining us today. We are going to transition to Q&A. Just give us a minute to get everyone on the stage. Walt Weisner, our Chief Customer Officer, will join us remotely. While we're getting arranged, you may email your questions to Kate at ir_questions@8x8.com. Thank you.
Go. Hey, great job, you guys. Thanks so much. I think we presented a lot of information today, so I think we'll start with Sam. Maybe you could sort of summarize what we presented and the top three takeaways.
First off, let me say thank you to everyone that joined us today. Thank you, Kate, for putting this on. Thank you to our investors, our stakeholders, and partners, and employees, and anyone else that listened in. I really appreciate it. We really wanted to leave you with three key messages today. Number one, you know, a year ago, a year and a half ago, we started on this innovation journey, and that's paying benefits today, be it ICA Digital or the CIDP or Engage or other things that we have coming up in the near future. A lot of innovation coming out. We wanted to highlight that to you and what it means. Number two is a very robust financial model. As Kevin highlighted, you know, fiscal 2020 is in the rearview mirror.
Today, as we look forward to fiscal 2025, we're a profitable, cash-flow positive company, and we see the green shoots around our new products to resume revenue growth here in a few quarters. That's not guidance. We just hope to, in the next few quarters, resume revenue growth. And lastly, as Lisa highlighted on her, on her section, we're retooling our GTM around where we are as a company. Our old GTM was very focused on being a single point product, mainly UC, and a little bit of contact center thrown in, to really becoming a portfolio of products company led by customer engagement. And if you look at Engage or the CIDP or Proactive Outreach or the things we talked about today, those really focus on customer engagement.
And so Lisa is doing a fantastic job retooling around this notion of selling multiple products to a single customer, around, you know, business outcomes and those kinds of things. And lastly, I'd highlight-
-is you'll see the messaging of the company change. We wanted to lay the groundwork with investors for that. You know, we, we wanna remove the labels around UC and CC and, and CPaaS, and these kinds of things, and really focus the investors around business outcomes and our customers around business outcomes. Because we are the only cloud vendor with UC, CC, CPaaS, informal contact center, you know, et cetera, Microsoft Teams integration, all under one roof, native in the cloud. And so what we wanna focus on and what you'll see more from us is solving specific business outcomes for our customers, because we think that drives economic value back to you, our stakeholders. So thanks, Kate.
Thank you, Sam. That's a great summary. So we've gotten a few questions in, so we're gonna jump around just a little bit here. The first one for Hunter: Can you summarize the AI strategy for 8x8, and how AI is integrated in our platform today, and how it will be integrated in the future?
Sure. The starting point for AI for us is the work that we're doing natively in our own code, and I think the discussions around the Customer Interaction Data Platform is really the starting point to think about that. You have a lot of interaction data, and there needs to be a consistent way of understanding what that data is telling you. So in our Customer Interaction Data Platform, that's where we do a lot of focus on our native development to make sure there's high-quality transcripts, great summarization, end-to-end understanding of what each interaction is doing. You don't want multiple different tools across your organization coming to different conclusions or different ways of representing that. That's not helpful to customers. So at the core, CIDP is the starting point of our native AI strategy.
An additional component of our native strategy is to make sure that we bring to these complex deployments the AI-driven analytics to understand how your full solution is behaving, where are the opportunities, how to optimize it. So we're working at both of those levels, almost sort of the foundation and then the overlay at the top. Now, we also have a very rich partner strategy here. In any given area, there are awesome tools out there today to help specific users in this solution to really get the most out of what they're doing, whether it's the customer that's calling into a contact center, the agent that's sitting there, a supervisor, there is lots of great point tools.
We want to bring a carefully curated list of the best options to our customer base so that they don't have to pick and choose between best of breed or not. So that is a very important part of the strategy, is to enable our customers to easily, deploy and manage in a complete solution, the best of breed tools that are out there. And I would say, third is not exactly building AI yourself, but I think we're building an amazing services team that can help our customers on their AI journey. A lot of them are just getting started.
There's noise everywhere about what to do with AI, and I think our services team is really helping be that consultant that can say, "Here's the next best thing to do, and we can get you that ROI fast." So native development in the foundation and in understanding your complete solution, bring the best-of-breed partner ecosystem tools to the table, and the services that help you on that journey effectively. That's the comprehensive AI strategy.
Great. Thanks, Hunter. This is a great segue into another question we've had about: Who is providing the customer data platform as part of the customer interaction data platform, or does it work with multiple customer data platforms?
Well, this, as company-wide strategy, we will work with multiple data platforms. But that said, we would look forward to having specific industry-leading partnership with the best-of-breed providers for our customer data platform as well.
Great. Thanks, Dhwani. All right, I'm gonna ask the next question from Walt, who is remote, so we'll bring him up here. Walt, can you, can you talk a little bit more about how our customer success program is driving customer retention, and some of the examples of what you're doing differently today that are helping to drive this improvement?
I'm sorry, Kate, could you repeat that?
Sure, sure. Can you give us a little more detail on how your customer success program and the changes that you've made there are driving higher customer retention and the other benefits to the company? What are you doing differently today than the company did, say, three years ago before you joined?
Absolutely. Well, first of all, I think most of us know that customer loyalty, customer retention, is a company-wide effort. This can't be done by a single organization. It's gotta be throughout the entire organization. It's gotta be part of the culture. For us, it's also being driven by our CEO, our CFO, and the board of directors. You know, I think we've done a good job, not just as a company, but then specifically within my post-sale organization, around developing new programs that are really tailored towards being proactive versus reactive. In my presentation, I talked about being competitive, differentiated from a customer experience perspective. I think SaaS, there are two parts of SaaS that are extremely important.
One is the technology, for sure, and we've got that, and then the other is the customer experience, and I think over the past three years, we've transformed that experience into being both proactive, value add, and really driving a lot of value for our customer base. One of the leading indicators for me, in terms of loyalty and customer retention, is our on-time renewal rate, and ours is at world-class level. It's in the mid-nineties, close to 100% on-time renewals. That's indicative of our customers' loyalty, it's indicative of how we approach our business in terms of making sure that our customers stay with us and see value from 8x8.
Great answer, Walt. Thank you so much. Okay, the next question that we'll move to is for Lisa, and we have a question about how we've changed to accommodate a more solution selling, and what specific use cases will have higher demand.
So we've put together sales playbooks for both our direct sales team and our partners that revolves around specific industry-focused use cases and business outcomes that we can drive. And I think what we start to see as we broaden the portfolio of solutions that we offer out to our customers, is there's a huge interest and attraction and business value that can be driven from the digital ones. And so when you think about ICA and what we've launched with our customers, that digital interaction gives them an ability to drive more revenue, it gives them an ability to more effectively and efficiently serve their customers, and it is resonating out in the market.
Great. Thank you so much. Okay, then let's move to the next question. I'm gonna give this to Sam, but anyone else feel free to break in. What are you seeing in the competitive environment? Is it more or less competitive? Has it changed materially in the past year, the past weeks, past months?
So I'm gonna give a two-part answer. I wanna talk first for a second about, you know, quarter to quarter, what's changed. Look, we saw at the end of last year a little bit of an increase in sort of the deal to deal fighting over an individual respective deal and those kinds of things. I think that's just a function of the fact that everyone wants to drive revenue growth and those kinds of things, and I think we're seeing that. But I wanna take a step back. I think what we've seen over the last few years is the market fundamentally change, and I think, you know, I credit us for being somewhat early to this move.
But if you go back to 2019 or 2020, 8x8's core message was voice, video, and chat for employee collaboration. And you think about what our message is today about customer engagement and those kinds of things, we've leveraged our tool set and our broadening product portfolio to shift what our core sale is. The collaboration market, really, I think Teams is gonna be the big winner there. We've said that. Microsoft is a great partner of ours, and I, yo u know, we care deeply about that relationship, but I have no desire to go head-to-head with Microsoft in voice, video, and chat for employee collaboration, and it didn't play to our strengths anyway with the contact center.
And so as we bring everything out and we really focus on customer engagement, I think we are finding, in our ideal customer profile, true product market fit for what we do. And I think product market fit is more important than competitive stuff. No one's gonna spend. And we're not gonna get into a price argument of $1 per seat here or there, if you really meet the customer's needs. Because the ROIC is so high on meeting those customer needs, I don't wanna say price comes off the table, it just becomes less important, and I think that's where our portfolio of products really comes in, that's where our ecosystem really comes in. Because we can come into a customer, and we talked about it with Westminster or others, where we can get very fast ROI.
At that point, the price of the product really didn't matter. What matters is, can you capture the ROI? And as Walt talked about, our services team helps ensure that that happens. And so I think when we bring that complete package to the table, I'm not really worried about the competition. I'm worried about, can we execute our strategy? 'Cause I think it's the right one.
Great. Anybody want to add to that? That, I think, was a great answer.
Yeah, good answer.
I've got, like, three follow-on questions about it. So we'll-
Okay.
So, we'll start with this one because you, this was what you mentioned last. But when we talk about the 80% deferral rate for the Manchester customer that we had, is that just for frequently asked questions, and or is the rate different for more complex questions?
Okay, so that was Westminster, not Manchester-
Yeah
-but we'll just go with it 'cause I think both those cities are actually customers. So, the 80% deferral was on. I think they've got three use cases now, and that's ICA Digital. Now, look, I would expect that as they start adding more complex use cases, that number could go down. But I wanna go back to the key premise here. If you look at a contact center, and, if it's Zack at Track or the Cape Air example that you saw in the videos or any of those, a vast majority of the questions and calls into a contact center are very informational in nature. And this is what AI does very, very well.
And so if we can just skim off 30% or 40% or 50% of the calls coming into a contact center and get those, you know, high 60%, 70%, 80% deflection rates, what we're gonna do is we're radically gonna improve the productivity at the contact center. Now, look, I know you're investors, so the first thing you're thinking about is, "Oh my goodness, that means you're gonna sell less seats!" The answer is yes, maybe, but also means that the contact center agents get to spend more time on revenue-enhancing projects and those kinds of things. And number two is, remember, we're selling the bots too, so we make up revenue and those kinds of things off of selling a more complete solution than solving customer problems. And I, I-
Well, if I can interject, one of the key metrics for a call center is first-call resolution. And I think the tools that we've talked about, the tools that we're making available, really enhance that. Now, why is that important? When we talked about customer satisfaction, we talked about customer loyalty, customer retention, all those are part and parcel of the first-call resolution to the customer satisfaction. So all these are intertwined, and having ICA Digital, ICA Voice, so are all tools that help our customers in that first-call resolution. Okay, then we'll go to the next one, and this is for Lisa, but also related to that answer, is when, when will the solution selling process be fully implemented across all your stated solutions?
Yeah, Lisa, when?
So I don't think you're ever done, right? Like, this is a journey, just like a customer journey. This is a journey the sales team is on. I think that, you know, I measure success by the metrics that we've aligned, the high performance structure and targets to which is the pipeline that we're generating, the conversion of that pipeline, and how we are measuring and managing the productivity of our sales team. So when I look at this, this is a point in time of where we're starting to infuse that into our sales process, and it's rinse and repeat and practice, and it's something you continue to retool because as we launch more products and solutions, that story, that narrative, those use cases continue to change.
So it's something that just becomes part of the fabric of how we enable and manage our teams.
But I do wanna add one thing to back what Lisa's saying. So a year ago or a year and a half ago, we talked about this Nasdaq a year, I guess a year ago, we were kind of a 2 products company becoming an 8 or 9 products company today. I wanna make sure investors understand there's, it's not our goal to be an 18 products company a year from now. There's a certain natural pace at which the sales force and our solutions can be developed to really get deep enough, and that's where those composable packages come in. So I want you to think about the fact that we can take 8 or 9 or 10 solutions, probably, you know, low double digits max, but we can reconfigure them 100 or 1,000 different ways.
The key is we have to be experts at those 10 solutions. Then we reconfigure it for healthcare, field service workers, you know, SLED, any of these types of things, but the key is that we have those 10 products reconfigured and correctly deployed in the packages for each of them. So I don't want. When we think about solution selling, I don't want this to be it's a never-ending journey, but it's also I'm not expecting our sales organization to be selling 40 products a year from now and 80 products 3 years from now. That's impossible. Then you end up with being sort of the, what is it? The, you know, jack of all and master of none kind of effect, and we don't want that.
Okay, so I'm gonna, I'm gonna combine a couple of questions that we've had here that follow on to the comments you made about our Teams' opportunity and how we're doing in attracting and expanding the Teams' user base. So first one is: when it comes to the Teams' opportunities, how do you determine what bucket those customers are in? Is it on the looking for options, or do they just wanna use Teams Phone? How do we determine sort of how they fit and propose the solution to win?
I'll start, and I think, Hunter, this might be one-
This is more about this. It's tip of the spear. It's, it's the sales conversation, yes.
Yeah, but it's, I mean, the whole point of what we're trying to build across, you know, 8x8 or whatever, however you wanna think about it, through Engage, through X6, 7, and 8 in our contact center, et cetera, is that we have the capability of mixing and matching.
Yes.
Right? So the key for us is we don't wanna come in and say, "What's your biggest use case?" You know, which probably has the least number of users, and then force that massive use case on every single user. And I think that's a lot of why the on-prem to cloud transition has actually slowed down in the last few years. A lot of on-prem customers don't have super complex use cases, and a lot are super complex. And you have to build a product portfolio that can mix and match to the individual needs of those users. People don't want $22 lines that are only used three times a month. That doesn't make sense. And so it's building a mix-and-match capability across the portfolio, and that's what we're doing, be it Microsoft Teams integration, 8x8s, Engage, Contact Center, et cetera. They're mix and match.
You can, you can decide what works best for every use case and customize it for your. And then lastly, this is how you drive high ROIC, right? 'Cause you're not overspending for things you're not using. It's also how you drive high retention rates because people are using the max amount of what they're getting. So that's where I would start.
I mean, I could just chime in. So from a product perspective, when we look at the options, we are having opportunities to use Microsoft-centric services from 8x8 or different kinds of personas, right? So whether it's a knowledge worker, back office worker, whether you're looking at a contact center worker, a service worker, we wanna make sure we have options available for the end user, the customer, to mix and match between they might not have everybody on Microsoft Teams, but some of them, and even out of them, not everybody is on customer calls all the time. So we give them the flexibility to choose the right fit solution from our perspective, and we partner with them from that side.
Yeah, I think even just 12-18 months ago, I would be talking to our partners, and they would talk about, "Well, I always have to. These customers, they either feel like they have to go with the cheap solution for everybody or the one that works for their advanced customers for everybody, and nobody has both.
Yeah.
I think, and I heard that so many times over the past couple of years, and that's really been the answer, as Sam has pointed out, the cornerstone of the strategy is enable them to come in, and from 8x8, they can get any range of appropriate solutions that integrate well with Teams and are tailored to that segment of their employee population. I think that's really where we excel.
Yeah.
And then it's on to Lisa's team to figure out how to-
How to package that up.
-how to suss out which is which, you know, which is which. And that's where-
Yeah, absolutely. That's the flexibility.
-that's where that solution selling comes in.
Yeah, absolutely
- to explain that and be able to determine what those populations are in the next customer.
A great segue to the next question, which is: can you elaborate more on the Microsoft relationship and sell-through with certified CCaaS, and any metrics you can share on how this is increasing the average revenue per user?
So, I mean, Hunter leads a lot of the Microsoft, so I'll let him sort of. I'll just give a soundbite answer and then let him expand out. I mean, look, Microsoft's a partner of ours. I think we- we're considered a good partner of theirs. I don't view Microsoft as a competitor. I view them as a partner through and through. We are working with Microsoft around Teams.
We were the first Microsoft certified Microsoft Teams certified contact center, and, you know, the way we leverage that, and the key behind it is what we wanted to avoid, and it's really a follow-on from the previous answer, is if you're a Teams environment and you want to use a contact center, and you want people on Teams to be able to talk to the people in the contact center, there needs to be a bridge there, and that's the bridge we provide. And we're looking at more products from Microsoft and more capabilities from Microsoft that can, you know, that we can bring to agents, et cetera. If you look, right, I mean, Microsoft's made a lot of investments in AI.
A lot of those investments are very powerful, and there's a lot of advantages we have in potentially bringing some of those to our customers.
Yeah, I think that's exactly right. We've got a lot of different threads going with them right now. I think the primary focus. We are not a, today, a reseller of Microsoft products. What we talk with them a lot is how we can jointly enable their channel to be able to do both and do it in an integrated way. And so a lot of what we've been engaging with them on is how to get access to their channel and help educate them on options for bringing telephony into Teams and really make that a smooth and seamless process. Now, to Sam's point, Microsoft has a wide range of amazing capabilities. We are looking at how to engage Copilot into some of the- as one of our AI options and things like that.
Today, there's not a sell-with motion, I heard that in the question, directly around Microsoft products, but we're doing a lot to try and really bring their channel to life on the combined options.
And then. Oh, go ahead.
No, the second, but I was just gonna go on to the second part-
Yeah, please
-of that question. So the sell-through rate, I'm incredibly excited about what that creates for us in terms of really supersizing our deal values. Because if you think about preparing our unified communications, our contact center solutions, with workforce engagement from Verint, with payment solutions from PCI Pal, with Cognigy, with Awaken, like, those can double the size of our deals, and we've seen it happen. And it really creates, like we talked about in our presentations, stickiness with our customers because we're bringing so much value to bear.
Yeah.
The only thing I'll add is, look, I know the big concern is that Microsoft commoditizes the market, you see prices collapse, and the world comes to an end. The thing I would say is, look, I just wanna remind that our attach rate to contact center, to Teams deals, is significantly higher than to not Teams deals.
Yes.
Right? So remember, having Teams drives more contact center sales, and I'll bet you it's gonna do that in spades when it comes to Engage, right? 'Cause that - that opens the TAM even larger 'cause I think Engage is gonna be a TAM expander for us. So I, you know, I, we can talk about what Teams means like this, but I would really encourage investors to think about Teams like this. That deep integration with Microsoft, that partnership with Microsoft, opens a lot of contact center opportunities and customer engagement opportunities. That's a great place to be.
Great. Perfect. That's a great answer. If you have any more questions, please, on this topic, please email the follow-on questions to ir_questions@8x8.com. I'm now gonna switch a little bit, but similar for Lisa. Can you give some examples of internal performance metrics that you're using to measure your progress?
Well, they're not internal if she tells them, are they? It's not internal and external.
That was-
Yeah, I mean, you know, it is, so sales metrics aren't, you know, some secret, right? When we think about, you know, where we have to baseline our sales organization, we are looking at the type of pipeline we generate, the volume of pipeline we need, what our conversion rates are by segment, where the conversion rates by our channels to market, our routes to market. We're looking at attach rate of products and solutions when we think about cross-selling and upselling, and where are we getting penetration? We obviously measure productivity of our reps. How are they tracking to their targets? We also have implemented activity-based selling, so that's another where, you know, you have to do a certain volume of calls and outreaches every day to generate customer engagement.
Those are things that we've now actually retooled and put into a dashboard that we use throughout our organization. From the front line in my team, all the way up to me, everybody is managed by that dashboard.
Can I ask a follow-on, Lisa? So, Lisa, you come from Verizon, Twilio, Genesys. Is this a new motion for you? Is this all-
I mean, no, this is-
Are you learning this, are you learning this all day today, all new?
I hate, I hate to say it, it's not rocket- I don't need to have a quantum physics degree to do this. But this is stuff that I think is, is very fundamental to, to sales execution.
The other thing I would say also is that, the marketing team and the sales team are really tightly linked, at 8x8, and so the quality of the pipeline that is being delivered, you know, we're constantly looking at that, so the conversion rates can be higher. So it's really nice to see that, that interaction, the hand in glove between marketing and sales in our organization now. So yeah.
And actually, I would add to that, it's not just marketing and sales. Like, when we look at building products, product success is, like, at the core of building a product. We don't wanna build shelfware. It's something that needs to be excelling in the market. We want customer happiness using it. So as we work through that, we work with Lisa's team closely about that, and then marketing motion comes in. So it's actually a very tight loop.
It's a full, full cycle.
Yeah.
Yeah. And I'll just add as well, as Lisa mentioned in her presentation, customer success is a big part of-
Absolutely
- of the process as well, so it's bringing all the areas. But Kevin, your response was a great segue into the next question of: how much visibility does the current pipeline give you to re-acceleration and growth?
How much does the pipeline visibility give us?
Yeah.
To re-accelerate, how much confidence do you have whether we're re-accelerating revenues?
Oh, yeah. Well, I mean, I have high, high confidence that we're gonna re-accelerate revenue. I just look at the new product growth rates, and Sam had mentioned this on our last earnings call, in fact. You know, we're talking about, you know, 50-60% year-over-year growth rates, our new products. So it starts from small, you know, single digit millions, so it doesn't necessarily manifest itself in the, in the P&L right now. But these are the types of, you know, green shoots that we're seeing in our new product portfolio that give me great confidence that we're going to really accelerate over time.
And I just wanna add one thing, maybe from the CEO perspective, less from the income statement perspective. But when you're sitting in the seat, and you're trying to figure out the visibility in the future, one way you get visibility is you're like: Okay, do we have the pipeline? Are the SQL sitting in Salesforce and those things? But if you look at it more from a venture capital observation, the first thing you have to achieve is product market fit. The first thing you have to achieve is product market fit. Pipeline becomes an outcome if you have a good fit between them. And I'll tell you, I'm gonna go back to ICA Digital, which was GA'd last fall. So October, September, right? Not. Yeah. Okay. So it was GA'd, it's out. I think every single customer we have on ICA is referenceable.
They all love the product.
Hundred percent.
It's spot on. As Dhwani mentioned in her presentation, the first users we have on ICA Voice are absolutely off the charts happy. That's product market fit. Then it becomes a matter of execution of just getting it out. But, like, I've been at companies where you launch products, and there's a thud-
Yeah.
right, of the product hitting the floor.
Yeah.
And you're like: Okay, there ain't no commercial in the world that's gonna solve this problem. We don't have that problem. We've got product market fit. And so you talk about visibility, like, we need to go execute against generating the pipelines and getting the word out, doing those things. But if you don't have that product market fit, I guarantee the visibility can't be there.
Okay, we're gonna shift a little bit back to the product question. This comes over the web. With so many AI-powered functions already included in nearly all CCaaS and UCaaS platforms, how does 8x8 create differentiation in the platform? There's a follow-on question to that, but I'll leave it with this at this point.
I hate to keep reiterating our CIDP acronym, but the customer interaction data platform really is an anchor spot. We have visibility into the entire organization's recordings and transcripts, and engagements that are going on with customers. And not just a window into the contact center, separate from a window into what's going on in the rest of the organization. Uniformly across our primary customer profile, that engagement is happening throughout the organization. If you're not looking at both pieces, you are not getting a full picture, and AI can't do anything for you if you're not starting with that full database.
So this is part number 1 of it, is big by, like what Sam was saying, blurring those definitions about what is UC and what is CC, and thinking more about what is customer engagement throughout the organization, you can now deploy AI in a completely different and more effective way than any company that's only serving a piece of the problem. No company that's serving a piece of the problem can give you a full AI-driven answer, and that's, that's the anchor point.
Only-
Sorry.
Go ahead.
I wanna add that.
Please.
Please don't miss the fact that, interaction data off of our third-party ecosystem partners is also in there.
Is incorporated into that.
Yes.
Okay. So I was gonna say, which is also, AI doesn't matter if it's not in front of the agent when they're on the phone with the customer.
Yeah.
Right? I mean, like, I think we miss this, this thing. There's not supercomputers that are replicating human beings. They're assisting human beings. They're co-pilots, they're Agent Assist, or whatever the case may be, but they're not replacing human beings. And so I think the fact you, l ike, one of the key things that we do is we actually integrate it. So we showed, I showed in my presentation, I think we showed it again in Dhwani's presentation, is that widget. That widget has multiple AI vendors, best in breed, but they're pulling, we're pulling that information together and presenting it to the supervisor or the agent at the moment they can do something with it to actually affect the customer outcome.
Yeah.
Right? And so I think the key there is, just because you have AI, you need a big best-in-breed AI across multiple products, and you need to bring it in front of the agent or the supervisor that's dealing with real-world problems, or the sales rep, or the nurse, or the field service worker in the Engage case. Which we showed you, that panel showed up right in the middle for Agent Assist, showing how we can use the same vendor that you use in the contact center to support your Engage customers. And this is fundamentally differentiating-
It's true
-from our competitors, because our competitors cannot, by definition, 'cause they don't spend enough, be best in breed across every single aspect of AI. And so we're bringing the best in breed AI in front of the person at the exact moment they can do something with it.
We were talking earlier about how that ability to capture all the data from all those interactions helps train the AI models.
Yes
So it delivers better examples. Can we expand on that a little bit?
Dhwani.
So I look at it, like, from the perspective of, like, you're looking at conversational intelligence, you're looking at engagement intelligence, you're looking at customer journey, you're looking at forecasting. In all these four categories, when you bring in these insights, trained over every multiple touch points of the user throughout the customer's journey, we are able to elevate that conversation for the user servicing that customer. Now, whether you're looking at conversational intelligence, think about summarization, topic analysis. When I talk about engagement, you, you think about the health scoring. You look at.
-the journey. So which topic works very best with which bot? So surface that as the first entry point, smart intelligence, or routing. When you look at predictions, forecasting, it's like churn predictions. All of this data, if you have multiple AIs working on them, it's gonna be absolutely disintegrated. It's gonna be wrong. You're gonna have different answers from different AIs, and that's not what we want. So you train them over at the native solution there, and you augment them at every touch point in every workspace that you can. And that's how you get a holistic view of your customer.
And I have to add one thing here. 'Cause we always ask about competition, right? What's our competition doing in this area? "Hey, Mr. Customer, dump it all in a data warehouse, figure it out yourself." Right?
Right.
So, I mean, it's really key on CIDP is that we're doing the work, the hard integration work, so that you can figure out a conversational IQ, a voice call, a meeting, you know, whatever the case may be, email through the CRM system, et cetera, all comes together in something you can actually make heads or tails out of. Our customers cannot and will not fund a team of data scientists just to do this type of work. We need. And we'll get paid. We will make economic value 'cause we'll be able to put that platform together and give them one single pane of glass that allows them to figure that stuff out.
Okay. Is that the composable solutions that you mentioned, Sam?
Well, a little bit, but it's more about the CIDP, right?
Yeah.
So the CIDP is taking every single interaction that's happening inside the contact center or outside the contact center. Your sales reps are not in a contact center. They're not an agent. They're not running through the contact center software. So you have a sales rep talking to a customer, where you have a customer going inbound to tech support. You have the marketing department talking to a customer. Today, the attitude of almost every vendor is, "Just go dump that in a data warehouse and magically stitch it together to make a customer journey." That's really hard.
It is.
It is really hard-
That's right
-speaking from experience. Customers will pay us to do it for them.
Okay. The composable experiences come in, that once you have done that analysis, you can now figure out which part of it helps a specific user, and you can then craft the experience for them with the right window into that analysis, and that's where the composable-
Workspaces are the front end of delivering this information-
Yeah
-contextually for every user. I think of CIDP as the layer of AI, the data platform, that services these multiple workspaces.
What composable packaging for me is-
We really love this stuff.
We do. We are. So composable packages for me is, we can go out to a customer and say, "We can give you a complete telehealth solution." If you take Engage for your nurses and your healthcare workers-
Mm-hmm
- plus contact center, plus Video Elevation, plus Proactive Outreach, you have a complete telehealth solution in a package ready to go. You can rearrange those pieces, and you have a solution for SLED, for things like snow day tomorrow, signing up for classes, your tuition's due, all those kinds of things. And so the idea is, those are separate use cases, but the underlying technology is very similar. We may switch out an integration. For healthcare, you want Epic.
Mm-hmm.
For field service workers, you want ServiceMax. For education, you may want Salesforce or something else.
Yeah.
So we can switch those in and out, but the idea is the underlying building blocks are the same. But what's interesting is, in our research, we did a lot of focus groups, a lot of our c ustomers will pay you for this. They will happily pay you for this because historically, they've taken all the risk of trying to stitch this stuff together.
Yeah.
Okay, so there's a bunch of follow-on questions. So we'll jump around a little bit. We'll shift to a financial one. How does AI, how can AI be monetized directly versus being embedded, and how does that help keep pricing stable or even move higher?
So, well, we have the, you know, a sell-through motion. We have a sell-with motion. In terms of the availability to monetize it, one of our ways is we could, in the sell-with, we can get a rev share arrangement from the third-party provider that the customer can pick. So that can come, you know, it'll, it'll come in the form of the, you know, money coming in when we, when we have usage on that particular product. So that's a great way for us to monetize our relationships with the, with the third-party ecosystem, and it comes at a really good margin, too. So, you know, we're, we're looking forward to having that ramp.
You know, we have the new product revenue statistic that I mentioned earlier, and as that comes through more and more, we'll see more of that happening as well, so looking forward to it.
I would also add that we have templated service engagements also to help with the implementation of the AI solution. So those are things that drive services revenue for us as well.
Yeah. And besides the revenue, I think there's a lot of customers who want AI but don't know exactly how that manifests itself in terms of helping them in the way that they work. So we provide that value there. We're very good at it. Our customer satisfaction scores for implementation and post-sale work is very high. So we think that we've got a competitive advantage there, not just selling the product, but also helping implement and getting value and quick ROI.
The other thing that we need to realize is, yes, the AI might be packaged with a solution like Engage, but a lot of the users that need a service like Engage, which is a more expensive product, might today be sitting on a fairly dumb ring group or a call queue solution in one of the lower-end UC offerings. So in many cases, it is the presence of not just the AI, but that fully crafted solution for that persona, where AI is a part of that, that drives that upsell to a much more expensive but also more productive application for those users. And there's a lot of users that sit there today being less than fully productive because they don't have this.
Okay, so, so another sort of related question to that. We've talked about services, we've talked about the new products. How does this change your relationship with the channel and help you build that relationship?
Oh, I think we bring a lot more value to our channel relationships, having the portfolio of solutions that we've got, the partnerships that we've got. In fact, I just came back from an industry event called Channel Partners, where I met with many of our partners, and we've got partners out there that are actually building their practice around 8x8 and the ecosystem that we bring to bear. And so that creates this multiple, multiplier effect out in the market in terms of distribution, because we've got resellers that are out there positioning our products and services in addition to our technology partners. So there's a lot of growth that I think we're gonna see in that based on what I'm seeing over the last few months in this space.
Yeah, I think the discussions with partners, especially resellers, become even more compelling, because frequently, they are the experts selling into a particular vertical, and they really know both how to integrate those other third-party options, but can also help us with understanding the best ones to bring together and how to package those solutions, as Sam was talking about. So we are really working very actively with our resell partners to craft the solutions that work in their space. So it becomes very much a two-way street. And the partner discussions really move to a completely different plane when you're doing that.
Okay, great. Next question, related to the composable experience answers is, Sam, can you talk a little bit more about the CPaaS business and the role it plays in the overall product strategy, as well as sort of the existing business that we have in Southeast Asia?
Okay, so first off, you know, we have a great CPaaS business in Southeast Asia. We're sort of a market leader in Singapore, Indonesia, Thailand, Vietnam, and the Philippines. And just as a reminder, 'cause I like to say it all the time, that Indonesia is the fourth most populous country in the world, and the Philippines is the twelfth most populous country in the world, so these are big market opportunities. What we really focused on the last year is, you know, getting the resumption of growth of our CPaaS business, but also bringing it closer to our UCaaS business. And, you know, I hate those labels, but I'll use it here. And as Dhwani mentioned in her presentation, Proactive Outreach, right?
That started as a CPaaS product, but we're using our global carrier relationships, we're using our global capability, and deeply integrating into the contact center. We tested this hypothesis last year: Did our core buyer want to buy CPaaS from us, or did they wanna buy it from a different vendor and integrate it themselves? And overwhelmingly, customers are almost price-agnostic. If it's integrated and it works, we'll take it from you. We want it from a single vendor, and we want it integrated into the product, and that's a Proactive Outreach.
Yeah, they don't, they actually don't wanna buy CPaaS. They wanna buy a solution-
They wanna buy-
-that works, that works-
Yes
- and it happens to have CPaaS embedded in it.
That's right. So think about, like, Video Elevation, right? We send an SMS message or a WhatsApp message, which then elevates to a video call. So we've got the voice call going on in the agent's head, we've got the video going on using the camera off the phone, split screen. That's a deep integration between what CPaaS, contact center, video, meetings, et cetera. People love that stuff, and it's got very fast ROI.
In our segment, the customers don't typically have the resources to go wire all that together and keep it functioning together if they buy it separately. We can take that burden for them, and it's a huge win for them.
Okay, I think we have time for just one more question, but everyone can chime in. You've told a great story here. So Sam, what metrics, and everybody else add to this, should we be looking at to measure our success as we progress along this journey that we've kind of outlined here?
So look, I mean, I'm in the end, to me, it's about grassroots, right? So obviously, service revenue growth, right? I care less, a little bit less about total revenue growth, 'cause that includes some of the old hardware, and so it, it may show a little bit different characteristics as we become more of a software company and less, you know, the traditional hardware stuff. Number two, new products, right? You know, if I have product market fit and we're executing correctly, the new products should continue to grow, et cetera. And then lastly, look, I can't help myself, but I always obsess about operating margin/cash flow. We're not a capital-intensive business, so they're very close together. But what that gives us is two things. Number one is, that gives us optionality.
We can return money to shareholders, we can pay back debt, we can do all kinds of things, and we can buy other businesses that continue to grow our, our portfolio, our footprint, our distribution engine, et cetera. And so cash flow really is the ability to do a bunch of different things in the future. So the three I always obsess about are those. The one metric that, to me, sits above all of them is retention rate.
Yeah.
Is retention rate.
Right.
Right? So we're a recurring revenue business model, right? So if the retention rate's high, de facto, service revenue growth will come out high, operating income will take care of itself, those kinds of things, right? And so the next step for us is to become, you know. If I was gonna add one KPI that I'll probably never publicly release for a whole host of reasons, but internally I'll obsess about, is the number of, you know, two products, 'cause we already do XCaaS re member. Two product customers, three product customers, four product customers, five product. Because we know the more products we sell, the retention rate goes up. And, you know, just to give a sense for investors, rough DCF, right? But adding one additional product has the ability to basically double the value of a customer. Double the value of a customer.
Now, imagine if we can add 3, 4, or 5 more products to that, but those simple math equations are pretty powerful.
So ditto for me on all the financial metrics that Sam mentioned. That's the finance guy. But I would have to say, this, and this speaks to the retention comment that Sam made, and Walt showed some great stats on customer sat. So where does that retention come from? For me, happy customers. Happy customers pay you, happy customers stay with you, and it's reflected in the actual retention rate statistics. So I think for me, in addition to the financial metrics, it's customer, customer satisfaction.
You know, Walt, just to piggyback on that, Walt said something that's super interesting, right? On-time renewals, right?
Yeah.
That's a metric he looks at, on-time renewals.
Yeah.
So one of the metrics I always look at is our A/R, and I can't believe how low our A/R is now. I mean, it's, l ook, happy customers renew on time, pay you on time, don't argue about their bill, all those kinds of things. And I'm- you know, when you talk about the future re- revenue of the company and the future visibility of the revenue company, we're getting on-time renewals, we have no collections issues, we've got new products launching. That's how you get, you know, confidence in the future.
And by the way-
Yeah
-our customers are very loyal and love us, and so that bodes really well for us to be able to sell on the base.
Can we talk about his reference ability from those customers as an indicator of their level of happiness?
I mean, in the SaaS business, right, I mean, the customer is everything. And I know it's easy to say, but to execute and do it consistently, that's really tough to do, and I think we've been doing a really good job around that.
Okay, we are right at 2:00 P.M. Thank you, everyone, for joining us. Thanks for submitting your questions.
Thank you.
We'll be here. You know, reach out to me, and if you have further questions, I'll pass them along to the team. But thank you so much for joining us today.