Cloud communications provider 8x8 (NASDAQ: EGHT) reported Q1 CY2026 results topping the market’s revenue expectations, with sales up 4.6% year on year to $185.2 million. The company expects next quarter’s revenue to be around $182.5 million, close to analysts’ estimates. Its non-GAAP profit of $0.11 per share was 41.9% above analysts’ consensus estimates.

Is now the time to buy EGHT? Find out in our full research report (it’s free for active Edge members).

StockStory’s Take

8x8’s first quarter results in 2026 were marked by a strong market reaction, reflecting investor confidence in the company’s evolving business model and operational execution. Management attributed the notable improvement to growth in usage-based revenue streams and ongoing cost discipline, with CEO Samuel C. Wilson highlighting the strategic integration of AI into the communications platform as a key factor. The quarter also showcased increasing customer adoption of unified, AI-enabled solutions, and continued progress in platform enhancements and partner ecosystem expansion.

Looking forward, 8x8’s guidance is shaped by the continued shift to usage-based pricing and uncertainties around forecasting non-contracted revenue streams. Management emphasized that future performance will hinge on growing adoption of AI-driven products, expansion of the partner network, and disciplined capital allocation. CFO Kevin Kraus noted, “We are leaning into where the market is growing fastest, while protecting profitability through the operating discipline we have demonstrated quarter after quarter.” The company is balancing investments in innovation with the need to maintain operational efficiency as it adapts to changing customer preferences and technology trends.

Key Insights from Management’s Remarks

Management identified the acceleration of AI adoption, rapid growth in usage-based offerings, and strategic platform investments as driving forces for the quarter’s performance.

• AI-driven product adoption: The launch and adoption of AI Studio and expanded digital engagement tools led to a surge in customer demand for solutions that automate routine interactions and enable seamless transitions between AI agents and human support.
• Usage-based revenue expansion: Usage-based offerings, including Communications Platform as a Service (CPaaS) APIs and digital channels, grew to 23% of service revenue from 14% a year ago. This shift toward variable, consumption-based models is reshaping revenue composition and introducing more quarter-to-quarter variability.
• Platform integration and customer wins: 8x8’s unified approach—combining voice, messaging, and AI—was credited for several new enterprise wins, including a full-platform deployment at a U.S. insurer and an omnichannel rollout for a large healthcare provider. Customers prioritized integrated workflows and security over point solutions.
• Partner and distribution focus: Management is ramping up investment in partner recruitment and enablement, aiming to address underdistribution and accelerate time-to-value for customers through improved onboarding and automation.
• Operational discipline and acquisition activity: The company completed several targeted acquisitions to enhance AI and messaging capabilities, while maintaining cost controls, reducing debt, and delivering improved operating margins despite ongoing investment in innovation.

Drivers of Future Performance

8x8’s outlook is driven by the shift to usage-based pricing, AI product adoption, and disciplined cost management amid macroeconomic uncertainty.

• AI and usage-based model expansion: Management expects continued growth in AI-powered solutions and CPaaS offerings, but notes that forecasting usage-based revenue is inherently less predictable due to customer behavior and lack of long-term commitments.
• Margin evolution amid mix shift: As usage-based and AI-driven products scale, gross margins may fluctuate in the near term, but operating discipline and automation are expected to offset mix impacts and support stable or improving non-GAAP operating margins.
• Capital allocation priorities: The company plans to reinvest in platform innovation, selectively pursue M&A for technology gaps, and further reduce debt, with share buybacks ranking as a lower priority given covenant constraints and the focus on strengthening the balance sheet.

Catalysts in Upcoming Quarters

In upcoming quarters, the StockStory team will focus on (1) tracking the pace of AI-powered product adoption and the scaling of usage-based revenue streams, (2) monitoring the impact of new partner recruitment and enablement efforts on market reach and sales cycles, and (3) assessing the company’s ability to maintain operating discipline and margin improvement amid product mix changes. Execution on strategic acquisitions and integration of new capabilities will also be critical markers.

8x8 currently trades at $2.79, up from $2.41 just before the earnings. Is there an opportunity in the stock?The answer lies in our full research report (it’s free).

Our Favorite Stocks Right Now

ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.

Our AI system flagged Palantir before it ran 1,662%. AppLovin before it ran 753%. Nvidia before it ran 1,178%. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE.

Stocks that have made our list include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.