8x8 Inc. (EGHT) saw its net income soar in the third fiscal quarter of 2010, despite economic troubles among business and residential customers, and competitors’ pricing.
The hosted VoIP provider on Wednesday reported a $1 million profit, compared to $180,000 in the year-ago period. The news cheered Wall Street and bumped up 8x8’s share price by more than 7 percent for a $1.30 close.
However, there were some sticking points, showing that even hosted services aren’t competition- or recession-proof. For one thing, 8x8 lost 41 percent of its residential subscribers because of “competitive pricing pressure from triple-play and free international calling offers,” said Bryan Martin, 8x8’s chairman and CEO. And even though business customer revenue was up 19 percent from a year ago, 8x8 lost some accounts to what Martin called “financial hardship.”
Still, businesses now chip in 79 percent of 8x8’s overall sales, up from 66 percent in 2009’s fiscal third year. And, despite some turnover, “we witnessed our lowest overall churn to date,” Martin said.
Nonetheless, 8x8’s revenue suffered a little. The company reported $15.9 million in sales, compared to $16.2 million in 2009’s fiscal third quarter. Profit also took a small hit from a non-cash, $265,000 charge for stock-related price appreciation.
