8×8 Q1 Results - Better Times Ahead?
Has 8×8 Inc. turned the corner? The company said it added 16K VOIP customers in the fiscal first-quarter to bring its subscriber base to 73,000 while revenue nearly tripled to $6 million from $2.1 million. The company, however, posted a $5.1 million loss. I'm not sure how to read these results. If you're an optimist, the good news is 8×8 attracted nearly as many subscribers in Q1 2005 than it did in all of 2004, while Q1 revenue was the highest in five years. Then again, it is hard to get too excited about a company losing as much money as it generates in sales. The company, whose shares have not performed well this year, is currently worth $107-million. Pulling out my handy-dandy envelope, this suggests Vonage is worth $900-million (not including a premium for its brand, market leadership and takeover/IPO prospects). You have to wonder about 8×8's future. Is a destined to become a small, niche player or a takeover candidate for someone looking to get into the VOIP market with a well-known brand? If investors vote with the feet, I'd say the jury is still out on the company's future.
For more thoughts on Vonage's potential value, check out my post earlier this month when the Vonage-Bell South rumors started to rumble.
July 27th, 2005 at 6:41 pm
The company added 16,000 lines - not 18,000. This is down from 17,000 added last quarter.
Looks like they have about $25/month in service revenue per sub with a cost of service of $15/month. Leaving a gross of $10/month per sub.
Continued losses. Decreasing cash.