Channel investors, Content, Unified communications

8×8 Buyout? Strategic Suitor Explores Potential 8×8 Acquisition, Report Says

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8x8, a unified communications as a service (UCaaS) company, has been approached about a potential company sale, StreetInsider reported. 8x8's business valuation was roughly $530.5 million as of November 15, 2022, according to SeekingAlpha.

The alleged 8x8 suitor's name was not disclosed -- though the chatter involves a "strategic buyer." That likely means the bidder is another UCaaS, VoIP or cloud communications provider. We don't know if the potential buyer is backed by private equity dollars, and we don't know if an actual M&A deal will occur.

8x8's stock ($EGHT) rose 5.5% on the M&A speculation. ChannelE2E has not independently confirmed the StreetInsider report. We've reached out to 8x8 for comment, and we will update this article if we receive a response to our inquiry.

8x8 Revenues, Net Losses and Stock Performance

On the financial front:

  • 8x8's revenue was $187.4 million in Q3 of fiscal 2023, up 24% from the corresponding quarter last year. Still, much of the growth involved the Fuze acquisition ($28.4 million) rather than organic growth.
  • 8x8's net loss was $11.6 million for Q3 of fiscal 2023, a considerable improvement compared to a $42.3 million net loss for Q3 of fiscal 2022.

8x8's stock has declined 81% over the past year, and 68% over the past five years, according to SeekingAlpha. Among the reasons: Standalone UCaaS service providers are struggling to keep pace with Microsoft Teams, Cisco Webex, Salesforce Slack and Zoom -- among other enterprise-scale collaboration platforms.

UCaaS Market vs. Microsoft Teams, Cisco Webex and Zoom

Amid that fierce competition, 8x8 cut roughly 200 employees in October 2022.  Rival UCaaS providers such as Mitel, Fuze and RingCentral all have had layoffs over the past two years or so. Another key player, Intermedia, canceled an IPO in 2021 and then lined up some funding from NEC.

Layoffs are a familiar pattern for 8x8. The company had job cuts in 2020. Then, 8x8 and Fuze ultimately merged in December 2021.

Amid that competitive backdrop, M&A activity in the UCaaS market has generally slowed down over the past two years or so.

Joe Panettieri

Joe Panettieri is co-founder & editorial director of MSSP Alert and ChannelE2E, the two leading news & analysis sites for managed service providers in the cybersecurity market.