Good afternoon. My name is Sarah, and I will be your conference operator today. At this time, I would like to welcome everyone to the 8x8, Inc. Fiscal First Quarter 2022 Earnings Conference Call. I will now turn the call over to Jennifer Graham Clary for the introduction.

Thank you. Good afternoon. Today's agenda will include a review of our first quarter results with Dave Sipes, Chief Executive Officer; and Samuel Wilson, Chief Financial Officer. Following our prepared remarks, there will be a question-and-answer session. Before we get started, just a reminder that our discussion today includes forward-looking statements about 8x8's future financial performance as well as its business, product and growth strategies, including the impact of the COVID-19 pandemic. We caution you not to put undue reliance on these forward-looking statements as they may involve risks and uncertainties that may cause actual results to vary materially from forward-looking statements as described in our risk factors in our reports filed with the SEC. Any forward-looking statements made on this call and presentation slides reflect our analysis as of today, and we have no plans or obligation to update them. Certain financial measures that will be discussed on this call, 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 those non-GAAP measures to the closest comparable GAAP measures is provided with our earnings press release and earnings presentation slides, which are available on 8x8's Investor Relations website at investor.8x8.com. With that, I will now turn the call over to our CEO, Dave Sipes.

Good afternoon, everyone, and thank you for joining us today. Our first quarter results exceeded expectations with both service revenue and total revenue growing above the high-end of our guidance range at 21% and 22% year-over-year, respectively. Key drivers of growth were strong demand for our integrated UCaaS and CCaaS, offering continued upmarket focus on the enterprise, channel execution, and our CPaaS business. We are driving operational excellence throughout our organization and fostering a culture that is committed to a Customer-First, Product-First, Team-First mindset. We strengthened our cash position and improved operating profitability on a non-GAAP basis. Last quarter, we laid out our vision for the next 3 to 5 years and listed 4 major focus areas for fiscal year '22: One, expanding our platform advantage; two, winning together with partners; three, driving operational excellence; four, expanding the base. I would like to use these as a framework for today's update. First, we are working aggressively to expand our platform advantage, specifically at the intersection of UCaaS and CCaaS, focusing our R&D investments to enhance the enterprise-grade elements of our contact center and maximize the intersection and unique use cases between UCaaS and CCaaS. During the quarter, we launched the following products and updates. Capitalizing on the demand for integrated UCaaS, CCaaS, and CPaaS offerings, we launched XCaaS, eXperience Communications as a Service for customer and employee engagement. This solution advances the cloud communications industry by breaking down the silos between UCaaS and CCaaS to optimize the employee and customer experience. We are receiving broad recognition from industry analysts, channel partners, and customers for fulfilling this need as organizations move to the cloud at a rapid pace. Recent competitor announcements validate this vision and highlight our strong leadership position with XCaaS. We are very proud to be delivering today what others are only now envisioning for the future. Customers have also embraced XCaaS, resulting in now one-third of 8x8's ARR and growing over 30% year-over-year. Let me highlight a few recent examples. Wren Kitchen, a privately owned British designer, manufacturer, and retailer of kitchens with 91 stores nationwide, chose 8x8 XCaaS to replace their legacy on-premise systems. They will deploy more than 4,000 employees, including 400 contact center agents, and will use analytics and reporting capabilities to gain deeper insights to ensure an optimal customer experience and support rapid business growth. Additionally, one of the oldest and largest privately held construction companies in the U.S., JSJ, selected 8x8 XCaaS to gain better operational visibility across 8 entities and 200 locations. The integrated CCaaS and UCaaS solution will support more than 1,600 employees, fully integrated with their Compass and Salesforce software platforms and utilize speech analytics and quality management to enhance customer experience and to help upskill their agents. The public and government sector was a bright spot growing globally. In the U.S., we won Cochise, a public community college in Arizona with over 10,000 students. They needed to replace an aging, failing on-premise communication system and selected 8x8 UCaaS for its ease of use, flexibility, and call handling capabilities to support more than 500 employees. Also in the U.S., we won Central Unified School District, which serves more than 15,000 K-12 students in Fresno, California. They needed a more reliable communication solution with a lower total cost of ownership. After a thorough review process and a 30-day proof of concept, they selected 8x8 UCaaS to support more than 1,500 employees across 24 schools. In the UK public sector, we're experiencing strong referenceability and word-of-mouth referrals, further solidifying our leadership position. Key wins there include the Police, Fire and Crime Commissioner for Essex, which provides policing, fire, and rescue services for the County of Essex and supports 1.8 million citizens. The Essex County Fire & Rescue Service selected 8x8 UCaaS and 8x8 Voice for Microsoft Teams to improve their communication capabilities across 50 fire stations and more than 1,400 members of staff. Additionally, Kent & Medway NHS and Social Care Partnership Trust, an NHS provider of secondary mental health care, selected 8x8 XCaaS for 3,200 seats to improve patient safety and experience. 8x8 XCaaS will integrate with key ICT platforms to provide cost efficiency improvements year-on-year, enhance security compliance, and enable a work-from-anywhere experience for staff. Our CPaaS portfolio of APIs and embeddable applications performed strongly in Q1. The focused strategy to extend leadership in Southeast Asia is already paying dividends. We recently announced that Coca-Cola, Europacific Partners Indonesia is using the 8x8 CPaaS SMS API to provide more than 460,000 large and small retail outlets with a secure mobile experience for managing orders and deliveries. Viriyah, one of Thailand's largest insurance companies, is using the 8x8 CPaaS video interaction API to enhance customer experience by enabling customer-facing video as part of their mobile claims service. Thirdly, WeCare.id is the first medical-based crowdfunding platform in Indonesia, built specifically to help patients raise funds for their treatment. They selected the 8x8 CPaaS SMS API for one-time password verification and donation notifications. Additionally, Jitsi as a Service, or JaaS, has grown its developer base by 4 times quarter-over-quarter as customers continue to embed a complete and secure meetings experience into web and mobile applications. We now have over 10,000 developers signed up. Furthermore, we recently released support for 500 active video meeting participants across our entire video meetings platform, including JaaS. Industry analysts are rallying around our vision for XCaaS. The market is responding, and we continue to receive recognition for our best-in-class integrated UCaaS and CCaaS solution. Recently, we were named a leader in both the 2021 Aragon Research Globe for Unified Communications and Collaboration, as well as the 2021 Aragon Research Globe for Intelligent Contact Centers. Furthermore, we received Frost & Sullivan's Global Competitive Strategy Leadership Award for integrated employee and customer experience management solutions. Our second major focus area is to make 8x8 the easiest company to do business with and win together across channel partner relationships by leveraging our differentiated wholesale and agency billing models and a partner-first strategy. Let me begin with our channel-first strategy and upmarket focus, which delivered strong results. We had a record quarter upmarket with over 820 customers with greater than $100,000 in ARR, a 36% increase year-over-year. Enterprise was our strongest customer segment, up 40% year-over-year and now representing 49% of our ARR. Channel growth was over 35% year-over-year as our momentum continued to build. We formed several key partnerships in Q1, including a strategic channel partnership with Sandler Partners, America's fastest-growing master agent and distributor of connectivity and cloud services, providing 8x8 XCaaS to their more than 9,000 technology partners. We also enrolled Callstats into the Genesys AppFoundry for enabling next-generation WebRTC monitoring, and we enrolled in the AWS Solution Providers Private Offers marketplace. During the quarter, we continued our rapid pace of Teams innovation by adding present synchronization to previously announced capabilities such as SMS, MMS, and fax. This led to significant adoption and larger deal sizes for our Microsoft Teams offering, as well as opportunities to sell additional capabilities such as our 8x8 XCaaS contact center solution, which is Microsoft certified for Teams. Some wins include Infinite Electronics, a leading global supplier of electronic components, who sought a single vendor platform with high availability. They selected 8x8 XCaaS integrated with Microsoft Teams to provide over 500 employees across the U.S., Mexico, and China with resilient and consistent communications and contact center capabilities. Additionally, a global biopharmaceutical company sought a single vendor communication platform with MS Teams integration. They selected 8x8 XCaaS with Voice for Microsoft Teams to improve employee and customer experience for 1,200 employees and 30 contact center agents. We recently announced that a leading provider of supply chain services, Archway Marketing Services, selected 8x8 XCaaS and 8x8 Voice for Microsoft Teams to support their technology enhancement initiative after experiencing issues with their legacy on-premise systems. We quickly deployed the first of their 13 locations in 72 hours and will support 750 UCaaS and 70 CCaaS users. Our third focus area is to drive operational excellence throughout the organization. In this regard, we increased non-GAAP gross margins sequentially from 61.2% to 62.6%. We continue to show financial leverage in our model, growing operating margins and cash from operations. We launched the industry's first and only financially backed platform-wide five nines or 99.999% SLA across an integrated cloud UCaaS and CCaaS solution. This sets a new industry benchmark for cloud communications reliability. In reference to organizational matters, Ken Berryman will be promoted to Chief Sales Officer effective August 6, reporting to me; and our Chief Revenue Officer, Steve Seger, will be leaving the company. Additionally, in the quarter, we hired Colin Carmichael to be the company's first-ever CIO. Our fourth focus area is to expand and defend our base. Q1 represented very strong growth with our installed base, which I'm proud to say now exceeds 2 million paid business users. Customers appreciate our ability to mix and match solutions to meet their needs as they transition to the cloud. Examples include Buckinghamshire Council, which provides services for around 800,000 citizens in the region, realizing the value of 8x8 XCaaS, having previously deployed 8x8 UCaaS across the organization for 4,500 employees. They have now added 250 CCaaS seats to further improve customer experience. Another land-and-expand win is Calibre Group, which provides learning solutions for millions of licensed professionals. They use 8x8 XCaaS to support enhanced customer engagement and the shift to hybrid work for more than 500 employees, including 200 contact center agents. This quarter, Calibre Group extended XCaaS, adding speech analytics to capture insight and sentiment on every customer interaction with the ability to review and deliver comprehensive agent evaluations and coaching for voice, chat, SMS, and social interactions. Furthermore, nVent, a high-performance electrical company, continues to add 8x8 XCaaS to more locations. They added more XCaaS and Microsoft Voice for Teams seats to support employees in the U.S., Canada, Mexico, and Germany, bringing their total global seat count to nearly 1,600. Additionally, we hired Walt Weisner to be our new Chief Customer Officer. Walt is a seasoned customer care leader in the cloud communications SaaS industry, who is responsible for delivering a superior end-to-end experience for 8x8 customers globally. To summarize, the first quarter of fiscal 2022 was a significant step forward in the plan I laid out last quarter. We beat our financial goals and are raising the bar in fiscal year 2022. We are well positioned to further extend our industry leadership with our customer-first, product-first, team-first CPT culture, our integrated platform advantage, and our future growth drivers. Our strategic vision and direction of a unified cloud offering with XCaaS is being validated in the marketplace, and we're proud to be delivering today what our competitors are envisioning for the future. Now, I will turn the call over to Sam to cover the finances.

Thanks, Dave, and good afternoon. We are pleased to have delivered results that exceeded guidance and improved operating leverage. Key drivers were better-than-expected performance from product categories, XCaaS, standalone UCaaS, CCaaS, and especially, CPaaS. Total revenue for the quarter was $148.3 million, an increase of 22% year-over-year and above our $142 million to $143.5 million guidance. Usage revenue did not sustain a seasonal slowdown. We had a solid quarter from professional services, and hardware shipments were stronger than expected. Looking at service revenue, we generated $137.8 million, an increase of 21% year-over-year and above our $132.5 million to $133.5 million guidance. We do not see the seasonal dip in telecom usage revenue customarily experienced during the early summer, likely due to regions reopening. Additionally, we witnessed our CPaaS business accelerate quarter-on-quarter. Total ARR was $536 million at quarter end, up 24% year-over-year. Our strategic investments in the channel and product innovation over the last several years are delivering solid results. I want to remind investors that we announced last quarter we were exiting the CPaaS wholesale business. In fiscal 2021, CPaaS wholesale services contributed $15 million in service revenue and essentially zero operating margin. Rationalizing these services will be a near-term 300 basis point headwind to service revenue growth rates in fiscal 2022, and is already incorporated into the fiscal '22 guidance I will provide shortly. We believe this is the right decision to concentrate our resources on our core market opportunities. For the quarter, the part of the business we are exiting contributed roughly $1.1 million in service revenue and little margin. We ended at a zero run rate at quarter's end. First quarter non-GAAP gross margin was 62.6%, as expected, higher sequentially as we finished restructuring our wholesale business, which we discussed on the last earnings call. Non-GAAP service revenue margin increased approximately 170 basis points over the previous quarter to nearly 69%. Non-GAAP other margin came in at minus 19.6% for the quarter, an improvement from the minus 34.7% a year ago, however, sequentially worse than the minus 12.5%. We have started making strategic investments in deployment capacity along with bringing in a new Chief Customer Officer. We expect to further invest in Q2. In total, gross profit dollars grew 24% year-over-year as we focus on higher-margin business. Looking ahead to the second quarter, we currently expect overall gross margins to improve due to programs we have started to reduce COGS as a percentage of total revenue. Turning to first quarter operating expenses. As we talked about on our last call, now that we are profitable on a non-GAAP basis, we have started to reinvest in the business to accelerate revenue growth. These investments have started, and we expect to begin to see the results by the end of FY '22 or early FY '23. Total spending as measured by COGS plus R&D plus sales and marketing plus G&A was up 13% year-over-year, below our 22% total revenue growth. As stated on our last call, we plan to grow total spending below total revenue growth and maintain our profitability on a non-GAAP basis. Non-GAAP operating margins were 0.9% for the quarter as we continue to move towards our exit FY '22 at approximately 2% goal. Turning to the balance sheet, total cash, restricted cash, and investments ended the quarter at approximately $162 million. Excluding $8.6 million of restricted cash, the balance was $153.2 million, an increase of approximately $363,000 quarter-over-quarter. Cash from operations was positive $4 million for the quarter. We expect cash from operations to be around breakeven for Q2, probably burn in Q3 before returning to positive in Q4. One final item under liabilities I'd like to discuss is deferred revenue, which increased to nearly $25 million during the quarter and is up 133% year-over-year. We have moved towards billing contracts in advance of service delivery and expect deferred revenue to grow on the balance sheet. RPO was approximately $530 million for the first quarter, up from $500 million in the fourth quarter. As a reminder, we made a policy change in Q4 to conform to industry norms. Please see the transcript for more details. Turning to the financial outlook. As we enter the second quarter, we continue to focus on making changes discussed in our first quarter strategy update, including exiting poor margin business, instituting sales and marketing changes and making incremental investments focused on accelerating revenue growth. Taking all of this into account, we have established guidance for Q2 fiscal '22 ending September 30, 2021, as follows: We anticipate total revenue to be in a range of $147.5 million to $149 million, representing approximately 14% to 15% year-over-year growth. While this is slower quarter-over-quarter growth, please note the first quarter included $1.1 million in wholesale business that we exited by quarter end. We anticipate service revenue to be in a range of $138.5 million to $139.5 million, representing approximately 15% year-over-year growth. We anticipate to be operating margin positive on a non-GAAP basis. Combining our outperformance for the first quarter with outlook, we are raising full year guidance for full year fiscal 2022 ending March 31, 2022, as follows: we are raising total revenue outlook from $595 million to $605 million to a new range of $604 million to $612 million, representing approximately 13% to 15% year-over-year growth. We are raising our service revenue range from $555 million to $565 million to a range of $564 million to $572 million, representing approximately 14% to 15% year-over-year growth. We are maintaining our guidance of Q4 non-GAAP operating margin of roughly 2%. Based on feedback from discussions we've had with the investor community, we made several changes this quarter to our IR metrics. I'm hoping this isn't a surprise as we have signaled on previous calls that changes were coming. During the first quarter, we made progress towards our long-term operating model shown on our last quarter. With that, thank you, and let me turn the call over to the operator for questions.

Our first question comes from Matt VanVliet with BTIG.

Nice job on the quarter. You talked a lot about a lot of channel recognition and industry analyst recognition, and it sounds like it's coming through on the channel bookings growth that you mentioned. But curious if you could give us a little more context in terms of where you're seeing the most success? And maybe how Europe and the UK specifically are really driving that? It sounded like a number of large deals came from the UK. So just curious where you're seeing the most success and whether there's still room to grow in the channel?

Yes. This is David, and thanks for the congrats on the quarter. We're seeing strong momentum on our XCaaS product, which integrates contact center and UC products. We're seeing it across all customer segments, but especially in enterprise, and you mentioned growth in the UK. We've been very strong internationally in the UK, as well as in the UK public sector. Additionally, we have the ability to add contact center into UC seats for existing customers, which helps improve overall revenue and retention rates. Our strategy is resonating with customers, and our job now is to go educate our channel about these advantages.

That's helpful. Sam, regarding investments in further growth initiatives, it appears that the ones from the last year are beginning to yield results. I'm curious about our current status in terms of duration. Are we mostly past the larger step function investments now that we have a significant number of new executives in place? Or do we still have a few more quarters ahead where, despite your mention of cash burn, we should consider our overall projections and margin leverage moving forward?

Okay. A couple of things there. So first off, I mean, we reiterated we want to exit the year at a 2% operating margin and no more. This is very much now that we're back to being non-GAAP profitable. We're emphasizing accelerating our revenue growth as we get into fiscal '23. I would say, I don't view the investments as step functions as much as a continuous stream of increasing our marketing spend, increasing our sales capacity, and putting more R&D dollars toward contact center and related areas on an ongoing basis. So slow linear growth of operating margin towards that 2% exit number as we continue to reinvest in accelerating revenue.

Our next question comes from Meta Marshall with Morgan Stanley.

Great, and congratulations on the quarter. I wanted to ask about the CCaaS and wholesale business statistics you provided for some clarity. Are you saying that you didn't experience as much of a headwind as expected this quarter, considering there was still $1.5 million in the wholesale business? Additionally, could you clarify whether there was any impact on the ARR due to the winding down of that wholesale business, or if that should be viewed as a pure number at this stage?

Okay. So I will take that. So it's $1.1 million. So as we mentioned on the last earnings call, we were exiting the business, and it took a little bit of time going into this quarter as we ramped it down in April and May. For the quarter, we had $1.1 million of what we consider wholesale business. We exited the quarter at a zero run rate. There is a minor headwind in ARR from the wholesale exit, but it is immaterial. I'd be surprised if it's more than $1 million. So those two things combined mean we didn't produce much revenue from wholesale, and we're almost entirely free from it.

Okay, just one last follow-up on that. Regarding the stat about the CPaaS business growing sequentially, you mentioned that it didn't include growth from the wholesale segment. You were saying that the business outside of wholesale grew sequentially, correct?

Yes, you're 100% correct. I should have been more clear when I said that. Yes, what we're talking about is the core non-wholesale business grew sequentially and fairly nicely sequentially.

Our next question comes from Mike Latimore with Northland Capital Markets.

Yes. Great. Excellent quarter there. On the gross service gross margin, obviously improving with the removal of the wholesale business, but is that kind of a sustainable level to sort of close to 69% level?

I'll take that one. Yes, and I will probably be fired if I don't think it can go up from here. So it is a topic with Dave all the time that we'd like to get our service gross margin up higher. It's not necessarily going to go linearly up every quarter, but it's definitely an objective of ours to get it higher over time.

Okay. And then you listed a number of good international wins. Any update on what international is percent of ARR or bookings or something like that?

If you have a third question, ask that real quick, and I will pull the number quickly for you. It will be in our 10-Q tomorrow, and I just need to get that real quick.

Okay. Got it. You mentioned that CPaaS was strong. So regarding the remaining CPaaS, are you primarily selling to developers, or are you also looking to cross-sell into your contact center business?

Yes. We're experiencing both. It's predominantly a developer business, which you see in the Coca-Cola business we won in Southeast Asia and in the other wins that we had there. We're also seeing XCaaS customers leveraging our CPaaS solutions. For example, Alliance Medical in the UK added messaging capabilities to an existing XCaaS deployment for customer alerts for appointments with doctors. So that's one example. So we do get both.

And revenue for the quarter, United States $103.7 million; and international, $44.7 million. There is some rounding in there. Okay, thanks a lot.

Our next question comes from Peter Levine with Evercore.

Congrats on a good quarter. You recently called out UCaaS. So maybe 2 questions. What investments or gaps in CCaaS are you filling or you feel are missing today? And give us your view or thoughts on the Zoom-Five9 acquisition? Just curious to know what your initial reaction was and your thoughts on how perhaps changes the competitive landscape?

Yes. So on that combination, those are two platforms we compete with today. So fundamentally, the landscape doesn't change from our perspective. I do believe it's a validation that other people are coming to the vision that we have of XCaaS, which is bringing UC and CC together. This movement is driven by customer demand for that solution. One conclusion is that the era of building your own contact center is over. Our contact center business is over a $100 million revenue run rate with strong growth. We also see that the era of partnerships is ending. Customers want integration, manageability, and reliability from a single vendor, while we continue to lead in delivering XCaaS and message functionality. This solution is well received, and it’s over a third of our business growing at 30% year-over-year.

For the first part of your question, which is on contact center gaps, I don't think we really have gaps as much as we continue to push up in scale. We're adding more concurrent agents, more capacity for larger contact centers, and continuing to expand omnichannel capabilities. We added a bunch of translation capabilities to handle 116-plus languages on the platform this quarter and similar enhancements. So it's really about pushing the limits of scale and features for larger enterprises to transition to the cloud.

And then maybe one last one for you, Sam. What are your hiring plans or goals, I think, here in the second half? How is hiring trending? Curious to know how retention looks given the competitive environment today?

Look, we're a very global organization, and our hiring has been strong. We're finding success in many markets, so we're not strictly Silicon Valley-based. We're catering to our employees' needs for mobility and a hybrid workforce. We believe we're experiencing strong success in that area.

Our next question comes from Will Power with Baird.

Okay. Great. Yes. I guess, first question. I just want to come back to the strong enterprise growth. It looked like really nice numbers in the quarter, both the customer growth, over $100,000 ARR customer growth, both sequentially and year-over-year. So I just would love to get any further perspective on the key drivers of that. How much of that is the market coming to you versus channel improvement? How much is XCaaS contributing to that? Just trying to better understand the key drivers there.

Yes. Our future growth is really tied to XCaaS, and it's a perfect fit for our mid-market and enterprise customers. You do see our ability to cross-sell into that segment, and our channel alignment has also improved with partnerships like Sandler Partners. There are still many opportunities to onboard more channel partners and to educate them on the advantages of XCaaS.

Let me just ask you just kind of along those lines. As you think about go-to-market for XCaaS, where are you in that evolution? I mean, as you think about your key channel partners, are 50% of them pushing XCaaS? I mean how many of them really understand the combined solution opportunity?

Yes. We're in the early stages of that evolution. Not all of our sales representatives are currently pushing XCaaS. Our focus is on enabling our teams internally as well as with our partners. That's a huge objective from now to the end of the year.

Your next question comes from George Sutton with Craig-Hallum.

I wanted to make sure I'm clear on one thing. So last quarter, we talked about how we've discussed for years integrated contact center and UCaaS capabilities. Now we're branding it as XCaaS, and I saw the blogs and things you did a couple of months ago on that. I just want to be clear, what has changed? As I understand it, you're building up employee functionality relative to CX functionality. But I just want to be clear, what's different quarter-over-quarter in terms of the actual product?

Yes. There are several enhancements: we launched the five nines platform SLA, and we added presence to Microsoft Teams, for example, that enhances both UC and CC. Every future enhancement we provide comes across both UC and CC, which improves our positioning. Additionally, we continue to focus on contact center scalability and improving our omnichannel capabilities.

Got you. One other thing on Jitsi and some of the newer capabilities you mentioned. I am a believer that much of the market is becoming video first in their decision-making. And I'm curious how much of a lead engine Jitsi is proving to become for the rest of your services?

Jitsi as a Service, or JaaS, is a growing element of our business, both as a CPaaS offering and as a free meeting service. Those capabilities enhance our overall employee experience, and although it’s newer and smaller, it's growing rapidly with significant increases in the developer base.

Our next question comes from Ryan Koontz with Needham & Company.

Circle back to your enterprise strength and customer trends you're seeing there. Microsoft quoted 80 million daily active users on Teams phone, and how do you see that impacting the market? And then price points there, I hear about some pretty aggressive price points, and how you're responding to shifts there and how bundling can help kind of prop up the ARPU?

Our integration with Microsoft Teams is showing wins, and I believe we have four elements that help us differentiate in that environment. One was our ongoing innovation, which we continue to have with our product capabilities. The second is that we empower all employees in an organization, not just knowledge workers. The third is our continued certification and alignment with Microsoft. And finally, we also have channel partners selling Microsoft offerings that help us leverage our XCaaS solutions effectively.

As for pricing, we haven't seen radically different pricing pressures. Occasionally, we see aggressive deals, but our platform's ability to mix and match solutions and our value proposition, including the lower total cost of ownership, means our pricing remains competitive.

Our next question comes from Tanika with Bank of America.

This is Tanika on for Dan. Congrats on the great quarter. So I was trying to understand the drivers for bundling UCaaS and CCaaS slightly better. Do you guys see the benefits more tied to IT management and simplicity? Or are customers more drawn to the integrations between the two?

The benefits are tied to both IT management and customer experience. Having integrated solutions allows company-wide collaboration, leading to easier management and integration into other enterprise systems. The single point of accountability also enhances reliability and performance across the entire organization.

This concludes our question-and-answer session as well as our conference for today. Thank you for attending today's presentation. You may now disconnect.