8x8, Inc. (EGHT) Earnings Call Transcript & Summary

All right. Welcome, everyone. Thanks for joining us today for our 8x8 investor update. We're going to handle this a little bit differently today, more of a sort of a talk show format with slides accompanying it. And I'm here with Sam Wilson, our CEO; and Bryan Martin, our CTO; and Kevin Kraus, our CFO, and they'll be here to answer questions and take us through. Before we get started, I want to transition to our safe harbor statement and a couple of other housekeeping items. So I just want to caution you, let me remind you that today's discussion includes forward-looking statements about future financial performance, including investments in innovation, focus on profitability and cash flow and other statements regarding our business products and growth strategies. And we caution you to not put any undue reliance on these and take no obligation to update. And then I also want to remind you that we will include non-GAAP financial measures and the appendix to the slides will have a reconciliation of this non-GAAP to the corresponding GAAP metrics. So with that, let's turn over to our regular content. Housekeeping, yes. Housekeeping item. If you would like to ask any questions in the chat, just how to do it hover over your -- the bottom of your screen. The chat window or the menu will come up, just click on the chat window and you can enter your question. I'll be monitoring that chat window for any questions that come up. Okay. I think, Sam, it's a good time for you to talk about why 8x8?

Okay. So obviously, I feel passionate about this because it's 8x8, and I'm the executive officer of the company. But I just want to remind investors some of the basics about what we do and how we do it, right? It's a large and growing market opportunity. And by large, it's, I don't know, $100 billion, $150 billion, $200 billion, a really big number compared to our $735 million a year in revenue. And so it's super important that we remember that this is a large opportunity that is coming our way because we are still in the process of moving from on-prem to cloud. And so our opportunity inside of the large TAM is a growing opportunity around the cloud version of it. Now that growth has slowed down from the heydays, like all technology adoptions, the saithe it is, but you still have a core tailwind around the on-prem to cloud. Second, voice network creates a structural advantage. There's this belief that with the hyperscalers and existence, the ability for software companies to create structural advantage, infrastructure advantage, if you will, is changed and maybe it has for some companies, but it certainly hasn't for us, right? We have a global voice network that we've been investing in. We offer PSTN replacement to 59 countries. We have users in 160 countries. We make billions of phone calls per year, and it transverses across our network. And we believe this voice network becomes more important in an age of AI. I gave a talk not too long ago, and I showed a picture of James Kirk from Star Trek talking to his AI in the '60s. And Gene Roddenberry clearly understood that Kirk was going to speak to his AI, he had no keyboard. He was not furiously typing away at 30 words a minute. He was speaking to his AI. So I'm a firm believer that the next 1 billion phone numbers used in the world will be on with AI agents. And those will be used, and we offer a global voice network, and that is a structural advantage. We have a unified platform with native AI. What does that mean? We offer voice, video, chat, contact center, field service workers. We offer CPaaS. We offer it on 1 unified platform, which means common analytics, common administration, common user interface, common conversation low as common capabilities that allow users and customers to mix and match that technology for success. We've reaccelerated growth, right? We've had 5 quarters of year-over-year growth. We dipped as we retrenched the company and expanded our product portfolio. There was much doubt in the investor community, whether we grow again, and we've had record revenues. And then lastly, we've had record profitability in terms of dollars of profits over the last year or 2, and we've used that to continue to delever the balance sheet, pay off debt and drive more and more profits into the company. Because remember, when we pass that, that means less interest, less interest means higher EPS over time, all things being equal. And so I think these are just core aspects of what makes us a company, right? We're a software company in the telecom space. We have AI. We have a unified platform. We have global capabilities, and our customers value that tremendously from us.

Okay. We'll come back to each of those as we go through the presentation. I am now going to turn it to Kevin to take us through the numbers.

Yes. Okay. So this complements some of what Sam has already said. We are a growing business last fiscal year, $736 million in revenue. We serve over 52,000 customers globally. Again, you heard from Sam were PSTN replacement in over 50 countries around the world. And we have a lot of third-party validation that goes along with our success. We've been a multiyear Gartner Magic Quadrant winner in both unified communications and contact center strong performer awards for both unified communications and contact center in Forrester. We've got a lot of other customer success-oriented awards, lots of Steve. So we have a lot on our trophy case at the office. So very proud of what we've been doing as a company.

And just real quickly, last quarter's highlights.

Sure. Yes, you heard from Sam already. It was our fifth quarter of year-over-year growth. We did $185 million in service revenue, $190 million total revenue. service revenue up about 5% year-on-year. And the profitability of the company, I will just say the multiproduct customers is a metric that we really focus on here because multiproduct customers tend to be stickier, higher retention, et cetera. All the things that we mentioned in our earnings calls, that customer growth was up 18%. And a little bit nuance on the revenue growth rate. We bought a company called Fuze about 4 years ago. The people who follow us know this. And we've successfully transitioned those customers over to [ Bite ]. And after the migration headwinds and when you discount them rather, which is ending now, they've ended, we've migrated all the customers over. We had an 8% revenue growth rate. So 5% with, in total, 8% without the Fuze headwinds. On the profitability side, we are GAAP profitable last quarter. Non-GAAP operating margin healthy, nearly 10%, 22nd quarter in a row of positive cash flow from operations and non-GAAP operating profit. So we focused on that. We want to generate the profits and cash flow to pay down the debt for all the reasons you heard Sam just mentioned. And we generated $17 million of cash flow from operations last quarter and ended the quarter with $92 million of cash and cash equivalents and restricted cash. So we've got a very healthy balance sheet that we continue to work on and improve over time.

Great. Great. So Bryan, I don't want to leave you out here. You've been with 8x8 for a long time, and I think you're the best person to take us through the defensive moat that we have. We get that question a lot from investors.

Yes. It starts with what Sam talked about. It's that carrier-grade network in the cloud. It seems simple A lot of investors wrote off voice long ago, but voice is the channel of choice that you go to for your most important conversations. When you need to call the plumber or I missed my flight in the morning, I'm not going to start texting with United Airlines. I'm on the phone, I need a flight now, and that's the urgent channel that you go to. And then this little technology that came along, we love acronyms at 8x8. And finally, an acronym came along called AI that every one of our customers, it's the only acronym we use that I don't have to define what it is or what it means. And the exciting thing about it for investors that have been with us through the migration to the cloud, industries like banking, finance and legal, the late adopters of cloud are all early adopters of AI. And so everyone is trying to figure out what it means for their business, how do they use it, they've got to go in front of the Board or their CEO and not just the IT teams anymore, and that's the other difference is cloud was something we sold to the IT team AI is something that we sell to every business, every department. And the solutions, the early solutions and 8x8 was applying AI to communications very, very early, way back before 2015. And we were bolting AI onto things that we were selling. And I see a lot of that out there. I see a lot of our customers trying to bolt it on here, different departments, bolting it on and applying it to a subset of their data. And I think it's a huge mistake. And I think if you listen to the salespeople coming in from your CRM suppliers or marketing has got this marketing tool and they've got a bolt-on AI solution for that. You end up with disparate AI solutions that are working on a subset of data. And what 8x8 has really figured out across our communications platform is we can apply a universal solution that works on every piece of communications data that comes across our platform and you think about we see all of our communications. We see every message that sit between your employees. We see every communication and interaction between our customers and their customers, and we can actually apply a holistic AI approach to processing all of that data. And that makes a huge difference in the outcomes and the solution that we can provide versus a piecemeal approach. And that it's just -- we've applied it to ourselves. We were customer 0 of everything we've developed, and we're now able to take those solutions and make them real for our customers.

So you're saying context matters that the AI is smarter, and gives you better outcomes with context. The next slide, we just have a few things here about the global voice network, and I know that you've been instrumental in helping create this. So maybe just walk us through a couple of the highlights, and then we'll will sort of move over to problems.

Yes. Well, again, I want to actually give Sam credit because he's been in the chair -- are we at 8 years yet?

I've been at the company 10, but I've only been the CEO for 3.5. It's odd years.

It's [ 310 ].

Sam, at the same time, when the industry was saying voice is dead, Sam really came in and double down on our investment in voice. So we've been investing in really increasing our presence, especially in Europe and North America, becoming a stronger I don't want to call it a carrier, but we're really investing in the strength of our cloud presence. And we've also now -- you saw the numbers that Kevin went through. we have the volume to actually tie in with the Tier 1s out there. We're not having to go through wholesalers in order to get to the Tier 1s. We can interconnect directly to the Tier 1s. It saves our customers' money because we're not having to pay those markups along the way. But it actually gives us better control of the numbering resources gives us faster reporting which is a 4-letter word in our industry, porting numbers and dealing with number management is one of the hardest things to do in the voice world in any country around the world. tying those services together, providing better toll-free services to our customers. And when you think about it in the world of AI, people are looking for things that will be durable in an AI world, the world of voice, you can't go to pick your favorite hyperscale or AI provider. You can't go to a quad prompt to use as an example and say, give me a toll-free number in Indonesia. You can ask it, but it won't be able to provide it. Versus 8x8, we can give you a prompt that can do that. And we can do it inside of cloud or open AI or Google Gemini. But the actual resources that provide that are being supplied by 8x8. And so we have those resources. It's an extremely difficult capability to run and run reliably. It's truly mice and critical. I go back to I missed that flight I've got to have those voice resources available. They've got to work 24/7, 365. They are mission-critical in the sense that we're running Tier 4 trauma centers on them. They are life and death literally. And they have to work and they have to work all the time and our customers depend on that day in and day out. And we've been doing this for a very, very long time. And when everything works, no one thinks about it. It's only when they stop working, that people realize it really is mission-critical life and death. And we have an incredible team of teammates around the world. We employ more than 2,000 employees now, which I pinch myself every night because I remember the days when it was just a very small group of us, sometimes on a Friday night, around my kitchen table, making this thing work. But it is amazing what this company has become and the resource and network that we've built around the world.

I just want to add one small thing because I know you highlighted it. But if you look in the upper left of the chart, right, best voice quality. When you are that Tier 1 carrier, there's no wholesaler in the middle. The call goes through less hops, the signaling is cleaner. There's -- it's going to be a higher quality. And in a world of AI, it's different than the legacy world that we used to be in, right? The legacy world of 7x24 support coverage was I have a contact center in the United States, have a contact center in India, I have a contact center in Poland or whatever the case may be, and that's my 7x24 coverage. But in the world of AI, I'm going to have 1 AI agent that speaks 50 languages, with 100 accent variance located in the United States or located in the United States and Europe for GPR reasons. We need to transfer those calls. Those calls in to be crystal clear so that the AI agent can pick up that clarity and understand how and what to do effectively. Otherwise, the AI benefits won't be there. And that is so important. And Bryan, you're so spot on when you say no 1 notices bad voice qualities like a cellphone. Nobody knows bad voice quality until you say, can you hear me for the fourth time, right? And we see it all the time in our low-grade competitors. This is an easy place to cheat, buy cheap services from crappy wholesalers. I was going to use the word and offer low-priced VoIP. And the consequence is, yes, your AI is not going to work very well.

That's a great segue into kind of where we're going from a vision. So let's start, Sam. You just outlined part of the problem. But let's talk a little bit about what customer expectations are and what data fragmentation really means?

Right. So when you think about our platform, right, it's one platform that covers digital channels, Viber signal, WhatsApp, SMS, et cetera. It covers the voice side of the network. And to make -- like we have the capabilities since it's all passing through our network to grab the context, the interaction, the transcription of every single passenger. And what we can do is put that together in one context of the situation, right? And so we know we can be able to see in a real-time type of dashboard, what was said on the call, what was the messaging, what are those kinds of things? And what -- when you do that, you can easily catch your contacts. What's a simple example. We at 8x8 have the capability of grabbing all of our internal calls all of our external calls, unless they're specifically excited to not be transcribed and say, what was the #1 reason people our customers were upset yesterday or the #1 reason why people called our contact center yesterday or what was the #1 thing on people's minds yesterday. Internal and external or company, that is such powerful information. This is the things that people have guessed at for years by asking sales reps, hey, what is the customer thinking? No longer have to do that. You don't have to ask 1 sales rep who dealt with 5 customers yesterday. We can get a snapshot of every single customer interaction yesterday globally. We can slice it and dice it any way we want, right? Number 2 is, from a customer standpoint, this allows a substantially better customer journey. I was on the phone with a Tier 1 financial service company not long ago. It happens to start with an app and be located in Boston, who runs our 401(k). And I had to have a simple thing done, and I had to repeat myself 5 times, 5 times, I repeat myself. Four of which I explained, I saw a product, so I never have to repeat myself again. It was ridiculous, but they had to transfer me from department to department to finally get the retirement services and get it done. And then this gets back into the whole thing, right? Data fragmentation, separation, systems of record, systems of workflow, et cetera. IT professionals don't want another product, an AI bolt-on. It has data located somewhere else in the cloud, not interlinked and everything else. And then no ability to measure the quality of the performance. I think one of the biggest crazy things, and we offer products that don't do this, by the way. But one of the biggest crazy things is you ask the AI agent vendor, how is the AI agent doing. The quality management is from the same person who sold you the product. And as an industry, are we surprised when they always go it's not my fault. It was perfect. It did everything perfect. And you have no ability to see that those things should be separate. What does a voice network give you, the ability to separate those things out. So AI raises CX expectations. We see the data for Meta gene from others very clearly. Customers don't mind dealing with AI as long as the experience is fantastic. If you want the data, if you want the experience to be fantastic. Can't be siloed, can't be data fragmented and the AI agent has to have context to be successful. That's the problem. And we can solve that.

So that's a great way to talk about what we're trying to do with.

That's right. So what does it take to solve that, right? Number one, you have to have one unified platform. Look, with every vendor, you end up with a separate set of contact with every PBX vendor, where every tenant vendor is a different call recording system, a different administration, a different contract, different everything. And so stitching it together becomes a complex data science problem. I don't understand why you want to do that, we give it to you all in one platform ready to go. You want one workspace, right? You don't want half your vendors on one UC provider and the other half on another provider are constantly trying to manage what all the employees are doing. And what about all the employees that aren't knowledge workers, they need to be on something so you can capture what they're doing, what's happening. You need to scale it out complexity, right? It means the easy seasonal staff, new locations, onboarding, et cetera. I mean, usage is now 26% of our revenue because we are actively working to get rid of complexity and make it easy to scale up and scale down. And then AI that works for everybody, right? It needs to be, I don't know, seamless, easy, buildable, customizable, those kinds of things. And AI for everyone is not only every call, every meeting. But AI, for me, if I'm 8x8 and I want AI in my tech support, it's different than AI and my billing engine, right? If I'm a retailer in pet goods, that's different than a retailer and women's clothing or a retailer of sporting goods, right? And so you want the ability to have AI that works for everybody. That doesn't mean a generic AI that sort of gives black answers. What it means is the ability to post train and be successful in offering AI that works in every vertical situation where it makes sense. Because if you're in the medical health care industry and you're scheduling an appointment, it's pretty different then if you're scheduling your pet for rooming thing, right?

Right. So Bryan, the next few slides are your slides where we're talking about why every conversation matters. We want to make a count, but you're going to talk about why. And I'm going to let you just go with the slides, tell me when you want to switch.

Okay. So we already talked about this a little bit. The voice is the dominant channel for really, really important conversations. My dishwasher is ruining my brand new hardwood floor, I'm going to call a plumber. But Sam already talked about the Star Trek example, that it's also the dominant it will become increasing. I can talk really, really fast, not as fast as Sam. But the AI can keep up, like try to out talk, you can't. You can go really, really quick. So go ahead and go forward. I think we made that point. This is what's really important is that the paradigms changed. So I used to go to a classroom with my notebook, and I tried to take notes on what was important about what the professor was saying. The compute power of AI has changed the paradigm. I don't need to take notes anymore. I go to Sam's meetings. I don't need to take notes because I can take the transcript from the meeting. And I have a perfect record of everything Sam said. I have a perfect impression of what mood he was in during the meeting.

Plus, you put a to-do list coming out of this thing.

And I know everything that he asked me to do, unfortunately. And I have no excuse to say, well, Sam, I forgot that you asked me to is also Yes, of course, he does. And next week, he's going to know exactly what he asked me to do, and I'm going to know exactly what he asked me to do and which things I didn't do. So now you have a perfect record of the conversation. And it's flipped the paradigm of how we think about how we store that information completely on its head. So I no longer need those notes, and you can see at the very bottom, a study that was done, they took 10 million call recordings compared that with the notes that were in the CRM of those same interactions and guess which one was more accurate, right? The actual recording was a better record. So go forward...

Go ahead. We recently did something I don't know you now about this. We really do something lot of our top customers. We got the permission of one of our top customers. We asked them we wanted to pull all their call transcripts for 2 days, okay? And then we asked them, what do you think the #1 reason your customer was calling the last 2 days into your local stores? And what was the one reason they were calling into our contact center. They got both wrong.

Because they were using notes or because they were...

They were just using tribal knowledge, guesses, ask somebody, et cetera. But when you actually pull 17,000 phone calls, drop it into AI. Now 10 years ago, we would say we're going to statistically sample 3% of those phone calls and spend 12 hours or 18 hours listening to these phone calls and take some sort of guess. But with AI today, we can take all 17,000 phone calls, drop it in, get a cup of coffee, probably get a burger and fries, come back, and there's an answer.

And with the unified platform, we're capturing those conversations, whether they're into the contact center or into billing or technical store.

In the local store -- the local store, the billing.

8x8 is taking it one step further. So the traditional way in the market companies are thinking about this equation right now as you're capturing every conversation between the contact center and your customers or maybe between your salespeople and your prospects, right? At 8x8, we're capturing every conversation. Every employee chat what your employees are talking about, billing department got an escalation. We want to know what our employees in the billing department are talking about that escalation. How are they resolving it? What problems do we have that are causing that issue so that we can resolve that quicker, and we're tying all that information together.

And we're getting it omnichannel. We're getting across all...

E-mail, digital, video, meetings, WhatsApp...

Think about the old days, I'm going to go meet one of our customers tomorrow. In the old days, I want to know what's the last interaction someone that it had with that customer. I would go into my favorite CRM system I would look at the customer, what do I typically find. Nothing because the salesperson that last visited the customer didn't even bother to take notes to put it in there. So now if I've got a recording of the last time that salesperson went to the customer, I've got a perfect record of what happened in that last interaction.

Okay. So I'll go to the next one.

I don't know what's the other slides -- okay. So then you can build and I credit Jeff Pulver, a good friend of mine for building this concept. You actually build what we're calling a business conversation stack. And the way to read this is bottom up, you've got the actual conversation stored in the bottom you actually store them in a very structured way, which is a global standard that is supporting called virtual conversations, you actually now think about all the data we're storing. This is a company's most value because I got our employee conversations, I've got to worry about security, compliance, how just being audited. Did we have consent to store this information? How is that being tracked. So there's a whole layer of -- now that you're storing all this data, you've got to secure it properly. That's what that -- is that teal? I don't know what that color is. Then you let the start chomping on it. That's the next layer in the stack. Now you actually start getting intelligence out of it and then you start driving outcomes at the top. So that's how the entire stack works. That's a huge problem. But it's very valuable if you can actually turn this loose inside of your business, now you're actually making a huge difference in the world. And that's what 8x8 supplying to our customers.

And you asked me a question about vision earlier, right? So when I look out, what we're doing 3 to 5 years, Eventually, what we'll do is as we run through this, it will start to be a lot back to that AI platform. right? So as we get that trusted conversation infrastructure as it's really easy for us to start the process of saying generic answers are no longer appropriate for customer ABC, you can get a custom answer. For your customers, here's a custom answer for you to solve that problem. So we will not only go from a situation where you can query the system and say, what was the #1 reason people called, what was my last interaction, what's happening, et cetera? We can actually get to the next steps, which starts to say, when the customer calls and he asks for ABC, for that individual customer, we can answer their specific question. We can get the context of who are they? What products do they have? What are they doing? What historically of customers in their customer journey done? All those kinds of things and start to make this a cycle over time.

So it's personalization at scale based on each customer. We can do that for our customers. and our customers can start to do that for their customers. So I think that's a great way to transition into the products and the platform. So the power of the platform, we'll skip through this pretty quickly. I think we've told people what we do. But we have our products at a glance, this kind of just gives you the overview for those of you who...

All right. So I want to stop you, though. So think about this from a journey perspective, right? So we're known for the last, right? We're known as a unified communications company. Bryan, thank you for all your hard work. We've got like 500 patents in UC and everything else. We've been in the business since it was created since Gartner had their first Magic Quadrant, we were there. And like that's what we're known for, right? We've been in the contact center business since 2011. We bought Contactual, et cetera. And we've been in the CPaaS game since 2019 when we bought Wavecell. But the part that I think people actually misunderstand is also that CX beyond the contact center, right? And it's one of our fastest-growing products. Every business has a whole bunch of people, about 40% of their customer interactions that are dealing with customers that are not in their contact center. And here's the secret. The secret is with AI, the contact center sleeve may shrink over time. It's not shrinking for us today, but it may shrink over that. But as it shrinks the CXB on the contact center is going to grow, right? That's the key. Like we're not losing agents and therefore, we're losing business. What we're losing potentially, and we're not seeing yet, but let's just hypothetically as AI gets better and better, we may have less need for a human being sitting in a contact center, sitting in a workspace waiting for the next phone call to be more of a person out doing a job who takes home calls on the side. And we've built products specifically for that. And that, I think it's why it's one of our fastest-growing product areas.

And that's the 8x8 Engage product is.

It is.

And of course, we've already talked about our carrier-grade network that sits underneath all this and empowers it. as well as the communication intelligence, which is that ability to capture and analyze all the data.

And then the last thing, just -- and I know it was on an earlier slide, but like I'm super proud of this. I think people missed this platform right here is doing over 16 billion interactions per year, 16 billion that is phone calls, SMS messages, WhatsApp everything, right, 16 billion interactions across this platform. That is not an insignificant number. Like the sheer internal computer science to have 16 billion transactions running at [ 5-9s ] reliability every day is a pretty gosh darn big moat.

So Kevin, we'll have plenty of time to talk about financials in a few minutes. I still know we're kind of letting me sit over there, but I think we're going to transition here to a little bit of a technical explanation of the platform, and Bryan is going to walk us through this and then a little bit about data security, compliance and data privacy.

Yes. I mean I'll just cover it at a 20,000-foot level. Again, I'll read it just bottom up. The global network that we started the conversation with is at the bottom of this slide. the intelligence we've been talking about sits above that, but it's connected to it because one of the things that we see great value in is actually utilizing data from the network and with the network to drive some of this decision-making and some of this intelligence. And I think that's also very unique. A lot of the AI solutions in the market are really divorced from that network connectivity. And a lot of those messages that Sam was just talking about, the what's happened the Viber and the SMS, and there's a brand-new channel out there called RCS, which is think of it as a very graphical kind of WhatsApp for old-style text messaging. If you're not connected to the network, you're missing all of that data. And there's a lot of data down there. So having -- it may look strange to have like intelligence down at the network level. I think it's very unique, and I think it's an 8x8 value add. The rest of this is we have a burgeoning ecosystem of partners, people like Microsoft and their Teams product that we've been partnered with since, I think we made the decision in 2018, maybe late 2017. And I remember very vividly, I was sitting with our Head of Sales at one of our largest customers, still a customer today in New York City with their CIO. And he said, Bryan, before you guys leave -- I want to show you this team's thing and see what are you guys doing with teams. And I just remember so vividly as guy named Scott Sampson and I said, what's Teams, never heard of teams. He said, well, come over here. A lot of my employees are starting to use teams. And I came back to 8x8 here in Silicon Valley. And I said, I remember calling a special meeting and said, we got a new Microsoft thing we got to talk about. It's called Teams. And I think it's going to be important. So let's talk about it. And sometimes better to be lucky than good. We decided back then to partner, not to compete. And to this day, we're one of their largest global partners for connectivity. So that ecosystem there, and Microsoft is not the only partner. They're just one of the largest ones. It's a big part of what we do. And that connectivity and the intelligence and the data that feeds into our AI ecosystem and our capabilities includes the data that comes from some of those partners in that part of the chart, too. The rest of it, I can just wave my magic wand and say the rest of it is just...

I want to add one small thing because I can out myself, right? There's always buzz in Silicon Valley about one small box here, right? Like agent assist, teeny billion valuation, voice and digital bots, oh my God, there's like 400 of these things, right? Look, we're one of the few companies -- our entire industry that actually has the complete platform, right? And we have voice and digital bots. We have Microbiota front end. We have an enterprise voice network, et cetera. Everyone else goes to the customer and says, here's a box of legos, you figured it out. We're the company that's differentiating ourselves from our competition because we go to them and say, we've already figured out how to put this together for you. And that is a key differentiator. In a world of cloud code or any particular widget can be built relatively quickly. It's building the platform and the systems that will differentiate the companies, not the individual lego blocks.

So I want to emphasize that point, but also the security compliance...

I was going to say that we also bring that part of it, too. So every -- all of this doesn't work if your data is not kept secure, if you can't supply GDPR in Europe, all of your security compliances in the U.S., we do hit. We were the very first cloud communications company to do PCI, HIPAA, E911 emergency service, like the list goes on and on and on...

The SEC in just the last 4 months has put out over 300 pages on [ start shake and robo ] calling compliance, right? This is a regulatory barrier. We need it. We will need it. We continue to meet it. We're awesome at it. We block robo calling every day. And yet like -- I mean, so this is when people talk about I'll just go build a voice network, sure, you will. I'll start with a couple of thousand pages of FCC regulations on [ Stercken ] alone. And by the way, the U.K., France and other countries have completely different versions of the same thing, right? And I'm just picking 1 of whatever, 5 boxes that are up there.

And I just remember the days, I cited those banks, financial, legal, like the institutions that care about this stuff. In the old days, we're not going to communicate through our cloud these days, it is the best practice because we've got more than 2,000 employees who spent 24/7 of their lives worried about this stuff. As opposed to a bank that's got a little tiny department with half-time people that spend a fraction of their time worried about how to secure these communications. So this is best practice. Now this is state-of-the-art in the industry for security. We don't throw rocks because we live in a glass house. It is a security and compliance are -- they always have been the #1. But in this day and age, it is very, very difficult out there. And so we spend a lot of time today by worried about this stuff.

Well, I'm going to go back just one, I went the wrong way, sorry. But never mind. Anyway, we talked a lot earlier about how we could see every conversation and everything. But I want to make the point, and I think we can go -- we'll go into it a little bit further later that we don't use our customers' data for -- it's that we capture it so the customer can look at it. There's a data privacy.

We are huge believers that customers' data are -- it's their data. We we're never -- I mean never, never, but we're not in the business of holding data hostage and there's plenty of businesses. There's plenty of people in this AI space that won't be ever able to say that. So I think partners that we work with and end customers that are interested in talking about that, they should come talk to us because it's something everyone should be aware of. There are walled gardens. There's walls going up every single day and you need to know where your data is and who you're entrusting it to and make sure you're working with the right vendors.

How much they're going to charge you to get your data back to you.

So one platform, every connection, but completely private. Okay. Now I'm going to go forward where I should have been before. The AI tailwind. We've been talking a lot about where AI is platform where it's going. I want to talk a little bit, and this is where we're going to give Kevin a few minutes to shine, I think. And although maybe not right away. And Katherine, when I saw your question, we'll be able to answer that as well. So I put together this little slide on the history of AI innovation at 8x8 because I think that a lot of people missed the how early we were in integrating AI capabilities into the platform and taking it all the way up to today. So Bryan, if you want to give us a couple of highlights.

Before you do -- I want to mention one, Kate was really nice to us. She actually should have started this in 2019.

Well, I was going to say...

Remember when we made a voice spot.

I didn't do this .