Voice over Internet Protocol (VoIP) service provider 8x8 (News - Alert) Inc. continued to pick up steam in the third quarter of fiscal 2009 as revenues jumped to $16.2 million, compared with $15.8 million during the same period in 2008, with 66 percent of total revenue coming from its business services.  

 

8x8 Inc., the provider of Packet8 business, mobile and residential communication services, announced the Q3 results today during a conference call.

 

The jump in business revenue proved important to the companies overall growth. In the third quarter of 2008  revenue from business service came in at  48 percent.

 

At the same time, the Santa Clara-based company’s Virtual Office revenue grew 41 percent from the same period of fiscal 2008 and 8 percent from the previous quarter.

 

8x8 Chairman and CEO Bryan Martin (News - Alert) said overall gross margin for the third quarter of fiscal 2009 was 67 percent, compared with 65 percent for the same period of fiscal 2008.

 

“During December company revenue from sales to SMBs set a new milestone,” said Martin of the 66 percent revenue, which totaled $2.3 million. It was the seventh consecutive quarterly increase in company cash and investment balances and the fifth consecutive quarter of net income.

 

The company partly credited its ability to reduce subscriber acquisitions for its continued growth and the reduction of churn through its ability to add more business customers than ever before, with over 2,400 gross additions.

 

In fact, Martin said on a percentage basis, the company experienced its lowest business churn in more than 18 months, a metric that they have focused on improving.

 

 "While our overall revenue growth does not yet reflect the company's strategic shift in focus from residential to business services, our underlying business services results, which now represent approximately two-thirds of our revenues, clearly indicate that our strategy is succeeding,” said Martin.

 

As reported by TMCnet earlier in December, 8x8 had previously reduced it’s monthly service charges for the Packet8 business, mobile and residential broadband communications services in an effort  to help small businesses whose cash-flow has been affected by the credit crunch.

 

The cost was reduced for the IP-PBX (News - Alert) service from $49.99 per month service to $24.99 per month per extension.

 

8x8 says it also plans to grow its sales organization over the next few quarters, citing a group that has become a “little top heavy” with sales management growth outpacing sales rep growth.

 

“It’s a little off,’ said Daniel Weirich, 8x8 CFO. “We are investing in brining people, primarily through promotion, in.”

 

“We continue to feel optimistic that this strategy will deliver value to both our customers and shareholders despite the current macro-economic conditions."

 

The company also announced its Board of Directors had passed a resolution to vest all outstanding employee stock options, “the majority of which are currently below the exercise price, so as to accelerate the recognition of approximately $2.4 million to $2.6 million of outstanding, future stock compensation expense into the Company's fourth fiscal quarter.”

 

This is expected to substantially eliminate all FAS-123(R) stock compensation expenses resulting from past stock option grants from the Company's 2010 fiscal year.