Despite year-over-year declines in revenue and income for the three-month period that ended June 30, officials with a Santa Clara, Calif.-based provider of voice, video and mobile communications solutions for business and residential customers say their hosted VoIP offerings continue to draw more and more subscribers.

 

Bryan Martin (News - Alert), chairman and CEO of 8x8 Inc., said during a conference call moments ago that the company “returned to profitability” during its first quarter, as it saw accelerating growth, especially among new business customers. Martin said that trend reflects the company’s successful strategy of minimizing the cost – through a hosted model – of entry into IP telephony, “making our services even more compelling in today’s tenuous economic climate.”

 

“We expect to report increased revenue and net income next quarter as a result of this strategy,” Martin said.

 

While the company’s focus on business customers “isn’t yet visible in the overall numbers,” Martin said during the conference call, 8x8 (News - Alert) is starting to see increases in overall monthly revenue.

 

Today, the company, which earlier this year eliminated about 35 positions, posted net income for the first quarter of $414,000 – down about 66 percent year-over-year. Revenues also fell to $15.6 million – down from $16.3 million for the year-ago quarter – and earnings per share came in at about 2 cents.

 

Yet that last figure represents a positive step for the company sequentially – as 8x8 lost 6 cents per share in the prior quarter, and its $414,000 net income represents a step forward as well from the fourth quarter of fiscal year 2009, when it posted a net loss of $3.9 million.

 

During the three-month period that ended June 30, 8x8 saw new sales rise to a record 2,907 business customers – up from 2,792 in the prior quarter – and it also increased its business customer subscriber base by 1,253 net new business customers. During the year-ago quarter, that figure stood at just 1,053, and it was 1,307 last quarter.

 

Officials with 8x8 – a company that’s serving as a platinum sponsor for the ITEXPO West 2009, to be held Sept. 1 to 3 in Los Angeles – told TMCnet recently in an interview that with a nudge from federal officials as to Internet telephony’s usefulness as an application, the proliferation of broadband Internet through broadband stimulus funds could help boost the VoIP market.

 

Huw Rees (News - Alert), the vice president of business development at 8x8, also told TMCnet that while his company applauds efforts to bring broadband Internet to the nation’s more remote areas, it’s still critical that the government focus on teaching people about applications they may want to use.

 

“We believe VoIP is one of many compelling applications and would love to see VoIP projects funded with some of the stimulus money,” Rees told TMC (News - Alert) CEO Rich Tehrani in an interview, printed in full below. “We also believe that (President Barack Obama) should instruct the new chairman of the (Federal Communications Commission) to repurpose the Universal Service Fund to provide high speed Internet access to every American in place of old (‘plain old telephone’) service.”

 

The company is pointing to some positive signs today, including the fact that the number of lines and services purchased by new business customers during the quarter set a record number of 27,937, or an average of 9.6 per new business customer. 8x8 also said it saw business customer churn declined to 2.7 percent – down from 3.2 percent in the same period last year, despite continued challenges in the overall economic climate for small businesses.

 

During the conference call, Martin referred to the current three-month period as the “sun rocket renewal quarter,” and said the company not only is converting more leads into business customers, but that it’s also started renewing annual subscriptions for telecom services for about 10,000 customers.

 

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