What is the current cash balance, free cash flow, and cash burn rate, and how do these metrics affect liquidity? | EGHT (Aug 06, 2025) | Candlesense
EGHT

What is the current cash balance, free cash flow, and cash burn rate, and how do these metrics affect liquidity?

What the press release tells us

The Business Wire announcement (“8x8, Inc. Announces First Quarter Fiscal Year 2026 Financial Results”) contains the company’s key cash‑related numbers for the quarter that ended June 30 2025. Unfortunately, the short excerpt you provided does not include the actual figures for:

  1. Current cash balance (the amount of cash and cash equivalents on the balance sheet at the end of the quarter)
  2. Free cash flow (cash generated from operations after subtracting capital‑expenditure outlays)
  3. Cash‑burn rate (the net cash outflow per month or per quarter, i.e., the rate at which cash is being consumed)

Because those numbers are not in the text you posted, I can’t give you the exact dollar amounts. If you need the precise values, you’ll have to consult the full earnings release on 8x8’s investor‑relations site, the SEC filing (Form 10‑Q) for the quarter, or a detailed earnings‑summary article that reproduces the numbers.

How the three metrics work together and affect liquidity

Even without the exact numbers, it’s useful to understand why each metric matters for a Saa‑S company like 8x8 and how they collectively shape the company’s liquidity picture.

Metric What it measures Why it matters for liquidity Typical “good” versus “danger” signals
Current cash balance Cash & cash equivalents on the balance sheet (including short‑term investments). The “fuel tank” that can be used to meet all short‑term obligations (payroll, suppliers, debt service, etc.) without needing external financing. High / growing cash → strong liquidity cushion.
Low or rapidly declining cash → may need to raise capital or cut costs.
Free cash flow (FCF) Cash generated from operating activities minus capital expenditures (capex) and sometimes other non‑operating cash outflows. Positive FCF means the business is generating more cash than it spends to maintain and grow its platform, which can be used to pay down debt, buy back shares, or reinvest. Negative FCF indicates reliance on external funding (equity, debt, or cash reserves) to fund growth. Positive, growing FCF → strengthens liquidity and reduces financing risk.
Negative, widening FCF deficit → puts pressure on cash balance, raises burn, may necessitate financing.
Cash‑burn rate Net cash outflow per period (usually per month/quarter) = (Cash balance at start –  cash at end) ÷ number of months. It reflects the speed at which cash is being spent. Determines how long existing cash will last (the “run‑way”):  Run‑way ≈ Cash balance ÷ Cash‑burn rate. A high burn shortens the runway, making the company vulnerable to market or operational disruptions. Low/declining burn → longer runway, less urgency to raise capital.
High/increasing burn → shorter runway, higher financing risk.

Interaction of the three

  1. Starting Point: A large cash balance gives a company a safety margin, but that margin erodes at the cash‑burn rate.
  2. Fuel for Growth: Free cash flow is the engine that can re‑fuel the cash balance. If FCF is positive, the company can replenish cash even while it burns cash on operating growth.
  3. Run‑way Calculation:
    [ \text{Run‑way (months)} = \frac{\text{Cash balance}}{\text{Monthly cash‑burn}} ]
    If cash‑burn is high and cash is low, the run‑way may be just a few months, forcing the company to either cut costs, accelerate revenue, or raise external capital.

How the reported numbers (when you have them) would be interpreted

Metric Typical “healthy” Typical “concerning”
Cash balance (e.g., $200 M) If the company’s total annual operating expense is $150 M, a $200 M cash pile gives >12‑month runway even without new cash. If cash is only $10 M and annual burn is $50 M, the company has <3 months of runway.
Free cash flow (e.g., +$30 M) Positive $30 M means the company generated enough cash to cover its capex, improving liquidity and allowing debt repayment or growth investment. Negative $30 M means the company is spending $30 M more than it generates, draining cash.
Cash‑burn rate (e.g., $10 M per month) With $200 M cash, a $10 M/month burn gives 20‑month runway. With $10 M cash, a $10 M/month burn means only 1 month left; immediate financing needed.

Bottom line

  • If 8x8’s current cash balance is large, its free cash flow is positive, and its cash‑burn rate is modest, the company enjoys strong liquidity, a long runway, and less dependence on external financing.
  • If the cash balance is modest or declining, free cash flow is negative (or shrinking), and the cash‑burn rate is high, the company faces liquidity pressure: the runway shortens, and the company may need to raise capital (equity, debt, or strategic partnerships) or tighten cost structure to avoid a liquidity crunch.

What to do next?

Locate the full earnings release (or the 10‑Q filing) for the quarter ended June 30 2025. Those documents will contain the exact figures for:

  • Cash and cash equivalents at quarter‑end (balance‑sheet line)
  • Free cash flow (often shown in the cash‑flow statement or the “Non‑GAAP” financial highlights)
  • Cash‑burn rate (often calculated by the company or derived by dividing the net cash used in operating activities by the number of months in the quarter)

With those numbers in hand, you can plug them into the runway formula and assess exactly how much runway 8x8 has left and whether its liquidity profile is robust or fragile.

Other Questions About This News

Are there any regulatory or macro‑economic factors mentioned that could impact future performance? What guidance did 8x8 provide for FY 2026—revenues, margins, and EPS—and how does that compare to consensus forecasts? Did 8x8 report any changes in customer churn, net dollar retention, or large contract wins/losses? What was the net income and EPS for the quarter, and how does it compare year‑over‑year and to analyst estimates? Did 8x8 announce any share repurchases, dividend changes, or other capital allocation actions? How did operating expenses (R&D, sales & marketing, G&A) change and what impact on operating margin? How did 8x8's revenue and earnings growth compare to expectations and prior guidance? Are there any updates on product launches, AI/telecom innovations, or competitive positioning? How does 8x8’s valuation multiples (P/E, EV/EBITDA) compare to peers such as RingCentral, Zoom, and Microsoft Teams? What are the key drivers behind the company’s revenue growth or decline (e.g., subscription revenue, enterprise vs SMB, geographic regions)? What is the company’s guidance on capital expenditures and R&D spending for the rest of FY 2026? What is the consensus outlook from analysts and any changes in analyst ratings after the release?