[May 24, 2018] |
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8x8, Inc. Reports Fourth Quarter and Fiscal 2018 Financial Results
8x8, Inc. (NYSE:EGHT), a leading provider of cloud phone, meeting,
collaboration, and contact center solutions, today reported financial
results for the fourth quarter and fiscal full-year ended March 31, 2018.
Fourth Quarter Fiscal 2018 Financial Results:
-
Revenue: Service revenue increased 20% year-over-year to $75.3
million. Adjusting for constant currency, service revenue increased
19%. Total revenue increased 19% year-over-year to $79.3 million.
Adjusting for constant currency, total revenue increased 18%.
-
Service revenue from mid-market and enterprise customers increased 29%
year-over-year and represented 60% of total service revenue.
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GAAP net loss was $13.3 million or ($0.14) per diluted share.
-
Non-GAAP net loss was $2.9 million or ($0.03) per diluted share.
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Margins: GAAP gross margin was 75%, compared with 77% in the same
period last year. Non-GAAP gross margin was 77%, compared with 79% in
the same period last year. GAAP service margin was 81%, compared with
83% in the same period last year. Non-GAAP service margin was 83%,
compared with 84% in the same period last year.
-
Cash generated from operating activities was $2.7 million.
"The fourth quarter was a strong finish to a transformational year at
8x8. Our solid performance reflects successful execution against our
strategic initiatives and is validation of the investments we continue
to make to accelerate service revenue growth," said Vik Verma, Chief
Executive Officer at 8x8, Inc.
Full-Year Fiscal 2018 Financial Results:
-
Revenue: Service revenue increased 19% year-over-year to $280.4
million. Adjusting for constant currency and the discontinued revenue
from the non-core, voice broadcasting segment of DXI, service revenue
increased 19%. Total revenue increased 17% year-over-year to $296.5
million. Adjusting for constant currency and the discontinued revenue
from the non-core, voice broadcasting segment of DXI, total revenue
increased 17%.
-
Service revenue from mid-market and enterprise customers increased 29%
year-over-year and represented 58% of total service revenue.
-
GAAP net loss was $104.5 million or ($1.14) per diluted share,
inclusive of two special items in the third fiscal quarter. The
special items were: 1) $71 million of non-cash, non-recurring tax
charges as a result of the Tax Cuts and Jobs Act and the Company's
decision to record a valuation allowance against its deferred tax
assets; and 2) $9 million non-cash, non-recurring impairment of
goodwill and other assets related to UK EasyContactNow.
-
Non-GAAP net income was $5.9 million, or $0.06 per diluted share,
excluding special items.
-
Margins: GAAP gross margin was 76%, compared with 75% in the same
period last year. Non-GAAP gross margin was 78%, compared with 77% in
the same period last year. GAAP service margin was 82% compared with
82% in the same period last year. Non-GAAP service margin was 84%,
compared with 84% in the same period last year.
-
Cash Flow: Cash generated from operating activities was $22 million.
Cash, restricted cash and investments were $160 million at March 31,
2018.
Additional Business Metrics and Highlights:
-
More than 50% of new monthly recurring revenue (MRR) booked in the
full-year from mid-market and enterprise customers who purchased 8x8's
integrated UCaaS and CCaaS solutions.
-
Average monthly service revenue by business customer (ARPU): ARPU per
mid-market and enterprise customers was $4,899, compared with $4,494
in the same period last year, a 9% year-over-year increase. ARPU per
business customer grew to $469, compared with $426 in the same period
last year, a 10% increase year-over-year.
-
Churn: Gross monthly business service revenue churn on an organic
basis was 0.3% during the fourth quarter, compared with 0.7% in the
same period a year ago.
-
Completed acquisition of MarianaIQ to strengthen AI and Machine
Learning capabilities for enterprise communications.
-
Synergy Research named 8x8 as the global leader for subscriber seats
in the combined mid-market and enterprise segments of the UCaaS market
for the twelfth consecutive quarter.
-
Leader in the 2017 Gartner Magic Quadrant for Unified Communications
as a Service for the sixth consecutive year and Challenger in Magic
Quadrant for Contact Center as a Service for the third consecutive
year.
-
CRN gave the 8x8 Partner Program a 5-Star rating in the 2018 Partner
Program Guide.
-
Best Communications Provider award at Call & Contact Centre Expo 2018
Awards UK.
-
8x8 was awarded a total of 154 patents through March 31, 2018.
-
Share Repurchase: During the full-year, the Company repurchased 1.4
million shares of common stock at an average price of $13.14 per
share, for a total of $17.9 million, under the Company's approved
share repurchase program.
-
Announced upcoming launch of X Series product line at Enterprise
Connect in March 2018.
"Our new X Series platform is the culmination of a multi-year process of
acquisition and organic investment, and we believe it will be a game
changer," continued Vik Verma. "Based on strong market adoption of our
unified platform and our increasing capabilities in data analytics and
artificial intelligence, including the recent acquisition of MarianaIQ,
X Series is uniquely positioned to be the communications engine
companies need to fuel their digital transformation efforts for years to
come."
"To fully leverage this market opportunity in fiscal 2019 and beyond, we
are expanding investments in engineering, marketing, sales, deployment,
and customer support. We are adopting this strategy in order to deliver
the most comprehensive, integrated system of engagement to the market.
We believe strongly this strategy and the investments we are making will
drive long-term value creation for our shareholders and customers."
Financial Outlook:
Our financial outlook reflects the adoption of the new ASC 606 revenue
recognition standard that is effective for us beginning April 1, 2018.
The guidance below includes the expected impact of the adoption of this
new standard, which replaced ASC 605. We expect no material difference
in revenue between ASC 606 and ASC 605. However, under ASC 606, we
estimate that certain sales commission expenses will reduce GAAP and
non-GAAP net loss by approximately $11 million to $13 million for the
full fiscal year 2019.
Full Year Fiscal 2019 Financial Outlook under ASC 606:
-
Service revenue in the range of $333 million to $338 million,
representing approximately 19% to 21% year-over-year increase.
-
Excluding DXI revenue, service revenue growth in the range of 21% to
22%.
-
Total revenue in the range of $347 million to $352 million,
representing approximately 17% to 19% year-over-year increase.
-
Non-GAAP pre-tax loss in the range of $13 million to $17 million.
First Fiscal Quarter 2019 Financial Outlook:
-
Service revenue in the range of $77 million to $78 million,
representing approximately 18% to 20% year-over-year increase.
-
Excluding DXI revenue, service revenue growth in the range of 20% to
21%.
-
Non-GAAP pre-tax loss in the range of $4 million to $5 million.
The Company does not reconcile its forward-looking non-GAAP net income
to the corresponding GAAP measures of GAAP net income (loss) due to the
significant variability of, and difficulty in making accurate forecasts
and projections with regards to, the various expenses we exclude. For
example, although future hiring and retention needs may be reasonably
predictable, stock-based compensation expense depends on variables that
are largely not within the control of nor predictable by management,
such as the market price of 8x8 common stock, and may also be
significantly impacted by events like acquisitions, the timing and
nature of which are difficult to predict with accuracy. Similarly,
impairments and other non-recurring items are difficult to predict as
they may depend on future events and external factors outside the
Company's control. The actual amounts of these excluded items could have
a significant impact on the Company's GAAP net income (loss).
Accordingly, management believes that reconciliations of this
forward-looking non-GAAP financial measure to the corresponding GAAP
measure is not available without unreasonable effort.
Conference Call Information:
Management will host a conference call to discuss earnings results on
May 24, 2018 at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time). The
call is accessible via the following numbers and webcast links:
Dial In:
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(866) 393-4306 Domestic or (734) 385-2616 International; Conference
ID #1568167
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Replay:
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(855) 859-2056 Domestic or (404) 537-3406 International; Conference
ID #1568167
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Webcast:
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http://investors.8x8.com
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Participants should plan to dial in or log on ten minutes prior to the
start time. A telephonic replay of the call will be available until June
13, 2018. The webcast will be archived on 8x8's website for a period of
30 days. For additional information, visit http://investors.8x8.com.
About 8x8, Inc.
8x8, Inc. (NYSE:EGHT) is a leading
provider of cloud phone, meeting, collaboration and contact center
solutions with over a million business users worldwide. 8x8 helps
enterprises engage at the speed of employee and customer expectations by
putting the collective intelligence of the organization in the hands of
every employee. For additional information, visit www.8x8.com,
or follow 8x8 on LinkedIn,
Twitter, and Facebook.
Non-GAAP Measures:
The Company has provided in this release financial information that has
not been prepared in accordance with Generally Accepted Accounting
Principles (GAAP). Management uses these non-GAAP financial measures
internally in analyzing the Company's financial results and believes
they are useful to investors, as a supplement to GAAP measures, in
evaluating the Company's ongoing operational performance. Management
believes that the use of these non-GAAP financial measures provides an
additional tool for investors to use in evaluating 8x8's ongoing
operating results and trends and in comparing financial results with
other companies in the industry, many of which present similar non-GAAP
financial measures to investors.
The Company has defined non-GAAP net income (loss) as net income (loss)
for GAAP plus amortization of acquired intangible assets, impairment
charges, stock-based compensation, other income and expenses, and the
provision for or benefit from income taxes. Amortization of acquired
intangible assets and impairment charges are excluded because they are a
non-cash expense that management does not consider part of ongoing
operations when assessing the Company's financial performance.
Stock-based compensation expense has been excluded because it is a
non-cash expense and relies on valuations based on future events, such
as the market price of 8x8 common stock and attrition, that are
difficult to predict and are affected by market factors that are largely
not within the control of management. Certain other income and expense
items, such as acquisition-related or severance expenses, have been
excluded because management considers them to be isolated transactions
and believes they are not reflective of the Company's ongoing
operations, reduce comparability of periodic operating results when
included, are difficult to predict, and are often one-time.
GAAP tax provision (benefit) for income taxes has been excluded as it is
also a non-cash expense that management does not consider part of its
analysis of the performance of ongoing operations. Due to the Company's
history of tax losses and full valuation allowance against deferred tax
assets, future GAAP and Non-GAAP effective tax rates are limited to
current taxes in certain US state and foreign jurisdictions. The Company
reports these current taxes as reduction from Non-GAAP pretax net income
to derive Non-GAAP net income after taxes.
The Company defines non-GAAP net income per share as non-GAAP net income
divided by the weighted-average diluted shares outstanding which
includes the effect of potentially dilutive stock options and awards.
The Company defines non-GAAP net income percentage of revenue as
non-GAAP net income (loss) divided by non-GAAP revenue. Management
believes that such exclusions facilitate comparisons to the Company's
historical operating results and to the results of other companies in
the same industry, and provides investors with information that
management uses in evaluating the Company's performance on a quarterly
and annual basis.
Although these non-GAAP financial measures adjust expense, they should
not be viewed as a pro forma presentation reflecting the elimination of
the underlying share-based compensation programs, which are an important
element of the Company's compensation structure. GAAP requires that all
forms of share-based payments should be valued and included, as
appropriate, in results of operations. Management believes these
expenses are a material part of the Company's operating results.
In addition:
-
This release may provide certain financial measures that have been
adjusted to exclude the impact of the discontinuation of the voice
broadcasting segment of DXI, as first reported in the third quarter of
the Company's 2017 fiscal year. To adjust for the discontinued voice
broadcasting business, revenue figures for each period being compared
exclude all revenue attributable to the discontinued business.
-
This release may provide certain financial measures that have been
adjusted to exclude all revenue generated by DXI in the revenue
figures for each period being compared. As first reported in the third
quarter of the Company's 2018 fiscal year, the Company has
de-emphasized the sale of DXI's ContactNow as a stand-alone product,
and management therefore believes it is useful to exclude this revenue
from certain period-to-period comparisons in order to assess the
growth of the Company's core business. Some financial measures
presented in this release may reflect adjustments for comparison on a
constant currency basis when management concluded that the elimination
of the impact of currency fluctuations between current and comparative
prior periods assist with the evaluation of the underlying business
performance.
The Company discloses these non-GAAP financial measures to the public as
an additional means by which investors can assess the Company's
performance and to identify the Company's operating results for
investors on the same basis applied by management. The non-GAAP
financial measures disclosed by the Company should not be considered a
substitute for, or superior to, financial measures calculated in
accordance with GAAP, and the financial results calculated in accordance
with GAAP and reconciliations to those financial statements should be
carefully evaluated. The non-GAAP financial measures used by the Company
may be calculated differently from, and therefore may not be comparable
to, similarly titled measures used by other companies.
Non-GAAP financial measures should not be considered in isolation from,
or as a substitute for, financial information prepared in accordance
with GAAP. Investors are encouraged to review the reconciliation of
these non-GAAP financial measures to their most directly comparable GAAP
financial measures. This reconciliation has been provided in the
financial statement tables included below in this press release.
Forward Looking Statements:
This news release contains "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995 and
Section 21E of the Securities Exchange Act of 1934. These statements
include, without limitation, information about future events based on
current expectations, potential product development efforts, near and
long-term objectives, potential new business, strategies, organization
changes, changing markets, future business performance and outlook. Such
statements are predictions only, and actual events or results could
differ materially from those made in any forward-looking statements due
to a number of risks and uncertainties. Actual results and trends may
differ materially from historical results or those projected in any such
forward-looking statements depending on a variety of factors.
These factors include, but are not limited to:
-
Customer acceptance and demand for our cloud communication and
collaboration services,
-
changes in the competitive dynamics of the markets in which we compete,
-
the quality and reliability of our services,
-
customer cancellations and rate of churn,
-
our ability to scale our business,
-
customer acquisition costs,
-
our reliance on infrastructure of third-party network services
providers,
-
risk of failure in our physical infrastructure,
-
risk of failure of our software,
-
our ability to maintain the compatibility of our software with
third-party applications and mobile platforms,
-
continued compliance with industry standards and regulatory
requirements in the United States and foreign countries in which we
make our software solutions available, and the costs of such
compliance,
-
risks relating to our strategies and objectives for future operations,
including the execution of integration plans and realization of the
expected benefits of our acquisitions,
-
the amount and timing of costs associated with recruiting, training
and integrating new employees,
-
timing and extent of improvements in operating results from increased
spending in marketing, sales, and research and development,
-
introduction and adoption of our cloud software solutions in markets
outside of the United States,
-
risk of cybersecurity breaches and other unauthorized disclosures of
personal data,
-
general economic conditions that could adversely affect our business
and operating results,
-
implementation and effects of new accounting standards and policies in
our reported financial results, and
-
potential future intellectual property infringement claims and other
litigation that could adversely affect our business and operating
results.
For a discussion of such risks and uncertainties, which could cause
actual results to differ from those contained in the forward-looking
statements, see "Risk Factors" in the Company's reports on Forms 10-K
and 10-Q, as well as other reports that 8x8, Inc. files from time to
time with the Securities and Exchange Commission. All forward-looking
statements are qualified in their entirety by this cautionary statement,
and 8x8, Inc. undertakes no obligation to update publicly any
forward-looking statement for any reason, except as required by law,
even as new information becomes available or other events occur in the
future.
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8x8, Inc.
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
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(In thousands, except per share amounts; unaudited)
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Three Months Ended
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Twelve Months Ended
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March 31,
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March 31,
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2018
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2017
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2018
|
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2017
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Service revenue
|
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$
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75,325
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$
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62,654
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$
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280,430
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$
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235,816
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Product revenue
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|
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4,019
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|
|
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3,834
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|
|
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16,070
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|
|
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17,572
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Total revenue
|
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79,344
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66,488
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296,500
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253,388
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Operating expenses:
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Cost of service revenue
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13,952
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10,803
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50,689
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|
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42,400
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Cost of product revenue
|
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5,826
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|
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4,187
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20,482
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|
|
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19,714
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Research and development
|
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10,016
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7,142
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34,797
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27,452
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Sales and marketing
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52,940
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38,228
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184,044
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139,277
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General and administrative
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10,340
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9,814
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38,915
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|
|
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31,214
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Impairment of goodwill, intangible assets, and equipment
|
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-
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|
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-
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9,469
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|
|
-
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Total operating expenses
|
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93,074
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70,174
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|
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338,396
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|
|
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260,057
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Loss from operations
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|
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(13,730
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)
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|
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(3,686
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)
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(41,896
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)
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(6,669
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)
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Other income, net
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610
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583
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3,693
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|
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1,792
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Loss from operations before provision (benefit) for income taxes
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(13,120
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)
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(3,103
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)
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(38,203
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)
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(4,877
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)
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Provision (benefit) for income taxes
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142
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(178
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)
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66,294
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(126
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)
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Net loss
|
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$
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(13,262
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)
|
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$
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(2,925
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)
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$
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(104,497
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)
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$
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(4,751
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)
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Net loss per share:
|
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Basic
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$
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(0.14
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)
|
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$
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(0.03
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)
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$
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(1.14
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)
|
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$
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(0.05
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)
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Diluted
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$
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(0.14
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)
|
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$
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(0.03
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)
|
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$
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(1.14
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)
|
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$
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(0.05
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)
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Weighted average number of shares:
|
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Basic
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92,526
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|
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91,175
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|
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92,017
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|
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90,340
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Diluted
|
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92,526
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91,175
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|
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92,017
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|
|
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90,340
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8x8, Inc.
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CONDENSED CONSOLIDATED BALANCE SHEETS
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(In thousands, unaudited)
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|
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|
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March 31,
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March 31,
|
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2018
|
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2017
|
ASSETS
|
|
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Current assets
|
|
|
|
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Cash and cash equivalents
|
|
$
|
31,703
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|
$
|
41,030
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Short-term investments
|
|
|
120,559
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|
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133,959
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Accounts receivable, net
|
|
|
16,296
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|
|
14,264
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Other current assets
|
|
|
10,040
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|
|
8,101
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Total current assets
|
|
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178,598
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|
|
197,354
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Property and equipment, net
|
|
|
35,732
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|
24,061
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Intangible assets, net
|
|
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11,958
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|
|
17,038
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Goodwill
|
|
|
40,054
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|
46,136
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Non-current deferred tax asset
|
|
|
-
|
|
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48,859
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Restricted cash
|
|
|
8,100
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|
|
-
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Other assets
|
|
|
2,767
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|
|
407
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Total assets
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$
|
277,209
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|
$
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333,855
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LIABILITIES AND STOCKHOLDERS' EQUITY
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Current liabilities
|
|
|
|
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Accounts payable
|
|
$
|
23,899
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|
$
|
18,631
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Accrued compensation
|
|
|
17,412
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|
|
11,508
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Accrued taxes
|
|
|
6,367
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|
|
5,354
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Deferred revenue
|
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|
2,559
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|
|
2,144
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Other accrued liabilities
|
|
|
6,026
|
|
|
5,707
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Total current liabilities
|
|
|
56,263
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|
|
43,344
|
|
|
|
|
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Other liabilities
|
|
|
2,172
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|
|
1,910
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Total liabilities
|
|
|
58,435
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|
|
45,254
|
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|
|
|
|
|
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Total stockholders' equity
|
|
|
218,774
|
|
|
288,601
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Total liabilities and stockholders' equity
|
|
$
|
277,209
|
|
$
|
333,855
|
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8x8, Inc.
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
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(In thousands, unaudited)
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended
|
|
|
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March 31,
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|
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2018
|
|
|
2017
|
Cash flows from operating activities:
|
|
|
|
|
|
|
Net loss
|
|
$
|
(104,497
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)
|
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$
|
(4,751
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)
|
Adjustments to reconcile net loss to net cash provided by
operating activities:
|
|
|
|
|
|
|
Depreciation
|
|
|
8,171
|
|
|
|
6,084
|
|
Amortization of intangible assets
|
|
|
5,033
|
|
|
|
3,762
|
|
Impairment of goodwill and long-lived assets
|
|
|
9,469
|
|
|
|
15
|
|
Amortization of capitalized software
|
|
|
2,513
|
|
|
|
591
|
|
Stock-based compensation expense
|
|
|
29,176
|
|
|
|
21,462
|
|
Tax benefit from stock-based compensation expense
|
|
|
-
|
|
|
|
(486
|
)
|
Deferred income tax expense (benefit)
|
|
|
66,273
|
|
|
|
(411
|
)
|
Gain on escrow settlement
|
|
|
(1,393
|
)
|
|
|
-
|
|
Other
|
|
|
677
|
|
|
|
1,196
|
|
Changes in assets and liabilities:
|
|
|
|
|
|
|
Accounts receivable, net
|
|
|
(2,402
|
)
|
|
|
(4,799
|
)
|
Other current and noncurrent assets
|
|
|
(3,149
|
)
|
|
|
(2,515
|
)
|
Accounts payable and accruals
|
|
|
11,860
|
|
|
|
8,135
|
|
Deferred revenue
|
|
|
310
|
|
|
|
195
|
|
Net cash provided by operating activities
|
|
|
22,041
|
|
|
|
28,478
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
Purchases of property and equipment
|
|
|
(9,178
|
)
|
|
|
(8,851
|
)
|
Purchase of businesses, net of cash acquired
|
|
|
-
|
|
|
|
(2,884
|
)
|
Proceeds from escrow settlement
|
|
|
1,393
|
|
|
|
-
|
|
Cost of capitalized software
|
|
|
(12,486
|
)
|
|
|
(5,516
|
)
|
Proceeds from maturity of investments
|
|
|
100,382
|
|
|
|
93,795
|
|
Sales of investments
|
|
|
27,841
|
|
|
|
41,288
|
|
Purchase of investments
|
|
|
(115,224
|
)
|
|
|
(140,026
|
)
|
Net cash used in investing activities
|
|
|
(7,272
|
)
|
|
|
(22,194
|
)
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
Capital lease payments
|
|
|
(1,079
|
)
|
|
|
(674
|
)
|
Payment of contingent consideration
|
|
|
(150
|
)
|
|
|
(300
|
)
|
Repurchase and tax-related withholding of common stock
|
|
|
(22,440
|
)
|
|
|
(3,003
|
)
|
Tax benefit from stock-based compensation expense
|
|
|
-
|
|
|
|
486
|
|
Proceeds from issuance of common stock under employee stock plans
|
|
|
7,229
|
|
|
|
5,087
|
|
Net cash (used in) provided by financing activities
|
|
|
(16,440
|
)
|
|
|
1,596
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash
|
|
|
444
|
|
|
|
(426
|
)
|
Net (decrease) increase in cash and cash equivalents
|
|
|
(1,227
|
)
|
|
|
7,454
|
|
|
|
|
|
|
|
|
Cash, cash equivalents and restricted cash, beginning of period
|
|
|
41,030
|
|
|
|
33,576
|
|
Cash, cash equivalents and restricted cash, end of period
|
|
$
|
39,803
|
|
|
$
|
41,030
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8x8, Inc.
|
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
|
(In thousands, except per share amounts; unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Three Months Ended
|
|
|
|
Twelve Months Ended
|
|
|
Twelve Months Ended
|
Reconcilation of GAAP to Non-GAAP
Expenses:
|
|
|
March 31, 2018
|
|
|
|
March 31, 2017
|
|
|
|
March 31, 2018
|
|
|
|
March 31, 2017
|
GAAP cost of service revenue
|
|
$
|
13,952
|
|
|
|
|
|
$
|
10,803
|
|
|
|
|
|
$
|
50,689
|
|
|
|
|
|
$
|
42,400
|
|
|
|
Amortization of acquired intangible assets
|
|
|
(708
|
)
|
|
|
|
|
|
(691
|
)
|
|
|
|
|
|
(2,933
|
)
|
|
|
|
|
|
(2,388
|
)
|
|
|
Stock-based compensation expense
|
|
|
(502
|
)
|
|
|
|
|
|
(394
|
)
|
|
|
|
|
|
(1,821
|
)
|
|
|
|
|
|
(1,732
|
)
|
|
|
Non-recurring items
|
|
|
(87
|
)
|
|
|
|
|
|
-
|
|
|
|
|
|
|
(87
|
)
|
|
|
|
|
|
-
|
|
|
|
Non-GAAP cost of service revenue
|
|
$
|
12,655
|
|
|
|
|
|
$
|
9,718
|
|
|
|
|
|
$
|
45,848
|
|
|
|
|
|
$
|
38,280
|
|
|
|
Non-GAAP service margin (as a percentage of service revenue)
|
|
$
|
62,670
|
|
|
83.2
|
%
|
|
|
$
|
52,936
|
|
|
84.5
|
%
|
|
|
$
|
234,582
|
|
|
83.7
|
%
|
|
|
$
|
197,536
|
|
|
83.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP and Non-GAAP cost of product revenue
|
|
$
|
5,826
|
|
|
|
|
|
$
|
4,187
|
|
|
|
|
|
$
|
20,482
|
|
|
|
|
|
$
|
19,714
|
|
|
|
Non-GAAP product margin (as a percentage of product revenue)
|
|
$
|
(1,807
|
)
|
|
-45.0
|
%
|
|
|
$
|
(353
|
)
|
|
-9.2
|
%
|
|
|
$
|
(4,412
|
)
|
|
-27.5
|
%
|
|
|
$
|
(2,142
|
)
|
|
-12.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP gross margin (as a percentage of revenue)
|
|
$
|
60,863
|
|
|
76.7
|
%
|
|
|
$
|
52,583
|
|
|
79.1
|
%
|
|
|
$
|
230,170
|
|
|
77.6
|
%
|
|
|
$
|
195,394
|
|
|
77.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP research and development
|
|
$
|
10,016
|
|
|
|
|
|
$
|
7,142
|
|
|
|
|
|
$
|
34,797
|
|
|
|
|
|
$
|
27,452
|
|
|
|
Stock-based compensation expense
|
|
|
(1,973
|
)
|
|
|
|
|
|
(951
|
)
|
|
|
|
|
|
(6,418
|
)
|
|
|
|
|
|
(3,762
|
)
|
|
|
Non-GAAP research and development (as a percentage of revenue)
|
|
$
|
8,043
|
|
|
10.1
|
%
|
|
|
$
|
6,191
|
|
|
9.3
|
%
|
|
|
$
|
28,379
|
|
|
9.6
|
%
|
|
|
$
|
23,690
|
|
|
9.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP sales and marketing
|
|
$
|
52,940
|
|
|
|
|
|
$
|
38,228
|
|
|
|
|
|
$
|
184,044
|
|
|
|
|
|
$
|
139,277
|
|
|
|
Amortization of acquired intangible assets, impairment
|
|
|
(330
|
)
|
|
|
|
|
|
(330
|
)
|
|
|
|
|
|
(2,100
|
)
|
|
|
|
|
|
(1,389
|
)
|
|
|
Stock-based compensation expense
|
|
|
(3,077
|
)
|
|
|
|
|
|
(2,714
|
)
|
|
|
|
|
|
(11,654
|
)
|
|
|
|
|
|
(8,832
|
)
|
|
|
Non-recurring items in operating expenses
|
|
|
(186
|
)
|
|
|
|
|
|
(493
|
)
|
|
|
|
|
|
(669
|
)
|
|
|
|
|
|
(493
|
)
|
|
|
Non-GAAP sales and marketing (as a percentage of revenue)
|
|
$
|
49,347
|
|
|
62.2
|
%
|
|
|
$
|
34,691
|
|
|
52.2
|
%
|
|
|
$
|
169,621
|
|
|
57.2
|
%
|
|
|
$
|
128,563
|
|
|
50.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP general and administrative
|
|
$
|
10,340
|
|
|
|
|
|
$
|
9,814
|
|
|
|
|
|
$
|
38,915
|
|
|
|
|
|
$
|
31,214
|
|
|
|
Stock-based compensation expense
|
|
|
(2,487
|
)
|
|
|
|
|
|
(1,773
|
)
|
|
|
|
|
|
(9,283
|
)
|
|
|
|
|
|
(7,136
|
)
|
|
|
Non-recurring items
|
|
|
(861
|
)
|
|
|
|
|
|
(993
|
)
|
|
|
|
|
|
(1,373
|
)
|
|
|
|
|
|
(1,071
|
)
|
|
|
Non-GAAP general and administrative (as a percentage of revenue)
|
|
$
|
6,992
|
|
|
8.8
|
%
|
|
|
$
|
7,048
|
|
|
10.6
|
%
|
|
|
$
|
28,259
|
|
|
9.5
|
%
|
|
|
$
|
23,007
|
|
|
9.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconcilation of GAAP Net Loss to
Non-GAAP Net Income (Loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income (loss)
|
|
$
|
(13,262
|
)
|
|
|
|
|
$
|
(2,925
|
)
|
|
|
|
|
$
|
(104,497
|
)
|
|
|
|
|
$
|
(4,751
|
)
|
|
|
Amortization of acquired intangible assets
|
|
|
1,038
|
|
|
|
|
|
|
1,021
|
|
|
|
|
|
|
5,033
|
|
|
|
|
|
|
3,762
|
|
|
|
Impairment of equipment, intangible assets, and goodwill
|
|
|
-
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
9,469
|
|
|
|
|
|
|
15
|
|
|
|
Stock-based compensation expense
|
|
|
8,039
|
|
|
|
|
|
|
5,832
|
|
|
|
|
|
|
29,176
|
|
|
|
|
|
|
21,462
|
|
|
|
Non-recurring items in operating expenses
|
|
|
1,134
|
|
|
|
|
|
|
1,486
|
|
|
|
|
|
|
2,129
|
|
|
|
|
|
|
1,564
|
|
|
|
Non-recurring items in other income (expenses), net
|
|
|
-
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
(1,393
|
)
|
|
|
|
|
|
-
|
|
|
|
Provision (benefit) for income taxes (1)
|
|
|
142
|
|
|
|
|
|
|
(178
|
)
|
|
|
|
|
|
66,294
|
|
|
|
|
|
|
(126
|
)
|
|
|
Non-GAAP net income (loss) before taxes (as a percentage of revenue)
|
|
$
|
(2,909
|
)
|
|
-3.7
|
%
|
|
|
$
|
5,236
|
|
|
7.9
|
%
|
|
|
$
|
6,211
|
|
|
2.1
|
%
|
|
|
$
|
21,926
|
|
|
8.7
|
%
|
Non-GAAP tax expense (2)
|
|
|
33
|
|
|
|
|
|
|
1,990
|
|
|
|
|
|
|
330
|
|
|
|
|
|
|
8,332
|
|
|
|
Non-GAAP net income (loss) after taxes (as a percentage of revenue)
|
|
$
|
(2,942
|
)
|
|
-3.7
|
%
|
|
|
$
|
3,246
|
|
|
4.9
|
%
|
|
|
$
|
5,881
|
|
|
2.0
|
%
|
|
|
$
|
13,594
|
|
|
5.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) The amounts for the three and twelve months ended Mar 31, 2017
have been adjusted to conform with the current period presentation.
|
(2) The non-GAAP tax provision in fiscal year 2018 does not have a
deferred income tax impact due to the full valuation allowance
applied against deferred tax assets. The non-GAAP effective tax rate
of -1.1% and 5.3% for the three and twelve months ended March 31,
2018, respectively, is based on current taxes for certain states and
foreign jurisdictions, and excludes the impact of the valuation
allowance. For the three and twelve months ended March 31, 2017, the
total non-GAAP effective tax rate was 38%.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in computing non-GAAP net income (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
92,526
|
|
|
|
|
|
|
91,175
|
|
|
|
|
|
|
92,017
|
|
|
|
|
|
|
90,340
|
|
|
|
Diluted
|
|
|
92,526
|
|
|
|
|
|
|
94,506
|
|
|
|
|
|
|
95,896
|
|
|
|
|
|
|
93,807
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net loss per share - Diluted
|
|
$
|
(0.14
|
)
|
|
|
|
|
$
|
(0.03
|
)
|
|
|
|
|
$
|
(1.14
|
)
|
|
|
|
|
$
|
(0.05
|
)
|
|
|
Non-GAAP net income (loss) before taxes per share - Diluted
|
|
$
|
(0.03
|
)
|
|
|
|
|
$
|
0.06
|
|
|
|
|
|
$
|
0.06
|
|
|
|
|
|
$
|
0.23
|
|
|
|
Non-GAAP net income (loss) after taxes per share - Diluted
|
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$
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(0.03
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)
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$
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0.03
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$
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0.06
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$
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0.14
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8x8, Inc.
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Selected Operating Statistics
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Mar. 31, 2017
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June 30, 2017
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Sept. 30, 2017
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Dec. 31, 2017
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Mar. 31, 2018
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Business customer average monthly service revenue per customer (1)
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$
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426
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$
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432
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$
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442
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$
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454
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$
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469
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Monthly business service revenue churn (2)(3)
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0.7
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%
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0.6
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%
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0.4
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%
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0.4
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%
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0.3
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%
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Overall service margin
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83
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%
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82
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%
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|
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81
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%
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83
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%
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|
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81
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%
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Overall product margin
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-9
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%
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-22
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%
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-17
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%
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-27
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%
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-45
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%
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Overall gross margin
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77
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%
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76
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%
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75
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%
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78
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%
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75
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%
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(1) Business customer average monthly service revenue per customer
is service revenue from business customers in the period divided by
the number of months in the period divided by the simple average
number of business customers during the period.
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(2) Business customer service revenue churn is calculated by
dividing the service revenue lost from business customers (after the
expiration of 30-day trial) during the period by the simple average
of business customer service revenue during the same period and
dividing the result by the number of months in the period.
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(3) Excludes DXI business customer service revenue churn for all
periods presented.
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View source version on businesswire.com: https://www.businesswire.com/news/home/20180524006323/en/
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