[January 25, 2017] |
|
8x8, Inc. Reports Third Quarter Fiscal 2017 Financial Results
8x8, Inc. (NASDAQ:EGHT), the leading provider of Enterprise
Communications as a Service (ECaaS), today reported financial results
for the third quarter of fiscal 2017 ended December 31, 2016.
Third Quarter Fiscal 2017 Financial Results:
-
Service revenue grew 23% year-over-year to $60.1 million; total
revenue grew 20% year-over-year to $63.7 million.
-
GAAP gross margin was 77%, compared with 72% in the same period last
year; non-GAAP gross margin was 79%, compared with 75% in the same
period last year.
-
GAAP service margin was 83%, compared with 80% in the same period last
year; non-GAAP service margin was 84%, compared with 83% in the same
period last year.
-
GAAP net loss was ($1.3 million), or ($0.01) per diluted share;
non-GAAP net income was $5.8 million, or $0.06 per diluted share.
-
Cash generated from operating activities was $8.8 million, compared
with $8.3 million in the same period last year.
-
Cash, cash equivalents and investments were $173 million at December
31, 2016, compared with $155 million at December 31, 2015.
"Our financial results for the third quarter of fiscal 2017 were very
strong with solid revenue growth and increasing gross and non-GAAP net
income margins. Adjusting for constant currency and the discontinued
segment of our UK business which we previously reported, service revenue
increased 28% and total revenue increased 24%," said 8x8 CEO Vik Verma.
"We are continuing to see enterprise customers transition their
communications infrastructure to the cloud, evidenced this quarter by
the addition of two new enterprise logos, including one Fortune 50
corporation."
"As we prepare for our next phase of growth, we are focused on enhancing
our global systems and worldwide customer support organization to better
serve the needs of our multinational customers," Verma continued. "We
are also further expanding the breadth and capabilities of our platform
with a new, recently completed technology acquisition in the
collaboration space that will be unveiled in March at the Enterprise
Connect Conference."
Additional Third Quarter and Year-to-Date
Highlights:
-
Service revenue from mid-market and enterprise customers grew 36%
year-over-year and represents 55% of the Company's total service
revenue.
-
New monthly recurring revenue (MRR) sold to mid-market and enterprise
customers and by channel sales teams accounted for 60% of total new
MRR booked in the quarter.
-
Average monthly service revenue (ARPU) per business customer grew to
$414, compared with $369 in the same year ago period; ARPU per
mid-market and enterprise customer grew to $4,412, compared with
$4,017 in the same year ago period.
-
Gross monthly revenue churn was 1.0%, compared with 1.2% in the same
period last year.
-
New enterprise Master Service Agreement signed with a Fortune 50
health care corporation to provide services to up to 10,000 users in
450 medical offices.
-
New enterprise agreement signed with a national retail chain for over
10,000 seats across 3500 locations.
-
2.0 Global Channel Program and new PartnerConnect Channel Portal
launched.
-
New channel partners Telarus, LANtelligence and PERRY proTECH in North
America, and Great Outcomes in NZ added.
-
Acquired a small, innovative technology company in the collaboration
space, completed in early January.
-
Three new patents awarded related to technology innovations enabling
seamless global enterprise communications and enhanced contact center
user experience for a total of 128 awarded patents to date.
-
Virtual Office Pro acknowledged with PCMag Editors' Choice Award.
-
Virtual Contact Center acknowledged with TMC's Customer Experience
Innovation Award.
8x8 maintained its annual guidance of revenue for fiscal 2017 in the
range of $251.0 million to $254.0 million and raised non-GAAP net income
guidance to a range of $18.0 to $20.0 million, representing non-GAAP net
income as a percent of revenue of 7.0% to 8.0%, from previously issued
non-GAAP net income guidance in the range of $16.0 million to $20.0
million.
Conference Call Information:
Management will host a conference call to discuss these results and
other matters related to the Company's business today, January 25, 2017
at 4:30 pm ET. The call is accessible via the following numbers and
webcast links:
Dial In:
|
(877) 843-0417, domestic
|
|
(408) 427-3791, international
|
Replay:
|
(855) 859-2056, domestic (Conference ID #46149120)
|
|
(404) 537-3406, international (Conference ID #46149120)
|
Webcast:
|
http://investors.8x8.com
|
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 three
hours after the conclusion of the call until February 1, 2017. The
webcast will be archived on 8x8's website for a period of one year. For
additional information, visit http://investors.8x8.com.
About 8x8, Inc.
8x8, Inc. (NASDAQ:EGHT) is the trusted provider of secure and reliable
enterprise cloud communications solutions to more than 45,000 businesses
operating in over 100 countries across six continents. 8x8's
out-of-the-box cloud solutions replace traditional on-premises PBX
hardware and software-based systems with a flexible and scalable
Software as a Service (SaaS) alternative, encompassing cloud business
phone service, contact center solutions, and conferencing. For
additional information, visit www.8x8.com,
www.8x8.com/UK or connect with 8x8
on LinkedIn, Twitter,
Google+ 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 our 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.
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.
Non-GAAP Net Income and Non-GAAP Net Income Per
Share
We have defined non-GAAP net income as net income for GAAP plus non-cash
tax adjustments, stock-based compensation, amortization of acquired
intangible assets, impairment of long-lived assets, and
acquisition-related costs. Non-cash tax adjustments represent the
difference between the amount of taxes we expect to pay and our GAAP tax
provision each period. We have excluded stock-based compensation expense
because it relies on estimates and assumptions about future events, such
as our future common stock price and the duration of employee service,
as well as valuations that are affected by market factors largely
outside management's control. Amortization of acquired intangible assets
is excluded because it is a non-cash expense that we do not consider
part of ongoing operations when assessing our financial performance, as
it relates to accounting for certain purchased assets. We have excluded
impairment of long-lived assets because we consider it to be an isolated
transaction and believe it is not reflective of our ongoing operations,
and it reduces comparability of periodic operating results when it is
included. We have excluded acquisition-related expenses because these
expenses are difficult to predict and are often one-time. We define
non-GAAP net income per share as non-GAAP net income divided by the
weighted-average diluted shares outstanding. We define non-GAAP net
income percentage of revenue as non-GAAP net income divided by revenue.
The GAAP and non-GAAP weighted average number of diluted shares to
calculate GAAP and non-GAAP earnings per share are the same. We believe
that such exclusions facilitate comparisons to our historical operating
results and to the results of other companies in the same industry, and
provides investors with information that we use in evaluating
management's performance on a quarterly and annual basis.
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, market acceptance of new or
existing services and features, success of our efforts to target
mid-market and larger distributed enterprises, changes in the
competitive dynamics of the markets in which we compete, customer
cancellations and rate of churn, impact of current economic climate and
adverse credit markets on our target customers, our ability to scale our
business, 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, 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, introduction and adoption of our cloud communications and
collaboration services in markets outside of the United States, risks
regarding compliance with regulations in the United States and foreign
jurisdictions in which our services are provided, and general economic
conditions 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.
|
|
|
|
|
|
|
|
|
|
8x8, Inc. CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (In thousands, except per share amounts;
unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
|
Nine Months Ended December 31,
|
|
|
2016
|
|
2015
|
|
|
2016
|
|
2015
|
Service revenue
|
$
|
60,149
|
|
$
|
48,948
|
|
|
$
|
173,162
|
|
$
|
140,068
|
|
Product revenue
|
|
3,527
|
|
|
4,220
|
|
|
|
13,738
|
|
|
11,935
|
|
Total revenue
|
|
63,676
|
|
|
53,168
|
|
|
|
186,900
|
|
|
152,003
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
Cost of service revenue (1)
|
|
10,525
|
|
|
9,713
|
|
|
|
31,597
|
|
|
27,359
|
|
Cost of product revenue
|
|
4,240
|
|
|
5,087
|
|
|
|
15,527
|
|
|
14,065
|
|
Research and development (2)
|
|
7,095
|
|
|
6,404
|
|
|
|
20,310
|
|
|
17,930
|
|
Sales and marketing (3)
|
|
35,667
|
|
|
27,585
|
|
|
|
101,049
|
|
|
78,138
|
|
General and administrative (4)
|
|
7,852
|
|
|
6,888
|
|
|
|
21,400
|
|
|
18,614
|
|
Total operating expenses
|
|
65,379
|
|
|
55,677
|
|
|
|
189,883
|
|
|
156,106
|
|
Loss from operations
|
|
(1,703
|
)
|
|
(2,509
|
)
|
|
|
(2,983
|
)
|
|
(4,103
|
)
|
Other income, net
|
|
408
|
|
|
272
|
|
|
|
1,209
|
|
|
710
|
|
Loss from operations before provision (benefit) for income taxes
|
|
(1,295
|
)
|
|
(2,237
|
)
|
|
|
(1,774
|
)
|
|
(3,393
|
)
|
Provision (benefit) for income taxes
|
|
30
|
|
|
(557
|
)
|
|
|
52
|
|
|
651
|
|
Net loss
|
$
|
(1,325
|
)
|
$
|
(1,680
|
)
|
|
$
|
(1,826
|
)
|
$
|
(4,044
|
)
|
|
|
|
|
|
|
|
|
|
|
Net loss per share:
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
(0.01
|
)
|
$
|
(0.02
|
)
|
|
$
|
(0.02
|
)
|
$
|
(0.05
|
)
|
Diluted
|
$
|
(0.01
|
)
|
$
|
(0.02
|
)
|
|
$
|
(0.02
|
)
|
$
|
(0.05
|
)
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
90,774
|
|
|
88,289
|
|
|
|
90,062
|
|
|
88,812
|
|
Diluted
|
|
90,774
|
|
|
88,289
|
|
|
|
90,062
|
|
|
88,812
|
|
|
|
|
|
|
|
|
|
|
|
(1)(2)(3)(4) - See reconciliation of GAAP measures to non-GAAP
measures.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8x8, Inc. RECONCILIATION OF SELECTED GAAP MEASURES TO
NON-GAAP MEASURES (In thousands, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Amounts include amortization of acquired intangible assets,
impairment of long-lived assets, and stock-based compensation as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
|
Nine Months Ended December 31,
|
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
GAAP cost of service revenue
|
|
$
|
10,525
|
|
|
$
|
9,713
|
|
|
$
|
31,597
|
|
|
$
|
27,359
|
|
|
Amortization of acquired intangible assets
|
|
|
(543
|
)
|
|
|
(618
|
)
|
|
|
(1,697
|
)
|
|
|
(1,451
|
)
|
|
Impairment of long-lived assets
|
|
|
-
|
|
|
|
(440
|
)
|
|
|
-
|
|
|
|
(440
|
)
|
|
Stock-based compensation expense
|
|
|
(538
|
)
|
|
|
(346
|
)
|
|
|
(1,338
|
)
|
|
|
(828
|
)
|
Non-GAAP cost of service revenue
|
|
$
|
9,444
|
|
|
$
|
8,309
|
|
|
$
|
28,562
|
|
|
$
|
24,640
|
|
Non-GAAP cost of service revenue as a percentage of service revenue
|
|
|
15.7
|
%
|
|
|
17.0
|
%
|
|
|
16.5
|
%
|
|
|
17.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2)
|
Amounts include stock-based compensation and acquisition related
expenses as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
|
Nine Months Ended December 31,
|
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
GAAP research and development
|
|
$
|
7,095
|
|
|
$
|
6,404
|
|
|
$
|
20,310
|
|
|
$
|
17,930
|
|
|
Stock-based compensation expense
|
|
|
(1,061
|
)
|
|
|
(850
|
)
|
|
|
(2,811
|
)
|
|
|
(2,107
|
)
|
|
Acquisition related expenses
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(5
|
)
|
Non-GAAP research and development
|
|
$
|
6,034
|
|
|
$
|
5,554
|
|
|
$
|
17,499
|
|
|
$
|
15,818
|
|
Non-GAAP research and development as a percentage of total revenue
|
|
|
9.5
|
%
|
|
|
10.4
|
%
|
|
|
9.4
|
%
|
|
|
10.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3)
|
Amounts include amortization of acquired intangible assets,
impairment of long-lived assets, stock-based compensation, and
acquisition related expenses as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
|
Nine Months Ended December 31,
|
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
GAAP sales and marketing
|
|
$
|
35,667
|
|
|
$
|
27,585
|
|
|
$
|
101,049
|
|
|
$
|
78,138
|
|
|
Amortization of acquired intangible assets
|
|
|
(330
|
)
|
|
|
(384
|
)
|
|
|
(1,044
|
)
|
|
|
(1,114
|
)
|
|
Impairment of long-lived assets
|
|
|
(15
|
)
|
|
|
(200
|
)
|
|
|
(15
|
)
|
|
|
(200
|
)
|
|
Stock-based compensation expense
|
|
|
(2,452
|
)
|
|
|
(1,689
|
)
|
|
|
(6,118
|
)
|
|
|
(4,308
|
)
|
|
Acquisition related expenses
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(27
|
)
|
Non-GAAP sales and marketing
|
|
$
|
32,870
|
|
|
$
|
25,312
|
|
|
$
|
93,872
|
|
|
$
|
72,489
|
|
Non-GAAP sales and marketing as a percentage of total revenue
|
|
|
51.6
|
%
|
|
|
47.6
|
%
|
|
|
50.2
|
%
|
|
|
47.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4)
|
Amounts include stock-based compensation, and acquisition related
expenses as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
|
Nine Months Ended December 31,
|
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
GAAP general and administrative
|
|
$
|
7,852
|
|
|
$
|
6,888
|
|
|
$
|
21,400
|
|
|
$
|
18,614
|
|
|
Stock-based compensation expense
|
|
|
(2,020
|
)
|
|
|
(1,778
|
)
|
|
|
(5,363
|
)
|
|
|
(3,959
|
)
|
|
Acquisition related expenses
|
|
|
(78
|
)
|
|
|
-
|
|
|
|
(78
|
)
|
|
|
(1,011
|
)
|
Non-GAAP general and administrative
|
|
$
|
5,754
|
|
|
$
|
5,110
|
|
|
$
|
15,959
|
|
|
$
|
13,644
|
|
Non-GAAP general and administrative as a percentage of total
revenue
|
|
|
9.0
|
%
|
|
|
9.6
|
%
|
|
|
8.5
|
%
|
|
|
9.0
|
%
|
|
|
|
|
|
|
|
8x8, Inc. CONDENSED CONSOLIDATED BALANCE SHEETS (In
thousands, unaudited)
|
|
|
|
|
|
|
|
|
|
|
December 31, 2016
|
|
|
March 31, 2016
|
ASSETS
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
33,457
|
|
$
|
33,576
|
Short-term investments
|
|
|
139,194
|
|
|
129,274
|
Accounts receivable, net
|
|
|
13,069
|
|
|
11,070
|
Inventory
|
|
|
572
|
|
|
520
|
Deferred tax assets
|
|
|
-
|
|
|
5,382
|
Other current assets
|
|
|
6,191
|
|
|
6,078
|
Total current assets
|
|
|
192,483
|
|
|
185,900
|
Property and equipment, net
|
|
|
15,224
|
|
|
12,375
|
Intangible assets, net
|
|
|
16,726
|
|
|
21,464
|
Goodwill
|
|
|
44,327
|
|
|
47,420
|
Non-current deferred tax asset
|
|
|
48,443
|
|
|
43,189
|
Other assets
|
|
|
6,645
|
|
|
3,104
|
Total assets
|
|
$
|
323,848
|
|
$
|
313,452
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
12,537
|
|
$
|
10,954
|
Accrued compensation
|
|
|
12,022
|
|
|
10,063
|
Accrued warranty
|
|
|
290
|
|
|
326
|
Accrued outside commissions
|
|
|
2,843
|
|
|
2,186
|
Deferred revenue
|
|
|
2,089
|
|
|
1,925
|
Other accrued liabilities
|
|
|
8,710
|
|
|
9,280
|
Total current liabilities
|
|
|
38,491
|
|
|
34,734
|
|
|
|
|
|
|
|
Other liabilities
|
|
|
3,082
|
|
|
3,412
|
Total liabilities
|
|
|
41,573
|
|
|
38,146
|
|
|
|
|
|
|
|
Total stockholders' equity
|
|
|
282,275
|
|
|
275,306
|
Total liabilities and stockholders' equity
|
|
$
|
323,848
|
|
$
|
313,452
|
|
|
|
|
|
|
|
8x8, Inc. CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS (In thousands, unaudited)
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended December 31,
|
|
|
|
2016
|
|
|
2015
|
Cash flows from operating activities:
|
|
|
|
|
|
|
Net loss
|
|
$
|
(1,826
|
)
|
|
$
|
(4,044
|
)
|
Adjustments to reconcile net loss to net cash provided by
operating activities:
|
|
|
|
|
|
|
Depreciation
|
|
|
4,463
|
|
|
|
3,598
|
|
Amortization of intangible assets
|
|
|
2,741
|
|
|
|
2,565
|
|
Impairment of long-lived assets
|
|
|
15
|
|
|
|
640
|
|
Amortization of capitalized software
|
|
|
442
|
|
|
|
456
|
|
Net accretion of discount and amortization of premium on
marketable securities
|
|
|
228
|
|
|
|
584
|
|
Stock-based compensation expense
|
|
|
15,630
|
|
|
|
11,202
|
|
Deferred income tax (benefit) provision
|
|
|
(104
|
)
|
|
|
361
|
|
Other
|
|
|
574
|
|
|
|
467
|
|
Changes in assets and liabilities:
|
|
|
|
|
|
|
Accounts receivable, net
|
|
|
(3,267
|
)
|
|
|
(3,138
|
)
|
Inventory
|
|
|
(87
|
)
|
|
|
(122
|
)
|
Other current and noncurrent assets
|
|
|
(1,065
|
)
|
|
|
(1,699
|
)
|
Deferred cost of goods sold
|
|
|
(86
|
)
|
|
|
(156
|
)
|
Accounts payable
|
|
|
1,732
|
|
|
|
418
|
|
Accrued compensation
|
|
|
2,146
|
|
|
|
3,351
|
|
Accrued warranty
|
|
|
(36
|
)
|
|
|
(17
|
)
|
Accrued taxes
|
|
|
(21
|
)
|
|
|
1,837
|
|
Deferred revenue
|
|
|
168
|
|
|
|
(427
|
)
|
Accrued outside commissions
|
|
|
657
|
|
|
|
256
|
|
Other current and noncurrent liabilities
|
|
|
(84
|
)
|
|
|
(748
|
)
|
Net cash provided by operating activities
|
|
|
22,220
|
|
|
|
15,384
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
Purchases of property and equipment
|
|
|
(6,509
|
)
|
|
|
(3,295
|
)
|
Purchase of businesses, net of cash acquired
|
|
|
-
|
|
|
|
(23,434
|
)
|
Cost of capitalized software
|
|
|
(3,939
|
)
|
|
|
(1,275
|
)
|
Proceeds from maturity of investments
|
|
|
47,625
|
|
|
|
38,451
|
|
Sales of investments - available for sale
|
|
|
34,821
|
|
|
|
43,934
|
|
Purchase of investments - available for sale
|
|
|
(92,647
|
)
|
|
|
(90,025
|
)
|
Net cash used in investing activities
|
|
|
(20,649
|
)
|
|
|
(35,644
|
)
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
Capital lease payments
|
|
|
(460
|
)
|
|
|
(321
|
)
|
Payment of contingent consideration
|
|
|
(300
|
)
|
|
|
(200
|
)
|
Repurchase of common stock
|
|
|
(2,828
|
)
|
|
|
(11,628
|
)
|
Proceeds from issuance of common stock under employee stock plans
|
|
|
2,694
|
|
|
|
2,848
|
|
Net cash used in financing activities
|
|
|
(894
|
)
|
|
|
(9,301
|
)
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash
|
|
|
(796
|
)
|
|
|
317
|
|
Net decrease in cash and cash equivalents
|
|
|
(119
|
)
|
|
|
(29,244
|
)
|
|
|
|
|
|
|
|
Cash and cash equivalents, beginning of period
|
|
|
33,576
|
|
|
|
53,110
|
|
Cash and cash equivalents, end of period
|
|
$
|
33,457
|
|
|
$
|
23,866
|
|
|
|
|
|
|
|
|
|
|
|
|
8x8, Inc. Selected Operating Statistics
|
|
|
|
Three Months Ended
|
|
|
Dec. 31, 2015
|
|
Mar. 31, 2016
|
|
Jun. 30, 2016
|
|
Sept. 30, 2016
|
|
Dec. 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
Business customer average monthly service revenue per customer (1)
|
|
$
|
369
|
|
$
|
385
|
|
$
|
399
|
|
$
|
409
|
|
$
|
414
|
Monthly business service revenue churn (2)(3)
|
|
|
1.2%
|
|
|
0.4%
|
|
|
0.5%
|
|
|
0.6%
|
|
|
1.0%
|
|
|
|
|
|
|
|
|
|
|
|
Overall service margin
|
|
|
80%
|
|
|
81%
|
|
|
81%
|
|
|
81%
|
|
|
83%
|
Overall product margin
|
|
|
-21%
|
|
|
-18%
|
|
|
-16%
|
|
|
-6%
|
|
|
-20%
|
Overall gross margin
|
|
|
72%
|
|
|
72%
|
|
|
74%
|
|
|
74%
|
|
|
77%
|
|
|
|
|
|
|
|
|
|
|
|
(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.
|
(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.
|
(3) Excludes DXI business customer service revenue churn for all
periods presented.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8x8, Inc. RECONCILIATION OF NET INCOME (LOSS) TO
NON-GAAP NET INCOME AND NON-GAAP NET INCOME PER SHARE (In
thousands, except per share amounts; unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
|
Nine Months Ended December 31,
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
Net loss
|
|
$
|
(1,325
|
)
|
|
$
|
(1,680
|
)
|
|
$
|
(1,826
|
)
|
|
$
|
(4,044
|
)
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash tax adjustments
|
|
|
49
|
|
|
|
(326
|
)
|
|
|
(104
|
)
|
|
|
361
|
|
Amortization of acquired intangible assets
|
|
|
873
|
|
|
|
1,002
|
|
|
|
2,741
|
|
|
|
2,565
|
|
Stock-based compensation expense
|
|
|
6,071
|
|
|
|
4,663
|
|
|
|
15,630
|
|
|
|
11,202
|
|
Acquisition related expenses
|
|
|
78
|
|
|
|
-
|
|
|
|
78
|
|
|
|
1,043
|
|
Impairment of long-lived assets
|
|
|
15
|
|
|
|
640
|
|
|
|
15
|
|
|
|
640
|
|
Non-GAAP net income
|
|
$
|
5,761
|
|
|
$
|
4,299
|
|
|
$
|
16,534
|
|
|
$
|
11,767
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation between GAAP and non-GAAP weighted average shares
used in computing basic and diluted net loss per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator for basic calculation
|
|
|
90,774
|
|
|
|
88,289
|
|
|
|
90,062
|
|
|
|
88,812
|
|
Effect of dilutive securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee stock options
|
|
|
1,792
|
|
|
|
1,614
|
|
|
|
1,702
|
|
|
|
1,595
|
|
Employee restricted purchase rights
|
|
|
1,407
|
|
|
|
1,303
|
|
|
|
1,723
|
|
|
|
1,048
|
|
Employee stock plan purchases
|
|
|
9
|
|
|
|
14
|
|
|
|
8
|
|
|
|
10
|
|
Denominator for diluted calculation
|
|
|
93,982
|
|
|
|
91,220
|
|
|
|
93,495
|
|
|
|
91,465
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net loss per share - Diluted
|
|
$
|
(0.01
|
)
|
|
$
|
(0.02
|
)
|
|
$
|
(0.02
|
)
|
|
$
|
(0.05
|
)
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash tax adjustments
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
0.01
|
|
Amortization of acquired intangible assets
|
|
|
0.01
|
|
|
|
0.01
|
|
|
|
0.03
|
|
|
|
0.03
|
|
Stock-based compensation expense
|
|
|
0.06
|
|
|
|
0.05
|
|
|
|
0.17
|
|
|
|
0.12
|
|
Acquisition related expenses
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
0.01
|
|
Impairment of long-lived assets
|
|
|
-
|
|
|
|
0.01
|
|
|
|
-
|
|
|
|
0.01
|
|
Non-GAAP net income per share - Diluted
|
|
$
|
0.06
|
|
|
$
|
0.05
|
|
|
$
|
0.18
|
|
|
$
|
0.13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income or loss as a percentage of total revenue
|
|
|
-2
|
%
|
|
|
-3
|
%
|
|
|
-1
|
%
|
|
|
-3
|
%
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash tax adjustments
|
|
|
0
|
%
|
|
|
-1
|
%
|
|
|
0
|
%
|
|
|
0
|
%
|
Amortization of acquired intangible assets
|
|
|
1
|
%
|
|
|
2
|
%
|
|
|
2
|
%
|
|
|
2
|
%
|
Stock-based compensation expense
|
|
|
10
|
%
|
|
|
9
|
%
|
|
|
8
|
%
|
|
|
7
|
%
|
Acquisition related expenses
|
|
|
0
|
%
|
|
|
0
|
%
|
|
|
0
|
%
|
|
|
1
|
%
|
Impairment of long-lived assets
|
|
|
0
|
%
|
|
|
1
|
%
|
|
|
0
|
%
|
|
|
1
|
%
|
Non-GAAP net income as a percentage of total revenue
|
|
|
9
|
%
|
|
|
8
|
%
|
|
|
9
|
%
|
|
|
8
|
%
|
|
8x8, Inc. RECONCILIATION OF GAAP GROSS MARGIN TO
NON-GAAP GROSS MARGIN (In thousands,
unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
|
Nine Months Ended December 31,
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
GAAP gross margin
|
|
$
|
48,911
|
|
$
|
38,368
|
|
$
|
139,776
|
|
$
|
110,579
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of acquired intangible assets
|
|
|
543
|
|
|
618
|
|
|
1,697
|
|
|
1,451
|
Impairment of long-lived assets
|
|
|
-
|
|
|
440
|
|
|
-
|
|
|
440
|
Stock-based compensation expense
|
|
|
538
|
|
|
346
|
|
|
1,338
|
|
|
828
|
Non-GAAP gross margin
|
|
$
|
49,992
|
|
$
|
39,772
|
|
$
|
142,811
|
|
$
|
113,298
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP gross margin as a percentage of total revenue
|
|
|
77%
|
|
|
72%
|
|
|
75%
|
|
|
73%
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of acquired intangible assets
|
|
|
1%
|
|
|
1%
|
|
|
1%
|
|
|
1%
|
Impairment of long-lived assets
|
|
|
0%
|
|
|
1%
|
|
|
0%
|
|
|
0%
|
Stock-based compensation expense
|
|
|
1%
|
|
|
1%
|
|
|
0%
|
|
|
1%
|
Non-GAAP gross margin as a percentage of total
|
|
|
|
|
|
|
|
|
|
|
|
|
revenue
|
|
|
79%
|
|
|
75%
|
|
|
76%
|
|
|
75%
|
|
8x8, Inc. RECONCILIATION OF GAAP SERVICE MARGIN TO
NON-GAAP SERVICE MARGIN (In thousands,
unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
|
Nine Months Ended December 31,
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
GAAP service margin
|
|
$
|
49,624
|
|
$
|
39,235
|
|
$
|
141,565
|
|
$
|
112,709
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of acquired intangible assets
|
|
|
543
|
|
|
618
|
|
|
1,697
|
|
|
1,451
|
Impairment of long-lived assets
|
|
|
-
|
|
|
440
|
|
|
-
|
|
|
440
|
Stock-based compensation expense
|
|
|
538
|
|
|
346
|
|
|
1,338
|
|
|
828
|
Non-GAAP service margin
|
|
$
|
50,705
|
|
$
|
40,639
|
|
$
|
144,600
|
|
$
|
115,428
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP service margin as a percentage of service revenue
|
|
|
83%
|
|
|
80%
|
|
|
82%
|
|
|
80%
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of acquired intangible assets
|
|
|
1%
|
|
|
1%
|
|
|
1%
|
|
|
1%
|
Impairment of long-lived assets
|
|
|
0%
|
|
|
1%
|
|
|
0%
|
|
|
0%
|
Stock-based compensation expense
|
|
|
0%
|
|
|
1%
|
|
|
1%
|
|
|
1%
|
Non-GAAP service margin as a percentage of service
|
|
|
|
|
|
|
|
|
|
|
|
|
revenue
|
|
|
84%
|
|
|
83%
|
|
|
84%
|
|
|
82%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8x8, Inc. RECONCILIATION OF GAAP INCOME (LOSS) FROM
OPERATIONS TO NON-GAAP INCOME FROM OPERATIONS (In
thousands, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
|
Nine Months Ended December 31,
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
GAAP loss from operations
|
|
$
|
(1,703
|
)
|
|
$
|
(2,509
|
)
|
|
$
|
(2,983
|
)
|
|
$
|
(4,103
|
)
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of acquired intangible assets
|
|
|
873
|
|
|
|
1,002
|
|
|
|
2,741
|
|
|
|
2,565
|
|
Stock-based compensation expense
|
|
|
6,071
|
|
|
|
4,663
|
|
|
|
15,630
|
|
|
|
11,202
|
|
Acquisition related expenses
|
|
|
78
|
|
|
|
-
|
|
|
|
78
|
|
|
|
1,043
|
|
Impairment of long-lived assets
|
|
|
15
|
|
|
|
640
|
|
|
|
15
|
|
|
|
640
|
|
Non-GAAP income from operations
|
|
$
|
5,334
|
|
|
$
|
3,796
|
|
|
$
|
15,481
|
|
|
$
|
11,347
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP loss from operations as a percentage of total revenue
|
|
|
-3
|
%
|
|
|
-5
|
%
|
|
|
-2
|
%
|
|
|
-3
|
%
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of acquired intangible assets
|
|
|
1
|
%
|
|
|
2
|
%
|
|
|
2
|
%
|
|
|
2
|
%
|
Stock-based compensation expense
|
|
|
10
|
%
|
|
|
9
|
%
|
|
|
8
|
%
|
|
|
7
|
%
|
Acquisition related expenses
|
|
|
0
|
%
|
|
|
0
|
%
|
|
|
0
|
%
|
|
|
1
|
%
|
Impairment of long-lived assets
|
|
|
0
|
%
|
|
|
1
|
%
|
|
|
0
|
%
|
|
|
0
|
%
|
Non-GAAP income from operations as a percentage of total revenue
|
|
|
8
|
%
|
|
|
7
|
%
|
|
|
8
|
%
|
|
|
7
|
%
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20170125006165/en/
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