[October 26, 2017] |
|
8x8, Inc. Announces Second Quarter Fiscal 2018 Financial Results
8x8, Inc. (NASDAQ:EGHT), the leading provider of truly unified
communications, today reported financial results for the second quarter
of fiscal 2018 ended September 30, 2017.
"8x8's financial results for the second quarter of fiscal 2018
demonstrate the continued strength of our core business and the impact
of our competitive differentiation in the enterprise segment,
illustrated by the 13 large enterprise deals, including one with a total
contract value of approximately $7 million, closed during the quarter.
Our technology ownership, integrated services platform, unparalleled
quality of service and global service delivery capabilities are the
primary reasons 8x8 continues to be a leading choice by a growing number
of enterprise customers," said 8x8 CEO Vik Verma. "With our compelling
suite of services and world class sales and marketing leadership teams
now in place, 8x8 is well poised to accelerate our market position and
revenue growth in fiscal 2019 and beyond."
Second Quarter Financial Results:
-
Service revenue increased 18% year-over-year (YoY) to $68.1 million.
-
Adjusting for the exclusion of the discontinued, non-core DXI
business segment, service revenue increased 19%.
-
Service revenue from mid-market and enterprise customers increased 28%
YoY and represented 58% of the Company's total service revenue.
-
On an adjusted basis as above, service revenue from mid-market and
enterprise customers increased 28%.
-
Total revenue increased 15% YoY to $72.5 million.
-
On an adjusted basis as above, total revenue increased 16%.
-
GAAP gross margin was 75%, compared with 74% in the same period last
year.
-
GAAP service margin was 81%, compared with 81% in the same period
last year.
-
Non-GAAP gross margin was 77%, compared with 75% in the same period
last year.
-
Non-GAAP service margin was 83%, compared with 83% in the same
period last year.
-
GAAP net loss was $546K, ($0.01) per diluted share.
-
Non-GAAP net income was $2.7 million, 4% of revenue, or $0.03 per
diluted share.
-
Non-GAAP pre-tax income was $4.2 million, 6% of revenue, or $0.04
per diluted share.
-
Cash generated from operating activities was $5.0 million.
-
Repurchased approximately 1.1 million shares of common stock at an
average price of $13.23 per share, for a total of $14.1 million, under
the Company's approved stock buyback program.
-
Cash, cash equivalents and investments were $167 million at September
30, 2017, compared with $170 million at September 30, 2016.
Additional Business Metrics and Highlights:
-
Grew second quarter fiscal 2018 average monthly service revenue (ARPU)
per mid-market and enterprise customer to $4,697, compared with $4,351
in the same period last year; grew overall ARPU to $442, compared with
$409 in the same period last year.
-
Achieved gross monthly business service revenue churn on an organic
basis of 0.4%, compared with 0.6% in the same period a year ago.
-
Named a Leader for the sixth consecutive year in the Gartner 2017
Unified Communications as a Service (UCaaS) Magic Quadrant.
-
Named a Challenger for the second year in the Gartner 2017 Contact
Center as a Service (CCaaS) Magic Quadrant.
-
Announced several key strategic senior leadership appointments to both
marketing and sales organizations to align with newly established
Small Business & eCommerce and Mid-market/Enterprise business units.
-
Launched new 8x8 Virtual Office Editions suite of services including
Virtual Office X8, the industry's most unified offering that weaves
together communications, collaboration and contact center capabilities
in a single, cost-effective, truly unified solution.
-
Awarded seven new communications patents for a total of 144 patents
awarded to date.
Financial Outlook
Mr. Verma added, "Given our recent realignment of the business and new
additions to the sales and marketing executive leadership team, we feel
it is prudent to reset the bar on our revenue expectations for fiscal
2018 while maintaining our commitment to achieving 25% service revenue
growth exiting fiscal 2019."
For the full fiscal 2018 year, 8x8 has revised its revenue outlook and
maintains its previous non-GAAP pre-tax income guidance:
Revenue:
-
Total revenue in the $292 million to $294 million range, representing
an approximately 15% to 16% year-over-year increase.
-
Service revenue in the $275 million to $277 million range,
representing an approximately 17% year-over-year increase.
-
Adjusting for the discontinued revenue from the non-core, voice
message broadcasting segment of our DXI operations, service revenue
growth in the range of 17% to 18% and total revenue growth in the
range of 16% to 17%.
Non-GAAP Pre-tax Income:
-
Non-GAAP pre-tax income of approximately $9 million, or 3% of revenue.
-
The Company's estimated non-GAAP effective tax rate is expected to be
approximately 36%.
-
The Company's cash taxes are expected to be less than $1 million for
the full year.
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,
acquisition and other expenses are difficult to predict as they depend
on future events. 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.
8x8 also announced that on October 24, 2017, it awarded restricted stock
units (RSUs) to acquire an aggregate of 306,415 shares of the Company's
common stock to 42 new employees under the 8x8, Inc. 2017 New Employee
Inducement Incentive Plan, adopted by the Board of Directors on the same
date. In addition, two newly hired senior vice presidents received
performance share units (PSUs) representing the right to receive, at
target, up to an aggregate of 82,307 shares of common stock (based on
the performance of 8x8's common stock relative to the Russell 2000
during specified measurement periods). These equity awards were approved
unanimously by the independent directors of the Board of Directors, and
each award was granted as an inducement material to the recipient's
entering into employment with 8x8, in accordance with Nasdaq Market
Place Rule 5635(c)(4). Each of the awards is subject to vesting pursuant
to the terms of the plan and the recipient's award agreement, including
a requirement that the recipient be employed through each vesting date.
Other terms of the RSU and PSU awards are substantially the same as
those applicable to RSUs and PSUs previously granted by the Company in
the current fiscal year.
Conference Call Information:
Management will host a conference call to discuss these results and
other matters related to the Company's business today, October 26, 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 # 93371947)
|
|
(404) 537-3406, International (Conference ID # 93371947)
|
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 November 2, 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. (EGHT), the
leading provider of truly unified cloud communications, powers over a
million business users worldwide. 8x8's suite of products seamlessly
weaves together unified cloud communications, messaging, meeting and
contact center solutions so today's modern organization can communicate
at the speed of employee and customer expectations. 8x8 uniquely
combines one unified management platform, one seamless communications
experience for employees and customers, and one real-time data analytics
platform for constant learning and improvement. For additional
information, visit www.8x8.com, 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 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.
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.
In addition, this release may provide certain financial measures that
have been adjusted to exclude the impact of the discontinuation of a
non-core, legacy DXI business (based on a voice message broadcasting
service), as first reported in the third quarter of the Company's 2017
fiscal year. To adjust for the discontinued business, revenue figures
for each period being compared exclude all revenue attributable to the
discontinued business. None of the financial measures presented in this
release reflect adjustments for comparison on a constant currency
basis. Management concluded that the impact of currency fluctuations
between current and comparative prior periods was not material for any
of the financial results presented in this release.
Management has used these adjusted financial measures internally in
evaluating the financial performance of the Company's business and
believes they provide investors an additional, useful assessment of the
Company's growth for these periods.
Non-GAAP Pre-Tax Income, Non-GAAP Net Income
and Non-GAAP Net Income Per Share
The Company has defined non-GAAP net income as net income for GAAP plus
amortization of acquired intangible assets, stock-based compensation,
other income and expenses, and the provision for or benefit from income
taxes. Amortization of acquired intangible assets is excluded because it
is 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, 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 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 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.
Non-GAAP net income before tax is then reduced by a projected annual
non-GAAP effective tax rate in order to provide better consistency
across the interim financial reporting periods. The Company's non-GAAP
effective tax rate for the first and second quarters of fiscal 2018 was
36%. The projected annual effective tax rate may fluctuate over the
interim periods for a variety of reasons, including significant changes
in the geographic earnings mix, changes in the estimates of tax credits
and deductions or changes in tax law in major jurisdictions where the
Company operates. Management will evaluate and assess the
appropriateness of this rate periodically, considering the impacts of
significant events and changes in the operations of the Company.
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 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.
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 the Company's efforts to target mid-market and larger
distributed enterprises;
-
changes in the competitive dynamics of the markets in which the
Company competes;
-
the timing and extent of improvements in operating results from senior
management changes and increased spending for marketing, sales and R&D
-
customer cancellations and rate of churn;
-
the Company's ability to scale its business;
-
the Company's ability to execute its global strategy;
-
the Company's reliance on infrastructure of third-party network
services providers;
-
risk of failure in the Company's physical infrastructure;
-
risk of failure of the software used to provide the Company's services;
-
the Company's ability to maintain the compatibility of its software
with third-party applications and mobile platforms;
-
continued compliance with industry standards and regulatory
requirements;
-
risks relating to the Company's strategies and objectives for future
operations, including the execution of integration plans and
realization of the expected benefits of its acquisitions;
-
the amount and timing of costs associated with recruiting, training
and integrating new employees;
-
introduction and adoption of the Company's 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 the Company's services are provided; and
-
general economic conditions that could adversely affect the Company's
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 September 30,
|
|
|
Six Months Ended September 30,
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
Service revenue
|
|
$
|
68,123
|
|
$
|
57,717
|
|
$
|
133,214
|
|
$
|
113,013
|
Product revenue
|
|
|
4,360
|
|
|
5,466
|
|
|
8,367
|
|
|
10,211
|
Total revenue
|
|
|
72,483
|
|
|
63,183
|
|
|
141,581
|
|
|
123,224
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of service revenue
|
|
|
12,757
|
|
|
10,837
|
|
|
24,419
|
|
|
21,072
|
Cost of product revenue
|
|
|
5,098
|
|
|
5,782
|
|
|
9,982
|
|
|
11,287
|
Research and development
|
|
|
8,311
|
|
|
6,505
|
|
|
16,254
|
|
|
13,215
|
Sales and marketing
|
|
|
41,163
|
|
|
33,691
|
|
|
82,273
|
|
|
65,382
|
General and administrative
|
|
|
9,616
|
|
|
6,747
|
|
|
18,572
|
|
|
13,548
|
Total operating expenses
|
|
|
76,945
|
|
|
63,562
|
|
|
151,500
|
|
|
124,504
|
Loss from operations
|
|
|
(4,462)
|
|
|
(379)
|
|
|
(9,919)
|
|
|
(1,280)
|
Other income, net
|
|
|
463
|
|
|
391
|
|
|
2,515
|
|
|
801
|
Income (loss) from operations before provision (benefit) for income
taxes
|
|
|
(3,999)
|
|
|
12
|
|
|
(7,404)
|
|
|
(479)
|
Provision (benefit) for income taxes
|
|
|
(3,453)
|
|
|
(15)
|
|
|
(4,689)
|
|
|
22
|
Net income (loss)
|
|
$
|
(546)
|
|
$
|
27
|
|
$
|
(2,715)
|
|
$
|
(501)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.01)
|
|
$
|
0.00
|
|
$
|
(0.03)
|
|
$
|
(0.01)
|
Diluted
|
|
$
|
(0.01)
|
|
$
|
0.00
|
|
$
|
(0.03)
|
|
$
|
(0.01)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
91,689
|
|
|
89,987
|
|
|
91,667
|
|
|
89,171
|
Diluted
|
|
|
91,689
|
|
|
93,447
|
|
|
91,667
|
|
|
89,171
|
|
|
|
|
|
|
|
8x8, Inc. CONDENSED CONSOLIDATED BALANCE SHEETS (In
thousands, unaudited)
|
|
|
|
|
|
|
|
|
|
|
September 30, 2017
|
|
|
March 31, 2017
|
ASSETS
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
34,570
|
|
$
|
41,030
|
Short-term investments
|
|
|
132,480
|
|
|
133,959
|
Accounts receivable, net
|
|
|
15,179
|
|
|
14,264
|
Other current assets
|
|
|
11,986
|
|
|
8,101
|
Total current assets
|
|
|
194,215
|
|
|
197,354
|
Property and equipment, net
|
|
|
29,600
|
|
|
24,061
|
Intangible assets, net
|
|
|
14,957
|
|
|
17,038
|
Goodwill
|
|
|
47,519
|
|
|
46,136
|
Non-current deferred tax asset
|
|
|
71,135
|
|
|
48,859
|
Other assets
|
|
|
417
|
|
|
407
|
Total assets
|
|
$
|
357,843
|
|
$
|
333,855
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
20,123
|
|
$
|
18,631
|
Accrued compensation
|
|
|
15,783
|
|
|
11,508
|
Accrued taxes
|
|
|
5,286
|
|
|
5,354
|
Deferred revenue
|
|
|
2,521
|
|
|
2,144
|
Other accrued liabilities
|
|
|
5,626
|
|
|
5,707
|
Total current liabilities
|
|
|
49,339
|
|
|
43,344
|
|
|
|
|
|
|
|
Other liabilities
|
|
|
1,564
|
|
|
1,910
|
Total liabilities
|
|
|
50,903
|
|
|
45,254
|
|
|
|
|
|
|
|
Total stockholders' equity
|
|
|
306,940
|
|
|
288,601
|
Total liabilities and stockholders' equity
|
|
$
|
357,843
|
|
$
|
333,855
|
|
|
|
|
|
|
|
8x8, Inc. CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS (In thousands, unaudited)
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended September 30,
|
|
|
|
2017
|
|
|
2016
|
Cash flows from operating activities:
|
|
|
|
|
|
|
Net loss
|
|
$
|
(2,715
|
)
|
|
$
|
(501
|
)
|
Adjustments to reconcile net loss to net cash provided by
operating activities:
|
|
|
|
|
|
|
Depreciation
|
|
|
3,962
|
|
|
|
2,979
|
|
Amortization of intangible assets
|
|
|
2,815
|
|
|
|
1,868
|
|
Amortization of capitalized software
|
|
|
581
|
|
|
|
296
|
|
Stock-based compensation expense
|
|
|
13,008
|
|
|
|
9,559
|
|
Deferred income tax benefit
|
|
|
(4,862
|
)
|
|
|
(153
|
)
|
Gain on escrow settlement
|
|
|
(1,393
|
)
|
|
|
-
|
|
Other
|
|
|
761
|
|
|
|
499
|
|
Changes in assets and liabilities:
|
|
|
|
|
|
|
Accounts receivable, net
|
|
|
(1,183
|
)
|
|
|
(1,859
|
)
|
Other current and noncurrent assets
|
|
|
(3,485
|
)
|
|
|
(2,297
|
)
|
Accounts payable and accruals
|
|
|
3,399
|
|
|
|
2,666
|
|
Deferred revenue
|
|
|
286
|
|
|
|
367
|
|
Net cash provided by operating activities
|
|
|
11,174
|
|
|
|
13,424
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
Purchases of property and equipment
|
|
|
(4,021
|
)
|
|
|
(5,230
|
)
|
Gain on escrow settlement
|
|
|
1,393
|
|
|
|
-
|
|
Cost of capitalized software
|
|
|
(5,203
|
)
|
|
|
(2,443
|
)
|
Proceeds from maturity of investments
|
|
|
(57,561
|
)
|
|
|
29,225
|
|
Sales of investments - available for sale
|
|
|
13,254
|
|
|
|
26,863
|
|
Purchase of investments - available for sale
|
|
|
45,850
|
|
|
|
(64,517
|
)
|
Net cash used in investing activities
|
|
|
(6,288
|
)
|
|
|
(16,102
|
)
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
Capital lease payments
|
|
|
(616
|
)
|
|
|
(333
|
)
|
Payment of contingent consideration
|
|
|
(150
|
)
|
|
|
(200
|
)
|
Repurchase and tax-related withholding of common stock
|
|
|
(13,842
|
)
|
|
|
(842
|
)
|
Proceeds from issuance of common stock under employee stock plans
|
|
|
2,788
|
|
|
|
2,600
|
|
Net cash (used in) provided by financing activities
|
|
|
(11,820
|
)
|
|
|
1,225
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash
|
|
|
474
|
|
|
|
(29
|
)
|
Net decrease in cash and cash equivalents
|
|
|
(6,460
|
)
|
|
|
(1,482
|
)
|
|
|
|
|
|
|
|
Cash and cash equivalents, beginning of period
|
|
|
41,030
|
|
|
|
33,576
|
|
Cash and cash equivalents, end of period
|
|
$
|
34,570
|
|
|
$
|
32,094
|
|
|
8x8, Inc. RECONCILIATION OF GAAP TO NON-GAAP
FINANCIAL MEASURES (In thousands, except per share
amounts; unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, 2017
|
|
|
|
Three Months Ended September 30, 2016
|
|
|
|
Six Months Ended September 30, 2017
|
|
|
|
Six Months Ended September 30, 2016
|
GAAP cost of service revenue
|
|
$
|
12,757
|
|
|
|
|
|
$
|
10,837
|
|
|
|
|
|
$
|
24,419
|
|
|
|
|
|
$
|
21,072
|
|
|
|
Amortization of acquired intangible assets
|
|
|
(710
|
)
|
|
|
|
|
|
(561
|
)
|
|
|
|
|
|
(1,507
|
)
|
|
|
|
|
|
(1,154
|
)
|
|
|
Stock-based compensation expense
|
|
|
(473
|
)
|
|
|
|
|
|
(440
|
)
|
|
|
|
|
|
(864
|
)
|
|
|
|
|
|
(800
|
)
|
|
|
Non-GAAP cost of service revenue
|
|
$
|
11,574
|
|
|
|
|
|
$
|
9,836
|
|
|
|
|
|
$
|
22,048
|
|
|
|
|
|
$
|
19,118
|
|
|
|
Non-GAAP service margin (as a percentage of service revenue)
|
|
$
|
56,549
|
|
|
83.0
|
%
|
|
|
$
|
47,881
|
|
|
83.0
|
%
|
|
|
$
|
111,166
|
|
|
83.4
|
%
|
|
|
$
|
93,895
|
|
|
83.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP and Non-GAAP cost of product revenue
|
|
$
|
5,098
|
|
|
|
|
|
$
|
5,782
|
|
|
|
|
|
$
|
9,982
|
|
|
|
|
|
$
|
11,287
|
|
|
|
Non-GAAP product margin (as a percentage of product revenue)
|
|
$
|
(738
|
)
|
|
-16.9
|
%
|
|
|
$
|
(316
|
)
|
|
-5.8
|
%
|
|
|
$
|
(1,615
|
)
|
|
-19.3
|
%
|
|
|
$
|
(1,076
|
)
|
|
-10.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP gross margin (as a percentage of revenue)
|
|
$
|
55,811
|
|
|
77.0
|
%
|
|
|
$
|
47,565
|
|
|
75.3
|
%
|
|
|
$
|
109,551
|
|
|
77.4
|
%
|
|
|
$
|
92,819
|
|
|
75.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP research and development
|
|
$
|
8,311
|
|
|
|
|
|
$
|
6,505
|
|
|
|
|
|
$
|
16,254
|
|
|
|
|
|
$
|
13,215
|
|
|
|
Stock-based compensation expense
|
|
|
(1,314
|
)
|
|
|
|
|
|
(863
|
)
|
|
|
|
|
|
(2,651
|
)
|
|
|
|
|
|
(1,750
|
)
|
|
|
Non-GAAP research and development (as a percentage of revenue)
|
|
$
|
6,997
|
|
|
9.7
|
%
|
|
|
$
|
5,642
|
|
|
8.9
|
%
|
|
|
$
|
13,603
|
|
|
9.6
|
%
|
|
|
$
|
11,465
|
|
|
9.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP sales and marketing
|
|
$
|
41,163
|
|
|
|
|
|
$
|
33,691
|
|
|
|
|
|
$
|
82,273
|
|
|
|
|
|
$
|
65,382
|
|
|
|
Amortization of acquired intangible assets
|
|
|
(583
|
)
|
|
|
|
|
|
(347
|
)
|
|
|
|
|
|
(1,308
|
)
|
|
|
|
|
|
(714
|
)
|
|
|
Stock-based compensation expense
|
|
|
(2,568
|
)
|
|
|
|
|
|
(1,751
|
)
|
|
|
|
|
|
(5,215
|
)
|
|
|
|
|
|
(3,666
|
)
|
|
|
Non-GAAP sales and marketing (as a percentage of revenue)
|
|
$
|
38,012
|
|
|
52.4
|
%
|
|
|
$
|
31,593
|
|
|
50.0
|
%
|
|
|
$
|
75,750
|
|
|
53.5
|
%
|
|
|
$
|
61,002
|
|
|
49.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP general and administrative
|
|
$
|
9,616
|
|
|
|
|
|
$
|
6,747
|
|
|
|
|
|
$
|
18,572
|
|
|
|
|
|
$
|
13,548
|
|
|
|
Stock-based compensation expense
|
|
|
(2,302
|
)
|
|
|
|
|
|
(1,454
|
)
|
|
|
|
|
|
(4,278
|
)
|
|
|
|
|
|
(3,343
|
)
|
|
|
Non-recurring items
|
|
|
(250
|
)
|
|
|
|
|
|
-
|
|
|
|
|
|
|
(510
|
)
|
|
|
|
|
|
-
|
|
|
|
Non-GAAP general and administrative (as a percentage of revenue)
|
|
$
|
7,064
|
|
|
9.7
|
%
|
|
|
$
|
5,293
|
|
|
8.4
|
%
|
|
|
$
|
13,784
|
|
|
9.7
|
%
|
|
|
$
|
10,205
|
|
|
8.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income (loss)
|
|
$
|
(546
|
)
|
|
|
|
|
$
|
27
|
|
|
|
|
|
$
|
(2,715
|
)
|
|
|
|
|
$
|
(501
|
)
|
|
|
Amortization of acquired intangible assets
|
|
|
1,293
|
|
|
|
|
|
|
908
|
|
|
|
|
|
|
2,815
|
|
|
|
|
|
|
1,868
|
|
|
|
Stock-based compensation expense
|
|
|
6,657
|
|
|
|
|
|
|
4,508
|
|
|
|
|
|
|
13,008
|
|
|
|
|
|
|
9,559
|
|
|
|
Non-recurring items in operating expenses
|
|
|
250
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
510
|
|
|
|
|
|
|
-
|
|
|
|
Non-recurring items in other income (expenses), net
|
|
|
-
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
(1,393
|
)
|
|
|
|
|
|
-
|
|
|
|
Provision (benefit) for income taxes (1)
|
|
|
(3,453
|
)
|
|
|
|
|
|
(15
|
)
|
|
|
|
|
|
(4,689
|
)
|
|
|
|
|
|
22
|
|
|
|
Non-GAAP net income before taxes (as a percentage of revenue)
|
|
$
|
4,201
|
|
|
5.8
|
%
|
|
|
$
|
5,428
|
|
|
8.6
|
%
|
|
|
$
|
7,536
|
|
|
5.3
|
%
|
|
|
$
|
10,948
|
|
|
8.9
|
%
|
Non-GAAP tax expense (2)
|
|
|
(1,512
|
)
|
|
|
|
|
|
(2,063
|
)
|
|
|
|
|
|
(2,713
|
)
|
|
|
|
|
|
(4,160
|
)
|
|
|
Non-GAAP net income after taxes (as a percentage of revenue)
|
|
$
|
2,689
|
|
|
3.7
|
%
|
|
|
$
|
3,365
|
|
|
5.3
|
%
|
|
|
$
|
4,823
|
|
|
3.4
|
%
|
|
|
$
|
6,788
|
|
|
5.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) The three and six months ended September 30, 2016 amounts have
been adjusted to conform with September 30, 2017 presentation.
|
(2) Calculated at 36% and 38% for September 30, 2017 and 2016,
respectively.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation between GAAP and non-GAAP weighted average shares
used in computing basic and diluted net loss per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator for basic calculation
|
|
|
91,689
|
|
|
|
|
|
|
89,987
|
|
|
|
|
|
|
91,667
|
|
|
|
|
|
|
89,171
|
|
|
|
Effect of dilutive securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee stock options
|
|
|
1,534
|
|
|
|
|
|
|
1,717
|
|
|
|
|
|
|
1,588
|
|
|
|
|
|
|
1,705
|
|
|
|
Employee restricted purchase rights
|
|
|
1,675
|
|
|
|
|
|
|
1,743
|
|
|
|
|
|
|
1,673
|
|
|
|
|
|
|
1,652
|
|
|
|
Denominator for diluted calculation
|
|
|
94,898
|
|
|
|
|
|
|
93,447
|
|
|
|
|
|
|
94,928
|
|
|
|
|
|
|
92,528
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net loss per share - Diluted
|
|
$
|
(0.01
|
)
|
|
|
|
|
$
|
0.00
|
|
|
|
|
|
$
|
(0.03
|
)
|
|
|
|
|
$
|
(0.01
|
)
|
|
|
Non-GAAP net income before taxes per share - Diluted
|
|
$
|
0.04
|
|
|
|
|
|
$
|
0.06
|
|
|
|
|
|
$
|
0.08
|
|
|
|
|
|
$
|
0.12
|
|
|
|
Non-GAAP net income after taxes per share - Diluted
|
|
$
|
0.03
|
|
|
|
|
|
$
|
0.04
|
|
|
|
|
|
$
|
0.05
|
|
|
|
|
|
$
|
0.07
|
|
|
|
|
8x8, Inc. Selected Operating Statistics
|
|
|
|
Three Months Ended
|
|
|
Sept. 30,
2016
|
|
Dec. 31,
2016
|
|
Mar. 31,
2017
|
|
June 30,
2017
|
|
Sept. 30,
2017
|
|
|
|
|
|
|
|
|
|
|
|
Business customer average monthly service revenue per customer (1)
|
|
$
|
409
|
|
|
$
|
414
|
|
|
$
|
426
|
|
|
$
|
432
|
|
|
$
|
442
|
|
Monthly business service revenue churn (2)(3)
|
|
|
0.6
|
%
|
|
|
1.0
|
%
|
|
|
0.7
|
%
|
|
|
0.6
|
%
|
|
|
0.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Overall service margin
|
|
|
81
|
%
|
|
|
83
|
%
|
|
|
83
|
%
|
|
|
82
|
%
|
|
|
81
|
%
|
Overall product margin
|
|
|
-6
|
%
|
|
|
-20
|
%
|
|
|
-9
|
%
|
|
|
-22
|
%
|
|
|
-17
|
%
|
Overall gross margin
|
|
|
74
|
%
|
|
|
77
|
%
|
|
|
77
|
%
|
|
|
76
|
%
|
|
|
75
|
%
|
|
|
|
|
|
|
|
|
|
|
|
(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.
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20171026006391/en/
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|