[January 25, 2018] |
|
8x8, Inc. Reports Third Quarter Fiscal 2018 Financial Results
8x8, Inc. (NYSE:EGHT), a leading provider of global cloud communications
and customer engagement solutions, today reported financial results for
the third quarter of fiscal 2018 ended December 31, 2017.
Third Fiscal Quarter 2018 Financial Results:
-
Revenue: Service revenue increased 20% year-over-year to $71.9
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 19% year-over-year to $75.6
million. Adjusting for constant currency and the discontinued revenue
from the non-core, voice broadcasting segment of DXI, total revenue
increased 18%.
-
Service revenue from mid-market and enterprise customers increased 28%
year-over-year and represented 59% of total service revenue.
-
GAAP net income: GAAP net loss was $88.5 million or ($0.96) per
diluted share, inclusive of two special items. 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, before taxes, was $1.6 million, or $0.02 per
diluted share, excluding special items.
"Our strong third quarter results demonstrate that we are executing on
our strategic initiatives. Mid-market and enterprise bookings grew 40%
year-over-year," said Vik Verma, Chief Executive Officer at 8x8, Inc.
"Additionally, we believe CIOs are increasingly demanding integrated
enterprise communications solutions for their employees, customers and
partners. 49% of new monthly recurring revenue booked from mid-market
and enterprise segments came from customers purchasing our integrated
UCaaS and CCaaS solutions. Thanks to our ownership of these underlying
technologies, 8x8 is uniquely qualified to deliver these solutions for
CIOs today and as their needs evolve in the future."
Additional Business Metrics and Highlights:
-
Margins: GAAP gross margin was 78%, compared with 77% in the same
period last year. Non-GAAP gross margin was 79%, compared with 79% in
the same period last year. GAAP service margin was 83%, compared with
83% 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 $8.2 million.
Cash, cash equivalents and investments were $161 million at December
31, 2017.
-
New monthly recurring revenue (MRR) booked from mid-market and
enterprise customers increased 40% year-over-year and comprised 65% of
total bookings in the third fiscal quarter.
-
49% of new monthly recurring revenue booked from mid-market and
enterprise customers purchased 8x8's integrated UCaaS and CCaaS
solutions.
-
Average monthly service revenue per business customer (ARPU): ARPU per
mid-market and enterprise customers were $4,765, compared with $4,412
in the same period last year. ARPU per business customer grew to $454,
compared with $414 in the same period last year.
-
Churn: Gross monthly business service revenue churn on an organic
basis of 0.4%, compared with 1.0% in the same period a year ago.
-
Synergy Research Group named 8x8 as the global leader for the eleventh
consecutive quarter for subscriber seats in the combined mid-market
and enterprise segments of the UCaaS market, which is defined as cloud
telephony, conferencing, collaboration and messaging.
-
8x8 was awarded 6 new communications patents for a total of 150
patents awarded to date.
-
Share Repurchase: Repurchased 298,713 shares of common stock at an
average price of $12.81 per share, for a total of $3.8 million, under
the Company's approved share repurchase program.
Financial Outlook: For the
full fiscal 2018 year, 8x8 has revised its financial outlook:
Revenue:
-
Total revenue in the range of $293 million to $294 million,
representing approximately 16% year-over-year increase, compared with
previous guidance of $292 million to $294 million, representing an
approximately 15% to 16% year-over-year increase.
-
Service revenue in the $278 million to $279 million range,
representing approximately 18% year-over-year increase, up from
previous guidance of $275 million to $277 million range, representing
an 17% year-over-year increase.
-
Adjusting for the discontinued revenue from the non-core, voice
broadcasting segment of DXI, service revenue growth in the range of
19% and total revenue growth in the range of 16% to 17%, compared with
previous guidance of 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 net income of approximately $9 million or 3% of
revenue.
-
Due to the Company's full valuation allowance against its deferred tax
assets, tax expense reflects current taxes in US states and foreign
jurisdictions. The estimated non-GAAP effective tax rate is
approximately 3% for fiscal year 2018 and excludes the one-time impact
of recording the valuation allowance.
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.
8x8 also announced that on January 22, 2018, it awarded restricted stock
units (RSUs) representing the right to acquire an aggregate of 456,791
shares of the Company's common stock and non-qualified options to
acquire an aggregate of 181,691 shares of common stock to 91 new
employees under the 8x8, Inc. 2017 New Employee Inducement Incentive
Plan. In addition, a newly hired senior vice president (SVP) received
RSUs representing the right to acquire 48,960 shares of common stock and
performance share units (PSUs) representing the right to receive, at
target, 28,654 shares of common stock. Each stock option is exercisable
at a price of $17.35 per share, which was the closing price of a share
of the company's Common Stock on the grant date. 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
as of the applicable vesting date. A portion of the RSUs awarded to the
newly hired SVP vest in full six months from the recipient's employment
commencement date. Other terms of the awards are substantially the same
as those applicable to RSUs, PSUs and options previously granted by the
Company to new employees during its current fiscal year.
These equity awards were approved unanimously by the Compensation
Committee of the Board of Directors. Each award was granted as an
inducement material to the recipient's entering into employment with
8x8, in accordance with Section 303a.08 of the New York Stock Exchange
listing and governance rules.
Conference Call Information:
Management will host a conference call to discuss earnings results on
January 25, 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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(877) 843-0417 Domestic or (408) 427-3791 International; Conference
ID #2297478
|
Replay:
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(855) 859-2056 Domestic or (404) 537-3406 International; Conference
ID #2297478
|
Webcast:
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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 March 7, 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 global cloud
communications and customer engagement solutions to over a million
business users worldwide, empowering them to deliver exceptional
customer experiences. For additional information, visit www.8x8.com,
or connect with 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.
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 broadcasting segment),
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. 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.
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 (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 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.
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8x8, Inc.
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
(In thousands, except per share amounts; unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
Service revenue
|
|
$
|
71,891
|
|
|
$
|
60,149
|
|
|
$
|
205,105
|
|
|
$
|
173,162
|
|
Product revenue
|
|
|
3,684
|
|
|
|
3,527
|
|
|
|
12,051
|
|
|
|
13,738
|
|
Total revenue
|
|
|
75,575
|
|
|
|
63,676
|
|
|
|
217,156
|
|
|
|
186,900
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of service revenue
|
|
|
12,318
|
|
|
|
10,525
|
|
|
|
36,737
|
|
|
|
31,597
|
|
Cost of product revenue
|
|
|
4,675
|
|
|
|
4,240
|
|
|
|
14,657
|
|
|
|
15,527
|
|
Research and development
|
|
|
8,527
|
|
|
|
7,095
|
|
|
|
24,781
|
|
|
|
20,310
|
|
Sales and marketing
|
|
|
48,830
|
|
|
|
35,667
|
|
|
|
131,103
|
|
|
|
101,049
|
|
General and administrative
|
|
|
10,003
|
|
|
|
7,852
|
|
|
|
28,575
|
|
|
|
21,400
|
|
Impairment of equipment, intangible assets and goodwill
|
|
|
9,469
|
|
|
|
-
|
|
|
|
9,469
|
|
|
|
-
|
|
Total operating expenses
|
|
|
93,822
|
|
|
|
65,379
|
|
|
|
245,322
|
|
|
|
189,883
|
|
Loss from operations
|
|
|
(18,247
|
)
|
|
|
(1,703
|
)
|
|
|
(28,166
|
)
|
|
|
(2,983
|
)
|
Other income, net
|
|
|
569
|
|
|
|
408
|
|
|
|
3,084
|
|
|
|
1,209
|
|
Loss from operations before provision for income taxes
|
|
|
(17,678
|
)
|
|
|
(1,295
|
)
|
|
|
(25,082
|
)
|
|
|
(1,774
|
)
|
Provision for income taxes
|
|
|
70,842
|
|
|
|
30
|
|
|
|
66,153
|
|
|
|
52
|
|
Net loss
|
|
$
|
(88,520
|
)
|
|
$
|
(1,325
|
)
|
|
$
|
(91,235
|
)
|
|
$
|
(1,826
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share:
|
|
|
|
|
|
|
|
|
|
|
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|
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Basic
|
|
$
|
(0.96
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
(0.99
|
)
|
|
$
|
(0.02
|
)
|
Diluted
|
|
$
|
(0.96
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
(0.99
|
)
|
|
$
|
(0.02
|
)
|
|
|
|
|
|
|
|
|
|
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Weighted average number of shares:
|
|
|
|
|
|
|
|
|
|
|
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|
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Basic
|
|
|
92,029
|
|
|
|
90,774
|
|
|
|
91,709
|
|
|
|
90,062
|
|
Diluted
|
|
|
92,029
|
|
|
|
90,774
|
|
|
|
91,709
|
|
|
|
90,062
|
|
|
|
|
|
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8x8, Inc.
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(In thousands, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
|
March 31,
|
|
|
|
2017
|
|
|
2017
|
ASSETS
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
31,769
|
|
$
|
41,030
|
Short-term investments
|
|
|
129,208
|
|
|
133,959
|
Accounts receivable, net
|
|
|
17,937
|
|
|
14,264
|
Other current assets
|
|
|
10,240
|
|
|
8,101
|
Total current assets
|
|
|
189,154
|
|
|
197,354
|
Property and equipment, net
|
|
|
32,551
|
|
|
24,061
|
Intangible assets, net
|
|
|
12,677
|
|
|
17,038
|
Goodwill
|
|
|
39,576
|
|
|
46,136
|
Non-current deferred tax asset
|
|
|
-
|
|
|
48,859
|
Other assets
|
|
|
967
|
|
|
407
|
Total assets
|
|
$
|
274,925
|
|
$
|
333,855
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LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
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Current liabilities
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
21,755
|
|
$
|
18,631
|
Accrued compensation
|
|
|
16,845
|
|
|
11,508
|
Accrued taxes
|
|
|
5,447
|
|
|
5,354
|
Deferred revenue
|
|
|
2,586
|
|
|
2,144
|
Other accrued liabilities
|
|
|
6,723
|
|
|
5,707
|
Total current liabilities
|
|
|
53,356
|
|
|
43,344
|
|
|
|
|
|
|
|
Other liabilities
|
|
|
1,160
|
|
|
1,910
|
Total liabilities
|
|
|
54,516
|
|
|
45,254
|
|
|
|
|
|
|
|
Total stockholders' equity
|
|
|
220,409
|
|
|
288,601
|
Total liabilities and stockholders' equity
|
|
$
|
274,925
|
|
$
|
333,855
|
|
|
|
|
|
|
|
|
|
|
|
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|
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8x8, Inc.
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(In thousands, unaudited)
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
|
|
|
|
December 31,
|
|
|
|
2017
|
|
|
2016
|
Cash flows from operating activities:
|
|
|
|
|
|
|
Net loss
|
|
$
|
(91,235
|
)
|
|
$
|
(1,826
|
)
|
Adjustments to reconcile net loss to net cash
|
|
|
|
|
|
|
provided by operating activities:
|
|
|
|
|
|
|
Depreciation
|
|
|
6,049
|
|
|
|
4,463
|
|
Amortization of intangible assets
|
|
|
3,995
|
|
|
|
2,741
|
|
Impairment of goodwill and long-lived assets
|
|
|
9,469
|
|
|
|
15
|
|
Amortization of capitalized software
|
|
|
1,270
|
|
|
|
442
|
|
Stock-based compensation expense
|
|
|
21,138
|
|
|
|
15,630
|
|
Deferred income tax expense (benefit)
|
|
|
66,273
|
|
|
|
(104
|
)
|
Gain on escrow settlement
|
|
|
(1,393
|
)
|
|
|
-
|
|
Other
|
|
|
226
|
|
|
|
802
|
|
Changes in assets and liabilities:
|
|
|
|
|
|
|
Accounts receivable, net
|
|
|
(3,305
|
)
|
|
|
(3,267
|
)
|
Other current and noncurrent assets
|
|
|
(2,315
|
)
|
|
|
(1,238
|
)
|
Accounts payable and accruals
|
|
|
8,855
|
|
|
|
4,394
|
|
Deferred revenue
|
|
|
351
|
|
|
|
168
|
|
Net cash provided by operating activities
|
|
|
19,378
|
|
|
|
22,220
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
Purchases of property and equipment
|
|
|
(6,524
|
)
|
|
|
(6,509
|
)
|
Gain on escrow settlement
|
|
|
1,393
|
|
|
|
-
|
|
Cost of capitalized software
|
|
|
(8,689
|
)
|
|
|
(3,939
|
)
|
Proceeds from maturity of investments
|
|
|
57,150
|
|
|
|
47,625
|
|
Sales of investments
|
|
|
23,382
|
|
|
|
34,821
|
|
Purchase of investments
|
|
|
(75,921
|
)
|
|
|
(92,647
|
)
|
Net cash used in investing activities
|
|
|
(9,209
|
)
|
|
|
(20,649
|
)
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
Capital lease payments
|
|
|
(855
|
)
|
|
|
(460
|
)
|
Payment of contingent consideration
|
|
|
(150
|
)
|
|
|
(300
|
)
|
Repurchase and tax-related withholding of common stock
|
|
(22,137
|
)
|
|
|
(2,828
|
)
|
Proceeds from issuance of common stock under employee stock plans
|
|
|
3,303
|
|
|
|
2,694
|
|
Net cash used in financing activities
|
|
|
(19,839
|
)
|
|
|
(894
|
)
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash
|
|
|
409
|
|
|
|
(796
|
)
|
Net decrease in cash and cash equivalents
|
|
|
(9,261
|
)
|
|
|
(119
|
)
|
|
|
|
|
|
|
|
Cash and cash equivalents, beginning of period
|
|
|
41,030
|
|
|
|
33,576
|
|
Cash and cash equivalents, end of period
|
|
$
|
31,769
|
|
|
$
|
33,457
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8x8, Inc.
|
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
|
(In thousands, except per share amounts; unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
|
|
Nine Months Ended
|
Reconciliation of GAAP to Non-GAAP
Expenses:
|
|
December 31, 2017
|
|
|
December 31, 2016
|
|
|
December 31, 2017
|
|
|
December 31, 2016
|
GAAP cost of service revenue
|
|
$
|
12,318
|
|
|
|
|
|
$
|
10,525
|
|
|
|
|
|
$
|
36,737
|
|
|
|
|
|
$
|
31,597
|
|
|
|
Amortization of acquired intangible assets
|
|
|
(714
|
)
|
|
|
|
|
|
(543
|
)
|
|
|
|
|
|
(2,221
|
)
|
|
|
|
|
|
(1,697
|
)
|
|
|
Stock-based compensation expense
|
|
|
(455
|
)
|
|
|
|
|
|
(538
|
)
|
|
|
|
|
|
(1,319
|
)
|
|
|
|
|
|
(1,338
|
)
|
|
|
Non-GAAP cost of service revenue
|
|
$
|
11,149
|
|
|
|
|
|
$
|
9,444
|
|
|
|
|
|
$
|
33,197
|
|
|
|
|
|
$
|
28,562
|
|
|
|
Non-GAAP service margin (as a percentage of service revenue)
|
|
$
|
60,742
|
|
|
84.5
|
%
|
|
|
$
|
50,705
|
|
|
84.3
|
%
|
|
|
$
|
171,908
|
|
|
83.8
|
%
|
|
|
$
|
144,600
|
|
|
83.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP and Non-GAAP cost of product revenue
|
|
$
|
4,675
|
|
|
|
|
|
$
|
4,240
|
|
|
|
|
|
$
|
14,657
|
|
|
|
|
|
$
|
15,527
|
|
|
|
Non-GAAP product margin (as a percentage of product revenue)
|
|
$
|
(991
|
)
|
|
-26.9
|
%
|
|
|
$
|
(713
|
)
|
|
-20.2
|
%
|
|
|
$
|
(2,606
|
)
|
|
-21.6
|
%
|
|
|
$
|
(1,789
|
)
|
|
-13.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP gross margin (as a percentage of revenue)
|
|
$
|
59,751
|
|
|
79.1
|
%
|
|
|
$
|
49,992
|
|
|
78.5
|
%
|
|
|
$
|
169,302
|
|
|
78.0
|
%
|
|
|
$
|
142,811
|
|
|
76.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP research and development
|
|
$
|
8,527
|
|
|
|
|
|
$
|
7,095
|
|
|
|
|
|
$
|
24,781
|
|
|
|
|
|
$
|
20,310
|
|
|
|
Stock-based compensation expense
|
|
|
(1,794
|
)
|
|
|
|
|
|
(1,061
|
)
|
|
|
|
|
|
(4,445
|
)
|
|
|
|
|
|
(2,811
|
)
|
|
|
Non-GAAP research and development (as a percentage of revenue)
|
|
$
|
6,733
|
|
|
8.9
|
%
|
|
|
$
|
6,034
|
|
|
9.5
|
%
|
|
|
$
|
20,336
|
|
|
9.4
|
%
|
|
|
$
|
17,499
|
|
|
9.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP sales and marketing
|
|
$
|
48,830
|
|
|
|
|
|
$
|
35,667
|
|
|
|
|
|
$
|
131,103
|
|
|
|
|
|
$
|
101,049
|
|
|
|
Amortization of acquired intangible assets, impairment
|
|
|
(466
|
)
|
|
|
|
|
|
(345
|
)
|
|
|
|
|
|
(1,774
|
)
|
|
|
|
|
|
(1,059
|
)
|
|
|
Stock-based compensation expense
|
|
|
(3,362
|
)
|
|
|
|
|
|
(2,452
|
)
|
|
|
|
|
|
(8,577
|
)
|
|
|
|
|
|
(6,118
|
)
|
|
|
Non-recurring items in operating expenses
|
|
|
(480
|
)
|
|
|
|
|
|
-
|
|
|
|
|
|
|
(480
|
)
|
|
|
|
|
|
-
|
|
|
|
Non-GAAP sales and marketing (as a percentage of revenue)
|
|
$
|
44,522
|
|
|
58.9
|
%
|
|
|
$
|
32,870
|
|
|
51.6
|
%
|
|
|
$
|
120,272
|
|
|
55.4
|
%
|
|
|
$
|
93,872
|
|
|
50.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP general and administrative
|
|
$
|
10,003
|
|
|
|
|
|
$
|
7,852
|
|
|
|
|
|
$
|
28,575
|
|
|
|
|
|
$
|
21,400
|
|
|
|
Stock-based compensation expense
|
|
|
(2,519
|
)
|
|
|
|
|
|
(2,020
|
)
|
|
|
|
|
|
(6,797
|
)
|
|
|
|
|
|
(5,363
|
)
|
|
|
Non-recurring items
|
|
|
-
|
|
|
|
|
|
|
(78
|
)
|
|
|
|
|
|
(510
|
)
|
|
|
|
|
|
(78
|
)
|
|
|
Non-GAAP general and administrative (as a percentage of revenue)
|
|
$
|
7,484
|
|
|
9.9
|
%
|
|
|
$
|
5,754
|
|
|
9.0
|
%
|
|
|
$
|
21,268
|
|
|
9.8
|
%
|
|
|
$
|
15,959
|
|
|
8.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP Net Loss to
Non-GAAP Net Income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income (loss)
|
|
$
|
(88,520
|
)
|
|
|
|
|
$
|
(1,325
|
)
|
|
|
|
|
$
|
(91,235
|
)
|
|
|
|
|
$
|
(1,826
|
)
|
|
|
Amortization of acquired intangible assets
|
|
|
1,180
|
|
|
|
|
|
|
873
|
|
|
|
|
|
|
3,995
|
|
|
|
|
|
|
2,741
|
|
|
|
Impairment of equipment, intangible assets, and goodwill
|
|
9,469
|
|
|
|
|
|
|
15
|
|
|
|
|
|
|
9,469
|
|
|
|
|
|
|
15
|
|
|
|
Stock-based compensation expense
|
|
|
8,130
|
|
|
|
|
|
|
6,071
|
|
|
|
|
|
|
21,138
|
|
|
|
|
|
|
15,630
|
|
|
|
Non-recurring items in operating expenses
|
|
|
480
|
|
|
|
|
|
|
78
|
|
|
|
|
|
|
990
|
|
|
|
|
|
|
78
|
|
|
|
Non-recurring items in other income (expenses), net
|
|
|
-
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
(1,393
|
)
|
|
|
|
|
|
-
|
|
|
|
Provision (benefit) for income taxes (1)
|
|
|
70,842
|
|
|
|
|
|
|
30
|
|
|
|
|
|
|
66,153
|
|
|
|
|
|
|
52
|
|
|
|
Non-GAAP net income before taxes (as a percentage of revenue)
|
|
$
|
1,581
|
|
|
2.1
|
%
|
|
|
$
|
5,742
|
|
|
9.0
|
%
|
|
|
$
|
9,117
|
|
|
4.2
|
%
|
|
|
$
|
16,690
|
|
|
8.9
|
%
|
Non-GAAP tax expense (2)
|
|
|
52
|
|
|
|
|
|
|
2,182
|
|
|
|
|
|
|
297
|
|
|
|
|
|
|
6,342
|
|
|
|
Non-GAAP net income after taxes (as a percentage of revenue)
|
|
$
|
1,529
|
|
|
2.0
|
%
|
|
|
$
|
3,560
|
|
|
5.6
|
%
|
|
|
$
|
8,820
|
|
|
4.1
|
%
|
|
|
$
|
10,348
|
|
|
5.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) The amounts for the three and nine months ended December 31,
2016 have been adjusted to conform with the current period
presentation.
|
(2) Our non-GAAP tax provision in fiscal year 2018 does not have a
deferred income tax impact due to the full valuation allowance
applied against our deferred tax assets. The non-GAAP effective tax
rate of 3% for the three and nine months ending December 31, 2017 is
based on current taxes for certain states and foreign jurisdictions,
and excludes the impact of the valuation allowance. For the three
and nine months ended December 31, 2016, the total non-GAAP
effective tax rate was 38%.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation between GAAP and non-GAAP
weighted average shares used in computing basic and
diluted net loss per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator for basic calculation
|
|
|
92,029
|
|
|
|
|
|
|
90,774
|
|
|
|
|
|
|
91,709
|
|
|
|
|
|
|
90,062
|
|
|
|
Effect of dilutive securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee stock options
|
|
|
1,487
|
|
|
|
|
|
|
1,792
|
|
|
|
|
|
|
1,546
|
|
|
|
|
|
|
1,702
|
|
|
|
Employee restricted purchase rights
|
|
|
1,096
|
|
|
|
|
|
|
1,407
|
|
|
|
|
|
|
1,622
|
|
|
|
|
|
|
1,723
|
|
|
|
Employee stock plan purchases
|
|
|
-
|
|
|
|
|
|
|
9
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
8
|
|
|
|
Denominator for diluted calculation
|
|
|
94,612
|
|
|
|
|
|
|
93,982
|
|
|
|
|
|
|
94,877
|
|
|
|
|
|
|
93,495
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net loss per share - Diluted
|
|
$
|
(0.96
|
)
|
|
|
|
|
$
|
(0.01
|
)
|
|
|
|
|
$
|
(0.99
|
)
|
|
|
|
|
$
|
(0.02
|
)
|
|
|
Non-GAAP net income before taxes per share - Diluted
|
|
$
|
0.02
|
|
|
|
|
|
$
|
0.06
|
|
|
|
|
|
$
|
0.10
|
|
|
|
|
|
$
|
0.18
|
|
|
|
Non-GAAP net income after taxes per share - Diluted
|
|
$
|
0.02
|
|
|
|
|
|
$
|
0.04
|
|
|
|
|
|
$
|
0.09
|
|
|
|
|
|
$
|
0.11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8x8, Inc.
|
Selected Operating Statistics
|
|
|
|
Three Months Ended
|
|
|
|
Dec. 31, 2016
|
|
Mar. 31, 2017
|
|
June 30, 2017
|
|
Sept. 30, 2017
|
|
Dec. 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
Business customer average monthly service revenue per customer (1)
|
|
$
|
414
|
|
|
$
|
426
|
|
|
$
|
432
|
|
|
$
|
442
|
|
|
$
|
454
|
|
Monthly business service revenue churn (2)(3)
|
|
|
1.0
|
%
|
|
|
0.7
|
%
|
|
|
0.6
|
%
|
|
|
0.4
|
%
|
|
|
0.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Overall service margin
|
|
|
83
|
%
|
|
|
83
|
%
|
|
|
82
|
%
|
|
|
81
|
%
|
|
|
83
|
%
|
Overall product margin
|
|
|
-20
|
%
|
|
|
-9
|
%
|
|
|
-22
|
%
|
|
|
-17
|
%
|
|
|
-27
|
%
|
Overall gross margin
|
|
|
77
|
%
|
|
|
77
|
%
|
|
|
76
|
%
|
|
|
75
|
%
|
|
|
78
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
(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/20180125006199/en/
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