[October 29, 2018] |
|
8x8, Inc. Reports Second Quarter Fiscal 2019 Financial Results
8x8, Inc. (NYSE:EGHT), a leading cloud provider of voice, video,
collaboration and contact center solutions for over one million users
worldwide, today reported financial results for the second quarter of
fiscal 2019 ended September 30, 2018.
Second Quarter Fiscal 2019 Financial Results:
-
Service revenue increased 19% year-over-year to $81.3 million.
Adjusting for constant currency and excluding DXI revenue, service
revenue increased 21% year-over-year.
-
Service revenue from mid-market and enterprise customers billing
greater than $1,000 in monthly recurring revenue (MRR), adjusting for
constant currency and excluding DXI revenue, increased approximately
30% year-over-year and represents 61% of total service revenue.
-
Service revenue from mid-market and enterprise customers billing
greater than $10,000 in monthly recurring revenue (MRR), adjusting for
constant currency and excluding DXI revenue, increased approximately
60% year-over-year and represents 28% of total monthly recurring
revenue.
-
Total revenue increased 18% year-over-year to $85.7 million. Adjusting
for constant currency and excluding DXI revenue, total revenue
increased 20% year-over-year.
-
GAAP net loss was $21.5 million or $(0.23) per diluted share,
including a $4.6 million charge associated with U.S. sales and use
taxes.
-
Non-GAAP net loss was $3.8 million or $(0.04) per diluted share.
"As large enterprises accelerate their digital transformation journey
and move to the cloud, 8x8 is capturing an increasing number of these
opportunities through our newly launched X Series platform. In our
second fiscal quarter, we added 27 new large enterprise customers, more
than double from a year ago. Also, service revenue from mid-market and
enterprise customers billing more than $10,000 in monthly recurring
revenue (MRR) grew approximately 60%," said Vik Verma, Chief Executive
Officer at 8x8, Inc. "The positive customer response to X Series
underlines the strength of 8x8 to help businesses transform their
customer and employee experience with one system of engagement across
voice, video, collaboration and contact center and one system of
intelligence, all on a single cloud technology platform."
Added Verma, "Earlier today we announced the acquisition of the Jitsi
video collaboration technology from Atlassian. Jitsi further extends
8x8's cloud technology platform with highly-scalable video routing and
interoperability capabilities, all built on industry standards such as
WebRTC. Jitsi's open-source technology and team of video technology
experts will play a role in leading our continuing development of new X
Series capabilities, including dedicated video collaboration
applications and WebRTC."
Additional Second Quarter Business Metrics and
Company Highlights:
Business Metrics
-
GAAP gross margin was 75%, consistent with the same period last year.
Non-GAAP gross margin was 77%, also consistent with the same period
last year. GAAP service margin was 80%, compared with 81% in the same
period last year. Non-GAAP service margin was 83%, consistent with the
same period last year.
-
Cash used in operating activities was $5.3 million. Cash, restricted
cash and investments were $137 million at September 30, 2018.
-
Average monthly service revenue per business customer (ARPU): ARPU for
mid-market and enterprise customers was $4,988, compared with $4,697
in the same period last year, a 6% year-over-year increase. Total ARPU
grew to $490, compared with $442 in the same period last year, an 11%
increase year-over-year.
-
New monthly recurring revenue (MRR) booked from mid-market and
enterprise customers increased approximately 50% year-over-year and
comprised 65% of total bookings.
-
Channel bookings increased more than 50% year-over-year.
Corporate Highlights
-
Mr. Steven Gatoff joined 8x8 as Chief Financial Officer.
-
Ms. Mary Ellen Genovese is transitioning to the UK as Managing
Director of European Operations.
-
Mr. Matthew Zinn joined 8x8 as General Counsel, Corporate Secretary
and Chief Privacy Officer.
-
Ms. Monique Bonner joined the Company's Board of Directors to further
enhance 8x8's brand, go-to market strategy and demand generation
initiatives.
-
Channel master-agent Planet One joined 8x8's global channel partner
program.
Product Innovation Highlights
-
Launched the X Series Team Messaging solution including automated
deployment capabilities for enterprise-wide adoption; public rooms for
cross-organizational collaboration; private rooms for sharing
confidential content; and interoperability with 23 third-party team
messaging platforms, including Slack.
-
Acquired Jitsi video collaboration capabilities from Atlassian to
integrate into 8x8 technology platform, further strengthening 8x8's X
Series platform offerings.
-
8x8 was granted 7 new patents in the quarter for a total of 170
patents awarded.
Industry Awards
-
8x8 Named a Leader for the seventh consecutive year in the Gartner
2018 Unified Communications as a Service (UCaaS) Magic Quadrant.
-
8x8 Named a Challenger for the fourth consecutive year in the Gartner
2018 Contact Center as a Service (CCaaS) Magic Quadrant.
Financial Outlook:
On April 1, 2018, 8x8 adopted Accounting Standards Codification (ASC)
606 using the modified retrospective transition method. The guidance
below includes the expected impact of the adoption of this new revenue
standard, which replaced ASC 605.
Third Quarter Fiscal 2019 Financial Outlook:
-
Service revenue in the range of $84.5 million to $85.5 million,
representing approximately 18% to 19% year-over-year growth.
-
Service revenue growth, excluding DXI revenue, in the range of 20% to
21%.
-
Non-GAAP pre-tax loss in the range of $5 million to $6 million.
Full Year Fiscal 2019 Financial Outlook:
-
The Company raises service revenue guidance from a range of $333
million to $338 million to a range of $334 million to $338 million,
representing approximately 19% to 21% year-over-year growth. Service
revenue growth, excluding DXI revenue, is anticipated to be in the
range of 21% to 22%.
-
The Company reiterates total revenue guidance in the range of $347
million to $352 million, representing approximately 17% to 19%
year-over-year growth.
-
The Company anticipates non-GAAP pre-tax loss to be at the high-end of
previously stated guidance at approximately ($17 million), excluding
expenses related to the Jitsi acquisition.
We do not reconcile our forward-looking estimates of 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 are not available without unreasonable effort.
Restricted Stock Grants:
The Company also announced that, on October 29, 2018, it granted awards
of restricted stock units (RSUs) representing rights to acquire a total
of 267,904 shares of the Company's common stock to 12 new employees
under the 8x8, Inc. 2017 New Employee Inducement Incentive Plan. The
awards were granted in connection with the Company's acquisition of
certain assets and hiring of personnel related to the Jitsi open source
platform (which transaction was also announced today), as inducements
material to the recipients' entering into employment with the Company or
its subsidiary. Each RSU award vests over the course of three years,
with the initial tranche vesting after one year, and the remainder
vesting in eight equal quarterly installments, subject to the
recipient's continued employment or other qualifying association with
the Company or any of its subsidiaries. Other terms of the awards are
substantially the same as those applicable to RSUs previously granted by
the Company to new employees during its current fiscal year. The awards
were approved by the independent compensation committee of the Company's
board of directors in accordance with New York Stock Exchange Rule
303A.08.
Conference Call Information:
Management will host a conference call to discuss earnings results on
October 29, 2018 at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time). The
call is accessible via the following numbers and webcast link:
Dial In:
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(866) 393-4306 Domestic or (734) 385-2616 International;
Conference ID #2067499
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Replay:
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(855) 859-2056 Domestic or (404) 537-3406 International;
Conference ID #2067499
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Webcast:
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http://investors.8x8.com
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Participants should plan to dial in or log on ten minutes prior to the
start time. A telephonic replay of the call will be available until
November 19, 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) cloud solutions help businesses transform their
customer and employee experience. With one system of engagement for
cloud voice, video, collaboration and contact center and one system of
intelligence on one technology platform, businesses can now communicate
faster and smarter to exceed the speed of customer expectations. For
additional information, visit www.8x8.com,
or follow 8x8 on LinkedIn, Twitter, and Facebook.
Non-GAAP Measures:
The Company has provided in this release financial information that has
not been prepared in accordance with Generally Accepted Accounting
Principles (GAAP). Management uses these non-GAAP financial measures
internally in analyzing the Company's financial results and believes
they are useful to investors, as a supplement to GAAP measures, in
evaluating the Company's ongoing operational performance. Management
believes that the use of these non-GAAP financial measures provides an
additional tool for investors to use in evaluating 8x8's ongoing
operating results and trends and in comparing financial results with
other companies in the industry, many of which present similar non-GAAP
financial measures to investors.
The Company has defined non-GAAP net income (loss) as net income (loss)
under GAAP, plus amortization of acquired intangible assets, impairment
charges, stock-based compensation, certain other income and expenses,
and the provision for or benefit from income taxes. Amortization of
acquired intangible assets are 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 conditions and events, such as the market
price of 8x8 common stock, that are difficult to predict and/or largely
not within the control of management. Certain other income and expense
items, such as acquisition-related, certain severance expenses and
expenses for tax or litigation risks, have been excluded because
management considers them one-time events or otherwise not indicative of
trends in the Company's ongoing operations. The Company has also
excluded non-cash rent expense related to its new headquarter building
because the building remains in the built-out phase.
GAAP tax provision (benefit) for income taxes has been excluded as
management does not consider taxes in 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 (loss) per share as non-GAAP net
income (loss) divided by the weighted-average basic or diluted shares
outstanding which includes the effect of potentially dilutive stock
options and awards.
Management believes that such exclusions facilitate comparisons to the
Company's historical operating results and to the results of other
companies in the same industry, and provides investors with information
that management uses in evaluating the Company's performance on a
quarterly and annual basis.
Although these non-GAAP financial measures adjust expenses, they should
not be viewed as a pro forma presentation reflecting the elimination of
the underlying share-based compensation programs, which are an important
element of the Company's compensation structure. GAAP requires that all
forms of share-based payments should be valued and included in the
results of operations.
In addition, this release includes financial measures that have been
adjusted as follows:
-
This release includes revenue figures adjusted to exclude revenue
generated by DXI. As first reported in the third quarter of our 2018
fiscal year, we have de-emphasized the sale of DXI's ContactNow as a
stand-alone product, and management therefore believes it is useful to
exclude this revenue from period-to-period comparisons to better
depict the relative performance of our core business.
-
This release includes revenue figures adjusted for comparison on a
constant currency basis, when management concluded that the
elimination of the impact of currency fluctuations between the periods
being compared would assist with the evaluation of the underlying
business performance.
We disclose these non-GAAP financial measures to the public as an
additional means by which investors can assess our performance. These
non-GAAP financial measures may be calculated differently from, and
therefore may not be comparable to, similarly titled measures used by
other companies. Non-GAAP financial measures should not be considered in
isolation from, or as a substitute for, financial information prepared
in accordance with GAAP. Investors are encouraged to review the
reconciliation of these non-GAAP financial measures to their most
directly comparable GAAP financial measures. This reconciliation has
been provided in the financial statement tables included below in this
press release.
Forward Looking Statements:
This news release contains "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995 and
Section 21E of the Securities Exchange Act of 1934. These statements
include, without limitation, information about future events based on
current expectations, potential product development efforts, near and
long-term objectives, potential new business, strategies, organization
changes, changing markets, future business performance and outlook. Such
statements are predictions only, and actual events or results could
differ materially from those made in any forward-looking statements due
to a number of risks and uncertainties. Actual results and trends may
differ materially from historical results or those projected in any such
forward-looking statements depending on a variety of factors.
These factors include, but are not limited to:
-
customer acceptance and demand for our cloud communication and
collaboration services,
-
changes in the competitive dynamics of the markets in which we compete,
-
the quality and reliability of our services,
-
customer cancellations and rate of churn,
-
our ability to scale our business,
-
customer acquisition costs,
-
our reliance on infrastructure of third-party network services
providers,
-
risk of failure in our physical infrastructure,
-
risk of failure of our software,
-
our ability to maintain the compatibility of our software with
third-party applications and mobile platforms,
-
continued compliance with industry standards and regulatory
requirements in the United States and foreign countries in which we
make our software solutions available, and the costs of such
compliance,
-
the risk that our actual liability for state and municipal taxes, fees
and surcharges may exceed our accrued contingent liability for these
amounts,
-
risks relating to our strategies and objectives for future operations,
including the execution of integration plans and realization of the
expected benefits of our acquisitions,
-
the amount and timing of costs associated with recruiting, training
and integrating new employees,
-
timing and extent of improvements in operating results from increased
spending in marketing, sales, and research and development,
-
introduction and adoption of our cloud software solutions in markets
outside of the United States,
-
risk of cybersecurity breaches and other unauthorized disclosures of
personal data,
-
general economic conditions that could adversely affect our business
and operating results,
-
implementation and effects of new accounting standards and policies in
our reported financial results, and
-
potential future intellectual property infringement claims and other
litigation that could adversely affect our business and operating
results.
For a discussion of such risks and uncertainties, which could cause
actual results to differ from those contained in the forward-looking
statements, see "Risk Factors" in the Company's reports on Forms 10-K
and 10-Q, as well as other reports that 8x8, Inc. files from time to
time with the Securities and Exchange Commission. All forward-looking
statements are qualified in their entirety by this cautionary statement,
and 8x8, Inc. undertakes no obligation to update publicly any
forward-looking statement for any reason, except as required by law,
even as new information becomes available or other events occur in the
future.
|
8x8, Inc.
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
(In thousands, except per share amounts; unaudited)
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
|
September 30,
|
|
|
September 30,
|
|
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
Service revenue
|
|
|
|
$
|
81,346
|
|
|
|
$
|
68,123
|
|
|
|
$
|
159,467
|
|
|
|
$
|
133,214
|
|
Product revenue
|
|
|
|
4,336
|
|
|
|
4,360
|
|
|
|
9,440
|
|
|
|
8,367
|
|
Total revenue
|
|
|
|
85,682
|
|
|
|
72,483
|
|
|
|
168,907
|
|
|
|
141,581
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of service revenue
|
|
|
|
15,866
|
|
|
|
12,757
|
|
|
|
30,945
|
|
|
|
24,419
|
|
Cost of product revenue
|
|
|
|
5,397
|
|
|
|
5,098
|
|
|
|
11,678
|
|
|
|
9,982
|
|
Research and development
|
|
|
|
13,933
|
|
|
|
8,311
|
|
|
|
27,043
|
|
|
|
16,254
|
|
Sales and marketing
|
|
|
|
55,930
|
|
|
|
41,163
|
|
|
|
109,235
|
|
|
|
82,273
|
|
General and administrative
|
|
|
|
16,543
|
|
|
|
9,616
|
|
|
|
27,976
|
|
|
|
18,572
|
|
Total operating expenses
|
|
|
|
107,669
|
|
|
|
76,945
|
|
|
|
206,877
|
|
|
|
151,500
|
|
Loss from operations
|
|
|
|
(21,987
|
)
|
|
|
(4,462
|
)
|
|
|
(37,970
|
)
|
|
|
(9,919
|
)
|
Other income, net
|
|
|
|
635
|
|
|
|
463
|
|
|
|
1,354
|
|
|
|
2,515
|
|
Loss from operations before provision (benefit) for income taxes
|
|
|
|
(21,352
|
)
|
|
|
(3,999
|
)
|
|
|
(36,616
|
)
|
|
|
(7,404
|
)
|
Provision (benefit) for income taxes
|
|
|
|
130
|
|
|
|
(3,453
|
)
|
|
|
221
|
|
|
|
(4,689
|
)
|
Net loss
|
|
|
|
$
|
(21,482
|
)
|
|
|
$
|
(546
|
)
|
|
|
$
|
(36,837
|
)
|
|
|
$
|
(2,715
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
$
|
(0.23
|
)
|
|
|
$
|
(0.01
|
)
|
|
|
$
|
(0.39
|
)
|
|
|
$
|
(0.03
|
)
|
Diluted
|
|
|
|
$
|
(0.23
|
)
|
|
|
$
|
(0.01
|
)
|
|
|
$
|
(0.39
|
)
|
|
|
$
|
(0.03
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
93,831
|
|
|
91,689
|
|
|
93,449
|
|
|
91,667
|
Diluted
|
|
|
|
93,831
|
|
|
91,689
|
|
|
93,449
|
|
|
91,667
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8x8, Inc.
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(In thousands, unaudited)
|
|
|
|
|
|
September 30,
|
|
|
March 31,
|
|
|
|
|
2018
|
|
|
2018
|
ASSETS
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
$
|
24,677
|
|
|
|
$
|
31,703
|
|
Short-term investments
|
|
|
|
104,232
|
|
|
|
120,559
|
|
Accounts receivable, net
|
|
|
|
18,870
|
|
|
|
16,296
|
|
Deferred sales commission costs
|
|
|
|
13,656
|
|
|
|
-
|
|
Other current assets
|
|
|
|
13,889
|
|
|
|
10,040
|
|
Total current assets
|
|
|
|
175,324
|
|
|
|
178,598
|
|
Property and equipment, net
|
|
|
|
42,395
|
|
|
|
35,732
|
|
Intangible assets, net
|
|
|
|
12,162
|
|
|
|
11,958
|
|
Goodwill
|
|
|
|
39,495
|
|
|
|
40,054
|
|
Restricted cash
|
|
|
|
8,100
|
|
|
|
8,100
|
|
Deferred sales commission costs, noncurrent
|
|
|
|
29,229
|
|
|
|
-
|
|
Other assets
|
|
|
|
2,927
|
|
|
|
2,767
|
|
Total assets
|
|
|
|
$
|
309,632
|
|
|
|
$
|
277,209
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
|
$
|
27,649
|
|
|
|
$
|
23,899
|
|
Accrued compensation
|
|
|
|
17,621
|
|
|
|
17,412
|
|
Accrued taxes
|
|
|
|
12,438
|
|
|
|
6,367
|
|
Deferred revenue
|
|
|
|
3,354
|
|
|
|
2,559
|
|
Other accrued liabilities
|
|
|
|
5,200
|
|
|
|
6,026
|
|
Total current liabilities
|
|
|
|
66,262
|
|
|
|
56,263
|
|
|
|
|
|
|
|
|
|
Other liabilities
|
|
|
|
4,007
|
|
|
|
2,172
|
|
Total liabilities
|
|
|
|
70,269
|
|
|
|
58,435
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity:
|
|
|
|
|
|
|
|
Common stock
|
|
|
|
95
|
|
|
|
93
|
|
Additional paid-in capital
|
|
|
|
445,103
|
|
|
|
425,790
|
|
Accumulated other comprehensive loss
|
|
|
|
(7,435
|
)
|
|
|
(5,645
|
)
|
Accumulated deficit
|
|
|
|
(198,400
|
)
|
|
|
(201,464
|
)
|
Total stockholders' equity
|
|
|
|
239,363
|
|
|
|
218,774
|
|
Total liabilities and stockholders' equity
|
|
|
|
$
|
309,632
|
|
|
|
$
|
277,209
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8x8, Inc.
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(In thousands, unaudited)
|
|
|
|
|
|
Six Months Ended
|
|
|
|
|
September 30,
|
|
|
|
|
2018
|
|
|
2017
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
Net loss
|
|
|
|
$
|
(36,837
|
)
|
|
|
$
|
(2,715
|
)
|
Adjustments to reconcile net loss to net cash (used in) provided by
operating activities:
|
|
|
|
|
|
|
|
Depreciation
|
|
|
|
4,231
|
|
|
|
3,962
|
|
Amortization of intangible assets
|
|
|
|
2,857
|
|
|
|
2,815
|
|
Amortization of capitalized software
|
|
|
|
3,749
|
|
|
|
581
|
|
Non-cash lease expenses
|
|
|
|
2,401
|
|
|
|
-
|
|
Stock-based compensation expense
|
|
|
|
19,040
|
|
|
|
13,008
|
|
Deferred income tax benefit
|
|
|
|
-
|
|
|
|
(4,862
|
)
|
Gain on escrow settlement
|
|
|
|
-
|
|
|
|
(1,393
|
)
|
Other
|
|
|
|
538
|
|
|
|
761
|
|
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
Accounts receivable, net
|
|
|
|
(3,347
|
)
|
|
|
(1,183
|
)
|
Deferred sales commission costs
|
|
|
|
(4,675
|
)
|
|
|
-
|
|
Other current and noncurrent assets
|
|
|
|
(1,452
|
)
|
|
|
(3,485
|
)
|
Accounts payable and accruals
|
|
|
|
8,131
|
|
|
|
3,399
|
|
Deferred revenue
|
|
|
|
814
|
|
|
|
286
|
|
Net cash (used in) provided by operating activities
|
|
|
|
(4,550
|
)
|
|
|
11,174
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
Purchases of property and equipment
|
|
|
|
(2,878
|
)
|
|
|
(4,021
|
)
|
Purchase of business
|
|
|
|
(2,625
|
)
|
|
|
-
|
|
Proceeds from escrow settlement
|
|
|
|
-
|
|
|
|
1,393
|
|
Cost of capitalized software
|
|
|
|
(11,386
|
)
|
|
|
(5,203
|
)
|
Proceeds from maturity of investments
|
|
|
|
35,455
|
|
|
|
45,850
|
|
Sales of investments
|
|
|
|
23,604
|
|
|
|
13,254
|
|
Purchases of investments
|
|
|
|
(42,437
|
)
|
|
|
(57,561
|
)
|
Net cash used in investing activities
|
|
|
|
(267
|
)
|
|
|
(6,288
|
)
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
Capital lease payments
|
|
|
|
(525
|
)
|
|
|
(616
|
)
|
Payment of contingent consideration
|
|
|
|
-
|
|
|
|
(150
|
)
|
Repurchase and tax-related withholding of common stock
|
|
|
|
(8,183
|
)
|
|
|
(13,842
|
)
|
Proceeds from issuance of common stock under employee stock plans
|
|
|
|
6,720
|
|
|
|
2,788
|
|
Net cash used in financing activities
|
|
|
|
(1,988
|
)
|
|
|
(11,820
|
)
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash
|
|
|
|
(221
|
)
|
|
|
474
|
|
Net decrease in cash and cash equivalents
|
|
|
|
(7,026
|
)
|
|
|
(6,460
|
)
|
|
|
|
|
|
|
|
|
Cash, cash equivalents and restricted cash, beginning of period
|
|
|
|
39,803
|
|
|
|
41,030
|
|
Cash, cash equivalents and restricted cash, end of period
|
|
|
|
$
|
32,777
|
|
|
|
$
|
34,570
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8x8, Inc.
|
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
|
(In thousands, except per share amounts; unaudited)
|
|
|
|
|
|
Three Months Ended
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
Six Months Ended
|
Reconciliation of GAAP to Non-GAAP Expenses:
|
|
|
|
September 30, 2018
|
|
|
September 30, 2017
|
|
|
September 30, 2018
|
|
|
September 30, 2017
|
GAAP cost of service revenue
|
|
|
|
$
|
15,866
|
|
|
|
|
|
|
$
|
12,757
|
|
|
|
|
|
|
$
|
30,945
|
|
|
|
|
|
|
$
|
24,419
|
|
|
|
|
Amortization of acquired intangible assets
|
|
|
|
(1,111
|
)
|
|
|
|
|
|
(710
|
)
|
|
|
|
|
|
(2,221
|
)
|
|
|
|
|
|
(1,507
|
)
|
|
|
|
Stock-based compensation expense
|
|
|
|
(638
|
)
|
|
|
|
|
|
(473
|
)
|
|
|
|
|
|
(1,096
|
)
|
|
|
|
|
|
(864
|
)
|
|
|
|
Non-GAAP cost of service revenue
|
|
|
|
$
|
14,117
|
|
|
|
|
|
|
$
|
11,574
|
|
|
|
|
|
|
$
|
27,628
|
|
|
|
|
|
|
$
|
22,048
|
|
|
|
|
Non-GAAP service margin (as a percentage of service revenue)
|
|
|
|
$
|
67,229
|
|
|
|
82.6
|
%
|
|
|
$
|
56,549
|
|
|
|
83.0
|
%
|
|
|
$
|
131,839
|
|
|
|
82.7
|
%
|
|
|
$
|
111,166
|
|
|
|
83.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP and Non-GAAP cost of product revenue
|
|
|
|
$
|
5,397
|
|
|
|
|
|
|
$
|
5,098
|
|
|
|
|
|
|
$
|
11,678
|
|
|
|
|
|
|
$
|
9,982
|
|
|
|
|
Non-GAAP product margin (as a percentage of product revenue)
|
|
|
|
$
|
(1,061
|
)
|
|
|
(24.5
|
)%
|
|
|
$
|
(738
|
)
|
|
|
(16.9
|
)%
|
|
|
$
|
(2,238
|
)
|
|
|
(23.7
|
)%
|
|
|
$
|
(1,615
|
)
|
|
|
(19.3
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP gross margin (as a percentage of revenue)
|
|
|
|
$
|
66,168
|
|
|
|
77.2
|
%
|
|
|
$
|
55,811
|
|
|
|
77.0
|
%
|
|
|
$
|
129,601
|
|
|
|
76.7
|
%
|
|
|
$
|
109,551
|
|
|
|
77.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP research and development
|
|
|
|
$
|
13,933
|
|
|
|
|
|
|
$
|
8,311
|
|
|
|
|
|
|
$
|
27,043
|
|
|
|
|
|
|
$
|
16,254
|
|
|
|
|
Stock-based compensation expense
|
|
|
|
(2,823
|
)
|
|
|
|
|
|
(1,314
|
)
|
|
|
|
|
|
(5,017
|
)
|
|
|
|
|
|
(2,651
|
)
|
|
|
|
Non-GAAP research and development (as a percentage of revenue)
|
|
|
|
$
|
11,110
|
|
|
|
13.0
|
%
|
|
|
$
|
6,997
|
|
|
|
9.7
|
%
|
|
|
$
|
22,026
|
|
|
|
13.0
|
%
|
|
|
$
|
13,603
|
|
|
|
9.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP sales and marketing
|
|
|
|
$
|
55,930
|
|
|
|
|
|
|
$
|
41,163
|
|
|
|
|
|
|
$
|
109,235
|
|
|
|
|
|
|
$
|
82,273
|
|
|
|
|
Amortization of acquired intangible assets
|
|
|
|
(314
|
)
|
|
|
|
|
|
(583
|
)
|
|
|
|
|
|
(636
|
)
|
|
|
|
|
|
(1,308
|
)
|
|
|
|
Stock-based compensation expense
|
|
|
|
(3,826
|
)
|
|
|
|
|
|
(2,568
|
)
|
|
|
|
|
|
(7,672
|
)
|
|
|
|
|
|
(5,215
|
)
|
|
|
|
Non-GAAP sales and marketing (as a percentage of revenue)
|
|
|
|
$
|
51,790
|
|
|
|
60.4
|
%
|
|
|
$
|
38,012
|
|
|
|
52.4
|
%
|
|
|
$
|
100,927
|
|
|
|
59.8
|
%
|
|
|
$
|
75,750
|
|
|
|
53.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP general and administrative
|
|
|
|
$
|
16,543
|
|
|
|
|
|
|
$
|
9,616
|
|
|
|
|
|
|
$
|
27,976
|
|
|
|
|
|
|
$
|
18,572
|
|
|
|
|
Stock-based compensation expense
|
|
|
|
(2,842
|
)
|
|
|
|
|
|
(2,302
|
)
|
|
|
|
|
|
(5,255
|
)
|
|
|
|
|
|
(4,278
|
)
|
|
|
|
Non-recurring items
|
|
|
|
(6,151
|
)
|
|
|
|
|
|
(250
|
)
|
|
|
|
|
|
(7,652
|
)
|
|
|
|
|
|
(510
|
)
|
|
|
|
Non-GAAP general and administrative (as a percentage of revenue)
|
|
|
|
$
|
7,550
|
|
|
|
8.8
|
%
|
|
|
$
|
7,064
|
|
|
|
9.7
|
%
|
|
|
$
|
15,069
|
|
|
|
8.9
|
%
|
|
|
$
|
13,784
|
|
|
|
9.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP Net Loss to Non-GAAP Net Income (Loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net loss
|
|
|
|
$
|
(21,482
|
)
|
|
|
|
|
|
$
|
(546
|
)
|
|
|
|
|
|
$
|
(36,837
|
)
|
|
|
|
|
|
$
|
(2,715
|
)
|
|
|
|
Amortization of acquired intangible assets
|
|
|
|
1,425
|
|
|
|
|
|
|
1,293
|
|
|
|
|
|
|
2,857
|
|
|
|
|
|
|
2,815
|
|
|
|
|
Stock-based compensation expense
|
|
|
|
10,129
|
|
|
|
|
|
|
6,657
|
|
|
|
|
|
|
19,040
|
|
|
|
|
|
|
13,008
|
|
|
|
|
Non-recurring items in operating expenses
|
|
|
|
6,151
|
|
|
|
|
|
|
250
|
|
|
|
|
|
|
7,652
|
|
|
|
|
|
|
510
|
|
|
|
|
Non-recurring items in other income (expenses), net
|
|
|
|
-
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
(1,393
|
)
|
|
|
|
Provision (benefit) for income taxes
|
|
|
|
130
|
|
|
|
|
|
|
(3,453
|
)
|
|
|
|
|
|
221
|
|
|
|
|
|
|
(4,689
|
)
|
|
|
|
Non-GAAP net income (loss) before taxes (as a percentage of revenue)
|
|
|
|
$
|
(3,647
|
)
|
|
|
(4.3
|
)%
|
|
|
$
|
4,201
|
|
|
|
5.8
|
%
|
|
|
|
$
|
(7,067
|
)
|
|
|
(4.2
|
)%
|
|
|
$
|
7,536
|
|
|
|
5.3
|
%
|
Non-GAAP tax expense (1)(2)
|
|
|
|
130
|
|
|
|
|
|
|
145
|
|
|
|
|
|
|
221
|
|
|
|
|
|
|
245
|
|
|
|
|
Non-GAAP net income (loss) after taxes (as a percentage of revenue)
|
|
|
|
$
|
(3,777
|
)
|
|
|
(4.4
|
)%
|
|
|
$
|
4,056
|
|
|
|
5.6
|
%
|
|
|
|
$
|
(7,288
|
)
|
|
|
(4.3
|
)%
|
|
|
$
|
7,291
|
|
|
|
5.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) The non-GAAP tax provision in fiscal year 2019 does not have a
deferred income tax impact due to the full valuation allowance
applied against deferred tax assets. The non-GAAP effective tax, is
based on current taxes for certain states and foreign jurisdictions.
|
(2) The amount for the three and six months ended September 30, 2017
has been adjusted to conform with current period presentation.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in computing non-GAAP net income (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
93,831
|
|
|
|
|
|
|
91,689
|
|
|
|
|
|
|
93,449
|
|
|
|
|
|
|
91,667
|
|
|
|
|
Diluted
|
|
|
|
93,831
|
|
|
|
|
|
|
94,898
|
|
|
|
|
|
|
93,449
|
|
|
|
|
|
|
94,928
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net loss per share - Diluted
|
|
|
|
(0.23
|
)
|
|
|
|
|
|
$
|
(0.01
|
)
|
|
|
|
|
|
$
|
(0.39
|
)
|
|
|
|
|
|
$
|
(0.03
|
)
|
|
|
|
Non-GAAP net income (loss) before taxes per share - Diluted
|
|
|
|
(0.04
|
)
|
|
|
|
|
|
$
|
0.04
|
|
|
|
|
|
|
$
|
(0.08
|
)
|
|
|
|
|
|
$
|
0.08
|
|
|
|
|
Non-GAAP net income (loss) after taxes per share - Diluted (2)
|
|
|
|
(0.04
|
)
|
|
|
|
|
|
$
|
0.04
|
|
|
|
|
|
|
$
|
(0.08
|
)
|
|
|
|
|
|
$
|
0.08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8x8, Inc.
|
RECONCILIATION OF ASC 605 TO ASC 606 STATEMENTS OF OPERATIONS
|
AND NON-GAAP NET INCOME (LOSS)
|
(In thousands, except per share amounts; unaudited)
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
September 30, 2018
|
|
|
September 30, 2018
|
|
|
|
ASC 605
|
|
|
Adjustments
|
|
|
ASC 606
(as reported)
|
|
|
ASC 605
|
|
|
Adjustments
|
|
|
ASC 606
(as reported)
|
Service revenue
|
|
|
$
|
81,543
|
|
|
|
$
|
(197
|
)
|
|
|
$
|
81,346
|
|
|
|
$
|
159,785
|
|
|
|
$
|
(318
|
)
|
|
|
$
|
159,467
|
|
Product revenue
|
|
|
$
|
4,176
|
|
|
|
$
|
160
|
|
|
|
$
|
4,336
|
|
|
|
$
|
9,187
|
|
|
|
$
|
253
|
|
|
|
$
|
9,440
|
|
Total revenue
|
|
|
$
|
85,719
|
|
|
|
$
|
(37
|
)
|
|
|
$
|
85,682
|
|
|
|
$
|
168,972
|
|
|
|
$
|
(65
|
)
|
|
|
$
|
168,907
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing
|
|
|
$
|
58,806
|
|
|
|
$
|
(2,876
|
)
|
|
|
$
|
55,930
|
|
|
|
$
|
113,910
|
|
|
|
$
|
(4,675
|
)
|
|
|
$
|
109,235
|
|
Loss from operations
|
|
|
$
|
(24,826
|
)
|
|
|
$
|
2,839
|
|
|
|
$
|
(21,987
|
)
|
|
|
$
|
(42,580
|
)
|
|
|
$
|
4,610
|
|
|
|
$
|
(37,970
|
)
|
Net loss
|
|
|
$
|
(24,321
|
)
|
|
|
$
|
2,839
|
|
|
|
$
|
(21,482
|
)
|
|
|
$
|
(41,447
|
)
|
|
|
$
|
4,610
|
|
|
|
$
|
(36,837
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
|
|
|
$
|
(0.26
|
)
|
|
|
$
|
0.03
|
|
|
|
$
|
(0.23
|
)
|
|
|
$
|
(0.44
|
)
|
|
|
$
|
0.05
|
|
|
|
$
|
(0.39
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net loss before taxes
|
|
|
$
|
(6,486
|
)
|
|
|
$
|
2,839
|
|
|
|
$
|
(3,647
|
)
|
|
|
$
|
(11,677
|
)
|
|
|
$
|
4,610
|
|
|
|
$
|
(7,067
|
)
|
Non-GAAP net loss after taxes
|
|
|
$
|
(6,616
|
)
|
|
|
$
|
2,839
|
|
|
|
$
|
(3,777
|
)
|
|
|
$
|
(11,898
|
)
|
|
|
$
|
4,610
|
|
|
|
$
|
(7,288
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net loss per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
|
|
|
$
|
(0.07
|
)
|
|
|
$
|
0.03
|
|
|
|
$
|
(0.04
|
)
|
|
|
$
|
(0.13
|
)
|
|
|
$
|
0.05
|
|
|
|
$
|
(0.08
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20181029005699/en/
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