Total Revenue of $53.2 Million Increases 29% YoY; Service Revenue
From Mid-Market/Enterprise Customers Now Represents 50% of Total Service
Revenue; Non-GAAP Net Income of $4.3 Million, $0.05 Per Share
8x8, Inc. (NASDAQ:EGHT), a provider of cloud-based unified
communications and contact center solutions, today reported financial
results for the third quarter of fiscal 2016 ended December 31, 2015.
Third Quarter Fiscal 2016 Financial Highlights:
-
Total revenue of $53.2 million increased 29% year-over-year; service
revenue of $48.9 million increased 29% year-over-year.
-
GAAP net loss for the third quarter of fiscal 2016 was ($1.7 million),
or ($0.02) per diluted share, compared with GAAP net income of
$444,000 or $0.01 per diluted share, in the third quarter of fiscal
2015.
-
Non-GAAP net income was $4.3 million, or $0.05 per diluted share,
compared with $4.1 million, or $0.04 per diluted share, for the same
period last year.
-
Service revenue from mid-market/enterprise customers grew 53%
year-over-year and now represents 50% of the Company’s total service
revenue.
-
New monthly recurring revenue (MRR) sold to mid-market/enterprise
customers and by channel sales teams increased 94% year-over-year and
accounted for 58% of total MRR booked in the quarter, compared with
43% of total MRR booked in the same period last year.
-
Average monthly service revenue (ARPU) per business customer increased
21% to $369, compared with $305 in the same period last year.
“8x8 executed another solid quarter, posting a 94% increase in new
monthly recurring revenue sold to mid-market and enterprise customers
and by channel sales teams. We continued to demonstrate the
effectiveness of our global and multi-channel growth strategies,
capturing larger customers and demonstrating our leadership position in
the fast-growing UCaaS industry,” said 8x8 CEO Vik Verma. “I am
extremely pleased with how our team is executing across the board, from
the increasing productivity of our sales organization to the dedication
and success of our global deployment teams.”
“Our service revenue from the mid-market and enterprise segment grew 53%
year-over-year and now constitutes 50% of our total service revenue,”
Verma continued. “Given our continued progress moving upmarket, we are
once again revising our fiscal 2016 revenue outlook upward to a range of
$205 million to $207 million, which represents a 26%-27% year-over-year
increase, from our previous outlook of $204 million to $206 million. Due
to the strong growth in our service revenue, we are also increasing our
guidance for non-GAAP net income as a percentage of revenue to
approximately 6%-7% for the full fiscal year.”
Additional Third Quarter and Year-to-Date
Highlights:
-
GAAP gross margin was unchanged from the year ago period at 72%;
non-GAAP gross margin was 75%, compared with 73% in the same year ago
period.
-
GAAP service margin was unchanged from the year ago period at 80%;
non-GAAP service margin was 83%, compared with 81% in the same period
a year ago.
-
Gross monthly organic business service revenue churn was 1.2%,
compared with 1.0% in the same period last year.
-
Cash, cash equivalents and investments were $155 million in the third
quarter of fiscal 2016, compared with $149 million in the previous
quarter; cash flow from operating activities was $8.3 million.
-
Repurchased approximately 66,000 shares of the Company’s common stock
during the quarter at an average price of $8.27 per share.
-
Completed integration of UK Solutions and DXI sales teams under one
8x8 UK umbrella organization.
-
Awarded two new U.S. patents related to contact center and
communication technologies contributing to a total of 114 awarded
patents.
Conference Call Information:
Management will host a conference call to discuss these results and
other matters related to the Company’s business today, January 21, 2016
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 #12488963)
|
|
|
(404) 537-3406, international (Conference ID #12488963)
|
|
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 midnight January 28, 2016.
The webcast will be archived on 8x8’s website for a period of one year.
For additional information, visit http://investors.8x8.com.
8x8 also announced that on January 19, 2016, it awarded restricted stock
units (RSUs) representing an aggregate of 71,063 shares of the Company's
common stock and options to purchase a total of 37,172 shares to 11 new
non-officer employees under the 8x8 "2013 New Employee Inducement
Incentive Plan." The equity awards were approved by the 8x8 Board of
Directors Compensation Committee and were granted as an inducement to
the new employees entering into employment with 8x8, in accordance with
Nasdaq Market Place Rule 5635(c)(4). Each of the awards are subject to
vesting pursuant to the terms of the award agreements, which include
that the recipient be employed through each vesting date.
About 8x8, Inc.
8x8, Inc. (NASDAQ:EGHT) is the trusted provider of secure and reliable
enterprise cloud communications solutions to more than 40,000 businesses
operating in over 100 countries across six continents. 8x8's
out-of-the-box cloud solutions replace traditional on-premise PBX
hardware and software-based systems with a flexible and scalable
Software as a Service (SaaS) alternative, encompassing cloud business
phone service, contact center solutions, and conferencing. For
additional information, visit www.8x8.com,
www.8x8.com/UK or connect with
8x8 on LinkedIn,
Twitter, Google+
and Facebook.
Non-GAAP Measures
The Company has provided in this release financial information that has
not been prepared in accordance with Generally Accepted Accounting
Principles (GAAP). Management uses these non-GAAP financial measures
internally in analyzing our financial results and believes they are
useful to investors, as a supplement to GAAP measures, in evaluating the
Company’s ongoing operational performance. Management believes that the
use of these non-GAAP financial measures provides an additional tool for
investors to use in evaluating 8x8’s ongoing operating results and
trends and in comparing financial results with other companies in the
industry, many of which present similar non-GAAP financial measures to
investors.
Non-GAAP financial measures should not be considered in isolation from,
or as a substitute for, financial information prepared in accordance
with GAAP. Investors are encouraged to review the reconciliation of
these non-GAAP financial measures to their most directly comparable GAAP
financial measures. This reconciliation has been provided in the
financial statement tables included below in this press release.
Non-GAAP Net Income and Non-GAAP Net Income Per
Share
We have defined non-GAAP net income as net income for GAAP plus gain on
patent sale, non-cash tax adjustments, stock-based compensation,
amortization of acquired intangible assets, acquisition-related costs
and impairment of long-lived assets. Non-cash tax adjustments represent
the difference between the amount of taxes we expect to pay and our GAAP
tax provision each period. We have excluded stock-based compensation
expense because it relies on valuations based on future events, such as
the market price of our common stock, that are difficult to predict and
are affected by market factors that are largely not within the control
of management. Amortization of acquired intangible assets is excluded
because it is a non-cash expense that we do not consider part of ongoing
operations when assessing our financial performance, as it relates to
accounting for certain purchased assets. We have excluded gain on patent
sale and impairment of long-lived assets because we consider them to be
isolated transactions and believe they are not reflective of our ongoing
operations, and it reduces comparability of periodic operating results
when it is included. We have excluded acquisition-related expenses
because these expenses are difficult to predict and are often one-time.
We define non-GAAP net income per share as non-GAAP net income divided
by the weighted-average diluted shares outstanding. We define non-GAAP
net income percentage of revenue as non-GAAP net income divided by
revenue. The GAAP and non-GAAP weighted average number of diluted shares
to calculate GAAP and non-GAAP earnings per share are the same. We
believe that such exclusions facilitate comparisons to our historical
operating results and to the results of other companies in the same
industry, and provides investors with information that we use in
evaluating management’s performance on a quarterly and annual basis.
Forward Looking Statements
This news release contains "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995 and
Section 21E of the Securities Exchange Act of 1934. These statements
include, without limitation, information about future events based on
current expectations, potential product development efforts, near and
long-term objectives, potential new business, strategies, organization
changes, changing markets, future business performance and outlook. Such
statements are predictions only, and actual events or results could
differ materially from those made in any forward-looking statements due
to a number of risks and uncertainties. Actual results and trends may
differ materially from historical results or those projected in any such
forward-looking statements depending on a variety of factors. These
factors include, but are not limited to, market acceptance of new or
existing services and features, success of our efforts to target
mid-market and larger distributed enterprises, changes in the
competitive dynamics of the markets in which we compete, customer
cancellations and rate of churn, impact of current economic climate and
adverse credit markets on our target customers, our ability to scale our
business, our reliance on infrastructure of third-party network services
providers, risk of failure in our physical infrastructure, risk of
failure of our software, our ability to maintain the compatibility of
our software with third-party applications and mobile platforms,
continued compliance with industry standards and regulatory
requirements, risks relating to our strategies and objectives for future
operations, including the execution of integration plans and realization
of the expected benefits of our acquisitions, the amount and timing of
costs associated with recruiting, training and integrating new
employees, introduction and adoption of our cloud communications and
collaboration services in markets outside of the United States, risks
regarding compliance with regulations in the United States and foreign
jurisdictions in which our services are provided, and general economic
conditions that could adversely affect our business and operating
results. For a discussion of such risks and uncertainties, which could
cause actual results to differ from those contained in the
forward-looking statements, see “Risk Factors” in the Company’s reports
on Forms 10-K and 10-Q, as well as other reports that 8x8, Inc. files
from time to time with the Securities and Exchange Commission. All
forward-looking statements are qualified in their entirety by this
cautionary statement, and 8x8, Inc. undertakes no obligation to update
publicly any forward-looking statement for any reason, except as
required by law, even as new information becomes available or other
events occur in the future.
|
8x8, Inc.
|
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
|
(In thousands, except per share amounts; unaudited)
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
December 31,
|
|
December 31,
|
|
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
Service revenue
|
|
$
|
48,948
|
|
|
$
|
37,802
|
|
$
|
140,068
|
|
|
$
|
108,199
|
|
Product revenue
|
|
|
4,220
|
|
|
|
3,570
|
|
|
11,935
|
|
|
|
10,684
|
|
Total revenue
|
|
|
53,168
|
|
|
|
41,372
|
|
|
152,003
|
|
|
|
118,883
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of service revenue (1)
|
|
|
9,713
|
|
|
|
7,544
|
|
|
27,359
|
|
|
|
22,046
|
|
Cost of product revenue
|
|
|
5,087
|
|
|
|
3,959
|
|
|
14,065
|
|
|
|
11,690
|
|
Research and development (2)
|
|
|
6,404
|
|
|
|
3,868
|
|
|
17,930
|
|
|
|
10,770
|
|
Sales and marketing (3)
|
|
|
27,585
|
|
|
|
20,559
|
|
|
78,138
|
|
|
|
59,159
|
|
General and administrative (4)
|
|
|
6,888
|
|
|
|
4,617
|
|
|
18,614
|
|
|
|
12,388
|
|
Gain on patent sale
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
|
(1,000
|
)
|
Total operating expenses
|
|
|
55,677
|
|
|
|
40,547
|
|
|
156,106
|
|
|
|
115,053
|
|
Income (loss) from operations
|
|
|
(2,509
|
)
|
|
|
825
|
|
|
(4,103
|
)
|
|
|
3,830
|
|
Other income, net
|
|
|
272
|
|
|
|
246
|
|
|
710
|
|
|
|
623
|
|
Income (loss) from operations before provision (benefit) for income
taxes
|
|
|
(2,237
|
)
|
|
|
1,071
|
|
|
(3,393
|
)
|
|
|
4,453
|
|
Provision (benefit) for income taxes
|
|
|
(557
|
)
|
|
|
627
|
|
|
651
|
|
|
|
2,710
|
|
Net income (loss)
|
|
$
|
(1,680
|
)
|
|
$
|
444
|
|
$
|
(4,044
|
)
|
|
$
|
1,743
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.02
|
)
|
|
$
|
0.01
|
|
$
|
(0.05
|
)
|
|
$
|
0.02
|
|
Diluted
|
|
$
|
(0.02
|
)
|
|
$
|
0.01
|
|
$
|
(0.05
|
)
|
|
$
|
0.02
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
88,289
|
|
|
|
89,594
|
|
|
88,812
|
|
|
|
89,107
|
|
Diluted
|
|
|
88,289
|
|
|
|
91,974
|
|
|
88,812
|
|
|
|
91,752
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)(2)(3)(4) - See reconciliation of GAAP measures to non-GAAP
measures.
|
|
|
8x8, Inc.
|
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES
|
(In thousands, unaudited)
|
|
(1) Amounts include amortization of acquired intangible assets,
impairment of long-lived assets, and stock-based compensation as
follows:
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
GAAP cost of service revenue
|
|
$
|
9,713
|
|
|
$
|
7,544
|
|
|
$
|
27,359
|
|
|
$
|
22,046
|
|
Amortization of acquired intangible assets
|
|
|
(618
|
)
|
|
|
(206
|
)
|
|
|
(1,451
|
)
|
|
|
(618
|
)
|
Impairment of long-lived assets
|
|
|
(440
|
)
|
|
|
-
|
|
|
|
(440
|
)
|
|
|
-
|
|
Stock-based compensation expense
|
|
|
(346
|
)
|
|
|
(201
|
)
|
|
|
(828
|
)
|
|
|
(476
|
)
|
Non-GAAP cost of service revenue
|
|
$
|
8,309
|
|
|
$
|
7,137
|
|
|
$
|
24,640
|
|
|
$
|
20,952
|
|
Non-GAAP cost of service revenue as a percentage of service revenue
|
|
|
17.0
|
%
|
|
|
18.9
|
%
|
|
|
17.6
|
%
|
|
|
19.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) Amounts include stock-based compensation and acquisition
related expenses as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
GAAP research and development
|
|
$
|
6,404
|
|
|
$
|
3,868
|
|
|
$
|
17,930
|
|
|
$
|
10,770
|
|
Stock-based compensation expense
|
|
|
(850
|
)
|
|
|
(420
|
)
|
|
|
(2,107
|
)
|
|
|
(1,049
|
)
|
Acquisition related expenses
|
|
|
-
|
|
|
|
-
|
|
|
|
(5
|
)
|
|
|
-
|
|
Non-GAAP research and development
|
|
$
|
5,554
|
|
|
$
|
3,448
|
|
|
$
|
15,818
|
|
|
$
|
9,721
|
|
Non-GAAP research and development as a percentage of total revenue
|
|
|
10.4
|
%
|
|
|
8.3
|
%
|
|
|
10.4
|
%
|
|
|
8.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3) Amounts include amortization of acquired intangible assets,
impairment of long-lived assets, stock-based compensation, and
acquisition related expenses as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
GAAP sales and marketing
|
|
$
|
27,585
|
|
|
$
|
20,559
|
|
|
$
|
78,138
|
|
|
$
|
59,159
|
|
Amortization of acquired intangible assets
|
|
|
(384
|
)
|
|
|
(348
|
)
|
|
|
(1,114
|
)
|
|
|
(1,069
|
)
|
Impairment of long-lived assets
|
|
|
(200
|
)
|
|
|
-
|
|
|
|
(200
|
)
|
|
|
-
|
|
Stock-based compensation expense
|
|
|
(1,689
|
)
|
|
|
(966
|
)
|
|
|
(4,308
|
)
|
|
|
(2,620
|
)
|
Acquisition related expenses
|
|
|
-
|
|
|
|
-
|
|
|
|
(27
|
)
|
|
|
-
|
|
Non-GAAP sales and marketing
|
|
$
|
25,312
|
|
|
$
|
19,245
|
|
|
$
|
72,489
|
|
|
$
|
55,470
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP sales and marketing as a percentage of total revenue
|
|
|
47.6
|
%
|
|
|
46.5
|
%
|
|
|
47.7
|
%
|
|
|
46.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4) Amounts include amortization of stock-based compensation and
acquisition related expenses as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
GAAP general and administrative
|
|
$
|
6,888
|
|
|
$
|
4,617
|
|
|
$
|
18,614
|
|
|
$
|
12,388
|
|
Stock-based compensation expense
|
|
|
(1,778
|
)
|
|
|
(1,047
|
)
|
|
|
(3,959
|
)
|
|
|
(2,344
|
)
|
Acquisition related expenses
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,011
|
)
|
|
|
-
|
|
Non-GAAP general and administrative
|
|
$
|
5,110
|
|
|
$
|
3,570
|
|
|
$
|
13,644
|
|
|
$
|
10,044
|
|
Non-GAAP general and administrative as a percentage of total
revenue
|
|
|
9.6
|
%
|
|
|
8.6
|
%
|
|
|
9.0
|
%
|
|
|
8.4
|
%
|
|
8x8, Inc.
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(In thousands, unaudited)
|
|
|
|
|
December 31,
|
|
|
March 31,
|
|
|
|
2015
|
|
|
2015
|
ASSETS
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
23,866
|
|
$
|
53,110
|
Short-term investments
|
|
|
130,719
|
|
|
123,984
|
Accounts receivable, net
|
|
|
9,927
|
|
|
6,642
|
Inventory
|
|
|
786
|
|
|
704
|
Deferred tax assets
|
|
|
3,955
|
|
|
4,454
|
Other current assets
|
|
|
5,647
|
|
|
2,702
|
Total current assets
|
|
|
174,900
|
|
|
191,596
|
Property and equipment, net
|
|
|
11,969
|
|
|
10,248
|
Intangible assets, net
|
|
|
23,050
|
|
|
12,260
|
Goodwill
|
|
|
48,144
|
|
|
36,887
|
Non-current deferred tax asset
|
|
|
43,169
|
|
|
43,169
|
Other assets
|
|
|
2,356
|
|
|
1,464
|
Total assets
|
|
$
|
303,588
|
|
$
|
295,624
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
9,917
|
|
$
|
7,775
|
Accrued compensation
|
|
|
9,880
|
|
|
6,183
|
Accrued warranty
|
|
|
322
|
|
|
339
|
Deferred revenue
|
|
|
1,807
|
|
|
1,768
|
Other accrued liabilities
|
|
|
8,496
|
|
|
5,765
|
Total current liabilities
|
|
|
30,422
|
|
|
21,830
|
|
|
|
|
|
|
|
Other liabilities
|
|
|
3,859
|
|
|
1,583
|
Total liabilities
|
|
|
34,281
|
|
|
23,413
|
|
|
|
|
|
|
|
Total stockholders' equity
|
|
|
269,307
|
|
|
272,211
|
Total liabilities and stockholders' equity
|
|
$
|
303,588
|
|
$
|
295,624
|
|
8x8, Inc.
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(In thousands, unaudited)
|
|
|
|
|
Nine Months Ended
|
|
|
|
December 31,
|
|
|
|
2015
|
|
|
2014
|
Cash flows from operating activities:
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
(4,044
|
)
|
|
$
|
1,743
|
|
Adjustments to reconcile net income (loss) to net cash provided by
operating activities:
|
|
|
|
|
|
|
Depreciation
|
|
|
3,598
|
|
|
|
2,513
|
|
Amortization of intangible assets
|
|
|
2,565
|
|
|
|
1,687
|
|
Impairment of long-lived assets
|
|
|
640
|
|
|
|
-
|
|
Amortization of capitalized software
|
|
|
456
|
|
|
|
255
|
|
Net accretion of discount and amortization of premium on
marketable securities
|
|
|
584
|
|
|
|
659
|
|
Stock-based compensation
|
|
|
11,202
|
|
|
|
6,489
|
|
Deferred income tax provision
|
|
|
361
|
|
|
|
2,444
|
|
Other
|
|
|
467
|
|
|
|
268
|
|
Changes in assets and liabilities:
|
|
|
|
|
|
|
Accounts receivable, net
|
|
|
(3,138
|
)
|
|
|
(2,062
|
)
|
Inventory
|
|
|
(122
|
)
|
|
|
235
|
|
Other current and noncurrent assets
|
|
|
(1,699
|
)
|
|
|
(505
|
)
|
Deferred cost of goods sold
|
|
|
(156
|
)
|
|
|
(179
|
)
|
Accounts payable
|
|
|
674
|
|
|
|
(736
|
)
|
Accrued compensation
|
|
|
3,351
|
|
|
|
2,044
|
|
Accrued warranty
|
|
|
(17
|
)
|
|
|
(237
|
)
|
Accrued taxes and fees
|
|
|
1,837
|
|
|
|
561
|
|
Deferred revenue
|
|
|
(427
|
)
|
|
|
(840
|
)
|
Other current and noncurrent liabilities
|
|
|
(748
|
)
|
|
|
(564
|
)
|
Net cash provided by operating activities
|
|
|
15,384
|
|
|
|
13,775
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
Purchases of property and equipment
|
|
|
(3,295
|
)
|
|
|
(4,523
|
)
|
Purchase of businesses, net of cash acquired
|
|
|
(23,434
|
)
|
|
|
-
|
|
Cost of capitalized software
|
|
|
(1,275
|
)
|
|
|
(456
|
)
|
Proceeds from maturity of investments
|
|
|
38,451
|
|
|
|
31,400
|
|
Sales of investments - available for sale
|
|
|
43,934
|
|
|
|
29,580
|
|
Purchase of investments - available for sale
|
|
|
(90,025
|
)
|
|
|
(77,821
|
)
|
Net cash used in investing activities
|
|
|
(35,644
|
)
|
|
|
(21,820
|
)
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
Capital lease payments
|
|
|
(321
|
)
|
|
|
(115
|
)
|
Payment of contingent consideration
|
|
|
(200
|
)
|
|
|
-
|
|
Repurchase of common stock
|
|
|
(11,628
|
)
|
|
|
(1,723
|
)
|
Proceeds from issuance of common stock under employee stock plans
|
|
|
2,848
|
|
|
|
2,666
|
|
Net cash (used in) provided by financing activities
|
|
|
(9,301
|
)
|
|
|
828
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash
|
|
|
317
|
|
|
|
656
|
|
Net decrease in cash and cash equivalents
|
|
|
(29,244
|
)
|
|
|
(6,561
|
)
|
|
|
|
|
|
|
|
Cash and cash equivalents at the beginning of the period
|
|
|
53,110
|
|
|
|
59,159
|
|
Cash and cash equivalents at the end of the period
|
|
$
|
23,866
|
|
|
$
|
52,598
|
|
|
8x8, Inc.
|
Selected Operating Statistics
|
|
|
|
Three Months Ended
|
|
|
Dec. 31, 2014
|
|
March 31, 2015
|
|
June 30, 2015
|
|
Sept. 30, 2015
|
|
Dec. 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
Business customer average monthly service revenue per customer (1)
|
|
$
|
305
|
|
|
$
|
320
|
|
|
$
|
353
|
|
|
$
|
360
|
|
|
$
|
369
|
|
Monthly business service revenue churn (2)(3)
|
|
|
1.0
|
%
|
|
|
0.5
|
%
|
|
|
1.0
|
%
|
|
|
0.7
|
%
|
|
|
1.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Overall service margin
|
|
|
80
|
%
|
|
|
81
|
%
|
|
|
81
|
%
|
|
|
80
|
%
|
|
|
80
|
%
|
Overall product margin
|
|
|
-11
|
%
|
|
|
-19
|
%
|
|
|
-18
|
%
|
|
|
-15
|
%
|
|
|
-21
|
%
|
Overall gross margin
|
|
|
72
|
%
|
|
|
73
|
%
|
|
|
73
|
%
|
|
|
73
|
%
|
|
|
72
|
%
|
|
(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 the
period ended June 30, September 30, and December 31, 2015.
|
|
8x8, Inc.
|
RECONCILIATION OF NET INCOME (LOSS) TO NON-GAAP NET INCOME
|
AND NON-GAAP NET INCOME PER SHARE
|
(In thousands, except per share amounts; unaudited)
|
|
|
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
2015
|
|
|
|
2014
|
|
|
|
|
|
2015
|
|
|
|
2014
|
Net income (loss)
|
|
$
|
(1,680
|
)
|
|
|
$
|
444
|
|
|
|
|
|
$
|
(4,044
|
)
|
|
|
$
|
1,743
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on patent sale
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
|
|
-
|
|
|
|
|
(1,000
|
)
|
Non-cash tax adjustments
|
|
|
(326
|
)
|
|
|
|
442
|
|
|
|
|
|
|
361
|
|
|
|
|
2,444
|
|
Amortization of acquired intangible assets
|
|
|
1,002
|
|
|
|
|
554
|
|
|
|
|
|
|
2,565
|
|
|
|
|
1,687
|
|
Stock-based compensation expense
|
|
|
4,663
|
|
|
|
|
2,634
|
|
|
|
|
|
|
11,202
|
|
|
|
|
6,489
|
|
Acquisition related expenses
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
|
|
1,043
|
|
|
|
|
-
|
|
Impairment of long-lived assets
|
|
|
640
|
|
|
|
|
-
|
|
|
|
|
|
|
640
|
|
|
|
|
-
|
|
Non-GAAP net income
|
|
$
|
4,299
|
|
|
|
|
4,074
|
|
|
|
|
|
$
|
11,767
|
|
|
|
$
|
11,363
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation between GAAP and non-GAAP weighted average shares
used in computing basic and diluted net income (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator for basic calculation
|
|
|
88,289
|
|
|
|
|
89,594
|
|
|
|
|
|
|
88,812
|
|
|
|
|
89,107
|
|
Effect of dilutive securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee stock options
|
|
|
1,614
|
|
|
|
|
1,963
|
|
|
|
|
|
|
1,595
|
|
|
|
|
2,210
|
|
Employee restricted purchase rights
|
|
|
1,303
|
|
|
|
|
417
|
|
|
|
|
|
|
1,048
|
|
|
|
|
435
|
|
Employee stock plan purchases
|
|
|
14
|
|
|
|
|
-
|
|
|
|
|
|
|
10
|
|
|
|
|
-
|
|
Denominator for diluted calculation
|
|
|
91,220
|
|
|
|
|
91,974
|
|
|
|
|
|
|
91,465
|
|
|
|
|
91,752
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income (loss) per share - Diluted
|
|
$
|
(0.02
|
)
|
|
|
$
|
0.01
|
|
|
|
|
|
$
|
(0.05
|
)
|
|
|
$
|
0.02
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on patent sale
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
|
|
-
|
|
|
|
|
(0.01
|
)
|
Non-cash tax adjustments
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
|
|
0.01
|
|
|
|
|
0.02
|
|
Amortization of acquired intangible assets
|
|
|
0.01
|
|
|
|
|
0.01
|
|
|
|
|
|
|
0.03
|
|
|
|
|
0.02
|
|
Stock-based compensation expense
|
|
|
0.05
|
|
|
|
|
0.02
|
|
|
|
|
|
|
0.12
|
|
|
|
|
0.07
|
|
Acquisition related expenses
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
|
|
0.01
|
|
|
|
|
-
|
|
Impairment of long-lived assets
|
|
|
0.01
|
|
|
|
|
-
|
|
|
|
|
|
|
0.01
|
|
|
|
|
-
|
|
Non-GAAP net income per share - Diluted
|
|
$
|
0.05
|
|
|
|
$
|
0.04
|
|
|
|
|
|
$
|
0.13
|
|
|
|
$
|
0.12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income or loss as a percentage of total revenue
|
|
|
-3
|
%
|
|
|
|
1
|
%
|
|
|
|
|
|
-3
|
%
|
|
|
|
1
|
%
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on patent sale
|
|
|
0
|
%
|
|
|
|
0
|
%
|
|
|
|
|
|
0
|
%
|
|
|
|
-1
|
%
|
Non-cash tax adjustments
|
|
|
-1
|
%
|
|
|
|
1
|
%
|
|
|
|
|
|
0
|
%
|
|
|
|
2
|
%
|
Amortization of acquired intangible assets
|
|
|
2
|
%
|
|
|
|
1
|
%
|
|
|
|
|
|
2
|
%
|
|
|
|
2
|
%
|
Stock-based compensation expense
|
|
|
9
|
%
|
|
|
|
7
|
%
|
|
|
|
|
|
7
|
%
|
|
|
|
6
|
%
|
Acquisition related expenses
|
|
|
0
|
%
|
|
|
|
0
|
%
|
|
|
|
|
|
1
|
%
|
|
|
|
0
|
%
|
Impairment of long-lived assets
|
|
|
1
|
%
|
|
|
|
0
|
%
|
|
|
|
|
|
1
|
%
|
|
|
|
0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net income as a percentage of total revenue
|
|
|
8
|
%
|
|
|
|
10
|
%
|
|
|
|
|
|
8
|
%
|
|
|
|
10
|
%
|
|
8x8, Inc.
|
RECONCILIATION OF GAAP GROSS MARGIN TO NON-GAAP
|
GROSS MARGIN
|
(In thousands, unaudited)
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
December 31,
|
|
December 31,
|
|
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
GAAP gross margin
|
|
$
|
38,368
|
|
|
$
|
29,869
|
|
|
$
|
110,579
|
|
|
$
|
85,147
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of acquired intangible assets
|
|
|
618
|
|
|
|
206
|
|
|
|
1,451
|
|
|
|
618
|
|
Impairment of long-lived assets
|
|
|
440
|
|
|
|
-
|
|
|
|
440
|
|
|
|
-
|
|
Stock-based compensation expense
|
|
|
346
|
|
|
|
201
|
|
|
|
828
|
|
|
|
476
|
|
Non-GAAP gross margin
|
|
$
|
39,772
|
|
|
$
|
30,276
|
|
|
$
|
113,298
|
|
|
$
|
86,241
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP gross margin as a percentage of total revenue
|
|
|
72
|
%
|
|
|
72
|
%
|
|
|
73
|
%
|
|
|
72
|
%
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of acquired intangible assets
|
|
|
1
|
%
|
|
|
1
|
%
|
|
|
1
|
%
|
|
|
1
|
%
|
Impairment of long-lived assets
|
|
|
1
|
%
|
|
|
0
|
%
|
|
|
0
|
%
|
|
|
0
|
%
|
Stock-based compensation expense
|
|
|
1
|
%
|
|
|
0
|
%
|
|
|
1
|
%
|
|
|
0
|
%
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP gross margin as a percentage of total revenue
|
|
|
75
|
%
|
|
|
73
|
%
|
|
|
75
|
%
|
|
|
73
|
%
|
|
8x8, Inc.
|
RECONCILIATION OF GAAP SERVICE MARGIN TO NON-GAAP
|
SERVICE MARGIN
|
(In thousands, unaudited)
|
|
|
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
GAAP service margin
|
|
$
|
39,235
|
|
|
$
|
30,258
|
|
|
$
|
112,709
|
|
|
$
|
86,153
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of acquired intangible assets
|
|
|
618
|
|
|
|
206
|
|
|
|
1,451
|
|
|
|
618
|
|
Impairment of long-lived assets
|
|
|
440
|
|
|
|
-
|
|
|
|
440
|
|
|
|
-
|
|
Stock-based compensation expense
|
|
|
346
|
|
|
|
201
|
|
|
|
828
|
|
|
|
476
|
|
Non-GAAP service margin
|
|
$
|
40,639
|
|
|
$
|
30,665
|
|
|
$
|
115,428
|
|
|
$
|
87,247
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP service margin as a percentage of service revenue
|
|
|
80
|
%
|
|
|
80
|
%
|
|
|
80
|
%
|
|
|
80
|
%
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of acquired intangible assets
|
|
|
1
|
%
|
|
|
1
|
%
|
|
|
1
|
%
|
|
|
1
|
%
|
Impairment of long-lived assets
|
|
|
1
|
%
|
|
|
0
|
%
|
|
|
0
|
%
|
|
|
0
|
%
|
Stock-based compensation expense
|
|
|
1
|
%
|
|
|
0
|
%
|
|
|
1
|
%
|
|
|
0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP service margin as a percentage of service revenue
|
|
|
83
|
%
|
|
|
81
|
%
|
|
|
82
|
%
|
|
|
81
|
%
|
|
8x8, Inc.
|
RECONCILIATION OF GAAP INCOME (LOSS) FROM OPERATIONS TO NON-GAAP
|
INCOME FROM OPERATIONS
|
(In thousands, unaudited)
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
December 31,
|
|
December 31,
|
|
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
GAAP income (loss) from operations
|
|
$
|
(2,509
|
)
|
|
$
|
825
|
|
|
$
|
(4,103
|
)
|
|
$
|
3,830
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on patent sale
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,000
|
)
|
Amortization of acquired intangible assets
|
|
|
1,002
|
|
|
|
554
|
|
|
|
2,565
|
|
|
|
1,687
|
|
Stock-based compensation expense
|
|
|
4,663
|
|
|
|
2,634
|
|
|
|
11,202
|
|
|
|
6,489
|
|
Acquisition related expenses
|
|
|
-
|
|
|
|
-
|
|
|
|
1,043
|
|
|
|
-
|
|
Impairment of long-lived assets
|
|
|
640
|
|
|
|
-
|
|
|
|
640
|
|
|
|
-
|
|
Non-GAAP income from operations
|
|
$
|
3,796
|
|
|
$
|
4,013
|
|
|
$
|
11,347
|
|
|
$
|
11,006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP income or loss from operations as a percentage of total revenue
|
|
|
-5
|
%
|
|
|
2
|
%
|
|
|
-3
|
%
|
|
|
3
|
%
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on patent sale
|
|
|
0
|
%
|
|
|
0
|
%
|
|
|
0
|
%
|
|
|
-1
|
%
|
Amortization of acquired intangible assets
|
|
|
2
|
%
|
|
|
2
|
%
|
|
|
2
|
%
|
|
|
1
|
%
|
Stock-based compensation expense
|
|
|
9
|
%
|
|
|
6
|
%
|
|
|
7
|
%
|
|
|
6
|
%
|
Acquisition related expenses
|
|
|
0
|
%
|
|
|
0
|
%
|
|
|
1
|
%
|
|
|
0
|
%
|
Impairment of long-lived assets
|
|
|
1
|
%
|
|
|
0
|
%
|
|
|
0
|
%
|
|
|
0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP income from operations as a percentage of total revenue
|
|
|
7
|
%
|
|
|
10
|
%
|
|
|
7
|
%
|
|
|
9
|
%
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20160121006428/en/
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