8x8, Inc. Reports Second Quarter Fiscal 2017 Financial Results
Total Revenue Increases 24% YoY to a Record $63.2 Million
Service Revenue from Mid-Market and Enterprise Customers Increases 36% YoY and Represents 53% of Total
Service Revenue
GAAP Net Income of $27k; Non-GAAP Net Income of $5.3 Million
8x8, Inc. (NASDAQ:EGHT), the leading provider of Enterprise Communications as a Service (ECaaS), today reported record financial
results for the second quarter of fiscal 2017 ended September 30, 2016.
Second Quarter Fiscal 2017 Financial Highlights:
- Total revenue grew 24% year-over-year to $63.2 million; service revenue grew 23% year-over-year to
$57.7 million.
- Service revenue from mid-market and enterprise customers grew 36% year-over-year organically and
represents over 53% of the Company’s total service revenue.
- New monthly recurring revenue (MRR) sold to mid-market and enterprise customers and by channel sales
teams increased 30% year-over-year and accounted for 65% of total MRR booked in the quarter.
- GAAP net income was $27k, or $0.00 per diluted share; non-GAAP net income was $5.3 million, or $0.06
per diluted share.
- GAAP gross margin was 74%, compared with 73% in the same period last year; non-GAAP gross margin
remained unchanged year-over-year at 75%.
- GAAP service margin was 81%, compared with 80% in the same period last year; non-GAAP service margin
was 83%, compared with 82% in the same period last year.
“8x8 had a strong second quarter of fiscal 2017 with 24% year-over-year revenue growth and continued traction moving upmarket.
65% of the new monthly recurring revenue booked during the quarter came from our mid-market, enterprise and channel sales teams,”
said 8x8 CEO Vik Verma. “This segment of our business continues to be a strong growth driver and now accounts for over 53% of our
services revenue, compared with 48% one year ago.”
“Our integrated Virtual Office and Virtual Contact Center solution remains a key differentiator with these large customer wins,
leading to six of our top ten deals in the quarter subscribing to both services. As customers and prospects learn more about the
benefits of digital communications, enhanced features and capabilities are taking on greater importance and we look forward to
driving continued technology innovation to maximize the business value of our solutions for customers worldwide.”
Additional Second Quarter and Year-to-Date Highlights:
- Average monthly service revenue per business customer was $409, compared with $360 in the same year
ago period.
- Gross monthly revenue churn was 0.6%, compared with 0.7% in the same period last year.
- Cash generated from operating activities was $6.9 million, compared with $2.5 million in the same
period last year.
- Cash, cash equivalents and investments were $170 million at September 30, 2016, compared with $149
million on September 30, 2015.
- Placement awarded in Leaders quadrant of the 2016 Gartner "Magic Quadrant for Unified Communications
as a Service (UCaaS), Worldwide" for the fifth consecutive year.
- Placement awarded in Challengers quadrant of the 2016 Gartner "Magic Quadrant for Contact Center as a
Service (CCaaS), North America” for the second consecutive year.
- Services platform launched in three international data centers – Amsterdam, Brazil and Singapore –
for a total of 12 data centers worldwide.
- New customer support center opened in Manila, Philippines.
- Quality Management solution for Virtual Contact Center released to production.
- Four new digital communications patents granted for a total of 125 awarded patents.
8x8 increased its annual revenue guidance for fiscal 2017 to a range of $251.0 million to $254.0 million from a range of $249.0
million to $253.0 million and maintained guidance for full year non-GAAP net income in the range of $16.0 million to $20.0 million,
representing non-GAAP net income as a percent of revenue of 6.5% to 8.0%.
Conference Call Information:
Management will host a conference call to discuss these results and other matters related to the Company’s business today,
October 26, 2016 at 4:30 pm ET. The call is accessible via the following numbers and webcast links:
| Dial In: |
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(877) 843-0417, domestic |
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(408) 427-3791, international |
| Replay: |
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(855) 859-2056, domestic (Conference ID #92932960) |
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(404) 537-3406, international (Conference ID #92932960) |
| 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 three hours after the conclusion of the call until November 2, 2016. The webcast will be archived on 8x8’s website for a
period of one year. For additional information, visit http://investors.8x8.com.
About 8x8, Inc.
8x8, Inc. (NASDAQ:EGHT) is the trusted provider of secure and reliable enterprise cloud communications solutions to more
than 45,000 businesses operating in over 100 countries across six continents. 8x8's out-of-the-box cloud solutions replace
traditional on-premises PBX hardware and software-based systems with a flexible and scalable Software as a Service (SaaS)
alternative, encompassing cloud business phone service, contact center solutions, and conferencing. For additional information,
visit www.8x8.com, www.8x8.com/UK or connect with 8x8 on LinkedIn, Twitter, Google+ and Facebook.
Non-GAAP Measures
The Company has provided in this release financial information that has not been prepared in accordance with Generally Accepted
Accounting Principles (GAAP). Management uses these non-GAAP financial measures internally in analyzing our financial results and
believes they are useful to investors, as a supplement to GAAP measures, in evaluating the Company’s ongoing operational
performance. Management believes that the use of these non-GAAP financial measures provides an additional tool for investors to use
in evaluating 8x8’s ongoing operating results and trends and in comparing financial results with other companies in the industry,
many of which present similar non-GAAP financial measures to investors.
Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared
in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP financial measures to their most
directly comparable GAAP financial measures. This reconciliation has been provided in the financial statement tables included below
in this press release.
Non-GAAP Net Income and Non-GAAP Net Income Per Share
We have defined non-GAAP net income as net income for GAAP plus non-cash tax adjustments, stock-based compensation, amortization
of acquired intangible assets, and acquisition-related costs. Non-cash tax adjustments represent the difference between the amount
of taxes we expect to pay and our GAAP tax provision each period. We have excluded stock-based compensation expense because it
relies on estimates and assumptions about future events, such as our future common stock price and the duration of employee
service, as well as valuations that are affected by market factors largely outside management’s control. Amortization of acquired
intangible assets is excluded because it is a non-cash expense that we do not consider part of ongoing operations when assessing
our financial performance, as it relates to accounting for certain purchased assets. We have excluded 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.
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| 8x8, Inc. |
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
| (In thousands, except per share amounts; unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
|
September 30, |
|
September 30, |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
| Service revenue |
|
$ |
57,717 |
|
|
$ |
46,951 |
|
|
$ |
113,013 |
|
|
$ |
91,119 |
|
| Product revenue |
|
|
5,466 |
|
|
|
3,991 |
|
|
|
10,211 |
|
|
|
7,715 |
|
| Total revenue |
|
|
63,183 |
|
|
|
50,942 |
|
|
|
123,224 |
|
|
|
98,834 |
|
|
|
|
|
|
|
|
|
|
|
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|
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| Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
| Cost of service revenue (1) |
|
|
10,837 |
|
|
|
9,186 |
|
|
|
21,072 |
|
|
|
17,645 |
|
| Cost of product revenue |
|
|
5,782 |
|
|
|
4,596 |
|
|
|
11,287 |
|
|
|
8,978 |
|
| Research and development (2) |
|
|
6,505 |
|
|
|
6,446 |
|
|
|
13,215 |
|
|
|
11,526 |
|
| Sales and marketing (3) |
|
|
33,691 |
|
|
|
26,730 |
|
|
|
65,382 |
|
|
|
50,554 |
|
| General and administrative (4) |
|
|
6,747 |
|
|
|
5,657 |
|
|
|
13,548 |
|
|
|
11,725 |
|
| Total operating expenses |
|
|
63,562 |
|
|
|
52,615 |
|
|
|
124,504 |
|
|
|
100,428 |
|
| Loss from operations |
|
|
(379 |
) |
|
|
(1,673 |
) |
|
|
(1,280 |
) |
|
|
(1,594 |
) |
| Other income, net |
|
|
391 |
|
|
|
204 |
|
|
|
801 |
|
|
|
438 |
|
| Income (loss) from operations before provision (benefit) for income taxes |
|
|
12 |
|
|
|
(1,469 |
) |
|
|
(479 |
) |
|
|
(1,156 |
) |
| Provision (benefit) for income taxes |
|
|
(15 |
) |
|
|
423 |
|
|
|
22 |
|
|
|
1,208 |
|
| Net income (loss) |
|
$ |
27 |
|
|
$ |
(1,892 |
) |
|
$ |
(501 |
) |
|
$ |
(2,364 |
) |
|
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|
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| Net income (loss) per share: |
|
|
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| Basic |
|
$ |
0.00 |
|
|
$ |
(0.02 |
) |
|
$ |
(0.01 |
) |
|
$ |
(0.03 |
) |
| Diluted |
|
$ |
0.00 |
|
|
$ |
(0.02 |
) |
|
$ |
(0.01 |
) |
|
$ |
(0.03 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Weighted average number of shares: |
|
|
|
|
|
|
|
|
|
|
|
|
| Basic |
|
|
89,987 |
|
|
|
88,557 |
|
|
|
89,171 |
|
|
|
88,397 |
|
| Diluted |
|
|
93,447 |
|
|
|
88,557 |
|
|
|
89,171 |
|
|
|
88,397 |
|
|
|
|
|
|
|
|
|
|
|
|
|
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| (1)(2)(3)(4) - See reconciliation of GAAP measures to non-GAAP
measures. |
| |
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| 8x8, Inc. |
| RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES |
| (In thousands, unaudited) |
|
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(1) Amounts include amortization of acquired intangible assets, and stock-based compensation as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Six Months Ended
|
|
|
|
September 30,
|
|
|
September 30,
|
|
|
|
2016 |
|
|
2015 |
|
|
2016 |
|
|
2015 |
| GAAP cost of service revenue |
|
$ |
10,837 |
|
|
$ |
9,186 |
|
|
$ |
21,072 |
|
|
$ |
17,645 |
|
| Amortization of acquired intangible assets |
|
|
(561 |
) |
|
|
(628 |
) |
|
|
(1,154 |
) |
|
|
(834 |
) |
| Stock-based compensation expense |
|
|
(440 |
) |
|
|
(263 |
) |
|
|
(800 |
) |
|
|
(482 |
) |
| Non-GAAP cost of service revenue |
|
$ |
9,836 |
|
|
$ |
8,295 |
|
|
$ |
19,118 |
|
|
$ |
16,329 |
|
|
Non-GAAP cost of service revenue as a percentage of service revenue
|
|
|
17.0 |
% |
|
|
17.7 |
% |
|
|
16.9 |
% |
|
|
17.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) Amounts include stock-based compensation and acquisition related expenses as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
|
September 30, |
|
|
September 30, |
|
|
|
2016 |
|
|
2015 |
|
|
2016 |
|
|
2015 |
| GAAP research and development |
|
$ |
6,505 |
|
|
$ |
6,446 |
|
|
$ |
13,215 |
|
|
$ |
11,526 |
|
| Stock-based compensation expense |
|
|
(863 |
) |
|
|
(726 |
) |
|
|
(1,750 |
) |
|
|
(1,257 |
) |
| Acquisition related expenses |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(5 |
) |
| Non-GAAP research and development |
|
$ |
5,642 |
|
|
$ |
5,720 |
|
|
$ |
11,465 |
|
|
$ |
10,264 |
|
|
Non-GAAP research and development as a percentage of total revenue
|
|
|
8.9 |
% |
|
|
11.2 |
% |
|
|
9.3 |
% |
|
|
10.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3) Amounts include amortization of acquired intangible assets, stock-based compensation, and
acquisition related expenses as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
|
September 30, |
|
|
September 30, |
|
|
|
2016 |
|
|
2015 |
|
|
2016 |
|
|
2015 |
| GAAP sales and marketing |
|
$ |
33,691 |
|
|
$ |
26,730 |
|
|
$ |
65,382 |
|
|
$ |
50,554 |
|
| Amortization of acquired intangible assets |
|
|
(347 |
) |
|
|
(390 |
) |
|
|
(714 |
) |
|
|
(730 |
) |
| Stock-based compensation expense |
|
|
(1,751 |
) |
|
|
(1,422 |
) |
|
|
(3,666 |
) |
|
|
(2,619 |
) |
| Acquisition related expenses |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(27 |
) |
| Non-GAAP sales and marketing |
|
$ |
31,593 |
|
|
$ |
24,918 |
|
|
$ |
61,002 |
|
|
$ |
47,178 |
|
|
Non-GAAP sales and marketing as a percentage of total revenue
|
|
|
50.0 |
% |
|
|
48.9 |
% |
|
|
49.5 |
% |
|
|
47.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4) Amounts include stock-based compensation, and acquisition related expenses as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
|
September 30, |
|
|
September 30, |
|
|
|
2016 |
|
|
2015 |
|
|
2016 |
|
|
2015 |
| GAAP general and administrative |
|
$ |
6,747 |
|
|
$ |
5,657 |
|
|
$ |
13,548 |
|
|
$ |
11,725 |
|
| Stock-based compensation expense |
|
|
(1,454 |
) |
|
|
(1,106 |
) |
|
|
(3,343 |
) |
|
|
(2,181 |
) |
| Acquisition related expenses |
|
|
- |
|
|
|
(121 |
) |
|
|
- |
|
|
|
(1,011 |
) |
| Non-GAAP general and administrative |
|
$ |
5,293 |
|
|
$ |
4,430 |
|
|
$ |
10,205 |
|
|
$ |
8,533 |
|
|
Non-GAAP general and administrative as a percentage of total revenue
|
|
|
8.4 |
% |
|
|
8.7 |
% |
|
|
8.3 |
% |
|
|
8.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 8x8, Inc. |
| CONDENSED CONSOLIDATED BALANCE SHEETS |
| (In thousands, unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, |
|
|
March 31,
|
|
|
|
2016 |
|
|
2016 |
| ASSETS |
|
|
|
|
|
|
| Current assets |
|
|
|
|
|
|
| Cash and cash equivalents |
|
$ |
32,094 |
|
$ |
33,576 |
| Short-term investments |
|
|
137,650 |
|
|
129,274 |
| Accounts receivable, net |
|
|
11,661 |
|
|
11,070 |
| Inventory |
|
|
464 |
|
|
520 |
| Deferred tax assets |
|
|
- |
|
|
5,382 |
| Other current assets |
|
|
7,366 |
|
|
6,078 |
| Total current assets |
|
|
189,235 |
|
|
185,900 |
| Property and equipment, net |
|
|
15,315 |
|
|
12,375 |
| Intangible assets, net |
|
|
18,212 |
|
|
21,464 |
| Goodwill |
|
|
45,290 |
|
|
47,420 |
| Non-current deferred tax asset |
|
|
48,565 |
|
|
43,189 |
| Other assets |
|
|
5,415 |
|
|
3,104 |
| Total assets |
|
$ |
322,032 |
|
$ |
313,452 |
|
|
|
|
|
|
|
| LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
| Current liabilities |
|
|
|
|
|
|
| Accounts payable |
|
$ |
14,026 |
|
$ |
10,954 |
| Accrued compensation |
|
|
9,995 |
|
|
10,063 |
| Accrued warranty |
|
|
333 |
|
|
326 |
| Accrued outside commissions |
|
|
2,183 |
|
|
2,186 |
| Deferred revenue |
|
|
2,281 |
|
|
1,925 |
| Other accrued liabilities |
|
|
8,457 |
|
|
9,280 |
| Total current liabilities |
|
|
37,275 |
|
|
34,734 |
|
|
|
|
|
|
|
| Other liabilities |
|
|
3,433 |
|
|
3,412 |
| Total liabilities |
|
|
40,708 |
|
|
38,146 |
|
|
|
|
|
|
|
| Total stockholders' equity |
|
|
281,324 |
|
|
275,306 |
| Total liabilities and stockholders' equity |
|
$ |
322,032 |
|
$ |
313,452 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 8x8, Inc. |
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
| (In thousands, unaudited) |
|
|
|
|
|
|
|
|
|
|
Six Months Ended |
|
|
|
September 30, |
|
|
|
2016 |
|
|
2015 |
| Cash flows from operating activities: |
|
|
|
|
|
|
| Net loss |
|
$ |
(501 |
) |
|
$ |
(2,364 |
) |
|
Adjustments to reconcile net loss to net cash provided by operating activities:
|
|
|
|
|
|
|
| Depreciation |
|
|
2,979 |
|
|
|
2,275 |
|
| Amortization of intangible assets |
|
|
1,868 |
|
|
|
1,563 |
|
| Amortization of capitalized software |
|
|
296 |
|
|
|
456 |
|
|
Net accretion of discount and amortization of premium on marketable securities
|
|
|
171 |
|
|
|
435 |
|
| Stock-based compensation expense |
|
|
9,559 |
|
|
|
6,539 |
|
| Deferred income tax (benefit) provision |
|
|
(153 |
) |
|
|
687 |
|
| Other |
|
|
328 |
|
|
|
248 |
|
| Changes in assets and liabilities: |
|
|
|
|
|
|
| Accounts receivable, net |
|
|
(1,859 |
) |
|
|
(2,976 |
) |
| Inventory |
|
|
38 |
|
|
|
(200 |
) |
| Other current and noncurrent assets |
|
|
(2,216 |
) |
|
|
(794 |
) |
| Deferred cost of goods sold |
|
|
(119 |
) |
|
|
(77 |
) |
| Accounts payable |
|
|
3,133 |
|
|
|
132 |
|
| Accrued compensation |
|
|
46 |
|
|
|
1,234 |
|
| Accrued warranty |
|
|
7 |
|
|
|
(14 |
) |
| Accrued taxes |
|
|
290 |
|
|
|
891 |
|
| Deferred revenue |
|
|
367 |
|
|
|
(621 |
) |
| Accrued outside commissions |
|
|
(3 |
) |
|
|
874 |
|
| Other current and noncurrent liabilities |
|
|
(807 |
) |
|
|
(1,173 |
) |
| Net cash provided by operating activities |
|
|
13,424 |
|
|
|
7,115 |
|
|
|
|
|
|
|
|
| Cash flows from investing activities: |
|
|
|
|
|
|
| Purchases of property and equipment |
|
|
(5,230 |
) |
|
|
(2,118 |
) |
| Purchase of businesses, net of cash acquired |
|
|
- |
|
|
|
(23,434 |
) |
| Cost of capitalized software |
|
|
(2,443 |
) |
|
|
(708 |
) |
| Proceeds from maturity of investments |
|
|
29,225 |
|
|
|
24,106 |
|
| Sales of investments - available for sale |
|
|
26,863 |
|
|
|
31,299 |
|
| Purchase of investments - available for sale |
|
|
(64,517 |
) |
|
|
(52,286 |
) |
| Net cash used in investing activities |
|
|
(16,102 |
) |
|
|
(23,141 |
) |
|
|
|
|
|
|
|
| Cash flows from financing activities: |
|
|
|
|
|
|
| Capital lease payments |
|
|
(333 |
) |
|
|
(200 |
) |
| Payment of contingent consideration |
|
|
(200 |
) |
|
|
(150 |
) |
| Repurchase of common stock |
|
|
(842 |
) |
|
|
(10,133 |
) |
| Proceeds from issuance of common stock under employee stock plans |
|
|
2,600 |
|
|
|
2,076 |
|
| Net cash provided by (used in) financing activities |
|
|
1,225 |
|
|
|
(8,407 |
) |
|
|
|
|
|
|
|
| Effect of exchange rate changes on cash |
|
|
(29 |
) |
|
|
118 |
|
| Net decrease in cash and cash equivalents |
|
|
(1,482 |
) |
|
|
(24,315 |
) |
|
|
|
|
|
|
|
| Cash and cash equivalents, beginning of period |
|
|
33,576 |
|
|
|
53,110 |
|
| Cash and cash equivalents, end of period |
|
$ |
32,094 |
|
|
$ |
28,795 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 8x8, Inc. |
| Selected Operating Statistics |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Sept. 30,
2015
|
|
Dec. 31,
2015
|
|
Mar. 31,
2016
|
|
Jun. 30,
2016
|
|
Sept. 30,
2016
|
|
|
|
|
|
|
|
|
|
|
|
| Business customer average monthly service revenue per customer (1) |
|
$ |
360 |
|
|
$ |
369 |
|
|
$ |
385 |
|
|
$ |
399 |
|
|
$ |
409 |
|
| Monthly business service revenue churn (2)(3) |
|
|
0.7 |
% |
|
|
1.2 |
% |
|
|
0.4 |
% |
|
|
0.5 |
% |
|
|
0.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
| Overall service margin |
|
|
80 |
% |
|
|
80 |
% |
|
|
81 |
% |
|
|
81 |
% |
|
|
81 |
% |
| Overall product margin |
|
|
-15 |
% |
|
|
-21 |
% |
|
|
-18 |
% |
|
|
-16 |
% |
|
|
-6 |
% |
| Overall gross margin |
|
|
73 |
% |
|
|
72 |
% |
|
|
72 |
% |
|
|
74 |
% |
|
|
74 |
% |
|
|
|
|
|
|
|
|
|
|
|
| (1) Business customer average monthly service revenue per customer is
service revenue from business customers in the period divided by the number of months in the period divided by the simple
average number of business customers during the period. |
| (2) Business customer service revenue churn is calculated by dividing
the service revenue lost from business customers (after the expiration of 30-day trial) during the period by the simple average
of business customer service revenue during the same period and dividing the result by the number of months in the period. |
| (3) Excludes DXI business customer service revenue churn for all periods
presented. |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 8x8, Inc. |
| RECONCILIATION OF NET INCOME (LOSS) TO NON-GAAP NET INCOME |
| AND NON-GAAP NET INCOME PER SHARE |
| (In thousands, except per share amounts; unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
|
September 30, |
|
|
September 30, |
|
|
|
2016 |
|
|
2015 |
|
|
2016 |
|
|
2015 |
| Net income (loss) |
|
$ |
27 |
|
|
$ |
(1,892 |
) |
|
$ |
(501 |
) |
|
$ |
(2,364 |
) |
| Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
| Non-cash tax adjustments |
|
|
(109 |
) |
|
|
211 |
|
|
|
(153 |
) |
|
|
687 |
|
| Amortization of acquired intangible assets |
|
|
908 |
|
|
|
1,017 |
|
|
|
1,868 |
|
|
|
1,563 |
|
| Stock-based compensation expense |
|
|
4,508 |
|
|
|
3,517 |
|
|
|
9,559 |
|
|
|
6,539 |
|
| Acquisition related expenses |
|
|
- |
|
|
|
121 |
|
|
|
- |
|
|
|
1,043 |
|
| Non-GAAP net income |
|
$ |
5,334 |
|
|
$ |
2,974 |
|
|
$ |
10,773 |
|
|
$ |
7,468 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation between GAAP and non-GAAP weighted average shares used in computing basic and diluted
net income (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
| Denominator for basic calculation |
|
|
89,987 |
|
|
|
88,557 |
|
|
|
89,171 |
|
|
|
88,397 |
|
| Effect of dilutive securities: |
|
|
|
|
|
|
|
|
|
|
|
|
| Employee stock options |
|
|
1,717 |
|
|
|
1,529 |
|
|
|
1,705 |
|
|
|
1,618 |
|
| Employee restricted purchase rights |
|
|
1,743 |
|
|
|
904 |
|
|
|
1,652 |
|
|
|
885 |
|
| Denominator for diluted calculation |
|
|
93,447 |
|
|
|
90,990 |
|
|
|
92,528 |
|
|
|
90,900 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| GAAP net income (loss) per share - Diluted |
|
$ |
0.00 |
|
|
$ |
(0.02 |
) |
|
$ |
(0.01 |
) |
|
$ |
(0.03 |
) |
| Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
| Non-cash tax adjustments |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
0.01 |
|
| Amortization of acquired intangible assets |
|
|
0.01 |
|
|
|
0.01 |
|
|
|
0.02 |
|
|
|
0.02 |
|
| Stock-based compensation expense |
|
|
0.05 |
|
|
|
0.04 |
|
|
|
0.11 |
|
|
|
0.07 |
|
| Acquisition related expenses |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
0.01 |
|
| Non-GAAP net income per share - Diluted |
|
$ |
0.06 |
|
|
$ |
0.03 |
|
|
$ |
0.12 |
|
|
$ |
0.08 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| GAAP net income or loss as a percentage of total revenue |
|
|
0 |
% |
|
|
-4 |
% |
|
|
0 |
% |
|
|
-2 |
% |
| Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
| Non-cash tax adjustments |
|
|
0 |
% |
|
|
1 |
% |
|
|
0 |
% |
|
|
1 |
% |
| Amortization of acquired intangible assets |
|
|
1 |
% |
|
|
2 |
% |
|
|
1 |
% |
|
|
1 |
% |
| Stock-based compensation expense |
|
|
7 |
% |
|
|
7 |
% |
|
|
8 |
% |
|
|
7 |
% |
| Acquisition related expenses |
|
|
0 |
% |
|
|
0 |
% |
|
|
0 |
% |
|
|
1 |
% |
|
Non-GAAP net income as a percentage of total revenue
|
|
|
8 |
% |
|
|
6 |
% |
|
|
9 |
% |
|
|
8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 8x8, Inc. |
|
| RECONCILIATION OF GAAP GROSS MARGIN TO NON-GAAP |
|
| GROSS MARGIN |
|
| (In thousands, unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
|
September 30, |
|
|
September 30, |
|
|
|
2016 |
|
|
2015 |
|
|
2016 |
|
|
2015 |
| GAAP gross margin |
|
$ |
46,564 |
|
|
$ |
37,160 |
|
|
$ |
90,865 |
|
|
$ |
72,211 |
|
| Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
| Amortization of acquired intangible assets |
|
|
561 |
|
|
|
628 |
|
|
|
1,154 |
|
|
|
834 |
|
| Stock-based compensation expense |
|
|
440 |
|
|
|
263 |
|
|
|
800 |
|
|
|
482 |
|
| Non-GAAP gross margin |
|
$ |
47,565 |
|
|
$ |
38,051 |
|
|
$ |
92,819 |
|
|
$ |
73,527 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| GAAP gross margin as a percentage of total revenue |
|
|
74 |
% |
|
|
73 |
% |
|
|
74 |
% |
|
|
73 |
% |
| Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
| Amortization of acquired intangible assets |
|
|
1 |
% |
|
|
1 |
% |
|
|
1 |
% |
|
|
1 |
% |
| Stock-based compensation expense |
|
|
0 |
% |
|
|
1 |
% |
|
|
0 |
% |
|
|
0 |
% |
|
Non-GAAP gross margin as a percentage of total revenue
|
|
|
75 |
% |
|
|
75 |
% |
|
|
75 |
% |
|
|
74 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 8x8, Inc. |
| RECONCILIATION OF GAAP SERVICE MARGIN TO NON-GAAP |
| SERVICE MARGIN |
| (In thousands, unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
|
September 30, |
|
|
September 30, |
|
|
|
2016 |
|
|
2015 |
|
|
2016 |
|
|
2015 |
| GAAP service margin |
|
$ |
46,880 |
|
|
$ |
37,765 |
|
|
$ |
91,941 |
|
|
$ |
73,474 |
|
| Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
| Amortization of acquired intangible assets |
|
|
561 |
|
|
|
628 |
|
|
|
1,154 |
|
|
|
834 |
|
| Stock-based compensation expense |
|
|
440 |
|
|
|
263 |
|
|
|
800 |
|
|
|
482 |
|
| Non-GAAP service margin |
|
$ |
47,881 |
|
|
$ |
38,656 |
|
|
$ |
93,895 |
|
|
$ |
74,790 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| GAAP service margin as a percentage of service revenue |
|
|
81 |
% |
|
|
80 |
% |
|
|
81 |
% |
|
|
81 |
% |
| Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
| Amortization of acquired intangible assets |
|
|
1 |
% |
|
|
1 |
% |
|
|
1 |
% |
|
|
1 |
% |
| Stock-based compensation expense |
|
|
1 |
% |
|
|
1 |
% |
|
|
1 |
% |
|
|
0 |
% |
|
Non-GAAP service margin as a percentage of service revenue
|
|
|
83 |
% |
|
|
82 |
% |
|
|
83 |
% |
|
|
82 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 8x8, Inc. |
| RECONCILIATION OF GAAP INCOME (LOSS) FROM OPERATIONS TO NON-GAAP |
| INCOME FROM OPERATIONS |
| (In thousands, unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
|
|
September 30, |
|
September 30, |
|
|
|
2016 |
|
|
2015 |
|
|
2016 |
|
|
2015 |
| GAAP loss from operations |
|
$ |
(379 |
) |
|
$ |
(1,673 |
) |
|
$ |
(1,280 |
) |
|
$ |
(1,594 |
) |
| Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
| Amortization of acquired intangible assets |
|
908 |
|
|
|
1,017 |
|
|
|
1,868 |
|
|
|
1,563 |
|
| Stock-based compensation expense |
|
4,508 |
|
|
|
3,517 |
|
|
|
9,559 |
|
|
|
6,539 |
|
| Acquisition related expenses |
|
- |
|
|
|
121 |
|
|
|
- |
|
|
|
1,043 |
|
| Non-GAAP income from operations |
|
$ |
5,037 |
|
|
$ |
2,982 |
|
|
$ |
10,147 |
|
|
$ |
7,551 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| GAAP loss from operations as a percentage of total revenue |
|
-1 |
% |
|
|
-3 |
% |
|
|
-1 |
% |
|
|
-2 |
% |
| Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
| Amortization of acquired intangible assets |
|
2 |
% |
|
|
2 |
% |
|
|
1 |
% |
|
|
2 |
% |
| Stock-based compensation expense |
|
7 |
% |
|
|
7 |
% |
|
|
8 |
% |
|
|
7 |
% |
| Acquisition related expenses |
|
|
0 |
% |
|
|
0 |
% |
|
|
0 |
% |
|
|
1 |
% |
| Non-GAAP income from operations as a percentage of total revenue |
|
8 |
% |
|
|
6 |
% |
|
|
8 |
% |
|
|
8 |
% |
Investor Contact:
8x8, Inc.
Joan Citelli, 408-654-0970
joan.citelli@8x8.com
or
Media Contact:
8x8, Inc.
Neha Mirchandani, 669-256-5095
neha.mirchandani@8x8.com
View source version on businesswire.com: http://www.businesswire.com/news/home/20161026006715/en/