8x8, Inc. (NASDAQ:EGHT) Q3 2021 Earnings Conference Call January 28, 2021 5:00 PM ET Company Participants Dave Sipes - Chief Executive Officer Sam Wilson - Chief Financial Officer Conference Call Participants Matt VanVliet - BTIG Rich Valera - Needham Tim Horan - Oppenheimer Jonathan Kees - Summit Insights Group William Power - Baird Peter Levine - Evercore Meta Marshall - Morgan Stanley Mike Latimore - Northland Capital Management Catharine Trebnick - Colliers International Securities George Sutton ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Title of each class Trading Symbol Name of each exchange on which registered COMMON STOCK, PAR VALUE $.001 PER SHARE EGHT New York Stock Exchange Washington, D.C. 20549 FORM10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________to _________ ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Title of each class Trading Symbol Name of each exchange on which registered COMMON STOCK, PAR VALUE $.001 PER SHARE EGHT New York Stock Exchange FORM10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________to _________ ...

8x8, Inc. (NASDAQ:EGHT) Q2 2021 Earnings Conference Call October 28, 2020 5:00 PM ET Company Participants Victoria Hyde-Dunn - IR Vik Verma - CEO Samuel Wilson - CFO Conference Call Participants Ryan MacWilliams - Stephens Inc. Michael Turrin - Wells Fargo Securities Matt VanVliet - BTIG Meta Marshall - Morgan Stanley Peter Levine - Evercore Mike Latimore - Northland Capital Management James Breen - William Blair Siti Panigrahi - Mizuho Andrew King - Colliers Securities Charlie Erlikh - Baird Jonathan Kees ...

PART I. FINANCIAL INFORMATION [ITEM 1. FINANCIAL STATEMENTS](index=7&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) Presents unaudited condensed consolidated financial statements, including balance sheets, statements of operations, comprehensive loss, stockholders' equity, and cash flows, with detailed notes [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets and stockholders' equity slightly decreased from March 31, 2020, to June 30, 2020, while liabilities remained stable | Metric | June 30, 2020 (in thousands) | March 31, 2020 (in thousands) | | :----------------------------------- | :--------------------------- | :---------------------------- | | **Total Assets** | $688,093 | $700,641 | | **Total Liabilities** | $509,227 | $509,910 | | **Total Stockholders' Equity** | $178,866 | $190,731 | | **Cash and Cash Equivalents** | $116,690 | $137,394 | | **Convertible Senior Notes, net** | $295,662 | $291,537 | [Condensed Consolidated Statements of Operations](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the three months ended June 30, 2020, total revenue increased, but a higher net loss was reported compared to 2019, driven by increased operating expenses | Metric | Three Months Ended June 30, 2020 (in thousands) | Three Months Ended June 30, 2019 (in thousands) | | :----------------------------------- | :---------------------------------------------- | :---------------------------------------------- | | **Total Revenue** | $121,807 | $96,675 | | **Loss from Operations** | $(37,760) | $(32,553) | | **Net Loss** | $(41,913) | $(34,265) | | **Basic and Diluted Net Loss Per Share** | $(0.40) | $(0.36) | [Condensed Consolidated Statements of Comprehensive Loss](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) The company's comprehensive loss increased for the three months ended June 30, 2020, compared to the prior year, primarily due to higher net loss, partially offset by unrealized investment gains and a positive foreign currency translation adjustment | Metric | Three Months Ended June 30, 2020 (in thousands) | Three Months Ended June 30, 2019 (in thousands) | | :---------------------------------------- | :---------------------------------------------- | :---------------------------------------------- | | **Net Loss** | $(41,913) | $(34,265) | | **Unrealized gain on investments in securities** | $422 | $121 | | **Foreign currency translation adjustment** | $885 | $(652) | | **Comprehensive Loss** | $(40,606) | $(34,796) | [Condensed Consolidated Statements of Stockholders' Equity](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) Stockholders' equity decreased from **$190,731 thousand** at March 31, 2020, to **$178,866 thousand** at June 30, 2020, mainly due to net loss, partially offset by stock-based compensation and common stock issuance for an acquisition | Metric | June 30, 2020 (in thousands) | March 31, 2020 (in thousands) | | :----------------------------------------- | :--------------------------- | :---------------------------- | | **Total Stockholders' Equity** | $178,866 | $190,731 | | **Net Loss** | $(41,913) | $(422,670) (Accumulated Deficit) | | **Stock-based compensation expense** | $23,118 | N/A | | **Issuance of common stock related to acquisition** | $8,489 | N/A | [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities significantly decreased for the three months ended June 30, 2020, compared to the prior year, while investing activities shifted from providing cash to using cash, resulting in a net decrease in cash and cash equivalents | Metric | Three Months Ended June 30, 2020 (in thousands) | Three Months Ended June 30, 2019 (in thousands) | | :-------------------------------------------------- | :---------------------------------------------- | :---------------------------------------------- | | **Net cash used in operating activities** | $(9,250) | $(20,509) | | **Net cash (used in) provided by investing activities** | $(11,900) | $11,171 | | **Net cash (used in) provided by financing activities** | $(134) | $1,367 | | **Net decrease in cash and cash equivalents, and restricted cash** | $(20,704) | $(7,558) | | **Cash, cash equivalents, and restricted cash at the end of the period** | $135,707 | $277,125 | [Notes to Unaudited Condensed Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) These notes provide detailed explanations of the company's business, significant accounting policies, revenue recognition, fair value measurements, business combinations, intangible assets, leases, commitments, convertible notes, stock-based compensation, income taxes, net loss per share, and geographical information, offering context to the unaudited financial statements [1. DESCRIPTION OF BUSINESS](index=13&type=section&id=1.%20DESCRIPTION%20OF%20BUSINESS) - 8x8, Inc. is a leading cloud provider of enterprise Software-as-a-Service (SaaS) communications solutions[40](index=40&type=chunk) - The company offers unified communications, team collaboration, video conferencing, contact center, data and analytics, and other services from one proprietary cloud technology platform[40](index=40&type=chunk) - Substantially all revenue is generated from communication services subscriptions and platform usage, complemented by hardware sales and professional services[40](index=40&type=chunk) [2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=13&type=section&id=2.%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) - The interim condensed consolidated financial statements are unaudited and prepared in accordance with U.S. GAAP and SEC regulations[42](index=42&type=chunk) - The company adopted ASU 2016-13 (Credit Losses) and ASU 2018-15 (Internal Use Software) in fiscal 2021, with no material impact on consolidated financial statements[48](index=48&type=chunk)[50](index=50&type=chunk) - Certain revenue and cost of revenue items were reclassified in Q4 fiscal 2020 for clarity, without impacting total revenue, net loss, or cash flows[46](index=46&type=chunk) [3. REVENUE RECOGNITION](index=14&type=section&id=3.%20REVENUE%20RECOGNITION) - Revenue is disaggregated by geographic region[52](index=52&type=chunk) | Metric | June 30, 2020 (in thousands) | March 31, 2020 (in thousands) | | :-------------------------- | :--------------------------- | :---------------------------- | | **Accounts receivable, net** | $40,572 | $37,811 | | **Contract assets, current, net** | $11,625 | $10,425 | | **Deferred revenue, current** | $8,352 | $7,105 | - Remaining performance obligations totaled approximately **$290.0 million** as of June 30, 2020, expected to be recognized over the next **36 months**[56](index=56&type=chunk) [4. FAIR VALUE MEASUREMENTS](index=15&type=section&id=4.%20FAIR%20VALUE%20MEASUREMENTS) | Category | Amortized Costs (in thousands) | Gross Unrealized Gain (in thousands) | Gross Unrealized Loss (in thousands) | Estimated Fair Value (in thousands) | | :------------------- | :----------------------------- | :----------------------------------- | :----------------------------------- | :---------------------------------- | | **Cash** | $34,028 | — | — | $34,028 | | **Money market funds** | $88,638 | — | — | $88,638 | | **Treasury securities** | $11,686 | $89 | — | $11,775 | | **Certificate of deposit** | $8,641 | — | — | $8,641 | | **Commercial paper** | $9,395 | $1 | — | $9,396 | | **Corporate debt** | $33,629 | $152 | $(7) | $33,774 | | **Total assets** | **$186,017** | **$242** | **$(7)** | **$186,252** | - The estimated fair value of the company's outstanding convertible senior notes was **$326.3 million** as of June 30, 2020, classified as Level 2 in the fair value hierarchy[62](index=62&type=chunk) [5. BUSINESS COMBINATIONS](index=17&type=section&id=5.%20BUSINESS%20COMBINATIONS) - On July 17, 2019, 8x8 acquired Wavecell Pte. Ltd. for a total fair value of purchase consideration of **$117.1 million**[63](index=63&type=chunk)[64](index=64&type=chunk) - The acquisition consideration comprised **$72.8 million** in cash and **$44.3 million** in shares of common stock[64](index=64&type=chunk) - The acquisition extended 8x8's technology platform with UCaaS, CCaaS, VCaaS, and CPaaS solutions, expanding API offerings geographically and in scope[63](index=63&type=chunk) | Asset/Liability | July 17, 2019 (in thousands) | | :---------------- | :--------------------------- | | **Cash** | $4,473 | | **Accounts receivable** | $9,438 | | **Intangible assets** | $21,010 | | **Goodwill** | $91,060 | [6. INTANGIBLE ASSETS, GOODWILL, AND OTHER ASSETS](index=19&type=section&id=6.%20INTANGIBLE%20ASSETS%2C%20GOODWILL%2C%20AND%20OTHER%20ASSETS) | Asset | June 30, 2020 Net Carrying Amount (in thousands) | March 31, 2020 Net Carrying Amount (in thousands) | | :------------------------------------ | :----------------------------------------------- | :------------------------------------------------ | | **Developed technology** | $16,195 | $17,620 | | **Customer relationships** | $5,578 | $5,997 | | **Trade and domain names** | — | $384 | | **Total acquired identifiable intangible assets** | **$21,773** | **$24,001** | - The weighted average remaining useful life for technology is **4.8 years** and for customer relationships is **5.7 years**[68](index=68&type=chunk) | Metric | Amount (in thousands) | | :----------------------------------- | :-------------------- | | **Balance at March 31, 2020** | $128,300 | | **Foreign currency translation adjustments** | $680 | | **Balance at June 30, 2020** | **$128,980** | - Amortization of deferred sales commission costs was **$6.1 million** for the three months ended June 30, 2020, up from **$4.2 million** in the prior year[72](index=72&type=chunk) [7. LEASES](index=21&type=section&id=7.%20LEASES) | Metric | June 30, 2020 (in thousands) | March 31, 2020 (in thousands) | | :----------------------------------- | :--------------------------- | :---------------------------- | | **Operating lease, right-of-use assets** | $76,054 | $78,963 | | **Operating lease liabilities, current** | $9,989 | $5,875 | | **Operating lease liabilities, non-current** | $87,884 | $92,452 | | **Total operating lease liabilities** | **$97,873** | **$98,327** | | Lease Expense (in thousands) | Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | | :--------------------------- | :------------------------------- | :------------------------------- | | **Operating lease expense** | $3,750 | $2,085 | | **Variable lease expense** | $782 | $209 | - The weighted average remaining lease term is **8.8 years**, and the weighted average discount rate is **4.0%**[75](index=75&type=chunk) [8. COMMITMENTS AND CONTINGENCIES](index=22&type=section&id=8.%20COMMITMENTS%20AND%20CONTINGENCIES) - The company had accrued contingent indirect tax liabilities of **$4.5 million** as of June 30, 2020, and March 31, 2020[80](index=80&type=chunk) - As of June 30, 2020, management believes it is not probable that a loss has been incurred from any material lawsuits, claims, and proceedings[82](index=82&type=chunk) [9. CONVERTIBLE SENIOR NOTES AND CAPPED CALL](index=24&type=section&id=9.%20CONVERTIBLE%20SENIOR%20NOTES%20AND%20CAPPED%20CALL) - The company has **$362.5 million** aggregate principal amount of **0.50%** convertible senior notes due 2024[86](index=86&type=chunk) | Metric | June 30, 2020 (in thousands) | March 31, 2020 (in thousands) | | :--------------------------- | :--------------------------- | :---------------------------- | | **Principal** | $362,500 | $362,500 | | **Unamortized debt discount** | $(65,919) | $(69,987) | | **Unamortized issuance costs** | $(919) | $(976) | | **Net carrying amount** | **$295,662** | **$291,537** | | Interest Expense (in thousands) | Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | | :------------------------------ | :------------------------------- | :------------------------------- | | **Contractual interest expense** | $453 | $359 | | **Amortization of debt discount** | $4,068 | $3,146 | | **Amortization of issuance costs** | $57 | $26 | | **Total interest expense** | **$4,578** | **$3,531** | - Capped call transactions partially offset potential dilution, covering approximately **14.1 million shares**, recorded as a reduction to additional paid-in capital[94](index=94&type=chunk) [10. STOCK-BASED COMPENSATION](index=25&type=section&id=10.%20STOCK-BASED%20COMPENSATION) | Stock-Based Compensation Expense (in thousands) | Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | | :---------------------------------------------- | :------------------------------- | :------------------------------- | | **Cost of service revenue** | $1,814 | $997 | | **Research and development** | $6,545 | $3,864 | | **Sales and marketing** | $5,739 | $3,921 | | **General and administrative** | $7,894 | $4,081 | | **Total** | **$22,779** | **$13,597** | | Stock Activity (in thousands, except shares) | June 30, 2020 | June 30, 2019 | | :------------------------------------------- | :------------ | :------------ | | **Stock options outstanding at period-end** | 2,259 | 2,974 | | **Stock awards outstanding at period-end** | 9,443 | 8,193 | | **Total unrecognized compensation expense at period-end** | $116,957 | $109,422 | [11. INCOME TAXES](index=26&type=section&id=11.%20INCOME%20TAXES) - The company's effective tax rate was **(0.5)%** for the three months ended June 30, 2020, and **(0.4)%** for the same period in 2019[99](index=99&type=chunk) - The difference in the effective tax rate and the U.S. federal statutory rate was primarily due to the full valuation allowance maintained against deferred tax assets[99](index=99&type=chunk) - The provision for income taxes was **$0.2 million** for the three months ended June 30, 2020, compared to **$0.1 million** in the prior year[147](index=147&type=chunk) [12. NET LOSS PER SHARE](index=26&type=section&id=12.%20NET%20LOSS%20PER%20SHARE) | Metric | Three Months Ended June 30, 2020 (in thousands, except per share) | Three Months Ended June 30, 2019 (in thousands, except per share) | | :------------------------------------ | :---------------------------------------------------------------- | :---------------------------------------------------------------- | | **Net loss available to common stockholders** | $(41,913) | $(34,265) | | **Common shares - basic and diluted** | 103,607 | 96,429 | | **Net loss per share (Basic and diluted)** | **$(0.40)** | **$(0.36)** | - **12,284 thousand** anti-dilutive shares (stock options, stock awards, and potential shares from ESPP) were excluded from the calculation of diluted earnings per share for the three months ended June 30, 2020[102](index=102&type=chunk) [13. GEOGRAPHICAL INFORMATION](index=28&type=section&id=13.%20GEOGRAPHICAL%20INFORMATION) | Region | Three Months Ended June 30, 2020 (in thousands) | Three Months Ended June 30, 2019 (in thousands) | YoY Change % | | :------------- | :---------------------------------------------- | :---------------------------------------------- | :----------- | | **United States** | $93,244 | $83,249 | **12.0%** | | **International** | $28,563 | $13,426 | **112.7%** | | **Total revenue** | **$121,807** | **$96,675** | **26.0%** | | Region | June 30, 2020 (in thousands) | March 31, 2020 (in thousands) | | :------------- | :--------------------------- | :---------------------------- | | **United States** | $89,954 | $87,673 | | **International** | $6,158 | $6,709 | | **Total property and equipment, net** | **$96,112** | **$94,382** | [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=28&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management's discussion and analysis of financial condition and results of operations, covering business overview, strategic outlook, COVID-19 impacts, revenue, expenses, and liquidity [BUSINESS OVERVIEW](index=28&type=section&id=BUSINESS%20OVERVIEW) - 8x8 is a leading SaaS provider of voice, video, chat, contact center, and enterprise-class API solutions powered by one global cloud communications platform[105](index=105&type=chunk) - The company serves customers across more than **150 countries**, with an increased focus on mid-market and enterprise categories[106](index=106&type=chunk) - Revenue is primarily subscription-based from communication services and platform usage, supplemented by sales and rentals of hardware and professional services[107](index=107&type=chunk) - The flagship service is 8x8 X Series, a suite of UCaaS and CCaaS solutions, with ongoing migration of legacy customers to this product suite[108](index=108&type=chunk)[109](index=109&type=chunk)[110](index=110&type=chunk) [SUMMARY AND OUTLOOK](index=30&type=section&id=SUMMARY%20AND%20OUTLOOK) | Metric | Q1 Fiscal 2021 | Q1 Fiscal 2020 | YoY Growth | | :-------------------------------------------------- | :------------- | :------------- | :--------- | | **Total service revenue** | **$114.2 million** | **$89.839 million** | **27.1%** | | **Average annualized service revenue per customer** | **$7,883** | **$7,069** | **11.5%** | | **Service revenue from mid-market and enterprise customers** | **45%** of total | N/A | **48%** | | **New bookings from bundled UCaaS and CCaaS (>$12K ARR)** | **55%** | **51%** | **+4 pp** | - The company focuses on improved operating efficiencies and revenue growth, aiming for profitability and operating cash flow improvement in fiscal 2021[112](index=112&type=chunk) - Plans for fiscal 2021 include investments in customer acquisition through global expansion, direct marketing, sales force, e-commerce, and indirect channel programs[113](index=113&type=chunk) [IMPACTS OF COVID-19](index=30&type=section&id=IMPACTS%20OF%20COVID-19) - The COVID-19 pandemic led to a significant portion of the workforce working from home, altered sales activities, reduced travel expenses, and improved employee productivity[114](index=114&type=chunk) - Small business and mid-size customers were more impacted by COVID-19 than enterprise customers[114](index=114&type=chunk) - CPaaS usage revenue grew year-over-year in Q1, despite lower than expected usage in APAC due to COVID-related slowdowns, with positive trends observed towards the end of the quarter[114](index=114&type=chunk) - The overall negative impact on the business was less significant than initially anticipated, but risks are continuously monitored and effects considered in credit loss impairments[116](index=116&type=chunk) [COMPONENTS OF RESULTS OF OPERATIONS](index=31&type=section&id=COMPONENTS%20OF%20RESULTS%20OF%20OPERATIONS) - Service revenue includes communication services subscriptions, platform usage revenue, and related fees from UCaaS, CCaaS, and CPaaS offerings[117](index=117&type=chunk) - Other revenue primarily includes sales and rentals of IP telephones and professional services[118](index=118&type=chunk) - Cost of service revenue includes network operations, personnel, technology licenses, amortization of internally developed software, customer service, and third-party carrier costs[119](index=119&type=chunk) - Operating expenses comprise Research and Development, Sales and Marketing, and General and Administrative expenses, each with specific personnel, overhead, and operational costs[121](index=121&type=chunk)[122](index=122&type=chunk)[123](index=123&type=chunk) - Other income (expense), net, primarily consists of interest expense related to convertible notes, offset by income from cash/investments and foreign exchange gains/losses[124](index=124&type=chunk) - Provision for income taxes primarily consists of state minimum taxes, with a valuation allowance maintained against U.S. deferred tax assets[126](index=126&type=chunk)[127](index=127&type=chunk) [RESULTS OF OPERATIONS](index=33&type=section&id=RESULTS%20OF%20OPERATIONS) [Revenue](index=33&type=section&id=Revenue) | Metric | Three Months Ended June 30, 2020 (in thousands) | Three Months Ended June 30, 2019 (in thousands) | Change (in thousands) | % Change | | :------------ | :---------------------------------------------- | :---------------------------------------------- | :-------------------- | :------- | | **Service revenue** | $114,183 | $89,839 | $24,344 | **27.1%** | | **Other revenue** | $7,624 | $6,836 | $788 | **11.5%** | | **Total revenue** | **$121,807** | **$96,675** | **$25,132** | **26.0%**| - Service revenue growth was primarily due to a net increase in the subscriber base, expanded offerings to existing customers, and growth in CPaaS usage, particularly in the APAC region[129](index=129&type=chunk) - Other revenue increased due to an increase in professional services revenue resulting from overall business growth[131](index=131&type=chunk) [Cost of Revenue](index=33&type=section&id=Cost%20of%20Revenue) | Metric | Three Months Ended June 30, 2020 (in thousands) | Three Months Ended June 30, 2019 (in thousands) | Change (in thousands) | % Change | | :-------------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------- | :------- | | **Cost of service revenue** | $40,996 | $25,300 | $15,696 | **62.0%** | | **Cost of other revenue** | $11,137 | $12,391 | $(1,254) | **(10.1)%** | - The increase in cost of service revenue was primarily attributable to a **$13.0 million** increase in communication infrastructure costs and a **$2.0 million** increase in amortization of capitalized software[133](index=133&type=chunk) - Cost of other revenue decreased due to lower hardware shipment volume, improved pricing, and a shift to the hardware rental program[136](index=136&type=chunk) [Operating Expenses](index=35&type=section&id=Operating%20Expenses) | Metric | Three Months Ended June 30, 2020 (in thousands) | Three Months Ended June 30, 2019 (in thousands) | Change (in thousands) | % Change | | :-------------------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------- | :------- | | **Research and development** | $21,494 | $18,331 | $3,163 | **17.3%** | | **Sales and marketing** | $60,150 | $53,599 | $6,551 | **12.2%** | | **General and administrative** | $25,790 | $19,607 | $6,183 | **31.5%** | - Research and development expenses increased primarily due to a **$2.7 million** increase in stock-based compensation and a **$0.7 million** increase in employee and consulting related expenditures[137](index=137&type=chunk) - Sales and marketing expenses increased due to higher employee expenditures (**$4.7 million**), channel commissions (**$3.1 million**), and amortization of deferred sales commission costs (**$1.9 million**), partially offset by reduced marketing program and travel costs[139](index=139&type=chunk) - General and administrative expenses increased due to a **$3.8 million** increase in stock-based compensation, a **$1.3 million** higher allowance for credit losses (partially COVID-19 related), and a **$1.3 million** increase in legal and tax related costs[143](index=143&type=chunk) [Other Income (Expense), net](index=37&type=section&id=Other%20Income%20(Expense)%2C%20net) | Metric | Three Months Ended June 30, 2020 (in thousands) | Three Months Ended June 30, 2019 (in thousands) | Change (in thousands) | % Change | | :-------------------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------- | :------- | | **Other income (expense), net** | $(3,925) | $(1,564) | $(2,361) | **151.0%** | - The increase in net expense was primarily due to a **$1.6 million** decrease in interest income and a **$1.0 million** increase related to contractual interest expense and amortization of debt discount from convertible notes[145](index=145&type=chunk) [Provision for Income Taxes](index=37&type=section&id=Provision%20for%20Income%20Taxes) | Metric | Three Months Ended June 30, 2020 (in thousands) | Three Months Ended June 30, 2019 (in thousands) | Change (in thousands) | % Change | | :-------------------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------- | :------- | | **Provision for income taxes** | $228 | $148 | $80 | **54.1%** | | **Percentage of loss before provision for income taxes** | **(0.5)%** | **(0.4)%** | N/A | N/A | - The effective tax rates were **(0.5)%** for Q1 2020 and **(0.4)%** for Q1 2019, primarily due to the full valuation allowance maintained against deferred tax assets[147](index=147&type=chunk) [Liquidity and Capital Resources](index=37&type=section&id=Liquidity%20and%20Capital%20Resources) | Metric | June 30, 2020 (in millions) | March 31, 2020 (in millions) | | :------------------------------------ | :-------------------------- | :--------------------------- | | **Cash, cash equivalents, and investments** | $167.2 | $186.9 | | **Restricted cash** | $19.0 | $19.0 | - Net cash used in operating activities for the three months ended June 30, 2020, was **$9.3 million**, an improvement from **$20.5 million** in the prior year[154](index=154&type=chunk) - The company expects to defer over **$4 million** in employer payroll taxes in fiscal 2021 under the CARES Act[150](index=150&type=chunk) - Lower cash usage from payroll compensation of over **$4 million** is expected in fiscal 2021 due to an employee stock salary program[152](index=152&type=chunk) - Management believes existing cash, cash equivalents, and investment balances, and anticipated cash flows from operations will be sufficient for the next **12 months**[153](index=153&type=chunk) [CRITICAL ACCOUNTING POLICIES & ESTIMATES](index=39&type=section&id=CRITICAL%20ACCOUNTING%20POLICIES%20%26%20ESTIMATES) - The preparation of financial statements requires management to make estimates and judgments affecting reported amounts of assets, liabilities, revenue, and expenses[158](index=158&type=chunk) - Key estimates include allowance for credit losses, impairment of goodwill and intangible assets, capitalization of internally developed software, and stock-based compensation expense[44](index=44&type=chunk) - There have been no significant changes to critical accounting policies and estimates during the three months ended June 30, 2020[159](index=159&type=chunk) [RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS](index=39&type=section&id=RECENTLY%20ADOPTED%20ACCOUNTING%20PRONOUNCEMENTS) - The company adopted ASU 2016-13 (Credit Losses), ASU 2018-13 (Fair Value Measurement), and ASU 2018-15 (Internal Use Software) in the first quarter of fiscal 2021[48](index=48&type=chunk)[49](index=49&type=chunk)[50](index=50&type=chunk) - The adoption of these pronouncements did not have a material impact on the company's consolidated financial statements[48](index=48&type=chunk)[49](index=49&type=chunk)[50](index=50&type=chunk) [RECENT ACCOUNTING PRONOUNCEMENTS](index=40&type=section&id=RECENT%20ACCOUNTING%20PRONOUNCEMENTS) - The company is currently assessing the impact of ASU 2019-12 (Income Taxes), effective for fiscal years beginning after December 15, 2020 (fiscal 2022), on its consolidated financial statements[51](index=51&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=41&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) Discusses market risks, including interest rate fluctuation and foreign currency exchange, noting no material impact from hypothetical **10%** changes [Interest Rate Fluctuation Risk](index=41&type=section&id=Interest%20Rate%20Fluctuation%20Risk) - As of June 30, 2020, the company had **$167.2 million** in cash, cash equivalents, and investments, primarily in money market funds, U.S. treasury, commercial paper, and corporate bonds[162](index=162&type=chunk) - A hypothetical **10%** change in interest rates would not have a material impact on the value of the company's cash, cash equivalents, or available-for-sale investments[162](index=162&type=chunk) - The fair value of the **$362.5 million** convertible senior notes (**$326.3 million** as of June 30, 2020) is subject to interest rate and market risk, but this does not impact the company's financial position, cash flows, or results of operations due to the fixed nature of the debt[163](index=163&type=chunk) [Foreign Currency Exchange Risk](index=41&type=section&id=Foreign%20Currency%20Exchange%20Risk) - The company has foreign currency risks related to revenue and operating expenses denominated in currencies other than the U.S. dollar, primarily the British Pound[164](index=164&type=chunk) - A hypothetical **10%** decrease in all foreign currencies against the US dollar would not result in a material foreign currency loss on foreign-denominated balances as of June 30, 2020[165](index=165&type=chunk) - The company does not currently use financial instruments to hedge foreign currency exchange risk but may do so in the future as foreign operations expand[166](index=166&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=41&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Details disclosure controls and procedures, their effectiveness, inherent limitations, and changes in internal control over financial reporting [Evaluation of Effectiveness of Disclosure Controls and Procedures](index=41&type=section&id=Evaluation%20of%20Effectiveness%20of%20Disclosure%20Controls%20and%20Procedures) - As of June 30, 2020, the Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective[168](index=168&type=chunk) - Disclosure controls are designed to ensure that required information is accumulated, communicated to management, and reported within specified time periods[167](index=167&type=chunk) [Limitations on the Effectiveness of Controls](index=41&type=section&id=Limitations%20on%20the%20Effectiveness%20of%20Controls) - Management acknowledges that no control system can prevent all errors and fraud, providing only reasonable, not absolute, assurance[169](index=169&type=chunk) - The design of a control system must reflect resource constraints, and benefits must be considered relative to costs[169](index=169&type=chunk) [Changes in Internal Control over Financial Reporting](index=43&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) - There were no changes in the company's internal control over financial reporting during the first quarter of fiscal year 2021 that materially affected, or are reasonably likely to materially affect, its internal control over financial reporting[171](index=171&type=chunk) PART II. OTHER INFORMATION [ITEM 1. LEGAL PROCEEDINGS](index=44&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) Incorporates legal proceedings information from Note 8, with management believing no material loss is probable as of June 30, 2020 - Information on legal proceedings is incorporated by reference from Note 8 of the financial statements[173](index=173&type=chunk) - As of June 30, 2020, management believes it is not probable that a material loss has been incurred from any pending lawsuits, claims, and proceedings[82](index=82&type=chunk) [ITEM 1A. RISK FACTORS](index=44&type=section&id=ITEM%201A.%20RISK%20FACTORS) Updates risk factors, highlighting new or modified risks related to data privacy and protection, regulatory uncertainty, and potential non-compliance impacts - No material changes from previously disclosed risk factors, except for those related to data privacy and protection[174](index=174&type=chunk) - Failure to comply with data privacy and protection laws (e.g., GDPR, CCPA) could result in fines, penalties, lawsuits, and adverse business impacts[175](index=175&type=chunk) - Regulatory uncertainty from Brexit and the invalidation of the Privacy Shield program by the Court of Justice of the European Union pose risks to data transfer and operations[176](index=176&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=44&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) No unregistered sales of equity securities or use of proceeds were reported - No unregistered sales of equity securities or use of proceeds were reported[178](index=178&type=chunk) [ITEM 3. DEFAULTS UPON SENIOR SECURITIES](index=44&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) No defaults upon senior securities were reported - No defaults upon senior securities were reported[179](index=179&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES](index=45&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) No mine safety disclosures were reported - No mine safety disclosures were reported[181](index=181&type=chunk) [ITEM 5. OTHER INFORMATION](index=45&type=section&id=ITEM%205.%20OTHER%20INFORMATION) No other information was reported for this item - No other information was reported for this item[182](index=182&type=chunk) [ITEM 6. EXHIBITS](index=46&type=section&id=ITEM%206.%20EXHIBITS) Lists all exhibits filed with the Form 10-Q, including corporate governance, convertible notes, equity plan, employment agreements, certifications, and XBRL data - This section lists all exhibits filed with the Form 10-Q, including corporate governance documents, indenture for convertible notes, equity incentive plan, employment agreements, certifications, and XBRL financial data[184](index=184&type=chunk) [SIGNATURE](index=47&type=section&id=SIGNATURE) Report duly signed on August 4, 2020, by Samuel Wilson, CFO of 8x8, Inc., certifying submission - The report was duly signed on August 4, 2020, by Samuel Wilson, Chief Financial Officer of 8x8, Inc., certifying its submission pursuant to the Securities Exchange Act of 1934[190](index=190&type=chunk)

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended March 31, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________to _________ Commission file number 000-21783 8x8, Inc. (Exact name of Registrant as Specified in its Charter) Delaware 77-0142404 (State or Other Juri ...

[PART I. FINANCIAL INFORMATION](index=7&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) Presents the company's unaudited financial statements, management's analysis, and disclosures on market risk [Item 1. Financial Statements (unaudited)](index=7&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) This section presents the unaudited condensed consolidated financial statements and accompanying notes for the reporting period [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) | Metric | Dec 31, 2019 (in thousands) | Mar 31, 2019 (in thousands) | | :--- | :--- | :--- | | Total current assets | $302,381 | $397,391 | | Total assets | $732,499 | $546,358 | | Total current liabilities | $121,636 | $74,705 | | Total liabilities | $513,008 | $296,968 | | Total stockholders' equity | $219,491 | $249,390 | - Total assets increased significantly from **$546.4 million** at March 31, 2019, to **$732.5 million** at December 31, 2019, primarily driven by increases in property and equipment, operating lease right-of-use assets, intangible assets, and goodwill[19](index=19&type=chunk) - Total liabilities also saw a substantial increase from **$297.0 million** to **$513.0 million**, mainly due to the recognition of operating lease liabilities and an increase in convertible senior notes[19](index=19&type=chunk) [Condensed Consolidated Statements of Operations](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) | Metric (in thousands, except per share) | Three Months Ended Dec 31, 2019 | Three Months Ended Dec 31, 2018 | Nine Months Ended Dec 31, 2019 | Nine Months Ended Dec 31, 2018 | | :--- | :--- | :--- | :--- | :--- | | Total revenue | $118,567 | $89,912 | $324,759 | $258,819 | | Loss from operations | $(43,168) | $(24,238) | $(113,665) | $(62,208) | | Net loss | $(47,071) | $(23,771) | $(122,268) | $(60,608) | | Net loss per share (Basic and diluted) | $(0.47) | $(0.25) | $(1.23) | $(0.64) | - Total revenue increased by **31.9%** for the three months ended December 31, 2019, and by **25.5%** for the nine months ended December 31, 2019, compared to the prior year periods[22](index=22&type=chunk) - **Net loss significantly widened**, more than doubling for both the three-month and nine-month periods ended December 31, 2019, primarily due to increased operating expenses and other expenses[22](index=22&type=chunk) [Condensed Consolidated Statements of Comprehensive Loss](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) | Metric (in thousands) | Three Months Ended Dec 31, 2019 | Three Months Ended Dec 31, 2018 | Nine Months Ended Dec 31, 2019 | Nine Months Ended Dec 31, 2018 | | :--- | :--- | :--- | :--- | :--- | | Net loss | $(47,071) | $(23,771) | $(122,268) | $(60,608) | | Foreign currency translation adjustment | $4,587 | $(549) | $682 | $(2,600) | | Comprehensive loss | $(42,496) | $(24,421) | $(121,480) | $(63,048) | - The foreign currency translation adjustment **positively impacted comprehensive loss** for the three and nine months ended December 31, 2019, partially offsetting the net loss, in contrast to negative adjustments in the prior year[24](index=24&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) | Metric (in thousands, except shares) | Balance at Mar 31, 2019 | Balance at Dec 31, 2019 | | :--- | :--- | :--- | | Common Shares | 96,119,888 | 100,784,960 | | Additional Paid-in Capital | $506,949 | $598,525 | | Accumulated Deficit | $(250,302) | $(372,570) | | Total Stockholders' Equity | $249,390 | $219,491 | - Stockholders' equity decreased from **$249.4 million** at March 31, 2019, to **$219.5 million** at December 31, 2019, primarily due to the accumulated deficit from net losses, despite increases in additional paid-in capital from stock issuances and stock-based compensation[26](index=26&type=chunk) - Common shares outstanding increased from **96.1 million to 100.8 million**, driven by issuances under stock plans and related to acquisitions[26](index=26&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=13&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) | Metric (in thousands) | Nine Months Ended Dec 31, 2019 | Nine Months Ended Dec 31, 2018 | | :--- | :--- | :--- | | Net cash used in operating activities | $(62,836) | $(6,673) | | Net cash (used in) provided by investing activities | $(84,836) | $4,664 | | Net cash provided by (used in) financing activities | $65,842 | $(1,030) | | Net decrease in cash and cash equivalents, and restricted cash | $(80,872) | $(3,378) | | Cash, cash equivalents, and restricted cash at the end of the period | $203,811 | $36,425 | - Net cash used in operating activities significantly increased to **$62.8 million** for the nine months ended December 31, 2019, from $6.7 million in the prior year, reflecting increased investments to accelerate revenue growth[35](index=35&type=chunk)[167](index=167&type=chunk) - Investing activities shifted from providing $4.7 million in cash to using **$84.8 million**, primarily due to the Wavecell acquisition ($58.9 million), property and equipment purchases, and capitalized software development costs[35](index=35&type=chunk)[168](index=168&type=chunk) - Financing activities provided **$65.8 million** in cash, mainly from the issuance of convertible senior notes ($65.3 million), contrasting with a net use of $1.0 million in the prior year[35](index=35&type=chunk)[169](index=169&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=15&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) [1. DESCRIPTION OF BUSINESS](index=15&type=section&id=1.%20DESCRIPTION%20OF%20BUSINESS) - 8x8, Inc. is a leading cloud provider of enterprise Software-as-a-Service (SaaS) communications solutions, offering unified communications, team collaboration, video conferencing, contact center, data and analytics, and communication APIs from a single proprietary cloud technology platform[38](index=38&type=chunk) - Substantially all revenue since fiscal 2004 has been generated from the sale of communications services and related hardware, shifting from its prior business of Voice over Internet Protocol semiconductors[38](index=38&type=chunk) [2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=15&type=section&id=2.%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) - The Company adopted ASU No. 2016-02 (Leases) effective April 1, 2019, using a modified retrospective approach, resulting in the recognition of approximately **$20.0 million in right-of-use assets** and **$21.4 million in lease liabilities** for existing operating leases[48](index=48&type=chunk)[50](index=50&type=chunk) - The adoption of the new lease standard **did not materially impact** the Company's accumulated deficit as of April 1, 2019[50](index=50&type=chunk) - The Company is currently assessing the impact of several recently issued accounting pronouncements, including ASU 2019-02 (Income Taxes), ASU 2019-08 (Stock Compensation), ASU 2018-13 (Fair Value Measurement), ASU 2018-15 (Internal Use Software), and ASU 2016-13 (Credit Losses), which become effective in fiscal years 2021 or 2022[51](index=51&type=chunk)[52](index=52&type=chunk)[53](index=53&type=chunk)[56](index=56&type=chunk) [3. REVENUE RECOGNITION](index=19&type=section&id=3.%20REVENUE%20RECOGNITION) - The Company recognizes service revenue from cloud-based subscription services and related usage, products, and professional services using a five-step model, allocating transaction price based on relative standalone selling prices[57](index=57&type=chunk)[58](index=58&type=chunk)[63](index=63&type=chunk) - Service revenue from subscriptions is recognized ratably over the contractual term, while usage fees are recognized when earned, and professional services revenue is recognized over time as services are rendered[64](index=64&type=chunk) | Contract Balance (in thousands) | Dec 31, 2019 | | :--- | :--- | | Accounts receivable, net | $37,384 | | Contract assets - current | $10,507 | | Contract assets - non-current | $8,413 | | Deferred revenue - current | $7,216 | | Deferred revenue - non-current | $1,411 | - Remaining performance obligations for contracts with terms greater than one year totaled approximately **$245.0 million** as of December 31, 2019, with most revenue expected to be recognized over the next 36 months[74](index=74&type=chunk) [4. FAIR VALUE MEASUREMENTS](index=23&type=section&id=4.%20FAIR%20VALUE%20MEASUREMENTS) | Asset Category (in thousands) | Amortized Costs (Dec 31, 2019) | Estimated Fair Value (Dec 31, 2019) | | :--- | :--- | :--- | | Cash | $22,722 | $22,722 | | Money market funds | $157,401 | $157,401 | | Treasury securities | $6,498 | $6,511 | | Corporate bonds | $36,181 | $36,274 | | Commercial paper | $8,835 | $8,836 | | Municipal securities | $1,345 | $1,345 | | Agency bonds | $2,099 | $2,114 | | Total assets | $235,081 | $235,203 | - As of December 31, 2019, the estimated fair value of the Company's outstanding convertible senior notes was **$362.3 million**, classified as Level 2 in the fair value hierarchy[77](index=77&type=chunk) - The Company now records certain investments as long-term due to the recent issuance of convertible senior notes and increased cash balances, expecting to hold them for at least 12 months[77](index=77&type=chunk) [5. BUSINESS COMBINATIONS](index=25&type=section&id=5.%20BUSINESS%20COMBINATIONS) - On July 17, 2019, 8x8 acquired Wavecell Pte. Ltd., an Asian-based global CPaaS provider, for approximately **$117.1 million**, comprising $72.8 million in cash and $44.3 million in common stock[78](index=78&type=chunk)[79](index=79&type=chunk) - The Wavecell acquisition aims to extend 8x8's technology platform with UCaaS, CCaaS, VCaaS, and CPaaS solutions, enhancing its ability to offer integrated communication and API solutions[78](index=78&type=chunk) | Acquired Assets/Liabilities (in thousands) | Fair Value (July 17, 2019) | | :--- | :--- | | Cash | $4,473 | | Accounts receivable | $9,438 | | Intangible assets | $21,010 | | Goodwill | $91,060 | | Accounts payable | $(9,548) | | Deferred revenue | $(90) | | Total consideration | $117,130 | - Goodwill of **$91.1 million** recognized from the Wavecell acquisition is primarily attributed to expected synergies and is not anticipated to be deductible for income tax purposes[81](index=81&type=chunk) [6. INTANGIBLE ASSETS AND GOODWILL](index=27&type=section&id=6.%20INTANGIBLE%20ASSETS%20AND%20GOODWILL) | Intangible Asset (in thousands) | Net Carrying Amount (Dec 31, 2019) | Net Carrying Amount (Mar 31, 2019) | | :--- | :--- | :--- | | Developed technology | $19,188 | $10,293 | | Customer relationships | $6,304 | $1,387 | | Trade and domain names | $963 | $0 | | Total acquired identifiable intangible assets | $26,455 | $11,680 | | Goodwill (in thousands) | Total | | :--- | :--- | | Balance at Mar 31, 2019 | $39,694 | | Additions due to acquisitions | $91,060 | | Foreign currency translation | $246 | | Balance at Dec 31, 2019 | $131,000 | - Goodwill increased significantly from **$39.7 million** at March 31, 2019, to **$131.0 million** at December 31, 2019, primarily due to additions from acquisitions, notably Wavecell[85](index=85&type=chunk) [7. RIGHT-OF-USE ASSETS AND LEASES](index=27&type=section&id=7.%20RIGHT-OF-USE%20ASSETS%20AND%20LEASES) | Lease Metric (in thousands) | Dec 31, 2019 | | :--- | :--- | | Operating lease, right-of-use assets | $77,062 | | Operating lease liabilities, current | $4,320 | | Operating lease liabilities, non-current | $86,187 | | Total operating lease liabilities | $90,507 | - Operating lease expense for the three and nine months ended December 31, 2019, was approximately **$4.4 million** and **$10.7 million**, respectively[90](index=90&type=chunk) - The Company entered into a new lease for its headquarters in Campbell, California, effective January 1, 2020, which increased operating lease right-of-use assets by **$56.8 million** and operating lease liabilities by **$56.1 million** during the second quarter of fiscal 2020[92](index=92&type=chunk)[94](index=94&type=chunk) [8. COMMITMENTS AND CONTINGENCIES](index=31&type=section&id=8.%20COMMITMENTS%20AND%20CONTINGENCIES) - The Company is subject to inquiries from various state and municipal taxing agencies regarding sales, use, telecommunications, excise, and income taxes, and is currently undergoing tax audits in several jurisdictions[95](index=95&type=chunk) - As of December 31, 2019, the Company **does not have any material provisions for lawsuits**, claims, and proceedings, believing it is not probable that a loss has been incurred[97](index=97&type=chunk) [9. CONVERTIBLE SENIOR NOTES AND CAPPED CALL](index=31&type=section&id=9.%20CONVERTIBLE%20SENIOR%20NOTES%20AND%20CAPPED%20CALL) - In February 2019, the Company issued $287.5 million in 0.50% convertible senior notes due 2024, and an additional $75 million in November 2019, bringing the total aggregate principal amount to **$362.5 million**[98](index=98&type=chunk)[99](index=99&type=chunk) | Metric (in thousands) | Dec 31, 2019 | Mar 31, 2019 | | :--- | :--- | :--- | | Principal | $362,500 | $287,500 | | Net carrying amount | $287,465 | $216,035 | | Interest Expense (in thousands) | Three Months Ended Dec 31, 2019 | Nine Months Ended Dec 31, 2019 | | :--- | :--- | :--- | | Total interest expense | $3,991 | $11,137 | - The Company entered into capped call transactions with an initial strike price of $25.68 per share and cap prices of $39.50 per share, covering approximately **14.1 million shares**, to partially offset potential dilution from note conversions[114](index=114&type=chunk) [10. STOCK-BASED COMPENSATION](index=34&type=section&id=10.%20STOCK-BASED%20COMPENSATION) | Stock-Based Compensation Expense (in thousands) | Three Months Ended Dec 31, 2019 | Three Months Ended Dec 31, 2018 | Nine Months Ended Dec 31, 2019 | Nine Months Ended Dec 31, 2018 | | :--- | :--- | :--- | :--- | :--- | | Total | $19,317 | $12,535 | $50,305 | $31,575 | - Total stock-based compensation expense increased by **54.1%** for the three months and **59.3%** for the nine months ended December 31, 2019, compared to the prior year periods[116](index=116&type=chunk) - As of December 31, 2019, total unrecognized stock-based compensation expense was **$143.6 million**, with a weighted-average remaining recognition period of 2.13 years for stock awards[116](index=116&type=chunk) - The Company had approximately **$7.1 million remaining** under its 2017 Repurchase Plan as of December 31, 2019, with no stock repurchases made during the three and nine months ended December 31, 2019[117](index=117&type=chunk)[119](index=119&type=chunk) [11. INCOME TAXES](index=36&type=section&id=11.%20INCOME%20TAXES) - The Company's effective tax rate was **(0.6)%** for both the three and nine months ended December 31, 2019, and (0.5)% and (0.6)% for the corresponding prior year periods, respectively[120](index=120&type=chunk) - The difference between the effective tax rate and the U.S. federal statutory rate is primarily due to a **full valuation allowance** maintained against deferred tax assets[120](index=120&type=chunk) [12. NET LOSS PER SHARE](index=36&type=section&id=12.%20NET%20LOSS%20PER%20SHARE) | Metric (in thousands, except per share) | Three Months Ended Dec 31, 2019 | Three Months Ended Dec 31, 2018 | Nine Months Ended Dec 31, 2019 | Nine Months Ended Dec 31, 2018 | | :--- | :--- | :--- | :--- | :--- | | Net loss available to common stockholders | $(47,071) | $(23,771) | $(122,268) | $(60,608) | | Common shares - basic and diluted | 99,922 | 95,370 | 99,082 | 94,093 | | Net loss per share (Basic and diluted) | $(0.47) | $(0.25) | $(1.23) | $(0.64) | - Net loss per share (basic and diluted) increased to **$(0.47)** for the three months and **$(1.23)** for the nine months ended December 31, 2019, from $(0.25) and $(0.64) in the prior year periods, respectively[121](index=121&type=chunk) | Anti-dilutive Shares (in thousands) | Three Months Ended Dec 31, 2019 | Three Months Ended Dec 31, 2018 | Nine Months Ended Dec 31, 2019 | Nine Months Ended Dec 31, 2018 | | :--- | :--- | :--- | :--- | :--- | | Stock options | 2,668 | 3,387 | 2,668 | 3,387 | | Stock awards | 9,790 | 8,109 | 9,790 | 8,109 | | Total anti-dilutive shares | 13,195 | 11,496 | 13,195 | 11,496 | [13. GEOGRAPHICAL INFORMATION](index=36&type=section&id=13.%20GEOGRAPHICAL%20INFORMATION) | Revenue by Geographic Area (in thousands) | Three Months Ended Dec 31, 2019 | Three Months Ended Dec 31, 2018 | Nine Months Ended Dec 31, 2019 | Nine Months Ended Dec 31, 2018 | | :--- | :--- | :--- | :--- | :--- | | United States | $90,171 | $77,606 | $258,847 | $223,690 | | International | $28,396 | $12,306 | $65,912 | $35,129 | | Total | $118,567 | $89,912 | $324,759 | $258,819 | - International revenue grew significantly by **130.7%** for the three months and **87.6%** for the nine months ended December 31, 2019, indicating successful geographic expansion[122](index=122&type=chunk) | Property and Equipment by Geographic Area (in thousands) | Dec 31, 2019 | Mar 31, 2019 | | :--- | :--- | :--- | | United States | $82,790 | $45,639 | | International | $6,986 | $7,196 | | Total | $89,776 | $52,835 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=37&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Provides management's perspective on financial condition, operational results, liquidity, and critical accounting policies [BUSINESS OVERVIEW](index=38&type=section&id=BUSINESS%20OVERVIEW) - 8x8 is a leading SaaS provider of cloud communications solutions, including voice, video, chat, contact center, and enterprise-class API solutions, serving customers across over 150 countries[125](index=125&type=chunk)[126](index=126&type=chunk) - The Company has increased its focus on mid-market and enterprise customer sectors, offering subscription-based cloud-based solutions like the 8x8 X Series (UCaaS and CCaaS) and CPaaS offerings from the Wavecell acquisition[126](index=126&type=chunk) - 8x8 is migrating legacy customers to its 8x8 X Series product suite, expecting to accelerate this process in fiscal 2020 and 2021 to reduce platform support costs[126](index=126&type=chunk) [SUMMARY AND OUTLOOK](index=38&type=section&id=SUMMARY%20AND%20OUTLOOK) - Cloud communications service revenue for Q3 fiscal 2020 was **$113.6 million**, reflecting **32.2% year-over-year growth**, driven by increased sales to mid-market and enterprise customers[127](index=127&type=chunk) - The Company continues to prioritize investments in sales, marketing, and R&D to accelerate revenue growth, capitalizing on the industry shift to cloud-based services, while also focusing on achieving operating efficiencies and profitability[128](index=128&type=chunk)[130](index=130&type=chunk) [COMPONENTS OF RESULTS OF OPERATIONS](index=39&type=section&id=COMPONENTS%20OF%20RESULTS%20OF%20OPERATIONS) - Service revenue is generated from software service subscriptions, platform usage, and professional services across UCaaS, CCaaS, and CPaaS offerings, with plans for continued growth through sales, marketing, geographic expansion, and strategic acquisitions[131](index=131&type=chunk) - Product revenue primarily comes from IP telephone sales, dependent on customer choice between hardware and software-based solutions[132](index=132&type=chunk) - Operating expenses (R&D, Sales & Marketing, G&A) are expected to increase in absolute dollars in future periods due to continued investments in growth, despite efforts to improve cost structure and operational efficiencies[136](index=136&type=chunk)[137](index=137&type=chunk)[138](index=138&type=chunk) - Other (expense) income, net, is primarily influenced by interest expense from convertible notes and income from cash, cash equivalents, and investments[140](index=140&type=chunk) - Provision for income taxes mainly consists of state minimum taxes and foreign operations taxes, with a full valuation allowance against U.S. deferred tax assets[141](index=141&type=chunk) [RESULTS OF OPERATIONS](index=41&type=section&id=RESULTS%20OF%20OPERATIONS) Revenue Performance (in thousands) | Revenue Type | Period | 2019 Amount | 2018 Amount | Dollar Change | Percent Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Service Revenue | 3 Months | $113,566 | $85,911 | $27,655 | 32.2% | | Service Revenue | 9 Months | $310,467 | $245,378 | $65,089 | 26.5% | | Product Revenue | 3 Months | $5,001 | $4,001 | $1,000 | 25.0% | | Product Revenue | 9 Months | $14,292 | $13,441 | $851 | 6.3% | - Service revenue growth was driven by an increase in the business customer subscriber base, higher average service revenue per customer, and contributions from newly acquired products[143](index=143&type=chunk) Cost of Revenue Performance (in thousands) | Cost Type | Period | 2019 Amount | 2018 Amount | Dollar Change | Percent Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Cost of Service Revenue | 3 Months | $49,326 | $27,632 | $21,694 | 78.5% | | Cost of Service Revenue | 9 Months | $124,488 | $78,383 | $46,105 | 58.8% | | Cost of Product Revenue | 3 Months | $6,893 | $5,318 | $1,575 | 29.6% | | Cost of Product Revenue | 9 Months | $19,119 | $16,996 | $2,123 | 12.5% | - Cost of service revenue increased faster than revenue growth due to newly acquired CPaaS products, increased overhead allocation, higher personnel costs, and increased amortization of intangibles and capitalized software[148](index=148&type=chunk)[149](index=149&type=chunk) Operating Expenses Performance (in thousands) | Expense Type | Period | 2019 Amount | 2018 Amount | Dollar Change | Percent Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Research and Development | 3 Months | $19,870 | $16,886 | $2,984 | 17.7% | | Research and Development | 9 Months | $57,635 | $43,999 | $13,636 | 31.0% | | Sales and Marketing | 3 Months | $63,099 | $46,276 | $16,823 | 36.4% | | Sales and Marketing | 9 Months | $174,593 | $128,451 | $46,142 | 35.9% | | General and Administrative | 3 Months | $22,547 | $18,038 | $4,509 | 25.0% | | General and Administrative | 9 Months | $62,589 | $53,198 | $9,391 | 17.7% | - Sales and marketing expenses increased significantly due to higher third-party commission expenses, personnel costs, and advertising/marketing investments, partially offset by capitalized commission costs[153](index=153&type=chunk)[156](index=156&type=chunk) Other (Expense) Income, Net (in thousands) | Metric | Period | 2019 Amount | 2018 Amount | Dollar Change | Percent Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Other (expense) income, net | 3 Months | $(3,623) | $579 | $(4,202) | (725.7)% | | Other (expense) income, net | 9 Months | $(7,919) | $1,933 | $(9,852) | (509.7)% | - The shift to net expense in other (expense) income was primarily driven by increased contractual interest expense, amortization of debt discount, and issuance costs related to the convertible senior notes[159](index=159&type=chunk) Provision for Income Taxes (in thousands) | Metric | Period | 2019 Amount | 2018 Amount | Dollar Change | | :--- | :--- | :--- | :--- | :--- | | Provision for income taxes | 3 Months | $280 | $112 | $168 | | Provision for income taxes | 9 Months | $684 | $333 | $351 | [Liquidity and Capital Resources](index=47&type=section&id=Liquidity%20and%20Capital%20Resources) - As of December 31, 2019, the Company had **$235.2 million** in cash, cash equivalents, and investments, along with $19.0 million in restricted cash[165](index=165&type=chunk) - Net cash used in operating activities for the nine months ended December 31, 2019, was **$62.8 million**, a significant increase from $6.7 million in the prior year, reflecting investments to accelerate revenue growth[167](index=167&type=chunk) - Net cash used in investing activities was **$84.8 million**, primarily due to the Wavecell acquisition ($58.9 million), purchases of property and equipment, and capitalized software development costs[168](index=168&type=chunk) - Net cash provided by financing activities was **$65.8 million**, mainly from the issuance of convertible senior notes ($65.3 million)[169](index=169&type=chunk) Contractual Obligations (in thousands) | Obligation Type | Total | Less than 1 year | 1-3 years | 3-5 years | More than 5 years | | :--- | :--- | :--- | :--- | :--- | :--- | | Senior convertible notes | $362,500 | $0 | $0 | $362,500 | $0 | | Interest on senior convertible notes | $8,156 | $1,813 | $3,625 | $2,718 | $0 | | Operating leases | $121,508 | $8,801 | $28,192 | $23,594 | $60,921 | | Total Contractual Obligations | $492,164 | $10,614 | $31,817 | $388,812 | $60,921 | [CRITICAL ACCOUNTING POLICIES & ESTIMATES](index=48&type=section&id=CRITICAL%20ACCOUNTING%20POLICIES%20&%20ESTIMATES) - The Company's financial statements rely on estimates and judgments, including those related to bad debts, goodwill and intangible asset impairment, capitalized software, deferred commissions, stock-based compensation, operating lease liabilities, and tax liabilities[44](index=44&type=chunk)[172](index=172&type=chunk) - There have been **no significant changes** to critical accounting policies and estimates during the three and nine months ended December 31, 2019, except for the adoption of ASU 2016-02 (Leases)[173](index=173&type=chunk) [RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS](index=48&type=section&id=RECENTLY%20ADOPTED%20ACCOUNTING%20PRONOUNCEMENTS) - The Company adopted ASU 2016-02, Leases, effective April 1, 2019, which required the recognition of right-of-use assets and lease liabilities on the balance sheet[48](index=48&type=chunk)[174](index=174&type=chunk) [RECENT ACCOUNTING PRONOUNCEMENTS](index=48&type=section&id=RECENT%20ACCOUNTING%20PRONOUNCEMENTS) - The Company is currently assessing the impact of several new accounting pronouncements, including those related to income taxes, stock compensation, fair value measurement, internal use software, and credit losses, which are effective in future fiscal years[51](index=51&type=chunk)[52](index=52&type=chunk)[53](index=53&type=chunk)[56](index=56&type=chunk)[174](index=174&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=48&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Discusses the company's exposure to and management of interest rate and foreign currency exchange risks [Interest Rate Fluctuation Risk](index=48&type=section&id=Interest%20Rate%20Fluctuation%20Risk) - The Company's investment activities aim to preserve principal while maximizing income, with a portfolio of cash equivalents and short-duration investments to minimize interest rate risk[174](index=174&type=chunk) - The fair market value of the Company's **$287.5 million** outstanding convertible senior notes is exposed to interest rate risk and fluctuations in its stock price[175](index=175&type=chunk) - A hypothetical 10% change in interest rates is **not expected to have a material impact** on the Company's interest income or expenses[176](index=176&type=chunk) [Foreign Currency Exchange Risk](index=48&type=section&id=Foreign%20Currency%20Exchange%20Risk) - The Company faces foreign currency risks from revenue and operating expenses denominated in currencies other than the U.S. dollar, primarily the British Pound[177](index=177&type=chunk) - Gains or losses from the translation of foreign-denominated cash, accounts receivable, and intercompany balances impact other comprehensive income[179](index=179&type=chunk) - A hypothetical 10% decrease in all foreign currencies against the U.S. dollar would **not result in a material foreign currency loss** as of December 31, 2019[179](index=179&type=chunk) [Item 4. Controls and Procedures](index=50&type=section&id=Item%204.%20Controls%20and%20Procedures) Details the evaluation and effectiveness of the company's disclosure controls and internal financial reporting procedures [Evaluation of Effectiveness of Disclosure Controls and Procedures](index=50&type=section&id=Evaluation%20of%20Effectiveness%20of%20Disclosure%20Controls%20and%20Procedures) - As of December 31, 2019, the Company's Chief Executive Officer and Chief Financial Officer concluded that its disclosure controls and procedures were **effective**[182](index=182&type=chunk) [Limitations on the Effectiveness of Controls](index=50&type=section&id=Limitations%20on%20the%20Effectiveness%20of%20Controls) - Management acknowledges that no control system can prevent all errors and fraud, providing only **reasonable, not absolute, assurance** due to inherent limitations and resource constraints[183](index=183&type=chunk) [Changes in Internal Control over Financial Reporting](index=50&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) - There were **no changes** in internal control over financial reporting during the third quarter of fiscal year 2020 that materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting[184](index=184&type=chunk) [PART II. OTHER INFORMATION](index=50&type=section&id=PART%20II.%20OTHER%20INFORMATION) Contains disclosures on legal proceedings, risk factors, equity security sales, and other required information [Item 1. Legal Proceedings](index=50&type=section&id=Item%201.%20Legal%20Proceedings) Reports no material provisions for lawsuits, claims, or other legal proceedings as of the reporting date - The Company does not have any material provisions for lawsuits, claims, and proceedings as of December 31, 2019, believing it is not probable that a loss has been incurred[97](index=97&type=chunk)[185](index=185&type=chunk) [Item 1A. Risk Factors](index=50&type=section&id=Item%201A.%20Risk%20Factors) Confirms no material changes to previously disclosed risk factors from the company's annual report - **No material changes** have occurred in the risk factors since the annual report on Form 10-K for fiscal year ended March 31, 2019, and subsequent quarterly reports[186](index=186&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=50&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Details stock repurchases and the status of the company's share repurchase program Purchases of Equity Securities (October 1, 2019 - December 31, 2019) | Period | Total Number of shares repurchased | Average Price Paid Per Share | | :--- | :--- | :--- | | October 1, 2019 through October 31, 2019 | — | — | | November 1, 2019 through November 30, 2019 | 4,088 | $20.82 | | December 1, 2019 through December 31, 2019 | — | — | - As of December 31, 2019, approximately **$7.1 million** (or 7,065,978 shares based on the last reported share count) remained available for purchase under the 2017 Repurchase Plan[117](index=117&type=chunk)[190](index=190&type=chunk) [Item 3. Defaults Upon Senior Securities](index=51&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) States that no defaults upon senior securities occurred during the reporting period - There were **no defaults** upon senior securities during the period[191](index=191&type=chunk) [Item 4. Mine Safety Disclosures](index=51&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Indicates that mine safety disclosures are not applicable to the company - There are **no mine safety disclosures** to report[192](index=192&type=chunk) [Item 5. Other Information](index=51&type=section&id=Item%205.%20Other%20Information) Confirms there is no other material information to report for the period - There is **no other information** to report[193](index=193&type=chunk) [Item 6. Exhibits](index=52&type=section&id=Item%206.%20Exhibits) Lists all exhibits filed with the report, including agreements, certifications, and iXBRL data - Key exhibits include the Underwriting Agreement (November 18, 2019), Indenture (February 19, 2019), Form of Capped Call Confirmation (November 21, 2019), and certifications from the Chief Executive Officer and Chief Financial Officer[195](index=195&type=chunk) - The report includes financial statements formatted in **iXBRL** (Inline eXtensible Business Reporting Language) as Exhibit 101[195](index=195&type=chunk)

UNITED STATES 8X8, INC. Title of each class Trading Symbol Name of each exchange on which registered COMMON STOCK, PAR VALUE $.001 PER SHARE EGHT New York Stock Exchange SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________t ...

UNITED STATES 8X8, INC. Title of each class Trading Symbol Name of each exchange on which registered COMMON STOCK, PAR VALUE $.001 PER SHARE EGHT New York Stock Exchange SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________to ___ ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended March 31, 2019 Commission file number 000-21783 8x8, Inc. (Exact name of Registrant as Specified in its Charter) Delaware 77-0142404 (State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification Number) 2125 O'Nel Drive San Jose, CA 95131 (Address of Principal Exe ...