Exhibit 99.1 8x8, Inc. Reports First Quarter Fiscal Year 2025 Financial Results • Service revenue of $173 million and total revenue of $178 million • Platform enhancements delivering new AI-based capabilities and solutions to customers • Existing term loan repaid on August 5, 2024 with proceeds of new bank loan and cash on-hand CAMPBELL, CA, August 7, 2024 – 8x8, Inc. (NASDAQ: EGHT), a leading integrated cloud contact center and unified communications platform provider, today reported financial results for ...

8x8, Inc. (NASDAQ:EGHT), the SaaS cloud communications solution provider, has continued reporting stable revenues not showing signs of meaningful top line growth. My previous article on 8x8, titled "8x8: Waiting For A Growth Recovery", went over 8x8's overall financial profile and the company's recently lacking growth. No signs of growth resuming has since been reported, as 8x8 continues to try to improve its offering's appeal. In the previous article, I initiated 8x8 at Hold as the valuation seemed to a re ...

Industry Overview - The telecom industry is experiencing a recovery driven by increased demand for connectivity and Internet-of-Things (IoT) services, but faces challenges from geopolitical tensions and persistent inflation [1] - Supply chain issues and labor market challenges are pushing operational costs higher, necessitating a reevaluation of investment portfolios [2] Company Analysis: Nokia (NOK) - Nokia has struggled in recent years, trading under $4 and losing over 23% of its value in the past three years [3] - The company faced a significant decline in sales in 2023, exacerbated by adverse currency fluctuations and a weak North American market [4] - Losing the AT&T contract to Ericsson has negatively impacted Nokia's operational performance, leading to a lack of major catalysts for stock recovery [5] Company Analysis: Vodafone Group (VOD) - Vodafone is experiencing a slowdown in both revenue and EBITDA growth, with group revenue declining by 2.5% and EBITDA growth down by 13.3% [6] - The company's financial position raises concerns about its debt management capabilities, reflected in a low rating of 4 out of 10 from GuruFocus and a negative Altman Z score of -0.51 [7] - Operational challenges include higher churn rates and declining customer loyalty in key markets like the U.K. and Germany, compounded by regulatory hurdles affecting its merger with Three UK [8] Company Analysis: 8×8 (EGHT) - 8×8 has seen a decline in top-line growth, now at -2.05%, compared to a 5-year average of 18.52% [9] - The company remains unprofitable despite efforts to improve cash flows, facing a significant debt load that threatens financial stability, with an Altman Z score of -0.29 [10] - 8×8 is attempting to leverage AI to enhance its offerings, but this carries risks in a competitive market [11]

Part I [Forward-Looking Statements and Risk Factors](index=3&type=section&id=Forward-Looking%20Statements%20and%20Risk%20Factors) The report defines forward-looking statements and outlines risks that could cause results to differ from projections - Forward-looking statements are identified by words like 'may,' 'will,' 'should,' 'estimates,' 'predicts,' 'potential,' 'continue,' 'strategy,' 'believes,' 'anticipates,' 'plans,' 'expects,' 'intends,' and similar expressions[12](index=12&type=chunk) - Factors that could cause actual results to differ include economic downturns, cost increases, debt impact, customer churn, geopolitical conflicts (Russia-Ukraine, Middle East), customer demand, competitive pressures, service quality, scalability, customer acquisition costs, reliance on channel partners, R&D/marketing spending, employee retention, third-party infrastructure, cybersecurity, regulatory compliance, international expansion, and banking system instability[12](index=12&type=chunk)[15](index=15&type=chunk) [Item 1. Business](index=4&type=section&id=Item%201.%20Business) The company provides integrated CCaaS, UCaaS, and CPaaS solutions via its XCaaS platform for mid-sized enterprises - 8x8 is a leading global provider of CCaaS, UCaaS, and CPaaS software, powered by its secure cloud-native communications platform (XCaaS)[16](index=16&type=chunk) - At the end of fiscal 2024, **over 43% of annualized recurring and usage revenue (ARR)** was generated by customers deploying both contact center and unified communications solutions, up from 40% in fiscal 2023[17](index=17&type=chunk) - The company had **over 3.0 million paid licensed users** at more than 57,000 customers worldwide at the end of fiscal year 2024[17](index=17&type=chunk) [Overview](index=4&type=section&id=Overview) - 8x8's XCaaS platform integrates CCaaS, UCaaS, and CPaaS, focusing on small- and mid-sized enterprises (100 to 10,000 employees) to deliver integrated solutions and avoid data silos[16](index=16&type=chunk)[18](index=18&type=chunk) - Routes to market include indirect sales through VARs, system integrators, and technology partners, as well as direct sales, with investments in customer success for satisfaction and retention[19](index=19&type=chunk) [Our Strategy](index=4&type=section&id=Our%20Strategy) - Strategic priorities include achieving high customer satisfaction through a lifetime engagement model, continuous innovation of the cloud-native XCaaS platform with AI-based features, enabling a solution approach to AI, driving multi-product adoption, acquiring new customers, and expanding the technology partner ecosystem[20](index=20&type=chunk)[21](index=21&type=chunk) [Our XCaaS Platform](index=5&type=section&id=Our%20XCaaS%20Platform) - The XCaaS platform is built on a microservices architecture, utilizing a global network of data centers and carrier partners for high availability, scalability, and data sovereignty[22](index=22&type=chunk)[23](index=23&type=chunk) - It offers a full suite of cloud communications software, including contact center, voice, team chat, video meetings, and AI-driven analytics, with extensive APIs for integration[22](index=22&type=chunk)[23](index=23&type=chunk) [Our Solutions](index=5&type=section&id=Our%20Solutions) - 8x8 offers a portfolio of integrated solutions: 8x8 Work (UCaaS with global PSTN connectivity in ~60 countries), 8x8 Contact Center (CCaaS with omnichannel engagement, AI-enabled self-service), 8x8 Engage (AI-powered for customer-facing employees outside contact center), 8x8 Communications Platform as-a-Service (CPaaS with SMS, Chat App, Video, Voice APIs), and Solutions for Microsoft Teams (global telephony, contact center functionality)[27](index=27&type=chunk)[28](index=28&type=chunk) [Technology Partner Ecosystem](index=6&type=section&id=Technology%20Partner%20Ecosystem) - The technology partner ecosystem comprises ISVs, VARs, and system integrators offering solutions that complement the core platform, integrated at both platform and user interface layers for specific use cases or vertical markets[30](index=30&type=chunk) [Routes to Market](index=6&type=section&id=Routes%20to%20Market) - Sales are conducted directly to customers and through indirect channels, including global and regional networks of VARs, carriers, master agents, sub-agents, ISVs, and system integrators[31](index=31&type=chunk) - The Elevate channel program supports both resale and agency models[31](index=31&type=chunk) [Our Customers](index=6&type=section&id=Our%20Customers) - The company serves a diverse customer base of **over 57,000 customers** with more than 3.0 million paid business licenses in over 160 countries, ranging from small businesses to large enterprises[32](index=32&type=chunk) - **No single customer accounted for 10% or more of revenue** in fiscal years 2024, 2023, or 2022[32](index=32&type=chunk) [Marketing and Promotional Activities](index=6&type=section&id=Marketing%20and%20Promotional%20Activities) - Marketing efforts include industry conferences, trade shows, webinars, and digital advertising[33](index=33&type=chunk)[34](index=34&type=chunk)[35](index=35&type=chunk) - In fiscal 2024, the company shifted investment from digital advertising to in-person small groups and one-on-one meetings, and expanded customer feedback mechanisms like 8x8 Customer Labs and the Customer Advisory Board[33](index=33&type=chunk)[34](index=34&type=chunk)[35](index=35&type=chunk) [Research and Development](index=7&type=section&id=Research%20and%20Development) - Substantial investments are made in R&D for new products, services, and enhancements, with R&D and engineering activities conducted by teams in the United States, Canada, United Kingdom, Portugal, Romania, Singapore, and Philippines[36](index=36&type=chunk) [Intellectual Property](index=7&type=section&id=Intellectual%20Property) - As of March 31, 2024, 8x8 holds **at least 372 patents** and has 97 United States and foreign patent applications pending, covering unified communications, video, APIs, collaboration, contact center services, infrastructure, and user experience[37](index=37&type=chunk) - Intellectual property is protected through a combination of trade secrets, patents, copyrights, trademarks, and contractual restrictions like confidentiality agreements[38](index=38&type=chunk) [Competition](index=7&type=section&id=Competition) - The cloud communications industry is highly competitive and rapidly evolving, with competition from other cloud service providers (e.g., RingCentral, Genesys, Zoom, Five9), legacy on-premises providers (e.g., Avaya, Cisco), and internet/cloud companies (e.g., Alphabet, Amazon, Microsoft)[40](index=40&type=chunk)[41](index=41&type=chunk)[42](index=42&type=chunk) - Many competitors possess greater resources, brand awareness, and larger customer bases, potentially leading to more aggressive pricing and bundled service offerings, which could adversely impact 8x8's revenue and market share[43](index=43&type=chunk)[44](index=44&type=chunk) [Operations](index=8&type=section&id=Operations) - Operations infrastructure includes data management, security, quality monitoring, and billing systems[45](index=45&type=chunk)[47](index=47&type=chunk)[48](index=48&type=chunk) - Global network operations centers (NOCs) in the US, UK, Romania, Indonesia, Singapore, and Philippines provide 24/7 support with redundant backup operations[45](index=45&type=chunk)[47](index=47&type=chunk)[48](index=48&type=chunk) - Customer and technical support is global, multi-channel (phone, chat, web, SMS), and follows a lifecycle approach from onboarding to renewal, including 8x8 University for training[49](index=49&type=chunk)[50](index=50&type=chunk) [Regulatory Matters](index=8&type=section&id=Regulatory%20Matters) - In the US, 8x8 is subject to FCC and state/local regulations for VoIP services, including E-911, number porting, customer data protection, and Universal Service Fund contributions[52](index=52&type=chunk) - Internationally, the company faces complex regulations, including stringent licensing obligations and data protection laws like the EU's GDPR and new privacy legislation in various US states (e.g., CCPA, CPRA, Virginia, Colorado, Texas, Oregon, Montana, Delaware, Iowa, Maryland, New Hampshire, New Jersey, Tennessee, Indiana)[53](index=53&type=chunk) [Geographic Areas](index=9&type=section&id=Geographic%20Areas) - The company operates as one reportable segment, with detailed financial information on revenue generated in different geographic areas provided in Note 12 to the Consolidated Financial Statements[55](index=55&type=chunk) [Employees and Human Capital](index=9&type=section&id=Employees%20and%20Human%20Capital) - As of March 31, 2024, 8x8 had **1,948 full-time employees globally**, with 67% located outside the United States[56](index=56&type=chunk) - The company fosters a hybrid work environment and promotes employee engagement through programs like Team8s, site committees, and quarterly surveys[59](index=59&type=chunk)[60](index=60&type=chunk)[61](index=61&type=chunk)[62](index=62&type=chunk) - Commitment to Diversity, Equity, Inclusion, and Belonging (DEIB) is demonstrated through a diversity council, unconscious bias training, employee resource groups, and role/gender pay equity audits[62](index=62&type=chunk)[63](index=63&type=chunk)[64](index=64&type=chunk)[65](index=65&type=chunk) [Item 1A. Risk Factors](index=12&type=section&id=Item%201A.%20Risk%20Factors) The company faces material risks across its business, operations, regulatory environment, and financial structure - The company's business is subject to risks including a **history of losses**, unpredictable operating results, intense competition, and dependence on new customer acquisition and retention[77](index=77&type=chunk) - Operational risks include **service outages**, scalability challenges, international expansion risks (including geopolitical conflicts), and the ability to maintain compatibility with third-party applications[78](index=78&type=chunk) - Regulatory risks encompass **cybersecurity breaches**, data privacy compliance, and adherence to industry standards and government regulations[79](index=79&type=chunk) [Risk Factors Summary](index=12&type=section&id=Risk%20Factors%20Summary) - Key risk categories include: Business and Industry (history of losses, unpredictable results, churn, competition, sales channels, product dependency, talent retention, acquisition benefits, tax liabilities, asset impairments); Products and Operations (service outages, scalability, international expansion, geopolitical conflicts, acquisitions, third-party compatibility, network reliance, number porting, cybersecurity, credit card liabilities); Regulatory Matters (data privacy, industry standards); Intellectual Property (infringement, protection, open-source software); Debt, Stock, and Charter (indebtedness, financing, conversion features, accounting standards, banking instability, stock sales, anti-takeover provisions); and General (COVID-19, financing, unforeseen events)[77](index=77&type=chunk)[78](index=78&type=chunk)[79](index=79&type=chunk)[80](index=80&type=chunk)[81](index=81&type=chunk)[84](index=84&type=chunk) [Risks Related to our Business and Industry](index=13&type=section&id=Risks%20Related%20to%20our%20Business%20and%20Industry) - The company has a history of operating losses, with an approximate **$27.6 million operating loss for FY2024** and an **accumulated deficit of $860.5 million**, and anticipates continued losses due to ongoing investments[81](index=81&type=chunk) - Future operating results are unpredictable due to factors like market changes, customer demand shifts (cancellations, downgrades), intense competition, lengthy sales cycles, regulatory changes, and reliance on usage-based revenue[83](index=83&type=chunk)[85](index=85&type=chunk) - Customer churn adversely impacts revenue and increases retention costs; the churn rate may increase due to economic conditions, competitive products, or service quality issues[89](index=89&type=chunk)[90](index=90&type=chunk) - Failure to realize anticipated benefits from the Fuze, Inc. acquisition, including integration difficulties, customer retention, and managing undisclosed liabilities, could adversely affect the business[109](index=109&type=chunk) - The company recorded an **$11.0 million impairment charge** on operating lease right-of-use assets in fiscal 2024 due to partially ceasing use of its headquarters and an international office space[114](index=114&type=chunk) [Risks Related to our Products and Operations](index=18&type=section&id=Risks%20Related%20to%20our%20Products%20and%20Operations) - Significant or repeated disruptions, outages, or failures of the platform or services due to defects, bugs, vulnerabilities, or cybersecurity incidents (including ransomware) could lead to customer loss, service claims, and significant costs[116](index=116&type=chunk) - Reliance on a few concentrated data center facilities and public cloud infrastructure makes the company vulnerable to failures, which could result in significant downtime, loss of customer data, and reputational harm[117](index=117&type=chunk)[118](index=118&type=chunk)[119](index=119&type=chunk) - International expansion exposes the business to risks such as localization challenges, varying regulatory requirements, increased competition, data security regulations (e.g., GDPR), geopolitical instability (e.g., Russia-Ukraine conflict, Middle East conflicts), and currency fluctuations[121](index=121&type=chunk)[122](index=122&type=chunk)[123](index=123&type=chunk)[124](index=124&type=chunk) - Acquisitions pose risks including integration difficulties, diversion of management attention, potential dilution, and exposure to undisclosed liabilities or new regulatory compliance obligations[126](index=126&type=chunk) - The company relies on third-party network service providers for connectivity and third-party vendors for IP phones and software endpoints; disruptions or cost increases from these dependencies could adversely affect operations[131](index=131&type=chunk)[132](index=132&type=chunk) [Risks Related to Regulatory Matters](index=23&type=section&id=Risks%20Related%20to%20Regulatory%20Matters) - Cyber intrusions, breaches of networks or systems (including those of service and cloud storage providers), and other malicious acts could lead to misappropriation of proprietary or customer data, service interruptions, increased costs, and legal liabilities[135](index=135&type=chunk)[136](index=136&type=chunk)[137](index=137&type=chunk) - Failure to comply with data privacy and protection laws (e.g., GDPR, CCPA/CPRA, various state laws) and contractual obligations could result in fines, penalties, lawsuits, and reputational harm[142](index=142&type=chunk)[143](index=143&type=chunk) - The company's products and services must comply with a complex array of industry standards and regulations, including FCC rules (E-911, number porting, robo-calling) and international telecommunications laws, with changes potentially increasing costs or limiting service offerings[144](index=144&type=chunk)[145](index=145&type=chunk)[146](index=146&type=chunk) [Risks Related to Intellectual Property](index=25&type=section&id=Risks%20Related%20to%20Intellectual%20Property) - The company faces risks of infringing third-party proprietary technology, which could lead to monetary liabilities or injunctions against using certain products or processes[148](index=148&type=chunk) - Inability to effectively protect its proprietary technology (patents, trade secrets, copyrights, trademarks) in the US or internationally could allow competitors to develop similar technologies or erode its competitive advantage[149](index=149&type=chunk)[150](index=150&type=chunk) - The use of open-source software carries risks that license terms could impose unanticipated conditions or restrictions, potentially requiring re-engineering or exposing proprietary features to competitors[152](index=152&type=chunk) [Risks Related to our Debt, our Stock, and our Charter](index=26&type=section&id=Risks%20Related%20to%20our%20Debt%2C%20our%20Stock%2C%20and%20our%20Charter) - The company has substantial indebtedness, including a **$225.0 million Term Loan** and **$201.9 million in 2028 Convertible Senior Notes**, which could limit financial flexibility, require significant cash flow for debt service, and place it at a competitive disadvantage[154](index=154&type=chunk)[155](index=155&type=chunk) - There is a risk of insufficient cash flow to service or pay down debt, or to repurchase notes upon a fundamental change or conversion, potentially leading to default or the need for dilutive equity capital[156](index=156&type=chunk)[157](index=157&type=chunk)[158](index=158&type=chunk) - Changes in financial accounting standards (e.g., for debt) or instability in the banking system could adversely impact reported operating results, financial condition, and liquidity[160](index=160&type=chunk)[161](index=161&type=chunk)[162](index=162&type=chunk) - Future sales of common stock or equity-linked securities, or certain anti-takeover provisions in the company's charter documents and Delaware law, could lower the market price of common stock and discourage takeover attempts[163](index=163&type=chunk)[164](index=164&type=chunk)[165](index=165&type=chunk) [General Risk Factors](index=29&type=section&id=General%20Risk%20Factors) - Current and future variants of COVID-19 and associated economic difficulties could reduce demand for cloud services, increase churn, and negatively impact revenue and cash flows[167](index=167&type=chunk)[168](index=168&type=chunk) - The company may not be able to secure future financing on favorable terms, or at all, to support growth initiatives, service debt, or respond to business challenges[169](index=169&type=chunk) - Unforeseen events such as natural disasters, war, terrorist attacks, global pandemics, or malicious conduct (including cyberattacks) could disrupt operations, degrade services, and negatively impact financial condition and revenue[170](index=170&type=chunk) [Item 1B. Unresolved Staff Comments](index=30&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) This section states that there are no unresolved staff comments from the Securities and Exchange Commission [Item 1C. Cybersecurity](index=30&type=section&id=Item%201C.%20Cybersecurity) The company's cybersecurity program aligns with the NIST framework and features robust governance and risk management - 8x8's cybersecurity program is aligned with the **National Institute of Standards and Technology (NIST)** cybersecurity framework[173](index=173&type=chunk) - The Chief Information Security Officer (CISO) oversees cybersecurity initiatives, reports directly to the Chief Legal Officer, and provides regular updates to the Board of Directors[174](index=174&type=chunk)[175](index=175&type=chunk)[176](index=176&type=chunk) - The company has a comprehensive Incident Response Plan (IRP), conducts regular risk assessments (vulnerability, penetration testing), implements technical/administrative/legal controls for third-party providers, and invests in employee training and awareness programs[179](index=179&type=chunk)[181](index=181&type=chunk)[182](index=182&type=chunk) [Item 2. Properties](index=31&type=section&id=Item%202.%20Properties) The company's principal operations are in California, with leased offices and data centers globally - Principal operations are located in **Campbell, California**[185](index=185&type=chunk) - International operations are conducted in leased office spaces in the United Kingdom, Romania, Canada, Portugal, Singapore, and the Philippines, primarily for sales, customer support, and research and development[185](index=185&type=chunk) - The company leases space from third-party data center hosting facilities in the United States, Europe, and the Asia Pacific region[186](index=186&type=chunk) [Item 3. Legal Proceedings](index=31&type=section&id=Item%203.%20Legal%20Proceedings) Information regarding legal proceedings is incorporated by reference from Note 7 in the financial statements [Item 4. Mine Safety Disclosures](index=31&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to 8x8, Inc Part II [Item 5. Market for Registrant's Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities](index=32&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%20and%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) This section covers common stock market information, dividend policy, stockholder count, and equity purchases - 8x8's common stock (EGHT) has been traded on the Nasdaq Global Select Market since November 15, 2022, previously listed on the New York Stock Exchange[191](index=191&type=chunk) - The company has **never paid cash dividends** on its common stock and has no plans to do so in the foreseeable future[192](index=192&type=chunk) [Market Information for Common Stock](index=32&type=section&id=Market%20Information%20for%20Common%20Stock) - The common stock trades under the symbol **'EGHT'** on the Nasdaq Global Select Market since November 15, 2022[191](index=191&type=chunk) [Dividend Policy](index=32&type=section&id=Dividend%20Policy) - The company has never paid cash dividends on its common stock and has no plans to do so in the foreseeable future[192](index=192&type=chunk) [Number of Common Stockholders](index=32&type=section&id=Number%20of%20Common%20Stockholders) - As of May 8, 2024, there were approximately **279 holders of record** of the company's common stock[193](index=193&type=chunk) [Stock Performance Graph](index=32&type=section&id=Stock%20Performance%20Graph) Cumulative Total Stockholder Return (March 31, 2019 - March 31, 2024) | Index | March 31, 2019 | March 31, 2020 | March 31, 2021 | March 31, 2022 | March 31, 2023 | March 31, 2024 | | :---------------------- | :------------- | :------------- | :------------- | :------------- | :------------- | :------------- | | 8x8, Inc. | $100.00 | $68.61 | $160.59 | $62.33 | $20.64 | $13.37 | | Russell 2000 | $100.00 | $74.89 | $144.21 | $134.45 | $117.06 | $137.98 | | NASDAQ Composite | $100.00 | $99.62 | $171.38 | $183.98 | $158.12 | $211.91 | | NASDAQ Telecommunications | $100.00 | $83.39 | $117.69 | $109.84 | $96.48 | $97.49 | | NYSE Composite | $100.00 | $81.14 | $122.88 | $131.30 | $121.09 | $144.23 | [Issuer Issuances and Purchases of Equity Securities](index=33&type=section&id=Issuer%20Issuances%20and%20Purchases%20of%20Equity%20Securities) - In August 2022, the company repurchased **10,695,000 shares** of its common stock for approximately **$60.0 million** in privately negotiated transactions[198](index=198&type=chunk) - Approximately **$7.1 million remains available** for purchase under the 2017 Repurchase Plan as of March 31, 2024[199](index=199&type=chunk) - On August 3, 2022, the company issued 1,015,024 shares of common stock, equivalent to approximately $5.1 million, to settle 50% of financial advisory fees[200](index=200&type=chunk) [Item 6. [Reserved]](index=33&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved and contains no information [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=34&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section analyzes financial condition and results of operations, highlighting revenue trends and strategic focus - Total revenue **decreased by approximately 2%** year-over-year to **$728.7 million** in fiscal 2024[212](index=212&type=chunk) - Service revenue **decreased by approximately 1%** year-over-year to **$700.6 million** in fiscal 2024, driven by increased customer churn and down-sell[212](index=212&type=chunk)[232](index=232&type=chunk) - The company's strategy focuses on expanding its enterprise customer base, reducing service delivery costs, improving sales efficiency, and increasing investment in research and development[213](index=213&type=chunk)[214](index=214&type=chunk) [Overview](index=34&type=section&id=OVERVIEW) - 8x8 is a leading SaaS provider of contact center, voice communications, video meetings, employee collaboration, and embeddable communication API solutions, integrated into its XCaaS platform[204](index=204&type=chunk) - The XCaaS platform leverages AI/machine learning, intuitive user interfaces, and real-time analytics, focusing on mid-market and enterprise customers (500 to 10,000 employees) who benefit most from its unified, global platform[204](index=204&type=chunk)[205](index=205&type=chunk)[209](index=209&type=chunk) - Revenue is generated from communications service subscriptions, platform usage, professional services, and sales of office phones and other hardware[210](index=210&type=chunk) [Summary and Outlook](index=35&type=section&id=SUMMARY%20AND%20OUTLOOK) Revenue Performance (FY2024 vs. FY2023) | Metric | FY2024 (in millions) | FY2023 (in millions) | Change (in millions) | Change (%) | | :---------------- | :------------------- | :------------------- | :------------------- | :--------- | | Total Revenue | $728.7 | $743.9 | $(15.2) | (2)% | | Service Revenue | $700.6 | $710.0 | $(9.5) | (1)% | - The company refinanced approximately **$403.8 million of 2024 Notes** in August 2022 through an exchange for **$201.9 million in 2028 Notes** and **$181.8 million in cash** (funded by a new $250.0 million Term Loan)[215](index=215&type=chunk) - The remaining **$63.3 million principal of the 2024 Notes** was paid on maturity on February 1, 2024, and **$25.0 million of the Term Loan principal** was voluntarily prepaid in May 2023[215](index=215&type=chunk) [Key Business Metrics](index=35&type=section&id=KEY%20BUSINESS%20METRICS) - Annualized Recurring and Usage Revenue (ARR) is defined as the sum of the most recent month's recurring subscription and platform usage charges (for consistent CPaaS customers) multiplied by 12, excluding non-bundled or overage UCaaS usage fees[217](index=217&type=chunk) Annualized Recurring and Usage Revenue (ARR) Trends | Category | End of Fiscal 2024 (in millions) | End of Fiscal 2023 (in millions) | Change (in millions) | Change (%) | | :---------------- | :----------------------------- | :----------------------------- | :------------------- | :--------- | | Total ARR | $697.0 | $703.0 | $(6.0) | (1)% | | Enterprise ARR | $402.0 | $405.0 | $(3.0) | (1)% | | Mid-Market ARR | $127.0 | $130.0 | $(3.0) | (2)% | | Small Business ARR | $167.0 | $168.0 | $(1.0) | (1)% | [Components of Results of Operations](index=36&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[221](index=221&type=chunk) - Other revenue consists of professional services and sales/rentals of IP telephones and other hardware[222](index=222&type=chunk) - Cost of service revenue primarily covers network operations, personnel, technology licenses, amortization of capitalized software, third-party carrier services, and outsourced customer service[223](index=223&type=chunk) - Operating expenses include Research and Development (personnel, third-party development, software/equipment), Sales and Marketing (personnel, commissions, advertising), General and Administrative (personnel, professional fees, corporate costs), and Impairment of Long-Lived Assets[225](index=225&type=chunk)[226](index=226&type=chunk)[227](index=227&type=chunk)[228](index=228&type=chunk) - Other expense, net, includes interest expense on debt, amortization of debt discount/issuance costs, gains/losses on debt extinguishment, and foreign exchange impacts[230](index=230&type=chunk) [Results of Operations (Fiscal 2024 vs. Fiscal 2023)](index=37&type=section&id=RESULTS%20OF%20OPERATIONS) Key Financial Results (FY2024 vs. FY2023, in thousands) | Metric | FY2024 | FY2023 | Change | Change (%) | | :-------------------------------- | :----- | :----- | :----- | :--------- | | Service Revenue | $700,579 | $710,044 | $(9,465) | (1.3)% | | Other Revenue | $28,126 | $33,894 | $(5,768) | (17.0)% | | **Total Revenue** | **$728,705** | **$743,938** | **$(15,233)** | **(2.0)%** | | Cost of Service Revenue | $192,960 | $198,871 | $(5,911) | (3.0)% | | Cost of Other Revenue | $31,945 | $42,604 | $(10,659) | (25.0)% | | **Total Cost of Revenue** | **$224,905** | **$241,475** | **$(16,570)** | **(6.9)%** | | **Gross Profit** | **$503,800** | **$502,463** | **$1,337** | **0.3%** | | Research and Development | $136,216 | $142,491 | $(6,275) | (4.4)% | | Sales and Marketing | $271,944 | $311,883 | $(39,939) | (12.8)% | | General and Administrative | $112,209 | $108,001 | $4,208 | 3.9% | | Impairment of Long-Lived Assets | $11,034 | $6,380 | $4,654 | 72.9% | | **Total Operating Expenses** | **$531,403** | **$568,755** | **$(37,352)** | **(6.6)%** | | **Loss from Operations** | **$(27,603)** | **$(66,292)** | **$38,689** | **(58.4)%** | | Other Expense, Net | $(36,347) | $(4,044) | $(32,303) | NM | | Provision for Income Taxes | $3,642 | $2,807 | $835 | 29.7% | | **Net Loss** | **$(67,592)** | **$(73,143)** | **$5,551** | **(7.6)%** | | Net Loss Per Share (Basic and Diluted) | $(0.56) | $(0.63) | $0.07 | NM | - The increase in Other expense, net, was primarily due to a **$18.5 million gain from debt extinguishment** in the prior year not recurring, a **$12.3 million increase in interest expense** on the variable-rate term loan, and increased foreign exchange losses[245](index=245&type=chunk) - Impairment of long-lived assets increased by **$4.7 million**, primarily due to an **$11.0 million non-cash charge** for operating lease right-of-use assets in fiscal 2024, related to partially ceasing use of headquarters and an international office space[243](index=243&type=chunk) [Liquidity and Capital Resources](index=40&type=section&id=Liquidity%20and%20Capital%20Resources) - As of March 31, 2024, the company had **$117.3 million in cash, cash equivalents, and short-term investments**, and $0.5 million in restricted cash[248](index=248&type=chunk) - Primary liquidity requirements include working capital, R&D, marketing, principal and interest payments on outstanding debt, and other general corporate needs[249](index=249&type=chunk) - The capital deployment strategy for fiscal 2024 is to invest excess cash in growth initiatives and software development, and to pay down debt[249](index=249&type=chunk) [Cash Flows](index=40&type=section&id=Cash%20Flows) Summary of Cash Flows (in thousands) | Activity | FY2024 | FY2023 | FY2022 | | :-------------------------------- | :----- | :----- | :----- | | Net cash provided by operating activities | $78,985 | $48,786 | $34,680 | | Net cash provided by (used in) investing activities | $8,546 | $6,050 | $(159,978) | | Net cash provided by (used in) financing activities | $(83,411) | $(37,784) | $105,425 | | Net increase (decrease) in cash and cash equivalents | $3,994 | $12,015 | $(20,458) | - Cash provided by operating activities **increased by $30.2 million** in fiscal 2024, mainly due to increased cash from customers and decreased cash paid to suppliers and for sales commissions[250](index=250&type=chunk) - Cash used in financing activities **increased by $45.6 million** in fiscal 2024, primarily due to principal repayments on the term loan and convertible senior notes, offset by proceeds from the term loan and common stock repurchases in fiscal 2023[250](index=250&type=chunk) [Material Cash Requirements and Other Obligations](index=41&type=section&id=Material%20Cash%20Requirements%20and%20Other%20Obligations) Contractual Obligations as of March 31, 2024 (in thousands) | Obligation | Total | Less than 1 year | 1-3 years | 3-5 years | Thereafter | | :------------------------ | :---- | :--------------- | :-------- | :-------- | :--------- | | 2028 Notes Principal | $201,914 | $— | $201,914 | $— | $— | | 2028 Notes Interest | $32,307 | $8,077 | $24,230 | $— | $— | | Term Loan Principal | $225,000 | $— | $225,000 | $— | $— | | Term Loan Interest | $92,393 | $27,718 | $64,675 | $— | $— | | Operating Lease Obligations | $77,284 | $13,737 | $23,964 | $21,148 | $18,435 | | Purchase Obligations | $61,154 | $44,855 | $15,150 | $877 | $272 | | **Total** | **$690,052** | **$94,387** | **$554,933** | **$22,025** | **$18,707** | [Critical Accounting Policies and Estimates](index=41&type=section&id=CRITICAL%20ACCOUNTING%20POLICIES%20AND%20ESTIMATES) - Critical accounting policies and estimates include revenue recognition (involving judgments on performance obligations, transaction price, and standalone selling prices), allowance for credit losses (based on aging, customer trends, macro-economic conditions), and acquisitions (fair value estimates for assets/liabilities)[255](index=255&type=chunk)[256](index=256&type=chunk)[257](index=257&type=chunk)[258](index=258&type=chunk)[259](index=259&type=chunk)[261](index=261&type=chunk)[262](index=262&type=chunk) - Other critical areas involve capitalized internal-use software costs (capitalization criteria, amortization), accounting for long-lived assets (recoverability review, impairment measurement), and goodwill/other intangible assets (annual impairment testing, amortization of definite-lived assets)[263](index=263&type=chunk)[264](index=264&type=chunk)[265](index=265&type=chunk)[266](index=266&type=chunk)[268](index=268&type=chunk)[269](index=269&type=chunk)[270](index=270&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=43&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section discusses exposure to interest rate risk on its variable-rate debt and foreign currency exchange risk - The company is exposed to interest rate risk on its **$225.0 million variable-rate Term Loan**; a hypothetical 10% increase in interest rates would increase annual interest expense by approximately **$2.4 million**[272](index=272&type=chunk) - Foreign currency exchange risk arises from revenue and operating expenses denominated in currencies other than the United States dollar, primarily the **British Pound and Euro**[274](index=274&type=chunk) - A hypothetical **10% decrease in all foreign currencies** against the United States dollar would not result in a material foreign currency loss on foreign-denominated balances as of March 31, 2024[275](index=275&type=chunk) [Interest Rate Fluctuation Risk](index=43&type=section&id=Interest%20Rate%20Fluctuation%20Risk) - Cash, cash equivalents, and investments totaled **$117.3 million** as of March 31, 2024, primarily in money market funds, US treasury, commercial paper, and corporate bonds, with a focus on capital preservation and liquidity[271](index=271&type=chunk) - The **$201.9 million 2028 Notes** bear a fixed interest rate and are not subject to interest rate risk[273](index=273&type=chunk) [Foreign Currency Exchange Risk](index=43&type=section&id=Foreign%20Currency%20Exchange%20Risk) - Gains or losses from the revaluation of certain cash balances, accounts receivable, and intercompany balances denominated in foreign currencies impact net income (loss)[275](index=275&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=44&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the audited consolidated financial statements and supplementary data for the last three fiscal years - The consolidated financial statements include the balance sheets, statements of operations, comprehensive loss, stockholders' equity, and cash flows for the periods presented[277](index=277&type=chunk) - Moss Adams LLP provided an **unqualified opinion** on the consolidated financial statements and the effectiveness of internal control over financial reporting as of March 31, 2024[279](index=279&type=chunk)[280](index=280&type=chunk) [Reports of Independent Registered Public Accounting Firm](index=45&type=section&id=Reports%20of%20Independent%20Registered%20Public%20Accounting%20Firm) - The independent auditor, Moss Adams LLP, issued an **unqualified opinion** on the consolidated financial statements and the effectiveness of internal control over financial reporting for 8x8, Inc. as of March 31, 2024[279](index=279&type=chunk)[280](index=280&type=chunk) - The valuation of Right-of-Use (ROU) assets, particularly management's judgments on significant assumptions in discounted cash flow analysis for impairment, was identified as a **critical audit matter**[287](index=287&type=chunk)[288](index=288&type=chunk)[289](index=289&type=chunk) [Consolidated Balance Sheets](index=47&type=section&id=Consolidated%20Balance%20Sheets) Consolidated Balance Sheet Highlights (in thousands) | Metric | March 31, 2024 | March 31, 2023 | Change (in thousands) | Change (%) | | :-------------------------- | :------------- | :------------- | :-------------------- | :--------- | | Total Current Assets | $247,836 | $273,124 | $(25,288) | (9.3)% | | Property and equipment, net | $53,181 | $57,871 | $(4,690) | (8.1)% | | Operating lease, right-of-use assets | $35,924 | $52,444 | $(16,520) | (31.5)% | | Intangible assets, net | $86,717 | $107,112 | $(20,395) | (19.0)% | | Goodwill | $266,574 | $266,863 | $(289) | (0.1)% | | **Total Assets** | **$755,979** | **$841,810** | **$(85,831)** | **(10.2)%** | | Total Current Liabilities | $172,584 | $229,887 | $(57,303) | (24.9)% | | Convertible senior notes, non-current | $197,796 | $196,821 | $975 | 0.5% | | Term loan | $211,894 | $231,993 | $(20,099) | (8.7)% | | **Total Liabilities** | **$654,021** | **$741,904** | **$(87,883)** | **(11.8)%** | | Total Stockholders' Equity | $101,958 | $99,906 | $2,052 | 2.1% | [Consolidated Statements of Operations](index=48&type=section&id=Consolidated%20Statements%20of%20Operations) Consolidated Statements of Operations Highlights (in thousands, except per share amounts) | Metric | FY2024 | FY2023 | FY2022 | | :-------------------------- | :----- | :----- | :----- | | Service revenue | $700,579 | $710,044 | $602,357 | | Other revenue | $28,126 | $33,894 | $35,773 | | **Total revenue** | **$728,705** | **$743,938** | **$638,130** | | Cost of service revenue | $192,960 | $198,871 | $195,909 | | Cost of other revenue | $31,945 | $42,604 | $51,649 | | **Total cost of revenue** | **$224,905** | **$241,475** | **$247,558** | | **Gross profit** | **$503,800** | **$502,463** | **$390,572** | | Research and development | $136,216 | $142,491 | $112,387 | | Sales and marketing | $271,944 | $311,883 | $314,223 | | General and administrative | $112,209 | $108,001 | $118,103 | | Impairment of long-lived assets | $11,034 | $6,380 | $— | | **Total operating expenses** | **$531,403** | **$568,755** | **$544,713** | | **Loss from operations** | **$(27,603)** | **$(66,292)** | **$(154,141)** | | Other expense, net | $(36,347) | $(4,044) | $(21,629) | | Provision (benefit) for income taxes | $3,642 | $2,807 | $(387) | | **Net loss** | **$(67,592)** | **$(73,143)** | **$(175,383)** | | Net loss per share: Basic and diluted | $(0.56) | $(0.63) | $(1.55) | | Weighted average number of shares: Basic and diluted | 121,106 | 115,959 | 113,354 | Other Expense, Net Details (in thousands) | Metric | FY2024 | FY2023 | FY2022 | | :-------------------------------- | :----- | :----- | :----- | | Interest expense | $(35,352) | $(23,020) | $(2,271) | | Amortization of debt discount and issuance costs | $(4,472) | $(4,254) | $(20,404) | | Gain on warrants remeasurement | $2,176 | $417 | $— | | Gain (loss) on debt extinguishment | $(1,766) | $18,545 | $— | | Gain (loss) on sale of assets | $(179) | $1,821 | $(68) | | Gain (loss) on foreign exchange | $(1,032) | $993 | $908 | | Other income | $4,278 | $1,454 | $206 | | **Other expense, net** | **$(36,347)** | **$(4,044)** | **$(21,629)** | [Consolidated Statements of Comprehensive Loss](index=49&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Loss) Consolidated Statements of Comprehensive Loss (in thousands) | Metric | FY2024 | FY2023 | FY2022 | | :-------------------------------- | :----- | :----- | :----- | | Net loss | $(67,592) | $(73,143) | $(175,383) | | Unrealized gain (loss) on investments in securities | $280 | $(184) | $(571) | | Foreign currency translation adjustment | $1,094 | $(4,830) | $(3,149) | | **Comprehensive loss** | **$(66,218)** | **$(78,157)** | **$(179,103)** | [Consolidated Statements of Stockholders' Equity](index=50&type=section&id=Consolidated%20Statements%20of%20Stockholders'%20Equity) Consolidated Statements of Stockholders' Equity (in thousands, except shares) | Metric | March 31, 2024 | March 31, 2023 | March 31, 2022 | | :-------------------------- | :------------- | :------------- | :------------- | | Common Stock (Shares) | 125,193,573 | 114,659,255 | 117,862,807 | | Common Stock (Amount) | $125 | $115 | $118 | | Additional Paid-in Capital | $973,895 | $905,635 | $956,599 | | Accumulated Other Comprehensive Loss | $(11,553) | $(12,927) | $(7,913) | | Accumulated Deficit | $(860,509) | $(792,917) | $(766,438) | | **Total Stockholders' Equity** | **$101,958** | **$99,906** | **$182,366** | [Consolidated Statements of Cash Flows](index=51&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Consolidated Statements of Cash Flows (in thousands) | Activity | FY2024 | FY2023 | FY2022 | | :-------------------------------- | :----- | :----- | :----- | | Net cash provided by operating activities | $78,985 | $48,786 | $34,680 | | Net cash provided by (used in) investing activities | $8,546 | $6,050 | $(159,978) | | Net cash provided by (used in) financing activities | $(83,411) | $(37,784) | $105,425 | | Effect of exchange rate changes on cash | $(126) | $(5,037) | $(585) | | **Net increase (decrease) in cash and cash equivalents** | **$3,994** | **$12,015** | **$(20,458)** | | Cash, cash equivalents and restricted cash, end of year | $116,723 | $112,729 | $100,714 | [Notes to Consolidated Financial Statements](index=52&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) [1. The Company and Significant Accounting Policies](index=53&type=section&id=1.%20THE%20COMPANY%20AND%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note details the basis of presentation and significant accounting policies for revenue, leases, and assets - 8x8 is a leading SaaS provider of contact center, voice, video, chat, and enterprise-class API solutions, powered by one global cloud communications platform[309](index=309&type=chunk) - In fiscal 2024, the company reclassified accrued compensation, accrued taxes, and other accrued liabilities into 'Accrued and other liabilities' and separately presented 'Cost of revenue' and 'Cost of other revenue' to recognize 'Gross profit' on the consolidated statements of operations[312](index=312&type=chunk) - Key accounting estimates include current expected credit losses, sales returns and customer credits, fair value and impairment of goodwill and long-lived assets, capitalized internal-use software costs, and stock-based compensation[313](index=313&type=chunk) - Revenue is recognized using a five-step model, allocating transaction price to distinct performance obligations based on standalone selling prices[314](index=314&type=chunk)[315](index=315&type=chunk)[320](index=320&type=chunk)[321](index=321&type=chunk) - The company recorded an **$11.0 million impairment charge** on operating lease right-of-use assets in fiscal 2024 due to partially ceasing use of its headquarters and an international office space[340](index=340&type=chunk) [2. Revenue Recognition](index=59&type=section&id=2.%20REVENUE%20RECOGNITION) This note details revenue disaggregation, contract balances, and remaining performance obligations Contract Balances (in thousands) | Metric | March 31, 2024 | March 31, 2023 | | :-------------------------------- | :------------- | :------------- | | Contract assets, current | $9,453 | $11,023 | | Contract assets, non-current | $7,879 | $10,570 | | Deferred revenue, current | $34,325 | $34,909 | | Deferred revenue, non-current | $7,810 | $10,615 | - Approximately **$38.7 million of revenue was recognized in fiscal 2024** that was included in deferred revenue at the beginning of the fiscal year[370](index=370&type=chunk) - Remaining performance obligations not yet recognized as of March 31, 2024, totaled approximately **$775.0 million**, with 86% expected to be recognized over the next 24 months[371](index=371&type=chunk) Amortization of Deferred Sales Commission Costs (in millions) | Fiscal Year | Amortization Expense | | :---------- | :------------------- | | 2024 | $40.2 | | 2023 | $38.2 | | 2022 | $34.7 | [3. Fair Value Measurements](index=60&type=section&id=3.%20FAIR%20VALUE%20MEASUREMENTS) This note provides a breakdown of assets and liabilities by fair value hierarchy levels Cash, Cash Equivalents, and Available-for-Sale Investments (March 31, 2024, in thousands) | Category | Amortized Costs | Estimated Fair Value | Cash and Cash Equivalents | Restricted Cash (Current & Non-current) | Short-Term Investments | | :---------------- | :-------------- | :------------------- | :------------------------ | :-------------------------------------- | :--------------------- | | Cash | $53,943 | $53,943 | $53,943 | $— | $— | | Money market funds (Level 1) | $37,633 | $37,633 | $37,172 | $461 | $— | | Term deposit (Level 2) | $25,147 | $25,147 | $25,147 | $— | $— | | Commercial paper (Level 2) | $1,049 | $1,048 | $— | $— | $1,048 | | **Total assets** | **$117,772** | **$117,771** | **$116,262** | **$461** | **$1,048** | Detachable Warrants Fair Value and Unobservable Inputs | Metric | March 31, 2024 | March 31, 2023 | | :-------------------------- | :------------- | :------------- | | Estimated fair value (in thousands) | $3,321 | $5,497 | | Stock volatility | 87.2% | 67.2% | | Risk-free rate | 4.3% | 3.6% | | Expected term | 3.4 years | 4.4 years | - The estimated fair value of the 2028 Notes was **$161.7 million** as of March 31, 2024, categorized as Level 2 in the fair value hierarchy due to limited trading activity[377](index=377&type=chunk) [4. Financial Statement Components](index=61&type=section&id=4.%20FINANCIAL%20STATEMENT%20COMPONENTS) This note provides detailed breakdowns of various balance sheet accounts Accounts Receivable, Net (in thousands) | Metric | March 31, 2024 | March 31, 2023 | | :-------------------------- | :------------- | :------------- | | Trade accounts receivable | $59,757 | $63,501 | | Unbilled trade accounts receivable | $4,470 | $5,668 | | Less: allowance for credit losses | $(2,746) | $(3,644) | | Less: allowance for sales reserves | $(2,502) | $(3,218) | | **Total accounts receivable, net** | **$58,979** | **$62,307** | Property and Equipment, Net (in thousands) | Metric | March 31, 2024 | March 31, 2023 | | :-------------------------- | :------------- | :------------- | | Total property and equipment | $238,598 | $226,164 | | Less: accumulated depreciation and amortization | $(185,417) | $(168,293) | | **Total property and equipment, net** | **$53,181** | **$57,871** | Accrued and Other Liabilities (in thousands) | Metric | March 31, 2024 | March 31, 2023 | | :-------------------------- | :------------- | :------------- | | Accrued compensation | $19,550 | $29,614 | | Accrued taxes | $44,096 | $29,570 | | Other accrued liabilities | $14,456 | $14,556 | | **Total accrued and other liabilities** | **$78,102** | **$73,740** | [5. Intangible Assets and Goodwill](index=62&type=section&id=5.%20INTANGIBLE%20ASSETS%20AND%20GOODWILL) This note details the carrying value of intangible assets and goodwill, confirming no impairment was recorded Acquired Identifiable Intangible Assets, Net (in thousands) | Asset Type | March 31, 2024 Net Carrying Amount | March 31, 2023 Net Carrying Amount | | :-------------------------- | :---------------------------------- | :---------------------------------- | | Developed technology | $9,631 | $18,100 | | Customer relationships | $77,086 | $89,012 | | Trade names and domains | $— | $— | | **Total acquired identifiable intangible assets** | **$86,717** | **$107,112** | Amortization Expense for Intangible Assets (in millions) | Fiscal Year | Amortization Expense | | :---------- | :------------------- | | 2024 | $20.4 | | 2023 | $21.1 | | 2022 | $8.3 | - Goodwill balance at March 31, 2024, was **$266.574 million**[385](index=385&type=chunk) - Annual impairment tests for goodwill in fiscal 2024, 2023, and 2022 determined **no adjustment to the carrying value was required**[385](index=385&type=chunk) [6. Leases](index=63&type=section&id=6.%20LEASES) This note outlines lease expenses and details an $11.0 million impairment charge on right-of-use assets Lease Expense Components (in thousands) | Metric | FY2024 | FY2023 | FY2022 | | :-------------------- | :----- | :----- | :----- | | Operating lease expense | $10,934 | $12,030 | $13,482 | | Variable lease expense | $3,690 | $6,378 | $3,837 | Supplemental Lease Information | Metric | March 31, 2024 | March 31, 2023 | | :-------------------------- | :------------- | :------------- | | Weighted average remaining lease term | 6.2 years | 7.0 years | | Weighted average discount rate | 4.3% | 4.1% | - An impairment charge of **$11.0 million** was recorded in fiscal 2024 for operating lease right-of-use assets, resulting from the partial cessation of use of the company's headquarters ($9.9 million) and an international office space ($1.1 million)[388](index=388&type=chunk)[389](index=389&type=chunk) [7. Commitments and Contingencies](index=64&type=section&id=7.%20COMMITMENTS%20AND%20CONTINGENCIES) This note details purchase obligations and legal proceedings, including an FCC investigation - Total contractual minimum purchase obligations were approximately **$61.2 million** as of March 31, 2024, including a $28.1 million noncancellable three-year hosting service contract[395](index=395&type=chunk)[396](index=396&type=chunk) - The company is involved in various legal proceedings, including an **FCC investigation** into potential violations by 8x8 and Fuze related to prior period regulatory filings and payments[397](index=397&type=chunk)[400](index=400&type=chunk) - A USAC invoice for **$14.9 million** for additional Universal Service Fund (USF) fees for Fuze (calendar years 2021 and 2022) led to recording an additional **$5.6 million liability**, which was paid subsequent to March 31, 2024, with an appeal ongoing for the remaining amount[400](index=400&type=chunk) - Contingent indirect tax liabilities accrued were **$19.2 million** as of March 31, 2024, up from $13.5 million in March 31, 2023[399](index=399&type=chunk) [8. Convertible Senior Notes and Term Loan](index=65&type=section&id=8.%20CONVERTIBLE%20SENIOR%20NOTES%20AND%20TERM%20LOAN) This note details the company's debt obligations, including convertible notes and a senior secured term loan - The remaining **$63.3 million** aggregate principal amount of 0.50% Convertible Senior Notes due 2024 were paid off in full on February 1, 2024[407](index=407&type=chunk) - The company borrowed a **$250.0 million senior secured Term Loan** in August 2022, maturing August 3, 2027, with an initial interest rate of SOFR (1.00% floor + 0.10% CSA) plus a 6.50% margin[410](index=410&type=chunk)[412](index=412&type=chunk) - In connection with the Term Loan, detachable warrants were issued to purchase **3.1 million shares** of common stock at an exercise price of $7.15 per share, with a fair value of $3.3 million at March 31, 2024[415](index=415&type=chunk) - Approximately **$201.9 million** aggregate principal amount of 4.00% Convertible Senior Notes due 2028 were issued in August 2022 as part of an exchange transaction, maturing February 1, 2028[418](index=418&type=chunk)[422](index=422&type=chunk)[423](index=423&type=chunk) Net Carrying Amount and Interest Expense for Term Loan and 2028 Notes (in thousands) | Metric | March 31, 2024 | March 31, 2023 | FY2024 Interest Expense | FY2023 Interest Expense | | :-------------------------------- | :------------- | :------------- | :---------------------- | :---------------------- | | Term Loan Net Carrying Amount | $211,894 | $231,993 | $30,157 | $19,828 | | 2028 Notes Net Carrying Amount | $197,796 | $196,821 | $9,039 | $4,575 | [9. Stock-Based Compensation and Stockholders' Equity](index=68&type=section&id=9.%20STOCK-BASED%20COMPENSATION%20AND%20STOCKHOLDERS'%20EQUITY) This note outlines equity incentive plans, stock-based compensation expense, and stock repurchase activity Stock-Based Compensation Expense (in thousands) | Category | FY2024 | FY2023 | FY2022 | | :-------------------------- | :----- | :----- | :----- | | Cost of service revenue | $4,993 | $9,236 | $8,815 | | Cost of other revenue | $1,918 | $3,531 | $4,717 | | Research and development | $24,112 | $29,581 | $32,655 | | Sales and marketing | $15,271 | $24,921 | $47,202 | | General and administrative | $15,616 | $22,267 | $39,942 | | **Total** | **$61,910** | **$89,536** | **$133,331** | - As of March 31, 2024, total unrecognized compensation cost related to RSUs was **$38.6 million**, expected to be recognized over a weighted average of 1.75 years[439](index=439&type=chunk) - Total unrecognized compensation cost related to PSUs was **$3.7 million** as of March 31, 2024, expected to be recognized over a weighted average of 1.16 years[442](index=442&type=chunk) - Under the Employee Stock Purchase Plan (ESPP), approximately 1.9 million shares were issued in fiscal 2024[444](index=444&type=chunk)[446](index=446&type=chunk) - Approximately **$7.1 million remains available** under the 2017 Repurchase Plan as of March 31, 2024[447](index=447&type=chunk) [10. Income Taxes](index=73&type=section&id=10.%20INCOME%20TAXES) This note details the income tax provision, deferred tax assets, and net operating loss carryforwards Income Tax Provision (Benefit) (in thousands) | Metric | FY2024 | FY2023 | FY2022 | | :-------------------------- | :----- | :----- | :----- | | Total current tax provision | $3,642 | $2,807 | $866 | | Total deferred tax provision | $— | $— | $(1,253) | | **Income tax provision (benefit)** | **$3,642** | **$2,807** | **$(387)** | - As of March 31, 2024, federal net operating loss (NOL) carryforwards totaled approximately **$1,118.7 million**, with $335.5 million expiring in 2034 and $783.2 million carrying forward indefinitely[452](index=452&type=chunk) - Research and development credit carryforwards as of March 31, 2024, were approximately **$16.8 million for federal** and **$23.4 million for California** tax purposes[452](index=452&type=chunk) - A full valuation allowance of approximately **$368.4 million** was maintained against deferred tax assets as of March 31, 2024, due to cumulative losses in recent periods[451](index=451&type=chunk) - Unrecognized tax benefits totaled **$10.8 million** at March 31, 2024, all of which would favorably affect the effective tax rate if recognized[453](index=453&type=chunk) [11. Net Loss Per Share](index=75&type=section&id=11.%20NET%20LOSS%20PER%20SHARE) This note provides the calculation of basic and diluted net loss per share Net Loss Per Share (in thousands, except per share data) | Metric | FY2024 | FY2023 | FY2022 | | :-------------------------------- | :----- | :----- | :----- | | Net loss | $(67,592) | $(73,143) | $(175,383) | | Weighted average common shares outstanding - basic and diluted | 121,106 | 115,959 | 113,354 | | **Net loss per share - basic and diluted** | **$(0.56)** | **$(0.63)** | **$(1.55)** | - Basic and diluted net loss per share are equivalent for all periods presented because the company was in a loss position, making the inclusion of potential common shares anti-dilutive[457](index=457&type=chunk) Anti-Dilutive Shares Excluded from Diluted EPS (in thousands) | Category | FY2024 | FY2023 | FY2022 | | :-------------------------------- | :----- | :----- | :----- | | Stock options | 497 | 685 | 867 | | Restricted stock units and Performance stock units | 7,396 | 13,617 | 10,401 | | Potential shares attributable to the ESPP | 1,446 | 1,261 | 761 | | Warrants to purchase common stock | — | 3,100 | — | | **Total anti-dilutive shares** | **9,339** | **18,663** | **12,029** | [12. Geographical Information](index=76&type=section&id=12.%20GEOGRAPHICAL%20INFORMATION) This note provides a breakdown of revenue and assets by geographic region Revenue by Geographic Region (in thousands) | Region | FY2024 | FY2023 | FY2022 | | :---------------- | :----- | :----- | :----- | | United States | $507,507 | $536,678 | $443,118 | | United Kingdom | $121,920 | $107,585 | $91,192 | | Other International | $99,278 | $99,675 | $103,820 | | **Total revenue** | **$728,705** | **$743,938** | **$638,130** | Property and Equipment, Net by Geographic Region (in thousands) | Region | March 31, 2024 | March 31, 2023 | | :---------------- | :------------- | :------------- | | United States | $49,992 | $54,191 | | International | $3,189 | $3,680 | | **Total property and equipment, net** | **$53,181** | **$57,871** | [13. Related Party Transactions](index=76&type=section&id=13.%20RELATED%20PARTY%20TRANSACTIONS) This note discloses a sales and marketing contract with a vendor that became a related party - The company has a two-year contract valued at **$1.4 million** with an outside sales and marketing vendor that became a related party in July 2022[459](index=459&type=chunk) - Payments to this related party vendor totaled **$0.7 million** during fiscal 2024[459](index=459&type=chunk) [Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=77&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) This section states there have been no changes in or disagreements with accountants [Item 9A. Controls and Procedures](index=77&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective - No material changes occurred in the company's internal control over financial reporting during the most recent fiscal quarter[462](index=462&type=chunk) - Management, including the CEO and CFO, concluded that **disclosure controls and procedures were effective** as of March 31, 2024[463](index=463&type=chunk) - Management also concluded that **internal control over financial reporting was effective** as of March 31, 2024, based on the COSO framework[464](index=464&type=chunk)[465](index=465&type=chunk) [Item 9B. Other Information](index=77&type=section&id=Item%209B.%20Other%20Information) This section reports the adoption of a Rule 10b5-1 Trading Plan by the CEO - CEO Samuel Wilson adopted a Rule 10b5-1 Trading Plan on March 14, 2024, for the potential sale of up to **29,000 shares** of common stock between June 13, 2024, and June 14, 2025[467](index=467&type=chunk) [Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=77&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This section states there are no disclosures regarding foreign jurisdictions that prevent inspections Part III [Item 10. Directors, Executive Officers and Corporate Governance](index=78&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Director, officer, and governance information is incorporated by reference from the 2024 proxy statement - Information on directors and corporate governance is incorporated by reference from the 2024 Annual Meeting of Stockholders proxy statement[472](index=472&type=chunk) - Information about current executive officers is incorporated from Item 1 of Part I[472](index=472&type=chunk) - The company has a Code of Conduct and Ethics applicable to all employees, including executive officers, posted on its investor relations website[473](index=473&type=chunk) [Item 11. Executive Compensation](index=78&type=section&id=Item%2011.%20Executive%20Compensation) Executive compensation information is incorporated by reference from the 2024 proxy statement - Executive compensation information is incorporated by reference from the definitive proxy statement for the 2024 Annual Meeting of Stockholders[474](index=474&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=78&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Security ownership and equity plan information is incorporated by reference from the 2024 proxy statement - Information on security ownership and equity compensation plans is incorporated by reference from the definitive proxy statement for the 2024 Annual Meeting of Stockholders[475](index=475&type=chunk) - Descriptions of equity compensation plans are also detailed in Note 9, Stock-Based Compensation and Stockholders' Equity, in the Notes to Consolidated Financial Statements[475](index=475&type=chunk) [Item 13. Certain Relationships and Related Transactions and Director Independence](index=78&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%20and%20Director%20Independence) Information on related transactions and director independence is incorporated by reference from the 2024 proxy statement - Information on certain relationships and related transactions and director independence is incorporated by reference from the definitive proxy statement for the 2024 Annual Meeting of Stockholders[476](index=476&type=chunk) [Item 14. Principal Accountant Fees and Services](index=78&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information on accountant fees and services is incorporated by reference from the 2024 proxy statement - Information on principal accountant fees and services is incorporated by reference from the definitive proxy statement for the 2024 Annual Meeting of Stockholders[477](index=477&type=chunk) Part IV [Item 15. Exhibits and Financial Statement Schedules](index=79&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists the financial statements and provides a comprehensive table of exhibits filed with the report - The financial statements are set forth under Part II, Item 8 of this Form 10-K[480](index=480&type=chunk) - Exhibits include the Agreement and Plan of Merger for Fuze, Restated Certificate of Incorporation, Amended and Restated By-Laws, Indentures for Convertible Senior Notes, various equity incentive plans, Term Loan Credit Agreement, and certifications (CEO, CFO)[483](index=483&type=chunk)[484](index=484&type=chunk) [Item 16. Form 10-K Summary](index=82&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item states that there is no Form 10-K Summary [Signatures](index=83&type=section&id=Signatures) This section contains the required signatures certifying the Annual Report on Form 10-K - The Annual Report on Form 10-K is signed by Samuel Wilson (Chief Executive Officer), Kevin Kraus (Chief Financial Officer), Suzy Seandel (Chief Accounting Officer), and other directors[492](index=492&type=chunk)[494](index=494&type=chunk)

Financial Data and Key Metrics Changes - The company ended the quarter with approximately $118 million in cash, restricted cash, and investments after repaying the remaining $63 million of 2024 notes [5][48] - Cash flow from operations for the year increased by 62% from fiscal 2023, reaching $79 million [33][97] - Non-GAAP operating margins increased to double digits, with a significant reduction in non-GAAP cost structure totaling over $47 million from fiscal 2023 [21][56] Business Line Data and Key Metrics Changes - Sales of new products increased by more than 50% year-over-year for the second consecutive quarter, indicating strong customer acceptance [20] - The contact center business showed solid momentum, with a year-over-year growth of 9% despite seasonal declines in CPaaS [106][107] - The company reported a flat year-over-year ARR of $697 million, with a decline primarily due to seasonal decreases in CPaaS usage and Fuze customer attrition [52][53] Market Data and Key Metrics Changes - The company is focusing on small and mid-sized enterprises as a target customer segment, which is expected to drive future growth [35] - The introduction of new products and enhancements is aimed at increasing cross-sell opportunities and improving customer experience [38][125] Company Strategy and Development Direction - The company aims to maintain leadership in CCaaS and CPaaS while embedding AI across its integrated platform [6][12] - Future strategies include driving innovation, improving go-to-market activities, and maintaining a balanced approach to growth and profitability [27][100] - The company plans to continue returning value to investors through debt repayments, having repaid $88.3 million in fiscal 2024 [28][93] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's stronger financial position compared to the end of fiscal 2023, despite acknowledging challenges in the macroeconomic environment [37][138] - The company anticipates a gradual increase in CPaaS as a percentage of total revenue and expects to return to year-over-year growth by the fourth quarter of fiscal 2025 [55][62] Other Important Information - The company has committed to reducing outstanding debt and is on track to meet its goal of returning $250 million to investors over three years [93] - The company is exploring term loan refinancing options to reduce interest expenses further [96] Q&A Session Summary Question: How did CPaaS or CCaaS usage look in the March quarter? - Management noted that the contact center business has been growing, while CPaaS experienced seasonal declines [105][106] Question: What are the assumptions for the 2025 guide regarding CPaaS? - Management expects continued improvement in CPaaS throughout each quarter of 2025, despite some seasonal impacts [111] Question: Can you provide a waterfall model for the return to growth? - Management indicated that new products are growing significantly, and improvements in CPaaS and contact center products are expected to contribute to overall growth [115][120] Question: What is the outlook on Fuze churn and customer transitions? - Management acknowledged some headwinds due to rightsizing customer needs but emphasized that customer satisfaction is improving [118][119] Question: What is the current macroeconomic environment affecting the business? - Management described a cautious environment with longer deal cycles but noted that they are still able to close deals [147][149]

May 8, 2024 This presentation includes 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. Any statements that are not statements of historical fact may be deemed to be forward-looking statements. For example, words such as "may," "will," "should," "estimates," "predicts," "potential," "continue," "strategy," "believes," "anticipates," "plans," "expects," "intends," and similar expressions are intended ...

8x8 (EGHT) came out with quarterly earnings of $0.08 per share, beating the Zacks Consensus Estimate of $0.07 per share. This compares to earnings of $0.11 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 14.29%. A quarter ago, it was expected that this telecommunications services company would post earnings of $0.10 per share when it actually produced earnings of $0.12, delivering a surprise of 20%.Over the last four quarters, ...

Revenue and Financial Performance - Fourth quarter revenue was $179 million, and fiscal year 2024 revenue totaled $729 million, representing a 2% decrease from $743.9 million in fiscal 2023[7]. - Total annual recurring revenue (ARR) was $697 million at quarter-end, a decrease of 1% from the previous year[8]. - Service revenue for Q1 2024 was $172.49 million, a decrease of 4.1% from $176.56 million in Q1 2023[36]. - Total revenue for Q1 2024 was $179.41 million, down 2.4% from $184.53 million in Q1 2023[36]. - Non-GAAP net income for the year was $57,964,000, representing 8.0% of total revenue, compared to $38,513,000 or 5.2% in the previous year, an increase of 50.9%[46]. - Total ARR for Q4 Fiscal 2023 was $703 million, with a growth rate of only 2% compared to previous quarters[51]. Profitability and Losses - GAAP operating loss improved by 58% to $27.6 million compared to a loss of $66.3 million in fiscal 2023[7]. - Non-GAAP operating profit increased by 52% to $94.7 million, up from $62.4 million in fiscal 2023[7]. - Adjusted EBITDA for the fourth quarter was $26 million, down from $31.6 million in the same period last year[8]. - Net loss for Q1 2024 was $23.59 million, compared to a net loss of $9.43 million in Q1 2023, indicating a significant increase in losses[36]. - The net loss for the year ended March 31, 2024, was $67,592,000, an improvement from a net loss of $73,143,000 in the previous year, representing a decrease of approximately 7.1%[42]. - The company reported a basic and diluted net loss per share of $0.19 for Q1 2024, compared to $0.08 for Q1 2023[36]. - Non-GAAP net income per share for Q1 Fiscal 2024 was $0.08, down from $0.11 in Q1 Fiscal 2023[48]. - The company reported a GAAP net loss per share of $(0.19) for Q1 Fiscal 2024, compared to $(0.08) in Q1 Fiscal 2023[48]. Cash Flow and Debt Management - Cash flow from operations increased 62% year-over-year to $79 million for fiscal year 2024[7]. - The company repaid $63.3 million of its 2024 Notes, bringing total debt repayment in fiscal 2024 to $88.3 million[9]. - Interest paid increased to $35,574,000 in 2024 from $22,162,000 in 2023, reflecting a rise of 60.5%[43]. - The company reported a repayment of $63,295,000 on convertible senior notes during the year, compared to a repayment of $217,299,000 in the previous year, indicating a reduction in debt repayment[42]. - Total current assets decreased to $247.84 million as of March 31, 2024, from $273.12 million as of March 31, 2023[40]. - Total liabilities decreased to $654.02 million as of March 31, 2024, from $741.90 million as of March 31, 2023[40]. - Cash and cash equivalents increased to $116.26 million as of March 31, 2024, compared to $111.40 million as of March 31, 2023[40]. - Total cash, cash equivalents, and restricted cash at the end of the year was $116,723,000, up from $112,729,000 at the beginning of the year, indicating a net increase of $3,994,000[42]. Operational Efficiency - Research and development expenses for Q1 2024 were $33.93 million, down from $36.46 million in Q1 2023, a decrease of 6.9%[36]. - The company incurred stock-based compensation expenses of $65,857,000 for the year, down from $90,634,000 in 2023, a reduction of 27.4%[46]. - The company recorded a charge of $10 million for Fuze indirect tax liabilities during the three months ended March 31, 2024[49]. - The total cost of service revenue as a percentage of service revenue was 27.5% for the year ended March 31, 2024, compared to 28.0% in 2023, showing a slight improvement[46]. Future Outlook - For Q1 fiscal 2025, the company expects service revenue in the range of $170 million to $174 million and total revenue between $176 million and $181 million[15]. - Non-GAAP net income per share for fiscal 2025 is projected to be between $0.37 and $0.45, based on a fully diluted share count of approximately 133 million[15]. Product Development - The company launched several new products, including 8x8 Engage and Proactive Outreach, aimed at enhancing customer engagement and experience[14]. - Total Annual Recurring Revenue (ARR) for Q1 Fiscal 2024 was $703 million, showing a year-over-year growth of 2%[51]. - Enterprise ARR, which accounts for customers generating over $100,000 ARR, was $404 million in Q1 Fiscal 2024, maintaining 58% of total ARR[51]. - Small Business ARR for Q1 Fiscal 2024 was $167 million, with a year-over-year growth of 5%[51]. - Mid-Market ARR for Q1 Fiscal 2024 was $132 million, reflecting a year-over-year growth of 5%[51].

SINGAPORE--(BUSINESS WIRE)--8x8, Inc. (NASDAQ: EGHT), a leading integrated cloud contact center, unified communications, and Communications Platform as a Service (CPaaS) provider, today announced that King Power Corporation has integrated 8x8’s SMS API solution into their e-commerce platform to enhance customer experiences while effectively reducing operational costs by 30% by driving efficiency and cost savings. King Power Corporation, one of the largest duty-free retailers in the world, sought a strate ...

CAMPBELL, Calif.--(BUSINESS WIRE)--8x8, Inc. (NASDAQ: EGHT), a leading integrated cloud contact center and communications platform provider, today announced investor events for the fourth fiscal quarter. Morgan Stanley Technology, Media and Telecom Conference San Francisco, CA Tuesday, March 5, at 3:35 pm Pacific Standard Time 8x8 Virtual Product and Innovation Update Virtual Thursday, March 14, 11:30 am - 2:00 pm Pacific Standard Time The above presentations will be webcast. Links to live and archived w ...