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Share Name | Share Symbol | Market | Type |
---|---|---|---|
8x8 Inc | NASDAQ:EGHT | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.05 | 1.81% | 2.81 | 2.66 | 3.45 | 2.85 | 2.74 | 2.78 | 589,810 | 05:00:08 |
8x8, Inc. (NASDAQ: EGHT), a leading integrated cloud contact center and unified communications platform provider, today reported financial results for the fourth quarter and fiscal year 2024 ended March 31, 2024.
Fiscal Year 2024 Financial Results:
"Fiscal 2024 was a transformative year at 8x8, where we significantly advanced our strategic initiatives. Our solid performance in the fourth quarter, highlighted by accelerating growth in the sales of new products, underscores the effectiveness of our transformation," said Samuel Wilson, Chief Executive Officer of 8x8.
"Looking ahead, we remain dedicated to driving innovation, enhancing our product offerings, and delivering superior business outcomes that meet the evolving needs of our customers. We believe this will pave the way to sustained growth and profitability in the future, delivering value to our customers, partners, employees and investors," Wilson added.
Fourth Quarter Fiscal 2024 Financial Results:
Fourth Quarter Fiscal 2024 Financial Metrics and Recent Business Highlights
Financial and Operating Metrics:
"Our fiscal Q4'24 results met or exceeded our expectations for revenue, non-GAAP operating margin and cash flow. We achieved a significant milestone by retiring the remaining $63.3 million of our 2024 Notes. This brings the total amount of principal retired in fiscal 2024 to $88.3 million, and we are well on our way to meeting our commitment of returning $250 million to investors through debt repayment by the end of fiscal 2026,” said Kevin Kraus, 8x8 Chief Financial Officer.
"As we move forward, our focus remains on driving innovation, enhancing operational efficiencies, and delivering sustained profitability and cash flow. These efforts are designed to build a solid foundation for future success and continue providing substantial returns to our investors," added Kraus.
A reconciliation of the non-GAAP measures to the most directly comparable GAAP measures and other information relating to non-GAAP measures is included in the supplemental reconciliation at the end of this release.
Recent Business Highlights:
Product Innovation Highlights
Drove innovations across 8x8's integrated cloud contact center and unified communications platform to enhance customer engagement throughout the organization, further connect teams, expand to new channels, and drive business success, including:
Industry Recognition
Corporate and ESG Updates
First Quarter and Fiscal 2025 Financial Outlook
Management provides expected ranges for total revenue, service revenue and non-GAAP operating margin based on its evaluation of the current business environment. The Company emphasizes that these expectations are subject to various important cautionary factors referenced in the section entitled "Forward-Looking Statements" below.
First Quarter Fiscal 2025 Ending June 30, 2024
Fiscal Year 2025 Ending March 31, 2025
The Company does not reconcile its forward-looking estimates of non-GAAP operating margin and non-GAAP net income per share to the corresponding GAAP measures of GAAP operating margin and GAAP net loss per share, respectively, due to the significant variability of, and difficulty in making accurate forecasts and projections with regards to, the various expenses such metrics exclude. For example, future hiring and employee turnover may not be reasonably predictable, stock-based compensation expense depends on variables that are largely not within the control of nor predictable by management, such as the market price of 8x8 common stock, and may also be significantly impacted by events like acquisitions, the timing and nature of which are difficult to predict with accuracy. The actual amounts of these excluded items could have a significant impact on the Company's GAAP operating margins and GAAP net loss per share. Accordingly, management believes that reconciliations of this forward-looking non-GAAP financial measure to the corresponding GAAP measure are not available without unreasonable effort. See the Explanation of GAAP to Non-GAAP Reconciliation below for the definition of non-GAAP operating margin and non-GAAP net income per share.
Conference Call Information:
Management will host a conference call to discuss earnings results on May 8, 2024, at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time). The conference call is expected to last approximately 60 minutes. Participants may:
Participants should plan to dial in or log on 10 minutes prior to the start time. The webcast will be archived on 8x8's website for a period of at least 30 days. For additional information, visit https://8x8.gcs-web.com/.
About 8x8, Inc.
8x8, Inc. (NASDAQ: EGHT) is transforming the future of business communications as a leading software as a service provider of 8x8 XCaaS™ (Experience Communications as a Service™), an integrated contact center, voice communications, video, chat, and SMS solution built on one global cloud communications platform. 8x8 uniquely eliminates the silos between unified communications as a service (UCaaS) and contact center as a service (CCaaS) to power the communications requirements of all employees globally as they work together to deliver differentiated customer experiences. For additional information, visit www.8x8.com, or follow 8x8 on LinkedIn, X and Facebook.
Forward Looking Statements:
This news release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934. 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 to identify forward-looking statements. These forward-looking statements, include but are not limited to: changing industry trends; the size of our market opportunity; the potential success and impact of our investments in AI; our strategic framework; our ability to increase profitability and cash flow to deleverage our balance sheet and fund investment in innovation; whether our UC and CC traffic will increase; whether we can increase customer retention; our future revenue and growth; whether we can sustain an increasing pace of innovation; the success of our go to market engine; our ability to improve G&A synergies; our ability to enhance shareholder value; and our financial outlook, revenue growth, and profitability, including whether we will achieve sustainable growth and profitability.
You should not place undue reliance on such forward-looking statements. Actual results could differ materially from those projected in forward-looking statements depending on a variety of factors, including, but not limited to: a reduction in our total costs as a percentage of revenue may negatively impact our revenues and our business; customer adoption and demand for our products may be lower than we anticipate; the impact of economic downturns on us and our customers; ongoing volatility and conflict in the political environment, including Russia's invasion of Ukraine and war in the Middle East; inflationary pressures and rising interest rates; competitive dynamics of the cloud communication and collaboration markets, including voice, contact center, video, messaging, and communication application programming interfaces, in which we compete may change in ways we are not anticipating; third parties may assert ownership rights in our IP, which may limit or prevent our continued use of the core technologies behind our solutions; our customer churn rate may be higher than we anticipate; our investments in marketing, channel and value-added resellers, new products, and our acquisition of Fuze, Inc. may not result in meeting our revenue or operating margin targets we forecast in our guidance, for a particular quarter or for the full fiscal year. Our increased emphasis on profitability and cash flow generation may not be successful. The reduction in our total costs as a percentage of revenue may negatively impact our revenue and our business in ways we don't anticipate and may not achieve the desired outcome.
For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" in the Company's reports on Forms 10-K and 10-Q, as well as other reports that 8x8, Inc. files from time to time with the Securities and Exchange Commission. All forward-looking statements are qualified in their entirety by this cautionary statement, and 8x8, Inc. undertakes no obligation to update publicly any forward-looking statement for any reason, except as required by law, even as new information becomes available or other events occur in the future.
Explanation of GAAP to Non-GAAP Reconciliation
The Company has provided, in this release, financial information that has not been prepared in accordance with Generally Accepted Accounting Principles (GAAP). Management uses these Non-GAAP financial measures internally to understand, manage, and evaluate the business, and to make operating decisions. Management believes they are useful to investors, as a supplement to GAAP measures, in evaluating the Company's ongoing operational performance. Management also believes that some of 8x8’s investors use these Non-GAAP financial measures as an additional tool in evaluating 8x8's ongoing "core operating performance" in the ordinary, ongoing, and customary course of the Company's operations. Core operating performance excludes items that are non-cash, not expected to recur, or not reflective of ongoing financial results. Management also believes that looking at the Company’s core operating performance provides consistency in period-to-period comparisons and trends.
These Non-GAAP financial measures may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies, which limits the usefulness of these measures for comparative purposes. Management recognizes that these Non-GAAP financial measures have limitations as analytical tools, including the fact that management must exercise judgment in determining which types of items to exclude from the Non-GAAP financial information. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of these Non-GAAP financial measures to their most directly comparable GAAP financial measures in the table titled "Reconciliation of GAAP to Non-GAAP Financial Measures". Detailed explanations of the adjustments from comparable GAAP to Non-GAAP financial measures are as follows:
Non-GAAP Costs of Revenue, Costs of Service Revenue and Costs of Other Revenue
Non-GAAP Costs of Revenue includes: (i) Non-GAAP Cost of Service Revenue, which is Cost of Service Revenue excluding amortization of acquired intangible assets, stock-based compensation expense and related employer payroll taxes, certain legal and regulatory costs, and certain severance, transition and contract exit costs; and (ii) Non-GAAP Cost of Other Revenue, which is Cost of Other Revenue excluding stock-based compensation expense and related employer payroll taxes, certain legal and regulatory costs, and certain severance, transition and contract exit costs.
Non-GAAP Service Revenue Gross Margin, Other Revenue Gross Margin, and Total Revenue Gross Margin
Non-GAAP Service Revenue Gross Profit and Margin as a percentage of Service Revenue and Non-GAAP Other Revenue Gross Profit and Margin as a percentage of Other Revenue are computed as Service Revenue less Non-GAAP Cost of Service Revenue divided by Service Revenue and Other Revenue less Non-GAAP Cost of Other Revenue divided by Other Revenue, respectively. Non-GAAP Total Revenue Gross Profit and Margin as a percentage of Total Revenue is computed as Total Revenue less Non-GAAP Cost of Service Revenue and Non-GAAP Cost of Other Revenue divided by Total Revenue. Management believes the Company’s investors benefit from understanding these adjustments and from an alternative view of the Company’s Cost of Service Revenue and Cost of Other Revenue, as well as the Company's Service, Other and Total Revenue Gross Margin performance compared to prior periods and trends.
Non-GAAP Operating Profit and Non-GAAP Operating Margin
Non-GAAP Operating Profit excludes: amortization of acquired intangible assets, stock-based compensation expense and related employer payroll taxes, acquisition and integration expenses, certain legal and regulatory costs, certain severance, transition and contract exit costs, and impairment of long-lived assets from Operating Profit (Loss). Non-GAAP Operating Margin is Non-GAAP Operating Profit divided by Revenue. Management believes that these exclusions provide investors with a supplemental view of the Company’s ongoing operating performance.
Non-GAAP Net Income and Adjusted EBITDA
Non-GAAP Net Income excludes: amortization of acquired intangible assets, stock-based compensation expense and related employer payroll taxes, acquisition and integration expenses, certain legal and regulatory costs, certain severance, transition and contract exit costs, impairment of long-lived assets, amortization of debt discount and issuance cost, gain or loss on debt extinguishment, gain or loss on remeasurement of warrants, gain or loss on sale of assets, and other income. Adjusted EBITDA excludes interest expense, provision for income taxes, depreciation, amortization of capitalized internal use software, and other income (expense), net from non-GAAP net income. Management believes the Company’s investors benefit from understanding these adjustments and an alternative view of our net income performance as compared to prior periods and trends.
Non-GAAP Net Income Per Share – Basic and Non-GAAP Net Income Per Share - Diluted
Non-GAAP Net Income Per Share – Basic is Non-GAAP Net Income divided by the weighted-average basic shares outstanding. Non-GAAP Net Income Per Share – Diluted is Non-GAAP Net Income divided by the weighted-average diluted shares outstanding. Diluted shares outstanding include the effect of potentially dilutive securities from stock-based benefit plans and convertible senior notes. These potentially dilutive securities are excluded from the computation of net loss per share attributable to common stockholders on a GAAP basis because the effect would have been anti-dilutive. They are added for the computation of diluted net income per share on a non-GAAP basis in periods when 8x8 has net profit on a non-GAAP basis as their inclusion provides a better indication of 8x8’s underlying business performance. Management believes the Company’s investors benefit by understanding our Non-GAAP net income performance as reflected in a per share calculation as ways of measuring performance by ownership in the Company. Management believes these adjustments offer investors a useful view of the Company’s diluted net income per share as compared to prior periods and trends.
Management evaluates and makes decisions about its business operations based on Non-GAAP financial information by excluding items management does not consider to be “core costs” or “core proceeds.” Management believes some of its investors also evaluate our "core operating performance" as a means of evaluating our performance in the ordinary, ongoing, and customary course of our operations. Management excludes the amortization of acquired intangible assets, which primarily represents a non-cash expense of technology and/or customer relationships already developed, to provide a supplemental way for investors to compare the Company’s operations pre-acquisition to those post-acquisition and to those of our competitors that have pursued internal growth strategies. Stock-based compensation expense has been excluded because it is a non-cash expense and relies on valuations based on future conditions and events, such as the market price of 8x8 common stock, that are difficult to predict and/or largely not within the control of management. The related employer payroll taxes for stock-based compensation are excluded since they are incurred only due to the associated stock-based compensation expense. Acquisition and integration expenses consist of external and incremental costs resulting directly from merger and acquisition and strategic investment activities such as legal and other professional services, due diligence, integration, and other closing costs, which are costs that vary significantly in amount and timing. Legal and regulatory costs include litigation and other professional services, as well as certain tax and regulatory liabilities. Severance, transition and contract exit costs include employee termination benefits, executive severance agreements, cancellation of certain contracts, and lease impairments. Debt amortization expenses relate to the non-cash accretion of the debt discount.
8x8, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
Three Months Ended March 31,
Years Ended March 31,
2024
2023
2024
2023
Service revenue
$
172,490
$
176,562
$
700,579
$
710,044
Other revenue
6,923
7,967
28,126
33,894
Total revenue
179,413
184,529
728,705
743,938
Cost of service revenue
48,557
46,951
192,960
198,871
Cost of other revenue
8,412
8,302
31,945
42,604
Total cost of revenue
56,969
55,253
224,905
241,475
Gross profit
122,444
129,276
503,800
502,463
Operating expenses:
Research and development
33,930
36,455
136,216
142,491
Sales and marketing
67,755
68,848
271,944
311,883
General and administrative
34,978
20,213
112,209
108,001
Impairment of long-lived assets
—
227
11,034
6,380
Total operating expenses
136,663
125,743
531,403
568,755
Income (loss) from operations
(14,219
)
3,533
(27,603
)
(66,292
)
Other expense, net
(7,306
)
(11,198
)
(36,347
)
(4,044
)
Loss before provision for income taxes
(21,525
)
(7,665
)
(63,950
)
(70,336
)
Provision for income taxes
2,066
1,766
3,642
2,807
Net loss
$
(23,591
)
$
(9,431
)
$
(67,592
)
$
(73,143
)
Net loss per share:
Basic and diluted
$
(0.19
)
$
(0.08
)
$
(0.56
)
$
(0.63
)
Weighted average number of shares:
Basic and diluted
124,324
114,924
121,106
115,959
SUPPLEMENTAL DETAILS - OTHER EXPENSE, NET
Three Months Ended March 31,
Years Ended March 31,
2024
2023
2024
2023
Interest expense
$
(8,575
)
$
(9,906
)
$
(35,352
)
$
(23,020
)
Amortization of debt discount and issuance costs
(1,075
)
(1,118
)
(4,472
)
(4,254
)
Gain (loss) on warrants remeasurement
942
(104
)
2,176
417
Gain (loss) on debt extinguishment
—
296
(1,766
)
18,545
Gain (loss) on sale of assets
(179
)
(5
)
(179
)
1,821
Gain (loss) on foreign exchange
48
(991
)
(1,032
)
993
Other income
1,533
630
4,278
1,454
Other expense, net
$
(7,306
)
$
(11,198
)
$
(36,347
)
$
(4,044
)
8x8, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
March 31, 2024
March 31, 2023
ASSETS
Current assets:
Cash and cash equivalents
$
116,262
$
111,400
Restricted cash, current
356
511
Short-term investments
1,048
26,228
Accounts receivable, net of allowance for expected credit losses of $2,746 and $3,644 as of March 31, 2024 and March 31, 2023, respectively
58,979
62,307
Deferred sales commission costs, current
35,933
38,048
Other current assets
35,258
34,630
Total current assets
247,836
273,124
Property and equipment, net
53,181
57,871
Operating lease, right-of-use assets
35,924
52,444
Intangible assets, net
86,717
107,112
Goodwill
266,574
266,863
Restricted cash, non-current
105
818
Deferred sales commission costs, non-current
52,859
67,644
Other assets, non-current
12,783
15,934
Total assets
$
755,979
$
841,810
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable
$
48,862
$
46,802
Accrued and other liabilities
78,102
73,740
Operating lease liabilities, current
11,295
11,504
Deferred revenue, current
34,325
34,909
Convertible senior notes, current
—
62,932
Total current liabilities
172,584
229,887
Operating lease liabilities, non-current
56,647
65,623
Deferred revenue, non-current
7,810
10,615
Convertible senior notes, non-current
197,796
196,821
Term loan
211,894
231,993
Other liabilities, non-current
7,290
6,965
Total liabilities
654,021
741,904
Stockholders' equity:
Preferred stock: $0.001 par value, 5,000,000 shares authorized, none issued and outstanding as of March 31, 2024 and 2023
—
—
Common stock: $0.001 par value, 300,000,000 shares authorized, 125,193,573 shares and 114,659,255 shares issued and outstanding at March 31, 2024 and 2023, respectively
125
115
Additional paid-in capital
973,895
905,635
Accumulated other comprehensive loss
(11,553
)
(12,927
)
Accumulated deficit
(860,509
)
(792,917
)
Total stockholders' equity
101,958
99,906
Total liabilities and stockholders' equity
$
755,979
$
841,810
8x8, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Years Ended March 31,
2024
2023
Cash flows from operating activities:
Net loss
$
(67,592
)
$
(73,143
)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation
8,301
10,464
Amortization of intangible assets
20,395
21,078
Amortization of capitalized internal-use software costs
18,486
20,739
Impairment of capitalized software
—
3,729
Amortization of debt discount and issuance costs
4,472
4,254
Amortization of deferred sales commission costs
40,181
38,195
Allowance for credit losses
2,236
1,892
Operating lease expense, net of accretion
10,934
12,030
Impairment of right-of-use assets
11,034
2,651
Stock-based compensation expense
61,910
89,536
(Gain) loss on debt extinguishment
1,766
(18,545
)
Gain on remeasurement of warrants
(2,176
)
(417
)
(Gain) loss on sale of assets
179
(1,821
)
Other
680
101
Changes in assets and liabilities:
Accounts receivable, net
753
(8,450
)
Deferred sales commission costs
(22,879
)
(31,086
)
Other current and non-current assets
(2,348
)
2,150
Accounts payable and accruals
(4,182
)
(24,403
)
Deferred revenue
(3,165
)
(168
)
Net cash provided by operating activities
78,985
48,786
Cash flows from investing activities:
Purchases of property and equipment
(2,650
)
(2,991
)
Proceeds from sale of intangible assets
—
1,000
Capitalized internal-use software costs
(14,289
)
(11,896
)
Purchases of investments
(6,174
)
(53,308
)
Sales of investments
—
8,296
Maturities of investments
31,659
66,199
Acquisition of businesses, net of cash acquired
—
(1,250
)
Net cash provided by investing activities
8,546
6,050
Cash flows from financing activities:
Proceeds from issuance of common stock under employee stock plans
4,884
4,679
Repurchase of capped calls
—
244
Repayment of principal on term loan
(25,000
)
—
Net proceeds from term loan
—
234,806
Repayment of convertible senior notes
(63,295
)
(217,299
)
Repurchase of common stock
—
(60,214
)
Net cash used in financing activities
(83,411
)
(37,784
)
Effect of exchange rate changes on cash
(126
)
(5,037
)
Net increase in cash, cash equivalents and restricted cash
3,994
12,015
Cash, cash equivalents and restricted cash, beginning of year
112,729
100,714
Cash, cash equivalents and restricted cash, end of year
$
116,723
$
112,729
Supplemental and non-cash disclosures:
Years Ended March 31,
2024
2023
Interest paid
$
35,574
$
22,162
Income taxes paid
$
5,974
$
1,530
Payables for property and equipment
$
3,868
$
38
Warrants issued in connection with term loan
$
—
$
5,915
Shares issued in connection with term loan and convertible senior notes
$
—
$
5,084
Issuance of 2028 convertible senior notes in exchange of 2024 convertible senior notes
$
—
$
201,914
8x8, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In thousands, except per share amounts)
Three Months Ended
Years Ended
March 31, 2024
March 31, 2023
March 31, 2024
March 31, 2023
Cost of Revenue:
GAAP cost of service revenue (as a percentage of service revenue)
$
48,557
28.2
%
$
46,951
26.6
%
$
192,960
27.5
%
$
198,871
28.0
%
Amortization of acquired intangible assets
(2,115
)
(2,118
)
(8,469
)
(8,752
)
Stock-based compensation expense and related employer payroll taxes
(1,767
)
(2,031
)
(7,428
)
(9,332
)
Legal and regulatory costs
—
—
—
(85
)
Severance, transition and contract exit costs
(180
)
736
(912
)
(790
)
Non-GAAP cost of service revenue (as a percentage of service revenue)
$
44,495
25.8
%
$
43,538
24.7
%
$
176,151
25.1
%
$
179,912
25.3
%
GAAP service revenue margin (as a percentage of service revenue)
$
123,933
71.8
%
$
129,611
73.4
%
$
507,619
72.5
%
$
511,173
72.0
%
Non-GAAP service revenue margin (as a percentage of service revenue)
$
127,995
74.2
%
$
133,024
75.3
%
$
524,428
74.9
%
$
530,132
74.7
%
GAAP cost of other revenue (as a percentage of other revenue)
$
8,412
121.5
%
$
8,302
104.2
%
$
31,945
113.6
%
$
42,604
125.7
%
Stock-based compensation expense and related employer payroll taxes
(442
)
(634
)
(2,020
)
(3,620
)
Severance, transition and contract exit costs
(31
)
(389
)
(155
)
(1,683
)
Non-GAAP cost of other revenue (as a percentage of other revenue)
$
7,939
114.7
%
$
7,279
91.4
%
$
29,770
105.8
%
$
37,301
110.1
%
GAAP other revenue margin (as a percentage of other revenue)
$
(1,489
)
(21.5
)%
$
(335
)
(4.2
)%
$
(3,819
)
(13.6
)%
$
(8,710
)
(25.7
)%
Non-GAAP other revenue margin (as a percentage of other revenue)
$
(1,016
)
(14.7
)%
$
688
8.6
%
$
(1,644
)
(5.8
)%
$
(3,407
)
(10.1
)%
GAAP gross margin (as a percentage of total revenue)
$
122,444
68.2
%
$
129,276
70.1
%
$
503,800
69.1
%
$
502,463
67.5
%
Non-GAAP gross margin (as a percentage of total revenue)
$
126,979
70.8
%
$
133,712
72.5
%
$
522,784
71.7
%
$
526,725
70.8
%
Operating Profit (Loss):
GAAP profit (loss) from operations (as a percentage of total revenue)
$
(14,219
)
(7.9
)%
$
3,533
1.9
%
$
(27,603
)
(3.8
)%
$
(66,292
)
(8.9
)%
Amortization of acquired intangible assets
5,095
5,125
20,395
21,078
Stock-based compensation expense and related employer payroll taxes
15,865
16,342
65,857
90,634
Acquisition and integration costs
145
(7,286
)
897
(4,553
)
Legal and regulatory costs(4)
10,072
898
15,517
771
Severance, transition and contract exit costs (1)
3,318
5,981
8,629
14,339
Impairment of long-lived assets (2)
—
227
11,034
6,380
Non-GAAP operating profit (as a percentage of total revenue)
$
20,276
11.3
%
$
24,820
13.5
%
$
94,726
13.0
%
$
62,357
8.4
%
Net Income (Loss):
GAAP net loss (as a percentage of total revenue)
$
(23,591
)
(13.1
)%
$
(9,431
)
(5.1
)%
$
(67,592
)
(9.3
)%
$
(73,143
)
(9.8
)%
Amortization of acquired intangible assets
5,095
5,125
20,395
21,078
Stock-based compensation expense and related employer payroll taxes
15,865
16,342
65,857
90,634
Acquisition and integration costs
145
(7,286
)
897
(4,553
)
Legal and regulatory costs
9,522
898
14,967
771
Severance, transition and contract exit costs (1)
3,318
5,981
8,629
14,339
Impairment of long-lived assets (2)
—
227
11,034
6,380
Amortization of debt discount and issuance cost
1,075
1,118
4,472
4,254
(Gain) loss on debt extinguishment
—
(295
)
1,766
(18,545
)
(Gain) loss on warrants remeasurement
(942
)
105
(2,176
)
(417
)
(Loss) gain on sale of assets
179
5
179
(1,821
)
Other income
(110
)
(116
)
(464
)
(464
)
Income tax expense effects, net (3)
—
—
—
—
Non-GAAP net income (as a percentage of total revenue)
$
10,556
5.9
%
$
12,673
6.9
%
$
57,964
8.0
%
$
38,513
5.2
%
Interest expense
8,575
9,906
35,352
23,020
Provision for income taxes
2,066
1,766
3,642
2,807
Depreciation
2,168
2,409
8,301
10,464
Amortization of capitalized internal-use software costs
4,067
4,342
18,486
20,739
Other expense (income), net
(1,471
)
477
(2,782
)
(1,982
)
Adjusted EBITDA (as a percentage of total revenue)
$
25,961
14.5
%
$
31,573
17.1
%
$
120,963
16.6
%
$
93,561
12.6
%
Shares used in computing net income (loss) per share amounts:
Basic
124,324
114,924
121,106
115,959
Diluted
125,962
117,442
122,560
117,443
GAAP net loss per share - Basic and Diluted
$
(0.19
)
$
(0.08
)
$
(0.56
)
$
(0.63
)
Non-GAAP net income per share - Basic
$
0.08
$
0.11
$
0.48
$
0.33
Non-GAAP net income per share - Diluted
$
0.08
$
0.11
$
0.47
$
0.33
(1)
During the year ended March 31, 2023, the Company reclassified $3.7 million impairment of capitalized software and $6.4 million of impairment of capitalized software and right-of-use assets, respectively, to impairment of long-lived assets in the condensed consolidated statement of operations to conform to current period presentation. During the three months ended March 31, 2023, the Company reclassified $0.2 million of impairment of right-of-use assets to impairment of long-lived assets in the condensed consolidated statement of operations to conform to current period presentation.
(2)
During the year ended March 31, 2024, amounts include impairment charges related to partially ceasing use of the Company's Headquarters and an international office space.
(3)
Non-GAAP adjustments do not have a material impact on our federal income tax provision due to past non-GAAP losses.
(4)
During the three months and year ended March 31, 2024, the Company recorded a charge of $10 million for Fuze indirect tax liabilities, primarily telecom taxes.
8x8, INC.
SELECTED OPERATING METRICS
(In millions)
Fiscal 2023
Fiscal 2024
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
TOTAL ARR (1)
$688
$692
$698
$703
$703
$707
$707
$697
Growth % (YoY)
28 %
25 %
22 %
2 %
2 %
2 %
1 %
(1) %
ARR BY CUSTOMER SIZE
ENTERPRISE (2)
$403
$401
$400
$405
$404
$407
$409
$402
% of Total ARR
59 %
58 %
57 %
58 %
58 %
58 %
58 %
58 %
Growth % (YoY)
54 %
42 %
30 %
3 %
— %
1 %
2 %
(1) %
MID-MARKET (3)
$125
$127
$130
$130
$132
$131
$129
$127
% of Total ARR
18 %
18 %
19 %
19 %
19 %
19 %
18 %
18 %
Growth % (YoY)
22 %
23 %
27 %
2 %
5 %
3 %
(1) %
(2) %
SMALL BUSINESS(4)
$159
$164
$168
$168
$167
$170
$168
$167
% of Total ARR
23 %
24 %
24 %
24 %
24 %
24 %
24 %
24 %
Growth % (YoY)
(7) %
(2) %
4 %
1 %
5 %
4 %
— %
(1) %
(1)
Annualized Recurring Subscriptions and Usage Revenue (ARR) (A) equals the sum of the most recent month of (i) recurring subscription amounts and (ii) platform usage charges for all CPaaS customers that demonstrate consistent monthly usage above a minimum threshold over the prior six-month period, multiplied by 12, and (B) excluding any non-bundled or overage usage fees associated with UCaaS subscriptions.
(2)
Enterprise ARR is defined as ARR from customers that generate >$100,000 ARR.
(3)
Mid-market ARR is defined as ARR from customers that generate $25,000 to $100,000 ARR.
(4)
Small business ARR is defined as ARR from customers that generate <$25,000 ARR.
Selected operating metrics presented in this table have not been derived from financial measures that have been prepared in accordance with U.S. Generally Accepted Accounting Principles. 8x8 measures the success of our strategy to attract and retain customers, in part, by analyzing trends in ARR and believes ARR may be useful to investors in evaluating our performance. 8x8 believes ARR is a useful indicator for measuring the overall performance of the business because it includes new customer additions, add-on sales, renewals and customer churn within a single metric. 8x8 uses trends in ARR to assess our ongoing operations, allocate resources, and drive the performance of the business. Management monitors these metrics together, and not individually, as it does not make business decisions based upon any single metric. ARR is a performance metric and should be viewed independently of revenue and deferred revenue, and ARR is not intended to be a substitute for, or combined with, any of these items. We caution that our presentation may not be consistent with that of other companies. Prior period metrics and customer classifications have not been adjusted for current period changes unless noted.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240508937745/en/
8x8, Inc. Media: PR@8x8.com Investor Relations: Investor.relations@8x8.com
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