30% Year-over-Year Increase in Revenue; 94%
Year-over-Year Increase in New Mid-Market and Channel Sales;
Non-GAAP Net Income of $3.0 Million or $0.03 per Share
8x8, Inc. (NASDAQ:EGHT), a provider of cloud-based unified
communications, contact center and collaboration solutions, today
reported financial results for the first quarter of fiscal 2015
ended June 30, 2014.
First Quarter Fiscal 2015 Financial
Results:
- Total revenue for the quarter increased
30% year-over-year to a record $37.9 million.
- Channel and mid-market sales increased
94% year-over-year, representing 44% of new monthly recurring
revenue sold in the quarter.
- Average monthly service revenue per
business customer was $293, up 11% compared with $263 in the same
period last year.
“8x8 delivered a very strong quarter with profitable 30% revenue
growth driven largely by the continued adoption of our services by
mid-market and distributed enterprise customers,” said 8x8 CEO Vik
Verma. “With a 94% year-over-year increase in new mid-market and
channel sales and 41% of our service revenues coming from the
mid-market, 8x8 is clearly expanding its leadership position in
this valuable market segment.”
Mr. Verma continued. “Given our strong first quarter
performance, we now expect revenue to grow by at least 25% for the
current fiscal year, with non-GAAP net income as a percentage of
revenue in the high-single digit range.”
Additional First Quarter
Results:
- GAAP net income for the first quarter
of fiscal 2015 was $8,000, or $0.00 per diluted share, compared
with GAAP net income of $2.1 million, or $0.03 per diluted share,
in the first quarter of fiscal 2014.
- Non-GAAP net income was $3.0 million,
$0.03 per diluted share, compared with $4.3 million, $0.06 per
diluted share, for the same period last year.
- Service margin was 80%, compared with
79% in the prior quarter and 82% in the same period a year ago;
overall gross margin was 71%, compared with 70% in the prior
quarter and 72% in the same period last year.
- Monthly business service revenue churn
was 0.4%, compared with 1.2% in the same period last year.
- Cash, cash equivalents and investments
increased sequentially by $3.6 million for a total of $182.0
million in the first quarter of fiscal 2015, compared with a total
of $57.8 million in the same period last year.
- Ended the quarter with 39,340 business
customers, up 1,407 customers sequentially and 5,966 compared with
the same period a year ago.
- Announced new channel partnerships with
master agent MicroCorp and technology services distributor Telecom
Brokerage Inc. to deliver cloud communications solutions to
enterprise customers through a combined network of 3,500+ agents,
system integrators, and VARs.
- Accepted as a supplier on UK G-Cloud 5
Framework, a UK Government initiative to encourage the adoption of
cloud services across the public sector.
- Ranked #1 on Infonetics Research Sixth
Annual “North American Business VoIP Service Leadership
Scorecard.”
On July 22, 2014, 8x8's Board of Directors authorized the
repurchase of up to an aggregate of $15.0 million of our Common
Stock. The repurchases may be made from time to time on the open
market at prevailing market prices or in negotiated transactions
off the market. The repurchase program is expected to continue
until July 22, 2015, unless extended or shortened by the Board of
Directors.
8x8 also reported, in accordance with NASDAQ Listing Rule
5635(c)(4), that employment inducement awards were granted to 26
new employees in connection with their recent hiring. The employees
received restrictive stock units for 136,769 shares of the
Company's Common Stock, subject to their continued employment and
other conditions. In addition, stock option grants for 96,684
shares were awarded.
Non-GAAP Measures
The Company has provided in this release financial information
that has not been prepared in accordance with Generally Accepted
Accounting Principles (GAAP). Management uses these non-GAAP
financial measures internally in analyzing our financial results
and believes they are useful to investors, as a supplement to GAAP
measures, in evaluating the Company’s ongoing operational
performance. Management believes that the use of these non-GAAP
financial measures provides an additional tool for investors to use
in evaluating 8x8’s ongoing operating results and trends and in
comparing financial results with other companies in the industry,
many of which present similar non-GAAP financial measures to
investors.
Non-GAAP financial measures should not be considered in
isolation from, or as a substitute for, financial information
prepared in accordance with GAAP. Investors are encouraged to
review the reconciliation of these non-GAAP financial measures to
their most directly comparable GAAP financial measures below. A
reconciliation of non-GAAP financial measures to their most
directly comparable GAAP measures has been provided in the
financial statement tables included below in this press
release.
Non-GAAP net income and non-GAAP net
income per share
We have defined non-GAAP net income as net income for GAAP plus
non-cash tax adjustments, stock-based compensation and amortization
of acquired intangible assets. Non-cash tax adjustments represent
the differences between the amount of taxes we expect to pay and
our GAAP tax provision each period. We have excluded stock-based
compensation expense because it relies on valuations based on
future events, such as the market price of our common stock, that
are difficult to predict and are affected by market factors that
are largely not within the control of management. Amortization of
acquired intangible assets is excluded because it is a non-cash
expense that we do not consider part of ongoing operations when
assessing our financial performance, as it relates to accounting
for certain purchased assets. We define non-GAAP net income per
share as non-GAAP net income divided by the weighted-average
diluted shares outstanding. We define non-GAAP net income
percentage of revenue as non-GAAP net income divided by revenue.
The GAAP and non-GAAP weighted average number of diluted shares to
calculate GAAP and non-GAAP earnings per share are the same. We
believe that such exclusions facilitate comparisons to our
historical operating results and to the results of other companies
in the same industry, and provides investors with information that
we use in evaluating management’s performance on a quarterly and
annual basis.
Conference Call
Information:
Management will host a conference call to discuss these results
and other matters related to the Company’s business today, July 23,
2014, at 4:30 pm EDT. The call is accessible via the following
numbers and webcast links:
Dial In: (877)
843-0417, domestic (408) 427-3791, international Replay: (855)
859-2056, domestic (Conference ID #68270346) (404) 537-3406,
international (Conference ID #68270346) Webcast:
http://investors.8x8.com
Participants should plan to dial in or log on ten minutes prior
to the start time. A telephonic replay of the call will be
available three hours after the conclusion of the call until
midnight July 29, 2014. The webcast will be archived on 8x8’s
website for a period of one year. For additional information, visit
http://investors.8x8.com.
About 8x8, Inc.
8x8, Inc. (NASDAQ:EGHT) is the trusted provider of secure and
reliable cloud-based unified
communications and virtual contact center solutions to
more than 39,000 small, midsize and distributed enterprise
organizations operating in over 40 countries across six continents.
8x8's out-of-the-box cloud solutions replace traditional on-premise
PBX hardware and software-based systems with a flexible and
scalable Software as a Service (SaaS) alternative, encompassing
cloud business phone service, contact center solutions, and web
conferencing. For additional information,
visit www.8x8.com, or www.8x8.com/UK or connect with
8x8
on Google+, Facebook, LinkedIn and Twitter.
Forward Looking
Statements
This news release contains "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995
and Section 21E of the Securities Exchange Act of 1934. These
statements include, without limitation, information about future
events based on current expectations, potential product development
efforts, near and long-term objectives, potential new business,
strategies, organization changes, changing markets, future business
performance and outlook. Such statements are predictions only, and
actual events or results could differ materially from those made in
any forward-looking statements due to a number of risks and
uncertainties. Actual results and trends may differ materially from
historical results or those projected in any such forward-looking
statements depending on a variety of factors. These factors
include, but are not limited to, market acceptance of new or
existing services and features, success of our efforts to target
mid-market and larger distributed enterprises, changes in the
competitive dynamics of the markets in which we compete, customer
cancellations and rate of churn, impact of current economic climate
and adverse credit markets on our target customers, our ability to
scale our business, our reliance on infrastructure of third-party
network services providers, risk of failure in our physical
infrastructure, risk of failure of our software, our ability to
maintain the compatibility of our software with third-party
applications and mobile platforms, continued compliance with
industry standards and regulatory requirements, risks relating to
our strategies and objectives for future operations, including the
execution of integration plans and realization of the expected
benefits of our acquisitions, the amount and timing of costs
associated with recruiting, training and integrating new employees,
introduction and adoption of our cloud communications and
collaboration services in markets outside of the United States, and
general economic conditions that could adversely affect our
business and operating results. For a discussion of such risks and
uncertainties, which could cause actual results to differ from
those contained in the forward-looking statements, see “Risk
Factors” in the Company’s reports on Forms 10-K and 10-Q, as well
as other reports that 8x8, Inc. files from time to time with the
Securities and Exchange Commission. All forward-looking statements
are qualified in their entirety by this cautionary statement, and
8x8, Inc. undertakes no obligation to update publicly any
forward-looking statement for any reason, except as required by
law, even as new information becomes available or other events
occur in the future.
8x8, Inc. CONDENSED CONSOLIDATED STATEMENTS OF
INCOME (In thousands, except per share amounts;
unaudited)
Three Months Ended June 30,
2014 2013 Service revenue $ 34,276 $ 26,499 Product
revenue 3,637 2,752 Total revenue 37,913 29,251 Operating
expenses (1): Cost of service revenue 6,997 4,786 Cost of product
revenue 3,969 3,347 Research and development 3,406 2,336 Sales and
marketing 19,160 13,072 General and administrative 3,878 2,772
Total operating expenses 37,410 26,313 Income from operations 503
2,938 Other income, net 177 15 Income from operations before
provision for income taxes 680 2,953 Provision for income taxes 672
961 Income from continuing operations 8 1,992 Income from
discontinued operations, net of income tax provision - 147 Net
income $ 8 $ 2,139 Income per share - continuing operations:
Basic $ 0.00 $ 0.03 Diluted $ 0.00 $ 0.03 Income per share -
discontinued operations: Basic $ 0.00 $ 0.00 Diluted $ 0.00 $ 0.00
Net income per share: Basic $ 0.00 $ 0.03 Diluted $ 0.00 $
0.03 Weighted average number of shares: Basic 88,592 72,510
Diluted 91,445 75,756 (1) Amounts include stock-based
compensation expense, as follows:
Three Months Ended
June 30, 2014 2013 Cost of service revenue $
115 $ 68 Cost of product revenue - - Research and development 314
154 Sales and marketing 744 347 General and administrative 674 338
$ 1,847 $ 907
8x8, Inc. CONDENSED CONSOLIDATED
BALANCE SHEETS (In thousands, unaudited)
June 30, March 31, 2014 2014
ASSETS Current assets: Cash and cash equivalents $ 55,073 $
59,159 Short-term investments 126,937 47,181 Accounts receivable,
net 5,947 5,503 Inventory 753 811 Deferred tax assets 1,732 2,065
Other current assets 2,307 2,214 Total current assets 192,749
116,933 Long-term investments - 72,021 Property and equipment, net
8,339 7,711 Intangible assets, net 14,670 15,095 Goodwill 38,802
38,461 Non-current deferred tax assets 47,520 47,797 Other assets
1,074 1,185 Total assets $ 303,154 $ 299,203
LIABILITIES
AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable
$ 8,217 $ 6,789 Accrued compensation 5,264 4,583 Accrued warranty
619 660 Deferred revenue 1,741 1,857 Other accrued liabilities
3,945 4,232 Total current liabilities 19,786 18,121 Other
liabilities 2,627 2,904 Total liabilities 22,413 21,025
Total stockholders' equity 280,741 278,178 Total liabilities and
stockholders' equity $ 303,154 $ 299,203
8x8, Inc. CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands,
unaudited) Three Months Ended June 30,
2014 2013 Cash flows from operating
activities: Net income $ 8 $ 2,139 Adjustments to reconcile net
income to net cash provided by operating activities:
Depreciation 755 675 Amortization of intangible assets 567 340
Amortization of capitalized software 85 - Net accretion of discount
and amortization of premium on marketable securities 192 -
Stock-based compensation 1,847 907 Deferred income tax provision
610 873 Other 9 158 Changes in assets and liabilities: Accounts
receivable, net (402 ) 132 Inventory 47 (61 ) Other current and
noncurrent assets (175 ) (306 ) Deferred cost of goods sold 157 30
Accounts payable 988 (316 ) Accrued compensation 674 82 Accrued
warranty (41 ) 22 Accrued taxes and fees 128 192 Deferred revenue
(352 ) 373 Other current and noncurrent liabilities (447 ) (7 ) Net
cash provided by operating activities 4,650 5,233
Cash flows from investing activities: Purchases of
property and equipment (1,026 ) (466 ) Cost of capitalized software
- (328 ) Proceeds from maturity of investments 3,300 - Sales of
investments - available for sale 18,992 - Purchase of investments -
available for sale (30,134 ) - Net cash used in investing
activities (8,868 ) (794 )
Cash flows from financing
activities: Capital lease payments (46 ) (5 ) Repurchase of
common stock (48 ) (120 ) Proceeds from issuance of common stock
under employee stock plans 170 1,296 Net cash
provided by financing activities 76 1,171 Effect of exchange
rate changes on cash 56 - Net (decrease) increase in
cash and cash equivalents (4,086 ) 5,610 Cash and cash
equivalents at the beginning of the period 59,159 50,305
Cash and cash equivalents at the end of the period $ 55,073
$ 55,915
8x8, Inc. Selected Operating Statistics (1) Three
Months Ended
June 30,
2013
Sept. 30,
2013
Dec. 31,
2013
March 31,
2014
June 30,
2014
Total business customers (2) 33,374 34,674 36,753 37,933
39,340 Business customer average monthly service revenue per
customer (3) $ 263 $ 268 $ 274 $ 287 $ 293 Monthly business service
revenue churn 1.2 % 1.2 % 1.5 % 1.2 % 0.4 % Overall service
margin 82 % 81 % 81 % 79 % 80 % Overall product margin -22 % -27 %
-34 % -23 % -9 % Overall gross margin 72 % 71 % 71 % 70 % 71 %
(1) Selected operating statistics table include continuing
operations and excludes dedicated server hosting business sold
September 30, 2013.(2) Business customers are defined as customers
paying for service. Customers that are currently in the 30-day
trial period are considered to be customers that are paying for
service. Customers subscribing to Virtual Office Solo, DNS or Cloud
VPS services are not included as business customers.(3) Business
customer average monthly service revenue per customer is service
revenue from business customers in the period divided by the number
of months in the period divided by the simple average number of
business customers during the period.
8x8, Inc. RECONCILIATION OF NET
INCOME TO NON-GAAP NET INCOME AND NON-GAAP NET INCOME PER
SHARE (In thousands, except per share amounts;
unaudited) Three Months Ended June 30,
2014 2013 Net income $ 8 $ 2,139
Non-cash tax adjustments 610 873 Amortization of acquired
intangible assets 567 340 Stock-based compensation expense 1,847
907 Non-GAAP net income $ 3,032 $ 4,259
Weighted average number of shares: Diluted 91,445 75,756
GAAP net income per share - Diluted $ 0.00 $ 0.03 Non-cash
tax adjustments 0.01 0.01 Amortization of acquired intangible
assets - 0.01 Stock-based compensation expense 0.02 0.01
Non-GAAP net income per share - Diluted $ 0.03 $ 0.06
GAAP net income percentage of revenue 0 % 7 %
Non-cash tax adjustments 2 % 3 % Amortization of acquired
intangible assets 1 % 2 % Stock-based compensation expense 5 % 3 %
Non-GAAP net income percentage of revenue 8 % 15 %
Investor Relations Contact:8x8, Inc.Joan Citelli,
408-654-0970Joan.citelli@8x8.com
8x8 (NYSE:EGHT)
Historical Stock Chart
From Feb 2024 to Mar 2024
8x8 (NYSE:EGHT)
Historical Stock Chart
From Mar 2023 to Mar 2024