Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
Item 2.02. Results of Operations and Financial Condition.
On January 21, 2016, 8x8, Inc., or the Company, issued a press release announcing its financial results for the nine months ended December 31, 2015. A copy
of this press release is furnished as Exhibit 99.1 to this report. The press release should be read in conjunction with the statements regarding forward-looking statements, which are
included in the text of the release.
In addition to disclosing financial results calculated in accordance with U.S. generally accepted accounting principles (GAAP), management also presents information regarding
the Company's performance over comparable periods based on net income and net income per share, exclusive of gain on patent sale, non-cash tax adjustments, stock-based
compensation, amortization of acquired intangible assets, acquisition-related costs, and impairment of long-lived assets. Because management discloses financial measures
calculated without taking into account these items, these financial measures are characterized as "non-GAAP financial measures" under Securities and Exchange Commission
rules.
The gain on patent sale in fiscal 2015 was a $1.0 million gain that management believes is not reflective of its ongoing operations.
Non-cash tax adjustments represented the difference between the amount of taxes the Company expects to pay and the GAAP tax provision each period. Management
excludes non-cash tax adjustments because they are non-cash transactions.
Stock-based compensation charges represent non-cash charges related to equity awards granted by the Company. Although these are recurring charges to the Company's
operations, management has excluded stock-based compensation expense because it relies on valuations based on future events, such as the market price of the Company's
common stock, that are difficult to predict and are affected by market factors that are largely not within the control of the Company. Thus, management believes that excluding these
charges facilitates comparisons of the Company's operational performance in different periods, as well as with similarly determined non-GAAP financial measures of comparable
companies.
Amortization of acquired intangible assets results from the Company's acquisitions of Contactual, Inc. and Zerigo, Inc. in fiscal 2012, Voicenet Solutions Limited in fiscal 2014,
and DXI Group Limited and Quality Software Corporation in fiscal 2016. Amortization of acquired intangible assets was excluded because it was a non-cash expense that the
Company does not consider part of ongoing operations when assessing the Company's financial performance.
Acquisition-related expenses and impairment of long-lived assets are difficult to predict and often one-time. Management believes these expenses are not reflective of the
Company's ongoing operations in terms of evaluating comparable period-to-period performance.
Management and the Company's board of directors will continue to analyze these non-GAAP financial measures to assess the business and compare operating results to the
Company's performance objectives. For example, the Company's budgeting and planning process utilizes these non-GAAP financial measures, along with other types of financial
information.
The Company discloses these non-GAAP financial measures to the public as an additional means by which investors can assess the Company's performance and to identify the
Company's operating results for investors on the same basis applied by management. The non-GAAP financial measures disclosed by the Company should not be considered a
substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations to those
financial statements should be carefully evaluated. The non-GAAP financial measures used by the Company may be calculated differently from, and therefore may not be
comparable to, similarly titled measures used by other companies. The Company has provided reconciliations of the non-GAAP financial measures to the most directly comparable
GAAP financial measures in the press release furnished as Exhibit 99.1.
Moreover, although these non-GAAP financial measures adjust expense, they should not be viewed as a pro forma presentation reflecting the elimination of the underlying
share-based compensation programs, which are an important element of the Company's compensation structure. GAAP requires that all forms of share-based payments should be
valued and included, as appropriate, in results of operations. Management believes these expenses are a material part of the Company's operating results.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits.
99.1 Press Release dated January 21, 2016
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: January 21, 2016
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By: /s/ Mary Ellen Genovese
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Mary Ellen Genovese
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Chief Financial Officer and Secretary
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INDEX TO EXHIBITS
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For Immediate Release
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8x8, Inc. Reports Third Quarter Fiscal 2016 Financial Results
Total Revenue of $53.2 Million Increases 29% YoY;
Service Revenue From Mid-Market/Enterprise Customers Now Represents 50% of Total
Service Revenue; Non-GAAP Net Income of $4.3 Million, $0.05 Per Share
SAN JOSE, Calif. - Jan. 21, 2016 - 8x8, Inc. (NASDAQ:EGHT), a provider of cloud-based unified communications and contact center solutions, today reported financial
results for the third quarter of fiscal 2016 ended December 31, 2015.
Third Quarter Fiscal 2016 Financial Highlights:
- Total revenue of $53.2 million increased 29% year-over-year; service revenue of $48.9 million increased 29% year-over-year.
- GAAP net loss for the third quarter of fiscal 2016 was ($1.7 million), or ($0.02) per diluted share, compared with GAAP net income of $444,000 or $0.01 per diluted share, in the third
quarter of fiscal 2015.
- Non-GAAP net income was $4.3 million, or $0.05 per diluted share, compared with $4.1 million, or $0.04 per diluted share, for the same period last year.
- Service revenue from mid-market/enterprise customers grew 53% year-over-year and now represents 50% of the Company's total service revenue.
- New monthly recurring revenue (MRR) sold to mid-market/enterprise customers and by channel sales teams increased 94% year-over-year and accounted for 58% of total MRR booked
in the quarter, compared with 43% of total MRR booked in the same period last year.
- Average monthly service revenue (ARPU) per business customer increased 21% to $369, compared with $305 in the same period last year.
"8x8 executed another solid quarter, posting a 94% increase in new monthly recurring revenue sold to mid-market and enterprise customers and by channel sales teams. We continued to
demonstrate the effectiveness of our global and multi-channel growth strategies, capturing larger customers and demonstrating our leadership position in the fast-growing UCaaS industry,"
said 8x8 CEO Vik Verma. "I am extremely pleased with how our team is executing across the board, from the increasing productivity of our sales organization to the dedication and success of
our global deployment teams."
"Our service revenue from the mid-market and enterprise segment grew 53% year-over-year and now constitutes 50% of our total service revenue," Verma continued. "Given our
continued progress moving upmarket, we are once again revising our fiscal 2016 revenue outlook upward to a range of $205 million to $207 million, which represents a 26%-27% year-over-year
increase, from our previous outlook of $204 million to $206 million. Due to the strong growth in our service revenue, we are also increasing our guidance for non-GAAP net income as a
percentage of revenue to approximately 6%-7% for the full fiscal year.
Additional Third Quarter and Year-to-Date Highlights:
- GAAP gross margin was unchanged from the year ago period at 72%; non-GAAP gross margin was 75%, compared with 73% in the same year ago period.
- GAAP service margin was unchanged from the year ago period at 80%; non-GAAP service margin was 83%, compared with 81% in the same period a year ago.
- Gross monthly organic business service revenue churn was 1.2%, compared with 1.0% in the same period last year.
- Cash, cash equivalents and investments were $155 million in the third quarter of fiscal 2016, compared with $149 million in the previous quarter; cash flow from operating activities
was $8.3 million.
- Repurchased approximately 66,000 shares of the Company's common stock during the quarter at an average price of $8.27 per share.
- Completed integration of UK Solutions and DXI sales teams under one 8x8 UK umbrella organization.
- Awarded two new U.S. patents related to contact center and communication technologies contributing to a total of 114 awarded patents.
Conference Call Information:
Management will host a conference call to discuss these results and other matters related to the Company's business today, January 21, 2016 at 4:30 pm ET. The call is accessible via
the following numbers and webcast links:
Dial In:
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(877) 843-0417, domestic
(408) 427-3791, international
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Replay:
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(855) 859-2056, domestic (Conference ID #12488963)
(404) 537-3406, international (Conference ID #12488963)
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Webcast:
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http://investors.8x8.com/
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Participants should plan to dial in or log on ten minutes prior to the start time. A telephonic replay of the call will be available three hours after the conclusion of the call until midnight
January 28, 2016. The webcast will be archived on 8x8's website for a period of one year. For additional information, visit
http://investors.8x8.com.
8x8 also announced that on January 19, 2016, it awarded restricted stock units (RSUs) representing an aggregate of 71,063 shares of the Company's common stock and options to
purchase a total of 37,172 shares to 11 new non-officer employees under the 8x8 "2013 New Employee Inducement Incentive Plan." The equity awards were approved by the 8x8 Board of
Directors Compensation Committee and were granted as an inducement to the new employees entering into employment with 8x8, in accordance with Nasdaq Market Place Rule 5635(c)(4).
Each of the awards are subject to vesting pursuant to the terms of the award agreements, which include that the recipient be employed through each vesting date.
About 8x8, Inc.
8x8, Inc. (NASDAQ:EGHT) is the trusted provider of secure and reliable enterprise cloud communications solutions to more than 40,000 businesses operating in over 100
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 conferencing. For additional information, visit
www.8x8.com, www.8x8.com/UK or connect with 8x8 on LinkedIn