Revenues for the first quarter of fiscal 2009 were $16.3 million, compared to $14.7 million for the same period of fiscal 2008 and $16.3 million for the previous quarter. Packet8 business service revenues grew to 56% of total revenue in the first quarter of fiscal 2009 compared to 44% of total revenue in the same period of fiscal 2008 and 50% of total revenue in the previous quarter. Sequentially, business services revenue grew by 12% from the previous quarter and 41% compared to the same period of fiscal 2008. The Company's residential and video revenues declined 6% sequentially from the previous quarter and 12% from the same period of fiscal 2008. Overall gross margin for the first quarter of fiscal 2009 was 68%, compared to 64% for the same period of fiscal 2008 and 67% for the previous quarter.
GAAP net income for the quarter increased to $1.2 million, or $0.02 per share, compared to $508,000, or $0.01 per share, for the same period of fiscal 2008 and $691,000, or $0.01 per share, for the previous quarter. The Company's cash and investments increased to $14.8 million in the first quarter of fiscal 2009 from $12.2 million in the same period of fiscal 2008 and $14.6 million in the previous quarter.
During the first quarter of fiscal 2009, the Company increased its business subscriber base by 1,053 net new customers and now serves more than 12,000 businesses with Packet8 IP communications solutions.
"We are pleased to report our third consecutive quarter of GAAP net income and fifth consecutive quarter of increased cash and investment balances," said 8x8 Chairman and CEO Bryan R. Martin. "Our continued gross margin expansion contributed to the doubling of our net income over last quarter and further strengthened our balance sheet. Even in this difficult economic climate, we are debt free with income from operations, something many of our prospective customers consider before making a multi-year decision about who will provide their phone services." Mr. Martin continued, "With the recent addition of new IP communications solutions for business, specifically Packet8 Virtual Trunking and Hosted Key System services, we can now save any business of any size significant telecommunications costs by leveraging their existing high speed Internet connection. This enables us to tap into a much broader segment of the business market from the smallest home office to larger, more established enterprises."
Management will host a conference call to discuss these results and other matters related to the Company's business today, July 31, 2008, at 4:30 p.m. EDT. To access the call, dial 888-713-4215 (domestic) or 617-213-4867 (international). A digital replay of the call will be available for one week following the live broadcast at 888-286-8010 (domestic) or 617-801-6888 (international). The replay passcode is 41401744. A webcast of this conference call will also be available for a limited time at the 8x8 Investor Relations website at: http://investors.8x8.com.
About 8x8, Inc.
8x8, Inc. (Nasdaq: EGHT) offers voice, video and mobile communications solutions for business and residential customers. Marketed under the Packet8 brand name, these solutions leverage existing broadband Internet connections and cellular networks to deliver advanced features and digital quality phone service at a fraction of the cost of legacy, copper wire alternatives. Businesses of any size, configuration or geographic location can benefit from the cost, performance and operational advantages of VoIP technology by selecting the Packet8 solution that best fits their needs, whether it's the Virtual Office Hosted iPBX phone system, Packet8 Complete Contact Center, Virtual Trunking IP dial tone solution or Packet8 Hosted Key System service. All Packet8 communications solutions carry little or no upfront investment, no maintenance or upgrade fees and no change in user behavior. For additional company information, visit 8x8's web site at www.8x8.com. For information about Packet8 products and services, visit www.packet8.net.
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, customer acceptance and demand for our VoIP products and services, the reliability of our services, the prices for our services, customer renewal rates, customer acquisition costs, actions by our competitors, including price reductions for their telephone services, potential federal and state regulatory actions, compliance costs, potential warranty claims and product defects, our needs for and the availability of adequate working capital, our ability to innovate technologically, the timely supply of products by our contract manufacturers, potential future intellectual property infringement claims that could adversely affect our business and operating results, and our ability to retain our listing on the NASDAQ Capital Market. 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.
NOTE: 8x8, the 8x8 logo, Packet8, the Packet8 logo, Packet8 Virtual Office, Packet8 Softalk, Packet8 Tango and Packet8 Complete Contact Center are trademarks of 8x8, Inc. All other trademarks are the property of their respective owners
8x8, Inc. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts; unaudited) Three Months Ended June 30, 2008 2007 Service revenues $15,019 $13,411 Product revenues 1,262 1,331 Total revenues 16,281 14,742 Operating expenses: Cost of service revenues 3,814 3,986 Cost of product revenues 1,432 1,383 Research and development 1,192 1,057 Selling, general and administrative 8,751 8,919 Total operating expenses 15,189 15,345 Income (loss) from operations 1,092 (603) Other income, net 85 132 Income on change in fair value of warrant liability 69 979 Income before provision for income taxes 1,246 508 Provision for income taxes 58 - Net income $1,188 $508 Net income per share: Basic $0.02 $0.01 Diluted $0.02 $0.01 Weighted average number of shares: Basic 62,096 61,772 Diluted 62,192 62,080 8x8, Inc. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, unaudited) June 30, March 31, 2008 2008 ASSETS Current assets Cash and cash equivalents $13,034 $11,185 Short-term investments 1,799 3,382 Accounts receivable, net 1,558 1,807 Inventory 1,717 1,539 Other current assets 1,511 1,492 Total current assets 19,619 19,405 Property and equipment, net 1,856 2,010 Other assets 127 136 Total assets $21,602 $21,551 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $5,652 $4,885 Accrued compensation 1,379 1,048 Accrued warranty 316 314 Deferred revenue 2,481 3,139 Other accrued liabilities 1,987 3,872 Total current liabilities 11,815 13,258 Other liabilities 86 109 Fair value of warrant liability 266 335 Total liabilities 12,167 13,702 Total stockholders' equity 9,435 7,849 Total liabilities and stockholders' equity $21,602 $21,551SOURCE 8x8, Inc.