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8x8, Inc. Announces First Quarter Fiscal 2009 Results

Jul 31, 2008
SANTA CLARA, Calif., July 31 /PRNewswire-FirstCall/ -- 8x8, Inc. (Nasdaq: EGHT), provider of Packet8 ( business, mobile and residential communication services, today announced financial results for the first quarter of fiscal 2009 ended June 30, 2008.

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:

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 For information about Packet8 products and services, visit

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.
             (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.
                            (In thousands, unaudited)

                                                   June 30,         March 31,
                                                     2008              2008
    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

    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           $21,551
SOURCE 8x8, Inc.
-0- 07/31/2008
/CONTACT: Joan Citelli of 8x8, Inc., +1-408-687-4320,
/Web site: /
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