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8x8, Inc. Reports Second Quarter Fiscal 2021 Financial Results

Oct 28, 2020

Service revenue growth of 19% year-over-year

Initiates Full-Year Fiscal 2021 Financial Outlook with 18% to 19% Service Revenue Growth

CAMPBELL, Calif.--(BUSINESS WIRE)-- 8x8, Inc. (NYSE: EGHT), a leading integrated cloud communications platform, today reported financial results for the second quarter of fiscal 2021 ended September 30, 2020.

Second Quarter Fiscal 2021 Financial Results Highlights:

  • Total revenue increased 17.9% year-over-year to $129.1 million.
  • Service revenue increased 19.3% year-over-year to $120.9 million.
  • GAAP Pre-Tax Loss was $38.3 million; Non-GAAP Pre-Tax Loss was $3.3 million.

“Our go-to-market strategy and unique value proposition as the only, single-vendor open communications platform are clearly paying off,” said Vik Verma, Chief Executive Officer at 8x8, Inc. “We delivered a strong quarter across the board and we have a clear line of sight to both profitability and continued growth. This reflects the significant strides made in unlocking the operating leverage in the company as well as strong demand for our platform with mid-market and enterprise customers.”

Q2 Fiscal 2021 Business Metrics and Highlights:

Financial and Business Metrics

  • Bookings:
    • Bookings greater than $100K ARR: Closed a record 48 new customer deals in the second quarter of fiscal 2021 with ARR (annual recurring revenue) greater than $100,000, an increase of 60% from the same period last year. These deals represented 42% of new bookings for the quarter and included 22 upsell and cross-sell deals.
    • Channel bookings grew 23% year-over-year and represented 59% of new bookings.
    • Contact center bookings grew to 32% of total new bookings which represented 62% year-over-year growth.
  • Annual recurring revenue (ARR):
    • Total ARR grew to $467.1 million, an increase of 20% from the same period last year.
    • Total ARR greater than $100K: 670 customers generated ARR greater than $100,000, compared with 536 customers in the same period last year, a 25% year-over-year growth.
    • Strong ARR growth by customer size:
      • Small Business customers (defined as companies whose annual revenue is less than $50 million) comprised 54% of total ARR which grew 11% year-over-year.
      • Mid-market customers (defined as companies whose annual revenue is between $50 million and $1 billion) comprised 27% of total ARR which grew 25% year-over-year.
      • Enterprise customers (defined as companies whose annual revenue is more than $1 billion) comprised 20% of total ARR which grew 44% year-over-year.
  • GAAP gross margin was 56%, compared with 55% in the same period last year. Non-GAAP gross margin was 61%, compared with 58% in the same period last year.
  • GAAP service margin was 63%, compared with 65% in the same period last year. Non-GAAP service margin was 67%, compared with 68% in the same period last year.
  • Cash used in operating activities was $3.8 million. Cash, restricted cash, and investments were $175.0 million at September 30, 2020 and $186.3 million at June 30, 2020.

Company Highlights

  • Appointed Mr. Steve Seger as Chief Revenue Officer.
  • Added Value-Added Resellers (VARs) including CERA Enterprises, Morgan Birge, and Spectrotel from the US and Adept Technology, Bistech, Britannic Technologies, Midland Telecom & IT, and OneCom from the UK.

Product Innovation Highlights & Industry Awards

  • Expanded global capabilities in Latin America, Europe, Africa, and Central and East Asia, and are now providing complete PSTN replacement in 42 countries across six continents.
  • Awarded International Vendor of the Year from AVANT.
  • Awarded Partners' Choice Award – Top Overall Supplier by Intelisys, Inc., a ScanSource company.
  • Ended the quarter with a total of 246 patents awarded.

Q3 and F2021 Financial Outlook:

Third Quarter Fiscal 2021 Financial Outlook Ending December 31, 2020:

  • Total Revenue guidance in the range of $132.0 million to $133.0 million, representing approximately 11% to 12% year-over-year growth.
  • Service Revenue guidance in the range of $124.0 million to $125.0 million, representing approximately 12% to 13% year-over-year growth.
  • Non-GAAP Pre-Tax Loss guidance of approximately $3.0 million.

Full-Year Fiscal 2021 Financial Outlook Ending March 31, 2021:

  • Total Revenue guidance in the range of $519.0 million to $522.0 million, representing approximately 16% to 17% year-over-year growth.
  • Service Revenue guidance in the range of $489.0 million to $492.0 million, representing approximately 18% to 19% year-over-year growth.
  • Non-GAAP Pre-Tax Loss guidance of approximately $16.0 million.

The Company does not reconcile its forward-looking estimates of non-GAAP Pre-Tax Income (Loss) to the corresponding GAAP measures of GAAP Net Income (Loss) due to the significant variability of, and difficulty in making accurate forecasts and projections with regards to, the various expenses it excludes. For example, although future hiring and retention needs may 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. Similarly, impairments and other items are difficult to predict as they may depend on future events and external factors outside the Company's control. The actual amounts of these excluded items could have a significant impact on the Company's GAAP Pre-Tax Income (Loss). Accordingly, management believes that reconciliations of this forward-looking non-GAAP financial measure to the corresponding GAAP measure are not available without unreasonable effort. All projections are on a non-GAAP basis. See the Financial Metrics Sheet for Second Quarter Fiscal Year 2021 posted on the Company's investor relations website for the definition of operational and key business metrics referenced in this press release.

Conference Call Information:

Management will host a conference call to discuss earnings results on October 28, 2020 at 2 p.m. Pacific Time (5 p.m. Eastern Time). The call is accessible via the following numbers and webcast link:

Dial In:

 

(844) 343-9040 Domestic or (647) 689-5131 International; Conference ID #4019669

Replay:

 

(800) 585-8367 Domestic or (416) 621-4642 International; Conference ID #4019669

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 until November 4, 2020. The webcast will be archived on 8x8's website for a period of 30 days. For additional information, visit http://investors.8x8.com.

About 8x8, Inc.

8x8, Inc. (NYSE: EGHT) is transforming the future of business communications as a leading cloud provider of voice, video, chat, contact center, and enterprise-class API solutions powered by one global communications platform. 8x8 empowers workforces worldwide to connect individuals and teams so they can collaborate faster and work smarter. Real-time business analytics and intelligence provide businesses unique insights across all interactions and channels so they can delight end-customers and accelerate their business. For additional information, visit www.8x8.com, or follow 8x8 on LinkedIn, Twitter, and Facebook.

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 the Company's 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.

The Company defines non-GAAP Net Income (Loss) as Net Income (Loss) under GAAP, plus amortization of acquired intangible assets, stock-based compensation expense and related employer payroll taxes, acquisition and integration expenses, debt amortization expense, certain legal and regulatory costs, certain severance and related termination costs, and the provision for income taxes.

The Company defines non-GAAP Net Income (Loss) per share as non-GAAP Net Income (Loss) divided by the weighted-average basic or diluted shares outstanding which includes the effect of potentially dilutive stock options and awards. Management believes that such exclusions facilitate comparisons to the Company's historical operating results and to the results of other companies in the same industry, and provides investors with information that management uses in evaluating the Company's performance on a quarterly and annual basis.

The Company discloses these non-GAAP financial measures to the public as an additional means by which investors can assess its performance. These non-GAAP financial measures may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies. 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. This reconciliation has been provided in the financial statement tables included below in this press release.

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, operational and economic impacts of the COVID-19 pandemic, new product innovations and integrations, market demand for our products, channel and e-commerce growth, sales and marketing activities, strategic partnerships, business strategies, improved customer acquisition and support costs, customer churn, future operating performance and efficiencies, financial outlook, revenue 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: market acceptance of new or existing services and features we may offer from time to time; customer acceptance and demand for our cloud communication and collaboration services, including voice, contact center, video, messaging, and communication APIs; competitive pressures, and any changes in the competitive dynamics of the markets in which the Company competes; the impact of economic downturns on the Company and on its customers, including the impacts of the COVID-19 pandemic; the quality and reliability of our services; customer cancellations and rate of churn; the Company's ability to scale its business; the Company's reliance on infrastructure of third-party network services providers; risk of failure in its physical infrastructure; risk of defects or bugs in its software; risk of cybersecurity breaches and other unauthorized disclosures of customer data; the Company's ability to maintain the compatibility of its software with third-party applications and mobile platforms; continued compliance with industry standards and regulatory requirements, including privacy, in the United States and foreign countries in which the Company makes its software solutions available, and the costs of such compliance; risks relating to the acquisition and integration of businesses it has acquired or may acquire in the future, particularly if the acquired business operates in a different market space from the Company or is based in a region where it does not have significant operations; the amount and timing of costs associated with recruiting, training and integrating new employees; timing and extent of improvements in operating results from increased spending in marketing, sales, and research and development; upfront investments, including the cost to support new strategic initiatives such as the Company's cloud migration program with value-added resellers and other partners, to acquire more customers may not result in additional revenue from new or existing customers; introduction and adoption of the Company cloud software solutions in markets outside of the United States; risks related to the Company's senior convertible notes and the related capped call transactions; implementation and effects of new accounting standards and policies in its reported financial results; and potential future intellectual property infringement claims and other litigation that could adversely affect the Company's 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 OPERATIONS

Unaudited

(In thousands, except per share amounts)

 

 

Three Months Ended
September 30,

 

Six Months Ended
September 30,

 

 

2020

 

2019

 

2020

 

2019

Service revenue

 

$

120,942

 

 

 

$

101,345

 

 

 

$

235,125

 

 

 

$

191,184

 

 

Other revenue

 

8,191

 

 

 

8,172

 

 

 

15,815

 

 

 

15,008

 

 

Total revenue

 

129,133

 

 

 

109,517

 

 

 

250,940

 

 

 

206,192

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue and operating expenses:

 

 

 

 

 

 

 

 

Cost of service revenue

 

44,803

 

 

 

35,813

 

 

 

85,799

 

 

 

61,113

 

 

Cost of other revenue

 

11,693

 

 

 

13,884

 

 

 

22,830

 

 

 

26,275

 

 

Research and development

 

21,567

 

 

 

19,434

 

 

 

43,061

 

 

 

37,765

 

 

Sales and marketing

 

61,399

 

 

 

57,895

 

 

 

121,549

 

 

 

111,494

 

 

General and administrative

 

22,769

 

 

 

20,435

 

 

 

48,559

 

 

 

40,042

 

 

Total operating expenses

 

162,231

 

 

 

147,461

 

 

 

321,798

 

 

 

276,689

 

 

Loss from operations

 

(33,098

)

 

 

(37,944

)

 

 

(70,858

)

 

 

(70,497

)

 

Other income (expense), net

 

(5,178

)

 

 

(2,732

)

 

 

(9,103

)

 

 

(4,296

)

 

Loss before provision for income taxes

 

(38,276

)

 

 

(40,676

)

 

 

(79,961

)

 

 

(74,793

)

 

Provision for income taxes

 

137

 

 

 

256

 

 

 

365

 

 

 

404

 

 

Net loss

 

$

(38,413

)

 

 

$

(40,932

)

 

 

$

(80,326

)

 

 

$

(75,197

)

 

 

 

 

 

 

 

 

 

 

Net loss per share:

 

 

 

 

 

 

 

 

Basic and diluted

 

$

(0.37

)

 

 

$

(0.42

)

 

 

$

(0.77

)

 

 

$

(0.77

)

 

Weighted average number of shares:

 

 

 

 

 

 

 

 

Basic and diluted

 

104,620

 

 

98,353

 

 

104,116

 

 

97,356

 

8x8, Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS

Unaudited

(In thousands)

 

 

September 30, 2020

 

March 31, 2020

ASSETS

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

121,848

 

 

 

$

137,394

 

 

Restricted cash, current

 

6,917

 

 

 

10,376

 

 

Short-term investments

 

31,381

 

 

 

33,458

 

 

Accounts receivable, net

 

42,971

 

 

 

37,811

 

 

Deferred sales commission costs, current

 

26,334

 

 

 

22,444

 

 

Other current assets

 

39,088

 

 

 

35,679

 

 

Total current assets

 

268,539

 

 

 

277,162

 

 

Property and equipment, net

 

96,185

 

 

 

94,382

 

 

Operating lease, right-of-use assets

 

72,841

 

 

 

78,963

 

 

Intangible assets, net

 

19,959

 

 

 

24,001

 

 

Goodwill

 

130,152

 

 

 

128,300

 

 

Restricted cash, non-current

 

8,641

 

 

 

8,641

 

 

Long-term investments

 

6,181

 

 

 

16,083

 

 

Deferred sales commission costs, non-current

 

64,061

 

 

 

53,307

 

 

Other assets

 

20,685

 

 

 

19,802

 

 

Total assets

 

$

687,244

 

 

 

$

700,641

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

 

$

35,278

 

 

 

$

40,261

 

 

Accrued compensation

 

28,698

 

 

 

22,656

 

 

Accrued taxes

 

11,574

 

 

 

10,251

 

 

Operating lease liabilities, current

 

9,498

 

 

 

5,875

 

 

Deferred revenue

 

9,452

 

 

 

7,105

 

 

Other accrued liabilities

 

21,913

 

 

 

37,277

 

 

Total current liabilities

 

116,413

 

 

 

123,425

 

 

Operating lease liabilities, non-current

 

87,462

 

 

 

92,452

 

 

Convertible senior notes, net

 

299,853

 

 

 

291,537

 

 

Other liabilities, non-current

 

9,057

 

 

 

2,496

 

 

Total liabilities

 

512,785

 

 

 

509,910

 

 

Stockholders' equity:

 

 

 

 

Common stock

 

106

 

 

 

103

 

 

Additional paid-in capital

 

688,116

 

 

 

625,474

 

 

Accumulated other comprehensive loss

 

(7,967

)

 

 

(12,176

)

 

Accumulated deficit

 

(505,796

)

 

 

(422,670

)

 

Total stockholders' equity

 

174,459

 

 

 

190,731

 

 

Total liabilities and stockholders' equity

 

$

687,244

 

 

 

$

700,641

 

 

8x8, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Unaudited

(In thousands)

 

 

Six Months Ended September 30,

 

 

2020

 

2019

Cash flows from operating activities:

 

 

 

 

Net loss

 

$

(80,326

)

 

 

$

(75,197

)

 

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

Depreciation and amortization

 

22,638

 

 

 

16,668

 

 

Amortization of debt discount and issuance costs

 

8,317

 

 

 

6,397

 

 

Amortization of deferred sales commission costs

 

12,764

 

 

 

8,718

 

 

Allowance for credit losses

 

2,994

 

 

 

944

 

 

Operating lease expense, net of accretion

 

7,585

 

 

 

6,234

 

 

Stock-based compensation

 

48,101

 

 

 

30,988

 

 

Other

 

467

 

 

 

690

 

 

Changes in assets and liabilities:

 

 

 

 

Accounts receivable, net

 

(6,290

)

 

 

(2,563

)

 

Deferred sales commission costs

 

(26,811

)

 

 

(20,498

)

 

Other current and non-current assets

 

(7,532

)

 

 

(17,418

)

 

Accounts payable and accruals

 

1,350

 

 

 

(400

)

 

Deferred revenue

 

3,675

 

 

 

922

 

 

Net cash used in operating activities

 

(13,068

)

 

 

(44,515

)

 

Cash flows from investing activities:

 

 

 

 

Purchases of property and equipment

 

(4,171

)

 

 

(7,138

)

 

Purchase of business

 

(3,459

)

 

 

(58,741

)

 

Cost of capitalized software

 

(16,158

)

 

 

(14,339

)

 

Proceeds from maturities of investments

 

30,071

 

 

 

8,545

 

 

Proceeds from sales of investments

 

219

 

 

 

30,639

 

 

Purchases of investments

 

(17,968

)

 

 

(18,890

)

 

Net cash used in investing activities

 

(11,466

)

 

 

(59,924

)

 

Cash flows from financing activities:

 

 

 

 

Finance lease payments

 

(70

)

 

 

(227

)

 

Tax-related withholding of common stock

 

(69

)

 

 

(5,426

)

 

Proceeds from issuance of common stock under employee stock plans

 

4,710

 

 

 

6,134

 

 

Net cash provided by financing activities

 

4,571

 

 

 

481

 

 

Effect of exchange rate changes on cash

 

958

 

 

 

511

 

 

Net decrease in cash, cash equivalents, and restricted cash

 

(19,005

)

 

 

(103,447

)

 

Cash, cash equivalents, and restricted cash, beginning of period

 

156,411

 

 

 

284,683

 

 

Cash, cash equivalents. and restricted cash, end of period

 

$

137,406

 

 

 

$

181,236

 

 

8x8, Inc.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

Unaudited

(In thousands, except per share amount)

 

 

Three Months Ended September 30,

 

Six Months Ended September 30,

 

 

2020

 

2019

 

2020

 

2019

Reconciliation of GAAP to Non-GAAP Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP cost of service revenue

 

$

44,803

 

 

 

 

 

$

35,813

 

 

 

 

 

$

85,799

 

 

 

 

 

$

61,113

 

 

 

 

Amortization of acquired intangible assets

 

(1,425

)

 

 

 

 

(1,796

)

 

 

 

 

(2,851

)

 

 

 

 

(3,106

)

 

 

 

Stock-based compensation expense and related employer payroll taxes(1)

 

(2,543

)

 

 

 

 

(1,182

)

 

 

 

 

(4,398

)

 

 

 

 

(2,179

)

 

 

 

Legal and regulatory costs

 

(157

)

 

 

 

 

 

 

 

 

 

(157

)

 

 

 

 

 

 

 

 

Severance and related termination costs

 

(583

)

 

 

 

 

(276

)

 

 

 

 

(1,427

)

 

 

 

 

(276

)

 

 

 

Non-GAAP cost of service revenue

 

$

40,095

 

 

 

 

 

$

32,559

 

 

 

 

 

$

76,966

 

 

 

 

 

$

55,552

 

 

 

 

Non-GAAP service margin (as a percentage of service revenue)

 

$

80,847

 

 

 

66.8

 

%

 

$

68,786

 

 

 

67.9

 

%

 

$

158,159

 

 

 

67.3

 

%

 

$

135,632

 

 

 

70.9

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP cost of other revenue

 

$

11,693

 

 

 

 

 

$

13,884

 

 

 

 

 

$

22,830

 

 

 

 

 

$

26,275

 

 

 

 

Stock-based compensation expense and related employer payroll taxes(1)

 

(1,190

)

 

 

 

 

(757

)

 

 

 

 

(2,027

)

 

 

 

 

(1,491

)

 

 

 

Severance and related termination costs

 

(45

)

 

 

 

 

(142

)

 

 

 

 

(75

)

 

 

 

 

(142

)

 

 

 

Non-GAAP cost of other revenue

 

$

10,458

 

 

 

 

 

$

12,985

 

 

 

 

 

$

20,728

 

 

 

 

 

24,642

 

 

 

 

Non-GAAP other margin (as a percentage of other revenue)

 

$

(2,267

)

 

 

(27.7

)

%

 

$

(4,813

)

 

 

(58.9

)

%

 

$

(4,913

)

 

 

(31.1

)

%

 

$

(9,634

)

 

 

(64.2

)

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP gross margin (as a percentage of revenue)

 

$

78,580

 

 

 

60.9

 

%

 

$

63,973

 

 

 

58.4

 

%

 

$

153,246

 

 

 

61.1

 

%

 

$

125,998

 

 

 

61.1

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP research and development

 

$

21,567

 

 

 

 

 

$

19,434

 

 

 

 

 

$

43,061

 

 

 

 

 

$

37,765

 

 

 

 

Stock-based compensation expense and related employer payroll taxes(1)

 

(8,547

)

 

 

 

 

(4,217

)

 

 

 

 

(15,324

)

 

 

 

 

(8,081

)

 

 

 

Acquisition and integration costs

 

(1

)

 

 

 

 

(22

)

 

 

 

 

(1

)

 

 

 

 

(33

)

 

 

 

Severance and related termination costs

 

(270

)

 

 

 

 

(385

)

 

 

 

 

(641

)

 

 

 

 

(385

)

 

 

 

Non-GAAP research and development (as a percentage of revenue)

 

$

12,749

 

 

 

9.9

 

%

 

$

14,810

 

 

 

13.5

 

%

 

$

27,095

 

 

 

10.8

 

%

 

$

29,266

 

 

 

14.2

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP sales and marketing

 

$

61,399

 

 

 

 

 

$

57,895

 

 

 

 

 

$

121,549

 

 

 

 

 

$

111,494

 

 

 

 

Amortization of acquired intangible assets

 

(402

)

 

 

 

 

(507

)

 

 

 

 

(1,204

)

 

 

 

 

(721

)

 

 

 

Stock-based compensation expense and related employer payroll taxes(1)

 

(7,364

)

 

 

 

 

(5,340

)

 

 

 

 

(13,333

)

 

 

 

 

(9,261

)

 

 

 

Acquisition and integration costs

 

 

 

 

 

 

(5

)

 

 

 

 

 

 

 

 

 

(5

)

 

 

 

Legal and regulatory costs

 

(1

)

 

 

 

 

 

 

 

 

 

(4

)

 

 

 

 

 

 

 

 

Severance and related termination costs

 

(244

)

 

 

 

 

(673

)

 

 

 

 

(740

)

 

 

 

 

(673

)

 

 

 

Non-GAAP sales and marketing (as a percentage of revenue)

 

$

53,388

 

 

 

41.3

 

%

 

$

51,370

 

 

 

46.9

 

%

 

$

106,268

 

 

 

42.3

 

%

 

$

100,834

 

 

 

48.9

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP general and administrative

 

$

22,769

 

 

 

 

 

$

20,435

 

 

 

 

 

$

48,559

 

 

 

 

 

$

40,042

 

 

 

 

Stock-based compensation expense and related employer payroll taxes(1)

 

(6,647

)

 

 

 

 

(5,895

)

 

 

 

 

(14,643

)

 

 

 

 

(9,976

)

 

 

 

Acquisition and integration costs

 

(47

)

 

 

 

 

(457

)

 

 

 

 

(190

)

 

 

 

 

(1,679

)

 

 

 

Legal and regulatory costs

 

(62

)

 

 

 

 

370

 

 

 

 

 

(1,575

)

 

 

 

 

825

 

 

 

 

Severance and related termination costs

 

(1,212

)

 

 

 

 

(416

)

 

 

 

 

(2,075

)

 

 

 

 

(1,593

)

 

 

 

Non-GAAP general and administrative (as a percentage of revenue)

 

$

14,801

 

 

 

11.5

 

%

 

$

14,037

 

 

 

12.8

 

%

 

$

30,076

 

 

 

12.0

 

%

 

$

27,619

 

 

 

13.4

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP other income and expense

 

$

(5,178

)

 

 

 

 

$

(2,732

)

 

 

 

 

$

(9,103

)

 

 

 

 

$

(4,296

)

 

 

 

Debt amortization expense

 

4,191

 

 

 

 

 

3,224

 

 

 

 

 

8,317

 

 

 

 

 

6,397

 

 

 

 

Non-GAAP other income and expense (as a percentage of revenue)

 

$

(987

)

 

 

(0.8

)

%

 

$

492

 

 

 

0.4

 

%

 

$

(786

)

 

 

(0.3

)

%

 

$

2,101

 

 

 

1.0

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of GAAP Net Loss to Non-GAAP Net Loss:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP net loss

 

$

(38,413

)

 

 

 

 

$

(40,932

)

 

 

 

 

$

(80,326

)

 

 

 

 

$

(75,197

)

 

 

 

Amortization of acquired intangible assets

 

1,827

 

 

 

 

 

2,303

 

 

 

 

 

4,055

 

 

 

 

 

3,827

 

 

 

 

Stock-based compensation expense and related employer payroll taxes(1)

 

26,291

 

 

 

 

 

17,391

 

 

 

 

 

49,725

 

 

 

 

 

30,988

 

 

 

 

Acquisition and integration costs

 

48

 

 

 

 

 

484

 

 

 

 

 

191

 

 

 

 

 

1,717

 

 

 

 

Legal and regulatory costs

 

220

 

 

 

 

 

(370

)

 

 

 

 

1,736

 

 

 

 

 

(825

)

 

 

 

Severance and related termination costs

 

2,354

 

 

 

 

 

1,892

 

 

 

 

 

4,958

 

 

 

 

 

3,069

 

 

 

 

Debt amortization expense

 

4,191

 

 

 

 

 

3,224

 

 

 

 

 

8,317

 

 

 

 

 

6,397

 

 

 

 

Provision for income taxes

 

137

 

 

 

 

 

256

 

 

 

 

 

365

 

 

 

 

 

404

 

 

 

 

Non-GAAP net loss before taxes (as a percentage of revenue)

 

$

(3,345

)

 

 

(2.6

)

%

 

$

(15,752

)

 

 

(14.4

)

%

 

$

(10,979

)

 

 

(4.4

)

%

 

$

(29,620

)

 

 

(14.4

)

%

Non-GAAP tax expense

 

137

 

 

 

 

 

256

 

 

 

 

 

365

 

 

 

 

 

404

 

 

 

 

Non-GAAP net loss after taxes (as a percentage of revenue)

 

$

(3,482

)

 

 

(2.7

)

%

 

$

(16,008

)

 

 

(14.6

)

%

 

$

(11,344

)

 

 

(4.5

)

%

 

$

(30,024

)

 

 

(14.6

)

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in computing non-GAAP net loss per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and Diluted

 

104,620

 

 

 

 

 

98,353

 

 

 

 

 

104,116

 

 

 

 

 

97,356

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP net loss per share - Basic and Diluted

 

$

(0.37

)

 

 

 

 

$

(0.42

)

 

 

 

 

$

(0.77

)

 

 

 

 

$

(0.77

)

 

 

 

Non-GAAP net loss before taxes per share - Basic and Diluted

 

$

(0.03

)

 

 

 

 

$

(0.16

)

 

 

 

 

$

(0.11

)

 

 

 

 

$

(0.30

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Beginning for the three months ended December 31, 2019, certain employer payroll taxes related to stock-based compensation were included as a non-GAAP reconciling item. Such employer payroll taxes were included in the amounts for the three and six months ended September 30, 2020.

 

8x8, Inc.

Investor Relations:
Victoria Hyde-Dunn
1-669-333-5200
victoria.hyde-dunn@8x8.com

Media:
John Sun
1-408-692-7054
john.sun@8x8.com

Source: 8x8, Inc.

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