SUNNYVALE, CA -- May 19, 2010 -- 8x8, Inc. (Nasdaq: EGHT), provider of innovative business communications solutions, today announced financial operating results for its fiscal fourth quarter and year ended March 31, 2010.

Net income for fiscal 2010 was $3.9 million or $0.06 per share compared with a net loss of $2.5 million or ($0.04) per share for fiscal 2009. Total revenue for fiscal 2010 was $63.4 million compared with $64.7 million for fiscal 2009. Revenue from business customers grew 21% year over year from $40.2 million in fiscal 2009 to $48.7 million in fiscal 2010 while revenue from residential customers declined 40% from $24.4 million to $14.7 million in fiscal 2010. Revenue from business customers accounted for 77% of the company's total annual revenue, compared with 62% of annual revenue in fiscal 2009.

Net income for the fourth quarter of fiscal 2010 was $1.1 million or $0.02 per share compared sequentially to net income of $1 million or $0.02 per share for the previous quarter and a net loss of $3.9 million or ($0.06) per share for the same period of fiscal 2009. Total revenue for the fourth quarter of fiscal 2010 was $15.9 million compared sequentially to $15.9 million for the previous quarter and $15.8 million for the same period of fiscal 2009. In the fourth quarter of fiscal 2010, 8x8 revenue from business customers grew to $13.4 million, a 6% increase over the prior quarter and 25% increase over the same period last year and accounted for 85% of total revenue in the fourth quarter of fiscal 2010 compared to 79% in the prior quarter and 68% in the same period last year. Revenue from residential customers declined 27% in the fourth quarter of fiscal 2010 to $2.4 million from $3.3 million in the prior quarter.

During the fourth quarter of fiscal 2010, 8x8 added a record 29,985 new business lines and services, up 14% from the prior quarter and 35% from the same period last year. Average lines and services per new business customer increased to a record 10.4 compared to 9.5 in the prior quarter and 8.0 in the same year ago period. 8x8 added 2,875 gross new business customers during the fourth quarter, compared with 2,785 customers in the prior quarter, and ended the fourth quarter of fiscal 2010 with a total of 20,428 business customers.

"8x8 continues to generate robust growth in its core business customer service revenue," said Bryan Martin, 8x8's Chairman and Chief Executive Officer. "As demonstrated by our performance of sequential business customer revenue growth over the past three years, we believe the impact of the current economic climate has been minimal on this revenue stream. We expect this trend to continue going forward, potentially enhanced through select acquisitions that can expand our product service offerings into our business customer base. Our ability to expand this recurring base of revenue has enabled us to generate predictable profitability and strengthen our balance sheet, positioning 8x8 for continued success in fiscal 2011 and beyond."

Cash and cash equivalents increased to $18.1 million in the fourth quarter of fiscal 2010 from $17.1 million in the previous quarter and $16.4 million in the same period of fiscal 2009.

Subsequent Events

In April 2010, 8x8 sold its wholly-owned French research and development subsidiary, 8x8 Europe, SARL, to Stonyfish, a privately-held company in Los Altos, California. 8x8 also invested $250,000 cash in the new venture and granted a non-exclusive license to certain 8x8 technology. 8x8 will own 17% of Stonyfish following its initial round of external fundraising. All 8x8 research and development activities will remain at the Company's Sunnyvale, California headquarters under the leadership of 8x8 Chief Technology Officer Ramprakash Narayanaswamy.

In May 2010, 8x8 acquired Central Host, Inc., a Los Gatos, California company, for $1.6 million in a combination of cash and unregistered 8x8 common stock. Central Host provides customized, high-performance, managed hosting and cloud-based computing solutions targeted at small and medium sized enterprises. Central Host has relocated to 8x8's Sunnyvale, California headquarters and will combine its operations with 8x8's existing Network Operations Center (NOC), sales and customer service operations. Central Host's services compliment the current suite of hosted business communication services 8x8 offers to its more than 20,000 business customers.

"8x8 continues to expand its portfolio of hosted, profitable services for small businesses with the acquisition of Central Host," added Mr. Martin. "Central Host has built a loyal customer base and provides 8x8 with differentiated IT hosting services, which we will market to both existing and new business customers, further expanding our technological lead in the marketplace."

• Posted record annual net income of $3.9 million or $0.06 per share for fiscal 2010 compared with a net loss of $2.5 million or ($0.04) per share for fiscal 2009

• Posted net income of $1.1 million or $0.02 per share for the fourth quarter of fiscal 2010, compared sequentially to net income of $1 million or $0.02 per share for the previous quarter and a net loss of $3.9 million or ($0.06) per share for the same period of fiscal 2009. The Company has generated net income in nine of the last ten quarters

• Increased revenue from business customers to 85% of total revenue - up from 79% in the prior quarter

• Sold a record number of 29,985 new business lines and services in the fourth quarter of fiscal 2010, up 14% from the prior quarter and 35% from the same period last year

• Added $1.7 million year-over-year and $986,000 quarter over quarter in cash and cash equivalents to the Company's balance sheet

• Launched new 8x8 Virtual Office Pro unified communications solution in January - 4,348 subscriptions at the end of fiscal year 2010

• Acquired Central Host, Inc., a managed hosting company, in May 2010 to broaden the Company's business services portfolio

Management will host a conference call to discuss these results and other matters related to the Company's business today, May 19, 2010, at 4:30 p.m. EDT. The call is accessible via the following numbers and webcast link:

8x8, Inc. (Nasdaq: EGHT) leverages its patented software technologies to deliver high quality voice solutions and integrated messaging and video to businesses of any size with employees in any locations on a wide variety of business telephony, web and mobile platforms.  8x8 also offers managed hosting and cloud-based computing services. For additional information, visit www.8x8.com.

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 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, 8x8 Virtual Office, 8x8 Virtual Office Pro, 8x8 Complete Contact Center and 8x8 Mobiletalk are trademarks of 8x8, Inc. All other trademarks are the property of their respective owners.

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Investor Relations Contact:
Joan Citelli
(408) 654-0970
jcitelli@8x8.com

8x8, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts; unaudited)

8x8, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, unaudited)