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United States securities and exchange commission logo
January 3, 2024
Kevin Kraus
Chief Financial Officer
8X8 Inc.
675 Creekside Way
Campbell, CA 95008
Re: 8X8 Inc.
Form 10-K for the
Year Ended March 31, 2023
Form 8-K Furnished
on November 1, 2023
File No. 001-38312
Dear Kevin Kraus:
We have limited our review of your filing to the financial
statements and related
disclosures and have the following comments.
Please respond to this letter within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe a
comment applies to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to this letter, we may have additional comments.
Form 10-K for the Year Ended March 31, 2023
Management's Discussion and Analysis of Financial Condition and Results
of Operations
Key Business Metrics, page 31
1. We note that the
calculation of annualized recurring subscriptions and usage revenue
(ARR) includes platform
usage charges for all CPaaS customers (subject to minimum
billings threshold for
a period of at least six consecutive months). Please tell us what
usage charges you are
referring to here and revise to clarify whether certain usage fees are
excluded from this
measure. In this regard, your revenue recognition policy refers to
bundled and non-bundled
usage fees. Also, Fuze's policy referenced variable usage fees
for blocks of
additional minutes and other items systematically purchased in excess of
plan limits. Refer to
SEC Release No. 33-10751.
Kevin Kraus
FirstName
8X8 Inc. LastNameKevin Kraus
Comapany
January Name8X8 Inc.
3, 2024
January
Page 2 3, 2024 Page 2
FirstName LastName
Results of Operations
Revenue, page 32
2. You state that service revenue increased during fiscal 2023, primarily
due to your installed
base of mid-market and enterprise customers, expanded deployments by
existing
customers, and growth in related telecom usage by your customers. You
also refer to a
partial offset due to a decrease in usage revenue in the Asia-Pacific
region. Please revise
to disclose the dollar or percentage change in revenue due to new
versus existing
customers. Also, tell us your consideration to disclose the number of
customers in your
installed base as you do in your Form 8-K earnings releases for your
enterprise customers.
In addition, where two or more factors contributed to a material
change from period-to-
period, including any offsetting factors, revise to include a
quantitative discussion of such
factors and avoid using vague terms such as "primarily" in favor of
specific quantification.
Similar revisions should be made in your Form 10-Q filings. In this
regard, you refer to
various factors such as increased churn, down-sell in your inorganic
customer base and
lower revenue in Southeast Asia region, partially offset by new
subscription revenue and
new organic bookings as contributing to the decrease in revenue during
the three and six
months ended September 30, 2022. Lastly, explain your reference to
"inorganic" customer
base and consider quantifying churn in future filings. Refer to Item
303(b) of Regulation
S-K.
Notes to Consolidated Financial Statements
Note 11. Geographical Information, page 68
3. We note that international revenues comprised 27% of total revenue in
fiscal 2023. Please
tell us whether revenue from any individual country is material, and
if so, how you
considered the guidance in ASC 280-10-50-41(a).
Form 8-K Furnished on November 1, 2023
Exhibit 99.1, page 1
4. We note you refer to adjusted EBITDA as a percentage of revenue in the
financial results
bullet points without also presenting the comparable GAAP measure of
net loss as a
percentage of revenue. In addition, you disclose various non-GAAP
operating expenses as
a percentage of revenue without disclosing the comparable GAAP
operating expense as a
percentage of revenue. Where you present non-GAAP measure, please
revise to ensure
that you present the comparable non-GAAP measure with equal or greater
prominence.
Refer to Question 102.10(a) of the non-GAAP C&DIs.
Reconciliation of GAAP to Non-GAAP Financial Measures, page 10
5. We note your measure of non-GAAP net income does not appear to include
the income
tax impact of your non-GAAP adjustments. Please revise to include a
separate income tax
adjustment commensurate with your non-GAAP measure of profit. In this
regard, while
Kevin Kraus
8X8 Inc.
January 3, 2024
Page 3
we note that you have a recognized GAAP pre-tax net loss and a valuation
allowance
against your deferred tax assets in recent years, you have also reported
non-GAAP net
income in the same periods such that a valuation allowance may not apply
on a non-
GAAP basis. Revise or explain further why you do not believe an income
tax expense
adjustment is necessary. Refer to non-GAAP C&DI Question 102.11.
In closing, we remind you that the company and its management are
responsible for the
accuracy and adequacy of their disclosures, notwithstanding any review,
comments, action or
absence of action by the staff.
Please contact Dave Edgar at 202-551-3459 or Kathleen Collins at
202-551-3499 with
any questions.
Sincerely,
FirstName LastNameKevin Kraus
Division of
Corporation Finance
Comapany Name8X8 Inc.
Office of Technology
January 3, 2024 Page 3
cc: Suzy Seandel
FirstName LastName