false00010237318X8 INC /DE/ 0001023731 2019-10-30 2019-10-30

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

	FORM	8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

October 30, 2019

Date of Report (Date of earliest event reported)

(Exact name of registrant as specified in its charter)

Delaware	001-38312	77-0142404
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification Number)

2125 O'Nel Drive

San Jose, CA 95131

(Address of principal executive offices including zip code)

(408) 727-1885

(Registrant's telephone number, including area code)

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
COMMON STOCK, PAR VALUE $.001 PER SHARE	EGHT	New York Stock Exchange

Emerging growth company      ☐     

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.      ☐     

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Item 2.02.    Results of Operations and Financial Condition.

On October 30, 2019, 8x8, Inc. issued a press release announcing its financial results for the three and six months ended September 30, 2019. A copy of this press release is furnished as Exhibit 99.1 to this report.

The press release is furnished and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act"), or subject to the liabilities of that Section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended. The press release should be read in conjunction with the statements regarding forward-looking statements, which are included in the text of the release.

Item 9.01.    Financial Statements and Exhibits

(d) Exhibits.

Exhibit	Description
99.1	Press release dated October 30, 2019

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: October 30, 2019

	8X8, INC.
	By:   /s/ Steven Gatoff
	Steven Gatoff
	Chief Financial Officer

•	Total revenue increased 27.8% year-over-year to $109.5 million.

•	Service revenue increased 28.5% year-over-year to $104.5 million.

•	GAAP net loss was $40.9 million or $(0.42) per diluted share.

•	Non-GAAP net loss was $16.0 million or $(0.16) per diluted share.

•	Bookings greater than $100K ARR: The Company closed 30 new customer deals in the second quarter of fiscal 2020 with ARR (annual recurring revenue) greater than $100,000. These deals represented 41% of new bookings for the quarter, compared with 35% of new bookings in the same period last year.

•	Channel bookings grew 80% year-over-year and represented 59% of new bookings.

•	Total ARR: The Company's total annual recurring revenue is $389.7 million, an increase of 34% from the same period last year.

•	Total ARR greater than $100K: The Company had 536 customers that generated ARR greater than $100,000, compared with 332 customers in the same period last year, a 61% year-over-year growth.

•	Strong ARR growth by customer size:

◦	Small Business customers (defined as companies whose revenue is less than $50 million) comprised 58% of total ARR which grew 18% year-over-year.

◦	Mid-market customers (defined as companies whose revenue is between $50 million and $1 billion) comprised 26% of total ARR which grew 53% year-over-year.

◦	Enterprise customers (defined as companies whose revenue is more than $1 billion) comprised 16% of total ARR which grew 83% year-over-year.

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•	Average annual service revenue per customer:

◦	Small business was $5,069, compared with $4,588 in the same period last year, a 10% increase year-over-year.

◦	Mid-market was $40,682, compared with $32,690 in the same period last year, a 24% increase year-over-year.

◦	Enterprise was $171,655, compared with $132,522 in the same period last year, a 30% increase year-over-year.

•	GAAP gross margin was 55%, compared with 63% in the same period last year. Non-GAAP gross margin was 58%, compared with 66% in the same period last year.

•	GAAP service margin was 59%, compared with 68% in the same period last year. Non-GAAP service margin was 63%, compared with 71% in the same period last year.

•	Cash used in operating activities was $44.5 million. Cash, restricted cash and investments were $231.0 million at September 30, 2019.

•	Contact center bookings represented 24% of total new bookings and grew 41% year-over-year.

•	Announced a strategic partnership with Poly and ScanSource to launch CloudFuelTM, a comprehensive cloud migration program for the value-added reseller (VAR) channel community.

•	Promoted Mr. John DeLozier to Senior Vice President, Global Channel Chief.

•	Added channel master-agents Telecom Consulting Group (TCG) and Converged Network Services Group (CNSG) to 8x8’s global channel partner program.

•	Launched 8x8 Video Meetings for all new customers and existing 8x8 customers as a complementary addition to their service subscriptions for Virtual Office mobile and desktop applications.

•	Launched early access to 8x8 Meeting Rooms, a video conferencing solution that makes it easy to schedule, host and join 8x8 Video Meetings from conference and huddle rooms.

•	Named a Leader for the eighth consecutive year in the Gartner 2019 Unified Communications as a Service (UCaaS) Magic Quadrant, Worldwide.

•	Named a Challenger for the fifth consecutive year in the Gartner 2019 Contact Center as a Service (CCaaS) Magic Quadrant, North America.

•	Awarded Partners' Choice Award – Top Overall Supplier by Intelisys, Inc., a ScanSource company.

•	Awarded Top Vendor Sales UK by AVANT at Special Forces Summit Europe event.

•	Awarded UC Today 2019 Best Cloud Communications Provider.

•	Added 11 new patents in the quarter for a total of 202 patents awarded.

•	Total Revenue guidance in the range of $113.5 million to $114.5 million, representing approximately 26% to 27% year-over-year growth.

•	Service Revenue guidance in the range of $109.0 million to $110.0 million, representing approximately 27% to 28% year-over-year growth.

•	Non-GAAP Pre-Tax Loss guidance of approximately $16.5 million.

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•	The Company raises total revenue guidance from approximately $438.0 million to approximately $440.0 million, representing approximately 25% year-over-year growth.

•	The Company raises service revenue guidance from approximately $420.0 million to approximately $422.0 million, representing approximately 26% year-over-year growth.

•	The Company updates non-GAAP pre-tax loss guidance from approximately $53 million to approximately $60 million, adding $7 million in non-recurring expense in Q3 and Q4 in support of the Poly and ScanSource partnership.

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•	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 we compete;

•	new strategic partnerships, such as our cloud migration program with Poly and Scansource, including the costs to support such initiatives and our ability to benefit from these initiatives in the future;

•	the quality and reliability of our services;

•	customer cancellations and rate of churn;

•	our ability to scale our business;

•	customer acquisition costs;

•	our reliance on infrastructure of third-party network services providers;

•	risk of failure in our physical infrastructure;

•	risk of defects or bugs in our software;

•	our ability to maintain the compatibility of our software with third-party applications and mobile platforms;

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•	continued compliance with industry standards and regulatory requirements in the United States and foreign countries in which we make our software solutions available, and the costs of such compliance;

•	the timing, extent and results of sales and use tax audits;

•	risks relating to the acquisition and integration of businesses we have acquired (most recently, Wavecell Pte. Ltd.) or may acquire in the future, particularly if the acquired business operates in a different market space from us or is based in a region where we do 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;

•	introduction and adoption of our cloud software solutions in markets outside of the United States;

•	risk of cybersecurity breaches and other unauthorized disclosures of customer data;

•	general economic conditions that could adversely affect our business and operating results;

•	implementation and effects of new accounting standards and policies in our reported financial results; and

•	potential future intellectual property infringement claims and other litigation that could adversely affect our business and operating results.

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