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:
Item 2.02. Results of Operations and Financial Condition.
On July 23, 2014, 8x8, Inc., or the Company, issued a press release announcing its financial results for the three months ended June 30,
2014. A copy of this press release is furnished as Exhibit 99.1 to this report. The press release should be read in conjunction with the
statements regarding forward-looking statements, which are included in the text of the release.
In addition to disclosing financial results calculated in accordance with U.S. generally accepted accounting principles (GAAP),
management also presents information regarding the Company's performance over comparable periods based on net income and net income
per share, exclusive of non-cash tax adjustments, stock-based compensation and amortization of acquired intangible assets. Because
management discloses financial measures calculated without taking into account these items, these financial measures are characterized as
"non-GAAP financial measures" under Securities and Exchange Commission rules.
Non-cash tax adjustments represented the difference between the amount of taxes the Company expects to pay and the GAAP tax
provision each period. Management excludes non-cash tax adjustments because they are non-cash transactions.
Stock-based compensation charges represent non-cash charges related to equity awards granted by the Company. Although these are
recurring charges to the Company's operations, management has excluded stock-based compensation expense because it relies on
valuations based on future events, such as the market price of the Company's common stock, that are difficult to predict and are affected by
market factors that are largely not within the control of the Company. Thus, management believes that excluding these charges facilitates
comparisons of the Company's operational performance in different periods, as well as with similarly determined non-GAAP financial measures
of comparable companies.
Amortization of acquired intangible assets results from the Company's acquisitions of Contactual, Inc. and Zerigo, Inc. in fiscal 2012 and
Voicenet Solutions Limited in fiscal 2014. Amortization of acquired intangible assets was excluded because it was a non-cash expense that the
Company does not consider part of ongoing operations when assessing the Company's financial performance.
Management and the Company's board of directors will continue to analyze these non-GAAP financial measures to assess the business
and compare operating results to the Company's performance objectives. For example, the Company's budgeting and planning process
utilizes these non-GAAP financial measures, along with other types of financial information.
The Company discloses these non-GAAP financial measures to the public as an additional means by which investors can assess the
Company's performance and to identify the Company's operating results for investors on the same basis applied by management. The non-
GAAP financial measures disclosed by the Company should not be considered a substitute for, or superior to, financial measures calculated in
accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations to those financial statements should
be carefully evaluated. The non-GAAP financial measures used by the Company may be calculated differently from, and therefore may not be
comparable to, similarly titled measures used by other companies. The Company has provided reconciliations of the non-GAAP financial
measures to the most directly comparable GAAP financial measures in the press release furnished as Exhibit 99.1.
Moreover, although these non-GAAP financial measures adjust expense, they should not be viewed as a pro forma presentation reflecting
the elimination of the underlying share-based compensation programs, which are an important element of the Company's compensation
structure. GAAP requires that all forms of share-based payments should be valued and included, as appropriate, in results of operations.
Management believes these expenses are a material part of the Company's operating results.
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers;
Compensatory Arrangements of Certain Officers.
Effective July 17, 2014, the role and responsibilities of Mr. Huw Rees have been modified, and his job title has been changed from Senior
Vice President of Business Development to Vice President of Customer Advocacy & Referral Programs, which is not an executive officer
position at the Company.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits.
99.1 Press Release dated July 23, 2014
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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: July 23, 2014
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Daniel Weirich
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Chief Financial Officer and Secretary
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INDEX TO EXHIBITS
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For Immediate Release
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8x8, Inc. Reports First Quarter Fiscal 2015 Financial Results
30% Year-over-Year Increase in Revenue; 94% Year-over-Year Increase in New Mid-Market
and
Channel Sales; Non-GAAP Net Income of $3.0 Million or $0.03 per Share
SAN JOSE, Calif. - July 23, 2014 -- 8x8, Inc. (NASDAQ:EGHT), a provider of cloud-based unified communications
,
contact center and collaboration solutions, today reported financial results for the first quarter of fiscal 2015 ended June 30, 2014.
First Quarter Fiscal 2015 Financial Results:
- Total revenue for the quarter increased 30% year-over-year to a record $37.9 million.
- Channel and mid-market sales increased 94% year-over-year, representing 44% of new monthly recurring revenue sold in the quarter.
- Average monthly service revenue per business customer was $293, up 11% compared with $263 in the same period last year.
"8x8 delivered a very strong quarter with profitable 30% revenue growth driven largely by the continued adoption of our services by
mid-market and distributed enterprise customers," said 8x8 CEO Vik Verma. "With a 94% year-over-year increase in new mid-market
and channel sales and 41% of our service revenues coming from the mid-market, 8x8 is clearly expanding its
leadership position in this valuable market segment."
Mr. Verma continued. "Given our strong first quarter performance, we now expect revenue to grow by at least 25% for the current fiscal
year, with non-GAAP net income as a percentage of revenue in the high-single digit range."
Additional First Quarter Results:
- GAAP net income for the first quarter of fiscal 2015 was $8,000, or $0.00 per diluted share, compared with GAAP net income of
$2.1 million, or $0.03 per diluted share, in the first quarter of fiscal 2014.
- Non-GAAP net income was $3.0 million, $0.03 per diluted share, compared with $4.3 million, $0.06 per diluted share, for the same period last year.
- Service margin was 80%, compared with 79% in the prior quarter and 82% in the same period a year ago; overall gross margin was 71%,
compared with 70% in the prior quarter and 72% in the same period last year.
- Monthly business service revenue churn was 0.4%, compared with 1.2% in the same period last year.
- Cash, cash equivalents and investments increased sequentially by $3.6 million for a total of $182.0 million in the first quarter of fiscal 2015,
compared with a total of $57.8 million in the same period last year.
- Ended the quarter with 39,340 business customers, up 1,407 customers sequentially and 5,966 compared with the same period a year ago.
- Announced new channel partnerships with master agent MicroCorp and technology services distributor Telecom Brokerage Inc. to deliver
cloud communications solutions to enterprise customers through a combined network of 3,500+ agents, system integrators, and VARs.
- Accepted as a supplier on UK G-Cloud 5 Framework, a UK Government initiative to encourage the adoption of cloud services across the
public sector.
- Ranked #1 on Infonetics Research Sixth Annual "North American Business VoIP Service Leadership Scorecard."
On July 22, 2014, 8x8's Board of Directors authorized the repurchase of up to an aggregate of $15.0 million of our Common Stock. The
repurchases may be made from time to time on the open market at prevailing market prices or in negotiated transactions off the market. The
repurchase program is expected to continue until July 22, 2015, unless extended or shortened by the Board of Directors.
8x8 also reported, in accordance with NASDAQ Listing Rule 5635(c)(4), that employment inducement awards were granted to 26 new
employees in connection with their recent hiring. The employees received restrictive stock units for 136,769 shares of the Company's Common
Stock, subject to their continued employment and other conditions. In addition, stock option grants for 96,684 shares were awarded.
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 our 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.
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 below. A reconciliation of non-GAAP financial measures to their most directly comparable GAAP measures has been provided
in the financial statement tables included below in this press release.
Non-GAAP net income and non-GAAP net income per share
We have defined non-GAAP net income as net income for GAAP plus non-cash tax adjustments, stock-based compensation and
amortization of acquired intangible assets. Non-cash tax adjustments represent the differences between the amount of taxes we expect to pay
and our GAAP tax provision each period. We have excluded stock-based compensation expense because it relies on valuations based on future
events, such as the market price of our common stock, that are difficult to predict and are affected by market factors that are largely not within the
control of management. Amortization of acquired intangible assets is excluded because it is a non-cash expense that we do not consider part of
ongoing operations when assessing our financial performance, as it relates to accounting for certain purchased assets. We define non-GAAP net income per share
as non-GAAP net income divided by the weighted-average diluted shares outstanding. We define non-GAAP net income percentage of revenue
as non-GAAP net income divided by revenue. The GAAP and non-GAAP weighted average number of diluted shares to calculate GAAP and
non-GAAP earnings per share are the same. We believe that such exclusions facilitate comparisons to
our historical operating results and to the results of other companies in the same industry, and provides investors with information that we use in
evaluating management's performance on a quarterly and annual basis.
Conference Call Information:
Management will host a conference call to discuss these results and other matters related to the Company's business today, July 23, 2014,
at 4:30 pm EDT. The call is accessible via the following numbers and webcast links:
Dial In:
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(877) 843-0417, domestic
(408) 427-3791, international
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Replay:
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(855) 859-2056, domestic (Conference ID #68270346)
(404) 537-3406, international (Conference ID #68270346)
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Webcast:
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http://investors.8x8.com/
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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 three hours after
the conclusion of the call until midnight July 29, 2014. The webcast will be archived on 8x8's website for a period of one year. For additional
information, visit http://investors.8x8.com
.
About 8x8, Inc.
8x8, Inc. (NASDAQ:EGHT) is the trusted provider of secure and reliable cloud-based unified
communications
and virtual contact center solutions to more than 39,000 small, midsize and distributed enterprise
organizations operating in over 40 countries across six continents. 8x8's out-of-the-box cloud solutions replace traditional on-premise PBX
hardware and software-based systems with a flexible and scalable Software as a Service (SaaS) alternative, encompassing cloud business
phone service, contact center solutions, and web conferencing.
For additional information, visit www.8x8.com
, or www.8x8.com/UK or connect with
8x8 on