8X8 Inc 10-Q for FY2021 Q2

8X8 Inc (EGHT)

10-Q 2020-10-29 For: 2020-09-30

Added on April 06, 2026

About this 10-Q

8X8 Inc filed this 10-Q on October 29, 2020, covering the quarter ended September 30, 2020 (FY2021 Q2).

Headline figures

Quarter ended September 30, 2020, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $129.13M; up 17.9% from $109.52M a year earlier
Net loss: $38.41M; compared with a net loss of $40.93M a year earlier

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Delaware			77-0142404
(State or Other Jurisdiction of Incorporation or Organization)			(I.R.S. Employer Identification Number)


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


			Page No.
Forward-Looking Statements and Risk Factors			2
PART I. FINANCIAL INFORMATION			4
Item 1. Financial Statements (unaudited):			4
Condensed Consolidated Balance Sheets			4
Condensed Consolidated Statements of Operations			5
Condensed Consolidated Statements of Comprehensive Loss			6
Condensed Consolidated Statements of Stockholders' Equity			7
Condensed Consolidated Statements of Cash Flows			8
Notes to Unaudited Condensed Consolidated Financial Statements			10
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			19
Item 3. Quantitative and Qualitative Disclosures About Market Risk			26
Item 4. Controls and Procedures			27
PART II. OTHER INFORMATION			28
Item 1. Legal Proceedings			28
Item 1A. Risk Factors			28
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			28
Item 3. Defaults Upon Senior Securities			28
Item 4. Mine Safety Disclosures			28
Item 5. Other Information			28
Item 6. Exhibits			29
Signature			30


	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, current	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
Commitments and contingencies (Note 8)
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


	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
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 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 common shares outstanding:
Basic and diluted	104,620		98,353		104,116		97,356


	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total
	Shares	Amount
Balance at March 31, 2020	103,178,621	$	103	$	625,474	$	(12,176)	$	(422,670)	$	190,731
Adjustment to opening balance for change in accounting principle	—	—		—		—		(2,800)		(2,800)
Issuance of common stock under stock plans, less withholding	688,414	1		(67)		—		—		(66)
Stock-based compensation expense	—	—		23,118		—		—		23,118
Issuance of common stock related to acquisition	—	—		8,489		—		—		8,489
Unrealized investment gain	—	—		—		422		—		422
Foreign currency translation adjustment	—	—		—		885		—		885
Net loss	—	—		—		—		(41,913)		(41,913)
Balance at June 30, 2020	103,867,035	104		657,014		(10,869)		(467,383)		178,866
Issuance of common stock under stock plans	2,119,196	2		4,706		—		—		4,708
Stock-based compensation expense	—	—		26,396		—		—		26,396

Unrealized investment gain/loss	—	—		—		(43)		—		(43)
Foreign currency translation adjustment	—	—		—		2,945		—		2,945
Net loss	—	—		—		—		(38,413)		(38,413)
Balance at September 30, 2020	105,986,231	$	106	$	688,116	$	(7,967)	$	(505,796)	$	174,459


	September 30,
	2020		2019
Cash and cash equivalents	$	121,848	$	162,219
Restricted cash, current	6,917		3,459
Restricted cash, non-current	8,641		15,558
Total cash, cash equivalents, and restricted cash	$	137,406	$	181,236


	September 30, 2020		March 31, 2020		Change
Contract assets	$	26,549	$	24,123	$	2,426
Deferred revenue	$	12,130	$	8,224	$	3,906


As of September 30, 2020	Amortized Costs		Gross Unrealized Gain		Gross Unrealized Loss		Estimated Fair Value		Cash and Cash Equivalents		Restricted Cash (Current & Non-Current)		Short-Term Investments		Long-Term Investments
Cash	$	32,611	$	—	$	—	$	32,611	$	25,694	$	6,917	$	—	$	—
Level 1:
Money market funds	94,354		—		—		94,354		94,354		—		—		—
Treasury securities	6,185		68		—		6,253		—		—		6,253		—
Subtotal	133,150		68		—		133,218		120,048		6,917		6,253		—
Level 2:
Certificate of deposit	8,641		—		—		8,641		—		8,641		—		—
Commercial paper	4,399		—		—		4,399		1,800		—		2,599
Corporate debt	28,586		124		—		28,710		—		—		22,529		6,181
Subtotal	41,626		124		—		41,750		1,800		8,641		25,128		6,181
Total assets	$	174,776	$	192	$	—	$	174,968	$	121,848	$	15,558	$	31,381	$	6,181


As of March 31, 2020	Amortized Costs		Gross Unrealized Gain		Gross Unrealized Loss		Estimated Fair Value		Cash and Cash Equivalents		Restricted Cash (Current & Non-Current)		Short-Term Investments		Long-Term Investments
Cash	$	31,378	$	—	$	—	$	31,378	$	21,002	$	10,376	$	—	$	—
Level 1:
Money market funds	110,796		—		—		110,796		110,796		—		—		—
Treasury securities	6,192		116		—		6,308		—		—		—		6,308
Subtotal	148,366		116		—		148,482		131,798		10,376		—		6,308
Level 2:
Certificate of deposit	8,641		—		—		8,641		—		8,641		—		—
Commercial paper	14,979		6		—		14,985		5,596		—		9,389		—
Corporate debt	34,153		32		(341)		33,844		—		—		24,069		9,775
Subtotal	57,773		38		(341)		57,470		5,596		8,641		33,458		9,775
Total assets	$	206,139	$	154	$	(341)	$	205,952	$	137,394	$	19,017	$	33,458	$	16,083


	September 30, 2020						March 31, 2020
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Developed technology	$	33,952	$	(19,182)	$	14,770	$	33,932	$	(16,312)	$	17,620
Customer relationships	11,614		(6,425)		5,189		11,409		(5,412)		5,997
Trade and domain names	986		(986)		—		983		(599)		384
Total acquired identifiable intangible assets	$	46,552	$	(26,593)	$	19,959	$	46,324	$	(22,323)	$	24,001


Remainder of 2021	$	2,829
2022	4,708
2023	3,156
2024	2,851
2025	2,851
Thereafter	3,564
Total	$	19,959


Balance at March 31, 2020	$	128,300
Foreign currency translation adjustments	1,852
Balance at September 30, 2020	$	130,152


Weighted average remaining lease term						8.6 years
Weighted average discount rate						4.0%


Remainder of 2021	$	5,631
2022	16,193
2023	15,007
2024	11,766
2025	11,429
Thereafter	58,122
Total lease payments	$	118,148
Less: imputed interest	(19,542)
Less: lease incentives receivable	(1,646)
Present value of lease liabilities	$	96,960


			FORM			10-Q


	September 30, 2020		March 31, 2020
Principal	$	362,500	$	362,500
Unamortized debt discount	(61,786)		(69,987)
Unamortized issuance costs	(861)		(976)
Net carrying amount	$	299,853	$	291,537


	Six Months Ended September 30,
	2020		2019
Stock awards outstanding at the beginning of the period:	9,191		7,820
Stock awards granted	5,343		5,123
Stock awards vested	(2,498)		(1,945)
Stock awards canceled and forfeited	(564)		(663)
Stock awards outstanding at the end of the period:	11,472		10,335
Weighted-average fair value of grants during the period	$	15.75	$	22.35
Weighted-average remaining recognition period (in years)	1.96		2.28
Total unrecognized compensation expense at period-end	$	144,066	$	127,540


	Six Months Ended September 30,
	2020		2019
Stock options outstanding at the beginning of the period:	2,274		3,114
Options granted	—		—
Options exercised	(36)		(287)
Options canceled and forfeited	(28)		(39)
Options outstanding at the end of the period:	2,210		2,788
Weighted-average fair value of grants during the period	$	—	$	—
Total intrinsic value of options exercised during the period	$	302	$	3,726
Weighted-average remaining recognition period (in years)	1.54		2.32
Total unrecognized compensation expense at period-end	$	671	$	1,268


	Three Months Ended September 30,				Six Months Ended September 30,
Revenue by geographic area:	2020		2019		2020		2019
United States	$	96,105	$	85,428	$	189,349	$	168,676
International	33,028		24,089		61,591		37,516
Total revenue	$	129,133	$	109,517	$	250,940	$	206,192


Property and equipment by geographic area:	September 30, 2020		March 31, 2020
United States	$	90,493	$	87,673
International	5,692		6,709
Total property and equipment, net	$	96,185	$	94,382


Exhibit Number						Description
3.1						Restated Certificate of Incorporation of Registrant, dated August 22, 2012 (incorporated by reference to Exhibit 3.1 to the Annual Report on Form 10-K filed May 27, 2013).
3.2						Amended and Restated By-Laws of 8x8, Inc. (incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K filed July 28, 2015).
4.1						Indenture, dated as of February 19, 2019, between 8x8, Inc. and Wilmington Trust, National Association, as trustee (including form of Note) (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed February 19, 2019).
10.1						8x8, Inc. Amended and Restated 2012 Equity Incentive Plan, effective July 27 , 2020.*+
10.2						8x8, Inc. Amended and Restated 2017 New Employee Inducement Incentive Plan, effective July 27, 2020.*+
10.3						8x8, Inc. Amended and Restated 2013 New Employee Inducement Incentive Plan, effective July 27, 2020.*+
10.4						8x8, Inc. Amended and Restated 1996 Employee Stock Purchase Plan, effective August 10, 2020.*+
10.5						Form of Notice of Grant of Restricted Stock Unit Award and Agreement under the Amended & Restated 2012 Equity Incentive Plan.*+
31.1						Certification of Chief Executive Officer pursuant to Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2						Certification of Chief Financial Officer pursuant to Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1						Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2						Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101						The following materials from the 8x8, Inc. Quarterly Report on Form 10-Q for the quarter ended June 30, 2020, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets as of June 30, 2020 and March 31, 2020; (ii) Condensed Consolidated Statements of Operations for the three months ended June 30, 2020 and 2019; (iii) Condensed Consolidated Statements of Comprehensive Loss for the three months ended June 30, 2020 and 2019; (iv) Condensed Consolidated Statements of Stockholders' Equity for the three months ended June 30, 2020 and 2019; (v) Condensed Consolidated Statements of Cash Flows for the three months ended June 30, 2020 and 2019; and (vi) notes to unaudited condensed consolidated financial statements.
104						Cover Page Interactive Data File, formatted in iXBRL and contained in Exhibit 101.



*			Management contract or compensatory plan or arrangement.
+			Furnished herewith.


			8X8, INC.

			By: /s/ Samuel Wilson
			Samuel Wilson
			Chief Financial Officer (Principal Financial, Accounting and Duly Authorized Officer)


Name of Participant:			%%FIRST_NAME%-% %%LAST_NAME%-%
Award Date:			%%OPTION_DATE,’Month DD, YYYY’%-%
Number of RSUs (at 100% of Attainment):			%%TOTAL_SHARES_GRANTED%-%
Vesting Commencement Date:			%%VEST_BASE_DATE,’Month DD, YYYY’%-%
Vesting Terms:


Employee Name:			%%FIRST_NAME%-% %%LAST_NAME%-%
Employee ID #:			%%EMPLOYEE_IDENTIFIER%-%
Address:			%%ADDRESS_LINE_1%-%, %%ADDRESS_LINE_2%-%
City			%%CITY%-%
State & ZIP			%%STATE%-% %%ZIPCODE%-%
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October 29, 2020

/s/ VIKRAM VERMA
Vikram Verma
Chief Executive Officer


October 29, 2020

/s/ SAMUEL WILSON
Samuel Wilson
Chief Financial Officer
(Principal Financial, Accounting and Duly Authorized Officer)