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目錄
美國
證券交易委員會
華盛頓特區20549
表格
10-Q
☒ 根據1934年證券交易法第13或15(d)條款的季度報告。
截至2024年6月30日季度結束 2024年9月30日
或
☐ 根據1934年證券交易所法案第13或15(d)條進行的過渡報告
在________到________的過渡期間
委員會文件號碼： 001-38312
_________________
8x8_RedSquare_Logo_RGB_130x130.jpg
8x8, INC.
(根據其章程規定的註冊人正式名稱)
_________________
特拉華州77-0142404
（註冊或組織的州或其他司法管轄區）（國稅局雇主身份識別號碼）
675 Creekside Way
坎貝爾, 加州 CA 95008
(總部辦公地址)
(408) 727-1885
(註冊公司之電話號碼，包括區號)
_________________
根據法案第12(b)條規定註冊的證券：
每種類別的名稱交易符號每個註冊交易所的名稱
普通股，每股面值為$0.001逐筆明細納斯達克全球貨幣選擇市場
請勾選表示：（1）申報人是否已在過去12個月（或申報人需要提交報告的較短期間）依據1934年證券交易法第13條或第15條（d）的所有要求提交了應提交的所有報告；以及（2）申報人是否在過去90天內一直受到此類報告要求的約束。    ☒ 是    ☐ 沒有
請勾選表示：申報人在過去12個月內(或其應當提交此类文件的縮短期間內)，是否已提出每份互動數據文件，該提交根據Regulation S-t第405條規定(本章232.405條)。是  ☒    無☐
請以核對標記表明是否登記人屬於大幅增長的申報人、加速增長的申報人、非加速增長的申報人、較小的申報公司或新興增長公司。請參見《交易所法》第120億2條中「大幅增長的申報人」、「加速增長的申報人」、「較小的申報公司」和「新興增長公司」的定義。.
大型加速歸檔人☐加速歸檔人☒
非加速歸檔人☐小型報告公司☒
新興成長型企業☐
如果一家新興成長公司，請諮詢標記，該登記公司是否選擇不使用根據《交易所法》第13(a)條提供的任何新的或修改過的財務會計準則的延長過渡期來遵守。  ☐
請用核選標記指示登記人是否為外殼公司（正如《交易所法》120億2規則所定義）。是    ☐    沒有    ☒
截至2024年10月31日，登記人普通股的流通股份數量為 130,660,747.

目錄
8X8, INC.
第10-Q表格季度報告目錄
2024年9月30日結束的季度
頁面
綜合損益簡明綜合損益表

1
目錄
前瞻性聲明和風險因素
本十份季度報告表格10-Q或本「季度報告」中的聲明，關於我們的期望、信念、估計、意圖或策略均屬於《1933 年證券法》第 27A 條（「證券法」）和《1934 年證券交易法》第 21E 條修訂（「交易法」）意義內的前瞻性陳述。此處所含的任何非歷史事實陳述可視為前瞻性陳述。例如，如「可能」、「將」、「應該」、「估計」、「預測」、「潛在」、「持續」、「策略」、「相信」、「預期」、「計劃」、「期望」、「意圖」及類似表達都旨在識別前瞻性陳述。這些前瞻性陳述包括但不限於以下方面的陳述：行業趨勢；客戶數量；每客戶年度服務收入；服務收入成本；服務收益增長；研究和發展費用；與我們持續增長計劃相關的成本；員工招聘；銷售和行銷費用；單位成本和成本降低；毛利率；未來期間的一般和行政費用；流動性；負債；資本；現金、現金等價物和投資餘額；預期現金流量；運營效率；以及COVID-19 疫情的持續影響。您不應過度依賴這些前瞻性陳述。實際結果和趨勢可能因各種因素與歷史結果及任何此類前瞻性陳述預測有實質不同。這些因素包括但不限於：
•經濟衰退對我們和客戶的影響；
•成本上漲、一般通膨壓力、以及供應鏈短缺和干擾對我們的營業費用產生的影響；
•與我們的延後動用條款貸款設施和到期於2028年的可轉換優先票據相關的風險，包括增加的利息支出對我們的股價影響以及未來偿还或再融資的時機。
•客戶取消和客戶流失率；
•政治和經濟環境持續不穩，包括俄羅斯入侵烏克蘭和中東衝突的影響，以及任何相關的宏觀經濟影響；
•客戶對我們的新舊雲通訊和協作服務以及功能的接受程度和需求，包括語音、聯絡中心、視訊、消息和通訊應用程式編程接口；
•市場競爭壓力，以及我們參與市場的競爭動態所發生的任何變化；
•我們服務的質量和可靠性；
•我們擴展業務的能力；
•客戶獲取成本；
•我們依賴一個由經銷夥伴組成的網絡來提供大量新客戶需求；
•提高營運業績時間與幅度，來自於對市場、銷售和研發支出的增加；
•招聘、培訓、整合新員工及留住現有員工所需的成本數量和時機；
•our reliance on infrastructure of third-party network service providers;
•risk of failure in our physical infrastructure;
•risk of defects or bugs in our software;
•risk of cybersecurity breaches;
•our ability to maintain the compatibility of our software with third-party applications and mobile platforms;
•continued compliance with industry standards and regulatory and privacy requirements, globally;
•introduction and adoption of our cloud software solutions in markets outside of the United States;
•risks that any reduction in spending may not achieve the desired result or may result in a reduction in revenue;
•risks relating to the acquisition and integration of businesses we have acquired or may acquire in the future, including most recently, Fuze, Inc.;
•risks related to the fluctuations in the value of the United States Dollar and other currencies that underlie our business transactions;
•risks related to our substantial amount of indebtedness, which could have important consequences to our business;
•potential future intellectual property infringement claims and other litigation that could adversely impact our business and operating results; and
•the instability in the banking system in recent years, which could adversely impact our operations and operating results.
Please refer to the "Risk Factors" section of our annual report on Form 10-K for the fiscal year ended March 31, 2024 (the "Form 10-K") and subsequent Securities and Exchange Commission ("SEC") filings for additional factors that could materially affect our financial performance. All forward-looking statements included in this Quarterly Report are based on information available to us on the date hereof, and we assume no obligation to update any such forward-looking statements. Readers are urged to carefully review and consider the various disclosures made in this Quarterly Report, which attempts to advise interested parties of the risks and factors that may affect our business, financial condition, results of operations and prospects.
Our fiscal year ends on March 31 of each calendar year. Each reference to a fiscal year in this Quarterly Report refers to the fiscal year ended March 31 of the calendar year indicated (for example, fiscal year 2025 refers to the fiscal year ended March 31, 2025). Unless the context requires otherwise, references to "we," "us," "our," "8x8," and the "Company" refer to 8x8, Inc. and its consolidated subsidiaries.
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PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
8X8, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands, except share and per share amounts)

September 30, 2024March 31, 2024
ASSETS
Current assets:
Cash and cash equivalents$117,405 $116,262 
Restricted cash462 356 
Short-term investments— 1,048 
Accounts receivable, net64,567 58,979 
Deferred sales commission costs34,107 35,933 
Other current assets29,810 35,258 
Total current assets246,351 247,836 
Property and equipment, net50,364 53,181 
Operating lease, right-of-use assets34,825 35,924 
Intangible assets, net76,519 86,717 
Goodwill269,229 266,574 
Restricted cash, non-current— 105 
Deferred sales commission costs, non-current48,711 52,859 
Other assets, non-current14,127 12,783 
Total assets$740,126 $755,979 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable$51,261 $48,862 
Accrued and other liabilities68,783 78,102 
Operating lease liabilities11,707 11,295 
Deferred revenue37,696 34,325 
Term loan, current39,393 — 
Total current liabilities208,840 172,584 
Operating lease liabilities, non-current52,785 56,647 
Deferred revenue, non-current6,594 7,810 
Convertible senior notes, non-current198,300 197,796 
Term loan159,194 211,894 
Other liabilities, non-current4,601 7,290 
Total liabilities630,314 654,021 
Commitments and contingencies (Note 7)
Stockholders' equity:
Preferred stock: $0.001 par value, 5,000,000 shares authorized, none issued and outstanding as of September 30, 2024 and March 31, 2024
— — 
Common stock: $0.001 par value, 300,000,000 shares authorized, 130,516,596 shares and 125,193,573 shares issued and outstanding as of September 30, 2024 and March 31, 2024, respectively
131 125 
Additional paid-in capital998,572 973,895 
Accumulated other comprehensive loss(3,549)(11,553)
Accumulated deficit(885,342)(860,509)
Total stockholders' equity109,812 101,958 
Total liabilities and stockholders' equity$740,126 $755,979 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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8X8, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Unaudited, in thousands except per share amounts)
 Three Months Ended September 30,Six Months Ended September 30,
 2024202320242023
Service revenue$175,075 $177,782 $347,876 $353,020 
Other revenue5,923 7,217 11,269 15,266 
Total revenue180,998 184,999 359,145 368,286 
Cost of service revenue50,251 49,144 99,747 95,420 
Cost of other revenue7,572 7,958 15,263 16,356 
Total cost of revenue57,823 57,102 115,010 111,776 
Gross profit123,175 127,897 244,135 256,510 
Operating expenses:
Research and development31,291 34,207 63,428 69,499 
Sales and marketing64,867 68,687 131,973 137,191 
General and administrative19,848 27,586 42,939 53,812 
Total operating expenses116,006 130,480 238,340 260,502 
Income (loss) from operations7,169 (2,583)5,795 (3,992)
Interest expense(7,905)(10,061)(17,861)(20,139)
Other income (expense), net(12,709)4,803 (10,993)2,407 
Loss before provision (benefit) for income taxes(13,445)(7,841)(23,059)(21,724)
Provision (benefit) for income taxes1,098 (389)1,774 1,055 
Net loss$(14,543)$(7,452)$(24,833)$(22,779)
Net loss per share:
Basic and diluted$(0.11)$(0.06)$(0.19)$(0.19)
Weighted average number of shares:
Basic and diluted129,250 120,757 127,633 118,778 
Comprehensive loss
Net loss$(14,543)$(7,452)$(24,833)$(22,779)
Unrealized gain (loss) on investments in securities— 7 (5)297 
Foreign currency translation adjustment8,363 (4,320)8,009 (2,879)
Comprehensive loss$(6,180)$(11,765)$(16,829)$(25,361)
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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8X8, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Unaudited, in thousands)
 Common StockAdditional
Paid-in
Capital		Accumulated
Other
Comprehensive
Loss		Accumulated
Deficit		Total
 SharesAmount
Balance at March 31, 2024125,194 $125 $973,895 $(11,553)$(860,509)$101,958 
Issuance of common stock under stock plans, less withholding2,769 3 (3)— — — 
Stock-based compensation expense— — 13,279 — — 13,279 
Unrealized investment loss— — — (5)— (5)
Foreign currency translation adjustment— — — (354)— (354)
Net loss— — — — (10,290)(10,290)
Balance at June 30, 2024127,963 $128 $987,171 $(11,912)$(870,799)$104,588 
Issuance of common stock under stock plans, less withholding1,479 2 (2)— — — 
ESPP share issuance1,075 1 1,682 — — 1,683 
Stock-based compensation expense— — 9,721 — — 9,721 
Foreign currency translation adjustment— — — 8,363 — 8,363 
Net loss— — — — (14,543)(14,543)
Balance at September 30, 2024130,517 $131 $998,572 $(3,549)$(885,342)$109,812 
 Common StockAdditional
Paid-in
Capital		Accumulated
Other
Comprehensive
Loss		Accumulated
Deficit		Total
 SharesAmount
Balance at March 31, 2023114,659 $115 $905,635 $(12,927)$(792,917)$99,906 
Issuance of common stock under stock plans, less withholding3,535 3 (3)— — — 
Stock-based compensation expense— — 18,559 — — 18,559 
Issuance of common stock under stock plans, less withholding, related to Fuze Acquisition1,038 1 (1)— — — 
Unrealized investment gain— — — 290 — 290 
Foreign currency translation adjustment— — — 1,441 — 1,441 
Net loss— — — — (15,327)(15,327)
Balance at June 30, 2023119,232 $119 $924,190 $(11,196)$(808,244)$104,869 
Issuance of common stock under stock plans, less withholding1,784 2 (2)— — — 
ESPP share issuance843 1 2,365 2,366 
Stock-based compensation expense— — 14,940 — — 14,940 
Unrealized investment gain— — — 7 — 7 
Foreign currency translation adjustment— — — (4,320)— (4,320)
Net loss— — — — (7,452)(7,452)
Balance at September 30, 2023121,859 $122 $941,493 $(15,509)$(815,696)$110,410 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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8X8, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
 Six Months Ended September 30,
20242023
Cash flows from operating activities:
Net loss$(24,833)$(22,779)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation3,756 4,090 
Amortization of intangible assets10,198 10,198 
Amortization of capitalized internal-use software costs7,022 10,061 
Amortization of debt discount and issuance costs1,718 2,240 
Amortization of deferred sales commission costs19,697 20,099 
Allowance for credit losses1,269 993 
Operating lease expense, net of accretion6,038 5,109 
Stock-based compensation expense22,177 32,717 
Loss on debt extinguishment11,996 1,766 
Gain on remeasurement of warrants(2,010)(2,531)
Other(3,626)52 
Changes in assets and liabilities:
Accounts receivable, net(5,314)299 
Deferred sales commission costs(12,447)(12,068)
Other current and non-current assets850 (1,306)
Accounts payable and accruals(8,886)(2,934)
Deferred revenue2,860 (2,070)
Net cash provided by operating activities30,465 43,936 
Cash flows from investing activities:
Purchases of property and equipment(1,589)(1,558)
Capitalized internal-use software costs(5,892)(7,442)
Purchase of investments— (6,174)
Purchase of cost investment(771)— 
Maturities of investments1,048 27,909 
Net cash (used in) provided by investing activities(7,204)12,735 
Cash flows from financing activities:
Proceeds from issuance of common stock under employee stock plans1,682 2,365 
Payments for debt issuance costs(1,114)— 
Repayment of principal on term loan(225,000)(25,000)
Gross proceeds from term loan200,000 — 
Other financing activities(704)— 
Net cash used in financing activities(25,136)(22,635)
Effect of exchange rate changes on cash3,019 (1,752)
Net increase in cash and cash equivalents1,144 32,284 
Cash, cash equivalents and restricted cash, beginning of year116,723 112,729 
Cash, cash equivalents and restricted cash, end of period$117,867 $145,013 
Supplemental and non-cash disclosures:
Six Months Ended September 30,
20242023
Interest paid$16,324 $17,799 
Income taxes paid$2,386 $3,118 
Payables and accruals for property and equipment$3,207 $— 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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8X8, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — UNAUDITED
1. THE COMPANY AND SIGNIFICANT ACCOUNTING POLICIES
THE COMPANY
8x8, Inc. ("8x8" or the "Company") was incorporated in California in February 1987 and was reincorporated in Delaware in December 1996. The Company trades under the symbol "EGHT" on the Nasdaq Global Select Market.
The Company is a leading Software-as-a-Service ("SaaS") provider of contact center, voice, video, chat, and enterprise-class API solutions powered by one global cloud communications platform. 8x8 empowers workforces worldwide by connecting individuals and teams, so they can collaborate faster and work smarter from anywhere. 8x8 provides real-time business analytics and intelligence, giving its customers unique insights across all interactions and channels on its platform, so they can support a distributed and hybrid working model while delighting their end-customers and accelerating their business. A majority of all revenue is generated from communication services subscriptions and platform usage. The Company also generates revenue from sales of hardware and professional services, which are complementary to the delivery of its integrated technology platform.
BASIS OF PRESENTATION AND CONSOLIDATION
The accompanying condensed consolidated financial statements are unaudited and have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") and regulations of the Securities and Exchange Commission ("SEC") regarding interim financial reporting. Accordingly, certain information and disclosures normally included in the Company's annual consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements as of and for the fiscal year ended March 31, 2024 and notes thereto included in the Form 10-K. There were no material changes during the three and six months ended September 30, 2024 to the Company's significant accounting policies as described in the Form 10-K.
The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The Company conducts its operations through one reportable segment.
In the opinion of the Company's management, these condensed consolidated financial statements reflect all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair statement of the Company's financial position, results of operations and cash flows for the periods presented. The results of operations for the interim periods presented are not necessarily indicative of the results to be expected for any subsequent quarter or for the entire year ending March 31, 2025.
CHANGE IN REPORTING PRESENTATION
Historically, cost of revenue and cost of other revenue have been presented within operating expenses. During the fourth quarter of fiscal year 2024, the Company made voluntary changes in accounting presentation and reclassified prior period amounts to conform to current year presentation to separately state cost of revenue, cost of other revenue and recognize gross profit on the Company's condensed consolidated statement of operations.
Historically, interest expense has been presented within other income (expense), net. During the second quarter of fiscal year 2025, the Company made voluntary changes in accounting presentation and reclassified prior period amounts to conform to current year presentation to separately state interest expense on the Company's condensed consolidated statement of operations.
USE OF ESTIMATES
The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and equity, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, the Company evaluates its estimates, including, but not limited to, those related to current expected credit losses, returns reserve for expected cancellations, fair value of and/or potential impairment of goodwill and value and useful life of long-lived assets (including intangible assets, right-of-use assets and cost investments), capitalized internal-use software costs, benefit period for deferred commissions, stock-based compensation, incremental borrowing rate used to calculate operating lease liabilities, income and sales tax liabilities, convertible senior notes and warrant fair value, litigation, and other contingencies. The Company bases its estimates on known facts and circumstances, historical experience, and various other assumptions. Actual results could differ from those estimates under different assumptions or conditions.

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RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS NOT YET ADOPTED
In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires disclosure of incremental segment information on an annual and interim basis. This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, and requires retrospective application to all prior periods presented in the financial statements. The Company is currently evaluating the impact that this guidance will have on the presentation of its condensed consolidated financial statements and accompanying notes.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which expands disclosures in an entity’s income tax rate reconciliation table and disclosures regarding cash taxes paid both in the U.S. and foreign jurisdictions. The update will be effective for annual periods beginning after December 15, 2024. The Company is currently evaluating the impact that this guidance will have on the presentation of its condensed consolidated financial statements and accompanying notes.
In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses (Topic 220): Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures, which requires companies to disclose additional information about specific expense categories in the notes to financial statements. The update will be effective for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. The Company is currently evaluating the impact that this guidance will have on the presentation of its condensed consolidated financial statements and accompanying notes.
There have been no other recent accounting pronouncements, changes in accounting pronouncements or recently adopted accounting guidance during the six months ended September 30, 2024 that are of significance or potential significance to us.
2. REVENUE RECOGNITION
Disaggregation of Revenue
The Company disaggregates its revenue by geographic region. See Note 12, Geographical Information.
Contract Balances
The following table provides amounts of contract assets and deferred revenue from contracts with customers (in thousands):
September 30, 2024March 31, 2024
Contract assets, current (component of Other current assets)$8,103 $9,453 
Contract assets, non-current (component of Other assets)7,906 7,879 
Deferred revenue, current37,696 34,325 
Deferred revenue, non-current6,594 7,810 
Contract assets are recorded for contract consideration not yet invoiced but for which the performance obligations are completed. Contract assets, net of allowances for credit losses, are included in other current assets or other assets in the Company's consolidated balance sheets, depending on if their reduction will be recognized during the succeeding twelve-month period or beyond. The allowance applied to our contract assets as of March 31, 2024 and 2023 and the activity in this account, including the current-period provision for expected credit losses for the six months ended September 30, 2024 and 2023, were not material. Contract assets are transferred to accounts receivable when the right to invoice becomes unconditional.
During the six months ended September 30, 2024 and 2023, the Company recognized revenues of approximately $27.1 million and $28.6 million that were included in deferred revenue at the beginning of the fiscal year, respectively.
Remaining Performance Obligations
The Company's subscription terms typically range from one to five years. Contract revenue from the remaining performance obligations that had not yet been recognized as of September 30, 2024 was approximately $800.0 million. This amount excludes contracts with an original expected length of less than one year. The Company expects to recognize revenue on approximately 87% of the remaining performance obligations over the next 24 months and approximately 13% over the remainder of the subscription period.
Deferred Sales Commission Costs
Amortization of deferred sales commission costs for the three months ended September 30, 2024 and 2023 was approximately $9.9 million and $10.1 million, respectively, and $19.7 million and $20.1 million during the six months ended September 30, 2024 and 2023, respectively.
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3. FAIR VALUE MEASUREMENTS
Cash, cash equivalents, and available-for-sale investments were as follows (in thousands):
As of September 30, 2024Amortized
Costs		Gross
Unrealized
Gain		Gross
Unrealized Loss		Estimated
Fair Value		Cash and Cash EquivalentsRestricted Cash
(Current)		Short-Term
Investments
Cash$89,771 $— $— $89,771 $89,771 $— $— 
Level 1:
Money market funds28,096 — — 28,096 27,634 462 — 
Total assets$117,867 $— $— $117,867 $117,405 $462 $— 
As of March 31, 2024Amortized
Costs		Gross
Unrealized
Gain		Gross
Unrealized Loss		Estimated
Fair Value		Cash and Cash EquivalentsRestricted Cash
(Current & Non-current)		Short-Term
Investments
Cash$53,943 $— $— $53,943 $53,943 $— $— 
Level 1:
Money market funds37,633 — — 37,633 37,172 461 — 
Subtotal91,576 — — 91,576 91,115 461 — 
Level 2:
Term deposit25,147 — — 25,147 25,147 — — 
Commercial paper1,049 — (1)1,048 — — 1,048 
Subtotal26,196 — (1)26,195 25,147 — 1,048 
Total assets$117,772 $— $(1)$117,771 $116,262 $461 $1,048 
As of September 30, 2023, cash, cash equivalents and restricted cash of $145.0 million included $144.0 million, $0.5 million, and $0.5 million of cash and cash equivalents, restricted cash and non-current restricted cash, respectively.
To support its current operations, the Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. The restricted cash component of the money market funds is comprised of letters of credit securing leases for certain office facilities.
The Company uses the Black-Scholes option-pricing valuation model to value its detachable warrants from inception and at each reporting period. During the three months ended September 30, 2024, the Company used historical volatility to determine the fair value of the warrants liability due to the low trading volume and moneyness assessment as of September 30, 2024. Changes in the fair values of the detachable warrants liability are recorded as loss on warrants remeasurement within Other (expense) income, net in the condensed consolidated statements of operations.
The following table presents additional information about valuation techniques and inputs used for the detachable warrants (see Note 8, Convertible Senior Notes and Term Loan) that are measured at fair value and categorized within Level 3 as of September 30, 2024 and March 31, 2024 (dollars in thousands):
September 30, 2024March 31, 2024
Estimated fair value of detachable warrants$1,311$3,321
Unobservable inputs:
Stock volatility76.3 %87.2 %
Risk-free rate3.6 %4.3 %
Expected term2.9 years3.4 years
As of September 30, 2024 and March 31, 2024, the estimated fair value of the Company’s convertible senior notes due in 2028 was $147.4 million and $161.7 million, respectively (see Note 8, Convertible Senior Notes and Term Loan). The fair value of the convertible senior notes was determined based on the closing price of each of the securities on the last trading day of the reporting period, and each is Level 2 in the fair value hierarchy due to limited trading activity of the debt instruments. As of September 30, 2024 and March 31, 2024, the carrying value of the Company’s 2024 Term Loan approximates its estimated fair value.
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4. FINANCIAL STATEMENT COMPONENTS
Accounts receivable, net consisted of the following (in thousands):
September 30, 2024March 31, 2024
Trade accounts receivable$65,672 $59,757 
Unbilled trade accounts receivable3,397 4,470 
Less: allowance for credit losses(2,227)(2,746)
Less: allowance for sales reserves(2,275)(2,502)
Total accounts receivable, net$64,567 $58,979 
Allowance for credit losses and sales reserves consisted of the following (in thousands):
Six Months Ended September 30, 2024Year Ended March 31, 2024
Credit LossesSales ReservesCredit LossesSales Reserves
Beginning balance$(2,746)$(2,502)$(3,644)$(3,218)
Reserve(438)(1,457)(1,969)(3,581)
Write-offs957 1,684 2,867 4,297 
Ending balance$(2,227)$(2,275)$(2,746)$(2,502)
Other current assets consisted of the following (in thousands):
September 30, 2024March 31, 2024
Prepaid expense$16,810 $18,172 
Contract assets, current8,103 9,453 
Other current assets4,897 7,633 
Total other current assets$29,810 $35,258 
Accrued and other liabilities consisted of the following (in thousands):
September 30, 2024March 31, 2024
Accrued compensation$18,031 $19,550 
Accrued taxes30,849 44,096 
Other accrued liabilities19,903 14,456 
Total accrued and other liabilities$68,783 $78,102 
Other income (expense), net consisted of the following (in thousands):
Three Months Ended September 30,Six Months Ended September 30,
2024202320242023
Loss on debt extinguishment$(11,996)$— $(11,996)$(1,766)
Gain on warrants remeasurement263 2,781 2,010 2,531 
Interest income936 603 1,977 1,238 
Other income (expense)(1,912)1,419 (2,984)404 
Other income (expense), net$(12,709)$4,803 $(10,993)$2,407 
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5. INTANGIBLE ASSETS AND GOODWILL
The carrying value of intangible assets consisted of the following (in thousands):
 September 30, 2024March 31, 2024
Gross
Carrying
Amount		Accumulated
Amortization		Net Carrying
Amount		Gross
Carrying
Amount		Accumulated
Amortization		Net Carrying
Amount
Developed technology$46,481 $(41,084)$5,397 $46,454 $(36,823)$9,631 
Customer relationships105,839 (34,717)71,122 105,827 (28,741)77,086 
Trade names and domains587 (587)— 584 (584)— 
Total acquired identifiable intangible assets$152,907 $(76,388)$76,519 $152,865 $(66,148)$86,717 
As of September 30, 2024, the weighted average remaining useful lives for developed technology and customer relationships were 1.2 years and 6.2 years, respectively. The annual amortization of the Company's intangible assets, based upon existing intangible assets and current useful lives, is estimated to be as follows (in thousands):
Remainder of fiscal year 2025$8,898 
202613,895 
202711,757 
202811,044 
2029 and thereafter30,925 
Total$76,519 
The following table provides a summary of the changes in the carrying amounts of goodwill (in thousands):
Balance as of March 31, 2024$266,574 
Foreign currency translation2,655 
Balance as of September 30, 2024$269,229 
6. LEASES
The components of lease expense were as follows (in thousands):
Three Months Ended September 30,Six Months Ended September 30,
2024202320242023
Operating lease expense$2,873 $2,602 $6,038 $5,109 
Variable lease expense$967 $1,018 $2,048 $2,099 
The supplemental cash flow information related to leases was as follows (in thousands):
Three Months Ended September 30,Six Months Ended September 30,
2024202320242023
Cash outflows from operating leases$3,653 $3,639 $7,395 $7,279 
Right-of-use assets obtained in exchange for operating lease obligations$— $2,311 $1,954 $2,311 
Short-term lease expense was immaterial during the six months ended September 30, 2024 and 2023.
The following table presents supplemental lease information:
September 30, 2024March 31, 2024
Weighted average remaining lease term5.7 years6.2 years
Weighted average discount rate4.5%4.3%
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The following table presents maturity of lease liabilities under the Company's non-cancellable operating leases as of September 30, 2024 (in thousands):
Remainder of fiscal year 2025$7,254 
202613,752 
202712,166 
202810,666 
202910,488 
Thereafter18,434 
Total lease payments72,760 
Less: imputed interest(8,268)
Present value of lease liabilities$64,492 
7. COMMITMENTS AND CONTINGENCIES
Indemnifications
In the normal course of business, the Company may agree to indemnify other parties, including customers, lessors, and parties to other transactions with the Company with respect to certain matters, such as breaches of representations or covenants or intellectual property infringement or other claims made by third parties. These agreements may limit the time within which an indemnification claim can be made and the amount of the claim. In addition, the Company has entered into indemnification agreements with its officers and directors.
It is not possible to determine the maximum potential amount of the Company's exposure under these indemnification agreements due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each agreement. Historically, payments made by the Company under these agreements have not had a material impact on the Company's operating results, financial position, or cash flows. Under some of these agreements, however, the Company's potential indemnification liability may not have a contractual limit.
Operating Leases
The Company's lease obligations consist of the Company's principal facility and various leased facilities under operating lease agreements. During the six months ended September 30, 2024, a material international operating lease commenced related to an international office building. See Note 6, Leases, in the Company's Annual Report on Form 10-K for more information on the Company's leases and the future minimum lease payments.
Purchase Obligations
The Company's purchase obligations include contracts with third-party customer support vendors and third-party network service providers. These contracts include minimum monthly commitments and the requirements to maintain the service level for several months.
During the three months ended September 30, 2024, the Company entered into a $24.1 million noncancelable three-year hosting service contract. Under this agreement, $7.1 million remains due during fiscal year 2025, $8.5 million will be due during fiscal year 2026, $6.0 million will be due during fiscal year 2027 and $2.5 million will be due during fiscal year 2028.
Legal Proceedings
The Company may be involved in various claims, lawsuits, investigations, and other legal proceedings, including intellectual property, commercial, regulatory compliance, securities, and employment matters that arise in the normal course of business. The Company determines whether an estimated loss from a contingency should be accrued by assessing whether a loss is deemed probable and can be reasonably estimated. The Company regularly evaluates current information to determine whether any accruals should be adjusted and whether new accruals are required. Actual claims could settle or be adjudicated against the Company in the future for materially different amounts than the Company has accrued due to the inherently unpredictable nature of litigation. Legal costs are expensed as incurred.
The Company believes it has recorded adequate provisions for any such lawsuits and claims and proceedings as of September 30, 2024. The Company believes that damage amounts claimed in these matters are not meaningful indicators of potential liability. Some of the matters pending against the Company involve potential compensatory, punitive, or treble damage claims or sanctions, that, if granted, could require the Company to pay damages or make other expenditures in amounts that could have a material adverse effect on its consolidated financial statements. Given the inherent uncertainties of litigation, the ultimate outcome of the ongoing matters described herein cannot be predicted, and the Company believes it has valid defenses with respect to the legal matters pending against it. Nevertheless, the consolidated financial statements could be materially adversely affected in a particular period by the resolution of one or more of these contingencies.
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State and Local Taxes and Surcharges
From time to time, the Company has received inquiries from a number of state and local taxing agencies with respect to the remittance of sales, use, telecommunications, excise, and income taxes. Several jurisdictions currently are conducting tax audits of the Company's records. The Company collects or has accrued amounts for taxes that it believes are required to be remitted. The amounts that have been remitted have historically been within the accruals established by the Company. The Company adjusts its accrual when facts relating to specific exposures warrant such adjustment. The Company periodically reviews the taxability of its services and determined that certain services may be subject to sales, use, telecommunications or other similar indirect taxes in certain jurisdictions. A similar review was performed on the taxability of services provided by Fuze, Inc., and it was determined that certain services may be subject to sales, use, telecommunications or other similar indirect taxes in certain jurisdictions. Accordingly, the Company recorded contingent indirect tax liabilities. As of March 31, 2024, the Company had accrued contingent indirect tax liabilities of $19.2 million, which included $5.6 million related to the Fuze Universal Service Fund (“USF”) matter discussed below which had been subsequently paid. As of September 30, 2024, the Company has accrued contingent indirect tax liabilities of $11.1 million.
FCC Investigation of 8x8, Inc. and Fuze, Inc.
On November 17, 2023, the Company received a letter of inquiry from the Enforcement Bureau of the Federal Communications Commission (the “FCC”) requesting certain information and supporting documents related to an investigation of potential violations by 8x8 and Fuze, Inc. in connection with certain prior period regulatory filings and payments. The Company has cooperated with the FCC in this matter and responded to the letter of inquiry. The Company subsequently received communications from the Universal Service Administrative Company (“USAC”), rejecting Fuze, Inc.'s previously filed 499-A returns for calendar years 2021 and 2022 and informing the Company that USAC would apply the safe harbor to Fuze revenues for those years for assessing Universal Service Fund ("USF") payments. The Company has since refiled the 499-A returns for calendar years 2021 and 2022 for Fuze, Inc., which have been subsequently accepted by USAC. On November 1, 2024, the Company entered into a Consent Decree with the FCC and considers this matter to be closed. See Note 14, “Subsequent Events".
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8. CONVERTIBLE SENIOR NOTES AND TERM LOAN
Components of convertible senior notes and term loans were as follows as of September 30, 2024 and March 31, 2024, respectively (in thousands):
September 30, 2024March 31, 2024
2024 Term Loan2022 Term Loan2028 NotesTotal2022 Term Loan2028 NotesTotal
Principal$200,000 $— $201,914 $401,914 $225,000 $201,914 $426,914 
Unamortized debt discount and issuance costs(1,413)— (3,614)(5,027)(13,106)(4,118)(17,224)
Net carrying amount$198,587 $— $198,300 $396,887 $211,894 $197,796 $409,690 
Current portion of long-term debt$39,393 $— $— $39,393 $— $— $— 
Non-current portion of long-term debt$159,194 $— $198,300 $357,494 $211,894 $197,796 $409,690 
Components of interest expense were as follows as of the three months ended September 30, 2024 and 2023, respectively (in thousands):
Three Months Ended September 30, 2024Three Months Ended September 30, 2023
2024 Term Loan2022 Term Loan2028 Notes2024 NotesTotal2022 Term Loan2028 Notes2024 NotesTotal
Contractual interest expense$2,619 $2,611 $2,019 $— $7,249 $6,592 $2,036 $80 $8,708 
Amortization of debt discount and issuance costs104 286 266 — 656 768 255 109 1,132 
Total interest expense$2,723 $2,897 $2,285 $— $7,905 $7,360 $2,291 $189 $9,840 
Components of interest expense were as follows as of the six months ended September 30, 2024 and 2023, respectively (in thousands):
Six Months Ended September 30, 2024Six Months Ended September 30, 2023
2024 Term Loan2022 Term Loan2028 Notes2024 NotesTotal2022 Term Loan2028 Notes2024 NotesTotal
Contractual interest expense$2,619 $9,466 $4,058 $— $16,143 $13,471 $4,050 $159 $17,680 
Amortization of debt discount and issuance costs104 1,110 504 — 1,718 1,542 482 216 2,240 
Total interest expense$2,723 $10,576 $4,562 $— $17,861 $15,013 $4,532 $375 $19,920 
The 2024 Term Loan (as defined below) is the Company’s senior secured obligation and ranks senior in right of payment to any of the Company’s indebtedness. The 2028 Notes are the Company’s senior unsecured obligation and rank junior in right of payment to any of the Company’s indebtedness in right of payment to the 2024 Term Loan.
2024 Delayed Draw Term Loan
On July 11, 2024, the Company entered into a new term loan credit agreement with Wells Fargo Bank, National Association, as administrative agent, and the lenders thereto (the “2024 Credit Agreement”). The 2024 Credit Agreement establishes a delayed draw term loan facility in an aggregate principal amount of up to $200.0 million maturing on August 15, 2027.
On August 5, 2024, the Company drew upon the entire facility of $200.0 million under the delayed draw term loan facility (the "2024 Term Loan") and used the proceeds of the 2024 Term Loan and cash on hand of approximately $29.0 million to repay in full the $225.0 million of outstanding principal amount and accrued interest of the 2022 Term Loan (defined below) and the fees incurred in connection with the repayment (the "Repayment"). For additional information, refer to the "2022 Term Loan and Warrants" section below.

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The 2024 Term Loan bears interest at an annual rate equal to Term SOFR, plus a margin of either 2.50%, 2.75% or 3.00% based on the consolidated total net leverage ratio of the Company and its subsidiaries. The initial margin will be 3.00% for the fiscal quarter ending September 30, 2024. The Company has the option to pay interest monthly, quarterly, or semi-annually. During the three months ended September 30, 2024, the Company elected monthly interest payment terms resulting in contractual interest expense of $2.6 million. The scheduled principal repayments of $22.5 million in fiscal year 2025 ($7.5 million on October 31, 2024, December 31, 2024 and March 31, 2025, respectively), $37.5 million in fiscal year 2026 ($7.5 million on June 30, 2025 and $10.0 million on September 30, 2025, December 31, 2025 and March 31, 2026, respectively), and $47.5 million in fiscal year 2027 ($10.0 million on June 30, 2026 and $12.5 million on September 30, 2026 and each quarter thereafter through maturity) are required, and the remaining $92.5 million principal is due before or upon maturity in fiscal year 2028. These annualized repayments will be made in quarterly installments. As of September 30, 2024, the debt issuance costs are amortized to interest expense over the term of the 2024 Term Loan at an effective interest rate of 8.76%.
The obligations under the 2024 Credit Agreement are guaranteed by the Company’s wholly-owned subsidiaries, subject to certain customary exceptions, and secured by a perfected security interest in substantially all of the Company’s tangible and intangible assets, as well as substantially all of the tangible and intangible assets of the guarantors.
Mandatory prepayments of the 2024 Term Loan are required to be made upon the occurrence of certain events, including, without limitation, (i) sales of certain assets, (ii) receipt of certain casualty and condemnation awards proceeds, and (iii) the incurrence of non-permitted indebtedness, subject to certain thresholds and reinvestment rights. Voluntary prepayments are permitted at any time without premium or penalty, subject to certain customary break funding payments.
The 2024 Credit Agreement contains a consolidated interest coverage ratio financial covenant, a maximum consolidated total net leverage ratio financial covenant and a maximum consolidated secured leverage ratio financial covenant, and contains affirmative and negative covenants customary for transactions of this type, including limitations with respect to share repurchases, indebtedness, liens, investments, dividends, disposition of assets, change in business, and transactions with affiliates. As of September 30, 2024, the Company was in compliance with all covenants set forth in the 2024 Credit Agreement.
2022 Term Loan and Warrants
As of March 31, 2024, the Company had $225.0 million of principal amount outstanding in a senior secured term loan facility (the “2022 Term Loan”) under a term loan credit agreement (the “2022 Credit Agreement”) entered into on August 3, 2022 with Wilmington Savings Fund Society, FSB, as administrative agent, and certain affiliates of Francisco Partners (“FP”). The 2022 Term Loan matured on August 3, 2027 and bore interest at an annual rate equal to the term Standard Overnight Financing Rate ("Term SOFR") (subject to a floor of 1.00% and a credit spread adjustment of 0.10%), plus a margin of 6.50%. Prior to the Repayment, the debt discount and debt issuance costs were amortized to interest expense over the term of the 2022 Term Loan at an effective interest rate of 11.9%.
Mandatory prepayments of the 2022 Term Loan were required to be made upon the occurrence of certain events, including, without limitation, (i) sales of certain assets, (ii) receipt of certain casualty and condemnation awards proceeds, and (iii) the incurrence of non-permitted indebtedness, subject to certain thresholds and reinvestment rights. Voluntary prepayments were permitted at any time, subject to certain prepayment premiums. On May 9, 2023, the Company voluntarily prepaid without penalty, $25.0 million of principal amount outstanding and $0.2 million of accrued interest on the 2022 Term Loan. The prepayment penalty of 2% on additional early prepayment of principal expired on August 3, 2024. This payment had no impact on the Company's compliance with the 2022 Term Loan covenants. Prior to the Repayment, the Company was in compliance with all covenants set forth in the 2022 Credit Agreement.
The obligations under the 2022 Credit Agreement were guaranteed by the Company’s wholly-owned subsidiaries, subject to certain customary exceptions, and secured by a perfected security interest in substantially all of the Company’s tangible and intangible assets, as well as substantially all of the tangible and intangible assets of the guarantors.
In connection with the 2022 Credit Agreement, the Company issued detachable warrants (the “Warrants”) to affiliates of FP to purchase an aggregate of 3.1 million shares of the Company’s common stock with a five-year term and an exercise price of $7.15 per share (subject to adjustment) that represents a 27.5% premium over the closing price per share of the Company’s common stock on August 3, 2022. The Warrants are classified as liabilities measured at fair value during each reporting period as the Warrants contain certain terms that could result in cash settlement as a result of events outside of the Company’s control. As of September 30, 2024 and March 31, 2024, the fair value of the Warrants was $1.3 million and $3.3 million, respectively, and was recorded within other liabilities, non-current on the condensed consolidated balance sheets. The subsequent changes in fair value were recorded through Other income (expense), net on the Company’s consolidated statement of operations. See Note 3, Fair Value Measurements, for further details.
On August 5, 2024, the Company repaid in full the outstanding principal amount and accrued interest of the 2022 Term Loan using the proceeds of the 2024 Term Loan and cash on hand. The Repayment was accounted for as a debt extinguishment. The carrying value of the 2022 Term Loan, including the unamortized debt discount and issuance costs, was derecognized. The difference of $12.0 million between the cash consideration paid to extinguish the 2022 Term Loan and the carrying value of the 2022 Term Loan was recognized as a loss on debt extinguishment included in the loss on debt extinguishment line item recorded in other expense in the condensed consolidated statement of operations. The Warrants continue to be outstanding, with no changes in terms in connection with the Repayment or issuance of the 2024 Term Loan.
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2028 Notes
As of September 30, 2024 and March 31, 2024, the Company had $201.9 million aggregate principal amount of 4.00% convertible senior notes due 2028 (the “2028 Notes”), with debt issuance costs of approximately $5.6 million, of which 50% was paid in the form of shares of the Company's common stock.
The 2028 Notes are senior obligations of the Company that accrue interest, payable semi-annually in arrears on February 1 and August 1 of each year. The 2028 Notes will mature on February 1, 2028, unless earlier converted, redeemed or repurchased. As of September 30, 2024, the Company was in compliance with all covenants set forth in the indenture governing the 2028 Notes.
The debt discount and debt issuance costs are amortized to interest expense over the term of the 2028 Notes at an effective interest rate of 4.70%.
9. STOCK-BASED COMPENSATION AND STOCKHOLDERS' EQUITY
The Company accounts for stock-based compensation through the measurement and recognition of compensation expense for share-based payment awards made to employees, directors or consultants over the related requisite service period, including stock appreciation rights, restricted stock, restricted stock units ("RSUs") and performance stock units ("PSUs"), qualified performance-based awards, and stock grants (all issuable under the Company's equity incentive plans).
The maximum number of shares reserved for the grant of awards under the 2022 Plan will be equal to the sum of: (i) 22.0 million shares (which is the sum of the 14.0 million new shares approved by shareholders on August 15, 2024 plus the 8.0 million shares available for grant under the 2022 Plan when it was initially adopted by shareholders on July 12, 2022) plus (ii) the number of shares subject to stock options granted under the 8x8 Inc. Amended and Restated 2012 Equity Incentive Plan (the “Prior Plan”) that were outstanding as of 12:01 a.m. Pacific Time on June 22, 2022 (the “Prior Plan Expiration Time”), but only to the extent such stock options expire, terminate, are cancelled without having been exercised in full or are settled in cash after the Prior Plan Expiration Time without the delivery of shares, plus (iii) the number of shares subject to restricted stock, RSUs and performance units granted under the Prior Plan that were outstanding as of the Prior Plan Expiration Time, but only to the extent such awards are forfeited by the holder, are reacquired by the Company at less than their then market value as a means of effecting a forfeiture, or are settled in cash after the Prior Plan Expiration Time without the delivery of shares (with the number of shares that recycle based on the Applicable Ratio, which is defined in the 2022 Plan), in each case, subject to adjustment upon certain changes in the Company’s capitalization. The 2022 Plan provides for the granting of incentive stock options to employees and non-statutory stock options to employees, directors or consultants, and granting of stock appreciation rights, restricted stock, restricted stock units and performance units, qualified performance-based awards, and stock grants. The stock option price of incentive stock options granted cannot be less than the fair market value on the effective date of the grant. Options, restricted stock, and restricted stock units generally vest over three or four years and expire ten years after the grant. As of September 30, 2024, 9.8 million shares remained available for future grants under the 2022 Plan.
Stock-Based Compensation
The following table presents stock-based compensation expense (in thousands):
 Three Months Ended September 30,Six Months Ended September 30,
 2024202320242023
Cost of service revenue$824 $1,137 $1,948 $2,823 
Cost of other revenue291 459 692 854 
Research and development3,494 5,415 8,317 13,048 
Sales and marketing2,153 3,917 5,101 8,566 
General and administrative2,613 3,592 6,119 7,426 
Total$9,375 $14,520 $22,177 $32,717 
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Restricted Stock Units
The following table presents the RSU activity (shares in thousands):
Number of SharesWeighted Average Grant Date Fair ValueWeighted Average Remaining Contractual Term (in Years)
Balance as of March 31, 202410,325 $5.36 1.75
Granted6,573 1.96 
Vested and released(4,248)6.05 
Forfeited(472)5.07 
Balance as of September 30, 202412,178 $3.30 1.15
As of September 30, 2024, there was $32.0 million of total unrecognized compensation cost related to RSUs, which is expected to be recognized over a weighted average of 1.99 years.
Performance Stock Units
PSUs are issued to a group of executives and generally time vest over periods ranging from one to three years from the grant date; vesting is generally also contingent upon achievement of applicable performance metrics or strategic objectives. Vesting of performance-based stock units granted can be tied to our total shareholder return, as measured relative to specified market indices during the applicable performance periods and be contingent upon continued service. The related stock-based compensation expense is recognized over the requisite service period and accounts for the probability that we will satisfy the performance measures or strategic objectives.
The following table presents the PSU activity (shares in thousands):
Number of SharesWeighted Average Grant Date Fair ValueWeighted Average Remaining Contractual Term (in Years)
Balance as of March 31, 20242,531 $4.38 1.16
Granted1,750 1.88 
Forfeited(274)10.32 
Balance as of September 30, 20244,007 $2.89 1.24
Total unrecognized compensation cost related to PSUs was $5.0 million as of September 30, 2024, which is expected to be recognized over a weighted average of 1.24 years.
Employee Stock Purchase Plan ("ESPP")
As of September 30, 2024, there was approximately $2.2 million of unrecognized compensation cost related to employee stock purchases. This cost is expected to be recognized over a weighted average period of 0.8 years. As of September 30, 2024, a total of 1.6 million shares were available for issuance under the ESPP.
10. INCOME TAXES
The Company's effective tax rate was (8.2)% and 5.0% for the three months ended September 30, 2024 and 2023, respectively, and (7.7)% and (4.9)% for the six months ended September 30, 2024 and 2023, respectively. The difference in the effective tax rate and the U.S. federal statutory rate was primarily due to the full valuation allowance the Company maintains against its deferred tax assets after adjusting for the impact of certain provisions enacted under the Tax Cuts and Jobs Act, current tax liabilities of profitable foreign subsidiaries subject to different local income tax rates, and state taxes in the United States. The effective tax rate is calculated by dividing the provision for income taxes by the loss before provision for income taxes.
11. NET LOSS PER SHARE
The following is a reconciliation of the weighted average number of common shares outstanding used in calculating basic and diluted net loss per share (in thousands, except per share data):
 Three Months Ended September 30,Six Months Ended September 30,
 2024202320242023
Net loss$(14,543)$(7,452)$(24,833)$(22,779)
Weighted average common shares outstanding - basic and diluted129,250 120,757 127,633 118,778 
Net loss per share - basic and diluted$(0.11)$(0.06)$(0.19)$(0.19)
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As the Company was in a loss position for all periods presented, basic net loss per share is equivalent to diluted net loss per share for all periods, as the inclusion of all potential shares of common stock outstanding would have been anti-dilutive. The following potentially weighted-average common shares were excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive (shares in thousands):
 Three Months Ended September 30,Six Months Ended September 30,
 2024202320242023
Stock options358 601 358 625 
Restricted stock units and Performance stock units6,414 10,855 7,309 9,878 
Potential shares attributable to the ESPP3,408 1,129 3,589 626 
Total anti-dilutive shares10,180 12,585 11,256 11,129 
12. GEOGRAPHICAL INFORMATION
The following tables set forth the geographic information for each period (in thousands):
Three Months Ended September 30,Six Months Ended September 30,
 2024202320242023
United States$121,459 $131,124 $244,317 $261,506 
United Kingdom32,428 31,487 61,634 61,327 
Other International27,111 22,388 53,194 45,453 
Total revenue$180,998 $184,999 $359,145 $368,286 
 September 30, 2024March 31, 2024
United States$47,734 $49,992 
International2,630 3,189 
Total property and equipment, net$50,364 $53,181 
13. RELATED PARTY TRANSACTIONS
The Company has been doing business with an outside sales and marketing vendor since December 2017, which became a related party in July 2022 when a member of the Company's board of directors joined the vendor's board of directors. The Company has a two-year contract with this vendor valued at $1.4 million and paid $0.4 million during the six months ended September 30, 2024.
14. SUBSEQUENT EVENTS
2024 Delayed Draw Term Loan
Under the terms of the 2024 Credit Agreement, the Company has the right to prepay the 2024 Term Loan at any time without any premium or penalty. On October 7, 2024, the Company paid $15.0 million of quarterly principal payments due October 31, 2024 and December 31, 2024, under the 2024 Term Loan. On November 1, 2024, the Company prepaid $18.0 million of additional principal payments. These short-term principal debt payments are accounted for as partial debt extinguishment transactions. As a result, the recognition of any associated unamortized debt discount and issuance costs of the 2024 Term Loan will be recognized within other expense, net, in the consolidated statement of operations for the three and nine months ended December 31, 2024. The remaining principal amount of the 2024 Term Loan after the payments is $167.0 million.
FCC Investigation of 8x8, Inc. and Fuze, Inc.
With respect to the FCC Investigation of the Company and Fuze, Inc. discussed in Note 7, Commitments and Contingencies, a Consent Decree was entered into with the FCC on November 1, 2024 under which the Company has agreed to implement a compliance plan, submit compliance reports to the FCC in certain intervals over the next three years and pay a civil penalty of $0.3 million, to be remitted to the FCC within thirty days. Subject to such requirements and other conditions enumerated under the Consent Decree, this concludes the FCC’s Investigation of the Company and Fuze, Inc. and the Company considers the matter to be closed.
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ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report. As discussed in the section titled “Forward-Looking Statements,” the following discussion and analysis contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. Factors that could cause or contribute to these differences include, but are not limited to, those discussed below and elsewhere in this Quarterly Report, particularly those set forth under the section entitled "Risk Factors" in the Form 10-K.
OVERVIEW
We are a leading provider of software-as-a-service solutions for contact center, voice communications, video meetings, employee collaboration, and embeddable communication application program interfaces. Our solutions empower workforces worldwide by connecting individuals and teams so they can collaborate faster, work smarter, and better serve customers, from any location. The communications capabilities and advanced artificial intelligence/machine learning technologies of our contact center, communication and collaboration solutions are integrated into a comprehensive cloud-based offering powered by our global communications platform, which together comprise our 8x8 XCaaS platform solution. The XCaaS platform delivers our unified communications as-a-service, contact center as-a-service, and communications platform as-a-service services. It includes artificial intelligence-driven self service and digital assistance, intuitive user interfaces, and real-time business analytics and intelligence, enabling organizations of all sizes to design, deploy and adapt tailored communications and workflows for differentiated employee and customer experiences.
The 8x8 XCaaS platform delivers the security, scalability, high availability, and ease-of-use of a modern cloud-based architecture while masking the complexity of a global communications infrastructure. A comprehensive data layer across the platform powers 8x8 artificial intelligence/machine learning algorithms, as well as vertical-specific and purpose-built applications from our ecosystem of technology partners. This enables data-driven business insights that can drive employee productivity, resource optimization, and more effective end-customer interactions through simplified and automated workflows. Built with core cloud technologies that we own and manage internally, as well as integrated third-party applications from our technology partners, our XCaaS platform enables agile workplaces and fosters seamless communications and collaboration between an organization’s customers, contact center agents, and employees, regardless of geographic location.
Our customers range from small businesses to large enterprises across all vertical markets, with users in more than 150 countries. In recent years, we have increased our focus on mid-market, enterprise, and public sector customers because these organizations typically have more complex communication and contact center requirements compared to the needs of small business customers. Organizations in these sectors – typically with 500 to 10,000 employees – are more likely to adopt multiple services and realize greater value from our unified, global communications platform and our growing product portfolio, including artificial intelligence-enabled solutions.
We generate service revenue from subscriptions to our communications services, as well as from usage of our platform. Our service subscription plans are sold on a per-user basis and are structured with increasing levels of functionality (designated as X1, X2, etc., through X8), based on the specific communication needs and customer engagement profile of each user. Platform usage, including telephony minutes, messaging, SMS, and digital and voice chat bot interactions, encompasses committed usage, which may be bundled with our service subscription plans, and uncommitted usage, which is sold on an as-used basis. Uncommitted usage of our platform increased as a percentage of revenue in fiscal year 2024 and is expected to continue to increase in the future with the introduction of new platform usage solutions.
We generate other revenue from professional services and the sale of office phones and other hardware equipment. We define a “customer” as one or more legal entities to which we provide services pursuant to a single contractual arrangement. In some cases, we may have multiple billing relationships with a single customer (for example, where we establish separate billing accounts for a parent company and each of its subsidiaries).
MACROECONOMIC AND OTHER FACTORS
We are subject to risks and exposures, including those caused by adverse economic conditions. Macroeconomic conditions that could adversely affect our business include the global economic slowdown, continued inflation, increased interest rates, supply chain disruptions, decreased economic output and fluctuations in currency exchange rates. We continuously monitor the direct and indirect impacts of these factors, as well as the overall global economy and geopolitical landscape on our business and financial results.
While the implications of macroeconomic events on our business, results of operations and overall financial position remain uncertain over the long term, we expect that adverse economic conditions will continue to adversely impact our business in future periods. For example, our installed base business, which includes more than 52,000 small businesses, continues to experience macroeconomic headwinds.
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SUMMARY AND OUTLOOK
As part of our long-term strategy to grow our revenue, achieve profitability, and increase cash flow, we have focused on expanding our mid-market, enterprise and public sector customer base. We believe that continued innovation is a critical factor in attracting and retaining these customers and is an important variable in achieving sustainable growth. We are committed to maintaining a high level of investment in engineering to deliver product innovation across our XCaaS platform, expand our ecosystem of integrated third-party applications, and maintain the high availability our customers require.
Our primary focus involves the following: (i) accelerating innovation, particularly in our platform and contact center as-a-service, and (ii) establishing communications platform as-a-service leadership in the Asia Pacific region and leveraging these capabilities globally. We continue to innovate new products like 8x8 Engage, voice and digital Intelligent Customer Assistant, and Agent Assist, while enhancing our platform with new capabilities, such as the Customer Interaction Data Platform and composable agent and supervisor user interfaces. These innovations enable tightly integrated solutions that prioritize ease-of-use, out-of-the-box functionality, and rapid deployment for our target customers.
Our investment in innovation has been complemented by initiatives to manage the costs of delivering our services and improve our sales efficiency. We continue to monitor factors that could have an impact on customer buying behavior and demand, including macroeconomic conditions, the competitive environment, contract duration, churn, upsell and down-sell, renewals, and payment terms, all of which have caused variability in our results and may continue to do in the future. We expect the total dollar amount of cost of service revenue and as a percentage of revenue to vary with the amount of service revenue and the mix of subscription and usage revenue within service revenue. To improve our sales efficiency, we continue to invest in marketing programs to drive awareness for our solutions, and we have increased training for our sales teams, and invested in tools to increase productivity. We have also expanded our partner programs to extend our reach within our target customer market, placing increased emphasis on developing a community of value-added resellers who provide implementation services and Tier 1 customer support in addition to sales. To support our customers and partners, we have expanded our customer success organization and continue to invest in improvements to our back-office processes to increase our operational efficiency over time.
KEY GAAP OPERATING RESULTS
To assess the success of our strategies to achieve growth and increase our cash flow, management reviews our financial performance as presented in our consolidated financial statements, including trends in revenue, gross profit margin, losses from operations, and cash flow generated by operations in absolute dollars and as a percentage of revenue as presented in the following table:
Fiscal Year 2025Fiscal Year 2024
Three Months EndedThree Months Ended
(In thousands, except percentages)September 30, 2024June 30, 2024March 31, 2024December 31, 2023September 30, 2023June 30, 2023
Service revenue$175,075$172,801$172,490$175,069$177,782$175,238
% of Total Revenue96.7 %97.0 %96.1 %96.7 %96.1 %95.6 %
Gross profit$123,175$120,960$122,444$124,846$127,897$128,613
% of Total Revenue68.1 %67.9 %68.2 %69.0 %69.1 %70.2 %
Income (loss) from operations$7,169$(1,374)$(14,219)$(9,391)$(2,583)$(1,410)
% of Total Revenue4.0 %(0.8)%(7.9)%(5.2)%(1.4)%(0.8)%
Net loss$(14,543)$(10,290)$(23,591)$(21,222)$(7,452)$(15,327)
% of Total Revenue(8.0)%(5.8)%(13.1)%(11.7)%(4.0)%(8.4)%
Net cash provided by operating activities$12,317$18,148$12,653$22,396$17,463$26,473

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COMPONENTS OF RESULTS OF OPERATIONS
Service Revenue
Service revenue consists of communication services subscriptions, platform usage revenue, and related fees from our unified communications as-a-service, contact center as-a-service, and communications platform as-a-service offerings. We plan to increase service revenue through a combination of new customer acquisition, cross-sell of additional products to existing customers, including new products resulting from our increased investment in innovation, geographic expansion of our customer base outside the United States, and sales initiatives with our Technology Partner Ecosystem partners, and potential strategic acquisitions of technologies and businesses.
Other Revenue
Other revenue consists of revenue from professional services, primarily for deployment of our solutions and/or platform, and revenue from sales and rentals of IP telephones in conjunction with our cloud telephony service. Other revenue is dependent on the number of customers who choose to purchase or rent IP telephone hardware in conjunction with our service instead of using the solution on their cell phone, computer, or other compatible device, and/or choose to engage our professional services organization for implementation and deployment of our cloud services.
Cost of Service Revenue
Cost of service revenue consists primarily of costs associated with network operations and related personnel, technology licenses, amortization of capitalized internal-use software, other communication origination and termination services provided by third-party carriers, and other costs such as customer service, and technical support costs. We allocate overhead costs, such as information technology and facilities, to cost of service revenue, as well as to each of the operating expense categories, generally based on relative headcount. Our information technology costs include costs for information technology infrastructure and personnel. Facilities costs primarily consist of office leases and related expenses.
Cost of Other Revenue
Cost of other revenue consists primarily of direct and indirect costs associated with the purchase, shipping and handling, and recycling of IP telephones as well as the personnel costs, and other expenditures incurred in connection with the professional services associated with the deployment and implementation of our products, and allocated information technology and facilities costs.
Research and Development
Research and development expenses consist primarily of personnel and related costs, third-party development, software and equipment costs necessary for us to conduct our product, platform development and engineering efforts, as well as allocated information technology and facilities costs.
Sales and Marketing
Sales and marketing expenses consist primarily of personnel and related costs, sales commissions, including those to channel partners, trade shows, advertising and other marketing, demand generation, and promotional expenses, as well as allocated information technology and facilities costs.
General and Administrative
General and administrative expenses consist primarily of personnel and related costs, professional services fees, corporate administrative costs, tax and regulatory fees, and allocated information technology and facilities costs.
Interest Expense
Interest expense consists primarily of interest expense related to our term loan and convertible notes, and amortization of debt discount and issuance costs.
Other Expense, Net
Other expense, net, consists primarily of gains or losses on debt extinguishment, gain or loss on warrant remeasurement, interest income, gains or losses on foreign exchange transactions, as well as other income.
Provision for (Benefit from) Income Taxes
Provision for (benefit from) income taxes consist primarily of foreign income taxes and state minimum taxes in the United States. As we expand the scale of our international business activities, any changes in the United States and foreign taxation of such activities may increase our overall provision for income taxes in the future. We have a valuation allowance for our United States deferred tax assets, including federal and state non-operating loss carryforwards. We expect to maintain this valuation allowance until it becomes more likely than not that the benefit of our federal and state deferred tax assets will be realized by way of expected future taxable income in the United States.
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RESULTS OF OPERATIONS
Revenue
Service revenue
Three Months Ended September 30,Six Months Ended September 30,
(In thousands, except percentages)20242023Change20242023Change
Service revenue$175,075$177,782$(2,707)(1.5)%$347,876$353,020$(5,144)(1.5)%
Percentage of total revenue96.7 %96.1 %  96.9 %95.9 %
Three Months Ended
Service revenue decreased by $2.7 million, or 1.5%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. This change was driven by a decrease in revenue from subscriptions of $3.8 million primarily due to a decline in revenue from customers on the Fuze platform partially offset by an increase of $1.1 million in platform usage revenue.
Six Months Ended
Service revenue decreased by $5.1 million, or 1.5%, for the six months ended September 30, 2024 compared to the six months ended September 30, 2023. This change was driven by a decrease in revenue from subscriptions of $9.6 million primarily due to a decline in revenue from customers on the Fuze platform offset by an increase of $4.5 million in platform usage revenue.
Other revenue
Three Months Ended September 30,Six Months Ended September 30,
(In thousands, except percentages)20242023Change20242023Change
Other revenue$5,923$7,217$(1,294)(17.9)%$11,269$15,266$(3,997)(26.2)%
Percentage of total revenue3.3 %3.9 %  3.1 %4.1 %
Three Months Ended
Other revenue decreased by $1.3 million, or 17.9%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023, due to lower professional service and product revenue of $0.9 million and $0.4 million, respectively.
Six Months Ended
Other revenue decreased by $4.0 million, or 26.2%, for the six months ended September 30, 2024 compared to the six months ended September 30, 2023, due to lower professional service and product revenue of $2.6 million and $1.4 million, respectively.
Cost of Revenue
Cost of service revenue
Three Months Ended September 30,Six Months Ended September 30,
(In thousands, except percentages)20242023Change20242023Change
Cost of service revenue$50,251$49,144$1,107 2.3 %$99,747$95,420$4,327 4.5 %
Percentage of service revenue28.7 %27.6 %  28.7 %27.0 %
Three Months Ended
Cost of service revenue increased by $1.1 million, or 2.3%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023, primarily due to an increase of $3.1 million in costs to deliver our subscription and platform usage services. This increase was partially offset by decreases of $1.1 million related to the amortization of capitalized software, $0.6 million in salaries, benefits, and consulting costs, and $0.3 million in software costs.

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Six Months Ended
Cost of service revenue increased by $4.3 million, or 4.5%, for the six months ended September 30, 2024 compared to the six months ended September 30, 2023, primarily due to an increase of $8.2 million in costs to deliver our subscription and platform usage services. This increase was partially offset by decreases of $2.3 million related to the amortization of capitalized software, $1.0 million in software costs, and $0.6 million in salaries, benefits, and consulting costs.
Cost of other revenue
Three Months Ended September 30,Six Months Ended September 30,
(In thousands, except percentages)20242023Change20242023Change
Cost of other revenue$7,572$7,958$(386)(4.9)%$15,263$16,356$(1,093)(6.7)%
Percentage of other revenue127.8 %110.3 %  135.4 %107.1 %
Three Months Ended
Cost of other revenue decreased by $0.4 million, or 4.9%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023, primarily due to $0.1 million decreased salaries, benefits, and consulting costs to deliver our professional services coupled with $0.3 million lower product costs associated with IP telephone hardware.
Six Months Ended
Cost of other revenue decreased by $1.1 million, or 6.7%, for the six months ended September 30, 2024 compared to the six months ended September 30, 2023, primarily due to $0.4 million decreased salaries, benefits, and consulting costs to deliver our professional services coupled with $0.7 million lower product costs associated with IP telephone hardware.
Operating Expenses
Research and development
Three Months Ended September 30,Six Months Ended September 30,
(In thousands, except percentages)20242023Change20242023Change
Research and development$31,291$34,207$(2,916)(8.5)%$63,428$69,499$(6,071)(8.7)%
Percentage of total revenue17.3 %18.5 %  17.7 %18.9 %
Three Months Ended
Research and development expenses decreased by $2.9 million, or 8.5%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023, primarily due to a decrease of $2.0 million in stock-based compensation and $0.9 million in combined salaries, benefits, consulting and other costs necessary for us to conduct our product, platform development and engineering efforts.
Six Months Ended
Research and development expenses decreased by $6.1 million, or 8.7%, for the six months ended September 30, 2024 compared to the six months ended September 30, 2023, primarily due to a decrease of $4.6 million in stock-based compensation and $1.5 million in combined salaries, benefits, consulting and other costs necessary for us to conduct our product, platform development and engineering efforts.
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Sales and marketing
Three Months Ended September 30,Six Months Ended September 30,
(In thousands, except percentages)20242023Change20242023Change
Sales and marketing$64,867$68,687$(3,820)(5.6)%$131,973$137,191$(5,218)(3.8)%
Percentage of total revenue35.8 %37.1 %  36.7 %37.3 %
Three Months Ended
Sales and marketing expenses decreased by $3.8 million, or 5.6%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023, primarily due to decreases of $2.3 million in channel commissions and amortization of deferred commissions, $1.9 million in stock-based compensation expense, and $0.5 million in paid media and other marketing services costs. These decreases were partially offset by an increase of $0.9 million in salaries, benefits, and consulting costs.
Six Months Ended
Sales and marketing expenses decreased by $5.2 million, or 3.8%, for the six months ended September 30, 2024 compared to the six months ended September 30, 2023, primarily due to decreases of $3.7 million in stock-based compensation expense, $2.8 million in channel commissions and amortization of deferred commissions, and $1.1 million in paid media and other marketing services costs. These decreases were partially offset by an increase of $2.4 million in salaries, benefits, and consulting costs.
General and administrative
Three Months Ended September 30,Six Months Ended September 30,
(In thousands, except percentages)20242023Change20242023Change
General and administrative$19,848$27,586$(7,738)(28.1)%$42,939$53,812$(10,873)(20.2)%
Percentage of total revenue11.0 %14.9 %  12.0 %14.6 %
Three Months Ended
General and administrative expenses decreased by $7.7 million, or 28.1%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023, primarily due to a $7.2 million decrease associated with Fuze, Inc. legal, regulatory and tax matters. During the three months ended September 30, 2024, we adjusted accruals related to USF and other Fuze, Inc. legal, regulatory and tax matters and recognized a benefit of $3.2 million, compared to $4.3 million of expenses recognized during the three months ended September 30, 2023. The decrease was also due to decreases of $1.0 million in stock-based compensation expense and $0.6 million in salaries, benefits, and consulting costs. These decreases were partially offset by an increase of $1.1 million in other general corporate costs.
Six Months Ended
General and administrative expenses decreased by $10.9 million, or 20.2%, for the six months ended September 30, 2024 compared to the six months ended September 30, 2023, primarily due to a $8.2 million decrease associated with Fuze, Inc regulatory and tax matters. During the six months ended September 30, 2024, we adjusted accruals related to USF and other Fuze, Inc. legal, regulatory and tax matters and recognized a benefit of $3.2 million, compared to $5.5 million of expenses recognized during the six months ended September 30, 2023. The decrease was also due to decreases of $2.4 million in salaries, benefits, and consulting costs and $1.4 million in stock-based compensation expense. These decreases were partially offset by an increase of $1.1 million in other general corporate costs.
Other expense, net
Interest expense
Three Months Ended September 30,Six Months Ended September 30,
(In thousands, except percentages)20242023Change20242023Change
Interest expense$(7,905)$(10,061)$2,156 (21.4)%$(17,861)$(20,139)$2,278 (11.3)%
Percentage of total revenue(4.4)%(5.4)%  (5.0)%(5.5)%
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Three Months Ended
Interest expense decreased by $2.2 million, or 21.4%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023, primarily due to the 2022 Term Loan debt extinguishment and decreased interest rate and principal on the 2024 Term Loan. See Note 8, Convertible Senior Notes and Term Loan, for further details.
Six Months Ended
Interest expense decreased by $2.3 million, or 11.3%, for the six months ended September 30, 2024 compared to the six months ended September 30, 2023, primarily due to the 2022 Term Loan debt extinguishment and decreased interest rate and principal on the 2024 Term Loan. See Note 8, Convertible Senior Notes and Term Loan, for further details.
Other expense, net
Three Months Ended September 30,Six Months Ended September 30,
(In thousands, except percentages)20242023Change20242023Change
Other income (expense), net$(12,709)$4,803$(17,512)NM$(10,993)$2,407$(13,400)NM
Percentage of total revenue(7.0)%2.6 %  (3.1)%0.7 %
Three Months Ended
We recognized $12.7 million of other expense, net during the three months ended September 30, 2024 compared to $4.8 million of other expense, net during the three months ended September 30, 2023, primarily due to a $12.0 million loss of debt extinguishment due to the payoff of the 2022 Term Loan, a $3.3 million increase in loss on foreign exchange and other expenses, and a $2.5 million gain on the remeasurement of warrants issued in connection with the term loan. These expense increases were offset by a $0.3 million increase in interest income earned on highly liquid investments.
Six Months Ended
We recognized $11.0 million of other expense, net during the six months ended September 30, 2024 compared to $2.4 million of other expense, net during the six months ended September 30, 2023 primarily due to a $10.2 million increase on loss of debt extinguishment due to the payoff of the 2022 Term Loan, a $3.4 million increase in loss on foreign exchange and other expenses, and a $0.5 million gain on the remeasurement of warrants issued in connection with the term loan. These expense increases were offset by a $0.7 million increase in interest income earned on highly liquid investments.
Provision for income taxes
Three Months Ended September 30,Six Months Ended September 30,
(In thousands, except percentages)20242023Change20242023Change
Provision (benefit) for income taxes$1,098$(389)$1,487 NM$1,774$1,055$719 NM
Percentage of total revenue0.6 %(0.2)%  0.5 %0.3 %
Three Months Ended
The provision for income taxes increased by $1.5 million for the three months ended September 30, 2024 compared to the three months ended September 30, 2023, driven by an increase in forecasted foreign tax expense of $0.6 million and an increase in forecasted state tax expense of $0.6 million, a decrease in our ASC 740-10 contingent liability of $0.5 million offset by a decrease in forecasted federal tax expense of $0.2 million.
Six Months Ended
The provision for income taxes increased by $0.7 million for the six months ended September 30, 2024 compared to the six months ended September 30, 2023, driven by an increase in forecasted state tax expense of $0.7 million, a decrease in our ASC 740-10 contingent liability of $0.2 million offset by a decrease in forecasted federal tax expense of $0.2 million.
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Liquidity and Capital Resources
We believe that our existing cash, cash equivalents and our anticipated cash flows from operations will be sufficient to meet our working capital, expenditure, and contractual obligation requirements for a minimum of the next twelve months and the foreseeable future. Although we believe we have adequate sources of liquidity for at least the next twelve months and for the foreseeable future, the success of our operations, the global economic outlook, and the pace of growth in our markets could impact our business and liquidity.
Cash, Cash Equivalents, and Investments
The following is a summary of our cash and cash equivalents and investments:
(In thousands)September 30, 2024March 31, 2024
Cash and cash equivalents$117,405 $116,262 
Restricted cash, current1
462 356 
Short-term investments— 1,048 
Restricted cash, non-current1
— 105 
Total$117,867 $117,771 
(1) Restricted cash supports letters of credit securing leases for office facilities and certain equipment for the same periods.
Our primary requirements for liquidity and capital are working capital needs due to delivery of our various products to customers, research and development, sales and marketing activities, principal and interest payments on our outstanding debt and other general corporate needs. Historically, these cash requirements have been met from cash provided by operating activities and our cash and cash equivalents balances. Our current capital deployment strategy for fiscal year 2025 is to use excess cash on hand to support our continued growth initiatives into select markets and planned software development activities and pay down our debt. As of September 30, 2024, we are not party to any off-balance sheet arrangements that have had or are reasonably likely to have a current or future material effect on our financial condition, results of operations, liquidity, capital expenditures, or capital resources. Significant cash requirements for the fiscal year include our operating lease obligations, interest payments related to our debt obligations, and operating and capital purchase commitments. For information regarding our expected cash requirements and timing of payments related to leases and non-cancelable purchase commitments, see Note 6, Leases, and Note 7, Commitments and Contingencies, respectively, to the consolidated financial statements in our Form 10-K. Additionally, see Note 8, Convertible Senior Notes and Term Loan, to the consolidated financial statements in our Form 10-K for more information related to our debt obligations and applicable covenants.
We are aware that our 2028 Notes are currently trading at a substantial discount to their respective principal amount. Furthermore, our outstanding 2024 Term Loan allows for voluntary prepayments. In order to reduce future cash interest payments, as well as future amounts due at maturity or upon redemption, we may, from time to time, make prepayments on our 2024 Term Loan, and seek to retire or purchase our outstanding debt through open-market purchases, privately negotiated transactions or otherwise. Any such transactions will be dependent upon several factors, including our liquidity requirements, contractual restrictions, prevailing market conditions, and other factors. Whether or not we engage in any such transactions will be determined at our discretion. The amounts involved may be material.
Cash Flows
The following is a summary of our cash flows provided by (used in) operating, investing and financing activities:
 Six Months Ended September 30,
(In thousands)20242023
Net cash provided by operating activities$30,465 $43,936 
Net cash (used in) provided by investing activities(7,204)12,735 
Net cash used in financing activities(25,136)(22,635)
Effect of exchange rate changes on cash3,019 (1,752)
Net increase in cash and cash equivalents$1,144 $32,284 
Cash provided by operating activities decreased by $13.5 million to $30.5 million for the six months ended September 30, 2024, mainly due to a decrease in cash received from customers and an increase in cash paid to suppliers and employees along with an increase in cash paid for sales commission costs. Cash used in investing activities decreased $19.9 million to $7.2 million for the six months ended September 30, 2024, mainly due to decreases in the purchases, sales, and maturities of investments. Cash used in financing activities increased by $2.5 million to $25.1 million for the six months ended September 30, 2024, due to payments for debt issuance costs and other financing activities.


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Debt Obligations
See Note 8, Convertible Senior Notes and Term Loan, in the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report for information regarding our debt obligations.
2024 Delayed Draw Term Loan
On July 11, 2024, we entered into a new term loan credit agreement with Wells Fargo Bank, National Association, as administrative agent, and the lenders thereto (the “2024 Credit Agreement”). The 2024 Credit Agreement establishes a delayed draw term loan facility in an aggregate principal amount of up to $200.0 million maturing on August 15, 2027.
On August 5, 2024, we drew upon the entire facility of $200.0 million under the delayed draw term loan facility (the "2024 Term Loan") and used the proceeds of the 2024 Term Loan and cash on hand of approximately $29.0 million to repay in full the $225.0 million of outstanding principal amount and accrued interest of the 2022 Term Loan and the fees incurred in connection with the repayment (the "Repayment").
The 2024 Term Loan bears interest at an annual rate equal to Term SOFR, plus a margin of either 2.50%, 2.75% or 3.00% based on the consolidated total net leverage ratio of the Company and its subsidiaries. The initial margin will be 3.00% for the fiscal quarter ending September 30, 2024. We have the option to pay interest monthly, quarterly, or semi-annually. During the three months ended September 30, 2024, we elected monthly interest payment terms which resulted in cash payments of $2.9 million from August 5, 2024. During the three months ended December 31, 2024, we have elected quarterly interest payment terms, which will result in cash payments of $3.4 million. The scheduled principal repayments of $22.5 million in fiscal year 2025 ($7.5 million on October 31, 2024, December 31, 2024 and March 31, 2025, respectively), $37.5 million in fiscal year 2026 ($7.5 million on June 30, 2025 and $10.0 million on September 30, 2025, December 31, 2025 and March 31, 2026, respectively), and $47.5 million in fiscal year 2027 ($10.0 million on June 30, 2026, $12.5 million on September 30, 2026 and each quarter thereafter through maturity) are required, and the remaining $92.5 million principal is due before or upon maturity in fiscal year 2028. These annualized repayments will be made in quarterly installments. As of September 30, 2024, the debt issuance costs are amortized to interest expense over the term of the 2024 Term Loan at an effective interest rate of 8.76%.
2022 Term Loan Extinguishment
On August 5, 2024, we repaid in full the outstanding principal amount and accrued interest of the 2022 Term Loan using the proceeds of the 2024 Term Loan and cash on hand. The Repayment was accounted for as a debt extinguishment. The carrying value of the 2022 Term Loan, including the unamortized debt discount and issuance costs, was derecognized. The difference of $12.0 million between the cash consideration paid to extinguish the 2022 Term Loan and the carrying value of the 2022 Term Loan was recognized as a loss on debt extinguishment included in the loss on debt extinguishment line item recorded in other expense in the condensed consolidated statement of operations. The Warrants continued to be outstanding with no change in terms in connection with the Repayment or issuance of the 2024 Term Loan.
We previously used the proceeds from the 2022 Credit Agreement to fund the cash portion of an exchange of the Company's approximately $403.8 million principal amount of 0.50% convertible senior notes due 2024 for cash plus approximately $201.9 million of 4.00% convertible senior notes due 2028, and the concurrent repurchase of approximately $60.0 million of our common stock with the counterparties to such exchange. Loans made under the 2022 Credit Agreement bore interest at an annual rate equal to the Term SOFR, subject to a floor of 1.00% and a credit spread adjustment of 0.10%, plus a margin of 6.50%. During the three months ended September 30, 2024, we paid $2.7 million of interest under the 2022 Term Loan. See Note 8, Convertible Senior Notes and Term Loan, to our condensed consolidated financial statements for details.
Material Cash Requirements and Other Obligations
As of March 31, 2024, our material cash requirements and other obligations were $690.1 million. During the three months ended September 30, 2024, we entered into a $24.1 million noncancelable three-year hosting service contract. Under this agreement, $7.1 million remains due during fiscal year 2025, $8.5 million will be due during fiscal year 2026, $6.0 million will be due during fiscal year 2027 and $2.5 million will be due during fiscal year 2028. For information regarding our material cash requirements and other obligations, see Item 7, "Management's Discussion and Analysis", in our fiscal year 2024 Form 10-K.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
The discussion and analysis of our financial condition and results of operations are based upon our condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosures of assets and liabilities. On an ongoing basis, we evaluate our critical accounting policies and estimates. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
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Our consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP"). See Note 1, The Company and Significant Accounting Policies, in the notes to the unaudited condensed consolidated financial statements included in this Quarterly Report, which describes the significant accounting policies and methods used in the preparation of our consolidated financial statements. There have been no significant changes during the six months ended September 30, 2024 to our critical accounting policies and estimates previously disclosed in our Form 10-K.
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk
There have been no material changes in our exposures to market risk since March 31, 2024. For details on the Company’s interest rate and foreign currency exchange risks, see Part I, Item 7A. “Quantitative and Qualitative Information About Market Risks” in our Form 10-K.
ITEM 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of September 30, 2024. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of September 30, 2024, our disclosure controls and procedures were effective at a reasonable assurance level.
Changes in Internal Control Over Financial Reporting
During the three months ended September 30, 2024, there was no change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Limitations on the Effectiveness of Controls
Our management, including the Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls or internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system's objectives will be met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected.
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PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings
Information with respect to this item may be found in Note 7, Commitments and Contingencies, under the heading “Legal Proceedings” in the Notes to Unaudited Condensed Consolidated Financial Statements included in this Quarterly Report is incorporated by reference in response to this item.
ITEM 1A. Risk Factors
Investing in our securities involves risk. Prior to making a decision about investing in our securities, you should carefully consider the specific factors discussed below and under the heading “Risk Factors” in any prospectus supplement, together with all of the other information contained or incorporated by reference in this Quarterly Report. You should also consider the risk factors related to our business and operations described in Part I, Item 1A of the Form 10-K under the heading “Risk Factors,” and in Part II, Item 1A of the Form 10-Q for the period ended June 30, 2024 under the heading "Risk Factors," which are incorporated by reference in this Quarterly Report. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also affect our operations.
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds
(a) None.
(b) None.
(c) None.
ITEM 3. Defaults Upon Senior Securities
None.
ITEM 4. Mine Safety Disclosures
Not applicable.
ITEM 5. Other Information
None of our directors or officers (as defined in Rule 16a-1(f) under the Exchange Act) adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement (as defined in Item 408(c) of Regulation S-K) during the three months ended September 30, 2024, except as described below:
Andrew Burton, a member of the Board of Directors, adopted a Rule 10b5-1 Trading Plan on September 12, 2024 that is intended to satisfy the affirmative defense of Rule 10b5-1(c) under the Exchange Act. Mr. Burton's Rule 10b5-1 Trading Plan provides for the potential sale of up to 8,624 shares of the Company's common stock between December 12, 2024 and June 27, 2025.
Kevin Kraus, Chief Financial Officer, adopted a Rule 10b5-1 Trading Plan on August 12, 2024 that is intended to satisfy the affirmative defense of Rule 10b5-1(c) under the Exchange Act. Mr. Kraus's Rule 10b5-1 Trading Plan provides for the potential sale of up to 12,000 shares of the Company's common stock between December 16, 2024 and November 28, 2025.
Laurence Denny, Chief Legal Officer, adopted a Rule 10b5-1 Trading Plan on August 19, 2024 that is intended to satisfy the affirmative defense of Rule 10b5-1(c) under the Exchange Act. Mr. Denny's Rule 10b5-1 Trading Plan provides for the potential sale of up to 35,000 shares of the Company's common stock, plus an additional number of shares (which may vary) that Mr. Denny may receive due to his participation in the Company's Employee Stock Purchase Plan, between November 18, 2024 and May 30, 2025.
Our officers (as defined in Rule 16a-1(f) under the Exchange Act) have also entered into sell-to-cover arrangements, which constitute non-Rule 10b5-1 trading arrangements (as defined in Item 408(c) of Regulation S-K), authorizing the pre-arranged sale of shares to satisfy tax withholding obligations of the Company arising exclusively from the vesting of restricted stock units (“RSUs”) and performance stock units (“PSUs”), as applicable, and the related issuance of shares. Any sale of shares under these arrangements will occur only if (i) the aggregate value of all of the shares withheld by the Company to satisfy such tax withholding obligations in the given fiscal year has reached a certain threshold, and (ii) the sale does not result in any short-swing liability under Section 16(b) of the Exchange Act. The amount of shares to be sold under these arrangements may vary and will be dependent on the trading price of the Company’s common stock at the time of the vesting of the RSUs and PSUs, as applicable. Each of these arrangements lasts until the final vesting date of the applicable RSUs or PSUs, or each officer’s earlier termination of employment.
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ITEM 6. Exhibits
Incorporated by Reference
Exhibit NumberExhibit DescriptionCompany FormFiling DateExhibit NumberFiled Herewith
3.18-K7/13/20223.1
3.28-K7/28/20153.2
10.18-K7/15/202410.1
31.1X
31.2X
32.1X
32.2X
101
The following materials from 8x8, Inc.'s Quarterly Report on Form 10-Q for the three months ended September 30, 2024, formatted in Inline XBRL: (i) Condensed Consolidated Balance Sheets as of September 30, 2024 and March 31, 2024, (ii) Condensed Consolidated Statements of Operations for the three months ended September 30, 2024 and 2023, (iii) Condensed Consolidated Statements of Comprehensive Loss for the three months ended September 30, 2024 and 2023, (iv) Condensed Consolidated Statements of Stockholders’ Equity as of September 30, 2024 and 2023, (v) Condensed Consolidated Statements of Cash Flows for the three months ended September 30, 2024 and 2023, and (vi) Notes to Consolidated Financial Statements, tagged as blocks of text and including detailed tags XBRL Instance Document
X
* Indicates management contract or compensatory plan or arrangement.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant, 8x8, Inc., a Delaware corporation, has duly caused this Quarterly Report on Form 10-Q to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Campbell, State of California, on November 6, 2024.
8x8, Inc.
/s/ Suzy Seandel
Suzy Seandel
Chief Accounting Officer
(Principal Accounting Officer and Duly Authorized Officer)

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