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What changed in 8X8 INC /DE/'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of 8X8 INC /DE/'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+390 added−362 removedSource: 10-K (2025-05-22) vs 10-K (2024-05-21)

Top changes in 8X8 INC /DE/'s 2025 10-K

390 paragraphs added · 362 removed · 176 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeThe capabilities of our communications and contact center solutions are packaged into comprehensive service offerings called the 8x8 “X Series." Generally, X1 through X4 Series service plans provide enterprise-grade voice, unified communications, video meetings, and team collaboration functionality, as well as contact center-like features for users with direct customer engagement. and X5 through X8 Series service plans include provide the features of X1 through X4, plus contact center functionality.
Biggest changeOur solutions are delivered through the 8x8 X Series packages, a tiered set of service plans that align with employee communication and customer engagement needs. X1–X4 plans include core unified communications functionality. X6–X8 plans add contact center capabilities, including embedded AI features such as interactive voice response, virtual agents, predictive routing, and conversational analytics.
Our Elevate channel program supports multiple routes to market for partners, including both resale (wholesale) and agency models, and also offers 8x8 sales and technical certifications. In addition to direct and indirect sales motions, we jointly go-to-market with some of our technology partner ecosystem partners through a 3-tiered program based on the degree of platform integration.
Our Elevate channel program supports multiple routes to market for partners, including both resale (wholesale) and agency models, and also offers 8x8 sales and technical certifications. In addition to direct and indirect sales motions, we jointly go to market with our technology partner ecosystem partners through a tiered program based on the degree of platform integration.
Intellectual Property As of March 31, 2024, we hold at least 372 patents, with another 97 United States and foreign patent applications pending. Our portfolio of patents, with expiration dates through 2042, and patent applications cover diverse aspects of our unified communications, video, application program interface and integrations, collaboration, contact center services, infrastructure, and user experience design and functionality.
Intellectual Property As of March 31, 2025, we hold at least 405 patents, with another 90 United States and foreign patent applications pending. Our portfolio of patents, with expiration dates through 2042, and patent applications cover diverse aspects of our unified communications, video, application program interface and integrations, collaboration, contact center services, infrastructure, AI, and user experience design and functionality.
We make these enhancements available to our customers frequently. We currently employ individuals in research, development, and engineering activities in the United States, Canada, United Kingdom, Portugal, Romania, Singapore, and Philippines, as well as outsourced software development consultants around the world.
We make these enhancements available to our customers frequently. We currently employ individuals in research, development, and engineering activities around the world, primarily in the United States, Canada, United Kingdom, Portugal, Romania, Singapore, and Philippines. We also utilize outsourced software development consultants around the world.
Research and Development The cloud communications market is characterized by rapid technological changes and advancements typical of most SaaS markets. Accordingly, we make substantial investments in innovation focused on the design and development of new products and services, as well as the development of enhancements and features to our existing products and services.
Research and Development The cloud communications and contact center markets are characterized by rapid technological changes and advancements typical of most software markets. Accordingly, we make substantial investments in innovation focused on the design and development of new products and services, as well as the development of enhancements and features to our existing products and services.
Our indirect sales channel consists of partners with multiple operating models, including global and regional networks of value-added resellers and carriers, as well as a partner network consisting of master agents and the sub-agent community, independent software vendors, system integrators, and service providers selling 8x8 solutions to small, mid-market, and enterprise businesses.
Our indirect sales channels consist of partners with multiple operating models, including global and regional networks of value-added resellers and carriers, as well as a partner network consisting of technology solutions distributors, and a sub-agent community, independent software vendors, system integrators, and service providers selling 8x8 solutions to small, mid-market, and enterprise businesses.
Our Customers We have a diverse customer base of more than 57,000 customers, with more than 3.0 million paid business licenses, with users in over 160 countries, including small business, mid-market and enterprise customers, and across a wide range of industries and use cases. No single customer represented 10% or more of our revenue in fiscal 2024, 2023, or 2022.
Our Customers We have a diverse customer base of more than 55,000 customers with users in over 160 countries, including small business, mid-market, public sector and enterprise customers, and across a wide range of industries and use cases. No single customer represented 10% or more of our revenue in fiscal 2023, 2024, or 2025.
Employees and Human Capital As of March 31, 2024, we had 1,948 full-time employees operating around the world, of which 67% are located outside of the United States. None of our employees are represented by a labor union or are subject to a collective bargaining arrangement.
Employees and Human Capital As of March 31, 2025, we had 1,942 full-time employees operating around the world, of which 67% are located outside of the United States. None of our employees are represented by a labor union or are subject to a collective bargaining arrangement. We have not experienced any work stoppages in fiscal 2025.
The contents of this website are not incorporated in or otherwise to be regarded as part of this Annual Report. We file reports with the Securities and Exchange Commission, or the SEC, which are available on our website free of charge.
Available Information We maintain a corporate Internet website at the address http://www.8x8.com. The contents of this website are not incorporated in or otherwise to be regarded as part of this Annual Report. We file reports with the Securities and Exchange Commission, or the SEC, which are available on our website free of charge.
See the section entitled “Risks Related to Regulatory Matters” in Part I, Item 1A "Risk Factors" for more information on these risks. Geographic Areas We have one reportable segment. Financial information relating to revenue generated in different geographic areas are set forth in Note 12 , Geographical Information, in the Notes to Consolidated Financial Statements contained in this Annual Report.
For more information regarding the risks associated with regulatory compliance, see Part I, Item 1A, "Risk Factors—Risks Related to Regulatory Matters." Geographic Areas We have one reportable segment. Financial information relating to revenue generated in different geographic areas are set forth in Note 2 , Revenue, in the Notes to Consolidated Financial Statements contained in this Annual Report.
In addition, the Securities and Exchange Commission maintains a website (www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the Securities and Exchange Commission, including 8x8. 10 Information About Our Executive Officers Our executive officers as of the date of this report are listed below. Samuel Wilson, Chief Executive Officer .
In addition, the Securities and Exchange Commission maintains a website (www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the Securities and Exchange Commission, including 8x8. 11
Key elements of our operations infrastructure include customer quoting and ordering capabilities, customer provisioning, customer access control, fraud control, network security, video, voice and short messaging service message routing, quality monitoring, media processing and normalization, call reliability, detailed call record and message storage, transactional metering for usage-based services, product interfaces and billing and integration with third-party applications.
These systems support both customer-facing services and internal business operations. Key components include customer quoting and ordering tools, provisioning and access control, fraud prevention, network and application security, media processing, message routing, quality and reliability monitoring, detailed call and message logging, usage metering, product interfaces, billing, and integrations with third-party applications.
Network Operations Center: We maintain global network operations centers around the world and employ experienced staff in voice and data operations in the United States, United Kingdom, Romania, Indonesia, Singapore, and Philippines to provide 24-hour operations support, seven days per week, whether working in our network operations centers or remotely.
Network Operations: We operate global network operations centers staffed by experienced personnel located in the United States, United Kingdom, Romania, Indonesia, Singapore, and the Philippines. These teams provide 24/7 monitoring and support, whether onsite or remotely.
Our solutions are intentionally engineered to enable information technology, or IT, teams and customer experience leaders to improve customer satisfaction, increase efficiency and drive better business outcomes for our customers. We have prioritized investments in: • High Levels of Customer Satisfaction.
Our solutions are intentionally engineered for effortless adoption, enabling information technology (“IT”), teams and customer experience leaders to improve customer satisfaction, increase employee productivity and drive better business outcomes as their needs evolve and mature over time.
Texas, Oregon, and Montana have enacted new privacy laws that will become effective in 2024. Delaware, Iowa, Maryland, New Hampshire, New Jersey, and Tennessee have enacted new privacy laws that will become effective in 2025, and Indiana has enacted a new privacy law that will become effective in 2026. All of these new privacy laws impose new obligations on us.
Other states, including Colorado, Connecticut, Delaware, Florida, Iowa, Montana, New Hampshire, Nebraska, New Jersey, Oregon, Texas, Utah, and Virginia, have enacted comprehensive privacy laws with similar compliance obligations. New privacy laws in Maryland, Minnesota, and Tennessee will become effective later in 2025, and additional laws in Indiana, Kentucky, and Rhode Island will become effective in 2026.
We also use software components in our platform that are licensed to the public under open-source licenses. See the section entitled “Risks Related to Intellectual Property” in Part I, Item 1A "Risk Factors" for more information on our intellectual property risks. Competition The cloud communications industry is competitive and rapidly evolving.
See the section entitled “Risks Related to Intellectual Property” in Part I, Item 1A "Risk Factors" for more information on our intellectual property risks. 7 Competition The markets for cloud-based business communications and contact center solutions are competitive, dynamic, and subject to rapid technological evolution. These markets continue to attract new entrants and experience consolidation among existing participants.
Our Strategy We believe there is a large market opportunity to provide solutions for small- and mid-sized enterprises that bridge the gaps in communications and customer experience that result from siloed communications and contact center environments.
Our integrated platform approach enables solutions that span the entire organization and bridge the gaps in communications and customer experience that result from siloed communications and contact center environments.
Interconnection Agreements: We have agreements with short messaging service, voice, and mobile network operators worldwide. Pursuant to these agreements, we can provide inbound and outbound telephone and short messaging services to traditional telecommunication systems and mobile networks worldwide through our platform via these carriers.
We also offer a premium success program and user training through 8x8 University, available via instructor-led sessions and self-paced online courses. Interconnection Agreements: 8x8 maintains interconnection agreements with SMS, voice, and mobile network operators worldwide. These agreements allow us to provide inbound and outbound voice and messaging services across global telecommunication and mobile networks via our platform.
Our Solutions Through our integrated technology platform, we offer our customers a portfolio of solutions for contact center, customer engagement, voice, video, chat, short messaging service and team collaboration, unified through a set of shared services, including a common data platform, advanced analytics, reporting, and automated workflows.
Our Solutions We deliver a portfolio of cloud-based business communications and contact center solutions that integrate voice, video, messaging, and team collaboration channels through our Platform for CX. This platform leverages shared services—including a unified data model, advanced analytics, transcriptions, translations and workflow automation—to enhance productivity, scalability, customer experience and interaction intelligence.
See the section entitled “Risks Related to Our Business and Industry” in Part I, Item 1A "Risk Factors" for more information on our risks related to competition. 7 Operations Our operations infrastructure consists of data management, security, quality monitoring and control, and billing systems that support the portfolio of communication and contact center services plans provided by our XCaaS platform.
However, we remain subject to competitive pressures that may affect our pricing, customer acquisition costs, and market share. See the section entitled “Risks Related to Our Business and Industry” in Part I, Item 1A "Risk Factors" for more information on our risks related to competition.
Our solutions are often tailored to specific use cases and vertical markets with embeddable communication application program interfaces that integrate capabilities from our technology partner ecosystem.
Our offerings are designed to support both horizontal and vertical use cases and are extensible through application programmable interfaces and integrations with our technology partner ecosystem.
For example, regulations we are subject to include E-911 services, porting of phone numbers under specific conditions, protection of customer data generated by the use of our services, and obligations to contribute to federal programs, including Universal Service Fund and other regulatory funds, as well as state and local 911 and universal service funds.
In the United States, at the federal level, our services are regulated by the Federal Communications Commission (the "FCC"). FCC regulations applicable to our VoIP services include requirements related to enhanced 911 ("E-911") services, customer proprietary network information ("CPNI") protection, phone number porting under specific conditions, and contributions to the Universal Service Fund ("USF") and other federal regulatory funding mechanisms.
Regulatory Matters In the United States, at the federal level, we are subject to regulation by the Federal Communications Commission (the "FCC") as a provider of Voice over Internet Protocol, or VoIP, as well as state and local regulations applicable to Voice over Internet Protocol providers.
Regulatory Matters As a provider of cloud-based communications and Voice over Internet Protocol (VoIP) services, our business is subject to extensive regulations in the United States and internationally. Compliance with these regulations, which are evolving and complex, requires ongoing significant expenditures, including substantial investments in research and development to meet compliance obligations.
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ITEM 1. BUSINESS Overview 8x8 is a leading global provider of contact center as-a-service, or CCaaS, and unified communications as-a-service, or UCaaS, software, powered by our secure cloud-native communications platform. We also provide embeddable communications platform as-a-service, or CPaaS, allowing customers to seamlessly integrate video and messaging to deliver tailored omni-channel customer experiences that increase customer engagement, loyalty and retention.
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ITEM 1. Business Overview 8x8, Inc. (“8x8”) is a global provider of integrated customer experience and business communications solutions, purpose-built to unify customer and employee engagement across the enterprise. Our Platform for CX™ combines contact center, business communications, and application programmable interfaces, or APIs, for communications into a single, secure, AI-powered system that delivers seamless, data-driven interactions.
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Together, these solutions comprise the 8x8 XCaaS platform. Our XCaaS platform has been deployed by a broad range of customers, ranging from small businesses to very large enterprises.
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Designed for agility and scale, our platform helps businesses eliminate silos, improve operational efficiency, and turn every conversation into actionable intelligence. By aligning technology with measurable outcomes, we empower organizations to transform how they connect, serve, and grow — from first interactions to lasting relationships.
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At the end of fiscal 2024, more than 43% of our annualized recurring and usage revenue, or ARR (see the section entitled “Key Business Metrics” in Part II, Item 7 "MD&A" for how we define and use annualized recurring and usage revenue) was generated by customers deploying both contact center as-a-service and unified communications as-a-service solutions, compared to 40% from the end of fiscal 2023.
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We serve a broad customer base—from small businesses to large global enterprises—across every major industry and in over 160 countries. Our strategic focus has increasingly shifted toward mid-market, small and mid-sized enterprise, and public sector organizations, particularly those with 500 to 10,000 employees.
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We had more than 3.0 million paid licensed users at more than 57,000 customers worldwide at the end of the fiscal year.
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These customers often have more complex communication and customer service needs and are more likely to benefit from—and invest in—multiple services across our platform. This focus aligns with our strengths, eliminating communication silos and enabling businesses to transform every customer interaction into a strategic asset.
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Since mid-fiscal 2023, we have focused a significant portion of our investment in innovation on enhancing our contact center as-a-service solution and expanding our product portfolio to address the requirements of small- and mid-sized enterprises, which we define as enterprise customers with 100 to 10,000 employees.
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We also invest resources in retaining our small business customers, including world class onboarding and customer care specialists that are a single point of contact for all service and support needs. We reach customers through a diversified go-to-market strategy that includes both direct and indirect channels.
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These customers want fully integrated solutions that deliver business outcomes, rather than point products from multiple vendors that they must integrate themselves and that create data silos and analytics gaps.
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We utilize a diversified partner ecosystem to complement our direct sales efforts and expand our global market reach. Our go-to-market strategy includes technology solutions distributors, or TSDs, and their sub-agent networks, who contribute to pipeline growth through referrals.
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Our routes to market include indirect sales through a variety of channels, including value-added resellers, or VARs, system integrators and technology partners, as well as direct sales to new and existing customers. We have also invested in expanding our customer success organization to drive increased customer satisfaction and retention.
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We also engage value-added resellers, or VARs, who market, sell, implement, and support our solutions, helping to drive customer acquisition and optimize our routes to market. In addition, we collaborate closely with strategic technology partners—particularly those with whom we maintain deep integrations or original equipment manufacturer, or OEM, relationships—via structured referral agreements and coordinated lead flow processes.
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Our customer success organization is dedicated to driving positive business outcomes through a lifetime engagement model, leading to consistently high customer satisfaction levels. Our approach is built on three foundational pillars: unified product experiences across all channels, rapid value realization via a modular approach and smooth onboarding, and proactive engagement strategies to foster long-term customer value.
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Our carrier partnerships extend our service availability to over 100 countries and territories, ensuring high-quality, reliable communications that support our international footprint. To further enhance deployment speed and geographic coverage, we leverage third-party service providers, enabling us to deliver implementation and support services efficiently at a global scale.
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These initiatives have led to high customer satisfaction scores among enterprise customers and recognition for our leadership and support. • Continuous Innovation of our Advanced Cloud-Native XCaaS Platform. Utilizing a micro-services architecture, our software-as-a-service, or SaaS, platform ensures high availability and supports the rapid deployment of new features and functionalities, including artificial intelligence-based features and applications.
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With our unified approach to communication and a commitment to continuous innovation, 8x8 enables businesses to deliver intelligent, connected experiences that securely scale across the enterprise. Our Strategy We believe there is a large market opportunity to provide customer experience and communication solutions to mid-market and small- and mid-sized enterprise organizations.
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Our innovation efforts are centered around key customer experience differentiators, including artificial intelligence-powered shared services, comprehensive capture and synchronization of customer interaction data, artificial intelligence-powered analytics, user experience/user interface, and enhanced contact center functionalities accessible to all customer-facing employees. • Enabling a Solution Approach to Artificial Intelligence .
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Our strategy is built around six key pillars: Unified Platform for Customer Experience ("CX"): Our cloud-native 8x8 Platform for CX integrates contact center, unified communications, and communications platform-as-a-service capabilities into a single, secure architecture. The platform is powered by our Customer Interaction Data Platform, which captures, connects, and contextualizes interaction data across the organization.
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We implement artificial intelligence natively at the platform layer for shared services and integrate purpose-built applied artificial intelligence products from our technology partner ecosystem at the data layer and in our user interface for a native-like user experience.
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With embedded artificial intelligence and omnichannel functionality, the 8x8 Platform for CX enables consistent, intelligent customer and employee experiences across voice, video, chat, and messaging—helping businesses drive operational efficiency, elevate service quality, and unlock actionable insights at scale.
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Our approach allows customers to implement best-of-breed solutions tailored to specific use cases without the burden of integrating products from multiple vendors. • Driving Multi-Product Adoption. Multi-product adoption significantly enhances customer revenue, satisfaction, and retention.
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Outcome-Driven Innovation: We invest in innovation designed to reduce complexity for our customers, help our customers elevate their experience, improve agent and employee productivity and modernize legacy systems. Flexible user interfaces and artificial intelligence-based features are enabled across our platform to improve productivity and drive proactive customer engagement.
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As we broaden our product offerings through internal development and strategic technology partnerships, we are able to deliver complete solutions that deliver rapid time to value while reducing total cost of ownership. Our business development teams work with our customer success managers to identify and actively pursue cross-sell opportunities within our existing customer base. • Acquiring New Customers.
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Features such as real-time call summaries, sentiment analysis, AI-based routing, and AI coaching on next-best-action enable proactive, personalized service and faster outcomes. Customer Focus: Mid-Market, Enterprise, and Public Sector: Our go-to-market strategy and innovation efforts are centered on serving mid-market, small to mid-sized enterprises, and public sector organizations—segments that often face complex communication and engagement challenges.
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There is a substantial opportunity to transition small and mid-sized enterprises from on-premise to our cloud-based communications and contact center solutions. We are refining our lead-generation tactics and market strategies across various channels, including direct sales, e-commerce, resellers, and strategic partners, to enhance solution awareness and grow our customer base. • Expanding our Technology Partner Ecosystem.
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With a modular platform and a comprehensive suite of capabilities, we enable these customers—many of whom may not have dedicated customer experience engineering teams—to easily adopt and integrate multiple products.
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We have developed a robust ecosystem of carefully curated technology, integration and reseller partners with solutions that complement our core platform. This ecosystem supports the integration of purpose-built applications that are tightly aligned with our platform, offering specific solutions for distinct use cases or industries.
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This approach drives greater value and improved outcomes and fosters long-term, strategic partnerships. 4 Modern Go-To-Market Approach: We reach customers through a hybrid approach that includes direct sales, digital channels, value-added resellers, and strategic integrations with large platforms like Microsoft Teams and Salesforce. This allows us to scale efficiently while tailoring our approach to different customer segments.
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This strategy includes deep integration at the data layer and in the user interface to minimize integration challenges for customers and increase their agility to meet evolving business demands. 4 Our XCaaS Platform Our XCaaS platform, built on a cutting-edge microservices architecture, utilizes our extensive global network of data centers, carrier partners, and cloud deployments to ensure high availability, scalability, and adherence to data sovereignty laws.
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Customer Lifecycle Success: Our customer success teams deliver a full lifecycle engagement model focused on rapid onboarding and long-term adoption based on account potential, resulting in increased share of wallet over time. This proactive approach is intended to drive higher customer satisfaction, increased cross-sell of additional products, and higher customer retention.
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Historically, our platform has scaled from basic communication services (local dial-tone services) to a full suite of cloud communications software including contact center, voice, team chat, video meetings, and artificial intelligence-driven analytics. Further, we provide an extensive library of application program interfaces, or APIs, and tools to integrate video, short messaging service, or SMS, messaging and other capabilities.
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Technology Partner Ecosystem and Platform Extensibility: Our Technology Partner Ecosystem—a carefully curated set of technology innovators—enables customers to integrate best-of-breed customer experience solutions through deep platform integration for a native-like experience. The extensibility of our platform enables rapid innovation, tailored solutions, and faster deployment of best-of-breed and emerging technologies while eliminating integration complexity.
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Our platform enables a broad range of solutions that improve employee and customer experiences, including artificial intelligence-powered self-service, intelligent routing, secure payments, and workforce management, for customer-facing employees.
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Our Platform for CX 8x8 delivers an integrated, AI-powered Platform for CX that unifies contact center-as-a-service ("CCaaS"), unified communications-as-a-service ("UCaaS"), and communications platform-as-a-service ("CPaaS") capabilities into a single cloud-native solution. At the core of the platform is the 8x8 Customer Interaction Data Platform, which captures, connects, and contextualizes interaction data across the organization.
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With our platform’s comprehensive data layer, customer interaction data can be coordinated across our unified communications as-a-service, contact center as-a-service and communications platform as-a-service solutions, as well as third-party solutions from our technology partner ecosystem, to provide contextual awareness across all customer touchpoints.
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This comprehensive, high-fidelity data foundation powers a growing portfolio of AI-based features—including intelligent routing, sentiment analysis, live agent guidance, and journey optimization—that enables our customers to drive operational efficiency and proactive, personalized customer engagement with their end customers.
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The key attributes of the 8x8 XCaaS platform include: • A unified, cloud-native platform for contact center, communications, and collaboration, fostering efficient engagements across geographies and departmental lines, as well as improved user productivity and data security. • Flexible service plans and deployment options to match product features to users' customer engagement profiles. • Artificial Intelligence-enabled workflow automation and self-service, enhancing customer experience with features like rapid escalation, intelligent routing and contextual awareness. • Comprehensive data capture on customer interactions with real-time analytics, orchestrated across multiple channels and devices, enabling actionable business insights. • Intuitive, composable user interfaces, allowing users to quickly customize their workspaces for easy access to the tools and data needed. • Seamless user experience across multiple devices. • Microsoft Teams integration for enhanced internal and external communication capabilities for Microsoft Teams users. • Extensive third-party integrations, supported by a broad ecosystem of artificial intelligence technology partners, systems integrators, and resellers. • Strong focus on security and compliance that meets or exceeds industry standards, ensuring data protection. • Patented Global Reach technology ensuring superior service quality and data compliance for international operations.
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The unified nature of our Platform for CX ensures seamless data capture, consistent processing and analytics, and continuous AI learning, offering a strategic advantage in delivering scalable, outcome-driven customer experience for our customers.
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These features position our platform as a leader in cloud communications, empowering businesses to deliver exceptional customer experiences and achieve significant efficiencies.
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The platform also includes tools such as AI Orchestrator for managing multi-vendor virtual agent environments, JourneyIQ for visualizing end-to-end customer journeys and moving customer engagement from reactive to proactive, and 8x8 Engage™, a mobile-inclusive solution extending modern customer experience capabilities beyond the contact center to all customer-facing teams with the right-sized tool as well as visibility to all customer data, interactions and touchpoints.
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Our portfolio of solutions includes: • 8x8 Work: a self-contained, feature-rich, end-to-end unified communications as a service solution that delivers enterprise-grade voice services, secure video meetings, and unified messaging including direct messages, public and private team messaging rooms, and peer-to-peer short and multimedia messaging, or SMS/MMS.
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With support for omnichannel communications—including short messaging service (“SMS”), rich messaging services, or RCS, for business messaging, WhatsApp, video, and voice—plus AI-powered features like real-time transcription, live summaries, Customer 360, Agent Assist, customer AI-health scoring, and Compose with AI for message generation, 8x8 enables enterprises to deliver faster, more intelligent, and more empathetic customer service across every channel and interaction.
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Through our Global Reach technology, 8x8 Work enables full public switched telephone network, or PSTN, connectivity in approximately 60 countries.
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To address specialized customer needs, the 8x8 Platform for CX is supported by a curated Technology Partner Ecosystem, integrating best-of-breed solutions across areas such as workforce management, compliance, social listening, vertical-specific analytics, and more.
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Our global footprint simplifies administration and relieves customers from the burden of maintaining separate relationships with regional and national carriers and navigating complex regulatory environments across multiple geographies. • 8x8 Contact Center: a cloud-based contact center as-a-service solution that includes omnichannel customer engagement, advanced analytics, artificial intelligence-enabled self-service automation, payment card industry-compliant secure payments, workforce management and employee collaboration.
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This open, modular architecture allows enterprises to quickly incorporate emerging innovations, swap out technologies as new leaders emerge, and tailor deployments to their unique business goals with no added integration complexity or data silos. As the contact center landscape rapidly evolves—with new entrants driving innovation in targeted features—this integration flexibility enables 8x8 and its customer to remain agile and future-ready.
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Our composable user workspaces provide rich customer data for contextual awareness and allow users to manage multiple views and productivity tools from a “single pane of glass.” • 8x8 Engage: an artificial intelligence-powered, tailored solution that equips customer-facing employees outside the contact center with the tools and capabilities to deliver consistent, successful customer engagements.
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Our solutions incorporate artificial intelligence across multiple touchpoints to improve business outcomes, optimize agent performance, and deliver more personalized and efficient customer experiences. 8x8 Work: 8x8 Work is our UCaaS solution designed to enable seamless collaboration and business continuity across voice, video, chat, and messaging.
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Combining platform capabilities traditionally available either only in unified communications as-a-service or contact center as-a-service solutions, 8x8 Engage leverages the common customer interaction data platform to provide rich data insights that are contextual and pervasive to help users outside the contact center deliver an exceptional level of service. • 8x8 Communications Platform as-a-Service: a comprehensive set of global communications platform-as-a-service capabilities that enable businesses to directly integrate our platform services within their websites, mobile apps and business systems for personalized customer engagement at a high scale.
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Delivered through a cloud-native platform, 8x8 Work empowers organizations to streamline communication, support hybrid work environments, and integrate with broader customer experience workflows.
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Our short messaging service, Chat App, Video Interaction, 8x8 Jitsi-as-a-Service, and Voice application program interfaces enable companies to reach their 5 customers anywhere with a proven, reliable global network.
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Key capabilities include: • Integrated Voice, Video, Messaging, and Collaboration: A single application for business telephony, HD video meetings, team chat, and SMS enables more efficient internal and external communication, reducing tool sprawl and improving employee productivity. • Enterprise-Grade Cloud Architecture and Global Reach: Built for resilience and scale, 8x8 Work offers secure, compliant communications with high availability in over 55 countries, supporting mobile and distributed teams with consistent reliability. • Intelligent Integration and Platform Extensibility: Native integrations with Microsoft Teams and leading business applications, along with deep interoperability across the 8x8 Platform for CX, allow customers to unlock data-driven insights and seamlessly transition between unified communications and contact center functions. 5 8x8 Contact Center: 8x8 Contact Center is a cloud-based CCaaS solution designed to deliver consistent, intelligent, and personalized customer engagement across voice, chat, email, and digital channels.
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Our communications platform as-a-service portfolio also includes Proactive Outreach, an application-to-person outbound customer engagement solution powered by 8x8’s programmable short messaging service and WhatsApp capabilities that enables personalized outbound messaging campaigns, organization-wide alerts and two-way bulk messaging.
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Integrated into the 8x8 Platform for CX, it enables organizations to elevate service experiences, improve agent productivity, and unlock actionable insights through AI-driven capabilities.
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Campaign management features include scheduling, advanced routing, reporting and analytics and more. • Solutions for Microsoft Teams: integrations with Microsoft Teams that provide reliable, integrated global telephony and customer engagement capabilities to Microsoft Teams users, including value added services such as integrated business messaging, conversational artificial intelligence, and advanced analytics. 8x8 offers one of the broadest set of enterprise voice integrations with Microsoft Teams.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeDuring the second quarter of fiscal 2023, we entered into the following arrangements: (i) on August 10, 2022, we borrowed $250.0 million, (of which $225.0 million remains outstanding following a $25.0 million debt pay-down in June 2023) in a senior secured term loan facility (the “Term Loan”) under the Credit Agreement entered into on August 3, 2022, which term loans will mature on August 3, 2027 and initially bear interest at an annual rate equal to the Standard Overnight Financing Rate, or SOFR, (which will be subject to a floor of 1.00% and a credit spread adjustment of 0.10%), plus a margin of 6.50%; and (ii) on August 11, 2022, we issued approximately $201.9 million aggregate principal amount of 4.00% convertible senior notes due February 1, 2028 (the “2028 Notes”), which bear interest at a rate of 4.00% per annum, payable semi-annually in arrears on February 1 and August 1 of each year, commencing on February 1, 2023, and will mature on February 1, 2028, unless earlier converted, redeemed or repurchased, pursuant to the indenture for the 2028 Notes.
Biggest changeIn August 2024, we entered into the following arrangements: (i) on August 5, 2024, we borrowed $200.0 million, (of which $152.0 million remains outstanding following $48.0 million in debt pay-downs between August 2024 and March 2025) in a senior secured term loan facility (the “Term Loan”) under the Credit Agreement entered into on July 11, 2024 (the "Credit Agreement"), which Term Loan will bear interest at an annual rate equal to the 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, and which Term Loan anticipates principal repayments of $37.5 million in fiscal year 2026 and $47.5 million in fiscal year 2027, with the remaining $92.5 million principal due before or upon maturity in fiscal 2028, and (ii) on August 11, 2022, we issued approximately $201.9 million aggregate principal amount of 4.00% convertible senior notes due February 1, 2028 (the “2028 Notes”), which bear interest at a rate of 4.00% per annum, payable semi-annually in arrears on February 1 and August 1 of each year, commencing on February 1, 2023, and will mature on February 1, 2028, unless earlier converted, redeemed or repurchased, pursuant to the indenture for the 2028 Notes.
A default under an applicable indenture or the occurrence of the fundamental change may also lead to a default under agreements governing our future indebtedness.
A default under an applicable indenture or the occurrence of a fundamental change may also lead to a default under agreements governing our future indebtedness.
Regulations to which we may be subject address the following matters, among others: • license requirements that apply to providers of communications services in many jurisdictions; • our obligation to contribute to various Universal Service Fund programs, including at the state level; • monitoring on rural call completion rates; • safeguarding and use of customer proprietary network information; • rules concerning access requirements for users with disabilities; • our obligation to offer 7-1-1 abbreviated dialing for access to relay services; 24 • compliance with the requirements of United States and foreign law enforcement agencies, including the Communications Assistance for Law Enforcement Act, and cooperation with local authorities in conducting wiretaps, pen traps and other surveillance activities; • the ability to dial 9-1-1 (or corresponding numbers in regions outside the United States), auto-locate E-911 calls (or corresponding equivalents) when required, and access emergency services; • the transmission of telephone numbers associated with calling parties between carriers and service providers like us; • regulations governing outbound dialing, including the Telephone Consumer Protection Act; • FCC and other regulators efforts to combat robo-calling and caller ID spoofing; • compliance with data protection regulations such as the GDPR in Europe, which impose stringent requirements on data privacy and security; • compliance with the Telecommunications (Security) Act 2021 in the UK, which imposes strict security requirements on telecom providers to protect the UK's telecoms network from cyber threats and vulnerabilities.
Regulations to which we may be subject address the following matters, among others: • license requirements that apply to providers of communications services in many jurisdictions; • our obligation to contribute to various Universal Service Fund programs, including at the state level; • monitoring on rural call completion rates; • safeguarding and use of customer proprietary network information; • rules concerning access requirements for users with disabilities; • our obligation to offer 7-1-1 abbreviated dialing for access to relay services; • compliance with the requirements of United States and foreign law enforcement agencies, including the Communications Assistance for Law Enforcement Act, and cooperation with local authorities in conducting wiretaps, pen traps and other surveillance activities; • the ability to dial 9-1-1 (or corresponding numbers in regions outside the United States), auto-locate E-911 calls (or corresponding equivalents) when required, and access emergency services; • the transmission of telephone numbers associated with calling parties between carriers and service providers like us; • regulations governing outbound dialing, including the Telephone Consumer Protection Act; • FCC and other regulators efforts to combat robo-calling and caller ID spoofing; • compliance with data protection regulations such as the GDPR in Europe, which impose stringent requirements on data privacy and security; • compliance with the Telecommunications (Security) Act 2021 in the UK, which imposes strict security requirements on telecom providers to protect the UK's telecoms network from cyber threats and vulnerabilities.
Our restated certificate of incorporation and amended and restated by-laws contain provisions that could have the effect of delaying or preventing changes in control or changes in our management without the consent of our board of directors, including, among other things: • no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates; • the ability of our board of directors to issue shares of preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer; • the exclusive right of our board of directors to elect a director to fill a vacancy created by the expansion of our board of directors or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors; • a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders; • the requirement that a special meeting of stockholders may be called only by a majority vote of our board of directors or by stockholders holdings share of our common stock representing in the aggregate a majority of votes then outstanding, which could delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; • the ability of our board of directors, by majority vote, to amend our by-laws, which may allow our board of directors to take additional actions to prevent a hostile acquisition and inhibit the ability of an acquirer to amend our by-laws to facilitate a hostile acquisition; and • advance notice procedures with which stockholders must comply to nominate candidates to our board of directors or to propose matters to be acted upon at a stockholders' meeting, which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer's own slate of directors or otherwise attempting to obtain control of us.
Our restated certificate of incorporation and amended and restated by-laws contain provisions that could have the effect of delaying or preventing changes in control or changes in our management without the consent of our board of directors, including, among other things: • no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates; • the ability of our board of directors to issue shares of preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer; • the exclusive right of our board of directors to elect a director to fill a vacancy created by the expansion of our board of directors or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors; • a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders; • the requirement that a special meeting of stockholders may be called only by a majority vote of our board of directors or by stockholders holdings share of our common stock representing in the aggregate a majority of votes then outstanding, which could delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; 30 • the ability of our board of directors, by majority vote, to amend our by-laws, which may allow our board of directors to take additional actions to prevent a hostile acquisition and inhibit the ability of an acquirer to amend our by-laws to facilitate a hostile acquisition; and • advance notice procedures with which stockholders must comply to nominate candidates to our board of directors or to propose matters to be acted upon at a stockholders' meeting, which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer's own slate of directors or otherwise attempting to obtain control of us.
For example, our Credit Agreement contains a minimum adjusted cash Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) financial covenant, a minimum liquidity covenant and a maximum secured leverage ratio financial covenant and contains affirmative and negative covenants customary for transactions of this type, including limitations with respect to indebtedness, liens, investments, dividends, disposition of assets, change in business, and transactions with affiliates; • making it more difficult for us to satisfy our obligations with respect to our indebtedness; • requiring us to dedicate a substantial portion of our cash flow from operations to debt service payments on our debt, which reduces the funds available for working capital, capital expenditures, acquisitions and other general corporate purposes; • limiting our flexibility in planning for, or reacting to, changes in the industry in which we operate; • placing us at a competitive disadvantage compared to any of our less-leveraged competitors; • increasing our vulnerability to both general and industry-specific adverse economic conditions; • potentially complicating our ability to refinance our debt under favorable conditions, or at all, which could further restrict our operational flexibility and increase our financing costs; • increasing our vulnerability to fluctuations in interest rates, particularly for any variable-rate debt; and • limiting our ability to obtain additional debt or equity financing to fund future working capital, capital expenditures, acquisitions or other general corporate requirements and increasing our cost of borrowing.
For example, our Credit Agreement contains a minimum adjusted cash Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) financial covenant, a minimum liquidity covenant and a maximum secured leverage ratio financial covenant and contains affirmative and negative covenants customary for transactions of this type, including limitations with respect to indebtedness, liens, investments, dividends, disposition of assets, change in business, and transactions with affiliates; • making it more difficult for us to satisfy our obligations with respect to our indebtedness; • requiring us to dedicate a substantial portion of our cash flow from operations to debt service payments on our debt, which reduces the funds available for working capital, capital expenditures, acquisitions and other general corporate purposes; 28 • limiting our flexibility in planning for, or reacting to, changes in the industry in which we operate; • placing us at a competitive disadvantage compared to any of our less-leveraged competitors; • increasing our vulnerability to both general and industry-specific adverse economic conditions; • potentially complicating our ability to refinance our debt under favorable conditions, or at all, which could further restrict our operational flexibility and increase our financing costs; • increasing our vulnerability to fluctuations in interest rates, particularly for any variable-rate debt; and • limiting our ability to obtain additional debt or equity financing to fund future working capital, capital expenditures, acquisitions or other general corporate requirements and increasing our cost of borrowing.
Further, in some jurisdictions we may not be able to pursue litigation effectively due to barriers inherent in foreign legal systems or customs. 25 Our inability to use software licensed from third parties, or our use of open-source software under license terms that interfere with our proprietary rights, could disrupt our business.
Further, in some jurisdictions we may not be able to pursue litigation effectively due to barriers inherent in foreign legal systems or customs. Our inability to use software licensed from third parties, or our use of open-source software under license terms that interfere with our proprietary rights, could disrupt our business.
Our current international operations and future initiatives, including Southeast Asia, will involve a variety of risks, including: • localization of our services, including translation into foreign languages and associated expenses; • regulation of our services as traditional telecommunications services, requiring us to obtain authorizations or licenses to operate in foreign jurisdictions, or alternatively preventing us from selling our full suite of services, or any services at all, in such jurisdictions; • changes in a specific country's or region's regulatory requirements, taxes, trade policies, tariffs, sanctions, trade laws, or political, or economic condition; • increased competition from regional and global cloud communications competitors in the various geographic markets in which we compete, where such markets may have different sales cycles, selling processes, and feature requirements, and may involve high levels of competition from local vendors that could require aggressive pricing strategies and adaptations to local market demands, which may limit our ability to compete effectively in different regions globally; • more stringent regulations relating to data security and the unauthorized use of, access to, and transfer of, commercial and personal information, particularly in the EU, and potentially conflicting privacy regulations that could complicate data management and compliance; • differing labor regulations, especially in the EU and Latin America, where labor laws are generally more advantageous to employees as compared to those in the United States, including deemed hourly wage and overtime regulations in these locations; • challenges inherent in efficiently managing an increased number of employees over large geographic distances, including the need to implement appropriate systems, policies, benefits, and compliance programs; • difficulties in managing a business in new markets with diverse cultures, languages, customs, legal systems, alternative dispute systems, and regulatory systems, which could delay or impede our ability to effectively launch our operations or scale them efficiently; • increased travel, real estate, infrastructure, and legal compliance costs associated with international operations; • different pricing environments, longer sales cycles, longer accounts receivable payment cycles, and other collection difficulties; • currency exchange rate fluctuations and the resulting effect on our revenue and expenses, and the cost and risk of entering into hedging transactions if we chose to do so in the future; • limitations on our ability to reinvest earnings from operations in one country to fund the capital needs of our operations in other countries; • laws and business practices favoring local competitors or general preferences for local vendors; • limited or insufficient intellectual property protection; • political instability or terrorist activities, including the impact of geopolitical tensions in regions like Eastern Europe, the Middle East, and Asia, which could affect market stability and operations, or impact our employees located in those regions; • a military conflict with China and/or Russia or other geopolitical conflicts between nation-states, that will likely involve cyberattacks on critical infrastructure, including, but not limited to, global data centers, power grids, and communication companies; • exposure to liabilities under anti-corruption and anti-money laundering laws, including the United States Foreign Corrupt Practices Act, the United Kingdom Bribery Act 2010, trade and export laws such as those enforced by the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury, and similar laws and regulations in other jurisdictions; • continuing uncertainty regarding social, political, immigration, and tax and trade policies in the United States and abroad, including as a result of the United Kingdom's withdrawal from the EU; • regional travel restrictions, business closures, government actions and other restrictions in connection with the geopolitical instabilities or pandemics; and • adverse tax burdens and foreign exchange controls that could make it difficult to repatriate earnings and cash.
Our current international operations and future initiatives, including Southeast Asia, will involve a variety of risks, including: • localization of our services, including translation into foreign languages and associated expenses; • regulation of our services as traditional telecommunications services, requiring us to obtain authorizations or licenses to operate in foreign jurisdictions, or alternatively preventing us from selling our full suite of services, or any services at all, in such jurisdictions; • changes in a specific country's or region's regulatory requirements, taxes, trade policies, tariffs, sanctions, trade laws, environmental laws, or political or economic condition; • increased competition from regional and global cloud communications competitors in the various geographic markets in which we compete, where such markets may have different sales cycles, selling processes, and feature requirements, and may involve high levels of competition from local vendors that could require aggressive pricing strategies and adaptations to local market demands, which may limit our ability to compete effectively in different regions globally; • more stringent and evolving regulations relating to data security, data privacy, data protection, data localization, cybersecurity, consumer protection, the use of AI technologies, and the unauthorized use of, access to, and transfer of, commercial and personal information, particularly in the EU, and potentially conflicting privacy regulations that could complicate data management and compliance; • differing labor regulations, especially in the EU and Latin America, where labor laws are generally more advantageous to employees as compared to those in the United States, including deemed hourly wage and overtime regulations in these locations; • challenges inherent in efficiently managing an increased number of employees over large geographic distances, including the need to implement appropriate systems, policies, benefits, and compliance programs; • difficulties in managing a business in new markets with diverse cultures, languages, customs, legal systems, alternative dispute systems, and regulatory systems, which could delay or impede our ability to effectively launch our operations or scale them efficiently; • increased travel, real estate, infrastructure, and legal compliance costs associated with international operations; • different pricing environments, longer sales cycles, longer accounts receivable payment cycles, and other collection difficulties; • currency exchange rate fluctuations and the resulting effect on our revenue and expenses, and the cost and risk of entering into hedging transactions if we chose to do so in the future; 20 • limitations on our ability to reinvest earnings from operations in one country to fund the capital needs of our operations in other countries; • laws and business practices favoring local competitors or general preferences for local vendors; • limited or insufficient intellectual property protection; • political instability or terrorist activities, including the impact of geopolitical tensions in regions like Eastern Europe, the Middle East, and Asia, which could affect market stability and operations, or impact our employees located in those regions; • a military conflict with China and/or Russia or other geopolitical conflicts between nation-states, that will likely involve cyberattacks on critical infrastructure, including, but not limited to, global data centers, power grids, and communication companies; • exposure to liabilities under anti-corruption and anti-money laundering laws, including the United States Foreign Corrupt Practices Act, the United Kingdom Bribery Act 2010, trade and export laws such as those enforced by the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury, and similar laws and regulations in other jurisdictions; • continuing uncertainty regarding social, political, immigration, and tax and trade policies in the United States and abroad, including as a result of the United Kingdom's withdrawal from the EU; • regional travel restrictions, business closures, government actions and other restrictions in connection with geopolitical instabilities or pandemics; and • adverse tax burdens and foreign exchange controls that could make it difficult to repatriate earnings and cash.
If we are unable to persuade our existing business partners to increase their sales of our services or to build successful partnerships with new organizations, or if our channel partners are unsuccessful in their marketing and sales efforts, we may not be able to grow our business and increase our revenue at the rate we predict, or at all, and our business may be materially adversely affected.
If we are unable to persuade our existing business partners to 15 increase their sales of our services or to build successful partnerships with new organizations, or if our channel partners are unsuccessful in their marketing and sales efforts, we may not be able to grow our business and increase our revenue at the rate we predict, or at all, and our business may be materially adversely affected.
Furthermore, lawsuits like these may require significant time and expense to defend, may divert management's attention away from other aspects of our operations and, upon resolution, may have a material adverse effect on our business, results of operations, financial condition, and cash flows. Inability to protect our proprietary technology would disrupt our business.
Furthermore, lawsuits like these may require significant time and expense to defend, may divert management's attention away from other aspects of our operations and, upon resolution, may have a material adverse effect on our business, results of operations, financial condition, and cash flows. 27 Inability to protect our proprietary technology would disrupt our business.
This reclassification could severely impact our financial ratios and may affect our ability to meet financial obligations or secure new financing under favorable terms. Changes in financial accounting standards or practices may cause adverse, unexpected financial reporting fluctuations and affect our reported operating results. U.S.
This reclassification could severely impact our financial ratios and may affect our ability to meet financial obligations or secure new financing under favorable terms. 29 Changes in financial accounting standards or practices may cause adverse, unexpected financial reporting fluctuations and affect our reported operating results. U.S.
We use the infrastructure of third-party network service providers, such as Equinix, Inc. and CenturyLink, Inc., and public cloud providers, including Amazon Web Services, Inc. and Oracle Corporation, to provide our cloud services over their networks rather than deploying our own network connectivity.
We use the infrastructure of third-party network service providers, such as Equinix, Inc., and public cloud providers, including Amazon Web Services, Inc. and Oracle Corporation, to provide our cloud services over their networks rather than deploying our own network connectivity.
In response to a competitive hiring environment, some of 16 our competitors are responding by increasing employee compensation, paying more on average than we pay for the same position or offering more attractive equity compensation.
In response to a competitive hiring environment, some of our competitors are responding by increasing employee compensation, paying more on average than we pay for the same position or offering more attractive equity compensation.
We have formed subsidiaries outside the United States, including a subsidiary in Romania that contributes significantly to our research and development efforts. Additionally, we have expanded into the United Kingdom, the EU, and Southeast Asia.
We have formed subsidiaries and expanded operations outside the United States, including a subsidiary in Romania that contributes significantly to our research and development efforts. Additionally, we have expanded into the United Kingdom, the EU, and Southeast Asia.
The risks and challenges associated with sales and other operations outside the United States are different in 19 some ways from those associated with our operations in the United States, and we have a limited history addressing those risks and meeting those challenges.
The risks and challenges associated with sales and other operations outside the United States are different in some ways from those associated with our operations in the United States, and we have a limited history addressing those risks and meeting those challenges.
To the extent that we cannot quickly port telephone numbers out when a customer leaves our service to go to another provider, we could be subject to regulatory enforcement action. 22 Risks Related to Regulatory Matters Cyber intrusions, breaches of our networks or systems or those of our service and cloud storage providers, and other malicious acts could adversely impact our business.
To the extent that we cannot quickly port telephone numbers out when a customer leaves our service to go to another provider, we could be subject to regulatory enforcement action. 23 Risks Related to Regulatory Matters Cyber intrusions, breaches of our networks or systems or those of our service and cloud storage providers, and other malicious acts could adversely impact our business.
These risks are discussed more fully below and include, but are not limited to: Risks Related to our Business and Industry • Our history of losses and anticipated continued losses. • Unpredictability of our future operating results. • Reductions in either spending or collections may result in reductions in revenue. • Future increases in our customer churn. • Dependence on new customer acquisition and retention and upsell to existing customers. • Intense competition in our industry. • Failure to manage and grow our indirect sales channels. • Complexity and length of enterprise customer sales cycle. • Dependence on new product and services to maintain and grow our business. • Difficulty attracting and retaining key management, technical and sales personnel. • We may not realize all of the anticipated benefits of our acquisition of Fuze, Inc. • Potential past and future liabilities related to federal, state, local and international taxes, fees, surcharges and levees. • We may incur impairments to goodwill, intangible assets or long-lived assets.
These risks are discussed more fully below and include, but are not limited to: Risks Related to our Business and Industry • Our history of losses and anticipated continued losses. • Unpredictability of our future operating results. • Reductions in spending may result in reductions in revenue. • Future increases in our customer churn. • Dependence on new customer acquisition and retention and upsell to existing customers. • Intense competition in our industry. • Failure to manage and grow our indirect sales channels. • Complexity and length of enterprise customer sales cycle. • Dependence on new product and services to maintain and grow our business. • Difficulty attracting and retaining key management, technical and sales personnel. • We may not realize all of the anticipated benefits of our acquisitions, including Fuze, Inc. • Potential past and future liabilities related to federal, state, local and international taxes, fees, surcharges and levees. • We may incur impairments to goodwill, intangible assets or long-lived assets.
If our existing anti-fraud procedures are not adequate or effective, consumer fraud and theft of service could have a material adverse effect on our business, financial condition, and operating results. Similarly, bad actors may use our products to promote their goals and encourage users to engage in improper or illegal activities.
If our existing anti-fraud procedures are not adequate or effective, consumer fraud and theft of service could have a material adverse effect on our business, financial condition, and operating results. Similarly, bad actors may use our products to promote their goals and encourage users to engage in improper, illegal or otherwise inappropriate activities.
During our fiscal year ending March 31, 2025, we intend to continue to invest in sales and marketing and research and development, among other areas of our business, to compete more successfully for the business of companies that are transitioning to cloud communications and otherwise position ourselves to take advantage of long-term revenue-generating opportunities.
During our fiscal year ending March 31, 2026, we intend to continue to invest in sales and marketing and research and development, among other areas of our business, to compete more successfully for the business of companies that are transitioning to cloud communications and otherwise position ourselves to take advantage of long-term revenue-generating opportunities.
We also face competition from Internet and cloud service companies such as Alphabet Inc. (Google Voice and Google Meet), Amazon Inc., and Microsoft Corporation. Some of these competitors have developed software solutions for their respective communications and/or collaboration silos, such as Microsoft, which is investing significantly in its Microsoft Teams unified communication and collaboration product.
We also face competition from Internet and cloud service companies such as Alphabet Inc. (Google Voice and Google Meet), Amazon Inc., and Microsoft Corporation. Some of these competitors have developed software solutions for their respective communications and/or collaboration products, such as Microsoft, which is investing significantly in its Microsoft Teams unified communication and collaboration product.
Currently, several jurisdictions are conducting audits of 8x8; in the event our positions are unsuccessful, we may be subject to tax payments, interest, and penalties in excess of those that we have accrued for. As of March 31, 2024, we have paid or accrued for state or local taxes, fees, and surcharges that we believe are required to be remitted.
Currently, several jurisdictions are conducting audits of 8x8; in the event our positions are unsuccessful, we may be subject to tax payments, interest, and penalties in excess of those that we have accrued for. As of March 31, 2025, we have paid or accrued for state or local taxes, fees, and surcharges that we believe are required to be remitted.
Among other risks we may encounter in connection with acquisitions: • we may experience difficulty and delays in integrating the products, technology platform, operations, systems and personnel of the acquired business with our own, particularly if the acquired business is outside of our core competencies; • we may not be able to manage the acquired business or the integration process effectively, which may limit our ability to realize the financial and strategic benefits we expected from the transaction; • the acquisition and integration may divert management’s attention from our day-to-day operations and disrupt the ordinary functioning of our ongoing business; • we may have difficulty establishing and maintaining appropriate governance, reporting relationships, policies, controls, and procedures for the acquired business, particularly if it is based in a country or region where we did not previously operate; • any failure to successfully manage the integration process may also adversely impact relationships with our employees, suppliers, customers, and business partners, or those of the acquired business, and may result in increased churn or the loss of key customers, business partners or employees for our business or those of the acquired business; • we may become subject to new or more stringent regulatory compliance obligations and costs by virtue of the acquisition, including risks related to international acquisitions that may operate in new jurisdictions or geographic areas where we may have no or limited experience; • we may become subject to litigation, investigations, proceedings, fines or penalties arising from or relating to the transaction or the acquired business, and any resulting liabilities may exceed our forecasts; • we may acquire businesses with different revenue models, customer concentration risks, and contractual relationships; • we may assume long-term contractual obligations, commitments or liabilities (for example, those relating to leased facilities), which could adversely impact our efforts to achieve and maintain profitability and impair our cash flow; • we may not successfully evaluate or utilize the acquired technology and accurately forecast the financial impact of an acquisition transaction, including accounting charges; • the acquisition may create a drag on our overall revenue growth rate, which could lead analysts and investors to reduce their valuation of our company; • we may be exposed to existing cyber risks not identified prior to an acquisition that could impact our core operations until mitigated; and • if an acquired business’s cybersecurity controls are materially weaker than ours, we may be exposed to existing cyber risks not identified prior to an acquisition that could impact our core operations until mitigated.
Among other risks we may encounter in connection with acquisitions: • we may experience difficulty and delays in integrating the products, technology platform, operations, systems and personnel of the acquired business with our own, particularly if the acquired business is outside of our core competencies, has significant international operations or weaker internal controls; • we may not be able to manage the acquired business or the integration process effectively, which may limit our ability to realize the financial and strategic benefits we expected from the transaction; 21 • the acquisition and integration may divert management's attention from our day-to-day operations and disrupt the ordinary functioning of our ongoing business; • we may have difficulty establishing and maintaining appropriate governance, reporting relationships, policies, controls, and procedures for the acquired business, particularly if it is based in a country or region where we did not previously operate; • any failure to successfully manage the integration process may also adversely impact relationships with our employees, suppliers, customers, and business partners, or those of the acquired business, and may result in increased churn or the loss of key customers, business partners or employees for our business or those of the acquired business; • we may become subject to new or more stringent regulatory compliance obligations and costs by virtue of the acquisition, including risks related to international acquisitions that may operate in new jurisdictions or geographic areas where we may have no or limited experience; • we may become subject to litigation, investigations, proceedings, fines or penalties arising from or relating to the transaction or the acquired business, including tax obligations or legal claims arising from the activities of the companies or businesses we acquire, and any resulting liabilities may exceed our forecasts; • we may acquire businesses with different revenue models, customer concentration risks, and contractual relationships; • we may assume long-term contractual obligations, commitments or liabilities (for example, those relating to leased facilities), which could adversely impact our efforts to achieve and maintain profitability and impair our cash flow; • we may not successfully evaluate or utilize the acquired technology and accurately forecast the financial impact of an acquisition transaction, including accounting charges; • the acquisition may create a drag on our overall revenue growth rate, which could lead analysts and investors to reduce their valuation of our company; • we may be exposed to existing cyber risks not identified prior to an acquisition that could impact our core operations until mitigated; and • if an acquired business's cybersecurity controls are materially weaker than ours, we may be exposed to existing cyber risks not identified prior to an acquisition that could impact our core operations until mitigated.
If our sales and marketing efforts are not effective in identifying and qualifying prospective new customers, demonstrating the quality, value, features and capabilities of our solutions, especially XCaaS, to those prospects and promoting our brand generally, we may not be able to acquire new customers at the rate necessary to achieve our revenue targets.
If our sales and marketing efforts are not effective in identifying and qualifying prospective new customers, demonstrating the quality, value, features and capabilities of our solutions to those prospects and promoting our brand generally, we may not be able to acquire new customers at the rate necessary to achieve our revenue targets.
Our notes are currently significantly out of the money, and our stock price would 26 have to increase significantly for our notes to convert prior to maturity.
Our notes are currently significantly out of the money, and our stock price would have to increase significantly for our notes to convert prior to maturity.
The investments we have made in fiscal 2024 and beyond may not generate the returns that we anticipate, which could adversely impact our financial condition and make it more difficult for us to grow revenue and/or achieve profitability in the time period that we expect, or not at all.
The investments we have made in fiscal 2025 and beyond may not generate the returns that we anticipate, which could adversely impact our financial condition and make it more difficult for us to grow revenue and/or achieve profitability in the time period that we expect, or not at all.
There is a risk that due to changes under the Tax Act, regulatory changes, or other unforeseen reasons, the existing net operating loss could expire or otherwise be unavailable to offset future income tax liabilities, which could have a material impact on our net income (loss) in future periods.
There is a risk that due to changes under the Tax Act, regulatory changes or other unforeseen reasons, the existing NOLs could expire or otherwise be unavailable to offset future income tax liabilities, which could have a material impact on our net income (loss) in future periods.
In connection with our voice, video meetings, chat, team messaging, contact center, and enterprise-class application program interface solutions, we face competition from other cloud service providers such as RingCentral, Inc., Genesys Telecommunications Laboratories, Inc., Zoom Video Communications, Inc., Vonage Holdings Corp.(acquired by Ericsson), Five9, Inc., NICE inContact, Inc., Talkdesk, Inc., and Twilio Inc., among others, as well as from legacy on-premises communications equipment providers, such as Avaya, Inc., Cisco Systems, Inc., and Mitel Networks Corp.
In connection with our voice, video meetings, chat, team messaging, contact center, and enterprise-class application program interface solutions, we face competition from other cloud service providers such as RingCentral, Inc., Genesys Telecommunications Laboratories, Inc., Zoom Video Communications, Inc., Ericsson, Five9, Inc., NICE inContact, Inc., Talkdesk, Inc., and Twilio Inc., among others, as well as from legacy on-premises communications equipment providers, such as Avaya, Inc., Cisco Systems, Inc., and Mitel Networks Corp.
Despite the implementation of security measures by us or our vendors, our computing devices, infrastructure, or networks, or our vendors' computing devices, infrastructure, or networks may be vulnerable to hackers, social engineering and phishing, ransomware, computer viruses, worms, other malicious software programs, or similar disruptive problems due to a security vulnerability in our or our vendors' infrastructure or network, or our vendors, customers, employees, business partners, consultants, or other internet users who attempt to invade our or our vendors' public and private computers, tablets, mobile devices, software, data networks, or voice networks.
Despite the implementation of security measures by us or our vendors, our computing devices, infrastructure, or networks, or our vendors' computing devices, infrastructure, or networks may be vulnerable to hackers, social engineering and phishing, ransomware, and malicious code or software, or similar disruptive problems due to a security vulnerability in our or our vendors' infrastructure or network, or our vendors, customers, employees, business partners, consultants, or other internet users who attempt to invade our or our vendors' public and private computers, tablets, mobile devices, software, data networks, or voice networks.
Our business operations, from our internal and service operations to research and development activities, sales and marketing efforts and customer and partner communications, depend on our ability to protect our network from interruption by damage from hackers, social engineering and phishing, ransomware, computer viruses, worms, other malicious software programs, including vulnerabilities in our network infrastructure such as firewalls, switches and routers, or similar disruptive problems or other events beyond our control.
Our business operations, from our internal and service operations to research and development activities, sales and marketing efforts and customer and partner communications, depend on our ability to protect our network from interruption by damage from hackers, social engineering and phishing, ransomware, and malicious code or software, including vulnerabilities in our network infrastructure such as firewalls, switches and routers, or similar disruptive problems or other events beyond our control.
We may be targets of cyber threats and security breaches, given the nature of the information that we store, process, and transmit and the fact that we provide communications services to a broad range of businesses. To the extent that state-sponsored incidents of cybersecurity breaches increase due to geopolitical tensions, this risk may continue to increase.
We may be the target of direct or indirect cyber threats and security breaches, given the nature of the information that we store, process, and transmit and the fact that we provide communications services to a broad range of businesses. To the extent that state-sponsored incidents of cybersecurity breaches increase due to geopolitical tensions, this risk may continue to increase.
Utilization of our net operating loss and tax credit carryforwards can become subject to substantial annual limitation due to the ownership change limitations provided by Section 382 of the Internal Revenue Code and similar state provisions.
Utilization of our NOLs and tax credit carryforwards can become subject to substantial annual limitation due to the ownership change limitations provided by Section 382 of the Internal Revenue Code and similar state provisions.
As a provider of interconnected Voice over Internet Protocol services, we are subject to various international, federal, state, and local requirements applicable to our industry, including those that address, among other matters, acceptable marketing practices, the accessibility of 9-1-1 or other international emergency services, local number porting, robo-calling, and caller ID spoofing.
As a provider of interconnected Voice over Internet Protocol services, we are subject to various international, federal, state, and local requirements applicable to our industry, including those that address, among other matters, acceptable marketing practices, the accessibility of 9-1-1 or other international emergency services, local number porting, robo-calling, caller ID spoofing, outage notifications, call traceback, and know your customer requirements.
In addition, under the Tax Cuts and Jobs Act, or the Tax Act, the amount of net operating loss that we are permitted to deduct in any taxable year is limited to 80% of the taxable income in such year.
In addition, under the Tax Cuts and Jobs Act, or the Tax Act, the amount of NOLs that we are permitted to deduct in any taxable year is limited to 80% of the taxable income in such year.
Any interruption or disruption to our network, or the third parties on which we rely, could adversely impact our ability to provide service. Our network could be disrupted by circumstances outside of our control, including natural disasters, acts of war, terrorist attacks, global pandemics or malicious acts, among other unforeseen events, including, but not limited to, cyberattacks.
Any interruption or disruption to our network, or the third parties on which we rely, could adversely impact our ability to provide service. Our network could be disrupted by circumstances outside of our control, including natural disasters, acts of war, terrorist attacks, malicious acts (including cyberattacks), or other unforeseen events.
Risks Related to our Products and Operations • Service outages due to software vulnerabilities or failures of physical infrastructure. • Scalability of our cloud software services to meet existing and new customer demand. • Risks related to international expansion, including the Russia and Ukraine war. • Risks related to current and future acquisitions. • Our ability to maintain compatibility with third-party applications and mobile platforms. • Reliance on third-parties to provide network services and connectivity. • Reliance on third-party vendors for IP phones and certain software endpoints. • Difficulty executing local number porting requests.
Risks Related to our Products and Operations • Service outages due to software vulnerabilities or failures of physical infrastructure. • Scalability of our cloud software services to meet existing and new customer demand. • International expansion, including geopolitical tensions and increasing costs of regulatory compliance. • Current and future acquisitions. • Our ability to maintain compatibility with third-party applications and mobile platforms. • Reliance on third-parties to provide network services and connectivity. • Reliance on third-party vendors for IP phones and certain software endpoints. • Difficulty executing local number porting requests.
Such an ownership change, or any future ownership change, could have a material effect on our ability to utilize the net operating loss or research credit carryforwards.
Such an ownership change, or any future ownership change, could have a material effect on our ability to utilize the NOLs or research credit carryforwards.
These include, but are not limited to: • changes in the markets we compete in, including reductions in market growth or consolidation among competitors, channel partners, or customers; • changes in customer demand, including cancellations, subscription downgrades, or substitution of our lower-priced, less feature-full products for our higher-priced, more feature-full products; • changes in the competitive dynamics in our markets, including competitors increasing compensation payable to channel partners or increasing discounts or credits issued to customers; • lengthy sales cycles; • changes in regulatory requirements or lengthy regulatory approval cycles; • new product introductions by us or our competitors; • unpredictability of usage-based revenue products that do not involve long-term subscription commitments; • the mix of our customer base, sales channels, and services sold; • the number of additional customers, on a net basis; 13 • the amount and timing of costs associated with recruiting, training, and integrating new employees; • the retention of our senior management and other key employees, their ability to execute on our business plan and the loss of services of senior management or other key employees, whether in the past or in the future; • unforeseen costs and expenses related to the expansion of our business, operations, and infrastructure; • our dependency on third-party vendors of hardware, software, and services that we resell to our customers, including the effects of supplier price increases which we are unable to pass along to our customers; • our ability to execute our operating plans successfully, including back-office system optimizations and increases in execution speed while also reducing costs and optimizing our operating margin; • continued compliance with industry standards and regulatory requirements; • decline in usage related to increases in return to office; • material security breaches or service interruptions due to cyberattacks or infrastructure failures or unavailability; and • introduction and adoption of our cloud software solutions in markets outside of the United States.
These include, but are not limited to: • changes in the markets we compete in, including reductions in market growth or consolidation among competitors, channel partners, or customers, and the impact of macroeconomic conditions such as inflation, interest rates, recession, tariffs, geopolitical instability, and decreased economic output; • changes in customer demand, including cancellations, subscription downgrades, or substitution of our lower-priced, less feature-full products for our higher-priced, more feature-full products, particularly as customers transition to AI-based solutions; • changes in the competitive dynamics in our markets, including competitors increasing compensation payable to channel partners or increasing discounts or credits issued to customers; • lengthy sales cycles; • changes in regulatory requirements or lengthy regulatory approval cycles; • new product introductions by us or our competitors, including AI-based products and features; • unpredictability of usage-based revenue products that do not involve long-term subscription commitments; • the mix of our customer base, sales channels, and services sold; • the number of additional customers, on a net basis; • the amount and timing of costs associated with recruiting, training, and integrating new employees; • the retention of our senior management and other key employees, their ability to execute on our business plan and the loss of services of senior management or other key employees, whether in the past or in the future; 13 • unforeseen costs and expenses related to the expansion of our business, operations, and infrastructure, including internationally; • our dependency on third-party vendors of hardware, software, and services that we resell to our customers, including the effects of supplier price increases which we are unable to pass along to our customers; • our ability to execute our operating plans successfully, including back-office system optimizations and increases in execution speed while also reducing costs and optimizing our operating margin; • continued compliance with industry standards and regulatory requirements; • decline in usage related to increases in return to office; • material security breaches or service interruptions due to cyberattacks or infrastructure failures or unavailability, which may result in additional expenses, losses, legal or regulatory actions, customer credits, and reputational harm; • introduction and adoption of our cloud software solutions in markets outside of the United States; and • litigation involving us, our industry, or both, including securities class action lawsuits.
Our ability to use our net operating losses or research tax credits to offset future taxable income is subject to certain limitations. As of March 31, 2024, we had federal net operating loss, or NOL, carryforwards of $1,118.7 million, of which $335.5 million are related to years prior to fiscal 2019 and begin to expire in 2034.
Our ability to use our net operating losses or research tax credits to offset future taxable income is subject to certain limitations. As of March 31, 2025, we had federal net operating loss ("NOL"), carryforwards of $1,023.8 million, of which $321.5 million are related to years prior to fiscal 2019 and begin to expire in 2035.
We operate in an emerging market that is characterized by rapid changes in customer requirements, frequent introductions of new and enhanced products and services, and continuing and rapid technological advancement.
We operate in an emerging market that is characterized by rapid changes in customer requirements, frequent introductions of new and enhanced products and services, and continuing and rapid technological advancement, particularly in artificial intelligence (AI) and machine learning.
Any errors, bugs, or vulnerabilities discovered in our code after release could result in damage to our reputation, loss of customers, loss of revenue, or liability for service credits or damages, any of which could adversely affect our business and financial results.
Some errors in our software code may not be discovered until after the code has been released. Any errors, bugs, or vulnerabilities discovered in our code after release could result in damage to our reputation, loss of customers, loss of revenue, or liability for service credits or damages, any of which could adversely affect our business and financial results.
If we are unable to maintain the quality and performance of our service whether due to a lack of feature parity or quality of service relative to the products of our competitors or service outages or disruptions, we could experience potentially sharp increases in customer cancellations and/or downgrades or customer credits which would adversely impact our revenue. 14 Our success hinges on our ability to acquire new customers and retain and sell additional services to our existing customers.
If we are unable to maintain the quality and performance of our service whether due to a lack of feature parity or quality of service relative to the products of our competitors or service outages or disruptions, we could experience potentially sharp increases in customer cancellations and/or downgrades or customer credits which would adversely impact our revenue.
Risks Related to our Debt, our Stock, and our Charter • Cash flow may be insufficient to service or pay down our substantial debt. • Inability to raise necessary funds in the future. • Conditional conversion features of our debt could adversely affect our financial condition. • Change in accounting standards, including for our debt, may cause adverse financial reporting fluctuations and affect our reported operating results. • The current instability in the banking system could adversely impact our operations. • Future sales of common stock or equity-linked securities. • Certain provisions in our charter may discourage takeover attempts.
Risks Related to Intellectual Property • Infringement of third-party proprietary technology. • Inability to protect our proprietary technology. • Inability to use third-party or open-source software. 12 Risks Related to our Debt, our Stock, and our Charter • Cash flow may be insufficient to service or pay down our substantial debt. • Inability to raise necessary funds in the future. • Conditional conversion features of our debt could adversely affect our financial condition. • Change in accounting standards, including for our debt, may cause adverse financial reporting fluctuations and affect our reported operating results. • Future sales of common stock or equity-linked securities. • Certain provisions in our charter may discourage takeover attempts.
As our target markets mature, or as competitors introduce lower cost and/or more differentiated products or services that compete or are perceived to compete with ours, we may be unable to attract new customers, on favorable terms, or at all, which could have an adverse effect on our revenue.
As our target markets mature, or as competitors introduce lower cost and/or more differentiated products or services that compete or are perceived to compete with ours, we may be unable to attract new customers, on favorable terms, or at all, which could have an adverse effect on our revenue. 14 In addition to acquiring new customers, we generate new revenue by selling our existing customers additional quantities of subscribed services, or subscriptions to new or upgraded services.
Non-compliance with this act could result in significant penalties and affect our ability to operate in the UK; and • adherence to environmental regulations concerning the disposal and recycling of electronic products and batteries, which are becoming increasingly relevant as we expand our hardware offerings.
Non-compliance with this act could result in significant penalties and affect our ability to operate in the UK; • adherence to environmental regulations, including those concerning the disposal and recycling of electronic products and batteries, which are becoming increasingly relevant as we expand our hardware offerings; and 26 • reporting on climate related financial risk (such as California SB 261).
Our ability to maintain or grow is also subject to the risk of future disruptive technologies. If new technologies emerge that are able to deliver communications and collaboration solution services at lower prices, more efficiently, more conveniently, or more securely, such technologies could adversely impact our ability to compete.
If new technologies emerge that are able to deliver communications and collaboration solution services at lower prices, more efficiently, more conveniently, or more securely, such technologies could adversely impact our ability to compete.
Our ability to realize these anticipated benefits, and the timing of this realization, depend upon a number of factors and future events, many of which we and Fuze, individually or collectively, cannot control.
("Fuze") will depend, in part, on our ability to realize the anticipated growth opportunities and synergies from combining the businesses of our company and Fuze. Our ability to realize these anticipated benefits, and the timing of this realization, depend upon a number of factors and future events, many of which we and Fuze, individually or collectively, cannot control.
The remaining $783.2 million carry forward indefinitely, but can only be used to apply up to 80% of the Company's taxable income for a given tax year. As of March 31, 2024, the Company also had state net operating loss carryforwards of $915.8 million, the majority of which will expire at various dates between 2025 and 2043.
The remaining $702.3 million carry forward indefinitely, but can only be used to apply up to 80% of the Company's taxable income for a given tax year. As of March 31, 2025, the Company also had state NOL carryforwards of $869.4 million, the majority of which will expire at various dates between 2026 and 2044.
These undisclosed liabilities could have an adverse effect on our business, financial condition, and prospects. Taxing authorities have asserted, or could in the future assert, that we should have collected or in the future should collect sales and use, value added, or similar taxes, including on similar services for which our competitors may not be subject to the same obligations.
These liabilities could include regulatory compliance issues, customer claims, intellectual property disputes, or other financial obligations, each of which could have a material adverse effect on our business, financial condition, and prospects. 17 Taxing authorities have asserted, or could in the future assert, that we should have collected or in the future should collect sales and use, value added, or similar taxes, including on similar services for which our competitors may not be subject to the same obligations.
Additionally, any dilutive effect of such issuances might decrease the earnings per share and ownership interests of existing shareholders, potentially leading to further downward pressure on our stock price. Certain provisions in our charter documents and Delaware law could discourage takeover attempts.
Additionally, any dilutive effect of such issuances might decrease the earnings per share and ownership interests of existing shareholders, potentially leading to further downward pressure on our stock price.
We recorded an operating loss of approximately $27.6 million for the year ended March 31, 2024, and ended the period with an accumulated deficit of approximately $860.5 million. We expect to continue to incur operating losses in the near future as we continue to invest in our business.
We recorded operating income of approximately $15.2 million for the year ended March 31, 2025, and ended the period with an accumulated deficit of approximately $887.7 million. We expect to continue to incur operating losses in the near future as we continue to invest in our business.
As of March 31, 2024, we currently have approximately $201.9 million aggregate principal amount of the 2028 Notes and the $225.0 million Term Loan outstanding.
As of May 12, 2025, we currently have approximately $201.9 million aggregate principal amount of the 2028 Notes and $137.0 million of the Term Loan outstanding.
Following the completion of the acquisition, the surviving corporation possesses not only all of the assets, but also all of the liabilities, of Fuze. We have experienced unexpected liabilities as a result of our Fuze acquisition. It is possible that undisclosed, contingent, or other liabilities or problems may arise in the future of which we were previously unaware.
Following the completion of the acquisition, we have assumed all of Fuze’s assets and liabilities. We have already experienced unexpected liabilities as a result of the Fuze acquisition, and it is possible that undisclosed, contingent, or other liabilities may arise in the future of which we were previously unaware.
The costs associated with any material defects or errors in our software or other performance problems may be substantial and could materially adversely affect our operating results. 18 Our physical infrastructure is concentrated in a few facilities (i.e., data centers and public cloud providers), and any failure in our physical infrastructure or service outages could lead to significant costs and/or disruptions and could reduce our revenue, harm our business reputation and have a material adverse effect on our financial results.
Our physical infrastructure is concentrated in a few facilities (i.e., data centers and public cloud providers), and any failure in our physical infrastructure or service outages could lead to significant costs and/or disruptions and could reduce our revenue, harm our business reputation and have a material adverse effect on our financial results.
In addition, at March 31, 2024, the Company had research and development credit carryforwards for federal and California tax purposes of approximately $16.8 million and $23.4 million, respectively. The federal income tax credit carryforwards will 17 expire at various dates between the calendar years 2035 and 2044, while the California income tax credits will carry forward indefinitely.
In addition, at March 31, 2025, the Company had research and development credit carryforwards for federal and California tax purposes of approximately $15.5 million and $24.2 million, respectively. The federal income tax credit carryforwards will expire at various dates between the calendar years 2037 and 2045, while the California income tax credits will carry forward indefinitely.
Although we have developed systems and processes that are designed to protect consumer information and prevent fraudulent credit card transactions and other security breaches, failure to mitigate such fraud or breaches may subject us to costly breach notification and other mitigation obligations, class action lawsuits, investigations, fines, forfeitures or penalties from governmental agencies that could adversely affect our operating results. 23 The law relating to the liability of providers of online payment services is currently unsettled and states may enact their own rules with which we may not comply.
Although we have developed systems and processes that are designed to protect consumer information and prevent fraudulent credit card transactions and other security breaches, failure to mitigate such fraud or breaches may subject us to costly breach notification and other mitigation obligations, class action lawsuits, investigations, fines, forfeitures or penalties from governmental agencies that could adversely affect our operating results.
The harm to our business may be magnified if we are unable to adjust our expenses to compensate for such shortfall, or if we determine that we need to increase our marketing and sales efforts in order to attract new customers and retain existing customers. 15 Failure to grow and manage our network of indirect sales channels partners could materially and adversely impact our revenue in the future.
The harm to our business may be magnified if we are unable to adjust our expenses to compensate for such shortfall, or if we determine that we need to increase our marketing and sales efforts in order to attract new customers and retain existing customers.
These incidents have led to recent service interruptions and may continue to do so. These incidents could result in further service interruptions for our customers as well as equipment damage, significantly impacting our operational capability and customer satisfaction. Our infrastructure is consolidated into a few large data center facilities distributed globally across different regions.
These incidents could result in further service interruptions for our customers as well as equipment damage, significantly impacting our operational capability and customer satisfaction. Our infrastructure is consolidated into a few large data center facilities distributed globally across different regions. Any failure or downtime in one of our data center facilities could affect a significant percentage of our customers.
As a result of these potential problems and risks, among others, businesses that we may acquire or invest in may not produce the revenue, competitive advantages, or business synergies that we anticipate, and the results and effects of any such acquisition may not be favorable enough to justify the amount of consideration we pay or the other investments we make in the acquired business. 21 If we do not or cannot maintain the compatibility of our communications and collaboration software with third-party applications and mobile platforms that our customers use in their businesses, our revenue could decline.
As a result of these potential problems and risks, among others, businesses that we may acquire or invest in may not produce the revenue, competitive advantages, or business synergies that we anticipate, and the results and effects of any such acquisition may not be favorable enough to justify the amount of consideration we pay or the other investments we make in the acquired business.
Natural disasters, war, terrorist attacks, global pandemics, or malicious conduct, among other unforeseen events, could adversely impact our operations, could degrade or impede our ability to offer services, and may negatively impact our financial condition, revenue, and costs going forward. Our cloud communications services rely on uninterrupted connection to the Internet through data centers and networks.
Natural disasters, war, terrorist attacks, global pandemics, or malicious conduct, among other unforeseen events, could disrupt our operations and negatively impact our services and financial results. Our cloud communications services depend on uninterrupted connections to the Internet through data centers and networks.
As such, we are subject to the data privacy and protection laws and regulations adopted by federal, state and foreign governmental agencies, including the EU's GDPR, the UK’s Data Protection Act 2018, the CCPA/CPRA, and the Virginia Consumer Data Protection Act.
As such, we are subject to the data privacy and protection laws and regulations adopted by federal, state and foreign governmental agencies, including the EU's GDPR, the UK’s Data Protection Act 2018, the CCPA/CPRA, and privacy laws enacted in Colorado, Connecticut, Delaware, Florida, Iowa, Montana, New Hampshire, Nebraska, New Jersey, Oregon, Texas, Utah, and Virginia.
We implement bug fixes and upgrades as part of our regularly scheduled system maintenance, which may lead to system downtime.
We implement bug fixes and upgrades as part of our regularly scheduled system maintenance, which may lead to system downtime, but some known vulnerabilities may take increased time to address due to other system dependencies.
This could reduce the demand for our cloud services, delay and lengthen sales cycles, increase customer churn, force us to lower the prices for our services and/or provide customers with service credits, and lead to slower growth or even a decline in our revenue, operating results, and cash flows.
This could delay and lengthen sales cycles, increase customer churn, pressure us to lower prices or provide service credits, and result in slower growth or declines in our revenue, operating results, and cash flows.
In addition, if we experience difficulties in the future integrating our mobile applications into smartphones, tablets, or other mobile devices or with certain communication platforms, such as Microsoft Teams, or if problems arise with our relationships with providers of mobile operating systems, such as those of Apple Inc. or Alphabet Inc., our future growth and our results of operations could suffer.
In addition, if we experience difficulties in the future integrating our mobile applications into smartphones, tablets, or other mobile devices or with certain communication platforms, such as Microsoft Teams, or if problems arise with our relationships with providers of mobile operating systems, such as those of Apple Inc. or Alphabet Inc., our future growth and our results of operations could suffer. 22 To provide our services, we rely on third parties for our network service and connectivity, and any disruption or deterioration in the quality of these services or the increase in the costs we incur from these third parties could adversely affect our business, results of operations, and financial condition.
General Risk Factors • Risks related to the ongoing impact of the COVID-19 pandemic. • Secure financing on favorable terms. • Risks related to natural disasters, war, terrorist attacks, global pandemics, and other unforeseen events.
General Risk Factors • Global macroeconomic and geopolitical events. • Inability to secure financing in the future on favorable terms. • Natural disasters, war, terrorist attacks, global pandemics and other unforeseen events.
If there is a security vulnerability in our or our vendors' infrastructure or networks that is successfully targeted, we could face increased costs, liability claims, government investigations, fines, penalties or forfeitures, class action litigation, reduced revenue, or harm to our reputation or competitive position.
If there is a security vulnerability in our or our vendors' infrastructure or networks that is successfully targeted, we could face increased costs, liability claims, government investigations, fines, penalties or forfeitures, class action litigation, reduced revenue, or harm to our reputation or competitive position. 24 We also rely on various third-party service providers to operate our platform and deliver our products, including network service providers, internet service providers, telecommunications carriers, providers of cloud infrastructure and cloud communications, and third-party technology and intellectual property.
In the future, we may sell additional shares of our common stock or equity-linked securities to raise capital.
Future sales of our common stock or equity-linked securities in the public market could lower the market price of our common stock, and a sustained decrease in our stock price could jeopardize our Nasdaq listing. In the future, we may sell additional shares of our common stock or equity-linked securities to raise capital.
Risks Related to Regulatory Matters • Risks related to cybersecurity breaches and malicious acts. • Liabilities related to credit card transaction processing services. • Failure to comply with data privacy and protection laws. • Services must comply with industry standards and government regulations. 12 Risks Related to Intellectual Property • Infringement of third-party proprietary technology. • Inability to protect our proprietary technology. • Inability to use third-party or open-source software.
Risks Related to Regulatory Matters • Cybersecurity breaches and malicious acts. • Liabilities related to credit card transaction processing services. • Failure to comply with data privacy and protection laws. • Services must comply with industry standards and government regulations including those related to telecommunications and cybersecurity.
We may be required to transfer our servers to new data center facilities or public cloud load to a different public cloud provider in the event that we are unable to renew our agreement or leases on acceptable terms, or at all, or the owners of the facilities decide to close their facilities, and we may incur significant costs and possible service interruption in connection with doing so.
Any future service interruptions could: • cause our customers to seek service credits or damages for losses incurred; • require us to replace existing equipment or add redundant facilities; • affect our reputation as a reliable provider of communications services; • cause existing customers to cancel or elect to not renew their contracts; or • make it more difficult for us to attract new customers. 19 We may be required to transfer our servers to new data center facilities or public cloud load to a different public cloud provider in the event that we are unable to renew our agreement or leases on acceptable terms, or at all, or the owners of the facilities decide to close their facilities, and we may incur significant costs and possible service interruption in connection with doing so.
Risks Related to our Products and Operations If our platform or services experience significant or repeated disruptions, outages, or failures due to defects, bugs, vulnerabilities, or similar software problems, or if we fail to determine the cause of any disruption or failure and correct it promptly, we could lose customers, become subject to service performance or warranty claims, or incur significant costs, reducing our revenue and adversely affecting our operating results.
Furthermore, acquisitions may require large one-time charges and can result in increased debt or contingent liabilities, adverse tax consequences, additional stock-based compensation expense and the recording and subsequent amortization or impairments of amounts related to certain purchased intangible assets or goodwill, any of which could negatively impact future results of operations. 18 Risks Related to our Products and Operations If our platform or services experience significant or repeated disruptions, outages, or failures due to defects, bugs, vulnerabilities, or similar software problems, or if we fail to determine the cause of any disruption or failure and correct it promptly, we could lose customers, become subject to service performance or warranty claims, or incur significant costs, reducing our revenue and adversely affecting our operating results.
There are a number of factors that may affect our operating results on a quarterly, annual, or longer-term basis, some of which are outside our control.
Our historical operating results have fluctuated and are expected to continue to fluctuate in the future. A decline in our operating results could cause our stock price to fall. There are a number of factors that may affect our operating results on a quarterly, annual, or longer-term basis, some of which are outside our control.
We generate revenue primarily from the sale of subscriptions to our cloud communications services to our customers, which include small business, mid-market and enterprise customers as well as government agencies and other organizations. We define a “customer” as the legal entity or entities to which we provide services pursuant to a single contractual arrangement.
Our success hinges on our ability to acquire new customers and retain and sell additional services to our existing customers. We generate revenue primarily from the sale of subscriptions to our cloud communications services to our customers, which include small business, mid-market and enterprise customers as well as government agencies and other organizations.
These provisions in our restated certificate of incorporation and amended and restated by-laws and under Delaware law could discourage potential takeover attempts, potentially reducing liquidity for our shareholders. 28 General Risk Factors Current and future variants of COVID-19 and any economic difficulty they trigger could significantly harm our business.
These provisions in our restated certificate of incorporation and amended and restated by-laws and under Delaware law could discourage potential takeover attempts, potentially reducing liquidity for our shareholders. General Risk Factors Macroeconomic and Geopolitical Conditions Could Adversely Affect Our Business, Financial Condition, and Results of Operations.
If we are unable to do this successfully and in a timely manner, our business and operating results could be materially adversely affected. The conflict between Russia and Ukraine and related sanctions, as well as other geopolitical conflicts, could negatively impact us.
If we are unable to do this successfully and in a timely manner, our international growth, business, and operating results could be materially adversely affected.
Our leased network and data centers, as well as public cloud infrastructure, are subject to various points of failure. Problems with cooling equipment, generators, uninterruptible power supply, routers, switches, or other equipment, whether or not within our control, often managed by third-party service providers, expose us to cybersecurity risks such as unauthorized access or data breaches.
Problems with cooling equipment, generators, uninterruptible power supply, routers, switches, or other equipment, including the software installed on such equipment, whether or not within our control, often managed by third-party service providers, expose us to cybersecurity risks such as unauthorized access or data breaches. These incidents have led to recent service interruptions and may continue to do so.
Because our ability to attract and retain customers depends on our ability to provide customers with highly reliable service, even minor interruptions in our service could harm our reputation.
The total destruction, closure, or severe impairment of any of our data center facilities could result in significant downtime of our services and the loss of customer data. Because our ability to attract and retain customers depends on our ability to provide customers with highly reliable service, even minor interruptions in our service could harm our reputation.
To the extent that we are unable to achieve market acceptance of our unified communications as-a-service and contact center as-a-service products and services, including our X Series, we may be unable to recoup our research and development and marketing costs on the schedule we anticipated, and our results of operations may suffer.
To the extent that we are unable to achieve market acceptance of our UCaaS and CCaaS products and services, we may be unable to recoup our research and development and marketing costs on the schedule we anticipated, and our results of operations may suffer. Our ability to maintain or grow is also subject to the risk of future disruptive technologies.
For example, our headquarters, global networks operations center, and one of our third-party data center facilities are located in the San Francisco Bay Area, a region known for seismic activity.
For example, our headquarters, global network operations center, and one of our third-party data center facilities are located in the San Francisco Bay Area, a region known for seismic activity. These events could cause physical damage to critical infrastructure, impede access to key facilities, or disrupt our service providers, which may result in outages or degradation of service.
Despite these efforts, our revenue may continue to decline, and/or we may incur significant losses in the future due to inflationary pressures impacting our cost structure, Russia's invasion of Ukraine, the conflict between Israel and Hamas and Israel and Iran or other geopolitical events, any further downturn in general economic conditions, increasing competition (including competitive pricing pressures and large competitors moving into our markets), decrease in the adoption or sustained use of the cloud communications market, exiting lines of business, interest rate and foreign currency fluctuations, or our inability to execute on business opportunities.
Despite these efforts, our revenue may continue to decline, and/or we may incur significant losses in the future due to general economic conditions, increasing competition (including competitive pricing pressures and large competitors moving into our markets), decrease in customer demand, including from the imposition of tariffs or other governmental actions, the growth of the adoption or sustained use of the cloud communications market, or if we fail for any reason to continue to capitalize on growth opportunities.
These vulnerabilities include but are not limited to risks from ransomware, sophisticated nation-state attacks, and emerging malware threats. We continuously monitor these threats and update our defenses in response. Such weaknesses have also been the cause of, and may in the future cause, temporary service outages or other disruptions for some customers, potentially leading to significant financial and reputational damage.
Such weaknesses have also been the cause of, and may in the future cause, temporary service outages or other disruptions for some customers, potentially leading to significant financial and reputational damage. Our cybersecurity response plan includes incident response teams and system updates to mitigate these risks.
We strive to comply with all applicable laws, regulations, policies and legal obligations relating to privacy and data protection.
Privacy laws restrict our processing of personal information, provided to us by our customers as well as data we collect from our customers and employees. We strive to comply with all applicable laws, regulations, policies and legal obligations relating to privacy and data protection.
Accordingly, it may be possible that in the future, we and our competitors may be subject to legal actions along with the users who shared such content. In addition, regardless of any legal liability we may face, if there is an incident generating extensive negative publicity about the content shared on our platform, our business and reputation could be harmed.
In addition, regardless of any legal liability we may face, if there is an incident generating extensive negative publicity about the content shared on our platform, our business and reputation could be harmed. 25 Failure to comply with laws and contractual obligations related to data privacy and protection could have a material adverse effect on our business, financial condition and operating results.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeITEM 1C. CYBERSECURITY 8x8 recognizes the critical importance of cybersecurity in maintaining the integrity, confidentiality, and availability of its systems and data. As a leading provider of communication and collaboration solutions, 8x8 is committed to safeguarding its assets, including customer data, from evolving cybersecurity threats.
Biggest changeITEM 1C. Cybersecurity 8x8 recognizes that cybersecurity is critical to the trust placed in our platform by customers, partners, and other stakeholders. The Company is committed to maintaining the confidentiality, integrity, and availability of its systems and data through a comprehensive cybersecurity risk management and governance framework.
The plan is regularly reviewed, tested, and updated to facilitate its effectiveness in mitigating and responding to cybersecurity threats promptly.
The plan is regularly reviewed, tested, and updated to facilitate its effectiveness in mitigating and responding to cybersecurity threats promptly. Governance The Company's board of directors, through its Technology & Cybersecurity Committee, oversees 8x8’s cybersecurity risk management strategy.
NIST Framework Adoption: 8x8's cybersecurity program is aligned with the National Institute of Standards and Technology, or NIST, cybersecurity framework, a widely recognized set of guidelines for managing and mitigating cybersecurity risks.
Cybersecurity Risk Management and Strategy 8x8 maintains a global cybersecurity risk management program aligned with the National Institute of Standards and Technology ("NIST") Cybersecurity Framework.
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By leveraging the National Institute of Standards and Technology framework, 8x8 has implemented a comprehensive and structured approach to identifying, protecting, detecting, responding to, and recovering from cybersecurity incidents. Governance Structure: At 8x8, cybersecurity is integral to the enterprise-wide risk management program. The Chief Information Security Officer, or CISO holds a pivotal role in overseeing the Company's cybersecurity initiatives.
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This program is integrated and embedded within the Company's overall enterprise risk management, or ERM, process and designed to proactively identify, assess, and manage cybersecurity threats that could materially affect our business operations, financial condition, or reputation.
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The Company's Chief Information Security Officer has served in various security leadership roles, including at a Fortune 500 technology company, and is a Certified Information System Security Professional, or CISSP, and a Licensed Private Investigator, and completed Harvard University's Cybersecurity Managing Risk in 2021.
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Key components of the program include: • Continuous threat monitoring and intelligence , with real-time detection capabilities across cloud and on-premise environments. • Periodic risk assessments and threat modeling , covering internal assets and supply chain exposure. • Third-party penetration testing , security audits, and independent assessments conducted at least annually. • A vulnerability management lifecycle to identify, prioritize, and remediate security flaws in infrastructure and applications. • Employee cybersecurity training and phishing simulations , tailored by role and location. 8x8 engages reputable external security firms and consultants to support ongoing evaluations, and has obtained certifications and attestations across various jurisdictions and industries (including ISO/IEC 27001, CyberEssentials Plus et al, and compliance with frameworks applicable to communications and cloud service providers).
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He also held a United States Top Secret / Sensitive Compartmentalized Information, or TS/SCI, security clearance when he advised the White House, Pentagon, National Security Agency, Central Intelligence Agency, and Federal Bureau of Investigation on classified projects.
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To date, the Company has not experienced any cybersecurity incidents that have materially impacted its operations or financial condition. Nevertheless, cybersecurity threats continue to evolve, and the Company has developed and implemented a comprehensive Incident Response Plan to effectively manage cybersecurity incidents.
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Reporting directly to the Chief Legal Officer, who in turn reports to the CEO, the Chief Information Security Officer is empowered to lead the Executive Risk Management Committee. Through this committee, critical cybersecurity issues are monitored, addressed, and escalated as necessary.
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This committee meets quarterly and receives briefings from senior leadership on cybersecurity risk trends, controls testing and efficacy, compliance posture, and incident management preparedness. The full board of directors is informed at least annually on cybersecurity matters, with additional updates as needed.
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Furthermore, the Chief Information Security Officer provides regular updates and presentations directly to the Board of Directors on cybersecurity matters. This direct line of communication ensures that the Board remains informed and engaged in understanding and managing cybersecurity risks facing the Company.
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The Company’s Chief Information Security Officer, or CISO, leads the cybersecurity program and reports functionally to the Chief Legal Officer, and periodically to the CEO, the Executive Risk Management Committee, and the board of directors.
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To enhance oversight and governance in this area, 8x8's Board of Directors has established the Technology & Cybersecurity Committee. This committee focuses specifically on the Company's technology, products, and cybersecurity program, providing strategic guidance and oversight to ensure alignment with business objectives and industry standard practices. Reporting and Communication: Transparent reporting and communication are key components of 8x8's cybersecurity program.
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The CISO has over 25 years of global cybersecurity, information security, disaster recovery, and business continuity experience, including leadership roles across UK national infrastructure and global Fortune 100 and 500 companies. The CISO holds an M.S. in Information Technology Security (with distinction), and is a Certified Information Security Manager, or CISM, and Certified Information Systems Security Professional, or CISSP.
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Incidents are promptly reported to the Chief Information Security Officer, who is responsible for escalating to relevant stakeholders, including executive leadership, the internal disclosure committee, and the Board of Directors, as required. Regular communication channels ensure that stakeholders are kept informed of the Company's cybersecurity posture and any emerging threats or incidents.
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While the board of directors has not formally designated a cybersecurity expert under SEC regulations, the Technology & Cybersecurity Committee includes directors with backgrounds in technology, data governance, and risk oversight, and all directors participate in training sessions to continue to enhance their understanding of cybersecurity issues and their implications for the Company. 33
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Determining Potential Impact and Materiality of Cybersecurity Incidents: 8x8 conducts thorough assessments to determine the potential impact and materiality of cybersecurity incidents. 8x8’s Chief Information Security Officer is a member of 8x8’s internal disclosure committee emphasizing the importance of cybersecurity as part of 8x8’s disclosure controls and procedures.
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By evaluating factors such as the nature of the incident, the extent of data exposure, and potential regulatory implications, the Company assesses the significance of cybersecurity events, which helps it take appropriate measures to mitigate risks, minimize impact and properly report any material cybersecurity incidents.
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Incident Response Plan (IRP) Implementation: 8x8 has developed and implemented a comprehensive Incident Response Plan, or IRP, to effectively manage cybersecurity incidents. The Incident Response Plan outlines clear reporting and escalation processes, delineating roles and responsibilities for incident response team members.
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Integration with Overall Risk Management Program: The cybersecurity program at 8x8 is fully integrated with the Company's overall risk management program through our Chief Information Security Officer's participation in such governance structures as the executive risk management committee, data protection committee, and internal disclosure committee and the incorporation of security in the Company’s overall compliance and enterprise risk management programs.
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By aligning cybersecurity initiatives with 8x8’s broader enterprise risk management initiatives, 8x8 pursues a holistic approach to identifying, assessing, and mitigating risks across the organization. 30 Risk Assessment and Identification: 8x8 conducts regular risk assessments to identify and prioritize cybersecurity risks.
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Through measures such as vulnerability assessments, and penetration testing, the Company identifies potential vulnerabilities and takes proactive steps to address them. 8x8 has also implemented technical, administrative and legal controls to manage our risk from third party service providers, including implementation of a third-party vendor risk management platform.
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Individuals or entities have attempted, and will continue to attempt, to penetrate our network security, and that of our platform, to try to cause harm to our business operations, including by misappropriating our proprietary information or that of our customers, employees and business partners or causing interruptions of our products and platform.
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See the sections entitled "Risks Related to our Products and Operations" and "Risks Related to Regulatory Matters" in Part I, Item 1A "Risk Factors" for more information on our cybersecurity risks. Training and Awareness: 8x8 invests in comprehensive training and awareness programs to educate employees about cybersecurity best practices and their roles in safeguarding company assets.
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By promoting a culture of cybersecurity awareness, 8x8 strengthens its overall security posture and reduces the risk of human error leading to cybersecurity incidents. Engagement with Third Parties: 8x8 collaborates with third-party auditors, consultants, and participates in bug bounty programs to enhance its cybersecurity capabilities.
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External audits and assessments provide independent validation of the effectiveness of 8x8’s cybersecurity controls, while bug bounty programs leverage the collective expertise of the cybersecurity community to identify and address potential vulnerabilities. Conclusion: 8x8 prioritizes cybersecurity as a fundamental aspect of its operations and is dedicated to maintaining a robust cybersecurity program aligned with industry practices and regulatory standards.
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Through strong governance, risk management, and continuous improvement efforts, 8x8 aims to protect its systems, data, and stakeholders from cybersecurity risks.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeIn addition, we lease space from third-party data center hosting facilities under co-location agreements in the United States, Europe, and the Asia Pacific region. For additional information regarding our obligations under leases, see Note 6 , Leases, in the Notes to Consolidated Financial Statements contained in Part II, Item 8 of this Annual Report.
Biggest changeFor additional information regarding our obligations under leases, see Note 6 , Leases, in the Notes to Consolidated Financial Statements contained in Part II, Item 8 of this Annual Report.
Outside the United States, our operations are conducted primarily in leased office space located in the United Kingdom (primarily used for sales and customer support in Europe), Romania (primarily used for customer support, and research and development), Canada (primarily used for research and development), Portugal (primarily used for research and development), Singapore (primarily used for regional sales and marketing, procurement, customer support, and communications platform as-a-service), and Philippines (primarily used research and development and customer support).
Outside the United States, our operations are conducted primarily in leased office space located in the United Kingdom (primarily used for sales and customer support in Europe), Romania (primarily used for customer support, and research and development), Ireland (primarily used for sales and customer support), Canada (primarily used for research and development), Portugal (primarily used for research and development), Singapore (primarily used for regional sales and marketing, procurement, customer support, research and development, and CPaaS), and Philippines (primarily used research and development and customer support).
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In addition, we utilize space within third-party data center hosting facilities under co-location agreements primarily across North America, Europe, and the Asia Pacific region. There is one location in South America.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 3. LEGAL PROCEEDINGS Information with respect to this item may be found in Note 7 , Commitments and Contingencies in the Notes to Consolidated Financial Statements contained in Part II, Item 8 of this Annual Report, under “Legal Proceedings”, which is incorporated herein by reference. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 31 PART II
Biggest changeITEM 3. Legal Proceedings Information with respect to this item may be found in Note 7 , Commitments and Contingencies in the Notes to Consolidated Financial Statements contained in Part II, Item 8 of this Annual Report, under “Legal Proceedings”, which is incorporated herein by reference. ITEM 4. Mine Safety Disclosures Not applicable. 34 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeIn accordance with Securities and Exchange Commission rules, the performance graph presents both the indices used in the previous year and the newly selected index. 32 March 31, 2019 2020 2021 2022 2023 2024 8x8, Inc. $ 100.00 $ 68.61 $ 160.59 $ 62.33 $ 20.64 $ 13.37 Russell 2000 100.00 74.89 144.21 134.45 117.06 137.98 NASDAQ Composite 100.00 99.62 171.38 183.98 158.12 211.91 NASDAQ Telecommunications 100.00 83.39 117.69 109.84 96.48 97.49 NYSE Composite 100.00 81.14 122.88 131.30 121.09 144.23 Issuer Issuances and Purchases of Equity Securities Repurchases In August 2022, the Company repurchased in privately negotiated transactions with a limited number of holders 10,695,000 shares of its common stock for approximately $60.0 million, in connection with the Exchange Transaction and negotiation of the secured term loan facility, as further described in Part II, Item 8, Note 8 , Convertible Senior Notes and Term Loan.
Biggest changeIn accordance with Securities and Exchange Commission rules, the performance graph presents both the indices used in the previous year and the newly selected index. 35 Issuer Issuances and Purchases of Equity Securities Repurchases In August 2022, the Company repurchased in privately negotiated transactions with a limited number of holders 10,695,000 shares of its common stock for approximately $60.0 million, in connection with the Exchange Transaction and negotiation of the secured term loan facility, as further described in Part II, Item 8, Note 8 , Convertible Senior Notes and Term Loan.
These shares were issued in a private placement in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act. The Company relied on this exemption based in part on representations made by the financial advisor in its engagement letter and related share payment letter . ITEM 6. [Reserved] 33
These shares were issued in a private placement in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act. The Company relied on this exemption based in part on representations made by the financial advisor in its engagement letter and related share payment letter . ITEM 6. [Reserved] 36
The graph below shows the cumulative total stockholder return over a five-year period, assuming the investment of $100 on March 31, 2019 in each of 8x8's common stock, the Nasdaq Composite Index, the New York Stock Exchange Composite Index, the Russell 2000 Index, and the Nasdaq Telecommunications Index.
The graph below shows the cumulative total stockholder return over a five-year period, assuming the investment of $100 on March 31, 2020 in each of 8x8's common stock, the Nasdaq Composite Index, the New York Stock Exchange Composite Index, the Russell 2000 Index, and the Nasdaq Telecommunications Index.
Number of Common Stockholders As of May 8, 2024, there were approximately 279 holders of record of our common stock. The actual number of stockholders is greater than this number of record holders and includes stockholders who are beneficial owners but whose shares are held in street name by brokers and other nominees.
Number of Common Stockholders As of May 12, 2025, there were approximately 275 holders of record of our common stock. The actual number of stockholders is greater than this number of record holders and includes stockholders who are beneficial owners but whose shares are held in street name by brokers and other nominees.
Wood Capital Advisors LLC, to settle 50% of its financial advisory fee for services provided in connection with the Exchange Transaction and negotiation of the secured term loan facility, as further described in Part II, Item 8, Note 8 , Convertible Senior Notes and Term Loan, to the consolidated financial statements through the issuance of 1,015,024 shares of the Company's common stock, equivalent to approximately $5.1 million.
Issuances On August 3, 2022, the Company agreed with its financial advisor, to settle 50% of its financial advisory fee for services provided in connection with the Exchange Transaction and negotiation of the secured term loan facility, as further described in Part II, Item 8, Note 8 , Convertible Senior Notes and Term Loan, to the consolidated financial statements through the issuance of 1,015,024 shares of the Company's common stock, equivalent to approximately $5.1 million.
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There was no activity under the 2017 Repurchase Plan for the year ended March 31, 2024. The value of shares that may yet be purchased under the 2017 Repurchase Plan is approximately $7.1 million. Issuances On August 3, 2022, the Company agreed with its financial advisor, J.
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In May 2017, the Company's board of directors authorized the Company to purchase $25.0 million of its common stock from time to time under the 2017 Repurchase Plan (the "Repurchase Plan"). The Repurchase Plan expires when the maximum purchase amount is reached, or upon the earlier revocation or termination by the Company's board of directors.
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The remaining amount available under the Repurchase Plan as of March 31, 2025 was approximately $7.1 million.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeProvision for income taxes For the years ended March 31, (in thousands, except percentages) 2024 2023 Change Provision for income taxes $ 3,642 $ 2,807 $ 835 29.7 % Percentage of total revenue 0.5 % 0.4 % For the year ended March 31, 2024, we recorded an income tax provision of $3.6 million compared to an income tax provision of $2.8 million in fiscal 2023, primarily due to higher federal and state income taxes as a result of the application of certain 2017 Tax Cuts and Jobs Act tax law changes that limited the amount of taxable income that can be offset by net operating loss carryforwards. 39 Liquidity and Capital Resources We believe that our existing cash, cash equivalents and investment balances and our anticipated cash flows from operations will be sufficient to meet our working capital, expenditure, and contractual obligation requirements for the next 12 months and the foreseeable future.
Biggest changeProvision for income taxes For the years ended March 31, (in thousands, except percentages) 2025 2024 Change Provision for income taxes $ 3,149 $ 3,642 $ (493) (13.5) % Percentage of total revenue 0.4 % 0.5 % For the year ended March 31, 2025, we recorded an income tax provision of $3.1 million compared to $3.6 million in fiscal 2024, primarily due to a reduction in state income taxes as a result of a reduction in state taxable income offset by an increase in foreign taxes primarily due to the exhaustion of NOL carryforwards and a change in income mix of our foreign jurisdictions.
In connection with partially ceasing use of the Company’s Headquarters and an international office space, the Company recorded impairment charges of $9.9 million and $1.1 million, respectively, as the carrying amount of the right-of-use assets related to the leases exceeded its fair value based on the Company’s estimate of future discounted cash flows related to the leased facility.
In connection with partially ceasing use of the Company’s Headquarters and an international office space, the Company recorded impairment charges of $9.9 million and $1.1 million, respectively, as the carrying amount of the right-of-use assets related to the leases exceeded its fair value based on the Company’s estimate of future discounted cash flows related to the leased facility.
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. 36 Impairment of Long-Lived Assets Impairment of long-lived assets consists of non-cash impairment charges for right-of-use assets and capitalized software.
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. Impairment of Long-Lived Assets Impairment of long-lived assets consists of non-cash impairment charges for right-of-use assets and capitalized software.
During fiscal 2024, we recorded an impairment of long-lived assets related to the Company's right-of-use assets on the consolidated statements of operations. See Note 6 , Leases, for further details. Goodwill and Other Intangible Assets Goodwill represents the excess fair value of consideration transferred over the fair value of net assets acquired in business combinations.
During fiscal 2024, we recorded an impairment of long-lived assets related to the Company's right-of-use assets on the consolidated statements of operations and comprehensive loss. See Note 6 , Leases, for further details. Goodwill and Other Intangible Assets Goodwill represents the excess fair value of consideration transferred over the fair value of net assets acquired in business combinations.
During the year ended March 31, 2024, the non-cash charge of $11.0 million was recorded as an impairment of long-lived assets on the consolidated statements of operations and consisted of an $11.0 million impairment of operating lease right-of-use assets. See Note 1 , The Company and Significant Accounting Policies, for further details.
During the year ended March 31, 2024, the non-cash charge of $11.0 million was recorded as an impairment of long-lived assets on the consolidated statements of operations and comprehensive loss and consisted of an $11.0 million impairment of operating lease right-of-use assets. See Note 1 , The Company and Significant Accounting Policies, for further details.
During the year ended March 31, 2024, the non-cash charge of $11.0 million was recorded as an impairment of long-lived assets on the consolidated statements of operations and consisted of an $11.0 million impairment of operating lease right-of-use assets. See Note 1 , The Company and Significant Accounting Policies, for further details.
During the year ended March 31, 2024, the non-cash charge of $11.0 million was recorded as an impairment of long-lived assets on the consolidated statements of operations and comprehensive loss and consisted of an $11.0 million impairment of operating lease right-of-use assets. See Note 1 , The Company and Significant Accounting Policies, for further details.
Significant cash requirements for the upcoming fiscal year include our interest payments related to our debt obligations, operating lease obligations, and operating and capital purchase commitments.
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.
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, innovation in our products and technologies, and through strategic acquisitions of technologies and businesses.
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, artificial intelligence, geographic expansion of our customer base outside the United States, innovation in our products and technologies, and through strategic acquisitions of technologies and businesses.
As of March 31, 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.
As of March 31, 2025, 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.
Amortization expense related to customer relationships and domain names are included in sales and marketing expense. Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate an asset’s carrying value may not be recoverable. 42
Amortization expense related to customer relationships and domain names are included in sales and marketing expense. Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate an asset’s carrying value may not be recoverable. 46
We have also expanded our partner programs to extend our reach within this 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.
We have also expanded our reseller 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.
Our business is diversified by vertical market and geography, and no single customer represented more than 10% of our total revenue during fiscal years 2024 and 2023.
Our business is diversified by vertical market and geography, and no single customer represented more than 10% of our total revenue during fiscal years 2025 and 2024.
Payments received in advance of subscription services being rendered are recorded as deferred revenue; revenue recognized for services rendered in advance of payments received are recorded as contract assets. Usage fees, when bundled, are billed in advance and recognized over time on a ratable basis over the contractual subscription term. Non-bundled usage fees are recognized as actual usage occurs.
Payments received in advance of subscription services being rendered are recorded as deferred revenue; revenue recognized for services rendered in advance of payments received are recorded as contract assets. Usage fees, when bundled, are billed in advance and recognized over time on a ratable basis over the contractual subscription term.
Our current capital deployment strategy for fiscal 2024 is to invest excess cash on hand to support our continued growth initiatives into select markets and planned software development activities, and pay down our debt.
Our current capital deployment strategy for fiscal year 2026 is to invest excess cash on hand to support our continued growth initiatives into select markets and planned software development activities, and pay down our debt.
A discussion of fiscal 2023 items and comparisons between fiscal 2023 and fiscal 2022 financial results can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2023 (the “2023 MD&A”), filed with the Securities and Exchange Commission on May 25, 2023.
A discussion of fiscal 2024 items and comparisons between fiscal 2024 and fiscal 2023 financial results can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2024 (the “2024 MD&A”), filed with the Securities and Exchange Commission on May 21, 2024.
This section discusses items pertaining to and comparisons of financial results between fiscal 2024 and fiscal 2023.
This section discusses items pertaining to and comparisons of financial results between fiscal 2025 and fiscal 2024.
Additionally, refer to Note 8 , Convertible Senior Notes and Term Loan, to the consolidated financial statements for more information related to our debt obligations and applicable covenants.
Additionally, refer to Note 8 , Convertible Senior Notes and Term Loan, to the consolidated financial statements for more information related to our debt obligations and applicable covenants. Our outstanding Term Loan allows for voluntary prepayments.
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.
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.
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.
We are committed to maintaining a high level of investment in research and development to deliver innovation across our Platform for CX, expand our ecosystem of integrated third-party applications, and maintain the high platform availability our customers require.
Professional services for deployment, 41 configuration, system integration, optimization, customer training or education are primarily billed on a fixed-fee basis and are performed by us directly. Professional services revenue is recognized as services are performed or upon completion of the deployment.
Sales returns are recorded as a reduction to revenue estimated based on historical experience. Professional services for deployment, configuration, system integration, optimization, customer training or education are primarily billed on a fixed-fee basis and are performed by us directly. Professional services revenue is recognized as services are performed or upon completion of the deployment.
Revenue Recognition Significant management judgments and estimates must be made and used in connection with the revenue recognized in any accounting period. Material differences may result in the amount and timing of our revenue for any period if management made different judgments or utilized different estimates. Revenue is recognized when performance obligations are satisfied, based on the transaction price.
Revenue Recognition Significant management judgments and estimates must be made and used in connection with the revenue recognized in any accounting period. Material differences may result in the amount and timing of our revenue for any period if management made different judgments or utilized different estimates.
Other revenue For the years ended March 31, (in thousands, except percentages) 2024 2023 Change Other revenue $ 28,126 $ 33,894 $ (5,768) (17.0) % Percentage of total revenue 3.9 % 4.6 % Other revenue decreased by $5.8 million, or 17.0% , in fiscal 2024, as compared to fiscal 2023, due to lower professional service and product revenue of $4.1 million and $1.7 million, respectively.
Other revenue For the years ended March 31, (in thousands, except percentages) 2025 2024 Change Other revenue $ 22,147 $ 28,126 $ (5,979) (21.3) % Percentage of total revenue 3.1 % 3.9 % Other revenue decreased by $6.0 million, or 21.3% , in fiscal 2025, as compared to fiscal 2024, due to lower product and professional service revenue of $3.2 million and $2.8 million, respectively.
Our primary requirements for liquidity and capital are working capital, research and development and marketing activities, principal and interest payments on our outstanding debt and other general corporate needs. Historically, these cash requirements have been met through cash provided by operating activities and cash and cash equivalents.
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.
(2) Total interest payments of $92.4 million were determined using the effective interest rate of 11.9% as of March 31, 2024. See Note 8 , Convertible Senior Notes and Term Loan, in the Notes to Consolidated Financial Statements included in this Annual Report regarding the interest rate terms.
(2) Total interest payments of $21.3 million were determined using the year-end Term SOFR rate of 7.32% plus 3.00% as of March 31, 2025. See Note 8 , Convertible Senior Notes and Term Loan, in the Notes to Consolidated Financial Statements included in this Annual Report regarding the interest rate terms.
Cash Flows The following is a summary of our cash flows provided by (used in) operating, investing and financing activities: Years Ended March 31, (In thousands) 2024 2023 2022 Net cash provided by operating activities $ 78,985 $ 48,786 $ 34,680 Net cash provided by (used in) investing activities 8,546 6,050 (159,978) Net cash provided by (used in) financing activities (83,411) (37,784) 105,425 Effect of exchange rate changes on cash (126) (5,037) (585) Net increase (decrease) in cash and cash equivalents $ 3,994 $ 12,015 $ (20,458) Cash provided by operating activities increased by $30.2 million to $79.0 million for fiscal 2024, mainly due to an increase in cash received from customers, decrease in cash paid to suppliers, and a decrease in cash paid for sales commission costs.
Cash Flows The following is a summary of our cash flows provided by (used in) operating, investing and financing activities (in thousands): Years Ended March 31, 2025 2024 2023 Net cash provided by operating activities $ 63,554 $ 78,985 $ 48,786 Net cash provided by (used in) investing activities (16,424) 8,546 6,050 Net cash used in financing activities (75,106) (83,411) (37,784) Effect of exchange rate changes on cash 577 (126) (5,037) Net increase (decrease) in cash and cash equivalents $ (27,399) $ 3,994 $ 12,015 Cash provided by operating activities decreased by $15.4 million to $63.6 million for fiscal 2025, mainly due to an increase in cash paid to suppliers and employees partially offset by an increase in cash received from customers.
Other Revenue Recognition Other revenue is primarily comprised of product revenue and professional services revenue. We recognize product revenue for telephony equipment at a point in time when transfer of control has occurred, which is generally upon shipment. Sales returns are recorded as a reduction to revenue estimated based on historical experience.
Non-bundled usage fees are recognized as actual usage occurs. 45 Other Revenue Recognition Other revenue is primarily comprised of product revenue and professional services revenue. We recognize product revenue for telephony equipment at a point in time when transfer of control has occurred, which is generally upon shipment.
During the year ended March 31, 2023, the impairment charge of $6.4 million was due to capitalized software and right-of-use assets of $3.7 million and $2.7 million, respectively.
During the year ended March 31, 2023, the impairment charge of $6.4 million was due to capitalized software and right-of-use assets of $3.7 million and $2.7 million, respectively. 39 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.
Provision for (Benefit from) Income Taxes Provision for (benefit from) income taxes consists 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.
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.
Other expense, net For the years ended March 31, (in thousands, except percentages) 2024 2023 Change Other expense, net $ (36,347) $ (4,044) $ (32,303) NM Percentage of total revenue (5.0) % (0.5) % We recognized $36.3 million of other expense, net during fiscal 2024 compared to $4.0 million of other expense, net during fiscal 2023 primarily due to $18.5 million gain from debt extinguishment from the 2024 convertible notes recorded in the prior year compared to a $1.8 million loss on debt extinguishment in fiscal 2024, $12.3 million increase in interest expense on our variable-rate term loan entered into in the second quarter of fiscal 2023, an increase of $2.0 million in unrealized foreign exchange losses, and $1.8 million of gain on sale of assets recorded in the prior year.
Other expense, net For the years ended March 31, (in thousands, except percentages) 2025 2024 Change Other income (expense), net $ (10,400) $ 3,477 $ (13,877) NM Percentage of total revenue (1.5) % 0.5 % We recognized $10.4 million of other expense, net during fiscal 2025 compared to $3.5 million of other income, net during fiscal 2024 primarily due to a $10.6 million increase on loss of debt extinguishment due to the payoff of the 2022 Term Loan, an increase of $2.0 million in unrealized foreign exchange losses, a decrease of $0.7 million in interest income, and a $0.6 million increase in other expense.
We generate other revenue from professional services and the sale of office phones and other hardware equipment. 34 We define a “customer” as one or more legal entities to which we provide services pursuant to a single contractual arrangement.
We define a “customer” as one or more legal entities to which we provide services pursuant to a single contractual arrangement.
This increase was partially offset by decreases of $6.3 million in stock-based compensation and $6.9 million in personnel-related, consulting and other costs. 38 Impairment of long-lived assets For the years ended March 31, (in thousands, except percentages) 2024 2023 Change Impairment of long-lived assets $ 11,034 $ 6,380 $ 4,654 72.9 % Percentage of total revenue 1.5 % 0.9 % Impairment of long-lived assets increased $4.7 million in fiscal 2024 compared to fiscal 2023.
These decreases were partially offset by an increase of $2.1 million in other general corporate costs. 41 Impairment of long-lived assets For the years ended March 31, (in thousands, except percentages) 2025 2024 Change Impairment of long-lived assets $ — $ 11,034 $ (11,034) (100.0) % Percentage of total revenue — % 1.5 % Impairment of long-lived assets decreased $11.0 million in fiscal 2025 compared to fiscal 2024.
RESULTS OF OPERATIONS Revenue Service revenue For the years ended March 31, (in thousands, except percentages) 2024 2023 Change Service revenue $ 700,579 $ 710,044 $ (9,465) (1.3) % Percentage of total revenue 96.1 % 95.4 % Service revenue decreased by $9.5 million, or 1.3%, for fiscal 2024 compared to fiscal 2023, and this change was driven by a decrease in subscription revenue of $9.5 million related to increased customer churn and down-sell.
Results of Operations Revenue Service revenue For the years ended March 31, (in thousands, except percentages) 2025 2024 Change Service revenue $ 692,923 $ 700,579 $ (7,656) (1.1) % Percentage of total revenue 96.9 % 96.1 % Service revenue decreased by $7.7 million, or 1.1%, for fiscal 2025 compared to fiscal 2024.
Operating Expenses Research and development For the years ended March 31, (in thousands, except percentages) 2024 2023 Change Research and development $ 136,216 $ 142,491 $ (6,275) (4.4) % Percentage of total revenue 18.7 % 19.2 % Research and development expenses decreased $6.3 million, or 4.4%, in fiscal 2024 compared to fiscal 2023, primarily due to decreases of $6.5 million in stock-based compensation, $1.8 million in amortization of capitalized software $0.6 million in software licenses.
Operating Expenses Research and development For the years ended March 31, (in thousands, except percentages) 2025 2024 Change Research and development $ 123,211 $ 136,216 $ (13,005) (9.5) % Percentage of total revenue 17.2 % 18.7 % Research and development expenses decreased $13.0 million, or 9.5%, in fiscal 2025 compared to fiscal 2024, primarily due to decreases of $9.5 million in stock-based compensation driven by lower weighted average grant date fair values for awards granted, $4.3 million in combined salaries, benefits, and consulting costs driven by lower headcount, and $3.5 million in facilities costs.
Cash provided by investing activities increased $2.5 million to $8.5 million for fiscal 2024, mainly due to decreases in the purchases, sales, and maturities of investments.
Cash used in investing activities decreased $25.0 million to $16.4 million for fiscal 2025, mainly due to decreases in the purchases, sales, and maturities of investments and $3.2 million of cash paid for the business combination.
To support our customers and partners, we are expanding our customer success organization and investing in improvements to our back-office processes to increase our operational efficiency over time. We believe that continued innovation is a critical factor in attracting and retaining mid-market and enterprise customers and is an important variable in achieving sustainable growth.
We believe that continued innovation is a critical factor in attracting and retaining our customers and is an important variable in achieving sustainable growth.
General and administrative For the years ended March 31, (in thousands, except percentages) 2024 2023 Change General and administrative $ 112,209 $ 108,001 $ 4,208 3.9 % Percentage of total revenue 15.4 % 14.5 % General and administrative expenses increased $4.2 million, or 3.9%, in fiscal 2024 compared to fiscal 2023 primarily due a $13.9 million increase primarily due to Fuze regulatory charges and $3.4 million increase of combined acquisition, integration, contract termination and other costs.
General and administrative For the years ended March 31, (in thousands, except percentages) 2025 2024 Change General and administrative $ 82,407 $ 112,209 $ (29,802) (26.6) % Percentage of total revenue 11.5 % 15.4 % General and administrative expenses decreased $29.8 million, or 26.6%, in fiscal 2025 compared to fiscal 2024 primarily due to a $24.2 million decrease associated with regulatory and state and local tax matters.
Sales and marketing For the years ended March 31, (in thousands, except percentages) 2024 2023 Change Sales and marketing $ 271,944 $ 311,883 $ (39,939) (12.8) % Percentage of total revenue 37.3 % 41.9 % Sales and marketing expenses decreased $39.9 million, or 12.8%, in fiscal 2024 compared to fiscal 2023 primarily due to decreases of $19.3 million in personnel-related and consulting costs, $17.2 million of combined paid media, marketing services and other costs, and $8.4 million in stock-based compensation expense.
Sales and marketing For the years ended March 31, (in thousands, except percentages) 2025 2024 Change Sales and marketing $ 264,461 $ 271,944 $ (7,483) (2.8) % Percentage of total revenue 37.0 % 37.3 % Sales and marketing expenses decreased $7.5 million, or 2.8%, in fiscal 2025 compared to fiscal 2024 primarily due to decreases of $8.2 million in channel commissions and amortization of contract acquisition costs and $6.7 million in stock-based compensation expense driven by lower weighted average grant date fair values for awards granted.
Debt Obligations See Note 8 , Convertible Senior Notes and Term Loan in the audited consolidated financial statements included elsewhere in this Annual Report for information regarding our debt obligations. 40 Material Cash Requirements and Other Obligations The following table summarizes the payments due for our outstanding contractual obligations as of March 31, 2024: Total Less than 1 year 1-3 years 3-5 years Thereafter 2028 Notes Principal payments $ 201,914 $ — $ 201,914 $ — $ — Interest payments 32,307 8,077 24,230 — — Term loan (1) Principal payments 225,000 — 225,000 — — Interest payments (2) 92,393 27,718 64,675 — — Operating lease obligations (3) 77,284 13,737 23,964 21,148 18,435 Purchase obligations 61,154 44,855 15,150 877 272 Total $ 690,052 $ 94,387 $ 554,933 $ 22,025 $ 18,707 (1) See Note 8 , Convertible Senior Notes and Term Loan, in the Notes to Consolidated Financial Statements included in this Annual Report for further information.
See Note 8 , Convertible Senior Notes and Term Loan, to our consolidated financial statements for details. 44 Material Cash Requirements and Other Obligations The following table summarizes the payments due for our outstanding contractual obligations as of March 31, 2025: Total Less than 1 year 1-3 years 3-5 years Thereafter 2028 Notes Principal payments $ 201,914 $ — $ 201,914 $ — $ — Interest payments 24,230 8,077 16,153 — — Term Loan (1) Principal payments 152,000 12,000 140,000 — — Interest payments (2) 21,317 10,203 11,114 — — Operating lease obligations (3) 67,835 13,501 23,668 22,708 7,958 Purchase obligations 59,766 49,409 9,787 532 38 Total $ 527,062 $ 93,190 $ 402,636 $ 23,240 $ 7,996 (1) See Note 8 , Convertible Senior Notes and Term Loan, in the Notes to Consolidated Financial Statements included in this Annual Report for further information.
These decreases were partially offset by increases of $2.2 million in combined employee, consulting and facility costs and $0.3 million in internally-developed software and other costs.
These decreases were partially offset by increases of $2.3 million to operate data centers, $1.4 million in internally-developed software, and $0.6 million in other costs necessary for us to conduct our product, platform development and engineering efforts.
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). SUMMARY AND OUTLOOK In fiscal 2024, our total revenue decreased $15.2 million, or approximately 2% year-over-year, to $728.7 million.
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). 37 Macroeconomic and Other Factors We are subject to risks and exposures, including those caused by adverse economic conditions.
Cost of Revenue Cost of service revenue 37 For the years ended March 31, (in thousands, except percentages) 2024 2023 Change Cost of service revenue $ 192,960 $ 198,871 $ (5,911) (3.0) % Percentage of service revenue 27.5 % 28.0 % Cost of service revenue decreased $5.9 million , or 3.0% , during fiscal 2024 compared to fiscal 2023, due to decreases of $6.1 million related to the amortization of capitalized software and intangible assets and $2.6 million of combined employee, consulting and stock-based compensation expense.
Cost of Revenue Cost of service revenue For the years ended March 31, (in thousands, except percentages) 2025 2024 Change Cost of service revenue $ 200,094 $ 192,960 $ 7,134 3.7 % Percentage of service revenue 28.9 % 27.5 % Cost of service revenue increased $7.1 million , or 3.7% , during fiscal 2025 compared to fiscal 2024, primarily due to an increase of $17.5 million in costs to deliver our subscription and platform usage services.
Our customers use our XCaaS platform to create tailored employee and customer experiences that increase productivity, improve responsiveness, and elevate customer and employee satisfaction and loyalty. Our service plans are structured with increasing levels of functionality and are designated as X1, X2, etc., through X8, based on the specific communication needs and customer engagement profile of each user.
Our service subscription plans are sold on a per-user basis and are structured with increasing levels of functionality, based on the specific communication needs and customer engagement profile of each user.
These decreases were partially offset by an increase of $5.2 million in channel commissions and amortization of deferred commission.
These decreases were partially offset by an increase of $5.3 million in salaries, benefits, and consulting costs driven by increased sales organization headcount and $2.1 million in digital marketing and other costs.
Cost of other revenue For the years ended March 31, (in thousands, except percentages) 2024 2023 Change Cost of other revenue $ 31,945 $ 42,604 $ (10,659) (25.0) % Percentage of other revenue 113.6 % 125.7 % Cost of other revenue decreased $10.7 million , or 25.0% , in fiscal 2024 compared to fiscal 2023, primarily due to $7.8 million decreased personnel-related costs to deliver our professional services coupled with $2.9 million lower product costs.
This increase was partially offset by decreases of $5.7 million from amortization of capitalized software and intangible assets, $3.1 million in stock-based compensation driven by lower weighted average grant date fair values for awards granted, $1.1 million in software costs, and $0.5 million in salaries, benefits, and consulting costs. 40 Cost of other revenue For the years ended March 31, (in thousands, except percentages) 2025 2024 Change Cost of other revenue $ 29,704 $ 31,945 $ (2,241) (7.0) % Percentage of other revenue 134.1 % 113.6 % Cost of other revenue decreased $2.2 million , or 7.0% , in fiscal 2025 compared to fiscal 2024, primarily due to decreases of $1.6 million in lower product costs associated with IP telephone hardware and $0.8 million of stock-based compensation.
In August 2022, we refinanced approximately $403.8 million of the $500.0 million aggregate principal amount of 2024 Notes through an exchange for approximately $201.9 million in 2028 Notes plus approximately $181.8 million in cash. The cash payment was funded with the partial proceeds of a new $250.0 million senior secured term loan due in 2027 entered into in August 2022.
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.
These decreases were partially offset by an increase of $2.8 million in costs to deliver our services. We expect cost of service revenue will increase in absolute dollars but generally remain consistent or decline as a percentage of revenue in future periods.
These decreases were offset by an increase of $0.2 million in salaries, benefits, and consulting costs to deliver our professional services.
Our service revenue decreased $9.5 million, or approximately 1% year-over-year, to $700.6 million. As part of our long-term strategy to expand our enterprise customer base, grow our revenue, and increase our profitability and cash flow, we have focused on reducing the cost of delivering our services and improving our sales efficiency while increasing our investment in research and development.
Summary and Outlook As part of our long-term strategy to grow our revenue and increase profitability and cash flow, we are focused on retaining our existing customers and expanding our mid-market, enterprise and public sector customer base.
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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.
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Overview 8x8, Inc. is a global provider of integrated customer experience and business communications solutions, purpose-built to unify customer and employee engagement across the enterprise. Our Platform for CX™ combines contact center, business communications, and application programmable interfaces, or APIs, for communications into a single, secure, AI-powered system that delivers seamless, data-driven interactions.
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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.
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Designed for agility and scale, our platform helps businesses eliminate silos, improve operational efficiency, and turn every conversation into actionable intelligence. By aligning technology with measurable outcomes, we empower organizations to transform how they connect, serve, and grow — from first interactions to lasting relationships.
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The XCaaS platform delivers our unified communications as-a-service, contact center as-a-service, and communications platform as-a-service services and includes artificial intelligence-driven 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.
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We serve a broad customer base—from small businesses to large global enterprises—across every major industry and in over 160 countries. Our strategic focus has increasingly shifted toward mid-market, small and mid-sized enterprise, and public sector organizations, particularly those with 500 to 10,000 employees.
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The 8x8 XCaaS platform offers a cloud technology stack for communication, collaboration, and customer interaction. It 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.
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These customers often have more complex communication and customer service needs and are more likely to benefit from—and invest in—multiple services across our platform. This focus aligns with our strengths, eliminating communication silos and enabling businesses to transform every customer interaction into a strategic asset.
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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 and intelligent integrated applications that can drive employee productivity, resource optimization, and more effective end-customer interactions through simplified and automated workflows.
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We also invest resources in retaining our small business customers, including world class onboarding and customer care specialists that are a single point of contact for all service and support needs. We reach customers through a diversified go-to-market strategy that includes both direct and indirect channels.
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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.
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We utilize a diversified partner ecosystem to complement our direct sales efforts and expand our global market reach. Our go-to-market strategy includes technology solutions distributors, or TSDs, and their sub-agent networks, who contribute to pipeline growth through referrals.
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Because our XCaaS platform includes unified communications as-a-service, contact center as-a-service and communications platform as-a-service and serves as a single integration framework for communications and customer interactions across an organization, customers can reduce costs associated with provisioning and management, increase customization based on use cases, and facilitate compliance with security and data privacy requirements on a global scale.
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We also engage value-added resellers, or VARs, who market, sell, implement, and support our solutions, helping to drive customer acquisition and optimize our routes to market. In addition, we collaborate closely with strategic technology partners—particularly those with whom we maintain deep integrations or original equipment manufacturer, or OEM, relationships—via structured referral agreements and coordinated lead flow processes.
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In fiscal 2023, we introduced platform-wide integration of generative artificial intelligence from OpenAI, making it easier for organizations to unlock the potential of generative artificial intelligence to personalize self-service, bot-based and agent-based customer engagements.
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Our carrier partnerships extend our service availability to over 100 countries and territories, ensuring high-quality, reliable communications that support our international footprint. To further enhance deployment speed and geographic coverage, we leverage third-party service providers, enabling us to deliver implementation and support services efficiently at a global scale.
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The XCaaS platform also integrates with a growing ecosystem of third-party applications, ranging from purpose-built and vertically-focused artificial intelligence-based applications to broadly deployed customer relationship management platforms and leading customer engagement and workforce management software.
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With our unified approach to communication and a commitment to continuous innovation, 8x8 enables businesses to deliver intelligent, connected experiences that securely scale across the enterprise. We generate service revenue from subscriptions to our communications services, as well as from usage of our platform.
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Our solutions approach to third party integrations and platform-wide enablement of generative artificial intelligence, combined with flexibility to “mix and match” functionality based on users’ communication requirements and customer engagement profiles, allows organizations of all sizes to design and deploy tailored user experiences previously reserved to very large enterprises.
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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. We generate other revenue from professional services and the sale of office phones and other hardware equipment.
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Our customers range from small businesses to large enterprises across all vertical markets, with users in more than 160 countries. In recent years, we have increased our focus on mid-market, small- and mid-sized 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.
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Macroeconomic conditions that could adversely affect our business include geopolitical instability, tariffs, 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.
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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 subscriptions as well as from usage of our platform.
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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 could adversely impact our business in future periods. For example, our installed base includes more than 50,000 small businesses, which tend to be disproportionately impacted by macroeconomic headwinds.
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To improve our sales efficiency, we have focused our sales and marketing resources on mid-market and enterprise customers, since these customers are likely to derive the greatest benefit from our unified XCaaS platform.
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Our primary focus involves the following: (i) accelerating innovation, particularly in enhancing our platform and contact center with artificial intelligence-based capabilities, and (ii) leveraging our CPaaS leadership in the Asia Pacific region to expand globally.
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Concurrently with the issuance of the 2028 Notes, we repurchased 10,695,000 shares of our common stock for approximately $60.0 million in privately negotiated transactions with a limited number of holders.
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We continue to introduce new products like 8x8 Engage, add capabilities that allow our customers to enhance employee and customer experience, and expand our Technology Partner Ecosystem to provide complete solutions tailored to specific use cases.
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In September 2022, December 2022 and February 2023, we repurchased $6.0 million, $21.8 million and $5.0 million in aggregate principal amount of the 2024 Notes, respectively, in separate privately negotiated transactions.
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We are also enhancing our platform foundation with cutting edge technology, 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.
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On February 1, 2024, we paid the remaining aggregate principal of $63.3 million, and accrued interest of $0.2 million, related to the 2024 Notes, which matured on February 1, 2024. See Note 8 , Convertible Senior Notes and Term Loan to our consolidated financial statements for details.
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Our investment in innovation has been complemented by initiatives to manage the cost of delivering our services and improve our sales efficiency.
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In May 2023, we voluntarily prepaid $25.0 million of principal on our senior secured term loan, reducing the total principal outstanding to $225.0 million. Due to the adjustable nature of the interest rate on our senior secured term loan, our net income may vary.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeA hypothetical variable interest rate increase of 10%, would increase our annual interest expense by approximately $2.4 million on our consolidated results of operations. 2028 Notes As of March 31, 2024, we have $201.9 million aggregate principal amount of the 2028 Notes.
Biggest changeA hypothetical variable interest rate increase of 10% would increase our annual interest expense by approximately $1.0 million on our consolidated results of operations. 2028 Notes As of March 31, 2025, we have $201.9 million aggregate principal amount of the 2028 Notes.
Gains or losses from the revaluation of certain cash balances, accounts receivable balances and intercompany balances that are denominated in these currencies impact our net income (loss). A hypothetical decrease in all foreign currencies against the United States dollar of 10% would not result in a material foreign currency loss on foreign-denominated balances as of March 31, 2024.
Gains or losses from the revaluation of certain cash balances, accounts receivable balances and intercompany balances that are denominated in these currencies impact our net income (loss). A hypothetical decrease in all foreign currencies against the United States dollar of 10% would not result in a material foreign currency loss on foreign-denominated balances as of March 31, 2025.
As our foreign operations expand, our results may be more impacted by fluctuations in the exchange rates of the currencies in which we do business. At this time, we do not, but we may in the future, enter into financial instruments to hedge our foreign currency exchange risk. 43
As our foreign operations expand, our results may be more impacted by fluctuations in the exchange rates of the currencies in which we do business. At this time, we do not, but we may in the future, enter into financial instruments to hedge our foreign currency exchange risk. 47
Foreign Currency Exchange Risk We have foreign currency risks related to our revenue and operating expenses denominated in currencies other than the United States dollar, primarily the British Pound and Euro, causing both our revenue and our operating results to be impacted by fluctuations in the exchange rates.
Foreign Currency Exchange Risk We have foreign currency risks related to our revenue and operating expenses denominated in currencies other than the United States dollar, primarily the British Pound and Singapore Dollar, causing both our revenue and our operating results to be impacted by fluctuations in the exchange rates.
Term Loan The Company is subject to interest rate risk with the Term Loan as we pay interest on the principal balance at a variable rate. As of March 31, 2024, the aggregate principal of the term loan was $225.0 million.
Term Loan The Company is subject to interest rate risk with the Term Loan as we pay interest on the principal balance at a variable rate. As of March 31, 2025, the aggregate principal of the Term Loan was $152.0 million.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Interest Rate Fluctuation Risk Cash, Cash Equivalents and Short-Term Investments We had cash, cash equivalents, and investments totaling $117.3 million as of March 31, 2024. Cash equivalents and investments were invested primarily in money market funds, United States treasury, commercial paper, and corporate bonds.
ITEM 7A. Quantitative and Qualitative Disclosures about Market Risk Interest Rate Fluctuation Risk Cash, Cash Equivalents and Short-Term Investments We had cash, cash equivalents, and investments totaling $88.1 million as of March 31, 2025. Cash equivalents and investments were invested primarily in money market funds, United States treasury, commercial paper, and corporate bonds.
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In addition, we are exposed to translation risk in connection with our foreign operations in Europe and Asia because our subsidiaries in these countries utilize the local currency as their functional currency and those financial results must be translated into U.S. dollars.
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Accordingly, the effects of exchange rate fluctuations on the net assets of these foreign subsidiaries’ operations are accounted for as translation gains or losses in accumulated other comprehensive loss within stockholders’ equity.
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During the year ended March 31, 2025, a hypothetical change of 10% in such foreign currency exchange rates would have resulted in additional foreign currency translation adjustment of approximately $13.0 million within accumulated other comprehensive loss.

Other EGHT 10-K year-over-year comparisons