Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
Item 2.02. Results of Operations and Financial Condition.
On October 22, 2014, 8x8, Inc., or the Company, issued a press release announcing its financial results for the six months ended September 30, 2014. A copy
of this press release is furnished as Exhibit 99.1 to this report. The press release should be read in conjunction with the statements regarding forward-looking statements, which are
included in the text of the release.
In addition to disclosing financial results calculated in accordance with U.S. generally accepted accounting principles (GAAP), management also presents information regarding
the Company's performance over comparable periods based on net income and net income per share, exclusive of non-cash tax adjustments, stock-based compensation, gain on
patent sale, amortization of acquired intangible assets, acquisition-related costs, gain on disposal of discontinued operations and management transition.
Because management discloses financial measures calculated without taking into account these items, these financial measures are characterized as "non-GAAP financial
measures" under Securities and Exchange Commission rules.
The gain on patent sale in fiscal 2015 was a $1.0 million gain that management believes is not reflective of its ongoing operations.
Non-cash tax adjustments represented the difference between the amount of taxes the Company expects to pay and the GAAP tax provision each period. Management
excludes non-cash tax adjustments because they are non-cash transactions.
Stock-based compensation charges represent non-cash charges related to equity awards granted by the Company. Although these are recurring charges to the Company's
operations, management has excluded stock-based compensation expense because it relies on valuations based on future events, such as the market price of the Company's
common stock, that are difficult to predict and are affected by market factors that are largely not within the control of the Company. Thus, management believes that excluding these
charges facilitates comparisons of the Company's operational performance in different periods, as well as with similarly determined non-GAAP financial measures of comparable
Amortization of acquired intangible assets results from the Company's acquisitions of Contactual, Inc. and Zerigo, Inc. in fiscal 2012 and Voicenet Solutions Limited in fiscal
2014. Amortization of acquired intangible assets was excluded because it was a non-cash expense that the Company does not consider part of ongoing operations when assessing
the Company's financial performance.
Acquisition-related expenses, gain on disposal of discontinued operations and management transition are difficult to predict and often one-time. Management believes these
expenses are not reflective of the Company's ongoing operations in terms of evaluating comparable period-to-period performance.
Management and the Company's board of directors will continue to analyze these non-GAAP financial measures to assess the business and compare operating results to the
Company's performance objectives. For example, the Company's budgeting and planning process utilizes these non-GAAP financial measures, along with other types of financial
The Company discloses these non-GAAP financial measures to the public as an additional means by which investors can assess the Company's performance and to identify the
Company's operating results for investors on the same basis applied by management. The non-GAAP financial measures disclosed by the Company should not be considered a
substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations to those
financial statements should be carefully evaluated. The non-GAAP financial measures used by the Company may be calculated differently from, and therefore may not be
comparable to, similarly titled measures used by other companies. The Company has provided reconciliations of the non-GAAP financial measures to the most directly comparable
GAAP financial measures in the press release furnished as Exhibit 99.1.
Moreover, although these non-GAAP financial measures adjust expense, they should not be viewed as a pro forma presentation reflecting the elimination of the underlying
share-based compensation programs, which are an important element of the Company's compensation structure. GAAP requires that all forms of share-based payments should be
valued and included, as appropriate, in results of operations. Management believes these expenses are a material part of the Company's operating results.
Item 9.01. Financial Statements and Exhibits
99.1 Press Release dated October 22, 2014
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: October 22, 2014
Chief Financial Officer and Secretary
INDEX TO EXHIBITS