8x8, Inc. (Nasdaq: EGHT) Corporate Overview

Transcription

8x8, Inc. (Nasdaq: EGHT)Corporate OverviewJefferies 2013 Global Technology, Media and Telecom ConferenceMay 7, 2013 2013 NASDAQ-LISTED: EGHT

Safe Harbor StatementDuring the course of this meeting, and any question and answer and demonstration period afterwards,representatives of the Company may make forward-looking statements regarding future events or the futurefinancial performance of the Company, including statements about future events based on currentexpectations, potential product development efforts, near and long-term objectives, potential new business,strategies, organization changes, changing markets, future business performance and outlook. Suchstatements are predictions only, and actual events or results could differ materially from those made in anyforward-looking statements due to a number of risks and uncertainties. Actual results and trends may differmaterially from historical results or those projected in any such forward-looking statements depending on avariety of factors. These factors include, but are not limited to, customer acceptance and demand for our VoIPproducts and services, the reliability of our services, the prices for our services, customer renewal rates,customer acquisition costs, actions by our competitors, including price reductions for their telephone services,potential federal and state regulatory actions, compliance costs, potential warranty claims and product defects,FinancialSummaryour needs for and the availability of adequateworking capital,our ability to innovate technologically, the timelysupply of products by our contract manufacturers, potential future intellectual property infringement claims thatcould adversely affect our business and operating results, and our ability to retain our listing on the NASDAQCapital Market. For a discussion of such risks and uncertainties, which could cause actual results to differfrom those contained in the forward-looking statements, see “Risk Factors” in the Company’s reports onForms 10-K and 10-Q, as well as other reports that 8x8, Inc. files from time to time with the Securities andExchange Commission. All forward-looking statements are qualified in their entirety by this cautionarystatement, and 8x8, Inc. undertakes no obligation to update publicly any forward-looking statement for anyreason, except as required by law, even as new information becomes available or other events occur in thefuture.Please refer to our most recent filings with the Securities and Exchange Commission which contain andidentify additional information covering factors that could cause the results to differ materially from thosecontained in our projections or forward-looking statements.2l8x8 Inc. NASDAQ-LISTED: EGHT

8x8, Inc. Business Overview3l8x8 Inc. NASDAQ-LISTED: EGHT

Typical 8x8 Prospect Quote4l8x8 Inc. NASDAQ-LISTED: EGHT

Typical 8x8 Prospect Quote5l8x8 Inc. NASDAQ-LISTED: EGHT

Mid-Market Customer Cost Savings Analysis 8x8 vs. Existing Telecom Service ProviderPrior long distancespend 42K/mo.6l8x8 Inc. NASDAQ-LISTED: EGHT

Why Businesses Choose 8x8"The simplicity of change management using the 8x8 solution was eyeopening. Previously, we had to involve substantial internal IT resourcesplus hire outside consultants to make simple moves, adds or changes.With 8x8 services, someone on my IT staff can quickly and easily executeall of these changes online.” - Ron Godine, TMW Systems"The management and expense of maintaining numerous PBX phonesystems and services with more than 20 different competitive localexchange carriers had become exorbitant. With the 8x8 Virtual Officesolution, all of our offices will now be connected under a single, cloudbased phone system at a fraction of what we were spending previously."- Jerry Howard, Irving Materials"We've only just begun to uncover the capabilities of the 8x8 solution andhave even requested new features that 8x8 has implemented on ourbehalf. We plan on rolling out additional 8x8 unified communicationsservices over the coming months with the goal of empowering ouremployees to be as efficient and productive on the road as they are in theoffice.” – Bob Hughes, McClarens7l8x8 Inc. NASDAQ-LISTED: EGHT

Competitors: 8x8 Leads UC Industry in Vision Gartner Magic Quadrant for UnifiedCommunications as a Service,North America – publishedNovember 19, 2012 8x8 recognized as a “Leader”based on ability to execute andcompleteness of vision Positioning also recognizescompany as “most visionary”Source: adrant.html?source OL-Research-GartnerMagicQuadrant8l8x8 Inc. NASDAQ-LISTED: EGHT

Competitors: 8x8 Leads Cloud UCaaS Market April 2013 Survey by Synergy Research Group– Total 2012 UCaaS business suite revenues came in 29% higher than 2011* From gh-growth-cloud-ucaas-market, April 11, 20139l8x8 Inc. NASDAQ-LISTED: EGHT

Competitors: 8x8 Leads UC Industry in Installed Lines Top 14 Providers by Installed Lines (North America), 2011*1. 8x82. Comcast3. West IP Communications4. Verizon5. RingCentral6. Vocalocity7. Megapath8. Thinking Phone Networks9. Fonality10. WVT11. Broadview12. M513. Vantage Communications14. Broadvox* From “North American Hosted IP Telephony and UC Services Market Report,” Frost & Sullivan, July 201210 l8x8 Inc. NASDAQ-LISTED: EGHT

8x8 UC Deployments Rival On-Premise Competitors 8x8 Ranks #6 Among On-Premise Business Deployments in and 1,52623419569,444198,189% .0%100.0%8x88x8 inin CYCY 20122012 11,36711,367 NewNew BusinessesBusinessesSource: IntelliCom Analytics, IntelliCom Market Performance DashboardSM, 2012 North American New Business Deployments11 l8x8 Inc. NASDAQ-LISTED: EGHT

8x8 Customers – Previous Service Provider SurveyPrevious ProviderAT&TVerizonComcastNone/New BusinessCenturyLinkVonageRingCentralCell Phone OnlySkypeCox CommunicationsWindstreamGoogle VoiceFrontierSprintCbeyondOptimumTime WarnerEarthlink# Responses1838662454233322623171716151410986% %2.7%2.5%2.4%2.2%1.6%1.4%1.3%0.9%Source: Survey of 637 respondents that were new customers of 8x8 Virtual Office service during July 2012 – January 2013 period12 l8x8 Inc. NASDAQ-LISTED: EGHT

Huge Untapped Market for Business UCU.S. Market for IP-Based Business Access LinesTotal U.S. Business LinesTotal IP Business LinesIP Telephony Penetration(balance is circuit-switched)Source: FCC Form 477 Filing Data - Local Telephone Competition: Status as of December 31, 2011, dated January 201313 l8x8 Inc. NASDAQ-LISTED: EGHT

UC as a Service – Why Should You Care?Communications data (voicemails, presence/directory, FAX messages, instant messages,call recordings, conference information, etc.) that is “locked in a box” is inaccessible!14 l8x8 Inc. NASDAQ-LISTED: EGHT

Select 8x8 Business Customers15 l8x8 Inc. NASDAQ-LISTED: EGHT

8x8 Government Customers –Federal “Cloud First” Initiative Existing government customersinclude:– Federal Maritime Commission– U.S. China Commission– Administrative Conference of theU.S.– Defense Nuclear Facilities SafetyBoard– Inter-American Foundation– Indiana Public Retirement System16 l8x8 Inc. NASDAQ-LISTED: EGHT

Financial Summary

MILLIONS30% AGR in Revenue from Business CustomersRevenue from Business Customers, Fiscal Years Ending March 3118 l8x8 Inc. NASDAQ-LISTED: EGHT

Consistent Quarterly Subscriber GrowthNet Ending Business Customer Count (by quarter)19 l8x8 Inc. NASDAQ-LISTED: EGHT

Increasing ARPU from Larger Business Customers20 l8x8 Inc. NASDAQ-LISTED: EGHT

Business Customer MetricsBusiness Customer Economics (for the quarter ended 12/31/12): Average number of services per business customer: 11.2 Service ARPU per month: 260 Contribution margin: 63% Acquisition cost per service: 98 Payback period: Approx. 7 months Customer churn: 1.6% Revenue churn: 2.6%21 l8x8 Inc. NASDAQ-LISTED: EGHT

Select Business Customer Operating StatisticsThree Months EndedGross business customer additions (1)Gross business customer cancellations(less cancellations within 30 days of sign-up)Business customer churn (less cancellations within 30 days of sign-up) (2)Business service revenue churnTotal business customers (3)Business customer average monthly service revenue per customer (4)Overall service marginOverall product marginOverall gross marginBusiness subscriber acquisition cost per service (5)Average number of subscribed services per business customerAverage number of subscribed services per new business customer (6)Dec. 31,20112,836March 31,20122,892June 30,20122,943Sept. 30,20122,915Dec. %31,473 23977%-24%68% 929.414.1 24476%-15%68% 999.813.6 25075%-30%67% 9710.114.0 25676%-22%68% 8910.614.7 26078%-34%68% 9811.217.01)Does not include customers of Virtual Office Solo or Zerigo, Inc. ("Zerigo").2)Business customer churn is calculated by dividing the number of business customers that terminated (after the expiration of the 30-day trial) during that period by the simple average number ofbusiness customers during the period and dividing the result by the number of months in the period. The simple average number of business customers during the period is the number of businesscustomers on the first day of the period plus the number of business customers on the last day of the period divided by two. In the second quarter of fiscal 2013, an affiliate with 411 businesscustomers representing approximately 9,000 of monthly service revenue cancelled service. Excluding these 411 cancellations, business customer churn (less cancellations within 30 days of signup) was 1.9%.3)Business customers are defined as customers paying for service. Customers that are currently in the 30- day trial period are considered to be customers that are paying for service. Customerssubscribing to Virtual Office Solo or Zerigo services are not included as business customers.4)Business customer average monthly service revenue per customer is service revenue from business customers in the period divided by the number of months in the period divided by the simpleaverage number of business customers during the period.5)Business subscriber acquisition cost per service is defined as the combined costs of advertising, marketing, promotions, sales commissions and equipment subsidies for business services soldduring the period divided by the number of gross business services added during the period.6)Total new services sold in the period divided by gross business customer additions.22 l8x8 Inc. NASDAQ-LISTED: EGHT

3rd Quarter Fiscal 2013 Highlights(quarter ended December 31, 2012) Revenue from business customers grew 22.2% during the quarter from thesame period last year and comprised 97% of total revenue. Overall gross margin was 68.3% compared with 67.8% in the prior quarter and67.9% in the same period last year; service gross margin was 78.1%,compared with 75.9% in the prior quarter and 76.9% in the same period lastyear. GAAP net income was 1.9 million, or 0.03 per diluted share, compared with 2.6 million, or 0.04 per share, for the same period last year. Non-GAAP net income was 3.8 million, or 0.05 per diluted share, comparedwith 3.7 million, or 0.05 per diluted share, in the same period a year ago. Cash flow from operating activities was 6.6 million for the quarter comparedwith 3.2 million in the same period last year. Ended the quarter with 46.5 million in cash, cash equivalents and investmentscompared with 40.1 million in the prior quarter and 21.9 million on December31, 2011.23 l8x8 Inc. NASDAQ-LISTED: EGHT

Non-GAAP Reconciliations (unaudited)Three Months EndedDecember 31, 2012In thousands, except per share amounts2012Net IncomeGain on patent saleNon-cash tax adjustmentsAmortizationStock-based compensation expenseAcquisition-related expenseFacility exit expenseNon-GAAP Net IncomeWeighted average number of sharesDilutedGAAP net income per share - DilutedGain on patent saleNon-cash tax adjustmentsAmortizationStock-based Compensation expenseAcquisition-related expenseFacility exit expenseNon-GAAP net income per share - DilutedGAAP net income percentage of revenueGain on patent saleNon-cash tax adjustmentsAmortizationStock-based compensation expenseAcquisition-related expenseFacility exit expenseNon-GAAP net income percentage of revenue24 l8x8 Inc. NASDAQ-LISTED: EGHT 1,9202011 2,586 3574182411403,742780357765 3,822Nine Months EndedDecember 31, 20122012 12,278(11,965)7,3591,0711,82730510,8752011 5,365 14%0.010.010.010.119%-1%1%2%1%12%

www.8x8.com25 l8x8 Inc. NASDAQ-LISTED: EGHT

With the 8x8 Virtual Office solution, all of our offices will now be connected under a single, cloud-based phone system at a fraction of what we were spending previously." - Jerry Howard, Irving Materials "We've only just begun to uncover the capabilities of the 8x8 solution and have even requested new feat