EGHT 10-K & 10-Q changes, risk factors and insider trading

Our operations and financial results are subject to various risks and uncertainties. You should consider carefully the risks and uncertainties described below, together with all of the other information in this report. If any of the following risks or other risks actually occur, our business, financial condition, results of operations, and future prospects could be materially harmed, and the price of our common stock could decline. OurThese businessdisclosures reflect our beliefs and opinions regarding factors that could also be materially and adversely affectedaffect us and our securities in the future. References to past events are provided by risksway of example only and uncertainties that are not presently knownintended to usbe a complete listing of such events or thata werepresentation currentlyas believeto arewhether or not material.such Unlessfactors otherwiseor indicated,similar referencesevents tohave our business being harmedoccurred in thesethe riskpast factorsor willtheir include harm to our resultslikelihood of operations,occurring financialin condition,the reputation, and future prospects.future.

•Dependence on new productproducts and services to maintain and grow our business.business and lack of resources to compete successfully.

•Potential past and future liabilities related to federal, state, local and international taxes, fees, surcharges and levees.levies.

•WePotential mayincurrence incurof impairments to goodwill, intangible assets or long-lived assets.

•Our abilityAbility to maintain compatibility with third-party applications and mobile platforms.

•Services must complyCompliance with industry standards and government regulations including those related to telecommunications and cybersecurity.

•Cash flow may be insufficient to service or pay down our substantial debt.

•ConditionalImpact of conditional conversion features of our debt could adversely affecton our financial condition.

•ChangeChanges in accounting standards, including for our debt, which may cause adverse financial reporting fluctuations and affect our reported operating results.

•Future sales of common stock or equity-linked securities.securities, including by existing stockholders.

•Certain provisions in our charter documents that may discourage takeover attempts.

We recorded operating income of approximately $15.2$18.9 million for the year ended March 31, 2025,2026, and ended the period with an accumulated deficit of approximately $887.7$886.1 million. WeOur expectrecent level of operating income is highly dependent on market demand for our products and services. Changes in economic conditions, competitive factors or a reduction in demand could lead to continuelower revenues and our inability to sustain our current results. As such, we may incur operating losses in the near future as we continue to invest in our business. During our fiscal year endingended March 31, 2026, we intendfocused toon continuecost todiscipline investand invested 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 expect to continue tomay incur losses for at leastin the next fiscal year and later, and we will need to increase our revenue to generate and sustain operating profitability in future periods. The investments we have made in fiscal 20252026 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 or sustain profitability in the time period that we expect, or not at all. In order to achieve sustained profitability, we will need to manage our cost structure more efficiently and not incur significant liabilities,efficiently, while continuing to grow our revenue. Despite these efforts, our revenue may continuedecline, towe decline,may incur additional liabilities, 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 at the same time that new and innovative competitors enter), 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 ifour we failfailure for any reason to continue to capitalize on growth opportunities. Additionally, inflationary pressures impacting our cost structure, geopolitical events, interest rate fluctuations, and foreign currency fluctuations could adversely impact our profitability. Given our history of fluctuating revenue and operating losses, we cannot be certain that we will be able to achieve or maintain operating profitability in the future or that, if we do become profitable, we will sustain profitability.future.

•changes in the markets we compete in, including reductions in market growth or consolidation among competitors, channel partners, or customers, and the impact of general macroeconomic conditions such as inflation, interest rates, recession, tariffs, trade policies, geopolitical instability, and decreased economic output;

•changes in customer demand, including cancellations, subscription downgrades, or substitution of our lower-priced, less feature-fullfeature-rich products for our higher-priced, more feature-fullfeature-rich products, particularly as customers transition to AI-based solutions;

It is possible that in some future periods ourOur results of operations may be below the expectations of public market analysts and investors.

In addition, changes in regulations, accounting principles, and our interpretation of these and judgments used in applying them, could have a material effect on our results of operations. We would also need to revise our business processes, systems, and controls, which require significant management attention and may negatively affect our financial reporting obligations. If any of these events were to occur, the price of our common stock would likely decline significantly.

Our increased emphasis on profitability and cash flow generation may not be successful. We intend to reducemaintain our total costs as a percentage of revenue, primarily impactingby lowering our sales and marketingoperating expenses. There can be no assurances that our cost reduction initiatives will result in the cost savings that we anticipate as a percentage of our revenue and will not have unintended or unforeseen consequences, including a further reduction in revenue. WeFurthermore, haveour experiencedfocus aon reductionreducing our spending may make it more difficult for us to compete given the rapid technological changes in revenue recently, which may have resulted from our costindustry reductionand initiatives.the need for innovation.

Our customers may elect not to renew their subscriptions at the end of their contractual commitments, either entirely or by reducing the contracted services, resulting in reduced revenue from those customers. Because of churn in our customer base, we must acquire new customers and sell additional 8x8 products and services to our existing customers on an ongoing basis to maintain our existingcurrent level of revenue. As a result, sales and marketing expenditures are an ongoing requirement of our business. Our ability to maintain and grow our revenue is adversely impacted by the rate at which our customers cancel or downgrade services. Churn reduces our revenue growth rate, and if our churn rate increases, we must acquire even more new customers and/or sell more products and services to existing customers, to maintain and grow our revenue. We incur significant costs to acquire new customers, and those costs are a meaningful component in driving our net profitability. Churn may also prevent us from increasing the price of our services in the future, as well asand limit our ability to sell additional 8x8 products and services to our existing customerscustomers, andso we may need to renew certain customers at a lower rate, each of which each case would adversely impact our revenue in the future. Therefore, if we are unsuccessful in managing our existing customer churn and/or our customer churn rate increases in the futurefuture, our revenue growth would decrease and our revenue may decline, causing our net loss to increase.

Our rate of customer cancellations or downgrades in services may increase in future periods due to a number of factors, some of which are beyond our control, such as the financial condition of our customers, the general economic environment, or significant shifts in geopolitical stability that affect global markets. Additionally, challenges in international expansion, including navigating diverse regulatory landscapes and adapting to local market conditions, may influence our ability to maintain or grow our customer base in certain regions. Pricing, competitive products, and migration of our customers from Fuze or other legacy products can all can contribute to churn. If we are unable to maintain the quality and performance of our serviceservice, 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 cancellationscancellations, downgrades and/or downgrades or customer creditscredits, which would adversely impact our revenue.

In addition to acquiring new customers, we generate new revenue by selling to our existing customers additional quantities of subscribed services, or subscriptions to new or upgraded services. Particularly in the case of large enterprises, we often have opportunities to expand the sale of our services within an organization after we have completed an initial sale to one part of the organization (for example, a business unit, division or department, or personnel based in a particular country or region) and the organization has qualified us as a vendor. We invest in efforts to educate and train users on the features and capabilities of our services so that they can become advocates within their organizations and encourage increased adoption of our solutions. However, if existing users within an organization are dissatisfied with any aspect of our cloud services, or the technical support, training or other professional services we provide, we may face challenges in up-selling or increasing our penetration of the organization.

We also face intense 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 ishas investinginvested significantly in its Microsoft Teams unified communication and collaboration product. Any of these companies could launch a new cloud-based business communications service, expand its existing offerings to compete with features of our services, or enter into a strategic partnership with, or complete an acquisition of, one or more of our cloud communications competitors. These companies are also able to integrate and bundle their services with a larger portfolio of offerings, which may make our products and services less appealing in comparison.

Many of our current and potential competitors have significantly greater resources andresources, brand awareness and/or name recognition, more diversified offerings and a larger base of customers than we have. As a result, these competitors may have greater marketingcredibility credibility.with our existing and potential customers, and we may not have the financial or other resources to compete effectively. They also may adopt more aggressive pricing policies and devote greater resources to the development, promotion, and sale of their products and services. Our competitors may also offer bundled service arrangements that present a more differentiated or better integrated product and services to customers. Increased competition could require us to lower our prices, reduce our sales revenue, increase our gross losses or cause us to lose market share. Announcements or expectations as to the introduction of new products and technologies by our competitors or us could cause customers to defer purchases of our existing products and services, which also could have a material adverse effect on our business, financial condition, or operating results.

Given the significant price competition in the markets for our services, we may be at a disadvantage compared with those competitors who have substantially greater resources than us or may otherwise be better positioned to withstand an extended period of downward pricing pressure. 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.

Our future business success, particularly to attract and support larger customers and expand into international markets, depends on our indirect sales channels. These channels consist of mastertechnology agentssolutions distributors and subagents, independent software vendors, system integrators, value-added resellers, and internet service providers, among others. We typically contract directly with the end customer and use these channel partners to identify, qualify and manage prospects throughout the sales cycle, although we also have arrangements with partners who purchase our services for resale to their own customers. As our business with master- and sub-agent partners has increased, we have seen our commission payments to these partners become an increasing portion of our sales and marketing expenses. Our future success depends upon our ability to develop and maintain successful relationships with these business partners, many of whom also market and sell services of our competitors, and our ability to increase the portion of sales opportunities they refer to us. To do so, we must continue to offer services that have quality, price, features, and other elements that compare favorably to those of competing services, ensure our partners are adequately trained and knowledgeable about our services, and provide sufficient incentives for these partners to sell our services in preference toover those of our competitors while maintaining a cost-effective agency structure. 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.

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. To compete successfully in this emerging market, we must continue to design, develop, manufacture, and sell highly scalable new and enhanced cloud software solutions products and services that provide higher levels of performance and reliability at lower cost. We will need to invest significantly in developing AI and automation capabilities for our products, as companies that are slow to adopt these technologies may face a competitive disadvantage. If we are unable to develop new products and services that address our customers' needs, to deliver our cloud software solution applications in one seamless integrated service offering that addresses our customers' needs, or to enhance and improve our products and services in a timely manner, we may not be able to achieve or maintain adequate market acceptance of our services. Further, overreliance on AI and automation could lead to service disruptions, or our customers' reliance on AI or automation could result in job cuts to roles in their IT departments which we have traditionally sold to, all of which may impact our ability to sell our products.

The competitive landscape is rapidly evolving, with new market entrants leveraging AI technologies, existing competitors engaging in M&A to strengthen their market position, and large well-capitalized companies potentially poised to enter the market in a targeted way. We face intense competition from other providers of UCaaS, CCaaS andCCaaS, CPaaS, messaging, video, fax, virtual events, AI (including quality management, sales assistant and other AI drivenAI-driven functionalities), virtual assistant, work-force management/optimization and other communication products and services. This is particularly acute as AI and automation continue to transform our industry, and we face the increasing risk that certain of our products and services may become redundant, obsolete, or less relevant.

To the extent that we are unable to achieve market acceptance of our UCaaSUCaaS, CCaaS, and CCaaSCPaaS 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.

The labor market for our business is subject to external factors that are beyond our control, including our industry's highly competitive market for skilled workers and leaders. If we increase employee compensation (beyond levels that reflect customary performance-based and/or cost-of-living adjustments) in response to the competitive hiring environment, we may sustain greater operating losses than we predicted in the near term, and we may not achieve profitability within the timeframe we had expected, or at all. In addition, we may need to issue equity at increased levels, now and in the future, to attract and retain key employees and executives, including weighting a greater percentage of our employees' total compensation in the form of equity as opposed to cash, which will have the adverse effect of increasing dilution for our stockholders. Volatility in, or lack of performance of, our stock price may also affect our ability to attract and retain key personnel.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes and other information included elsewhere in this Annual Report. In addition to historical data, this discussion contains forward-looking statements about our business, results of operations, cash flows, financial condition and prospects based on current expectations that involve risks, uncertainties and assumptions. Our actual results could differ materially from such forward-looking statements. Factors that could cause or contribute to those differences include, but are not limited to, those identified below and those discussed in the sections titled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” included elsewhere in this Annual Report. Additionally, our historical results are not necessarily indicative of the results that may be expected for any period in the future.

This section discusses items pertaining to and comparisons of financial results between fiscal 20252026 and fiscal 2024.2025. A discussion of fiscal 20242025 items and comparisons between fiscal 20242025 and fiscal 20232024 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, 20242025 (the “20242025 MD&A”), filed with the Securities and Exchange CommissionSEC on May 21,22, 2024.2025.

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 8x8 Platform for CX™ combines contact center, business communications, and application programmable interfaces,interfaces or APIs,("APIs") for communications into a single, secure, AI-poweredsystem systempowered by artificial intelligence ("AI") that delivers seamless, data-driven interactions. 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.

We generate serviceService revenueRevenue from subscriptions to our communicationsUCaaS services,and CCaaS offerings, as well as from usage of our platform. Our service subscription plans are sold on a per-user basis and are structured with increasing levels of functionality, based on the specific communication needs and customer engagement profile of each user. Platform usage,usage includingrevenue telephonyis minutes,revenue messaging,recognized SMS,from sales of products on an as-used basis and includes the use of our communications APIs, digital and voice chatAI botinteractions interactions,and encompassestelephony committedminutes. usage,Usage whichrevenue mayincreased beby bundled56% within fiscal 2026 as customers increased inbound and outbound engagement strategies using our servicecommunication subscription plans,APIs and uncommittedAI-based usage, which is sold on an as-used basis.interactions.

We are subject to risks and exposures, including those caused by adverse economic conditions. 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 landscapelandscape, on our business and financial results.

While the implications of macroeconomic events on our business, results of operations, and overall financial position remain uncertain over the long term,uncertain, we expect that adversedifficult economic conditions could adverselynegatively impact our business in future periods. For example, our installed base includes more than 50,000 small businesses, which tend to be disproportionately impactedaffected by macroeconomic headwinds. International revenue grew from approximately 33% of total revenue in fiscal 2025 to approximately 39% in fiscal 2026, increasing our exposure to foreign currency fluctuations. However, a significant portion of our international operating expenses are denominated in the same currencies as our international revenue, which partially mitigates the impact of currency movements on profitability. We also continue to monitor the pace of AI adoption across our customer base, which represents both an evolving competitive dynamic and a direct driver of demand for our platform capabilities and usage-based revenue.

As part of our long-term strategyobjectives to grow our revenue and increase profitability and cash flow, we are focused on retaining our existing customers and driving multi-product adoption within our installed base, as well as expanding our mid-market,base enterprisewith andnew public sector customer base.customers. We believe that continued innovation is a critical factor in attracting and retaining our customers and is an important variable in achieving sustainable growth. We are committed to maintainingcontinuing a high level ofour 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 that our customers require.

Service revenue consists of communication services subscriptions, platform usage revenue, and related fees from our UCaaS, CCaaS,CCaaS and CPaaS offerings. We plan to increase service revenue through a combination of new customer acquisition, cross-sellcross-selling 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.

Other revenue consists of revenue from professional services, primarily in support of deployment of our solutions and/or platform, and revenue from sales and rentals of IP telephones in conjunction with our cloud telephony service. Other revenue is dependent on the number of customers who choose to purchase or rent an IP telephone hardware in conjunction with our service instead of using the solution on their cell phone, computer, or other compatible device, and/or choose to engage our professional services organization for implementation and deployment of our cloud services.

Cost of service revenue consists primarily of costs associated with network operations and related personnel, technology licenses, amortization of intangible assets and capitalized internal-useinternal use software, other communication origination and termination services provided by third-party carriers, outsourced customer service call center operations, and other costs such as customer service, and technical support costs. We allocate overhead costs, such as information technology and facilities, to cost of service revenue, as well as to each of the operating expense categories, generally based on relative headcount. Our information technology costs include costs for information technology infrastructure and personnel. Facilities costs primarily consist of office leases and related expenses.

Cost of other revenue consists primarily of direct and indirect costs associated with the purchase and shipping and handling of IP telephonestelephone hardware as well as the scheduling, shipping and handling, personnel costs, and other expenditures incurred in connection with the professional services associated with the deployment and implementation of our products, and allocated information technology and facilities costs.

Research and development expenses consist primarily of personnel and related costs, stock-based compensation, third-party development, software and equipment costs necessary for us to conduct our product, platform development and engineering efforts, as well as allocated information technology and facilities costs.

Sales and marketing expenses consist primarily of personnel and related costs, stock-based compensation, sales commissions, including those to the channel, trade shows, advertising and other marketing, demand generation, and promotional expenses, as well as allocated information technology and facilities costs.

General and administrative expenses consist primarily of personnel and related costs, professional services fees, corporate administrative costs, tax and regulatory fees, stock-based compensation and allocated information technology and facilities costs.

Other Expense,Income (Expense), Net

Other expense,income (expense), net, consists primarily of losses on debt extinguishment, gain or loss on warrant remeasurement, interest income, gains or losses on foreign exchange transactions, as well as other income.

Provision for 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. We have a valuation allowance for our United StatesU.S. deferred tax assets, including federal and state non-operatingnet 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.

Our business is diversified by vertical market and geography, and no single customer represented more than 10% of our total revenue during fiscal years 20252026 and 2024.2025. We continue to monitor factors that could have an impact on customer buying behavior and demand, including macroeconomic conditions, contract duration, churn, upsell and down-sell, renewals, and payment terms, all of which could cause variability in our revenue.

Other revenue decreased by $6.0$1.7 million, or 21.3%,7.5%, in fiscal 2025, as2026 compared to fiscal 2024,2025, due to lower product revenue and professional service revenue of $3.2$1.0 million and $2.8$0.7 million, respectively.

Cost of service revenue increased $7.1by $32.5 million, or 3.7%,16.2%, duringin fiscal 20252026 compared to fiscal 2024,2025, primarily due to an increaseincreases of $17.5$39.8 million in network and carrier service provider costs to deliver our subscription and platform usage services.services Thisto increasesupport wasour capacity needs and $3.2 million in salaries, benefits, and consulting costs. These increases were partially offset by decreases of $5.7$5.2 million fromin amortization of capitalized software and intangible assets, $3.1 million in stock-based compensation drivenand by lower weighted average grant date fair values for awards granted, $1.1$2.2 million in softwareamortization costs,of andcapitalized $0.5 million in salaries, benefits, and consulting costs.software.

Cost of other revenue decreased $2.2by $1.6 million, or 7.0%,5.4%, in fiscal 20252026 compared to fiscal 2024,2025, primarily due to decreases of $1.6$1.0 million in lower product costs associated with IP telephone hardware and $0.8 million of stock-based compensation. These decreases were offset by an increase of $0.2 million in salaries, benefits, and consulting costs to deliver our professional services.

Research and development expenses decreased $13.0by $10.2 million, or 9.5%,8.3%, in fiscal 20252026 compared to fiscal 2024,2025, primarily due to decreases of $9.5$8.9 million in stock-based compensation driven by a reduction in amortization of unvested equity awards, reflecting lower weighted average grant datevolumes fairin valuesrecent forperiods, awards$2.0 granted,million $4.3in costs to operate data centers and facilities, $1.1 million in combined salaries, benefits, and consulting costs driven by lower headcount, and $3.5 million in facilities 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.efforts, and $1.0 million in internally-developed software and other costs. These decreases were partially offset by increases of $1.8 million in software licenses and $1.0 million in amortization of capitalized software.

Sales and marketing expenses decreased $7.5by $12.1 million, or 2.8%,4.6%, in fiscal 20252026 compared to fiscal 20242025 primarily due to decreases of $8.2$12.0 million in channel commissions and amortization of deferred contract acquisition costscosts, and $6.7$3.8 million in stock-based compensation expense driven by a reduction in amortization of unvested equity awards, reflecting lower weighted average grant datevolumes fairin valuesrecent forperiods, awardsand granted.$0.3 million in paid media and other marketing services costs. These decreases were partially offset by an increaseincreases of $5.3$4.0 million in salaries, benefits, and consulting costs driven by increased sales organization headcount and $2.1 million in digital marketing and other costs.

General and administrative expenses decreasedincreased $29.8by $8.3 million, or 26.6%,10.1%, in fiscal 20252026 compared to fiscal 20242025 primarily due to aan $24.2increase of $10.9 million decreaserelated associated withto regulatory and state and local tax matters. During fiscal 2025, we recognized a $9.9 million benefit due to adjusted accruals related to USF and other legal, regulatory and state and local tax mattersmatters. andWe also recognized aan benefitincrease in transaction-related expenses of $9.9$2.4 million, comparedoffset toby $14.3a milliondecrease in audit fees of expenses$1.4 recognized during fiscal 2024.million. The decreaseincrease was also due to decreasesincreases of $3.9$1.4 million in salaries, benefits, and consulting costs and $3.8$0.4 million in facilities costs. These increases were partially offset by decreases of $3.6 million in stock-based compensation driven by a reduction in amortization of unvested equity awards, reflecting lower weighted average grant datevolumes fairin valuesrecent forperiods, awardsand granted. These decreases were partially offset by an increase of $2.1$0.8 million in other general corporate costs.

Interest expense decreased by $11.0$11.1 million, or 27.5%,38.4%, in fiscal 20252026 compared to fiscal 2024,2025, primarily due to a lower interest rate and principal balance on the 2024 Term Loan compared to the 2022 Term Loan Debtand extinguishmentcapitalized interest related to property, plant and decreasedequipment interestfrom rategeneral andborrowing principal on the Term Loan.costs. See Note 8, Convertible Senior Notes and Term Loan, for further details.

Other expense,income (expense), net

We recognized $2.4 million of other income, net during fiscal 2026 compared to $10.4 million of other expense, net during fiscal 2025 compared to $3.5 million of other income, net during fiscal 20242025, primarily due to a $10.6decrease millionin increase onthe loss ofon debt extinguishment of $12.2 million due to the payoff of the 2022 Term Loan, ana increase of $2.0$2.7 million indecrease unrealizeddue to reduced foreign exchange losses, aand decreasean increase of $0.7 million in other income. These decreases were offset by a $1.4 million decrease in interest income,income earned on cash and cash equivalents and a $0.6reduced gain of $1.4 million increaseon the remeasurement of Warrants issued in otherconnection expense.with the 2022 Term Loan.

For the year ended March 31, 2025,2026, we recorded an income tax provision of $3.1$1.9 million compared to $3.6$3.1 million in fiscal 2024,2025, primarily duedriven toby athe reductioneffect inof the OBBBA's federal and state incometax 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.provisions.

Cash,Cash and Cash Equivalents, and InvestmentsEquivalents

The following is a summary of our cash and cash equivalents and investments (in thousands):

(1) Restricted cash supports letters of credit securing leases for office facilities and certain equipment for the same periods, and an accrued holdbackis related to aaccrued holdbacks for business combinationcombinations (see Note 1, The Company and Significant Accounting Policies).

Our primary requirements for liquidity and capital are working capital needs due toinclude delivery of our various products to customers, research and development, sales and marketing activities, principal and interest payments on our outstanding debt and other general corporate needs. Historically, these cash requirements have been met from cash provided by operating activities and our cash and cash equivalents balances. Our current capital deployment strategy for fiscal year 2026 is to investmaintain excesssufficient cash on handliquidity to supportfund our continuedoperations and growth initiativesinitiatives, into select markets andincluding planned software development activities, and to pay down our debt. As of March 31, 2025,2026, we are not party to any off-balance sheet arrangements that have had or are reasonably likely to have a current or future material effect on our financial condition, results of operations, liquidity, capital expenditures, or capital resources. Significant cash requirements for the fiscal year include our operating lease obligations, principal and interest payments related to our debt obligations, and operating and capital purchase commitments. For information regarding our expected cash requirements and timing of payments related to leases and noncancellable purchase commitments, see Note 6, Leases, and Note 7, Commitments and Contingencies, respectively, to the consolidated financial statements. 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.obligations.

Our outstanding 2024 Term Loan allows for voluntary prepayments. In order to reduce future cash interest payments, as well as future amounts due at maturity or upon redemption, we may, from time to time, make prepayments. The Company evaluates opportunities for stock repurchases, and may utilize cash and cash equivalents to repurchase shares under the 2017 RepurchasePlan. Plan.During the year ended March 31, 2026, the Company repurchased 1.0 million shares of common stock in the open market for approximately $1.8 million at an average price of $1.83 per share. The remaining amount of shares of common stock available for repurchase under the 2017 Plan as of March 31, 2026 was approximately $5.2 million. For more information, see Note 9, Stock-Based Compensation and Stockholders' Equity.

Cash provided by operating activities decreased by $15.4$7.8 million to $63.6$55.8 million for fiscal 2025,2026, mainlyprimarily due to a decrease in cash collected from customers and an increase in cash paid to suppliers and employeesvendors, partially offset by ana increasedecrease in cash receivedpaid fromto customers.employees and interest on outstanding debt. Cash used in investing activities decreasedincreased $25.0by $4.3 million to $16.4$20.7 million for fiscal 2025,2026, mainly due to decreasesincreases in the purchases,purchases sales,of property, plant and maturitiesequipment, ofcapitalized investmentsinternal-use software costs and $3.2 million of cash paid for the business combination.combinations. Cash used in financing activities decreased by $8.3$44.7 million to $75.1$30.4 million for fiscal 2025,2026, mainly due to lower principal repayments for ourthe term2024 loanTerm andLoan payoff(as described below), partially offset by the repurchase of acommon perpetual license related to our enterprise resource planning software.stock.

On August 5, 2024, we drew upon the entire facility of $200.0 million under the delayed draw term loan facility (the "2024 Term Loan") and used the proceeds of the 2024 Term Loan and cash on hand of approximately $29.0 million to repay in full the $225.0 million of outstanding principal amount and accrued interest of the 2022 Term Loan and the fees incurred in connection with the repayment (the "Repayment").Repayment.

The 2024 Term Loan bears 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. The initial margin will bewas 3.00% for the fiscal quarter ending September 30, 2024.2024 and remained 3.00% as of March 31, 2026. We have the option to pay interest monthly, quarterly, or semi-annually. During the three months ended March 31, 2025,2026, we elected monthly interest payment terms which resulted in cash payments of $2.7$2.0 million. DuringFor the three months endedending June 30, 2025,2026, we have elected monthly interest payment terms, which will result in cash payments of approximately $2.6$1.8 million. As of August 5, 2024, the scheduled principal repayments of $22.5 million in fiscal year 2025 ($7.5 million on October 31, 2024, December 31, 2024 and March 31, 2025, respectively), $37.5 million in fiscal year 2026 ($7.5 million on June 30, 2025 and $10.0 million on September 30, 2025, December 31, 2025 and March 31, 2026, respectively), and $47.5 million in fiscal year 2027 ($10.0 million on June 30, 2026, $12.5 million on September 30, 2026 and each quarter thereafter through maturity) are required, and the remaining $92.5 million principal is due before or upon maturity in fiscal year 2028. These annualized repayments will be made in quarterly installments. As of March 31, 2025,2026, the debt issuance costs arewere amortized to interest expense over the term of the 2024 Term Loan at an effective interest rate of 8.67%.8.64%.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report. As discussed in the section titledentitled “Forward-Looking Statements,” the following discussion and analysis contain forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. Factors that could cause or contribute to these differences include, but are not limited to, those discussed below and elsewhere in this Quarterly Report, particularlyand those set forth under the section entitled "Risk Factors" in the Form 10-K.10-K for the fiscal year ended March 31, 2026.

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 8x8 Platform for CX™ combines contact center, business communications, and application programmable interfaces,interfaces or APIs,("APIs") for communications into a single, secure, AI-poweredsecure system powered by artificial intelligence ("AI") that delivers seamless, data-driven interactions. 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.

We generate service revenue from subscriptions to our communicationsUCaaS services,and CCaaS offerings, as well as from usage of our platform. Our service subscription plans are sold on a per-user basis and are structured with increasing levels of functionality, based on the specific communication needs and customer engagement profile of each user. Platform usage revenue is revenue recognized from sales of products on an as-used basis, such as telephony minutes, messaging, SMS,basis and includes the use of our communications APIs, and digital and voice chatAI botinteractions and telephony minutes. Usage revenue increased by 63% in the first quarter of fiscal 2027 as customers increased inbound and outbound engagement strategies using our communication APIs and AI-based interactions.

We are subject to risks and exposures, including those caused by adverse economic conditions. Macroeconomic conditions that could adversely affect our business include geopolitical instability, tariffs, continuedinflationary inflation,pressures, increased interest rates, supply chain disruptions, decreased economic outputoutput, and fluctuations in currency exchange rates.volatility. We continuously monitor the direct and indirect impacts of these factors, as well as the overall global economy and geopolitical landscapelandscape, on our business and financial results.

As part of our long-term strategyobjectives to grow our revenue and increase profitability and cash flow, we are focused on retaining our existing customers and driving multi-product adoption within our installed base, as well as expanding our mid-market,base enterprisewith andnew public sector customer base.customers. We believe that continued innovation is a critical factor in attracting and retaining our customers and is an important variable in achieving sustainable growth. We are committed to continuing our 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 that our customers require.

To assess the success of our strategies to achieve growth and increase our cash flow, our management reviews our financial performance as presented in our condensed consolidated financial statements, including trends in revenue, gross profit margin, income (loss) from operations, and cash flow generated by operations in absolute dollars and as a percentage of revenue as presented in the following table:

Service revenue consists of communication services subscriptions andsubscriptions, platform usage revenuerevenue, and related fees from our UCaaS, CCaaS and CPaaS offerings. We plan to increase service revenue through a combination of new customer acquisition, cross-sellcross-selling 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.

Other revenue consists of revenue from professional services, primarily in support of deployment of our solutions and/or platform, and revenue from sales and rentals of IP telephones in conjunction with our cloud telephony service. Other revenue is dependent on the number of customers who choose to purchase or rent IP telephone hardware in conjunction with our service instead of using the solution on their cell phone, computer, or other compatible device, and/or choose to engage our professional services organization for implementation and deployment of our cloud services.

Cost of service revenue consists primarily of costs associated with network operations and related personnel, technology licenses, amortization of intangible assets and capitalized internal-useinternal use software, other communication origination and termination services provided by third-party carriers, outsourced customer service call center operations, and other costs such as customer service,service costs and technical support costs. We allocate overhead costs, such as information technology and facilities, to cost of service revenue, as well as to each of the operating expense categories, generally based on relative headcount. Our information technology costs include costs for information technology infrastructure and personnel. Facilities costs primarily consist of office leases and related expenses.

Cost of other revenue consists primarily of direct and indirect costs associated with the purchase and shipping and handling of IP telephone hardwarehardware, as well as the scheduling, shipping and handling, personnel costs, and other expenditures incurred in connection with the professional services associated with the deployment and implementation of our products, and allocated information technology and facilities costs.

Research and development expenses consist primarily of personnel and related costs, stock-based compensation, third-party development, software and equipment costs necessary for us to conduct our product, platform development and engineering efforts, as well as allocated information technology and facilities costs.

Sales and marketing expenses consist primarily of personnel and related costs, stock-based compensation, sales commissions, including those to the channel, trade shows, advertising and other marketing, demand generation, and promotional expenses, as well as allocated information technology and facilities costs.

General and administrative expenses consist primarily of personnel and related costs, professional services fees, corporate administrative costs, tax and regulatory fees, stock-based compensation and allocated information technology and facilities costs.

Other Expense,Income (Expense), Net

Other expense,income (expense), net, consists primarily of losses on debt extinguishment, gain or loss on warrant remeasurement, interest income, gains or losses on foreign exchange transactions, as well as other income.

Service revenue increased by $6.2$9.0 million, or 3.6%,5.1%, for the three months ended DecemberJune 31,30, 2025,2026, compared to the three months ended DecemberJune 31,30, 2024.2025. This change was driven by an increase of $14.0$18.5 million in platform usage revenue generated primarily in the Asia-Pacific region, resulting from higher customer consumption volumes of our usage-based offerings, reflecting expanded customer adoption and usage of messaging, minutes and AI-based solutions during the period. This increase was partially offset by a decrease in subscription revenue of $7.8$9.5 million consistingrelated predominantlyto ofcustomer formerchurn Fuzeand customers.down-sell.

Other revenue decreased by $0.1$0.2 million, or 1.0%,4.5%, for the three months ended DecemberJune 31,30, 2025,2026, compared to the three months ended DecemberJune 31,30, 2024,2025, due to a decrease in professional service revenue of $0.5$0.8 million, partially offset by an increase in product revenue of $0.4$0.6 million.

Cost of service revenue increased by $9.0$13.8 million, or 17.8%,25.7%, for the three months ended DecemberJune 31,30, 2025,2026, compared to the three months ended DecemberJune 31,30, 2024,2025, primarily due to increasesan increase of $10.9$15.8 million in network and carrier service provider costs to deliver our subscription and platform usage services toand support our capacity needs and $0.6 million in salaries, benefits and consulting costs.needs. These increases were partially offset by decreases of $1.6 million in amortizationsalaries, of intangible assets, $0.5 million in stock-based compensation,benefits and $0.4consulting costs, $0.2 million in amortization of capitalizedintangible software.assets, and $0.2 million in stock-based compensation.

Cost of other revenue decreased by $1.1$0.9 million, or 4.7%,13.2%, for the ninethree months ended DecemberJune 31,30, 2025,2026, compared to the ninethree months ended DecemberJune 31,30, 2024,2025, primarily due to decreasesa of $0.9 million in lower product costs associated with IP telephone hardware and $0.7 million of stock-based compensation. These decreases were partially offset by an increase of $0.5 milliondecrease in salaries, benefits, and consulting costs to deliver our professional services.

Research and development expenses decreasedwere by $2.6 million, or 8.9%,flat for the three months ended DecemberJune 31,30, 2025,2026, compared to the three months ended DecemberJune 31,30, 2024,2025, primarily due to decreases of $2.2 million in stock-based compensation, $1.2$2.4 million in combined salaries, benefits, and consulting costs necessary for us to conduct our product, platform development and engineering efforts,efforts and $0.7$0.5 million in costsstock-based to operate data centers.compensation. These decreases were partially offset by increases of $1.1$2.4 million in capitalization of internally-developed software, software licenses and other costs and $0.4$0.5 million in amortization of capitalized software.

Sales and marketing expenses decreased by $5.1$9.4 million, or 7.8%,13.8%, for the three months ended DecemberJune 31,30, 2025,2026, compared to the three months ended DecemberJune 31,30, 2024,2025, primarily due to decreases of $3.4$4.1 million in salaries, benefits, and consulting costs, $3.5 million in channel commissions and amortization of deferred contract acquisition costs, $1.4 million in stock-based compensation expense, and $0.7$1.0 million in paid media and other marketing services costs.costs, Theseand decreases were partially offset by an increase of $0.4$0.8 million in salaries,stock-based benefits,compensation and consulting costs.expense.

General and administrative expenses increased by $6.8$1.5 million, or 11.4%,6.5%, for the ninethree months ended DecemberJune 31,30, 2025,2026, compared to the ninethree months ended DecemberJune 31,30, 2024,2025, primarily due to increases of $10.9$2.4 million in legaltransaction-related and regulatorygeneral costs,corporate $0.9costs and $0.5 million in salaries, benefits,personnel and consulting costs, and $0.6 million in facilities costs. These increases were partially offset by decreases of $2.6$0.9 million in stock-based compensation and $3.0$0.5 million in otherlegal generaland corporateregulatory costs.

Interest expense decreasedincreased by $1.3$0.2 million, or 21.5%,5.3%, for the three months ended DecemberJune 31,30, 2025,2026, compared to the three months ended DecemberJune 31,30, 2024,2025, primarily due to capitalized interest related to property, plant and equipment from general borrowing costs recorded in fiscal 2026. This increase was partially offset by reduced debt interest due to a lower interest rate and principal balance on the 2024 Term Loan. See Note 8, Convertible Senior Notes and Term Loan, for further details.

We recognized $1.3$0.4 million of other expense, net during the three months ended June 30, 2026, compared to $0.4 million of other income, net during the ninethree months ended DecemberJune 31,30, 2025, compared to $10.2 million of other expense, net during the nine months ended December 31, 2024, primarily due to aan decrease in the loss on debt extinguishmentincrease of $12.1 million, a $1.0$0.7 million decrease due to reducedin foreign exchange losses, and a decrease of $0.3 million in other expenses. These decreases were offset by $1.3 million decrease in interest income earned on cash and cash equivalentslosses and a reduced gain of $0.6$0.1 million on the remeasurement of the Warrants issued in connection with the 2022 Term Loan.

The provisionProvision for income taxes decreased by $0.4$0.3 million for the three months ended DecemberJune 31,30, 2025,2026, compared to the three months ended DecemberJune 31,30, 2024,2025, primarily driven by the effecteffects of the OBBBA'sOBBBA on federal and state tax provisiontaxes for the three months ended DecemberJune 31,30, 2025.2026.