Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Mar. 31, 2017 | May 25, 2017 | Sep. 30, 2016 | |
Document And Entity Information | |||
Entity Registrant Name | 8X8 INC /DE/ | ||
Entity Central Index Key | 1,023,731 | ||
Document Type | 10-K | ||
Document Period End Date | Mar. 31, 2017 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --03-31 | ||
Is Entity a Well-known Seasoned Issuer? | Yes | ||
Is Entity a Voluntary Filer? | No | ||
Is Entity's Reporting Status Current? | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 1,362,839,166 | ||
Entity Common Stock, Shares Outstanding | 91,620,610 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,017 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2017 | Mar. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 41,030 | $ 33,576 |
Short-term investments | 133,959 | 129,274 |
Accounts receivable, net | 14,264 | 11,070 |
Inventory | 908 | 520 |
Deferred cost of goods sold | 619 | 634 |
Deferred tax asset | 0 | 5,382 |
Other current assets | 6,574 | 5,444 |
Total current assets | 197,354 | 185,900 |
Property and equipment, net | 16,384 | 12,375 |
Intangible assets, net | 17,038 | 21,464 |
Goodwill | 46,136 | 47,420 |
Non-current deferred tax asset | 48,859 | 43,189 |
Other assets | 8,084 | 3,104 |
Total assets | 333,855 | 313,452 |
Current liabilities: | ||
Accounts payable | 15,711 | 10,954 |
Accrued compensation | 11,508 | 10,063 |
Accrued warranty | 324 | 326 |
Accrued taxes | 5,354 | 5,200 |
Accrued outside commissions | 2,920 | 2,186 |
Deferred revenue | 2,144 | 1,925 |
Other accrued liabilities | 5,383 | 4,080 |
Total current liabilities | 43,344 | 34,734 |
Non-current liabilities | 1,850 | 3,258 |
Non-current deferred revenue | 60 | 154 |
Total liabilities | 45,254 | 38,146 |
Commitments and contingencies (Note 7) | ||
Stockholders' equity: | ||
Preferred stock, $0.001 par value: Authorized: 5,000,000 shares; Issued and outstanding: no shares at March 31, 2017 and 2016 | 0 | 0 |
Common stock, $0.001 par value: Authorized: 200,000,000 shares; Issued and outstanding: 91,500,091 shares and 89,213,205 shares at March 31, 2017 and 2016, respectively | 91 | 89 |
Additional paid-in capital | 412,762 | 389,260 |
Accumulated other comprehensive loss | (9,642) | (4,184) |
Accumulated deficit | (114,610) | (109,859) |
Total stockholders' equity | 288,601 | 275,306 |
Total liabilities and stockholders' equity | $ 333,855 | $ 313,452 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2017 | Mar. 31, 2016 |
Stockholders' equity: | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value per share | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 91,500,091 | 89,213,205 |
Common stock, shares outstanding | 91,500,091 | 89,213,205 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2015 | |
Consolidated Statements Of Operations | |||
Service revenue | $ 235,816 | $ 192,241 | $ 148,208 |
Product revenue | 17,572 | 17,095 | 14,205 |
Total revenue | 253,388 | 209,336 | 162,413 |
Operating expenses: | |||
Cost of service revenue | 42,400 | 37,078 | 29,701 |
Cost of product revenue | 19,714 | 20,168 | 15,863 |
Research and development | 27,452 | 24,040 | 15,118 |
Sales and marketing | 139,277 | 109,379 | 80,667 |
General and administrative | 31,214 | 25,745 | 18,182 |
Gain on patent sale | 0 | 0 | (1,000) |
Total operating expenses | 260,057 | 216,410 | 158,531 |
Income (loss) from operations | (6,669) | (7,074) | 3,882 |
Other income, net | 1,792 | 1,107 | 833 |
Income (loss) before provision (benefit) for income taxes | (4,877) | (5,967) | 4,715 |
Provision (benefit) for income taxes | (126) | (847) | 2,789 |
Net income (loss) | $ (4,751) | $ (5,120) | $ 1,926 |
Net income (loss) per share: | |||
Basic | $ (0.05) | $ (0.06) | $ 0.02 |
Diluted | $ (0.05) | $ (0.06) | $ 0.02 |
Weighted average number of shares: | |||
Basic | 90,340 | 88,477 | 89,071 |
Diluted | 90,340 | 88,477 | 91,652 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | |||
Net income (loss) | $ (4,751) | $ (5,120) | $ 1,926 |
Other comprehensive loss, net of tax | |||
Unrealized gain (loss) on investments in securities | 70 | (50) | (26) |
Foreign currency translation adjustment | (5,528) | (2,025) | (2,513) |
Comprehensive loss | $ (10,209) | $ (7,195) | $ (613) |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock | Additional Paid-In Capital | Accumulated other Comprehensive Income (Loss) | Accumulated Deficit | Total |
Beginning balance, amount at Mar. 31, 2014 | $ 88 | $ 384,325 | $ 430 | $ (106,665) | $ 278,178 |
Beginning balance, shares at Mar. 31, 2014 | 88,525,015 | ||||
Issuance of common stock under stock plans | $ 2 | 4,525 | 0 | 0 | 4,527 |
Issuance of common stock under stock plans, shares | 2,043,781 | ||||
Cost of issuance of common stock | $ 0 | (8) | 0 | 0 | (8) |
Repurchase of common stock | $ (2) | (19,369) | 0 | 0 | (19,371) |
Repurchase of common stock, shares | (2,503,268) | ||||
Stock-based compensation expense | $ 0 | 9,347 | 0 | 0 | 9,347 |
Income tax benefit from stock-based compensation | 0 | 151 | 0 | 0 | 151 |
Unrealized investment gain (loss) | 0 | 0 | (26) | 0 | (26) |
Foreign currency translation adjustment | 0 | 0 | (2,513) | 0 | (2,513) |
Net income (loss) | 0 | 0 | 0 | 1,926 | 1,926 |
Ending balance, amount at Mar. 31, 2015 | $ 88 | 378,971 | (2,109) | (104,739) | 272,211 |
Ending balance, shares at Mar. 31, 2015 | 88,065,528 | ||||
Issuance of common stock under stock plans | $ 2 | 5,386 | 0 | 0 | 5,388 |
Issuance of common stock under stock plans, shares | 2,218,470 | ||||
Cost of issuance of common stock | $ 0 | (3) | 0 | 0 | (3) |
Issuance of common stock for acquisition of businesses, net of issuance costs | $ 0 | 0 | 0 | 0 | 0 |
Issuance of common stock for acquisition of businesses, net of issuance costs, shares | 352,044 | ||||
Repurchase of common stock | $ (1) | (11,652) | 0 | 0 | (11,653) |
Repurchase of common stock, shares | (1,422,837) | ||||
Stock-based compensation expense | $ 0 | 16,334 | 0 | 0 | 16,334 |
Income tax benefit from stock-based compensation | 0 | 224 | 0 | 0 | 224 |
Unrealized investment gain (loss) | 0 | 0 | (50) | 0 | (50) |
Foreign currency translation adjustment | 0 | 0 | (2,025) | 0 | (2,025) |
Net income (loss) | 0 | 0 | 0 | (5,120) | (5,120) |
Ending balance, amount at Mar. 31, 2016 | $ 89 | 389,260 | (4,184) | (109,859) | 275,306 |
Ending balance, shares at Mar. 31, 2016 | 89,213,205 | ||||
Issuance of common stock under stock plans | $ 3 | 4,564 | 0 | 0 | 4,567 |
Issuance of common stock under stock plans, shares | 2,576,785 | ||||
Cost of issuance of common stock | $ 0 | (6) | 0 | 0 | (6) |
Repurchase of common stock | $ (1) | (3,004) | 0 | 0 | (3,005) |
Repurchase of common stock, shares | (289,899) | ||||
Stock-based compensation expense | $ 0 | 21,462 | 0 | 0 | 21,462 |
Income tax benefit from stock-based compensation | 0 | 486 | 0 | 0 | 486 |
Unrealized investment gain (loss) | 0 | 0 | 70 | 0 | 70 |
Foreign currency translation adjustment | 0 | 0 | (5,528) | 0 | (5,528) |
Net income (loss) | 0 | 0 | 0 | (4,751) | (4,751) |
Ending balance, amount at Mar. 31, 2017 | $ 91 | $ 412,762 | $ (9,642) | $ (114,610) | $ 288,601 |
Ending balance, shares at Mar. 31, 2017 | 91,500,091 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2015 | |
Cash flows from operating activities: | |||
Net income (loss) | $ (4,751) | $ (5,120) | $ 1,926 |
Adjustments to reconcile net income (loss) to net cash provided by operating activites: | |||
Depreciation | 6,084 | 4,994 | 3,540 |
Amortization of intangibles | 3,762 | 3,557 | 2,232 |
Impairment of long-lived assets | 15 | 640 | 0 |
Amortization of capitalized software | 591 | 456 | 341 |
Net accretion of discount and amortization of premium on marketable securities | 219 | 740 | 896 |
Stock-based compensation | 21,462 | 16,334 | 9,347 |
Tax benefit from stock-based compensation | (486) | (224) | (151) |
Deferred income tax (benefit) provision | (411) | (1,493) | 2,390 |
Other | 977 | 533 | 256 |
Changes in assets and liabilities: | |||
Accounts receivable, net | (4,799) | (4,539) | (1,529) |
Inventory | (430) | 136 | 52 |
Other current and non-current assets | (2,025) | (1,432) | (196) |
Deferred cost of goods sold | (60) | (224) | (207) |
Accounts payable | 4,173 | 2,473 | 610 |
Accrued compensation | 1,615 | 3,566 | 1,632 |
Accrued warranty | (2) | (13) | (321) |
Accrued taxes | 247 | 2,292 | 490 |
Accrued outside commissions | 734 | 1,744 | (5) |
Deferred revenue | 195 | (273) | (1,065) |
Other current and non-current liabilities | 1,368 | (580) | 1,002 |
Net cash provided by operating activities | 28,478 | 23,567 | 21,240 |
Cash flows from investing activities: | |||
Acquisitions of property and equipment | (8,851) | (4,894) | (5,826) |
Cost of capitalized software | (5,516) | (2,095) | (724) |
Purchase of investments - available for sale | (140,026) | (126,723) | (106,021) |
Sales of investments - available for sale | 41,288 | 56,302 | 36,764 |
Proceeds from maturities of investments | 93,795 | 64,361 | 63,546 |
Acquisition of businesses, net of cash acquired | (2,884) | (23,246) | 0 |
Net cash used in investing activities | (22,194) | (36,295) | (12,261) |
Cash flows from financing activities: | |||
Capital lease payments | (674) | (446) | (149) |
Payment of contingent consideration | (300) | (200) | 0 |
Repurchase of common stock | (3,003) | (11,653) | (19,371) |
Tax benefit from stock-based compensation expense | 486 | 224 | 151 |
Proceeds from issuance of common stock under employee stock plans | 5,087 | 4,827 | 4,455 |
Net cash provided by (used in) financing activities | 1,596 | (7,248) | (14,914) |
Effect of exchange rate changes on cash | (426) | 442 | (114) |
Net increase (decrease) in cash and cash equivalents | 7,454 | (19,534) | (6,049) |
Cash and cash equivalents,beginning of year | 33,576 | 53,110 | 59,159 |
Cash and cash equivalents, end of year | 41,030 | 33,576 | 53,110 |
Supplemental and non-cash disclosures: | |||
Acquisition of property and equipment, net in connection with acquisitions of businesses | 0 | 1,453 | 0 |
Acquisition of capital lease in connection with acquisitions of businesses | 0 | 1,332 | 0 |
Equipment acquired under capital leases | 1,152 | 573 | 0 |
Cash paid for interest | 16 | 44 | 5 |
Cash paid for income taxes | $ 460 | $ 445 | $ 159 |
THE COMPANY AND SIGNIFICANT ACC
THE COMPANY AND SIGNIFICANT ACCOUNTING POLICIES - Note 1 | 12 Months Ended |
Mar. 31, 2017 | |
Notes to Financial Statements | |
THE COMPANY AND SIGNIFICANT ACCOUNTING POLICIES - Note 1 | 1. THE COMPANY AND SIGNIFICANT ACCOUNTING POLICIES THE COMPANY 8x8, Inc. ("8x8" or the "Company") was incorporated in California in February 1987 and was reincorporated in Delaware in December 1996. The Company is a leading provider of enterprise cloud communications solutions, including unified communications, team collaboration, contact center, and analytics, integrated over a single Software-as-a Service (SaaS) platform. The 8x8 Communications Cloud TM The Company's fiscal year ends on March 31 of each calendar year. Each reference to a fiscal year in these notes to the consolidated financial statements refers to the fiscal year ended March 31 of the calendar year indicated (for example, fiscal 2017 refers to the fiscal year ended March 31, 2017). Acquisitions In January 2017, the Company entered into a share purchase agreement with the shareholders of LeChat, Inc., the maker of Sameroom TM In June 2015, the Company entered into an asset purchase agreement with the shareholder of Quality Software Corporation and other parties affiliated with the shareholder and Quality Software Corporation, a developer of cloud-native quality management capabilities and analytics. In May 2015, the Company entered into a share purchase agreement with the shareholders of DXI Limited, API Telecom Limited, Easycallnow Limited and RAS Telecom Limited, a provider of in cloud-based outbound and blended contact center solutions. See Note 13 for further discussion. PRINCIPLES OF CONSOLIDATION The consolidated financial statements include the accounts of 8x8 and its subsidiaries. All material intercompany accounts and transactions have been eliminated. USE OF ESTIMATES The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and equity and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, the Company evaluates its estimates, including, but not limited to, those related to bad debts, returns reserve for expected cancellations, valuation of inventories, income and sales tax, and litigation and other contingencies. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities, and equity that are not readily apparent from other sources. Actual results could differ from those estimates under different assumptions or conditions. REVENUE RECOGNITION Service and Product Revenue The Company recognizes service revenue, mainly from subscription services to its cloud-based voice, call center, video and collaboration solutions, when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, price is fixed or determinable and collectability is reasonably assured. The Company defers recognition of service revenues in instances when cash receipts are received before services are delivered and recognizes deferred revenues ratably, over the course of the contract, as services are provided. Under the terms of the Company's typical subscription agreements, new customers can terminate their service within 30 days of order placement and receive a full refund of fees previously paid. The Company has determined that it has sufficient history of subscriber conduct to make a reasonable estimate of cancellations within the 30-day trial period. Therefore, the Company recognizes new subscriber revenue that is fixed or determinable and that is not contingent on future performance or future deliverables in the month in which the new order was shipped, net of an allowance for expected cancellations. The Company recognizes revenue from product sales, mainly 8x8 IP telephones, for which there are no related services to be rendered upon shipment to customers provided that persuasive evidence of an arrangement exists, the price is fixed or determinable, title has transferred, collection of resulting receivables is reasonably assured, there are no customer acceptance requirements, and there are no remaining significant obligations. Gross outbound shipping and handling charges are recorded as revenue, and the related costs are included in cost of goods sold. Reserves for returns and allowances for customer sales are recorded at the time of shipment. In accordance with the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 605, Revenue Recognition The Company records revenue net of any sales and service related taxes and mandatory government charges that are billed to its customers. The Company believes this approach results in consolidated financial statements that are more easily understood by users. Multiple Element Arrangements ASC 605-25, Revenue Recognition - Multiple Element Arrangements VSOE generally exists only when a Company sells the deliverable separately, on more than a limited basis, at prices within a relatively narrow range. When VSOE cannot be established, the Company attempts to establish the selling price of deliverables based on relevant TPE. TPE is determined based on manufacturer's prices for similar deliverables when sold separately, when possible. As the Company has historically been unable to establish a selling price using VSOE or TPE, it uses a BESP for the allocation of arrangement consideration. The objective of BESP is to determine the price at which the Company would transact a sale if the product or service was sold on a stand-alone basis. BESP is generally used for offerings that are not typically sold on a stand-alone basis or for new or highly customized offerings. The Company determines BESP for a product or service by considering multiple factors including, but not limited to: the price list established by its management which is typically based on general pricing practices and targeted gross margin of products and services sold; and analysis of pricing history of new arrangements, including multiple element and stand-alone transactions. In accordance with the guidance of ASC 605-25, when the Company enters into revenue arrangements with multiple deliverables the Company allocates arrangement consideration, among the products and subscriber services based on their relative selling prices. Arrangement consideration allocated to the sold products that is fixed or determinable and that is not contingent on future performance or future deliverables is recognized as product revenues during the period of the sale less the allowance for estimated returns during the 30-day trial period. Arrangement consideration allocated to subscriber services that is fixed or determinable and that is not contingent on future performance or future deliverables is recognized ratably as service revenues as the related services are provided, which is generally over the initial contract term. DEFERRED COST OF GOODS SOLD Deferred cost of goods sold represents the cost of products sold for which the end customer or distributor has a right of return. The cost of the products sold is recognized contemporaneously with the recognition of revenue, when the subscriber has accepted the service. CASH, CASH EQUIVALENTS AND INVESTMENTS The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Management determines the appropriate categorization of its investments at the time of purchase and reevaluates the classification at each reporting date. The cost of the Company's investments is determined based upon specific identification. The Company's investments are comprised of mutual funds, commercial paper, corporate debt, municipal securities, asset backed securities, mortgage backed securities, agency bonds, international government securities, certificates of deposit and money market funds. At March 31, 2017 and 2016, all investments were classified as available-for-sale and reported at fair value, based either upon quoted prices in active markets, quoted prices in less active markets, or quoted market prices for similar investments, with unrealized gains and losses, net of related tax, if any, included in other comprehensive income (loss) and disclosed as a separate component of consolidated stockholders' equity. Realized gains and losses on sales of all such investments are reported within the caption of other income in the consolidated statements of operations and computed using the specific identification method. The Company classifies its investments as current based on the nature of the investments and their availability for use in current operations. The Company's investments in marketable securities are monitored on a periodic basis for impairment. In the event that the carrying value of an investment exceeds its fair value and the decline in value is determined to be other-than-temporary, an impairment charge is recorded and a new cost basis for the investment is established. These available-for-sale investments are primarily held in the custody of one major financial institution. ACCOUNTS RECEIVABLE ALLOWANCE The Company estimates the amount of uncollectible accounts receivable at the end of each reporting period based on the aging of the receivable balance, current and historical customer trends, and communications with its customers. Amounts are written off only after considerable collection efforts have been made and the amounts are determined to be uncollectible. INVENTORY Inventory is stated at the lower of standard cost, which approximates actual cost using the first-in, first-out method, or market. Any write-down of inventory to the lower of cost or market at the close of a fiscal period creates a new cost basis that subsequently would not be marked up based on changes in underlying facts and circumstances. On an ongoing basis, the Company evaluates inventory for obsolescence and slow-moving items. This evaluation includes analysis of sales levels, sales projections, and purchases by item, as well as raw material usage related to the Company's manufacturing facilities. If the Company's review indicates a reduction in utility below carrying value, it reduces inventory to a new cost basis. If future demand or market conditions are different than the Company's current estimates, an inventory adjustment may be required, and would be reflected in cost of goods sold in the period the revision is made. PROPERTY AND EQUIPMENT Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method. Estimated useful lives of three years are used for equipment and software and five years for furniture and fixtures. Amortization of leasehold improvements is computed using the shorter of the remaining facility lease term or the estimated useful life of the improvements. Maintenance, repairs and ordinary replacements are charged to expense. Expenditures for improvements that extend the physical or economic life of the property are capitalized. Gains or losses on the disposition of property and equipment are recorded in the Consolidated Statements of Operations. Construction in progress primarily relates to costs to acquire or internally develop software for internal use not fully completed as of March 31, 2017. ACCOUNTING FOR LONG-LIVED ASSETS The Company reviews the recoverability of its long-lived assets, such as property and equipment, definite lived intangibles or capitalized software, when events or changes in circumstances occur that indicate that the carrying value of the asset or asset group may not be recoverable. Examples of such events could include a significant disposal of a portion of such assets, an adverse change in the market involving the business employing the related asset or a significant change in the operation or use of an asset. The assessment of possible impairment is based on the Company's ability to recover the carrying value of the asset or asset group from the expected future pre-tax cash flows (undiscounted and without interest charges) of the related operations. If these cash flows are less than the carrying value of such asset or asset group, an impairment loss is recognized for the difference between estimated fair value and carrying value. The measurement of impairment requires management to estimate the fair value of long-lived assets and asset groups through future cash flows. See Note 5 for further discussion on impairment charges incurred. 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. Goodwill and intangible assets with indefinite useful lives are not amortized, but are tested annually for impairment and more often if there is an indicator of impairment. The Company has determined that it has three reporting units, and allocates goodwill to the reporting units for the purposes of its annual impairment test. The Company's annual goodwill impairment test is performed on January 1 each year. No goodwill impairment charges were recorded in the periods presented. Intangible assets with finite useful lives are amortized on a straight-line basis over the periods benefited. Amortization expense for the customer relationship intangible asset is included in sales and marketing expenses. Amortization expense for technology is included in cost of service revenue. WARRANTY EXPENSE The Company accrues for estimated product warranty cost upon revenue recognition. Accruals for product warranties are calculated based on the Company's historical warranty experience adjusted for any specific requirements. RESEARCH, DEVELOPMENT AND SOFTWARE COSTS Computer software developed or obtained for internal use in accordance with ASC 350-40, Internal Use Software ADVERTISING COSTS Advertising costs are expensed as incurred and were $9.5 million, $8.5 million and $6.8 million for the years ended March 31, 2017, 2016 and 2015, respectively. FOREIGN CURRENCY TRANSLATION The Company has determined that the functional currency of each of its foreign subsidiaries are the subsidiary's local currency. The Company believes this most appropriately reflects the current economic facts and circumstances of the Company's subsidiaries' operations. The assets and liabilities of the subsidiaries are translated at the applicable exchange rate as of the end of the balance sheet period and revenue and expenses are translated at an average rate over the period presented. Resulting currency translation adjustments are recorded as a component of accumulated other comprehensive income or loss within the stockholder's equity in the consolidated balance sheets. BUSINESS SEGMENTS The Company has two reportable segments, Americas and Europe. The Company's chief operating decision makers, the Chief Executive Officer, Chief Financial Officer, and Chief Technology Officer, evaluate performance of the Company and makes decisions regarding allocation of resources based on geographical results (see Note 12). CUSTOMER ACQUISITION COSTS Customer acquisition costs are expensed as incurred and include the advertising, marketing, promotions, commissions, rebates and equipment subsidy costs associated with the Company's efforts to acquire new subscribers. INCOME TAXES Income taxes are accounted for using the asset and liability approach. Under the asset and liability approach, a current tax liability or asset is recognized for the estimated taxes payable or refundable on tax returns for the current year. A deferred tax liability or asset is recognized for the estimated future tax effects attributed to temporary differences and carryforwards. If necessary, the deferred tax assets are reduced by the amount of benefits that, based on available evidence, is more likely than not expected to be realized. CONCENTRATIONS Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and cash equivalents, investments and trade accounts receivable. The Company has cash equivalents and investment policies that limit the amount of credit exposure to any one financial institution and restrict placement of these funds to financial institutions evaluated as highly credit-worthy. The Company has not experienced any material losses relating to its investment instruments. The Company sells its products to business customers and distributors. The Company performs ongoing credit evaluations of its customers' financial condition and generally does not require collateral from its customers. At March 31, 2017 and 2016, no customer accounted for more than 10% of accounts receivable. The Company purchases all of its hardware products from suppliers that manufacturer the hardware directly. The inability of any supplier to fulfill supply requirements of the Company could materially impact future operating results, financial position or cash flows. The Company also relies primarily on third-party network service providers to provide telephone numbers and PSTN call termination and origination services for its customers. If these service providers failed to perform their obligations to the Company, such failure could materially impact future operating results, financial position and cash flows. FAIR VALUE OF FINANCIAL INSTRUMENTS The Company defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal market or the most advantageous market in which it would transact. The accounting guidance for fair value measurement requires the Company to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Observable inputs are inputs that reflect the assumptions market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company's assumptions about the factors that market participants would use in valuing the asset or liability developed based on the best information available in the circumstances. The standard establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value by requiring that the most observable inputs be used when available. A financial instrument's categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is as follows: Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly, such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets). Level 3 applies to assets or liabilities for which fair value is derived from valuation techniques in which one or more significant inputs are unobservable, including the Company's own assumptions. The estimated fair value of financial instruments is determined by the Company using available market information and valuation methodologies considered to be appropriate. The carrying amounts of the Company's cash and cash equivalents, accounts receivable and accounts payable approximate their fair values due to their short maturities. The Company's investments are carried at fair value. ACCOUNTING FOR STOCK-BASED COMPENSATION The Company accounts for its employee stock options, stock purchase rights, restricted stock units and restricted performance stock units granted under the 2006 Stock Plan, the 2003 Contactual Plan, the 2012 Equity Incentive Plan, the 2013 New Employee Inducement Incentive Plan and stock purchase rights under the 1996 Employee Stock Purchase Plan (collectively "Equity Compensation Plans") under the provisions of ASC 718 - Stock Compensation To value option grants under the Equity Compensation Plans for stock-based compensation the Company used the Black-Scholes option valuation model. Fair value determined using the Black-Scholes option valuation model varies based on assumptions used for the expected stock prices volatility, expected life, risk-free interest rates and future dividend payments. The Company used the historical volatility of its stock over a period equal to the expected life of the options. The expected life assumptions represent the weighted-average period stock-based awards are expecting to remain outstanding. These expected life assumptions were established through the review of historical exercise behavior of stock-based award grants with similar vesting periods. The risk-free interest rates were based on the closing market bid yields of actively traded U.S. treasury securities in the over-the-counter market for the expected term equal to the expected term of the option. The dividend yield assumption is based on the Company's history and expectation of future dividend payout. Compensation expense for stock-based payment awards is recognized using the straight-line single-option method and includes the impact of estimated forfeitures. The Company issued restricted performance stock units (PSUs) to a group of executives with vesting that is contingent on both market performance and continued service during the fiscal year ended March 31, 2017: These PSUs vest (1) 50% on September 22, 2018 and (2) 50% on September 27, 2019, in each case subject to the performance of the Company's common stock relative to the Russell 2000 Index (the benchmark) during the period from grant date through such vesting date. A 2x multiplier will be applied to the total shareholder returns (TSR) for each 1% of positive or negative relative TSR, and the number of shares earned will increase or decrease by 2% of the target numbers. In the event the Company's common stock performance is below negative 30%, relative to the benchmark, no shares will be issued. The Company issued PSUs to a group of executives with vesting that is contingent on both market performance and continued service during the fiscal year ended March 31, 2016: These PSUs vest (1) 50% on September 22, 2017 and (2) 50% on September 27, 2018, in each case subject to performance of the Company's common stock relative to the Russell 2000 Index during the period from grant date through such vesting date. A 2x multiplier will be applied to the (TSR) for each 1% of positive or negative relative TSR, and the number of shares earned will increase or decrease by 2% of the target numbers. In the event 8x8's common stock performance is below negative 30%, relative to the benchmark, no shares will be issued. The Company issued PSUs to a group of executives with vesting that is contingent on both market performance and continued service. For the market-based restricted performance stock units issued during the fiscal year ended March 31, 2015: the number of shares of the Company's stock to be received at vesting if applicable service requirements are also met will range from 0% to 100% of the target amount based total shareholder return ("TSR"), which compares the performance of the price per share of the Company's common stock with the NASDAQ Composite Index ("Index") for the three performance periods ending March 31, 2016, March 31, 2017 and March 31, 2018, for the fiscal year ended March 31, 2015; and for the three performance periods ending March 31, 2015, March 31, 2016 and March 31, 2017 for the fiscal year ended March 31, 2014, in the following manner: where in each such measurement period, (1) if the performance return on the price per share of the Company's common stock exceeds the performance return on the NASDAQ Composite Index, (which shall be determined by subtracting the percentage return on the NASDAQ Composite Index from the percentage return on the price per share of the Common Stock), then all of the TSR Performance Shares for such measurement period will be deemed earned and will vest; (2) if the performance return on the price per share of Common Stock is more than 50% lower than the performance return on the NASDAQ Composite Index, then none of the TSR Performance Shares for such measurement period will be deemed earned and will vest; and (3) if the performance return on the price per share of Common Stock is between 0% and 50% lower than the performance return on the NASDAQ Composite Index, then the number of TSR Performance Shares deemed earned and vesting for such measurement period will be reduced by 2% for each 1% by which the performance return on the NASDAQ Composite Index exceeds the performance return on the Common Stock, (4) if the performance return on the price per share of Common Stock is between 0% and 50% higher than the performance return on the NASDAQ Composite Index, then the number of TSR Performance Shares deemed earned and vesting for such measurement period will increase by 2% for each 1% by which the performance return on the Common Stock exceeds the performance return on the NASDAQ Composite Index, and the number of shares of the Company's stock to be received at vesting will range from 0% or 100% of the target amount based on four tranches, with each tranche vesting at the later of (a) the satisfaction of the applicable service-based vesting requirement for that tranche, and (b) on the first date that the average stock price of the Company's common stock for a consecutive 30 trading day period exceeds 150% of the grant date stock price. The minimum service vesting requirement for each tranche is as follows: Tranche 1: One year following the date of the grant Tranche 2: Two years following the date of the grant Tranche 3: Three years following the date of the grant Tranche 4: Four years following the date of the grant Market-based restricted performance stock units are valued using a Monte Carlo simulation model on the date of grant. Fair value determined using the Monte Carlo simulation model varies based on the assumptions used for the expected stock price volatility, the correlation coefficient between the Company and the NASDAQ Composite Index, risk-free interest rates, and future dividend payments. COMPREHENSIVE INCOME (LOSS) Comprehensive (loss) income, as defined, includes all changes in equity (net assets) during a period from non-owner sources. The difference between net income (loss) and comprehensive (loss) income is due to foreign currency translation adjustments and unrealized gains or losses on investments classified as available-for-sale. NET INCOME (LOSS) PER SHARE Basic net income (loss) per share is computed by dividing net income (loss) available to common stockholders (numerator) by the weighted average number of vested, unrestricted common shares outstanding during the period (denominator). Diluted net income per share is computed on the basis of the weighted average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method. Dilutive potential common shares include outstanding stock options and employee restricted purchase rights. DEFERRED RENT In April 2012, the Company entered into an 87-month lease agreement for its new headquarters. Under the terms of the lease agreement: the Company received a three-month rent holiday from rental payments; base rent is $130,821 for the 15 months after the rent holiday; and rent expense increases 3% each year thereafter. In the second quarter of fiscal 2013, the Company received a $1.7 million allowance for reimbursement for the cost of tenant improvements that the Company included in cash flows from operating activities. In accordance with the guidance in ASC 840-20, Leases Rent Holidays. Rent Escalations. Tenant Improvement Allowance In January 2016, the Company entered into a 48-month lease for additional office space near the Company's US headquarters. In April 2016, the lease was amended for actual move in date. Base rent begins at $105,628 and increases 3% each year thereafter. Future minimum annual lease payments under this lease is included in "Leases" in Note 8. At March 31, 2017, total deferred rent included in other accrued liabilities and non-current liabilities was $1.1 million and $0.8 million, respectively. At March 31, 2016, total deferred rent included in other accrued liabilities and non-current liabilities was $0.3 million and $1.0 million, respectively. RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS In August 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-15 , Presentation of Financial Statements: Going Concern (Subtopic 205-40) In April 2015, the FASB issued ASU No. 2015-05, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer's Accounting for Fees Paid in a Cloud Computing Arrangement. In November 2015, the FASB issued ASU No. 2015-17, Income Taxes - Balance Sheet Classification of Deferred Taxes (Topic 740) RECENT ACCOUNTING PRONOUNCEMENTS In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers The Company is in the initial stages of the assessment of the impact of the new standard on the Company's accounting policies, processes and system requirements. The Company has assigned internal resources and engaged third-party service providers to assist with the assessment and implementation. The Company currently believes the most significant impact relates to the allocation of consideration in a contract between product and service performance obligations. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments In August 2016, the FASB issued ASU No. 2016-15 , Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments In October 2016, the FASB has issued ASU No. 2016-16 , Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory In November 2016, the FASB has issued ASU No. 2016-18 , Statement of Cash Flows (Topic 230) In January 2017, the FASB has issued ASU No. 2017-01 , Business Combinations (Topic 805): Clarifying the Definition of a Business In January 2017, the FASB has issued ASU No. 2017-04, Intangibles and Other (Topic 350): Simplifying the Test for Goodwill Impairment In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting |
FAIR VALUE MEASURESMENTS - Note
FAIR VALUE MEASURESMENTS - Note 2 | 12 Months Ended |
Mar. 31, 2017 | |
Cash and Cash Equivalents [Abstract] | |
FAIR VALUE MEASURESMENTS - Note 2 | 2. FAIR VALUE MEASURESMENTS Cash, cash equivalents, available-for-sale investments, and contingent consideration were (in thousands): Gross Gross Cash and Amortized Unrealized Unrealized Estimated Cash Short-Term As of March 31, 2017 Costs Gain Loss Fair Value Equivalents Investments Cash $ 29,122 $ - $ - $ 29,122 $ 29,122 $ - Level 1: Money market funds 11,908 - - 11,908 11,908 - Mutual funds 2,000 - (194) 1,806 - 1,806 Subtotal 43,030 - (194) 42,836 41,030 1,806 Level 2: Commercial paper 19,144 8 - 19,152 - 19,152 Corporate debt 83,995 61 (58) 83,998 - 83,998 Asset backed securities 26,906 4 (22) 26,888 - 26,888 Mortgage backed securities 116 - (1) 115 - 115 Agency bond 2,000 - - 2,000 - 2,000 Subtotal 132,161 73 (81) 132,153 - 132,153 Total assets $ 175,191 $ 73 $ (275) $ 174,989 $ 41,030 $ 133,959 Level 3: Contingent consideration $ - $ - $ - $ 148 $ - $ - Total liabilities $ - $ - $ - $ 148 $ - $ - Gross Gross Cash and Amortized Unrealized Unrealized Estimated Cash Short-Term As of March 31, 2016 Costs Gain Loss Fair Value Equivalents Investments Cash $ 18,596 $ - $ - $ 18,596 $ 18,596 $ - Level 1: Money market funds 14,980 - - 14,980 14,980 - Mutual funds 2,000 - (187) 1,813 - 1,813 Subtotal 35,576 - (187) 35,389 33,576 1,813 Level 2: Commercial paper 6,794 2 - 6,796 - 6,796 Corporate debt 85,164 78 (28) 85,214 - 85,214 Municipal securities 1,007 - (1) 1,006 - 1,006 Asset backed securities 24,614 7 (11) 24,610 - 24,610 Mortgage backed securities 2,045 - (17) 2,028 - 2,028 Agency bond 6,805 1 - 6,806 - 6,806 International government securities 1,000 1 - 1,001 - 1,001 Subtotal 127,429 89 (57) 127,461 - 127,461 Total assets $ 163,005 $ 89 $ (244) $ 162,850 $ 33,576 $ 129,274 Level 3: Contingent consideration $ - $ - $ - $ 341 $ - $ - Total liabilities $ - $ - $ - $ 341 $ - $ - Contractual maturities of investments as of March 31, 2017 are set forth below (in thousands): Estimated Fair Value Due within one year $ 78,039 Due after one year 55,920 Total $ 133,959 Contingent Consideration and Escrow Liability The Company's contingent consideration liability and escrow liability, included in other accrued liabilities and noncurrent liabilities on the consolidated balance sheets, is associated with the Quality Software Corporation (QSC) acquisition made in the first quarter of fiscal 2016. Amounts held in escrow were measured at fair value using present value computations at the time of acquisition. The contingent consideration was measured at fair value using a probability weighted average of the potential payment outcomes that would occur should certain contract milestones be reached. As there was no market data available to use in valuing the contingent consideration; therefore, the Company developed its own assumptions related to the achievement of the milestones to evaluate the fair value of the liability. As such, the contingent consideration is classified within Level 3 as described below. The items are classified as Level 3 within the valuation hierarchy, consisting of contingent consideration and escrow liability related to the QSC acquisition, were valued based on an estimate of the probability of success of the milestones being achieved and present value computations, respectively. The table below presents a roll-forward of the contingent consideration and escrow liability valued using a Level 3 input (in thousands): Years Ended March 31, 2017 2016 Balance at beginning of period $ 341 $ - Purchase price contingent consideration - 541 Fair value adjustment 107 - Contingent consideration payments (300) (200) Balance at end of period $ 148 $ 341 |
INVENTORIES - Note 3
INVENTORIES - Note 3 | 12 Months Ended |
Mar. 31, 2017 | |
Notes to Financial Statements | |
INVENTORIES - Note 3 | 3. INVENTORIES Components of inventories were as follows (in thousands): March 31, 2017 2016 Work-in-process $ - $ 76 Finished goods 908 444 $ 908 $ 520 |
PROPERTY AND EQUIPMENT - Note 4
PROPERTY AND EQUIPMENT - Note 4 | 12 Months Ended |
Mar. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT - Note 4 | 4. PROPERTY AND EQUIPMENT Property and equipment consisted of the following (in thousands): March 31, 2017 2016 Computer equipment $ 24,293 $ 18,277 Furniture and fixtures 1,411 1,067 Software 7,380 5,417 Leasehold improvements 5,579 3,667 Construction in progress 689 967 39,352 29,395 Less: accumulated depreciation and amortization (22,968) (17,020) $ 16,384 $ 12,375 |
INTANGIBLE ASSETS - Note 5
INTANGIBLE ASSETS - Note 5 | 12 Months Ended |
Mar. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS - Note 5 | 5. INTANGIBLE ASSETS The carrying value of intangible assets consisted of the following (in thousands): March 31, 2017 March 31, 2016 Gross Gross Carrying Accumulated Net Carrying Carrying Accumulated Net Carrying Amount Amortization Amount Amount Amortization Amount Technology $ 18,685 $ (7,010) $ 11,675 $ 18,640 $ (4,622) $ 14,018 Customer relationships 9,419 (6,187) 3,232 9,993 (4,847) 5,146 Trade names/domains 2,036 - 2,036 2,205 - 2,205 In-process research and development 95 - 95 95 - 95 Total acquired identifiable intangible assets $ 30,235 $ (13,197) $ 17,038 $ 30,933 $ (9,469) $ 21,464 At March 31, 2017, annual amortization of definite lived intangible assets, based upon existing intangible assets and current useful lives, is estimated to be the following (in thousands): Amount 2018 $ 3,854 2019 3,459 2020 3,009 2021 2,666 2022 1,701 Thereafter 218 Total $ 14,907 Impairment of Long-Lived Assets During the year ended March 31, 2017, the Company decided to discontinue a certain customer segment of its United Kingdom based platform-as-a-service (DXI PaaS) that was acquired in fiscal 2016 as part of the DXI acquisition. The Company evaluated long-lived assets related to the DXI reporting unit including the technology, customer relationships, and trade name intangible assets for impairment and determined that the assets were not impaired. However, the Company recorded an impairment charge equal to the remaining value of the impaired DXI PaaS customer relationship in the third fiscal quarter. The impairment recorded during the fiscal year was immaterial to the consolidated statements of operations. Revenues and net income (loss) from DXI PaaS were not material for all periods presented. During the year ended March 31, 2016, the Company decided to end-of-life its hosted virtual desktop service (Zerigo). The Company evaluated long-lived assets related to Zerigo including the technology, customer relationships, and trade name intangible assets for impairment. The Company determined it was appropriate to record an impairment charge equal to the remaining value of the impaired long-lived assets in the third fiscal quarter. The impairment recorded during the fiscal year was $0.6 million, of which $0.4 million and $0.2 million was recorded in cost of service and sales and marketing, respectively, in the consolidated statements of operations. Revenues and net income (loss) from Zerigo were not material for all periods presented. |
CAPITALIZED SOFTWARE COSTS - No
CAPITALIZED SOFTWARE COSTS - Note 6 | 12 Months Ended |
Mar. 31, 2017 | |
Notes to Financial Statements | |
CAPITALIZED SOFTWARE COSTS - Note 6 | 6. CAPITALIZED SOFTWARE COSTS Capitalized software consisted of the following (in thousands): Other Long-Term Assets March 31, 2017 2016 Capitalized projects in service $ 1,804 $ - Capitalized projects in process 6,461 2,753 Accumulated amortization (588) - Total capitalized software costs $ 7,677 $ 2,753 Application development stage costs capitalized during the year $ 5,516 $ 2,095 Application development stage costs capitalized during the year in other long-term assets consists of cost related to both completed and in-process costs capitalized in accordance with ASC 350-40. Property and Equipment March 31, 2017 2016 Capitalized projects in service $ 2,904 $ 1,183 Capitalized projects in process 689 967 Accumulated amortization (871) (250) Total capitalized software costs $ 2,722 $ 1,900 Application development stage costs capitalized during the year $ 1,452 $ 756 Application development stage costs capitalized during the year in other property and equipment consists of cost related to both completed and in-process costs capitalized in accordance with ASC 350-40. |
GOODWILL - Note 7
GOODWILL - Note 7 | 12 Months Ended |
Mar. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL - Note 7 | 7. GOODWILL The following table provides a summary of the changes in the carrying amounts of goodwill by reporting segment (in thousands): Americas Europe Total Balance at March 31, 2015 $ 23,940 $ 12,947 $ 36,887 Additions due to acquisitions 1,789 10,125 11,914 Foreign currency translation - (1,381) (1,381) Balance at March 31, 2016 25,729 21,691 47,420 Additions due to acquisitions 1,580 - 1,580 Foreign currency translation - (2,864) (2,864) Balance at March 31, 2017 $ 27,309 $ 18,827 $ 46,136 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Note 8 | 12 Months Ended |
Mar. 31, 2017 | |
Notes to Financial Statements | |
COMMITMENTS AND CONTINGENCIES - Note 8 | 8. COMMITMENTS AND CONTINGENCIES Guarantees Indemnifications In the normal course of business, the Company may agree to indemnify other parties, including customers, lessors and parties to other transactions with the Company, with respect to certain matters such as breaches of representations or covenants or intellectual property infringement or other claims made by third parties. These agreements may limit the time within which an indemnification claim can be made and the amount of the claim. In addition, the Company has entered into indemnification agreements with its officers and directors. It is not possible to determine the maximum potential amount of the Company's exposure under these indemnification agreements due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular agreement. Historically, payments made by the Company under these agreements have not had a material impact on the Company's operating results, financial position or cash flows. Under some of these agreements, however, the Company's potential indemnification liability might not have a contractual limit. Product Warranties The Company accrues for the estimated costs that may be incurred under its product warranties upon revenue recognition. Operating Leases The Company's operating lease obligations consist of the Company's principal facility and various leased facilities under operating lease agreements, which expire on various dates from fiscal 2018 through fiscal 2026. The Company leases its headquarters facility in San Jose, California under an operating lease agreement that expires in October 2019. At March 31, 2017, future minimum annual lease payments under non-cancelable operating leases were as follows (in thousands): Year ending March 31: 2018 $ 4,708 2019 5,596 2020 4,906 2021 2,435 2022 and Thereafter 6,908 Total $ 24,553 Rent expense for the years ended March 31, 2017, 2016 and 2015 was $5.1 million, $2.1 million and $1.8 million, respectively. Capital Leases The Company has non-cancelable capital lease agreements for office and computer equipment bearing interest at various rates. At March 31, 2017, future minimum annual lease payments under non-cancelable capital leases were as follows (in thousands): Year ending March 31: 2018 $ 981 2019 681 2020 169 2021 5 2022 5 Total minimum payments 1,841 Less: Amount representing interest (116) 1,725 Less: Short-term portion of capital lease obligations (918) Long-term portion of capital lease obligations $ 807 Capital leases included in computer and office equipment were approximately $2.7 million and $1.6 million at March 31, 2017 and 2016, respectively. Total accumulated amortization was approximately $1.0 million and $0.1 million at March 31, 2017 and 2016, respectively. Minimum Third-Party Customer Support Commitments In the third quarter of 2010, the Company amended its contract with one of its third-party customer support vendors containing a minimum monthly commitment of approximately $0.4 million effective April 1, 2010. As the agreement requires a 150-day notice to terminate, the total remaining obligation under the contract was $2.2 million at March 31, 2017. Minimum Third-Party Network Service Provider Commitments The Company entered into contracts with multiple vendors for third-party network service which expire on various dates in fiscal 2017 through 2018. At March 31, 2017, future minimum annual payments under these third-party network service contracts were as follows (in thousands): Year ending March 31: 2018 $ 1,364 2019 133 2020 8 Total minimum payments $ 1,505 Legal Proceedings The Company, from time to time, is involved in various legal claims or litigation, including patent infringement claims that can arise in the normal course of the Company's operations. Pending or future litigation could be costly, could cause the diversion of management's attention and could upon resolution, have a material adverse effect on the Company's business, results of operations, financial condition and cash flows. On February 22, 2011, the Company was named a defendant in Bear Creek Technologies, Inc. (BCT) v. 8x8, Inc. et al. In re Bear Creek Technologies, Inc. On November 14, 2016, the Company was named as a defendant in Serenitiva LLC v. 8x8, Inc On December 2, 2016, the Company was named as a defendant in Paluxy Messaging LLC v. 8x8, Inc. On April 16, 2015, the Company was named as a defendant in a lawsuit, Slocumb Law Firm v. 8x8, Inc., filed in the United States District Court for the Middle District of Alabama. The Slocumb Law Firm has alleged that it purchased certain business services from the Company that did not perform as advertised or expected, and has asserted various causes of actions including fraud, breach of contract, violations of the Alabama Deceptive Trade Practices Act and negligence. On June 10, 2015, the United States Magistrate Judge issued a Report and Recommendation that the Court grant the Company's motion to stay the case and compel the Slocumb Law Firm to arbitrate its claims in Santa Clara County, California pursuant to a clause mandating arbitration of disputes set forth in the terms and conditions to which Slocumb Law Firm agreed in connection with its purchase of business services from the Company The Court closed this case administratively when it granted the Company's motion to compel arbitration. Under the Company's standard business terms and conditions, as of March 31, 2017, the period to initiate arbitration has lapsed. State and Municipal Taxes From time to time, the Company has received inquiries from a number of state and municipal taxing agencies with respect to the remittance of sales, use, telecommunications, excise, and income taxes. Several jurisdictions currently are conducting tax audits of the Company's records. The Company collects or has accrued for taxes that it believes are required to be remitted. The amounts that have been remitted have historically been within the accruals established by the Company. The Company adjusts its accrual when facts relating to specific exposures warrant such adjustment. For the fiscal year ended March 31, 2017, the City of San Francisco levied an assessment for utility taxes against the Company. The Company plans to vigorously appeal the assessment. Based on historical experience of the Company, management has determined the probable loss relating to this exposure to be approximately $0.5 million. Although the outcome cannot be predicted, the estimated reasonable additional loss is between $0 to $0.5 million. |
STOCKHOLDERS' EQUITY - Note 9
STOCKHOLDERS' EQUITY - Note 9 | 12 Months Ended |
Mar. 31, 2017 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY - Note 9 | 9. STOCKHOLDERS' EQUITY 2006 Stock Plan In May 2006, the Company's board of directors approved the 2006 Stock Plan ("2006 Plan"). The Company's stockholders subsequently adopted the 2006 Plan in September 2006, and became effective in October 2006. The Company reserved 7,000,000 shares of the Company's common stock for issuance under this plan. As of March 31, 2017, there are no shares available for future grants under the 2006 Plan. The 2006 Plan provides for granting incentive stock options to employees and non-statutory stock options to employees, directors or consultants. The stock option price of incentive stock options granted may not be less than the fair market value on the effective date of the grant. Other types of options and awards under the 2006 Plan may be granted at any price approved by the administrator, which generally will be the compensation committee of the board of directors. Options generally vest over four years and expire ten years after grant. In 2009, the 2006 Plan was amended to provide for the granting of stock purchase rights. The 2006 Plan expired in May 2016. 2003 Contactual Plan In the second fiscal quarter of 2012, the Company assumed the Amended and Restated Contactual, Inc. 2003 Stock Option Plan (the "2003 Contactual Plan") and registered an aggregate of 171,974 shares of the Company's common stock that may be issued upon the exercise of stock options previously granted under the 2003 Contactual Plan and assumed by the Company when it acquired Contactual. No new stock options or other awards can be granted under 2003 Contactual Plan. 2012 Equity Incentive Plan In June 2012, the Company's board of directors approved the 2012 Equity Incentive Plan ("2012 Plan"). The Company's stockholders subsequently adopted the 2012 Plan in July 2012, and became effective in August 2012. The Company reserved 4,100,000 shares of the Company's common stock for issuance under this plan. In August 2014 and 2016, the 2012 Plan was amended to allow for an additional 6,800,000 and 4,500,000 shares reserved for issuance, respectively. As of March 31, 2017, 4,060,411 shares remained available under the 2012 Plan. The 2012 Plan provides for granting incentive stock options to employees and non-statutory stock options to employees, directors or consultants, and granting of stock appreciation rights, restricted stock, restricted stock units and performance units, qualified performance-based awards and stock grants. The stock option price of incentive stock options granted may not be less than the fair market value on the effective date of the grant. Other types of options and awards under the 2012 Plan may be granted at any price approved by the administrator, which generally will be the compensation committee of the board of directors. Options, restricted stock and restricted stock units generally vest over four years and expire ten years after grant. The 2012 Plan expires in June 2022. 2013 New Employee Inducement Incentive Plan In September 2013, the Company's board of directors approved the 2013 New Employee Inducement Incentive Plan ("2013 Plan"). The Company reserved 1,000,000 shares of the Company's common stock for issuance under this plan. In November 2014, the 2013 Plan was amended to allow for an additional 1,200,000 shares reserved for issuance. In July 2015, the Plan was amended to allow for an additional 1,200,000 shares reserved for issuance. In connection with its approval of the August 2016 amendments to the 2012 Plan, the Board of Directors has approved the suspension of future grants under the 2013 Plan, which became effective immediately upon stockholder approval of the proposed 2012 Plan amendments in August 2016. In addition, the 2013 Plan was amended to reduce the number of shares reserved for issuance under the 2013 Plan to the number of shares that are then subject to outstanding awards under the 2013 Plan, leaving no shares available for future grant. The 2013 Plan provided for granting non-statutory stock options, stock appreciation rights, restricted stock, restricted stock and performance units and stock grants solely to newly hired employees as a material inducement to accepting employment with the Company. Options were granted at market value on the grant date under the 2013 Plan, unless determined otherwise at the time of grant by the administrator, which generally will be the compensation committee of the board of directors. Options generally expire ten years after grant. Stock-Based Compensation The following table summarizes stock-based compensation expense (in thousands): Years Ended March 31, 2017 2016 2015 Cost of service revenue $ 1,732 $ 1,159 $ 692 Cost of product revenue - - - Research and development 3,762 2,914 1,495 Sales and marketing 8,832 6,133 3,748 General and administrative 7,136 6,128 3,412 Total $ 21,462 $ 16,334 $ 9,347 Stock Options, Stock Purchase Right and Restricted Stock Unit Activity Stock Option activity under all the Company's stock option plans since March 31, 2014, is summarized as follows: Weighted Average Exercise Number of Price Shares Per Share Outstanding at March 31, 2014 6,002,382 $ 4.14 Granted 1,110,466 7.29 Exercised (1,326,385) 1.87 Canceled/Forfeited (458,556) 6.06 Outstanding at March 31, 2015 5,327,907 5.19 Granted 723,776 8.63 Exercised (1,162,175) 2.56 Canceled/Forfeited (96,242) 8.06 Outstanding at March 31, 2016 4,793,266 6.29 Granted 407,392 14.63 Exercised (603,998) 2.34 Canceled/Forfeited (134,248) 8.41 Outstanding at March 31, 2017 4,462,412 $ 7.52 Vested and expected to vest at March 31, 2017 4,462,412 $ 7.52 Exercisable at March 31, 2017 3,191,879 $ 6.47 Stock Purchase Right activity since March 31, 2014 is summarized as follows: Weighted Weighted Average Average Grant-Date Remaining Number of Fair Market Contractual Shares Value Term (in Years) Balance at March 31, 2014 489,627 $ 4.83 1.93 Granted 31,432 7.88 Vested (223,360) 3.98 Forfeited (73,864) 5.39 Balance at March 31, 2015 223,835 5.92 1.50 Granted - - Vested (115,789) 5.32 Forfeited (25,875) 7.40 Balance at March 31, 2016 82,171 6.30 0.76 Granted - - Vested (69,426) 6.00 Forfeited (1,375) 6.72 Balance at March 31, 2017 11,370 $ 8.10 1.09 Restricted Stock Unit activity since March 31, 2014 is summarized as follows: Weighted Weighted Average Number of Average Grant Remaining Contractual Shares Date Fair Value Term (in Years) Balance at March 31, 2014 1,134,856 $ 9.00 2.00 Granted 1,965,786 6.68 Vested (187,788) 9.54 Forfeited (214,168) 8.30 Balance at March 31, 2015 2,698,686 7.33 1.88 Granted 2,681,997 8.78 Vested (589,788) 7.79 Forfeited (246,096) 8.15 Balance at March 31, 2016 4,544,799 8.08 1.67 Granted 2,491,877 15.15 Vested (1,600,831) 7.89 Forfeited (496,795) 9.56 Balance at March 31, 2017 4,939,050 $ 11.57 2.47 Significant option groups outstanding at March 31, 2017 and related weighted average exercise price, contractual life, and aggregate intrinsic value information for 8x8, Inc.'s stock option plans are as follows: Options Outstanding Options Exercisable Weighted Weighted Weighted Average Average Average Exercise Remaining Aggregate Exercise Aggregate Price Contractual Intrinsic Price Intrinsic Shares Per Share Life (Years) Value Shares Per Share Value $ 0.55 to $ 4.60 912,189 $ 1.91 2.0 $ 12,168,894 912,189 $ 1.91 $ 12,168,894 $ 5.87 to $ 6.86 1,139,300 $ 6.48 6.7 9,996,307 863,274 $ 6.35 7,680,449 $ 7.52 to $ 9.21 920,268 $ 8.43 7.4 6,277,429 503,564 $ 8.47 3,414,760 $ 9.35 to $ 10.50 904,935 $ 9.73 6.6 4,998,813 758,640 $ 9.71 4,206,928 $ 10.86 to $ 15.40 585,720 $ 13.48 8.8 1,043,018 154,212 $ 11.68 551,242 4,462,412 $ 34,484,461 3,191,879 $ 28,022,273 The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the aggregate difference between the closing stock price of the Company's common stock on March 31, 2017 and the exercise price for in-the-money options) that would have been received by the option holders if all in-the-money options had been exercised on March 31, 2017. The total intrinsic value of options exercised in the years ended March 31, 2017, 2016 and 2015 was $7.2 million, $9.2 million and $8.1 million, respectively. As of March 31, 2017, there was $48.5 million of unamortized stock-based compensation expense related to unvested stock options and awards which is expected to be recognized over a weighted average period of 2.05 years. Unamortized stock-based compensation expense related to shares issued as part of the DXI acquisition (see Note 13) was approximately $1.3 million, which will be recognized over a weighted average period of 2.17 years. Cash received from option exercises and purchases of shares under the Equity Compensation Plans for the years ended March 31, 2017, 2016 and 2015 were $5.1 million, $4.8 million and $4.5 million, respectively. The total tax benefit attributable to stock options exercised in the year ended March 31, 2017, 2016 and 2015 was $0.5 million, $0.2 million and $0.2 million, respectively. 1996 Employee Stock Purchase Plan The Company's 1996 Stock Purchase Plan ("Employee Stock Purchase Plan") was adopted in June 1996 and became effective upon the closing of the Company's initial public offering in July 1997. Under the Employee Stock Purchase Plan, 500,000 shares of common stock were initially reserved for issuance. At the start of each fiscal year, the number of shares of common stock subject to the Employee Stock Purchase Plan increases so that 500,000 shares remain available for issuance. During fiscal 2017, 2016 and 2015, approximately 0.3 million, 0.4 million, and 0.3 million shares, respectively, were issued under the Employee Stock Purchase Plan. In May 2006, the Company's board of directors approved a ten-year extension of the Employee Stock Purchase Plan. Stockholders approved a ten-year extension of the Employee Stock Purchase Plan at the 2006 Annual Meeting of Stockholders held September 18, 2006. The Employee Stock Purchase Plan is effective until August 2017. The Employee Stock Purchase Plan permits eligible employees to purchase common stock through payroll deductions at a price equal to 85% of the fair market value of the common stock at the beginning of each two-year offering period or the end of a six month purchase period, whichever is lower. When the Employee Stock Purchase Plan was reinstated in fiscal 2005, the offering period was reduced from two years to one year. The contribution amount may not exceed ten percent of an employee's base compensation, including commissions, but not including bonuses and overtime. In the event of a merger of the Company with or into another corporation or the sale of all or substantially all of the assets of the Company, the Employee Stock Purchase Plan provides that a new exercise date will be set for each option under the plan which exercise date will occur before the date of the merger or asset sale. As of March 31, 2017, there were approximately $0.8 million of total unrecognized compensation cost related to employee stock purchases. This cost is expected to be recognized over a weighted average period of 0.5 years. Assumptions Used to Calculate Stock-Based Compensation Expense The fair value of each of the Company's option grants has been estimated on the date of grant using the Black-Scholes pricing model with the following assumptions: Years Ended March 31, 2017 2016 2015 Expected volatility 44% 53% 61% Expected dividend yield - - - Risk-free interest rate 1.1% to 2.2% 1.5% to 1.8% 1.4% to 1.9% Weighted average expected option term 4.9 years 5.4 years 6.0 years Weighted average fair value of options granted $ 5.74 $ 4.17 $ 4.14 The estimated fair value of stock purchase rights granted under the Employee Stock Purchase Plan was estimated using the Black-Scholes pricing model with the following weighted-average assumptions: Years Ended March 31, 2017 2016 2015 Expected volatility 37% 43% 49% Expected dividend yield - - - Risk-free interest rate 0.65% 0.39% 0.12% Weighted average expected rights term 0.75 years 0.83 years 0.80 years Weighted average fair value of rights granted $ 4.19 $ 3.25 $ 2.52 Stock Repurchases In February 2015, the Company's board of directors authorized the Company to purchase up to $20.0 million of its common stock from time to time until February 29, 2016 (the "2015 Repurchase Plan"). This tranche of shares authorized for repurchase expired in February 2016. In October 2015, the Company's board of directors authorized the Company to purchase an additional $15.0 million of its common stock from time to time until October 20, 2016 under the 2015 Repurchase Plan. The plan expired in October 2016 with an unused authorized repurchase amount of $15.0 million. The stock repurchase activity as of March 31, 2017 is summarized as follows: Weighted Average Shares Price Amount Repurchased Per Share Repurchased (1) Balance as of March 31, 2015 2,488,215 7.38 $ 19,200,393 Repurchase of common stock under 2015 Repurchase Plan 1,392,135 8.02 11,164,329 Balance as of March 31, 2016 3,880,350 $ $ 30,364,722 Repurchase of common stock under 2015 Repurchase Plan - - Balance as of March 31, 2017 3,880,350 $ $ 30,364,722 (1) Amount excludes commission fees. The total purchase price of the common stock repurchased and retired was reflected as a reduction to consolidated stockholders' equity during the period of repurchase. In fiscal 2017, 2016 and 2015, the Company also withheld 289,899, 30,702, and 15,053 shares, respectively, shares related to tax withholdings on restricted stock awards with a total price of $3.0 million, $0.5 million, and $0.1 million, respectively. |
INCOME TAXES - Note 10
INCOME TAXES - Note 10 | 12 Months Ended |
Mar. 31, 2017 | |
Notes to Financial Statements | |
INCOME TAXES - Note 10 | 10. INCOME TAXES For the years ended March 31, 2017, 2016 and 2015, the Company recorded a (benefit) provision for income taxes of approximately ($0.1) million, ($0.8) million and $2.8 million, respectively. The components of the consolidated (benefit) provision for income taxes for fiscal 2017, 2016 and 2015 consisted of the following (in thousands): March 31, Current: 2017 2016 2015 Federal $ (7) $ 97 $ 92 State 588 551 457 Foreign 112 71 1 Total current tax provision 693 719 550 Deferred: Federal 1,506 95 2,602 State (1,095) (854) (363) Foreign (1,230) (807) - Total deferred tax (benefit) provision (819) (1,566) 2,239 Income tax (benefit) provision $ (126) $ (847) $ 2,789 The Company's income (loss) from continuing operations before income taxes included ($8.4) million, ($6.9) million and ($3.5) million of foreign subsidiary loss for the fiscal years ended March 31, 2017, 2016 and 2015, respectively. The Company is permanently reinvesting the earnings of its profitable foreign subsidiaries. The Company intends to reinvest these profits in expansion of overseas operations. If the Company were to remit these earnings, the tax impact would be immaterial. Upon adoption of ASU 2015-17 in fiscal 2017, the Company classifies all deferred tax assets or deferred tax liabilities as long-term. Deferred tax assets and (liabilities) were comprised of the following (in thousands): March 31, Current deferred tax assets 2017 2016 Net operating loss carryforwards $ - $ 2,739 Inventory valuation - 14 Reserves and allowances - 2,740 Net current deferred tax assets - 5,493 Net operating loss carryforwards 36,427 38,449 Research and development and other credit carryforwards 8,614 7,106 Stock-based compensation 6,942 5,577 Reserves and allowances 3,266 - Fixed assets and intangibles (3,688) (6,160) Net non-current deferred tax assets 51,561 44,972 Valuation allowance (2,934) (3,760) Total $ 48,627 $ 46,705 As of March 31, 2017, and 2016, management assessed the realizability of deferred tax assets based on the available evidence, including a history of taxable income and estimates of future taxable income. At March 31, 2017, management evaluated the need for a valuation allowance and determined that a valuation allowance of approximately $2.9 million was needed compared with approximately $3.8 million as of March 31, 2016. The net change in the valuation allowance for the years ended March 31, 2017 and 2016 was a decrease of $0.8 million and $1.1 million, respectively. At March 31, 2017, the Company had net operating loss carryforwards for federal and state income tax purposes of approximately $141.7 million and $23.2 million, respectively, which expire at various dates between 2018 and 2037. The net operating loss carryforwards include approximately $60.9 million in excess tax benefits resulting from employee exercises of non- qualified stock options or disqualifying dispositions of incentive stock options, the tax benefits of which, when realized, will be accounted for as an addition to additional paid-in capital rather than as a reduction of the provision for income taxes. In addition, at March 31, 2017, the Company had research and development credit carryforwards for federal and California tax reporting purposes of approximately $5.6 million and $7.3 million, respectively. The federal income tax credit carryforwards will expire at various dates between 2021 and 2037, while the California income tax credits will carry forward indefinitely. A reconciliation of the Company's provision (benefit) for income taxes to the amounts computed using the statutory U.S. federal income tax rate of 34% is as follows (in thousands): Years Ended March 31, 2017 2016 2015 Tax provision at statutory rate $ (1,652) $ (2,029) $ 1,599 State income taxes before valuation allowance, net of federal effect 108 9 269 Foreign tax rate differential 885 (769) - Research and development credits (1,484) (1,253) (725) Change in valuation allowance (287) (1,555) (1,480) Compensation/option differences (246) (471) (331) Non-deductible compensation 1,079 944 746 Acquisition costs 54 230 - Expiring CA NOLs - 1,626 1,484 Foreign loss not benefited 780 2,342 1,192 Other 637 79 35 Total income tax provision $ (126) $ (847) $ 2,789 For the years ended March 31, 2017, 2016 and 2015, the Company realized excess tax benefits as a result of stock option exercises and stock award settlements of $0.5 million, $0.2 million and $0.1 million, respectively, that were recorded to additional paid-in capital. The Company recognizes the tax benefit from uncertain tax positions if it is more likely than not that the tax positions will be sustained on examination by the tax authorities, based on the technical merits of the position. The tax benefit is measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands): Unrecognized Tax Benefits 2017 2016 2015 Balance at beginning of year $ 2,881 $ 2,420 $ 2,165 Gross increase - tax positions in prior period - 82 27 Gross decreases - tax positions in prior period - - - Gross increases - tax positions related to the current year 450 379 228 Balance at end of year $ 3,331 $ 2,881 $ 2,420 At March 31, 2017, the company had a liability for unrecognized tax benefits of $3.3 million, all of which, if recognized, would decrease the company's effective tax rate. The Company does not expect its unrecognized tax benefits to change significantly over the next 12 months. The Company files U.S. federal and state income tax returns in jurisdictions with varying statutes of limitations. The Company has not been under examination by income tax authorities in federal, state or other foreign jurisdictions. The tax years fiscal 1998 through fiscal 2017 generally remain subject to examination by federal and most state tax authorities. The Company's policy for recording interest and penalties associated with tax examinations is to record such items as a component of operating expense income before taxes. During the fiscal year ended March 31, 2017, 2016 and 2015, the Company did not recognize any interest or penalties related to unrecognized tax benefits. Utilization of the Company's net operating loss and tax credit carryforwards can become subject to a substantial annual limitation due to the ownership change limitations provided by Section 382 of the Internal Revenue Code and similar state provisions. Such an annual limitation could result in the expiration or elimination of the net operating loss and tax credit carryforwards before utilization. The Company has performed an analysis of its changes in ownership under Section 382 of the Internal Revenue Code. The Company currently believes that the Section 382 limitation will not limit utilization of the carryforwards prior to their expiration, with the exception of certain acquired loss and tax credit carryforwards of Contactual, Inc. |
NET INCOME (LOSS) PER SHARE - N
NET INCOME (LOSS) PER SHARE - Note 11 | 12 Months Ended |
Mar. 31, 2017 | |
Notes to Financial Statements | |
NET INCOME (LOSS) PER SHARE - Note 11 | 11. NET INCOME (LOSS) PER SHARE The following is a reconciliation of the weighted average number of common shares outstanding used in calculating basic and diluted net income (loss) per share (in thousands, except share and per share data): Years Ended March 31, 2017 2016 2015 (In Thousands, Except Per Share Amounts) Numerator: Net income (loss) available to common stockholders $ (4,751) $ (5,120) $ 1,926 Denominator: Common shares 90,340 88,477 89,071 Denominator for basic calculation 90,340 88,477 89,071 Employee stock options - - 2,088 Employee restricted purchase rights - - 493 Denominator for diluted calculation 90,340 88,477 91,652 Net income (loss) per share: Basic $ (0.05) $ (0.06) $ 0.02 Diluted $ (0.05) $ (0.06) $ 0.02 The following shares attributable to outstanding stock options and restricted stock purchase rights were excluded from the calculation of diluted earnings per share because their inclusion would have been antidilutive (in thousands): Years Ended March 31, 2017 2016 2015 Common stock options 4,462 4,793 1,812 Stock purchase rights 4,950 4,628 57 9,412 9,421 1,869 |
SEGMENT REPORTING - Note 12
SEGMENT REPORTING - Note 12 | 12 Months Ended |
Mar. 31, 2017 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING - Note 12 | 12. SEGMENT REPORTING ASC 280, Segment Reporting The Company manages its operations primarily on a geographic basis. The Chief Executive Officer, the Chief Financial Officer, and the Chief Technology Officer or the Company's Chief Operating Decision Makers (CODMs), evaluate performance of the Company and make decisions regarding allocation of resources based on geographic results. The Company's reportable segments are the Americas and Europe. The Americas segment is primarily North America. The Europe segment is primarily the United Kingdom. Each operating segment provides similar products and services. The Company's CODMs evaluate the performance of its operating segments based on revenues and net income. The Company does not allocate research and development, sales and marketing, general and administrative, amortization expense, stock-based compensation expense, and commitment and contingencies for each segment as management does not consider this information in its evaluation of the performance of each operating segment. Revenues are attributed to each segment based on the ordering location of the customer or ship to location. The following tables set forth the segment and geographic information for each period (in thousands): Total Revenue for the Years Ended March 31, 2017 2016 2015 Americas (principally US) $ 227,914 $ 185,241 $ 150,764 Europe (principally UK) 25,474 24,095 11,649 $ 253,388 $ 209,336 $ 162,413 Revenue is based upon the destination of shipments and the customers' service address. In fiscal 2017, 2016 and 2015 intersegment revenues of approximately $4.9 million, $1.0 million and $0, respectively, were eliminated in consolidation, and have been excluded from the table above. Total Depreciation and Amortization for the Years Ended March 31, 2017 2016 2015 Americas (principally US) $ 6,842 $ 5,776 $ 4,739 Europe (principally UK) 3,595 3,231 1,374 $ 10,437 $ 9,007 $ 6,113 Total Net Income (Loss) for the Years Ended March 31, 2017 2016 2015 Americas (principally US) $ 2,557 $ 940 $ 5,433 Europe (principally UK) (7,308) (6,060) (3,507) $ (4,751) $ (5,120) $ 1,926 March 31, 2017 2016 Total Assets Property and Equipment, net Total Assets Property and Equipment, net Americas (principally US) $ 284,011 $ 11,803 $ 261,886 $ 9,733 Europe (principally UK) 49,844 4,581 51,566 2,642 $ 333,855 $ 16,384 $ 313,452 $ 12,375 |
ACQUISITIONS - Note 13
ACQUISITIONS - Note 13 | 12 Months Ended |
Mar. 31, 2017 | |
Business Combinations [Abstract] | |
ACQUISITIONS - Note 13 | 13. ACQUISITIONS LeChat, Inc. On January 5, 2017, the Company entered into an Agreement and Plan of Merger (the "Agreement") with the preferred and common shareholders LeChat Inc. (LeChat) for the purchase of all the outstanding preferred and common shares of LeChat. The transaction closed on January 6, 2017. The total aggregate purchase price was $3.1 million, consisting of approximately $2.4 million paid to the preferred shareholders at closing, $0.2 million paid to the common shareholders at closing, and approximately $0.5 million in cash deposited into escrow to be held for two years as security against indemnity claims made by the Company after the closing date. The Company recorded the acquired tangible and identifiable intangible assets and liabilities assumed based on their estimated fair values. The excess of the consideration transferred over the aggregate fair values of the assets acquired and liabilities assumed was recorded as goodwill. The amount of goodwill recognized was primarily attributable to the expected contributions of the entity to the overall corporate strategy in addition to synergies and acquired workforce of the acquired business. The finite-lived intangible asset consisted of developed technology, with an estimated weighted-average useful life of two years. The fair value assigned to identifiable intangible assets acquired was based on estimates and assumptions made by management using a cost approach method. Intangible assets are amortized on a straight-line basis. The fair values of the assets acquired and liabilities assumed are as follows (in thousands): Fair Value Assets acquired: Cash $ 231 Intangible assets 1,200 Other non-current assets 428 Total assets acquired 1,859 Liabilities assumed: Current liabilities (324) Total liabilities assumed (324) Net identifiable assets acquired 1,535 Goodwill 1,580 Total consideration transferred $ 3,115 None of the goodwill recognized is expected to be deductible for income tax purposes. Revenue from LeChat from the date of acquisition to March 31, 2017 was immaterial. Total acquisition related costs were immaterial. Pro forma information has not been presented as the impact to the Company's Consolidated Financial Statements was not material. DXI Group Limited On May 26, 2015, the Company entered into a share purchase agreement with the shareholders of DXI Limited, and its wholly owned subsidiaries, (collectively DXI) for the purchase of the entire share capital of DXI. The transaction closed effective May 29, 2015. The total aggregate purchase price was approximately $22.5 million, consisting of $18.7 million in cash paid to the DXI shareholders at closing, and $3.8 million in cash deposited into escrow to be held for two years as security against indemnity claims made by the Company after the closing date. The cash escrow is to be released in annual installments over two years. The Company recorded the acquired tangible and identifiable intangible assets and liabilities assumed based on their estimated fair values. The excess of the consideration transferred over the aggregate fair values of the assets acquired and liabilities assumed is recorded as goodwill. The amount of goodwill recognized is primarily attributable to the expected contributions of the entity to the overall corporate strategy in addition to synergies and acquired workforce of the acquired business. The finite-lived intangible assets consist of the following: customer relationships, with an estimated weighted-average useful life of two and five years; and developed technology, with an estimated weighted-average useful life of six years. The indefinite lived intangible asset consisted of a tradename. The fair value assigned to identifiable intangible assets acquired was based on estimates and assumptions made by management using income approach methods. Intangible assets are amortized on a straight-line basis. The fair values of the assets acquired and liabilities assumed are as follows (in thousands): Fair Value Assets acquired: Cash $ 1,318 Current assets 2,016 Property and equipment 1,453 Intangible assets 13,374 Total assets acquired 18,161 Liabilities assumed: Current liabilities and non-current liabilities (5,734) Total liabilities assumed (5,734) Net identifiable assets acquired 12,427 Goodwill 10,125 Total consideration transferred $ 22,552 None of the goodwill recognized is expected to be deductible for income tax purposes. DXI contributed revenue of approximately $10.0 million and a net loss of approximately ($3.2) million for the period from the date of acquisition to March 31, 2016. Total acquisition related costs were approximately $0.9 million, which were included in general and administrative expenses. The Company determined that it is impractical to include pro forma information given the difficulty in obtaining the historical financial information of DXI. Inclusion of such information would require the Company to make estimates and assumptions regarding DXI's historical financial results that the Company believes may ultimately prove inaccurate. In the second quarter of fiscal 2016, the Company updated its analysis of the valuation of the assets and liabilities acquired, which resulted in an increase of approximately $1.1 million to goodwill, a decrease in intangible assets of approximately $1.3 million, and a decrease to current and non-current liabilities of $0.2 million, compared with the preliminary estimates recorded for the first quarter of fiscal 2016. The impact of the change in preliminary values on the first quarter of fiscal 2016 statement of operations was not material. Therefore, no measurement period adjustment was required. Quality Software Corporation On June 3, 2015, the Company entered into an asset purchase agreement with the shareholder of Quality Software Corporation (QSC) and other parties affiliated with the shareholder and QSC for the purchase of certain assets as per the purchase agreement. The total aggregate fair value of the consideration was approximately $2.9 million, which $2.2 million was paid in cash to the QSC shareholder at closing. As part of the aggregate purchases price, there is also $0.5 million in contingent consideration payable subject to attainment of certain revenue and product release milestones for the acquired business, and $0.3 million in cash held by the Company in escrow to be retained for two years as security against indemnity claims made by the Company after the closing date. The preliminary fair value of the contingent consideration and escrow amounts was $0.7 million at the acquisition date. The Company recorded the acquired identifiable intangible assets and liabilities assumed based on their estimated fair values. The excess of the consideration transferred over the aggregate fair values of the assets acquired and liabilities assumed is recorded as goodwill. The amount of goodwill recognized is primarily attributable to the expected contributions of the entity to the overall corporate strategy in addition to synergies and acquired workforce of the acquired business. The finite-lived intangible assets consist of the following: customer relationships, with an estimated weighted-average useful life of five years; and developed technology, with an estimated weighted-average useful life of six years. The indefinite lived intangible asset consisted of in-process research and development and a tradename. The fair value assigned to identifiable intangible assets acquired was based on estimates and assumptions made by management using income approach methods. Intangible assets are amortized on a straight-line basis. The fair values of the assets acquired and liabilities assumed are as follows (in thousands): Fair Value Assets acquired: Intangible assets $ 1,100 Goodwill 1,789 Total consideration transferred $ 2,889 QSC's contributions to revenue and income for the period from the date of acquisition to March 31, 2016 were not material. Total acquisition related costs were approximately $0.1 million, which were included in general and administrative expenses. The Company determined that the acquisition was not deemed to be a material business combination and it is impractical to include such pro forma information given the difficulty in obtaining the historical financial information of QSC. Inclusion of such information would require the Company to make estimates and assumptions regarding QSC's historical financial results that the Company believes may ultimately prove inaccurate. In the fourth quarter of fiscal 2016, the Company updated its analysis of the valuation of the assets and liabilities acquired, which resulted in an increase of approximately $0.1million to goodwill, and a decrease in intangible assets of approximately $0.1 million compared with what was recorded for the third quarter of fiscal 2016. The impact of the change in preliminary values on the first quarter of fiscal 2016 statement of operations was not material. Therefore, no measurement period adjustment was required. |
EMPLOYEE BENEFIT PLAN - Note 14
EMPLOYEE BENEFIT PLAN - Note 14 | 12 Months Ended |
Mar. 31, 2017 | |
Postemployment Benefits [Abstract] | |
EMPLOYEE BENEFIT PLAN - Note 14 | 14. EMPLOYEE BENEFIT PLAN 401(k) Savings Plan In April 1991, the Company adopted a 401(k) savings plan (the "Savings Plan") covering substantially all of its U.S. employees. Eligible employees may contribute to the Savings Plan from their compensation up to the maximum allowed by the Internal Revenue Service. In January 2007, the Company reactivated the employer matching contribution. The matching contribution is 100% of each employee's contributions up to $1,500, then 50% of the employee's contributions, not to exceed $3,000 per annum, in aggregate. The matching expense in 2017, 2016 and 2015 was $1.6 million, $0.9 million and $0.7 million, respectively. The Savings Plan does not allow employee contributions to be invested in the Company's common stock. |
PATENT SALE - Note 15
PATENT SALE - Note 15 | 12 Months Ended |
Mar. 31, 2017 | |
Notes to Financial Statements | |
PATENT SALE - Note 15 | 15. PATENT SALE In June 2012, the Company entered into a patent purchase agreement and sold a family of patents to a third party for approximately $12.0 million plus a future payment of up to a maximum of $3.0 million based on future license agreements entered into by the third-party purchaser. In August 2014 and February 2013, the third-party entered into two separate license agreements with its customers; therefore, the Company earned an additional $1.0 million each under the patent purchase agreement for fiscal 2015 and 2013. Under the terms and conditions of the patent purchase agreement, the Company has retained certain limited rights to continue to use the patents. The patent purchase agreement contains representations and warranties customary for transactions of this type. |
SUBSEQUENT EVENTS - Note 16
SUBSEQUENT EVENTS - Note 16 | 12 Months Ended |
Mar. 31, 2017 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS - Note 16 | 16. SUBSEQUENT EVENTS In May 2015, the Company had entered into a share purchase agreement with the shareholders of DXI Limited which included cash deposited into escrow to be held for two years as security against indemnity claims made by the Company after the closing date. In April 2017, the Company agreed with the shareholders of DXI Limited to return approximately $1.4 million to the Company and release the remaining funds held in escrow to the shareholders. The Company recorded a gain in the amount of this release of approximately $1.4 million in the first quarter of fiscal 2018. |
CONSOLIDATED QUARTERLY FINANCIA
CONSOLIDATED QUARTERLY FINANCIAL DATA (Unaudited) - Note 17 | 12 Months Ended |
Mar. 31, 2017 | |
Consolidated Quarterly Financial Data | |
CONSOLIDATED QUARTERLY FINANCIAL DATA (Unaudited) - Note 17 | 17. CONSOLIDATED QUARTERLY FINANCIAL DATA (UNAUDITED) In thousands, except per share data amounts: QUARTER ENDED March 31, Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Sept. 30, June 30, 2017 2016 2016 2016 2016 2015 2015 2015 Service revenue $ 62,654 $ 60,149 $ 57,717 $ 55,296 $ 52,174 $ 48,948 $ 46,951 $ 44,168 Product revenue 3,834 3,527 5,466 4,745 5,160 4,220 3,991 3,724 Total revenue 66,488 63,676 63,183 60,041 57,334 53,168 50,942 47,892 Operating expenses: Cost of service revenue 10,803 10,525 10,837 10,235 9,720 9,713 9,186 8,459 Cost of product revenue 4,187 4,240 5,782 5,505 6,103 5,087 4,596 4,382 Research and development 7,142 7,095 6,505 6,710 6,110 6,404 6,446 5,080 Sales and marketing 38,228 35,667 33,691 31,691 31,240 27,585 26,730 23,824 General, and administrative 9,814 7,852 6,747 6,801 7,132 6,888 5,657 6,068 Total operating expenses 70,174 65,379 63,562 60,942 60,305 55,677 52,615 47,813 Income (loss) from operations (3,686) (1,703) (379) (901) (2,971) (2,509) (1,673) 79 Other income, net 583 408 391 410 397 272 204 234 Income (loss) from operations before provision (benefit) for income taxes (3,103) (1,295) 12 (491) (2,574) (2,237) (1,469) 313 Provision (benefit) for income taxes (178) 30 (15) 37 (1,498) (557) 423 785 Net income (loss) $ (2,925) $ (1,325) $ 27 $ (528) $ (1,076) $ (1,680) $ (1,892) $ (472) Net income (loss) per share: Basic $ (0.03) $ (0.01) $ 0.00 $ (0.01) $ (0.01) $ (0.02) $ (0.02) $ (0.01) Diluted $ (0.03) $ (0.01) $ 0.00 $ (0.01) $ (0.01) $ (0.02) $ (0.02) $ (0.01) Shares used in per share calculations: Basic 91,175 90,774 89,987 89,434 88,888 88,289 88,557 88,233 Diluted 91,175 90,774 93,447 89,434 88,888 88,289 88,557 88,233 |
Schedule II Valuation and Quali
Schedule II Valuation and Qualifying Accounts | 12 Months Ended |
Mar. 31, 2017 | |
Chedule Ii Valuation And Qualifying Accounts | |
Schedule of Valuation and Qualifying Accounts Disclosure | SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS (in thousands) Balance at Additions Balance Beginning Charged to at End Description of Year Expenses Deductions (a) of Year Total Allowance for Doubtful Accounts: Year ended March 31, 2015: $ 466 $ 279 $ (329) $ 416 Year ended March 31, 2016: $ 416 $ 509 $ (339) $ 586 Year ended March 31, 2017: $ 586 $ 941 $ (573) $ 954 (a) The deductions related to allowance for doubtful accounts represent accounts receivable which are written off. |
Summary of Significant Accounti
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Mar. 31, 2017 | |
Notes to Financial Statements | |
Company | THE COMPANY 8x8, Inc. ("8x8" or the "Company") was incorporated in California in February 1987 and was reincorporated in Delaware in December 1996. The Company is a leading provider of enterprise cloud communications solutions, including unified communications, team collaboration, contact center, and analytics, integrated over a single Software-as-a Service (SaaS) platform. The 8x8 Communications Cloud TM |
Fiscal Period | The Company's fiscal year ends on March 31 of each calendar year. Each reference to a fiscal year in these notes to the consolidated financial statements refers to the fiscal year ended March 31 of the calendar year indicated (for example, fiscal 2017 refers to the fiscal year ended March 31, 2017). |
Acquisitions | Acquisitions In January 2017, the Company entered into a share purchase agreement with the shareholders of LeChat, Inc., the maker of Sameroom TM In June 2015, the Company entered into an asset purchase agreement with the shareholder of Quality Software Corporation and other parties affiliated with the shareholder and Quality Software Corporation, a developer of cloud-native quality management capabilities and analytics. In May 2015, the Company entered into a share purchase agreement with the shareholders of DXI Limited, API Telecom Limited, Easycallnow Limited and RAS Telecom Limited, a provider of in cloud-based outbound and blended contact center solutions. See Note 13 for further discussion. |
Principles of Consolidation | PRINCIPLES OF CONSOLIDATION The consolidated financial statements include the accounts of 8x8 and its subsidiaries. All material intercompany accounts and transactions have been eliminated. |
Use of Estimates | USE OF ESTIMATES The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and equity and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, the Company evaluates its estimates, including, but not limited to, those related to bad debts, returns reserve for expected cancellations, valuation of inventories, income and sales tax, and litigation and other contingencies. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities, and equity that are not readily apparent from other sources. Actual results could differ from those estimates under different assumptions or conditions. |
Service Revenue | Service Revenue The Company recognizes service revenue, mainly from subscription services to its cloud-based voice, call center, video and collaboration solutions, when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, price is fixed or determinable and collectability is reasonably assured. The Company defers recognition of service revenues in instances when cash receipts are received before services are delivered and recognizes deferred revenues ratably, over the course of the contract, as services are provided. |
Product Revenue | Under the terms of the Company's typical subscription agreements, new customers can terminate their service within 30 days of order placement and receive a full refund of fees previously paid. The Company has determined that it has sufficient history of subscriber conduct to make a reasonable estimate of cancellations within the 30-day trial period. Therefore, the Company recognizes new subscriber revenue that is fixed or determinable and that is not contingent on future performance or future deliverables in the month in which the new order was shipped, net of an allowance for expected cancellations. The Company recognizes revenue from product sales, mainly 8x8 IP telephones, for which there are no related services to be rendered upon shipment to customers provided that persuasive evidence of an arrangement exists, the price is fixed or determinable, title has transferred, collection of resulting receivables is reasonably assured, there are no customer acceptance requirements, and there are no remaining significant obligations. Gross outbound shipping and handling charges are recorded as revenue, and the related costs are included in cost of goods sold. Reserves for returns and allowances for customer sales are recorded at the time of shipment. In accordance with the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 605, Revenue Recognition The Company records revenue net of any sales and service related taxes and mandatory government charges that are billed to its customers. The Company believes this approach results in consolidated financial statements that are more easily understood by users. |
Revenue Recognition for Multiple Element Arrangements | Multiple Element Arrangements ASC 605-25, Revenue Recognition - Multiple Element Arrangements VSOE generally exists only when a Company sells the deliverable separately, on more than a limited basis, at prices within a relatively narrow range. When VSOE cannot be established, the Company attempts to establish the selling price of deliverables based on relevant TPE. TPE is determined based on manufacturer's prices for similar deliverables when sold separately, when possible. As the Company has historically been unable to establish a selling price using VSOE or TPE, it uses a BESP for the allocation of arrangement consideration. The objective of BESP is to determine the price at which the Company would transact a sale if the product or service was sold on a stand-alone basis. BESP is generally used for offerings that are not typically sold on a stand-alone basis or for new or highly customized offerings. The Company determines BESP for a product or service by considering multiple factors including, but not limited to: the price list established by its management which is typically based on general pricing practices and targeted gross margin of products and services sold; and analysis of pricing history of new arrangements, including multiple element and stand-alone transactions. In accordance with the guidance of ASC 605-25, when the Company enters into revenue arrangements with multiple deliverables the Company allocates arrangement consideration, among the products and subscriber services based on their relative selling prices. Arrangement consideration allocated to the sold products that is fixed or determinable and that is not contingent on future performance or future deliverables is recognized as product revenues during the period of the sale less the allowance for estimated returns during the 30-day trial period. Arrangement consideration allocated to subscriber services that is fixed or determinable and that is not contingent on future performance or future deliverables is recognized ratably as service revenues as the related services are provided, which is generally over the initial contract term. |
Deferred Cost of Goods Sold | DEFERRED COST OF GOODS SOLD Deferred cost of goods sold represents the cost of products sold for which the end customer or distributor has a right of return. The cost of the products sold is recognized contemporaneously with the recognition of revenue, when the subscriber has accepted the service. |
Cash, Cash Equivalents and Investments | CASH, CASH EQUIVALENTS AND INVESTMENTS The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Management determines the appropriate categorization of its investments at the time of purchase and reevaluates the classification at each reporting date. The cost of the Company's investments is determined based upon specific identification. The Company's investments are comprised of mutual funds, commercial paper, corporate debt, municipal securities, asset backed securities, mortgage backed securities, agency bonds, international government securities, certificates of deposit and money market funds. At March 31, 2017 and 2016, all investments were classified as available-for-sale and reported at fair value, based either upon quoted prices in active markets, quoted prices in less active markets, or quoted market prices for similar investments, with unrealized gains and losses, net of related tax, if any, included in other comprehensive income (loss) and disclosed as a separate component of consolidated stockholders' equity. Realized gains and losses on sales of all such investments are reported within the caption of other income in the consolidated statements of operations and computed using the specific identification method. The Company classifies its investments as current based on the nature of the investments and their availability for use in current operations. The Company's investments in marketable securities are monitored on a periodic basis for impairment. In the event that the carrying value of an investment exceeds its fair value and the decline in value is determined to be other-than-temporary, an impairment charge is recorded and a new cost basis for the investment is established. These available-for-sale investments are primarily held in the custody of one major financial institution. |
Accounts Receivable Allowance | ACCOUNTS RECEIVABLE ALLOWANCE The Company estimates the amount of uncollectible accounts receivable at the end of each reporting period based on the aging of the receivable balance, current and historical customer trends, and communications with its customers. Amounts are written off only after considerable collection efforts have been made and the amounts are determined to be uncollectible. |
Inventory | INVENTORY Inventory is stated at the lower of standard cost, which approximates actual cost using the first-in, first-out method, or market. Any write-down of inventory to the lower of cost or market at the close of a fiscal period creates a new cost basis that subsequently would not be marked up based on changes in underlying facts and circumstances. On an ongoing basis, the Company evaluates inventory for obsolescence and slow-moving items. This evaluation includes analysis of sales levels, sales projections, and purchases by item, as well as raw material usage related to the Company's manufacturing facilities. If the Company's review indicates a reduction in utility below carrying value, it reduces inventory to a new cost basis. If future demand or market conditions are different than the Company's current estimates, an inventory adjustment may be required, and would be reflected in cost of goods sold in the period the revision is made. |
Property and Equipment | PROPERTY AND EQUIPMENT Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method. Estimated useful lives of three years are used for equipment and software and five years for furniture and fixtures. Amortization of leasehold improvements is computed using the shorter of the remaining facility lease term or the estimated useful life of the improvements. Maintenance, repairs and ordinary replacements are charged to expense. Expenditures for improvements that extend the physical or economic life of the property are capitalized. Gains or losses on the disposition of property and equipment are recorded in the Consolidated Statements of Operations. Construction in progress primarily relates to costs to acquire or internally develop software for internal use not fully completed as of March 31, 2017. |
Accounting for Long-Lived Assets | ACCOUNTING FOR LONG-LIVED ASSETS The Company reviews the recoverability of its long-lived assets, such as property and equipment, definite lived intangibles or capitalized software, when events or changes in circumstances occur that indicate that the carrying value of the asset or asset group may not be recoverable. Examples of such events could include a significant disposal of a portion of such assets, an adverse change in the market involving the business employing the related asset or a significant change in the operation or use of an asset. The assessment of possible impairment is based on the Company's ability to recover the carrying value of the asset or asset group from the expected future pre-tax cash flows (undiscounted and without interest charges) of the related operations. If these cash flows are less than the carrying value of such asset or asset group, an impairment loss is recognized for the difference between estimated fair value and carrying value. The measurement of impairment requires management to estimate the fair value of long-lived assets and asset groups through future cash flows. See Note 5 for further discussion on impairment charges incurred. |
Goodwill and Other Intangible Assets | 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. Goodwill and intangible assets with indefinite useful lives are not amortized, but are tested annually for impairment and more often if there is an indicator of impairment. The Company has determined that it has three reporting units, and allocates goodwill to the reporting units for the purposes of its annual impairment test. The Company's annual goodwill impairment test is performed on January 1 each year. No goodwill impairment charges were recorded in the periods presented. Intangible assets with finite useful lives are amortized on a straight-line basis over the periods benefited. Amortization expense for the customer relationship intangible asset is included in sales and marketing expenses. Amortization expense for technology is included in cost of service revenue. |
Warranty Expense | WARRANTY EXPENSE The Company accrues for estimated product warranty cost upon revenue recognition. Accruals for product warranties are calculated based on the Company's historical warranty experience adjusted for any specific requirements. |
Research, Development and Software Costs | RESEARCH, DEVELOPMENT AND SOFTWARE COSTS Computer software developed or obtained for internal use in accordance with ASC 350-40, Internal Use Software |
Advertising Costs | ADVERTISING COSTS Advertising costs are expensed as incurred and were $9.5 million, $8.5 million and $6.8 million for the years ended March 31, 2017, 2016 and 2015, respectively. |
Foreign Currency Translation | FOREIGN CURRENCY TRANSLATION The Company has determined that the functional currency of each of its foreign subsidiaries are the subsidiary's local currency. The Company believes this most appropriately reflects the current economic facts and circumstances of the Company's subsidiaries' operations. The assets and liabilities of the subsidiaries are translated at the applicable exchange rate as of the end of the balance sheet period and revenue and expenses are translated at an average rate over the period presented. Resulting currency translation adjustments are recorded as a component of accumulated other comprehensive income or loss within the stockholder's equity in the consolidated balance sheets. |
Business Segments | BUSINESS SEGMENTS The Company has two reportable segments, Americas and Europe. The Company's chief operating decision makers, the Chief Executive Officer, Chief Financial Officer, and Chief Technology Officer, evaluate performance of the Company and makes decisions regarding allocation of resources based on geographical results (see Note 12). |
Customer Acquisition Costs | CUSTOMER ACQUISITION COSTS Customer acquisition costs are expensed as incurred and include the advertising, marketing, promotions, commissions, rebates and equipment subsidy costs associated with the Company's efforts to acquire new subscribers. |
Income Taxes | INCOME TAXES Income taxes are accounted for using the asset and liability approach. Under the asset and liability approach, a current tax liability or asset is recognized for the estimated taxes payable or refundable on tax returns for the current year. A deferred tax liability or asset is recognized for the estimated future tax effects attributed to temporary differences and carryforwards. If necessary, the deferred tax assets are reduced by the amount of benefits that, based on available evidence, is more likely than not expected to be realized. |
Concentrations | CONCENTRATIONS Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and cash equivalents, investments and trade accounts receivable. The Company has cash equivalents and investment policies that limit the amount of credit exposure to any one financial institution and restrict placement of these funds to financial institutions evaluated as highly credit-worthy. The Company has not experienced any material losses relating to its investment instruments. The Company sells its products to business customers and distributors. The Company performs ongoing credit evaluations of its customers' financial condition and generally does not require collateral from its customers. At March 31, 2017 and 2016, no customer accounted for more than 10% of accounts receivable. The Company purchases all of its hardware products from suppliers that manufacturer the hardware directly. The inability of any supplier to fulfill supply requirements of the Company could materially impact future operating results, financial position or cash flows. The Company also relies primarily on third-party network service providers to provide telephone numbers and PSTN call termination and origination services for its customers. If these service providers failed to perform their obligations to the Company, such failure could materially impact future operating results, financial position and cash flows. |
Fair Values of Financial Instruments | FAIR VALUE OF FINANCIAL INSTRUMENTS The Company defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal market or the most advantageous market in which it would transact. The accounting guidance for fair value measurement requires the Company to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Observable inputs are inputs that reflect the assumptions market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company's assumptions about the factors that market participants would use in valuing the asset or liability developed based on the best information available in the circumstances. The standard establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value by requiring that the most observable inputs be used when available. A financial instrument's categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is as follows: Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly, such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets). Level 3 applies to assets or liabilities for which fair value is derived from valuation techniques in which one or more significant inputs are unobservable, including the Company's own assumptions. The estimated fair value of financial instruments is determined by the Company using available market information and valuation methodologies considered to be appropriate. The carrying amounts of the Company's cash and cash equivalents, accounts receivable and accounts payable approximate their fair values due to their short maturities. The Company's investments are carried at fair value. |
Accounting for Stock-Based Compensation | ACCOUNTING FOR STOCK-BASED COMPENSATION The Company accounts for its employee stock options, stock purchase rights, restricted stock units and restricted performance stock units granted under the 2006 Stock Plan, the 2003 Contactual Plan, the 2012 Equity Incentive Plan, the 2013 New Employee Inducement Incentive Plan and stock purchase rights under the 1996 Employee Stock Purchase Plan (collectively "Equity Compensation Plans") under the provisions of ASC 718 - Stock Compensation To value option grants under the Equity Compensation Plans for stock-based compensation the Company used the Black-Scholes option valuation model. Fair value determined using the Black-Scholes option valuation model varies based on assumptions used for the expected stock prices volatility, expected life, risk-free interest rates and future dividend payments. The Company used the historical volatility of its stock over a period equal to the expected life of the options. The expected life assumptions represent the weighted-average period stock-based awards are expecting to remain outstanding. These expected life assumptions were established through the review of historical exercise behavior of stock-based award grants with similar vesting periods. The risk-free interest rates were based on the closing market bid yields of actively traded U.S. treasury securities in the over-the-counter market for the expected term equal to the expected term of the option. The dividend yield assumption is based on the Company's history and expectation of future dividend payout. Compensation expense for stock-based payment awards is recognized using the straight-line single-option method and includes the impact of estimated forfeitures. The Company issued restricted performance stock units (PSUs) to a group of executives with vesting that is contingent on both market performance and continued service during the fiscal year ended March 31, 2017: These PSUs vest (1) 50% on September 22, 2018 and (2) 50% on September 27, 2019, in each case subject to the performance of the Company's common stock relative to the Russell 2000 Index (the benchmark) during the period from grant date through such vesting date. A 2x multiplier will be applied to the total shareholder returns (TSR) for each 1% of positive or negative relative TSR, and the number of shares earned will increase or decrease by 2% of the target numbers. In the event the Company's common stock performance is below negative 30%, relative to the benchmark, no shares will be issued. The Company issued PSUs to a group of executives with vesting that is contingent on both market performance and continued service during the fiscal year ended March 31, 2016: These PSUs vest (1) 50% on September 22, 2017 and (2) 50% on September 27, 2018, in each case subject to performance of the Company's common stock relative to the Russell 2000 Index during the period from grant date through such vesting date. A 2x multiplier will be applied to the (TSR) for each 1% of positive or negative relative TSR, and the number of shares earned will increase or decrease by 2% of the target numbers. In the event 8x8's common stock performance is below negative 30%, relative to the benchmark, no shares will be issued. The Company issued PSUs to a group of executives with vesting that is contingent on both market performance and continued service. For the market-based restricted performance stock units issued during the fiscal year ended March 31, 2015: the number of shares of the Company's stock to be received at vesting if applicable service requirements are also met will range from 0% to 100% of the target amount based total shareholder return ("TSR"), which compares the performance of the price per share of the Company's common stock with the NASDAQ Composite Index ("Index") for the three performance periods ending March 31, 2016, March 31, 2017 and March 31, 2018, for the fiscal year ended March 31, 2015; and for the three performance periods ending March 31, 2015, March 31, 2016 and March 31, 2017 for the fiscal year ended March 31, 2014, in the following manner: where in each such measurement period, (1) if the performance return on the price per share of the Company's common stock exceeds the performance return on the NASDAQ Composite Index, (which shall be determined by subtracting the percentage return on the NASDAQ Composite Index from the percentage return on the price per share of the Common Stock), then all of the TSR Performance Shares for such measurement period will be deemed earned and will vest; (2) if the performance return on the price per share of Common Stock is more than 50% lower than the performance return on the NASDAQ Composite Index, then none of the TSR Performance Shares for such measurement period will be deemed earned and will vest; and (3) if the performance return on the price per share of Common Stock is between 0% and 50% lower than the performance return on the NASDAQ Composite Index, then the number of TSR Performance Shares deemed earned and vesting for such measurement period will be reduced by 2% for each 1% by which the performance return on the NASDAQ Composite Index exceeds the performance return on the Common Stock, (4) if the performance return on the price per share of Common Stock is between 0% and 50% higher than the performance return on the NASDAQ Composite Index, then the number of TSR Performance Shares deemed earned and vesting for such measurement period will increase by 2% for each 1% by which the performance return on the Common Stock exceeds the performance return on the NASDAQ Composite Index, and the number of shares of the Company's stock to be received at vesting will range from 0% or 100% of the target amount based on four tranches, with each tranche vesting at the later of (a) the satisfaction of the applicable service-based vesting requirement for that tranche, and (b) on the first date that the average stock price of the Company's common stock for a consecutive 30 trading day period exceeds 150% of the grant date stock price. The minimum service vesting requirement for each tranche is as follows: Tranche 1: One year following the date of the grant Tranche 2: Two years following the date of the grant Tranche 3: Three years following the date of the grant Tranche 4: Four years following the date of the grant Market-based restricted performance stock units are valued using a Monte Carlo simulation model on the date of grant. Fair value determined using the Monte Carlo simulation model varies based on the assumptions used for the expected stock price volatility, the correlation coefficient between the Company and the NASDAQ Composite Index, risk-free interest rates, and future dividend payments. |
Comprehensive Income (Loss) | COMPREHENSIVE (LOSS) INCOME Comprehensive (loss) income, as defined, includes all changes in equity (net assets) during a period from non-owner sources. The difference between net income (loss) and comprehensive (loss) income is due to foreign currency translation adjustments and unrealized gains or losses on investments classified as available-for-sale. |
Net Income (Loss) Per Share | NET INCOME (LOSS) PER SHARE Basic net income (loss) per share is computed by dividing net income (loss) available to common stockholders (numerator) by the weighted average number of vested, unrestricted common shares outstanding during the period (denominator). Diluted net income per share is computed on the basis of the weighted average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method. Dilutive potential common shares include outstanding stock options and employee restricted purchase rights. |
Deferred Rent | DEFERRED RENT In April 2012, the Company entered into an 87-month lease agreement for its new headquarters. Under the terms of the lease agreement: the Company received a three-month rent holiday from rental payments; base rent is $130,821 for the 15 months after the rent holiday; and rent expense increases 3% each year thereafter. In the second quarter of fiscal 2013, the Company received a $1.7 million allowance for reimbursement for the cost of tenant improvements that the Company included in cash flows from operating activities. In accordance with the guidance in ASC 840-20, Leases Rent Holidays. Rent Escalations. Tenant Improvement Allowance In January 2016, the Company entered into a 48-month lease for additional office space near the Company's US headquarters. In April 2016, the lease was amended for actual move in date. Base rent begins at $105,628 and increases 3% each year thereafter. Future minimum annual lease payments under this lease is included in "Leases" in Note 8. At March 31, 2017, total deferred rent included in other accrued liabilities and non-current liabilities was $1.1 million and $0.8 million, respectively. At March 31, 2016, total deferred rent included in other accrued liabilities and non-current liabilities was $0.3 million and $1.0 million, respectively. |
Recently Adopted Accounting Pronouncements | RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS In August 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-15 , Presentation of Financial Statements: Going Concern (Subtopic 205-40) In April 2015, the FASB issued ASU No. 2015-05, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer's Accounting for Fees Paid in a Cloud Computing Arrangement. In November 2015, the FASB issued ASU No. 2015-17, Income Taxes - Balance Sheet Classification of Deferred Taxes (Topic 740) |
Recent Accounting Pronouncements | RECENT ACCOUNTING PRONOUNCEMENTS In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers The Company is in the initial stages of the assessment of the impact of the new standard on the Company's accounting policies, processes and system requirements. The Company has assigned internal resources and engaged third-party service providers to assist with the assessment and implementation. The Company currently believes the most significant impact relates to the allocation of consideration in a contract between product and service performance obligations. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments In August 2016, the FASB issued ASU No. 2016-15 , Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments In October 2016, the FASB has issued ASU No. 2016-16 , Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory In November 2016, the FASB has issued ASU No. 2016-18 , Statement of Cash Flows (Topic 230) In January 2017, the FASB has issued ASU No. 2017-01 , Business Combinations (Topic 805): Clarifying the Definition of a Business In January 2017, the FASB has issued ASU No. 2017-04, Intangibles and Other (Topic 350): Simplifying the Test for Goodwill Impairment In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting |
Indemnifications | Indemnifications In the normal course of business, the Company may agree to indemnify other parties, including customers, lessors and parties to other transactions with the Company, with respect to certain matters such as breaches of representations or covenants or intellectual property infringement or other claims made by third parties. These agreements may limit the time within which an indemnification claim can be made and the amount of the claim. In addition, the Company has entered into indemnification agreements with its officers and directors. It is not possible to determine the maximum potential amount of the Company's exposure under these indemnification agreements due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular agreement. Historically, payments made by the Company under these agreements have not had a material impact on the Company's operating results, financial position or cash flows. Under some of these agreements, however, the Company's potential indemnification liability might not have a contractual limit. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Mar. 31, 2017 | |
Fair Value Measurements Tables | |
Fair Value Measurements, Recurring and Nonrecurring (Tables) | Cash, cash equivalents, available-for-sale investments, and contingent consideration were (in thousands): Gross Gross Cash and Amortized Unrealized Unrealized Estimated Cash Short-Term As of March 31, 2017 Costs Gain Loss Fair Value Equivalents Investments Cash $ 29,122 $ - $ - $ 29,122 $ 29,122 $ - Level 1: Money market funds 11,908 - - 11,908 11,908 - Mutual funds 2,000 - (194) 1,806 - 1,806 Subtotal 43,030 - (194) 42,836 41,030 1,806 Level 2: Commercial paper 19,144 8 - 19,152 - 19,152 Corporate debt 83,995 61 (58) 83,998 - 83,998 Asset backed securities 26,906 4 (22) 26,888 - 26,888 Mortgage backed securities 116 - (1) 115 - 115 Agency bond 2,000 - - 2,000 - 2,000 Subtotal 132,161 73 (81) 132,153 - 132,153 Total assets $ 175,191 $ 73 $ (275) $ 174,989 $ 41,030 $ 133,959 Level 3: Contingent consideration $ - $ - $ - $ 148 $ - $ - Total liabilities $ - $ - $ - $ 148 $ - $ - Gross Gross Cash and Amortized Unrealized Unrealized Estimated Cash Short-Term As of March 31, 2016 Costs Gain Loss Fair Value Equivalents Investments Cash $ 18,596 $ - $ - $ 18,596 $ 18,596 $ - Level 1: Money market funds 14,980 - - 14,980 14,980 - Mutual funds 2,000 - (187) 1,813 - 1,813 Subtotal 35,576 - (187) 35,389 33,576 1,813 Level 2: Commercial paper 6,794 2 - 6,796 - 6,796 Corporate debt 85,164 78 (28) 85,214 - 85,214 Municipal securities 1,007 - (1) 1,006 - 1,006 Asset backed securities 24,614 7 (11) 24,610 - 24,610 Mortgage backed securities 2,045 - (17) 2,028 - 2,028 Agency bond 6,805 1 - 6,806 - 6,806 International government securities 1,000 1 - 1,001 - 1,001 Subtotal 127,429 89 (57) 127,461 - 127,461 Total assets $ 163,005 $ 89 $ (244) $ 162,850 $ 33,576 $ 129,274 Level 3: Contingent consideration $ - $ - $ - $ 341 $ - $ - Total liabilities $ - $ - $ - $ 341 $ - $ - Contractual maturities of investments as of March 31, 2017 are set forth below (in thousands): Estimated Fair Value Due within one year $ 78,039 Due after one year 55,920 Total $ 133,959 |
Rollforward of contingent consideration liabilities (Tables) | The table below presents a roll-forward of the contingent consideration and escrow liability valued using a Level 3 input (in thousands): Years Ended March 31, 2017 2016 Balance at beginning of period $ 341 $ - Purchase price contingent consideration - 541 Fair value adjustment 107 - Contingent consideration payments (300) (200) Balance at end of period $ 148 $ 341 |
Inventory (Tables)
Inventory (Tables) | 12 Months Ended |
Mar. 31, 2017 | |
Inventory Tables | |
Inventory (Tables) | Components of inventories were as follows (in thousands): March 31, 2017 2016 Work-in-process $ - $ 76 Finished goods 908 444 $ 908 $ 520 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Mar. 31, 2017 | |
Property And Equipment Tables | |
Components of Property, Plant and Equipment | Property and equipment consisted of the following (in thousands): March 31, 2017 2016 Computer equipment $ 24,293 $ 18,277 Furniture and fixtures 1,411 1,067 Software 7,380 5,417 Leasehold improvements 5,579 3,667 Construction in progress 689 967 39,352 29,395 Less: accumulated depreciation and amortization (22,968) (17,020) $ 16,384 $ 12,375 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Mar. 31, 2017 | |
Intangible Assets Tables | |
Carrying values of intangible assets | The carrying value of intangible assets consisted of the following (in thousands): March 31, 2017 March 31, 2016 Gross Gross Carrying Accumulated Net Carrying Carrying Accumulated Net Carrying Amount Amortization Amount Amount Amortization Amount Technology $ 18,685 $ (7,010) $ 11,675 $ 18,640 $ (4,622) $ 14,018 Customer relationships 9,419 (6,187) 3,232 9,993 (4,847) 5,146 Trade names/domains 2,036 - 2,036 2,205 - 2,205 In-process research and development 95 - 95 95 - 95 Total acquired identifiable intangible assets $ 30,235 $ (13,197) $ 17,038 $ 30,933 $ (9,469) $ 21,464 |
Finite-lived intangible assets - future amortization expense | At March 31, 2017, annual amortization of definite lived intangible assets, based upon existing intangible assets and current useful lives, is estimated to be the following (in thousands): Amount 2018 $ 3,854 2019 3,459 2020 3,009 2021 2,666 2022 1,701 Thereafter 218 Total $ 14,907 |
Capitalized Software Costs (Tab
Capitalized Software Costs (Tables) | 12 Months Ended |
Mar. 31, 2017 | |
Capitalized Software Costs Tables | |
Schedule of Capitalized Software | Capitalized software consisted of the following (in thousands): Other Long-Term Assets March 31, 2017 2016 Capitalized projects in service $ 1,804 $ - Capitalized projects in process 6,461 2,753 Accumulated amortization (588) - Total capitalized software costs $ 7,677 $ 2,753 Application development stage costs capitalized during the year $ 5,516 $ 2,095 Capitalized software consisted of the following (in thousands): Property and Equipment March 31, 2017 2016 Capitalized projects in service $ 2,904 $ 1,183 Capitalized projects in process 689 967 Accumulated amortization (871) (250) Total capitalized software costs $ 2,722 $ 1,900 Application development stage costs capitalized during the year $ 1,452 $ 756 |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Mar. 31, 2017 | |
Goodwill Tables | |
Carrying amounts of goodwill | The following table provides a summary of the changes in the carrying amounts of goodwill by reporting segment (in thousands): Americas Europe Total Balance at March 31, 2015 $ 23,940 $ 12,947 $ 36,887 Additions due to acquisitions 1,789 10,125 11,914 Foreign currency translation - (1,381) (1,381) Balance at March 31, 2016 25,729 21,691 47,420 Additions due to acquisitions 1,580 - 1,580 Foreign currency translation - (2,864) (2,864) Balance at March 31, 2017 $ 27,309 $ 18,827 $ 46,136 |
Commitments And Contingencies (
Commitments And Contingencies (Tables) | 12 Months Ended |
Mar. 31, 2017 | |
Commitments And Contingencies Tables | |
Future minimum annual operating lease payments | At March 31, 2017, future minimum annual lease payments under non-cancelable operating leases were as follows (in thousands): Year ending March 31: 2018 $ 4,708 2019 5,596 2020 4,906 2021 2,435 2022 and Thereafter 6,908 Total $ 24,553 |
Future annual lease payments under noncancelable capital leases | At March 31, 2017, future minimum annual lease payments under non-cancelable capital leases were as follows (in thousands): Year ending March 31: 2018 $ 981 2019 681 2020 169 2021 5 2022 5 Total minimum payments 1,841 Less: Amount representing interest (116) 1,725 Less: Short-term portion of capital lease obligations (918) Long-term portion of capital lease obligations $ 807 |
Minimum third party network service provider commitments | At March 31, 2017, future minimum annual payments under these third-party network service contracts were as follows (in thousands): Year ending March 31: 2018 $ 1,364 2019 133 2020 8 Total minimum payments $ 1,505 |
Distribution of Stock-Based Com
Distribution of Stock-Based Compensation Plan Expense (Tables) | 12 Months Ended |
Mar. 31, 2017 | |
Distribution Of Stock-based Compensation Plan Expense Tables | |
Schedule Of Stock-Based Compensation Expense By Statement Of Operations Line Item | The following table summarizes stock-based compensation expense (in thousands): Years Ended March 31, 2017 2016 2015 Cost of service revenue $ 1,732 $ 1,159 $ 692 Cost of product revenue - - - Research and development 3,762 2,914 1,495 Sales and marketing 8,832 6,133 3,748 General and administrative 7,136 6,128 3,412 Total $ 21,462 $ 16,334 $ 9,347 |
Stock-Based Compensation And Em
Stock-Based Compensation And Employee Purchase Plan (Tables) | 12 Months Ended |
Mar. 31, 2017 | |
Employee Stock Purchase Plan | |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The estimated fair value of stock purchase rights granted under the Employee Stock Purchase Plan was estimated using the Black-Scholes pricing model with the following weighted-average assumptions: Years Ended March 31, 2017 2016 2015 Expected volatility 37% 43% 49% Expected dividend yield - - - Risk-free interest rate 0.65% 0.39% 0.12% Weighted average expected rights term 0.75 years 0.83 years 0.80 years Weighted average fair value of rights granted $ 4.19 $ 3.25 $ 2.52 |
Option Grants | |
Disclosure Of Share-Based Compensation Arrangements By Share-Based Payment Award | Stock Option activity under all the Company's stock option plans since March 31, 2014, is summarized as follows: Weighted Average Exercise Number of Price Shares Per Share Outstanding at March 31, 2014 6,002,382 $ 4.14 Granted 1,110,466 7.29 Exercised (1,326,385) 1.87 Canceled/Forfeited (458,556) 6.06 Outstanding at March 31, 2015 5,327,907 5.19 Granted 723,776 8.63 Exercised (1,162,175) 2.56 Canceled/Forfeited (96,242) 8.06 Outstanding at March 31, 2016 4,793,266 6.29 Granted 407,392 14.63 Exercised (603,998) 2.34 Canceled/Forfeited (134,248) 8.41 Outstanding at March 31, 2017 4,462,412 $ 7.52 Vested and expected to vest at March 31, 2017 4,462,412 $ 7.52 Exercisable at March 31, 2017 3,191,879 $ 6.47 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The fair value of each of the Company's option grants has been estimated on the date of grant using the Black-Scholes pricing model with the following assumptions: Years Ended March 31, 2017 2016 2015 Expected volatility 44% 53% 61% Expected dividend yield - - - Risk-free interest rate 1.1% to 2.2% 1.5% to 1.8% 1.4% to 1.9% Weighted average expected option term 4.9 years 5.4 years 6.0 years Weighted average fair value of options granted $ 5.74 $ 4.17 $ 4.14 |
Stock Purchase Rights | |
Disclosure Of Share-Based Compensation Arrangements By Share-Based Payment Award | Stock Purchase Right activity since March 31, 2014 is summarized as follows: Weighted Weighted Average Average Grant-Date Remaining Number of Fair Market Contractual Shares Value Term (in Years) Balance at March 31, 2014 489,627 $ 4.83 1.93 Granted 31,432 7.88 Vested (223,360) 3.98 Forfeited (73,864) 5.39 Balance at March 31, 2015 223,835 5.92 1.50 Granted - - Vested (115,789) 5.32 Forfeited (25,875) 7.40 Balance at March 31, 2016 82,171 6.30 0.76 Granted - - Vested (69,426) 6.00 Forfeited (1,375) 6.72 Balance at March 31, 2017 11,370 $ 8.10 1.09 |
Restricted Stock Units | |
Disclosure Of Share-Based Compensation Arrangements By Share-Based Payment Award | Restricted Stock Unit activity since March 31, 2014 is summarized as follows: Weighted Weighted Average Number of Average Grant Remaining Contractual Shares Date Fair Value Term (in Years) Balance at March 31, 2014 1,134,856 $ 9.00 2.00 Granted 1,965,786 6.68 Vested (187,788) 9.54 Forfeited (214,168) 8.30 Balance at March 31, 2015 2,698,686 7.33 1.88 Granted 2,681,997 8.78 Vested (589,788) 7.79 Forfeited (246,096) 8.15 Balance at March 31, 2016 4,544,799 8.08 1.67 Granted 2,491,877 15.15 Vested (1,600,831) 7.89 Forfeited (496,795) 9.56 Balance at March 31, 2017 4,939,050 $ 11.57 2.47 |
Stock Options Outstanding And E
Stock Options Outstanding And Exercisable (Tables) | 12 Months Ended |
Mar. 31, 2017 | |
Stock Options Outstanding And Exercisable Tables | |
Summary Of Outstanding And Exercisable Stock Options | Significant option groups outstanding at March 31, 2017 and related weighted average exercise price, contractual life, and aggregate intrinsic value information for 8x8, Inc.'s stock option plans are as follows: Options Outstanding Options Exercisable Weighted Weighted Weighted Average Average Average Exercise Remaining Aggregate Exercise Aggregate Price Contractual Intrinsic Price Intrinsic Shares Per Share Life (Years) Value Shares Per Share Value $ 0.55 to $ 4.60 912,189 $ 1.91 2.0 $ 12,168,894 912,189 $ 1.91 $ 12,168,894 $ 5.87 to $ 6.86 1,139,300 $ 6.48 6.7 9,996,307 863,274 $ 6.35 7,680,449 $ 7.52 to $ 9.21 920,268 $ 8.43 7.4 6,277,429 503,564 $ 8.47 3,414,760 $ 9.35 to $ 10.50 904,935 $ 9.73 6.6 4,998,813 758,640 $ 9.71 4,206,928 $ 10.86 to $ 15.40 585,720 $ 13.48 8.8 1,043,018 154,212 $ 11.68 551,242 4,462,412 $ 34,484,461 3,191,879 $ 28,022,273 |
Stock Repurchases (Tables)
Stock Repurchases (Tables) | 12 Months Ended |
Mar. 31, 2017 | |
Stock Repurchases Tables | |
Stock Repurchases [Table Text Block] | The stock repurchase activity as of March 31, 2017 is summarized as follows: Weighted Average Shares Price Amount Repurchased Per Share Repurchased (1) Balance as of March 31, 2015 2,488,215 7.38 $ 19,200,393 Repurchase of common stock under 2015 Repurchase Plan 1,392,135 8.02 11,164,329 Balance as of March 31, 2016 3,880,350 $ $ 30,364,722 Repurchase of common stock under 2015 Repurchase Plan - - Balance as of March 31, 2017 3,880,350 $ $ 30,364,722 (1) Amount excludes commission fees. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Mar. 31, 2017 | |
Income Taxes Tables | |
Components of tax provision | The components of the consolidated (benefit) provision for income taxes for fiscal 2017, 2016 and 2015 consisted of the following (in thousands): March 31, Current: 2017 2016 2015 Federal $ (7) $ 97 $ 92 State 588 551 457 Foreign 112 71 1 Total current tax provision 693 719 550 Deferred: Federal 1,506 95 2,602 State (1,095) (854) (363) Foreign (1,230) (807) - Total deferred tax (benefit) provision (819) (1,566) 2,239 Income tax (benefit) provision $ (126) $ (847) $ 2,789 |
Schedule of tax effects of temporary differences that give rise to deferred tax assets and liabilities | Deferred tax assets and (liabilities) were comprised of the following (in thousands): March 31, Current deferred tax assets 2017 2016 Net operating loss carryforwards $ - $ 2,739 Inventory valuation - 14 Reserves and allowances - 2,740 Net current deferred tax assets - 5,493 Net operating loss carryforwards 36,427 38,449 Research and development and other credit carryforwards 8,614 7,106 Stock-based compensation 6,942 5,577 Reserves and allowances 3,266 - Fixed assets and intangibles (3,688) (6,160) Net non-current deferred tax assets 51,561 44,972 Valuation allowance (2,934) (3,760) Total $ 48,627 $ 46,705 |
Reconciliation of U.S. statutory income tax rate to company's effective tax rate | A reconciliation of the Company's provision (benefit) for income taxes to the amounts computed using the statutory U.S. federal income tax rate of 34% is as follows (in thousands): Years Ended March 31, 2017 2016 2015 Tax provision at statutory rate $ (1,652) $ (2,029) $ 1,599 State income taxes before valuation allowance, net of federal effect 108 9 269 Foreign tax rate differential 885 (769) - Research and development credits (1,484) (1,253) (725) Change in valuation allowance (287) (1,555) (1,480) Compensation/option differences (246) (471) (331) Non-deductible compensation 1,079 944 746 Acquisition costs 54 230 - Expiring CA NOLs - 1,626 1,484 Foreign loss not benefited 780 2,342 1,192 Other 637 79 35 Total income tax provision $ (126) $ (847) $ 2,789 |
Reconciliation of beginning and ending amount of unrecognized tax benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands): Unrecognized Tax Benefits 2017 2016 2015 Balance at beginning of year $ 2,881 $ 2,420 $ 2,165 Gross increase - tax positions in prior period - 82 27 Gross decreases - tax positions in prior period - - - Gross increases - tax positions related to the current year 450 379 228 Balance at end of year $ 3,331 $ 2,881 $ 2,420 |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 12 Months Ended |
Mar. 31, 2017 | |
Net Income Per Share Tables | |
Net Income Per Share | The following is a reconciliation of the weighted average number of common shares outstanding used in calculating basic and diluted net income (loss) per share (in thousands, except share and per share data): Years Ended March 31, 2017 2016 2015 (In Thousands, Except Per Share Amounts) Numerator: Net income (loss) available to common stockholders $ (4,751) $ (5,120) $ 1,926 Denominator: Common shares 90,340 88,477 89,071 Denominator for basic calculation 90,340 88,477 89,071 Employee stock options - - 2,088 Employee restricted purchase rights - - 493 Denominator for diluted calculation 90,340 88,477 91,652 Net income (loss) per share: Basic $ (0.05) $ (0.06) $ 0.02 Diluted $ (0.05) $ (0.06) $ 0.02 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following shares attributable to outstanding stock options and restricted stock purchase rights were excluded from the calculation of diluted earnings per share because their inclusion would have been antidilutive (in thousands): Years Ended March 31, 2017 2016 2015 Common stock options 4,462 4,793 1,812 Stock purchase rights 4,950 4,628 57 9,412 9,421 1,869 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Mar. 31, 2017 | |
Segment Information Tables | |
Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas | The following tables set forth the segment and geographic information for each period (in thousands): Total Revenue for the Years Ended March 31, 2017 2016 2015 Americas (principally US) $ 227,914 $ 185,241 $ 150,764 Europe (principally UK) 25,474 24,095 11,649 $ 253,388 $ 209,336 $ 162,413 Total Depreciation and Amortization for the Years Ended March 31, 2017 2016 2015 Americas (principally US) $ 6,842 $ 5,776 $ 4,739 Europe (principally UK) 3,595 3,231 1,374 $ 10,437 $ 9,007 $ 6,113 Total Net Income (Loss) for the Years Ended March 31, 2017 2016 2015 Americas (principally US) $ 2,557 $ 940 $ 5,433 Europe (principally UK) (7,308) (6,060) (3,507) $ (4,751) $ (5,120) $ 1,926 March 31, 2017 2016 Total Assets Property and Equipment, net Total Assets Property and Equipment, net Americas (principally US) $ 284,011 $ 11,803 $ 261,886 $ 9,733 Europe (principally UK) 49,844 4,581 51,566 2,642 $ 333,855 $ 16,384 $ 313,452 $ 12,375 |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Mar. 31, 2017 | |
LeChat | |
Schedule of Purchase Price Allocation | The fair values of the assets acquired and liabilities assumed are as follows (in thousands): Fair Value Assets acquired: Cash $ 231 Intangible assets 1,200 Other non-current assets 428 Total assets acquired 1,859 Liabilities assumed: Current liabilities (324) Total liabilities assumed (324) Net identifiable assets acquired 1,535 Goodwill 1,580 Total consideration transferred $ 3,115 |
DXI | |
Schedule of Purchase Price Allocation | The fair values of the assets acquired and liabilities assumed are as follows (in thousands): Fair Value Assets acquired: Cash $ 1,318 Current assets 2,016 Property and equipment 1,453 Intangible assets 13,374 Total assets acquired 18,161 Liabilities assumed: Current liabilities and non-current liabilities (5,734) Total liabilities assumed (5,734) Net identifiable assets acquired 12,427 Goodwill 10,125 Total consideration transferred $ 22,552 |
QSC | |
Schedule of Purchase Price Allocation | The fair values of the assets acquired and liabilities assumed are as follows (in thousands): Fair Value Assets acquired: Intangible assets $ 1,100 Goodwill 1,789 Total consideration transferred $ 2,889 |
Quarterly Financial Data (Unaud
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Mar. 31, 2017 | |
Consolidated Quarterly Financial Data | |
Quarterly Financial Data (Unaudited) | In thousands, except per share data amounts: QUARTER ENDED March 31, Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Sept. 30, June 30, 2017 2016 2016 2016 2016 2015 2015 2015 Service revenue $ 62,654 $ 60,149 $ 57,717 $ 55,296 $ 52,174 $ 48,948 $ 46,951 $ 44,168 Product revenue 3,834 3,527 5,466 4,745 5,160 4,220 3,991 3,724 Total revenue 66,488 63,676 63,183 60,041 57,334 53,168 50,942 47,892 Operating expenses: Cost of service revenue 10,803 10,525 10,837 10,235 9,720 9,713 9,186 8,459 Cost of product revenue 4,187 4,240 5,782 5,505 6,103 5,087 4,596 4,382 Research and development 7,142 7,095 6,505 6,710 6,110 6,404 6,446 5,080 Sales and marketing 38,228 35,667 33,691 31,691 31,240 27,585 26,730 23,824 General, and administrative 9,814 7,852 6,747 6,801 7,132 6,888 5,657 6,068 Total operating expenses 70,174 65,379 63,562 60,942 60,305 55,677 52,615 47,813 Income (loss) from operations (3,686) (1,703) (379) (901) (2,971) (2,509) (1,673) 79 Other income, net 583 408 391 410 397 272 204 234 Income (loss) from operations before provision (benefit) for income taxes (3,103) (1,295) 12 (491) (2,574) (2,237) (1,469) 313 Provision (benefit) for income taxes (178) 30 (15) 37 (1,498) (557) 423 785 Net income (loss) $ (2,925) $ (1,325) $ 27 $ (528) $ (1,076) $ (1,680) $ (1,892) $ (472) Net income (loss) per share: Basic $ (0.03) $ (0.01) $ 0.00 $ (0.01) $ (0.01) $ (0.02) $ (0.02) $ (0.01) Diluted $ (0.03) $ (0.01) $ 0.00 $ (0.01) $ (0.01) $ (0.02) $ (0.02) $ (0.01) Shares used in per share calculations: Basic 91,175 90,774 89,987 89,434 88,888 88,289 88,557 88,233 Diluted 91,175 90,774 93,447 89,434 88,888 88,289 88,557 88,233 |
Valuation and Qualifying Accoun
Valuation and Qualifying Accounts (Tables) | 12 Months Ended |
Mar. 31, 2017 | |
Valuation And Qualifying Accounts Tables | |
Schedule of Valuation Allowance for Impairment of Recognized Servicing Assets [Table Text Block] | SCHEDULE II Balance at Additions Balance Beginning Charged to at End Description of Year Expenses Deductions (a) of Year Total Allowance for Doubtful Accounts: Year ended March 31, 2015: $ 466 $ 279 $ (329) $ 416 Year ended March 31, 2016: $ 416 $ 509 $ (339) $ 586 Year ended March 31, 2017: $ 586 $ 941 $ (573) $ 954 (a) The deductions related to allowance for doubtful accounts represent accounts receivable which are written off. |
Description of the Business (Na
Description of the Business (Narrative) (Details) | 12 Months Ended |
Mar. 31, 2017 | |
Description Of Business Narrative Details | |
Year Founded | 1,987 |
Entity Incorporation, Date of Incorporation | Dec. 31, 1996 |
Entity Incorporation, State Country Name | Delaware |
Fiscal Year End Date | --03-31 |
Significant Accounting Policies
Significant Accounting Policies Service and Product Revenue (Narrative) (Details) | Mar. 31, 2017 |
Significant Accounting Policies Service And Product Revenue Narrative Details | |
Trial period offered with all new services, days | 30 |
Significant Accounting Polici46
Significant Accounting Policies (Advertising Costs) (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2015 | |
Significant Accounting Policies Advertising Costs Narrative Details | |||
Advertising expense | $ 9.5 | $ 8.5 | $ 6.8 |
Significant Accounting Polici47
Significant Accounting Policies (Deferred Rent) (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Deferred rent recorded in other accrued liabilities | $ 1.1 | $ 0.3 |
Deferred rent recorded in other non-current liabilities | $ 0.8 | $ 1 |
Headquarters | ||
Lease agreement terms | In April 2012, the Company entered into an 87-month lease agreement for its new headquarters. Under the terms of the lease agreement: the Company received a three-month rent holiday from rental payments; base rent is $130,821 for the 15 months after the rent holiday; and rent expense increases 3% each year thereafter. In the second quarter of fiscal 2013, the Company received a $1.7 million allowance for reimbursement for the cost of tenant improvements that the Company included in cash flows from operating activities. In accordance with the guidance in ASC 840-20, Leases Rent Holidays. Rent Escalations. Tenant Improvement Allowance | |
Term of contract | 7 years 3 months | |
Tenant improvement allowance | $ 1.7 | |
Near Headquarters | ||
Lease agreement terms | In January 2016, the Company entered into a 48-month lease for additional office space near the Company's US headquarters. In April 2016, the lease was amended for actual move in date. Base rent begins at $105,628 and increases 3% each year thereafter. Future minimum annual lease payments under this lease is included in "Leases" in Note 8. | |
Term of contract | 4 years |
Cash, Cash Equivalents and Inve
Cash, Cash Equivalents and Investments with Hierarchy (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2014 |
Amortized Costs | $ 175,191 | $ 163,005 | ||
Gross Unrealized Gains | 73 | 89 | ||
Gross Unrealized Loss | (275) | (244) | ||
Estimated Fair Value | 174,989 | 162,850 | ||
Cash and cash equivalents | 41,030 | 33,576 | $ 53,110 | $ 59,159 |
Short-term marketable investments | 133,959 | 129,274 | ||
Liabilities, Fair Value Disclosure | 148 | 341 | $ 0 | |
Aavailable-for-sale investments due within one year | 78,039 | |||
Aavailable-for-sale investments due after one year | 55,920 | |||
Level 1 | ||||
Amortized Costs | 43,030 | 35,576 | ||
Gross Unrealized Gains | 0 | 0 | ||
Gross Unrealized Loss | (194) | (187) | ||
Estimated Fair Value | 42,836 | 35,389 | ||
Cash and cash equivalents | 41,030 | 33,576 | ||
Short-term marketable investments | 1,806 | 1,813 | ||
Level 2 | ||||
Amortized Costs | 132,161 | 127,429 | ||
Gross Unrealized Gains | 73 | 89 | ||
Gross Unrealized Loss | (81) | (57) | ||
Estimated Fair Value | 132,153 | 127,461 | ||
Cash and cash equivalents | 0 | 0 | ||
Short-term marketable investments | 132,153 | 127,461 | ||
Level 3 | ||||
Amortized Costs | 0 | 0 | ||
Gross Unrealized Gains | 0 | 0 | ||
Gross Unrealized Loss | 0 | 0 | ||
Estimated Fair Value | 148 | 341 | ||
Cash and cash equivalents | 0 | 0 | ||
Short-term marketable investments | 0 | 0 | ||
Liabilities, Fair Value Disclosure | 148 | 341 | ||
Cash | ||||
Amortized Costs | 29,122 | 18,596 | ||
Gross Unrealized Gains | 0 | 0 | ||
Gross Unrealized Loss | 0 | 0 | ||
Estimated Fair Value | 29,122 | 18,596 | ||
Cash and cash equivalents | 29,122 | 18,596 | ||
Short-term marketable investments | 0 | 0 | ||
Money Market Funds | Level 1 | ||||
Amortized Costs | 11,908 | 14,980 | ||
Gross Unrealized Gains | 0 | 0 | ||
Gross Unrealized Loss | 0 | 0 | ||
Estimated Fair Value | 11,908 | 14,980 | ||
Cash and cash equivalents | 11,908 | 14,980 | ||
Short-term marketable investments | 0 | 0 | ||
Mutual Funds | Level 1 | ||||
Amortized Costs | 2,000 | 2,000 | ||
Gross Unrealized Gains | 0 | 0 | ||
Gross Unrealized Loss | (194) | (187) | ||
Estimated Fair Value | 1,806 | 1,813 | ||
Cash and cash equivalents | 0 | 0 | ||
Short-term marketable investments | 1,806 | 1,813 | ||
Commercial Paper | Level 2 | ||||
Amortized Costs | 19,144 | 6,794 | ||
Gross Unrealized Gains | 8 | 2 | ||
Gross Unrealized Loss | 0 | 0 | ||
Estimated Fair Value | 19,152 | 6,796 | ||
Cash and cash equivalents | 0 | 0 | ||
Short-term marketable investments | 19,152 | 6,796 | ||
Corporate Debt | Level 2 | ||||
Amortized Costs | 83,995 | 85,164 | ||
Gross Unrealized Gains | 61 | 78 | ||
Gross Unrealized Loss | (58) | (28) | ||
Estimated Fair Value | 83,998 | 85,214 | ||
Cash and cash equivalents | 0 | 0 | ||
Short-term marketable investments | 83,998 | 85,214 | ||
Municipal Securities | Level 2 | ||||
Amortized Costs | 1,007 | |||
Gross Unrealized Gains | 0 | |||
Gross Unrealized Loss | (1) | |||
Estimated Fair Value | 1,006 | |||
Cash and cash equivalents | 0 | |||
Short-term marketable investments | 1,006 | |||
Asset-backed Securities | Level 2 | ||||
Amortized Costs | 26,906 | 24,614 | ||
Gross Unrealized Gains | 4 | 7 | ||
Gross Unrealized Loss | (22) | (11) | ||
Estimated Fair Value | 26,888 | 24,610 | ||
Cash and cash equivalents | 0 | 0 | ||
Short-term marketable investments | 26,888 | 24,610 | ||
Mortgage backed Securities | Level 2 | ||||
Amortized Costs | 116 | 2,045 | ||
Gross Unrealized Gains | 0 | 0 | ||
Gross Unrealized Loss | (1) | (17) | ||
Estimated Fair Value | 115 | 2,028 | ||
Cash and cash equivalents | 0 | 0 | ||
Short-term marketable investments | 115 | 2,028 | ||
Agency Bond | Level 2 | ||||
Amortized Costs | 2,000 | 6,805 | ||
Gross Unrealized Gains | 0 | 1 | ||
Gross Unrealized Loss | 0 | 0 | ||
Estimated Fair Value | 2,000 | 6,806 | ||
Cash and cash equivalents | 0 | 0 | ||
Short-term marketable investments | 2,000 | 6,806 | ||
International Government Securities | Level 2 | ||||
Amortized Costs | 1,000 | |||
Gross Unrealized Gains | 1 | |||
Gross Unrealized Loss | 0 | |||
Estimated Fair Value | 1,001 | |||
Cash and cash equivalents | 0 | |||
Short-term marketable investments | 1,001 | |||
Contingent Consideration | Level 3 | ||||
Amortized Costs | 0 | 0 | ||
Gross Unrealized Gains | 0 | 0 | ||
Gross Unrealized Loss | 0 | 0 | ||
Estimated Fair Value | 148 | 341 | ||
Cash and cash equivalents | 0 | 0 | ||
Short-term marketable investments | 0 | 0 | ||
Liabilities, Fair Value Disclosure | $ 148 | $ 341 |
Fair Value Measurements (Contin
Fair Value Measurements (Contingent Consideration Liability) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Contingent consideration liabilities [Roll Forward] | ||
Contingent considerations, beginning of period | $ 341 | $ 0 |
Purchase price contigent consideration | 0 | 541 |
Fair value adjustment | 107 | |
Contingent consideration payments | (300) | (200) |
Contingent consideration, end of period | $ 148 | $ 341 |
Inventory (Details)
Inventory (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Mar. 31, 2016 |
Inventory Details | ||
Work-in-process | $ 0 | $ 76 |
Finished goods | 908 | 444 |
Inventory, net | $ 908 | $ 520 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Mar. 31, 2016 |
Property And Equipment Details | ||
Computer equipment | $ 24,293 | $ 18,277 |
Furniture and fixtures | 1,411 | 1,067 |
Software | 7,380 | 5,417 |
Leasehold improvements | 5,579 | 3,667 |
Construction in progress | 689 | 967 |
Gross | 39,352 | 29,395 |
Less: accumulated depreciation and amortization | (22,968) | (17,020) |
Net | $ 16,384 | $ 12,375 |
Intangible Assets Schedule Of I
Intangible Assets Schedule Of Intangibles (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Mar. 31, 2016 |
Gross Carrying Amount | $ 30,235 | $ 30,933 |
Accumulated Amortization | (13,197) | (9,469) |
Net Carrying Amount | 17,038 | 21,464 |
Technology | ||
Gross Carrying Amount | 18,685 | 18,640 |
Accumulated Amortization | (7,010) | (4,622) |
Net Carrying Amount | 11,675 | 14,018 |
Customer relationships | ||
Gross Carrying Amount | 9,419 | 9,993 |
Accumulated Amortization | (6,187) | (4,847) |
Net Carrying Amount | 3,232 | 5,146 |
Trade names/domains | ||
Gross Carrying Amount | 2,036 | 2,205 |
Accumulated Amortization | 0 | 0 |
Net Carrying Amount | 2,036 | 2,205 |
In-process research and development | ||
Gross Carrying Amount | 95 | 95 |
Accumulated Amortization | 0 | 0 |
Net Carrying Amount | $ 95 | $ 95 |
Intangible Assets Schedule Of F
Intangible Assets Schedule Of Future Amortization Of Intangibles (Details) $ in Thousands | Mar. 31, 2017USD ($) |
Intangible Assets Schedule Of Future Amortization Of Intangibles Details | |
2,018 | $ 3,854 |
2,019 | 3,459 |
2,020 | 3,009 |
2,021 | 2,666 |
2,022 | 1,701 |
Thereafter | 218 |
Total | $ 14,907 |
Intangible Assets Impairmrent o
Intangible Assets Impairmrent of Long-Lived Assets (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Dec. 31, 2015 | Mar. 31, 2017 | |
Intangible Assets Impairmrent Of Long-lived Assets Narrative Details | ||
Impaired Intangible Asset, Description | The Company evaluated long-lived assets related to Zerigo including the technology, customer relationships, and trade name intangible assets for impairment. | During the year ended March 31, 2017, the Company decided to discontinue a certain customer segment of its United Kingdom based platform-as-a-service (DXI PaaS) that was acquired in fiscal 2016 as part of the DXI acquisition. The Company evaluated long-lived assets related to the DXI reporting unit including the technology, customer relationships, and trade name intangible assets for impairment and determined that the assets were not impaired. However, the Company recorded an impairment charge equal to the remaining value of the impaired DXI PaaS customer relationship in the third fiscal quarter. The impairment recorded during the fiscal year was immaterial to the consolidated statements of operations. Revenues and net income (loss) from DXI PaaS were not material for all periods presented. |
Impaired Intangible Asset, Facts and Circumstances Leading to Impairment | The Company determined it was appropriate to record an impairment charge equal to the remaining value of the impaired long-lived assets in the third fiscal quarter. | |
Impaired Intangible Asset, Segment Classification | During the year ended March 31, 2016, the Company decided to end-of-life its hosted virtual desktop service (Zerigo). | |
Impairment of Intangible Assets, Finite-lived | $ 0.6 | |
Impaired Intangible Asset, Income Statement Classification | The impairment recorded during the fiscal year was $0.6 million, of which $0.4 million and $0.2 million was recorded in cost of service and sales and marketing, respectively, in the consolidated statements of operations. |
Capitalized Software Costs by A
Capitalized Software Costs by Asset Classification (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Capitalized projects in service | $ 7,380 | $ 5,417 |
Software Development Costs - Other Long-Term Assets | ||
Capitalized projects in service | 1,804 | 0 |
Capitalized projects in process | 6,461 | 2,753 |
Accumulated amortization | (588) | 0 |
Total capitalized software costs | 7,677 | 2,753 |
Application development stage costs capitalized during the year | 5,516 | 2,095 |
Software and Software Development - Property and Equipment | ||
Capitalized projects in service | 2,904 | 1,183 |
Capitalized projects in process | 689 | 967 |
Accumulated amortization | (871) | (250) |
Total capitalized software costs | 2,722 | 1,900 |
Application development stage costs capitalized during the year | $ 1,452 | $ 756 |
Changes in Carrying Amount of G
Changes in Carrying Amount of Goodwill by Location (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Goodwill, beginning balance | $ 47,420 | $ 36,887 |
Additions due to acquisitions | 1,580 | 11,914 |
Foreign currency translation | (2,864) | (1,381) |
Goodwill, ending balance | 46,136 | 47,420 |
Americas | ||
Goodwill, beginning balance | 25,729 | 23,940 |
Additions due to acquisitions | 1,580 | 1,789 |
Foreign currency translation | 0 | 0 |
Goodwill, ending balance | 27,309 | 25,729 |
Europe | ||
Goodwill, beginning balance | 21,691 | 12,947 |
Additions due to acquisitions | 0 | 10,125 |
Foreign currency translation | (2,864) | (1,381) |
Goodwill, ending balance | $ 18,827 | $ 21,691 |
Commitments and Contingencies57
Commitments and Contingencies (Operating Leases) (Details) $ in Thousands | Mar. 31, 2017USD ($) |
Year ending March 31: | |
2,018 | $ 4,708 |
2,019 | 5,596 |
2,020 | 4,906 |
2,021 | 2,435 |
2022 and Thereafter | 6,908 |
Total | $ 24,553 |
Commitments and Contingencies58
Commitments and Contingencies (Capital Leases) (Details) $ in Thousands | Mar. 31, 2017USD ($) |
Year ending March 31: | |
2,018 | $ 1,004 |
2,019 | 736 |
2,020 | 163 |
Total minimum payments | 1,903 |
Less: Amount representing interest | (116) |
Total payments, net of interest | 1,787 |
Less: Short-term portion of capital lease obligations | (918) |
Long-term portion of capital lease obligations | $ 869 |
Commitments and Contingencies59
Commitments and Contingencies (Service Provider Contracts) (Details) $ in Thousands | Mar. 31, 2017USD ($) |
Year ending March 31: | |
2,018 | $ 1,364 |
2,019 | 133 |
2,020 | 8 |
Total minimum payments | $ 1,505 |
Commitments and Contingencies60
Commitments and Contingencies (Leases - Rent Expense) (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2015 | |
Commitments And Contingencies Leases - Rent Expense Narrative Details | |||
Rent expense | $ 5.1 | $ 2.1 | $ 1.8 |
Commitments and Contingencies61
Commitments and Contingencies (CustomerSupport Commitments) (Narrative) (Details) $ in Millions | Mar. 31, 2017USD ($) | Mar. 31, 2016USD ($) |
Commitments And Contingencies Customersupport Commitments Narrative Details | ||
Third party customer support vendor minimum monthly commitment | $ 0.4 | |
Third party customer support vendor maximum obligation | $ 2.2 | |
Advance termination notice required, days | 150 | |
Property and equipment under capital lease | $ 2.7 | $ 1.6 |
Accumulated depreciation related to assets under capital lease | $ 1 | $ 0.1 |
Stockholders' Equity Stock-Base
Stockholders' Equity Stock-Based Compensation Expense By Statement Of Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2015 | |
Stock-based employee compensation expense related to employee stock options and employee stock purchases, net of tax | $ 21,462 | $ 16,334 | $ 9,347 |
Cost of service revenue | |||
Stock-based employee compensation expense related to employee stock options and employee stock purchases, net of tax | 1,732 | 1,159 | 692 |
Cost of product revenue | |||
Stock-based employee compensation expense related to employee stock options and employee stock purchases, net of tax | 0 | 0 | 0 |
Research and development | |||
Stock-based employee compensation expense related to employee stock options and employee stock purchases, net of tax | 3,762 | 2,914 | 1,495 |
Sales and marketing | |||
Stock-based employee compensation expense related to employee stock options and employee stock purchases, net of tax | 8,832 | 6,133 | 3,748 |
General and administrative | |||
Stock-based employee compensation expense related to employee stock options and employee stock purchases, net of tax | $ 7,136 | $ 6,128 | $ 3,412 |
Stockholders' Equity Option Act
Stockholders' Equity Option Activity (Details) - $ / shares | 12 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2015 | |
Stockholders Equity Option Activity Details | |||
Balance at beginning of period | 4,793,266 | 5,327,907 | 6,002,382 |
Granted | 407,392 | 723,776 | 1,110,466 |
Exercised | (603,998) | (1,162,175) | (1,326,385) |
Cancelled/forfeited | (134,248) | (96,242) | (458,556) |
Balance at end of period | 4,462,412 | 4,793,266 | 5,327,907 |
Options, Vested and expected to vest | 4,462,412 | ||
Options, Exercisable at end of period | 3,191,879 | ||
Weighted-average exercise price of options outstanding, at beginning of period | $ 6.29 | $ 5.19 | $ 4.14 |
Weighted-average exercise price of options granted during period | 14.63 | 8.63 | 7.29 |
Weighted-average exercise price of options exercised during the period | 2.34 | 2.56 | 1.87 |
Weighted-average exercise price of options forfeited, cancelled or expired during the period | 8.41 | 8.06 | 6.06 |
Weighted-average exercise price of options outstanding at end of period | 7.52 | $ 6.29 | $ 5.19 |
Options, Vested and Expected to Vest, Weighted Average Exercise Price | 7.52 | ||
Weighted-Average Exercise Prices, Exercisable at end of period | $ 6.47 |
Stockholders' Equity Stock Purc
Stockholders' Equity Stock Purchase Right Activity (Details) - $ / shares | 12 Months Ended | |||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2014 | |
Stockholders Equity Stock Purchase Right Activity Details | ||||
Balance at beginning of year | 82,171 | 223,835 | 489,627 | |
Granted | 0 | 0 | 31,432 | |
Vested | (69,426) | (115,789) | (223,360) | |
Forfeited | (1,375) | (25,875) | (73,864) | |
Balance at end of year | 11,370 | 82,171 | 223,835 | 489,627 |
Weighted-average grant date fair value, beginning balance | $ 6.30 | $ 5.92 | $ 4.83 | |
Weighted-average grant date fair value of restricted stock rights granted | 0 | 0 | 7.88 | |
Weighted-average grant date fair value, released during period | 6 | 5.32 | 3.98 | |
Weighted-average grant date fair value, forfeited during period | 6.72 | 7.40 | 5.39 | |
Weighted-average grant date fair value, ending balance | $ 8.10 | $ 6.30 | $ 5.92 | $ 4.83 |
Weighted-average remaining contractual term, in years, ending balance | 1 year 32 days | 274 days | 1 year 180 days | 1 year 335 days |
Stockholders' Equity Restricted
Stockholders' Equity Restricted Stock Unit Activity (Details) | 12 Months Ended | |||
Mar. 31, 2017$ / sharesshares | Mar. 31, 2016$ / sharesshares | Mar. 31, 2015$ / sharesshares | Mar. 31, 2014 | |
Stockholders Equity Restricted Stock Unit Activity Details | ||||
Balance at beginning of period | shares | 4,544,799 | 2,698,686 | 1,134,856 | |
Granted | shares | 2,491,877 | 2,681,997 | 1,965,786 | |
Vested | shares | (1,600,831) | (589,788) | (187,788) | |
Forfeited | shares | (496,795) | (246,096) | (214,168) | |
Balance at end of period | shares | 4,939,050 | 4,544,799 | 2,698,686 | |
RSU weighted-average remaining contractual term, in years | 2.47 | 1.67 | 1.88 | 2 |
Beginning of period, weighted-average purchase price | $ / shares | $ 8.08 | $ 7.33 | $ 9 | |
Granted, weighted-average purchase price | $ / shares | 15.15 | 8.78 | 6.68 | |
Vested, weighted-average purchase price | $ / shares | 7.89 | 7.79 | 9.54 | |
Forfeited, weighted-average purchase price | $ / shares | 9.56 | 8.15 | 8.30 | |
End of period, weighted-average purchase price | $ / shares | $ 11.57 | $ 8.08 | $ 7.33 |
Stockholder's Equity Stock Opti
Stockholder's Equity Stock Options Outstanding And Exercisable (Details) - USD ($) | 12 Months Ended | |||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2014 | |
Options Outstanding, Number of Shares | 4,462,412 | 4,793,266 | 5,327,907 | 6,002,382 |
Options Outstanding, Weighted-Average Exercise Price Per Share | $ 7.52 | $ 6.29 | $ 5.19 | $ 4.14 |
Options Exercisable, Number of Shares | 3,191,879 | |||
Options Exercisable, Weighted-Average Exercise Price Per Share | $ 6.47 | |||
$0.55 - $4.60 | ||||
Range of Exercise Prices, Minimum | 0.55 | |||
Range of Exercise Prices, Maximum | $ 4.60 | |||
Options Outstanding, Number of Shares | 912,189 | |||
Options Outstanding, Weighted-Average Exercise Price Per Share | $ 1.91 | |||
Options Outstanding, Weighted-Average Remaining Contractual Term (in years) | 2 years | |||
Options Outstanding, Aggregate Intrinsic Value | $ 12,168,894 | |||
Options Exercisable, Number of Shares | 912,189 | |||
Options Exercisable, Weighted-Average Exercise Price Per Share | $ 1.91 | |||
Options Exercisable, Aggregate Intrinsic Value | $ 12,168,894 | |||
$5.87 - $6.86 | ||||
Range of Exercise Prices, Minimum | $ 5.87 | |||
Range of Exercise Prices, Maximum | $ 6.86 | |||
Options Outstanding, Number of Shares | 1,139,300 | |||
Options Outstanding, Weighted-Average Exercise Price Per Share | $ 6.48 | |||
Options Outstanding, Weighted-Average Remaining Contractual Term (in years) | 6 years 252 days | |||
Options Outstanding, Aggregate Intrinsic Value | $ 9,996,307 | |||
Options Exercisable, Number of Shares | 863,274 | |||
Options Exercisable, Weighted-Average Exercise Price Per Share | $ 6.35 | |||
Options Exercisable, Aggregate Intrinsic Value | $ 7,680,449 | |||
$7.52 - $9.21 | ||||
Range of Exercise Prices, Minimum | $ 7.52 | |||
Range of Exercise Prices, Maximum | $ 9.21 | |||
Options Outstanding, Number of Shares | 920,268 | |||
Options Outstanding, Weighted-Average Exercise Price Per Share | $ 8.43 | |||
Options Outstanding, Weighted-Average Remaining Contractual Term (in years) | 7 years 144 days | |||
Options Outstanding, Aggregate Intrinsic Value | $ 6,277,429 | |||
Options Exercisable, Number of Shares | 503,564 | |||
Options Exercisable, Weighted-Average Exercise Price Per Share | $ 8.47 | |||
Options Exercisable, Aggregate Intrinsic Value | $ 3,414,760 | |||
$9.35 - $10.50 | ||||
Range of Exercise Prices, Minimum | $ 9.35 | |||
Range of Exercise Prices, Maximum | $ 10.50 | |||
Options Outstanding, Number of Shares | 904,935 | |||
Options Outstanding, Weighted-Average Exercise Price Per Share | $ 9.73 | |||
Options Outstanding, Weighted-Average Remaining Contractual Term (in years) | 6 years 216 days | |||
Options Outstanding, Aggregate Intrinsic Value | $ 4,998,813 | |||
Options Exercisable, Number of Shares | 758,640 | |||
Options Exercisable, Weighted-Average Exercise Price Per Share | $ 9.71 | |||
Options Exercisable, Aggregate Intrinsic Value | $ 4,206,928 | |||
$10.86 - $15.40 | ||||
Range of Exercise Prices, Minimum | $ 10.86 | |||
Range of Exercise Prices, Maximum | $ 15.40 | |||
Options Outstanding, Number of Shares | 585,720 | |||
Options Outstanding, Weighted-Average Exercise Price Per Share | $ 13.48 | |||
Options Outstanding, Weighted-Average Remaining Contractual Term (in years) | 8 years 288 days | |||
Options Outstanding, Aggregate Intrinsic Value | $ 1,043,018 | |||
Options Exercisable, Number of Shares | 154,212 | |||
Options Exercisable, Weighted-Average Exercise Price Per Share | $ 11.68 | |||
Options Exercisable, Aggregate Intrinsic Value | $ 551,242 | |||
$0.55 - $15.40 | ||||
Range of Exercise Prices, Minimum | $ 0.55 | |||
Range of Exercise Prices, Maximum | $ 15.40 | |||
Options Outstanding, Number of Shares | 4,462,412 | |||
Options Outstanding, Aggregate Intrinsic Value | $ 34,484,461 | |||
Options Exercisable, Number of Shares | 3,191,879 | |||
Options Exercisable, Aggregate Intrinsic Value | $ 28,022,273 |
Stockholder's Equity Assumption
Stockholder's Equity Assumptions Used In Black-Scholes Model (Details) - $ / shares | 12 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2015 | |
Option Grants | |||
Expected volatility | 44.00% | 53.00% | 61.00% |
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Risk-free interest rate, minimum | 1.10% | 1.50% | 1.40% |
Risk-free interest rate, maximum | 2.20% | 1.80% | 1.90% |
Weighted average expected option term, in years | 4 years 324 days | 5 years 144 days | 6 years |
Weighted average fair value of options granted, per share | $ 5.74 | $ 4.17 | $ 4.14 |
Employee Stock Purchase | |||
Expected volatility | 37.00% | 43.00% | 49.00% |
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Risk-free interest rate | 0.65% | 0.39% | 0.12% |
Weighted average expected option term, in years | 270 days | 299 days | 288 days |
Weighted average fair value of options granted, per share | $ 4.19 | $ 3.25 | $ 2.52 |
Stockholders' Equity (Narrative
Stockholders' Equity (Narrative) (Details) - USD ($) shares in Millions | 12 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2015 | |
Cash received from option exercises and purchases of shares under the Purchase Plans | $ 5,100,000 | $ 4,800,000 | $ 4,500,000 |
Stock-Based Awards | |||
Total intrinsic value of options exercised | 7,200,000 | 9,200,000 | 8,100,000 |
Unamortized stock-based compensation expense related to unvested stock awards | $ 48,500,000 | ||
Weighted average period of recognition for unrecognized compensation costs (in years) | 2 years 18 days | ||
Tax benefit attributable to stock options exercised | $ 500,000 | $ 200,000 | $ 200,000 |
DXI Plan | |||
Unamortized stock-based compensation expense related to unvested stock awards | $ 1,300,000 | ||
Weighted average period of recognition for unrecognized compensation costs (in years) | 2 years 61 days | ||
Employee Stock Purchase Plan | |||
Employee Stock Purchase Plan Shares Issued | 0.3 | 0.4 | 0.3 |
Percentage of market value price of common stock under Employee Stock Purchase Plan | 85.00% | ||
Maximum contribution percentage amount of employee's base compensation | 10.00% |
Stockholders' Equity Repurchase
Stockholders' Equity Repurchases of Common Shares (Detail) - USD ($) | 12 Months Ended | ||||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2015 | |||
Stock repurchased and retired during period, value | $ (3,005,000) | $ (11,653,000) | $ (19,371,000) | ||
Stock repurchased and retired at end of period, value | $ 30,364,722 | ||||
February 2,015 | |||||
Stock repurchased and retired during period, shares | 0 | 1,392,135 | |||
Stock repurchased and retired during period, value | $ 0 | $ 11,164,329 | [1] | $ 19,200,393 | [1] |
Stock repurchased, weighted average price per share | $ 8.02 | $ 7.38 | |||
Stock repurchased and retired at end of period, shares | 3,880,350 | 3,880,350 | 2,488,215 | ||
Stock repurchased and retired at end of period, value | $ 30,364,722 | $ 30,364,722 | |||
Stock repurchase program, authorized amount | $ 20,000,000 | ||||
Stock repurchase program expiration date | Oct. 20, 2016 | Feb. 29, 2016 | |||
October 2,015 | |||||
Stock repurchase program, authorized amount | $ 15,000,000 | ||||
Total Plan 2015 | |||||
Stock repurchase program, remaining authorized repurchase amount | $ 15,000,000 | ||||
[1] | Amount excludes commission fees. |
Inome Taxes (Income Tax Provisi
Inome Taxes (Income Tax Provision) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2015 | |
Current: | |||||||||||
Federal | $ (7) | $ 97 | $ 92 | ||||||||
State | 588 | 551 | 457 | ||||||||
Foreign | 112 | 71 | 1 | ||||||||
Total current income tax provision | 693 | 719 | 550 | ||||||||
Deferred: | |||||||||||
Federal | 1,506 | 95 | 2,602 | ||||||||
State | (1,095) | (854) | (363) | ||||||||
Foreign | (1,230) | (807) | 0 | ||||||||
Total deferred tax (benefit) provision | (819) | (1,566) | 2,239 | ||||||||
Income tax (benefit) provision | $ (178) | $ 30 | $ (15) | $ 37 | $ (1,498) | $ (557) | $ 423 | $ 785 | $ (126) | $ (847) | $ 2,789 |
Income taxes (Deferred Tax Asse
Income taxes (Deferred Tax Assets) (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Mar. 31, 2016 |
Current deferred tax assets | ||
Net operating loss carryforwards | $ 0 | $ 2,739 |
Inventory valuation | 0 | 14 |
Reserves and allowances | 0 | 2,740 |
Net current deferred tax assets | 0 | 5,493 |
Net operating loss carryforwards | 36,427 | 38,449 |
Research and development and other credit carryforwards | 8,614 | 7,106 |
Stock-based compensation | 6,942 | 5,577 |
Reserves and allowances | 3,266 | 0 |
Fixed assets and intangibles | (3,688) | (6,160) |
Net non-current deferred tax assets | 51,561 | 44,972 |
Valuation allowance | (2,934) | (3,760) |
Total | $ 48,627 | $ 46,705 |
Income Taxes (Reconciliation of
Income Taxes (Reconciliation of Taxes Provided to Federal Statutory Rate) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2015 | |
Income Taxes Reconciliation Of Taxes Provided To Federal Statutory Rate Details | |||||||||||
Tax provision at statutory rate | $ (1,652) | $ (2,029) | $ 1,599 | ||||||||
State income taxes before valuation allowance, net of federal effect | 108 | 9 | 269 | ||||||||
Foreign tax rate differential | 885 | (769) | 0 | ||||||||
Research and development credits | (1,484) | (1,253) | (725) | ||||||||
Change in valuation allowance | (287) | (1,555) | (1,480) | ||||||||
Compensation/option differences | (246) | (471) | (331) | ||||||||
Non-deductible compensation | 1,079 | 944 | 746 | ||||||||
Acquisition costs | 54 | 230 | 0 | ||||||||
Expiring CA NOLs | 0 | 1,626 | 1,484 | ||||||||
Foreign loss not benefited | 780 | 2,342 | 1,192 | ||||||||
Other | 637 | 79 | 35 | ||||||||
Total income tax (benefit) provision | $ (178) | $ 30 | $ (15) | $ 37 | $ (1,498) | $ (557) | $ 423 | $ 785 | $ (126) | $ (847) | $ 2,789 |
Income Taxes (Unrecognized Tax
Income Taxes (Unrecognized Tax Benefits) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2015 | |
Income Taxes Unrecognized Tax Benefits Details | |||
Balance at beginning of year | $ 2,881 | $ 2,420 | $ 2,165 |
Gross increases - tax position in prior period | 0 | 82 | 27 |
Gross decreases - tax position in prior period | 0 | 0 | 0 |
Gross increases - tax positions related to the current year | 450 | 379 | 228 |
Balance at end of year | $ 3,331 | $ 2,881 | $ 2,420 |
Net Income Per Share (Details)
Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2015 | |
Numerator: | |||||||||||
Net income available to common stockholders | $ (2,925) | $ (1,325) | $ 27 | $ (528) | $ (1,076) | $ (1,680) | $ (1,892) | $ (472) | $ (4,751) | $ (5,120) | $ 1,926 |
Denominator: | |||||||||||
Common shares | 91,175 | 90,774 | 89,987 | 89,434 | 88,888 | 88,289 | 88,557 | 88,233 | 90,340 | 88,477 | 89,071 |
Denominator for basic calculation | 91,175 | 90,774 | 89,987 | 89,434 | 88,888 | 88,289 | 88,557 | 88,233 | 90,340 | 88,477 | 89,071 |
Employee stock options | 0 | 0 | 2,088 | ||||||||
Employee stock purchase rights | 0 | 0 | 493 | ||||||||
Denominator for diluted calculation | 91,175 | 90,774 | 93,447 | 89,434 | 88,888 | 88,289 | 88,557 | 88,233 | 90,340 | 88,477 | 91,652 |
Net loss per share: | |||||||||||
Basic | $ (0.03) | $ (0.01) | $ 0 | $ (0.01) | $ (0.01) | $ (0.02) | $ (0.02) | $ (0.01) | $ (0.05) | $ (0.06) | $ 0.02 |
Diluted | $ (0.03) | $ (0.01) | $ 0 | $ (0.01) | $ (0.01) | $ (0.02) | $ (0.02) | $ (0.01) | $ (0.05) | $ (0.06) | $ 0.02 |
Net Income Per Share Options an
Net Income Per Share Options and Rights Excluded (Details) - shares shares in Thousands | 12 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2015 | |
Anti-dilutive shares | 9,412 | 9,421 | 1,869 |
Employee stock options | |||
Anti-dilutive shares | 4,462 | 4,793 | 1,812 |
Stock purchase rights | |||
Anti-dilutive shares | 4,950 | 4,628 | 57 |
Segment Reporting Revenue and P
Segment Reporting Revenue and Property and Equipment by Geographic Area (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2015 | |
Net revenue | $ 253,388 | $ 209,336 | $ 162,413 | ||||||||
Depreciation and amortization expense | 10,437 | 9,007 | 6,113 | ||||||||
Net income (loss) | $ (2,925) | $ (1,325) | $ 27 | $ (528) | $ (1,076) | $ (1,680) | $ (1,892) | $ (472) | (4,751) | (5,120) | 1,926 |
Total assets | 333,855 | 313,452 | 333,855 | 313,452 | |||||||
Property and equipments, net | 16,384 | 12,375 | 16,384 | 12,375 | |||||||
Americas | |||||||||||
Net revenue | 227,914 | 185,241 | 150,764 | ||||||||
Depreciation and amortization expense | 6,842 | 5,776 | 4,739 | ||||||||
Net income (loss) | 2,557 | 940 | 5,433 | ||||||||
Total assets | 284,011 | 261,886 | 284,011 | 261,886 | |||||||
Property and equipments, net | 11,803 | 9,733 | 11,803 | 9,733 | |||||||
Europe | |||||||||||
Net revenue | 25,474 | 24,095 | 11,649 | ||||||||
Depreciation and amortization expense | 3,595 | 3,231 | 1,374 | ||||||||
Net income (loss) | (7,308) | (6,060) | $ (3,507) | ||||||||
Total assets | 49,844 | 51,566 | 49,844 | 51,566 | |||||||
Property and equipments, net | $ 4,581 | $ 2,642 | $ 4,581 | $ 2,642 |
Acquisitions (Purchase Informat
Acquisitions (Purchase Information) (Details) - USD ($) $ in Thousands | 1 Months Ended | ||
Jan. 31, 2017 | Jun. 30, 2015 | May 31, 2015 | |
LeChat | |||
Effective date of purchase agreement | Jan. 6, 2017 | ||
Business Acquisition, Description of Acquired Entity | On January 5, 2017, the Company entered into an Agreement and Plan of Merger (the "Agreement") with the preferred and common shareholders LeChat Inc. (LeChat) for the purchase of all the outstanding preferred and common shares of LeChat. The transaction closed on January 6, 2017. The total aggregate purchase price was $3.1 million, consisting of approximately $2.4 million paid to the preferred shareholders at closing, $0.2 million paid to the common shareholders at closing, and approximately $0.5 million in cash deposited into escrow to be held for two years as security against indemnity claims made by the Company after the closing date. The Company recorded the acquired tangible and identifiable intangible assets and liabilities assumed based on their estimated fair values. The excess of the consideration transferred over the aggregate fair values of the assets acquired and liabilities assumed was recorded as goodwill. The amount of goodwill recognized was primarily attributable to the expected contributions of the entity to the overall corporate strategy in addition to synergies and acquired workforce of the acquired business. The finite-lived intangible asset consisted of developed technology, with an estimated weighted-average useful life of two years. The fair value assigned to identifiable intangible assets acquired was based on estimates and assumptions made by management using a cost approach method. Intangible assets are amortized on a straight-line basis. | ||
Assets acquired: | |||
Cash | $ 231 | ||
Intangible assets | 1,200 | ||
Other non-current assets | 428 | ||
Total assets acquired | 1,859 | ||
Liabilities assumed: | |||
Current and non-current liabilities | (324) | ||
Total liabilities assumed | (324) | ||
Net identifiable assets acquired | 1,535 | ||
Goodwill | 1,580 | ||
Total consideration transferred | $ 3,115 | ||
DXI | |||
Effective date of purchase agreement | May 26, 2015 | ||
Business Acquisition, Description of Acquired Entity | On May 26, 2015, the Company entered into a share purchase agreement with the shareholders of DXI Limited, and its wholly owned subsidiaries, (collectively DXI) for the purchase of the entire share capital of DXI. The transaction closed effective May 29, 2015. The total aggregate purchase price was approximately $22.5 million, consisting of $18.7 million in cash paid to the DXI shareholders at closing, and $3.8 million in cash deposited into escrow to be held for two years as security against indemnity claims made by the Company after the closing date. The cash escrow is to be released in annual installments over two years. | ||
Assets acquired: | |||
Cash | $ 1,318 | ||
Current assets | 2,016 | ||
Property and equipment | 1,453 | ||
Intangible assets | 13,374 | ||
Total assets acquired | 18,161 | ||
Liabilities assumed: | |||
Current and non-current liabilities | (5,734) | ||
Total liabilities assumed | (5,734) | ||
Net identifiable assets acquired | 12,427 | ||
Goodwill | 10,125 | ||
Total consideration transferred | $ 22,552 | ||
QSC | |||
Effective date of purchase agreement | Jun. 3, 2015 | ||
Business Acquisition, Description of Acquired Entity | On June 3, 2015, the Company entered into an asset purchase agreement with the shareholder of Quality Software Corporation (QSC) and other parties affiliated with the shareholder and QSC for the purchase of certain assets as per the purchase agreement. The total aggregate fair value of the consideration was approximately $2.9 million, which $2.2 million was paid in cash to the QSC shareholder at closing. As part of the aggregate purchases price, there is also $0.5 million in contingent consideration payable subject to attainment of certain revenue and product release milestones for the acquired business, and $0.3 million in cash held by the Company in escrow to be retained for two years as security against indemnity claims made by the Company after the closing date. The preliminary fair value of the contingent consideration and escrow amounts was $0.7 million at the acquisition date. | ||
Assets acquired: | |||
Intangible assets | $ 1,100 | ||
Total assets acquired | 1,100 | ||
Liabilities assumed: | |||
Net identifiable assets acquired | 1,100 | ||
Goodwill | 1,789 | ||
Total consideration transferred | $ 2,889 |
Employee Benefit Plan (Narrativ
Employee Benefit Plan (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2015 | |
Employee Benefit Plan Narrative Details | |||
401(k) Savings Plan | In April 1991, the Company adopted a 401(k) savings plan (the "Savings Plan") covering substantially all of its U.S. employees. Eligible employees may contribute to the Savings Plan from their compensation up to the maximum allowed by the Internal Revenue Service. In January 2007, the Company reactivated the employer matching contribution. The matching contribution is 100% of each employee's contributions up to $1,500, then 50% of the employee's contributions, not to exceed $3,000 per annum, in aggregate. | ||
Matching 401(k) expense | $ 1.6 | $ 0.9 | $ 0.7 |
Patent Sale (Narrative) (Detail
Patent Sale (Narrative) (Details) - USD ($) $ in Millions | 1 Months Ended | ||
Aug. 31, 2014 | Feb. 28, 2013 | Jun. 30, 2012 | |
Patent Sale Narrative Details | |||
Sale of patents | $ 1 | $ 1 | $ 12 |
Future maximum patent license collection | $ 3 |
Subsequent Events (Narrative) (
Subsequent Events (Narrative) (Details) - DXI Subsequent Event | 1 Months Ended |
Apr. 30, 2017 | |
Subsequent Event, Date | Apr. 30, 2017 |
Subsequent Event, Description | In May 2015, the Company had entered into a share purchase agreement with the shareholders of DXI Limited which included cash deposited into escrow to be held for two years as security against indemnity claims made by the Company after the closing date. In April 2017, the Company agreed with the shareholders of DXI Limited to return approximately $1.4 million to the Company and release the remaining funds held in escrow to the shareholders. |
Consolidated Quarterly Financ81
Consolidated Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2015 | |
Quarterly Financial Data Details | |||||||||||
Service revenue | $ 62,654 | $ 60,149 | $ 57,717 | $ 55,296 | $ 52,174 | $ 48,948 | $ 46,951 | $ 44,168 | $ 235,816 | $ 192,241 | $ 148,208 |
Product revenue | 3,834 | 3,527 | 5,466 | 4,745 | 5,160 | 4,220 | 3,991 | 3,724 | 17,572 | 17,095 | 14,205 |
Total revenue | 66,488 | 63,676 | 63,183 | 60,041 | 57,334 | 53,168 | 50,942 | 47,892 | 253,388 | 209,336 | 162,413 |
Operating expenses: | |||||||||||
Cost of service revenue | 10,803 | 10,525 | 10,837 | 10,235 | 9,720 | 9,713 | 9,186 | 8,459 | 42,400 | 37,078 | 29,701 |
Cost of product revenue | 4,187 | 4,240 | 5,782 | 5,505 | 6,103 | 5,087 | 4,596 | 4,382 | 19,714 | 20,168 | 15,863 |
Research and development | 7,142 | 7,095 | 6,505 | 6,710 | 6,110 | 6,404 | 6,446 | 5,080 | 27,452 | 24,040 | 15,118 |
Sales and marketing | 38,228 | 35,667 | 33,691 | 31,691 | 31,240 | 27,585 | 26,730 | 23,824 | 139,277 | 109,379 | 80,667 |
General and administrative | 9,814 | 7,852 | 6,747 | 6,801 | 7,132 | 6,888 | 5,657 | 6,068 | 31,214 | 25,745 | 18,182 |
Total operating expenses | 70,174 | 65,379 | 63,562 | 60,942 | 60,305 | 55,677 | 52,615 | 47,813 | 260,057 | 216,410 | 158,531 |
Income (loss) from operations | (3,686) | (1,703) | (379) | (901) | (2,971) | (2,509) | (1,673) | 79 | (6,669) | (7,074) | 3,882 |
Other income, net | 583 | 408 | 391 | 410 | 397 | 272 | 204 | 234 | 1,792 | 1,107 | 833 |
Income (loss) before provision (benefit) for income taxes | (3,103) | (1,295) | 12 | (491) | (2,574) | (2,237) | (1,469) | 313 | (4,877) | (5,967) | 4,715 |
Provision (benefit) for income taxes | (178) | 30 | (15) | 37 | (1,498) | (557) | 423 | 785 | (126) | (847) | 2,789 |
Net income (loss) | $ (2,925) | $ (1,325) | $ 27 | $ (528) | $ (1,076) | $ (1,680) | $ (1,892) | $ (472) | $ (4,751) | $ (5,120) | $ 1,926 |
Net income (loss) per share: | |||||||||||
Basic | $ (0.03) | $ (0.01) | $ 0 | $ (0.01) | $ (0.01) | $ (0.02) | $ (0.02) | $ (0.01) | $ (0.05) | $ (0.06) | $ 0.02 |
Diluted | $ (0.03) | $ (0.01) | $ 0 | $ (0.01) | $ (0.01) | $ (0.02) | $ (0.02) | $ (0.01) | $ (0.05) | $ (0.06) | $ 0.02 |
Shares used in per share calculations: | |||||||||||
Basic | 91,175 | 90,774 | 89,987 | 89,434 | 88,888 | 88,289 | 88,557 | 88,233 | 90,340 | 88,477 | 89,071 |
Diluted | 91,175 | 90,774 | 93,447 | 89,434 | 88,888 | 88,289 | 88,557 | 88,233 | 90,340 | 88,477 | 91,652 |
Schedule II Valuation and Qua82
Schedule II Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2015 | ||
Total Allowance for Doubtful Accounts | ||||
Balance at Beginning of Year | $ 586 | $ 416 | $ 466 | |
Additions Charged to Expenses | 941 | 509 | 279 | |
Deductions | [1] | (573) | (339) | (329) |
Balance At End of Year | $ 954 | $ 586 | $ 416 | |
[1] | The deductions related to allowance for doubtful accounts represent accounts receivable which are written off. |