Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Sep. 30, 2018 | Nov. 02, 2018 | |
Document And Entity Information | ||
Entity Registrant Name | 8X8 INC /DE/ | |
Entity Central Index Key | 1,023,731 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --03-31 | |
Entity Small Business | false | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 95,371,181 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,019 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2018 | Mar. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 24,677 | $ 31,703 |
Short-term investments | 104,232 | 120,559 |
Accounts receivable, net | 18,870 | 16,296 |
Deferred sales commission costs | 13,656 | 0 |
Other current assets | 13,889 | 10,040 |
Total current assets | 175,324 | 178,598 |
Property and equipment, net | 42,395 | 35,732 |
Intangible assets, net | 12,162 | 11,958 |
Goodwill | 39,495 | 40,054 |
Restricted cash | 8,100 | 8,100 |
Deferred sales commission costs, noncurrent | 29,229 | 0 |
Other assets | 2,927 | 2,767 |
Total assets | 309,632 | 277,209 |
Current liabilities: | ||
Accounts payable | 27,649 | 23,899 |
Accrued compensation | 17,621 | 17,412 |
Accrued taxes | 12,438 | 6,367 |
Deferred revenue | 3,354 | 2,559 |
Other accrued liabilities | 5,200 | 6,026 |
Total current liabilities | 66,262 | 56,263 |
Non-current liabilities | 4,007 | 2,172 |
Total liabilities | 70,269 | 58,435 |
Commitments and contingencies (Note 6) | ||
Stockholders' equity: | ||
Preferred stock, $0.001 par value: Authorized: 5,000,000 shares; Issued and outstanding: no shares at September 30, 2018 and 2017 | 0 | 0 |
Common stock, $0.001 par value: Authorized: 200,000,000 shares; Issued and outstanding: 94,772,267 shares and 92,847,354 shares at September 30, 2018 and March 31, 2018 and 2017, respectively | 95 | 93 |
Additional paid-in capital | 445,103 | 425,790 |
Accumulated other comprehensive loss | (7,435) | (5,645) |
Accumulated deficit | (198,400) | (201,464) |
Total stockholders' equity | 239,363 | 218,774 |
Total liabilities and stockholders' equity | $ 309,632 | $ 277,209 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2018 | Mar. 31, 2018 |
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 | 94,772,267 | 92,847,354 |
Common stock, shares outstanding | 94,772,267 | 92,847,354 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenues | $ 85,682 | $ 72,483 | $ 168,907 | $ 141,581 |
Operating expenses: | ||||
Research and development | 13,933 | 8,311 | 27,043 | 16,254 |
Sales and marketing | 55,930 | 41,163 | 109,235 | 82,273 |
General and administrative | 16,543 | 9,616 | 27,976 | 18,572 |
Total operating expenses | 107,669 | 76,945 | 206,877 | 151,500 |
Loss from operations | (21,987) | (4,462) | (37,970) | (9,919) |
Other income, net | 635 | 463 | 1,354 | 2,515 |
Loss before income taxes | (21,352) | (3,999) | (36,616) | (7,404) |
Provision (benefit) for income taxes | 130 | (3,453) | 221 | (4,689) |
Net loss | $ (21,482) | $ (546) | $ (36,837) | $ (2,715) |
Net loss per share: | ||||
Basic and diluted | $ (0.23) | $ (0.01) | $ (0.39) | $ (0.03) |
Weighted average common shares outstanding: | ||||
Basic and diluted | 93,831 | 91,689 | 93,449 | 91,667 |
Service | ||||
Revenue from Contract with Customer, Including Assessed Tax | $ 81,346 | $ 68,123 | $ 159,467 | $ 133,214 |
Operating expenses: | ||||
Cost of Goods and Services Sold | 15,866 | 12,757 | 30,945 | 24,419 |
Product | ||||
Revenue from Contract with Customer, Including Assessed Tax | 4,336 | 4,360 | 9,440 | 8,367 |
Operating expenses: | ||||
Cost of Goods and Services Sold | $ 5,397 | $ 5,098 | $ 11,678 | $ 9,982 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (21,482) | $ (546) | $ (36,837) | $ (2,715) |
Other comprehensive income (loss), net of tax | ||||
Unrealized gain on investments in securities | 149 | 198 | 262 | 225 |
Foreign currency translation adjustment | (379) | 1,192 | (2,051) | 2,983 |
Comprehensive income (loss) | $ (21,712) | $ 844 | $ (38,626) | $ 493 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Cash flows from operating activities: | ||
Net loss | $ (36,837) | $ (2,715) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activites: | ||
Depreciation | 4,231 | 3,962 |
Amortization of intangible assets | 2,857 | 2,815 |
Amortization of capitalized software | 3,749 | 581 |
Non-cash lease expenses | 2,401 | 0 |
Stock-based compensation | 19,040 | 13,008 |
Deferred income tax benefit | 0 | (4,862) |
Gain on escrow settlement | 0 | (1,393) |
Other | 538 | 761 |
Changes in assets and liabilities: | ||
Accounts receivable, net | (3,347) | (1,183) |
Deferred sales commission costs | (4,675) | 0 |
Other current and noncurrent assets | (1,452) | (3,485) |
Accounts payable and accruals | 8,131 | 3,399 |
Deferred revenue | 814 | 286 |
Net cash (used in) provided by operating activities | (4,550) | 11,174 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (2,878) | (4,021) |
Purchase of business | (2,625) | 0 |
Proceeds from escrow settlement | 0 | 1,393 |
Capitalized software development costs | (11,386) | (5,203) |
Proceeds from maturity of investments | 35,455 | 45,850 |
Sales of investments | 23,604 | 13,254 |
Purchase of investments | (42,437) | (57,561) |
Net cash used in investing activities | (267) | (6,288) |
Cash flows from financing activities: | ||
Capital lease payments | (525) | (616) |
Payment of contingent consideration and escrow | 0 | (150) |
Repurchase and tax-related withholding of common stock | (8,183) | (13,842) |
Proceeds from issuance of common stock under employee stock plans | 6,720 | 2,788 |
Net cash used in financing activities | (1,988) | (11,820) |
Effect of exchange rate changes on cash | (221) | 474 |
Net decrease in cash and cash equivalents | (7,026) | (6,460) |
Cash, cash equivalents, and restricted cash at the beginning of the period | 39,803 | 41,030 |
Cash, cash equivalents, and restricted cash at the end of the period | 32,777 | 34,570 |
Supplemental cash flow information | ||
Income taxes paid | 250 | 174 |
Interest paid | 0 | 16 |
Property and equipment acquired under capital leases | $ 0 | $ 765 |
DESCRIPTION OF BUSINESS AND SIG
DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES - Note 1 | 6 Months Ended |
Sep. 30, 2018 | |
Notes to Financial Statements | |
DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES - Note 1 | 1. DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES DESCRIPTION OF BUSINESS A provider of enterprise cloud communications solutions, 8x8, Inc. (8x8 or the Company) helps businesses get their employees, customers and applications more connected and productive worldwide. From one technology platform, the Company offers cloud phone, collaboration, conferencing, contact center, data analytics and other services to business customers on a Software-as-a-Service (SaaS) model. The Company's solutions offer a secure, reliable and simplified approach for businesses to transition their legacy, on-premises communications systems to the cloud. The comprehensive solution, built from owned core cloud technologies, enables 8x8 customers to rely on a single provider for their global communications, contact center and customer support requirements. Combining these services allows customers to eliminate information silos and expose vital, real-time communications data spanning multiple services, applications and devices which, in turn, can improve productivity, business performance and customer experience. The Company's customers are spread across more than 150 countries and range from small businesses to large enterprises with more than 10,000 employees. BASIS OF PRESENTATION AND CONSOLIDATION 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 2019 refers to the fiscal year ending March 31, 2019). The accompanying interim consolidated financial statements are unaudited and have been prepared on substantially the same basis as our annual consolidated financial statements for the fiscal year ended March 31, 2018, with the exception of new revenue recognition guidance discussed in the recently adopted accounting principles section below. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (SEC), regarding interim financial reporting. In the opinion of the Company's management, these interim consolidated financial statements reflect all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair statement of our financial position, results of operations, and cash flows for the periods presented. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from these estimates. The March 31, 2018 year-end consolidated balance sheet data in this document were derived from audited consolidated financial statements and does not include all of the disclosures required by U.S. generally accepted accounting principles. These consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements as of and for the fiscal year ended March 31, 2018 and notes thereto included in the Company's fiscal 2018 Annual Report on Form 10-K. The results of operations and cash flows for the interim periods included in these consolidated financial statements are not necessarily indicative of the results to be expected for any future period or the entire fiscal year. The consolidated financial statements include the accounts of 8x8 and its subsidiaries. All material intercompany accounts and transactions have been eliminated. ACQUISITION In April 2018, the Company entered into an asset purchase agreement with MarianaIQ, Inc. The total aggregate purchase price consisted of cash paid at closing and cash deposited into escrow to be held for fifteen months as security against indemnity claims made by the Company after the closing date. See Note 11 for additional information. 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, income and sales tax liabilities, stock-based compensation, and litigation and other contingencies. The Company bases its estimates on historical experience and on various other assumptions. Actual results could differ from those estimates under different assumptions or conditions. SIGNIFICANT ACCOUNTING POLICIES The significant accounting policies used in preparation of these consolidated financial statements are disclosed in our Annual Report on Form 10-K for the fiscal year ended March 31, 2018 filed with the SEC on May 30, 2018, and there have been no changes to the Company's significant accounting policies during the three months ended September 30, 2018 except for the accounting policies described below that were updated as a result of adopting Accounting Standards Update (ASU) 2014-9, Revenue from Contracts with Customers: Topic 606 Other Assets and Deferred Costs - Contracts with Customers, RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS In May 2014, the Financial Accounting Standards Board (FASB) issued ASU 2014-9, which replaces numerous requirements in U.S. GAAP and provide companies with a single revenue recognition model for recognizing revenue from contracts with customers. ASC 606 requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. It defines a five-step process to achieve this core principle and, in doing so, more judgment and estimates are required with the revenue recognition process than were required under the previous guidance (ASC 605). The new standard permits the use of either the full retrospective or modified retrospective transition method. The Company adopted the new standard effective April 1, 2018 using the modified retrospective method. Under the modified retrospective method, the comparative periods' information is not restated and continues to be reported under the accounting standards in effect in those prior periods. Instead, on April 1, 2018, the Company recognized the cumulative effect of initially applying ASC 606 as an adjustment to the opening balance of accumulated deficit and the corresponding balance sheet accounts, which resulted in a net decrease to accumulated deficit of $39.9 million. The impact on the Company's opening balances primarily relates to the capitalization of additional commission costs under ASC 606 in the amount of $38.2 million. Under ASC 605, the Company expensed all commission costs as incurred. Under ASC 606, the Company defers all incremental commission costs to obtain the contract and amortizes these costs over a benefit period of five years. The remaining $1.7 million impact of adopting the standard relates to revenue being recognized earlier under ASC 606 than it would have been under ASC 605, which resulted in a contract asset as of the adoption date. See Note 2 for additional disclosure on the impact of adopting this standard. RECENT ACCOUNTING PRONOUNCEMENTS In February 2016, the FASB issued ASU 2016-2, Leases (Topic 842), In June 2018, the FASB issued ASU 2018-7, Compensation-Stock Compensation (Topic 718) In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) In August 2018, the FASB issued 2018-15, Intangibles-Goodwill and Other-Internal Use Software (Subtopic 350-40) |
REVENUE RECOGNITION - Note 2
REVENUE RECOGNITION - Note 2 | 6 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
REVENUE RECOGNITION - Note 2 | 2. REVENUE RECOGNITION Revenue Recognition under ASC 606 The Company recognizes service revenue, mainly from subscription services to its cloud-based voice, call center, video and collaboration solutions using the five-step model as prescribed by ASC 606: • Identification of the contract, or contracts, with a customer; The Company identifies performance obligations in contracts with customers, which may include subscription services and related usage, product revenue and professional services. The transaction price is determined based on the amount the Company expects to be entitled to in exchange for transferring the promised services or products to the customer. The transaction price in the contract is allocated to each distinct performance obligation in an amount that represents the relative amount of consideration expected to be received in exchange for satisfying each performance obligation. Revenue is recognized when performance obligations are satisfied. Revenues are recorded based on the transaction price excluding amounts collected on behalf of third parties such as sales and telecommunication taxes, which are collected on behalf of and remitted to governmental authorities. The Company usually bills its customers on a monthly basis. Contracts typically range from annual to multi-year agreements with payment terms of net 30 days or less. The Company occasionally allows a 30-day period to cancel a subscription and return products shipped for a full refund. Judgments and Estimates The estimation of variable consideration for each performance obligation requires the Company to make subjective judgments. The Company has service-level agreements with customers warranting defined levels of uptime reliability and performance. Customers may get credits or refunds if the Company fails to meet such levels. If the services do not meet certain criteria, fees are subject to adjustment or refund representing a form of variable consideration. The Company may impose minimum revenue commitments (MRC) on its customers at the inception of the contract. Thus, in estimating variable consideration for each of these performance obligations, the Company assesses both the probability of MRC occurring and the collectability of the MRC, of which both represent a form of variable consideration. The Company enters into contracts with customers that regularly include promises to transfer multiple services and products, such as subscriptions, products, and professional services. For arrangements with multiple services, the Company evaluates whether the individual services qualify as distinct performance obligations. In its assessment of whether a service is a distinct performance obligation, the Company determines whether the customer can benefit from the service on its own or with other readily available resources, and whether the service is separately identifiable from other services in the contract. This evaluation requires the Company to assess the nature of each individual service offering and how the services are provided in the context of the contract, including whether the services are significantly integrated, highly interrelated, or significantly modify each other, which may require judgment based on the facts and circumstances of the contract. When agreements involve multiple distinct performance obligations, the Company allocates arrangement consideration to all performance obligations at the inception of an arrangement based on the relative standalone selling prices (SSP) of each performance obligation. Usage fees deemed to be variable consideration meet the allocation exception for variable consideration. Where the Company has standalone sales data for its performance obligations which are indicative of the price at which the Company sells a promised good or service separately to a customer, such data is used to establish SSP. In instances where standalone sales data is not available for a particular performance obligation, the Company estimates SSP by the use of observable market and cost-based inputs. The Company continues to review the factors used to establish list price and will adjust standalone selling price methodologies as necessary on a prospective basis. Service Revenue Service revenue from subscriptions to the Company's cloud-based technology platform is recognized over time on a ratable basis over the contractual subscription term beginning on the date that the platform is made available to the customer. Payments received in advance of subscription services being rendered are recorded as a deferred revenue. Usage fees, either bundled or not bundled, are recognized when the Company has a right to invoice. Professional services for configuration, system integration, optimization, customer training and/or education are primarily billed on a fixed-fee basis and are performed by the Company directly or, alternatively, customers may also choose to perform these services themselves or engage their own third-party service providers. Professional services revenue is recognized over time, generally as customer sites go live. When a contract with a customer is signed, the Company assesses whether collection of the fees under the arrangement is probable. The Company estimates the amount to reserve for uncollectible amounts based on the aging of the contract balance, current and historical customer trends, and communications with its customers. These reserves are recorded as operating expenses against the contract asset (Accounts Receivable). In the normal course of business, the Company records revenue reductions for customer credits. Product Revenue The Company recognizes product revenue for telephony equipment at a point in time, when transfer of control has occurred, which is generally upon shipment. Sales returns are recorded as a reduction to revenue estimated based on historical experience. Contract Assets Contract assets are recorded for those parts of the contract consideration not yet invoiced but for which the performance obligations are completed. The revenue is recognized when the customer receives services or equipment for a reduced consideration at the onset of an arrangement, for example when the initial month's services or equipment are discounted. Contract assets are included in other current or non-current assets in the consolidated balance sheets, depending on if their reduction is recognized during the succeeding 12-month period or beyond. Deferred Revenue Deferred revenues represent billings or payments received in advance of revenue recognition and is recognized upon transfer of control. Balances consist primarily of annual plan subscription services and professional and training services not yet provided as of the balance sheet date. Deferred revenues that will be recognized during the succeeding 12-month period are recorded as current deferred revenues in the consolidated balance sheets, with the remainder recorded as other non-current liabilities in the consolidated balance sheets. Costs to Obtain a Customer Contract Sales commissions and related expenses are considered incremental and recoverable costs of acquiring customer contracts. These costs are capitalized as other current or non-current assets and amortized on a straight-line basis over the anticipated benefit period, which is five years. The benefit period was estimated by taking into consideration the length of customer contracts, technology lifecycle, and other factors. This amortization expense is recorded in sales and marketing expense within the Company's consolidated statement of operations. Practical Expedients The new guidance under ASC 340-40, Other Assets and Deferred Costs - Contracts with Customers, sets forth the requirement of deferring incremental costs of obtaining a contract, typically sales commissions, that were expensed as incurred under the previous guidance. The Company applies a practical expedient that permits to apply Subtopic 340-40 to a portfolio of contracts, instead of on a contract-by-contract basis, as they are similar in their characteristics, and the financial statement effects of applying Subtopic 340-40 to that portfolio would not differ materially from applying it to the individual contracts within that portfolio. Impact of Adopting ASC 606 The Company recognized the cumulative effect of initially applying ASC 606 as an adjustment to retained earnings in the consolidated balance sheet as of April 1, 2018 (in thousands). Adjustments Balance at Due to Balance at March 31, 2018 ASC 606 April 1, 2018 Current assets: Deferred sales commission costs $ - $ 11,234 $ 11,234 Other current assets $ 10,040 $ 1,725 $ 11,765 Non-current assets: Deferred sales commission costs $ - $ 26,942 $ 26,942 Stockholders' Equity Accumulated deficit $ (201,464) $ 39,901 $ (161,563) The following tables summarize the impact of the ASC 606 adoption on the Company's consolidated financial statements for the quarter ended September 30, 2018. Selected Consolidated Balance Sheet Line Items (in thousands): September 30, 2018 (As Reported) ASC 605 Adjustments ASC 606 Current assets: Deferred sales commission costs $ - $ 13,656 $ 13,656 Other current assets $ 12,107 $ 1,782 $ 13,889 Non-current assets: Deferred sales commission costs $ - $ 29,229 $ 29,229 Stockholders' Equity Accumulated deficit $ (243,067) $ 44,667 $ (198,400) Selected Consolidated Statement of Operations Line Items (in thousands, except per share amounts): Three Months Ended September 30, 2018 Six Months Ended September 30, 2018 (As Reported) (As Reported) ASC 605 Adjustments ASC 606 ASC 605 Adjustments ASC 606 Service revenue $ 81,543 $ (197) $ 81,346 $ 159,785 $ (318) $ 159,467 Product revenue 4,176 160 4,336 9,187 253 9,440 Total revenue $ 85,719 $ (37) $ 85,682 $ 168,972 $ (65) $ 168,907 Operating expenses: Sales and marketing $ 58,806 $ (2,876) $ 55,930 $ 113,910 $ (4,675) $ 109,235 Loss from operations $ (24,826) $ 2,839 $ (21,987) $ (42,580) $ 4,610 $ (37,970) Net loss $ (24,321) $ 2,839 $ (21,482) $ (41,447) $ 4,610 $ (36,837) Net loss per share: Basic and diluted $ (0.26) $ 0.03 $ (0.23) $ (0.44) $ 0.05 $ (0.39) Selected Consolidated Statements of Cash Flows Line Items (in thousands): September 30, 2018 (As Reported) ASC 605 Adjustments ASC 606 Net loss $ (41,447) $ 4,610 $ (36,837) Deferred sales commission costs $ - $ (4,675) $ (4,675) Other current and noncurrent assets $ (1,517) $ 65 $ (1,452) Net cash provided by operating activities $ (4,550) $ - $ (4,550) Disaggregation of Revenue The Company disaggregates its revenue by geographic region. See Note 10 for more information. Contract Balances The following table provides information about receivables, contract assets and deferred revenues from contracts with customers (in thousands): September 30, 2018 Accounts receivable, net $ 18,870 Other current assets $ 1,782 Deferred revenue - current $ 3,354 Deferred revenue - noncurrent $ 11 Changes in the contract assets and the deferred revenue balances during the six months ended September 30, 2018 are as follows (in thousands): April 1, 2018 September 30, 2018 $ Change Other current assets $ 1,725 $ 1,782 $ 57 Deferred revenue $ 2,578 $ 3,364 $ 786 The change in contract assets was primarily driven by the recognition of revenue that has not yet been billed. The increase in deferred revenues was due to billings in advance of performance obligations being satisfied. During the three and six months ended September 30, 2018, $1.8 million and $3.2 million, respectively, of revenue recognized was included in the deferred revenues balance at the beginning of the period, which was offset by additional deferrals during the period. Remaining Performance Obligations The Company's subscription terms typically range from one to four years. Contract revenue as of September 30, 2018, that has not yet been recognized was approximately $140 million. This excludes contracts with an original expected length of one year or less. The Company expects to recognize revenue on the vast majority of the remaining performance obligation over the next 24 months. |
FAIR VALUE MEASUREMENTS - Note
FAIR VALUE MEASUREMENTS - Note 3 | 6 Months Ended |
Sep. 30, 2018 | |
Cash and Cash Equivalents [Abstract] | |
FAIR VALUE MEASUREMENTS - Note 3 | 3. FAIR VALUE MEASUREMENTS Cash, cash equivalents, and available-for-sale investments (in thousands): Gross Gross Cash and Amortized Unrealized Unrealized Estimated Cash Short-Term As of September 30, 2018 Costs Gain Loss Fair Value Equivalents Investments Cash $ 16,585 $ - $ - $ 16,585 $ 16,585 $ - Level 1: Money market funds 8,092 - - 8,092 8,092 - Subtotal 24,677 - - 24,677 24,677 - Level 2: Commercial paper 3,178 - - 3,178 - 3,178 Corporate debt 69,575 19 (132) 69,462 - 69,462 Municipal securities 5,501 3 - 5,504 - 5,504 Asset backed securities 21,960 6 (59) 21,907 - 21,907 Agency bond 4,221 - (40) 4,181 - 4,181 Subtotal 104,435 28 (231) 104,232 - 104,232 Total assets $ 129,112 $ 28 $ (231) $ 128,909 $ 24,677 $ 104,232 Gross Gross Cash and Amortized Unrealized Unrealized Estimated Cash Short-Term As of March 31, 2018 Costs Gain Loss Fair Value Equivalents Investments Cash $ 16,499 $ - $ - $ 16,499 $ 16,499 $ - Level 1: Money market funds 15,204 - - 15,204 15,204 - Subtotal 31,703 - - 31,703 31,703 - Level 2: Commercial paper 13,254 - (8) 13,246 - 13,246 Corporate debt 70,631 6 (296) 70,341 - 70,341 Municipal securities 3,385 3 (1) 3,387 - 3,387 Asset backed securities 27,063 1 (119) 26,945 - 26,945 Agency bond 4,183 - (35) 4,148 - 4,148 International government securities 2,497 - (5) 2,492 - 2,492 Subtotal 121,013 10 (464) 120,559 - 120,559 Total assets $ 152,716 $ 10 $ (464) $ 152,262 $ 31,703 $ 120,559 Contractual maturities of investments as of September 30, 2018 are set forth below (in thousands): Estimated Fair Value Due within one year $ 49,792 Due after one year 54,440 Total $ 104,232 |
INTANGIBLE ASSETS - Note 4
INTANGIBLE ASSETS - Note 4 | 6 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS - Note 4 | 4. INTANGIBLE ASSETS The carrying value of intangible assets consisted of the following (in thousands): September 30, 2018 March 31, 2018 Gross Net Gross Net Carrying Accumulated Carrying Carrying Accumulated Carrying Amount Amortization Amount Amount Amortization Amount Technology $ 22,902 $ (12,755) $ 10,147 $ 19,702 $ (10,535) $ 9,167 Customer relationships 9,464 (7,639) 1,825 9,776 (7,366) 2,410 Trade names/domains 2,108 (1,918) 190 2,108 (1,727) 381 In-process research and development 95 (95) - 95 (95) - Total acquired identifiable intangible assets $ 34,569 $ (22,407) $ 12,162 $ 31,681 $ (19,723) $ 11,958 At September 30, 2018, annual amortization of intangible assets, based upon our existing intangible assets and current useful lives, is estimated to be the following (in thousands): Amount Remaining 2019 $ 2,699 2020 4,716 2021 2,753 2022 1,766 2023 228 Total $ 12,162 |
GOODWILL - Note 5
GOODWILL - Note 5 | 6 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL - Note 5 | 5. 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, 2018 $ 27,309 $ 12,745 $ 40,054 Additions due to acquisition 300 - 300 Foreign currency translation - (859) (859) Balance at September 30, 2018 $ 27,609 $ 11,886 $ 39,495 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Note 6 | 6 Months Ended |
Sep. 30, 2018 | |
Notes to Financial Statements | |
COMMITMENTS AND CONTINGENCIES - Note 6 | 6. COMMITMENTS AND CONTINGENCIES Facility and Equipment Leases The Company leases its headquarter's office space in San Jose, California, and also leases office space under non-cancelable operating leases in various domestic and international locations. During the first quarter of fiscal 2019, as it took control of its new corporate headquarters to begin the build out, the Company began to record additional rent expenses on a straight-line basis. Total rent expense for the three and six months ended September 30, 2018 was $2.6 million and $5.3 million, respectively. Total rent expense for the three and six months ended September 30, 2017 was $1.4 million and $2.8 million, respectively. Future minimum annual lease payments as of September 30, 2018 were as follows (in thousands): Amount Remaining 2019 $ 2,937 2020 6,918 2021 8,936 2022 8,826 2023 8,335 Thereafter 54,678 Total $ 90,630 The Company has entered into a series of noncancelable capital lease agreements for data center and office equipment bearing interest at various rates. Other Commitments, Indemnifications and Contingencies From time to time, the Company receives inquiries from various 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. During the second quarter of fiscal 2019, the Company determined that additional sales taxes were probable of being assessed and estimable in multiple states as a result of preliminary findings from current sales and use tax audits. As a result, the Company estimated an incremental sales tax liability of $4.6 million, which was recorded as general and administrative expense in the consolidated statements of operations in the second quarter of fiscal 2019. 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. |
STOCK-BASED COMPENSATION - Note
STOCK-BASED COMPENSATION - Note 7 | 6 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
STOCK-BASED COMPENSATION - Note 7 | 7. STOCK-BASED COMPENSATION The following tables summarize information pertaining to the stock-based compensation expense from stock options and stock awards (in thousands, except weighted-average grant-date fair value and recognition period): Three Months Ended Six Months Ended September 30, September 30, 2018 2017 2018 2017 Cost of service revenue $ 638 $ 473 $ 1,096 $ 864 Cost of product revenue - - - - Research and development 2,823 1,314 5,017 2,651 Sales and marketing 3,826 2,568 7,672 5,215 General and administrative 2,842 2,302 5,255 4,278 Total $ 10,129 $ 6,657 $ 19,040 $ 13,008 Six Months Ended September 30, 2018 2017 Stock options outstanding at the beginning of the period: 3,998 4,462 Options granted 195 229 Options exercised (574) (329) Options canceled and forfeited (97) (134) Options outstanding at the end of the period: 3,522 4,228 Weighted-average fair value of grants during the period $ 8.47 $ 5.28 Total intrinsic value of options exercised during the period $ 8,525 $ 3,537 Weighted-average remaining recognition period at period-end (in years) 2.52 1.95 Stock awards outstanding at the beginning of the period: 5,939 4,950 Stock awards granted 2,112 2,446 Stock awards vested (1,720) (1,225) Stock awards canceled and forfeited (433) (272) Stock awards outstanding at the end of the period: 5,898 5,899 Weighted-average fair value of grants during the period $ 22.01 $ 14.09 Weighted-average remaining recognition period at period-end (in years) 2.44 2.75 Total unrecognized compensation expense at period-end $ 79,121 $ 63,323 Stock Repurchases In May 2017, the Company's board of directors authorized the Company to purchase up to $25.0 million of its common stock from time to time under the 2017 Repurchase Plan (the "2017 Plan"). The 2017 Plan expires when the maximum purchase amount is reached, or upon the earlier revocation or termination by the board of directors. The remaining amount available under the 2017 Plan at September 30, 2018 was approximately $7.1 million. There were no stock repurchases under the 2017 Plan during the six months period ended September 30, 2018. |
INCOME TAXES - Note 8
INCOME TAXES - Note 8 | 6 Months Ended |
Sep. 30, 2018 | |
Notes to Financial Statements | |
INCOME TAXES - Note 8 | 8. INCOME TAXES The Company's effective tax rate was (1)% and 86% for the three months ended September 30, 2018 and 2017, respectively. The effective tax rate is calculated by dividing the income tax provision by net income (loss) before income tax expense. The difference in the effective tax rate and the U.S. federal statutory rate was due primarily to the change in pretax profitability, and geographic mix of profits and losses and the full valuation allowance recorded during the third quarter of fiscal year 2018. |
NET LOSS PER SHARE - Note 9
NET LOSS PER SHARE - Note 9 | 6 Months Ended |
Sep. 30, 2018 | |
Notes to Financial Statements | |
NET LOSS PER SHARE - Note 9 | 9. NET LOSS PER SHARE The following table summarizes the computation of basic and diluted net loss per share (in thousands, except share and per share data): Three Months Ended Six Months Ended September 30, September 30, 2018 2017 2018 2017 Numerator: Net loss available to common stockholders $ (21,482) $ (546) $ (36,837) $ (2,715) Denominator: Common shares - basic and diluted 93,831 91,689 93,449 91,667 Net loss per share Basic and diluted $ (0.23) $ (0.01) $ (0.39) $ (0.03) The following shares attributable to outstanding stock options and stock awards were excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive (in thousands): Three Months Ended Six Months Ended September 30, September 30, 2018 2017 2018 2017 Stock options 3,522 4,228 3,522 4,228 Stock awards 5,897 5,899 5,897 5,899 Total anti-dilutive shares 9,419 10,127 9,419 10,127 |
SEGMENT REPORTING AND GEOGRAPHI
SEGMENT REPORTING AND GEOGRAPHICAL INFORMATION - Note 10 | 6 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING - Note 10 | 10. SEGMENT REPORTING AND GEOGRAPHICAL INFORMATION The Company manages its operations primarily on a geographic basis. 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. The following tables set forth the segment and geographic information for each period (in thousands): Revenue for the Three Months Ended Six Months Ended September 30, September 30, 2018 2017 2018 2017 Americas (principally US) $ 77,100 $ 65,121 $ 151,965 $ 127,526 Europe (principally UK) 8,582 7,362 16,942 14,055 $ 85,682 $ 72,483 $ 168,907 $ 141,581 Revenues are attributed to each segment based on the ordering location of the customer or ship to location. For the three and six months ended September 30, 2018 and 2017, inter-segment revenues of approximately $6.5 million and $13.1 million, and $4.4 million and $6.9 million respectively, were eliminated in consolidation, and have been excluded from the table above. Depreciation and Amortization for the Three Months Ended Six Months Ended September 30, September 30, 2018 2017 2018 2017 Americas (principally US) $ 4,665 $ 2,336 $ 8,972 $ 4,869 Europe (principally UK) 994 1,295 1,865 2,489 $ 5,659 $ 3,631 $ 10,837 $ 7,358 Net Income (Loss) for the Three Months Ended Six Months Ended September 30, September 30, 2018 2017 2018 2017 Americas (principally US) $ (21,237) $ 970 $ (35,586) $ 1,379 Europe (principally UK) (245) (1,516) (1,251) (4,094) $ (21,482) $ (546) $ (36,837) $ (2,715) September 30, 2018 March 31, 2018 Total Property and Total Property and Assets Equipment, net Assets Equipment, net Americas (principally US) $ 265,373 $ 34,958 $ 240,099 $ 27,270 Europe (principally UK) 44,259 7,437 37,110 8,462 $ 309,632 $ 42,395 $ 277,209 $ 35,732 |
ACQUISITIONS - Note 11
ACQUISITIONS - Note 11 | 6 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
ACQUISITIONS - Note 11 | 11. ACQUISITIONS MarianaIQ On April 12, 2018, the Company entered into an Asset Purchase Agreement with MarianaIQ Inc. (MarianaIQ) for the purchase of certain assets of MarianaIQ. The total aggregate purchase price consisted of cash paid to MarianaIQ at closing, and cash to be held in escrow by the Company for fifteen months, as security against indemnity claims asserted by the Company after the closing date. The escrow amount is recorded as other accrued liabilities on the consolidated balance sheets as of September 30, 2018. The Company recorded the acquired developed technology as an identifiable intangible asset with an estimated useful life of two years. The fair value of the technology was based on estimates and assumptions made by management using a cost approach method. The intangible asset is amortized on a straight-line basis over two years. The excess of the consideration transferred over the aggregate fair value of the asset acquired 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 the acquired workforce. The preliminary fair values of the assets acquired are as follows (in thousands): Fair Value Assets acquired: Intangible assets $ 3,200 Net identifiable assets acquired 3,200 Goodwill 300 Total consideration transferred $ 3,500 MarianaIQ did not contribute materially to revenue or net loss for the period of acquisition to September 30, 2018. Goodwill recognized upon acquisition is expected to be deductible for income tax purposes and is included in the Americas reporting unit (see Note 5). Total acquisition costs were immaterial. |
SUBSEQUENT EVENTS - Note 12
SUBSEQUENT EVENTS - Note 12 | 6 Months Ended |
Sep. 30, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS - Note 12 | 12. SUBSEQUENT EVENTS On October 26, 2018, the Company entered into an Asset Purchase Agreement with Atlassian Corporation Plc. (Atlassian) through which the Company purchased certain assets from Atlassian relating to the Jitsi open source video communications technology (Jitsi). The Company intends to integrate Jitsi's video collaboration capabilities into 8x8's technology platform to further enhance the Company's video and X Series platform offerings. |
Summary of Significant Accounti
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Sep. 30, 2018 | |
Notes to Financial Statements | |
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 2019 refers to the fiscal year ending March 31, 2019). |
Use of Estimates | The accompanying interim consolidated financial statements are unaudited and have been prepared on substantially the same basis as our annual consolidated financial statements for the fiscal year ended March 31, 2018, with the exception of new revenue recognition guidance discussed in the recently adopted accounting principles section below. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (SEC), regarding interim financial reporting. |
Basis of Presentation | The March 31, 2018 year-end consolidated balance sheet data in this document were derived from audited consolidated financial statements and does not include all of the disclosures required by U.S. generally accepted accounting principles. These consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements as of and for the fiscal year ended March 31, 2018 and notes thereto included in the Company's fiscal 2018 Annual Report on Form 10-K. The results of operations and cash flows for the interim periods included in these consolidated financial statements are not necessarily indicative of the results to be expected for any future period or the entire fiscal year. The significant accounting policies used in preparation of these consolidated financial statements are disclosed in our Annual Report on Form 10-K for the fiscal year ended March 31, 2018 filed with the SEC on May 30, 2018, and there have been no changes to the Company's significant accounting policies during the three months ended September 30, 2018 except for the accounting policies described below that were updated as a result of adopting Accounting Standards Update (ASU) 2014-9, Revenue from Contracts with Customers: Topic 606 Other Assets and Deferred Costs - Contracts with Customers, |
Acquisition | ACQUISITION In April 2018, the Company entered into an asset purchase agreement with MarianaIQ, Inc. The total aggregate purchase price consisted of cash paid at closing and cash deposited into escrow to be held for fifteen months as security against indemnity claims made by the Company after the closing date. See Note 11 for additional information. |
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. |
Recently Adopted Accounting Pronouncements | RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS In May 2014, the Financial Accounting Standards Board (FASB) issued ASU 2014-9, which replaces numerous requirements in U.S. GAAP and provide companies with a single revenue recognition model for recognizing revenue from contracts with customers. ASC 606 requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. It defines a five-step process to achieve this core principle and, in doing so, more judgment and estimates are required with the revenue recognition process than were required under the previous guidance (ASC 605). The new standard permits the use of either the full retrospective or modified retrospective transition method. The Company adopted the new standard effective April 1, 2018 using the modified retrospective method. Under the modified retrospective method, the comparative periods' information is not restated and continues to be reported under the accounting standards in effect in those prior periods. Instead, on April 1, 2018, the Company recognized the cumulative effect of initially applying ASC 606 as an adjustment to the opening balance of accumulated deficit and the corresponding balance sheet accounts, which resulted in a net decrease to accumulated deficit of $39.9 million. The impact on the Company's opening balances primarily relates to the capitalization of additional commission costs under ASC 606 in the amount of $38.2 million. Under ASC 605, the Company expensed all commission costs as incurred. Under ASC 606, the Company defers all incremental commission costs to obtain the contract and amortizes these costs over a benefit period of five years. The remaining $1.7 million impact of adopting the standard relates to revenue being recognized earlier under ASC 606 than it would have been under ASC 605, which resulted in a contract asset as of the adoption date. See Note 2 for additional disclosure on the impact of adopting this standard. |
Recent Accounting Pronouncements | RECENT ACCOUNTING PRONOUNCEMENTS In February 2016, the FASB issued ASU 2016-2, Leases (Topic 842), In June 2018, the FASB issued ASU 2018-7, Compensation-Stock Compensation (Topic 718) In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) In August 2018, the FASB issued 2018-15, Intangibles-Goodwill and Other-Internal Use Software (Subtopic 350-40) |
Revenue recognition | Revenue Recognition under ASC 606 The Company recognizes service revenue, mainly from subscription services to its cloud-based voice, call center, video and collaboration solutions using the five-step model as prescribed by ASC 606: • Identification of the contract, or contracts, with a customer; The Company identifies performance obligations in contracts with customers, which may include subscription services and related usage, product revenue and professional services. The transaction price is determined based on the amount the Company expects to be entitled to in exchange for transferring the promised services or products to the customer. The transaction price in the contract is allocated to each distinct performance obligation in an amount that represents the relative amount of consideration expected to be received in exchange for satisfying each performance obligation. Revenue is recognized when performance obligations are satisfied. Revenues are recorded based on the transaction price excluding amounts collected on behalf of third parties such as sales and telecommunication taxes, which are collected on behalf of and remitted to governmental authorities. The Company usually bills its customers on a monthly basis. Contracts typically range from annual to multi-year agreements with payment terms of net 30 days or less. The Company occasionally allows a 30-day period to cancel a subscription and return products shipped for a full refund. Judgments and Estimates The estimation of variable consideration for each performance obligation requires the Company to make subjective judgments. The Company has service-level agreements with customers warranting defined levels of uptime reliability and performance. Customers may get credits or refunds if the Company fails to meet such levels. If the services do not meet certain criteria, fees are subject to adjustment or refund representing a form of variable consideration. The Company may impose minimum revenue commitments (MRC) on its customers at the inception of the contract. Thus, in estimating variable consideration for each of these performance obligations, the Company assesses both the probability of MRC occurring and the collectability of the MRC, of which both represent a form of variable consideration. The Company enters into contracts with customers that regularly include promises to transfer multiple services and products, such as subscriptions, products, and professional services. For arrangements with multiple services, the Company evaluates whether the individual services qualify as distinct performance obligations. In its assessment of whether a service is a distinct performance obligation, the Company determines whether the customer can benefit from the service on its own or with other readily available resources, and whether the service is separately identifiable from other services in the contract. This evaluation requires the Company to assess the nature of each individual service offering and how the services are provided in the context of the contract, including whether the services are significantly integrated, highly interrelated, or significantly modify each other, which may require judgment based on the facts and circumstances of the contract. When agreements involve multiple distinct performance obligations, the Company allocates arrangement consideration to all performance obligations at the inception of an arrangement based on the relative standalone selling prices (SSP) of each performance obligation. Usage fees deemed to be variable consideration meet the allocation exception for variable consideration. Where the Company has standalone sales data for its performance obligations which are indicative of the price at which the Company sells a promised good or service separately to a customer, such data is used to establish SSP. In instances where standalone sales data is not available for a particular performance obligation, the Company estimates SSP by the use of observable market and cost-based inputs. The Company continues to review the factors used to establish list price and will adjust standalone selling price methodologies as necessary on a prospective basis. Service Revenue Service revenue from subscriptions to the Company's cloud-based technology platform is recognized over time on a ratable basis over the contractual subscription term beginning on the date that the platform is made available to the customer. Payments received in advance of subscription services being rendered are recorded as a deferred revenue. Usage fees, either bundled or not bundled, are recognized when the Company has a right to invoice. Professional services for configuration, system integration, optimization, customer training and/or education are primarily billed on a fixed-fee basis and are performed by the Company directly or, alternatively, customers may also choose to perform these services themselves or engage their own third-party service providers. Professional services revenue is recognized over time, generally as customer sites go live. When a contract with a customer is signed, the Company assesses whether collection of the fees under the arrangement is probable. The Company estimates the amount to reserve for uncollectible amounts based on the aging of the contract balance, current and historical customer trends, and communications with its customers. These reserves are recorded as operating expenses against the contract asset (Accounts Receivable). In the normal course of business, the Company records revenue reductions for customer credits. Product Revenue The Company recognizes product revenue for telephony equipment at a point in time, when transfer of control has occurred, which is generally upon shipment. Sales returns are recorded as a reduction to revenue estimated based on historical experience. Contract Assets Contract assets are recorded for those parts of the contract consideration not yet invoiced but for which the performance obligations are completed. The revenue is recognized when the customer receives services or equipment for a reduced consideration at the onset of an arrangement, for example when the initial month's services or equipment are discounted. Contract assets are included in other current or non-current assets in the consolidated balance sheets, depending on if their reduction is recognized during the succeeding 12-month period or beyond. Deferred Revenue Deferred revenues represent billings or payments received in advance of revenue recognition and is recognized upon transfer of control. Balances consist primarily of annual plan subscription services and professional and training services not yet provided as of the balance sheet date. Deferred revenues that will be recognized during the succeeding 12-month period are recorded as current deferred revenues in the consolidated balance sheets, with the remainder recorded as other non-current liabilities in the consolidated balance sheets. Costs to Obtain a Customer Contract Sales commissions and related expenses are considered incremental and recoverable costs of acquiring customer contracts. These costs are capitalized as other current or non-current assets and amortized on a straight-line basis over the anticipated benefit period, which is five years. The benefit period was estimated by taking into consideration the length of customer contracts, technology lifecycle, and other factors. This amortization expense is recorded in sales and marketing expense within the Company's consolidated statement of operations. Practical Expedients The new guidance under ASC 340-40, Other Assets and Deferred Costs - Contracts with Customers, sets forth the requirement of deferring incremental costs of obtaining a contract, typically sales commissions, that were expensed as incurred under the previous guidance. The Company applies a practical expedient that permits to apply Subtopic 340-40 to a portfolio of contracts, instead of on a contract-by-contract basis, as they are similar in their characteristics, and the financial statement effects of applying Subtopic 340-40 to that portfolio would not differ materially from applying it to the individual contracts within that portfolio. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 6 Months Ended |
Sep. 30, 2018 | |
Revenue Recognition | |
Schedule of impacts of adopting ASC 606 | The Company recognized the cumulative effect of initially applying ASC 606 as an adjustment to retained earnings in the consolidated balance sheet as of April 1, 2018 (in thousands). Adjustments Balance at Due to Balance at March 31, 2018 ASC 606 April 1, 2018 Current assets: Deferred sales commission costs $ - $ 11,234 $ 11,234 Other current assets $ 10,040 $ 1,725 $ 11,765 Non-current assets: Deferred sales commission costs $ - $ 26,942 $ 26,942 Stockholders' Equity Accumulated deficit $ (201,464) $ 39,901 $ (161,563) The following tables summarize the impact of the ASC 606 adoption on the Company's consolidated financial statements for the quarter ended September 30, 2018. Selected Consolidated Balance Sheet Line Items (in thousands): September 30, 2018 (As Reported) ASC 605 Adjustments ASC 606 Current assets: Deferred sales commission costs $ - $ 13,656 $ 13,656 Other current assets $ 12,107 $ 1,782 $ 13,889 Non-current assets: Deferred sales commission costs $ - $ 29,229 $ 29,229 Stockholders' Equity Accumulated deficit $ (243,067) $ 44,667 $ (198,400) Selected Consolidated Statement of Operations Line Items (in thousands, except per share amounts): Three Months Ended September 30, 2018 Six Months Ended September 30, 2018 (As Reported) (As Reported) ASC 605 Adjustments ASC 606 ASC 605 Adjustments ASC 606 Service revenue $ 81,543 $ (197) $ 81,346 $ 159,785 $ (318) $ 159,467 Product revenue 4,176 160 4,336 9,187 253 9,440 Total revenue $ 85,719 $ (37) $ 85,682 $ 168,972 $ (65) $ 168,907 Operating expenses: Sales and marketing $ 58,806 $ (2,876) $ 55,930 $ 113,910 $ (4,675) $ 109,235 Loss from operations $ (24,826) $ 2,839 $ (21,987) $ (42,580) $ 4,610 $ (37,970) Net loss $ (24,321) $ 2,839 $ (21,482) $ (41,447) $ 4,610 $ (36,837) Net loss per share: Basic and diluted $ (0.26) $ 0.03 $ (0.23) $ (0.44) $ 0.05 $ (0.39) Selected Consolidated Statements of Cash Flows Line Items (in thousands): September 30, 2018 (As Reported) ASC 605 Adjustments ASC 606 Net loss $ (41,447) $ 4,610 $ (36,837) Deferred sales commission costs $ - $ (4,675) $ (4,675) Other current and noncurrent assets $ (1,517) $ 65 $ (1,452) Net cash provided by operating activities $ (4,550) $ - $ (4,550) |
Schedule of contract assets and liabilities | The following table provides information about receivables, contract assets and deferred revenues from contracts with customers (in thousands): September 30, 2018 Accounts receivable, net $ 18,870 Other current assets $ 1,782 Deferred revenue - current $ 3,354 Deferred revenue - noncurrent $ 11 Changes in the contract assets and the deferred revenues balances during the six months ended September 30, 2018 are as follows (in thousands): April 1, 2018 September 30, 2018 $ Change Other current assets $ 1,725 $ 1,782 $ 57 Deferred revenue $ 2,578 $ 3,364 $ 786 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 6 Months Ended |
Sep. 30, 2018 | |
Fair Value Measurements | |
Fair Value Measurements, Recurring and Nonrecurring (Tables) | Cash, cash equivalents, and available-for-sale investments (in thousands): Gross Gross Cash and Amortized Unrealized Unrealized Estimated Cash Short-Term As of September 30, 2018 Costs Gain Loss Fair Value Equivalents Investments Cash $ 16,585 $ - $ - $ 16,585 $ 16,585 $ - Level 1: Money market funds 8,092 - - 8,092 8,092 - Subtotal 24,677 - - 24,677 24,677 - Level 2: Commercial paper 3,178 - - 3,178 - 3,178 Corporate debt 69,575 19 (132) 69,462 - 69,462 Municipal securities 5,501 3 - 5,504 - 5,504 Asset backed securities 21,960 6 (59) 21,907 - 21,907 Agency bond 4,221 - (40) 4,181 - 4,181 Subtotal 104,435 28 (231) 104,232 - 104,232 Total assets $ 129,112 $ 28 $ (231) $ 128,909 $ 24,677 $ 104,232 Gross Gross Cash and Amortized Unrealized Unrealized Estimated Cash Short-Term As of March 31, 2018 Costs Gain Loss Fair Value Equivalents Investments Cash $ 16,499 $ - $ - $ 16,499 $ 16,499 $ - Level 1: Money market funds 15,204 - - 15,204 15,204 - Subtotal 31,703 - - 31,703 31,703 - Level 2: Commercial paper 13,254 - (8) 13,246 - 13,246 Corporate debt 70,631 6 (296) 70,341 - 70,341 Municipal securities 3,385 3 (1) 3,387 - 3,387 Asset backed securities 27,063 1 (119) 26,945 - 26,945 Agency bond 4,183 - (35) 4,148 - 4,148 International government securities 2,497 - (5) 2,492 - 2,492 Subtotal 121,013 10 (464) 120,559 - 120,559 Total assets $ 152,716 $ 10 $ (464) $ 152,262 $ 31,703 $ 120,559 Contractual maturities of investments as of September 30, 2018 are set forth below (in thousands): Estimated Fair Value Due within one year $ 49,792 Due after one year 54,440 Total $ 104,232 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 6 Months Ended |
Sep. 30, 2018 | |
Intangible Assets | |
Carrying values of intangible assets | The carrying value of intangible assets consisted of the following (in thousands): September 30, 2018 March 31, 2018 Gross Net Gross Net Carrying Accumulated Carrying Carrying Accumulated Carrying Amount Amortization Amount Amount Amortization Amount Technology $ 22,902 $ (12,755) $ 10,147 $ 19,702 $ (10,535) $ 9,167 Customer relationships 9,464 (7,639) 1,825 9,776 (7,366) 2,410 Trade names/domains 2,108 (1,918) 190 2,108 (1,727) 381 In-process research and development 95 (95) - 95 (95) - Total acquired identifiable intangible assets $ 34,569 $ (22,407) $ 12,162 $ 31,681 $ (19,723) $ 11,958 |
Finite-lived intangible assets - future amortization expense | At September 30, 2018, annual amortization of intangible assets, based upon our existing intangible assets and current useful lives, is estimated to be the following (in thousands): Amount Remaining 2019 $ 2,699 2020 4,716 2021 2,753 2022 1,766 2023 228 Total $ 12,162 |
Goodwill (Tables)
Goodwill (Tables) | 6 Months Ended |
Sep. 30, 2018 | |
Goodwill Tables Abstract | |
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, 2018 $ 27,309 $ 12,745 $ 40,054 Additions due to acquisition 300 - 300 Foreign currency translation - (859) (859) Balance at September 30, 2018 $ 27,609 $ 11,886 $ 39,495 |
Commitments And Contingencies (
Commitments And Contingencies (Tables) | 6 Months Ended |
Sep. 30, 2018 | |
Commitments And Contingencies | |
Future minimum annual operating lease payments | Future minimum annual lease payments as of September 30, 2018 were as follows (in thousands): Amount Remaining 2019 $ 2,937 2020 6,918 2021 8,936 2022 8,826 2023 8,335 Thereafter 54,678 Total $ 90,630 |
Distribution of Stock-Based Com
Distribution of Stock-Based Compensation Plan Expense (Tables) | 6 Months Ended |
Sep. 30, 2018 | |
Distribution Of Stock-based Compensation Plan Expense | |
Schedule Of Stock-Based Compensation Expense By Statement Of Operations Line Item | Three Months Ended Six Months Ended September 30, September 30, 2018 2017 2018 2017 Cost of service revenue $ 638 $ 473 $ 1,096 $ 864 Cost of product revenue - - - - Research and development 2,823 1,314 5,017 2,651 Sales and marketing 3,826 2,568 7,672 5,215 General and administrative 2,842 2,302 5,255 4,278 Total $ 10,129 $ 6,657 $ 19,040 $ 13,008 |
Stock-Based Compensation And Em
Stock-Based Compensation And Employee Purchase Plan (Tables) | 6 Months Ended |
Sep. 30, 2018 | |
Option Grants | |
Disclosure Of Share-Based Compensation Arrangements By Share-Based Payment Award | Six Months Ended September 30, 2018 2017 Stock options outstanding at the beginning of the period: 3,998 4,462 Options granted 195 229 Options exercised (574) (329) Options canceled and forfeited (97) (134) Options outstanding at the end of the period: 3,522 4,228 Weighted-average fair value of grants during the period $ 8.47 $ 5.28 Total intrinsic value of options exercised during the period $ 8,525 $ 3,537 Weighted-average remaining recognition period at period-end (in years) 2.52 1.95 |
Stock Awards | |
Disclosure Of Share-Based Compensation Arrangements By Share-Based Payment Award | Six Months Ended September 30, 2018 2017 Stock awards outstanding at the beginning of the period: 5,939 4,950 Stock awards granted 2,112 2,446 Stock awards vested (1,720) (1,225) Stock awards canceled and forfeited (433) (272) Stock awards outstanding at the end of the period: 5,898 5,899 Weighted-average fair value of grants during the period $ 22.01 $ 14.09 Weighted-average remaining recognition period at period-end (in years) 2.44 2.75 Total unrecognized compensation expense at period-end $ 79,121 $ 63,323 |
Net Income (Loss) Per Share (Ta
Net Income (Loss) Per Share (Tables) | 6 Months Ended |
Sep. 30, 2018 | |
Net Income Loss Per Share | |
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 loss per share (in thousands, except share and per share data): Three Months Ended Six Months Ended September 30, September 30, 2018 2017 2018 2017 Numerator: Net loss available to common stockholders $ (21,482) $ (546) $ (36,837) $ (2,715) Denominator: Common shares - basic and diluted 93,831 91,689 93,449 91,667 Net loss per share Basic and diluted $ (0.23) $ (0.01) $ (0.39) $ (0.03) |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following shares attributable to outstanding stock options and stock awards were excluded from the calculation of diluted earnings per share because their inclusion would have been antidilutive (in thousands): Three Months Ended Six Months Ended September 30, September 30, 2018 2017 2018 2017 Stock options 3,522 4,228 3,522 4,228 Stock awards 5,897 5,899 5,897 5,899 Total anti-dilutive shares 9,419 10,127 9,419 10,127 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Sep. 30, 2018 | |
Segment Information | |
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): Revenue for the Three Months Ended Six Months Ended September 30, September 30, 2018 2017 2018 2017 Americas (principally US) $ 77,100 $ 65,121 $ 151,965 $ 127,526 Europe (principally UK) 8,582 7,362 16,942 14,055 $ 85,682 $ 72,483 $ 168,907 $ 141,581 September 30, 2018 March 31, 2018 Total Property and Total Property and Assets Equipment, net Assets Equipment, net Americas (principally US) $ 265,373 $ 34,958 $ 240,099 $ 27,270 Europe (principally UK) 44,259 7,437 37,110 8,462 $ 309,632 $ 42,395 $ 277,209 $ 35,732 |
Schedule of Segment Reporting Information, by Segment | Depreciation and Amortization for the Three Months Ended Six Months Ended September 30, September 30, 2018 2017 2018 2017 Americas (principally US) $ 4,665 $ 2,336 $ 8,972 $ 4,869 Europe (principally UK) 994 1,295 1,865 2,489 $ 5,659 $ 3,631 $ 10,837 $ 7,358 Net Income (Loss) for the Three Months Ended Six Months Ended September 30, September 30, 2018 2017 2018 2017 Americas (principally US) $ (21,237) $ 970 $ (35,586) $ 1,379 Europe (principally UK) (245) (1,516) (1,251) (4,094) $ (21,482) $ (546) $ (36,837) $ (2,715) |
Acquisition (Tables)
Acquisition (Tables) | 6 Months Ended |
Sep. 30, 2018 | |
Acquisition Tables Abstract | |
Schedule of Business Acquisitions, by Acquisition [Table Text Block] | The preliminary fair values of the assets acquired are as follows (in thousands): Fair Value Assets acquired: Intangible assets $ 3,200 Net identifiable assets acquired 3,200 Goodwill 300 Total consideration transferred $ 3,500 |
Description of the Business (Na
Description of the Business (Narrative) (Details) | 6 Months Ended |
Sep. 30, 2018 | |
Description Of Business Narrative | |
Fiscal Year End Date | --03-31 |
Number of countries in which customer are spread | 150 |
Description of the Business (Ac
Description of the Business (Acquisitions Narrative) (Details) | 1 Months Ended |
Apr. 30, 2018 | |
Description Of Business Acquisitions Narrative | |
Effective date of purchase agreement | Apr. 30, 2018 |
Business Acquisition, Description of Acquired Entity | In April 2018, the Company entered into an asset purchase agreement with MarianaIQ, Inc. The total aggregate purchase price consisted of cash paid at closing and cash deposited into escrow to be held for fifteen months as security against indemnity claims made by the Company after the closing date. See Note 11 for additional information.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"> </p>" id="sjs-B5"><p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">In April 2018, the Company entered into an asset purchase agreement with MarianaIQ, Inc. The total aggregate purchase price consisted of cash paid at closing and cash deposited into escrow to be held for fifteen months as security against indemnity claims made by the Company after the closing date. See Note 11 for additional information.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"> </p> |
Revenue Recognition - Summary o
Revenue Recognition - Summary of Impact of ASC 606 (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Mar. 31, 2018 | |
Service revenue | $ 81,346 | $ 159,467 | |||
Product revenue | 4,336 | 9,440 | |||
Total revenue | 85,682 | $ 72,483 | 168,907 | $ 141,581 | |
Operating expenses: | |||||
Sales and marketing | 55,930 | 41,163 | 109,235 | 82,273 | |
Loss from operations | (21,987) | (4,462) | (37,970) | (9,919) | |
Net loss | $ (21,482) | $ (546) | $ (36,837) | $ (2,715) | |
Net loss per share: | |||||
Basic and diluted | $ (0.23) | $ (0.01) | $ (0.39) | $ (0.03) | |
Current assets: | |||||
Deferred sales commission costs | $ 13,656 | $ 13,656 | $ 11,234 | ||
Other current assets | 13,889 | 13,889 | 11,765 | ||
Non-current assets: | |||||
Deferred sales commission costs | 29,229 | 29,229 | 26,942 | ||
Stockholders' equity: | |||||
Accumulated deficit | (198,400) | (198,400) | (161,563) | ||
Cash Flow Line Items | |||||
Net loss | (21,482) | $ (546) | (36,837) | $ (2,715) | |
Deferred sales commission costs | (4,675) | 0 | |||
Other current and noncurrent assets | (1,452) | ||||
Net cash provided by operating activities | (4,550) | $ 11,174 | |||
ASC 605 | Previous | |||||
Service revenue | 81,543 | 159,785 | |||
Product revenue | 4,176 | 9,187 | |||
Total revenue | 85,719 | 168,972 | |||
Operating expenses: | |||||
Sales and marketing | 58,806 | 113,910 | |||
Loss from operations | (24,826) | (42,580) | |||
Net loss | $ (24,321) | $ (41,447) | |||
Net loss per share: | |||||
Basic and diluted | $ (0.26) | $ (0.44) | |||
Current assets: | |||||
Deferred sales commission costs | 0 | ||||
Other current assets | 10,040 | ||||
Non-current assets: | |||||
Deferred sales commission costs | 0 | ||||
Stockholders' equity: | |||||
Accumulated deficit | (201,464) | ||||
Cash Flow Line Items | |||||
Net loss | $ (24,321) | $ (41,447) | |||
Deferred sales commission costs | 0 | ||||
Other current and noncurrent assets | (1,517) | ||||
Net cash provided by operating activities | (4,550) | ||||
ASC 606 | Adjustment | |||||
Service revenue | (197) | (318) | |||
Product revenue | 160 | 253 | |||
Total revenue | (37) | (65) | |||
Operating expenses: | |||||
Sales and marketing | (2,876) | (4,675) | |||
Loss from operations | 2,839 | 4,610 | |||
Net loss | $ 2,839 | $ 4,610 | |||
Net loss per share: | |||||
Basic and diluted | $ 0.03 | $ 0.05 | |||
Current assets: | |||||
Deferred sales commission costs | $ 13,656 | $ 13,656 | 11,234 | ||
Other current assets | 1,782 | 1,782 | 1,725 | ||
Non-current assets: | |||||
Deferred sales commission costs | 29,229 | 29,229 | 26,942 | ||
Stockholders' equity: | |||||
Accumulated deficit | 44,667 | 44,667 | $ 39,901 | ||
Cash Flow Line Items | |||||
Net loss | 2,839 | 4,610 | |||
Deferred sales commission costs | (4,675) | ||||
Other current and noncurrent assets | 65 | ||||
Net cash provided by operating activities | 0 | ||||
ASC 605 | Previous | |||||
Current assets: | |||||
Deferred sales commission costs | 0 | 0 | |||
Other current assets | 12,017 | 12,017 | |||
Non-current assets: | |||||
Deferred sales commission costs | 0 | 0 | |||
Stockholders' equity: | |||||
Accumulated deficit | $ (243,067) | $ (243,067) |
Revenue Recognition - Contract
Revenue Recognition - Contract Balances with Contract Customers (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Mar. 31, 2018 |
Accounts receivable | $ 18,870 | $ 16,296 |
Other current assets | 1,782 | 1,725 |
Deferred revenue - current | 3,354 | $ 2,559 |
Contracts with Customers | ||
Accounts receivable | 18,870 | |
Other current assets | 1,782 | |
Deferred revenue - current | 3,354 | |
Deferred revenue - noncurrent | $ 11 |
Revenue Recognition - Schedule
Revenue Recognition - Schedule of Changes in Contract Assets and Deferred Revenues (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Sep. 30, 2018 | Mar. 31, 2018 | |
Contractors [Abstract] | ||
Other current assets | $ 1,782 | $ 1,725 |
Change in other current assets | 57 | |
Deferred revenue | 3,364 | $ 2,578 |
Change in deferred revenue | $ 786 |
Revenue Recognition - Estimated
Revenue Recognition - Estimated Revenue Expected to be Recognized in Future for Performance Obligations (Narrative) (Details) $ in Millions | Sep. 30, 2018USD ($) |
Revenue Recognition - Estimated Revenue Expected To Be Recognized In Future For Performance Obligations Narrative | |
Revenue, Remaining Performance Obligation | $ 140 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 2 years |
Cash, Cash Equivalents and Inve
Cash, Cash Equivalents and Investments with Hierarchy (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Mar. 31, 2018 |
Amortized Costs | $ 129,112 | $ 152,716 |
Gross Unrealized Gains | 28 | 10 |
Gross Unrealized Loss | (231) | (464) |
Estimated Fair Value | 128,909 | 152,262 |
Cash and cash equivalents | 24,677 | 31,703 |
Short-term marketable investments | 104,232 | 120,559 |
Aavailable-for-sale investments due within one year | 49,792 | |
Aavailable-for-sale investments due after one year | 54,440 | |
Level 1 | ||
Amortized Costs | 24,677 | 31,073 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Loss | 0 | 0 |
Estimated Fair Value | 24,677 | 31,073 |
Cash and cash equivalents | 24,677 | 31,073 |
Short-term marketable investments | 0 | 0 |
Level 2 | ||
Amortized Costs | 104,435 | 121,013 |
Gross Unrealized Gains | 28 | 10 |
Gross Unrealized Loss | (231) | (464) |
Estimated Fair Value | 104,232 | 120,559 |
Cash and cash equivalents | 0 | 0 |
Short-term marketable investments | 104,232 | 120,559 |
Cash | ||
Amortized Costs | 16,585 | 16,499 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Loss | 0 | 0 |
Estimated Fair Value | 16,585 | 16,499 |
Cash and cash equivalents | 16,585 | 16,499 |
Short-term marketable investments | 0 | 0 |
Money Market Funds | Level 1 | ||
Amortized Costs | 8,092 | 15,204 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Loss | 0 | 0 |
Estimated Fair Value | 8,092 | 15,204 |
Cash and cash equivalents | 8,092 | 15,204 |
Short-term marketable investments | 0 | 0 |
Commercial Paper | Level 2 | ||
Amortized Costs | 3,178 | 13,254 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Loss | 0 | (8) |
Estimated Fair Value | 3,178 | 13,246 |
Cash and cash equivalents | 0 | 0 |
Short-term marketable investments | 3,178 | 13,246 |
Corporate Debt | Level 2 | ||
Amortized Costs | 69,575 | 70,631 |
Gross Unrealized Gains | 19 | 6 |
Gross Unrealized Loss | (132) | (296) |
Estimated Fair Value | 69,462 | 70,341 |
Cash and cash equivalents | 0 | 0 |
Short-term marketable investments | 69,462 | 70,341 |
Municipal Securities | Level 2 | ||
Amortized Costs | 5,501 | 3,385 |
Gross Unrealized Gains | 3 | 3 |
Gross Unrealized Loss | 0 | (1) |
Estimated Fair Value | 5,504 | 3,387 |
Cash and cash equivalents | 0 | 0 |
Short-term marketable investments | 5,504 | 3,387 |
Asset-backed Securities | Level 2 | ||
Amortized Costs | 21,960 | 27,063 |
Gross Unrealized Gains | 6 | 1 |
Gross Unrealized Loss | (59) | (119) |
Estimated Fair Value | 21,907 | 26,945 |
Cash and cash equivalents | 0 | 0 |
Short-term marketable investments | 21,907 | 26,945 |
Agency Bond | Level 2 | ||
Amortized Costs | 4,221 | 4,183 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Loss | (40) | (35) |
Estimated Fair Value | 4,181 | 4,148 |
Cash and cash equivalents | 0 | 0 |
Short-term marketable investments | $ 4,181 | 4,148 |
International Government Securities | Level 2 | ||
Amortized Costs | 2,497 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Loss | (5) | |
Estimated Fair Value | 2,492 | |
Cash and cash equivalents | 0 | |
Short-term marketable investments | $ 2,492 |
Intangible Assets Schedule Of I
Intangible Assets Schedule Of Intangibles (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Mar. 31, 2018 |
Gross Carrying Amount | $ 34,569 | $ 31,681 |
Accumulated Amortization | (22,407) | (19,723) |
Net Carrying Amount | 12,162 | 11,958 |
Technology | ||
Gross Carrying Amount | 22,902 | 19,702 |
Accumulated Amortization | (12,755) | (10,535) |
Net Carrying Amount | 10,147 | 9,167 |
Customer relationships | ||
Gross Carrying Amount | 9,464 | 9,776 |
Accumulated Amortization | (7,639) | (7,366) |
Net Carrying Amount | 1,825 | 2,410 |
Trade names/domains | ||
Gross Carrying Amount | 2,108 | 2,108 |
Accumulated Amortization | (1,918) | (1,727) |
Net Carrying Amount | 190 | 381 |
In-process research and development | ||
Gross Carrying Amount | 95 | 95 |
Accumulated Amortization | (95) | (95) |
Net Carrying Amount | $ 0 | $ 0 |
Intangible Assets Schedule Of F
Intangible Assets Schedule Of Future Amortization Of Intangibles (Details) $ in Thousands | Sep. 30, 2018USD ($) |
Intangible Assets Schedule Of Future Amortization Of Intangibles | |
Remaining 2,019 | $ 2,699 |
2,020 | 4,716 |
2,021 | 2,753 |
2,022 | 1,766 |
2,023 | 228 |
Total | $ 12,162 |
Changes in Carrying Amount of G
Changes in Carrying Amount of Goodwill by Location (Detail) $ in Thousands | 6 Months Ended |
Sep. 30, 2018USD ($) | |
Goodwill, beginning balance | $ 40,054 |
Additions due to acquisitions | 300 |
Foreign currency translation | (859) |
Goodwill, ending balance | 39,495 |
Americas | |
Goodwill, beginning balance | 27,309 |
Additions due to acquisitions | 300 |
Foreign currency translation | 0 |
Goodwill, ending balance | 27,609 |
Europe | |
Goodwill, beginning balance | 12,745 |
Additions due to acquisitions | 0 |
Foreign currency translation | (859) |
Goodwill, ending balance | $ 11,886 |
Commitments and Contingencies_2
Commitments and Contingencies (Operating Leases) (Details) $ in Thousands | Sep. 30, 2018USD ($) |
Year ending March 31: | |
Remaining 2,019 | $ 2,937 |
2,020 | 6,918 |
2,021 | 8,936 |
2,022 | 8,826 |
2,023 | 8,335 |
Thereafter | 54,678 |
Total | $ 90,630 |
Commitments and Contingencies_3
Commitments and Contingencies (Operating Leases Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Commitments And Contingencies Operating Leases Narrative | ||||
Rent expense | $ 2.6 | $ 1.4 | $ 5.3 | $ 2.8 |
Stock-based Compensation Stock-
Stock-based Compensation Stock-Based Compensation Expense By Statement Of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Stock-based employee compensation expense related to employee stock options and employee stock purchases, pre tax | $ 10,129 | $ 6,657 | $ 19,040 | $ 13,008 |
Cost of service revenue | ||||
Stock-based employee compensation expense related to employee stock options and employee stock purchases, pre tax | 638 | 473 | 1,096 | 864 |
Cost of product revenue | ||||
Stock-based employee compensation expense related to employee stock options and employee stock purchases, pre tax | 0 | 0 | 0 | 0 |
Research and development | ||||
Stock-based employee compensation expense related to employee stock options and employee stock purchases, pre tax | 2,823 | 1,314 | 5,017 | 2,651 |
Sales and marketing | ||||
Stock-based employee compensation expense related to employee stock options and employee stock purchases, pre tax | 3,826 | 2,568 | 7,672 | 5,215 |
General and administrative | ||||
Stock-based employee compensation expense related to employee stock options and employee stock purchases, pre tax | $ 2,842 | $ 2,302 | $ 5,255 | $ 4,278 |
Stock-based Compensation Option
Stock-based Compensation Option Activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 6 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Stock-based Compensation Option Activity | ||
Balance at beginning of period | 3,998 | 4,462 |
Granted | 195 | 229 |
Exercised | (574) | (329) |
Cancelled/forfeited | (97) | (134) |
Balance at end of period | 3,522 | 4,228 |
Weighted-average exercise price of options granted during period | $ 8.47 | $ 5.28 |
Total intrinsic value of options exercised during the period | $ 8,525 | $ 3,537 |
Weighted Average Remaining recognition period in years | 2 years 187 days | 1 year 342 days |
Stock-based Compensation Stock
Stock-based Compensation Stock Awards Activity (Details) - $ / shares shares in Thousands | 6 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Stock-based Compensation Stock Awards Activity | ||
Balance at beginning of period | 5,939 | 4,950 |
Granted | 2,112 | 2,446 |
Vested | (1,720) | (1,225) |
Canceled and forfeited | (433) | (272) |
Balance at end of period | 5,898 | 5,899 |
Weighted-average grant date fair market value of restricted stock rights granted | $ 22.01 | $ 14.09 |
Weighted-average remaining contractual term, in years, ending balance | 2 years 158 days | 2 years 270 days |
Stock-based Compensation (Narra
Stock-based Compensation (Narrative) (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Sep. 30, 2017 |
Stock-based Compensation Narrative | ||
Total unrecognized compensation expense related to stock awards | $ 79,121 | $ 63,323 |
Stock Repurchases 2017 (Narrati
Stock Repurchases 2017 (Narrative) (Details) - USD ($) | 6 Months Ended | |
Sep. 30, 2018 | Mar. 31, 2018 | |
Stock Repurchases 2017 Narrative | ||
Stock repurchased and retired during period, shares | 0 | |
Stock repurchased and retired during period, value | $ 0 | |
Stock repurchase program, authorized amount | $ 25,000,000 | |
Stock repurchase program, remaining authorized repurchase amount | $ 7,100,000 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) | 6 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Effective Income Tax Rate, Percent | (1.00%) | 86.00% |
Net Income (Loss) Per Share (De
Net Income (Loss) Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Numerator: | ||||
Net loss available to common stockholders | $ (21,482) | $ (546) | $ (36,837) | $ (2,715) |
Denominator: | ||||
Common shares - basic and diluted | 93,831 | 91,689 | 93,449 | 91,667 |
Net loss per share: | ||||
Basic and diluted | $ (0.23) | $ (0.01) | $ (0.39) | $ (0.03) |
Net Income (Loss) Per Share (Op
Net Income (Loss) Per Share (Options and Awards Excluded) (Details) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Anti-dilutive shares | 9,419 | 10,127 | 9,419 | 10,127 |
Stock options | ||||
Anti-dilutive shares | 3,522 | 4,228 | 3,522 | 4,228 |
Stock awards | ||||
Anti-dilutive shares | 5,897 | 5,899 | 5,897 | 5,899 |
Segment Reporting Revenue and P
Segment Reporting Revenue and Property and Equipment by Geographic Area (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Mar. 31, 2018 | |
Net revenue | $ 85,682 | $ 72,483 | $ 168,907 | $ 141,581 | |
Depreciation and amortization expense | 5,659 | 3,631 | 10,837 | 7,358 | |
Net income (loss) | (21,482) | (546) | (36,837) | (2,715) | |
Intersegment revenues eliminated in consolidation | 6,500 | 4,400 | 13,100 | 6,900 | |
Total assets | 309,632 | 309,632 | $ 277,209 | ||
Property and equipments, net | 42,395 | 42,395 | 35,732 | ||
Americas | |||||
Net revenue | 77,100 | 65,121 | 151,965 | 127,526 | |
Depreciation and amortization expense | 4,665 | 2,336 | 8,972 | 4,869 | |
Net income (loss) | (21,237) | 970 | (35,586) | 1,379 | |
Total assets | 265,373 | 265,373 | 240,099 | ||
Property and equipments, net | 34,958 | 34,958 | 27,270 | ||
Europe | |||||
Net revenue | 8,582 | 7,362 | 16,942 | 14,055 | |
Depreciation and amortization expense | 994 | 1,295 | 1,865 | 2,489 | |
Net income (loss) | (245) | $ (1,516) | (1,251) | $ (4,094) | |
Total assets | 44,259 | 44,259 | 37,110 | ||
Property and equipments, net | $ 7,437 | $ 7,437 | $ 8,462 |
Acquisitions (Details)
Acquisitions (Details) - USD ($) $ in Thousands | 1 Months Ended | 6 Months Ended |
Apr. 30, 2018 | Sep. 30, 2018 | |
Assets acquired: | ||
Goodwill | $ 300 | |
Business Acquisition, Description of Acquired Entity | In April 2018, the Company entered into an asset purchase agreement with MarianaIQ, Inc. The total aggregate purchase price consisted of cash paid at closing and cash deposited into escrow to be held for fifteen months as security against indemnity claims made by the Company after the closing date. See Note 11 for additional information.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"> </p>" id="sjs-B5"><p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">In April 2018, the Company entered into an asset purchase agreement with MarianaIQ, Inc. The total aggregate purchase price consisted of cash paid at closing and cash deposited into escrow to be held for fifteen months as security against indemnity claims made by the Company after the closing date. See Note 11 for additional information.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"> </p> | |
MarianaIQ | ||
Assets acquired: | ||
Intangible assets | 3,200 | |
Goodwill | $ 300 | |
Net identifiable assets acquired | 3,200 | |
Total consideration transferred | $ 3,500 | |
Cash | 2,600 | |
Contingent payments | 900 | |
Total purchase price | $ 3,500 | |
Business Acquisition, Name of Acquired Entity | MarianaIQ Inc. | |
Business Acquisition, Description of Acquired Entity | <i>MarianaIQ</i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">On April 12, 2018, the Company entered into an Asset Purchase Agreement (the "Agreement") with MarianaIQ Inc. (MarianaIQ) for the purchase of certain assets of MarianaIQ. The total aggregate purchase price consisted of cash paid to MarianaIQ at closing, and cash to be held in escrow by the Company for fifteen months, as security against indemnity claims asserted by the Company after the closing date. The escrow amount is recorded as other accrued liabilities on the consolidated balance sheets as of September 30, 2018.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"></p>" id="sjs-B16"><p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"><i>MarianaIQ</i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">On April 12, 2018, the Company entered into an Asset Purchase Agreement (the "Agreement") with MarianaIQ Inc. (MarianaIQ) for the purchase of certain assets of MarianaIQ. The total aggregate purchase price consisted of cash paid to MarianaIQ at closing, and cash to be held in escrow by the Company for fifteen months, as security against indemnity claims asserted by the Company after the closing date. The escrow amount is recorded as other accrued liabilities on the consolidated balance sheets as of September 30, 2018.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"></p> | |
Business Combination, Assets and Liabilities, Description | The Company recorded the acquired developed technology as an identifiable intangible asset with an estimated useful life of two years. The fair value of the technology was based on estimates and assumptions made by management using a cost approach method. The intangible asset is amortized on a straight-line basis over two years.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">The excess of the consideration transferred over the aggregate fair value of the asset acquired 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 the acquired workforce.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">MarianaIQ did not contribute materially to revenue or net loss for the period of acquisition to September 30, 2018. Goodwill recognized upon acquisition is expected to be deductible for income tax purposes and is included in the Americas reporting unit (see Note 5). Total acquisition costs were immaterial.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"> </p>" id="sjs-B17"><p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">The Company recorded the acquired developed technology as an identifiable intangible asset with an estimated useful life of two years. The fair value of the technology was based on estimates and assumptions made by management using a cost approach method. The intangible asset is amortized on a straight-line basis over two years.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">The excess of the consideration transferred over the aggregate fair value of the asset acquired 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 the acquired workforce.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">MarianaIQ did not contribute materially to revenue or net loss for the period of acquisition to September 30, 2018. Goodwill recognized upon acquisition is expected to be deductible for income tax purposes and is included in the Americas reporting unit (see Note 5). Total acquisition costs were immaterial.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0"> </p> |
Subsequent Events (Narrative) (
Subsequent Events (Narrative) (Details) | 6 Months Ended |
Sep. 30, 2018 | |
Subsequent Events Narrative | |
Subsequent Event, Description | On October 26, 2018, the Company entered into an Asset Purchase Agreement with Atlassian Corporation Plc. (Atlassian) through which the Company purchased certain assets from Atlassian relating to the Jitsi open source video communications technology (Jitsi). The Company intends to integrate Jitsi's video collaboration capabilities into 8x8's technology platform to further enhance the Company's video and X Series platform offerings.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"></p>" id="sjs-B4"><p style="font: 10pt Times New Roman, Times, Serif; margin-right: 0; margin-left: 0">On October 26, 2018, the Company entered into an Asset Purchase Agreement with Atlassian Corporation Plc. (Atlassian) through which the Company purchased certain assets from Atlassian relating to the Jitsi open source video communications technology (Jitsi). The Company intends to integrate Jitsi's video collaboration capabilities into 8x8's technology platform to further enhance the Company's video and X Series platform offerings.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"></p> |