8x8 2009 Annual Report Download - page 32

ITEM 6. SELECTED FINANCIAL DATA
2009 2008 2007 2006 2005
Total revenues $ 64,674 $ 61,646 $ 53,130 $ 31,892 $ 11,475
Net income (loss) $ (2,500) $ 30 $ (9,930) $ (23,253) $ (15,348)
Net income (loss) per share:
Basic $ (0.04) $ 0.00 $ (0.16) $ (0.42) $ (0.35)
Diluted $ (0.04) $ 0.00 $ (0.16) $ (0.42) $ (0.35)
Total assets $ 21,856 $ 21,551 $ 19,958 $ 31,120 $ 39,080
Fair value of warrant liability $ 21 $ 335 $ 3,387 $ 7,123 $ 4,837
Accumulated deficit $ (202,719) $ (200,219) $ (200,249) $ (190,319) $ (167,066)
Total stockholders' equity $ 9,030 $ 7,849 $ 5,377 $ 12,970 $ 24,907
(in thousands, except per share amounts)
Years Ended March 31,
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
OVERVIEW
We were founded in 1987 and completed an initial public offering of common stock in 1997. We develop and market
telecommunication services for Internet protocol, or IP, telephony and video applications. We offer the 8x8 broadband VoIP
and video communications service, 8x8 Virtual Office service, 8x8 Trunking service, 8x8 Hosted Key System service,
videophone equipment and services, and the 8x8 MobileTalk service. We shipped our first VoIP product in 1998, launched our
8x8 service in November 2002, the 8x8 Virtual Office business service offering in March 2004 and the 8x8 MobileTalk service
in November 2008. As of March 31, 2009, we had more than 80,000 8x8 residential and videophone customers and more than
16,000 business customers in service. Since fiscal 2004, substantially all of our revenues have been generated from the sale,
license and provision of VoIP products, services and technology. Prior to fiscal 2003, our focus was on our VoIP
semiconductor business.
CRITICAL ACCOUNTING POLICIES & ESTIMATES
Our consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United
States of America. Note 1 to the consolidated financial statements in Part II, Item 8 of this Report describes the significant
accounting policies and methods used in the preparation of our consolidated financial statements.
We have identified the policies below as some of the more critical to our business and the understanding of our results of
operations. These policies may involve a higher degree of judgment and complexity in their application and represent the
critical accounting policies used in the preparation of our financial statements. Although we believe our judgments and
estimates are appropriate, actual future results may differ from our estimates. If different assumptions or conditions were to
prevail, the results could be materially different from our reported results. The impact and any associated risks related to these
policies on our business operations is discussed throughout Management's Discussion and Analysis of Financial Condition and
Results of Operations where such policies affect our reported and expected financial results.
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 financial statements and the reported amounts of
revenues and expenses during the reporting period. On an ongoing basis, we evaluate our estimates, including, but not limited
to, those related to bad debts, valuation of inventories, and litigation and other contingencies. We base our estimates on
historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results
of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent
from other sources. Actual results could differ from those estimates under different assumptions or conditions. We base our
estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances,
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