8x8 2013 Annual Report Download - page 34

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SELECTED OPERATING STATISTICS
We periodically review certain key business metrics, within the context of our articulated performance goals, in order to
evaluate the effectiveness of our operational strategies, allocate resources and maximize the financial performance of our
business. The selected operating statistics include the following:
March 31,
Dec 31,
Sept. 30,
June 30,
March 31,
2013
2012
2012
2012
2012
Gross business customer additions
(1)
2,808 2,617 2,915 2,943 2,892
Number of new services sold (1)(2) 50,728 44,391 42,920 41,146 39,221
Average number of subscribed services
per new business customer (3) 18.1 17.0 14.7 14.0 13.6
Business subscriber acquisition cost
per service (4) 92$ 98$ 89$ 97$ 99$
Total business customers (5) 32,535 31,473 30,498 29,913 28,671
Average number of subscribed services
per business customer (6) 11.5 11.2 10.6 10.1 9.8
Business customer average monthly
service revenue per customer (7) 263$ 260$ 256$ 250$ 244$
Business customer churn (less
cancellations within 30 days
of sign-up) (8) 1.7% 1.6% 2.4% 1.7% 2.0%
Business service revenue churn 1.5% 2.6% 1.0% 2.3% 1.6%
Overall service margin 80% 78% 76% 75% 76%
Overall product margin
-17%
-34%
-22%
-30%
-15%
Overall gross margin 71% 68% 68% 67% 68%
Selected Operating Statistics
(1) DoesnotincludecustomersofVirtualOfficeSoloorZerigo,Inc.(“Zerigo”).
(2) Numberofrecurringrevenueservicessoldtobusinesscustomersduringtheperiod.
(3) Numberofnewservicessolddividedbygrossbusinesscustomeradditions.
(4) Thecombinedcostsofadvertising,marketing,promotions,salescommissionsandequipmentsubsidiesfornewservicessoldduringtheperioddividedby
thenumberofnewservicessoldduringtheperiod.
(5) Businesscustomersaredefinedascustomerspayingforservice.Customersthatarecurrentlyinthe30-daytrialperiodareconsideredtobecustomers
thatarepayingforservice.CustomerssubscribingtoVirtualOfficeSoloorZerigoservicesarenotincludedasbusinesscustomers.
(6) Thesimpleaveragenumberofsubscribedservicesdividedbythesimpleaveragenumberofbusinesscustomersduringtheperiod.Thesimpleaverage
numberofsubscribedservicesisthenumberofsubscribedservicesonthefirstdayoftheperiodplusthenumberofsubscribedservicesonthelastdayof
theperioddividedbytwo.Thesimpleaveragenumberofbusinesscustomersisthenumberofbusinesscustomersonthefirstdayoftheperiodplusthe
numberofbusinesscustomersonthelastdayoftheperioddividedbytwo.
(7) Businesscustomeraveragemonthlyservicerevenuepercustomerisservicerevenuefrombusinesscustomersintheperioddividedbythenumberof
monthsintheperioddividedbythesimpleaveragenumberofbusinesscustomersduringtheperiod.
(8) Businesscustomerchurniscalculatedbydividingthenumberofbusinesscustomersthatterminated(aftertheexpirationofthe30-daytrial)bythesimple
averagenumberofbusinesscustomersanddividingtheresultbythenumberofmonthsintheperiod.Inthesecondquarteroffiscal2013,anaffiliatewith
411businesscustomersrepresentingapproximately$9,000ofmonthlyservicerevenuecancelledservice.Excludingthese411cancellations,business
customerchurn(lesscancellationswithin30daysofsign-up)was1.9%.
We believe it is useful to monitor these metrics together and not individually, as we do not make business decisions based upon
any single metric.