8x8 2008 Annual Report Download - page 3

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PART I
ITEM 1. BUSINESS
Forward-Looking Statements and Risk Factors
Statements contained in this annual report on Form 10-K, or Annual Report, regarding our expectations, beliefs, estimates,
intentions or strategies are forward-looking statements within the meaning of Section 27A of the Securities Act and Section
21E of the Exchange Act. Any statements contained herein that are not statements of historical fact may be deemed to be
forward-looking statements. For example, words such as “may,” “will,” “should,” “estimates,” “predicts,” “potential,”
“continue,” “strategy,” “believes,” “anticipates,” “plans,” “expects,” “intends,” and similar expressions are intended to identify
forward-looking statements. You should not place undue reliance on these forward-looking statements. Actual results and
trends may differ materially from historical results or those projected in any such forward-looking statements depending on a
variety of factors. These factors include, but are not limited to, customer acceptance and demand for our voice over Internet
protocol, or VoIP, telephony products and services, the reliability of our services, the prices for our services, customer renewal
rates, customer acquisition costs, actions by our competitors, including price reductions for their telephone services, potential
federal and state regulatory actions, compliance costs, potential warranty claims and product defects, our needs for and the
availability of adequate working capital, our ability to innovate technologically, the timely supply of products by our contract
manufacturers, potential future intellectual property infringement claims that could adversely affect our business and operating
results, and our ability to retain our listing on the NASDAQ Capital Market. The forward-looking statements may also be
impacted by the additional risks faced by us as described in this Report, including those set forth under the section entitled
"Factors that May Affect Future Results." All forward-looking statements included in this Annual Report are based on
information available to us on the date hereof, and we assume no obligation to update any such forward-looking statements.
Readers are urged to carefully review and consider the various disclosures made in this Annual Report, which attempt to advise
interested parties of the risks and factors that may affect our business, financial condition, results of operations and prospects.
Our fiscal year ends on March 31 of each calendar year. Each reference to a fiscal year in this Annual Report, refers to the
fiscal year ending March 31 of the calendar year indicated (for example, fiscal 2008 refers to the fiscal year ended March 31,
2008). Unless the context requires otherwise, references to “we,” “us,” “our,” “8x8” and the “Company” refer to 8x8, Inc. and
its consolidated subsidiaries.
Overview
We develop, market and sell telecommunication services and technology for Internet protocol, or IP, telephony and video
applications under the brand “Packet8.” We offer the Packet8 broadband digital phone service, Packet8 Virtual Office hosted
PBX service, Packet8 videophone equipment and service, and Packet8 MobileTalk service. We shipped our first IP product in
1998, launched our Packet8 service in November 2002, the Packet8 Virtual Office hosted PBX business service in March
2004, the Packet8 videophone service in June 2004 and the Packet8 MobileTalk service in November 2007. As of March 31,
2008, we had more than 100,000 Packet8 residential and videophone lines and more than 11,000 business customers in service.
The Packet8 voice and video broadband phone service (Packet8) enables broadband Internet users to add digital voice and
video communications services to their high-speed Internet connections. Customers can choose a direct-dial phone number
from any of the rate centers offered by the service, and then use an 8x8-supplied terminal adapter to connect any telephone to a
broadband Internet connection and make or receive calls from a regular telephone number. All Packet8 telephone accounts
come with voice mail, caller ID, call waiting, call waiting caller ID, call forwarding, hold, line-alternate, 3-way conferencing,
web and voice-prompt access to account controls, and online billing. In addition, we offer videophones and video telephony
software in conjunction with our service plans that connect to a customer’ s high-speed Internet connection to deliver all of the
voice features above, as well as unlimited video calls to any other Packet8 videophone customer in the world. We also offer
Internet protocol-based, or IP, telephones with built-in connectivity to Packet8 via an IP connector on the phone. We have
developed a suite of business services called Packet8 Virtual Office that offer feature-rich communications services to small
and medium-sized businesses eliminating the need for traditional telecommunications services and business phone systems.
Our primary focus with the Virtual Office service is on replacing private branch exchange, or PBX, telephone systems in the