8x8 2009 Annual Report Download - page 37

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,
2009
Dec. 31,
2008
Sept. 30,
2008
June 30,
2008
March 31,
2008
Dec. 31,
2007
Sept. 30,
2007
June 30,
2007
Gross business customer additions (1) 2,792 2,437 3,324 2,398 2,162 1,924 1,872 1,746
Gross business customer cancellations (less
cancellations within 30 days of sign-up) 1,245 1,224 1,187 1,098 1,138 949 849 876
Business customer churn (less cancellations
within 30 days of sign-up) (2) 2.7% 2.9% 3.1% 3.2% 3.6% 3.3% 3.3% 3.8%
Total business customers (3) 16,013 14,706 13,744 11,898 10,845 10,007 9,111 8,160
Business customer average monthly service
per customer (4) 202$ 208$ 220$ 237$ 229$ 233$ 234$ 247$
Revenue from business customers (in '000s) 10,728$ 10,614$ 9,826$ 9,077$ 8,111$ 7,542$ 6,953$ 6,444$
Revenue from residential and video
customers (in '000s) 5,236$ 5,572$ 6,356$ 7,192$ 7,685$ 8,182$ 7,793$ 8,181$
Revenue from technology licensing (in '000s) (199)$ 17$ 243$ 12$ 536$ 80$ 22$ 117$
Total Revenue 15,765$ 16,203$ 16,425$ 16,281$ 16,332$ 15,804$ 14,768$ 14,742$
Percentage of revenue from business customers 68.1% 65.5% 59.8% 55.8% 49.7% 47.7% 47.1% 43.7%
Percentage of revenue from residential and
video customers 33.2% 34.4% 38.7% 44.1% 47.0% 51.8% 52.8% 55.5%
Percentage of revenue from technolog
y
licensing -1.3% 0.1% 1.5% 0.1% 3.3% 0.5% 0.1% 0.8%
Total Revenue 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Overall service margin 71% 74% 73% 75% 74% 70% 67% 70%
Overall product margin -50% 9% -10% -13% -23% 15% -77% -4%
Overall gross margin 59% 67% 65% 68% 67% 65% 52% 64%
Total (business, residential and video)
subscriber acquisition cost per service (5) 119$ 135$ 163$ 162$ 155$ 129$ 99$ 138$
Business subscriber acquisition cost per
service (6) 118$ 141$ 171$ 171$ 158$ 161$ 142$ 141$
Average number of services subscribed to per
business custome
r
6.6 6.6 6.9 7.1 7.2 7.3 7.2 7.0
Business customer subscriber acquisition cost (7) 785$ 933$ 1,174$ 1,217$ 1,135$ 1,177$ 1,028$ 991$
Residential lines in service 81,569 86,992 93,865 100,937 107,260 112,229 117,338 100,571
Total (business, residential and video)
customer churn (less cancellations within
30 days of sign-up) (8) 3.5% 3.9% 4.2% 3.5% 4.0% 3.8% 3.9% 4.6%
Selected Operating Statistics
(1) Includes 1,154 "Find me, Follow me" and 40 8x8 Virtual Office customers acquired in the second quarter of fiscal 2009
from Avtex Solutions, LLC ("Avtex").
(2) Business customer churn is calculated by dividing the number of business customers that terminated (after the expiration of
the 30 day trial) during that period by the simple average number of business customers during the period and dividing the
result by the number of months in the period. The simple average number of business customers during the period 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.
(3) Business customers are defined as customers paying for service. Prior to April 1, 2008, 8x8 included customers in the
business customer count that were using the service as a trial or evaluation and not yet paying for service. The numbers in this
table prior to and after April 1, 2008, only include business customers that are paying for service. Customers that have prepaid
for their first month of service and are currently in the 30 day trial period are considered to be customers that are paying for
service.
35