8x8 2010 Annual Report Download - page 34

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March 31,
2010
Dec. 31,
2009
Se
p
t. 30,
2009
June 30,
2009
March 31,
2009
Dec. 31,
2008
Se
p
t. 30,
2008
June 30,
2008
Gross business customer additions (1) 2,875 2,785 2,609 2,907 2,792 2,437 3,324 2,398
Gross business customer cancellations (less
cancellations within 30 days of sign-up) 1,616 1,331 1,416 1,371 1,245 1,224 1,187 1,098
Business customer churn (less cancellations
within 30 days of sign-up) (2) 2.7% 2.4% 2.7% 2.7% 2.7% 2.9% 3.1% 3.2%
Total business customers (3) 20,428 19,407 18,199 17,266 16,013 14,706 13,744 11,898
Business customer average monthly service
revenue per customer (4) 204$ 204$ 201$ 196$ 202$ 208$ 220$ 237$
Service revenue from business customers (in '000s) 12,182$ 11,494$ 10,714$ 9,787$ 9,293$ 8,883$ 8,466$ 8,073$
Product revenue from business customers (in '000s) 1,266$ 1,156$ 1,128$ 935$ 1,435$ 1,731$ 1,360$ 1,004$
Total revenue from business customers (in '000s) 13,448$ 12,650$ 11,842$ 10,722$ 10,728$ 10,614$ 9,826$ 9,077$
Revenue from business customers (in '000s) 13,448$ 12,650$ 11,842$ 10,722$ 10,728$ 10,614$ 9,826$ 9,077$
Revenue from residential customers (in '000s) 2,396$ 3,278$ 4,168$ 4,811$ 5,236$ 5,572$ 6,356$ 7,192$
Revenue from technology licensing (in '000s) 23$ 16$ 17$ 25$ (199)$ 17$ 243$ 12$
Total Revenue 15,867$ 15,944$ 16,027$ 15,558$ 15,765$ 16,203$ 16,425$ 16,281$
Percentage of revenue from business customers 84.8% 79.3% 73.9% 68.9% 68.1% 65.5% 59.8% 55.8%
Percentage of revenue from residential customers 15.1% 20.6% 26.0% 30.9% 33.2% 34.4% 38.7% 44.1%
Percentage of revenue from technology licensing 0.1% 0.1% 0.1% 0.2% -1.3% 0.1% 1.5% 0.1%
Total Revenue 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Overall service margin 77% 78% 76% 76% 71% 74% 73% 75%
Overall product margin -43% -59% -42% -75% -50% 9% -10% -13%
Overall gross margin 68% 68% 67% 66% 59% 67% 65% 68%
Total (business, residential and video) subscriber
acquisition cost per service (5) 97$ 102$ 88$ 108$ 119$ 135$ 163$ 162$
Business subscriber acquisition cost per service (6) 97$ 102$ 90$ 93$ 118$ 141$ 171$ 171$
Average number of services subscribed to pe
business custome
r
7.5 7.3 7.1 6.9 6.6 6.6 6.9 7.1
Business customer subscriber acquisition cost (7) 723$ 749$ 638$ 638$ 785$ 933$ 1,174$ 1,217$
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. 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.
(4) 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.
(5) Total (business, residential and video) subscriber acquisition cost per service is defined as the combined costs of
advertising, marketing, promotions, commissions and equipment subsidies during the period divided by the number of gross
services added during the period.
(6) Business subscriber acquisition cost per service is defined as the combined costs of advertising, marketing, promotions,
commissions and equipment subsidies for business services sold during the period divided by the number of gross business
services added during the period. The addition of 1,154 Avtex customers that migrated to 8x8 in the second fiscal quarter of
2009 but subscribed to “Find me, Follow me” services rather than 8x8 Virtual Office service, and the $79,230 in expense
related to the acquisition of these 1,154 customers, is excluded from this calculation.
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