8x8 2016 Annual Report Download - page 29

Our future operating results may vary substantially from period to period and may be difficult to predict.
Our historical operating results have fluctuated significantly and will likely continue to fluctuate in the future, and a decline in our operating results could cause our
stock price to fall. On an annual and a quarterly basis, there are a number of factors that may affect our operating results, many of which are outside our control.
These include, but are not limited to:
changes in market demand;
the timing of customer subscriptions for our cloud software solutions;
customer cancellations;
changes in the competitive dynamics of our market, including consolidation among competitors or customers;
lengthy sales cycles and/or regulatory approval cycles;
new product introductions by us or our competitors;
extent of market acceptance of new or existing services and features;
the mix of our customer base and sales channels;
the mix of services sold;
the number of additional customers, on a net basis;
the amount and timing of costs associated with recruiting, training and integrating new employees;
unforeseen costs and expenses related to the expansion of our business, operations and infrastructure;
continued compliance with industry standards and regulatory requirements;
material security breaches or service interruptions due to cyberattacks or infrastructure failures or unavailability;
introduction and adoption of our cloud software solutions in markets outside of the United States; and
general economic conditions.
Due to these and other factors, we believe that period-to-period comparisons of our results of operations are not meaningful and should not be relied upon as
indicators of our future performance. It is possible that in some future periods our results of operations may be below the expectations of public market analysts
and investors. If this were to occur, the price of our common stock would likely decline significantly.
Our products must comply with industry standards, FCC regulations, state, local, country-specific and international regulations, and changes may
require us to modify existing products and/or services.
In addition to reliability and quality standards, the market acceptance of telephony over broadband IP networks is dependent upon the adoption of industry
standards so that products from multiple manufacturers are able to communicate with each other. Our cloud-based communications and collaboration services rely
heavily on communication standards such as SIP, MGCP and network standards such as TCP/IP and UDP to interoperate with other vendors' equipment. There is
currently a lack of agreement among industry leaders about which standard should be used for a particular application, and about the definition of the standards
themselves. These standards, as well as audio and video compression standards, continue to evolve. We also must comply with certain rules and regulations of the
FCC regarding electromagnetic radiation and safety standards established by Underwriters Laboratories, as well as similar regulations and standards applicable in
other countries. Standards are frequently modified or replaced. As standards evolve, we may be required to modify our existing products or develop and support
new versions of our products. We must comply with certain federal, state and local requirements regarding how we interact with our customers, including
marketing practices, consumer protection, privacy, and billing issues, the provision of 9-1-1 emergency service and the quality of service we provide to our
customers. The failure of our products and services to comply, or delays in compliance, with various existing and evolving standards could delay or interrupt
volume production of our communications and collaboration services, subject us to fines or other imposed penalties, or harm the perception and adoption rates of
our service, any of which would have a material adverse effect on our business, financial condition or operating results.
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