8X8 (EGHT)

Risks

• Our business is subject to a number of risks that may adversely affect our business, financial condition, results of operations, and cash flows. These risks are discussed more fully below and include, but are not limited to:
• Risks Related to our Business and Industry
• Risks Related to our Products and Operations
• Risks Related to Regulatory Matters
• Risks Related to Intellectual Property
• Risks Related to our Debt, our Stock, and our Charter
• Risks Related to our Business and Industry
• We have a history of losses, have incurred significant negative cash flows in the past, and anticipate continuing losses in the future. As such, we may not be able to achieve or maintain profitability in the future.
• Our future operating results, including revenues, expenses, losses and profits, may vary substantially from period to period and may be difficult to predict. As a result, we may fail to meet or exceed the expectations of market analysts or investors, which could negatively impact our stock price.
• Churn in our customer base adversely impacts our revenues and requires us to spend money to retain existing customers and to capture replacement customers. If we experience further increases in customer churn in the future, our revenue growth will be further adversely impacted and our customer retention costs will increase.
• Our success depends on our ability to acquire new customers and retain and sell additional services to our existing customers.
• Intense competition for new customers and retention of existing customers (including pricing pressure) in the markets in which we compete may prevent us from increasing or sustaining our revenue growth, or achieving and maintaining profitability, which could materially harm our business.
• Failure to grow and manage our network of indirect sales channels partners could materially and adversely impact our revenues in the future.
• As we increase sales to enterprise customers, our sales process has become more complex and resource-intensive, our average sales cycle has become longer, and the difficulty in predicting when sales will be completed has increased.
• The market for cloud software solutions is subject to rapid technological change, and we depend on new product and service introductions in order to maintain and grow our business.
• We may have difficulty attracting or retaining senior management and other personnel with the industry experience and technical skills necessary to support our growth.
• Taxing authorities have asserted that we should have collected or in the future should collect sales and use, value added, or similar taxes, including where similar services from competitors may not be subject to the same obligations to collect taxes from customers, and we have been and could be in the future subject to liability with respect to past or future sales, which have and could adversely affect our business.
• Our ability to use our net operating losses or research tax credits to offset future taxable income is subject to certain limitations.
• If our platform or services experience significant or repeated disruptions, outages, or failures due to defects, bugs, vulnerabilities, or similar software problems, or if we fail to determine the cause of any disruption or failure and correct it promptly, we could lose customers, become subject to service performance or warranty claims, or incur significant costs, reducing our revenues and adversely affecting our operating results.
• Our physical infrastructure is concentrated in a few facilities (i.e., data centers and public cloud providers), and any failure in our physical infrastructure or service outages could lead to significant costs and/or disruptions and could reduce our revenue, harm our business reputation and have a material adverse effect on our financial results.
• We may not be able to scale our business efficiently or quickly enough to meet our customers' growing needs, leading to increased customer churn and damage to reputation and brand, each of which could harm our operating results.
• Because our long-term growth strategy involves continued expansion outside the United States, our business will be susceptible to risks associated with international operations.
• The conflict between Russia and Ukraine and related sanctions could negatively impact us.
• We face risks related to acquisitions now and in the future that may divert our management's attention, result in dilution to our stockholders, and consume resources that are necessary to sustain and grow our existing business.
• If we do not or cannot maintain the compatibility of our communications and collaboration software with third-party applications and mobile platforms that our customers use in their businesses, our revenue could decline.
• We depend on third-party vendors for IP phones and certain software endpoints, and any delay or interruption in supply by these vendors would result in delayed or reduced shipments to our customers and may harm our business.
• Difficulty executing local number porting requests could negatively impact our business.
• Vulnerabilities to security breaches, cyber intrusions, and other malicious acts could adversely impact our business.
• We could be liable for breaches of security on our website, fraudulent activities by our users, or the failure of third-party vendors to deliver credit card transaction processing services.
• Failure to comply with laws and contractual obligations related to data privacy and protection could have a material adverse effect on our business, financial condition and operating results.
• Our products and services must comply with industry standards, FCC regulations, state, local, country-specific, and international regulations, and changes may require us to modify existing services, potentially increase our costs or prices we charge customers, and otherwise harm our business.
• Efforts to address robo-calling and caller ID spoofing could cause us competitive harm.
• Our infringement of a third party's proprietary technology could disrupt our business.
• Inability to protect our proprietary technology would disrupt our business.
• Our inability to use software licensed from third parties, or our use of open source software under license terms that interfere with our proprietary rights, could disrupt our business.
• Servicing our debt, including the paying down of principal, requires the use of cash, and we may not have sufficient cash flow from our business to pay down our debt.
• We may not have the ability to raise the funds necessary to settle conversions of the notes in cash or repurchase the notes upon a fundamental change, and our future debt may contain limitations on our ability to pay cash upon conversion or repurchase of the notes.
• The conditional conversion feature of the notes, if triggered, may adversely affect our financial condition and operating results.
• Changes in financial accounting standards or practices, such as changes in the accounting method for our convertible debt securities that may be settled in cash, may cause adverse, unexpected financial reporting fluctuations and affect our reported operating results.
• The capped call transactions entered into in connection with our sale of notes may affect the market value of our common stock.
• Future sales of our common stock or equity-linked securities in the public market could lower the market price of our common stock.
• Certain provisions in our charter documents and Delaware law could discourage takeover attempts.
• Current and future variants of COVID-19 and any economic difficulty they trigger could significantly harm our business.
• We may not be able to secure financing on favorable terms, or at all, to meet our future capital needs.
• Natural disasters, war, terrorist attacks, global pandemics, or malicious conduct, among other unforeseen events, could adversely impact our operations, could degrade or impede our ability to offer services, and may negatively impact our financial condition, revenues, and costs going forward.