UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Securities registered pursuant to Section 12(g) of the Act: None

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 of 1933 and Section 21E of the Securities Exchange Act of 1934. 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. These forward-looking statements include, but are not limited to, statements regarding: industry trends; our number of customers; average annual service revenue per customer; cost of service revenue; research and development expenses; hiring of employees; sales and marketing expenses; and general and administrative expenses in future periods; and the impact of the COVID-19 pandemic. You should not place undue reliance on these forward-looking statements. Actual results and trends may differ materially from historical results and those projected in any such forward-looking statements depending on a variety of factors. These factors include, but are not limited to-

• to:

The forward-looking statements may also be impacted by the additional risks faced by us as described in this Annual Report, including those set forth under the section entitled "Risk Factors." 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 attemptattempts 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 ended March 31 of the calendar year indicated (for example, fiscal 20172020 refers to the fiscal year ended March 31, 2017)2020). Unless the context requires otherwise, references to "we," "us," "our," "8x8" and the "Company" refer to 8x8, Inc. and its consolidated subsidiaries.

Overview

A

8x8 is transforming the future of business communications as a leading Software-as-a-Service ("SaaS") provider of enterprisevoice, video, chat, contact center, and enterprise-class API solutions powered by one global cloud communications solutions,platform. 8x8 helps businesses getempowers workforces worldwide by connecting individuals and teams so they can collaborate faster and work smarter. 8x8 provides real-time business analytics and intelligence giving its customers unique insights across all interactions and channels on our platform so they can delight their employees, customersend-customers and applications talking, to make people more connectedaccelerate their business. 8x8 has approximately 1.2 million global business users. Additionally, 8x8 supports its Jitsi open source video meetings platform and productive, no matter where they are8x8 free Video Meetings that surpassed 20 million monthly active users globally in May 2020.

Until recently, the world.   From a single, proprietary platform, which we refer to as the 8x8 Communications Cloud™, we offer unified communications team collaboration, contact center, analytics and other servicesmarket had been one of the last to our business customers on a Software-as-a Service (SaaS) model.

2

---

While organizations of all sizes have started to migrate from legacy, on-premises systems to cloud communications solutions like ours, the adoption of cloud communications by larger businesses has increased markedly in recent years and will, we believe, drive the next phase of cloud communications growth. Small businesses were the first to transition their communications to the cloud several years ago, often based on its cost effectiveness, ease of deployment and inherent flexibility. Now, larger businesses that have adopted cloud-based solutions for other applications and processes are increasingly looking to modernize their communications in a similar fashion. We believe this adoption is being driven by the convergence of several market trends, including the increasing costs of maintaining installed legacy communications systems; the fragmentation resulting from use of multiple on-premises systems, which has worsened as workforces have become more distributed and international; and the proliferation of personal mobile devices in the workplace.

Our solutions offer businesses a secure, reliable and simplified approach for businesses to transition their legacy, on-premises communications systemsmove to the cloud. Today, boards and executive leadership teams increasingly see secure cloud communications as a core element of business resilience and a key enabler for driving competitive differentiation through seamless, personalized engagement with their customers. We believe the ability for employees to communicate productively from either a single, easy-to-use application or directly within their existing business applications is quickly becoming a fundamental differentiator in digital transformation.

The 8x8 open communications platform is one of the industry’s most complete cloud technology stack and operates in a SaaS business model. A consistent data layer across the platform powers 8x8 AI/ML (artificial intelligence/machine learning) algorithms to deliver data-driven business insights and intelligent, comprehensive, and integrated applications that drive employee productivity, resource optimization, and more effective end customer interactions. Our comprehensive solution, builtcloud communications, contact center, and collaboration solutions are designed for easy deployment, management, and use, operating across multiple devices and locations for any business workflow or global environment. Built from core cloud technologies that we own and manage internally, our platform solution enables 8x8 customers to rely on a singleone provider for their global communications, video meetings, contact center and customer support requirements. Combining these services allows our customers to eliminate information silos and expose vital, real-time communications data spanning multiple services, applications and devices — which, in turn, can improve productivity, business performance and customer experience.

Our customers are spread across more than 100 countries and range from small businesses to large enterprises with more than 10,000 employees. In recent years, we have increased our focus on the mid-market and enterprise customer segments, and in fiscal 2017, we generated a majority of our services revenue from customers in these business segments. We provide most of our communications services on a SaaS model, with monthly billing of service fees and usage charges, under contracts with terms that generally range from one to four years.

Our Industry

Businesses today face increasing cost and complexity with deployments of communications and collaboration solutions. Companies of all sizes are managing a global, distributed, remote and multigenerational workforce that seeks to leverage multiple forms of communication in their day-to-day interactions. The rapid rise of mobile devices in the enterprise has created demand for BYOD (bring your own device) integration as part of s typical business' communications needs.  Companies are looking to increase their competitive edge by also integrating their communications with ERP (Enterprise Resource Planning), CRM (Customer Relationship Management), HCM (Human Capital Management) applications and other back-office IT (information technology) systems within their communications infrastructure. Further complicating matters, business users are circumventing their IT departments by using a variety of self-selected third-party tools for team communications and collaboration, driving a shift in the buying center for communications and collaboration from IT to individuals, a phenomenon known in the industry as "shadow IT."

We believe traditional on-premises communications systems are unable to accommodate all of these needs in a cost-efficient manner. In addition to being difficult to deploy and expensive to maintain in multiple locations for a globally distributed workforce, these solutions often fail to provide the mobility, business continuity and integration capabilities required by modern business customers. BYOD demands from employees further complicate the delivery of a company-wide communication system using on-premises equipment. The result is a patchwork of communications systems with security risks that stretch across the organization.

3

---

The 8x8 Solution

Platform Strategy

We offer unifieda highly scalable and configurable cloud communications platform comprising voice, video meetings, chat and team collaboration, contact center, communication APIs, and analytics in a scalable platform that is used byfor businesses of all sizes across the globe,globe. Customers can start out with an individual service or combination of services, for example, with video conferencing or phone service, and can be accessed utilizing available Internet connections.

then scale their usage over time by enabling additional services, capabilities and analytics offerings when ready. The key attributes of the 8x8 Communications Cloud solution include:

• Seamless Communication

The result is a communication, meeting, and contact center engagement platform that seamless, continuous communications and collaboration drives more effectiveenables businesses to move at the speed of employee and customer engagementexpectations, leading to less churn and greater business productivity. Our ownershipmore revenue. While we believe in and continue to emphasize the power of the core technology underlying each of our offerings enables us to tightly integrate our solutions and provide users with the tools needed to communicate and collaborate with others in an integrated and fluid manner.  A single global corporate directory providing presence and click-to-contact functionality across all devices is the hallmark of our platform approach to communications.

Integrated Unified Communications and Contact Center Solutions.A feature that we believe is unique to the 8x8 Communications Cloud is the integration of our 8x8 Virtual Office Unified Communications solution with our Virtual Contact Center solution within a single cloud platform. One of the primary benefits of this integration is the unification of contact center agents with the rest of the organization through the global corporate directory- facilitating, for example, the involvement of subject matter experts outside of the call center in customer interactions.  In addition to our full-featured Virtual Contact Center solution, we also offer 8x8 ContactNow, an intelligent, scalable and easy-to-use contact center solution for teams.

Team Collaboration Interoperability.With the rise in popularity of team collaboration tools, including Slack, HipChat and various other team collaboration environments, we see a growing need for interoperability between these environments to support contextual communications between teams that are utilizing these tools. A recent addition to the 8x8 Communications Cloud, our Sameroom technology enables team-to-team collaboration via interoperability between the most popular of these tools in the market today.

Big Data and Analytics.We believe that visibility into communications data and trends helps businesses optimize productivity and customer engagement. To address this need, we have developed a robust suite of web-based tools to help customers make informed business decisions based on underlying communications data. These analytics tools deliver rapid, easy-to-use, customizable insights into the communications information associated with all 8x8 extensions and supported devices in an organization's communications network.  

Global Reach®.8x8's Global Reach® initiative refers to our global strategy to provide enterprise-grade quality of service, reliability, security and support for our multinational customers. We serve customers operating in over 100 countries, through 12 data centers that cover seven dispersed regions - United States, Canada, United Kingdom, Continental Europe, Singapore/Asia, Australia and Philippines - helping provide superior call quality to customers worldwide.

Integration with other Business Applications.Many businesses are faced with customer communication challenges due to gaps in employee communication, poor internal collaboration, and little or no contextual data available at the time of customer contact. Our software uses a combination of open application program interfaces (APIs) and pre-built integrations to enhance functionality with data from other third-party enterprise applications including Salesforce, Microsoft Dynamics, NetSuite, Zendesk, Oracle Sales Cloud and Hubspot. These integrations expose rich communications data to the applications used every day by groups such as sales, marketing, customer service, HR, finance, and more to improve workflows and drive better productivity.

Customer & Partner APIs. The 8x8 Communications Cloud offers a number of open APIs that allow customers and partners to expose rich communications data to their existing enterprise applications. These include APIs for direct access to messaging and chat, meetings, interactive voice response (IVR) /auto attendant, short messaging service (SMS), fax, analytics and data extraction, and provisioning and service management.

Intuitive User Experience.Because we deliver our software from one integrated platform, we believe our solutions offer a seamless, intuitive communication experience across voice, messaging, collaboration and video.  Our web interfaces act as the communications portal for all 8x8 services and provide customers with a familiar and consistent user experience across all endpoints, as well as integration with many commonly used business productivity application, CRM solutions and vertical business applications.

Rapid Deployment.Business agility in the global, modern economy is a competitive necessity, and we embrace the notion that communication services should be deployable as quickly as possible. Our services can be generally be provisioned in minutes from web-based administrative tools. We have automated our provisioning, billing and other systems to provide greater speed and flexibility in deployment for our customers. To ensure consistency and quality across our products and customer base, we have developed a deployment methodology, branded as Elite Touch®, that we apply to all of our deployments, from single-site remote implementation to complex deployments involving multiple sites, global implementation and integration with CRM or other back-end systems.

4

---

• Committed Service Quality over the Public Internet.We currently offer qualifying customers a service level agreement (SLA) with commitments regarding "end-to-end" service availability and voice quality, for calls transmitted over the public Internet. This end-to-end SLA provides for at least 99.99% uptime and a voice-quality mean opinion score (MOS) of 3.0 or higher for at least 98% of all calls carried over the network, subject to customary exceptions and conditions, including the customer's implementation of dual diverse connections to the Internet and adherence to our setup guidelines. We are able to provide these commitments because of our proprietary audio technology stack and the geographical and network architecture, designed to optimize the path for voice data across the Internet.
• Emphasis on Security and Compliance.Security and compliance in this cloud environment is difficult and expensive to achieve. We believe we have created a top-down culture of security and compliance, including a commitment to secure architecture and development. We have also invested heavily in system security and compliance with U.S. federal regulations including FISMA (Federal Information Security Management Act), HIPAA (Health Insurance Portability and Accountability Act), CPNI (Customer Proprietary Network Information), and International Standards such as ISO/IEC 27001, ISO/IEC 9001, the U.K. Government's Cyber Essentials Plus, and the EU-US Privacy Shield Framework.

Our Strategy

We are committed to developing and delivering the most innovative, reliable, scalable and secure cloud software for global business communications as part of the 8x8 Communications Cloud. Our strategy is informed by evolving market dynamics, including the growing adoption of cloud communications software by larger commercial and enterprise customers, along with the unique attributes of our technology.

Key elements of our strategy include:

• Providing Superior, Enterprise Grade Functionality. We have invested in our software and software delivery infrastructure to provide a high-level of availability, reliability, security and compliance, and will continue to invest in this area. We intend to continue to expand our customer deployment and support capabilities, including our program management, professional services, and partner delivery capabilities, to meet the needs of larger, multinational customers.
• Focusing on Mid-Market and Enterprise Market Segments.We plan to capitalize on the growing adoption of cloud-based communications and collaboration solutions by commercial/mid-market and enterprise customers through increased focus on these market segments, through both a direct and channel sales strategy.
• Maintaining a Single Integrated Platform.We believe business communications solutions are increasingly requiring a breadth of software capabilities, from simple voice and video collaboration to complex multi-channel contact center capabilities, and we expect this trend to continue. We believe our ability to deliver a full spectrum of capabilities within a single cloud platform from a single vendor is a competitive advantage, especially for larger customers. We plan to continue expanding these services within our platform, including extending our contact center capabilities, adding deeper collaboration services, and bringing an increasing number of analytics-driven applications to market. Additionally, we intend to upsell our products and services by educating our customers on the additional services we offer, and the value of using them in concert.
• Expanding our Global Footprint. As more and more businesses establish international operations, we believe companies will view traditional communication solutions bridging multiple geographies and carrier networks as cumbersome and expensive. We will continue to focus on expanding our ability to effectively and efficiently deliver our services into the countries and regions we currently serve. In addition, we plan to continue expanding the distribution of our services into new countries through a combination of organic growth, regional acquisitions and channel partners.
• Expanding Paths to Market with Self-Service Solutions. We are investing in web-based, self-service capabilities in order to enable a broader set of customers to discover, purchase and implement our products. We have recently launched 8x8 ContactNow, our simplified contact center solution for teams, into the US market with full self-service capabilities, and we expect to leverage this model across additional services in the future.
• Acquiring Strategic Assets.We intend to identify, acquire and integrate strategic technologies, assets and businesses to expand the breadth and adoption of our cloud software offerings and drive growth, both domestically and internationally.

5

---

Our Products

Powered by internally owned and managed technologies, 8x8's solutions serve businesses of all sizes, scaling readily to serve large, globally distributed enterprise customers. All of our core software components work together and can be combined into different bundles depending on the business needs of our customers.

Our current suite of products includes:

8x8 Virtual Office

8x8 Virtual Office (VO) delivers high quality voice and unified communications-as-a-service globally. 8x8 Virtual Office is a self-contained, end-to-end solution that enables a customer to use a single business phone number to place and receive calls from any supported device (including desktop phones, computers with an installed software telephone app and mobile devices) over any available broadband Internet connection. We offer metered, unlimited, and international service plans.

The basic feature set of 8x8 Virtual Office includes auto attendants; unlimited, metered or international calling plans; worldwide extension dialing; corporate directory with click-to-call functionality; presence, messaging and chat; voicemail to email notification; conferencing; ring groups (ringing multiple extensions at the same time or in sequence); hot-desking (multiple people sharing the same physical device); call recording; fax; call monitoring; music on hold; and a receptionist console with a night-attendant feature to answer and route calls when no employees are available. A web-based portal enables system administrators to manage their Virtual Office solution, including setting up user profiles; configuring auto-attendants, ring groups, call queues and branches; managing corporate directories; and viewing call detail records and billing information.

We also provide, at no additional cost, Virtual Office Mobile software that turns Apple iOS and Android-based mobile devices into extensions on the 8x8 Virtual Office platform. Virtual Office Mobile can be downloaded from the Apple or Google Play stores as an application.

8x8 Virtual Contact Center

8x8 Virtual Contact Center (VCC) is a multi-channel cloud based solution that enables even the smallest contact center to enjoy customer experience and agent productivity benefits that were previously available only to large contact centers at a much higher cost. 8x8 Virtual Contact Center is suitable for customer support, sales and any other corporate function that generates a high volume of inbound interactions with customers.

Basic features of the 8x8 Virtual Contact Center solution include a programmable IVR tool for greeting customers, automatic queuing and routing of inbound inquiries, skills-based routing of inquiries to the appropriate call center agents, browser-based agent console, multimedia management, real-time monitoring and reporting, internal chat, voice recording and logging, historical reporting, contact and case management tools, and integration with popular third-party CRM tools. To give customers a truly global presence, 8x8 Virtual Contact Center seamlessly connects an organization's international agents over a single platform with integrated presence, multilingual chat with automatic translation, call routing, reporting and management.

Recent enhancements to 8x8 Virtual Contact Center include Customer Journey analytics capabilities that offer insight into customer experience and cloud-native Quality Management tools that help contact center managers evaluate every customer interaction and make timely improvements.

8x8 Virtual Office Meetings (Web and Video Conferencing/Collaboration)

8x8 Virtual Office Meetings is a cloud-based video conferencing and collaboration solution that enables secure, continuous collaboration with borderless high definition (HD) video and audio communications from mobile and desktop devices, anywhere in the world. Virtual Office Meetings is built seamlessly into 8x8's Virtual Office desktop and mobile experience which allows users to schedule meetings, initiate instant collaboration on the fly, and transition IM conversations into a meeting from a single application. In addition, the solution gives users access to their corporate directory for easy engagement and eliminates the need for users and IT to manage multiple logins and passwords.

6

---

Inside a Virtual Office Meeting, participants experience high definition audio conferencing (for employees or external participants using a software download), content sharing, chat conversations, high definition video conferencing and meeting recordings. Meetings can be scheduled in advance either from the software itself or from Microsoft Outlook or Google Calendar. When in a meeting, users can take advantage of 8x8's integrated presence feature to bring additional participants directly into a collaboration session using their preferred method of communication, including IM, email and voice.

8x8 Sameroom (Team Collaboration Interoperability)

With the surge in team messaging and collaboration apps such as Slack and HipChat, enterprises are increasingly subject to application proliferation and fragmentation that is hard to manage and govern securely. 8x8 Sameroom provides an interoperability platform that enables cross-team messaging and collaboration within a large organization and between organizations. With the Sameroom technology, our customers can collaborate across more than twenty disparate team messaging solutions.

8x8 ContactNow (Contact Center Solution for Teams)

8x8 ContactNow is an intelligent, scalable and easy-to-use cloud contact center solution that we market for use by teams.  ContactNow provides call center functionality for teams that regularly interact with internal and external customers, such as sales, marketing, human resources, recruiting and help desks, but do not require the capabilities and feature set of a full scale, traditional contact center solution. 8x8 ContactNow offers a flexible pay-as-you-go model and is readily scalable and customizable through self-service configuration, allowing customers to add and subtract agents "on the fly" based on customer demand. We expect 8x8 ContactNow generally to be more affordable and better suited for the needs of small teams than 8x8 VCC.

Script8 (Scripting Engine)

Script8 is a dynamic communications flow and routing engine that offers a scripting environment for intelligently routing communications data for specific workflows. Script8 allows end-users to create simple, personalized and customizable communications experiences, including communications control, external data source integration and intelligent routing. Script8 use cases have included, for example: routing priority calls based on sales pipeline data in CRM system; IVR with two-factor authentication; sending SMS with directions to a retail store; and emergency dialing with Caller ID override.

Our Technology

We introduced our first communications SaaScollective offering in 2002, and have since expanded our solutions, features and capabilities. Our services are powered by internally-owned and operated technologies and are delivered to our customers from our 8x8 Communications Cloud platform. From inception through March 31, 2017 we have been awarded 131 United States patents covering a variety of voice and video communications, signaling, processing and storage technologies. Many patents in our portfolio relate to the communications software used in our various SaaS solutions.

We developed our Global Reach patented technology to ensure that 8x8 voice communications, placed or received anywhere on the globe on any compatible device, can have the same consistent quality as a local call within a single area code. Many hosted Voice over Internet Protocol (VoIP) solutions route call data through the same data center, regardless of the physical or geographic location of callers. By contrast, when an end-user makes a call using our solution, our patented technology seeks out the closest data center to the caller's location, subject to service quality, security and data sovereignty considerations. We call this "geo-routing." Our proprietary technologies take into account current Internet and carrier network conditions and determine the best route virtually instantaneously, ensuring that latency is minimized within the available routing options.

7

---

Many of our software solutions provide mission critical services to our business customers. We have therefore developed technologies and architectures that embed high reliability and uptime into our software. Based on this reliability and our Global Reach techology, we are able to offer qualifying enterprise customers an end-to-end SLA that provides commitments as to both the availability of our solutions, we also make our solutions available independently to introduce customers to our platform and expand their platform engagement over time.

We have a diverse and growing customer base of more than 55,000 companies in 150 countries, with no single customer representing 10% or uptime, and voice call quality.

We believe one of the key areas that differentiates 8x8 from our competitors is the qualitymore of our real-time service delivery over the public Internet. Real-time voice is perhaps the most difficult application to be delivered over the public Internet as there is no time for retransmissionrevenues in fiscal 2020, 2019, and there is little buffering that can be done without impacting the quality2018. This includes companies of every size and across a real-time conversation. As such, qualitywide range of the connection well beyond just the available bandwidth is the most important element of service delivery for VoIP. By having diverse routesindustries and connectivity as well as full and granular Border Gateway Protocol (BGP) control over these connections, 8x8 is constantly inspecting the state of the Internet to optimize our service delivery to customers.

In addition, we have instrumented hundreds of thousands of 8x8 endpoints to provide details of quality of connection information at the end of each call to 8x8's internal network operations environment. This is possible due to our full control over the core networking stack/equipment and the transit connections in our data centers.  

Our technologies include a number of deployment methodologies that represent best practices for implementing our software at a customer site and driving customer adoption of our more advanced software features. We also manage and port existing business numbers globally, and we provide local number porting services in more than 40 countries. We provide software connectivity to emergency services and other regulatory services required by law in different regions of the world. We have developed our own billing software, and provide our customers with electronic monthly billing.

Finally, a key aspect of our technology, especially critical for larger enterprise customers and certain industry verticals (such as healthcare), is our emphasis on security and compliance, which we have addressed through specific measures such as our end-to-end encryption technologies and certifications with various regulations and industry standards as described above.

use cases.

Sales, Marketing and Promotional Activities

We market our services directly to end users through a variety of means, including search engine marketing and optimization, third-party lead generation sources, industry conferences, trade shows, webinars, and webinars, as well as traditionaldigital advertising channels. We employ a direct sales organization, consisting of inside and field-based sales agents, and we partner with an indirect channel partner network consisting of master agents and the sub-agent community, value-added resellers (VARs), master agents,independent software vendors (ISVs), system integrators and service providers. We typically contract directly with the end customer and use these channel partnersproviders selling 8x8 solutions to identify, qualify and manage prospects throughout the sales cycle, and have arrangements with a number of partners who resell our services to their customers. Forsmall, mid-market, and enterprise customers, our sales professionals work closely with inside technical support, sales engineers and deployment specialists to develop customized solution proposals based on individual customer requirements.

In fiscal 2017, we invested in new resources and support tools for our channel partner program, including new sales enablement training and resources, deployment and support certification programs, online customer return on investment (ROI) tools, co-branded marketing materials and our new "PartnerConnect" portal which, among other capabilities, allows partners to launch and manage pre-built, multi-touch digital co-marketing campaigns.

Competition

Given the size and stage of the current market opportunity and the breadth of our communications and collaboration service platform, we face competition from many companies, including other cloud services providers, communications and collaboration software vendors and incumbent telephone companies and other resellers of legacy communications equipment. For more information regarding the risks associated with such competition, please refer to our "Risk Factors" below.

8

---

Cloud Services Providers

For customers looking to implement cloud-based communications, we compete with other cloud communication software providers such as RingCentral, Fuze, Vonage, Five9 and InContact/Nice. We believe that the integration of our services over a common platform, including contact center, differentiates our services from those offered by these competitors. We believe we also compare favorably as to security, reliability, quality of service, analytics and global coverage.

Communications and Collaboration Software Vendors

We also face competition from communications and collaboration software vendors such as Cisco, Google, Amazon and Microsoft Corporation, some of which are well-established in the communications industry while others have only recently begun to market cloud communications solutions. Some of these competitors have developed strong software solutions for its respective communications and/or collaboration silo. Many of these competitors are substantially larger, better capitalized, and more well-known than we are. However, we believe that a collective deployment of these software solutions is likely to be more expensive and cumbersome for customers, when compared to similar deployments of our services.

Incumbent Telephony Companies and Legacy Equipment Providers

Our cloud-based software replaces wire line business voice services sold by incumbent telephone and cable companies such as AT&T, CenturyLink, Comcast, and Verizon Communications, often in conjunction with on-premises hardware solutions from companies like Avaya, Cisco and Mitel. We believe that the solutions offered by these competitors are typically more expensive to adopt, require cumbersome on-premises implementations, and need regular hardware and IT infrastructure upgrades. Furthermore, the offerings often do not provide all the functionality needed for larger customers to integrate their communication systems with their IT infrastructure, therefore requiring additional system integration investments.

Operations

Our operations infrastructure consists of data management, monitoring, control and billing systems that support all of our products and services. We have invested substantial resources to develop and implement our real-time call management information system. Key elements of our operations infrastructure include a prospective customer quotation portal, customer provisioning, customer access, fraud control, network security, call routing, call monitoring, media processing and normalization, call reliability, detailed call record storage and billing and integration with third-party applications. We maintain a call-switching platform in software that manages call admission, call control and call rating and routes calls to an appropriate destination or customer premises equipment.

Network Operations Center

We maintain global network operations centers at our headquarters in San Jose, California and in Cluj-Napoca, Romania, and employ a staff with experience in voice and data operations to provide 24-hour operations support, seven days per week. We use various tools to monitor and manage all elements of our network and our partners' networks in real time. We also monitor the network elements of some of our larger business customers. Additionally, our network operations center provides technical support to troubleshoot equipment and network problems. We also rely upon the network operations centers and resources of our telecommunications carrier partners and data center providers to augment our monitoring and response efforts.

In the event of a major disruption at a data center, such as a natural disaster, failover between data centers for 8x8 Virtual Office is designed to occur instantly. Active calls may disconnect, but new calls can be generated immediately. In addition, most of the maintenance services performed by 8x8 are seamless and non-disruptive to customers. For example, we can move the core call flow processing from one data center to another without dropping a call. We offer local redundancy (i.e., failover to a data center within the same region) as a standard feature of 8x8 Virtual Contact Center, and geographical redundancy (i.e., failover to a data center in a different region) can be enabled as an option to provision geo-redundant tenants on multiple sites. Our ContactNow product is geographically redundant in the U.S. and, in the UK, across multiple sites in London.

9

---

Customer and Technical Support

8x8 maintains a global customer support organization with operations in the United States, United Kingdom, Philippines and Romania. Customers can access 8x8 customer support services directly from the company website or receive multi-channel technical support via phone, chat, web and email. Emergency support is available on a 24x7 basis.

We take a lifecycle approach to customer support, supporting customers from onboarding to deployment and training, and through the renewal process, to drive greater user adoption of 8x8 services. For our larger enterprise customers, our Elite Touch implementation methodology utilizes a Deployment Management team and provides active support through the "go-live" date at each customer site.  We also provide a Customer Success Manager as a single point of contact for every aspect of the post-sale relationship.  Finally, we offer a variety of training classes through our 8x8 Academy, either through instructor-led classes or self-paced eLearning.

Interconnection Agreements

We are a party to telecommunications interconnect and service agreements with VoIP providers and public switched telephone network (PSTN) telecommunications carriers in the United States and other global regions.  Pursuant to these agreements, VoIP calls originating on our network can be terminated on other VoIP networks or the PSTN, and likewise, calls originating on other VoIP networks and the PSTN can be terminated on our network.

businesses.

Research and Development

The cloud communications market is characterized by rapid technological changes and advancements, typical of most SaaS markets. Accordingly, we make substantial investments in the design and development of new products and services, as well as the development of enhancements and features to our existing products and services, and make these enhancements available to our customers frequently. Research and development expenses in each of the fiscal years ended March 31, 2017, 2016 and 2015 were $27.5 million, $24.0 million and $15.1 million, respectively.

We plan to invest in expanding the set of services within our platform, including extending our contact center capabilities, adding deeper collaboration services, and bringing an increasing number of analytics-driven applications to market. We expect our future development programs also to focus on the integration and functionality of our products and services with other SaaS products, such as Salesforce.com, NetSuite, Zendesk and others.

We currently employ individuals in research, development, and engineering activities in our facilities in San Jose, California, London, Englandthe United States, United Kingdom, Romania, Singapore, and Cluj, RomaniaPhilippines, as well as outsourced software development consultants.

consultants around the world.

In the United States, at the federal level, we are subject to regulation by the Federal Communications Commission (FCC) as a provider of communication services over the Internet, or VoIP, as well as state and local regulations applicable to VoIP providers. For example, regulations we are subject to include E-911 services, porting of phone numbers under specific conditions, protection of customer data generated by the use of our services, and obligations to contribute to federal programs including universal service fund and other software communications and collaboration services, like ours, have been subject to less regulation at theregulatory funds as well as state and federal levels than traditional telecommunications services. The FCC has subjected VoIPlocal 911 and universal service providers to a smaller subset of regulations that apply to traditional telecommunications service providers and has not yet classified VoIP services as either telecommunications or information. The FCC is currently examining the status of VoIP service providers and the services they provide in multiple open proceedings.

Many state regulatory agencies impose taxes and other surcharges on VoIP services, and certain states take the position that offerings by VoIP providers are intrastate telecommunications services and therefore subject to state regulation. These states argue that if the beginning and end points of communications are known, and if some of these communications occur entirely within the boundaries of a state, the state can regulate that offering. We believe that federal regulations largely pre-empt state regulations that treat VoIP offerings in the same manner as providers of traditional telecommunications services. However, there are many areas of regulation where pre-emption has not been resolved as a matter of law. It is possible that the FCC could determine that VoIP services are not information services, or that there could be a judicial or legislative determination that the states are not pre-empted from regulating VoIP services as traditional telecommunications services. We cannot predict how or when these issues will be resolved or the potential future impact on our business at this time.

10

---

funds.

In addition to regulations addressing Internet telephonyat the federal and broadband services, other regulatory issues relating to the Internet generally could affect our ability to provide our services. Congress has adoptedstate levels, many states are also enacting privacy legislation that regulates certain aspectsapply to companies such as us which collect, store, and process many types of data, including personal data. In particular, California has recently enacted the Internet including online content, user privacy, taxation,California Consumer Privacy Act, or CCPA. The CCPA imposes new obligations on qualifying for- profit companies, such as us, doing business in California, and substantially increases potential liability for third-party activities and jurisdiction. In addition, a number of initiatives pending in Congress and state legislatures would prohibit or restrict advertising or sale of certain products and services on the Internet, which may have the effect of raising the cost of doing business on the Internet generally.

such companies for failure to comply with data protection rules applicable to California residents.

Internationally, we are subject to a complex patchwork of regulations that vary from country to country. Some countries have adopted laws that make the provision of VoIP services illegal within the country. Other countries have adopted laws that impose stringent licensing obligations on providers of VoIP services like ours. In many countries, it is not clear how laws that have historically been applied to traditional telecommunications providers will be applied to providers of VoIP services like us.

In the European Union (EU), the General Data Protection Regulation, or GDPR, imposes obligations on all companies that collect, store, and process many types of data, including personal data, like us, and substantially increases potential liability for all companies, including us, for failure to comply with data protection rules.

The effect of any future laws, regulations and orders, or any changes in existing laws or their enforcement, including the application of new taxes and regulations on communication applications like ours running over the internet, on our operations cannot be determined. But as a general matter, increased regulation andSee the imposition of additional funding obligations increases service costs that may or may not be recoverable from our customers. An increasesection entitled “Risks Related to Regulatory Matters” in these costs could make our services less competitive with traditional telecommunications services, if we increase our prices, or decrease our profit margins, if we attempt to absorb such costs.

Federal, state, local and foreign governmental organizations are considering other legislative and regulatory proposals that would regulate and/or tax applications running over the Internet. We cannot predict whether new taxes will be imposed on our services, and depending on the type of taxes imposed, whether and how our services would be affected thereafter. Increased regulation of the Internet may decrease its growth and hinder technological development, which may negatively impact the cost of doing business via the Internet or otherwise materially adversely affect our business, financial condition and results of operations. Please refer to Part I, Item 1A "Risk Factors," for a discussion of regulatory risks, proceedings and issues that could adversely affect our business and operating results in the future.

Intellectual Property and Proprietary Rights

Our ability to compete depends, in part,more information on our ability to obtain and enforce intellectual property protection for our technology in the United States and internationally. We currently rely primarily on a combination of trade secrets, patents, copyrights, trademarks and licenses to protect our intellectual property. From inception through March 31, 2017, we have been awarded 131 United States patents, of which we expect to expire between 2017 and 2035. these risks.

Employees

As of March 31, 2017,2020, our workforce consisted of 1,0191,675 full time employees spread across the globe.who are primarily located in North America, Europe and Asia Pacific. None of our employees are represented by a labor union or arenor subject to a collective bargaining arrangement.

Available Information

We were incorporated in California in February 1987 and reincorporated in Delaware in December 1996. We maintain a corporate Internet website at the address http://www.8x8.com. The contents of this website are not incorporated in or otherwise to be regarded as part of this Annual Report. We file reports with the Securities and Exchange Commission, or SEC, which are available on our website free of charge. These reports include annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to such reports, each of which is provided on our website as soon as reasonably practicalpracticable after we electronically file such materials with or furnish them to the SEC. You can also read and copy any materials we file with the SEC at the SEC's Public Reference Room at 100 F Street, NE, Washington, DC 20549. You can obtain additional information about the operation of the Public Reference Room by calling the SEC at 1.800.SEC.0330. In addition, the SEC maintains a website (www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, including 8x8.

Information About Our Executive Officers of the Registrant

Our executive officers as of the date of this report are listed below.

In addition, changes in regulatory and accounting principles, and our interpretation of these and judgments used in applying them to our facts and circumstances, could have a material effect on our results of operations and financial condition. We also need to revise our business processes, systems and controls which requires significant management attention and may negatively affect our financial reporting obligations.

Our rate of customer cancellations or downgrades in services may increase in future periods due to a number of factors, some of which are beyond our control, such as the financial condition of our customers. In addition, if we are unable to maintain the quality and performance of our service whether due to a lack of feature parity or quality of service relative to the products of our competitors or due to service outages or disruptions, we could suffer significantly.

experience potentially sharp increases in customer cancellations and/or downgrades or customer credits which would adversely impact our revenues.

Our success depends on our ability to acquire new customers, and to retain and sell additional services to our existing customers.

We generate revenue primarily from the growthsale of subscriptions to our cloud communications services to our customers, which include small and customer acceptancemid-size businesses ("SMBs"), mid-market and larger enterprises, government agencies and other organizations. We define a “customer” as the legal entity or entities to which we provide services pursuant to a single contractual arrangement. In recent fiscal years, our business has grown steadily, and the revenue generated from sales of our services.

products and services has increased each fiscal year. Our future success depends on our ability to significantlycontinue to increase the amount of revenue we generate from sales to new and existing customers, and the rate at which our revenues increase.

Our customers are generally not obligated to, and may elect not to, renew their subscriptions after their current subscriptions expire. As a result, we have no assurance that the revenue stream associated with a particular customer account will continue beyond the initial subscription term, which is typically one to four years in length. Any decline in the quality and/or availability of our services could increase customer churn, force us to lower the prices for our services and/or provide customers with service credits. If a customer does elect to renew our services, it may reduce the quantity, downgrade the service plan associated with the service, or negotiate a lower price, which in each case would reduce the monthly recurring revenue generated from salesby that customer in the future. Because of our cloud software solutions to business customers, including small and midsize businesses (SMBs) and mid-market and larger distributed enterprises. To increase our revenue,customer churn, we must also continually add new customers to grow our business beyond our current user base and encourage existingto replace customers who choose not to continue their subscriptions (on terms favorable to us), increase their usageuse our platform in order to grow our revenue from one period to the next and prevent a decrease in revenue.

Our ability to attract new customers depends on a number of factors. If our sales and marketing efforts are not effective in identifying and qualifying prospective new customers, demonstrating the quality, value, features and capabilities of our services and/or purchase additional services from us. For customer demand and adoption of our cloud communications solutions to grow,those prospects, and promoting our brand generally, we may not be able to acquire new customers at the rate necessary to achieve our revenue targets. We must also continue to design, develop, offer and sell services whose quality, cost, features and feature benefits of these services mustcapabilities compare favorably to those of competing services.offered by our competitors. For example, our cloud unified communications and contact center services must continue to evolve with changing market demands and customer preferences so that high-quality service and popular features can be consistently offered at competitive prices. As our target markets mature, or as competitors introduce lower cost and/or more differentiated products or services that compete or are perceived to compete with ours, we may be unable to renew or extend our agreements with existing customers, or attract new customers or new business from existing customers, on favorable terms, or at all, which could have an adverse effect on our revenue and growth.

The rate at which

In addition to acquiring new customers, we generate new revenue by selling our existing customers purchase anyadditional quantities of subscribed services, or subscriptions to new or enhancedupgraded services. Particularly in the case of large enterprises, we often have opportunities to expand the sale of our services within an organization after we have completed an initial sale to one part of the organization (for example, a business unit, division or department, or personnel based in a particular country or region) and the organization has qualified us as a vendor. We invest in efforts to educate and train users as to the features and capabilities of our services so that they can become advocates within their organization and encourage increased adoption of our solutions. However, if existing users within an organization are dissatisfied with any aspect of our cloud services, or the technical support, training or other professional services we provide, we may offer depends onface challenges in up-selling or increasing our penetration of the organization. As noted elsewhere in this Annual Report, our marketing and customer support could be negatively impacted, by shelter-in-place requirements or other measures implemented to slow the spread of COVID-19, which in turn could negatively impact our revenue.

The cloud communications industry is competitive and rapidly evolving. We expect the industry to become more competitive in the future due to a number of factors including, general economic conditions,for example, the importanceentry into the market of new competitors or the consolidation of existing competitors. Because we offer multiple services from a single platform, we compete with businesses in several overlapping industries, including voice, video meetings, chat, team messaging, contact center and enterprise-class API solutions.

We may also face competition from large Internet and cloud service companies such as Alphabet Inc. (Google Voice and Google Meet (formerly called Google Hangouts), Amazon Inc., Oracle Corporation, Microsoft Corporation, and Slack, Inc., some of which are well established in the communications industry while others have only recently begun to market cloud communications solutions. Some of these additionalcompetitors have developed strong software solutions for their respective communications and/or collaboration siloes, such as Microsoft which is investing significantly in its Teams unified communication and collaboration product. Any of these companies could launch a new cloud-based business communications service, expand its existing offerings to compete with features of our services, or enter into a strategic partnership with, or complete an acquisition of, one or more of our cloud communications competitors.

Many of our current and potential competitors have significantly greater resources and brand awareness, and a larger base of customers than we have. As a result, these competitors may have greater credibility with our existing and potential customers. They also may adopt more aggressive pricing policies and devote greater resources to the development, promotion and sale of their products and services. Our competitors may also offer bundled service arrangements that present a more differentiated or better integrated product and services to customers. Increased competition could require us to lower our prices, reduce our sales revenue, increase our gross losses or cause us to lose market share. In addition, many of our customers are not subject to long-term contractual commitments and have the price at which we offer them. Ifability to switch from our customers react negativelyservices to our competitors' offerings on relatively short notice. Announcements, or expectations, as to the introduction of new products and technologies by our competitors or enhanced service offeringsus could cause customers to defer purchases of our existing products and services, which also could have a material adverse effect on our business, financial condition or operating results.

Given the significant price competition in the markets for our effortsservices, we may be at a disadvantage compared with those competitors who have substantially greater resources than us or may otherwise be better positioned to upsell are otherwise not as successful as we project,withstand an extended period of downward pricing pressure. The harm to our business may suffer.be magnified if we are unable to adjust our expenses to compensate for such shortfall, or if we determine that we need to increase our marketing and sales efforts in order to attract new customers and retain existing customers.

Our ability to increase our customer base and achieve broader market acceptance of our products and services will depend to a significant extent on our ability to expand our existing marketing and sales operations. We continually invest in our marketing and sales activities, including our sales force and our network of strategic partners, in the United States and internationally. Our sales strategies must also continue to evolve and adapt as our market matures, for example through the offering of additional customer self-service tools and e-commerce automation for the SMB segmentsmall business market and the development of new and more sophisticated sales channels thatfor mid-market and enterprise customers.

Our revenue is dependent on the success of our direct and internal channel sales teams and the efforts of our internal marketing team. The direct channel is driven largely by our dedicated sales agents, both inside and field-based, who market and sell our products and services to end customers. The success of our indirect channel is dependent on our dedicated internal channel teams who leverage the strengthsefforts of our channel partners to significantly expand our sales and marketing reach. Our future success depends on our ability to continue to grow and maintain effective direct and indirect sales organizations and properly incentivize our sales agents to find and close sales opportunities both directly with end customers and through a growing network of channel partners. We have made and continue to make significant investments in our sales teams and our marketing teams and we cannot be sure these investments will be successful. Identifying and recruiting qualified sales representatives and

training them is time-consuming and resource-intensive, and they may not be fully trained and productive for a significant amount of time. In addition, marketing and selling new and enhanced features and services may require increasingly sophisticated and costly sales and marketing efforts whichthat may require us to incur additional expenses and may negatively impact the results of our operations.

To support All of these efforts require us to invest significant financial and other resources, thus increasing our sales and marketing expenses and customer acquisition costs. If we are unable to hire, develop and retain talented sales personnel, if our new sales personnel are unable to achieve desired productivity levels in a reasonable period of time or if our sales and marketing programs are not effective, we may not increase our revenue in future periods at the successful marketing and salerate we predict, or at all. The efficacy of our sales agents may be harmed by shelter-in-place orders and business closures imposed by governments around the world to slow the spread of COVID-19.

Our future business success, particularly to attract and support larger customers and expand into international markets, depends on our indirect sales channels. These channels consist of master agents and subagents (who generally earn commissions from us), independent software vendors (ISVs), system integrators, value-added resellers (VARs), and internet service providers, among others. We typically contract directly with the end customer and use these channel partners to identify, qualify and manage prospects throughout the sales cycle-although we also have arrangements with partners who purchase our services for resale to newtheir own customers. Our future success depends upon our ability to develop and existing customers,maintain successful relationships with these business partners-many of whom also market and sell services of our competitors-and increasing the portion of sales opportunities they refer to us. To do so, we must continue to offer high-quality training, deployment,services that have quality, cost, feature and customer support. Providingother elements that compare favorably to competing services; ensure our partners are adequately trained and knowledgeable about our services; and provide sufficient incentives for these partners to sell our services effectively requires thatin preference to those of our customer support personnel have industry-specific technical knowledge and expertise, which may make it difficult and costly for us to locate and hire qualified personnel, particularly in the competitive Silicon Valley labor market wherecompetitors. If we are headquartered. Our support personnel also require extensive training onunable to persuade our products, whichexisting business partners to increase their sales of our services, or to build successful partnerships with new organizations, or if our channel partners are unsuccessful in their marketing and sales efforts, we may make it difficultnot be able to scale up our support operations rapidly. The importance of high-quality customer support will increase as we expandgrow our business globally and pursue new mid-market and distributed enterprise customers. Ifincrease our revenues at the rate we do not help our customers quickly resolve post-deployment issues and provide effective ongoing support, our ability to sell additional features and services to existing customers will sufferpredict, or at all, and our reputationbusiness may be harmed.

materially, adversely affected.

As more of ourwe increase sales efforts are targeted atto enterprise customers, our sales cycle mayprocess has become more time-consumingcomplex and expensive, we may encounter pricing pressure and implementation and customization challenges,resource-intensive, our average sales cycle has become longer, and we may have to delay revenue recognition for some complex transactions, all of which could harm our business and operating results.

more difficulty predicting when sales will be completed.

We currently derive a majority of our revenuesnew revenue growth from sales of our cloud software solutions to mid-market and larger distributed enterprises, and we believe that increasing our sales to these customers is key to our future growth. Our sales cycle, which is the time between initial contact with a potential customer and the ultimate sale to that customer, is often lengthy and unpredictable for larger enterprise customers. Many of our prospective enterprise customers do not have prior experience with cloud-based communications and, therefore, typically spend significant time and resources evaluating our solutions before they purchase from us. Similarly, we typically spend more time and effort determining their requirements and educating these customers about the benefits and uses of our solutions. Enterprise customers also tend to demand more customizations, integrations and additional features than SMB customers. As a result, we may be required to divert more sales and engineering resources to a smaller number of large transactions than we have in the past, which means that we will have less personnel available to support other segmentssectors, or that we will need to hire additional personnel, which would increase our operating expenses.

13

---

It is often difficult for us to forecast when a potential enterprise sale will close, the size of the customer's initial service order and the period over which the deploymentimplementation will occur, any of which impacts our recognitionmay impact the amount of revenue.revenue we recognize or the timing of revenue recognition. Enterprise customers may delay their purchases from one quarter to another as they assess their budget constraints, negotiate early contract terminations with their existing providers or wait for us to develop new features. Any delay in closing, or failure to close, a large enterprise sales opportunity in a particular quarter or year could significantly harm our projected growth rates and cause the amount of new sales we book to vary significantly from quarter to quarter. We also may also have to delay revenue recognition on some of these transactions until the customer's technical or implementation requirements have been met.

In some cases, we may enter into a contract with a large enterprise customer such as a preferred vendor agreement,that establishes the terms and conditions for future orders of services by that customer, its affiliates or clients (as the case may be) but that has little or no minimum purchase commitments but establishes the terms on which the customer's affiliates, clients or franchisees (as the case may be) may order services from us in the future.commitment. We may expend significant time and resources towards becoming a preferred vendor without booking significant sales from the opportunity until months or years after we sign the initial agreement.agreement, if at all. If we are unsuccessful in selling ourfail to persuade these customers to order services to the prospective purchasersfrom us under these agreements, we may not recognize revenue in excess of the expenses we incur in pursuing these opportunities, which could adversely impact our profitabilityresults of operations and cash flow.

We also face significant risks in implementing and supporting the

If we do not efficiently manage our deployment services we sell tofor our small business, mid-market and larger distributed enterprises, our margins will be adversely impacted, our costs will increase, and ifour recurring service revenue may not grow at the rate we do not manage these efforts effectively,expected, harming our business and results of operations couldoperations.

revenue. However, these investments may be materiallycostly and adversely affected.

time-consuming and there is no guarantee that we will be successful in lowering the cost and increasing the efficiency of our deployment and implementation professional services.

We have a limited history of selling our services to larger businesses and have experienced, and may continue to experience, new challenges in deployingconfiguring and providing ongoing support for the solutions we sell to large customers.

customers, including the provision of professional services for these customers on a profitable basis. Larger customers' networks are often more complex than those of smaller customers, have more unique requirements, and the configuration of our services for these customers generally requirerequires participation from the customercustomer’s information technology (IT) team, and thereteam. There is no guarantee that the customer will make available to us the necessary personnel and other resources with adequate expertisefor a successful configuration of services. This will be available when we deploy our services. The lack of local resources may prevent us from ensuring the proper deployment of our services, which can in turn adversely impact the quality of services that we deliver over our customers' networks, and/or may result in delays in the implementation of our services. This may create a public perception that we are unable to deliver high quality of service to our customers, which could harm our reputation and make itmade more difficult as a result of business closure and shelter-in-place orders imposed by governments world-wide in response to attract new customers and retain existing customers. Moreover, larger customers tend to require higher levels of customer service and individual attention (including periodic business reviews and in-person visits, for example), which may increase our costs for implementing and delivering services.COVID-19. If a customer is unsatisfied with the quality of services we provide or the quality of work performed by us or a third party, we may decide to incur costs beyond the scope of our contract with the customer in order to address the situation and protect our reputation, which may in turn reduce or eliminate the profitability of our contract with the customer. In addition, negative publicity related to our larger customer relationships, regardless of its accuracy, could harm our reputation and make it more difficult

If the emerging market for us to compete for new business with current and prospective customers.

We also face challenges building and training an integrated sales force capable of addressing thecloud communications services and features of our comprehensive product suite, as well as a staff of expert engineering and customer support personnel capable of addressing the full range of installation and deployment issues that tend to arise more frequently with larger customers. Also, we have only limited experience in developing and managing sales channels and distribution arrangements for larger businesses. If we fail to effectively execute the sale, deployment and ongoing support of our services to mid-market and larger distributed enterprises, our results of operations and our overall abilitydoes not continue to grow, our customer basefuture business could be materially and adversely affected.

Intense competition in the markets in which we compete could prevent us from increasing or sustaining our revenue growth and increasing or maintaining profitability.

harmed.

The market for cloud communications services is evolving rapidly and is characterized by an increasing number of market entrants. As is typical of a rapidly evolving industry, is competitive,the demand for and we expect it to become increasingly competitive in the future. We may also face competition from companies in adjacent or overlapping industries.

14

---

In connection with our unified communication services, we face competition from other providersmarket acceptance of, cloud communicationcommunications services is uncertain. Our success will depend to a substantial extent on the widespread adoption of cloud communications services as a replacement for legacy on-premise systems. Many larger organizations have invested substantial technical and financial resources and personnel to integrate legacy on-premise communications systems into their businesses and, therefore, may be reluctant or unwilling to migrate to cloud communications services such as RingCentral, Fuze, Vonageours. It is difficult to predict client adoption rates and Dialpad. In connection withdemand for our solution, the future growth rate and size of the cloud contact center services, we face competition from other providerscommunications service market, or the entry of cloudcompetitive products and premise-based contact center software services, such as inContact (recently acquired by NICE), Five9 and Interactive Intelligence. In addition, because manyservices. The expansion of our target customers have historically purchasedthe cloud communications services from incumbent telephone companies along with legacy on-premises communication equipment, we compete with these customers' existing providers. These competitors include, for example, AT&T, CenturyLink, Comcast and Verizon Communications in the United States, as well as local incumbent communications providers in the international markets where we operate, such as Vodafone, Telefonica, Orange, America Movil and Deutsche Telekom, all in conjunction with on-premises hardware solutions from companies like Avaya, Cisco and Mitel.   We may also face competition from large Internet and cloud service companies such as Google Inc., Amazon Inc., Oracle Corporation and Microsoft Corporation, any of which might launch a new cloud-based business communications service, expand its existing offerings or acquire other cloud-based business communications companies in the future.

Many of our current and potential competitors have longer operating histories, significantly greater resources and brand awareness, and a larger base of customers than we have. As a result, these competitors may have greater credibility with our existing and potential customers. They also may be able to adopt more aggressive pricing policies and devote greater resources to the development, promotion and sale of their products. Our competitors may also offer bundled service arrangements that present a more differentiated or better integrated product to customers. Increased competition could require us to lower our prices, reduce our sales revenue, lower our gross profits and/or cause us to lose market share. In addition, many of our customers are not subject to long-term contractual commitments and have the ability to switch from our services to our competitors' offeringsdepends on relatively short notice.

Given the significant price competition in the markets for our services, we may be at a disadvantage compared with those competitors who have substantially greater resources than us or may otherwise be better positioned to withstand an extended period of downward pricing pressure. The adverse impact of a shortfall in our revenues may be magnified by our inability to adjust our expenses to compensate for such shortfall. Announcements, or expectations, as to the introduction of new products and technologies by our competitors or us could cause customers to defer purchases of our existing products, which also could have a material adverse effect on our business, financial condition or operating results.

We have a history of losses and are uncertain of our future profitability.

We recorded an operating loss of approximately $6.7 million for the fiscal year ended March 31, 2017 and ended the period with an accumulated deficit of approximately $115 million. Although we have achieved operating income in three of our five most recent fiscal years, we incurred substantial operating losses prior to that period and we may incur operating losses in the future, and those loses could be substantial. As we expand our geographic reach and range of service offerings, and further invest in research and development, sales and marketing, and regulatory compliance, we will need to increase revenues in order to generate sustainable operating profit. Given our history of fluctuating revenues and operating losses, we cannot be certain that we will be able to achieve or maintain operating profitability on an annual basis or on a quarterly basis in the future.

Our churn rate may increase in future periods due to customer cancellations or other factors, which may adversely impact our revenue or require us to spend more money to grow our customer base.

Our customers generally do not have long-term contracts with us and may discontinue their subscriptions for our services after the expiration of their initial subscription period, which typically range from one to three years. In addition, our customers may renew for lower subscription amounts or for shorter contract lengths. We may not accurately predict cancellation rates for our customers. Our cancellation rates may increase or fluctuate as a result of a number of factors, including customer usage, pricing changes, numberthe refresh rate for legacy on-premise systems, cost, performance and perceived value associated with cloud communications services, as well as the ability of applications used by our customers, customer satisfaction with ourproviders of cloud communications solutions to address security, stability and privacy concerns. If we or other cloud communications service the acquisitionproviders experience security incidents, loss of our customers by other companies and deteriorating general economic conditions. If our customers do not renew their subscriptions for ourclient data, disruptions in service or decreaseother problems, the amount they spend with us,market for cloud communications services as a whole, including our revenue will decline and our business will suffer.

15

---

Our average monthly business service revenue churn was less than 1% over the past two fiscal years. Our method of computing this revenue churn rateservices, may be different from methods used byharmed. If the demand for cloud communications services fails to develop or develops more slowly than we anticipate, it could significantly harm our competitors and other companies in our industry to compute their publicly disclosed churn rates. As a result, only limited reliance can be placed on our churn rate when attempting to compare it to that of other companies. Also, our churn rate can vary based on events that may not be indicative of actual trends in our business. Our churn rate could increase in the future if customers are not satisfied with our service. Other factors, including increased competition from other providers of communications and collaborations services, alternative technologies, and adverse business conditions also influence our churn rate.

Because of churn, we must acquire new customers on an ongoing basis to maintain our existing level of customers and revenues. As a result, marketing expenditures are an ongoing requirement of our business. If our churn rate increases, we will have to acquire even more new customers in order to maintain our existing revenues. We incur significant costs to acquire new customers, and those costs are an important factor in determining our net profitability. Therefore, if we are unsuccessful in retaining customers or are required to spend significant amounts to acquire new customers beyond those budgeted, our revenue could decrease and our net loss could increase.

Our rate of customer cancellations may increase in future periods due to a number of factors, some of which are beyond our control, such as the financial condition of our customers or the state of credit markets. In addition, a single, protracted service outage or a series of service disruptions, whether due to our services or those of our carrier partners, may result in a sharp increase in customer cancellations.

Due to the length of our sales cycle, especially in adding new mid-market and larger distributed enterprises as customers, we may also experience delays in acquiring new customers to replace those that have terminated our services. Such delays would be exacerbated if general economic conditions worsen. An increase in churn, particularly in challenging economic times, could have a negative impact on the results of our operations.

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 operate in an emerging market that is characterized by rapid changes in customer requirements, frequent introductions of new and enhanced products and services, and continuing and rapid technological advancement. To compete successfully in this emerging market, we must continue to design, develop, manufacture, and sell highly scalable new and enhanced cloud software solutions products and services that provide higher levels of performance and reliability at lower cost. If we are unable to develop new products and services that address our customers' needs, to deliver our cloud software solution applications in one seamless integrated productservice offering that addresses our customers' needs, or to enhance and improve our products and services in a timely manner, we may not be able to achieve or maintain adequate market acceptance of our services.

Our ability to grow is also subject to the risk of future disruptive technologies. Access and use of our services is provided via the cloud, which, itself, has been disruptive to the previous premises-based model.

If new technologies emerge that are able to deliver communications and collaboration solutions services at lower prices, more efficiently, more conveniently or more securely, such technologies could adversely impact our ability to compete.

If we are unable to develop new features and services internally due to factors such as competitive labor markets, high employee turnover, lack of management ability or a lack of other research and development resources, we may miss market opportunities. Further, many of our competitors have historically spent a greater amount of funds on their research and development programs, and those that do not may be acquired by larger companies that would allocate greater resources to our competitors' research and development programs. In addition, there is no guarantee that our research and development efforts will succeed, or that our new products and services will enable us to maintain or grow our revenue or recover our development costs. Our failure to maintain adequate research and development resources, to compete effectively with the research and development programs of our competitors and to successfully monetize our research and development efforts could materially and adversely affect our business and results of operations.

16

---

We may nothave difficulty attracting or retaining senior management and other personnel with the industry experience and technical skills necessary to support our growth.

Companies in the cloud communications industry compete aggressively for top talent in all areas of business, but particularly senior management, sales and marketing, professional services and engineering, where employees with industry experience, technical knowledge and specialized skill sets are particularly valued. Demand can be ableexpected to scale our business efficiently or quickly enoughincrease if cloud communications continues to meet our customers' growing needs, in which case our operating results could be harmed.

As usagegain a greater share of the global communications market. Some of our competitors may respond to these competitive pressures by increasing employee compensation, paying more on average than we pay for the same position. Any such disparity in compensation could make us less attractive to candidates as a potential employer, which in turn may make it more difficult for us to hire and retain qualified employees. Training an individual who lacks prior cloud software solutionscommunications experience to be successful in a sales or technical role can take months or even years.

If an employee of 8x8 leaves to work for a competitor, not only are we impacted by mid-marketthe loss of the individual resource, but we also face the risk that the individual will share our trade secrets with the competitor in violation of their contractual and larger distributed enterprises expands and as customers continuelegal obligations to integrate our services across their enterprises, we are required to devote additional resources to improving our application architecture, integrating our products and applications across our technology platform, integrating with third-party systems, and maintaining infrastructure performance. As our customers gain more experience with our services, the number of users and transactions managed by our services, the amount of data transferred, processed and stored by us, the number of locations where our service is being accessed, and the volume of communications managed by our servicesus. Our competitors have in some cases,the past and may in the future expand rapidly.target their hiring efforts on a particular department, and if we lose a group of employees to a competitor over a short time period, our day-to-day operations may be impaired. While we may have remedies available to us through litigation, they would likely take significant time and expense and divert management attention from other areas of the business.

If we increase employee compensation (beyond levels that reflect customary performance-based and/or cost-of-living adjustments) in response to competitive pressures, we may sustain greater operating losses than we predicted in the near term, and we may not achieve profitability within the timeframe we had expected, or at all. In addition, we willmay need to appropriately scaleissue equity at increased levels, now and in the future, to attract and retain key employees and executives, including weighting a greater percentage of our internal business systemsemployees total compensation in the form of equity as opposed to cash, which will have the adverse effect of increasing dilution for our stockholders.

We also face challenges building and training an integrated sales force capable of addressing the services and features of our comprehensive service suite, as well as a staff of expert engineering and customer support personnel capable of addressing the full range of implementation and configuration issues that tend to arise more frequently with larger customers. Also, we have only limited experience in developing and managing sales channels and distribution arrangements for larger businesses. If we fail to effectively execute the sale, configuration and ongoing support of our services to mid-market and larger enterprises, our results of operations and our overall ability to grow our customer base could be materially and adversely affected.

To support the successful marketing and sale of our services organization, includingto new and existing customers, we must continue to offer high-quality training, implementation, and customer support. Providing these services effectively requires that our customer support personnel have industry-specific technical knowledge and expertise, which may make it difficult and costly for us to locate and hire qualified personnel, particularly in the competitive labor market in Silicon Valley where we are headquartered. Our support personnel also require extensive training on our products and services, which may make it difficult to scale up our support operations rapidly or effectively. The importance of high-quality customer support will increase as we expand our business globally and regulatory compliance,pursue new mid-market and enterprise customers. If we do not help our customers quickly resolve post-implementation issues and provide effective ongoing support, our ability to serve our growing customer base. Any failure of or delay in these efforts could cause impaired system performancesell additional features and reduced customer satisfaction. These issues could reduce the attractiveness of our cloud software solutionsservices to customers, resulting in decreased sales to new customers, lower renewal rates by existing customers the issuance of service credits, or requested refunds, which could hurt our revenue growthwill suffer and our reputation. These system upgrades and the expansion of our support and services have been and will continue toreputation may be expensive and complex, requiring management time and attention and increasingharmed.

Workforce reductions may not be effective in reducing our operating expenses. costs, might have unintended consequences, and could negatively impact our business.

We could also face inefficiencies or operational failureshave made reductions in our workforce during the fourth quarter of fiscal 2020 and may be required to make further reductions in the future in response to changes in the economic environment, our industry and demand, including as a result of any negative economic conditions caused by the COVID-19 pandemic. Reductions in our efforts to scale our infrastructure. Moreover, there are inherent risks associated with upgrading, improving and expanding our information technology systems. We cannot be sure that the expansion and improvements to our infrastructure and systems will be fully or effectively implemented on a timely basis, if at all. These efforts may reduce revenue and our margins andworkforce could adversely impact our financial results.

Tofuture sales and ability to provide services or recruit necessary employees in the future. In addition to being costly, such reductions may lead to additional attrition and loss of necessary human resources. While workforce reductions are expected to reduce our operating costs, we cannot be certain that these efforts will be successful or that we will not be required to implement additional actions to structure our business to operate in a cost-effective manner in the future.

The applicability of state and local taxes, fees, surcharges or similar taxes to our services we rely on third parties for all of our network connectivityis complex, ambiguous and co-location facilities.

We currently use the infrastructure of third-party network service providers, including the services of Equinix, Inc.,subject to interpretation and Level 3 Communications, Inc., to provide all of our cloud services over their networks rather than deploying our own networks.

We also rely on third-party network service providers to originate and terminate substantially all of the PTSN calls using our cloud-based services. We leverage the infrastructure of third-party network service providers to provide telephone numbers, PSTN call termination and origination services, and local number portability for our customers rather than deploying our own network throughoutchange. In the United States, for example, we collect state and internationally. This decision has resultedlocal taxes, fees and surcharges based on our understanding of the applicable laws in lower capitalthe relevant jurisdiction. The taxing authorities may challenge our interpretation of the laws and operating costsmay assess additional taxes, penalties and interests which could have adverse effects on the results of operations and, to the extent we pass these through to our customers, demand for our businessservices. Additionally, the applicability of sales and use, value added, or similar taxes may differ between services such as unified communication, voice, video, contact center and platform communications such that the obligations to collect taxes from customers may vary between services and between companies such that we may be obligated to collect taxes at a higher rate that other services from our competitors impacting

We have accrued a liability of approximately $4.5 million as our best estimate of the probable amount of taxes, fees and surcharges that may be imposed by states, municipalities and other taxing jurisdictions on our services to date. Historically, the amounts that have been remitted for uncollected state, municipal and other similar indirect taxes, fees, or surcharges have been within the accruals we established. We adjust our accrual when facts relating to specific exposures warrant such adjustment. This accrued contingent liability is based on our analysis of several factors, including the location where our services are used, our nexus to that jurisdiction for tax purposes, and the taxability of our services under the rules and regulations in each state or municipality (as these may be interpreted by regulatory and judicial authorities from time to time). While we have accrued for these potential liabilities based on our analyses and best estimates at the short-term, but has reducedtime, state, municipal and other taxing and regulatory authorities may challenge our operating flexibilityposition, which could result in us being liable for sales and use taxes, fees, or surcharges, as well as related penalties and interest, above our accrued contingent liability. To the extent we collect or otherwise recover these taxes, fees or surcharges from our customers, our services may become less competitive, our churn rate may increase, and our revenue from new and existing customers may be materially adversely affected.

Our ability to make timely service changes. Ifuse our net operating losses or research tax credits to offset future taxable income may be subject to certain limitations.

Risks Related to our reliance on these service providers, when problems occurProducts and Operations

If we are unable to migrate our customers to our newer X Series suite of services in a network,timely and efficient manner, we may experience higher customer churn rates, which will adversely impact our revenues and require us to spend more money to acquire and grow our revenue.

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 may be difficultpromptly, we could lose customers, become subject to identify the sourceservice performance or warranty claims or incur significant costs, reducing our revenues and adversely affecting our operating results.

Our customers use our communications services to manage important aspects of the problem. The occurrence of hardwaretheir businesses, and softwareany errors, whether caused bydefects, outages, or disruptions to our service or products or thoseother performance problems with our service could hurt our reputation and may damage our customers' businesses, any of another vendor,which may result in our granting of credits to customers that in turn would reduce our revenue. Our services and the delaysystems infrastructure underlying our cloud communications platform incorporate software that is highly technical and complex. Our software has contained, and may now or in the future contain, undetected errors, bugs, or vulnerabilities to hackers, which have caused, and may in the future cause, temporary service outages or other disruptions for some customers. Some errors in our software code may not be discovered until after the code has been released. Any errors, bugs, or vulnerabilities discovered in our code after release could result in damage to our reputation, loss of market acceptancecustomers, loss of revenue, or liability for service credits or damages, any of which could adversely affect our business and financial results. We implement bug fixes and upgrades as part of our productsregularly scheduled system maintenance, which may lead to system downtime. Even if we are able to implement the bug fixes and upgrades in a timely manner, any necessary revisionshistory of defects, or the loss, damage or inadvertent release of confidential customer data, could cause our reputation to be harmed, and customers may forceelect not to purchase or renew their agreements with us and subject us to incur significant expenses. Under the terms of the "end-to-end" service level commitments that we make for the benefit of qualifying customers, we are potentially at risk for service problems experienced by these service providers. Customers who do not qualify for these enhanced SLA commitments may nevertheless hold us responsible for these service issues and seek serviceperformance credits, early termination rightswarranty claims or increased insurance costs. The costs associated with any material defects or errors in our software or other remedies. Accordingly, service issues experienced byperformance problems may be substantial and could materially adversely affect our service provider partners may harm our reputation as well as our business, financial condition or operating results.

17

---

Our physical infrastructure is concentrated in a few facilities and any failure in our physical infrastructure or servicesservice outages could lead to significant costs andand/or disruptions and could reduce our revenue, harm our business reputation and have a material adverse effect on our financial results.

Our leased network and data centers are subject to various points of failure. Problems with cooling equipment, generators, uninterruptible power supply, routers, switches, or other equipment, whether or not within our control, could result in service interruptions for our customers as well as equipment damage. Because our services do not require geographic proximity of our data centers to our customers, our infrastructure is consolidated into a few large data center facilities. Any failure or downtime in one of our data center facilities could affect a significant percentage of our customers. While our data center facilities are currently operating as essential businesses exempt from current shelter-in-place orders, further tightening of business closure orders or social distancing or COVID-19 outbreaks could negatively impact these facilities. The total destruction, closure, or severe impairment of any of our data center facilities could result in significant downtime of our services and the loss of customer data. Because our ability to attract and retain customers depends on our ability to provide customers with highly reliable service, even minor interruptions in our service could harm our reputation. Additionally, in connection with the expansion or consolidation of our existing data center facilities from time to time, there is an increased risk that service interruptions may occur as a result of server relocation or other unforeseen construction-related issues.

We have experienced interruptions in service in the past. While we have not experienced a material increase in customer attrition following these events, the harm to our reputation is difficult to assess. We have taken and continue to take steps to improve our infrastructure to prevent service interruptions, including upgrading our electrical and mechanical infrastructure. However, service interruptions continue to be a significant risk for us and could materiallyhave a material adverse impact on our business.

Any future service interruptions could:

We may also be required to transfer our servers to new data center facilities in the event that we are unable to renew our leases on acceptable terms, or at all, or the owners of the facilities decide to close their facilities, and we may incur significant costs and possible service interruption in connection with doing so. In addition, any financial difficulties, such as bankruptcy or foreclosure, faced by our third-party data center operators, or any of the service providers with which we or they contract, may have negative effects on our business, the nature and extent of which are difficult to predict. Additionally, if our data centers are unable to keep up with our increasing needs for capacity, our ability to grow our business could be materially and adversely impacted.

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.

We rely on third-party vendors for IP phones and software endpoints required to utilize our service. We currently do not have long-term supply contracts with any of these vendors. As a result, most of these third-party vendors are not obligated to provide products or services to us for any specific period, in any specific quantities or at any specific price, except as may be provided in a particular purchase order. The inability of these third-party vendors to deliver IP phones of acceptable quality and in a timely manner, particularly the sole source vendors, could adversely affect our operating results or cause them to fluctuate more than anticipated. Additionally, some of our products and services may require specialized or high-performance component parts that may not be available in quantities or in time frames that meet our requirements.

18

---

If we do notrequirements due to COVID-19 pandemic 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 will decline.

The functionality and popularity of our cloud software solutions depends, in part, on our ability to integrate our services with third-party applications and platforms, including enterprise resource planning, customer relations management, human capital management and other proprietary application suites. Third-party providers of applications and application programmable interfaces, or APIs, may change the features of their applications and platforms, restrict our access to their applications and platforms or alter the terms governing use of their applications and APIs and access to those applications and platforms in an adverse manner. Such changes could functionally limit or terminate our ability to use these third-party applications and platforms in conjunction with our services, whichotherwise.

Difficulty executing local number porting requests could negatively impact our offeringsbusiness.

The FCC and harmforeign regulators require VoIP providers to support telephone number porting within specified timeframes. In order to port telephone numbers, we rely on third party telecommunications carriers to complete the process. Often number ports take longer than the specified timeframes. For many potential customers, the ability to quickly port their existing telephone numbers into our business. Ifservice in a timely fashion is a very important consideration. To the extent that we failcannot quickly port telephone numbers in, our ability to integrateacquire new customers may be negatively impacted. To the extent that we cannot quickly port telephone numbers out when a customer leaves our software with new third-party back-end enterprise applications and platforms used byservice to go to another provider, we could be subject to regulatory enforcement action.

Natural disasters, war, terrorist attacks, global pandemics or malicious conduct, among other unforeseen events, could adversely impact our customers, we may not be ableoperations, could degrade or impede our ability to offer services, and may negatively impact our financial condition, revenues and costs going forward.

Our cloud communications services rely on uninterrupted connection to the functionality thatInternet through data centers and networks. Any interruption or disruption to our customers need,network, or the third parties on which would negativelywe rely, could adversely impact our ability to generate revenueprovide service. Our network could be disrupted by circumstances outside of our control including natural disasters, acts of war, terrorist attacks, global pandemics or malicious acts, among other unforeseen events, including, but not limited to, cyber-attacks. For example, our headquarters, global networks operations center and adversely impactone of our business. 

Our services also allow our customersthird-party data center facilities are located in the San Francisco Bay Area, a region known for seismic activity. Also, global pandemics, such as the one caused by COVID-19, may restrict travel by personnel, reduce the availability of materials required to use and managemaintain data centers that support our cloud software solutions on smartphones, tablets and other mobile devices. As new smart devices and operating systems are released, we may encounter difficulties supporting these devices andcommunication services, and wecould require us or our partner data centers and Internet service providers to curtail operations in certain geographic regions. Such an event may need to devote significant resources to the creation, support, and maintenance ofalso impede our mobile applications. In addition, if we experience difficulties in the future integrating our mobile applications into smartphones, tablets or other mobile devices or if problems arise with our relationships with providers of mobile operating systems, such as those of Apple Inc. or Google Inc., our future growth and our results of operations could suffer.

If our software fails due to defects or similar problems, and if we fail to correct any defect or other software problems, we could lose customers, become subject to service performance or warranty claims or incur significant costs.

Our customers use our service to manage important aspects of their businesses, and any errors, defects, disruptionscustomers' connections to our service or other performance problems with our service could hurt our reputation and may damage our customers' businesses. Our services and the systems infrastructure underlying our cloud communications platform incorporate software that is highly technical and complex. Our software has contained, and may now or in the future contain, undetected errors, bugs, or vulnerabilities. Some errors in our software code may only be discovered after the code has been released. Any errors, bugs, or vulnerabilities discovered in our code after release could result in damage to our reputation, loss of users, loss of revenue, or liability for damages, any of which could adversely affect our business and financial results. We implement bug fixes and upgrades as part of our regularly scheduled system maintenance, which may lead to system downtime. Even if we are able to implement the bug fixes and upgrades in a timely manner, any history of defects, or the loss, damage or inadvertent release of confidential customer data, could cause our reputation to be harmed, and customers may elect not to purchase or renew their agreements with us and subject us to service performance credits, warranty claims or increased insurance costs. The costs associated with any material defects or errors in our software or other performance problems may be substantial and could materially adversely affect our operating results.

19

---

Internet access providers and Internet backbone providers may be able to block, degrade or charge for access to or bandwidth use of certain of our products and services, which could lead to additional expenses and the loss of users.

Our products and services depend on the ability of our users to accessnetwork, since these connections also occur over the Internet, and certainwould be perceived by our customers as an interruption of our products require significant bandwidth to work effectively. In addition, users who access our services, and applications through mobile devices,even though such as smartphones and tablets, must have a high-speed connection, such as Wi-Fi, 3G, 4G or LTE, to use our services and applications. Currently, this access is provided by companies that have significant and increasing market power in the broadband and Internet access marketplace, including incumbent telephone companies, cable companies and mobile communications companies. Some of these providers offer products and services that directly compete with our own offerings, which give them a significant competitive advantage. Some of these broadband providers have stated that they may exempt their own customers from data-caps or offer other preferred treatment to their customers. Other providers have stated that they may take measures that could degrade, disrupt or increase the cost of user access to certain of our products by restricting or prohibiting the use of their infrastructure to support or facilitate our offerings, or by charging increased fees to us or our users to provide our offerings, while others, including some of the largest providers of broadband Internet access services, have committed to not engaging in such behavior. These providers have the ability generally to increase their rates, which may effectively increase the cost to our customers of using our cloud software solutions.

On March 12, 2015, the Federal Communications Commission, or FCC, released an order thatinterruption would prevent broadband Internet access providers from degrading or otherwise disrupting a broad range of services provisioned over consumers' and enterprises' broadband Internet access lines. While this order was appealed by a number of providers and trade organizations, it was subsequently upheld by the United States Court of Appeals for the DC Circuit on June 14, 2016. A petition for rehearing seeking an en banc rehearing is currently pending. In addition, the current Chairman of the FCC has publicly expressed an interest in changing the regulatory model for broadband Internet access under the current rules. The regulatory treatment of prioritization or degradation of traffic over the Internet, also known as net neutrality, varies widely among the jurisdictions in which we operate. While certain jurisdictions, such as the European Union have strong protections for competitive services such as ours, other countries either lack a net neutrality framework altogether or otherwise have lax enforcement of their rules. Broadband Internet access provider interference could result in a loss of existing users and increased costs, and could impair our ability to attract new users, thereby negatively impacting our revenue and growth.

Vulnerabilities to security breaches, cyber intrusions and other malicious acts could adversely impact our business.

Our operations depend on our ability to protect our network from interruption by damage from unauthorized entry, computer viruses or other eventsbe beyond our control. In the past,addition, as a result of COVID-19, we may have been subjectexperiencing changes to denial or disruptionour normal business practices due to our employees working from home in compliance with shelter-in-place orders in many of service, or DDOS,our office locations. As we implement modifications to employee travel and we may be subject to DDOS attacksemployee work locations in the future. We cannot assure you that our backup systems, regular data backups, security protocols, DDOS mitigation andresponse, among other procedures that are currently in place, or that may be in placebusiness modifications, these changes could, in the future, will be adequate to prevent significant damage, system failure or data loss.

Critical to our provision of service is the storage, processing, and transmission of confidential and sensitive data. We store, process and transmit a wide variety of confidential and sensitive information including credit card, bank account and other financial information, proprietary, trade secret or other data that may be protected by intellectual property laws, customers' and employees' personally identifiable information, as well as other sensitive information. We, along with others in the industry, will be subject to cyber threats and security breaches, given the nature of the information we store, process and transmit.

Depending on the evolving nature of cyber threats and the measures we may have to implement to continue to maintain the security of our networks and data, our profitability may be adversely impacted or we may have to increase the price of our services which may make our offerings less competitive with other communications providers.

20

---

If an individual obtains unauthorized access to our network, or if our network is penetrated, our service could be disrupted and sensitive information could be lost, stolen or disclosed which could have a variety of negative impacts, including legal liability, investigations by law enforcement and regulatory agencies, and exposure to fines or penalties, any of which could harm our business reputation and have a material negative impact on our business. In addition, to the extent we market our services as compliant with particular laws governing data privacy and security, such as Health Insurance Portability and Accountability Act and foreign data protection laws, a security breach that exposes protected information may make us susceptible to a number of claims related to our marketing.

Many governments have enacted laws requiring companies to notify individuals of data security incidents involving certain types of personal data. In addition, some of our customers contractually require notification of any data security compromise. Security compromises experienced by our competitors, by our customers or by us may lead to public disclosures, which may lead to widespread negative publicity. Any security compromise in our industry, whether actual or perceived, could harm our reputation, erode customer confidence in the effectiveness of our security measures, negatively impact our abilitynormal provision of services, particularly in the areas of sales and marketing to attract new customers, cause existing customers to elect not to renew their subscriptions or subject us to third-party lawsuits, regulatory fines or other action or liability, which could materially and adversely affect our business and operating results.

In contracts with larger enterprises, we often agree to assume liability for security breaches in excessprospective customers. Any of the amount of committed revenue from the contract. In addition, there can be no assurance that any limitations of liability provisions in our contracts for a security breach would be enforceable or adequate or would otherwise protect us from any such liabilities or damages with respect to any particular claim. We also cannot be sure that our existing general liability insurance coverage and coverage for errors or omissions will continue to be available on acceptable terms or will be available in sufficient amounts to cover one or more large claims, or that the insurer will not deny coverage as to any future claim. The successful assertion of one or more large claims against us that exceed available insurance coverage, or the occurrence of changes in our insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements,these events could have a material adverse impact on our business causing us to incur significant expenses, lose substantial amounts of revenue, suffer damage to our reputation, and lose customers.

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.

We collect, store, and process many types of data, including personal data in the course of our business. As such, we are subject to the data privacy and protection laws and regulations adopted by federal, state and foreign governmental agencies.agencies, including the European Union’s General Data Protection Regulation ("GDPR") and the California Consumer Privacy Act ("CCPA"). Data privacy and protection is highly regulated in many jurisdictions and may become the subject of additional regulation in the future. For example, lawmakers and regulators worldwide are considering proposals that would require companies, like us, that encrypt users' data to ensure access to such data by law enforcement authorities. Privacy laws restrict our storage, use, processing, disclosure, transfer and protection of personal information, including credit card data, provided to us by our customers as well as data we collect from our customers and employees. We strive to comply with all applicable laws, regulations, policies and legal obligations relating to privacy and data protection. However, if we fail to comply, we may be subject to fines, penalties and lawsuits, statutory damages at both the federal and state levels in the U.S., substantial fines and penalties under the European Union’s GDPR, class action lawsuits, and our reputation may suffer. We may also be required to make modifications to our data practices that could have an adverse impact on our business.

Governmental entities, class action lawyers and privacy advocates are increasingly examining companies' data collection, processing, use, storing, sharing, transferring and transmitting or personal data and data linkable to individuals. Self-regulatory codes of conduct, enforcement actions by regulatory agencies, and lawsuits by private parties impose additional compliancebusiness, including increasing our operating costs on us negative impacting our profitability as well as subjectwhich may cause us to unknown potential liabilities. These evolving laws, rulesincrease our prices making our services less competitive. While the United Kingdom enacted a Data Protection Act in May 2018 that substantially implements the GDPR and practicesimplemented statutory amendments to the Data Protection Act in 2019 that further aligned it with GDPR, the United Kingdom’s exit from the European Union has created regulatory uncertainty such as with respect to the cross-border transfer of data. Such uncertainty may also curtailadversely impact the operations of our current business activities which may also result in slimmer profit marginsU.K. subsidiary and reduce new opportunities.

add operational complexities that did not previously exist.

We are also subject to the privacy and data protection-related obligations in our contracts with our customers and other third parties. Any failure, or perceived failure, by us to comply with federal, state, or international laws, including laws and regulations regulating privacy, data or consumer protection, or to comply with our contractual obligations related to privacy, could result in proceedings or actions against us by governmental entities, contractual parties or others, which could result in significant liability to us, as well as harm to our reputation. Additionally, third parties on which we rely enter into contracts to protect and safeguard our customers' data. Should such parties violate these agreements or suffer a breach, we could be subject to proceedings or actions against us by governmental entities, contractual parties or others, which could result in significant liability to us as well as harm to our reputation.

21

---

There is considerable uncertainty with respect to the state of law governing data transfers between the European Union ("EU"), and other countries with similar data protection laws, and the U.S. There is ongoing litigation in the EU, as well as calls by certain political and governmental bodies in the EU to re-evaluate data transfers between the EU and the U.S., that could negatively impact the existing legally acceptable methods for transferring data between the EU and the U.S. on which we rely as do many other companies that transfer certain data between the EU and the U.S. Moreover, while we established alternative methods to transfer data between the EU and U.S. that addressed certain legal uncertainties that previously existed, some independent data regulators have adopted the position that other forms of compliance, including the methods we rely upon now as do many other companies, are also invalid though the legal grounds for these findings remains unclear at this time. Like many other companies, we continue to face uncertainty with respect to the measures we have implemented. Additionally, there is continued uncertainty regarding the legality of transferring certain data between the EU and U.S. caused by: (i) ongoing litigation that could invalidate the existing method that we, along with many other companies, rely upon for compliance with relevant law; and (ii) there is the possibility that political and other governmental bodies may invalidate the method we, along with many other companies, rely upon to comply with relevant law. We cannot predict how or if this issue will be resolved nor can we evaluate our potential liability at this time.

We could be liable for breaches of security on our website, fraudulent activities of our users, or the failure of third-party vendors to deliver credit card transaction processing services.

A fundamental requirement for operating an Internet-based, worldwide cloud software solutions and electronically billing our customers is the secure transmission of confidential information and media over public networks. Although we have developed systems and processes that are designed to protect consumer information and prevent fraudulent credit card transactions and other security breaches, failure to mitigate such fraud or breaches may adversely affect our operating results. The law relating to the liability of providers of online payment services is currently unsettled and states may enact their own rules with which we may not comply. We rely on third-party providers to process and guarantee payments made by our subscribers up to certain limits, and we may be unable to prevent our customers from fraudulently receiving goods and services.

Our liability risk will increase if a larger fraction of transactions effected using our cloud-based services involve fraudulent or disputed credit card transactions.

In addition, the functionality of our current billing system relies on certain third-party vendors delivering services. If these vendors are unable or unwilling to provide services, we will not be able to charge for our services in a timely or scalable fashion, which could significantly decrease our revenue and have a material adverse effect on our business, financial condition and operating results.

We must maintain Payment Card Industry Data Security Standard, or PCI DSS, compliance to bill our customers via credit card. If we fail to meet minimum-security standards for PCI DSS compliance, credit card providers such as American Express Company or Visa Inc. could refuse to process credit card transactions on our behalf and our ability to collect payments from our customers would be adversely impacted.

We may also experience losses due to subscriber fraud and theft of service. Subscribers have, in the past, obtained access to our service without paying for monthly service and international toll calls by unlawfully using our authorization codes or by submitting fraudulent credit card information. If our existing anti-fraud procedures are not adequate or effective, consumer fraud and theft of service could have a material adverse effect on our business, financial condition and operating results.

Natural disasters, war, terrorist attacks or malicious conduct could adversely impact our operations and could degrade or impede our ability to offer services.

Our cloud communications services rely on uninterrupted connection to the Internet through data centers and networks. Any interruption or disruption to our network, or the third parties on which we rely, could adversely impact our ability to provide service. Our network could be disrupted by circumstances outside of our control including natural disasters, acts of war, terrorist attacks or other malicious acts including, but not limited to, cyber-attacks. Our headquarters, global networks operations center and one of our third-party data center facilities are located in the San Francisco Bay Area, a region known for seismic activity. Should any of these events occur and interfere with our ability to operate our network even for a limited period of time, we could incur significant expenses, lose substantial amounts of revenue, suffer damage to our reputation, and lose customers. Such an event may also impede our customers' connections to our network, since these connections also occur over the Internet, and would be perceived by our customers as an interruption of our services, even though such interruption would be beyond our control. Any of these events could have a material adverse impact on our business.

22

---

Our infringement of a third party's proprietary technology could disrupt our business.

There has been substantial litigation in the communications, cloud communication services, semiconductor, electronics, and related industries regarding intellectual property rights and, from time to time, third parties may claim that we, our customers, our licensees or parties indemnified by us are infringing, misappropriating or otherwise violating their intellectual property rights. Third parties may also claim that our employees have misappropriated or divulged their former employers' trade secrets or confidential information. Our broad range of current and former technology, including IP telephony systems, digital and analog circuits, software, and semiconductors, increases the likelihood that third parties may claim infringement by us of their intellectual property rights.

During our 2017 fiscal year, we were named as defendants in two lawsuits, each brought by a non-practicing entity and alleging infringement of a single patent. During our 2016 fiscal year, we were similarly named as defendants in two lawsuits in which we were alleged to have infringed patents. We were successful in settling all four lawsuits relatively quickly, although we have in the past been involved in patent infringement lawsuits that spanned several years. Certain technology necessary for us to provide our services may, in fact, be patented by other parties either now or in the future. If such technology were held under patent by another person, we would have to negotiate a license for the use of that technology, which we may not be able to negotiate at a price that is acceptable or at all. The existence of such a patent, or our inability to negotiate a license for any such technology on acceptable terms, could force us to cease using such technology and offering products and services incorporating such technology.

If we are found to be infringing on the intellectual property rights of any third-party in lawsuits or proceedings that may be asserted against us, we could be subject to monetary liabilities for such infringement, which could be material. We could also be required to refrain from using, manufacturing or selling certain products or using certain processes, either of which could have a material adverse effect on our business and operating results. From time to time, we have received, and may continue to receive in the future, notices of claims of infringement, misappropriation or misuse of other parties' proprietary rights. There can be no assurance that we will prevail in these discussions and actions or that other actions alleging infringement by us of third-party patents will not be asserted or prosecuted against us. Furthermore, lawsuits like these may require significant time and expense to defend, may divert management's attention away from other aspects of our operations and, upon resolution, may have a material adverse effect on our business, results of operations, financial condition and cash flows.

Inability to protect our proprietary technology would disrupt our business.

We rely, in part, on trademark, copyright, and trade secret law to protect our intellectual property in the United States and abroad. We seek to protect our software, documentation, and other written materials under trade secret and copyright law, which afford only limited protection. We have additional United States and foreign patent applications pending. We cannot predict whether such pending patent applications will result in issued patents, and if they do, whether such patents will effectively protect our intellectual property. The intellectual property rights we obtain may not be sufficient to provide us with a competitive advantage, and could be challenged, invalidated, infringed or misappropriated. We may not be able to protect our proprietary rights in the United States or internationally (where effective intellectual property protection may be unavailable or limited), and competitors may independently develop technologies that are similar or superior to our technology, duplicate our technology or design around any patent of ours.

We attempt to further protect our proprietary technology and content by requiring our employees and consultants to enter into confidentiality and assignment of inventions agreements and third parties to enter into nondisclosure agreements. These agreements may not effectively prevent unauthorized use or disclosure of our confidential information, intellectual property or technology and may not provide an adequate remedy in the event of unauthorized use or disclosure of our confidential information, intellectual property or technology.

Litigation may be necessary in the future to enforce our intellectual property rights, to determine the validity and scope of our proprietary rights or the rights of others, or to defend against claims of infringement or invalidity. Such litigation could result in substantial costs and diversion of management time and resources and could have a material adverse effect on our business, financial condition, and operating results. Any settlement or adverse determination in such litigation would also subject us to significant liability.

We also may be required to protect our proprietary technology and content in an increasing number of jurisdictions, a process that is expensive and may not be successful, or which we may not pursue in every location. In addition, effective intellectual property protection may not be available to us in every country, and the laws of some foreign countries may not be as protective of intellectual property rights as those in the United States. Additional uncertainty may result from changes to intellectual property legislation enacted in the United States and elsewhere, and from interpretations of intellectual property laws by applicable courts and agencies. Accordingly, despite our efforts, we may be unable to obtain and maintain the intellectual property rights necessary to provide us with a competitive advantage.

23

---

Because our long-term growth strategy involves further expansion outside the United States, our business will be susceptible to risks associated with international operations.

An important component of our growth strategy involves the further expansion of our operations and customer base internationally. We have formed several subsidiaries outside the United States, including a Romanian subsidiary that contributes significantly to our research and development efforts. We have also acquired two UK-based companies — DXI in May 2015 and Voicenet in November 2013. The risks and challenges associated with sales and other operations outside the United States are different in some ways from those associated with our operations in the United States, and we have a limited history addressing those risks and meeting those challenges. Our current international operations and future initiatives will involve a variety of risks, including:

• localization of our services, including translation into foreign languages and associated expenses;
• regulation of our services as traditional telecommunications services, requiring us to obtain authorizations or licenses to operate in foreign jurisdictions, or alternatively preventing us from selling our full suite of services, or any services at all, in such jurisdictions;
• unexpected changes in a specific country or region's regulatory requirements, taxes, trade laws, or political or economic conditions;
• more stringent regulations relating to data security and the unauthorized use of, access to, and transfer of, commercial and personal information, particularly in the European Union;
• differing labor regulations, especially in the European Union and Latin America, where labor laws are generally more advantageous to employees as compared to the United States, including deemed hourly wage and overtime regulations in these locations;
• challenges inherent in efficiently managing an increased number of employees over large geographic distances, including the need to implement appropriate systems, policies, benefits and compliance programs;
• difficulties in managing a business in new markets with diverse cultures, languages, customs, legal systems, alternative dispute systems and regulatory systems;
• increased travel, real estate, infrastructure and legal compliance costs associated with international operations;
• different pricing environments, longer sales cycles, longer accounts receivable payment cycles and other collection difficulties;
• currency exchange rate fluctuations and the resulting effect on our revenue and expenses, and the cost and risk of entering into hedging transactions if we chose to do so in the future;
• limitations on our ability to reinvest earnings from operations in one country to fund the capital needs of our operations in other countries;
• laws and business practices favoring local competitors or general preferences for local vendors;
• limited or insufficient intellectual property protection;
• political instability or terrorist activities;
• exposure to liabilities under anti-corruption and anti-money laundering laws, including the U.S. Foreign Corrupt Practices Act, the UK Bribery Act 2010 and similar laws and regulations in other jurisdictions; and
• adverse tax burdens and foreign exchange controls that could make it difficult to repatriate earnings and cash.

24

---

We have limited experience in operating our business internationally, which increases the risk that any potential future expansion efforts that we may undertake will not be successful. We expect to invest substantial time and resources to expand our international operations. If we are unable to do this successfully and in a timely manner, our business and operating results could be materially adversely affected.

Acquisitions may divert our management's attention, result in dilution to our stockholders and consume resources that are necessary to sustain our business.

In fiscal 2017, we acquired LeChat, Inc., the developer of Sameroom. In fiscal 2016, we acquired DXI Limited, which developed the technology on which ContactNow was based, and substantially all of the assets of Quality Software Corporation, or QSC, which developed the technology behind our Quality Management service. In fiscal 2014, we acquired Voicenet Solutions Limited, a UK-based provider of cloud communication services in the United Kingdom. If appropriate opportunities present themselves, we may make additional acquisitions or investments or enter into joint ventures or strategic alliances with other companies. Risks commonly encountered in such transactions include:

• the difficulty of assimilating the operations and personnel of the combined companies;
• the risk that we may not be able to integrate the acquired services or technologies with our current services, products, and technologies;
• the potential disruption of our ongoing business;
• the diversion of management attention from our existing business;
• the inability of management to maximize our financial and strategic position through the successful integration of the acquired businesses;
• difficulty in maintaining controls, procedures, and policies;
• the impairment of relationships with employees, suppliers, and customers as a result of any integration;
• the loss of an acquired base of customers and accompanying revenue;
• the loss of an acquired base of customers and accompanying revenue while trying to transition the customer from the legacy systems to 8x8's technology due to mismatch of the features, usability, packaging, or pricing at the renewal times;
• the loss of an acquired base of customers and accompanying revenue due to failure and/or lack of maintenance/support for the legacy services and/or equipment/software/services being end of life;
• additional regulatory compliance obligations and costs associated with the acquired operations;
• litigation arising from or relating to the transaction;
• the assumption of leased facilities, other long-term commitments or liabilities that could have a material adverse impact on our profitability and cash flow; and
• the dilution to our existing stockholders from the issuance of additional shares of common stock or reduction of earnings per outstanding share in connection with an acquisition that fails to increase the value of our company.

As a result of these potential problems and risks, among others, businesses that we may acquire or invest in may not produce the revenue, earnings, or business synergies that we anticipate. In addition, there can be no assurance that any potential transaction will be successfully completed or that, if completed, the acquired business or investment will generate sufficient revenue to offset the associated costs or other potential harmful effects on our business.

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, some 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;

25

---

• 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/services, potentially increase our costs or services.

In additionprices we charge customers, and otherwise harm our business.

As a provider of interconnected VoIP services, we are subject 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 certainvarious international, federal, state and local requirements regarding how we interact withapplicable to our customers,industry, including those that address, among other matters, acceptable marketing practices, consumer protection, privacy, and billing issues,invoice presentation, the provisionaccessibility of 9-1-1 or other international emergency services, including location datalocal number porting, robo-calling, and the quality of service we provide to our customers.caller

ID spoofing. The failure of our products and services to comply, or delays in compliance, with various existing and evolving standards could delay or interrupt volume productionour introduction of our communications and collaboration services,new products, subject us to fines or other imposed penalties, or harm the perception and adoption rates of our service,reputation, any of which would have a material adverse effect on our business, financial condition or operating results.

For example:

• The FCC has adopted network neutrality rules. In March 2015,

Regulations to which we may be subject address the FCC adopted new network neutrality following matters, among others:

Regulation of our services as telecommunications services may require us to obtain authorizations or licenses to operate in foreign jurisdictions and comply with legal requirements applicable to traditional telephony providers. Regulators around the world, including those in the European Union generally do not distinguish between our cloud-based communications services and traditional telephony services. By entering additional international markets we may subject ourselves to significant regulation from foreign telecommunications authorities, including obligations to obtain telecommunications licenses and authorizations, complying with consumer protection laws and cooperating with local law enforcement authorities.providers. This regulation impactsmay impact our ability to differentiate ourselves from incumbent service providers and imposes substantial compliance costs on us. Regulation restricts our ability to compete and, in some jurisdictions, it may restrict how we are able to expand our service offerings. Moreover,In addition, the regulatory environment is constantly evolving and changes to the applicable regulations may have an adverse effect upon our business by imposing additional compliance costs, modifying our technology and operations and in general affecting our profitability.

26

---

• Reformreform of federal and state Universal Service Fund programs and payment of regulatory and other fees in international markets, could increase the cost of our service to our customers diminishing or eliminating ourany pricing advantage. we may have. The FCC and a number of states are considering reform or other modifications to Universal Service Fund programs. Furthermore, the FCC has ruled that states can require us to contribute to state Universal Service Fund programs. A number of states already require us to contribute, while others are actively considering extending their programs to include the services we provide. At the same time, foreign regulatory authorities may impose regulatory fees or other contributions on our services. Should the FCC, states or foreign regulators adopt new contribution mechanisms or otherwise modify contribution obligations that increase our contribution burden, we will either need to raise the amount we currently collect from our customers to cover these obligations or absorb the costs, which would reduce our profit margins. We currently pass-through Universal Service Fund contributions and certain other fees to our customers, which may result in our services becoming less competitive as compared to those provided by others.
• We may become subject to state regulation for certain service offerings. Certain states take the position that offerings by VoIP providers, like us, are intrastate and therefore subject to state regulation. These states argue that if the beginning and end points of communications are known, and if some of these communications occur entirely within the boundaries of a state, the state can regulate that offering. We believe that the FCC has preempted states from regulating VoIP services like ours in the same manner as providers of traditional telecommunications services. We cannot predict how this issue will be resolved or its impact on our business at this time.
• The FCC adopted rules concerning call completion rates to rural areas of the United States. It is possible that we, like other providers in the communications marketplace, may be subject to fines or other enforcement actions should the FCC determine that our call completion rates to rural areas are, or have been, unacceptable.
• The FCC and foreign regulators may require providers like us to comply with regulations related to how we present bills to customers. The adoption of such obligations may require us to revise our bills and may increase our costs of providing service which could either result in price increases or reduce our profitability.
• There may be risk associated with our ability to comply with U.S. and foreign rules concerning disabilities access requirements and the FCC and foreign regulators may expand disabilities access requirements to additional services we offer. We cannot predict whether we will be subject to additional accessibility requirements or whether any of our service offerings that are not currently subject to disabilities access requirements will be subject to such obligations. It is possible that we, like other providers in the communications marketplace, may be subject to fines or other enforcement actions if we are found not to be in compliance with the FCC's and foreign accessibility requirements.
• There may be risks associated with our ability to comply with requirements of the Telecommunications Relay Service and similar foreign statutes. The FCC requires providers of interconnected VoIP services to comply with certain regulations pertaining to people with disabilities and to contribute to the Telecommunications Relay Services fund. We are also required to offer 7-1-1 abbreviated dialing for access to relay services. At the same time, several foreign regulators also mandate accessibility requirements for people with disabilities. It is possible that we, like other providers in the communications marketplace, may be subject to fines or other enforcement actions if we are found not to be in compliance with these requirements, including the FCC's 7-1-1 abbreviated dialing obligations.
• There may be risks associated with our ability to comply with the requirements of U.S. and foreign law enforcement agencies. The FCC requires all interconnected VoIP providers to comply with the Communications Assistance for Law Enforcement Act, or CALEA. Similarly, foreign regulatory frameworks require VoIP providers to comply with local assistance to law enforcement laws and cooperation with local authorities in conducting wiretaps, pentraps and other surveillance activities. The FCC and other regulators may allow VoIP providers to comply with CALEA and similar statutes through the use of a service provided by a trusted third-party with the ability to extract call content and call-identifying information from a VoIP provider's network. Regardless of our reliance on a third party for compliance, it is possible that we, like other providers in the communications marketplace, may be subject to fines or other enforcement actions if we are found not to be in compliance with our obligations under CALEA or other similar assistance with law enforcement statutes.

27

---

• U.S. and foreign regulations may require us to deploy an E-911 or access to emergency service that automatically determines the location of our customers. On June 1, 2007, the FCC released a Notice of Proposed Rulemaking, or the VoIP E-911 order, in which it tentatively concluded that all interconnected VoIP providers that allow customers to use their service in more than one location (nomadic VoIP service providers, such as us), must utilize an automatic location technology that meets the same accuracy standards which apply to providers of commercial mobile radio services (mobile phone service providers). Since then, the FCC has been conducting proceedings and inquiries concerning the implementation of such a rule, including possible changes to the manner providers provision E-911 services on mobile applications. At the same time, foreign regulatory authorities, have conducted similar proceedings mandating VoIP providers in the applicable jurisdiction to provide caller location data when completing calls to the local emergency service numbers. The outcome of these proceedings cannot be determined at this time and we may or may not be able to comply with any such obligations that may be adopted. At present, we currently have no means to automatically identify the physical location of one of our customers on the Internet. We cannot guarantee that emergency calling service consistent with the VoIP E-911 order and other similar foreign orders will be available to all of our customers, especially those accessing our services from outside of the United States. Compliance with these obligations could result in service price increases and could have a material adverse effect on our business, financial condition or operating results.
• The FCC adopted orders reforming the system of payments between regulated carriers that we partner with to interface with the public switch telephone network. The FCC reformed the system under which regulated providers of telecommunications services compensate each other for various types of traffic, including VoIP traffic that terminates on the PSTN and applied new call signaling requirements to VoIP providers and other service providers. The FCC's new rules require, among other things, interconnected VoIP providers, like us, that originate interstate or intrastate traffic destined for the PSTN, to transmit the telephone number associated with the calling party to the next provider in the call path. Intermediate providers must pass calling party number or charge number signaling information they receive from other providers unaltered, to subsequent providers in the call path. While we believe we are in compliance with this rule, tonetwork. To the extent that we pass traffic that does not have appropriate calling party number or charge number information, we could be subject to fines and cease and desist orders. These orders or other penalties. The FCC's Order reforming payments between carriers for various types of traffic may also result in increasing the payments we make to underlying carriers to access the PSTN, which may result incause us increasing the retail price ofto raise our service,prices, potentially making our offering less competitive with traditional telecom providers, of telecommunications services, or may reduce our profitability.

Our emergency

On August 1, 2019, the Federal Communications Commission adopted new rules for transmission of automatic location information for interconnected VoIP services and E-911 callingMulti-line Telephone Systems (“MLTS”). In particular as of:

8x8 services are different from those offered by traditional wireline telephone companies and may expose us to significant liability. There may be risks associated with limitations associated with E-911 and other emergency dialing with the 8x8 service.

Both our emergency callinglikely both non-fixed interconnected VoIP service and our E-911 calling serviceMLTS. We do not currently have the ability to deliver automated dispatchable location with 911 calls. If we are different, in significant respects, from the emergency calling services offered by traditional wireline telephone companies in the United States and abroad. In each case, the differences may cause significant delays, or even failures, in callers' receipt of the emergency assistance they need.

The FCC may determine that our nomadic emergency calling service does not satisfy the requirements of its VoIP E-911 order because, in some instances, our nomadic emergency calling service requires that we route an emergency callable to implement a national emergency call center instead of connecting our customers directlysolution to a local public-safety answering point through a dedicated connection and through the appropriate selective router. Similarly, foreign telecommunications regulators may determine that our nomadic emergency calling service does not meet applicable local emergency dialing andprovide automated dispatchable location requirements.

Delays our customers may encounter when making emergency services calls and any inability of the answering point to automatically recognize the caller's location or telephone number can result in life threatening consequences. Customers may, in the future, attempt to hold us responsible for any loss, damage, personal injury or death suffered as a result of any failure of our E-911 services and other emergency dialing services.

In July 2008, the President signed into law the New and Emerging Technologies 911 Improvement Act of 2008. The law provides public safety entities, interconnected VoIP providers and others involved in handlingwith 911 calls, the same liability protections when handling 911 calls from interconnected VoIP users as from mobilewe could be subject to enforcement action or wired telephone service users. The applicability of the liability protectionsbe unable to provide our national call center service is unclear at the present time.

28

---

Alleged or actual failurevoice services.

Failure of our solutions to comply with regulations governing outbound dialing including regulations under the Telephone Consumer Protection Act of 1991 and similar foreign statutes, could harm our business, financial condition, results of operations and cash flows.

business.

The legal and contractual environment surrounding calling consumers and wireless phone numbers is complex and evolving. In the United States, two federal agencies, the Federal Trade Commission ("FTC") and the FCC, and various states have enacted laws including, at the federal level, the Telephone Consumer Protection Act of 1991, or TCPA, that restrict the placing of certain telephone calls and texts to residential and wireless telephone subscribers by means of automatic telephone dialing systems, prerecorded or artificial voice messages and fax machines. Internationally, we are also subject to similar laws imposing limitations on marketing calls to wireline and wireless numbers and compliance with do not call rules. These laws require companies to institute processes and safeguards to comply with these restrictions. Some of these laws can be enforced by the FTC, FCC, State Attorneys General, foreign regulators or private party litigants. In these types of actions, the plaintiff may seek damages, statutory penalties, costs and/or attorneys' fees.

It is possible that the FTC, FCC, foreign regulators, private litigants or others may attempt to holdfees against our customers, or us as a software provider, responsible for alleged violations of these laws. In the event that litigation is brought, or fines are assessed, against us,and we may not successfully enforce or collect upon any contractual indemnities we may have from our customers. Additionally, any changesU.S. regulators have recently taken a more aggressive stance towards Voice-over-Internet Protocol (VoIP) providers whose customers engage in telemarketing. For instance in December 2019, the FTC sued a VoIP provider alleging that it assisted and facilitated telemarketers it knew, or consciously avoided knowing, were violating telemarketing regulations. In January 2020, the FTC sent

letters to these lawsa number of VoIP providers warning them that “assisting and facilitating” illegal telemarketing or their interpretationrobocalling is against the law. More recently in April 2020, the FCC and FTC sent joint letters to several VoIP providers warning them that further restrict calling consumers, any adverse publicity regardingrouting and transmitting illegal robocalls, including Coronavirus-related scam calls, is illegal and may lead to federal law enforcement against them. While we have in place procedures for monitoring potentially abusive and fraudulent customer practices, if we are found to be assisting illegal telemarketing or robocalling conduct by customers of our services, we could be exposed to significant financial penalties and regulatory actions.

In June 2019, the alleged or actual failureFCC ruled that providers of voice services may by companies, including our customers and competitors,default (subject to comply with such laws, or any governmental or private enforcement actions related thereto, could resultopt-out by subscribers) block voice traffic based on reasonable analytics designed to identify unwanted calls. In March 2020, the FCC required that all voice service providers implement the STIR/SHAKEN caller ID authentication framework in the reduced useInternet Protocol (IP) portions of our solutiontheir networks by June 30, 2021. There is significant uncertainty regarding how STIR/SHAKEN will work. For example, there is currently no accepted standard by which voice service providers that do not have authorization to directly obtain telephone numbers will be able to authenticate calls originated by their customers. We are seeking authorization to directly obtain telephone numbers in the U.S. in order to be able to authenticate calls under STIR/SHAKEN originated by our clientssubscribers. The STIR/SHAKEN framework will likely be used throughout the world.  It is likely that the standards to obtain STIR/SHAKEN signing authority in other countries will differ from the U.S. requirements and potential clients, which could harmsimilar to the U.S., there are no accepted standards yet for how voice service providers that do not have direct STIR/SHAKEN signing authority will be able to authenticate calls originated by their customers.  In addition, foreign regulators have allowed terminating voice service providers to block voice traffic to address robo-calling or other unwanted calls.  If we do not have a solution in place for STIR/SHAKEN when STIR/SHAKEN becomes widely adopted, our business financial condition, results of operations and cash flows. We anticipate that these risks will increasecould be harmed as we beginwould be unable to market and sellauthenticate originating calls from our EasyContactNowsubscriber’s telephone numbers under STIR/SHAKEN.  Call recipients would be less likely to answer non-authenticated calls. In addition, the terminating voice service in the United States.

Failure of our back-end information technology systems to function properly could result in significant business disruption.

We rely on IT systems to manage numerous functions of our internal operations.  We have historically utilized internally developed IT systemsproviders may block calls that are not integrated withauthenticated under STIR/SHAKEN as the lack of authentication could be viewed as a reasonable indication that the call is unwanted by the recipient. This would make our ERP system. These ITservice less desirable for our customers. Further if we do not have STIR/SHAKEN caller ID authentication in place when required, we could be subject to regulatory enforcement action.

There has been substantial litigation in the communications, cloud communication services, semiconductor, electronics, and related industries regarding intellectual property rights and, from time to time, third parties may claim that we, our customers, our licensees or parties indemnified by us are infringing, misappropriating or otherwise violating their intellectual property rights. Third parties may also claim that our employees have misappropriated or divulged their former employers' trade secrets or confidential information. Our broad range of current and former technology, including IP telephony systems, require specialized knowledgedigital and analog circuits, software, and semiconductors, increases the likelihood that third parties may claim infringement by us of their intellectual property rights. Certain technology necessary for whichus to provide our services may, in fact, be patented by other parties either now or in the future. If such technology were held under patent by another person, we would have to train new personnel, and ifnegotiate a license for the use of that technology, which we were to experience an unusual increase in attrition of our IT personnel, we may not be adequately equipped to respond to an IT system failure. These IT systems were developed at a time when we provided services primarily to SMB customers and they may not be able to accommodate the requirementsnegotiate at a price that is acceptable or at all. The existence of larger enterprises as effectively as more modernsuch a patent, or our inability to negotiate a license for any such technology on acceptable terms, could force us to cease using such technology and flexible solutions. Continued reliance on these systems may harm us competitivelyoffering products and impede our efforts to sell to larger enterprises.

Althoughservices incorporating such technology.

If we are in the process of upgrading a number of our IT systems, including our ERP software, our quote-to-cash software and our customer service and support software, we face risks relatingfound to these transitions. For example, we may incur greater costs than we anticipate to train our personnelbe infringing on the new systems; we may experience more errorsintellectual property rights of any third-party in our records during the transition; and welawsuits or proceedings that may be delayed in meeting our various reporting obligations. To the extent anyasserted against us, we could be subject to monetary liabilities for such infringement, which could be material. We could also be required to refrain from using, manufacturing or selling certain products or using certain processes, either of these risks or events impact our customer service, we may experience an increase in customer attrition, which could have a material adverse impacteffect on our business and operating results. We have received and may continue to receive in the future, notices of claims of infringement, misappropriation or misuse of other parties' proprietary rights. There can be no assurance that we will prevail in these discussions and actions or that other actions alleging infringement by us of third-party patents will not be asserted or prosecuted against us. Furthermore, lawsuits like these may require significant time and expense to defend, may divert management's attention away from other aspects of our operations and, upon resolution, may have a material adverse effect on our business, results of operations.

operations, financial condition and cash flows.

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.

Our technology platform incorporates software licensed from third parties, including some software, known as open source software, which we use without charge. Although we monitor our use of open source software, the terms of many open source licenses to which we are subject have not been interpreted by U.S. or foreign courts, and there is a risk that such licenses could be construed in a manner that imposes unanticipated conditions or restrictions on our ability to provide our platform to our customers, content creators and brand advertisers.customers. In the future, we could be required to seek licenses from third parties in order to continue offering our platform, which licenses may not be available on terms that are acceptable to us, or at all. Alternatively, we may need to re-engineer our platform or discontinue use of portions of the functionality provided by our platform. In addition, the terms of open source software licenses may require us to provide software that we develop using such software to others on unfavorable license terms. Our inability to use third- partythird-party software could result in disruptions to our business, or delays in the development of future offerings or enhancements of existing offerings, which could impair our business.

Increased energy costs, power outages,

Risks Related to our Debt, our Stock, and our Charter

Holders of the notes have the right to require us to repurchase their notes upon the occurrence of a fundamental change at a repurchase price equal to 100% of the principal amount of the notes to be repurchased, plus accrued and unpaid interest, if any. In addition, upon conversion of the notes, unless we elect to deliver solely shares of our common stock to settle such conversion (other than paying cash in lieu of delivering any fractional share), we will be required to make cash payments in respect of the notes being converted. However, we may not have enough available cash or be able to obtain financing at the time we are required to make repurchases of notes surrendered therefor or notes being converted. In addition, our ability to repurchase the notes or to pay cash upon conversions of the notes may be limited availabilityby law, by regulatory authority or by agreements governing our future indebtedness. Our failure to repurchase notes at a time when the repurchase is required by the indenture or to pay any cash payable on future conversions of electrical resourcesthe notes as required by the indenture would constitute a default under the indenture. A default under the indenture or the occurrence of the fundamental change may also lead to a default under agreements governing our future indebtedness. If the repayment of the related indebtedness were to be accelerated after any applicable notice or grace periods, we may not have sufficient funds to repay the indebtedness and repurchase the notes or make cash payments upon conversions thereof.

The conditional conversion feature of the notes, if triggered, may adversely affect our financial condition and operating results.

Our data centers are susceptible

In the event the conditional conversion feature of the notes is triggered, holders of notes will be entitled to increased costsconvert the notes at any time during specified periods at their option. If one or more holders elect to convert their notes, unless we elect to satisfy our conversion obligation by delivering solely shares of power andour common stock (other than paying cash in lieu of delivering any fractional share), we would be required to electrical power outages. Our customer contractssettle a portion or all of our conversion obligation through the payment of cash, which could adversely affect our liquidity. In addition, even if holders of notes do not contain provisionselect to convert their notes, we could be required under applicable accounting rules to reclassify all or a portion of the outstanding principal of the notes as a current rather than long-term liability, which would result in a material reduction of our net working capital.

The accounting method for convertible debt securities that would allow usmay be settled in cash, such as the notes, could have a material effect on our reported financial results.

Under Accounting Standards Codification 470-20, Debt with Conversion and Other Options (“ASC 470-20”), an entity must separately account for the liability and equity components of the convertible debt instruments (such as the notes) that may be settled entirely or partially in cash upon conversion in a manner that reflects the issuer’s economic interest cost. The effect of ASC 470-20 on the accounting for the notes is that the equity component is required to pass on any increased costs of energy to our customers, which could affect our operating margins. Any increasesbe included in the priceadditional paid-in capital section of stockholders’ equity on our servicesconsolidated balance sheet at the issuance date and the value of the equity component would be treated as debt discount for purposes of accounting for the debt component of the notes. As a result, we will be required to recoup these costs could not be implemented until the endrecord a greater amount of a customer contract term. Further, power requirements at our data centers are increasingnon-cash interest expense as a result of the increasing power demandsamortization of today's servers. Increasesthe discounted carrying value of the notes to their face amount over the term of the notes. We will report larger net losses (or lower net income) in our power costsfinancial results because ASC 470-20 will require interest to include both the amortization of the debt discount and the instrument’s non-convertible coupon interest rate, which could impactadversely affect our operatingreported or future financial results, the trading price of our common stock and the trading price of the notes.

In connection with the offer and sale of the notes, we entered into capped call transactions with one or more of the initial purchasers or affiliates thereof and/or other financial condition. Sinceinstitutions (the “option counterparties”). The capped call transactions are expected generally to reduce the potential dilution upon conversion of the notes at maturity and/or offset any cash payments we rely on third partiesare required to provide our data centers with power sufficient to meet our needs, our data centers could have a limited or inadequatemake in excess of the principal amount of electrical resources necessaryconverted notes, as the case may be, with such reduction and/or offset subject to meeta cap.

In capped call transactions similar to the ones we entered into, the option counterparties or their respective affiliates typically enter into various derivative transactions with respect to the issuer's common stock and/or purchase shares of the issuer's common stock concurrently with or shortly after the pricing of the notes. The option counterparties or their respective affiliates in our customer requirements. We attemptcapped call transactions may modify their hedge positions by entering into or unwinding various derivatives with respect to limit exposureour common stock and/or purchasing or selling our common stock or other securities of ours in secondary market transactions following the pricing of the notes and prior to system downtime duethe maturity of the notes (and are likely to power outages by using backup generators and power supplies. However, these protections may not limit our exposuredo so during the valuation period for the capped call transactions, which is expected to power shortagesoccur during the 40 trading day period beginning on the 41st scheduled trading day prior to the maturity of the notes). This activity could also cause or outages entirely. Any system downtime resulting from insufficient power resourcesavoid an increase or power outages could damage our reputation and lead us to lose current and potential customers, which would harm our operating results and financial condition.

29

---

Decreasing telecommunications rates and increasing regulatory charges may diminish or eliminate our competitive pricing advantage versus legacy providers.

Decreasing telecommunications rates may diminish or eliminatea decrease in the competitive pricing advantagemarket price of our services, while increased regulationcommon stock.

In the future, we may sell additional shares of our common stock or equity-linked securities to raise capital. In addition, a substantial number of shares of our common stock is reserved for issuance upon the exercise of stock options, upon the vesting and settlement of restricted stock units and performance units, and upon conversion of our notes. We cannot predict the impositionsize of additional regulatory funding obligations atfuture issuances or the federal, state, local and foreign level could require us to either increaseeffect, if any, that they may have on the retailmarket price for our services, thus making us less competitive,common stock. The issuance and sale of substantial amounts of common stock or absorbequity-linked securities, or the perception that such costs, thus decreasing our profit margins. Internationalissuances and domestic telecommunications rates have decreased significantly oversales may occur, could adversely affect the last few years in mosttrading price of the marketsnotes and the market price of our common stock and impair our ability to raise capital through the sale of additional equity or equity-linked securities.

If securities or industry analysts do not publish research or reports about our business, or expect to doif they change their recommendations regarding our stock adversely, our stock price and trading volume could be negatively impacted.

The trading market for our common stock will be influenced by the research and reports that securities or industry analysts publish about us or our business. Users who select our services to take advantageIf one or more of the current pricing differential between traditional telecommunications rates andanalysts who cover us downgrades our rates may switchstock or publishes inaccurate or unfavorable research about our business, our stock price would likely decline. If one or more of these analysts ceases coverage of our company or fails to traditional telecommunications carriers if such pricing differentials diminish or disappear, and we will be unable to use such pricing differentials to attract new customers in the future. Continued rate decreases would requirepublish reports on us to lower our rates to remain competitive in the United States and abroad and would reduce or possibly eliminate any gross profit from our services. In addition, we may lose subscribersregularly, demand for our services.

stock could decrease, which might cause our stock price and trading volume to decline.

Certain provisions in our charter documents and Delaware law could discourage takeover attempts and lead to management entrenchment.

attempts.

Our restated certificate of incorporation and amended and restated bylawsby-laws contain provisions that could have the effect of delaying or preventing changes in control or changes in our management without the consent of our board of directors, including, among other things:

We have never paid cash dividends on our common stock and have no plans to do so in the foreseeable future.

As of May 25, 2017,15, 2020, there were 223approximately 213 holders of record of our common stock.

The following table sets forth the rangeactual number of highstockholders is greater than this number of record holders and low close prices for each period indicated:

Period			High			Low
Fiscal 2017:
First quarter		$	14.61		$	10.19
Second quarter		$	15.43		$	12.94
Third quarter		$	15.63		$	13.05
Fourth quarter		$	16.50		$	14.20
Fiscal 2016:
First quarter		$	9.49		$	8.34
Second quarter		$	9.05		$	7.62
Third quarter		$	12.17		$	8.16
Fourth quarter		$	12.91		$	9.29

includes stockholders who are beneficial owners but whose shares are held in street name by brokers and other nominees.

See Item 12 of Part III of this Annual Report regarding information about securities authorized for issuance under our equity compensation plans.

The graph below shows the cumulative total stockholder return over a five-yearfive year period assuming the investment of $100 on March 31, 20122015 in each of 8x8's common stock, the NASDAQNYSE Composite Index, the Russell 2000 Index and the NASDAQ TelecommunicationsNasdaq Composite Computer & Data Processing Index. The graph is furnished, not filed, and the historical return cannot be indicative of future performance.

32

---

We are a leading software-as-a-service (“SaaS”) provider of enterprisevoice, video, chat, contact center, and enterprise-class API solutions powered by one global cloud communications solutions, helping businesses getplatform. From our proprietary cloud technology platform, organizations across all their locations and employees customers and applications talking,have access to make people more connected and productive, no matter where they are in the world.   From a single, proprietary platform, which we refer to as the 8x8 Communications Cloud, we offer unified communications, team collaboration, video conferencing, contact center, data and analytics, communication APIs, and other services, enabling them to be more productive and responsive to their customers.

In the fourth quarter of fiscal 2017,2020, the Company committed to an operational initiative to adjust our ARPU grew 11%cost structure, reorganize departments, and remove redundant functions across the Company. This initiative was implemented to $426, comparedstreamline operations and structure the Company in a way that will enable our ability to more effectively scale the business and drive leverage in our cost structure and operations globally.

The increase resultedin service revenue in fiscal 2020, compared with fiscal 2019 was primarily attributable to an increase in our customer subscriber base (net of customer churn), with the largest part of the increase coming from our success in selling a greater number of subscriptions to larger, more established customers.

Second, we continued the advancement of our technology and product development work on several key platform infrastructure and product development initiatives. Initiatives include our new micro services platform, admin portal, desktop and mobile clients, and back office improvements to enable end-to-end quoting, ordering, provisioning, configuring, and billing our expanded mid-market and enterprise customers, who are our fastest growing customer sector, contributing to an increase in the average annual service revenue per customer. This increase was primarily due to organic growth and to a lesser extent CPaaS revenue generated in connection with our acquisition of Wavecell in July 2019. Our service subscriber base grew from approximately 52,000 customers on March 31, 2019 to approximately 55,000 customers on March 31, 2020. Average annual service revenue per customer increased from $6,629 during fiscal 2019 to $7,876 for fiscal 2020. We expect the number of customers and average annual service revenue per customer to continue to grow in future periods. We expect total service revenue to grow over time as our business continues to expand globally.

The increase in other revenue in fiscal 2020, compared with fiscal 2019, and fiscal 2019 compared to fiscal 2018, was primarily attributable to the increase in product sales and professional services revenue resulting from the overall growth in our business and subscriber base. We expect other revenue to grow over time at a rate lower than our service revenue as we focus on delivering higher margin subscription services revenue to existing and new customers.

Our products and services are subject to realize.

sales, use and utility taxes and other fees in many jurisdictions. We have receivedassess, collect and remit these taxes and report them to municipal, state and federal agencies on a monthly or quarterly basis. We regularly receive inquiries, demands or audit requests from several state,these municipal and 9-1-1 taxing agencies seeking payment of taxes that are applied to or collected fromstate tax agencies. During the customers of providers of traditional public switched telephone network services. We recorded $0.5 million, $0.4 million and $0.1 million of expense for the yearsyear ended March 31, 2017, 20162019, we determined that additional sales taxes were probable of being assessed and 2015, respectively, forestimable in multiple states as a result of findings from sales and use tax audits, and estimated an $8.0 million sales tax exposure for such assessments.

36

---

liability. As of March 31, 2020, we have an accrual related to sales tax liability of $4.5 million.