(Registrant's telephone number, including area code)


Title of each class	Trading Symbol	Name of each exchange on which registered
COMMON STOCK, PAR VALUE $.001 PER SHARE	EGHT	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares of the Registrant's Common Stock outstanding as of ~~October 22, 2020~~August 2, 2021 was ~~106,321,438.~~112,033,014.

INDEX TO QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTER ENDED ~~SEPTEMBER~~JUNE 30, ~~2020~~

~~TABLE OF CONTENTS~~2021

Forward-Looking Statements and Risk Factors

Statements contained in this quarterly report on Form 10-Q, or Quarterly 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 and other~~ revenue; research and development expenses; hiring of employees; sales and marketing expenses; 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:

•the impact of economic downturns on us and our customers, including the impacts of the COVID-19 pandemic;

•customer cancellations and rate of customer churn;

•~~benefits that can be realized from migrating customers from legacy products, including reducing the number of supported platforms and improved customer churn;~~

•customer acceptance and demand for our new and existing cloud communication and collaboration services and features, including voice, contact center, video, messaging, and communication application programming interfaces ("APIs");

•competitive market pressures, and any changes in the competitive dynamics of the markets in which we compete;

•~~market acceptance of new or existing services and features we may offer from time to time;~~

•the quality and reliability of our ~~products and~~ services;

•our ability to scale our business;

•customer acquisition costs;

•our reliance on a network of channel partners to provide substantial new customer demand;

•upfront investments, including the cost to support new strategic initiatives such as our cloud migration program with value-added resellers ("VARs") and other partners, to acquire more customers may not result in additional revenue from new or existing customers;

•timing and extent of improvements in operating results from increased spending in marketing, sales, and research and development;

•the amount and timing of costs associated with recruiting, training and integrating new employees and retaining existing employees;

•our reliance on infrastructure of third-party network services providers;

•risk of failure in our physical infrastructure;

•risk of defects or bugs in our software;

•risk of cybersecurity breaches;

•our ability to maintain the compatibility of our software with third-party applications and mobile platforms;

•continued compliance with industry standards, and regulatory and privacy requirements, ~~including privacy, in the United States and foreign countries in which we make our cloud software and services solutions available, and the costs of such compliance;~~globally;

•introduction and adoption of our cloud software solutions in markets outside of the United States;

•risks relating to the acquisition and integration of businesses we have acquired ~~(for example, Wavecell Pte. Ltd.)~~ or may acquire in the ~~future, particularly if the acquired business operates in a different product market space from us or is based in a region where we do not have significant operations;~~future;

•risks related to our senior convertible notes and the related capped call transactions;

•~~implementation and effects of new accounting standards and policies in our reported financial results;~~ and

•potential future intellectual property infringement claims and other litigation that could adversely impact our business and operating results.

Please refer to the "Risk Factors" section of our annual report on Form 10-K for the fiscal year ended March 31, ~~2020~~2021, as modified by the "Risk Factors" section of ~~our~~this Quarterly Report, ~~for the three-month period ended June 30, 2020,~~ and subsequent Securities and Exchange Commission ("SEC") filings for additional factors that could materially affect our financial performance. All forward-looking statements included in this Quarterly 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 Quarterly Report, which attempts 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 Quarterly Report, refers to the fiscal year ended March 31, of the calendar year indicated (for example, fiscal ~~2021~~2022 refers to the fiscal year ending on March 31, ~~2021)~~2022). Unless the context requires otherwise, references to "we," "us," "our," "8x8" and the "Company" refer to 8x8, Inc. and its consolidated subsidiaries.

All dollar amounts within this Quarterly Report are in thousands of U.S. Dollars ("dollars") unless otherwise noted.

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CONDENSED CONSOLIDATED BALANCE SHEETS

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Table of Contents

8X8, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

~~(Unaudited)~~

(InUnaudited, dollars and shares in thousands except per share amounts)


		Three Months Ended September 30,				Six Months Ended September 30,					Three Months Ended June 30,
		2020		2019		2020		2019				2021		2020
Service revenue	Service revenue	$	120,942	$	101,345	$	235,125	$	191,184	Service revenue		$	137,796	$	114,183
Other revenue	Other revenue	8,191		8,172		15,815		15,008		Other revenue		10,531		7,624
Total revenue	Total revenue	129,133		109,517		250,940		206,192		Total revenue		148,327		121,807
Operating expenses:	Operating expenses:									Operating expenses:
Cost of service revenue	Cost of service revenue	44,803		35,813		85,799		61,113		Cost of service revenue		46,010		40,996
Cost of other revenue	Cost of other revenue	11,693		13,884		22,830		26,275		Cost of other revenue		13,746		11,137
Research and development	Research and development	21,567		19,434		43,061		37,765		Research and development		25,392		21,494
Sales and marketing	Sales and marketing	61,399		57,895		121,549		111,494		Sales and marketing		75,915		60,150
General and administrative	General and administrative	22,769		20,435		48,559		40,042		General and administrative		26,091		25,790

Total operating expenses	Total operating expenses	162,231		147,461		321,798		276,689		Total operating expenses		187,154		159,567
Loss from operations	Loss from operations	(33,098)		(37,944)		(70,858)		(70,497)		Loss from operations		(38,827)		(37,760)
Other expense, net	Other expense, net	(5,178)		(2,732)		(9,103)		(4,296)		Other expense, net		(4,823)		(3,925)
Loss before provision for income taxes	Loss before provision for income taxes	(38,276)		(40,676)		(79,961)		(74,793)		Loss before provision for income taxes		(43,650)		(41,685)
Provision for income taxes	Provision for income taxes	137		256		365		404		Provision for income taxes		256		228
Net loss	Net loss	$	(38,413)	$	(40,932)	$	(80,326)	$	(75,197)	Net loss		$	(43,906)	$	(41,913)

Net loss per share:	Net loss per share:									Net loss per share:
Basic and diluted	Basic and diluted	$	(0.37)	$	(0.42)	$	(0.77)	$	(0.77)	Basic and diluted		$	(0.40)	$	(0.40)
Weighted-average common shares outstanding:	Weighted-average common shares outstanding:									Weighted-average common shares outstanding:
Basic and diluted	Basic and diluted	104,620		98,353		104,116		97,356		Basic and diluted		109,925		103,607

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Table of Contents

8X8, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

~~(Unaudited)~~

(InUnaudited, dollars in thousands)


		Three Months Ended September 30,				Six Months Ended September 30,					Three Months Ended June 30,
		2020		2019		2020		2019				2021		2020
Net loss	Net loss	$	(38,413)	$	(40,932)	$	(80,326)	$	(75,197)	Net loss		$	(43,906)	$	(41,913)
Other comprehensive income (loss), net of tax	Other comprehensive income (loss), net of tax									Other comprehensive income (loss), net of tax
Unrealized gain (loss) on investments in securities		(43)		(3)		379		118
Unrealized (loss) gain on investments in securities										Unrealized (loss) gain on investments in securities		(33)		422
Foreign currency translation adjustment	Foreign currency translation adjustment	2,945		(3,253)		3,830		(3,905)		Foreign currency translation adjustment		283		885
Comprehensive loss	Comprehensive loss	$	(35,511)	$	(44,188)	$	(76,117)	$	(78,984)	Comprehensive loss		$	(43,656)	$	(40,606)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Table of Contents

8X8, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

~~(Unaudited)~~(Unaudited, dollars and shares in thousands)

~~(In thousands, except shares)~~

Common Stock Additional
Paid-in
Capital Accumulated
Other
Comprehensive
Loss Accumulated
Deficit Total
Shares Amount
Balance at March 31, 2020 103,178,621 $ 103 $ 625,474 $ (12,176) $ (422,670) $ 190,731
Adjustment to opening balance for change in accounting principle — — — — (2,800) (2,800)
Issuance of common stock under stock plans, less withholding 688,414 1 (67) — — (66)
Stock-based compensation expense — — 23,118 — — 23,118
Issuance of common stock related to acquisition — — 8,489 — — 8,489
Unrealized investment gain — — — 422 — 422
Foreign currency translation adjustment — — — 885 — 885
Net loss — — — — (41,913) (41,913)
Balance at June 30, 2020 103,867,035 104 657,014 (10,869) (467,383) 178,866
Issuance of common stock under stock plans 2,119,196 2 4,706 — — 4,708
Stock-based compensation expense — — 26,396 — — 26,396
Unrealized investment gain/loss — — — (43) — (43)
Foreign currency translation adjustment — — — 2,945 — 2,945
Net loss — — — — (38,413) (38,413)
Balance at September 30, 2020 105,986,231 $ 106 $ 688,116 $ (7,967) $ (505,796) $ 174,459


	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total
	Shares	Amount
Balance at Balance at March 31, 2021	109,135	$	109	$	755,643	$	(4,193)	$	(591,055)	$	160,504
Issuance of common stock under stock plans, less withholding	1,562	2		3,438		—		—		3,440
Stock-based compensation expense	—	—		36,508		—		—		36,508
Unrealized investment gain (loss)	—	—		—		(33)		—		(33)
Foreign currency translation adjustment	—	—		—		283		—		283
Net loss	—	—		—		—		(43,906)		(43,906)
Balance at Balance at June 30, 2021	110,697	$	111	$	795,589	$	(3,943)	$	(634,961)	$	156,796

Common Stock Additional
Paid-in
Capital Accumulated
Other
Comprehensive
Loss Accumulated
Deficit Total
Shares Amount
Balance at March 31, 2019 96,119,888 $ 96 $ 506,949 $ (7,353) $ (250,302) $ 249,390
Issuance of common stock under stock plans, less withholding 451,308 1 1,493 — — 1,494
Stock-based compensation expense — — 14,059 — — 14,059
Unrealized investment gain — — — 121 — 121
Foreign currency translation adjustment — — — (652) — (652)
Net loss — — — — (34,265) (34,265)
Balance at June 30, 2019 96,571,196 97 522,501 (7,884) (284,567) 230,147
Issuance of common stock under stock plans, less withholding 1,761,483 2 (790) — — (788)
Stock-based compensation expense — — 17,867 — — 17,867
Issuance of common stock related to acquisitions 1,476,009 1 35,838 — 0 35,839
Unrealized investment loss — — — (3) — (3)
Foreign currency translation adjustment — — — (3,253) — (3,253)
Net loss — — — — (40,932) (40,932)
Balance at September 30, 2019 99,808,688 $ 100 $ 575,416 $ (11,140) $ (325,499) $ 238,877


	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total
	Shares	Amount
Balance at Balance at March 31, 2020	103,179	$	103	$	625,474	$	(12,176)	$	(422,670)	$	190,731
Adjustment to opening balance for change in accounting principle	—	—		—		—		(2,800)		(2,800)
Issuance of common stock under stock plans, less withholding	688	1		(67)		—		—		(66)
Stock-based compensation expense	—	—		23,118		—		—		23,118
Issuance of common stock related to acquisition	—	—		8,489		—				8,489
Unrealized investment gain	—	—		—		422		—		422
Foreign currency translation adjustment	—	—		—		885		—		885
Net loss	—	—		—		—		(41,913)		(41,913)
Balance at Balance at June 30, 2020	103,867	$	104	$	657,014	$	(10,869)	$	(467,383)	$	178,866

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Table of Contents

8X8, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

~~(Unaudited)~~

(InUnaudited, dollars in thousands)


		Six Months Ended September 30,					Three Months Ended June 30,
		2020		2019			2021		2020
Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net loss	Net loss	$	(80,326)	$	(75,197)	Net loss	$	(43,906)	$	(41,913)
Adjustments to reconcile net loss to net cash used in operating activities:
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:						Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation	Depreciation	5,690		4,599		Depreciation	2,922		2,823
Amortization of intangible assets	Amortization of intangible assets	4,055		3,827		Amortization of intangible assets	1,285		2,228
Amortization of capitalized software		12,893		8,242
Amortization of capitalized internal-use software costs						Amortization of capitalized internal-use software costs	7,243		6,217
Amortization of debt discount and issuance costs	Amortization of debt discount and issuance costs	8,317		6,397		Amortization of debt discount and issuance costs	4,393		4,126
Amortization of deferred sales commission costs	Amortization of deferred sales commission costs	12,764		8,718		Amortization of deferred sales commission costs	8,245		6,138
Allowance for credit losses	Allowance for credit losses	2,994		944		Allowance for credit losses	383		1,742
Operating lease expense, net of accretion	Operating lease expense, net of accretion	7,585		6,234		Operating lease expense, net of accretion	3,459		3,750
Stock-based compensation		48,101		30,988
Stock-based compensation expense						Stock-based compensation expense	36,587		22,779
Other	Other	467		690		Other	713		602
Changes in assets and liabilities:	Changes in assets and liabilities:					Changes in assets and liabilities:
Accounts receivable, net		(6,290)		(2,563)
Accounts receivable						Accounts receivable	924		(3,428)
Deferred sales commission costs	Deferred sales commission costs	(26,811)		(20,498)		Deferred sales commission costs	(11,615)		(13,186)
Other current and non-current assets	Other current and non-current assets	(7,532)		(17,418)		Other current and non-current assets	(2,550)		(3,025)
Accounts payable and accruals	Accounts payable and accruals	1,350		(400)		Accounts payable and accruals	(5,063)		(519)
Deferred revenue	Deferred revenue	3,675		922		Deferred revenue	1,012		2,416
Net cash used in operating activities		(13,068)		(44,515)
Net cash provided by (used in) operating activities						Net cash provided by (used in) operating activities	4,032		(9,250)

Cash flows from investing activities:	Cash flows from investing activities:					Cash flows from investing activities:
Purchases of property and equipment	Purchases of property and equipment	(4,171)		(7,138)		Purchases of property and equipment	(878)		(2,453)
Purchase of businesses		(3,459)		(58,741)
Cost of capitalized software		(16,158)		(14,339)
Capitalized internal-use software costs						Capitalized internal-use software costs	(6,546)		(8,866)
Purchases of investments						Purchases of investments	(28,721)		(17,156)
Sales of investments						Sales of investments	10,299		0
Proceeds from maturities of investments	Proceeds from maturities of investments	30,071		8,545		Proceeds from maturities of investments	14,700		16,575
Proceeds from sales of investments		219		30,639
Purchases of investments		(17,968)		(18,890)

Net cash used in investing activities	Net cash used in investing activities	(11,466)		(59,924)		Net cash used in investing activities	(11,146)		(11,900)

Cash flows from financing activities:	Cash flows from financing activities:					Cash flows from financing activities:
Finance lease payments	Finance lease payments	(70)		(227)		Finance lease payments	(4)		(67)

Tax-related withholding of common stock	Tax-related withholding of common stock	(69)		(5,426)		Tax-related withholding of common stock	(99)		(69)
Proceeds from issuance of common stock under employee stock plans	Proceeds from issuance of common stock under employee stock plans	4,710		6,134		Proceeds from issuance of common stock under employee stock plans	3,538		2
Net cash provided (used in) by financing activities						Net cash provided (used in) by financing activities	3,435		(134)

Net cash provided by financing activities		4,571		481
Effects of currency exchange rates on cash, cash equivalent, and restricted cash	Effects of currency exchange rates on cash, cash equivalent, and restricted cash	958		511		Effects of currency exchange rates on cash, cash equivalent, and restricted cash	436		580
Net decrease in cash, cash equivalents, and restricted cash	Net decrease in cash, cash equivalents, and restricted cash	(19,005)		(103,447)		Net decrease in cash, cash equivalents, and restricted cash	(3,243)		(20,704)
Cash, cash equivalents, and restricted cash at the beginning of the period	Cash, cash equivalents, and restricted cash at the beginning of the period	156,411		284,683		Cash, cash equivalents, and restricted cash at the beginning of the period	121,172		156,411
Cash, cash equivalents, and restricted cash at the end of the period	Cash, cash equivalents, and restricted cash at the end of the period	$	137,406	$	181,236	Cash, cash equivalents, and restricted cash at the end of the period	$	117,929	$	135,707
Supplemental and non-cash disclosures:
Income taxes paid		$	406	$	361
Interest paid		$	906	$	647
Right of use assets obtained in exchange for new or modified operating lease liabilities		$	0	$	62,832

Supplemental information:						Supplemental information:
Cash paid for income taxes						Cash paid for income taxes	$	337	$	165

Reconciliation of cash, cash equivalents, and restricted cash at the end of the period:						Reconciliation of cash, cash equivalents, and restricted cash at the end of the period:
Cash and cash equivalents						Cash and cash equivalents	$	109,288	$	116,690
Restricted cash, current						Restricted cash, current	8,179		10,376
Restricted cash, non-current						Restricted cash, non-current	462		8,641
Total cash, cash equivalents, and restricted cash						Total cash, cash equivalents, and restricted cash	$	117,929	$	135,707

~~Table of Contents~~

~~Reconciliation of cash, cash equivalents, and restricted cash to the condensed consolidated balance sheets (in thousands):~~

September 30,
2020 2019
Cash and cash equivalents $ 121,848 $ 162,219
Restricted cash, current 6,917 3,459
Restricted cash, non-current 8,641 15,558
Total cash, cash equivalents, and restricted cash $ 137,406 $ 181,236

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Table of Contents

8X8, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. DESCRIPTION OF BUSINESS

8x8, Inc. ("8x8" or the "Company") was incorporated in California in February 1987, and was reincorporated in Delaware in December 1996.

The Company is a leading ~~cloud provider of enterprise~~ Software-as-a-Service ("SaaS") provider of contact center, voice, video, chat, and enterprise-class API solutions powered by one global cloud communications ~~solutions that enable businesses of all sizes to communicate~~platform. 8x8 empowers workforces worldwide by connecting individuals and teams so they can collaborate faster and work smarter across voice, video meetings, chat, and contact centers, transforming both employee and customer experiences with communications that work simply, integrate seamlessly, and perform reliably. From one proprietary cloud technology platform, customers have access to unified communications, team collaboration, video conferencing, contact center, data andfrom anywhere. 8x8 provides real-time business analytics and ~~other services. Substantially~~intelligence giving its customers unique insights across all interactions and channels on our platform so they can support a distributed and hybrid working model while delighting their end-customers and accelerating their business. A majority of all revenue is generated from communication services subscriptions and platform usage. The Company also generates revenue from sales of hardware and professional services, which are complementary to the delivery of our integrated technology platform.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION AND CONSOLIDATION

The accompanying ~~interim~~ condensed consolidated financial statements are unaudited and have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") and regulations of the Securities and Exchange Commission ("SEC") regarding interim financial reporting. ~~The March 31, 2020 year-end condensed consolidated balance sheet data~~Accordingly, certain information and disclosures normally included in ~~this document were derived from audited~~our annual consolidated financial statements ~~and does not include all of the disclosures required by GAAP.~~prepared in accordance with GAAP have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements as of and for the fiscal year ended March 31, ~~2020~~2021, and notes thereto included in the Company's fiscal ~~2020 annual report~~2021 Annual Report on Form ~~10-K.~~10-K ("Form 10-K"). There ~~have been~~were no material changes induring the three months ended June 30, 2021, to our significant accounting policies as described in the Company's ~~annual report on~~ Form 10-K for the fiscal year ended March 31, 2020 during the three and six months ended September 30, 2020, except for the accounting policies described below that were updated as a result of adopting Accounting Standards Update ("ASU") 2016-03, ~~Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,~~ ~~further amended by various ASUs and ASU 2018-15,~~ ~~Intangibles-Goodwill and Other-Internal Use Software~~ (Subtopic 350-40). The results of operations and cash flows for the interim periods included in these condensed consolidated financial statements are not necessarily indicative of the results to be expected for any future periods or the entire fiscal year.2021.

The unaudited ~~interim~~ condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The Company conducts its operations through 1one reportable segment.

In the opinion of the Company's management, these ~~interim~~ condensed consolidated financial statements reflect all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair statement of the Company's financial position, results of operations, and cash flows for the periods presented. The results of operations for the interim periods presented are not necessarily indicative of the results to be expected for any subsequent quarter or for the entire year ending March 31, 2022.

USE OF ESTIMATES

The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and equity, and disclosure of contingent assets and liabilities at the ~~date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the~~ reporting ~~period.~~date. On an ongoing basis, the Company evaluates its estimates, including, but not limited to, those related to allowance for credit losses, ~~returns~~ reserve for expected customer credits or cancellations, fair value of and/or evaluation for impairment of goodwill and other long-lived assets, capitalization of internally developed software, benefit period for deferred sales commission costs, stock-based compensation expense, ~~incremental borrowing~~discount rate used to calculate operating lease liabilities, income and sales tax liabilities, fair value of convertible senior notes, litigation, and other contingencies. The Company bases its estimates on known facts and circumstances, historical experience, and various other assumptions. Actual results could differ from those estimates under different assumptions or conditions.

~~RECLASSIFICATIONS AND OTHER CHANGES~~

During the fourth quarter of fiscal 2020, the Company determined that presenting service revenue as revenue from the Company's core communication services would provide transparency and clarity to the users of the financial statements. As such, the Company reclassified certain revenue and cost of revenue on its condensed consolidated statement of operations for the three and six months ended September 30, 2019. Professional services revenue and cost of professional services revenue previously reported in service revenue and cost of service revenue are now reported in other revenue and cost of other revenue. Product revenue and cost of product revenue are also now reported in other revenue and cost of other revenue. The reclassifications did not have any impact on total revenue, consolidated net loss, or cash flows.

~~Table of Contents~~

~~In addition, certain prior year amounts in the condensed consolidated statements of cash flows have been reclassified to conform with the current year presentation.~~

RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS

~~In June 2016, the Financial Accounting Standards Board ("FASB") issued ASU 2016‑13,~~ ~~Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments~~, as amended, which replaces the existing impairment model with a forward-looking expected loss method. Under this update, on initial recognition and at each reporting period, an entity is required to recognize an allowance that reflects the entity's current estimate of credit losses expected to be incurred over the life of the financial instrument. For trade receivables, loans, and other financial instruments, an entity is required to use a forward-looking expected loss model to recognize credit losses that are probable. The Company adopted ASU 2016-13 on a modified retrospective basis as of April 1, 2020 through a cumulative-effect adjustment to the Company's beginning accumulated deficit balance; the impact of the adoption was not material to the Company's consolidated financial statements. Credit losses are not expected to be significant based on historical collection trends, the financial condition of the Company’s customers, and external market factors, including those related to the COVID-19 pandemic. The Company will continue to actively monitor the impact of the recent COVID-19 pandemic on expected credit losses.

~~In August 2018, the FASB issued ASU 2018-13,~~ ~~Fair Value Measurement~~ ~~(Topic 820), which makes modifications to disclosure requirements on fair value measurements.~~ ~~The Company adopted ASU 2018-13 on April 1, 2020, and the impact of the adoption was immaterial to the Company's consolidated financial statements.~~

~~In August 2018, the FASB issued ASU 2018-15,~~ ~~Intangibles-Goodwill and Other-Internal Use Software~~ (Subtopic 350-40), which reduces complexity for the accounting for costs of implementing a cloud computing service arrangement. The Company adopted this guidance on a prospective basis effective April 1, 2020. The adoption of this guidance did not have a material impact on the Company's consolidated financial statements.

~~RECENT ACCOUNTING PRONOUNCEMENTS NOT YET ADOPTED~~

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740), which ~~enhances~~enhanced and ~~simplifies~~simplified various aspects of the income tax accounting guidance, including requirements such as tax basis step-up in goodwill obtained in a transaction that is not a business combination, ownership changes in investments, and interim-period accounting for enacted changes in tax law. The amendment ~~will be~~was effective for public companies with fiscal years beginning after December 15, 2020, which is fiscal 2022 for the ~~Company; early~~Company. The adoption ~~is permitted. The Company is currently assessing the impact~~ of this ~~pronouncement to its consolidated~~guidance in the first quarter of the Company's fiscal 2022 did not have a material impact on the Company's financial statements.

RECENT ACCOUNTING PRONOUNCEMENTS NOT YET ADOPTED

In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40), which simplifies accounting for convertible instruments by eliminating two of the three accounting models available for convertible debt instruments and convertible preferred stock. The guidance also addresses how convertible instruments are accounted for in the diluted earnings per share calculation. The guidance is effective for fiscal years beginning after December 15, 2021, which is fiscal 2023 for the Company; early adoption is permitted. The Company is currently assessing the impact of this pronouncement to its consolidated financial statements.

~~3. REVENUE RECOGNITION~~

~~Disaggregation of Revenue~~

~~The Company disaggregates its revenue by geographic regions. See Note 13 for more information.~~

~~Contract Balances~~

~~The following table provides information about receivables, contract assets, and deferred revenues from contracts with customers (in thousands):~~

September 30, 2020 March 31, 2020
Accounts receivable, net $ 42,971 $ 37,811
Contract assets, current, net (included in Other current assets) $ 11,712 $ 10,425
Contract assets, non-current, net (included in Other assets) $ 14,837 $ 13,698
Deferred revenue, current $ 9,452 $ 7,105
Deferred revenue, non-current (included in Other liabilities, non-current) $ 2,678 $ 1,119

~~Changes in the contract assets and deferred revenue balances during the six months ended September 30, 2020 are as follows (in thousands):~~

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September 30, 2020 March 31, 2020 Change
Contract assets $ 26,549 $ 24,123 $ 2,426
Deferred revenue $ 12,130 $ 8,224 $ 3,906
3. REVENUE RECOGNITION

Disaggregation of Revenue

The Company disaggregates its revenue by geographic region. See Note 12. Geographical Information.

Contract Balances

The ~~change~~following table provides amounts of receivables, contract assets, and deferred revenues from contracts with customers:


	June 30, 2021		March 31, 2021
Accounts receivable, net	$	49,755	$	51,150
Contract assets, current	$	12,324	$	12,840
Contract assets, non-current	$	18,269	$	17,987
Deferred revenue, current	$	21,985	$	20,737
Deferred revenue, non-current	$	2,813	$	2,999

Contract assets, current, contract assets, non-current, and deferred revenue, non-current are recorded on the Condensed Consolidated Balance Sheets in Other current assets, Other assets, and Other liabilities, non-current, respectively.

Contract assets represent recognition of revenue that has not yet been billed; the net decrease in contract assets was primarily driven by the ~~recognition~~billing of revenue ~~that has not yet been billed,~~previously recognized. The net ~~of amounts billed during the period and reserve for current estimate of credit losses. The~~ increase in deferred revenue was due to billings in advance of performance obligations being ~~satisfied, net of revenue recognized for services rendered during the period. Revenue of $1.3 million and $5.0 million was recognized during~~satisfied. During the three ~~and six~~ months ended ~~September~~June 30, ~~2020,~~2021, the Company recognized revenues of approximately $7.6 million, which ~~were~~was included in the deferred revenue balance at the beginning of the period.

Remaining Performance Obligations

The Company's subscription terms typically range from one to five years. Contract revenue from remaining performance obligations that ~~has~~had not yet been recognized as of ~~September~~June 30, ~~2020~~2021, was approximately ~~$330 million from remaining performance obligations.~~$530.0 million. This amount excludes contracts with an original expected length of less than one ~~year or less.~~year. The Company expects to recognize revenue on ~~most~~approximately 75% of the remaining performance obligations over the next 36 ~~months.~~months and approximately 25% thereafter.

Deferred Sales Commission Costs

Amortization of deferred sales commission costs ~~was $6.7 million and $4.5 million~~ for the three months ended ~~September~~June 30, 2021 and 2020, ~~and 2019, respectively, and $12.8~~was $8.2 million and ~~$8.7~~$6.1 million, ~~for the six months ended September 30, 2020 and 2019,~~ respectively. There were no material write-offs ~~relative to~~of deferred sales commission costs during the ~~costs capitalized during these periods.~~

~~4. FAIR VALUE MEASUREMENTS~~

~~Cash, cash equivalents, restricted cash,~~three months ended June 30, 2021 and ~~available-for-sale investments were as follows (in thousands):~~

As of September 30, 2020 Amortized Costs Gross
Unrealized Gain Gross
Unrealized Loss Estimated Fair Value Cash and
Cash Equivalents Restricted Cash (Current & Non-Current) Short-Term Investments Long-Term Investments
Cash $ 32,611 $ — $ — $ 32,611 $ 25,694 $ 6,917 $ — $ —
Level 1:
Money market funds 94,354 — — 94,354 94,354 — — —
Treasury securities 6,185 68 0 6,253 — — 6,253 0
     Subtotal 133,150 68 0 133,218 120,048 6,917 6,253 0
Level 2:
Certificate of deposit 8,641 — — 8,641 — 8,641 — 0
Commercial paper 4,399 0 0 4,399 1,800 — 2,599
Corporate debt 28,586 124 0 28,710 — — 22,529 6,181
     Subtotal 41,626 124 0 41,750 1,800 8,641 25,128 6,181
     Total assets $ 174,776 $ 192 $ 0 $ 174,968 $ 121,848 $ 15,558 $ 31,381 $ 6,181

As of March 31, 2020 Amortized Costs Gross
Unrealized Gain Gross
Unrealized Loss Estimated Fair Value Cash and
Cash Equivalents Restricted Cash (Current & Non-Current) Short-Term Investments Long-Term Investments
Cash $ 31,378 $ — $ — $ 31,378 $ 21,002 $ 10,376 $ — $ —
Level 1:
Money market funds 110,796 — — 110,796 110,796 — — —
Treasury securities 6,192 116 0 6,308 — — — 6,308
     Subtotal 148,366 116 0 148,482 131,798 10,376 — 6,308
Level 2:
Certificate of deposit 8,641 — — 8,641 — 8,641 — 0
Commercial paper 14,979 6 0 14,985 5,596 — 9,389 —
Corporate debt 34,153 32 (341) 33,844 — — 24,069 9,775
     Subtotal 57,773 38 (341) 57,470 5,596 8,641 33,458 9,775
     Total assets $ 206,139 $ 154 $ (341) $ 205,952 $ 137,394 $ 19,017 $ 33,458 $ 16,083
2020.

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~~Certificate~~4. FAIR VALUE MEASUREMENTS

The following tablse presents estimated fair values of cash, cash equivalents, restricted cash, and available-for-sale investments:


June 30, 2021	Amortized Costs		Gross Unrealized Gain		Gross Unrealized Loss		Estimated Fair Value		Cash and Cash Equivalents		Restricted Cash (Current & Non-Current)		Short-Term Investments		Long-Term Investments
Cash	$	39,480	$	—	$	—	$	39,480	$	39,480	$	0	$	—	$	—
Level 1:
Money market funds	67,108		—		—		67,108		67,108		—		—		—

Subtotal	106,588		0		0		106,588		106,588		0		0		0
Level 2:
Certificate of deposit	8,641		—		—		8,641		—		8,641		—		0
Municipal bonds	700		—		—		700		700		—		—		—
Commercial paper	15,120		2		0		15,122		2,000		—		13,122		—
Corporate debt	30,796		30		(5)		30,821		0		—		18,109		12,712
Subtotal	55,257		32		(5)		55,284		2,700		8,641		31,231		12,712
Total assets	$	161,845	$	32	$	(5)	$	161,872	$	109,288	$	8,641	$	31,231	$	12,712


March 31, 2021	Amortized Costs		Gross Unrealized Gain		Gross Unrealized Loss		Estimated Fair Value		Cash and Cash Equivalents		Restricted Cash (Current & Non-Current)		Short-Term Investments		Long-Term Investments
Cash	$	39,070	$	—	$	—	$	39,070	$	39,070	$	0	$	—	$	—
Level 1:
Money market funds	67,712		—		—		67,712		67,712		—		—		—
Treasury securities	6,177		17		0		6,194		—		—		6,194		0
Subtotal	112,959		17		0		112,976		106,782		0		6,194��		0
Level 2:
Certificate of deposit	8,641		—		—		8,641		—		8,641		—		—
Commercial paper	17,656		42		0		17,698		700		—		16,998		—
Corporate debt	22,193		1		0		22,194		5,049		—		17,145		0
Subtotal	48,490		43		0		48,533		5,749		8,641		34,143		0
Total assets	$	161,449	$	60	$	0	$	161,509	$	112,531	$	8,641	$	40,337	$	0

Certificates of deposit ~~represents~~represent the Company's ~~letter~~letters of ~~credits~~credit securing leases for office facilities, ~~and~~ the ~~balance~~balances of which isare included in ~~restricted~~Restricted cash, current and Restricted cash, non-current in on the Company's ~~condensed consolidated balance sheet.~~Condensed Consolidated Balance Sheets.

The Company considers its investments as available to support its current operations and it has classified all investments as available-for-sale securities. AsThe Company does not intend to sell any of ~~September 30, 2020, for~~its investments that ~~were~~are in unrealized loss positions ~~the Company does not have the intent to sell any~~and, as of ~~these investments and~~June 30, 2021, has determined that it is not more likely than not that it will be required to sell any of these investments before recovery of the entire amortized cost ~~basis.~~bases.

The Company regularly reviews the changes to the rating of its securities at the individual security level by rating agencies ~~as well as~~and reasonably monitors the surrounding economic conditions to assess the risk of expected credit losses. As of ~~September~~June 30, ~~2020,~~2021, the Company did not have any risk of expected credit ~~losses.~~losses on its investments.

As of ~~September~~June 30, ~~2020,~~2021 and March 31, 2021, the estimated fair value of the Company's outstanding convertible senior notes ~~(the "Notes"~~("Notes") was ~~$336.7~~$450.7 million and $502.9 million, respectively, which was determined based on the closing price for the Notes on the last trading day of the reporting period and is ~~considered to be~~categorized within Level 2 inof the fair value hierarchy due to limited trading activity of the Notes. See Note 8, Convertible Senior Notes and Capped Call.

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5. ~~BUSINESS COMBINATIONS~~

In July 2019, the Company purchased all of the outstanding shares and equity interests of Wavecell, Pte. Ltd. During the three months ended September 30, 2020, the fair value of all assets acquired and liabilities assumed in the transaction, were finalized, and did not result in any additional adjustments to the preliminary purchase price allocation in the current quarter. Of the $10.4 million cash and 394,515 shares (equivalent to $8.5 million at acquisition) that were held back, the Company released $3.5 million of cash and 116,505 shares on the one-year anniversary of the acquisition. The remaining balance is expected to be released in January 2021.

6. INTANGIBLE ASSETS AND GOODWILL

Intangible Assets

The carrying value of intangible assets consisted of the ~~following (in thousands):~~following:


		September 30, 2020						March 31, 2020							June 30, 2021						March 31, 2021
		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount			Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Developed technology	Developed technology	$	33,952	$	(19,182)	$	14,770	$	33,932	$	(16,312)	$	17,620	Developed technology	$	27,231	$	(15,793)	$	11,438	$	33,960	$	(21,458)	$	12,502
Customer relationships	Customer relationships	11,614		(6,425)		5,189		11,409		(5,412)		5,997		Customer relationships	6,428		(2,021)		4,407		11,969		(7,341)		4,628
Trade and domain names	Trade and domain names	986		(986)		0		983		(599)		384		Trade and domain names	83		(83)		0		988		(988)		0
Total acquired identifiable intangible assets	Total acquired identifiable intangible assets	$	46,552	$	(26,593)	$	19,959	$	46,324	$	(22,323)	$	24,001	Total acquired identifiable intangible assets	$	33,742	$	(17,897)	$	15,845	$	46,917	$	(29,787)	$	17,130

During the three months ended June 30, 2021, the Company determined certain of its fully amortized intangible assets were no longer in use. As a result, the Company wrote off $6.7 million in gross carrying value of developed technology, $5.5 million of customer relationships, and $0.9 million of trade and domain names. Such intangibles had been fully amortized in prior periods, thus there was no net impact to the Company's financial statements.

As of ~~September~~June 30, ~~2020,~~2021, the weighted average remaining useful life ~~for~~of developed technology and customer relationships was ~~4.8~~4.4 years and ~~5.6~~5.0 years, respectively.

~~At September~~As of June 30, ~~2020,~~2021, the expected future amortization expense of ~~these~~the intangible assets iswas as ~~follows (in thousands):~~follows:

Remainder of 2021 $ 2,829
2022 4,708
2023 3,156
2024 2,851
2025 2,851
Thereafter 3,564
Total $ 19,959


Remainder of fiscal 2022	$	4,388
Fiscal 2023	2,904
Fiscal 2024	2,851
Fiscal 2025	2,851
Fiscal 2026	2,851
Thereafter	0
Total	$	15,845

Goodwill

The following table provides a summary of the ~~changes~~change in the carrying ~~amounts~~amount of ~~goodwill (in thousands):~~goodwill:


Balance at March 31, 2021	$	131,520
Foreign currency translation adjustments	79
Balance at June 30, 2021	$	131,599

6. LEASES

Operating Leases

The following table provides balance sheet information related to the Company's operating leases:


	June 30, 2021		March 31, 2021
Assets
Operating lease, right-of-use assets	$	63,402	$	66,664

Liabilities
Operating lease liabilities, current	$	12,792	$	12,942
Operating lease liabilities, non-current	79,403		82,456
Total operating lease liabilities	$	92,195	$	95,398

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~~Balance at March 31, 2020~~	$	~~128,300~~
~~Foreign currency translation adjustments~~	~~1,852~~
~~Balance at September 30, 2020~~	$	~~130,152~~

~~7. LEASES~~

~~Operating Leases~~

~~The Company primarily leases facilities for office and data center space under non-cancellable operating leases for its U.S. and international locations that expire at various dates through 2030.~~

The following table ~~provides balance sheet information related to leases as of September 30, 2020 (in thousands):~~

September 30, 2020 March 31, 2020
Assets
Operating lease, right-of-use assets $ 72,841 $ 78,963
Liabilities
Operating lease liabilities, current $ 9,498 $ 5,875
Operating lease liabilities, non-current 87,462 92,452
Total operating lease liabilities $ 96,960 $ 98,327

~~The~~presents the components of lease expense ~~were as follows (in thousands):~~and cash outflows from operating leases:


		Three Months Ended September 30,				Six Months Ended September 30,					Three Months Ended June 30,
		2020		2019		2020		2019				2021		2020
Operating lease expense	Operating lease expense	$	3,833	$	4,156	$	7,583	$	6,241	Operating lease expense		$	3,459	$	3,750
Variable lease expense	Variable lease expense	$	857	$	229	$	1,639	$	438	Variable lease expense		$	750	$	782
Cash outflows from operating leases										Cash outflows from operating leases		$	4,200	$	2,054

Short-term lease expense was immaterial for the three ~~and six~~ months ended ~~September~~June 30, ~~2020~~2021 and ~~2019.~~

~~Operating cash outflow from operating lease was $4.2 million and $4.5 million, respectively, for the six months ended September 30, 2020 and 2019.~~2020.

The following table presents supplemental ~~information for the six months ended September 30, 2020 (in thousands, except for weighted average):~~lease information:


~~Weighted average remaining lease term~~						~~8.6 years~~
~~Weighted average discount rate~~						~~4.0%~~

June 30, 2021

March 31, 2021

Weighted average remaining lease term

8.2 years

8.4 years

Weighted average discount rate

4.0%

The following table presents maturity of lease liabilities under the Company's non-cancellable operating leases as of June 30, 2021:


Remainder of fiscal 2022	$	12,175
Fiscal 2023	15,170
Fiscal 2024	11,851
Fiscal 2025	11,514
Fiscal 2026	10,513
Thereafter	47,693
Total lease payments	108,916
Less: imputed interest	(16,721)
Present value of lease liabilities	$	92,195

7. COMMITMENTS AND CONTINGENCIES

Legal Proceedings

The Company may be involved in various claims, lawsuits, investigations and other legal proceedings, including intellectual property, commercial, regulatory compliance, securities and employment matters that arise in the normal course of business. The Company determines whether an estimated loss from a contingency should be accrued by assessing whether a loss is deemed probable and can be reasonably estimated. The Company regularly evaluates current information to determine whether any accruals should be adjusted and whether new accruals are required. Actual claims could settle or be adjudicated against the Company in the future for materially different amounts than the Company has accrued due to the inherently unpredictable nature of litigation. Legal costs are expensed as incurred.

The Company believes it has recorded adequate provisions for any such lawsuits and claims and proceedings as of June 30, 2021. The Company believes that damage amounts claimed in these matters are not meaningful indicators of potential liability. Some of the matters pending against the Company involve potential compensatory, punitive or treble damage claims or sanctions, that, if granted, could require the Company to pay damages or make other expenditures in amounts that could have a material adverse effect on its Consolidated Financial Statements. Given the inherent uncertainties of litigation, the ultimate outcome of the ongoing matters described herein cannot be predicted, and the Company believes it has valid defenses with respect to the legal matters pending against it. Nevertheless, the Consolidated Financial Statements could be materially adversely affected in a particular period by the resolution of one or more of these contingencies.

Wage and Hour Litigation. On September ~~30,~~21, 2020, ~~(in thousands):~~

Remainder of 2021 $ 5,631
2022 16,193
2023 15,007
2024 11,766
2025 11,429
Thereafter 58,122
Total lease payments $ 118,148
Less: imputed interest (19,542)
Less: lease incentives receivable (1,646)
Present value of lease liabilities $ 96,960

~~Lease Assignment~~the Company received a copy of a letter filed by a former employee, Plaintiff Denise Rivas, with the California Labor and Workforce Development Agency (“LWDA”) providing notice of the Plaintiff’s intent to bring a Private Attorney General Act (“PAGA”) claim, on behalf of the Company’s non-exempt employees based in California, for alleged California wage and hour practices violations. On September 25, 2020, the Plaintiff filed a separate class action complaint (“Class Complaint”) in Santa Clara County Superior Court against the Company in which she alleges 10 causes of action, on behalf of herself and all of the Company’s non-exempt employees based in California for the last four years, related to violations of California state wage and hour practices and the federal Fair Credit Reporting Act. The Class Complaint was served on the Company on September 29, 2020. On October 28, 2020, the Company filed a general denial of all claims and asserted various affirmative defenses. On October 29, 2020, the Company removed the matter to Federal Court. On December 1, 2020, Plaintiff filed a companion PAGA lawsuit complaint (“PAGA Complaint”) in Santa Clara County Superior Court against the Company, in which she alleges 6 violations of California state wage and hour practices for all of the Company's current and former non-exempt employees based in California from September 16, 2019 to the present. The PAGA Complaint was served on

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~~In the fourth quarter of fiscal 2018,~~ the Company ~~entered into~~on December 11, 2020. On January 26, 2021, the Company filed a ~~132-month lease agreement (the "Agreement") with CAP Phase I, a Delaware limited liability company (the "Landlord"), to rent approximately 162,000 square feet~~general denial of ~~office space in a new building in San Jose, California. The lease term began on January 1, 2019. On April 30, 2019, due~~all claims and asserted various affirmative defenses to the ~~Company's rapid growth~~PAGA Complaint. Both actions are scheduled for a joint mediation in September 2021, and ~~greater than anticipated future space needs, the Company entered into an assignment and assumption (the "Assignment")~~discovery is stayed in both actions pending completion of the Agreement with the Landlord, and Roku Inc., a Delaware corporation ("Roku"), whereby the Company assigned to Roku the Agreement. Pursuant to the Assignment, the Company expects to be released from all of its obligations under the lease and related standby letter of credit by the end of the Company’s fiscal year ending March 31, 2022, or shortly thereafter. The Company also expects to receive the reimbursement of base rent and direct expenses from Roku by the end of the Company’s fiscal year ending March 31, 2022 in accordance with the Assignment.

The obligations related to the Agreement are not included in the right-of-use asset or lease liabilities as of September 30, 2020. The remaining obligations related to the Assignment of $4.8 million and the termination fee of $0.8 million are recorded in other accrued liabilities and other liabilities, non-current, respectively, in the Company's condensed consolidated balance sheet. The expected receivable of $6.9 million is recorded in other current assets in the Company's condensed consolidated balance sheet.

~~8. COMMITMENTS AND CONTINGENCIES~~mediation.

Other Commitments, Indemnifications, and Contingencies

State and Local Taxes and Surcharges. From time to time, the Company ~~receives~~has received inquiries from ~~federal and various~~a number of state and ~~municipal~~local taxing agencies with respect to the remittance of sales, use, telecommunications, excise, ~~payroll,~~ and income taxes. Several jurisdictions currently are ~~currently~~ conducting tax audits of the Company's records. The Company collects ~~from its customers~~ or has accrued for taxes that it believes are required to be remitted. The amounts that have been remitted have historically been within the accruals established by the Company. The Company adjusts its ~~accrued taxes~~accrual when facts relating to specific exposures warrant such adjustment. ~~The~~During the second quarter of fiscal 2019, the Company ~~continues to conduct~~conducted a periodic review of the taxability of ~~certain of~~ its services and determined that certain services may be subject to sales, use, telecommunications or other similar indirect taxes in certain jurisdictions. Accordingly, the Company recorded contingent indirect tax liabilities. As of ~~September~~June 30, ~~2020~~2021 and March 31, ~~2020,~~2021, the Company had accrued contingent indirect tax liabilities of ~~$4.5 million.~~

~~Legal Proceedings~~

~~The Company, from time to time, may be involved in a variety of claims, lawsuits, investigations~~$2.8 million and other proceedings, including patent infringement claims, employment litigation, regulatory compliance matters and contractual disputes, that can arise in the normal course of the Company's operations. The Company accrues a liability when management believes information available prior to the issuance of the financial statements indicates it is probable a loss has been incurred as of the date of the financial statements and the amount of loss can be reasonably estimated. The Company adjusts its accruals to reflect the impact of negotiations, settlements, rulings, advice of legal counsel and other information and events pertaining to a particular case. Legal costs are expensed as incurred.

As of September 30, 2020, the Company does not have any material provisions for any such lawsuits, claims and proceedings and believes it is not probable that a loss had been incurred. Litigation is inherently unpredictable and subject to significant uncertainties. While there can be no assurances that favorable final outcomes will be obtained, the Company believes it has valid defenses with respect to legal matters pending against it. Future litigation could be costly to defend, could impose significant burdens on employees and cause the diversion of management's attention, and could upon resolution have a material adverse effect on the Company's business, results of operations, financial condition and cash flows.$3.1 million, respectively.

9.8. CONVERTIBLE SENIOR NOTES AND CAPPED ~~CALL~~CALLS

Convertible Senior Notes

In February 2019, the Company issued $287.5 million aggregate principal amount of 0.50% convertible senior notes (the "Initial Notes") due 2024 in a private placement, including the exercise in full of the initial purchasers' option to purchase additional notes. The Initial Notes are senior unsecured obligations of the Company and interest is payable semiannually in arrears on February 1 and August 1 of each year, beginning on August 1, 2019. The Initial Notes will mature on February 1, 2024, unless earlier repurchased, redeemed, or converted. The total net proceeds from the debt offering, after deducting initial purchase discounts, debt issuance costs, and costs of the capped call transactions described below, were approximately $245.8 million.

In November 2019, the Company issued an additional ~~$75~~$75.0 million aggregate principal amount of 0.50% convertible senior notes (the "Additional Notes" and together with the Initial Notes, the "Notes") due 2024 in a registered offering under the same indenture as the Initial Notes. The total net proceeds from the Additional Notes, after deducting underwriting discounts, debt issuance costs and costs of the capped call transactions described below, were approximately $64.6 million. The Additional Notes constitute a further issuance of, and form a single series with, the ~~Company’s outstanding 0.50% convertible senior notes~~

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~~due 2024 issued in February 2019 in the aggregate principal amount of $287.5 million.~~Initial Notes. Immediately after giving effect to the issuance of the Additional Notes, the Company ~~has~~had $362.5 million aggregate principal amount of convertible senior notes.

The Notes are senior unsecured obligations of the Company and interest is payable semiannually in arrears on February 1 and August 1 of each year, beginning on ~~February~~August 1, ~~2020.~~2019. The Notes will mature on February 1, 2024, unless earlier repurchased, redeemed, or converted.

Each $1,000 principal amount of the Notes ~~are~~is initially convertible into 38.9484 shares of the Company’s common stock, par value $0.001, which is equivalent to an initial conversion price of approximately $25.68 per share. The conversion rate is subject to adjustment upon the occurrence of certain specified events but will not be adjusted for any accrued and unpaid interest. In addition, upon the occurrence of certain corporate events that occur prior to the maturity date or following the Company's issuance of a notice of redemption, in each case as described in the Indenture, the Company will, in certain circumstances, increase the conversion rate for a holder that elects to convert its Notes in connection with such a corporate event or during the relevant redemption period.

~~The~~Prior to the close of business on the business day immediately preceding October 1, 2023, the Notes will be convertible only under the following circumstances:

1.At any time during any calendar quarter commencing after the fiscal quarter ending on June 30, 2019 (and only during such calendar quarter), if the last reported sale price of the Common Stock for at ~~certain times~~least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day;

2.During the 5 business day period immediately after any 10 consecutive trading day period (the measurement period), if the trading price per $1,000 principal amount of the Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the common stock on each such trading day and ~~upon~~the conversion rate on each such trading day;

3.If the Company calls any or all of the Notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date; or

4.Upon the occurrence of ~~certain~~specified corporate events (as set forth in the ~~future. Further, on~~indenture governing the Notes).

On or after October 1, 2023, until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their Notes, regardless of the foregoing circumstances. Upon conversion, the Company will satisfy its conversion obligation by paying or delivering, as the case may be, cash, shares of common stock, or a combination of cash and shares of common stock, at the Company's election. The Company’s current intent is to settle the principal amount of the Notes in cash upon conversion. During the ~~six~~three months ended ~~September~~June 30, ~~2020,~~2021, the conditions allowing holders of the Notes to convert were not met.

Table of Contents

The Company may not redeem the Notes prior to February 4, 2022. On or after February 4, 2022, the Company may redeem for cash all or part of the Notes, at the redemption price equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if the last reported sale price of the common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which the Company provides a redemption notice. If a fundamental change (as defined in the indenture governing the notes) occurs at any time, holders of Notes may require the Company to repurchase for cash all or any portion of their Notes at a repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date.

The Notes are senior unsecured obligations and will rank senior in right of payment to any of the Company’s indebtedness that is expressly subordinated in right of payment to the ~~Notes,~~Notes; equal in right of payment with the Company’s existing and future liabilities that are not so ~~subordinated,~~subordinated; effectively junior in right of payment to any of the Company’s secured indebtedness to the extent of the value of the assets securing such ~~indebtedness,~~indebtedness; and structurally junior to all indebtedness and other liabilities (including trade payables) of current or future subsidiaries of the Company.

The following table presents the net carrying amount of the liability component of the ~~Notes was as follows (in thousands):~~Notes:


		September 30, 2020		March 31, 2020			June 30, 2021		March 31, 2021
Principal	Principal	$	362,500	$	362,500	Principal	$	362,500	$	362,500
Unamortized debt discount	Unamortized debt discount	(61,786)		(69,987)		Unamortized debt discount	(48,990)		(53,323)
Unamortized issuance costs	Unamortized issuance costs	(861)		(976)		Unamortized issuance costs	(682)		(742)
Net carrying amount	Net carrying amount	$	299,853	$	291,537	Net carrying amount	$	312,828	$	308,435

~~Interest~~The following table presents interest expense related to the ~~Notes was as follows (in thousands):~~Notes:

Three Months Ended September 30, Six Months Ended September 30,
2020 2019 2020 2019
Contractual interest expense $ 453 $ 360 $ 906 $ 719
Amortization of debt discount 4,133 3,198 8,201 6,344
Amortization of issuance costs 58 27 115 53
Total interest expense $ 4,644 $ 3,585 $ 9,222 $ 7,116

~~Table of Contents~~


	Three Months Ended June 30,
		2021		2020
Contractual interest expense		$	453	$	453
Amortization of debt discount		4,332		4,068
Amortization of issuance costs		61		57
Total interest expense		$	4,846	$	4,578

In connection with the pricing of the ~~Initial Notes and Additional~~ Notes, the Company entered into privately negotiated capped call transactions ("Capped Calls") with certain counterparties. The Capped Calls each have an initial strike price of approximately $25.68 per share, subject to certain adjustments, which corresponds to the initial conversion price of the Notes. The Capped Calls have initial cap prices of $39.50 per share, subject to certain adjustments. The Capped Calls are expected to partially offset the potential dilution to the Company’s Common Stock upon any conversion of the Notes, with such offset subject to a cap based on the cap price. The Capped Calls cover, subject to anti-dilution adjustments, approximately 14.1 million shares of the Company’s Common Stock. The Capped Calls are subject to adjustment upon the occurrence of specified extraordinary events affecting the Company, including merger events, tender offers, and announcement events. In addition, the Capped Calls are subject to certain specified additional disruption events that may give rise to a termination of the Capped Calls, including nationalization, insolvency or delisting, changes in law, failures to deliver, insolvency filings, and hedging disruptions. For accounting purposes, the Capped Calls are separate transactions, and not part of the terms of the Notes. As these transactions meet certain accounting criteria, the Capped Calls are recorded in stockholders' equity and are not accounted for as derivatives. The cost of $33.7 million incurred to purchase the Capped Calls in connection with the Initial Notes and $9.3 million in connection with the Additional Notes were recorded as a reduction to additional paid-in capital and will not be remeasured.

~~10.~~9. STOCK-BASED COMPENSATION

The following ~~tables summarize information pertaining to the~~table presents stock-based compensation ~~expense (in thousands):~~expense:

~~Restricted Stock Units (RSU) and Performance Stock Units (PSU)~~

Activities related to RSU and PSU, collectively Stock Awards, during six months ended September 30, 2020 and 2019 are summarized as follows (in thousands, except weighted-average grant-date fair value and recognition period):

Six Months Ended September 30,
2020 2019
Stock awards outstanding at the beginning of the period: 9,191 7,820
Stock awards granted 5,343 5,123
Stock awards vested (2,498) (1,945)
Stock awards canceled and forfeited (564) (663)
Stock awards outstanding at the end of the period: 11,472 10,335
Weighted-average fair value of grants during the period $ 15.75 $ 22.35
Weighted-average remaining recognition period (in years) 1.96 2.28
Total unrecognized compensation expense at period-end $ 144,066 $ 127,540

~~Activities related to Stock Options, during six months ended September 30, 2020 and 2019 are summarized as follows (in thousands, except weighted-average grant-date fair value and recognition period):~~


	Three Months Ended June 30,
		2021		2020
Cost of service revenue		$	1,968	$	1,814
Cost of other revenue		1,071		787
Research and development		8,698		6,545
Sales and marketing		14,326		5,739
General and administrative		10,524		7,894
Total		$	36,587	$	22,779

Six Months Ended September 30,
2020 2019
Stock options outstanding at the beginning of the period: 2,274 3,114
Options granted 0 0
Options exercised (36) (287)
Options canceled and forfeited (28) (39)
Options outstanding at the end of the period: 2,210 2,788
Weighted-average fair value of grants during the period $ 0 $ 0
Total intrinsic value of options exercised during the period $ 302 $ 3,726
Weighted-average remaining recognition period (in years) 1.54 2.32
Total unrecognized compensation expense at period-end $ 671 $ 1,268
Stock Options

The following table presents stock option activity (shares in thousands):


	Number of Shares	Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding at March 31, 2021	1,813	$	9.46	2.86 years	$	41,673
Granted	0	0
Exercised	(391)	9.04
Canceled/Forfeited	(9)	21.85
Outstanding at June 30, 2021	1,413	$	9.50	2.61 years	$	25,806

Vested and expected to vest at June 30, 2021	1,411	$	9.48	2.60 years	$	25,788
Exercisable at June 30, 2021	1,373	$	9.19	2.48 years	$	25,498

The total intrinsic value of options exercised during the three months ended June 30, 2021 and 2020, was $9.1 million and less than $0.1 million, respectively.

As of June 30, 2021, there was $0.3 million of total unrecognized compensation cost related to stock options, which is expected to be recognized over a weighted average period of approximately 0.9 years.

Restricted Stock Units (RSUs)

The following table presents RSU activity (shares in thousands):


	Number of Shares	Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding at March 31, 2021	8,646	$	19.27	1.85 years	$	280,467
Granted	3,466	26.36
Vested and released	(969)	20.07
Forfeited	(317)	19.71
Outstanding at June 30, 2021	10,826	$	21.45	2.05 years	$	300,524

As of June 30, 2021, there was $165.1 million of total unrecognized compensation cost related to RSUs.

Performance Stock Units (PSUs)

The Company has granted PSUs to certain of its executives with vesting that is contingent on continued service and either Company or market performance. PSUs issued in June 2021 consist of three tranches: the first tranche vests on the 1st anniversary and is based on the Non-GAAP Gross Profit of the Company; the remaining two tranches vest on the 2nd and 3rd anniversaries, respectively, and are based on the Total Shareholder Return ("TSR") of the Company, as measured relative to a specified market index during the specified periods. For the first tranche, a range of 90% to 110% attainment of the target Non-GAAP Gross Profit over the vesting period will result in a range from 0% to 200% of the target number of shares being earned. For the awards based on TSR, a 2x multiplier will be applied for each percentage point of positive or negative relative TSR over the specified vesting periods, such that the number of shares of common stock earned will increase or decrease by 2% of the target number of shares, subject to a maximum of 200% of the target number of shares. In the event that the Company’s relative TSR performance is less than negative 30%, relative to the specified index, 0 shares will be earned for the applicable performance period. The amount of compensation expense is based on how many shares are probable to be earned for the applicable performance period.

The first tranche was valued at $25.78 per share based on the closing price of the Company's common stock on the grant date.

The second and third tranches were valued at $33.32 and $34.48, respectively, per share as determined by Monte Carlo simulations using a volatility factor of 58.7% and a risk-free rate of 0.3%.

The following table presents PSU activity (shares in thousands):

Granted for performance achievement1

1 Represents additional PSUs awarded as a result of the achievement of performance goals above the performance targets established at grant.

As of June 30, 2021, there was $32.3 million of total unrecognized compensation cost related to PSUs.

Employee Stock Purchase Plan (ESPP)

~~In July 2020, 329,430 shares were purchased and issued under the ESPP.~~ As of ~~September~~June 30, ~~2020,~~2021, there was approximately $0.6 million of unrecognized cost related to employee stock purchases. This cost is expected to be recognized over a weighted average period of 0.1 years. As of June 30, 2021, a total of $2.9 million of unrecognized compensation, net of estimated forfeitures, which will be amortized on a straight line basis over the remaining weighted-average vesting period of 0.57 years. As of September 30, 2020, a total of 3,252,8822,865,669 shares were available for issuance under the ESPP.

Salary and Bonus Stock Program

In March 2021, the Company offered its employees an opportunity to receive a portion of their base cash salary and/or cash bonus for fiscal 2022 in shares of the Company's common stock. Participants that choose to receive stock in place of base cash salary will be subject to reduced cash payroll starting July 2021 through March 2022. The number of shares received by the employee is based on the lower of the closing price of the common stock as of one of two specified look-back dates.

The estimated fair value of the shares issued has two components: 1) the value of the base cash salary and/or cash bonus opted to be received as shares, and 2) the grant date fair value of the look-back feature. The estimated fair value of the stock awards will be recognized in stock based compensation expense over the requisite service period of the participants, which may differ from the period in which their original cash compensation is earned. The look-back features are valued as options using the Black-Scholes model, applied to the total number of shares would have been granted under the program based on the closing price of our common stock on the grant date.

The following table presents the estimated fair value on the date of grant of each of the look-back features and the assumptions used in the Black-Scholes pricing model:


Fair value of look-back options	$4.64		-	$8.24
Valuation assumptions:
Expected volatility	58.7%
Risk-free interest rates	0.06	%	-	0.07%
Expected terms (in years)	0.38		-	1.21
Dividend rate	0%

The risk-free rates were determined based on published treasury rates over terms consistent with those of the share exchange program. The volatility rate was determined based on historic volatility of the Company's stock and is consistent with the rate used for valuation of the PSU awards granted in June 2021.

As of June 30, 2021, there was $8.8 million of total unrecognized compensation cost related to the stock exchange program.

In May 2017, the Company's board of directors authorized the 2017 Repurchase Plan under which the Company could purchase up to $25.0 million of its common stock. The remaining amount available at September 30, 2020 was approximately $7.1 million. There were 0 stock repurchases during the three ~~and six~~ months ended ~~September~~June 30, ~~2020~~2021 and ~~2019.~~June 30, 2020.

~~11.~~10. INCOME TAXES

The Company's effective tax rate was ~~(0.4)~~(0.6)% and ~~(0.6)~~(0.5)% for the three months ended ~~September~~June 30, 2021 and 2020, ~~and 2019, respectively, and (0.5)% for the six months ended September 30, 2020 and 2019.~~respectively. The difference in the effective tax rate and the U.S. federal statutory rate was primarily due to the full valuation allowance the Company ~~continues to maintain~~maintains against its deferred tax assets. The effective tax rate is calculated by dividing the Provision for income ~~tax~~taxes by the Loss before provision ~~by net loss before~~for income ~~tax expense.~~taxes.

~~12. NET LOSS PER SHARE~~

~~The following table summarizes the computation of basic and diluted net loss per share (in thousands, except share and per share data):~~

Three Months Ended September 30, Six Months Ended September 30,
2020 2019 2020 2019
Numerator:
Net loss available to common stockholders $ (38,413) $ (40,932) $ (80,326) $ (75,197)
Denominator:
Common shares - basic and diluted 104,620 98,353 104,116 97,356
Net loss per share
Basic and diluted $ (0.37) $ (0.42) $ (0.77) $ (0.77)

The following shares attributable to outstanding stock options and stock awards were excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive (in thousands):

Three Months Ended September 30, Six Months Ended September 30,
2020 2019 2020 2019
Stock options 2,210 2,788 2,210 2,788
Stock awards 11,472 10,334 11,472 10,334
Potential shares to be issued from ESPP 529 387 529 387
Total anti-dilutive shares 14,211 13,509 14,211 13,509

~~13.~~11. NET LOSS PER SHARE

The following table presents the weighted average number of common shares outstanding used in calculating basic and diluted net loss per share (dollars in thousands, except per share data):

The following potentially dilutive common shares were excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive (shares in thousands):

12. GEOGRAPHICAL INFORMATION

The following tables ~~set forth the~~present information by geographic ~~information for each period (in thousands):~~area:

Revenue by geographic area:

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q. As discussed in the section titled “Forward-Looking Statements,” the following discussion and analysis contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. Factors that could cause or contribute to these differences include, but are not limited to, those discussed below and elsewhere in this report, particularly those set forth under the section entitled "Risk Factors" in our ~~annual report~~Annual Report on Form 10-K ("Form 10-K") for the fiscal year ended March 31, ~~2020 as modified by those in Part II, Item 1A of our Quarterly Report for the three-month period ended June 30, 2020 on Form 10-Q under the heading "Risk Factors."~~2021.

We are a leading software-as-a-service ("SaaS") provider of voice, video, chat, contact center, and enterprise-class application programming ~~interfaces~~interface ("API") solutions powered by one global cloud communications platform. From our proprietary cloud technology platform, organizations across all their locations and employees globally have access to 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.

Our customers ~~range~~represent companies ranging from small businesses to large multinational enterprises, and their users are spread across more than 150 countries. In recent years, we have increased our focus on the mid-market (which we define as customers that generate $25K to $100K ARR) and enterprise (which we define as customers that generate more than $100K ARR) customer categories. See “Key Business Metrics” section below for our definition and discussion of ARR.

We have a portfolio of ~~cloud-based~~SaaS offerings ~~that are subscription based,~~ made available at different rates varying by the specific functionalities, services, and number of users. We generate service revenue from subscriptions to our communication services ~~subscriptions and~~as well as from our customer's usage of certain of our platform ~~usage.~~services. We generate other revenues from the sales and rentals of office phones and other hardware equipment, and professional services. We define a “customer” as one or more legal entities to which we provide services pursuant to a single contractual arrangement. In some cases, we may have multiple billing relationships with a single customer (for example, where we establish separate billing accounts for a parent company and each of its subsidiaries).

Our flagship service is our 8x8 X Series, a next generation suite of unified communications as a service ("UCaaS") and contact center as a service ("CCaaS") solutions, which consist of service plans of increasing functionality designated X1, X2, etc., through X8. With 8x8 X Series, we provide enterprise-grade voice, unified communications, video meetings, team collaboration, and contact center functionalities from a single platform. The continued increase in demand for an integrated UCaaS and CCaaS solution led us to introduce eXperience Communications as a Service ("XCaaS"), a deployment model that erases boundaries between UCaaS and CCaaS, delivered through our differentiated single platform.

We also offer standalone SaaS services for contact center and video meetings ~~and~~as well as enterprise communication ~~APIs. Through~~APIs for SMS, messaging, voice, and video APIs through our ~~July 2019 acquisition of Wavecell Pte. Ltd., an Asia-based~~ global ~~communication~~communications platform as a service ("CPaaS") ~~provider of SMS, messaging, voice and video APIs to enterprises, we expanded our API offerings both geographically and functionally.~~. We expect to continue ~~integrating~~developing and enhancing these services ~~into~~on our platform, as we believe in the value of the collective solutions.

As of September 30, 2020, over 90% of our customer base has been migrated to the 8x8 X Series platform and we intend to migrate the remaining customer base through the end of the fiscal year. These migrations may require us to incur professional services and related engineering costs. While we may not be able to recover these costs from our customers, we believe that we will realize other benefits including reducing the number of platforms that we are required to support and improved customer retention.

In the ~~second~~first quarter of fiscal ~~2021,~~2022, our ~~total~~ service revenue grew ~~19.3%~~approximately 21% year-over-year to ~~$120.9~~$137.8 million. We continued to show an increase in our ~~average annualized service revenue per customer,~~total ARR, which grew to ~~$8,052~~$536 million in the ~~second~~first quarter of fiscal ~~2021, compared with $7,957~~2022, from $432 million in the same period ofin fiscal ~~2020, as we are selling more~~2021, driven by the growth in sales to mid-market and enterprise customers. ~~Service revenue~~ARR from mid-market and enterprise customers represented ~~46%~~68% of total ~~service revenue~~ARR in the first quarter of fiscal 2022, and grew ~~29% over~~34% compared to the ~~prior year. We increased the number of bundled deals where customers purchase our integrated communications and contact center solutions.~~same period in fiscal 2021.

Our continued business focus is on achieving improved operating efficiencies while delivering revenue growth. We ~~continue to make important investments in our products and technology platform, and~~ focus on key areas of spend in our go-to-market ~~strategy.~~strategy and improving gross margin and operating margin through increased spend discipline. Additionally, we ~~aim~~look to drive improved efficiencies in our ~~small business~~ customer acquisition and operations, and are ~~heavily~~ focused on expanding our business upmarket with mid-market and enterprise customers. We believe that ~~effective execution~~this approach will enable the Company to grow and capture market share during this phase of industry disruption, in a cost-effective way, and support the Company in pursuit of its path to profitability and operating ~~cash flow~~cashflow improvement.

~~In the remainder of fiscal 2021, we~~We plan to continue making investments in activities to acquire more customers, including ~~global expansion and~~ investing in our ~~direct~~ marketing efforts, internal and field sales ~~force, e-commerce,~~capacity, and ~~outbound marketing efforts.~~research and development. We also intend to continue investing in our indirect channel programs to acquire more third-party selling agents to help sell our solutions, including investments in our value added resellers ("VARs") and master agent programs. Should these upfront investments not result in additional revenue from new or existing customers, including as result of adverse impacts from the COVID-19 pandemic, and/or these cost reduction and efficiency efforts do not result in meaningful savings, our operating results may be adversely impacted.

The full extent of the impact of the COVID-19 pandemic on our business, operations and financial results ~~will~~continues to depend on numerous evolving factors that we may not be able to accurately predict, including those set forth under the section entitled "Risk Factors" in our ~~annual report on~~ Form 10-K for the fiscal year ended March 31, ~~2020 as modified by the "Risk Factors" section of our Quarterly Report on Form 10-Q for the three-month period ended June 30, 2020.~~2021. In an effort to contain the spread of COVID-19 ~~or slow~~and its ~~spread,~~variants, governments around the world have enacted various measures, ~~some of which have been subsequently rescinded, modified or reinstated,~~ including orders to close at times non-essential businesses, isolate residents to their homes, and practice social distancing. To protect the health and safety of our employees, our workforce ~~continues to spend a~~has spent significant ~~amount of~~ time working from home ~~with many of our offices around the world remaining closed~~ and travel ~~being~~has been curtailed for our employees as well as our customers as the number of COVID-19 cases continues to surge and retreat in various locations globally, and the availability and reliability of testing remains inconsistent. These restrictions have altered the ways we conduct sales activities and market to current and prospective customers and how we conduct our ongoing business operations, resulting in reductions in travel related expenses and, by some measures, has resulted in improved employee productivity in certain areas. Small business and mid-size customers have been more impacted by the COVID-19 pandemic than enterprise customers, which has necessitated greater flexibility and responsiveness to our customers evolving needs.customers. While we anticipate that the global health crisis caused by COVID-19 ~~including any resurgences,~~ and the measures enacted to slow its spread

will negatively impact ~~certain~~ business activity across the globe, ~~to date,~~ it ~~has~~is not ~~resulted~~clear what its potential effects, including the availability and effectiveness of vaccines, now and in ~~as significant a negative impact~~the future, and current and future variants of the virus, will be on our business, ~~as initially anticipated. We continue to proactively and closely monitor~~including the ~~health of~~effects on our customers, suppliers or vendors, or on our financial results.

Our management periodically reviews certain key business metrics in order to evaluate our operations, allocate resources, and ~~suppliers~~drive financial performance in our business.

Annualized Recurring Subscriptions and ~~other impacts~~Usage (“ARR”)

Our management reviews Annualized Recurring Subscriptions and Usage (“ARR”) and believes it may be useful to investors in order to evaluate trends in future revenues of the ~~pandemic~~Company. Our management believes revenues are an important indicator for measuring the overall performance of the business. Our management uses trends in ARR to ~~determine whether risks~~assess our on-going operations, allocate resources, and drive the financial performance of ~~loss~~the business. We define Annualized Recurring Subscriptions and Usage, or ARR, as equal to the sum of the most recent month of (i) recurring subscription amounts and (ii) platform usage charges for all CPaaS customers (subject to a minimum billings threshold for a period of at least six consecutive months), multiplied by 12. We are not aware of any uniform standards for calculating ARR and caution that our presentation may not be consistent with that of other ~~negative impacts upon~~companies. For example, to the extent our ~~business exist. The effects~~ARR is used to evaluate trends in future revenue, such an evaluation would assume a sustained level of ~~COVID-19 have also been considered~~usage from existing customers which may fluctuate in ~~management's judgments around credit loss impairments.~~future periods.

COMPONENTS OF RESULTS OF OPERATIONS

Service revenue consists of communication services subscriptions, platform usage revenue, and related fees from our UCaaS, CCaaS, XCaaS, and CPaaS offerings. We plan to continue ~~to drive~~driving our business to increase service revenue through a combination of increased sales and marketing efforts, geographic expansion of our customer base outside the United States, innovation in product and technology, and through strategic ~~partnerships~~acquisitions of technologies and ~~other business development.~~businesses.

Other revenue consists of revenues from professional services, primarily in support of deployment of our solutions and/or platform, and revenues from sales and rentals of IP telephones in conjunction with our cloud telephony ~~service, and revenues from non-recurring professional services, primarily in support of deployment of our solutions and/or platform.~~service. Other revenue is dependent on the number of customers who choose to purchase or rent an IP telephone in conjunction with our service instead of using the solution on their cell phone, computer or other compatible device, and/or choose to engage our services for implementation and deployment of our cloud services.

Cost of Service Revenue

Cost of service revenue consists primarily of costs associated with network operations and related personnel, technology licenses, amortization of ~~internally developed~~platform related capitalized internal-use software, ~~and other costs such as customer service, and technical support costs. Cost of service revenue also includes~~ other communication origination and termination services provided by third-party carriers and outsourced customer service call center ~~operations.~~operations, and other costs such as customer service, and technical support costs. We allocate overhead costs such as IT and facilities to cost of service revenue, as well as to each of the operating expense categories, generally based on relative headcount. Our IT costs include costs for IT infrastructure and personnel. Facilities costs primarily consist of office leases and related ~~expenses.~~expenses.

Cost of Other Revenue

Cost of other revenue consists primarily of direct and indirect costs associated with the purchasing of IP telephones as well as the scheduling, shipping and handling, personnel costs, ~~and related~~ expenditures incurred in connection with the professional services associated with the deployment and implementation of our products, and allocated IT and facilities costs.

Research and Development

Research and development expenses consist primarily of personnel and related costs, third-party development, software and ~~related work,~~ equipment costs necessary for us to conduct our product, ~~and~~ platform development and engineering efforts, and allocated IT and facilities costs.

Sales and marketing expenses consist primarily of personnel and related costs, sales commissions, including those to the channel, trade shows, advertising and other marketing, demand generation, ~~channel costs,~~ promotional expenses, and allocated IT and facilities costs.

General and Administrative

General and administrative expenses consist primarily of personnel and related costs, professional services fees, ~~human resources, legal, employee recruiting, general management,~~corporate administrative costs, tax and regulatory fees, and allocated IT and facilities costs.

~~Other Income (Expense), net~~

Other ~~income (expense),~~Expense, Net

Other expense, net, consists primarily of interest expense related to the convertible notes, offset by income earned on our cash, cash equivalents, ~~and~~ investments, and foreign exchange gains/losses.

Provision for Income Taxes

Provision for income taxes consists primarily of foreign income taxes and state minimum taxes in the United ~~States and foreign income taxes.~~States. As we expand the scale of our international business activities, any changes in the U.S. and foreign taxation of such activities may increase our overall provision for income taxes in the future. We have a valuation allowance for our U.S. deferred tax assets, including federal and state net operating loss carryforwards ~~or NOLs.~~("NOLs"). We expect to maintain this valuation allowance until it becomes more likely than not that the benefit of our federal and state deferred tax assets will be realized by way of expected future taxable income in the United States.

RESULTS OF OPERATIONS

The following discussion should be read in conjunction with our condensed consolidated financial statements and the notes thereto.

September 30,
Service revenue 2020 2019 Change
(dollar amounts in thousands)
Three months ended $ 120,942 $ 101,345 $ 19,597 19.3 %
Percentage of total revenue 93.7 % 92.5 %
Six months ended $ 235,125 $ 191,184 $ 43,941 23.0 %
Percentage of total revenue 93.7 % 92.7 %
Service revenue


	2021			2020			Change



Three Months Ended June 30,	$	137,796		$	114,183		$	23,613	20.7	%
Percentage of total revenue	92.9		%	93.7		%

Service revenue increased for the three ~~and six~~ months ended ~~September~~June 30, ~~2020~~2021, as compared ~~with~~to the ~~same period of the previous fiscal year~~three months ended June 30, 2020, primarily due to a net increase in our ~~subscriber~~customer base, expanded offerings to existing customers, and growth in related usage; service revenue from new customers was primarily driven by global sales of ~~standalone~~XCaaS, and ~~bundled~~our standalone UCaaS and

CCaaS ~~deals globally~~offerings to our mid-market and enterprise customers. ~~Increase~~The increase in service revenue was also attributable to growth in usage revenue generated by our CPaaS products, primarily in the APAC region.

We expect total service revenue to grow over time with our ~~expanding~~diverse platform offering as our business continues to expand globally and ~~across broader~~deeper into our customer categories.

September 30,
Other revenue 2020 2019 Change
(dollar amounts in thousands)
Three months ended $ 8,191 $ 8,172 $ 19 0.2 %
Percentage of total revenue 6.3 % 7.5 %
Six months ended $ 15,815 $ 15,008 $ 807 5.4 %
Percentage of total revenue 6.3 % 7.3 %
Other revenue


	2021			2020			Change



Three Months Ended June 30,	$	10,531		$	7,624		$	2,907	38.1	%
Percentage of total revenue	7.1		%	6.3		%

Other revenue ~~remained relatively flat during~~increased for the three months ended ~~September~~June 30, 2021, as compared to the three months ended June 30, 2020, ~~compared with the same period in the prior fiscal year the slight increase was in~~primarily due to increased professional services revenue resulting from the overall growth in our business and subscriber base, largely offset by a decrease in product revenue as a result of shift towards hardware rental program and reduced demand for hardware caused by COVID-19 pandemic with increase in work from home policies.

Other revenue increased during the six months ended September 30, 2020 compared with the same period in the prior fiscal year primarily due to an increase in professional services revenue resulting from the overall growth in our business and subscribercustomer base, partially offset by a decrease in product revenue as a result of a shift toward our hardware rental program and ~~reduced demand for hardware caused by COVID-19 pandemic with increase in work from home policies.~~soft phone usage.

We expect other revenue to grow over time ~~at a rate lower than~~as our ~~service revenue~~customer base grows, particularly in mid-market and enterprise, as we focus on delivering ~~higher margin~~enhanced platform offerings to existing and new customers.

No customer represented greater than 10% of the Company's total revenue for the three ~~and six~~ months ended ~~September~~June 30, ~~2020~~2021 or ~~2019.~~2020.

September 30,
Cost of service revenue 2020 2019 Change
(dollar amounts in thousands)
Three months ended $ 44,803 $ 35,813 $ 8,990 25.1 %
Percentage of service revenue 37.0 % 35.3 %
Six months ended $ 85,799 $ 61,113 $ 24,686 40.4 %
Percentage of service revenue 36.5 % 32.0 %

~~The increase in cost~~Cost of service revenue


	2021			2020			Change



Three Months Ended June 30,	$	46,010		$	40,996		$	5,014	12.2	%
Percentage of service revenue	33.4		%	35.9		%

Cost of service revenue increased for the three months ended ~~September~~June 30, 2021, as compared to the three months ended June 30, 2020, ~~from the same period in the prior fiscal year was~~yet decreased as a percentage of service revenue, primarily ~~attributable~~due to ~~a $7.2~~increases of:

•$5.9 million ~~increase~~ in communication infrastructure costs incurred to deliver our services ~~primarily due to~~resulting from growth in usage across our platform including those in connection with ~~CPaaS, a $1.9~~CPaaS;

•$0.7 million ~~increase~~ in amortization of capitalized ~~software,~~internal-use software; and ~~a $1.2~~

•$0.2 million ~~increase~~ in stock-based compensation expense. ~~These increases were partially offset by a $0.7 million decrease in employee and consulting related expenditures and a $0.6 million decrease in depreciation and amortization of intangible assets.~~

Cost of service revenue for the six months ended September 30, 2020 increased over the same prior fiscal year period primarily due to $20.2 million increase in communication infrastructure costs incurred to deliver our services primarily due to growth in usage across our platform including those in connection with CPaaS, a $3.9 million increase in amortization of capitalized software, and a $2.0 million increase in stock-based compensation expense. These increases were partially offset by a decrease of $1.0 million in employee and consulting related expenditures and a decrease of $0.6 million in depreciation and amortization of intangible assets.

~~We expect that cost of service revenue will increase in absolute dollars in future periods as revenue continues to grow.~~

September 30,
Cost of other revenue 2020 2019 Change
(dollar amounts in thousands)
Three months ended $ 11,693 $ 13,884 $ (2,191) (15.8) %
Percentage of other revenue 142.8 % 169.9 %
Six months ended $ 22,830 $ 26,275 $ (3,445) (13.1) %
Percentage of product revenue 144.4 % 175.1 %
These increases were partially offset by decreases of:

•$1.1 million in employee and consulting related expenditures; and

•$0.4 million in depreciation and amortization of intangible assets.

We expect cost of service revenue will increase in absolute dollars in future periods as revenue continues to grow.

Cost of other revenue


	2021			2020			Change



Three Months Ended June 30,	$	13,746		$	11,137		$	2,609	23.4	%
Percentage of other revenue	130.5		%	146.1		%

Cost of other revenue increased for the three ~~and six~~ months ended ~~September~~June 30, ~~2020 decreased~~2021, as compared to the ~~same periods in the prior fiscal year~~three months ended June 30, 2020, primarily due to ~~a decrease in cost of products as a result of decrease~~an increase in hardware shipment ~~volume,~~volume.

Cost of other revenue as a percentage of other revenue decreased, due to improved pricing and an increase in our hardware rental ~~program, which has better margins than hardware sales.~~revenue. We expect that Other revenue margin will vary period over period.

September 30,
Research and development 2020 2019 Change
(dollar amounts in thousands)
Three months ended $ 21,567 $ 19,434 $ 2,133 11.0 %
Percentage of total revenue 16.7 % 17.7 %
Six months ended $ 43,061 $ 37,765 $ 5,296 14.0 %
Percentage of total revenue 17.2 % 18.3 %
Research and development

•$2.2 million ~~increase~~ in stock-based compensation ~~expense,~~expense;

•$1.5 million from less capitalized internal-use software costs;

•$0.5 million in employee and ~~a $0.3~~consulting related expenditures;

•$0.5 million ~~increase~~ in public cloud ~~expenses.~~ expenses; and

•$0.3 million in amortization of capitalized internal-use software.

These increases were partially offset by a ~~$1.5 million higher allocation to capitalized software costs, and a $0.5 million decrease in travel related costs.~~

Research and development expenses for the six months ended September 30, 2020 increased compared to the same prior fiscal year period primarily due to a $6.7 million increase in stock-based compensation expense, a $0.8 million increase in public cloud expenses, and a $0.5 million increase in employee and consulting related expenditures. These increases were partially offset by a $1.9 million higher allocation of capitalized software costs from research and development expenses during the period and a decrease of ~~$0.9~~$0.7 million in ~~travel related~~facility and overhead costs.

We plan to continue to invest in research and development to support our efforts to expand the capabilities and scope of our platform and to enhance the user experience. While we expect to continue to improve our cost structure and achieve operational efficiencies, we expect that research and development expenses will increase in absolute dollars in future periods as we continue to invest in our development efforts, and vary from period-to-period as a percentage of revenue.

September 30,
Sales and marketing 2020 2019 Change
(dollar amounts in thousands)
Three months ended $ 61,399 $ 57,895 $ 3,504 6.1 %
Percentage of total revenue 47.5 % 52.9 %
Six months ended $ 121,549 $ 111,494 $ 10,055 9.0 %
Percentage of total revenue 48.4 % 54.1 %
Sales and marketing


	2021			2020			Change



Three Months Ended June 30,	$	75,915		$	60,150		$	15,765	26.2	%
Percentage of total revenue	51.2		%	49.4		%

Sales and marketing expenses increased for the three months ended ~~September~~June 30, ~~2020 increased over~~2021, as compared to the ~~same prior fiscal year period~~three months ended June 30, 2020, primarily due to ~~a $2.8~~increases of:

•$8.6 million ~~increase in channel commissions, a $2.1 million increase in amortization of deferred sales commission costs, a $1.7 million increase~~ in stock-based compensation ~~expense, a $0.6~~expense; and

•$6.8 million ~~increase~~ in ~~employee~~internal and ~~consulting related expenditures, and a $0.6 million increase in marketing software and application related expenditures.~~ external sales commissions.

These increases were partially offset by a net decrease of ~~$2.3~~$0.1 million in marketing program and public cloud expenses ~~as we~~due to gained efficiencies in lead generation and brand awareness, ~~and a $1.9 million decrease in~~ travel related ~~costs.~~

~~Sales~~costs, and ~~marketing expenses for the six months ended September 30, 2020 increased over the same prior fiscal year period primarily due to a $5.4 million increase in~~ employee and consulting related expenditures, a $4.3 million increase in channel commissions, a $4.0 million increase in amortization of deferred sales commission costs, a $3.5 million increase in stock-based compensation expense, and a $2.2 million increase in marketing software and application costs. These increases were partially offset by a net decrease of $7.2 million in marketing program and public cloud expenses as we gained efficiencies in lead generation and brand awareness, and a $2.7 million decrease in travel related costs.expenditures.

We plan to continue investing in sales and marketing to attract and retain customers on our platform and to increase our brand awareness. While we expect to continue to improve our cost structure and achieve operational efficiencies, we expect that sales and marketing expenses will increase in absolute dollars in future periods and vary from period-to-period as a percentage of revenue.

September 30,
General and administrative 2020 2019 Change
(dollar amounts in thousands)
Three months ended $ 22,769 $ 20,435 $ 2,334 11.4 %
Percentage of total revenue 17.6 % 18.7 %
Six months ended $ 48,559 $ 40,042 $ 8,517 21.3 %
Percentage of total revenue 19.4 % 19.4 %

General and administrative


	2021			2020			Change



Three Months Ended June 30,	$	26,091		$	25,790		$	301	1.2	%
Percentage of total revenue	17.6		%	21.2		%

General and administrative expenses increased for the three months ended ~~September~~June 30, ~~2020 increased~~2021, as compared to the ~~same prior fiscal year period~~three months ended June 30, 2020, primarily due to ~~a $0.7~~increases of:

•$2.6 million higher allowance for credit losses recognized partially in response to external market factors and uncertainties in connection with the COVID-19 pandemic, a $0.7 million increase in employee and consulting related expenditures, a $0.6 million increase in stock-based compensation ~~expense,~~expense;

•$0.8 million in contract termination costs; and ~~a $0.7~~

•$0.5 million ~~increase~~ in ~~facilities and other allocated expenses; these increases were partially offset by a $0.4 million decrease in acquisition and integration~~facility related costs.

General and administrative expenses for the six months ended September 30, 2020 increased over the same prior fiscal year period primarily due to a $4.4 million increase in stock-based compensation expense, a $2.2 million increase in tax related expense, a $2.1 million higher allowance for credit losses recognized, a $1.6 million increase in employee and consulting related expenditures, and a $1.2 million increase in facilities and other allocated expenses. These increases were partially offset by ~~a $1.5~~decreases of:

•$2.0 million ~~decrease~~ in ~~acquisition~~legal and ~~integration costs~~regulatory costs;

•$1.0 million of lower allowances for credit losses; and ~~a $1.4~~

•$0.4 million ~~decrease~~ in ~~contract termination cost.~~employee and consulting related expenditures.

We expect to continue improving our cost structure and achieve operational efficiencies, and therefore also expect that general and administrative expenses as a percentage of total revenue will decline over time.

September 30,
Other expense, net 2020 2019 Change
(dollar amounts in thousands)
Three months ended $ (5,178) $ (2,732) $ (2,446) 89.5 %
Percentage of total revenue (4.0) % (2.5) %
Six months ended $ (9,103) $ (4,296) $ (4,807) 111.9 %
Percentage of total revenue (3.6) % (2.1) %

Other expense, net ~~of other income increased~~


	2021			2020			Change



Three Months Ended June 30,	$	4,823		$	3,925		$	898	22.9	%
Percentage of total revenue	3.3		%	3.2		%

The change in Other expense, net for the three months ended ~~September~~June 30, 2021, as compared to the three months ended June 30, 2020, ~~over the same prior fiscal year period~~was primarily due to ~~a $1.1 million of lower interest income and a $1.0 million increase~~increased expenses related to contractual interest expense, amortization of debt discount, and amortization of issuance costs associated with additional convertible notes issued in November 2019. The remaining increase is attributable to fluctuations in foreign exchange rates.


Delaware			77-0142404
(State or Other Jurisdiction of Incorporation or Organization)			(I.R.S. Employer Identification Number)


			Page ~~No.~~
Forward-Looking Statements and Risk Factors			2
PART I. FINANCIAL INFORMATION			43
Item 1. Financial Statements (unaudited):			43
Condensed Consolidated Balance Sheets			43
Condensed Consolidated Statements of Operations			54
Condensed Consolidated Statements of Comprehensive Loss			65
Condensed Consolidated Statements of Stockholders' Equity			76
Condensed Consolidated Statements of Cash Flows			87
Notes to Unaudited Condensed Consolidated Financial Statements			108
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			1917
Item 3. Quantitative and Qualitative Disclosures About Market Risk			2623
Item 4. Controls and Procedures			2724
PART II. OTHER INFORMATION			2825
Item 1. Legal Proceedings			2825
Item 1A. Risk Factors			2825
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			2825
Item 3. Defaults Upon Senior Securities			2825
Item 4. Mine Safety Disclosures			2825
Item 5. Other Information			2825
Item 6. Exhibits			2926
Signature			3027


							June 30, 2021		March 31, 2021
		September 30, 2020		March 31, 2020			(unaudited)		(audited)
ASSETS	ASSETS					ASSETS
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	121,848	$	137,394	Cash and cash equivalents	$	109,288	$	112,531
Restricted cash, current	Restricted cash, current	6,917		10,376		Restricted cash, current	8,179		8,179
Short-term investments	Short-term investments	31,381		33,458		Short-term investments	31,231		40,337
Accounts receivable, net	Accounts receivable, net	42,971		37,811		Accounts receivable, net	49,755		51,150
Deferred sales commission costs, current	Deferred sales commission costs, current	26,334		22,444		Deferred sales commission costs, current	31,711		30,241
Other current assets	Other current assets	39,088		35,679		Other current assets	36,066		34,095
Total current assets	Total current assets	268,539		277,162		Total current assets	266,230		276,533
Property and equipment, net	Property and equipment, net	96,185		94,382		Property and equipment, net	90,776		93,076
Operating lease, right-of-use assets	Operating lease, right-of-use assets	72,841		78,963		Operating lease, right-of-use assets	63,402		66,664
Intangible assets, net	Intangible assets, net	19,959		24,001		Intangible assets, net	15,845		17,130
Goodwill	Goodwill	130,152		128,300		Goodwill	131,599		131,520
Restricted cash, non-current	Restricted cash, non-current	8,641		8,641		Restricted cash, non-current	462		462
Long-term investments	Long-term investments	6,181		16,083		Long-term investments	12,712		0
Deferred sales commission costs, non-current	Deferred sales commission costs, non-current	64,061		53,307		Deferred sales commission costs, non-current	74,394		72,427
Other assets	Other assets	20,685		19,802		Other assets	20,238		20,597
Total assets	Total assets	$	687,244	$	700,641	Total assets	$	675,658	$	678,409

LIABILITIES AND STOCKHOLDERS' EQUITY	LIABILITIES AND STOCKHOLDERS' EQUITY					LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:	Current liabilities:					Current liabilities:
Accounts payable	Accounts payable	$	35,278	$	40,261	Accounts payable	$	33,233	$	31,236
Accrued compensation	Accrued compensation	28,698		22,656		Accrued compensation	27,876		29,879
Accrued taxes	Accrued taxes	11,574		10,251		Accrued taxes	11,321		12,129
Operating lease liabilities, current	Operating lease liabilities, current	9,498		5,875		Operating lease liabilities, current	12,792		12,942
Deferred revenue, current	Deferred revenue, current	9,452		7,105		Deferred revenue, current	21,985		20,737
Other accrued liabilities	Other accrued liabilities	21,913		37,277		Other accrued liabilities	13,995		14,455
Total current liabilities	Total current liabilities	116,413		123,425		Total current liabilities	121,202		121,378
Operating lease liabilities, non-current	Operating lease liabilities, non-current	87,462		92,452		Operating lease liabilities, non-current	79,403		82,456
Convertible senior notes, net	Convertible senior notes, net	299,853		291,537		Convertible senior notes, net	312,828		308,435

Other liabilities, non-current	Other liabilities, non-current	9,057		2,496		Other liabilities, non-current	5,429		5,636
Total liabilities	Total liabilities	512,785		509,910		Total liabilities	518,862		517,905
Commitments and contingencies (Note 8)
Commitments and contingencies (Note 7)						Commitments and contingencies (Note 7)	0		0
Stockholders' equity:	Stockholders' equity:					Stockholders' equity:
Common stock	Common stock	106		103		Common stock	111		109
Additional paid-in capital	Additional paid-in capital	688,116		625,474		Additional paid-in capital	795,589		755,643
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(7,967)		(12,176)		Accumulated other comprehensive loss	(3,943)		(4,193)
Accumulated deficit	Accumulated deficit	(505,796)		(422,670)		Accumulated deficit	(634,961)		(591,055)
Total stockholders' equity	Total stockholders' equity	174,459		190,731		Total stockholders' equity	156,796		160,504
Total liabilities and stockholders' equity	Total liabilities and stockholders' equity	$	687,244	$	700,641	Total liabilities and stockholders' equity	$	675,658	$	678,409


	Three Months Ended September 30,				Six Months Ended September 30,
	2020		2019		2020		2019
Cost of service revenue	$	2,410	$	1,182	$	4,224	$	2,179
Cost of other revenue	1,113		757		1,900		1,491
Research and development	8,255		4,217		14,800		8,081
Sales and marketing	7,054		5,340		12,793		9,261
General and administrative	6,490		5,895		14,384		9,976
Total	$	25,322	$	17,391	$	48,101	$	30,988


	Number of Shares	Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding at March 31, 2021	1,576	$	27.33	1.24 years	$	51,116
Granted	465	27.92
Granted for performance achievement1	20	27.92
Vested and released	(206)	16.12
Forfeited	(198)	24.61
Outstanding at June 30, 2021	1,657	$	30.56	1.43 years	$	46,012


	September 30,
	2020		2019
Cash and cash equivalents	$	121,848	$	162,219
Restricted cash, current	6,917		3,459
Restricted cash, non-current	8,641		15,558
Total cash, cash equivalents, and restricted cash	$	137,406	$	181,236


As of September 30, 2020	Amortized Costs		Gross Unrealized Gain		Gross Unrealized Loss		Estimated Fair Value		Cash and Cash Equivalents		Restricted Cash (Current & Non-Current)		Short-Term Investments		Long-Term Investments
Cash	$	32,611	$	—	$	—	$	32,611	$	25,694	$	6,917	$	—	$	—
Level 1:
Money market funds	94,354		—		—		94,354		94,354		—		—		—
Treasury securities	6,185		68		0		6,253		—		—		6,253		0
Subtotal	133,150		68		0		133,218		120,048		6,917		6,253		0
Level 2:
Certificate of deposit	8,641		—		—		8,641		—		8,641		—		0
Commercial paper	4,399		0		0		4,399		1,800		—		2,599
Corporate debt	28,586		124		0		28,710		—		—		22,529		6,181
Subtotal	41,626		124		0		41,750		1,800		8,641		25,128		6,181
Total assets	$	174,776	$	192	$	0	$	174,968	$	121,848	$	15,558	$	31,381	$	6,181


As of March 31, 2020	Amortized Costs		Gross Unrealized Gain		Gross Unrealized Loss		Estimated Fair Value		Cash and Cash Equivalents		Restricted Cash (Current & Non-Current)		Short-Term Investments		Long-Term Investments
Cash	$	31,378	$	—	$	—	$	31,378	$	21,002	$	10,376	$	—	$	—
Level 1:
Money market funds	110,796		—		—		110,796		110,796		—		—		—
Treasury securities	6,192		116		0		6,308		—		—		—		6,308
Subtotal	148,366		116		0		148,482		131,798		10,376		—		6,308
Level 2:
Certificate of deposit	8,641		—		—		8,641		—		8,641		—		0
Commercial paper	14,979		6		0		14,985		5,596		—		9,389		—
Corporate debt	34,153		32		(341)		33,844		—		—		24,069		9,775
Subtotal	57,773		38		(341)		57,470		5,596		8,641		33,458		9,775
Total assets	$	206,139	$	154	$	(341)	$	205,952	$	137,394	$	19,017	$	33,458	$	16,083


Remainder of 2021	$	2,829
2022	4,708
2023	3,156
2024	2,851
2025	2,851
Thereafter	3,564
Total	$	19,959


Remainder of 2021	$	5,631
2022	16,193
2023	15,007
2024	11,766
2025	11,429
Thereafter	58,122
Total lease payments	$	118,148
Less: imputed interest	(19,542)
Less: lease incentives receivable	(1,646)
Present value of lease liabilities	$	96,960


Property and equipment by geographic area:	Property and equipment by geographic area:	September 30, 2020		March 31, 2020		Property and equipment by geographic area:	June 30, 2021		March 31, 2021
United States	United States	$	90,493	$	87,673	United States	$	85,928	$	87,945
International	International	5,692		6,709		International	4,848		5,131
Total property and equipment, net	Total property and equipment, net	$	96,185	$	94,382	Total property and equipment, net	$	90,776	$	93,076


Exhibit Number						Description
3.1						Restated Certificate of Incorporation of Registrant, dated August 22, 2012 (incorporated by reference to Exhibit 3.1 to the Annual Report on Form 10-K filed May 27, 2013).
3.2						Amended and Restated By-Laws of 8x8, Inc. (incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K filed July 28, 2015).
4.1						Indenture, dated as of February 19, 2019, between 8x8, Inc. and Wilmington Trust, National Association, as trustee (including form of Note) (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed February 19, 2019).
10.1						~~8x8, Inc. Amended and Restated 2012 Equity Incentive Plan, effective~~ ~~July 27, 2020.~~*+
~~10.2~~						~~8x8, Inc.~~ Amended and Restated 2017 ~~New Employee Inducement Incentive Plan, effective July 27, 2020.*+~~
~~10.3~~						~~8x8, Inc. Amended~~Executive Change-In-Control and ~~Restated 2013 New Employee Inducement Incentive Plan, effective July 27, 2020.~~Severance Policy as filed herewith.*+
~~10.4~~						~~8x8, Inc. Amended and Restated 1996 Employee Stock Purchase Plan, effective August 10, 2020.*+~~
~~10.5~~						~~Form of Notice of Grant of Restricted Stock Unit Award and Agreement under the Amended & Restated 2012 Equity Incentive Plan.*+~~
31.1						Certification of Chief Executive Officer pursuant to Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2						Certification of Chief Financial Officer pursuant to Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1						Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2						Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101						The following materials from the 8x8, Inc. Quarterly Report on Form 10-Q for the quarter ended June 30, ~~2020,~~2021, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets as of June 30, ~~2020~~2021 and March 31, ~~2020;~~2021; (ii) Condensed Consolidated Statements of Operations for the three months ended June 30, ~~2020~~2021 and ~~2019;~~2020; (iii) Condensed Consolidated Statements of Comprehensive Loss for the three months ended June 30, ~~2020~~2021 and ~~2019;~~2020; (iv) Condensed Consolidated Statements of Stockholders' Equity for the three months ended June 30, ~~2020~~2021 and ~~2019;~~2020; (v) Condensed Consolidated Statements of Cash Flows for the three months ended June 30, ~~2020~~2021 and ~~2019;~~2020; and (vi) notes to unaudited condensed consolidated financial statements.
104						Cover Page Interactive Data File, formatted in iXBRL and contained in Exhibit 101.



*			Management contract or compensatory plan or arrangement.
+			Furnished herewith.


			8X8, INC.

			By: /s/ Samuel Wilson
			Samuel Wilson
			Chief Financial Officer (Principal Financial ~~Accounting~~ and Duly Authorized Officer)