EGHT 8X8

Document and Entity Information

Document and Entity Information - shares3 Months Ended
Jun. 30, 2018Jul. 30, 2018
Document And Entity Information
Entity Registrant Name8X8 INC /DE/
Entity Central Index Key1023731
Document Type10-Q
Document Period End DateJun. 30,
2018
Amendment Flagfalse
Current Fiscal Year End Date--03-31
Is Entity a Well-known Seasoned Issuer?Yes
Is Entity a Voluntary Filer?No
Is Entity's Reporting Status Current?Yes
Entity Filer CategoryLarge Accelerated Filer
Entity Common Stock, Shares Outstanding93,321,888
Document Fiscal Period FocusQ1
Document Fiscal Year Focus2019

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in ThousandsJun. 30, 2018Mar. 31, 2018
Current assets:
Cash and cash equivalents $ 34,557 $ 31,703
Short-term investments109,903 120,559
Accounts receivable, net17,725 16,296
Deferred sales commission costs12,706 0
Other current assets11,131 10,040
Total current assets186,022 178,598
Property and equipment, net38,100 35,732
Intangible assets, net13,610 11,958
Goodwill39,651 40,054
Restricted cash8,100 8,100
Deferred sales commission costs, noncurrent27,041 0
Other assets3,027 2,767
Total assets315,551 277,209
Current liabilities:
Accounts payable26,900 23,899
Accrued compensation16,366 17,412
Accrued taxes7,930 6,367
Deferred revenue2,838 2,559
Other accrued liabilities6,688 6,026
Total current liabilities60,722 56,263
Non-current liabilities2,987 2,172
Total liabilities63,709 58,435
Commitments and contingencies (Note 6)
Stockholders' equity:
Common stock92 93
Additional paid-in capital435,872 425,790
Accumulated other comprehensive loss(7,204)(5,645)
Accumulated deficit(176,918)(201,464)
Total stockholders' equity251,842 218,774
Total liabilities and stockholders' equity $ 315,551 $ 277,209

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands3 Months Ended
Jun. 30, 2018Jun. 30, 2017
Revenues $ 83,225 $ 69,098
Operating expenses:
Research and development13,110 7,943
Sales and marketing53,305 41,110
General and administrative11,433 8,956
Total operating expenses99,208 74,555
Loss from operations(15,983)(5,457)
Other income, net719 2,052
Loss before provision (benefit) for income taxes(15,264)(3,405)
Provision (benefit) for income taxes91 (1,236)
Net loss $ (15,355) $ (2,169)
Net loss per share:
Basic $ (0.16) $ (0.02)
Diluted $ (0.16) $ (0.02)
Weighted average number of shares:
Basic93,064 91,643
Diluted93,064 91,643
Service
Revenue from Contract with Customer, Including Assessed Tax $ 78,121 $ 65,091
Operating expenses:
Cost of Goods and Services Sold15,079 11,662
Product
Revenue from Contract with Customer, Including Assessed Tax5,104 4,007
Operating expenses:
Cost of Goods and Services Sold $ 6,281 $ 4,884

CONDENSED CONSOLIDATED STATEME4

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands3 Months Ended
Jun. 30, 2018Jun. 30, 2017
Statement of Comprehensive Income [Abstract]
Net loss $ (15,355) $ (2,169)
Other comprehensive income (loss), net of tax
Unrealized gain on investments in securities113 27
Foreign currency translation adjustment(1,672)1,791
Comprehensive loss $ (16,914) $ (351)

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands3 Months Ended
Jun. 30, 2018Jun. 30, 2017
Cash flows from operating activities:
Net loss $ (15,355) $ (2,169)
Adjustments to reconcile net loss to net cash provided by operating activites:
Depreciation2,061 1,897
Amortization of intangible assets1,432 1,522
Amortization of capitalized software1,685 308
Non-cash lease expenses1,200 0
Stock-based compensation8,911 6,351
Deferred income tax benefit0 (1,492)
Gain on escrow settlement0 (1,393)
Other372 101
Changes in assets and liabilities:
Accounts receivable, net(1,497)(147)
Deferred sales commission costs(1,799)0
Other current and noncurrent assets(419)(1,623)
Accounts payable and accruals3,905 2,889
Deferred revenue293 (61)
Net cash provided by operating activities789 6,183
Cash flows from investing activities:
Purchases of property and equipment(1,223)(2,293)
Purchase of business(2,625)0
Proceeds from escrow settlement0 1,393
Cost of capitalized software(5,112)(2,122)
Proceeds from maturity of investments18,400 25,450
Sales of investments - available for sale11,914 5,252
Purchase of investments - available for sale(19,534)(21,327)
Net cash provided by investing activities1,820 6,353
Cash flows from financing activities:
Capital lease payments(277)(351)
Repurchase and withholding of common stock(229)(1,054)
Proceeds from issuance of common stock under employee stock plans1,007 720
Net cash (used in) provided by financing activities501 (685)
Effect of exchange rate changes on cash(256)294
Net increase (decrease) in cash and cash equivalents2,854 12,145
Cash, cash equivalents, and restricted cash at the beginning of the period39,803 41,030
Cash, cash equivalents, and restricted cash at the end of the period42,657 53,175
Supplemental cash flow information
Income taxes paid127 69
Interest paid0 7
Property and equipment acquired under capital leases $ 0 $ 765

DESCRIPTION OF BUSINESS AND SIG

DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES - Note 13 Months Ended
Jun. 30, 2018
Notes to Financial Statements
DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES - Note 11. DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES DESCRIPTION OF BUSINESS The Company is a leading provider of enterprise
cloud communications solutions, including unified communications, team collaboration, contact center, and analytics, integrated
over a single Software-as-a-Service (SaaS) platform. The 8x8 Communications Cloud TM BASIS OF PRESENTATION The Company's fiscal year ends on March 31
of each calendar year. Each reference to a fiscal year in these notes to the consolidated financial statements refers to the fiscal
year ended March 31 of the calendar year indicated (for example, fiscal 2019 refers to the fiscal year ending March 31, 2019). The accompanying interim condensed consolidated
financial statements are unaudited and have been prepared on substantially the same basis as our annual consolidated financial
statements for the fiscal year ended March 31, 2018, with the exception of new revenue recognition guidance discussed in the recently
adopted accounting principles section below. 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 our financial position, results of operations, and cash flows for the periods presented. The preparation of financial
statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets, liabilities, disclosure of contingent assets and liabilities at the date of the condensed
consolidated financial statements, and the reported amounts of revenue and expenses during the reporting periods. Actual results
could differ from these estimates. The March 31, 2018 year-end condensed consolidated
balance sheet data in this document were derived from audited consolidated financial statements and does not include all of the
disclosures required by U.S. generally accepted accounting principles. 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, 2018 and notes thereto included in the Company's fiscal 2018 Annual Report on Form 10-K. 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 period or the entire fiscal year. ACQUISITION In April 2018, the Company entered into an
asset purchase agreement with MarianaIQ, Inc. The total aggregate purchase price was $3.5 million, consisting of approximately
$2.6 million paid at closing and $0.9 million in cash deposited into escrow to be held for fifteen months as security against indemnity
claims made by the Company after the closing date. See Note 11 for additional information. PRINCIPLES OF CONSOLIDATION The condensed consolidated financial statements
include the accounts of 8x8 and its subsidiaries. All material intercompany accounts and transactions have been eliminated. SIGNIFICANT ACCOUNTING POLICIES The significant accounting policies used in
preparation of these condensed consolidated financial statements are disclosed in our Annual Report on Form 10-K for the fiscal
year ended March 31, 2018 filed with the SEC on May 30, 2018, and there have been no changes to the Company's significant accounting
policies during the three months ended June 30, 2018 except for the accounting policies described below that were updated
as a result of adopting Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers: Topic 606 Other Assets and Deferred Costs - Contracts with Customers,
RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS In May 2014, the Financial Accounting Standards
Board (FASB) issued ASU 2014-09, which replaces numerous requirements in U.S. GAAP and provide companies with a single revenue
recognition model for recognizing revenue from contracts with customers. ASC 606 requires an entity to recognize the amount of
revenue to which it expects to be entitled for the transfer of promised goods or services to customers in an amount that reflects
the consideration to which the entity expects to be entitled in exchange for those goods or services. It defines a five-step process
to achieve this core principle and, in doing so, more judgment and estimates are required with the revenue recognition process
than were required under the previous guidance (ASC 605). The new standard permits the use of either
the full retrospective or modified retrospective transition method. The Company adopted the new standard effective April 1, 2018
using the modified retrospective method. Under the modified retrospective method, the comparative periods' information is not
restated and continues to be reported under the accounting standards in effect in those prior periods. Instead, on April 1, 2018,
the Company recognized the cumulative effect of initially applying ASC 606 as an adjustment to the opening balance of accumulated
deficit and the corresponding balance sheet accounts, which resulted in a net decrease to accumulated deficit of $39.9 million.
The impact on the Company's opening balances primarily relates to the capitalization of additional commission costs under ASC
606 in the amount of $38.2 million. Under ASC 605, the Company expensed all commission costs as incurred. Under the ASC 606, the
Company defers all incremental commission costs to obtain the contract and amortizes these costs over a period of benefit of five
years. The remaining $1.7 million impact of adopting the standard relates to revenue being recognized earlier under
ASC 606 than it would have been under ASC 605. See Note 2 for additional impact and transition disclosures. In January 2016, the FASB issued ASU No. 2016-01
Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities In August 2016, the FASB issued ASU No. 2016-15 ,
Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments In October 2016, the FASB has issued ASU No.
2016-16 , Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory RECENT ACCOUNTING PRONOUNCEMENTS In February 2016, the FASB issued ASU No.
2016-02, Leases (Topic 842), In June 2018, the FASB issued 2018-07, Compensation-Stock
Compensation (Topic 718)

REVENUE RECOGNITION - Note 2

REVENUE RECOGNITION - Note 23 Months Ended
Jun. 30, 2018
Accounting Policies [Abstract]
REVENUE RECOGNITION - Note 22. REVENUE RECOGNITION Revenue Recognition under ASC 606 The Company recognizes service revenue, mainly
from subscription services to its cloud-based voice, call center, video and collaboration solutions using the five-step model as
prescribed by ASC 606:
Identification
of the contract, or contracts, with a customer; Identification
of the performance obligations in the contract; Determination
of the transaction price; Allocation
of the transaction price to the performance obligations in the contract; and Recognition
of revenue when or as, the Company satisfies a performance obligation. The Company identifies
performance obligations in contracts with customers, which may include subscription services and related usage, product
revenue and professional services. The transaction price is determined based on the amount expected to be entitled to in
exchange for transferring the promised services or product to the customer. The Transaction price in the contract is
allocated to each distinct performance obligation in an amount that represents the relative amount of consideration expected
to be received in exchange for satisfying each performance obligation. Revenue is recognized when performance obligations are
satisfied. Revenues are recorded based on the transaction price excluding amounts collected on behalf of third parties such
as sales and telecommunication taxes, which are collected on behalf of and remitted to governmental authorities. The Company
usually bills its customers on a monthly basis. Contracts typically range from annual to multi-year agreements with payment
terms of net 30 days or less. The Company occasionally allows a 30-day period to cancel a subscription and return products
shipped for a full refund. Judgement and Estimates The estimation of variable consideration for
each performance obligation requires the Company to make subjective judgments. The Company has service-level agreements with customers
warranting defined levels of uptime reliability and performance. Customers may get credits or refunds if the Company fails to meet
such levels. If the services do not meet certain criteria, fees are subject to adjustment or refund representing a form of variable
consideration. The Company also imposes minimum revenue commitments (MRC) on its customers at the inception of the contract. Thus,
in estimating variable consideration for each of these performance obligations, the Company assesses both the probability of (MRC)
occurring and the collectability of the MRC, of which both represent a form of variable consideration. The Company enters into contracts with customers
that regularly include promises to transfer multiple service and products, such as subscriptions, product, and professional services.
For arrangements with multiple services, the Company evaluates whether the individual services qualify as distinct performance
obligations. In its assessment of whether a service is a distinct performance obligation, the Company determines whether the customer
can benefit from the service on its own or with other readily available resources and whether the service is separately identifiable
from other services in the contract. This evaluation requires the Company to assess the nature of each individual service offering
and how the services are provided in the context of the contract, including whether the services are significantly integrated,
highly interrelated, or significantly modify each other, which may require judgment based on the facts and circumstances of the
contract. When agreements involve multiple distinct
performance obligations, the Company allocates arrangement consideration to all performance obligations at the inception of an
arrangement based on the relative standalone selling prices (SSP) of each performance obligation. Where the Company has standalone
sales data for its performance obligations which are indicative of the price at which the Company sells a promised good or service
separately to a customer, such data is used to establish SSP. In instances where standalone sales data is not available for a particular
performance obligation, the Company estimates SSP by the use of observable market and cost-based inputs. The Company continues
to review the factors used to establish list price and will adjust standalone selling price methodologies as necessary on a prospective
basis. Service Revenue Service revenue from software subscriptions
to the Company's cloud-based technology platform is recognized over time on a ratable basis over the contractual subscription term
beginning on the date that the subscription is made available to the customer. Payments received in advance of subscription services
being rendered are recorded as a deferred revenue. Usage fees, either bundled or not bundled, are recognized when the Company has
a right to invoice. Professional services for configuration, system integration, optimization or education are primarily billed
on a fixed-fee basis and are performed by the Company directly or, alternatively, clients may also choose to perform these services
themselves or engage their own third-party service providers. Professional services revenue is recognized over time, generally
as customer sites go live. When a contract with a customer is signed,
the Company assesses whether collection of the fees under the arrangement is probable. The Company estimates the amount to reserve
for uncollectible amounts at the end of each reporting period based on the aging of the contract balance, current and historical
customer trends, and communications with its customers. These reserves are recorded against the contract asset (Accounts Receivable).
The Company also records reductions to revenue for estimated customer credits at the end of each reporting period. Customer credits
are estimated based on current and historical customer trends, and communications with its customers. Product Revenue The Company recognizes product revenue at
a point in time, when transfer of control has occurred, which is generally when delivery has occurred. Sales returns are recorded as a reduction
to revenue based on historical experience. Contract Assets Contract assets are recorded for those parts
of the contract consideration not yet invoiced but for which the performance obligations are completed. The revenue is recognized
the customer receives services or equipment for a reduced consideration at the onset of an arrangement, for example when the initial
month's services or equipment are discounted. Contract assets are included other current assets in the condensed consolidated balance
sheets Deferred Revenue Deferred revenues represent billings or payments
received in advance of revenue recognition and is recognized upon transfer of control. Balances consist primarily of annual plan
subscription services and professional and training services not yet provided as of the balance sheet date. Deferred revenues that
will be recognized during the succeeding 12-month period are recorded as current deferred revenues in the condensed consolidated
balance sheets, with the remainder recorded as other non-current liabilities in the condensed consolidated balance sheets. Costs to Obtain a Customer Contract Sales commissions and related expenses are
considered incremental and recoverable costs of acquiring customer contracts. These costs are capitalized and amortized on a straight-line
basis over the anticipated benefit period, which is five years. The benefit period was estimated by taking into consideration the
length of customer contracts, technology lifecycle, and other factors. This amortization expense is recorded in sales and marketing
expense within the Company's condensed consolidated statement of operations. Practical Expedients The Company applies a practical expedient
that permits the Company to apply Subtopic 340-40 to a single portfolio of contracts, as they are similar in their characteristics,
and the financial statement effects of applying Subtopic 340-40 to that portfolio would not differ materially from applying it
to the individual contracts within that portfolio. Adoption Impact of ASC 606 The Company recognized the cumulative effect
of initially applying ASC 606 as an adjustment to retained earnings in the condensed consolidated balance sheet as of April 1,
2018 (in thousands).
Adjustments
Balance at Due to Balance at
March 31, 2018 ASC 606 April 1, 2018
Current assets:
Deferred sales commission costs $ - $ 11,234 $ 11,234
Other current assets $ 10,040 $ 1,725 $ 11,765
Non-current assets:
Deferred sales commission costs $ - $ 26,942 $ 26,942
Stockholders' Equity
Accumulated deficit $ (201,464) $ 39,901 $ (161,563) The following tables summarize the impacts
of ASC 606 adoption on the Company's condensed consolidated financial statements for the quarter ended June 30, 2018. Selected Condensed Consolidated Balance
Sheet Line Items (in thousands):
June 30, 2018
(As Reported)
ASC 605 Adjustments ASC 606
Current assets:
Deferred sales commission costs $ - $ 12,706 $ 12,706
Other current assets $ 9,434 $ 1,697 $ 11,131
Non-current assets:
Deferred sales commission costs $ - $ 27,041 $ 27,041
Stockholders' Equity
Accumulated deficit $ (218,362) $ 41,444 $ (176,918) Selected Condensed Consolidated Statement
of Operations Line Items (in thousands, except per share amounts):
June 30, 2018
(As Reported)
ASC 605 Adjustments ASC 606
Service revenue $ 78,242 $ (121) $ 78,121
Product revenue 5,011 93 5,104
Total revenue $ 83,253 $ (28) $ 83,225
Operating expenses:
Sales and marketing $ 55,104 $ (1,799) $ 53,305
Loss from operations $ (17,754) $ 1,771 $ (15,983)
Net loss $ (17,126) $ 1,771 $ (15,355)
Net loss per share:
Basic and Diluted $ (0.18) $ 0.02 $ (0.16) Selected Condensed Consolidated Statement
of Cash Flows Line Items (in thousands):
June 30, 2018
(As Reported)
ASC 605 Adjustments ASC 606
Net loss $ (17,126) $ 1,771 $ (15,355)
Deferred sales commission costs $ - $ (1,799) $ (1,799)
Other current and noncurrent assets $ (447) $ 28 $ (419)
Net cash provided by operating activities $ 789 $ - $ 789 Disaggregation of Revenue The Company disaggregates its revenue by geographic
region. See Note 10 for more information. Contract Balances The following table provides information about
receivables, contract assets and deferred revenues from contracts with customers (in thousands):
June 30, 2018
Accounts receivable, net $ 17,725
Other current assets $ 1,697
Deferred revenue - current $ 2,838
Deferred revenue - noncurrent $ 16 Changes in the contract assets and the deferred
revenues balances during the three months ended June 30, 2018 are as follows (in thousands):
April 1, 2018 June 30, 2018 $ Change
Other current assets $ 1,725 $ 1,697 $ (28)
Deferred revenue $ 2,578 $ 2,854 $ 276 The decrease in contract assets was primarily
driven by the recognition of revenue that has not yet been billed. The increase in deferred revenues was due to billings in advance
of performance obligations being satisfied. During the three months ended June 30, 2018, $1.4 million of revenue recognized
was included in the deferred revenues balance at the beginning of the period, which was offset by additional deferrals during the
period. Remaining Performance Obligations The Company's subscription terms range
from one to three years. Contract revenue as of June 30, 2018, that has not yet been recognized was approximately $130
million. This excludes contracts with an original expected length of one year or less. The Company expects to recognize
revenue on the vast majority of the remaining performance obligation over the next 24 months.

FAIR VALUE MEASUREMENTS - Note

FAIR VALUE MEASUREMENTS - Note 33 Months Ended
Jun. 30, 2018
Cash and Cash Equivalents [Abstract]
FAIR VALUE MEASUREMENTS - Note 33. FAIR VALUE MEASUREMENTS Cash, cash equivalents, and available-for-sale
investments (in thousands):
Gross Gross Cash and
Amortized Unrealized Unrealized Estimated Cash Short-Term
As of June 30, 2018 Costs Gain Loss Fair Value Equivalents Investments
Cash $ 13,051 $ - $ - $ 13,051 $ 13,051 $ -
Level 1:
Money market funds 21,506 - - 21,506 21,506 -
Subtotal 34,557 - - 34,557 34,557 -
Level 2:
Commercial paper 3,199 - - 3,199 - 3,199
Corporate debt 72,400 12 (221) 72,191 - 72,191
Municipal securities 3,392 1 - 3,393 - 3,393
Asset backed securities 24,552 - (92) 24,460 - 24,460
Agency bond 4,202 - (39) 4,163 - 4,163
International government securities 2,499 - (2) 2,497 - 2,497
Subtotal 110,244 13 (354) 109,903 - 109,903
Total assets $ 144,801 $ 13 $ (354) $ 144,460 $ 34,557 $ 109,903
Gross Gross Cash and
Amortized Unrealized Unrealized Estimated Cash Short-Term
As of March 31, 2018 Costs Gain Loss Fair Value Equivalents Investments
Cash $ 16,499 $ - $ - $ 16,499 $ 16,499 $ -
Level 1:
Money market funds 15,204 - - 15,204 15,204 -
Subtotal 31,703 - - 31,703 31,703 -
Level 2:
Commercial paper 13,254 - (8) 13,246 - 13,246
Corporate debt 70,631 6 (296) 70,341 - 70,341
Municipal securities 3,385 3 (1) 3,387 - 3,387
Asset backed securities 27,063 1 (119) 26,945 - 26,945
Agency bond 4,183 - (35) 4,148 - 4,148
International government securities 2,497 - (5) 2,492 - 2,492
Subtotal 121,013 10 (464) 120,559 - 120,559
Total assets $ 152,716 $ 10 $ (464) $ 152,262 $ 31,703 $ 120,559 Contractual maturities of investments as of
June 30, 2018 are set forth below (in thousands):
Estimated
Fair Value
Due within one year $ 54,153
Due after one year 55,750
Total $ 109,903

INTANGIBLE ASSETS - Note 4

INTANGIBLE ASSETS - Note 43 Months Ended
Jun. 30, 2018
Goodwill and Intangible Assets Disclosure [Abstract]
INTANGIBLE ASSETS - Note 44. INTANGIBLE ASSETS The carrying value of intangible assets consisted
of the following (in thousands):
June 30, 2018 March 31, 2018
Gross Net Gross Net
Carrying Accumulated Carrying Carrying Accumulated Carrying
Amount Amortization Amount Amount Amortization Amount
Technology $ 22,902 $ (11,645) $ 11,257 $ 19,702 $ (10,535) $ 9,167
Customer relationships 9,655 (7,587) 2,068 9,776 (7,366) 2,410
Trade names/domains 2,108 (1,823) 285 2,108 (1,727) 381
In-process research and development 95 (95) - 95 (95) -
Total acquired identifiable intangible assets $ 34,760 $ (21,150) $ 13,610 $ 31,681 $ (19,723) $ 11,958 At June 30, 2018, annual amortization of intangible
assets, based upon our existing intangible assets and current useful lives, is estimated to be the following (in thousands):
Amount
Remaining 2019 $ 4,689
2020 4,716
2021 2,554
2022 1,423
2023 228
Total $ 13,610

GOODWILL - Note 5

GOODWILL - Note 53 Months Ended
Jun. 30, 2018
Goodwill and Intangible Assets Disclosure [Abstract]
GOODWILL - Note 55. GOODWILL The following table provides a summary of
the changes in the carrying amounts of goodwill by reporting segment (in thousands):
Americas Europe Total
Balance at March 31, 2018 $ 27,309 $ 12,745 $ 40,054
Additions due to acquisition 300 - 300
Foreign currency translation - (703) (703)
Balance at June 30, 2018 $ 27,609 $ 12,042 $ 39,651

COMMITMENTS AND CONTINGENCIES -

COMMITMENTS AND CONTINGENCIES - Note 63 Months Ended
Jun. 30, 2018
Notes to Financial Statements
COMMITMENTS AND CONTINGENCIES - Note 66. COMMITMENTS
AND CONTINGENCIES Facility and Equipment Leases The Company leases its headquarters in San
Jose, California, and also leases office space under non-cancelable operating leases in various domestic and international locations.
During the first quarter of fiscal 2019 as it commenced the build-out of its new corporate headquarters, the Company began to
record additional straight-line rent expenses. Total rent expense for the three months ended June 30, 2018 and 2017 was $2.6 million
and $1.4 million, respectively. Future minimum annual lease payments as of June 30, 2018 were as follows (in thousands):
Amount
Remaining 2019 $ 4,314
2020 6,622
2021 8,961
2022 8,848
2023 8,353
Thereafter 54,724
Total $ 91,822 The Company has entered into a series of noncancelable
capital lease agreements for data center and office equipment bearing interest at various rates. Other Commitments, Indemnifications and
Contingencies There were no material changes in our other
commitments under contractual obligations, indemnification and other contingencies since March 31, 2018. Legal Proceedings The Company, from time to time, is involved
in various legal claims or litigation, including patent infringement claims that can arise in the normal course of the Company's
operations. Pending or future litigation could be costly, could 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.

STOCK-BASED COMPENSATION - Note

STOCK-BASED COMPENSATION - Note 73 Months Ended
Jun. 30, 2018
Equity [Abstract]
STOCK-BASED COMPENSATION - Note 77. STOCK-BASED COMPENSATION The following table summarizes information
pertaining to the stock-based compensation expense from stock options and stock awards (in thousands, except weighted-average
grant-date fair value and recognition period):
Three Months Ended
June 30,
2018 2017
Cost of service revenue $ 458 $ 391
Cost of product revenue - -
Research and development 2,194 1,337
Sales and marketing 3,845 2,647
General and administrative 2,414 1,976
Total $ 8,911 $ 6,351
Three Months Ended
June 30,
2018 2017
Stock options outstanding at the beginning of the period: 3,998 4,462
Options granted 81 35
Options exercised (115) (101)
Options canceled and forfeited (73) (48)
Options outstanding at the end of the period: 3,891 4,348
Weighted-average fair value of grants during the period $ 8.57 $ 4.93
Total intrinsic value of options exercised during the period $ 1,186 $ 792
Weighted-average remaining recognition period at period-end (in years) 2.35 1.92
Stock awards outstanding at the beginning of the period: 5,939 4,950
Stock awards granted 948 370
Stock awards exercised (299) (189)
Stock awards canceled and forfeited (168) (128)
Stock awards outstanding at the end of the period: 6,420 5,003
Weighted-average fair value of grants during the period $ 22.20 $ 13.50
Weighted-average remaining recognition period at period-end (in years) 2.40 2.45
Total unrecognized compensation expense at period-end $ 67,025 $ 46,171 Stock Repurchases In May 2017, the Company's board of directors
authorized the Company to purchase $25.0 million of its common stock from time to time under the 2017 Repurchase Plan (the "2017
Plan"). The 2017 Plan expires when the maximum purchase amount is reached, or upon the earlier revocation or termination by
the board of directors. The remaining amount available under the 2017 Plan at June 30, 2018 was approximately $7.1 million. There
were no stock repurchases under the 2017 Plan during the three month period ended June 30, 2018.

INCOME TAXES - Note 8

INCOME TAXES - Note 83 Months Ended
Jun. 30, 2018
Notes to Financial Statements
INCOME TAXES - Note 88. INCOME TAXES The Company's effective tax rate was -0.6%
and 36.3% for the three months ended June 30, 2018 and 2017, respectively. The effective tax rate is calculated by dividing the
income tax provision by net income before income tax expense. The difference in the effective tax rate and the U.S. federal statutory
rate was due primarily to the change in pretax profitability, and geographic mix of profits and losses and the full valuation
allowance recorded during fiscal 2018.

NET INCOME (LOSS) PER SHARE - N

NET INCOME (LOSS) PER SHARE - Note 93 Months Ended
Jun. 30, 2018
Notes to Financial Statements
NET INCOME (LOSS) PER SHARE - Note 99. NET INCOME (LOSS) PER SHARE The following is a reconciliation of the weighted
average number of common shares outstanding used in calculating basic and diluted net loss per share (in thousands, except share
and per share data):
Three Months Ended
June 30,
2018 2017
Numerator:
Net loss available to common stockholders $ (15,355) $ (2,169)
Denominator:
Common shares - basic and diluted 93,064 91,643
Net loss per share
Basic $ (0.16) $ (0.02)
Diluted $ (0.16) $ (0.02) 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 antidilutive (in thousands):
Three Months Ended
June 30,
2018 2017
Stock options 3,891 4,348
Stock awards 6,420 5,003
Total anti-dilutive shares 10,311 9,351

SEGMENT REPORTING AND GEOGRAPHI

SEGMENT REPORTING AND GEOGRAPHICAL INFORMATION - Note 103 Months Ended
Jun. 30, 2018
Segment Reporting [Abstract]
SEGMENT REPORTING - Note 1010. SEGMENT REPORTING AND GEOGRAPHICAL INFORMATION The Company manages its operations primarily
on a geographic basis. The Chief Executive Officer, the Chief Financial Officer, and the Chief Technology Officer or the Company's
Chief Operating Decision Makers (CODMs), evaluate performance of the Company and make decisions regarding allocation of resources
based on geographic results. The Company's reportable segments are the Americas and Europe. The Americas segment is primarily
North America. The Europe segment is primarily the United Kingdom. Each operating segment provides similar products and services. Revenues are attributed to each segment based
on the ordering location of the customer or ship to location. The following tables set forth the segment
and geographic information for each period (in thousands):
Revenue for the
Three Months Ended
June 30,
2018 2017
Americas (principally US) $ 74,986 $ 62,405
Europe (principally UK) 8,239 6,693
$ 83,225 $ 69,098 Revenue is based upon the destination of shipments
and the customers' service address. For the three months ended June 30, 2018 and 2017, intersegment revenues of approximately $6.6
million and $2.5 million, respectively, were eliminated in consolidation, and have been excluded from the table above.
Depreciation and
Amortization for the
Three Months Ended
June 30,
2018 2017
Americas (principally US) $ 4,307 $ 2,533
Europe (principally UK) 871 1,194
$ 5,178 $ 3,727
Net Income (Loss) for the
Three Months Ended
June 30,
2018 2017
Americas (principally US) $ (14,349) $ 409
Europe (principally UK) (1,006) (2,578)
$ (15,355) $ (2,169)
June 30, 2018 March 31, 2018
Total Property and Total Property and
Assets Equipment, net Assets Equipment, net
Americas (principally US) $ 271,043 $ 30,293 $ 240,099 $ 27,270
Europe (principally UK) 44,508 7,807 37,110 8,462
$ 315,551 $ 38,100 $ 277,209 $ 35,732

ACQUISITIONS - Note 11

ACQUISITIONS - Note 113 Months Ended
Jun. 30, 2018
Business Combinations [Abstract]
ACQUISITIONS - Note 1111. ACQUISITIONS MarianaIQ On April 12, 2018, the Company entered into
an Asset Purchase Agreement (the "Agreement") with MarianaIQ Inc. (MarianaIQ) for the purchase of certain assets of MarianaIQ.
The total aggregate purchase price was $3.5 million, consisting of approximately $2.6 million in cash paid to MarianaIQ at closing,
and $0.9 million in cash to be held in escrow by the Company for fifteen months, as security against indemnity claims asserted
by the Company after the closing date. The escrow amount is recorded as other accrued liabilities on the condensed consolidated
balance sheets as of June 30, 2018. The Company recorded the acquired developed technology as an identifiable intangible asset
with an estimated useful life of two years. The fair value of the technology was based on estimates and assumptions made by management
using a cost approach method. The intangible asset is amortized on a straight-line basis over two years. The Company recorded the acquired developed
technology as an identifiable intangible asset with an estimated useful life of two years. The fair value of the technology was
based on estimates and assumptions made by management using a cost approach method. The intangible asset is amortized on a straight-line
basis over two years. The excess of the consideration transferred
over the aggregate fair value of the asset acquired was recorded as goodwill. The amount of goodwill recognized was primarily attributable
to the expected contributions of the entity to the overall corporate strategy in addition to the acquired workforce. The preliminary fair values of the assets
acquired are as follows (in thousands):
Fair Value
Assets acquired:
Intangible assets $ 3,200
Net identifiable assets acquired 3,200
Goodwill 300
Total consideration transferred $ 3,500 MarianaIQ did not contribute to revenue or
net loss for the period of acquisition to June 30, 2018. Goodwill recognized upon acquisition is expected to be deductible for
income tax purposes and is included in the Americas reporting unit (see Note 5). Total acquisition costs were immaterial.

Summary of Significant Accounti

Summary of Significant Accounting Policies (Policies)3 Months Ended
Jun. 30, 2018
Notes to Financial Statements
Fiscal PeriodThe Company's fiscal year ends on March 31
of each calendar year. Each reference to a fiscal year in these notes to the consolidated financial statements refers to the fiscal
year ended March 31 of the calendar year indicated (for example, fiscal 2019 refers to the fiscal year ended March 31, 2019).
Use of EstimatesThe accompanying interim condensed consolidated
financial statements are unaudited and have been prepared on substantially the same basis as our annual consolidated financial
statements for the fiscal year ended March 31, 2018, with the exception of new revenue recognition guidance discussed in the recently
adopted accounting principles section below. 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 our financial position, results of operations, and cash flows for the periods presented. The preparation of financial
statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets, liabilities, disclosure of contingent assets and liabilities at the date of the condensed
consolidated financial statements, and the reported amounts of revenue and expenses during the reporting periods. Actual results
could differ from these estimates.
Basis of PresentationThe March 31, 2018 year-end condensed consolidated
balance sheet data in this document were derived from audited consolidated financial statements and does not include all of the
disclosures required by U.S. generally accepted accounting principles. 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, 2018 and notes thereto included in the Company's fiscal 2018 Annual Report on Form 10-K. 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 period or the entire fiscal year. The significant accounting policies used
in preparation of these condensed consolidated financial statements are disclosed in our Annual Report on Form 10-K for the fiscal
year ended March 31, 2018 filed with the SEC on May 30, 2018, and there have been no changes to the Company's significant accounting
policies during the three months ended June 30, 2018 except for the accounting policies described below that were updated
as a result of adopting Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers: Topic 606 Other Assets and Deferred Costs - Contracts with Customers,
AcquisitionACQUISITION In April 2018, the Company entered into an
asset purchase agreement with MarianaIQ, Inc. The total aggregate purchase price was $3.5 million, consisting of approximately
$2.6 million paid at closing and $0.9 million in cash deposited into escrow to be held for fifteen months as security against
indemnity claims made by the Company after the closing date. See Note 11 for additional information.
Principles of ConsolidationPRINCIPLES OF CONSOLIDATION The consolidated financial statements include
the accounts of 8x8 and its subsidiaries. All material intercompany accounts and transactions have been eliminated.
Recently Adopted Accounting PronouncementsRECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS In May 2014, the Financial Accounting Standards
Board (FASB) issued ASU 2014-09, which replaces numerous requirements in U.S. GAAP and provide companies with a single revenue
recognition model for recognizing revenue from contracts with customers. ASC 606 requires an entity to recognize the amount of
revenue to which it expects to be entitled for the transfer of promised goods or services to customers in an amount that reflects
the consideration to which the entity expects to be entitled in exchange for those goods or services. It defines a five-step process
to achieve this core principle and, in doing so, more judgment and estimates are required with the revenue recognition process
than were required under the previous guidance (ASC 605). The new standard permits the use of either
the full retrospective or modified retrospective transition method. The Company adopted the new standard effective April 1, 2018
using the modified retrospective method. Under the modified retrospective method, the comparative periods' information is not
restated and continues to be reported under the accounting standards in effect in those prior periods. Instead, on April 1, 2018,
the Company recognized the cumulative effect of initially applying ASC 606 as an adjustment to the opening balance of accumulated
deficit and the corresponding balance sheet accounts, which resulted in a net decrease to accumulated deficit of $39.9 million.
The impact on the Company's opening balances primarily relates to the capitalization of additional commission costs under ASC
606 in the amount of $38.2 million. Under ASC 605, the Company expensed all commission costs as incurred. Under the ASC 606, the
Company defers all incremental commission costs to obtain the contract and amortizes these costs over a period of benefit of five
years. The remaining $1.7 million impact of adopting the standard relates to revenue being recognized earlier under
ASC 606 than it would have been under ASC 605. See Note 2 for additional impact and transition disclosures. In January 2016, the FASB issued ASU No. 2016-01
Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities In August 2016, the FASB issued ASU No. 2016-15 ,
Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments In October 2016, the FASB has issued ASU No.
2016-16 , Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory
Recent Accounting PronouncementsRECENT ACCOUNTING PRONOUNCEMENTS In February 2016, the FASB issued ASU No.
2016-02, Leases (Topic 842), In June 2018, the FASB issued 2018-07, Compensation-Stock
Compensation (Topic 718)
Revenue recognitionRevenue Recognition under ASC 606 The Company recognizes service revenue, mainly
from subscription services to its cloud-based voice, call center, video and collaboration solutions using the five-step model as
prescribed by ASC 606:
Identification
of the contract, or contracts, with a customer; Identification
of the performance obligations in the contract; Determination
of the transaction price; Allocation
of the transaction price to the performance obligations in the contract; and Recognition
of revenue when or as, the Company satisfies a performance obligation. The Company identifies
performance obligations in contracts with customers, which may include subscription services and related usage, product
revenue and professional services. The transaction price is determined based on the amount expected to be entitled to in
exchange for transferring the promised services or product to the customer. The Transaction price in the contract is
allocated to each distinct performance obligation in an amount that represents the relative amount of consideration expected
to be received in exchange for satisfying each performance obligation. Revenue is recognized when performance obligations are
satisfied. Revenues are recorded based on the transaction price excluding amounts collected on behalf of third parties such
as sales and telecommunication taxes, which are collected on behalf of and remitted to governmental authorities. The Company
usually bills its customers on a monthly basis. Contracts typically range from annual to multi-year agreements with payment
terms of net 30 days or less. The Company occasionally allows a 30-day period to cancel a subscription and return products
shipped for a full refund. Judgement and Estimates The estimation of variable consideration for
each performance obligation requires the Company to make subjective judgments. The Company has service-level agreements with customers
warranting defined levels of uptime reliability and performance. Customers may get credits or refunds if the Company fails to meet
such levels. If the services do not meet certain criteria, fees are subject to adjustment or refund representing a form of variable
consideration. The Company also imposes minimum revenue commitments (MRC) on its customers at the inception of the contract. Thus,
in estimating variable consideration for each of these performance obligations, the Company assesses both the probability of (MRC)
occurring and the collectability of the MRC, of which both represent a form of variable consideration. The Company enters into contracts with customers
that regularly include promises to transfer multiple service and products, such as subscriptions, product, and professional services.
For arrangements with multiple services, the Company evaluates whether the individual services qualify as distinct performance
obligations. In its assessment of whether a service is a distinct performance obligation, the Company determines whether the customer
can benefit from the service on its own or with other readily available resources and whether the service is separately identifiable
from other services in the contract. This evaluation requires the Company to assess the nature of each individual service offering
and how the services are provided in the context of the contract, including whether the services are significantly integrated,
highly interrelated, or significantly modify each other, which may require judgment based on the facts and circumstances of the
contract. When agreements involve multiple distinct
performance obligations, the Company allocates arrangement consideration to all performance obligations at the inception of an
arrangement based on the relative standalone selling prices (SSP) of each performance obligation. Where the Company has standalone
sales data for its performance obligations which are indicative of the price at which the Company sells a promised good or service
separately to a customer, such data is used to establish SSP. In instances where standalone sales data is not available for a particular
performance obligation, the Company estimates SSP by the use of observable market and cost-based inputs. The Company continues
to review the factors used to establish list price and will adjust standalone selling price methodologies as necessary on a prospective
basis. Service Revenue Service revenue from software subscriptions
to the Company's cloud-based technology platform is recognized over time on a ratable basis over the contractual subscription term
beginning on the date that the subscription is made available to the customer. Payments received in advance of subscription services
being rendered are recorded as a deferred revenue. Usage fees, either bundled or not bundled, are recognized when the Company has
a right to invoice. Professional services for configuration, system integration, optimization or education are primarily billed
on a fixed-fee basis and are performed by the Company directly or, alternatively, clients may also choose to perform these services
themselves or engage their own third-party service providers. Professional services revenue is recognized over time, generally
as customer sites go live. When a contract with a customer is signed,
the Company assesses whether collection of the fees under the arrangement is probable. The Company estimates the amount to reserve
for uncollectible amounts at the end of each reporting period based on the aging of the contract balance, current and historical
customer trends, and communications with its customers. These reserves are recorded against the contract asset (Accounts Receivable).
The Company also records reductions to revenue for estimated customer credits at the end of each reporting period. Customer credits
are estimated based on current and historical customer trends, and communications with its customers. Product Revenue The Company recognizes product revenue at
a point in time, when transfer of control has occurred, which is generally when delivery has occurred. Sales returns are recorded as a reduction
to revenue based on historical experience. Contract Assets Contract assets are recorded for those parts
of the contract consideration not yet invoiced but for which the performance obligations are completed. The revenue is recognized
the customer receives services or equipment for a reduced consideration at the onset of an arrangement, for example when the initial
month's services or equipment are discounted. Contract assets are included other current assets in the condensed consolidated balance
sheets Deferred Revenue Deferred revenues represent billings or payments
received in advance of revenue recognition and is recognized upon transfer of control. Balances consist primarily of annual plan
subscription services and professional and training services not yet provided as of the balance sheet date. Deferred revenues that
will be recognized during the succeeding 12-month period are recorded as current deferred revenues in the condensed consolidated
balance sheets, with the remainder recorded as other non-current liabilities in the condensed consolidated balance sheets. Costs to Obtain a Customer Contract Sales commissions and related expenses are
considered incremental and recoverable costs of acquiring customer contracts. These costs are capitalized and amortized on a straight-line
basis over the anticipated benefit period, which is five years. The benefit period was estimated by taking into consideration the
length of customer contracts, technology lifecycle, and other factors. This amortization expense is recorded in sales and marketing
expense within the Company's condensed consolidated statement of operations. Practical Expedients The Company applies a practical expedient
that permits the Company to apply Subtopic 340-40 to a single portfolio of contracts, as they are similar in their characteristics,
and the financial statement effects of applying Subtopic 340-40 to that portfolio would not differ materially from applying it
to the individual contracts within that portfolio.
Segment ReportingSEGMENT REPORTING The Company manages its operations primarily
on a geographic basis. The Chief Executive Officer, the Chief Financial Officer, and the Chief Technology Officer or the Company's
Chief Operating Decision Makers (CODMs), evaluate performance of the Company and make decisions regarding allocation of resources
based on geographic results. The Company's reportable segments are the Americas and Europe. The Americas segment is primarily
North America. The Europe segment is primarily the United Kingdom. Each operating segment provides similar products and services. Revenues are attributed to each segment based
on the ordering location of the customer or ship to location.

Revenue Recognition (Tables)

Revenue Recognition (Tables)3 Months Ended
Jun. 30, 2018
Revenue Recognition Tables
Schedule of impacts of adopting ASC 606The Company recognized the cumulative effect
of initially applying ASC 606 as an adjustment to retained earnings in the condensed consolidated balance sheet as of April 1,
2018 (in thousands).
Adjustments
Balance at Due to Balance at
March 31, 2018 ASC 606 April 1, 2018
Current assets:
Deferred sales commission costs $ - $ 11,234 $ 11,234
Other current assets $ 10,040 $ 1,725 $ 11,765
Non-current assets:
Deferred sales commission costs $ - $ 26,942 $ 26,942
Stockholders' Equity
Accumulated deficit $ (201,464) $ 39,901 $ (161,563) The following tables summarize the impacts
of ASC 606 adoption on the Company's condensed consolidated financial statements for the quarter ended June 30, 2018. Selected Condensed Consolidated Balance
Sheet Line Items (in thousands):
June 30, 2018
(As Reported)
ASC 605 Adjustments ASC 606
Current assets:
Deferred sales commission costs $ - $ 12,706 $ 12,706
Other current assets $ 9,434 $ 1,697 $ 11,131
Non-current assets:
Deferred sales commission costs $ - $ 27,041 $ 27,041
Stockholders' Equity
Accumulated deficit $ (218,362) $ 41,444 $ (176,918) Selected Condensed Consolidated Statement
of Operations Line Items (in thousands, except per share amounts):
June 30, 2018
(As Reported)
ASC 605 Adjustments ASC 606
Service revenue $ 78,242 $ (121) $ 78,121
Product revenue 5,011 93 5,104
Total revenue $ 83,253 $ (28) $ 83,225
Operating expenses:
Sales and marketing $ 55,104 $ (1,799) $ 53,305
Loss from operations $ (17,754) $ 1,771 $ (15,983)
Net loss $ (17,126) $ 1,771 $ (15,355)
Net loss per share:
Basic and Diluted $ (0.18) $ 0.02 $ (0.16) Selected Condensed Consolidated Statement
of Cash Flows Line Items (in thousands):
June 30, 2018
(As Reported)
ASC 605 Adjustments ASC 606
Net loss $ (17,126) $ 1,771 $ (15,355)
Deferred sales commission costs $ - $ (1,799) $ (1,799)
Other current and noncurrent assets $ (447) $ 28 $ (419)
Net cash provided by operating activities $ 789 $ - $ 789
Schedule of contract assets and liabilitiesThe following table provides information
about receivables, contract assets and deferred revenues from contracts with customers (in thousands):
June 30, 2018
Accounts receivable, net $ 17,725
Other current assets $ 1,697
Deferred revenue - current $ 2,838
Deferred revenue - noncurrent $ 16 Changes in the contract assets and the deferred
revenues balances during the three months ended June 30, 2018 are as follows (in thousands):
April 1, 2018 June 30, 2018 $ Change
Other current assets $ 1,725 $ 1,697 $ (28)
Deferred revenue $ 2,578 $ 2,854 $ 276

FAIR VALUE MEASUREMENTS (Tables

FAIR VALUE MEASUREMENTS (Tables)3 Months Ended
Jun. 30, 2018
Fair Value Measurements Tables
Fair Value Measurements, Recurring and Nonrecurring (Tables)Cash, cash equivalents, and available-for-sale
investments (in thousands):
Gross Gross Cash and
Amortized Unrealized Unrealized Estimated Cash Short-Term
As of June 30, 2018 Costs Gain Loss Fair Value Equivalents Investments
Cash $ 13,051 $ - $ - $ 13,051 $ 13,051 $ -
Level 1:
Money market funds 21,506 - - 21,506 21,506 -
Subtotal 34,557 - - 34,557 34,557 -
Level 2:
Commercial paper 3,199 - - 3,199 - 3,199
Corporate debt 72,400 12 (221) 72,191 - 72,191
Municipal securities 3,392 1 - 3,393 - 3,393
Asset backed securities 24,552 - (92) 24,460 - 24,460
Agency bond 4,202 - (39) 4,163 - 4,163
International government securities 2,499 - (2) 2,497 - 2,497
Subtotal 110,244 13 (354) 109,903 - 109,903
Total assets $ 144,801 $ 13 $ (354) $ 144,460 $ 34,557 $ 109,903
Gross Gross Cash and
Amortized Unrealized Unrealized Estimated Cash Short-Term
As of March 31, 2018 Costs Gain Loss Fair Value Equivalents Investments
Cash $ 16,499 $ - $ - $ 16,499 $ 16,499 $ -
Level 1:
Money market funds 15,204 - - 15,204 15,204 -
Subtotal 31,703 - - 31,703 31,703 -
Level 2:
Commercial paper 13,254 - (8) 13,246 - 13,246
Corporate debt 70,631 6 (296) 70,341 - 70,341
Municipal securities 3,385 3 (1) 3,387 - 3,387
Asset backed securities 27,063 1 (119) 26,945 - 26,945
Agency bond 4,183 - (35) 4,148 - 4,148
International government securities 2,497 - (5) 2,492 - 2,492
Subtotal 121,013 10 (464) 120,559 - 120,559
Total assets $ 152,716 $ 10 $ (464) $ 152,262 $ 31,703 $ 120,559 Contractual maturities of investments as of
June 30, 2018 are set forth below (in thousands):
Estimated
Fair Value
Due within one year $ 54,153
Due after one year 55,750
Total $ 109,903

Intangible Assets (Tables)

Intangible Assets (Tables)3 Months Ended
Jun. 30, 2018
Intangible Assets Tables
Carrying values of intangible assetsThe carrying value of intangible assets consisted
of the following (in thousands):
June 30, 2018 March 31, 2018
Gross Net Gross Net
Carrying Accumulated Carrying Carrying Accumulated Carrying
Amount Amortization Amount Amount Amortization Amount
Technology $ 22,902 $ (11,645) $ 11,257 $ 19,702 $ (10,535) $ 9,167
Customer relationships 9,655 (7,587) 2,068 9,776 (7,366) 2,410
Trade names/domains 2,108 (1,823) 285 2,108 (1,727) 381
In-process research and development 95 (95) - 95 (95) -
Total acquired identifiable intangible assets $ 34,760 $ (21,150) $ 13,610 $ 31,681 $ (19,723) $ 11,958
Finite-lived intangible assets - future amortization expenseAt June 30, 2018, annual amortization of
intangible assets, based upon our existing intangible assets and current useful lives, is estimated to be the following (in thousands):
Amount
Remaining 2019 $ 4,689
2020 4,716
2021 2,554
2022 1,423
2023 228
Total $ 13,610

Goodwill (Tables)

Goodwill (Tables)3 Months Ended
Jun. 30, 2018
Goodwill Tables
Carrying amounts of goodwillThe following table provides a summary of
the changes in the carrying amounts of goodwill by reporting segment (in thousands):
Americas Europe Total
Balance at March 31, 2018 $ 27,309 $ 12,745 $ 40,054
Additions due to acquisition 300 - 300
Foreign currency translation - (703) (703)
Balance at June 30, 2018 $ 27,609 $ 12,042 $ 39,651

Commitments And Contingencies (

Commitments And Contingencies (Tables)3 Months Ended
Jun. 30, 2018
Commitments And Contingencies Tables
Future minimum annual operating lease paymentsFuture minimum annual lease payments as of
June 30, 2018 were as follows (in thousands):
Amount
Remaining 2019 $ 4,314
2020 6,622
2021 8,961
2022 8,848
2023 8,353
Thereafter 54,724
Total $ 91,822

Distribution of Stock-Based Com

Distribution of Stock-Based Compensation Plan Expense (Tables)3 Months Ended
Jun. 30, 2018
Distribution Of Stock-based Compensation Plan Expense Tables
Schedule Of Stock-Based Compensation Expense By Statement Of Operations Line ItemThe following table summarizes information
pertaining to the stock-based compensation expense from stock options and stock awards (in thousands, except weighted-average
grant-date fair value and recognition period):
Three Months Ended
June 30,
2018 2017
Cost of service revenue $ 458 $ 391
Cost of product revenue - -
Research and development 2,194 1,337
Sales and marketing 3,845 2,647
General and administrative 2,414 1,976
Total $ 8,911 $ 6,351

Stock-Based Compensation And Em

Stock-Based Compensation And Employee Purchase Plan (Tables)3 Months Ended
Jun. 30, 2018
Option Grants
Disclosure Of Share-Based Compensation Arrangements By Share-Based Payment AwardThree Months Ended
June 30,
2018 2017
Stock options outstanding at the beginning of the period: 3,998 4,462
Options granted 81 35
Options exercised (115) (101)
Options canceled and forfeited (73) (48)
Options outstanding at the end of the period: 3,891 4,348
Weighted-average fair value of grants during the period $ 8.57 $ 4.93
Total intrinsic value of options exercised during the period $ 1,186 $ 792
Weighted-average remaining recognition period at period-end (in years) 2.35 1.92
Stock Awards
Disclosure Of Share-Based Compensation Arrangements By Share-Based Payment AwardThree Months Ended
June 30,
2018 2017
Stock awards outstanding at the beginning of the period: 5,939 4,950
Stock awards granted 948 370
Stock awards exercised (299) (189)
Stock awards canceled and forfeited (168) (128)
Stock awards outstanding at the end of the period: 6,420 5,003
Weighted-average fair value of grants during the period $ 22.20 $ 13.50
Weighted-average remaining recognition period at period-end (in years) 2.40 2.45
Total unrecognized compensation expense at period-end $ 67,025 $ 46,171

Net Income (Loss) Per Share (Ta

Net Income (Loss) Per Share (Tables)3 Months Ended
Jun. 30, 2018
Net Income Loss Per Share Tables
Net Income (Loss) Per ShareThe following is a reconciliation of the weighted
average number of common shares outstanding used in calculating basic and diluted net loss per share (in thousands, except share
and per share data):
Three Months Ended
June 30,
2018 2017
Numerator:
Net loss available to common stockholders $ (15,355) $ (2,169)
Denominator:
Common shares - basic and diluted 93,064 91,643
Net loss per share
Basic $ (0.16) $ (0.02)
Diluted $ (0.16) $ (0.02)
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per ShareThe 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 antidilutive (in thousands):
Three Months Ended
June 30,
2018 2017
Stock options 3,891 4,348
Stock awards 6,420 5,003
Total anti-dilutive shares 10,311 9,351

Segment Information (Tables)

Segment Information (Tables)3 Months Ended
Jun. 30, 2018
Segment Information Tables
Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical AreasThe following tables set forth the segment
and geographic information for each period (in thousands):
Revenue for the
Three Months Ended
June 30,
2018 2017
Americas (principally US) $ 74,986 $ 62,405
Europe (principally UK) 8,239 6,693
$ 83,225 $ 69,098
June 30, 2018 March 31, 2018
Total Property and Total Property and
Assets Equipment, net Assets Equipment, net
Americas (principally US) $ 271,043 $ 30,293 $ 240,099 $ 27,270
Europe (principally UK) 44,508 7,807 37,110 8,462
$ 315,551 $ 38,100 $ 277,209 $ 35,732
Schedule of Segment Reporting Information, by SegmentDepreciation and
Amortization for the
Three Months Ended
June 30,
2018 2017
Americas (principally US) $ 4,307 $ 2,533
Europe (principally UK) 871 1,194
$ 5,178 $ 3,727
Net Income (Loss) for the
Three Months Ended
June 30,
2018 2017
Americas (principally US) $ (14,349) $ 409
Europe (principally UK) (1,006) (2,578)
$ (15,355) $ (2,169)

Acquisition (Tables)

Acquisition (Tables)3 Months Ended
Jun. 30, 2018
Acquisition Tables
Schedule of Business Acquisitions, by Acquisition [Table Text Block]The preliminary fair values of the assets
acquired are as follows (in thousands):
Fair Value
Assets acquired:
Intangible assets $ 3,200
Net identifiable assets acquired 3,200
Goodwill 300
Total consideration transferred $ 3,500

Description of the Business (Na

Description of the Business (Narrative) (Details) $ in Millions3 Months Ended
Jun. 30, 2018USD ($)
Description Of Business Narrative Details
Fiscal Year End Date--03-31
Assets, net of accumulated amortization reclassified $ 7.7

Description of the Business (Ac

Description of the Business (Acquisitions Narrative) (Details)1 Months Ended
Apr. 30, 2018
Description Of Business Acquisitions Narrative Details
Effective date of purchase agreementApr. 30,
2018
Business Acquisition, Description of Acquired EntityIn April 2018, the Company entered into an
asset purchase agreement with MarianaIQ, Inc. The total aggregate purchase price was $3.5 million, consisting of approximately
$2.6 million paid at closing and $0.9 million in cash deposited into escrow to be held for fifteen months as security against
indemnity claims made by the Company after the closing date. See Note 11 for additional information.

Revenue Recognition - Summary o

Revenue Recognition - Summary of Impact of ASC 606 (Details) - USD ($) $ / shares in Units, $ in Thousands3 Months Ended
Jun. 30, 2018Jun. 30, 2017Mar. 31, 2018
Service revenue $ 78,121
Product revenue5,104
Total revenue83,225 $ 69,098
Operating expenses:
Sales and marketing53,305 41,110
Loss from operations(15,983)(5,457)
Net loss $ (15,355)(2,169)
Net loss per share:
Basic and diluted $ (0.16)
Current assets:
Deferred sales commission costs $ 12,706 $ 11,234
Other current assets11,131 11,765
Non-current assets:
Deferred sales commission costs27,041 26,942
Stockholders' equity:
Accumulated deficit(176,918)(161,563)
Cash Flow Line Items
Net loss(15,355)(2,169)
Deferred sales commission costs(1,799)0
Other current and noncurrent assets(419)
Net cash provided by operating activities789 $ 6,183
ASC 605 | Previous
Service revenue78,242
Product revenue5,011
Total revenue83,253
Operating expenses:
Sales and marketing55,104
Loss from operations(17,754)
Net loss $ (17,126)
Net loss per share:
Basic and diluted $ (0.18)
Current assets:
Deferred sales commission costs0
Other current assets10,040
Non-current assets:
Deferred sales commission costs0
Stockholders' equity:
Accumulated deficit(201,464)
Cash Flow Line Items
Net loss $ (17,126)
Deferred sales commission costs0
Other current and noncurrent assets(447)
Net cash provided by operating activities789
ASC 606 | Adjustment
Service revenue(121)
Product revenue93
Total revenue(28)
Operating expenses:
Sales and marketing(1,799)
Loss from operations1,771
Net loss $ 1,771
Net loss per share:
Basic and diluted $ 0.02
Current assets:
Deferred sales commission costs $ 12,706 11,234
Other current assets1,697 1,725
Non-current assets:
Deferred sales commission costs27,041 26,942
Stockholders' equity:
Accumulated deficit41,444 $ 39,901
Cash Flow Line Items
Net loss1,771
Deferred sales commission costs(1,799)
Other current and noncurrent assets28
Net cash provided by operating activities0
ASC 605 | Previous
Current assets:
Deferred sales commission costs0
Other current assets9,434
Non-current assets:
Deferred sales commission costs0
Stockholders' equity:
Accumulated deficit $ (218,362)

Revenue Recognition - Contract

Revenue Recognition - Contract Balances with Contract Customers (details) - USD ($) $ in ThousandsJun. 30, 2018Mar. 31, 2018
Accounts receivable $ 17,725 $ 16,296
Other current assets1,697 1,725
Deferred revenue - current2,838 $ 2,559
Contracts with Customers
Accounts receivable17,725
Other current assets1,697
Deferred revenue - current2,838
Deferred revenue - noncurrent $ 16

Revenue Recognition - Schedule

Revenue Recognition - Schedule of Changes in Contract Assets and Deferred Revenues (Details) - USD ($) $ in Thousands3 Months Ended
Jun. 30, 2018Mar. 31, 2018
Contractors [Abstract]
Other current assets $ 1,697 $ 1,725
Change in other current assets(28)
Deferred revenue2,854 $ 2,578
Change in deferred revenue $ 276

Revenue Recognition - Estimated

Revenue Recognition - Estimated Revenue Expected to be Recognized in Future Related to Performance Obligations (Details) $ in MillionsJun. 30, 2018USD ($)
Revenue Recognition - Estimated Revenue Expected To Be Recognized In Future Related To Performance Obligations Details
Revenue, Remaining Performance Obligation $ 130
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period2 years

Cash, Cash Equivalents and Inve

Cash, Cash Equivalents and Investments with Hierarchy (Details) - USD ($) $ in ThousandsJun. 30, 2018Mar. 31, 2018
Amortized Costs $ 144,801 $ 152,716
Gross Unrealized Gains13 10
Gross Unrealized Loss(354)(464)
Estimated Fair Value144,460 152,262
Cash and cash equivalents34,557 31,703
Short-term marketable investments109,903 120,559
Aavailable-for-sale investments due within one year54,153
Aavailable-for-sale investments due after one year55,750
Level 1
Amortized Costs34,557 31,073
Gross Unrealized Gains0 0
Gross Unrealized Loss0 0
Estimated Fair Value34,557 31,073
Cash and cash equivalents34,557 31,073
Short-term marketable investments0
Level 2
Amortized Costs110,244 121,013
Gross Unrealized Gains13 10
Gross Unrealized Loss(354)(464)
Estimated Fair Value109,903 120,559
Cash and cash equivalents0 0
Short-term marketable investments109,903 120,559
Cash
Amortized Costs13,051 16,499
Gross Unrealized Gains0 0
Gross Unrealized Loss0 0
Estimated Fair Value13,051 16,499
Cash and cash equivalents13,051 16,499
Short-term marketable investments0 0
Money Market Funds | Level 1
Amortized Costs21,506 15,204
Gross Unrealized Gains0 0
Gross Unrealized Loss0 0
Estimated Fair Value21,506 15,204
Cash and cash equivalents21,506 15,204
Short-term marketable investments0 0
Commercial Paper | Level 2
Amortized Costs3,199 13,254
Gross Unrealized Gains0 0
Gross Unrealized Loss0 (8)
Estimated Fair Value3,199 13,246
Cash and cash equivalents0 0
Short-term marketable investments3,199 13,246
Corporate Debt | Level 2
Amortized Costs72,400 70,631
Gross Unrealized Gains12 6
Gross Unrealized Loss(221)(296)
Estimated Fair Value72,191 70,341
Cash and cash equivalents0 0
Short-term marketable investments72,191 70,341
Municipal Securities | Level 2
Amortized Costs3,392 3,385
Gross Unrealized Gains1 3
Gross Unrealized Loss0 (1)
Estimated Fair Value3,393 3,387
Cash and cash equivalents0 0
Short-term marketable investments3,393 3,387
Asset-backed Securities | Level 2
Amortized Costs24,552 27,063
Gross Unrealized Gains0 1
Gross Unrealized Loss(92)(119)
Estimated Fair Value24,460 26,945
Cash and cash equivalents0 0
Short-term marketable investments24,460 26,945
Agency Bond | Level 2
Amortized Costs4,202 4,183
Gross Unrealized Gains0 0
Gross Unrealized Loss(39)(35)
Estimated Fair Value4,163 4,148
Cash and cash equivalents0 0
Short-term marketable investments4,163 4,148
International Government Securities | Level 2
Amortized Costs2,499 2,497
Gross Unrealized Gains0 0
Gross Unrealized Loss(2)(5)
Estimated Fair Value2,497 2,492
Cash and cash equivalents0 0
Short-term marketable investments $ 2,497 $ 2,492

Intangible Assets Schedule Of I

Intangible Assets Schedule Of Intangibles (Details) - USD ($) $ in ThousandsJun. 30, 2018Mar. 31, 2018
Gross Carrying Amount $ 34,760 $ 31,681
Accumulated Amortization(21,150)(19,723)
Net Carrying Amount13,610 11,958
Technology
Gross Carrying Amount22,902 19,702
Accumulated Amortization(11,645)(10,535)
Net Carrying Amount11,257 9,167
Customer relationships
Gross Carrying Amount9,655 9,776
Accumulated Amortization(7,587)(7,366)
Net Carrying Amount2,068 2,410
Trade names/domains
Gross Carrying Amount2,108 2,108
Accumulated Amortization(1,823)(1,727)
Net Carrying Amount285 381
In-process research and development
Gross Carrying Amount95 95
Accumulated Amortization(95)(95)
Net Carrying Amount $ 0 $ 0

Intangible Assets Schedule Of F

Intangible Assets Schedule Of Future Amortization Of Intangibles (Details) $ in ThousandsJun. 30, 2018USD ($)
Intangible Assets Schedule Of Future Amortization Of Intangibles Details
Remaining 2,019 $ 4,689
2,020 4,716
2,021 2,554
2,022 1,423
2,023 228
Total $ 13,610

Changes in Carrying Amount of G

Changes in Carrying Amount of Goodwill by Location (Detail) $ in Thousands3 Months Ended
Jun. 30, 2018USD ($)
Goodwill, beginning balance $ 40,054
Additions due to acquisitions300
Foreign currency translation(703)
Goodwill, ending balance39,651
Americas
Goodwill, beginning balance27,309
Additions due to acquisitions300
Foreign currency translation0
Goodwill, ending balance27,609
Europe
Goodwill, beginning balance12,745
Foreign currency translation(703)
Goodwill, ending balance $ 12,042

Commitments and Contingencies38

Commitments and Contingencies (Operating Leases) (Details) $ in ThousandsJun. 30, 2018USD ($)
Year ending March 31:
Remaining 2,019 $ 4,314
2,020 6,622
2,021 8,961
2,022 8,848
2,023 8,353
Thereafter54,724
Total $ 91,822

Commitments and Contingencies39

Commitments and Contingencies (Operating Leases Narrative) (Details) - USD ($) $ in Millions3 Months Ended
Jun. 30, 2018Jun. 30, 2017
Commitments And Contingencies Operating Leases Narrative Details
Rent expense $ 2.6 $ 1.4

Stock-based Compensation Stock-

Stock-based Compensation Stock-Based Compensation Expense By Statement Of Operations (Details) - USD ($) $ in Thousands3 Months Ended
Jun. 30, 2018Jun. 30, 2017
Stock-based employee compensation expense related to employee stock options and employee stock purchases, pre tax $ 8,911 $ 6,351
Cost of service revenue
Stock-based employee compensation expense related to employee stock options and employee stock purchases, pre tax458 391
Cost of product revenue
Stock-based employee compensation expense related to employee stock options and employee stock purchases, pre tax0 0
Research and development
Stock-based employee compensation expense related to employee stock options and employee stock purchases, pre tax2,194 1,337
Sales and marketing
Stock-based employee compensation expense related to employee stock options and employee stock purchases, pre tax3,845 2,647
General and administrative
Stock-based employee compensation expense related to employee stock options and employee stock purchases, pre tax $ 2,414 $ 1,976

Stock-based Compensation Option

Stock-based Compensation Option Activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands3 Months Ended
Jun. 30, 2018Jun. 30, 2017
Stock-based Compensation Option Activity Details
Balance at beginning of period3,998 4,462
Granted81 35
Exercised(115)(101)
Cancelled/forfeited(73)(48)
Balance at end of period3,891 4,348
Weighted-average exercise price of options granted during period $ 8.57 $ 4.93
Total intrinsic value of options exercised during the period $ 1,186 $ 792
Weighted Average Remaining recognition period in years2 years 126 days1 year 331 days

Stock-based Compensation Stock

Stock-based Compensation Stock Awards Activity (Details) - $ / shares shares in Thousands3 Months Ended
Jun. 30, 2018Jun. 30, 2017
Stock-based Compensation Stock Awards Activity Details
Balance at beginning of period5,939 4,950
Granted948 370
Vested(299)(189)
Canceled and forfeited(168)(128)
Balance at end of period6,420 5,003
Weighted-average grant date fair market value of restricted stock rights granted $ 22.20 $ 13.5
Weighted-average remaining contractual term, in years, ending balance2 years 144 days2 years 162 days

Stock-based Compensation (Narra

Stock-based Compensation (Narrative) (Details) - USD ($) $ in ThousandsJun. 30, 2018Jun. 30, 2017
Stock-based Compensation Narrative Details
Total unrecognized compensation expense related to stock awards $ 67,025 $ 46,171

Stock Repurchases 2017 (Narrati

Stock Repurchases 2017 (Narrative) (Details) - USD ($)3 Months Ended
Jun. 30, 2018Mar. 31, 2018
Stock Repurchases 2017 Narrative Details
Stock repurchased and retired during period, shares0
Stock repurchased and retired during period, value $ 0
Stock repurchase program, authorized amount $ 25,000,000
Stock repurchase program, remaining authorized repurchase amount $ 7,100,000

Income Taxes (Narrative) (Detai

Income Taxes (Narrative) (Details)3 Months Ended
Jun. 30, 2018Jun. 30, 2017
Effective Income Tax Rate, Percent(0.60%)36.30%

Net Income (Loss) Per Share (De

Net Income (Loss) Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands3 Months Ended
Jun. 30, 2018Jun. 30, 2017
Numerator:
Net loss available to common stockholders $ (15,355) $ (2,169)
Denominator:
Common shares - basic and diluted93,064 93,064
Net loss per share:
Basic $ (0.16) $ (0.02)
Diluted $ (0.16) $ (0.02)

Net Income (Loss) Per Share (Op

Net Income (Loss) Per Share (Options and Awards Excluded) (Details) - shares shares in Thousands3 Months Ended
Jun. 30, 2018Jun. 30, 2017
Anti-dilutive shares10,311 9,351
Stock options
Anti-dilutive shares3,891 4,348
Stock awards
Anti-dilutive shares6,420 5,003

Segment Reporting Revenue and P

Segment Reporting Revenue and Property and Equipment by Geographic Area (Details) - USD ($) $ in Thousands3 Months Ended
Jun. 30, 2018Jun. 30, 2017Mar. 31, 2018
Net revenue $ 83,225 $ 69,098
Depreciation and amortization expense5,178 3,727
Net income (loss)(15,355)(2,169)
Intersegment revenues eliminated in consolidation6,600 2,500
Total assets315,551 $ 277,209
Property and equipments, net38,100 35,732
Americas
Net revenue74,986 62,405
Depreciation and amortization expense4,307 2,533
Net income (loss)(14,349)409
Total assets271,403 240,099
Property and equipments, net20,519 27,270
Europe
Net revenue8,239 6,693
Depreciation and amortization expense871 1,194
Net income (loss)(1,006) $ (2,578)
Total assets44,508 37,110
Property and equipments, net $ 6,454 $ 8,462

Acquisitions (Details)

Acquisitions (Details) - USD ($) $ in Thousands1 Months Ended3 Months Ended
Apr. 30, 2018Jun. 30, 2018
Assets acquired:
Goodwill $ 300
Business Acquisition, Description of Acquired EntityIn April 2018, the Company entered into an
asset purchase agreement with MarianaIQ, Inc. The total aggregate purchase price was $3.5 million, consisting of approximately
$2.6 million paid at closing and $0.9 million in cash deposited into escrow to be held for fifteen months as security against
indemnity claims made by the Company after the closing date. See Note 11 for additional information.
MarianaIQ
Assets acquired:
Intangible assets3,200
Goodwill $ 300
Net identifiable assets acquired3,200
Total consideration transferred $ 3,500
Cash2,600
Contingent payments900
Total purchase price $ 3,500
Business Acquisition, Name of Acquired EntityMarianaIQ Inc.
Business Acquisition, Description of Acquired EntityMarianaIQ On April 12, 2018, the Company entered into
an Asset Purchase Agreement (the "Agreement") with MarianaIQ Inc. (MarianaIQ) for the purchase of certain assets of MarianaIQ.
The total aggregate purchase price was $3.5 million, consisting of approximately $2.6 million in cash paid to MarianaIQ at closing,
and $0.9 million in cash to be held in escrow by the Company for fifteen months, as security against indemnity claims asserted
by the Company after the closing date. The escrow amount is recorded as other accrued liabilities on the condensed consolidated
balance sheets as of June 30, 2018. The Company recorded the acquired developed technology as an identifiable intangible asset
with an estimated useful life of two years. The fair value of the technology was based on estimates and assumptions made by management
using a cost approach method. The intangible asset is amortized on a straight-line basis over two years.
Business Combination, Assets and Liabilities, DescriptionThe Company recorded the acquired developed
technology as an identifiable intangible asset with an estimated useful life of two years. The fair value of the technology was
based on estimates and assumptions made by management using a cost approach method. The intangible asset is amortized on a straight-line
basis over two years. The excess of the consideration transferred
over the aggregate fair value of the asset acquired was recorded as goodwill. The amount of goodwill recognized was primarily attributable
to the expected contributions of the entity to the overall corporate strategy in addition to the acquired workforce. MarianaIQ did not contribute to revenue or
net loss for the period of acquisition to June 30, 2018. Goodwill recognized upon acquisition is expected to be deductible for
income tax purposes and is included in the Americas reporting unit (see Note 5). Total acquisition costs were immaterial.