EGHT

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How EGHT rewrote its risk factors

10-K ITEM 1A · FY2025 → FY2026

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These disclosures reflect our beliefs and opinions regarding factors that could materially and adversely affect us and our securities in the future.
References to past events are provided by way of example only and are not intended to be a complete listing of such events or a representation as to whether or not such factors or similar events have occurred in the past or their likelihood of occurring in the future.
These risks are discussed more fully below and include, but are not limited to: Risks Related to our Business and Industry • Our history of losses and anticipated continued losses. • Unpredictability of our future operating results. • Failure to innovate and adapt to technological changes. • Reductions in spending may result in reductions in revenue. • Future increases in our customer churn. • Dependence on new customer acquisition and retention and upsell to existing customers. • Intense competition in our industry. • Failure to manage and grow our indirect sales channels. • Complexity and length of enterprise customer sales cycle. • Dependence on new products and services to maintain and grow our business and lack of resources to compete successfully. • Difficulty attracting and retaining key management, technical and sales personnel. • Current and future acquisitions, which may divert management's attention. • Potential past and future liabilities related to federal, state, local and international taxes, fees, surcharges and levies. • Changes or interpretations in tax rules, regulations or tax positions. • Potential incurrence of impairments to goodwill, intangible assets or long-lived assets.
Risks Related to our Products and Operations • Ability to replace decreasing sources of revenue with revenue from sales of AI solutions. • Service outages due to software vulnerabilities or failures of physical infrastructure. • Rapid technological change in the contact center software solutions market, which requires developing new features. • Scalability of our cloud software services to meet existing and new customer demand. • International expansion, including geopolitical tensions and increasing costs of regulatory compliance. • Ability to maintain compatibility with third-party applications and mobile platforms. • Reliance on third-parties to provide network services and connectivity. • Reliance on third-party vendors for IP phones and certain software endpoints. • Difficulty executing local number porting requests.
Risks Related to Regulatory Matters • Cybersecurity breaches and malicious acts. • Liabilities related to credit card transaction processing services. • Failure to comply with data privacy and protection laws. • Compliance with industry standards and government regulations including those related to telecommunications and cybersecurity.
Risks Related to our Debt, our Stock, and our Charter • Our substantial amount of indebtedness. • Cash flow may be insufficient to service or pay down our debt. • Inability to raise necessary funds in the future. • Impact of conditional conversion features of our debt on our financial condition. • Necessity of additional capital or restructuring of existing debt to pursue business objectives. • Changes in accounting standards, including for our debt, which may cause adverse financial reporting fluctuations and affect our reported operating results. • Future sales of common stock or equity-linked securities, including by existing stockholders. • Certain provisions in our charter documents that may discourage takeover attempts.
We recorded operating income of approximately $18.9 million for the year ended March 31, 2026, and ended the period with an accumulated deficit of approximately $886.1 million.
Our recent level of operating income is highly dependent on market demand for our products and services.
Changes in economic conditions, competitive factors or a reduction in demand could lead to lower revenues and our inability to sustain our current results.
As such, we may incur operating losses in the future as we continue to invest in our business.
During our fiscal year ended March 31, 2026, we focused on cost discipline and invested in sales and marketing and research and development, among other areas of our business, to compete more successfully for the business of companies that are transitioning to cloud communications and otherwise position ourselves to take advantage of long-term revenue-generating opportunities.
We may incur losses in the next fiscal year and later, and we will need to increase our revenue to generate and sustain operating profitability in future periods.
The investments we have made in fiscal 2026 and beyond may not generate the returns that we anticipate, which could adversely impact our financial condition and make it more difficult for us to grow revenue and/or achieve or sustain profitability in the time period that we expect, or not at all.
In order to achieve sustained profitability, we will need to manage our cost structure more efficiently, while continuing to grow our revenue.
Despite these efforts, our revenue may decline, we may incur additional liabilities, and/or we may incur significant losses in the future due to general economic conditions, increasing competition (including competitive pricing pressures and large competitors moving into our markets at the same time that new and innovative competitors enter), decrease in customer demand, including from tariffs or other governmental actions, the growth of the adoption or sustained use of the cloud communications market, or our failure for any reason to continue to capitalize on growth opportunities.
Given our history of fluctuating revenue and operating losses, we cannot be certain that we will be able to achieve or maintain operating profitability in the future.
These include, but are not limited to: • changes in the markets we compete in, including reductions in market growth or consolidation among competitors, channel partners, or customers, and the impact of general macroeconomic conditions such as inflation, interest rates, recession, tariffs, trade policies, geopolitical instability, and decreased economic output; • changes in customer demand, including cancellations, subscription downgrades, or substitution of our lower-priced, less feature-rich products for our higher-priced, more feature-rich products, particularly as customers transition to AI-based solutions; • the impact of AI-related developments or speculation about the future of AI on the software and SaaS industries and market conditions generally; • changes in the competitive dynamics in our markets, including competitors increasing compensation payable to channel partners or increasing discounts or credits issued to customers; • lengthy sales cycles; • new product introductions by us or our competitors, including AI-based products and features; • unpredictability of usage-based revenue products that do not involve long-term subscription commitments; • the mix of our customer base, sales channels, and services sold; • the number of additional customers, on a net basis; • the amount and timing of costs associated with recruiting, training, and integrating new employees; • the retention of our senior management and other key employees, their ability to execute on our business plan and the loss of services of senior management or other key employees, whether in the past or in the future; • unforeseen costs and expenses related to the expansion of our business, operations, and infrastructure, including internationally; • our dependency on third-party vendors of hardware, software, and services that we resell to our customers, including the effects of supplier price increases which we are unable to pass along to our customers; • our ability to execute our operating plans successfully, including back-office system optimizations and increases in execution speed while also reducing costs and optimizing our operating margin; • changes in regulatory requirements or lengthy regulatory approval cycles; • continued compliance with industry standards and regulatory requirements; • decline in usage related to increases in return to office; • material security breaches or service interruptions due to cyberattacks or infrastructure failures or unavailability, which may result in additional expenses, losses, legal or regulatory actions, customer credits, and reputational harm; • introduction and adoption of our cloud software solutions in markets outside of the United States; and • litigation involving us, our industry, or both, including securities class action lawsuits.
Our results of operations may be below the expectations of public market analysts and investors.
We would also need to revise our business processes, systems, and controls, which require significant management attention and may negatively affect our financial reporting obligations.
Failure to innovate and adapt in response to rapidly evolving technological changes in the midst of an intensely competitive market may harm our competitive position and business prospects.
We compete in markets that evolve rapidly.
The pace of innovation will continue to accelerate as customers recognize the advantages of acquiring leading technologies and adopting AI native solutions and modern cloud-based infrastructure.
Cutting-edge capabilities such as AI, machine learning, hyper automation, low-code/no-code application development and predictive insights become increasingly relevant to the customer’s evolving needs.
Our continued growth also depends on continued use of voice, video communications, messaging and contact center solutions by businesses, compared to other means of communications, including, but not limited to, email and other data-based methods.
In addition, to compete successfully, we must anticipate and adapt to technological changes and evolving industry standards and continue to design, develop, manufacture, and sell new and enhanced services that provide increasingly higher levels of performance and reliability.
Competitors, regardless of their size, may be able to respond more quickly and effectively to new or changing opportunities, technologies, standards, customer requirements and buying practices.
They may introduce new technology, solve similar problems in different ways or more effectively utilize existing technology that reduces demand for our services.
They may utilize acquisitions, integrations or consolidations to offer integrated or bundled products, enhanced functionality or other advantages.
Some of our existing competitors and potential competitors are larger and have greater name recognition, the ability to more efficiently scale their business, more established operations, more customer relationships and greater financial and technical resources than we do.
We intend to maintain our total costs as a percentage of revenue, primarily by lowering our operating expenses.
Furthermore, our focus on reducing our spending may make it more difficult for us to compete given the rapid technological changes in our industry and the need for innovation.
Because of churn in our customer base, we must acquire new customers and sell additional 8x8 products and services to our existing customers on an ongoing basis to maintain our current level of revenue.
Churn may also prevent us from increasing the price of our services in the future, and limit our ability to sell additional 8x8 products and services to our existing customers, so we may need to renew certain customers at a lower rate, each of which would adversely impact our revenue in the future.
Pricing, competitive products, and migration of our customers from legacy products can all contribute to churn.
If we are unable to maintain the quality and performance of our service, whether due to a lack of feature parity or quality of service relative to the products of our competitors or service outages or disruptions, we could experience potentially sharp increases in customer cancellations, downgrades and/or customer credits, which would adversely impact our revenue.
In addition to acquiring new customers, we generate new revenue by selling to our existing customers additional quantities of subscribed services, or subscriptions to new or upgraded services.
We also face intense competition from Internet and cloud service companies such as Alphabet Inc.
Some of these competitors have developed software solutions for their respective communications and/or collaboration products, such as Microsoft, which has invested significantly in its Microsoft Teams unified communication and collaboration product.
These companies are also able to integrate and bundle their services with a larger portfolio of offerings, which may make our products and services less appealing in comparison.
Many of our current and potential competitors have significantly greater resources, brand awareness and/or name recognition, more diversified offerings and a larger base of customers than we have.

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Gone since FY2025

These risks are discussed more fully below and include, but are not limited to: Risks Related to our Business and Industry • Our history of losses and anticipated continued losses. • Unpredictability of our future operating results. • Reductions in spending may result in reductions in revenue. • Future increases in our customer churn. • Dependence on new customer acquisition and retention and upsell to existing customers. • Intense competition in our industry. • Failure to manage and grow our indirect sales channels. • Complexity and length of enterprise customer sales cycle. • Dependence on new product and services to maintain and grow our business. • Difficulty attracting and retaining key management, technical and sales personnel. • We may not realize all of the anticipated benefits of our acquisitions, including Fuze, Inc. • Potential past and future liabilities related to federal, state, local and international taxes, fees, surcharges and levees. • We may incur impairments to goodwill, intangible assets or long-lived assets.
Risks Related to our Products and Operations • Service outages due to software vulnerabilities or failures of physical infrastructure. • Scalability of our cloud software services to meet existing and new customer demand. • International expansion, including geopolitical tensions and increasing costs of regulatory compliance. • Current and future acquisitions. • Our ability to maintain compatibility with third-party applications and mobile platforms. • Reliance on third-parties to provide network services and connectivity. • Reliance on third-party vendors for IP phones and certain software endpoints. • Difficulty executing local number porting requests.
Risks Related to Regulatory Matters • Cybersecurity breaches and malicious acts. • Liabilities related to credit card transaction processing services. • Failure to comply with data privacy and protection laws. • Services must comply with industry standards and government regulations including those related to telecommunications and cybersecurity.
Risks Related to our Debt, our Stock, and our Charter • Cash flow may be insufficient to service or pay down our substantial debt. • Inability to raise necessary funds in the future. • Conditional conversion features of our debt could adversely affect our financial condition. • Change in accounting standards, including for our debt, may cause adverse financial reporting fluctuations and affect our reported operating results. • Future sales of common stock or equity-linked securities. • Certain provisions in our charter may discourage takeover attempts.
We recorded operating income of approximately $15.2 million for the year ended March 31, 2025, and ended the period with an accumulated deficit of approximately $887.7 million.
We expect to continue to incur operating losses in the near future as we continue to invest in our business.
During our fiscal year ending March 31, 2026, we intend to continue to invest in sales and marketing and research and development, among other areas of our business, to compete more successfully for the business of companies that are transitioning to cloud communications and otherwise position ourselves to take advantage of long-term revenue-generating opportunities.
We expect to continue to incur losses for at least the next fiscal year and later, and we will need to increase our revenue to generate and sustain operating profitability in future periods.
The investments we have made in fiscal 2025 and beyond may not generate the returns that we anticipate, which could adversely impact our financial condition and make it more difficult for us to grow revenue and/or achieve profitability in the time period that we expect, or not at all.
In order to achieve profitability, we will need to manage our cost structure more efficiently and not incur significant liabilities, while continuing to grow our revenue.
Despite these efforts, our revenue may continue to decline, and/or we may incur significant losses in the future due to general economic conditions, increasing competition (including competitive pricing pressures and large competitors moving into our markets), decrease in customer demand, including from the imposition of tariffs or other governmental actions, the growth of the adoption or sustained use of the cloud communications market, or if we fail for any reason to continue to capitalize on growth opportunities.
Given our history of fluctuating revenue and operating losses, we cannot be certain that we will be able to achieve or maintain operating profitability in the future or that, if we do become profitable, we will sustain profitability.
These include, but are not limited to: • changes in the markets we compete in, including reductions in market growth or consolidation among competitors, channel partners, or customers, and the impact of macroeconomic conditions such as inflation, interest rates, recession, tariffs, geopolitical instability, and decreased economic output; • changes in customer demand, including cancellations, subscription downgrades, or substitution of our lower-priced, less feature-full products for our higher-priced, more feature-full products, particularly as customers transition to AI-based solutions; • changes in the competitive dynamics in our markets, including competitors increasing compensation payable to channel partners or increasing discounts or credits issued to customers; • lengthy sales cycles; • changes in regulatory requirements or lengthy regulatory approval cycles; • new product introductions by us or our competitors, including AI-based products and features; • unpredictability of usage-based revenue products that do not involve long-term subscription commitments; • the mix of our customer base, sales channels, and services sold; • the number of additional customers, on a net basis; • the amount and timing of costs associated with recruiting, training, and integrating new employees; • the retention of our senior management and other key employees, their ability to execute on our business plan and the loss of services of senior management or other key employees, whether in the past or in the future; • unforeseen costs and expenses related to the expansion of our business, operations, and infrastructure, including internationally; • our dependency on third-party vendors of hardware, software, and services that we resell to our customers, including the effects of supplier price increases which we are unable to pass along to our customers; • our ability to execute our operating plans successfully, including back-office system optimizations and increases in execution speed while also reducing costs and optimizing our operating margin; • continued compliance with industry standards and regulatory requirements; • decline in usage related to increases in return to office; • material security breaches or service interruptions due to cyberattacks or infrastructure failures or unavailability, which may result in additional expenses, losses, legal or regulatory actions, customer credits, and reputational harm; • introduction and adoption of our cloud software solutions in markets outside of the United States; and • litigation involving us, our industry, or both, including securities class action lawsuits.
It is possible that in some future periods our results of operations may be below the expectations of public market analysts and investors.
We also need to revise our business processes, systems, and controls, which require significant management attention and may negatively affect our financial reporting obligations.
We intend to reduce our total costs as a percentage of revenue, primarily impacting our sales and marketing expenses.
We have experienced a reduction in revenue recently, which may have resulted from our cost reduction initiatives.
Because of churn in our customer base, we must acquire new customers and sell additional 8x8 products and services to our existing customers on an ongoing basis to maintain our existing level of revenue.
Churn may also prevent us from increasing the price of our services in the future, as well as limit our ability to sell additional 8x8 products and services to our existing customers and we may need to renew certain customers at a lower rate, of which each case would adversely impact our revenue in the future.
Pricing, competitive products, and migration of our customers from Fuze or other legacy products all can contribute to churn.
If we are unable to maintain the quality and performance of our service whether due to a lack of feature parity or quality of service relative to the products of our competitors or service outages or disruptions, we could experience potentially sharp increases in customer cancellations and/or downgrades or customer credits which would adversely impact our revenue.
In addition to acquiring new customers, we generate new revenue by selling our existing customers additional quantities of subscribed services, or subscriptions to new or upgraded services.
We also face competition from Internet and cloud service companies such as Alphabet Inc.
Some of these competitors have developed software solutions for their respective communications and/or collaboration products, such as Microsoft, which is investing significantly in its Microsoft Teams unified communication and collaboration product.
Many of our current and potential competitors have greater resources and brand awareness and a larger base of customers than we have.
As a result, these competitors may have greater marketing credibility.
Announcements or expectations as to the introduction of new products and technologies by our competitors or us could cause customers to defer purchases of our existing products and services, which also could have a material adverse effect on our business, financial condition, or operating results.
The harm to our business may be magnified if we are unable to adjust our expenses to compensate for such shortfall, or if we determine that we need to increase our marketing and sales efforts in order to attract new customers and retain existing customers.
These channels consist of master agents and subagents, independent software vendors, system integrators, value-added resellers, and internet service providers, among others.
As our business with master- and sub-agent partners has increased, we have seen our commission payments to these partners become an increasing portion of our sales and marketing expenses.
To do so, we must continue to offer services that have quality, price, features, and other elements that compare favorably to those of competing services, ensure our partners are adequately trained and knowledgeable about our services, and provide sufficient incentives for these partners to sell our services in preference to those of our competitors while maintaining a cost-effective agency structure.
We operate in an emerging market that is characterized by rapid changes in customer requirements, frequent introductions of new and enhanced products and services, and continuing and rapid technological advancement, particularly in artificial intelligence (AI) and machine learning.
If we are unable to develop new products and services that address our customers' needs, to deliver our cloud software solution applications in one seamless integrated service offering that addresses our customers' needs, or to enhance and improve our products and services in a timely manner, we may not be able to achieve or maintain adequate market acceptance of our services.
We face intense competition from other providers of UCaaS, CCaaS and CPaaS, messaging, video, fax, virtual events, AI (including quality management, sales assistant and other AI driven functionalities), virtual assistant, work-force management/optimization and other communication products and services.
To the extent that we are unable to achieve market acceptance of our UCaaS and CCaaS products and services, we may be unable to recoup our research and development and marketing costs on the schedule we anticipated, and our results of operations may suffer.
Our ability to maintain or grow is also subject to the risk of future disruptive technologies.
If new technologies emerge that are able to deliver communications and collaboration solution services at lower prices, more efficiently, more conveniently, or more securely, such technologies could adversely impact our ability to compete.
This is particularly acute as AI and automation continues to transform our industry and we face the increasing risk that certain of our products and services may become redundant, that an over-reliance on AI and automation could lead to service disruptions, or that customers’ over-reliance on AI or automation will result in job cuts to roles in their IT departments which we have traditionally sold to, all of which may impact our ability to sell our products.
Volatility in, or lack of performance of, our stock price may also affect our ability to attract and retain key personnel.
We may not realize all of the anticipated benefits of the acquisition of Fuze, Inc.

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Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2025 ↗, FY2026 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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