8x8 Inc · NASDAQ:EGHT
8x8 — Investor Presentation (September 2006)
25 slides from 8x8's investor presentation, Sep 18, 2006
Slide 1: 8x8, Inc. Company Overview
1-866-TRY-VOIP 8x8, Inc. (Nasdaq:EGHT) Company Overview September 18, 2006 © 2006 8x8 Inc. (Nasdaq: EGHT) 1
Slide 2: Safe Harbor Statement
Safe Harbor Statement • During the course of this meeting, and any question and answer and demonstration period afterwards, representatives of the Company may make forward-looking statements regarding future events or the future financial performance of the Company, including statements about future
Slide 3: Who is 8x8?
Who is 8x8? • Founded – 1987 • IPO – 1997 Nasdaq:EGHT • Internet telephony innovator: – Launched service – www.packet8.net November 2002 – First Virtual Office business plan March 2004 – First consumer VoIP E911 offering June 2004 – First consumer VoIP videophone service June 2004 – First integrated
Slide 4: Financial Summary
Financial Summary © 2006 8x8 Inc. (Nasdaq: EGHT) 4
Slide 5: EGHT Stock Performance
EGHT Stock Performance (all data as of 9/15/2006) Returns as of 8/31/2006 VoIP Sector Equity Performance VOII.OB VG ITUI.OB Since Vonage IPO EGHT YTD Performance DVW DDDC CALL © 2006 8x8 Inc. (Nasdaq: EGHT) 5 -100% -50% 0% 50% 100%
Slide 6: Selected Income Statement Data
Selected Income Statement Data (in millions, except per share and line amounts) (6/2006 results include stock option expense of $663K, or 5.4% of revenues for the quarter. We were not required to report such expense in prior quarters.) Quarter Ended 12/05 3/06 6/06 Total Revenues $8.5 $10.3 $12.3 Gr
Slide 7: Selected Balance Sheet Data
Selected Balance Sheet Data (in millions) 30-Jun-06 Cash and Investments $17.8 Total Assets 20.8 Total Debt 0.0 Stockholders' Equity $15.0 Shares Outstanding 61.0 © 2006 8x8 Inc. (Nasdaq: EGHT) 7
Slide 8: Packet8 Revenues
Packet8 Revenues Revenue (thousands) $14,000 $12,000 $10,000 $8,000 $6,000 $4,000 $2,000 $0 4Q03 2Q04 4Q04 2Q05 4Q05 2Q06 4Q06 Fiscal Quarter (year end is 3/31) • 10 consecutive quarters of increasing revenues • Raised $60M to date to fund Packet8 © 2006 8x8 Inc. (Nasdaq: EGHT) 8
Slide 9: Financial & Operational Highlights
Financial & Operational Highlights Fiscal Q1 (Quarter ended Jun 30 ‘06) • 19% increase in revenues Subscriber Lines in Service 160,000 over the Mar ’06 quarter 140,000 • Quarterly revenue more than doubled same period 120,000 last year 100,000 • Quarterly net loss narrowed 80,000 14% (including stoc
Slide 10: Gross Margin Improvements – Business & Video Services
Gross Margin Improvements – Business & Video Services • Sustainable business models – Gross margins are higher for both video and business services • June 30 ’06: Virtual Office was 19% of deployed lines, but represented approximately 25% of Packet8 revenues • Higher margins also result from more on
Slide 11: Gross Margin Improvements – Other Sources
Gross Margin Improvements – Other Sources • Equipment costs are declining – Product margins have improved from (96%) to (36%) in two quarters and will continue to improve as we have eliminated free activation effective 7/1/2006. • Network termination & origination costs are declining – We have added
Slide 12: 8x8's Strategy is Working
8x8’s Strategy is Working • Monthly net loss has narrowed to less than $1M Numbers are unaudited and include stock-based compensation charges of $663K for the first fiscal quarter (quarter ended June 2006). Stock-based compensation charges for July and August are estimated on the assumption that the
Slide 13: 8x8's Strategy is Working
8x8’s Strategy is Working • Forecasting that monthly positive cash flow will be achieved during calendar Q1 2007 • Forecasting that cash bottoms at approximately $10M Based on these assumptions: • 8x8 is not seeking additional capital • 8x8 is not planning a reverse stock split © 2006 8x8 Inc. (Nasd
Slide 14: Residential Market & Services
Residential Market & Services © 2006 8x8 Inc. (Nasdaq: EGHT) 14
Slide 15: Packet8 Residential Voice Offerings
Packet8 Residential Voice Offerings • $19.99/month residential plan – US phone number of your choice + unlimited US & Canada calls • More than 4,000 rate centers available – Includes: Voicemail, caller ID, call waiting, 3-way calling, call forwarding, “*”-dialing features, call waiting caller ID, ca
Slide 16: Packet8 Softphones & Videophones
Packet8 Softphones & Videophones • VoIP with free video – Free softphone • Free in-network calling • $5.99/month PSTN service – $199 videophone (direct) • $19.99/month service • Includes all residential voice services + free video • TV-like 2-way video – “Star Trek Experience” – Just like using a te
Slide 17: Small, Micro & Home Business Market and Services
Small, “Micro” & Home Business Market and Services © 2006 8x8 Inc. (Nasdaq: EGHT) 17
Slide 18: U.S. Small Business Market
U.S. Small Business Market • 99% of all Businesses are SMBs Fortune 1000 – Just the tip! Large Business (1,000+) – 8K Mid-size Business (100–999) – 93K Small Business (<100) – 7.9M Home Business – 15M © 2006 8x8 Inc. (Nasdaq: EGHT) 18
Slide 19: Packet8 Virtual Office
Packet8 Virtual Office TM • Groups individual Packet8 lines into a virtual PBX – Extensions can be located anywhere in the world • Targets small businesses with “extension-based” feature sets • Compelling price – $39.99 per month per extension – Unlimited calls in the U.S. and Canada – International
Slide 20: Value proposition for small businesses
Value proposition for small businesses • Small businesses are used to large phone bills from legacy providers as a cost of doing business. – Many are still paying $0.05-$0.07/minute for local calls! • Before Packet8 Virtual Office, small businesses had two choices for a multi-line phone system – Cen
Slide 21: New for 2006
New for 2006 © 2006 8x8 Inc. (Nasdaq: EGHT) 21
Slide 22: New Business IP FAX Services
New Business IP FAX Services • Nationwide, reliable business-quality FAX over IP service • FAX services can be immediately provisioned on the 2nd line of any Packet8 Virtual Office business phone terminal adapter © 2006 8x8 Inc. (Nasdaq: EGHT) 22
Slide 23: Packet8 Softalk v. 1.5 / Softalk Office
Packet8 Softalk v. 1.5 / Softalk Office • Enhanced user interface with H.264 video – Twice the video quality at the same bandwidth • Seamless integration with Packet8 Virtual Office – Included with the Intel 600SM PCI Phone Adapter on new motherboard reference designs © 2006 8x8 Inc. (Nasdaq: EGHT)
Slide 24: New Packet8 Videophone
New Packet8 Videophone • H.264 video (twice the video quality of the current DV326 videophone at the same bandwidth) • Cost below $200 • Available January 2007 © 2006 8x8 Inc. (Nasdaq: EGHT) 24
Slide 25: Summary
Summary • Achieving positive cash flow and profitability is 8x8’s highest priority • 8x8’s differentiated VoIP services are not just about lower phone bills – they’re also about things you cannot do with a legacy phone line – Customizable business-class telecommunications services for small and mult