8x8 (EGHT) risk factors, FY2025 10-K

Risks Related to our Business and Industry

1. 01We have a history of losses, have incurred significant negative cash flows in the past, and anticipate continuing losses in the future. As such, we may not be able to achieve or maintain profitability in the future
2. 02Our future operating results, including revenue, expenses, losses, profits, and operating cash flow, may vary substantially from period to period and may be difficult to predict. As a result, we may fail to meet or exceed the expectations of market analysts or investors, which could negatively impact our stock price
3. 03It is possible that in some future periods our results of operations may be below the expectations of public market analysts and investors
4. 04Any reduction in our spending may not achieve the desired result or may result in a reduction in revenue
5. 05Churn in our customer base adversely impacts our revenue and requires us to spend money to retain existing customers and to capture replacement customers. If we experience increases in customer churn in the future, our revenue growth will be adversely impacted and our customer retention costs will increase
6. 06Our success hinges on our ability to acquire new customers and retain and sell additional services to our existing customers
7. 07Intense competition for new customers and retention of existing customers (including pricing pressure) in the markets in which we compete may prevent us from increasing or sustaining our revenue growth, or achieving and maintaining profitability, which could materially harm our business
8. 08Failure to grow and manage our network of indirect sales channels partners could materially and adversely impact our revenue in the future
9. 09As we increase sales to enterprise customers, our sales process has become more complex and resource-intensive, our average sales cycle has become longer, and the difficulty in predicting when sales will be completed has increased
10. 10The market for cloud software solutions is subject to rapid technological change, and we depend on new product and service introductions in order to maintain and grow our business
11. 11To 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
12. 12We may have difficulty attracting or retaining senior management and other personnel with the industry experience and technical skills necessary to support our desired growth
13. 13We may not realize all of the anticipated benefits of the acquisition of Fuze, Inc
14. 14Our ability to use our net operating losses or research tax credits to offset future taxable income is subject to certain limitations
15. 15We may incur impairments to goodwill, intangible assets, or long-lived assets which could negatively impact our operating results and financial condition

Risks Related to our Products and Operations

1. 16We may not be able to scale our business operations efficiently or quickly enough to meet our customers' growing needs, leading to increased customer churn and damage to reputation and brand, each of which could harm our operating results
2. 17Because our long-term growth strategy involves continued expansion outside the United States, our business will be susceptible to risks associated with international operations
3. 18Global geopolitical developments, such as wars, sanctions, trade disputes, or other international tensions, could adversely affect us
4. 19Although we have acquired several companies and business units in recent years, including Fuze, we have limited experience with purchasing and integrating other businesses. We may not be able to identify suitable acquisition candidates in the future or negotiate and complete acquisitions on favorable terms
5. 20If we do not or cannot maintain the compatibility of our communications and collaboration software with third-party applications and mobile platforms that our customers use in their businesses, our revenue could decline
6. 21To provide our services, we rely on third parties for our network service and connectivity, and any disruption or deterioration in the quality of these services or the increase in the costs we incur from these third parties could adversely affect our business, results of operations, and financial condition
7. 22We depend on third-party vendors for IP phones and certain software endpoints, and any delay or interruption in supply by these vendors would result in delayed or reduced shipments to our customers and may harm our business
8. 23Difficulty executing local number porting requests could negatively impact our business

Risks Related to Regulatory Matters

1. 24Cyber intrusions, breaches of our networks or systems or those of our service and cloud storage providers, and other malicious acts could adversely impact our business
2. 25We could be liable for breaches of security on our website, fraudulent, improper or illegal activities by our users, or the failure of third-party vendors to deliver credit card transaction processing services, which could result in claims, increase the cost of operations or otherwise harm our business and reputation
3. 26Failure to comply with laws and contractual obligations related to data privacy and protection could have a material adverse effect on our business, financial condition and operating results
4. 27Our products and services must comply with industry standards, FCC regulations, state, local, country-specific, and international regulations, and changes may require us to modify existing services, potentially increase our costs or prices we charge customers, and otherwise harm our business

Risks Related to Intellectual Property

1. 28If we are found to be infringing on a third party's proprietary technology, our business could be disrupted
2. 29Inability to protect our proprietary technology would disrupt our business
3. 30Our inability to use software licensed from third parties, or our use of open-source software under license terms that interfere with our proprietary rights, could disrupt our business

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

1. 31We have a substantial amount of indebtedness, which could have important consequences to our business
2. 32As of May 12, 2025, we currently have approximately $201.9 million aggregate principal amount of the 2028 Notes and $137.0 million of the Term Loan outstanding
3. 33We may not have the ability to raise the funds necessary to settle conversions of the new notes in cash or repurchase the new notes upon a fundamental change, and our future debt may contain limitations on our ability to pay cash upon conversion or repurchase of the new notes
4. 34The conditional conversion feature of our Notes, if triggered, may adversely affect our financial condition and operating results
5. 35Changes in financial accounting standards or practices may cause adverse, unexpected financial reporting fluctuations and affect our reported operating results
6. 36Future sales of our common stock or equity-linked securities in the public market could lower the market price of our common stock, and a sustained decrease in our stock price could jeopardize our Nasdaq listing
7. 37Certain provisions in our charter documents and Delaware law could discourage takeover attempts
8. 38These provisions might result in our stock trading at a lower price due to perceptions of decreased acquisition potential
9. 39Macroeconomic and Geopolitical Conditions Could Adversely Affect Our Business, Financial Condition, and Results of Operations
10. 40We may not be able to secure financing on favorable terms, or at all, to meet our future capital needs
11. 41Natural disasters, war, terrorist attacks, global pandemics, or malicious conduct, among other unforeseen events, could disrupt our operations and negatively impact our services and financial results