eght-20250630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


			FORM			10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________to _________

Commission file number: 001-38312

_________________

8x8, INC.

(Exact name of Registrant as Specified in its Charter)

_________________


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

675 Creekside Way

Campbell, CA 95008


(Address of principal executive offices)

(408) 727-1885


(Registrant's telephone number, including area code)

_________________

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of each exchange on which registered
COMMON STOCK, PAR VALUE $0.001 PER SHARE	EGHT	Nasdaq Global Select Market

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

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

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

Large accelerated filer

☐

Accelerated filer

☒

Non-accelerated filer

☐

Smaller reporting company

☒

Emerging growth company

☐

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

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

The number of shares of the Registrant's Common Stock outstanding as of July 31, 2025 was 136,368,843.

Table of Contents

8X8, INC.

INDEX TO QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTER ENDED JUNE 30, 2025


			Page
Forward-Looking Statements and Risk Factors			2
PART I. FINANCIAL INFORMATION			3
Item 1. Financial Statements (unaudited):			3
Condensed Consolidated Balance Sheets			3
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)			4
Condensed Consolidated Statements of Stockholders' Equity			5
Condensed Consolidated Statements of Cash Flows			6
Notes to Unaudited Condensed Consolidated Financial Statements			7
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			20
Item 3. Quantitative and Qualitative Disclosures About Market Risk			28
Item 4. Controls and Procedures			28
PART II. OTHER INFORMATION			29
Item 1. Legal Proceedings			29
Item 1A. Risk Factors			29
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			29
Item 3. Defaults Upon Senior Securities			29
Item 4. Mine Safety Disclosures			29
Item 5. Other Information			30
Item 6. Exhibits			30
Signature			31

Table of Contents

Forward-Looking Statements and Risk Factors

Statements contained in this quarterly report on Form 10-Q, or this "Quarterly Report", regarding our expectations, beliefs, estimates, intentions or strategies are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. For example, words such as "may," "will," "should," "estimates," "predicts," "potential," "continue," "strategy," "believes," "anticipates," "plans," "expects," "intends," and similar expressions are intended to identify forward-looking statements. These forward-looking statements include, but are not limited to, statements regarding: industry trends; our number of customers; growth and cost of service revenue; research and development expenses; costs related to our continued growth initiatives; sales and marketing expenses; gross profit margin; general and administrative expenses in future periods; liquidity; indebtedness; capital; cash, cash equivalents and investment balances; and anticipated cash flows. You should not place undue reliance on these forward-looking statements. Actual results and trends may differ materially from historical results and those projected in any such forward-looking statements depending on a variety of factors. These factors include, but are not limited to:

•the impact of economic downturns on us and our customers;

•the impact of cost increases and general inflationary pressures, as well as supply chain shortages and disruptions, on our operating expenses;

•risks related to our secured term loan facility due in 2027 and convertible senior notes due in 2028, including the impact of increased interest expense and timing of any future repayments or refinancing on our stock price;

•customer cancellations and rate of customer churn;

•ongoing volatility and tensions in the political and economic environment, including from trade wars and tariffs, the impact of Russia’s invasion of Ukraine and conflicts in the Middle East, and any related macro-economic impacts;

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

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

•the quality and reliability of our services;

•our ability to scale our business;

•customer acquisition costs;

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

•complexity and length of enterprise customer sales cycle;

•dependence on new products and services to maintain and grow our business;

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

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

•risk of failure in our physical infrastructure;

•risk of defects or bugs in our software;

•risk of cybersecurity breaches;

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

•continued compliance with industry standards and regulatory and privacy requirements, globally;

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

•risks that any reduction in spending may not achieve the desired result or may result in a reduction in revenue;

•risks related to the acquisition and integration of businesses we have acquired or may acquire in the future, including most recently, Fuze, Inc.;

•risks related to the fluctuations in the value of the United States Dollar and other currencies that underlie our business transactions;

•risks related to our substantial amount of indebtedness, which could have important consequences to our business;

•potential past and future liabilities related to federal, state, local and international taxes, fees, surcharges and levees;

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

•risk of inability to use third-party or open source software; and

•risks related to natural disasters, war, terrorist attacks, global pandemics and other unforeseen events.

Please refer to the "Risk Factors" section of our annual report on Form 10-K for the fiscal year ended March 31, 2025, as filed with the SEC on May 22, 2025 (the "Form 10-K"), and subsequent Securities and Exchange Commission ("SEC") filings for additional factors that could materially affect our financial performance. All forward-looking statements included in this Quarterly Report are based on information available to us on the date hereof, and we assume no obligation to update any such forward-looking statements. Readers are urged to carefully review and consider the various disclosures made in this Quarterly Report, which attempts to advise interested parties of the risks and factors that may affect our business, financial condition, results of operations and prospects. Our fiscal year ends on March 31 of each calendar year. Each reference to a fiscal year in this Quarterly Report refers to the fiscal year ended March 31 of the calendar year indicated (for example, fiscal year 2026 refers to the fiscal year ending March 31, 2026). Unless the context requires otherwise, references to "we," "us," "our," "8x8," and the "Company" refer to 8x8, Inc. and its consolidated subsidiaries. All dollar amounts within this Quarterly Report are in thousands of United States Dollars ("Dollars") unless otherwise noted.

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. Financial Statements

8X8, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited, in thousands, except per share amounts)


	June 30, 2025		March 31, 2025
ASSETS
Current assets:
Cash and cash equivalents	$	81,315	$	88,050
Restricted cash	105		462

Accounts receivable, net	60,514		49,680
Deferred contract acquisition costs	29,679		30,935
Other current assets	36,367		34,739
Total current assets	207,980		203,866
Property and equipment, net	47,972		47,919
Operating lease, right-of-use assets	32,260		33,508
Intangible assets, net	64,474		67,949
Goodwill	274,476		271,530
Restricted cash, non-current	812		812
Deferred contract acquisition costs, non-current	42,197		44,239
Other assets, non-current	14,177		13,354
Total assets	$	684,348	$	683,177

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	42,890	$	45,773
Accrued and other liabilities	73,768		63,025
Operating lease liabilities	11,003		11,102
Deferred revenue	42,130		37,751
Term loan, current	6,648		11,593
Total current liabilities	176,439		169,244
Operating lease liabilities, non-current	47,010		49,196
Deferred revenue, non-current	645		706
Convertible senior notes, non-current	199,039		198,790
Term loan	129,695		139,581
Other liabilities, non-current	3,330		3,456
Total liabilities	556,158		560,973
Commitments and contingencies (Note 7)
Stockholders' equity:
Preferred stock: $0.001 par value, 5,000 shares authorized, none issued and outstanding as of June 30, 2025 and March 31, 2025	—		—
Common stock: $0.001 par value, 300,000 shares authorized, 135,747 shares and 134,355 shares issued and outstanding as of June 30, 2025 and March 31, 2025, respectively	136		134
Additional paid-in capital	1,022,943		1,018,902
Accumulated other comprehensive loss	(2,853)		(9,111)
Accumulated deficit	(892,036)		(887,721)
Total stockholders' equity	128,190		122,204
Total liabilities and stockholders' equity	$	684,348	$	683,177

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

Table of Contents

8X8, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(Unaudited, in thousands except per share amounts)


	Three Months Ended June 30,
	2025		2024
Service revenue	$	176,308	$	172,801
Other revenue	5,053		5,346
Total revenue	181,361		178,147
Cost of service revenue	53,822		49,496
Cost of other revenue	7,099		7,691
Total cost of revenue	60,921		57,187
Gross profit	120,440		120,960
Operating expenses:
Research and development	28,364		32,137
Sales and marketing	68,184		67,106
General and administrative	23,327		23,091

Total operating expenses	119,875		122,334
Income (loss) from operations	565		(1,374)
Interest expense	(3,968)		(9,956)
Other income (expense), net	364		1,716
Loss before provision for income taxes	(3,039)		(9,614)
Provision for income taxes	1,276		676
Net loss	$	(4,315)	$	(10,290)
Net loss per share:
Basic and diluted	$	(0.03)	$	(0.08)

Weighted average number of shares:
Basic and diluted	134,809		125,999

Comprehensive income (loss)
Net loss	$	(4,315)	$	(10,290)
Unrealized loss on investments in securities	—		(5)
Foreign currency translation adjustment	6,258		(354)
Comprehensive income (loss)	$	1,943	$	(10,649)

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

Table of Contents

8X8, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(Unaudited, in thousands)


	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total
	Shares	Amount
Balance at March 31, 2025	134,355	$	134	$	1,018,902	$	(9,111)	$	(887,721)	$	122,204
Issuance of common stock under stock plans	2,692	3		(3)		—		—		—
Common shares withheld for settlement of taxes in connection with equity-based compensation	(300)	—		(489)		—		—		(489)
Repurchase of common stock	(1,000)	(1)		(1,847)		—		—		(1,848)
Stock-based compensation expense	—	—		6,380		—		—		6,380

Foreign currency translation adjustment	—	—		—		6,258		—		6,258
Net loss	—	—		—		—		(4,315)		(4,315)
Balance at June 30, 2025	135,747	$	136	$	1,022,943	$	(2,853)	$	(892,036)	$	128,190


	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total
	Shares	Amount
Balance at March 31, 2024	125,194	$	125	$	973,895	$	(11,553)	$	(860,509)	$	101,958
Issuance of common stock under stock plans	2,769	3		(3)		—		—		—
Stock-based compensation expense	—	—		13,279		—		—		13,279
Unrealized investment loss	—	—		—		(5)		—		(5)
Foreign currency translation adjustment	—	—		—		(354)		—		(354)
Net loss	—	—		—		—		(10,290)		(10,290)
Balance at June 30, 2024	127,963	$	128	$	987,171	$	(11,912)	$	(870,799)	$	104,588

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

Table of Contents

8X8, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, in thousands)


	Three Months Ended June 30,
	2025		2024
Cash flows from operating activities:
Net loss	$	(4,315)	$	(10,290)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation	1,690		1,908
Amortization of intangible assets	3,501		5,099
Amortization of capitalized internal-use software costs	2,673		3,758
Amortization of debt discount and issuance costs	336		1,062
Amortization of deferred contract acquisition costs	8,956		9,838
Allowance for credit losses	290		334
Operating lease expense, net of accretion	2,854		3,165

Stock-based compensation expense	6,352		12,801
Loss on debt extinguishment	81		—
Gain on remeasurement of warrants	(209)		(1,747)

Other	(368)		581
Changes in assets and liabilities:
Accounts receivable, net	(9,503)		(732)
Deferred contract acquisition costs	(4,471)		(4,803)
Other current and non-current assets	(2,997)		(658)
Accounts payable and accruals	3,347		(1,413)
Deferred revenue	3,656		(755)
Net cash provided by operating activities	11,873		18,148
Cash flows from investing activities:
Purchases of property and equipment	(377)		(382)
Capitalized internal-use software costs	(4,039)		(3,025)

Purchase of cost investment	—		(771)
Maturities of investments	—		1,048
Net cash used in investing activities	(4,416)		(3,130)
Cash flows from financing activities:

Payments for repurchases of common stock	(1,848)		—

Repayment of principal on term loan	(15,000)		—

Other financing activities	(489)		(352)
Net cash used in financing activities	(17,337)		(352)
Effect of exchange rate changes on cash	2,788		(164)
Net increase (decrease) in cash and cash equivalents	(7,092)		14,502
Cash, cash equivalents and restricted cash, beginning of year	89,324		116,723
Cash, cash equivalents and restricted cash, end of period	$	82,232	$	131,225

Supplemental disclosures of cash flow information:
Interest paid	$	2,567	$	6,707
Income taxes paid	$	574	$	479
Payables and accruals for property and equipment	$	21	$	3,574

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

Table of Contents

8X8, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — UNAUDITED

1. The Company and Significant Accounting Policies

The Company

8x8, Inc. ("8x8" or the "Company") was incorporated in California in February 1987 and was reincorporated in Delaware in December 1996. The Company trades under the symbol "EGHT" on the Nasdaq Global Select Market.

The Company is a leading Software-as-a-Service ("SaaS") provider of contact center, voice, video, chat, and enterprise-class API solutions powered by one global cloud communications platform. 8x8 empowers workforces worldwide by connecting individuals and teams, so they can collaborate faster and work smarter from anywhere. 8x8 provides real-time business analytics and intelligence, giving its customers unique insights across all interactions and channels on its platform, so they can support a distributed and hybrid working model while delighting their end-customers and accelerating their business. A majority of all revenue is generated from communication services subscriptions and platform usage. The Company also generates revenue from sales of hardware and professional services, which are complementary to the delivery of its integrated technology platform.

Basis of Presentation and Consolidation

The accompanying condensed consolidated financial statements are unaudited and have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") and regulations of the Securities and Exchange Commission ("SEC") regarding interim financial reporting. Accordingly, certain information and disclosures normally included in the Company's annual consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements as of and for the fiscal year ended March 31, 2025 and notes thereto included in the Form 10-K. There were no material changes during the three months ended June 30, 2025 to the Company's significant accounting policies as described in the Form 10-K.

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

In the opinion of the Company's management, these condensed consolidated financial statements reflect all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair statement of the Company's financial position, results of operations and cash flows for the periods presented. The results of operations for the interim periods presented are not necessarily indicative of the results to be expected for any subsequent quarter or for the entire year ending March 31, 2026.

Change in Reporting Presentation

Historically, interest expense has been presented within other income (expense), net. During the second quarter of fiscal year 2025, the Company made voluntary changes in accounting presentation and reclassified prior period amounts to conform to current year presentation to separately state interest expense on the Company's condensed consolidated statement of operations.

Use of Estimates

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

Table of Contents

Recently Issued Not Yet Adopted Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which expands disclosures in an entity’s income tax rate reconciliation table and disclosures regarding cash taxes paid both in the U.S. and foreign jurisdictions. The standard is effective for annual periods beginning after December 15, 2024, and will therefore be adopted by the Company in its Form 10-K for the fiscal year ending March 31, 2026. The Company is currently evaluating the impact that this guidance will have on its consolidated financial statements and annual income tax disclosures.

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses (Topic 220): Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures, and issued subsequent amendments to the implementation guidance (including ASU 2025-01), which requires companies to disclose additional information about specific expense categories in the notes to financial statements. The update will be effective for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. The Company is currently evaluating the impact that this guidance will have on the presentation of its consolidated financial statements and accompanying notes.

In November 2024, the FASB issued ASU No. 2024-04, Debt (Topic 470): Debt with Conversion and Other Options, which clarifies whether the induced conversion guidance can be applied to the settlement of a convertible debt instrument that does not require the issuance of equity securities upon conversion. This ASU is effective for fiscal years beginning after December 15, 2025, and interim periods within fiscal years beginning after December 15, 2026. The Company is currently evaluating the impact that this guidance will have on the presentation of its consolidated financial statements and accompanying notes.

In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, providing a practical expedient to calculating current expected credit loss by assuming that the current conditions as of the balance sheet date will not change for the remaining life of the asset. This expedient can only be applied to current accounts receivable and current contract assets. This update is effective for annual reporting periods beginning after December 15, 2025 and interim periods within those annual periods, and this update is applied prospectively. The Company is evaluating the impact the that this guidance will have on its consolidated financial statements and accompanying notes.

There have been no other recent accounting pronouncements, changes in accounting pronouncements or recently adopted accounting guidance during the three months ended June 30, 2025 that are of significance or potential significance to us.

2. Revenue

Disaggregation of Revenue

The following tables set forth the revenue geographic information for each period (in thousands):


	Three Months Ended June 30,
	2025		2024
United States	$	113,091	$	122,858
United Kingdom	30,731		29,206
Other International	37,539		26,083
Total revenue	$	181,361	$	178,147

Contract Balances

The following table provides amounts of contract assets and deferred revenue from contracts with customers (in thousands):


	June 30, 2025		March 31, 2025
Contract assets, current (component of Other current assets)	$	8,109	$	7,009
Contract assets, non-current (component of Other non-current assets)	8,111		7,268
Deferred revenue, current	42,130		37,751
Deferred revenue, non-current	645		706

Contract assets are recorded for contract consideration not yet invoiced but for which the performance obligations are completed. Contract assets, net of allowances for credit losses, are included in other current assets or other assets in the Company's consolidated balance sheets, depending on if their reduction will be recognized during the succeeding twelve-month period or beyond.

The change in contract assets was primarily driven by billing customers for amounts that had previously been recognized in revenue but not yet billed. During the three months ended June 30, 2025 and 2024, the Company recognized revenues of approximately $16.5 million and $15.5 million that were included in deferred revenue at the beginning of the fiscal year, respectively.

Table of Contents

Remaining Performance Obligations

The Company's subscription terms typically range from one year to five years. Contract revenue from the remaining performance obligations that had not yet been recognized as of June 30, 2025 was approximately $755.0 million. This amount excludes contracts with an original expected length of less than one year. The Company expects to recognize revenue on approximately 83% of the remaining performance obligations over the next 24 months and approximately 17% over the remainder of the subscription period. For purposes of this disclosure, the Company excludes contracts with an original expected length of less than one year.

Deferred Contract Acquisition Costs

Deferred sales commissions are considered incremental and recoverable costs of acquiring customer contracts. Amortization of deferred contract acquisition costs for the three months ended June 30, 2025 and 2024 was approximately $9.0 million and $9.8 million, respectively. There were no material write-offs during the three months ended June 30, 2025 and 2024.

The following table provides amounts of deferred contract acquisition costs from contracts with customers (in thousands):


	June 30, 2025		March 31, 2025
Deferred contract acquisition costs	$	29,679	$	30,935
Deferred contract acquisition costs, non-current	42,197		44,239

3. Fair Value Measurements

Cash, cash equivalents, and available-for-sale investments were as follows (in thousands):


	As of June 30, 2025
	Amortized Costs		Estimated Fair Value		Cash and Cash Equivalents		Restricted Cash (Current & Non-Current)
Cash	$	65,052	$	65,052	$	64,240	$	812
Level 1:
Money market funds	17,180		17,180		17,075		105




Total assets	$	82,232	$	82,232	$	81,315	$	917


	As of March 31, 2025
	Amortized Costs		Estimated Fair Value		Cash and Cash Equivalents		Restricted Cash (Current & Non-Current)
Cash	$	64,765	$	64,765	$	63,953	$	812
Level 1:
Money market funds	24,559		24,559		24,097		462





Total assets	$	89,324	$	89,324	$	88,050	$	1,274

As of June 30, 2024, cash, cash equivalents and restricted cash of $131.2 million included $130.8 million and $0.5 million of cash and cash equivalents, restricted cash and non-current restricted cash, respectively.

To support its current operations, the Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. The restricted cash component of the money market funds is comprised of letters of credit securing leases for certain office facilities and an accrued holdback related to a business combination.

The Company uses the Black-Scholes option-pricing valuation model to value its detachable warrants from inception and at each reporting period. During the three months ended June 30, 2025, the Company used historical volatility to determine the fair value of the warrants liability due to the low trading volume and moneyness assessment as of June 30, 2025. Changes in the fair values of the detachable warrants liability are recorded as a gain (loss) on warrants remeasurement within other income (expense), net in the condensed consolidated statements of operations and comprehensive income (loss).

The following table presents additional information about valuation techniques and inputs used for the detachable warrants (see Note 8, Convertible Senior Notes and Term Loan) that are measured at fair value and categorized within Level 3 as of June 30, 2025 and March 31, 2025 (dollars in thousands):

Table of Contents


	June 30, 2025			March 31, 2025
Estimated fair value of detachable warrants	$	887		$	1,096
Unobservable inputs:
Stock volatility	79.7		%	79.8		%
Risk-free rate	3.7		%	3.9		%
Expected term	2.1 years			2.4 years

As of June 30, 2025 and March 31, 2025, the estimated fair value of the Company’s convertible senior notes due in 2028 was $171.2 million and $171.1 million, respectively (see Note 8, Convertible Senior Notes and Term Loan). The fair value of the convertible senior notes was determined based on the closing price of each of the securities on the last trading day of the reporting period, and each is Level 2 in the fair value hierarchy due to limited trading activity of the debt instruments. As of June 30, 2025 and March 31, 2025, the carrying value of the Company’s Term Loan approximates its estimated fair value.

4. Financial Statement Components

Accounts receivable, net consisted of the following (in thousands):


	June 30, 2025		March 31, 2025
Trade accounts receivable	$	61,586	$	50,839
Unbilled trade accounts receivable	5,905		4,972
Less: allowance for credit losses	(1,744)		(1,898)
Less: allowance for sales reserves	(5,233)		(4,233)
Total accounts receivable, net	$	60,514	$	49,680

Allowance for credit losses and sales reserves consisted of the following (in thousands):


	Three Months Ended June 30, 2025				Year Ended March 31, 2025
	Credit Losses		Sales Reserves		Credit Losses		Sales Reserves
Beginning balance	$	(1,898)	$	(4,233)	$	(2,746)	$	(2,502)
(Reserve) provision	(212)		(2,496)		(1,001)		(5,355)
Write-offs (recoveries)	366		1,496		1,849		3,624
Ending balance	$	(1,744)

SEC Form 10-Q filed by 8x8 Inc