8x8 Inc

ITEM 1A. Risk Factors

Investing in our securities involves risk. Prior to making a decision about investing in our securities, you should carefully consider the specific factors discussed below and under the heading Risk Factors in any prospectus supplement, together with all of the other information contained or incorporated by reference in this Quarterly Report. You should also consider the risk factors related to our business and operations described in Part I, Item 1A of the Form 10-K under the heading Risk Factors, which are incorporated by reference and in this QuParterly Report. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also affect our operations.

We have a substantial amount of indebtedness, which could have important consequences to our business.

We have a substantial amount of indebtedness. On August 11, 2022, we issued approximately $201.9 million aggregate principal amount of 4.00% convertible senior notes due February 1, 2028 (t II, Item 1A of the 2028 Notes), which bear interest at a rate of 4.00% per annum, payable semi-annually in arrears on February 1 and August 1 of each year, commencing on February 1, 2023, and will mature on February 1, 2028, unless earlier converted, redeemed or repurchased, pursuant to the indenture for the 2028 Notes. On August 5, 2024, we borrowed $200.0 million under a delayed draw term loan facility (the 2024 Term Loan) under a Credit Agreement entered into on July 11, 2024 (the 2024 Credit Agreement). The delayed draw term loan facility will mature on August 15, 2027 and initially bear interest at an annual rate equal to term Standard Overnight Financing Rate, plus a margin of either 2.50%, 2.75% or 3.00% based on our and our subsidiaries consolidated total net leverage ratio.

Our substantial indebtedness could have important consequences that could have a material adverse effect on our business, financial condition and results of operations, including the following:

requiring us to comply with restrictive covenants in our senior secured debt facility, which limits the manner in which we conduct our business, and which obligations under the Form 10-Q for the period ended June 30, 2024 Credit Agreement are guaranteed by our wholly-owned subsidiaries. For example, our 2024 Credit Agreement contains a consolidated interest coverage ratio financial covenant, a maximum consolidated total net leverage ratio financial covenant and a maximum consolidated secured leverage ratio financial covenant and contains affirmative and negative covenants customary for transactions of this type, including limitations with respect to share repurchases, indebtedness, liens, investments, dividends, disposition of assets, change in business, and transactions with affiliates;

making it more difficult for us to satisfy our obligations with respect to our indebtedness;

requiring us to dedicate a substantial portion of our cash flow from operations to debt service payments on our debt,under the heading "Risk Factors," which reduces the funds available for working capital, capital expenditures, acquisitions and other general are incorporate purposes;

limiting our flexibility in planning for, or reacting to, changes in the industry in which we operate;

placing us at a competitive disadvantage compared to any of our less-leveraged competitors;

increasing our vulnerability to both general and industry-specific adverse economic conditions;

potentially complicating our ability to refinance our debt under favorable conditions, or at all, which could further restrict our operational flexibility and increase our financing costs;

increasing our vulnerability to fluctuations in interest rates, particularly for any variable-rate debt; and

limiting our ability to obtain additional debt or equity financing to fund future working capital, capital expenditures, acquisitions or other general corporate requirements and increasing our cost of borrowing.

Servicing our debt, including the paying down of principal, requires the use of cash ad by reference in this Quarterly Report. Additional risks and liquidity of our clearing, cash management and custodial financial institutions, and we may not have sufficient cash flow from our business to pay down our debt.

As of June 30, 2024, we currently have approximately $201.9 million aggregate principal amount of the 2028 Notes outstanding, and as of August 5, 2024, we currently have approximately $200.0 million aggregate principal amount of the 2024 Term Loan outstanding.

Our ability to make scheduled payments of the principal of, pay interest on, or refinance our indebtedness, including the amounts payable under the 2028 Notes and the 2024 Term Loan, depends on our future performance, which is subject to economic, financial, competitive, and other factors beyond our control, such as recent and potential future disruptions in access to bank deposits or lending commitments due to bank failure, as well as iuncertainties not presently known the event of sustained deterioration in the liquidity, or failure, of our clearing, cash management and custodial financial institutions. The volatility of the global economy, changes in the credit market conditions, and fluctuations in interest rates could further complicate our ability to refinance our debt. Our business may not continue to generate cash flow from operations in the future sufficient to service our debt, including paying off the principal when due, and make necessary capital expenditures. Our notes are currently significantly out of the money, and our stock price

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would have to increase significantly for our notes to convert prior to o us or that we currently deem imaturity. If we are unable to generate such cash flow, we may be required to adopt one or more alternatives, such as selling assets, restructuring debt or obtaining additional equity capital on terms that may be onerous or highly dilutive. Our ability to refinance our indebtedness will depend on the capital markets and our financial condition at such time. We may also face heightened regulatory scrutiny or changes in financial regulation which could impact our refinancing options. We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on our debt obligationsmaterial may also affect our operations.