8x8, Inc. has a market cap of $355.9 million; its shares were traded at around $5.08 with a P/E ratio of 38.7 and P/S ratio of 4.2.
Highlight of Business Operations:Product revenue consists primarily of revenue from sales of IP telephones attributable to our 8x8 service. Product revenue increased in the first quarter of fiscal 2012 primarily due to an increase in equipment sales to business customers. No customer represented greater than 10% of our total revenue for the three months ended June 30, 2012 and 2011. Revenue from customers outside the United States was not material for the three months ended June 30, 2012 or 2011.
The cost of service revenue primarily consists of costs associated with network operations and related personnel, telephony origination and termination services provided by third party carriers and technology license and royalty expenses. Cost of service revenue for the three months ended June 30, 2012 increased over the comparable period in the prior fiscal year primarily due to a $1.0 million increase in third party network service expenses, a $0.3 million increase in payroll and related costs, a $0.2 million increase in temporary personnel, consulting and outside service expenses, a $0.2 million increase in amortization expenses due to intangibles acquired in acquisition of businesses and a $0.2 million increase in depreciation expense.
The cost of product revenue consists of costs associated with systems, components, system manufacturing, assembly and testing performed by third-party vendors, estimated warranty obligations and direct and indirect costs associated with product purchasing, scheduling, quality assurance, shipping and handling. The amount of revenue allocated to product revenue based on the relative selling price is less than the cost of the IP phone equipment. The cost of product revenue for the three months ended June 30, 2012 increased over the comparable period in the prior fiscal year primarily due to an increase in the shipment of equipment to customers.
Net cash provided by operating activities for the three months ended June 30, 2012 was approximately $14.9 million, compared with $2.1 million for the three months ended June 30, 2011. The increase in cash flow was primarily due to a $12.0 million gain on the sale of a patent family in June 2012 and an increase in service and product revenue in the first three months of fiscal 2012. Cash provided by operating activities has historically been affected by the amount of net income, sales of subscriptions, changes in working capital accounts particularly in deferred revenue due to timing of annual plan renewals, add-backs of non-cash expense items such as the use of deferred tax assets, depreciation and amortization and the expense associated with stock-based awards.
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