8X8 INC /DE/

Previous wording

We are a leading provider of software-as-a-service solutions for contact center, voice communications, video meetings, employee collaboration, and embeddable communication application program interfaces. Our solutions empower workforces worldwide by connecting individuals and teams so they can collaborate faster, work smarter, and better serve customers, from any location. The communications capabilities and advanced artificial intelligence/machine learning technologies of our contact center, communication and collaboration solutions are integrated into a comprehensive cloud-based offering powered by our global communications platform, which together comprise our 8x8 XCaaS platform solution. The XCaaS platform delivers our unified communications as-a-service, contact center as-a-service, and communications platform as-a-service services. It includes artificial intelligence-driven self service and digital assistance, intuitive user interfaces, and real-time business analytics and intelligence, enabling organizations of all sizes to design, deploy and adapt tailored communications and workflows for differentiated employee and customer experiences.

Current wording

We are a leading provider of software-as-a-service solutions for contact center, voice communications, video meetings, employee collaboration, and embeddable communication application program interfaces. Our solutions empower workforces worldwide by connecting individuals and teams so they can collaborate faster, work smarter, and better serve customers, from any location. The communications capabilities and advanced artificial intelligence/machine learning technologies of our contact center, communication and collaboration solutions are integrated into a comprehensive cloud-based offering powered by our global communications platform, which together comprise our 8x8 Platform for Customer Experience ("CX") solution. The Platform for CX delivers our unified communications as-a-service, contact center as-a-service, and communications platform as-a-service services. It includes artificial intelligence-driven self-service and digital assistance, intuitive user interfaces, and real-time business analytics and intelligence, enabling organizations of all sizes to design, deploy and adapt tailored communications and workflows for differentiated employee and customer experiences.

Previous wording

The 8x8 XCaaS platform delivers the security, scalability, high availability, and ease-of-use of a modern cloud-based architecture while masking the complexity of a global communications infrastructure. A comprehensive data layer across the platform powers 8x8 artificial intelligence/machine learning algorithms, as well as vertical-specific and purpose-built applications from our ecosystem of technology partners. This enables data-driven business insights that can drive employee productivity, resource optimization, and more effective end-customer interactions through simplified and automated workflows. Built with core cloud technologies that we own and manage internally, as well as integrated third-party applications from our technology partners, our XCaaS platform enables agile workplaces and fosters seamless communications and collaboration between an organization’s customers, contact center agents, and employees, regardless of geographic location.

Current wording

The Platform for CX delivers the security, scalability, high availability, and ease-of-use of a modern cloud-based architecture while masking the complexity of a global communications infrastructure. A comprehensive data layer across the platform powers 8x8 artificial intelligence/machine learning algorithms, as well as vertical-specific and purpose-built applications from our ecosystem of technology partners. This enables data-driven business insights that can drive employee productivity, resource optimization, and more effective end-customer interactions through simplified and automated workflows. Built with core cloud technologies that we own and manage internally, as well as integrated third-party applications from our technology partners, our Platform for CX enables agile workplaces and fosters seamless communications and collaboration between an organization’s customers, contact center agents, and employees, regardless of geographic location.

Previous wording

While the implications of macroeconomic events on our business, results of operations and overall financial position remain uncertain over the long term, we expect that adverse economic conditions will continue to adversely impact our business in future periods. For example, our installed base business, which includes more than 52,000 small businesses, continues to experience macroeconomic headwinds.

Current wording

While the implications of macroeconomic events on our business, results of operations and overall financial position remain uncertain over the long term, we expect that adverse economic conditions will continue to adversely impact our business in future periods. For example, our installed base business, which includes more than 51,000 small businesses, continues to experience macroeconomic headwinds.

Previous wording

As part of our long-term strategy to grow our revenue, achieve profitability, and increase cash flow, we have focused on expanding our mid-market, enterprise and public sector customer base. We believe that continued innovation is a critical factor in attracting and retaining these customers and is an important variable in achieving sustainable growth. We are committed to maintaining a high level of investment in engineering to deliver product innovation across our XCaaS platform, expand our ecosystem of integrated third-party applications, and maintain the high availability our customers require.

Current wording

As part of our long-term strategy to grow our revenue, achieve profitability, and increase cash flow, we have focused on expanding our mid-market, enterprise and public sector customer base. We believe that continued innovation is a critical factor in attracting and retaining these customers and is an important variable in achieving sustainable growth. We are committed to maintaining a high level of investment in engineering to deliver product innovation across our Platform for CX, expand our ecosystem of integrated third-party applications, and maintain the high availability our customers require.

Previous wording

To assess the success of our strategies to achieve growth and increase our cash flow, management reviews our financial performance as presented in our consolidated financial statements, including trends in revenue, gross profit margin, losses from operations, and cash flow generated by operations in absolute dollars and as a percentage of revenue as presented in the following table:

Current wording

To assess the success of our strategies to achieve growth and increase our cash flow, management reviews our financial performance as presented in our consolidated financial statements, including trends in revenue, gross profit margin, income (loss) from operations, and cash flow generated by operations in absolute dollars and as a percentage of revenue as presented in the following table:

Previous wording

General and administrative expenses consist primarily of personnel and related costs, professional services fees, corporate administrative costs, tax and regulatory fees, and allocated information technology and facilities costs.

Current wording

General and administrative expenses consist primarily of personnel and related costs, professional services fees, corporate administrative costs, state and local taxes and regulatory fees, and allocated information technology and facilities costs.

Previous wording

Provision for (benefit from) income taxes consist primarily of foreign income taxes and state minimum taxes in the United States. As we expand the scale of our international business activities, any changes in the United States and foreign taxation of such activities may increase our overall provision for income taxes in the future. We have a valuation allowance for our United States deferred tax assets, including federal and state non-operating loss carryforwards. We expect to maintain this valuation allowance until it becomes more likely than not that the benefit of our federal and state deferred tax assets will be realized by way of expected future taxable income in the United States.

Current wording

Provision for income taxes consist primarily of foreign income taxes and state minimum taxes in the United States. As we expand the scale of our international business activities, any changes in the United States and foreign taxation of such activities may increase our overall provision for income taxes in the future. We have a valuation allowance for our United States deferred tax assets, including federal and state non-operating loss carryforwards. We expect to maintain this valuation allowance until it becomes more likely than not that the benefit of our federal and state deferred tax assets will be realized by way of expected future taxable income in the United States.

Previous wording

Service revenue decreased by $2.7 million, or 1.5%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. This change was driven by a decrease in revenue from subscriptions of $3.8 million primarily due to a decline in revenue from customers on the Fuze platform partially offset by an increase of $1.1 million in platform usage revenue.

Current wording

Service revenue decreased by $1.6 million, or 0.9%, for the three months ended December 31, 2024 compared to the three months ended December 31, 2023. This change was driven by a decrease in revenue from subscriptions of $4.3 million primarily due to a decline in revenue from customers on the Fuze platform partially offset by an increase of $2.7 million in platform usage revenue.

Previous wording

Service revenue decreased by $5.1 million, or 1.5%, for the six months ended September 30, 2024 compared to the six months ended September 30, 2023. This change was driven by a decrease in revenue from subscriptions of $9.6 million primarily due to a decline in revenue from customers on the Fuze platform offset by an increase of $4.5 million in platform usage revenue.

Current wording

Service revenue decreased by $6.8 million, or 1.3%, for the nine months ended December 31, 2024 compared to the nine months ended December 31, 2023. This change was driven by a decrease in revenue from subscriptions of $13.9 million primarily due to a decline in revenue from customers on the Fuze platform offset by an increase of $7.1 million in platform usage revenue.

Previous wording

Other revenue decreased by $1.3 million, or 17.9%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023, due to lower professional service and product revenue of $0.9 million and $0.4 million, respectively.

Current wording

Other revenue decreased by $4.5 million, or 21.3%, for the nine months ended December 31, 2024 compared to the nine months ended December 31, 2023, due to lower professional service and product revenue of $2.7 million and $1.8 million, respectively.

Previous wording

Cost of service revenue increased by $1.1 million, or 2.3%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023, primarily due to an increase of $3.1 million in costs to deliver our subscription and platform usage services. This increase was partially offset by decreases of $1.1 million related to the amortization of capitalized software, $0.6 million in salaries, benefits, and consulting costs, and $0.3 million in software costs.

Current wording

Cost of service revenue increased by $1.5 million, or 3.2%, for the three months ended December 31, 2024 compared to the three months ended December 31, 2023, primarily due to an increase of $4.0 million in costs to deliver our subscription and platform usage services. This increase was partially offset by decreases of $0.9 million in amortization of capitalized software and $1.6 million in salaries, benefits, and consulting costs.

Previous wording

Cost of service revenue increased by $4.3 million, or 4.5%, for the six months ended September 30, 2024 compared to the six months ended September 30, 2023, primarily due to an increase of $8.2 million in costs to deliver our subscription and platform usage services. This increase was partially offset by decreases of $2.3 million related to the amortization of capitalized software, $1.0 million in software costs, and $0.6 million in salaries, benefits, and consulting costs.

Current wording

Cost of service revenue increased by $5.9 million, or 4.1%, for the nine months ended December 31, 2024 compared to the nine months ended December 31, 2023, primarily due to an increase of $12.2 million in costs to deliver our subscription and platform usage services. This increase was partially offset by decreases of $3.2 million related to the amortization of capitalized software, $2.1 million in salaries, benefits, and consulting costs, and $1.0 million in software costs.

Previous wording

Cost of other revenue decreased by $1.1 million, or 6.7%, for the six months ended September 30, 2024 compared to the six months ended September 30, 2023, primarily due to $0.4 million decreased salaries, benefits, and consulting costs to deliver our professional services coupled with $0.7 million lower product costs associated with IP telephone hardware.

Current wording

Cost of other revenue increased by $0.1 million, or 1.3%, for the three months ended December 31, 2024 compared to the three months ended December 31, 2023, primarily due to a decrease of $0.1 million in salaries, benefits, and consulting costs to deliver our professional services.

Previous wording

Cost of other revenue decreased by $0.4 million, or 4.9%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023, primarily due to $0.1 million decreased salaries, benefits, and consulting costs to deliver our professional services coupled with $0.3 million lower product costs associated with IP telephone hardware.

Current wording

Cost of other revenue decreased by $1.0 million, or 4.3%, for the nine months ended December 31, 2024 compared to the nine months ended December 31, 2023, primarily due to a decrease of $0.7 million in lower product costs associated with IP telephone hardware coupled with a decrease of $0.3 million in salaries, benefits, and consulting costs to deliver our professional services.

Previous wording

Research and development expenses decreased by $2.9 million, or 8.5%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023, primarily due to a decrease of $2.0 million in stock-based compensation and $0.9 million in combined salaries, benefits, consulting and other costs necessary for us to conduct our product, platform development and engineering efforts.

Current wording

Research and development expenses decreased by $3.0 million, or 9.0%, for the three months ended December 31, 2024 compared to the three months ended December 31, 2023, primarily due to decreases of $2.0 million in stock-based compensation, $1.3 million in facilities costs, $0.8 million in combined salaries, benefits, and consulting costs, and $0.3 million in other costs necessary for us to conduct our product, platform development and engineering efforts. These decreases were partially offset by increases of $1.0 million in costs to operate data centers and $0.4 million in internally-developed software.

Previous wording

Research and development expenses decreased by $6.1 million, or 8.7%, for the six months ended September 30, 2024 compared to the six months ended September 30, 2023, primarily due to a decrease of $4.6 million in stock-based compensation and $1.5 million in combined salaries, benefits, consulting and other costs necessary for us to conduct our product, platform development and engineering efforts.

Current wording

Research and development expenses decreased by $9.0 million, or 8.8%, for the nine months ended December 31, 2024 compared to the nine months ended December 31, 2023, primarily due to decreases of $6.6 million in stock-based compensation, $4.0 million in combined salaries, benefits, consulting and other costs, and $1.5 million in facilities and other costs necessary for us to conduct our product, platform development and engineering efforts. These decreases were partially offset by increases of $2.1 million in costs to operate data centers and $1.0 million in internally-developed software.

Previous wording

Sales and marketing expenses decreased by $3.8 million, or 5.6%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023, primarily due to decreases of $2.3 million in channel commissions and amortization of deferred commissions, $1.9 million in stock-based compensation expense, and $0.5 million in paid media and other marketing services costs. These decreases were partially offset by an increase of $0.9 million in salaries, benefits, and consulting costs.

Current wording

Sales and marketing expenses decreased by $1.4 million, or 2.0%, for the three months ended December 31, 2024 compared to the three months ended December 31, 2023, primarily due to decreases of $2.3 million in channel commissions and amortization of deferred commissions and $1.7 million in stock-based compensation expense. These decreases were partially offset by increases of $1.4 million in paid media and other marketing services costs and $1.2 million in salaries, benefits, and consulting costs.

Previous wording

Sales and marketing expenses decreased by $5.2 million, or 3.8%, for the six months ended September 30, 2024 compared to the six months ended September 30, 2023, primarily due to decreases of $3.7 million in stock-based compensation expense, $2.8 million in channel commissions and amortization of deferred commissions, and $1.1 million in paid media and other marketing services costs. These decreases were partially offset by an increase of $2.4 million in salaries, benefits, and consulting costs.

Current wording

Sales and marketing expenses decreased by $6.6 million, or 3.2%, for the nine months ended December 31, 2024 compared to the nine months ended December 31, 2023, primarily due to decreases of $5.4 million in stock-based compensation expense and $5.2 million in channel commissions and amortization of deferred commissions. These decreases were partially offset by an increase of $3.7 million in salaries, benefits, and consulting costs and $0.3 million in paid media and other marketing services costs.

Previous wording

General and administrative expenses decreased by $7.7 million, or 28.1%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023, primarily due to a $7.2 million decrease associated with Fuze, Inc. legal, regulatory and tax matters. During the three months ended September 30, 2024, we adjusted accruals related to USF and other Fuze, Inc. legal, regulatory and tax matters and recognized a benefit of $3.2 million, compared to $4.3 million of expenses recognized during the three months ended September 30, 2023. The decrease was also due to decreases of $1.0 million in stock-based compensation expense and $0.6 million in salaries, benefits, and consulting costs. These decreases were partially offset by an increase of $1.1 million in other general corporate costs.

Current wording

General and administrative expenses decreased by $6.8 million, or 29.0%, for the three months ended December 31, 2024 compared to the three months ended December 31, 2023, primarily due to a $6.0 million decrease associated with Fuze, Inc. legal, regulatory and state and local tax matters. During the three months ended December 31, 2024, we adjusted accruals related to USF and other Fuze, Inc. legal, regulatory and state and local tax matters and recognized a benefit of $6.0 million. The decrease was also due to decreases of $0.6 million in stock-based compensation expense and $0.2 million in salaries, benefits, and consulting costs.

Previous wording

General and administrative expenses decreased by $10.9 million, or 20.2%, for the six months ended September 30, 2024 compared to the six months ended September 30, 2023, primarily due to a $8.2 million decrease associated with Fuze, Inc regulatory and tax matters. During the six months ended September 30, 2024, we adjusted accruals related to USF and other Fuze, Inc. legal, regulatory and tax matters and recognized a benefit of $3.2 million, compared to $5.5 million of expenses recognized during the six months ended September 30, 2023. The decrease was also due to decreases of $2.4 million in salaries, benefits, and consulting costs and $1.4 million in stock-based compensation expense. These decreases were partially offset by an increase of $1.1 million in other general corporate costs.

Current wording

General and administrative expenses decreased by $17.7 million, or 22.9%, for the nine months ended December 31, 2024 compared to the nine months ended December 31, 2023, primarily due to a $14.7 million decrease associated with Fuze, Inc regulatory and state and local tax matters. During the nine months ended December 31, 2024, we adjusted accruals related to USF and other Fuze, Inc. legal, regulatory and state and local tax matters and recognized a benefit of $9.2 million, compared to $5.5 million of expenses recognized during the nine months ended December 31, 2023. The decrease was also due to decreases of $2.5 million in salaries, benefits, and consulting costs and $2.0 million in stock-based compensation expense. These decreases were partially offset by an increase of $1.5 million in other general corporate costs.

Previous wording

Interest expense decreased by $2.2 million, or 21.4%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023, primarily due to the 2022 Term Loan debt extinguishment and decreased interest rate and principal on the 2024 Term Loan. See Note 8, Convertible Senior Notes and Term Loan, for further details.

Current wording

Interest expense decreased by $4.2 million, or 41.8%, for the three months ended December 31, 2024 compared to the three months ended December 31, 2023, primarily due to the 2022 Term Loan debt extinguishment and decreased interest rate and principal on the 2024 Term Loan. See Note 8, Convertible Senior Notes and Term Loan, for further details.

Previous wording

Interest expense decreased by $2.3 million, or 11.3%, for the six months ended September 30, 2024 compared to the six months ended September 30, 2023, primarily due to the 2022 Term Loan debt extinguishment and decreased interest rate and principal on the 2024 Term Loan. See Note 8, Convertible Senior Notes and Term Loan, for further details.

Current wording

Interest expense decreased by $6.5 million, or 21.4%, for the nine months ended December 31, 2024 compared to the nine months ended December 31, 2023, primarily due to the 2022 Term Loan debt extinguishment and decreased interest rate and principal on the 2024 Term Loan. See Note 8, Convertible Senior Notes and Term Loan, for further details.

Previous wording

We recognized $12.7 million of other expense, net during the three months ended September 30, 2024 compared to $4.8 million of other expense, net during the three months ended September 30, 2023, primarily due to a $12.0 million loss of debt extinguishment due to the payoff of the 2022 Term Loan, a $3.3 million increase in loss on foreign exchange and other expenses, and a $2.5 million gain on the remeasurement of warrants issued in connection with the term loan. These expense increases were offset by a $0.3 million increase in interest income earned on highly liquid investments.

Current wording

We recognized $0.8 million of other income, net during the three months ended December 31, 2024 compared to $1.3 million of other expense, net during the three months ended December 31, 2023, primarily due to a $2.2 million decrease in loss on foreign exchange and other expenses and a decrease of $0.5 million in gain on the remeasurement of warrants issued in connection with the term loan. These expense decreases were offset by a $0.6 million decrease in interest income earned on highly liquid investments.

Previous wording

We recognized $11.0 million of other expense, net during the six months ended September 30, 2024 compared to $2.4 million of other expense, net during the six months ended September 30, 2023 primarily due to a $10.2 million increase on loss of debt extinguishment due to the payoff of the 2022 Term Loan, a $3.4 million increase in loss on foreign exchange and other expenses, and a $0.5 million gain on the remeasurement of warrants issued in connection with the term loan. These expense increases were offset by a $0.7 million increase in interest income earned on highly liquid investments.

Current wording

We recognized $10.2 million of other expense, net during the nine months ended December 31, 2024, compared to $1.1 million of other income, net during the nine months ended December 31, 2023, primarily due to a $10.4 million increase on loss of debt extinguishment due to the payoff of the 2022 Term Loan and a $0.9 million increase in loss on foreign exchange and other expenses.

Previous wording

The provision for income taxes increased by $1.5 million for the three months ended September 30, 2024 compared to the three months ended September 30, 2023, driven by an increase in forecasted foreign tax expense of $0.6 million and an increase in forecasted state tax expense of $0.6 million, a decrease in our ASC 740-10 contingent liability of $0.5 million offset by a decrease in forecasted federal tax expense of $0.2 million.

Current wording

The provision for income taxes increased by $1.1 million for the nine months ended December 31, 2024 compared to the nine months ended December 31, 2023, driven by an increase in estimated United States cash taxes of $0.9 million and an increase in foreign income tax expense of $0.2 million.

Previous wording

The following is a summary of our cash and cash equivalents and investments:

Current wording

The following is a summary of our cash and cash equivalents and investments (in thousands):

Previous wording

The following is a summary of our cash flows provided by (used in) operating, investing and financing activities:

Current wording

The following is a summary of our cash flows provided by (used in) operating, investing and financing activities (in thousands):

Previous wording

Cash provided by operating activities decreased by $13.5 million to $30.5 million for the six months ended September 30, 2024, mainly due to a decrease in cash received from customers and an increase in cash paid to suppliers and employees along with an increase in cash paid for sales commission costs. Cash used in investing activities decreased $19.9 million to $7.2 million for the six months ended September 30, 2024, mainly due to decreases in the purchases, sales, and maturities of investments. Cash used in financing activities increased by $2.5 million to $25.1 million for the six months ended September 30, 2024, due to payments for debt issuance costs and other financing activities.

Current wording

Cash provided by operating activities decreased by $8.7 million to $57.7 million for the nine months ended December 31, 2024, mainly due to an increase in cash paid to suppliers and employees partially offset by an increase in cash received from customers. Cash used in investing activities decreased $22.5 million to $10.2 million for the nine months ended December 31, 2024, mainly due to decreases in the purchases, sales, and maturities of investments. Cash used in financing activities increased by $36.5 million to $59.1 million for the nine months ended December 31, 2024, mainly due to principal repayments for our term loan, payments for debt issuance costs, and other financing activities.

Previous wording

The 2024 Term Loan bears interest at an annual rate equal to Term SOFR, plus a margin of either 2.50%, 2.75% or 3.00% based on the consolidated total net leverage ratio of the Company and its subsidiaries. The initial margin will be 3.00% for the fiscal quarter ending September 30, 2024. We have the option to pay interest monthly, quarterly, or semi-annually. During the three months ended September 30, 2024, we elected monthly interest payment terms which resulted in cash payments of $2.9 million from August 5, 2024. During the three months ended December 31, 2024, we have elected quarterly interest payment terms, which will result in cash payments of $3.4 million. The scheduled principal repayments of $22.5 million in fiscal year 2025 ($7.5 million on October 31, 2024, December 31, 2024 and March 31, 2025, respectively), $37.5 million in fiscal year 2026 ($7.5 million on June 30, 2025 and $10.0 million on September 30, 2025, December 31, 2025 and March 31, 2026, respectively), and $47.5 million in fiscal year 2027 ($10.0 million on June 30, 2026, $12.5 million on September 30, 2026 and each quarter thereafter through maturity) are required, and the remaining $92.5 million principal is due before or upon maturity in fiscal year 2028. These annualized repayments will be made in quarterly installments. As of September 30, 2024, the debt issuance costs are amortized to interest expense over the term of the 2024 Term Loan at an effective interest rate of 8.76%.

Current wording

The 2024 Term Loan bears interest at an annual rate equal to Term SOFR, plus a margin of either 2.50%, 2.75% or 3.00% based on the consolidated total net leverage ratio of the Company and its subsidiaries. The initial margin will be 3.00% for the fiscal quarter ending September 30, 2024. We have the option to pay interest monthly, quarterly, or semi-annually. During the three months ended December 31, 2024, we elected quarterly payment terms which resulted in cash payments of $3.2 million. During the three months ended March 31, 2025, we have elected monthly interest payment terms, which will result in cash payments of approximately $2.9 million. As of August 5, 2024, the scheduled principal repayments of $22.5 million in fiscal year 2025 ($7.5 million on October 31, 2024, December 31, 2024 and March 31, 2025, respectively), $37.5 million in fiscal year 2026 ($7.5 million on June 30, 2025 and $10.0 million on September 30, 2025, December 31, 2025 and March 31, 2026, respectively), and $47.5 million in fiscal year 2027 ($10.0 million on June 30, 2026, $12.5 million on September 30, 2026 and each quarter thereafter through maturity) are required, and the remaining $92.5 million principal is due before or upon maturity in fiscal year 2028. These annualized repayments will be made in quarterly installments. As of December 31, 2024, the debt issuance costs are amortized to interest expense over the term of the 2024 Term Loan at an effective interest rate of 8.69%.

Previous wording

As of March 31, 2024, our material cash requirements and other obligations were $690.1 million. During the three months ended September 30, 2024, we entered into a $24.1 million noncancelable three-year hosting service contract. Under this agreement, $7.1 million remains due during fiscal year 2025, $8.5 million will be due during fiscal year 2026, $6.0 million will be due during fiscal year 2027 and $2.5 million will be due during fiscal year 2028. For information regarding our material cash requirements and other obligations, see Item 7, "Management's Discussion and Analysis", in our fiscal year 2024 Form 10-K.

Current wording

As of March 31, 2024, our material cash requirements and other obligations were $690.1 million. During the nine months ended December 31, 2024, we entered into a $24.1 million noncancelable three-year hosting service contract. Under this agreement, $4.5 million remains due during fiscal year 2025, $8.5 million will be due during fiscal year 2026, $6.0 million will be due during fiscal year 2027 and $2.5 million will be due during fiscal year 2028. For information regarding our material cash requirements and other obligations, see Item 7, "Management's Discussion and Analysis", in our Form 10-K.

Previous wording

Our consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP"). See Note 1, The Company and Significant Accounting Policies, in the notes to the unaudited condensed consolidated financial statements included in this Quarterly Report, which describes the significant accounting policies and methods used in the preparation of our consolidated financial statements. There have been no significant changes during the six months ended September 30, 2024 to our critical accounting policies and estimates previously disclosed in our Form 10-K.

Current wording

Our consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP"). See Note 1, The Company and Significant Accounting Policies, in the notes to the unaudited condensed consolidated financial statements included in this Quarterly Report, which describes the significant accounting policies and methods used in the preparation of our consolidated financial statements. There have been no significant changes during the nine months ended December 31, 2024 to our critical accounting policies and estimates previously disclosed in our Form 10-K.