\nSAN JOSE, Calif.–(BUSINESS WIRE)–\u00a08×8, Inc. (NASDAQ:EGHT), provider of innovative cloud communications and\u00a0computing solutions, today announced it has sold its dedicated server hosting business to The IRC Company, Inc. (dba Black Lotus Communications) for $3 million in cash. The transaction signed and closed on September 30, 2013.<\/p>\n
The dedicated server hosting business, acquired by 8×8 in May 2010, provided managed hosting services on dedicated servers to 288 customers as of June 30, 2013. For the fiscal year ended March 31, 2013, this business generated revenue of approximately $3.8 million and $753,000 in the first quarter of fiscal 2014. 8×8\u2019s Infrastructure as a Service (IaaS) and Desktop as a Service (DaaS) cloud hosting business is not included in this transaction. The Company will report a gain of approximately $1 million related to this transaction in the second quarter of fiscal 2014.<\/p>\n
\u201cThe sale of our dedicated server hosting business enables 8×8 to sharpen its focus on the continued innovation and adoption of our core, cloud-based business service offerings,\u201d said 8×8 CEO Vik Verma. \u201cAt the same time, this strategic transaction will have a positive effect on our gross margins and growth rates, further illustrating the success and profitability of our cloud-based business model.\u201d<\/p>\n
Excluding revenue from the dedicated server hosting business, reported revenue from business customers in the first quarter of fiscal 2014 increased 24% from the amount reported for the first quarter of fiscal\u00a02013, compared with the previously announced growth rate of 22%. Gross margin in the first quarter of fiscal 2014 was 72%, excluding dedicated server hosting revenue and cost of sales, compared with 71%, including dedicated server hosting revenue and cost of sales. Income from operations for the dedicated server hosting business was approximately $251,000 in the first quarter of fiscal 2014 and approximately $823,000 in fiscal 2013.<\/p>\n
\u201cBlack Lotus is looking forward to working with our new clients in supporting their needs,\u201d said Shawn Marck, Chief Technology Officer of Black Lotus. \u201cOur culture is driven by exceeding expectations and delivering business solutions through technology<\/a>. We now have three data centers in the United States; Los Angeles, Silicon Valley and Northern Virginia.\u201d<\/p>\n NCC International represented 8×8, Inc. on an exclusive basis and provided financial advisory services during the transaction. 8×8 is providing the following unedited pro forma consolidated\u00a0statements of income as additional information for investors to consider with this release.<\/p>\n","protected":false},"excerpt":{"rendered":"