Finance & Investment Club PHO 206 – 10/03/2012

1. General Meeting #4 Finance & Investment Club PHO 206 – 10/03/2012

2. Finance Club Long-term Goals Long-term Goals Education • To offer an educational, real-life opportunity for aspiring investment professionals Community • To foster lasting relationships amongst our membership in Boston University and beyond Alpha • To continue professional procedures to maintain an alpha generating process Growth • Personal, career and fund growth

3. Stock Pitch: 8x8, Inc. Finance & Investment Club Telecommunications Sector Kevin Ng – Investment Associate ArlindHoxha – Investment Asscoiate Fall 2012

4. Company Overview • 8x8, Inc. markets and provides telecommunications services for Internet Protocol telephones and video applications mainly for business customers. The company is also expanding its line of services to include • contact center services • web-based conferencing • unified communications services • cloud based computing services • The company uses Voice over Internet Protocol technology which allows customers to place calls through the internet rather than through traditional switching methods that are more costly and harder to implement 8x8 (NASDAQ: EGHT)

5. Focusing on Services Has Fueled Revenue Growth • Company is focused on increasing its number of services and retaining customers • The number of services subscribed to per business customer grew to 10.1 in the first quarter of FY13 in comparison to 8.4 in the same period last year • The churn rate fell to a record low of 1.7% in 1Q13, down from 2% at the end of FY12 • More services and greater retention have fueled revenue growth • Average revenue per business user grew to a record high of $250 in 1Q13, up from $200 a year earlier 3 year Revenue CAGR = 16.34%

6. VoIP Market Growth in the U.S. • Expected to grow from 12% market share of sector in 2010, to 32% by 2015 • VoIP subscribers are expected to grow from 21 million in 2010 to almost 70 million by 2015 (CAGR of 27%) • By 2013, an estimated 79% of U.S. businesses will be using VoIP technologies Government Sector Small & Medium Businesses (SMB) Large Enterprises SMBs allocated 10% of spending to cloud bundles in 2011, expected to increase to 15% by 2015 40% of surveyed organizations use videoconferencing services or applications Strongest penetration rate with over 48% having VoIP in at least one location 41% of SMBs have already switched to VoIP with an additional 20% switching next year Saves money by reducing operating costs over time while boosting the customer experience Simplifies infrastructure and management complexity while being easy to use

7. 8x8: Positioned for Market Penetration • Dominates the SMB market by providing comprehensive VoIP services • Larger competitors cannot focus on advertising VoIP without drawing business away from other segments • Offers a full-fledged contact center typically unaffordable for SMBs • Cloud communication services can be installed without an IT person and potentially save hundreds of thousands Small & Medium Businesses (SMB) 8x8 • Competitive advantage in pricing • Acquisition of Contactual in 2012 brought in dozens of large enterprises for potential cross-selling services Large Enterprises Government Sector • Partnered with Level3 (LVLT) for Networx and WITS 3 Contracts With more than 80 competitors, top market share of Hosted IP lines installed in 2011 (7.9%)

8. Patents and Patent Value

9. Risks

10. Conclusion 8x8 could potentially be a good investment because of 1)Revenue growth created by its focus on customers and services 2) The company’s position to take advantage of a growing market 3) Strong patent portfolio which makes the company a takeover target However, the company could be overvalued at a price of 6.36 (as of 10/16) • EV/EBITDA of 41.26x is above the comparable mean and median of 7.85 and 3.76, respectively Company reports earnings on 10/24- do we get in before or after?

11. Back Up Slides

12. Industry Breakdown and Summary Industry Breakdown by Market Cap ($BN)Market Share by TTM Revenue *Domestic and Foreign Telecom($908.1 BN), Diversified Communication Services($102.7 BN), Communication Equipment($3931.8 BN), Wireless Communications ($37114.6 BN)

13. Comparable Company Analysis

14. Guest Speaker Presentation

15. Leaderboard Update Healthcare’s FadiHumaid

16. Leaderboard Update Technology’s Vivian Chen

17. Employment Opportunities • Company: Bank of America Merrill Lynch • Positions: Investment Banking Summer Analyst,Global Capital Markets Summer Analyst • Location: New York • When: Summer 2013 • Requirements: Junior standing, 3.2 minimum GPA • Send resume to buinvest@bu.edu by 11:59pm on October 21st • Company: Citigroup • Position: Sales & Trading Summer Analyst • Location: New York • When: Summer 2013 • Requirements: Junior standing • Send resume to buinvest@bu.edu by 11:59pm on October 21st

18. Veritas 5th Annual Conference Veritas Financial Group -Sheraton Commander (16 Garden Street, Cambridge, MA) -Saturday, November 3rd, around 10:30AM - 4:30PM -The event is free and open to all college students -Lunch is also provided MANDATORY REGISTRATION: http://tinyurl.com/vfgconference2012

19. Upcoming Speaker Events Next Meeting: October 24th, PHO 206 Wear Business Professional • Aaron Klein – Vice President • Joined Keybanc in 2005 where he serves in the Clean Tech & Energy groups. Aaron is a graduate of Ohio University