Ooma, Inc. (NYSE: OOMA), a smart communications platform for businesses and consumers, today released financial results for the fiscal second quarter ended July 31, 2022.

Second Quarter Fiscal 2023 Financial Highlights:

  • Revenue: Total revenue was $52.7 million, up 12% year-over-year. Subscription and services revenue increased to $48.0 million from $43.5 million in the second quarter of fiscal 2022, and was 91% of total revenue, primarily driven by the growth of Ooma Business.
  • Net Income/Loss: GAAP net income was $0.3 million, or $0.01 per basic and diluted share, compared to GAAP net loss of $0.4 million, or $0.02 per basic and diluted share, in the second quarter of fiscal 2022. GAAP net income for the second quarter includes a tax benefit for the release of a $2.0 million valuation allowance resulting from the recording of certain intangible assets in connection with the acquisition of OnSIP announced today. Non-GAAP net income was $3.0 million, or $0.12 per diluted share, compared to non-GAAP net income of $3.3 million, or $0.13 per diluted share in the prior year period.
  • Adjusted EBITDA: Adjusted EBITDA was $4.0 million, compared to $4.1 million in the second quarter of fiscal 2022.

For more information about non-GAAP net income and Adjusted EBITDA, see the section below titled "Non-GAAP Financial Measures" and the reconciliation provided in this release.

“Ooma achieved strong results for Q2, with revenue increasing 12% year-over-year to $52.7 million, improved gross margins, and solid non-GAAP net income,” said Eric Stang, chief executive officer of Ooma. “Ooma’s investment in new features for Ooma Office, market and channel development for Ooma Enterprise, international expansion to serve a large multinational customer, and the development and Q2 launch of AirDial all contributed to growth. We believe these initiatives represent a powerful strategy going forward. In addition, I’m excited to announce that Ooma acquired Junction Networks Inc., which does business as OnSIP. This acquisition will add approximately 50,000 new business users to Ooma and is expected to be accretive starting in Q4 of this year. It’s my pleasure to welcome all of OnSIP’s employees to the Ooma family.”

Business Outlook:

For the third quarter of fiscal 2023, Ooma expects:

  • Total revenue in the range of $56.0 million to $56.5 million.
  • GAAP net loss in the range of $1.6 million to $2.1 million and GAAP net loss per share in the range of $0.06 to $0.08.
  • Non-GAAP net income in the range of $2.7 million to $3.2 million and non-GAAP net income per share in the range of $0.11 to $0.13.

For the full fiscal year 2023, Ooma expects:

  • Total revenue in the range of $215.5 million to $218.5 million.
  • GAAP net loss in the range of $3.3 million to $4.3 million, and GAAP net loss per share in the range of $0.13 to $0.17.
  • Non-GAAP net income in the range of $11.4 million to $12.4 million, and non-GAAP net income per share in the range of $0.45 to $0.49.

The following is a reconciliation of GAAP net loss to non-GAAP net income and GAAP basic and diluted net loss per share to non-GAAP diluted net income per share guidance for the fiscal third quarter ending October 31, 2022 and the fiscal year ending January 31, 2023 (in millions, except per share data):

Projected range Three Months Ending Fiscal Year Ending October 31, 2022 January 31, 2023 (unaudited) GAAP net loss

($1.6)-($2.1

)

($3.3)-($4.3

)

Stock-based compensation and related taxes

3.6

 

14.1

 

Amortization of intangible assets and acquisition-related costs

1.2

3.6

 

Acquisition-related income tax benefit

 

(2.0

)

Non-GAAP net income

$2.7-$3.2

 

$11.4-$12.4

 

  GAAP net loss per share

($0.06)-($0.08

)

($0.13)-($0.17

)

Stock-based compensation and related taxes

0.14

 

0.56

 

Amortization of intangible assets and acquisition-related costs

0.05

 

0.14

 

Acquisition-related income tax benefit

 

(0.08

)

Non-GAAP net income per share

$0.11-$0.13

 

$0.45-$0.49

 

  Weighted-average number of shares used in per share amounts: Basic

24.6

 

24.5

 

Diluted

25.2

 

25.3

 

Conference Call Information:

Ooma will host a conference call and live webcast for analysts and investors today at 5:00 p.m. Eastern time. The news release with the financial results will be accessible from the company's website prior to the conference call.

Parties in the United States and Canada can access the call by dialing +1 (888) 550-5744, using conference ID 4726540. International parties can access the call by dialing +1 (646) 960-0223, using conference ID 4726540.

The webcast will be accessible on the Events and Presentations page of Ooma’s investor relations website, https://investors.ooma.com, for a period of at least one year. A telephonic replay of the conference call will be available from approximately two hours after the call is completed or about 8:00 p.m. Eastern time on September 1, 2022 until 11:59 p.m. Eastern time Thursday, September 8, 2022. To access the replay, parties in the United States and Canada should call +1 (800) 770-2030 and use conference code 4726540. International parties should call +1 (647) 362-9199 and use conference code 4726540.

Non-GAAP Financial Measures

In addition to disclosing financial measures prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), this press release and the accompanying tables contain certain non-GAAP financial measures, including: non-GAAP net income, non-GAAP net income per share, non-GAAP gross profit and gross margin, non-GAAP operating income, and Adjusted EBITDA. Adjusted EBITDA represents the net income before interest and other income, income tax benefit, depreciation and amortization of capital expenditures, amortization of intangible assets, acquisition-related transaction costs, and stock-based compensation expense and related taxes.

Other non-GAAP financial measures exclude stock-based compensation expense and related taxes, amortization of intangible assets, acquisition-related transaction costs, and acquisition-related income tax benefit. Non-GAAP weighted-average diluted shares include the effect of potentially dilutive securities from the company’s stock-based benefit plans.

These non-GAAP financial measures are presented to provide investors with additional information regarding our financial results and core business operations. Ooma considers these non-GAAP financial measures to be useful measures of the operating performance of the company, because they contain adjustments for unusual events or factors that do not directly affect what management considers to be Ooma's core operating performance and are used by the company's management for that purpose. Management also believes that these non-GAAP financial measures allow for a better evaluation of the company's performance by facilitating a meaningful comparison of the company's core operating results in a given period to those in prior and future periods. In addition, investors often use similar measures to evaluate the operating performance of a company.

Non-GAAP financial measures are presented for supplemental informational purposes only to aid an understanding of the company's operating results. The non-GAAP financial measures should not be considered a substitute for financial information presented in accordance with GAAP and may be different from non-GAAP financial measures presented by other companies. A limitation of the non-GAAP financial measures presented is that the adjustments relate to items that the company generally expects to continue to recognize. The adjustment of these items should not be construed as an inference that the adjusted gains or expenses are unusual, infrequent or non-recurring. Therefore, both GAAP financial measures of Ooma's financial performance and the respective non-GAAP measures should be considered together. Please see the reconciliation of non-GAAP financial measures to the most directly comparable GAAP measure in the tables below.

Disclosure Information

Ooma uses the investor relations section on its website as a means of complying with its disclosure obligations under Regulation FD. Accordingly, investors should monitor Ooma's investor relations website in addition to following Ooma's press releases, Securities and Exchange Commission (“SEC”) filings, and public conference calls and webcasts.

Legal Notice Regarding Forward-Looking Statements

This press release contains forward-looking statements under the Private Securities Litigation Reform Act of 1995. In particular, the financial projections under “Business Outlook” and the statements contained in the quotations of our Chief Executive Officer regarding expectations regarding the Company’s initiatives, strategies and acquisition of OnSIP constitute forward-looking statements. Forward-looking statements can be identified by the fact that they do not relate strictly to historical facts and generally contain words such as "believes”, "expects”, "may”, "will”, "should”, "seeks”, "approximately”, "intends”, "plans”, "estimates”, "anticipates”, and other expressions that are predictions of or indicate future events. Although the forward-looking statements contained in this press release are based upon information available at the time the statements are made and reflect management's good faith beliefs, forward-looking statements inherently involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements to differ materially from anticipated future results. Important factors that could cause actual results to differ materially from expectations include, among others: our inability to attract new customers on a cost-effective basis; our inability to retain customers; our inability to realize expected returns from our investments made in connection with our international expansion efforts and development of new product features; failure to realize AirDial opportunities; intense competition; loss of key retailers and reseller partnerships; our reliance on vendors to manufacture the on-premise appliances and end-point devices we sell; our reliance on third parties for our network connectivity and co-location facilities; our reliance on third parties for some of our software development, quality assurance and operations; our reliance on third parties to provide the majority of our customer service and support representatives; and interruptions to our service. You should not place undue reliance on these forward-looking statements, which speak only as of the date hereof. We do not undertake to update or revise any forward-looking statements after they are made, whether as a result of new information, future events, or otherwise, except as required by applicable law.

The forward-looking statements contained in this press release are also subject to other risks and uncertainties, including those more fully described in our filings which we make with the SEC from time to time, including the risk factors contained in our Quarterly Report on form 10-Q for the quarter ended April 30, 2022, filed with the SEC on June 8, 2022. The forward-looking statements in this press release are based on information available to Ooma as of the date hereof, and Ooma disclaims any obligation to update any forward-looking statements, except as required by law.

About Ooma, Inc.

Ooma (NYSE: OOMA) creates powerful connected experiences for businesses and consumers, delivered from its smart cloud-based SaaS platform. For businesses of all sizes, Ooma provides advanced voice and collaboration features including messaging, intelligent virtual attendants, and video conferencing to help them run more efficiently. For consumers, Ooma’s residential phone service provides PureVoice HD voice quality, advanced functionality and integration with mobile devices. Learn more at www.ooma.com or www.ooma.ca in Canada.

OOMA, INC CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited, amounts in thousands)     July 31, January 31,

2022

2022

Assets Current assets: Cash and cash equivalents

$

16,192

 

$

19,667

 

Short-term investments

 

6,277

 

 

11,613

 

Accounts receivable, net

 

6,592

 

 

7,310

 

Inventories

 

21,075

 

 

13,841

 

Other current assets

 

14,968

 

 

13,598

 

Total current assets

 

65,104

 

 

66,029

 

Property and equipment, net

 

7,698

 

 

6,481

 

Operating lease right-of-use assets

 

14,663

 

 

14,396

 

Intangible assets, net

 

11,690

 

 

4,208

 

Goodwill

 

8,695

 

 

4,264

 

Other assets

 

15,132

 

 

13,875

 

Total assets

$

122,982

 

$

109,253

 

  Liabilities and stockholders' equity Current liabilities: Accounts payable

$

12,968

 

$

7,507

 

Accrued expenses and other current liabilities

 

22,904

 

 

22,823

 

Deferred revenue

 

17,686

 

 

16,600

 

Total current liabilities

 

53,558

 

 

46,930

 

Long-term operating lease liabilities

 

11,076

 

 

11,194

 

Other liabilities

 

48

 

 

73

 

Total liabilities

 

64,682

 

 

58,197

 

  Stockholders' equity: Common stock

 

5

 

 

4

 

Additional paid-in capital

 

187,571

 

 

179,860

 

Accumulated other comprehensive loss

 

(60

)

 

(20

)

Accumulated deficit

 

(129,216

)

 

(128,788

)

Total stockholders' equity

 

58,300

 

 

51,056

 

Total liabilities and stockholders' equity

$

122,982

 

$

109,253

 

OOMA, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited, amounts in thousands, except share and per share data)   Three Months Ended Six Months Ended July 31, July 31, July 31, July 31,

2022

 

2021

 

2022

 

2021

Revenue: Subscription and services

$

47,995

 

$

43,537

 

$

94,718

 

$

85,502

 

Product and other

 

4,658

 

 

3,520

 

 

8,272

 

 

7,127

 

Total revenue

 

52,653

 

 

47,057

 

 

102,990

 

 

92,629

 

  Cost of revenue: Subscription and services

 

12,675

 

 

12,326

 

 

25,884

 

 

24,665

 

Product and other

 

6,161

 

 

5,428

 

 

11,337

 

 

10,579

 

Total cost of revenue

 

18,836

 

 

17,754

 

 

37,221

 

 

35,244

 

Gross profit

 

33,817

 

 

29,303

 

 

65,769

 

 

57,385

 

  Operating expenses: Sales and marketing

 

17,432

 

 

14,331

 

 

33,583

 

 

28,347

 

Research and development

 

11,119

 

 

9,416

 

 

21,617

 

 

18,723

 

General and administrative

 

6,912

 

 

6,014

 

 

12,974

 

 

11,739

 

Total operating expenses

 

35,463

 

 

29,761

 

 

68,174

 

 

58,809

 

Loss from operations

 

(1,646

)

 

(458

)

 

(2,405

)

 

(1,424

)

Interest and other income, net

 

17

 

 

19

 

 

50

 

 

98

 

Loss before income taxes

 

(1,629

)

 

(439

)

 

(2,355

)

 

(1,326

)

Income tax benefit

 

1,967

 

 

 

 

1,927

 

 

 

Net income (loss)

$

338

 

$

(439

)

$

(428

)

$

(1,326

)

  Net income (loss) per share of common stock: Basic and diluted

$

0.01

 

$

(0.02

)

$

(0.02

)

$

(0.06

)

  Weighted-average shares of common stock outstanding: Basic

 

24,388,275

 

 

23,359,715

 

 

24,254,465

 

 

23,209,151

 

Diluted

 

24,873,764

 

 

23,359,715

 

 

24,254,465

 

 

23,209,151

 

OOMA, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited, amounts in thousands)   Three Months Ended Six Months Ended July 31, July 31, July 31, July 31,

2022

2021

2022

2021

Cash flows from operating activities: Net income (loss)

$

338

 

$

(439

)

$

(428

)

$

(1,326

)

Adjustments to reconcile net income (loss) to net cash provided by operating activities: Stock-based compensation expense

 

3,505

 

 

3,321

 

 

6,842

 

 

6,515

 

Depreciation and amortization of capital expenditures

 

889

 

 

775

 

 

1,739

 

 

1,548

 

Amortization of intangible assets

 

372

 

 

326

 

 

698

 

 

652

 

Amortization of operating lease right-of-use assets

 

732

 

 

713

 

 

1,449

 

 

1,531

 

Deferred income tax benefit

 

(2,043

)

 

 

 

(2,043

)

 

 

Other

 

11

 

 

14

 

 

26

 

 

24

 

Changes in operating assets and liabilities: Accounts receivable, net

 

(715

)

 

(762

)

 

973

 

 

400

 

Inventories and deferred inventory costs

 

(6,665

)

 

(394

)

 

(7,158

)

 

(1,600

)

Prepaid expenses and other assets

 

355

 

 

(2,037

)

 

(2,326

)

 

(3,007

)

Accounts payable, accrued expenses and other liabilities

 

4,641

 

 

343

 

 

2,690

 

 

(2,127

)

Deferred revenue

 

743

 

 

710

 

 

520

 

 

384

 

Net cash provided by operating activities

 

2,163

 

 

2,570

 

 

2,982

 

 

2,994

 

  Cash flows from investing activities: Proceeds from maturities and sales of short-term investments

 

4,325

 

 

3,000

 

 

9,125

 

 

9,900

 

Purchases of short-term investments

 

(489

)

 

(2,816

)

 

(3,869

)

 

(8,859

)

Capital expenditures

 

(1,353

)

 

(1,077

)

 

(2,812

)

 

(1,742

)

Business acquisition

 

(9,771

)

 

 

 

(9,771

)

 

 

Net cash used in investing activities

 

(7,288

)

 

(893

)

 

(7,327

)

 

(701

)

  Cash flows from financing activities: Proceeds from issuance of common stock

 

 

 

152

 

 

1,554

 

 

1,621

 

Shares repurchased for tax withholdings on vesting of restricted stock units

 

(336

)

 

(660

)

 

(684

)

 

(1,145

)

Net cash (used in) provided by financing activities

 

(336

)

 

(508

)

 

870

 

 

476

 

Net (decrease) increase in cash and cash equivalents

 

(5,461

)

 

1,169

 

 

(3,475

)

 

2,769

 

Cash and cash equivalents at beginning of period

 

21,653

 

 

18,898

 

 

19,667

 

 

17,298

 

Cash and cash equivalents at end of period

$

16,192

 

$

20,067

 

$

16,192

 

$

20,067

 

OOMA, INC. Reconciliation of Non-GAAP Financial Measures (Unaudited, amounts in thousands, except percentages, shares and per share data)   Three Months Ended Six Months Ended July 31, July 31, July 31, July 31,

2022

2021

2022

2021

Revenue

$

52,653

 

$

47,057

 

$

102,990

 

$

92,629

 

  GAAP gross profit

$

33,817

 

$

29,303

 

$

65,769

 

$

57,385

 

Stock-based compensation and related taxes

 

248

 

 

296

 

 

496

 

 

585

 

Amortization of intangible assets

 

79

 

 

73

 

 

152

 

 

146

 

Non-GAAP gross profit

$

34,144

 

$

29,672

 

$

66,417

 

$

58,116

 

  Gross margin on a GAAP basis

 

64

%

 

62

%

 

64

%

 

62

%

Gross margin on a Non-GAAP basis

 

65

%

 

63

%

 

64

%

 

63

%

  GAAP operating loss

$

(1,646

)

$

(458

)

$

(2,405

)

$

(1,424

)

Stock-based compensation and related taxes

 

3,567

 

 

3,442

 

 

7,007

 

 

6,767

 

Amortization of intangible assets and acquisition-related costs

 

1,173

 

 

326

 

 

1,499

 

 

652

 

Non-GAAP operating income

$

3,094

 

$

3,310

 

$

6,101

 

$

5,995

 

  GAAP net income (loss)

$

338

 

$

(439

)

$

(428

)

$

(1,326

)

Stock-based compensation and related taxes

 

3,567

 

 

3,442

 

 

7,007

 

 

6,767

 

Amortization of intangible assets and acquisition-related costs

 

1,173

 

 

326

 

 

1,499

 

 

652

 

Acquisition-related income tax benefit

 

(2,043

)

 

 

 

(2,043

)

 

 

Non-GAAP net income

$

3,035

 

$

3,329

 

$

6,035

 

$

6,093

 

  GAAP basic and diluted net income (loss) per share

$

0.01

 

$

(0.02

)

$

(0.02

)

$

(0.06

)

Stock-based compensation and related taxes

 

0.14

 

 

0.15

 

 

0.29

 

 

0.29

 

Amortization of intangible assets and acquisition-related costs

 

0.05

 

 

0.01

 

 

0.06

 

 

0.03

 

Acquisition-related income tax benefit

 

(0.08

)

 

 

 

(0.08

)

 

 

Non-GAAP net income per basic share

$

0.12

 

$

0.14

 

$

0.25

 

$

0.26

 

Non-GAAP net income per diluted share

$

0.12

 

$

0.13

 

$

0.24

 

$

0.25

 

  GAAP weighted-average basic shares

 

24,388,275

 

 

23,359,715

 

 

24,254,465

 

 

23,209,151

 

GAAP weighted-average diluted shares

 

24,873,764

 

 

23,359,715

 

 

24,254,465

 

 

23,209,151

 

Non-GAAP weighted-average diluted shares

 

24,873,764

 

 

24,767,569

 

 

24,908,575

 

 

24,558,433

 

  GAAP net income (loss)

$

338

 

$

(439

)

$

(428

)

$

(1,326

)

Reconciling items: Interest and other income, net

 

(17

)

 

(19

)

 

(50

)

 

(98

)

Income taxes

 

(1,967

)

 

 

 

(1,927

)

 

 

Depreciation and amortization of capital expenditures

 

889

 

 

775

 

 

1,739

 

 

1,548

 

Amortization of intangible assets and acquisition-related costs

 

1,173

 

 

326

 

 

1,499

 

 

652

 

Stock-based compensation and related taxes

 

3,567

 

 

3,442

 

 

7,007

 

 

6,767

 

Adjusted EBITDA

$

3,983

 

$

4,085

 

$

7,840

 

$

7,543

 

 

INVESTOR CONTACT: Matthew S. Robison Director of IR and Corporate Development Ooma, Inc. ir@ooma.com (650) 300-1480

MEDIA CONTACT: Mike Langberg Director of Corporate Communications Ooma, Inc. press@ooma.com (650) 566-6693

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