OOMA

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

Third Quarter Fiscal 2023 Financial Highlights:

• Revenue: Total revenue was $56.7 million, up 15% year-over-year. Subscription and services revenue increased to $51.7 million from $44.7 million in the third quarter of fiscal 2022, and was 91% of total revenue, primarily driven by the growth of Ooma Business.
• Net Income/Loss: GAAP net loss was $2.8 million, or $0.11 per basic and diluted share, compared to GAAP net loss of $0.3 million, or $0.01 per basic and diluted share, in the third quarter of fiscal 2022. GAAP net loss for the third quarter includes a $1.4 million charge for consolidation of facilities, as well as $0.6 million in acquisition-related costs, both associated with the acquisition of OnSIP in late July. Non-GAAP net income was $3.5 million, or $0.14 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 $4.5 million, compared to $4.0 million in the third 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 executed well in Q3, increasing revenue 15% year-over-year to $56.7 million and attaining its highest-ever quarterly non-GAAP net income and adjusted EBITDA,” said Eric Stang, chief executive officer of Ooma. “We introduced new features for our Ooma Office Pro Plus tier of service, grew sales of Ooma Enterprise in select verticals including hospitality, expanded our user base in Europe in addition to North America, and added T-Mobile as a resale partner for AirDial, our new solution to replace businesses’ aging and expensive copper lines. We also continued the integration of our recent acquisition OnSIP and are pleased to report that OnSIP was adjusted EBITDA accretive in Q3, ahead of plan. Looking forward, we continue to see significant opportunity and remain focused on executing our strategy to drive profitable growth.”

Business Outlook:

For the fourth quarter of fiscal 2023, Ooma expects:

• Total revenue in the range of $56.3 million to $56.6 million.
• GAAP net loss in the range of $0.7 million to $1.0 million and GAAP net loss per share in the range of $0.03 to $0.04.
• Non-GAAP net income in the range of $3.5 million to $3.8 million and non-GAAP net income per share in the range of $0.14 to $0.15.

For the full fiscal year 2023, Ooma expects:

• Total revenue in the range of $216.0 million to $216.3 million.
• GAAP net loss in the range of $4.0 million to $4.3 million, and GAAP net loss per share in the range of $0.16 to $0.18.
• Non-GAAP net income in the range of $13.0 million to $13.3 million, and non-GAAP net income per share in the range of $0.51 to $0.53.

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 fourth quarter and fiscal year ending January 31, 2023 (in millions, except per share data):

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

($0.7)-($1.0

)

 

($4.0)-($4.3

)

Stock-based compensation and related taxes

3.6

 

 

14.2

 

Amortization of intangible assets and acquisition-related costs

0.9

 

 

3.8

 

Facilities consolidation charges

—

 

 

1.4

 

Acquisition-related income tax benefit

—

 

 

(2.1

)

Non-GAAP net income

$3.5-$3.8

 

 

$13.0-$13.3

 

 

 

 

GAAP net loss per share

($0.03)-($0.04

)

 

($0.16)-($0.18

)

Stock-based compensation and related taxes

0.14

 

 

0.56

 

Amortization of intangible assets and acquisition-related costs

0.04

 

 

0.15

 

Facilities consolidation charges

—

 

 

0.06

 

Acquisition-related income tax benefit

—

 

 

(0.08

)

Non-GAAP net income per share

$0.14-$0.15

 

 

$0.51-$0.53

 

 

 

 

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

 

 

 

Basic

24.9

 

 

24.5

 

Diluted

25.7

 

 

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 November 30, 2022 until 11:59 p.m. Eastern time Wednesday, December 7, 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, facilities consolidation charges, 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, facilities consolidation charges and acquisition-related income tax benefit. For the third quarter of fiscal 2023, facilities consolidation charges included asset write-downs related to leased office space assumed in connection with Ooma’s acquisition of OnSIP in July 2022 that the company determined were not needed to support the future growth of its business. 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 business opportunities and strategies may 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 July 31, 2022, filed with the SEC on September 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)     October 31, January 31,

 

2022

 

 

2022

 

Assets Current assets: Cash and cash equivalents

$

20,037

 

$

19,667

 

Short-term investments

 

4,495

 

 

11,613

 

Accounts receivable, net

 

7,125

 

 

7,310

 

Inventories

 

22,021

 

 

13,841

 

Other current assets

 

14,550

 

 

13,598

 

Total current assets

 

68,228

 

 

66,029

 

Property and equipment, net

 

7,662

 

 

6,481

 

Operating lease right-of-use assets

 

12,782

 

 

14,396

 

Intangible assets, net

 

11,256

 

 

4,208

 

Goodwill

 

8,946

 

 

4,264

 

Other assets

 

15,640

 

 

13,875

 

Total assets

$

124,514

 

$

109,253

 

  Liabilities and stockholders' equity Current liabilities: Accounts payable

$

11,827

 

$

7,507

 

Accrued expenses and other current liabilities

 

24,805

 

 

22,823

 

Deferred revenue

 

17,476

 

 

16,600

 

Total current liabilities

 

54,108

 

 

46,930

 

Long-term operating lease liabilities

 

10,539

 

 

11,194

 

Other liabilities

 

39

 

 

73

 

Total liabilities

 

64,686

 

 

58,197

 

  Stockholders' equity: Common stock

 

5

 

 

4

 

Additional paid-in capital

 

191,909

 

 

179,860

 

Accumulated other comprehensive loss

 

(60

)

 

(20

)

Accumulated deficit

 

(132,026

)

 

(128,788

)

Total stockholders' equity

 

59,828

 

 

51,056

 

Total liabilities and stockholders' equity

$

124,514

 

$

109,253

 

OOMA, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited, amounts in thousands, except share and per share data)   Three Months Ended Nine Months Ended October 31,2022 October 31,2021 October 31,2022 October 31,2021 Revenue: Subscription and services

$

51,749

 

$

44,659

 

$

146,467

 

$

130,161

 

Product and other

 

4,930

 

 

4,513

 

 

13,202

 

 

11,640

 

Total revenue

 

56,679

 

 

49,172

 

 

159,669

 

 

141,801

 

  Cost of revenue: Subscription and services

 

14,070

 

 

12,274

 

 

39,954

 

 

36,939

 

Product and other

 

6,689

 

 

6,652

 

 

18,026

 

 

17,231

 

Total cost of revenue

 

20,759

 

 

18,926

 

 

57,980

 

 

54,170

 

Gross profit

 

35,920

 

 

30,246

 

 

101,689

 

 

87,631

 

  Operating expenses: Sales and marketing

 

18,019

 

 

15,078

 

 

51,602

 

 

43,425

 

Research and development

 

12,498

 

 

9,467

 

 

34,115

 

 

28,190

 

General and administrative (1)

 

8,258

 

 

6,080

 

 

21,232

 

 

17,819

 

Total operating expenses

 

38,775

 

 

30,625

 

 

106,949

 

 

89,434

 

Loss from operations

 

(2,855

)

 

(379

)

 

(5,260

)

 

(1,803

)

Interest and other income, net

 

94

 

 

53

 

 

144

 

 

151

 

Loss before income taxes

 

(2,761

)

 

(326

)

 

(5,116

)

 

(1,652

)

Income tax (provision) benefit

 

(49

)

 

—

 

 

1,878

 

 

—

 

Net loss

$

(2,810

)

$

(326

)

$

(3,238

)

$

(1,652

)

  Net loss per share of common stock: Basic and diluted

$

(0.11

)

$

(0.01

)

$

(0.13

)

$

(0.07

)

  Weighted-average shares of common stock outstanding: Basic and diluted

 

24,608,685

 

 

23,619,406

 

 

24,373,836

 

 

23,348,529

 

    (1) Includes asset impairment related to facilities consolidation as follows:

$

1,402

 

$

—

 

$

1,402

 

$

—

 

OOMA, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited, amounts in thousands)   Three Months Ended Nine Months Ended October 31,2022 October 31,2021 October 31,2022 October 31,2021 Cash flows from operating activities: Net loss

$

(2,810

)

$

(326

)

$

(3,238

)

$

(1,652

)

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

 

3,541

 

 

3,233

 

 

10,383

 

 

9,748

 

Depreciation and amortization of capital expenditures

 

998

 

 

780

 

 

2,737

 

 

2,328

 

Amortization of intangible assets

 

794

 

 

326

 

 

1,492

 

 

978

 

Amortization of operating lease right-of-use assets

 

799

 

 

699

 

 

2,248

 

 

2,230

 

Facilities consolidation charges

 

1,402

 

 

—

 

 

1,402

 

 

—

 

Deferred income tax benefit

 

(90

)

 

—

 

 

(2,133

)

 

—

 

Other

 

8

 

 

15

 

 

34

 

 

39

 

Changes in operating assets and liabilities: Accounts receivable, net

 

(533

)

 

(1,457

)

 

440

 

 

(1,057

)

Inventories and deferred inventory costs

 

(977

)

 

(369

)

 

(8,135

)

 

(1,969

)

Prepaid expenses and other assets

 

1,022

 

 

(1,355

)

 

(1,304

)

 

(4,362

)

Accounts payable, accrued expenses and other liabilities

 

(1,446

)

 

389

 

 

1,244

 

 

(1,738

)

Deferred revenue

 

(219

)

 

(57

)

 

301

 

 

327

 

Net cash provided by operating activities

 

2,489

 

 

1,878

 

 

5,471

 

 

4,872

 

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

 

1,775

 

 

4,330

 

 

10,900

 

 

14,230

 

Purchases of short-term investments

 

—

 

 

(6,007

)

 

(3,869

)

 

(14,866

)

Capital expenditures

 

(1,095

)

 

(1,308

)

 

(3,907

)

 

(3,050

)

Business acquisition

 

—

 

 

—

 

 

(9,771

)

 

—

 

Net cash provided by (used in) investing activities

 

680

 

 

(2,985

)

 

(6,647

)

 

(3,686

)

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

 

1,123

 

 

959

 

 

2,677

 

 

2,580

 

Shares repurchased for tax withholdings on vesting of restricted stock units

 

(447

)

 

(479

)

 

(1,131

)

 

(1,624

)

Net cash provided by financing activities

 

676

 

 

480

 

 

1,546

 

 

956

 

Net increase (decrease) in cash and cash equivalents

 

3,845

 

 

(627

)

 

370

 

 

2,142

 

Cash and cash equivalents at beginning of period

 

16,192

 

 

20,067

 

 

19,667

 

 

17,298

 

Cash and cash equivalents at end of period

$

20,037

 

$

19,440

 

$

20,037

 

$

19,440

 

OOMA, INC. Reconciliation of Non-GAAP Financial Measures (Unaudited, amounts in thousands, except percentages, shares and per share data)   Three Months Ended Nine Months Ended October 31,2022 October 31,2021 October 31,2022 October 31,2021 Revenue

$

56,679

 

$

49,172

 

$

159,669

 

$

141,801

 

  GAAP gross profit

$

35,920

 

$

30,246

 

$

101,689

 

$

87,631

 

Stock-based compensation and related taxes

 

242

 

 

210

 

 

738

 

 

795

 

Amortization of intangible assets

 

139

 

 

73

 

 

291

 

 

219

 

Non-GAAP gross profit

$

36,301

 

$

30,529

 

$

102,718

 

$

88,645

 

  Gross margin on a GAAP basis

 

63

%

 

62

%

 

64

%

 

62

%

Gross margin on a Non-GAAP basis

 

64

%

 

62

%

 

64

%

 

63

%

  GAAP operating loss

$

(2,855

)

$

(379

)

$

(5,260

)

$

(1,803

)

Stock-based compensation and related taxes

 

3,585

 

 

3,306

 

 

10,592

 

 

10,073

 

Amortization of intangible assets and acquisition-related costs

 

1,374

 

 

326

 

 

2,873

 

 

978

 

Facilities consolidation charges

 

1,402

 

 

—

 

 

1,402

 

 

—

 

Non-GAAP operating income

$

3,506

 

$

3,253

 

$

9,607

 

$

9,248

 

  GAAP net loss

$

(2,810

)

$

(326

)

$

(3,238

)

$

(1,652

)

Stock-based compensation and related taxes

 

3,585

 

 

3,306

 

 

10,592

 

 

10,073

 

Amortization of intangible assets and acquisition-related costs

 

1,374

 

 

326

 

 

2,873

 

 

978

 

Facilities consolidation charges

 

1,402

 

 

—

 

 

1,402

 

 

—

 

Acquisition-related income tax benefit

 

(90

)

 

—

 

 

(2,133

)

 

—

 

Non-GAAP net income

$

3,461

 

$

3,306

 

$

9,496

 

$

9,399

 

  GAAP basic and diluted net loss per share

$

(0.11

)

$

(0.01

)

$

(0.13

)

$

(0.07

)

Stock-based compensation and related taxes

 

0.14

 

 

0.14

 

 

0.43

 

 

0.43

 

Amortization of intangible assets and acquisition-related costs

 

0.05

 

 

0.01

 

 

0.12

 

 

0.04

 

Facilities consolidation charges

 

0.06

 

 

—

 

 

0.06

 

 

—

 

Acquisition-related income tax benefit

 

—

 

 

—

 

 

(0.09

)

 

—

 

Non-GAAP net income per basic share

$

0.14

 

$

0.14

 

$

0.39

 

$

0.40

 

Non-GAAP net income per diluted share

$

0.14

 

$

0.13

 

$

0.38

 

$

0.38

 

  GAAP weighted-average basic and diluted shares

 

24,608,685

 

 

23,619,406

 

 

24,373,836

 

 

23,348,529

 

Non-GAAP weighted-average diluted shares

 

25,181,210

 

 

24,964,822

 

 

25,035,092

 

 

24,758,489

 

  GAAP net loss

$

(2,810

)

$

(326

)

$

(3,238

)

$

(1,652

)

Reconciling items: Interest and other income, net

 

(94

)

 

(53

)

 

(144

)

 

(151

)

Income taxes

 

49

 

 

—

 

 

(1,878

)

 

—

 

Depreciation and amortization of capital expenditures

 

998

 

 

780

 

 

2,737

 

 

2,328

 

Facilities consolidation charges

 

1,402

 

 

—

 

 

1,402

 

 

—

 

Amortization of intangible assets and acquisition-related costs

 

1,374

 

 

326

 

 

2,873

 

 

978

 

Stock-based compensation and related taxes

 

3,585

 

 

3,306

 

 

10,592

 

 

10,073

 

Adjusted EBITDA

$

4,504

 

$

4,033

 

$

12,344

 

$

11,576

 

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20221130005989/en/

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