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
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