Smart Connected Services
Investor Presentation
M a y 2 6 , 2 0 2 0
Safe Harbor Statement
This presentation contains forward-looking statements. In particular, statements regarding future economic performance, finances, and expectations and objectives of management 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 and trends and that do not relate to historical matters. Although the forward-looking statements contained in this presentation 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: the impact of the COVID-19 pandemic on our business and the measures we take in response to the pandemic; our inability to attract new customers on a cost-effective basis; our inability to retain customers; intense competition; our reliance on retailers and reseller partnerships to sell our products; 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 presentation are also subject to other risks and uncertainties, including those more fully described in our filings with the Securities and Exchange Commission, including the risk factors contained in our annual report on form 10K for the year ended January 31, 2020, filed with the SEC on April 14, 2020. The forward-looking statements in this presentation 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.
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Ooma Provides Leading Communications Services
We transform sophisticated technology
into elegant, simple communications solutions
accessible to everyone.
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Ooma Today
TOTAL REVENUE
(in millions)
$151.6
$129.2
$114.5
$34.0 $40.3
FY 2018 FY 2019 FY 2020 | 1QF20 | 1QF21 | |||
Annual | Quarterly | ||||
Founded 2003; IPO 2015 NYSE: OOMA Multi-tenant SaaS platform
1M+ core users Customers of all sizes
90%+ recurring revenue (~100% retention*) ~800 employees and contractors
HQ: Sunnyvale, CA
- Net dollar subscription retention rate Note: Fiscal year end January 31.
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Customers Rate Ooma #1
Business | Home | |||||
#1 Ranked by Readers | Top Ranked by Readers | |||||
7 Years in a Row | 7 Times | |||||
5
Our Solutions Serve Customers Better
HOME | HOME OFFICE | SMALL / MEDIUM BUSINESS | LARGE BUSINESS ENTERPRISE |
Ooma Telo | Ooma Office | Ooma Enterprise |
Superior Value | Created for SMB | Extensive Features |
Innovative Features | Simple to Install / Use | Flexible, Customizable |
phone service | Sound like a big business | Business communications |
Free home" | " | " |
(just pay taxes and fees) | at a small business price | built exclusively for you |
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Our Platform Delivers Breakthrough Features
DEPENDABLE VOICE QUALITY
Overcomes Internet Congestion
- Advanced codec
- Adaptive redundancy
- Router / QoS
EASE OF USE
Provides End-to-End Solution
- Smart endpoints
- Simple deployments
TAILORED SOLUTIONS
Enables Customization
- Modern flexible design
- Easy integrations
ENHANCED RELIABILITY
Ensures Real-Time Fail Over
- Fully redundant architecture
- Remote diagnostics
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Our Disruptive Cost Structure Enables Superior Value
RECURRING ARPU1
(Monthly)
$11.50
70%
Margin per user
30%
Cost per user
WHY CUSTOMERS BUY
Ooma Telo | Ooma Office | Ooma Enterprise | ||
• | Free calling / no | • Value/unlimited | • | Customizable to |
more phone bills | nationwide calling | individual needs | ||
• | Uses existing | • Easy to install / | • | High reliability |
home phones | configure | |||
Ooma is"a brand I | Ooma for its | Ooma satisfies our | ||
I choose" | " | |||
recognize and trust | quality, ease of use | unique requirements | ||
and value | ||||
1Average revenue per user for core users (approximate)
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Our Business Scope Provides Sales Synergy
Mass Advertising
Retailers
Standard Features
DIY Installation
User Administered
Standard Internet
SOLUTIONS
Targeted Outreach
Resellers
Customization
Custom Deployments
IT Specialists
Dedicated Connectivity
45%of Telo customers and 22%of Office customers
1sthear about Ooma word of mouth
Source: Ooma customer survey
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Our Reach Extends to New Opportunities
PARTNER-FRIENDLY SOLUTIONS | RESELLER-FRIENDLY SOLUTIONS |
WIRELESS INTERNET | SECURITY |
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Massive Market Transformation Underway
Business
61MLines1
54%
46%
19%
CAGR2
Growth Opportunity
Global Cloud PBX Market
Traditional
Home
70MLines1
36%
Traditional
1North America. 22014 - 2017
Internet/
Cloud
1%
64% CAGR2
Internet/
Cloud
$18.2B
15.5%
CAGR
$5B
20192027
Source: FCC Voice Telephone Services: Status as of December 31, 2016; CRTC Communications Monitoring Report 2018; IDC: U.S. Consumer Landline Voice Services 2014-2018 Forecast; Research and Markets, June 2019
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Integrated Growth Strategy
Advertising | Direct Sales |
75%1 | Customer | Resellers | |
Net Promoter | |||
Referrals | and Partners | ||
Score | |||
ServicesRetailers
Expansion
1PC Mag 2020, for Ooma's Small Business Solution
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Significant Growth Drivers
Small businesses with underserved needs
Large businesses with custom requirements
Telecom resellers requiring own-brand solutions
New adjacent services
Geographic expansion
Our platform
uniquely enables
solutions to
untapped
opportunities
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Financial Overview
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Compounding Subscriptions Drive Revenue
ANNUAL REVENUE | QUARTERLY REVENUE | ||||||
(in millions) | (in millions) | ||||||
$151.6 | |||||||
$129.2 | $40.3 | Other | |||||
$114.5 | |||||||
$34.0 | Revenue | ||||||
Other | |||||||
Revenue | |||||||
Core | Core | ||||||
Subscription | $94.2 | $111.7 | $135.3 | $30.2 | $36.7 | Subscription | |
and Services | and Services | ||||||
Revenue | Revenue | ||||||
FY 2018 | FY 2019 | FY 2020 | 1QF20 | 1QF21 | |||
Core Subscription & Services Revenue includes Ooma Business, which is the combined revenue of Office and Enterprise, and Residential. Other Revenue includes Product sales and Talkatone.
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Ooma Business Drives User
and Subscription Revenue Growth
SUBSCRIPTION AND SERVICES REVENUE
(in millions) $135.3
$111.7
Business | $34.0 | $54.6 |
$36.7 | |||
Home | $77.7 | $80.7 | $16.2 |
$20.5 | |||
FY 2019 | FY 2020 | 1QF21 |
USERS
(in thousands) | |||
976 | 1,048 | 1,049 | |
156 | 231 | 236 | Business |
819 | 817 | 813 | Home |
FY 2019 | FY 2020 | 1QF21 |
1QF21 Ooma Business Subscription Revenue Growth of 54% YoY
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Key Metrics
ARPU | AERR | ||
($ per month) | ($ millions) | ||
$10.96 | $11.56 | $138 | $146 |
$9.80 | $119 | |
$8.80 | $103 | |
FY 2018 FY 2019 FY 2020 | 1QF21 | FY 2018 FY 2019 FY 2020 | 1QF21 |
Monthly Business ARPU ~$20, Monthly Home ARPU ~$8
ARPU is blended monthly average subscription and services revenue per core user/seat. AERR is annualized exit recurring revenue.
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Robust Gross Margin
LONG TERM TARGET GROSS MARGIN RANGES | |||||||
Subscription/Services | High | ||||||
Total | Low | ||||||
80% | |||||||
70% | 70% | 71% | 75% | ||||
70% | |||||||
60% | 62% | 63% | 65% | ||||
FY 2019 | FY 2020 | 1QF21 | Total | Subscriptions/Services |
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Improving EBITDA
1-3 Year | |||||||||
2QF19 | 3QF19 | 4QF19 | 1QF20 | 2QF20 | 3QF20 | 4QF20 | 1QF21 | Target | |
8% | $3,500 | ||||||||
6% | $3,000 | ||||||||
5% | $2,500 | ||||||||
4% | $2,000 | ||||||||
2% | $1,500 | ||||||||
$1,000 | |||||||||
0% | $500 | ||||||||
-2% | $0 | ||||||||
($500) | |||||||||
-4% | EBITDA/Rev. (%) | EBITDA (000) | ($1,000) | ||||||
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Strong Financial Position
($ millions) | FY 2019 | FY 2020 | 1QF21 |
Cash and Investments | $42.6 | $26.1 | $23.3 |
Cash used in Operations | ($3.9) | ($7.6) | ($2.8) |
Capital Spending | ($1.9) | ($3.3) | ($0.8) |
Adjusted EBITDA | ($1.9) | $1.0 | $3.0 |
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Long-Term Target Model (Non-GAAP)
(% revenue) | FY 2019 | FY 2020 | 1QF21 | 1-3 Year | Long-Term | ||
Targets | Ranges | ||||||
Subscription & Services | 70% | 70% | 71% | 70%-75% | 75% | - 80% | |
Gross Margin | |||||||
Overall Gross Margin | 60% | 62% | 63% | 62%-65% | 65% | - 70% | |
Sales & Marketing | 30% | 31% | 29% | 32%-35% | 20% | - 25% | |
Research & Development | 23% | 21% | 19% | 17%-19% | 12% | - 15% | |
General & Administrative | 10% | 10% | 9% | 7%-9% | 6% | - 8% | |
Adjusted EBITDA | (1%) | 1% | 8% | 5% | 20% - 25% | ||
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Thank You.
Appendix GAAP to Non-GAAP Reconciliation
$ Thousands | FY 2018 | FY 2019 | FY 2020 | 1QF20 | 1QF21 |
GAAP Gross Profit | $68,092 | $76,491 | $89,381 | $20,433 | $25,175 |
Add: Stock-based compensation and related taxes | 1,129 | 957 | 1,311 | 304 | 270 |
Amortization of Intangibles | 183 | 549 | 480 | 155 | 73 |
Restructuring charges | - | - | 2,289 | - | - |
Non-GAAP Gross Profit | $69,404 | $77,997 | $93,461 | $20,892 | $25,518 |
GAAP Sales and Marketing | $37,302 | $40,761 | $50,497 | $11,459 | $12,446 |
Add: Stock-based compensation and related taxes | (1,857) | (1,501) | (2,004) | (475) | (505) |
Amortization of Intangibles | - | (159) | (736) | (45) | (253) |
Restructuring charges | - | - | (162) | - | - |
Non-GAAP Sales and Marketing | $35,445 | $39,101 | $47,595 | $10,939 | $11,688 |
GAAP Research and Development | $29,328 | $33,903 | $37,770 | $8,882 | $8,846 |
Add: Stock-based compensation and related taxes | (4,046) | (3,906) | (4,773) | (1,155) | (1,095) |
Amortization of Intangibles | (6) | (5) | (6) | (2) | - |
Restructuring charges | - | - | (634) | - | - |
Non-GAAP Research and Development | $25,276 | $29,992 | $32,357 | $7,725 | $7,751 |
GAAP General and Administrative | $15,186 | $17,613 | $20,825 | $5,112 | $5,028 |
Add: Stock-based compensation and related taxes | (4,086) | (4,331) | (5,061) | (1,189) | (1,264) |
Amortization of Intangibles | (124) | (27) | (5) | (5) | - |
Acquistion related costs | (118) | (423) | (262) | (36) | - |
Litigation costs | - | (142) | (606) | (534) | - |
Change in fair value of acquisition-related | - | 342 | 200 | - | - |
contingent consideration | |||||
Non-GAAP General and Administrative | $10,858 | $13,032 | $15,091 | $3,348 | $3,764 |
GAAP Operating Loss | ($13,724) | ($15,786) | ($19,711) | ($5,020) | ($1,145) |
Add: Stock-based compensation and related taxes | 11,118 | 10,695 | 13,149 | 3,123 | 3,134 |
Amortization of Intangibles | 313 | 740 | 1,227 | 207 | 326 |
Acquistion related costs | 118 | 81 | 262 | 36 | - |
Litigation costs | - | 142 | 606 | 142 | - |
Change in fair value of acquisition-related | - | - | (200) | - | - |
contingent consideration | |||||
Restructuring charges | - | - | 3,085 | - | - |
Non-GAAP Operating Income (Loss) | ($2,175) | ($4,128) | ($1,582) | ($1,512) | $2,315 |
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Ooma Inc. published this content on 26 May 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 26 May 2020 20:32:03 UTC