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Ooma Reports First Quarter Fiscal Year 2018 Financial Results

May 23, 2017

PALO ALTO, Calif., May 23, 2017 /PRNewswire/ -- Ooma, Inc. (NYSE: OOMA), a smart communications platform for small businesses and consumers, today released financial results for the first quarter ended April 30, 2017.    

First Quarter Fiscal 2018 Financial Highlights:

  • Revenue: Total revenue was $27.6 million, up 13% year-over-year. Subscription and services revenue increased 12% year-over-year to $24.1 million, driven by 63% growth of Ooma Office subscription and services revenue. Product and other revenue increased 17% year-over-year to $3.5 million, and was 13% of total revenue.
  • Net Loss: GAAP net loss was $3.4 million, or $0.19 per basic and diluted share, compared to GAAP net loss of $4.0 million, or $0.23 per basic and diluted share, in the first quarter of fiscal 2017. Non-GAAP net loss was $0.3 million, or $0.02 per basic and diluted share, compared to non-GAAP net loss of $1.4 million, or $0.08 per basic and diluted share, in the first quarter of fiscal 2017.
  • Adjusted EBITDA: Adjusted EBITDA was $0.1 million for the first quarter of fiscal 2018 compared to ($1.1) million in the prior year period.

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

"We are progressing well on our strategy to grow Ooma Office which delivered strong results and we continue to make significant advances on Office, including launching service for WeWork in France," said Eric Stang, chief executive officer of Ooma. "Our subscription services revenue for Office and Telo combined grew 20% in Q1 versus a year ago, however, we are disappointed that revenue from both Business Promoter and Talkatone declined in the quarter.  We are behind on some key residential initiatives for the year and are taking steps to improve our execution.  We believe our core business is fundamentally strong and we have a great opportunity ahead."

Recent Business Highlights:

  • Announced the expansion of Ooma Office into France as a provider of cloud-based phone service for WeWork.
  • Won PCMag's Business Choice Awards for Best VoIP Solution for an unprecedented fourth consecutive year.

Business Outlook:

For the second quarter fiscal 2018, Ooma expects to report:

  • Total revenue between $27.6 million to $28.0 million.
  • GAAP net loss in the range of $3.8 million to $4.3 million, and non-GAAP net loss in the range of $0.5 million to $0.8 million.
  • GAAP net loss per share in the range of $0.21 to $0.23, and non-GAAP net loss per share in the range of $0.03 to $0.05 based on approximately 18.3 million basic and diluted weighted average common shares outstanding.

For the full fiscal year 2018, Ooma expects to report:

  • Total revenue in the range of $113.0 million to $116.0 million.
  • GAAP net loss in the range of $13.3 million to $14.8 million, and non-GAAP net loss in the range of $1.5 million to $2.5 million.
  • GAAP net loss per share in the range of $0.71 to $0.79, and non-GAAP net loss per share in the range of $0.08 to $0.13 based on approximately 18.8 million basic and diluted weighted average common shares outstanding.

The following is a reconciliation of GAAP net loss to non-GAAP net loss and GAAP basic and diluted earnings per share to non-GAAP basic and diluted earnings per share guidance for the second fiscal quarter and the fiscal year ending January 31, 2018 (in millions, except per share data):



Projected range



Three Months
Ending


Fiscal Year Ending



July 31, 2017


January 31, 2018



(unaudited)

GAAP Net Loss


 ($3.8)-($4.3)


 ($13.3)-($14.8)

Stock-based compensation and related taxes


 3.2-3.4


 11.5-12.0

Amortization of intangibles


0.1


0.3

Non-GAAP Net Loss


 ($0.5)-($0.8)


 ($1.5)-($2.5)






Basic and Diluted Net Loss per Share on a GAAP basis


 ($0.21)-($0.23)


 ($0.71)-($0.79)

Stock-based compensation and related taxes


0.17


 0.61-0.64

Amortization of intangibles


0.01


0.02

Basic and Diluted Net Loss per Share on a Non-GAAP basis


 ($0.03)-($0.05)


 ($0.08)-($0.13)

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





Basic and diluted


18.3


18.8

 

Conference Call Information:

Ooma will host a conference call and live webcast for analysts and investors at 5:00 p.m. Eastern time today, May 23, 2017. 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 (800) 227-9428, using conference code 1867791. International parties can access the call by dialing +1 (785) 830-1925, using conference code 1867791.

The webcast will be accessible on Ooma's investor relations website at http://investors.ooma.com for a period of one year. A telephonic replay of the conference call will be available through Saturday, May 27, 2017. To access the replay, parties in the United States and Canada should call +1 (888) 203-1112 and enter conference code 1867791. International parties should call +1 (719) 457-0820 and enter conference code 1867791.

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 loss, non-GAAP net loss per share, non-GAAP gross profit and gross margin, non-GAAP operating loss, and Adjusted EBITDA. Adjusted EBITDA represents the net loss before interest and other income, depreciation and amortization and other non-GAAP expenses.

These non-GAAP financial measures exclude non-cash stock-based compensation expense and related taxes and amortization of intangibles.

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 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, 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, 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. In particular, this press release includes forward looking statements regarding continued growth of our subscriber base, the strength and quality of our SaaS platform, our competitive advantage serving small business, home and mobile customers, and improvement in our financial performance.  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; 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; our limited operating history; 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 with the Securities and Exchange Commission, including the risk factors contained in our Annual  Report Form 10-K for the year ended January 31, 2017, filed with the SEC on April 11, 2017. 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

Founded in 2004, Ooma creates new communications experiences for small businesses and consumers. Its smart platform serves as a communications hub, which offers cloud-based telephony, internet security, home security and other connected services. Ooma combines PureVoice HD call quality and innovative features with mobile applications for reliable anytime, anywhere calling. The company has been ranked the No. 1 home phone service for overall satisfaction and value for five consecutive years by the leading consumer research publication. Ooma is also partnering with connected device makers to create smarter offices and homes. Ooma is available in stores and online from leading retailers. For more information about Ooma, please visit www.ooma.com or follow us on TwitterLinkedIn or Facebook.

Ooma, PureVoice and the Ooma logo are trademarks of Ooma, Inc. All other company and product names may be trademarks of the respective companies with which they are associated.


OOMA, INC

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands)







April 30,


January 31,


2017


2017


(unaudited)



Assets




Current assets:

$53,275


$53,201

Cash and cash equivalents

$9,008


$3,990

Short-term investments

44,267


49,211

Accounts receivable, net

4,442


4,714

Inventories

6,984


5,830

Deferred inventory costs

1,366


1,620

Prepaid expenses and other current assets

1,882


1,891

Total current assets

67,949


67,256





Property and equipment, net

4,364


4,176

Intangible assets, net

454


537

Goodwill

1,117


1,117

Other assets

160


252

Total assets

$74,044


$73,338





Liabilities and stockholders' equity




Current liabilities:




Accounts payable

$7,895


$5,857

Accrued expenses

10,195


11,579

Deferred revenue

15,470


15,521

Total current liabilities

33,560


32,957





Other liabilities

522


561

Total liabilities

$34,082


33,518





Stockholders' equity:




Common stock

2


2

Additional paid-in capital

121,185


117,639

Accumulated comprehensive loss

(23)


(11)

Accumulated deficit

(81,202)


(77,810)

Total stockholders' equity

39,962


39,820

Total liabilities and stockholders' equity

$74,044


$73,338

 

OOMA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in thousands, except share and per share data)









Three Months Ended



 April 30,


 April 30,



2017


2016



(unaudited)

Revenue:





Subscription and services


24,100


21,490

Product and other


3,478


2,969

Total revenue


27,578


24,459






Cost of revenue:





Subscription and services


7,749


7,271

Product and other


3,796


3,539

Total cost of revenue


11,545


10,810

Gross profit


16,033


13,649






Operating expenses:





Sales and marketing


9,154


8,095

Research and development


6,621


5,741

General and administrative


3,756


3,855

Total operating expenses


19,531


17,691

Loss from operations:


(3,498)


(4,042)

Other income (expense):





Interest income (expense), net


122


64

Other (expense) income, net


(16)


22

Net loss


$(3,392)


$(3,956)






Net loss per share of common stock:





Basic and diluted


$(0.19)


$(0.23)

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





Basic and diluted


18,128,504


17,059,986


 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, amounts in thousands)








Three Months Ended



April 30,


April 30,



2017


2016

Cash flows from operating activities:





Net loss 


$(3,392)


$(3,956)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:





Stock-based compensation expense


2,971


2,474

Depreciation and amortization


543


389

Amortization of intangibles


83


97

Changes in operating assets and liabilities:





Accounts receivable, net


272


587

Inventories


(1,154)


1,103

Deferred inventory costs


254


172

Prepaid expenses and other assets


89


(110)

Accounts payable and accrued expenses


572


(1,373)

Other liabilities


(3)


(20)

Deferred revenue


(70)


(608)

Net cash provided by (used in) operating activities


165


(1,245)

Cash flows from investing activities:





Purchases of short-term investments


(5,441)


(19,260)

Proceeds from maturity of short-term investments


9,860


2,500

Proceeds from sale of short-term investments


450


Purchases of property and equipment


(579)


(321)

Net cash provided by (used in) investing activities


4,290


(17,081)

Cash flows from financing activities:





Repayment of debt and capital leases



(628)

Payment of acquisition related earn-out



(100)

Shares repurchased for tax withholdings on vesting of restricted
stock units

(300)


Proceeds from issuance of common stock related to employee stock benefit plans


863


623

Net cash provided by (used in) financing activities


563


(105)

Net increase (decrease) in cash and cash equivalents


5,018


(18,431)

Cash and cash equivalents at beginning of period


3,990


27,413

Cash and cash equivalents at end of period


$9,008


$8,982


 

OOMA, INC.

Reconciliation of Non-GAAP Financial Measures

Impact of Non-GAAP Adjustments on Reported Net Loss

(Amounts in thousands, except percentages and per share data)









Three Months Ended



April 30,


April 30,



2017


2016



(unaudited)

Revenue


$27,578


$24,459

Reconciliation of GAAP Gross Profit and GAAP Gross Margin 
to Non-GAAP Gross Profit and Non-GAAP Gross Margin:




GAAP Gross Profit


$16,033


$13,649

Stock-based compensation and related taxes


322


235

Amortization of intangibles


40


40

Non-GAAP Gross Profit


$16,395


$13,924






Gross Margin on a GAAP basis


58%


56%

Gross Margin on a Non-GAAP basis


59%


57%






Reconciliation of Operating Loss on a GAAP Basis
to Operating Loss on a Non-GAAP Basis:




GAAP Operating Loss


$(3,498)


$(4,042)

Stock-based compensation and related taxes


3,018


2,474

Amortization of intangibles


83


97

Non-GAAP Operating Loss


$(397)


$(1,471)






Reconciliation of GAAP Net Loss to Non-GAAP Net Loss:




GAAP Net Loss


$(3,392)


$(3,956)

Stock-based compensation and related taxes


3,018


2,474

Amortization of intangibles


83


97

Non-GAAP Net Loss


$(291)


$(1,385)






Reconciliation of Basic and Diluted Net Loss per Share on a GAAP Basis
to Basic and Diluted Net Loss per Share on a Non-GAAP Basis:




Basic and Diluted Net Loss per share on a GAAP Basis


$(0.19)


$(0.23)

Stock-based compensation and related taxes


0.17


0.14

Amortization of intangibles



0.01

Basic and Diluted Net Loss per share on a Non-GAAP Basis


$(0.02)


$(0.08)






Reconciliation of Net Loss to Adjusted EBITDA:





Net Loss


$(3,392)


$(3,956)

Reconciling items:





Interest and other (income) expense, net


(106)


(86)

Depreciation and amortization


468


389

Amortization of intangibles


83


97

Stock-based compensation and related taxes


3,018


2,474

Adjusted EBITDA


$71


$(1,082)

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/ooma-reports-first-quarter-fiscal-year-2018-financial-results-300462675.html

SOURCE Ooma, Inc.

Investor Relations: Soohwan Kim, CFA, The Blueshirt Group for Ooma, Inc., ir@ooma.com, (650) 300-1480

1Purchase of Ooma Telo required, beginning at suggested retail price of $129.99. Ooma's free home phone service does not include high-speed Internet or broadband service. Free home calling offered in the United States only. Federal universal service charges, FCC regulatory fee, state and local taxes, fees & surcharges and regulatory and compliance fees are billed monthly and are subject to change. To determine the specific charges in your area, go to http://www.ooma.com/rates. Transfer of your existing phone number, where available, requires a one-time processing fee. Ooma Premier. and other enhanced features carry a monthly service fee and may require additional peripheral devices sold separately.

Unlimited U.S. calls are subject to normal residential usage limitations. See http://www.ooma.com/termsandconditions for current usage limitations. International calls are billed per minute and must be prepaid. Directory assistance (411) calls are billed per call. See http://www.ooma.com/rates. Ooma E911 service operates differently from non-Internet 911 service. See http://www.ooma.com/911 for details. Some alarms, faxes and other devices may not be compatible. Additional terms apply, see http://www.ooma.com/termsandconditions.

Any questions? Call us (free, of course). Call 866.452.6662. Monday-Friday 5am-5pm PST, Saturday-Sunday 8am-5pm PST.

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