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Ooma Reports Fourth Quarter and Fiscal Year 2020 Financial Results

March 05, 2020

Business Subscription and Services Revenue up 61% year-over-year
Named Winner of PCMag’s Business Choice Award for VoIP

SUNNYVALE, Calif., March 05, 2020 (GLOBE NEWSWIRE) -- Ooma, Inc. (NYSE: OOMA), a smart communications platform for businesses and consumers, today released financial results for the fourth quarter and fiscal year ended January 31, 2020.

Fourth Quarter Fiscal 2020 Financial Highlights:

  • Revenue: Total revenue was $40.6 million, up 17% year-over-year. Subscription and services revenue increased to $37.4 million and was 92% of total revenue, driven by 22% year-over-year growth in combined Ooma Business and Ooma Residential services.
  • Net Income/Loss: GAAP net loss was $2.3 million, or $0.11 per basic and diluted share, compared to GAAP net loss of $3.5 million, or $0.17 per basic and diluted share, in the fourth quarter fiscal 2019. Non-GAAP net income was $1.0 million, or $0.04 per diluted share, compared to a non-GAAP net loss of $0.7 million, or $0.03 per basic and diluted share in the prior year period.
  • Adjusted EBITDA: Adjusted EBITDA was $1.4 million, compared to negative $0.5 million in fourth quarter fiscal 2019.

Full Year Fiscal 2020 Financial Highlights:

  • Revenue: Total revenue was $151.6 million, up 17% year-over-year. Subscription and services revenue increased to $139.5 million and was 92% of total revenue, driven by 21% year-over-year growth in combined Ooma Business and Ooma Residential services.
  • Net Income/Loss: GAAP net loss was $18.8 million, or $0.89 per basic and diluted share, compared to GAAP net loss of $14.6 million, or $0.74 per basic and diluted share, in fiscal 2019. Non-GAAP net loss was $0.7 million, or $0.03 per diluted share, compared to a non-GAAP net loss of $3.0 million, or $0.15 per basic and diluted share in the prior fiscal year.
  • Adjusted EBITDA: Adjusted EBITDA was $1.0 million, compared to negative $1.9 million in fiscal 2019.

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

“The fourth quarter of our 2020 fiscal year was outstanding for Ooma, with significant growth in recurring revenues and continued execution of our strategy to expand Ooma Business,” said Eric Stang, chief executive officer of Ooma. “Revenues grew 17% year-over-year, driven by 61% growth in Ooma Business subscription and services revenue. With our business solutions today serving customers from one user to more than 20,000 users, we are well positioned to grow Ooma Business with our award-winning offering for small businesses and custom solutions for larger enterprises.”

Business Outlook:

For the first quarter of fiscal 2021, Ooma expects:

  • Total revenue in the range of $40.0 million to $40.5 million.
  • GAAP net loss in the range of $2.5 million to $3.0 million and GAAP net loss per share in the range of $0.12 to $0.14.
  • Non-GAAP net income in the range of $0.5 million to $1.0 million and non-GAAP net income per share in the range of $0.02 to $0.04.

For the full fiscal year 2021, Ooma expects:

  • Total revenue in the range of $167.0 million to $170.0 million.
  • GAAP net loss in the range of $10.5 million to $12.5 million, and GAAP net loss per share in the range of $0.48 to $0.56
  • Non-GAAP net income in the range of $2.0 million to $4.0 million, and non-GAAP earnings per share in the range of $0.09 to $0.17.

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 basic and diluted net income per share guidance for the first fiscal quarter ending April 30, 2020 and the fiscal year ending January 31, 2021 (in millions, except per share data):

     
    Projected range
  Three Months Ending   Fiscal Year Ending
    April 30, 2020   January 31, 2021
    (unaudited)
GAAP net loss   ($2.5)-($3.0)   ($10.5)-($12.5)
Stock-based compensation and related taxes   3.2   13.2
Amortization of intangible assets   0.3   1.3
Non-GAAP net income   $0.5-$1.0   $2.0-$4.0
         
GAAP net loss per share   ($0.12)-($0.14)   ($0.48)-($0.56)
Stock-based compensation and related taxes   0.15   0.59
Amortization of intangible assets   0.01   0.06
Non-GAAP net income per share   $0.02-$0.04   $0.09-$0.17
         
Weighted-average number of shares used in per share amounts:        
Basic   21.9   22.5
Diluted   22.9   23.5
         

Conference Call Information: Ooma will host a conference call and live webcast for analysts and investors at 5:00 p.m. Eastern time today, March 5, 2020. 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 (833) 233-4456, using conference ID “Ooma Fourth Quarter”. International parties can access the call by dialing +1 (647) 689-4135, using conference ID “Ooma Fourth Quarter”. 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 11:59 p.m. ET on Thursday, March 12, 2020. To access the replay, parties in the United States and Canada should call +1 (800) 585-8367 and use conference ID 8582563. International parties should call +1 (416) 621-4642 and enter conference ID 8582563.

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

These non-GAAP financial measures exclude non-cash stock-based compensation expense and related taxes, acquisition-related costs, amortization of intangible assets, restructuring charges and certain litigation costs outside the ordinary course of our business.  For fiscal 2020, restructuring charges primarily included write-downs for Smart Cam inventory and certain assets including the related intangibles and severance expenses for the affected employees.

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, statements regarding future economic performance and financial positions, 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. This press release includes forward–looking statements regarding the company’s business outlook, its opportunity to continue the growth of Ooma Business and its execution of other initiatives to drive long-term shareholder value. 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 inability to achieve the intended results from our acquisition of Broadsmart; 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 SEC, including the risk factors contained in our quarterly filing on Form 10-Q for the quarter ended October 31, 2019, filed with the SEC on December 6, 2019. 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

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 that are flexible and scalable. For consumers, Ooma’s residential phone service provides PureVoice HD voice quality, advanced functionality and integration with their mobile devices. Ooma’s innovative smart security solution delivers a range of wireless security sensors that make it easy for anyone to protect their home or business. Learn more at www.ooma.com or www.ooma.ca in Canada.

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

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

 
OOMA, INC
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, amounts in thousands)
       
       
  January 31,   January 31,
  2020   2019
Assets      
Current assets:      
Cash and cash equivalents $ 11,680     $ 15,370  
Short-term investments   14,384       27,253  
Accounts receivable, net   4,591       3,723  
Inventories   8,369       10,117  
Other current assets   8,992       5,450  
Total current assets   48,016       61,913  
Property and equipment, net   5,270       4,563  
Operating lease right-of-use assets   7,897        
Intangible assets, net   6,818       2,635  
Goodwill   4,264       3,898  
Other assets   8,186       5,379  
Total assets $ 80,451     $ 78,388  
       
Liabilities and stockholders' equity      
Current liabilities:      
Accounts payable $ 8,499     $ 10,231  
Accrued expenses and other current liabilities   22,576       19,048  
Deferred revenue   15,797       15,443  
Total current liabilities   46,872       44,722  
Long-term operating lease liabilities   4,990        
Other liabilities   174       619  
Total liabilities   52,036       45,341  
       
Stockholders' equity:      
Common stock   4       4  
Additional paid-in capital   152,993       138,848  
Accumulated other comprehensive gain (loss)   14       (10 )
Accumulated deficit   (124,596 )     (105,795 )
Total stockholders' equity   28,415       33,047  
Total liabilities and stockholders' equity $ 80,451     $ 78,388  
       

 


OOMA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, amounts in thousands, except share and per share data)
                 
    Three Months Ended   Fiscal Year Ended
    January 31,   January 31,   January 31,   January 31,
    2020   2019   2020   2019
Revenue:                
Subscription and services   $ 37,429     $ 30,897     $ 139,499     $ 116,429  
Product and other     3,219       3,823       12,094       12,802  
Total revenue     40,648       34,720       151,593       129,231  
                 
Cost of revenue:                
Subscription and services     11,631       9,720       43,748       36,108  
Product and other     4,429       5,293       18,464       16,632  
Total cost of revenue     16,060       15,013       62,212       52,740  
Gross profit     24,588       19,707       89,381       76,491  
                 
Operating expenses:                
Sales and marketing     12,999       10,612       50,497       40,761  
Research and development     8,652       8,345       37,770       33,903  
General and administrative     5,409       4,577       20,825       17,613  
Total operating expenses     27,060       23,534       109,092       92,277  
Loss from operations     (2,472 )     (3,827 )     (19,711 )     (15,786 )
Interest and other income, net     114       231       780       830  
Loss before income taxes     (2,358 )     (3,596 )     (18,931 )     (14,956 )
Income tax benefit     64       107       130       384  
Net loss   $ (2,294 )   $ (3,489 )   $ (18,801 )   $ (14,572 )
                 
Net loss per share of common stock:                
Basic and diluted   $ (0.11 )   $ (0.17 )   $ (0.89 )   $ (0.74 )
Weighted-average shares of common stock outstanding:                
Basic and diluted     21,581,568       20,227,252       21,051,039       19,799,781  
                 

 


 
OOMA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, amounts in thousands)
                 
    Three Months Ended   Fiscal Year Ended
    January 31,   January 31,   January 31,   January 31,
    2020   2019   2020   2019
Cash flows from operating activities:                
Net loss   $ (2,294 )   $ (3,489 )   $ (18,801 )   $ (14,572 )
Adjustments to reconcile net loss to net cash used in operating activities:                
Stock-based compensation expense     3,114       2,636       12,761       10,370  
Depreciation and amortization of capital expenditures     572       552       2,548       2,269  
Amortization of intangible assets and non-cash acquisition-related costs     127       (14 )     1,027       398  
Non-cash restructuring charges                 1,603        
Non-cash operating lease expense     632             1,997        
Deferred income taxes     (78 )     (105 )     (144 )     (382 )
Other     (68 )     (124 )     (147 )     (332 )
Changes in operating assets and liabilities:                
Accounts receivable, net     424       (843 )     135       (1,050 )
Inventories     1,051       (2,520 )     407       (4,213 )
Other assets     (1,320 )     (2,513 )     (4,965 )     (5,335 )
Accounts payable and other liabilities     (1,213 )     3,985       (4,089 )     8,149  
Restructuring liability     (1,504 )                  
Deferred revenue     (225 )     314       104       772  
Net cash used in operating activities     (782 )     (2,121 )     (7,564 )     (3,926 )
                 
Cash flows from investing activities:                
Purchases of short-term investments           (11,776 )     (31,234 )     (38,485 )
Proceeds from maturities and sales of short-term investments     1,452       18,199       44,446       58,961  
Capital expenditures     (889 )     (483 )     (3,273 )     (1,921 )
Business acquisitions, net of cash assumed                 (7,073 )     (2,402 )
Payment for purchase of convertible note           (1,300 )           (1,300 )
Net cash provided by investing activities     563       4,640       2,866       14,853  
                 
Cash flows from financing activities:                
Proceeds from issuance of common stock     211       123       2,951       2,886  
Shares repurchased for tax withholdings on vesting of restricted stock units           (628 )     (1,523 )     (2,926 )
Payment of acquisition-related holdback                 (420 )      
Net cash provided by (used in) financing activities     211       (505 )     1,008       (40 )
Net (decrease) increase in cash and cash equivalents     (8 )     2,014       (3,690 )     10,887  
Cash and cash equivalents at beginning of period     11,688       13,356       15,370       4,483  
Cash and cash equivalents at end of period   $ 11,680     $ 15,370     $ 11,680     $ 15,370  
                 

 


 
OOMA, INC.
Reconciliation of Non-GAAP Financial Measures
(Unaudited, amounts in thousands, except percentages, shares and per share data)
                 
    Three Months Ended   Fiscal Year Ended
  January 31,   January 31,   January 31,   January 31,
    2020
  2019
  2020
  2019
Revenue   $ 40,648     $ 34,720     $ 151,593     $ 129,231  
                 
GAAP gross profit   $ 24,588     $ 19,707     $ 89,381     $ 76,491  
Stock-based compensation and related taxes     305       249       1,311       957  
Amortization of intangible assets     73       149       480       549  
Restructuring charges                 2,289        
Non-GAAP gross profit   $ 24,966     $ 20,105     $ 93,461     $ 77,997  
                 
Gross margin on a GAAP basis     60 %     57 %     59 %     59 %
Gross margin on a Non-GAAP basis     61 %     58 %     62 %     60 %
                 
GAAP operating loss   $ (2,472 )   $ (3,827 )   $ (19,711 )   $ (15,786 )
Stock-based compensation and related taxes     3,145       2,692       13,149       10,695  
Amortization of intangible assets and acquisition-related costs     127       (14 )     1,289       821  
Restructuring charges                 3,085        
Litigation costs           142       606       142  
Non-GAAP operating income (loss)   $ 800     $ (1,007 )   $ (1,582 )   $ (4,128 )
                 
GAAP net loss   $ (2,294 )   $ (3,489 )   $ (18,801 )   $ (14,572 )
Stock-based compensation and related taxes     3,145       2,692       13,149       10,695  
Amortization of intangible assets and acquisition-related costs     127       (14 )     1,289       752  
Restructuring charges                 3,085        
Litigation costs           142       606       142  
Non-GAAP net income (loss)   $ 978     $ (669 )   $ (672 )   $ (2,983 )
                 
GAAP basic and diluted net loss per share   $ (0.11 )   $ (0.17 )   $ (0.89 )   $ (0.74 )
Stock-based compensation and related taxes     0.15       0.13       0.62       0.54  
Amortization of intangible assets and acquisition-related costs     0.01             0.06       0.04  
Restructuring charges                 0.15        
Litigation costs           0.01       0.03       0.01  
Non-GAAP net income (loss) per basic share   $ 0.05     $ (0.03 )   $ (0.03 )   $ (0.15 )
Non-GAAP net income (loss) per diluted share   $ 0.04     $ (0.03 )   $ (0.03 )   $ (0.15 )
                 
GAAP weighted-average basic and diluted shares     21,581,568       20,227,252       21,051,039       19,799,781  
Non-GAAP weighted-average diluted shares     22,545,678       20,227,252       21,051,039       19,799,781  
                 
GAAP net loss   $ (2,294 )   $ (3,489 )   $ (18,801 )   $ (14,572 )
Reconciling items:                
Interest and other income, net     (114 )     (231 )     (780 )     (830 )
Income tax benefit     (64 )     (107 )     (130 )     (315 )
Depreciation and amortization of capital expenditures     572       552       2,548       2,269  
Stock-based compensation and related taxes     3,145       2,692       13,149       10,695  
Amortization of intangible assets and acquisition-related costs     127       (14 )     1,289       752  
Restructuring charges                 3,085        
Litigation costs           142       606       142  
Adjusted EBITDA   $ 1,372     $ (455 )   $ 966     $ (1,859 )
                 

 

new Ooma logo.png

Source: Ooma, Inc.

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 https://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 https://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 https://www.ooma.com/rates. Ooma E911 service operates differently from non-Internet 911 service. See https://www.ooma.com/911 for details. Some alarms, faxes and other devices may not be compatible. Additional terms apply, see https://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.

Copyright © 2017 Ooma, Inc. All rights reserved.