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Ooma Reports Third Quarter Fiscal Year 2021 Financial Results

SUNNYVALE, Calif.–(BUSINESS WIRE)–Ooma, Inc. (NYSE: OOMA), a smart communications platform for businesses and consumers, today released financial results for the third fiscal quarter ended October 31, 2020.

Third Quarter Fiscal 2021 Financial Highlights:

  • Revenue: Total revenue was $43.0 million, up 9% year-over-year. Subscription and services revenue increased to $39.6 million from $36.5 million in the third quarter of fiscal 2020, and was 92% of total revenue, driven by growth in combined Ooma Business and Ooma Residential services.
  • Net Income/Loss: GAAP net loss was $0.4 million, or $0.02 per basic and diluted share, compared to GAAP net loss of $6.8 million, or $0.32 per basic and diluted share, in the third quarter of fiscal 2020. Non-GAAP net income was $3.1 million, or $0.13 per diluted share, compared to non-GAAP net income of $0.1 million, or $0.01 per diluted share in the prior year period.
  • Adjusted EBITDA: Adjusted EBITDA was $3.6 million, compared to $0.6 million in the third quarter of fiscal 2020.

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.

“Ooma demonstrated continued strong performance for the third quarter of fiscal 2021, with revenue increasing to $43 million and solid non-GAAP profitability,” said Eric Stang, chief executive officer. “It was a strong quarter across the business, with significant growth in sales through channel partners and increased adoption of our higher tier of service Ooma Office Pro. The strategy adjustments we made this year in light of the pandemic and our strong core value propositions for small businesses and larger businesses with special needs position us well for Q4.”

Business Outlook:

Ooma provides guidance based on current market conditions and expectations. The Company emphasizes that the guidance is subject to cautionary factors referenced in the section discussing forward-looking statements below, including risks and uncertainties associated with the COVID-19 pandemic.

For the fourth quarter of fiscal 2021, Ooma expects to report:

  • Total revenue in the range of $43.0 million to $43.8 million.
  • GAAP net loss in the range of $0.8 million to $1.4 million and GAAP net loss per share in the range of $0.04 to $0.07.
  • Non-GAAP net income in the range of $2.0 million to $2.6 million and non-GAAP earnings per share in the range of $0.08 to $0.11.

For the full fiscal year 2021, Ooma expects to report:

  • Total revenue in the range of $167.7 million to $168.5 million.
  • GAAP net loss in the range of $2.7 million to $3.3 million, and GAAP net loss per share in the range of $0.13 to $0.15.
  • Non-GAAP net income in the range of $10.6 million to $11.2 million, and non-GAAP earnings per share in the range of $0.45 to $0.47.

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 earnings per share guidance for the fourth fiscal quarter and fiscal year ending January 31, 2021 (in millions, except per share data):

Projected range

Three Months Ending

 

 

Fiscal Year Ending

January 31, 2021

 

 

January 31, 2021

(unaudited)
GAAP net loss

($0.8)-($1.4)

 

 

($2.7)-($3.3)

Stock-based compensation and related taxes

3.1

 

 

12.6

Amortization of intangible assets

0.3

 

 

1.3

Non-GAAP net income

$2.0-$2.6

 

 

$10.6-$11.2

 

 

 

 

GAAP net loss per share

($0.04)-($0.07)

 

 

($0.13)-($0.15)

Stock-based compensation and related taxes

0.14

 

 

0.55

Amortization of intangible assets

0.01

 

 

0.05

Non-GAAP net income per share

$0.08-$0.11

 

 

$0.45-$0.47

 

 

 

 

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

 

 

 

 

Basic

22.8

 

 

22.4

Diluted

24.0

 

 

23.6

Conference Call Information:

Ooma will host a conference call and live webcast for analysts and investors at 5:00 p.m. Eastern time today, November 19, 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 4896477. International parties can access the call by dialing +1 (647) 689-4135, using conference ID 4896477.

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 8:00 p.m. Eastern time on November 19, 2020 until 11:59 p.m. Eastern time Thursday, November 26, 2020. To access the replay, parties in the United States and Canada should call +1 (800) 585-8367 and use conference ID 4896477. International parties should call +1 (416) 621-4642 and use conference ID 4896477.

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 of capital expenditures, amortization of intangible assets, acquisition-related costs, stock-based compensation and related taxes, restructuring charges and certain litigation costs outside the ordinary course of our business.

Other non-GAAP financial measures exclude stock-based compensation expense and related taxes, amortization of intangible assets, acquisition-related costs, restructuring charges and certain litigation costs outside the ordinary course of our business.

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, changes in the company’s strategy 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: 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; 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 with the SEC, including the risk factors contained in our quarterly report on Form 10-Q for the quarter ended July 31, 2020, filed with the SEC on September 4, 2020. 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 that are flexible and scalable. For consumers, Ooma’s residential phone service provides PureVoice HD voice quality, advanced functionality and integration with 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. 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,

2020

 

2020

Assets
Current assets:
Cash and cash equivalents

$

15,511

 

$

11,680

 

Short-term investments

 

12,105

 

 

14,384

 

Accounts receivable, net

 

4,990

 

 

4,591

 

Inventories

 

10,233

 

 

8,369

 

Other current assets

 

10,582

 

 

8,992

 

Total current assets

 

53,421

 

 

48,016

 

Property and equipment, net

 

5,037

 

 

5,270

 

Operating lease right-of-use assets

 

6,209

 

 

8,057

 

Intangible assets, net

 

5,839

 

 

6,818

 

Goodwill

 

4,264

 

 

4,264

 

Other assets

 

10,975

 

 

8,186

 

Total assets

$

85,745

 

$

80,611

 

 
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable

$

7,409

 

$

8,499

 

Accrued expenses and other current liabilities

 

21,431

 

 

22,576

 

Deferred revenue

 

16,313

 

 

15,797

 

Total current liabilities

 

45,153

 

 

46,872

 

Long-term operating lease liabilities

 

3,029

 

 

5,150

 

Other liabilities

 

89

 

 

174

 

Total liabilities

 

48,271

 

 

52,196

 

 
Stockholders’ equity:
Common stock

 

4

 

 

4

 

Additional paid-in capital

 

163,898

 

 

152,993

 

Accumulated other comprehensive gain

 

14

 

 

14

 

Accumulated deficit

 

(126,442

)

 

(124,596

)

Total stockholders’ equity

 

37,474

 

 

28,415

 

Total liabilities and stockholders’ equity

$

85,745

 

$

80,611

 

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,

 

October 31,

 

October 31,

 

October 31,

 

2020

 

 

 

2019

 

 

 

2020

 

 

 

2019

 

Revenue:
Subscription and services

$

39,633

 

$

36,489

 

$

115,749

 

$

102,070

 

Product and other

 

3,334

 

 

3,106

 

 

8,936

 

 

8,875

 

Total revenue

 

42,967

 

 

39,595

 

 

124,685

 

 

110,945

 

 
Cost of revenue:
Subscription and services

 

11,366

 

 

11,093

 

 

34,322

 

 

32,117

 

Product and other

 

4,914

 

 

6,462

 

 

12,999

 

 

14,035

 

Total cost of revenue

 

16,280

 

 

17,555

 

 

47,321

 

 

46,152

 

Gross profit

 

26,687

 

 

22,040

 

 

77,364

 

 

64,793

 

 
Operating expenses:
Sales and marketing

 

13,158

 

 

13,205

 

 

37,383

 

 

37,498

 

Research and development

 

8,955

 

 

10,639

 

 

26,851

 

 

29,118

 

General and administrative

 

5,096

 

 

5,136

 

 

15,346

 

 

15,416

 

Total operating expenses

 

27,209

 

 

28,980

 

 

79,580

 

 

82,032

 

Loss from operations

 

(522

)

 

(6,940

)

 

(2,216

)

 

(17,239

)

Interest and other income, net

 

109

 

 

128

 

 

370

 

 

666

 

Loss before income taxes

 

(413

)

 

(6,812

)

 

(1,846

)

 

(16,573

)

Income tax benefit

 

 

 

28

 

 

 

 

66

 

Net loss

$

(413

)

$

(6,784

)

$

(1,846

)

$

(16,507

)

 
Net loss per share of common stock:
Basic and diluted

$

(0.02

)

$

(0.32

)

$

(0.08

)

$

(0.79

)

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

 

22,531,047

 

 

21,274,285

 

 

22,222,659

 

 

20,872,253

 

OOMA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, amounts in thousands)
 

Three Months Ended

 

Nine Months Ended

October 31,

 

October 31,

 

October 31,

 

October 31,

 

2020

 

 

 

2019

 

 

 

2020

 

 

 

2019

 

Cash flows from operating activities:
Net loss

$

(413

)

$

(6,784

)

$

(1,846

)

$

(16,507

)

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

 

3,121

 

 

3,254

 

 

9,219

 

 

9,647

 

Depreciation and amortization of capital expenditures

 

662

 

 

629

 

 

2,131

 

 

1,976

 

Amortization of intangible assets

 

326

 

 

384

 

 

978

 

 

900

 

Non-cash operating lease expense

 

799

 

 

466

 

 

2,391

 

 

1,365

 

Non-cash restructuring charges

 

 

 

1,603

 

 

 

 

1,603

 

Other

 

17

 

 

145

 

 

41

 

 

(79

)

Changes in operating assets and liabilities:
Accounts receivable, net

 

(726

)

 

(332

)

 

(399

)

 

(289

)

Inventories

 

(844

)

 

745

 

 

(1,368

)

 

(644

)

Other assets

 

(3,055

)

 

(1,342

)

 

(4,873

)

 

(3,645

)

Accounts payable and other liabilities

 

2,599

 

 

701

 

 

(4,541

)

 

(1,438

)

Deferred revenue

 

13

 

 

(96

)

 

431

 

 

329

 

Net cash provided by (used in) operating activities

 

2,499

 

 

(627

)

 

2,164

 

 

(6,782

)

 
Cash flows from investing activities:
Purchases of short-term investments

 

(3,791

)

 

(12,040

)

 

(15,804

)

 

(31,236

)

Proceeds from maturities and sales of short-term investments

 

6,125

 

 

10,950

 

 

18,111

 

 

42,996

 

Capital expenditures

 

(773

)

 

(752

)

 

(2,281

)

 

(2,384

)

Business acquisition, net of cash assumed

 

 

 

 

 

 

 

(7,073

)

Net cash provided by (used in) investing activities

 

1,561

 

 

(1,842

)

 

26

 

 

2,303

 

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

 

919

 

 

932

 

 

2,820

 

 

2,740

 

Shares repurchased for tax withholdings on vesting of restricted stock units

 

(357

)

 

(793

)

 

(1,179

)

 

(1,523

)

Payment of acquisition-related holdback

 

 

 

 

 

 

 

(420

)

Net cash provided by financing activities

 

562

 

 

139

 

 

1,641

 

 

797

 

Net increase (decrease) in cash and cash equivalents

 

4,622

 

 

(2,330

)

 

3,831

 

 

(3,682

)

Cash and cash equivalents at beginning of period

 

10,889

 

 

14,018

 

 

11,680

 

 

15,370

 

Cash and cash equivalents at end of period

$

15,511

 

$

11,688

 

$

15,511

 

$

11,688

 

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,

 

October 31,

 

October 31,

 

October 31,

 

2020

 

 

 

2019

 

 

 

2020

 

 

 

2019

 

Revenue

$

42,967

 

$

39,595

 

$

124,685

 

$

110,945

 

 
GAAP gross profit

$

26,687

 

$

22,040

 

$

77,364

 

$

64,793

 

Stock-based compensation and related taxes

 

258

 

 

348

 

 

797

 

 

1,006

 

Amortization of intangible assets

 

73

 

 

128

 

 

219

 

 

407

 

Restructuring charges

 

 

 

2,289

 

 

 

 

2,289

 

Non-GAAP gross profit

$

27,018

 

$

24,805

 

$

78,380

 

$

68,495

 

 
Gross margin on a GAAP basis

 

62

%

 

56

%

 

62

%

 

58

%

Gross margin on a Non-GAAP basis

 

63

%

 

63

%

 

63

%

 

62

%

 
GAAP operating loss

$

(522

)

$

(6,940

)

$

(2,216

)

$

(17,239

)

Stock-based compensation and related taxes

 

3,183

 

 

3,383

 

 

9,492

 

 

10,004

 

Amortization of intangible assets and acquisition-related costs

 

326

 

 

433

 

 

978

 

 

1,162

 

Restructuring charges

 

 

 

3,085

 

 

 

 

3,085

 

Litigation costs

 

 

 

 

 

 

 

606

 

Non-GAAP operating income (loss)

$

2,987

 

$

(39

)

$

8,254

 

$

(2,382

)

 
GAAP net loss

$

(413

)

$

(6,784

)

$

(1,846

)

$

(16,507

)

Stock-based compensation and related taxes

 

3,183

 

 

3,383

 

 

9,492

 

 

10,004

 

Amortization of intangible assets and acquisition-related costs

 

326

 

 

433

 

 

978

 

 

1,162

 

Restructuring charges

 

 

 

3,085

 

 

 

 

3,085

 

Litigation costs

 

 

 

 

 

 

 

606

 

Non-GAAP net income (loss)

$

3,096

 

$

117

 

$

8,624

 

$

(1,650

)

 
GAAP basic and diluted net loss per share

$

(0.02

)

$

(0.32

)

$

(0.08

)

$

(0.79

)

Stock-based compensation and related taxes

 

0.14

 

 

0.16

 

 

0.43

 

 

0.48

 

Amortization of intangible assets and acquisition-related costs

 

0.02

 

 

0.02

 

 

0.04

 

 

0.06

 

Restructuring charges

 

 

 

0.15

 

 

 

 

0.15

 

Litigation costs

 

 

 

 

 

 

 

0.02

 

Non-GAAP net income (loss) per basic share

$

0.14

 

$

0.01

 

$

0.39

 

$

(0.08

)

Non-GAAP net income (loss) per diluted share

$

0.13

 

$

0.01

 

$

0.37

 

$

(0.08

)

 
GAAP weighted-average basic and diluted shares

 

22,531,047

 

 

21,274,285

 

 

22,222,659

 

 

20,872,253

 

Non-GAAP weighted-average diluted shares

 

23,632,203

 

 

22,148,123

 

 

23,334,980

 

 

20,872,253

 

 
GAAP net loss

$

(413

)

$

(6,784

)

$

(1,846

)

$

(16,507

)

Reconciling items:
Interest and other income, net

 

(109

)

 

(128

)

 

(370

)

 

(666

)

Income tax benefit

 

 

 

(28

)

 

 

 

(66

)

Depreciation and amortization of capital expenditures

 

662

 

 

628

 

 

2,131

 

 

1,976

 

Amortization of intangible assets and acquisition-related costs

 

326

 

 

433

 

 

978

 

 

1,162

 

Stock-based compensation and related taxes

 

3,183

 

 

3,383

 

 

9,492

 

 

10,004

 

Restructuring charges

 

 

 

3,085

 

 

 

 

3,085

 

Litigation costs

 

 

 

 

 

 

 

606

 

Adjusted EBITDA

$

3,649

 

$

589

 

$

10,385

 

$

(406

)

 

Contacts

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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