Press release

Ooma Reports Second Quarter Fiscal Year 2022 Financial Results

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Ooma, Inc. (NYSE: OOMA), a smart communications platform for businesses and consumers, today released financial results for the fiscal second quarter ended July 31, 2021.

Second Quarter Fiscal 2022 Financial Highlights:

  • Revenue: Total revenue was $47.1 million, up 14% year-over-year. Subscription and services revenue increased to $43.5 million from $38.5 million in the second quarter of fiscal 2021, and was 93% of total revenue, primarily driven by the growth of Ooma Business.
  • Net Income/Loss: GAAP net loss was $0.4 million, or $0.02 per basic and diluted share, compared to GAAP net loss of $0.4 million, or $0.02 per basic and diluted share, in the second quarter of fiscal 2021. Non-GAAP net income was $3.3 million, or $0.13 per diluted share, compared to non-GAAP net income of $3.1 million, or $0.13 per diluted share in the prior year period.
  • Adjusted EBITDA: Adjusted EBITDA was $4.1 million, compared to $3.7 million in the second quarter of fiscal 2021.

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 achieved strong results for the second quarter of fiscal 2022, with revenue increasing to $47.1 million and solid non-GAAP profitability,” said Eric Stang, chief executive officer of Ooma. “Key metrics either improved or remained strong across the business, with business revenues increasing sequentially to 26% year over year and expanding to 48% of total revenue. Ooma continued to invest in Q2 to execute its leadership strategy for serving small business customers, develop its enterprise business solutions, and expand internationally. We believe Ooma’s Q2 results combined with the many growth initiatives underway create strong momentum for the second half of our fiscal year.”

Business Outlook:

For the third quarter of fiscal 2022, Ooma expects:

  • Total revenue in the range of $47.8 million to $48.5 million.
  • GAAP net loss in the range of $0.8 million to $1.6 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 $2.8 million and non-GAAP net income per share in the range of $0.08 to $0.11.

For the full fiscal year 2022, Ooma expects:

  • Total revenue in the range of $188.5 million to $190.0 million.
  • GAAP net loss in the range of $3.0 million to $4.5 million, and GAAP net loss per share in the range of $0.14 to $0.20.
  • Non-GAAP net income in the range of $10.0 million to $11.5 million, and non-GAAP net income per share in the range of $0.40 to $0.46.

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 third quarter ending October 31, 2021, and the fiscal year ending January 31, 2022 (in millions, except per share data):

Projected range
Three Months Ending Fiscal Year Ending
October 31, 2021 January 31, 2022
(unaudited)
GAAP net loss ($0.8)-($1.6) ($3.0)-($4.5)
Stock-based compensation and related taxes

3.3

13.2

Amortization of intangible assets

0.3

1.3

Non-GAAP net income $2.0-$2.8 $10.0-11.5
 
GAAP net loss per share ($0.04)-($0.07) ($0.14)-($0.20)
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 $0.40-$0.46
 
Weighted-average number of shares used in per share amounts:
Basic

23.6

23.5

Diluted

24.9

25.0

 

Conference Call Information:

Ooma will host a conference call and live webcast for analysts and investors at 5:00 p.m. Eastern time today, September 2, 2021. 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 5264798. International parties can access the call by dialing +1 (647) 689-4135, using conference ID 5264798.

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 September 2, 2021, until 11:59 p.m. Eastern time on Thursday, September 9, 2021. To access this replay, parties in the United States and Canada should call +1 (800) 585-8367 and use conference code 5264798. International parties should call +1 (416) 621-4642 and use conference code 5264798.

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 (if any), depreciation and amortization of capital expenditures, amortization of intangible assets, and stock-based compensation and related taxes.

Other non-GAAP financial measures exclude stock-based compensation expense and related taxes and amortization of intangible assets.

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 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. 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; 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; 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 April 30, 2021, filed with the SEC on June 9, 2021. 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)
 
 

July 31,

 

January 31,

 

2021

 

 

 

2021

 

Assets
Current assets:
Cash and cash equivalents

$

20,067

 

$

17,298

 

Short-term investments

 

9,941

 

 

11,013

 

Accounts receivable, net

 

4,828

 

 

5,228

 

Inventories

 

13,840

 

 

12,233

 

Other current assets

 

11,845

 

 

10,222

 

Total current assets

 

60,521

 

 

55,994

 

Property and equipment, net

 

5,620

 

 

5,071

 

Operating lease right-of-use assets

 

14,339

 

 

6,045

 

Intangible assets, net

 

4,860

 

 

5,513

 

Goodwill

 

4,264

 

 

4,264

 

Other assets

 

13,588

 

 

12,210

 

Total assets

$

103,192

 

$

89,097

 

 
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable

$

9,002

 

$

7,499

 

Accrued expenses and other current liabilities

 

20,896

 

 

22,731

 

Deferred revenue

 

16,797

 

 

16,426

 

Total current liabilities

 

46,695

 

 

46,656

 

Long-term operating lease liabilities

 

11,199

 

 

2,815

 

Other liabilities

 

88

 

 

75

 

Total liabilities

 

57,982

 

 

49,546

 

 
Stockholders’ equity:
Common stock

 

4

 

 

4

 

Additional paid-in capital

 

173,568

 

 

166,577

 

Accumulated other comprehensive gain

 

1

 

 

7

 

Accumulated deficit

 

(128,363

)

 

(127,037

)

Total stockholders’ equity

 

45,210

 

 

39,551

 

Total liabilities and stockholders’ equity

$

103,192

 

$

89,097

 

OOMA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited, amounts in thousands, except share and per share data)

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

 

July 31,

 

July 31,

 

July 31,

 

July 31,

 

 

 

2021

 

 

 

2020

 

 

 

2021

 

 

 

2020

 

Revenue:
Subscription and services

$

43,537

 

$

38,500

 

$

85,502

 

$

76,116

 

Product and other

 

3,520

 

 

2,912

 

 

7,127

 

 

5,602

 

Total revenue

 

47,057

 

 

41,412

 

 

92,629

 

 

81,718

 

 
Cost of revenue:
Subscription and services

 

12,326

 

 

11,615

 

 

24,665

 

 

22,956

 

Product and other

 

5,428

 

 

4,295

 

 

10,579

 

 

8,085

 

Total cost of revenue

 

17,754

 

 

15,910

 

 

35,244

 

 

31,041

 

Gross profit

 

29,303

 

 

25,502

 

 

57,385

 

 

50,677

 

 
Operating expenses:
Sales and marketing

 

14,331

 

 

11,779

 

 

28,347

 

 

24,225

 

Research and development

 

9,416

 

 

9,050

 

 

18,723

 

 

17,896

 

General and administrative

 

6,014

 

 

5,222

 

 

11,739

 

 

10,250

 

Total operating expenses

 

29,761

 

 

26,051

 

 

58,809

 

 

52,371

 

Loss from operations

 

(458

)

 

(549

)

 

(1,424

)

 

(1,694

)

Interest and other income, net

 

19

 

 

182

 

 

98

 

 

261

 

Net loss

$

(439

)

$

(367

)

$

(1,326

)

$

(1,433

)

 
Net loss per share of common stock:
Basic and diluted

$

(0.02

)

$

(0.02

)

$

(0.06

)

$

(0.06

)

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

 

23,359,715

 

 

22,232,176

 

 

23,209,151

 

 

22,066,771

 

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

Three Months Ended

 

Six Months Ended

July 31,

 

July 31,

 

July 31,

 

July 31,

 

2021

 

 

 

2020

 

 

 

2021

 

 

 

2020

 

Cash flows from operating activities:
Net loss

$

(439

)

$

(367

)

$

(1,326

)

$

(1,433

)

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

 

3,321

 

 

3,090

 

 

6,515

 

 

6,098

 

Depreciation and amortization of capital expenditures

 

775

 

 

756

 

 

1,548

 

 

1,469

 

Amortization of intangible assets

 

326

 

 

326

 

 

652

 

 

652

 

Non-cash operating lease expense

 

713

 

 

798

 

 

1,531

 

 

1,592

 

Other

 

14

 

 

(6

)

 

24

 

 

24

 

Changes in operating assets and liabilities:
Accounts receivable, net

 

(762

)

 

1,157

 

 

400

 

 

327

 

Inventories

 

(394

)

 

1,174

 

 

(1,600

)

 

(524

)

Other assets

 

(2,037

)

 

(1,148

)

 

(3,007

)

 

(1,818

)

Accounts payable and other liabilities

 

343

 

 

(4,134

)

 

(2,127

)

 

(7,140

)

Deferred revenue

 

710

 

 

867

 

 

384

 

 

418

 

Net cash provided by (used in) operating activities

 

2,570

 

 

2,513

 

 

2,994

 

 

(335

)

 
Cash flows from investing activities:
Proceeds from maturities and sales of short-term investments

 

3,000

 

 

2,800

 

 

9,900

 

 

11,986

 

Purchases of short-term investments

 

(2,816

)

 

(2,998

)

 

(8,859

)

 

(12,013

)

Capital expenditures

 

(1,077

)

 

(746

)

 

(1,742

)

 

(1,508

)

Net cash used in investing activities

 

(893

)

 

(944

)

 

(701

)

 

(1,535

)

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

 

152

 

 

634

 

 

1,621

 

 

1,901

 

Shares repurchased for tax withholdings on vesting of restricted stock units

 

(660

)

 

(350

)

 

(1,145

)

 

(822

)

Net cash (used in) provided by financing activities

 

(508

)

 

284

 

 

476

 

 

1,079

 

Net increase (decrease) in cash and cash equivalents

 

1,169

 

 

1,853

 

 

2,769

 

 

(791

)

Cash and cash equivalents at beginning of period

 

18,898

 

 

9,036

 

 

17,298

 

 

11,680

 

Cash and cash equivalents at end of period

$

20,067

 

$

10,889

 

$

20,067

 

$

10,889

 

 
OOMA, INC.
Reconciliation of Non-GAAP Financial Measures
(Unaudited, amounts in thousands, except percentages, shares and per share data)
 

Three Months Ended

 

Six Months Ended

July 31,

 

July 31,

 

July 31,

 

July 31,

 

2021

 

 

 

2020

 

 

 

2021

 

 

 

2020

 

Revenue

$

47,057

 

$

41,412

 

$

92,629

 

$

81,718

 

 
GAAP gross profit

$

29,303

 

$

25,502

 

$

57,385

 

$

50,677

 

Stock-based compensation and related taxes

 

296

 

 

269

 

 

585

 

 

539

 

Amortization of intangible assets

 

73

 

 

73

 

 

146

 

 

146

 

Non-GAAP gross profit

$

29,672

 

$

25,844

 

$

58,116

 

$

51,362

 

 
Gross margin on a GAAP basis

 

62

%

 

62

%

 

62

%

 

62

%

Gross margin on a Non-GAAP basis

 

63

%

 

62

%

 

63

%

 

63

%

 
GAAP operating loss

$

(458

)

$

(549

)

$

(1,424

)

$

(1,694

)

Stock-based compensation and related taxes

 

3,442

 

 

3,175

 

 

6,767

 

 

6,309

 

Amortization of intangible assets

 

326

 

 

326

 

 

652

 

 

652

 

Non-GAAP operating income

$

3,310

 

$

2,952

 

$

5,995

 

$

5,267

 

 
GAAP net loss

$

(439

)

$

(367

)

$

(1,326

)

$

(1,433

)

Stock-based compensation and related taxes

 

3,442

 

 

3,175

 

 

6,767

 

 

6,309

 

Amortization of intangible assets

 

326

 

 

326

 

 

652

 

 

652

 

Non-GAAP net income

$

3,329

 

$

3,134

 

$

6,093

 

$

5,528

 

 
GAAP basic and diluted net loss per share

$

(0.02

)

$

(0.02

)

$

(0.06

)

$

(0.06

)

Stock-based compensation and related taxes

 

0.15

 

 

0.14

 

 

0.29

 

 

0.28

 

Amortization of intangible assets

 

0.01

 

 

0.02

 

 

0.03

 

 

0.03

 

Non-GAAP net income per basic share

$

0.14

 

$

0.14

 

$

0.26

 

$

0.25

 

Non-GAAP net income per diluted share

$

0.13

 

$

0.13

 

$

0.25

 

$

0.24

 

 
GAAP weighted-average basic and diluted shares

 

23,359,715

 

 

22,232,176

 

 

23,209,151

 

 

22,066,771

 

Non-GAAP weighted-average diluted shares

 

24,767,569

 

 

23,326,465

 

 

24,558,433

 

 

23,076,692

 

 
GAAP net loss

$

(439

)

$

(367

)

$

(1,326

)

$

(1,433

)

Reconciling items:
Interest and other income, net

 

(19

)

 

(182

)

 

(98

)

 

(261

)

Depreciation and amortization of capital expenditures

 

776

 

 

756

 

 

1,549

 

 

1,469

 

Amortization of intangible assets

 

326

 

 

326

 

 

652

 

 

652

 

Stock-based compensation and related taxes

 

3,442

 

 

3,175

 

 

6,767

 

 

6,309

 

Adjusted EBITDA

$

4,086

 

$

3,708

 

$

7,544

 

$

6,736