BusinessWire

Ooma Reports Second 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 second quarter fiscal 2021 ended July 31, 2020.


Second Quarter Fiscal 2021 Financial Highlights:

  • Revenue: Total revenue was $41.4 million, up 11% year-over-year. Subscription and services revenue increased to $38.5 million and was 93% of total revenue, driven by 12% year-over-year 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 $5.0 million, or $0.24 per basic and diluted share, in the second quarter fiscal 2020. Non-GAAP net income was $3.1 million, or $0.13 per diluted share, compared to a non-GAAP net loss of $0.9 million, or $0.04 per basic and diluted share in the prior year period.
  • Adjusted EBITDA: Adjusted EBITDA was $3.7 million, compared to negative $0.5 million in the second quarter 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 delivered strong financial results for the second quarter of fiscal 2021, achieving 26% year-over-year subscription revenue growth for Ooma Business and solid non-GAAP profitability,” said Eric Stang, chief executive officer. “With our Office Pro feature set and the launch of Ooma Connect and now Ooma Wi-Fi, we bring an increasingly unique value proposition to our business customers, and see significant opportunity to capitalize on these innovative services.”

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 third quarter of fiscal 2021, Ooma expects to report:

  • Total revenue in the range of $41.0 million to $41.8 million.
  • GAAP net loss in the range of $1.3 million to $1.8 million and GAAP net loss per share in the range of $0.06 to $0.08.
  • Non-GAAP net income in the range of $1.7 million to $2.2 million and non-GAAP earnings per share in the range of $0.07 to $0.09.

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

  • Total revenue in the range of $163.0 million to $164.5 million.
  • GAAP net loss in the range of $4.4 million to $5.9 million, and GAAP net loss per share in the range of $0.20 to $0.26.
  • Non-GAAP net income in the range of $8.0 million to $9.5 million, and non-GAAP earnings per share in the range of $0.34 to $0.40.

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 third fiscal quarter ending October 31, 2020 and the fiscal year ending January 31, 2021 (in millions, except per share data):

Projected range
Three Months Ending Fiscal Year Ending
October 31, 2020 January 31, 2021
(unaudited)
GAAP net loss

($1.3)-($1.8)

 

($4.4)-($5.9)

Stock-based compensation and related taxes

3.2

 

12.6

Amortization of intangible assets

0.3

 

1.3

Non-GAAP net income

$1.7-$2.2

 

$8.0-$9.5

 

 

 

GAAP net loss per share

($0.06)-($0.08)

 

($0.20)-($0.26)

Stock-based compensation and related taxes

0.14

 

0.55

Amortization of intangible assets

0.01

 

0.05

Non-GAAP net income per share

$0.07-$0.09

 

$0.34-$0.40

 

 

 

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

 

 

 

Basic

22.5

 

22.4

Diluted

24.0

 

23.7

Conference Call Information:

Ooma will host a conference call and live webcast for analysts and investors at 5:00 p.m. Eastern time today, August 25, 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 7073335. International parties can access the call by dialing +1 (647) 689-4135, using conference ID 7073335.

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 August 25, 2020 until 11:59 p.m. Eastern time Tuesday, September 1, 2020. To access the replay, parties in the United States and Canada should call +1 (800) 585-8367 and use conference ID 7073335. International parties should call +1 (416) 621-4642 and use conference ID 7073335.

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 and 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 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, its opportunity to continue the growth of Ooma Business customers with the introduction of innovative services 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 April 30, 2020, filed with the SEC on June 9, 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)
 

July 31,

 

January 31,

2020

 

2020

Assets
Current assets:
Cash and cash equivalents

$

10,889

 

$

11,680

 

Short-term investments

 

14,453

 

 

14,384

 

Accounts receivable, net

 

4,264

 

 

4,591

 

Inventories

 

9,249

 

 

8,369

 

Other current assets

 

9,896

 

 

8,992

 

Total current assets

 

48,751

 

 

48,016

 

Property and equipment, net

 

4,876

 

 

5,270

 

Operating lease right-of-use assets

 

6,759

 

 

8,057

 

Intangible assets, net

 

6,165

 

 

6,818

 

Goodwill

 

4,264

 

 

4,264

 

Other assets

 

9,818

 

 

8,186

 

Total assets

$

80,633

 

$

80,611

 

 
Liabilities and stockholders' equity
Current liabilities:
Accounts payable

$

4,836

 

$

8,499

 

Accrued expenses and other current liabilities

 

21,514

 

 

22,576

 

Deferred revenue

 

16,270

 

 

15,797

 

Total current liabilities

 

42,620

 

 

46,872

 

Long-term operating lease liabilities

 

3,681

 

 

5,150

 

Other liabilities

 

119

 

 

174

 

Total liabilities

 

46,420

 

 

52,196

 

 
Stockholders' equity:
Common stock

 

4

 

 

4

 

Additional paid-in capital

 

160,215

 

 

152,993

 

Accumulated other comprehensive gain

 

23

 

 

14

 

Accumulated deficit

 

(126,029

)

 

(124,596

)

Total stockholders' equity

 

34,213

 

 

28,415

 

Total liabilities and stockholders' equity

$

80,633

 

$

80,611

 

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,

2020

 

2019

 

2020

 

2019

Revenue:
Subscription and services

$

38,500

 

$

34,469

 

$

76,116

 

$

65,581

 

Product and other

 

2,912

 

 

2,874

 

 

5,602

 

 

5,769

 

Total revenue

 

41,412

 

 

37,343

 

 

81,718

 

 

71,350

 

 
Cost of revenue:
Subscription and services

 

11,615

 

 

11,213

 

 

22,956

 

 

21,024

 

Product and other

 

4,295

 

 

3,810

 

 

8,085

 

 

7,573

 

Total cost of revenue

 

15,910

 

 

15,023

 

 

31,041

 

 

28,597

 

Gross profit

 

25,502

 

 

22,320

 

 

50,677

 

 

42,753

 

 
Operating expenses:
Sales and marketing

 

11,779

 

 

12,834

 

 

24,225

 

 

24,293

 

Research and development

 

9,050

 

 

9,597

 

 

17,896

 

 

18,479

 

General and administrative

 

5,222

 

 

5,168

 

 

10,250

 

 

10,280

 

Total operating expenses

 

26,051

 

 

27,599

 

 

52,371

 

 

53,052

 

Loss from operations

 

(549

)

 

(5,279

)

 

(1,694

)

 

(10,299

)

Interest and other income, net

 

182

 

 

280

 

 

261

 

 

538

 

Loss before income taxes

 

(367

)

 

(4,999

)

 

(1,433

)

 

(9,761

)

Income tax benefit

 

 

 

16

 

 

 

 

38

 

Net loss

$

(367

)

$

(4,983

)

$

(1,433

)

$

(9,723

)

 
Net loss per share of common stock:
Basic and diluted

$

(0.02

)

$

(0.24

)

$

(0.06

)

$

(0.47

)

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

 

22,232,176

 

 

20,849,935

 

 

22,066,771

 

 

20,667,905

 

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,

2020

 

2019

 

2020

 

2019

Cash flows from operating activities:
Net loss

$

(367

)

$

(4,983

)

$

(1,433

)

$

(9,723

)

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

 

3,090

 

 

3,411

 

 

6,098

 

 

6,393

 

Depreciation and amortization of capital expenditures

 

756

 

 

695

 

 

1,469

 

 

1,347

 

Amortization of intangible assets

 

326

 

 

309

 

 

652

 

 

516

 

Non-cash operating lease expense

 

798

 

 

453

 

 

1,592

 

 

899

 

Other

 

(6

)

 

(98

)

 

24

 

 

(224

)

Changes in operating assets and liabilities:
Accounts receivable, net

 

1,157

 

 

(19

)

 

327

 

 

43

 

Inventories

 

1,174

 

 

(738

)

 

(524

)

 

(1,389

)

Other assets

 

(1,148

)

 

(1,298

)

 

(1,818

)

 

(2,303

)

Accounts payable and other liabilities

 

(4,134

)

 

1,002

 

 

(7,140

)

 

(2,139

)

Deferred revenue

 

867

 

 

855

 

 

418

 

 

425

 

Net cash provided by (used in) operating activities

 

2,513

 

 

(411

)

 

(335

)

 

(6,155

)

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

 

(2,998

)

 

(3,851

)

 

(12,013

)

 

(19,196

)

Proceeds from maturities and sales of short-term investments

 

2,800

 

 

15,077

 

 

11,986

 

 

32,046

 

Capital expenditures

 

(746

)

 

(1,030

)

 

(1,508

)

 

(1,632

)

Business acquisition, net of cash assumed

 

 

 

(7,073

)

 

 

 

(7,073

)

Net cash (used in) provided by investing activities

 

(944

)

 

3,123

 

 

(1,535

)

 

4,145

 

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

 

634

 

 

354

 

 

1,901

 

 

1,808

 

Shares repurchased for tax withholdings on vesting of restricted stock units

 

(350

)

 

 

 

(822

)

 

(730

)

Payment of acquisition-related holdback

 

 

 

(420

)

 

 

 

(420

)

Net cash provided by (used in) financing activities

 

284

 

 

(66

)

 

1,079

 

 

658

 

Net increase (decrease) in cash and cash equivalents

 

1,853

 

 

2,646

 

 

(791

)

 

(1,352

)

Cash and cash equivalents at beginning of period

 

9,036

 

 

11,372

 

 

11,680

 

 

15,370

 

Cash and cash equivalents at end of period

$

10,889

 

$

14,018

 

$

10,889

 

$

14,018

 

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,

2020

 

2019

 

2020

 

2019

Revenue

$

41,412

 

$

37,343

 

$

81,718

 

$

71,350

 

 
GAAP gross profit

$

25,502

 

$

22,320

 

$

50,677

 

$

42,753

 

Stock-based compensation and related taxes

 

269

 

 

354

 

 

539

 

 

658

 

Amortization of intangible assets

 

73

 

 

124

 

 

146

 

 

279

 

Non-GAAP gross profit

$

25,844

 

$

22,798

 

$

51,362

 

$

43,690

 

 
Gross margin on a GAAP basis

 

62

%

 

60

%

 

62

%

 

60

%

Gross margin on a Non-GAAP basis

 

62

%

 

61

%

 

63

%

 

61

%

 
GAAP operating loss

$

(549

)

$

(5,279

)

$

(1,694

)

$

(10,299

)

Stock-based compensation and related taxes

 

3,175

 

 

3,498

 

 

6,309

 

 

6,621

 

Amortization of intangible assets and acquisition-related costs

 

326

 

 

486

 

 

652

 

 

729

 

Litigation costs

 

 

 

72

 

 

 

 

606

 

Non-GAAP operating income (loss)

$

2,952

 

$

(1,223

)

$

5,267

 

$

(2,343

)

 
GAAP net loss

$

(367

)

$

(4,983

)

$

(1,433

)

$

(9,723

)

Stock-based compensation and related taxes

 

3,175

 

 

3,498

 

 

6,309

 

 

6,621

 

Amortization of intangible assets and acquisition-related costs

 

326

 

 

486

 

 

652

 

 

729

 

Litigation costs

 

 

 

72

 

 

 

 

606

 

Non-GAAP net income (loss)

$

3,134

 

$

(927

)

$

5,528

 

$

(1,767

)

 
GAAP basic and diluted net loss per share

$

(0.02

)

$

(0.24

)

$

(0.06

)

$

(0.47

)

Stock-based compensation and related taxes

 

0.14

 

 

0.17

 

 

0.28

 

 

0.32

 

Amortization of intangible assets and acquisition-related costs

 

0.02

 

 

0.02

 

 

0.03

 

 

0.03

 

Litigation costs

 

 

 

0.01

 

 

 

 

0.03

 

Non-GAAP net income (loss) per basic share

$

0.14

 

$

(0.04

)

$

0.25

 

$

(0.09

)

Non-GAAP net income (loss) per diluted share

$

0.13

 

$

(0.04

)

$

0.24

 

$

(0.09

)

 
GAAP weighted-average basic and diluted shares

 

22,232,176

 

 

20,849,935

 

 

22,066,771

 

 

20,667,905

 

Non-GAAP weighted-average diluted shares

 

23,326,465

 

 

20,849,935

 

 

23,076,692

 

 

20,667,905

 

 
GAAP net loss

$

(367

)

$

(4,983

)

$

(1,433

)

$

(9,723

)

Reconciling items:
Interest and other income, net

 

(182

)

 

(280

)

 

(261

)

 

(538

)

Income tax benefit

 

 

 

(16

)

 

 

 

(38

)

Depreciation and amortization of capital expenditures

 

756

 

 

695

 

 

1,469

 

 

1,347

 

Amortization of intangible assets and acquisition-related costs

 

326

 

 

486

 

 

652

 

 

729

 

Stock-based compensation and related taxes

 

3,175

 

 

3,498

 

 

6,309

 

 

6,621

 

Litigation costs

 

 

 

72

 

 

 

 

606

 

Adjusted EBITDA

$

3,708

 

$

(528

)

$

6,736

 

$

(996

)

 


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