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CST: 25/05/2019 20:07:28   

Ooma Reports Fourth Quarter and Fiscal Year 2019 Financial Results

81 Days ago

Fourth Quarter Ooma Business revenue grows 50% year-over-year

Named Winner of PCMag’s Business Choice Award for VoIP

SUNNYVALE, Calif., March 05, 2019 (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, 2019.

Fourth Quarter Fiscal 2019 Financial Highlights

  • Revenue: Total revenue was $34.7 million, up 15% year-over-year. Subscription and services revenue increased to $30.9 million and was 89% of total revenue, driven by 16% year-over-year growth in Ooma Business and Ooma Residential.
  • Net Loss: GAAP net loss was $3.5 million, or $0.17 per basic and diluted share, compared to GAAP net loss of $2.9 million, or $0.15 per basic and diluted share, in the fourth quarter fiscal 2018. Non-GAAP net loss was $0.7 million, or $0.03 per basic and diluted share, compared to non-GAAP net loss of $0.5 million, or $0.03 per basic and diluted share, in the prior year period.
  • Adjusted EBITDA: Adjusted EBITDA was ($0.5) million compared to ($0.2) million in the prior year period.

Full Year Fiscal 2019 Financial Highlights

  • Revenue: Total revenue was $129.2 million, up 13% year-over-year. Subscription and services revenue increased 14% to $116.4 million and was 90% of total revenue. Product and other revenue increased 2% year-over-year to $12.8 million.
  • Net Loss: GAAP net loss was $14.6 million, or $0.74 per basic and diluted share, compared to GAAP net loss of $13.1 million, or $0.71 per basic and diluted share, in fiscal 2018. Non-GAAP net loss was $3.0 million, or $0.15 per basic and diluted share, compared to non-GAAP net loss of $1.6 million, or $0.08 per basic and diluted share, in fiscal 2018.
  • Adjusted EBITDA: Adjusted EBITDA was ($1.9) million for fiscal 2019 compared to ($0.2) million in the prior fiscal year.

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.

“The fourth quarter of our 2019 fiscal year was outstanding for Ooma, with significant growth in recurring revenues and continued execution on our key strategic initiatives,” said Eric Stang, chief executive officer of Ooma. “Revenues grew 15% year-over-year, driven by 50% growth in Ooma Business subscription and services revenue. We progressed well on each of our three key initiatives, which are to grow Ooma Office and Ooma Enterprise and to expand our smart security solution. We remain confident that our focus on these initiatives will enhance our leadership position and further our growth.”

Business Outlook:

For the first quarter of fiscal 2020, Ooma expects to report:

  • Total revenue in the range of $33.5 million to $34.0 million.
  • GAAP net loss in the range of $4.5 million to $5.2 million and GAAP net loss per share in the range of $0.22 to $0.25.
  • Non-GAAP net loss in the range of $0.9 million to $1.3 million and non-GAAP net loss per share in the range of $0.04 to $0.06.

For the full fiscal year 2020, Ooma expects to report:

  • Total revenue in the range of $140.0 million to $143.0 million.
  • GAAP net loss in the range of $18.7 million to $22.2 million, and GAAP net loss per share in the range of $0.89 to $1.06.
  • Non-GAAP net loss in the range of $3.0 million to $5.0 million, and non-GAAP net loss per share in the range of $0.14 to $0.24.

The following is a reconciliation of GAAP net loss to non-GAAP net loss and GAAP basic and diluted net loss per share to non-GAAP basic and diluted net loss per share guidance for the first fiscal quarter ending April 30, 2019 and the fiscal year ending January 31, 2020 (in millions, except per share data):

   
    Projected range  
    Three Months Ending       Fiscal Year Ending  
    January 31, 2020       January 31, 2020  
               
    (unaudited)  
GAAP net loss   ($4.5)-($5.2 )     ($18.7)-($22.2 )
Stock-based compensation and related taxes    3.0-3.1        13.0-13.5  
Amortization of intangibles     0.2         0.7  
Litigation costs    0.4-0.6        2.0-3.0  
Non-GAAP net loss   ($0.9)-($1.3 )     ($3.0)-($5.0 )
               
GAAP basic and diluted net loss per share   ($0.22)-($0.25 )     ($0.89)-($1.06 )
Stock-based compensation and related taxes    0.15        0.62-0.64  
Amortization of intangibles    0.01         0.03  
Litigation costs    0.02-0.03        0.10-0.15  
Non-GAAP basic and diluted net loss per share   ($0.04)-($0.06 )     ($0.14)-($0.24 )
               
Weighted-average number of shares used in per share amounts:              
Basic and diluted     20.5         21.0  
               

Conference Call Information:

Ooma will host a conference call and live webcast for analysts and investors at 5:00 p.m. Eastern time today, March 5, 2019. 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 Tuesday, March 12, 2019. To access the replay, parties in the United States and Canada should call +1 (800) 585-8367 and use conference ID 9146645. International parties should call +1 (416) 621-4642 and enter conference ID 9146645.

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 expense or 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, change in fair value of acquisition-related contingent consideration, acquisition-related transaction costs, amortization of acquired intangibles, non-cash acquisition-related income tax benefit, 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, 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. This press release includes forward–looking statements regarding the company’s business outlook and its execution of its initiative to continue the growth of Ooma Office, Ooma Enterprise and smart security services and its execution and its execution of other initiatives driving 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 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 quarterly filing on Form 10Q for the period ended October 31, 2018, filed with the SEC on December 7, 2018. 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 provides PureVoice HD voice quality, advanced functionality and integration with their mobile devices. Ooma’s groundbreaking smart security solution delivers a full range of wireless security sensors and an intelligent video camera that make it easy for users to protect their home or business. Learn more at www.ooma.com.

Ooma, PureVoice HD 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. The detailed terms and conditions of Ooma's products, services, and support are fully set forth in the Terms and Conditions, available online under the "legal" tab on the bottom navigation bar of the Ooma website.

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.
mike.langberg@ooma.com
(650) 566-6693

 
OOMA, INC
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, amounts in thousands)
       
  January 31,   January 31,
  2019   2018
Assets      
Current assets:      
Cash and cash equivalents $   15,370     $   4,483  
Short-term investments     27,253         47,307  
Accounts receivable, net     3,723         2,858  
Inventories     10,117         6,079  
Other current assets     5,450         4,397  
Total current assets     61,913         65,124  
Property and equipment, net     4,563         4,732  
Intangible assets, net      2,635         1,292  
Goodwill     3,898         1,947  
Other assets     5,379         336  
Total assets $   78,388     $   73,431  
       
Liabilities and stockholders' equity        
Current liabilities:      
Accounts payable $   10,231     $   5,453  
Accrued expenses     19,048         14,777  
Deferred revenue     15,443         15,556  
Total current liabilities     44,722         35,786  
Other liabilities     619         577  
Total liabilities     45,341         36,363  
       
Stockholders' equity:      
Common stock     4         2  
Additional paid-in capital     138,848         128,081  
Accumulated other comprehensive loss     (10 )       (84 )
Accumulated deficit     (105,795 )       (90,931 )
Total stockholders' equity     33,047         37,068  
Total liabilities and stockholders' equity   $   78,388     $   73,431  
 


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,
    2019   2018   2019   2018
Revenue:                
Subscription and services   $   30,897     $   27,169     $   116,429     $   101,999  
Product and other       3,823         3,051         12,802         12,491  
Total revenue       34,720         30,220         129,231         114,490  
                 
Cost of revenue:                
Subscription and services       9,720         8,230         36,108         31,406  
Product and other       5,293         3,678         16,632         14,992  
Total cost of revenue         15,013         11,908         52,740         46,398  
Gross profit       19,707         18,312         76,491         68,092  
                 
Operating expenses:                
Sales and marketing        10,612         9,776         40,761         37,302  
Research and development        8,345         7,968         33,903         29,328  
General and administrative        4,577         3,675         17,613         15,186  
Total operating expenses       23,534         21,419         92,277         81,816  
Loss from operations       (3,827 )       (3,107 )       (15,786 )       (13,724 )
Interest and other income, net       231         180         830         603  
Loss before income taxes       (3,596 )       (2,927 )       (14,956 )       (13,121 )
Income tax benefit       107         —         384         —  
Net loss   $   (3,489 )   $   (2,927 )   $   (14,572 )   $   (13,121 )
                 
Net loss per share of common stock:                
Basic and diluted   $   (0.17 )   $   (0.15 )   $   (0.74 )   $   (0.71 )
Weighted-average number of shares used in per share amounts:                
Basic and diluted       20,227,252         19,051,778         19,799,781         18,570,128  
                 


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,
  2019   2018   2019   2018
Cash flows from operating activities:              
Net loss  $   (3,489 )   $   (2,927 )   $   (14,572 )   $   (13,121 )
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:              
Stock-based compensation expense     2,636         2,195         10,370         10,921  
Depreciation and amortization     552         512         2,269         1,958  
Amortization of acquired intangibles     200         69         740         313  
Change in fair value of acquisition-related contingent consideration     (214 )       —         (342 )       —  
Deferred income taxes     (107 )       —         (384 )       —  
Amortization and accretion of premiums from investments     (124 )       (23 )       (332 )       135  
Changes in operating assets and liabilities:              
Accounts receivable, net     (843 )       684         (1,050 )       1,856  
Inventories     (2,300 )       137         (4,034 )       (249 )
Deferred inventory costs     (220 )       71         (179 )       559  
Other assets     (2,511 )       (286 )       (5,333 )       (1,519 )
Accounts payable and other liabilities     3,985         659         8,149         2,366  
Deferred revenue     314         (297 )       772         (46 )
Net cash (used in) provided by operating activities     (2,121 )       794         (3,926 )       3,173  
               
Cash flows from investing activities:              
Purchases of short-term investments     (11,776 )       (10,433 )       (38,485 )       (49,331 )
Proceeds from maturities and sales of short-term investments     18,199         11,690         58,961         51,017  
Capital expenditures     (483 )       (731 )       (1,921 )       (2,478 )
Acquisition of business, net of cash acquired     —         (1,363 )       (2,402 )       (1,363 )
Investment in privately-held company     (1,300 )       —         (1,300 )       —  
Net cash provided by (used in) investing activities     4,640         (837 )       14,853         (2,155 )
               
Cash flows from financing activities:              
Shares repurchased for tax withholdings on vesting of restricted stock units     (628 )       (470 )       (2,926 )       (2,443 )
Proceeds from issuance of common stock      123         49         2,886         1,918  
Net cash used in financing activities     (505 )       (421 )       (40 )       (525 )
Net increase (decrease) in cash and cash equivalents     2,014         (464 )       10,887         493  
Cash and cash equivalents at beginning of period     13,356         4,947         4,483         3,990  
Cash and cash equivalents at end of period $   15,370     $   4,483     $   15,370     $   4,483  
               


OOMA, INC.
Reconciliation of Non-GAAP Financial Measures
(Unaudited, amounts in thousands, except percentages and per share data)
               
  Three Months Ended   Fiscal Year Ended
  January 31,   January 31,   January 31,   January 31,
  2019   2018   2019   2018
Revenue $   34,720     $   30,220     $   129,231     $   114,490  
               
GAAP gross profit $   19,707     $   18,312     $   76,491     $   68,092  
Stock-based compensation and related taxes     249         197         957         1,129  
Amortization of intangible assets     149         63         549         183  
Non-GAAP gross profit $   20,105     $   18,572     $   77,997     $   69,404  
               
Gross margin on a GAAP basis   57 %     61 %     59 %     59 %
Gross margin on a Non-GAAP basis   58 %     61 %     60 %     61 %
               
GAAP operating loss $   (3,827 )   $   (3,107 )   $   (15,786 )   $   (13,724 )
Stock-based compensation and related taxes     2,692         2,232         10,695         11,118  
Acquisition-related costs and amortization of intangible assets     200         187         1,163         431  
Litigation costs     142         —         142         —  
Change in fair value of acquisition-related contingent consideration     (214 )       —         (342 )       —  
Non-GAAP operating loss $   (1,007 )   $   (688 )   $   (4,128 )   $   (2,175 )
               
GAAP net loss $   (3,489 )   $   (2,927 )   $   (14,572 )   $   (13,121 )
Stock-based compensation and related taxes     2,692         2,232         10,695         11,118  
Acquisition-related costs and amortization of intangible assets     200         187         1,163         431  
Litigation costs     142         —         142         —  
Income tax benefit     —         —         (69 )       —  
Change in fair value of acquisition-related contingent consideration     (214 )       —         (342 )       —  
Non-GAAP net loss $   (669 )   $   (508 )   $   (2,983 )   $   (1,572 )
               
GAAP basic and diluted net loss per share $   (0.17 )   $   (0.15 )   $   (0.74 )   $   (0.71 )
Stock-based compensation and related taxes     0.13         0.11         0.54         0.61  
Acquisition-related costs and amortization of intangible assets     0.01         —         0.06         0.02  
Litigation costs     0.01         —         0.01         —  
Income tax benefit     —         —         —         —  
Change in fair value of acquisition-related contingent consideration     (0.01 )       0.01         (0.02 )       —  
Non-GAAP basic and diluted net loss per share $   (0.03 )   $   (0.03 )   $   (0.15 )   $   (0.08 )
               
GAAP net loss $   (3,489 )   $   (2,927 )   $   (14,572 )   $   (13,121 )
Reconciling items:              
Interest and other income, net     (231 )       (180 )       (830 )       (603 )
Income tax benefit     (107 )       —         (384 )       —  
Change in fair value of acquisition-related contingent consideration     (214 )       —         (342 )       —  
Litigation costs     142         —         142         —  
Depreciation and amortization     552         512         2,269         1,958  
Acquisition-related costs and amortization of intangible assets     200         187         1,163         431  
Stock-based compensation and related taxes     2,692         2,232         10,695         11,118  
Adjusted EBITDA $   (455 )   $   (176 )   $   (1,859 )   $   (217 )
 

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