Slide 1: Smart Connected Services Investor Presentation
Smart Connected Services Investor Presentation Information as of August 27, 2019 Proprietary and confidential. August 27, 2019
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation contains forward-looking statements. 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 t
Slide 3: Ooma is a cloud/SaaS provider of communications and other connected services
Productivity Automation Ooma is a cloud/SaaS Network provider of communications and other connected Portal Appliance App services, with solutions for Communications business, home, and mobile users Infrastructure www.ooma.com Proprietary and confidential.
Slide 4: Company Overview
Company Overview Founded 2003 HQ: Sunnyvale, California IPO in 2015, NYSE: OOMA Multi-tenant SaaS platform >1 million core users 90%+ recurring revenue 103% recurring revenue retention ~770 Employees/contractors Proprietary and confidential.
Slide 5: Investment Highlights
Investment Highlights Massive Connected Services Opportunity Total Revenue (in millions) $129.2 $114.5 $104.5 Unique Hybrid SaaS Platform Solution Disruptive Cloud Communications and $37.3 $31.7 Other Connected Services Efficient Integrated Go-to-Market FY 2017 FY 2018 FY 2019 F2Q19 F2Q20 Strategy A
Slide 6: Mega Trends Drive Our Business
Mega Trends Drive Our Business Cloud Communications “Traditional methods for voice are ripe for replacement.” - Macquarie SMB SaaS “SMBs are expanding the SaaS market opportunity for vendors.” - JPMorgan IoT “The Internet of Things represents huge potential … need for more … systems to deploy, manag
Slide 7: Disruptive Cloud Communications Opportunity
Disruptive Cloud Communications Opportunity Business Home 62M Business Lines in 74M Home Lines in North America North America 30% 2% CAGR1 CAGR1 39% Internet/ Cloud 40% 60% Traditional Internet/ Cloud 61% Traditional We Target Communications to Drive Adoption of the Ooma Platform 1: 2013 - 2016 Sour
Slide 8: Unique SaaS Platform with CPE
Unique SaaS Platform with CPE Multi-Tenant SaaS Linux Appliance, Router, Platform DECT/ULE Radio, Network Optional 4G Wireless Mobile Services, Alerts and Control Portal User Appliance App Configurable Services Connects to Many Endpoint Devices Integrated, Managed Platform Enabling Communications an
Slide 9: Competitive Advantages
Competitive Advantages Breakthrough Voice • Proprietary PureVoice Technology Quality • Unique Applications that Create Innovative Services Customer Interest and Stickiness • Plug-and-Play Solutions, Diagnostics and Enhanced User New Service Upgrades Experience • Disruptive Low Cost Calling Architect
Slide 10: Customers Rate Ooma #1
Customers Rate Ooma #1 Office Home #1 Ranked by Readers Top Ranked by Readers 6 Years in a Row 7 times in a row Proprietary and confidential.
Slide 11: Ooma Ecosystem
Ooma Ecosystem Innovative DIY home security & features monitoring Mobile Take action Integration Home, with Remote 911 Home Business Phone Security Disruptive Quality and Value. SMB Enterprise Phone UCaaS DIY setup & Private label for management Resellers Curated business Enterprise-grade features f
Slide 12: SMB Services: Ooma Office
SMB Services: Ooma Office • Suite of user configurable cloud PBX features Business Services • Virtual • eFax Receptionist • Conferencing • Broadest solution available • Music-on-Hold • Call Forwarding • Voicemail • Ring Groups • Call Transfers • Mobile Apps • Eliminates expensive specialist IT And M
Slide 13: Small Businesses Are Switching From Traditional/Cable Phone Service
Small Businesses Are Switching From Traditional/Cable Phone Service Previous Phone Service Reasons For Purchasing % Ooma Office 1. Cost savings/unlimited nationwide calling 2. Easy to install/simple to configure 3. Uses regular (existing) phones 4. Powerful features 5. Great voice quality (PureVoice
Slide 14: Enterprise UCaaS: Ooma Enterprise
Enterprise UCaaS: Ooma Enterprise • Enterprise Targeted Solution Enterprise Services • Integrations • Collaboration • Enhanced Quality Of Service • Rich Telephony • High Availability • Contact Center • Tailored Desk • Global Service phone Experience • Mobile Apps • Reporting • Bespoke Solutions And
Slide 15: Home Phone: Ooma Telo
Home Phone: Ooma Telo Home • Free basic home phone service, Services just pay taxes and fees • Unlimited US • Blacklisting Calling • 911 Alerts • Voicemail • Instant 2nd Line • Multi-ring • Alexa Skills • Innovative Premier features • Ring Groups And More! • Ideal for families with children, multi-g
Slide 16: Homes Are Switching From Traditional Service
Homes Are Switching From Traditional Service Previous Phone Service Reasons For Purchasing % Ooma Telo 1. Free Calling/No More Phone Bills 2. Uses Existing Home Phones 3. Easy Installation 4. Great Voice Quality 5. Bundled Calling Features/Premier Features Source: Ooma Survey for Feb. 2017 – Jan. 20
Slide 17: Smart Security: Ooma Home
Smart Security: Ooma Home • Do-it-yourself smart security that leverages the Ooma Telo Security Services Remote 911 Facial Recognition Automatic Arm/Disarm Phone call Alerts Video Battery Backup Video On-board Memory • Rich notifications via mobile Text & Push Notifications DIY Installation And More
Slide 18: New Ooma Smart Cam
New Ooma Smart Cam • Facial recognition for personalized alerts • Keeps working during internet and power outages • More powerful user experience – Geofencing – Security system integration • And all the basics: – Indoor/outdoor – 1080p full HD, with night vision – Live streaming and two way talk – I
Slide 19: Smart Home Growth Opportunity
Smart Home Growth Opportunity Smart Home Security Ooma Opportunity Market Growth* North America • Large, growing market • Unique integrated solution 18% CAGR 27% • Leverage of existing Household Penetration: platform/customers • Disrupt expensive traditional security *Source: https://www.statista.co
Slide 20: Integrated Growth Strategy
Integrated Growth Strategy Efficient Marketing Cost-Effective Sales TV / Traditional Media Leading Retailers • Broad Reach • Low Cost • Builds Brand Image Online Targeted Campaigns • Directly Direct Sales • Through Retailers Social / Word of Mouth Net Promoter Resellers And Partners 69% Score1 1: PC
Slide 21: Growth Drivers
Growth Drivers • SMB/Home Cloud Productivity Automation Communications Network • Enterprise UCaaS App Portal Appliance • Security and Other Communications Connected Services Infrastructure • International Markets Proprietary and confidential.
Slide 22: Investment Highlights
Investment Highlights Massive Connected Services Opportunity Unique Hybrid SaaS Platform Solution Disruptive Cloud Communications and Other Connected Services Efficient Integrated Go-to-Market Strategy Predictable SaaS Subscription Business/Financial Model Proprietary and confidential.
Slide 23: Financial Overview
Financial Overview Proprietary and confidential. August 27, 2019
Slide 24: Steady Revenue Growth
Steady Revenue Growth Annual Revenue Quarterly Revenue $129.2 $37.3 $114.5 $104.5 $31.7 $28.2 FY 2017 FY 2018 FY 2019 F2Q18 F2Q19 F2Q20 $ Millions Proprietary and confidential.
Slide 25: Core Subscription Revenue & Users
Core Subscription Revenue & Users Subscription & Services Revenue Subscribers 1,023K ($ in millions) 976K 929K $111.7 $94.2 $78.2 $34.5 FY 2017 FY 2018 FY 2019 F2Q20 FY 2018 FY 2019 F2Q20 2Q20 Core Subscription Revenue Growth of 23% yr./yr. (16% excluding the 2Q20 Broadsmart Acquisition) 2Q20 Overal
Slide 26: Business – Small Office & UCaaS
Business – Small Office & UCaaS Business Subscription & Services Revenue Business Subscribers ($ in millions) 202K $34.0 156K $22.5 120K $14.1 $13.3 FY 2017 FY 2018 FY 2019 F2Q20 FY 2018 FY 2019 F2Q20 2Q20 Business Subscription Revenue growth of 68% yr./yr. (46% excl. Broadsmart) Business Subscripti
Slide 27: Residential
Residential Residential Subscription & Services Revenue (millions) $77.7 $71.7 $64.1 $19.3 $20.1 FY 2017 FY 2018 FY 2019 F2Q19 F2Q20 2Q20 Residential Subscription Revenue Growth of 4% yr./yr. Residential Subscription & Services Revenue Excluding Talkatone Proprietary and confidential.
Slide 28: Key Metrics
Key Metrics $11.00 $135.1 $9.77 $119.1 $8.79 $8.13 $103.0 FY 2017 FY 2018 FY 2019 F2Q20 FY 2018 FY 2019 F2Q20 ARPU is blended monthly average subscription and services revenue per core user/seat. AERR is annualized exit recurring revenue. Proprietary and confidential.
Slide 29: Robust Gross Margin
Robust Gross Margin Long-Term Gross Margin Ranges Subscription/Services Low Total High 70% 70% 69% 61% 61% 60% FY 2018 FY 2019 F2Q20 Proprietary and confidential.
Slide 30: Strong Financial Position
Strong Financial Position ($ millions) FY 2018 FY 2019 F2Q20 Cash and Investments (no debt) $51.8 $42.6 $28.7 Cash from (used in) Operations $3.2 ($3.9) ($0.4) Capital Spending ($2.5) ($1.9) ($1.0) Adjusted EBITDA ($0.2) ($1.9) ($0.5) Proprietary and confidential.
Slide 31: Long-Term Model (Non-GAAP)
Long-Term Model (Non-GAAP) 3-YEAR LONG-TERM % REVENUE FY 2018 FY 2019 F2Q20 TARGETS RANGES Subscription & Services Gross Margin 70% 70% 69% 70%-75% 75% - 80% Total Gross Margin 61% 60% 61% 62%-65% 65% - 70% Sales & Marketing 31% 30% 32% 32%-35% 20% - 25% Research & Development 22% 23% 22% 17%-19% 12
Slide 32: Thank You
Thank You Proprietary and confidential. August 27, 2019
Slide 33: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation $ Thousands FY 2017 FY 2018 FY 2019 F2Q19 F2Q20 GAAP Gross Profit $59,329 $68,092 $76,491 $18,773 $22,320 Add : Stock-based compensation expense and 1,038 1,129 957 249 354 related taxes Amortization of Intangibles 162 183 549 139 124 Non-GAAP Gross Profit $60,529 $69