Slide 1: Smart Connected Services Investor Presentation
Smart Connected Services Investor Presentation December 5, 2023
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 Provides Leading Communications Services
Ooma Provides Leading Communications Services We transform sophisticated technology into elegant, simple communications solutions accessible to everyone. 3
Slide 4: Ooma Today
Ooma Today TOTAL REVENUE (in millions) Founded 2003; IPO 2015 NYSE: OOMA $216 Multi-tenant SaaS platform $192 $169 1.2M core users Customers of all sizes $59.9 90+% recurring revenue (99% retention*) $56.7 1,192 employees and contractors FY 2021 FY 2022 FY 2023 3QF23 3QF24 HQ: Sunnyvale, CA Annual Q
Slide 5: Customers Rate Ooma #1
Customers Rate Ooma #1 #1 Ranked by Readers 10 Years in a Row Top Ranked by Readers 9 Times for Telecom Services Consumer Reports ranking through 2021, including a tie with a regional provider 5
Slide 6: Our Solutions Serve Customers Better
Our Solutions Serve Customers Better HOME HOME OFFICE SMALL / MEDIUM BUSINESS LARGE BUSINESS ENTERPRISE Superior Value Created for SMB Extensive Features Innovative Features Simple to Install / Use Flexible, Customizable “ Free home phone service (just pay taxes and fees) “ Sound like a big business
Slide 7: Our Platform Delivers Breakthrough Features
Our Platform Delivers Breakthrough Features DEPENDABLE VOICE QUALITY Overcomes Internet Congestion TAILORED SOLUTIONS • Advanced codec • Adaptive redundancy Enables Customization • Router / QoS • Modern flexible design • Easy integrations EASE OF USE Provides End-to-End Solution ENHANCED RELIABILITY
Slide 8: Our Disruptive Cost Structure Enables Superior Value
Our Disruptive Cost Structure Enables Superior Value RECURRING ARPU1 WHY CUSTOMERS BUY (Monthly) Ooma Telo Ooma Office Ooma Enterprise $14.63 • Free calling / no • Value/unlimited • Customizable to more phone bills nationwide calling individual needs • Uses existing • Easy to install / • High reliab
Slide 9: Our Business Scope Provides Sales Synergy
Our Business Scope Provides Sales Synergy Mass Advertising Targeted Outreach Retailers Resellers Standard Features Customization DIY Installation SOLUTIONS Custom Deployments User Administered IT Specialists Standard Internet Dedicated Connectivity 40% of Telo customers and 22% of Office customers f
Slide 10: Our Reach Extends to New Opportunities
Our Reach Extends to New Opportunities RESELLER-FRIENDLY SOLUTIONS WIRELESS INTERNET AirDial IoT & TELEPHONY MANAGED Wi-Fi & SECURITY 10
Slide 11: Massive Market Transformation Underway
Massive Market Transformation Underway North American Business Market Growth Opportunity 58M Business Lines1 Worldwide hosted voice/UC public cloud (UCaaS) market 26% 35 28% CAGR1 $31B Over the Top 30 36% VoIP All other VoIP 25 $21B 8% 35% 20 CAGR Traditional 15 37% Cable/Other 10 VoIP 5 1% 0 CAGR1
Slide 12: The Solution for POTS (copper) Line Replacement
The Solution for POTS (copper) Line Replacement More than 10 million copper lines must be replaced by 20281 Common Applications Elevators Fire Alarm Panels Security Panels PBX Trunks Gate Phones Security Blue Light Panels Phones • Reduce costs • Sustain existing equipment • Cloud/SaaS DNA for remote
Slide 13: Integrated Growth Strategy
Integrated Growth Strategy Advertising Direct Sales 73%1 Customer Resellers Net Promoter Referrals and Partners Score Services Retailers Expansion 1PC Mag 2022, for Ooma’s Small Business Solution 13
Slide 14: Significant Growth Drivers
Significant Growth Drivers Small businesses with underserved needs Large businesses with custom requirements Our platform uniquely enables Telecom resellers requiring own-brand solutions solutions to untapped New adjacent services opportunities Geographic expansion 14
Slide 15: Financial Overview
Financial Overview 15
Slide 16: Consistent Revenue Performance
Consistent Revenue Performance ANNUAL REVENUE QUARTERLY REVENUE (in millions) (in millions) $59.9 $56.7 All Other $216.2 Revenue $192.3 All Other $168.9 Revenue Core Core Subscription Subscription $152.6 $171.1 $193.6 $50.3 $54.2 and Services and Services Revenue Revenue FY 2021 FY 2022 FY 2023 3QF2
Slide 17: Ooma Business Drives Growth
Ooma Business Drives Growth CORE SUBSCRIPTION AND SERVICES REVENUE CORE USERS (in millions) (in thousands) 1,210 1,241 $193.6 $171.1 1,100 Business $85.0 $105.3 308 428 475 Business $54.2 Residential $86.1 $88.4 792 781 766 Residential $32.3 $21.9 FY 2023 3QF24 FY 2022 FY 2023 3QF24 Core Business Su
Slide 18: Key Metrics
Key Metrics ARPU AERR ($ per month) ($ millions) $14.63 $225 $14.24 $13.41 $207 $12.46 $177 $161 FY 2021 FY 2022 FY 2023 3QF24 FY 2021 FY 2022 FY 2023 3QF24 Monthly Business ARPU ~$23, Monthly Residential ARPU ~$9 Average Revenue Per User (ARPU) is blended monthly average subscription and services r
Slide 19: Robust Gross Margin
Robust Gross Margin LONG TERM TARGET GROSS MARGIN RANGES Subscription/Services High Total Low 80% 73% 75% 72% 72% 70% 62% 64% 65% 62% FY 2022 FY 2023 3QF24 Total Subscriptions/Services 19
Slide 20: Consistent Adjusted EBITDA Performance
Consistent Adjusted EBITDA Performance Adjusted EBITDA (thousands) 3QF22 4QF22 1QF23 2QF23 3QF23 4QF23 1QF24 2QF24 3QF24 $5,200 $4,800 $4,400 $4,000 $3,600 $3,200 $2,800 $2,400 $2,000 $1,600 $1,200 $800 $400 $0 Adjustments to EBITDA are described in the Reconciliation of Non-GAAP Financial Measures
Slide 21: Financial Position Summary
Financial Position Summary ($ millions) FY 2022 FY 2023 3QF24 9 mo. FY24 Cash and Investments $31.3 $26.9 $18.91 $18.9 Debt --- --- $18.02 $18.0 Cash from Operations $6.7 $8.8 $1.9 $6.8 Capital Spending ($4.2) ($5.2) ($1.4) ($4.9) Adjusted EBITDA $15.6 $17.4 $5.0 $14.6 1. During 3QF24 Ooma acquired
Slide 22: Target Model (Non-GAAP)
Target Model (Non-GAAP) Actual Results Targets Mid-Term (% revenue) FY 2022 FY 2023 3QF24 Long-Term (1-3 Year) Subscription & Services 72% 73% 72% 70%-75% 75% - 80% Gross Margin Overall Gross Margin 62% 64% 62% 62%-65% 65% - 70% Sales & Marketing 29% 30% 28% 29%-32% 20% - 25% Research & Development
Slide 23: Thank You.
Ooma Thank You.
Slide 24: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation $ Thousands FY 2022 FY 2023 3QF23 3QF24 GAAP Gross Profit $118,438 $137,648 $35,920 $36,939 Add : Stock-based compensation and related taxes 1,026 986 242 260 Amortization of intangibles 292 430 139 173 Non-GAAP Gross Profit $119,756 $139,064 $36,301 $37,372 GAAP Sale