Ooma, Inc. · NYSE:OOMA
Ooma — Investor Presentation (November 2018)
32 slides from Ooma's investor presentation, Nov 27, 2018
Slide 1: Smart Connected Services Investor Presentation
Smart Connected Services Investor Presentation Information as of November 27, 2018
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 Portal App other connected Appliance Communications services, with solutions for business, home, and mobile users Infrastructure www.ooma.com CONFIDENTIAL AND PROPRIETARY | 3
Slide 4: Company Overview
Company Overview Founded 2004 HQ: Sunnyvale, California IPO in 2015, NYSE: OOMA Multi-tenant SaaS platform ~969k core users ~90% recurring revenue ~100% recurring revenue retention 650+ Employees/contractors CONFIDENTIAL AND PROPRIETARY | 4
Slide 5: Investment Highlights
Investment Highlights Massive Connected Services Opportunity Total Revenue (in millions) Unique Hybrid SaaS Platform Solution Disruptive Cloud Communications and Other Connected Services Efficient Integrated Go-to-Market Annual Quarterly Strategy Predictable SaaS Subscription Business/Financial Mode
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
Unique SaaS Platform Linux Appliance, Multi-Tenant SaaS Router, USB, Platform Network DECT/ULE Radio Mobile Services, Alerts and Control Portal User Appliance App Configurable Services Connects to Many Endpoint Devices Integrated, Managed Platform Enabling Both Communications and Other Connected Ser
Slide 9: Competitive Advantages
Competitive Advantages Breakthrough Voice • Proprietary PureVoice Technology Quality Innovative Services • Unique Applications that Create Customer Interest and Stickiness Enhanced User • Plug-and-Play Solutions, Diagnostics Experience and New Service Upgrades Superior Value • Disruptive Low Cost Ca
Slide 10: Customers Rate Ooma #1
Customers Rate Ooma #1 Office Home #1 Ranked by Readers Top Ranked by Readers 5 Years in a Row in last 7 surveys, including 2018 CONFIDENTIAL AND PROPRIETARY | 10
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 management for Resellers Curated business Enterprise-grade features f
Slide 12: SMB Phone: Ooma Office
SMB Phone: Ooma Office • Suite of user configurable cloud PBX features Business Services • Virtual • eFax • Broadest solution available Receptionist • Conferencing • Music-on-Hold • Call Forwarding • Voicemail • Ring Groups • Call Transfers • Mobile Apps • Eliminates expensive specialist IT support
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 Source: Oo
Slide 14: Enterprise UCaaS: Ooma Enterprise
Enterprise UCaaS: Ooma Enterprise • Enterprise Targeted Solution Enterprise Services • Integrations • Collaboration • Rich Telephony • High Availability • Enhanced Quality Of Service • Contact Center • Tailored Desk • Global Service phone Experience • Mobile Apps • Reporting • Bespoke Solutions And
Slide 15: Home Phone: Ooma Telo
Home Phone: Ooma Telo • Free home phone service, just Home pay taxes and fees Services • Unlimited US • Blacklisting Calling • 911 Alerts • Voicemail • Instant 2nd Line • Innovative Premier features • Multi-ring • Alexa Skills • Ring Groups And More! • Ideal for families with children, multi-generat
Slide 16: Homes Are Switching From Traditional/Cable Phone Service
Homes Are Switching From Traditional/Cable Phone 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. 20
Slide 17: Home Security: Ooma Home
Home Security: Ooma Home • Do-it-yourself home security that Security Services leverages the Ooma Telo Remote 911 Facial Recognition Automatic Arm/Disarm Video Battery Backup Phone call Alerts Video On-board Memory Text & Push Notifications DIY Installation • Rich notifications And More! • Remote 91
Slide 18: Smart Home Growth Opportunity
Smart Home Growth Opportunity Smart Home Security Ooma Opportunity Market Growth* North America • Large, growing market • Unique integrated solution 18% 27% CAGR • Leverage existing Household Penetration: platform/customers • Disrupt expensive traditional security *Source: https://www.statista.com/o
Slide 19: 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 72% Score1 1: PC
Slide 20: Growth Drivers
Growth Drivers • SMB/Home Cloud Communications Productivity Automation Network • Enterprise UCaaS Portal Appliance App • Security and Other Communications Connected Services • International Markets Infrastructure CONFIDENTIAL AND PROPRIETARY | 20
Slide 21: 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 CONFIDENTIAL AND PROPRIETARY | 21
Slide 22: Financial Overview
€3 ooma Financial Overview
Slide 23: Steady Revenue Growth
Steady Revenue Growth Annual Revenue Quarterly Revenue $ Millions CONFIDENTIAL AND PROPRIETARY | 23
Slide 24: Core Subscription Revenue & Users
Core Subscription Revenue & Users Subscription & Services Revenue ($ in millions) 3Q19 Combined Business and Residential Subscription Revenue Growth of 20% yr./yr. Overall Subscription & Services Revenue Excluding Talkatone CONFIDENTIAL AND PROPRIETARY | 24
Slide 25: Business – Small Office & UCaaS
Business – Small Office & UCaaS Business Subscription & Services Revenue ($ in millions) 3Q19 Business Subscription Revenue growth of 52% yr./yr. Business Subscription & Services Revenue Includes Ooma Office and Ooma Enterprise CONFIDENTIAL AND PROPRIETARY | 25
Slide 26: Residential – Communications & Security
Residential – Communications & Security Residential Subscription & Services Revenue ($ in millions) 3Q19 Residential Subscription Revenue Growth of 9% yr./yr. CONFIDENTIAL AND PROPRIETARY | 26
Slide 27: Key Metrics
Key Metrics ARPU is blended monthly average subscription and services revenue per core user/seat. AERR is annualized exit recurring revenue. CONFIDENTIAL AND PROPRIETARY | 27
Slide 28: Improving Gross Margin
Improving Gross Margin Long-Term Gross Margin Ranges Subscription/Services Low Total High CONFIDENTIAL AND PROPRIETARY | 28
Slide 29: Strong Financial Position
Strong Financial Position ($ millions) FY 2017 FY 2018 9 mos. F19 Cash and Investments (no debt) $53.2 $51.8 $46.9 Cash from (used in) Operations $0.4 $3.2 ($1.8) Capital Spending ($1.6) ($2.5) ($1.4) Cash used for Acquisitions & ($1.6) ($3.8) ($4.7) Other Financial Activities Adjusted EBITDA ($1.4)
Slide 30: Long-Term Target Model (Non-GAAP)
Long-Term Target Model (Non-GAAP) LONG-TERM % REVENUE FY 2017 FY 2018 F3Q18 F3Q19 RANGES Subscription & Services 69% 70% 71% 72% 75% - 80% Gross Margin Total Gross Margin 58% 61% 61% 63% 65% - 70% Sales & Marketing 31% 31% 31% 32% 20% - 25% Research & Development 20% 22% 23% 23% 12% - 15% General &
Slide 31: Thank you
€3 ooma Thank you
Slide 32: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation $ Thousands FY2015 FY 2016 FY 2017 FY 2018 F3Q18 F3Q19 GAAP Gross Profit $35,477 $46,910 $59,329 $68,092 $17,166 $20,073 Add : Stock-based compensation expense and 36 437 1,038 1,129 262 257 related taxes Amortization of Intangibles 122 163 162 183 40 146 Non-GAAP Gro