Slide 1: Smart Connected Services Investor Presentation
Smart Connected Services Investor Presentation Information as of March 5, 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 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 ~976k 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) $129.2 $114.5 $104.5 Unique Hybrid SaaS Platform Solution Disruptive Cloud Communications $34.7 and $30.2 Other Connected Services FY 2017 FY 2018 FY 2019 F4Q18 F4Q19 Efficient Integrated Go-to-Market Annual Qua
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, Router, DECT/ULE Radio, Multi-Tenant SaaS Optional 4G Wireless Platform Network Mobile Services, Alerts and Control Portal User Appliance App Configurable Services Connects to Many Endpoint Devices Integrated, Managed Platform Enabling Both Communications and Ot
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 6 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 Receptionist • Conferencing • Broadest solution available • Music-on-Hold • Call Forwarding • Voicemail • Ring Groups • Call Transfers • Mobile Apps • Eliminates expensive specialist IT And More
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 Services • Enterprise Targeted Solution • Integrations • Collaboration • Rich Telephony • High Availability • Contact Center • Tailored Desk • Global Service phone Experience • Enhanced Quality Of Service • Mobile Apps • Reporting And More! • Bespoke Solu
Slide 15: Home Phone: Ooma Telo
Home Phone: Ooma Telo Home Services • Free basic home phone • Unlimited US • Blacklisting service, just pay taxes and Calling 911 Alerts • Voicemail • fees • Instant 2nd Line • Multi-ring • Alexa Skills • Ring Groups • Innovative Premier features And More! • Ideal for families with Ooma Telo childre
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: Smart Security: Ooma Home
Smart Security: Ooma Home • Do-it-yourself smart 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 • Rich notifications Text & Push Notifications DIY Installation And More! • Remote
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% 27% CAGR • Leverage existing Household Penetration: platform/customers • Disrupt expensive traditional security *Source: https://www.statista.com/o
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 Communications Productivity Automation Network • Enterprise UCaaS Portal Appliance App • Security and Other Communications Connected Services • International Markets Infrastructure CONFIDENTIAL AND PROPRIETARY | 21
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 CONFIDENTIAL AND PROPRIETARY | 22
Slide 23: Financial Overview
Ooma Financial Overview
Slide 24: Steady Revenue Growth
Steady Revenue Growth Annual Revenue Quarterly Revenue $129.2 $114.5 $34.7 $104.5 $30.2 $27.6 FY 2017 FY 2018 FY 2019 F4Q17 F4Q18 F4Q19 $ Millions CONFIDENTIAL AND PROPRIETARY | 24
Slide 25: Core Subscription Revenue & Users
Core Subscription Revenue & Users Subscription & Services Revenue Subscribers ($ in millions) 976K 929K $111.7 858K $94.2 $78.2 $29.7 FY 2017 FY 2018 FY 2019 F4Q19 FY 2017 FY 2018 FY 2019 4Q19 Combined Business and Residential Subscription Revenue Growth of 16% yr./yr. Overall Subscription & Service
Slide 26: Business – Small Office & UCaaS
Business – Small Office & UCaaS Business Subscription & Services Revenue Business Subscribers ($ in millions) 156K $34.0 120K $22.5 87K $14.1 $9.8 FY 2017 FY 2018 FY 2019 F4Q19 FY 2017 FY 2018 FY 2019 4Q19 Business Subscription Revenue growth of 50% yr./yr. Business Subscription & Services Revenue I
Slide 27: Residential – Communications & Security
Residential – Communications & Security Residential Subscription & Services Revenue (millions) $77.7 $71.7 $64.1 $19.0 $19.8 FY 2017 FY 2018 FY 2019 F4Q18 F4Q19 4Q19 Residential Subscription Revenue Growth of 4.5% yr./yr. Residential Subscription & Services Revenue Excluding Talkatone CONFIDENTIAL A
Slide 28: Key Metrics
Key Metrics $119.1 $10.17 $9.77 $103.0 $8.79 $8.13 $85.2 FY 2017 FY 2018 FY 2019 F4Q19 FY 2017 FY 2018 FY 2019 ARPU is blended monthly average subscription and services revenue per core user/seat. AERR is annualized exit recurring revenue. CONFIDENTIAL AND PROPRIETARY | 28
Slide 29: Improving Gross Margin
Improving Gross Margin Long-Term Gross Margin Ranges Subscription/Services Low Total High 69% 70% 70% 61% 60% 58% FY 2017 FY 2018 FY 2019 CONFIDENTIAL AND PROPRIETARY | 29
Slide 30: Strong Financial Position
Strong Financial Position ($ millions) FY 2017 FY 2018 FY 2019 Cash and Investments (no debt) $53.2 $51.8 $42.6 Cash from (used in) Operations $0.4 $3.2 ($3.9) Capital Spending ($1.6) ($2.5) ($1.9) Adjusted EBITDA ($1.4) ($0.2) ($1.9) CONFIDENTIAL AND PROPRIETARY | 30
Slide 31: Long-Term Target Model (Non-GAAP)
Long-Term Target Model (Non-GAAP) LONG-TERM % REVENUE FY 2017 FY 2018 FY 2019 RANGES Subscription & Services Gross Margin 69% 70% 70% 75% - 80% Total Gross Margin 58% 61% 60% 65% - 70% Sales & Marketing 31% 31% 30% 20% - 25% Research & Development 20% 22% 23% 12% - 15% General & Administrative 10% 9
Slide 32: Thank you
Ooma Thank you
Slide 33: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation $ Thousands FY 2017 FY 2018 FY 2019 F4Q18 F4Q19 GAAP Gross Profit $59,329 $68,092 $76,491 $18,312 $19,707 Add : Stock-based compensation expense and 1,038 1,129 957 197 249 related taxes Amortization of Intangibles 162 183 549 63 149 Non-GAAP Gross Profit $60,529 $69,