Slide 1: Smart Connected Services Investor Presentation
Smart Connected Services Investor Presentation May 23, 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 90+% recurring revenue (99% retention*) $50.3 $56.9 1,078 employees and contractors FY 2021 FY 2022 FY 2023 1QF22 1QF24 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 $14.28 • 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 20% 35 25% CAGR1 $31B Over the Top 30 36% VoIP All other VoIP 25 $21B 8% 38% 20 CAGR Traditional 15 37% Cable/Other 10 VoIP 5 0% 0 CAGR1
Slide 12: 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 12
Slide 13: 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 13
Slide 14: Financial Overview
Financial Overview 14
Slide 15: Consistent Revenue Performance
Consistent Revenue Performance ANNUAL REVENUE QUARTERLY REVENUE (in millions) (in millions) $56.9 $216.2 All Other $50.3 $192.3 Revenue All Other $168.9 Revenue Core Core Subscription Subscription $152.6 $171.1 $193.6 $45.4 $51.8 and Services and Services Revenue Revenue FY 2021 FY 2022 FY 2023 1QF2
Slide 16: Ooma Business Drives Growth
Ooma Business Drives Growth CORE SUBSCRIPTION AND SERVICES REVENUE CORE USERS (in millions) (in thousands) $193.6 1,210 1,225 1,100 $171.1 Business $85.0 $105.3 308 428 449 Business $51.8 Residential $86.1 $88.4 792 781 776 Residential $29.8 $22.1 FY 2023 1QF24 FY 2022 FY 2023 1QF24 Overall Business
Slide 17: Key Metrics
Key Metrics ARPU AERR ($ per month) ($ millions) $14.24 $14.28 $207 $210 $13.41 $12.46 $177 $161 FY 2021 FY 2022 FY 2023 1QF24 FY 2021 FY 2022 FY 2023 1QF24 Monthly Business ARPU ~$23, Monthly Residential ARPU ~$9 ARPU is blended monthly average subscription and services revenue per core user/seat.
Slide 18: Robust Gross Margin
Robust Gross Margin LONG TERM TARGET GROSS MARGIN RANGES Subscription/Services High Total Low 80% 73% 73% 75% 72% 70% 62% 64% 64% 65% FY 2022 FY 2023 1QF24 Total Subscriptions/Services 18
Slide 19: Consistent Adjusted EBITDA Performance
Consistent Adjusted EBITDA Performance Adjusted EBITDA (thousands) 1QF22 2QF22 3QF22 4QF22 1QF23 2QF23 3QF23 4QF23 1QF24 $5,200 $4,800 $4,400 $4,000 $3,600 $3,200 $2,800 $2,400 $2,000 $1,600 $1,200 $800 $400 $0 Adjustments to EBITDA are described in the Reconciliation of Non-GAAP Financial Measures
Slide 20: Strong Financial Position
Strong Financial Position ($ millions) FY 2022 FY 2023 1QF24 Cash and Investments $31.3 $26.9 $28.4 Cash from Operations $6.7 $8.8 $1.3 Capital Spending ($4.2) ($5.2) ($1.4) Adjusted EBITDA $15.6 $17.4 $4.8 20
Slide 21: Target Model (Non-GAAP)
Target Model (Non-GAAP) Actual Results Targets Mid-Term (% revenue) FY 2022 FY 2023 1QF24 Long-Term (1-3 Year) Subscription & Services 72% 73% 73% 70%-75% 75% - 80% Gross Margin Overall Gross Margin 62% 64% 64% 62%-65% 65% - 70% Sales & Marketing 29% 30% 30% 29%-32% 20% - 25% Research & Development
Slide 22: Thank You.
Ooma Thank You.
Slide 23: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation $ Thousands FY 2022 FY 2023 1QF23 1QF24 GAAP Gross Profit $118,438 $137,648 $31,952 $35,952 Add : Stock-based compensation and related taxes 1,026 986 248 260 Amortization of intangibles 292 430 73 110 Non-GAAP Gross Profit $119,756 $139,064 $32,273 $36,322 GAAP Sales