Slide 1: Smart Connected Services Investor Presentation
Smart Connected Services Investor Presentation May 26, 2020
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 Multi-tenant SaaS platform $151.6 $129.2 1M+ core users $114.5 Customers of all sizes 90%+ recurring revenue (~100% retention*) $34.0 $40.3 ~800 employees and contractors FY 2018 FY 2019 FY 2020 1QF20 1QF21 HQ: Sunnyvale, CA An
Slide 5: Customers Rate Ooma #1
Customers Rate Ooma #1 Business Home #1 Ranked by Readers Top Ranked by Readers 7 Years in a Row 7 Times 5
Slide 6: Our Solutions Serve Customers Better
Our Solutions Serve Customers Better HOME HOME OFFICE SMALL / MEDIUM BUSINESS LARGE BUSINESS ENTERPRISE Ooma Telo Ooma Office Ooma Enterprise Superior Value Created for SMB Extensive Features Innovative Features Simple to Install / Use Flexible, Customizable “ Free home phone service (just pay taxes
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 $11.50 • 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 45% of Telo customers and 22% of Office customers 1
Slide 10: Our Reach Extends to New Opportunities
Our Reach Extends to New Opportunities PARTNER-FRIENDLY SOLUTIONS RESELLER-FRIENDLY SOLUTIONS WIRELESS INTERNET SECURITY 10
Slide 11: Massive Market Transformation Underway
Massive Market Transformation Underway Business Growth Opportunity 61M Lines1 19% CAGR2 Global Cloud PBX Market 54% 46% Traditional Internet/ Cloud $18.2B 15.5% CAGR Home 70M Lines1 1% CAGR2 $5B 36% 64% Traditional Internet/ Cloud 2019 2027 1North America. 22014 - 2017 Source: FCC Voice Telephone Se
Slide 12: Integrated Growth Strategy
Integrated Growth Strategy Advertising Direct Sales 75%1 Customer Resellers Net Promoter Referrals and Partners Score Services Retailers Expansion 1PC Mag 2020, 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: Compounding Subscriptions Drive Revenue
Compounding Subscriptions Drive Revenue ANNUAL REVENUE QUARTERLY REVENUE (in millions) (in millions) $151.6 $129.2 $40.3 Other $114.5 $34.0 Revenue Other Revenue Core Core Subscription Subscription $94.2 $111.7 $135.3 $30.2 $36.7 and Services and Services Revenue Revenue FY 2018 FY 2019 FY 2020 1QF2
Slide 16: Ooma Business Drives User and Subscription Revenue Growth
Ooma Business Drives User and Subscription Revenue Growth SUBSCRIPTION AND SERVICES REVENUE USERS (in millions) (in thousands) $135.3 1,048 1,049 $111.7 976 Business 156 231 236 Business $34.0 $54.6 $36.7 Home $77.7 $80.7 $16.2 819 817 813 Home $20.5 FY 2019 FY 2020 1QF21 FY 2019 FY 2020 1QF21 1QF21
Slide 17: Key Metrics
Key Metrics ARPU AERR ($ per month) ($ millions) $11.56 $146 $10.96 $138 $9.80 $119 $8.80 $103 FY 2018 FY 2019 FY 2020 1QF21 FY 2018 FY 2019 FY 2020 1QF21 Monthly Business ARPU ~$20, Monthly Home ARPU ~$8 ARPU is blended monthly average subscription and services revenue per core user/seat. AERR is a
Slide 18: Robust Gross Margin
Robust Gross Margin LONG TERM TARGET GROSS MARGIN RANGES Subscription/Services High Total Low 80% 75% 70% 70% 71% 70% 62% 63% 65% 60% FY 2019 FY 2020 1QF21 Total Subscriptions/Services 18
Slide 19: Improving EBITDA
Improving EBITDA 1-3 Year 2QF19 3QF19 4QF19 1QF20 2QF20 3QF20 4QF20 1QF21 Target 8% $3,500 $3,000 6% 5% $2,500 4% $2,000 $1,500 2% $1,000 0% $500 $0 -2% ($500) -4% EBITDA/Rev. (%) EBITDA (000) ($1,000) 19
Slide 20: Strong Financial Position
Strong Financial Position ($ millions) FY 2019 FY 2020 1QF21 Cash and Investments $42.6 $26.1 $23.3 Cash used in Operations ($3.9) ($7.6) ($2.8) Capital Spending ($1.9) ($3.3) ($0.8) Adjusted EBITDA ($1.9) $1.0 $3.0 20
Slide 21: Long-Term Target Model (Non-GAAP)
Long-Term Target Model (Non-GAAP) 1-3 Year Long-Term (% revenue) FY 2019 FY 2020 1QF21 Targets Ranges Subscription & Services 70% 70% 71% 70%-75% 75% - 80% Gross Margin Overall Gross Margin 60% 62% 63% 62%-65% 65% - 70% Sales & Marketing 30% 31% 29% 32%-35% 20% - 25% Research & Development 23% 21% 1
Slide 22: Thank You.
Ooma Thank You.
Slide 23: Appendix GAAP to Non-GAAP Reconciliation
$ Thousands FY 2018 FY 2019 FY 2020 1QF20 1QF21 Appendix GAAP Gross Profit Add : Stock-based compensation and related taxes $68,092 1,129 $76,491 957 $89,381 1,311 $20,433 304 $25,175 270 GAAP to Amortization of Intangibles Restructuring charges 183 - 549 - 480 2,289 155 - 73 - Non-GAAP Non-GAAP Gro