Ooma, Inc. (NYSE: OOMA), a smart communications platform for
businesses and consumers, today released financial results for the
fiscal third quarter ended October 31, 2023.
Fiscal Third Quarter 2024 Financial Highlights:
- Revenue: Total revenue was $59.9 million, up 6%
year-over-year. Subscription and services revenue increased to
$55.9 million from $51.7 million in the third quarter of fiscal
2023, and was 93% of total revenue, primarily driven by the growth
of Ooma Business.
- Net Income/Loss: GAAP net income was $2.3 million, or
$0.09 per basic and diluted share, compared to GAAP net loss of
$2.8 million, or $0.11 per basic and diluted share, in the third
quarter of fiscal 2023. GAAP net income in the third quarter of
fiscal 2024 includes tax benefit for the release of a $3.2 million
valuation allowance resulting from the recording of certain
intangible assets in connection with the acquisition of 2600Hz Inc.
("2600Hz"). GAAP net loss in the third quarter of fiscal 2023
included a $1.4 million charge for consolidation of facilities, as
well as $0.6 million in acquisition-related costs, both of which
resulted from the acquisition of OnSIP in July 2022. Non-GAAP net
income was $4.0 million, or $0.15 per diluted share, compared to
non-GAAP net income of $3.5 million, or $0.14 per diluted share in
the prior year period.
- Adjusted EBITDA: Adjusted EBITDA was $5.0 million,
compared to $4.5 million in the third quarter of fiscal 2023.
For more information about non-GAAP net income and Adjusted
EBITDA, see the section below titled "Non-GAAP Financial Measures"
and the reconciliation provided in this release.
“Q3 was another strong quarter for Ooma, with 8% year-over-year
subscription and services revenue growth driven by 14%
year-over-year growth in core business services revenue,” said Eric
Stang, chief executive officer of Ooma. “We continued in the
quarter to invest in premium product features and international
expansion for Ooma Office and Ooma Enterprise, and to increase
sales resources and reseller partnerships for AirDial. In addition,
we acquired the company 2600Hz to expand our technological
resources and capitalize on the opportunity we see in the wholesale
and CPaaS marketplace. We believe we are pursuing exciting
opportunities for growth in conjunction with sensible expense
management.”
Business Outlook:
For the fourth quarter of fiscal 2024, Ooma expects:
- Total revenue in the range of $61.2 million to $61.8
million.
- GAAP net loss in the range of $3.5 million to $3.8 million and
GAAP net loss per share in the range of $0.13 to $0.14.
- Non-GAAP net income in the range of $3.1 million to $3.4
million and non-GAAP net income per share in the range of $0.12 to
$0.13.
For the full fiscal year 2024, Ooma expects:
- Total revenue in the range of $236.3 million to $236.9
million.
- GAAP net loss in the range of $1.2 million to $1.5 million, and
GAAP net loss per share in the range of $0.04 to $0.05.
- Non-GAAP net income in the range of $14.9 million to $15.2
million, and non-GAAP net income per share in the range of $0.57 to
$0.58.
The following is a reconciliation of GAAP net loss to non-GAAP
net income and GAAP basic and diluted net loss per share to
non-GAAP diluted net income per share guidance for the fiscal
fourth quarter and the fiscal year ending January 31, 2024 (in
millions, except per share data):
Projected range Three Months Ending Fiscal Year
Ending January 31, 2024 January 31, 2024
(unaudited) GAAP net loss
($3.5)-($3.8
)
($1.2)-($1.5
)
Stock-based compensation and related taxes
4.5
15.5
Amortization of intangible assets and acquisition-related costs
1.9
4.3
Restructuring costs
0.5
0.5
Acquisition-related income tax benefit
—
(3.2
)
Facilities consolidation gain
—
(1.0
)
Legal settlement costs
—
0.3
Non-GAAP net income $3.1-$3.4 $14.9-$15.2
GAAP net
loss per share
($0.13)-($0.14
)
($0.04)-($0.05
)
Stock-based compensation and related taxes
0.17
0.59
Amortization of intangible assets and acquisition-related costs
0.07
0.16
Restructuring costs
0.02
0.02
Acquisition-related income tax benefit
—
(0.12
)
Facilities consolidation gain
—
(0.04
)
Legal settlement costs
—
0.01
Non-GAAP net income per share
$0.12-$0.13
$0.57-$0.58
Weighted-average number of shares used in per share
amounts: Basic
26.2
25.7
Diluted
26.7
26.3
Conference Call Information:
The company will host a conference call and live webcast for
analysts and investors today at 5:00 p.m. Eastern time. The news
release with the financial results will be accessible from the
company's website prior to the conference call.
To access the call by phone, please visit
https://register.vevent.com/register/BI6fd0f83d4de54c07baf932bed0b6b282
to register and receive the dial-in details. To avoid delays, Ooma
encourages participants to dial into the conference call ten
minutes ahead of the scheduled start time. For webcast listening,
please visit Ooma’s Events & Presentations page
https://investors.ooma.com/news-events/events-presentation for a
link.
Following the call, an archived version of the webcast will be
available on the Ooma investor relations site at
https://investors.ooma.com for 12 months.
Non-GAAP Financial Measures
In addition to disclosing financial measures prepared in
accordance with U.S. generally accepted accounting principles
(“GAAP”), this press release and the accompanying tables contain
certain non-GAAP financial measures, including: non-GAAP net
income, non-GAAP net income per share, non-GAAP gross profit and
gross margin, non-GAAP operating income, and Adjusted EBITDA.
Adjusted EBITDA represents the net income before interest and other
income, income taxes, depreciation and amortization of capital
expenditures, amortization of intangible assets,
acquisition-related transaction costs, certain litigation
settlement costs, non-recurring gains, and stock-based compensation
expense and related taxes.
Other non-GAAP financial measures exclude stock-based
compensation expense and related taxes, certain non-recurring
charges and gains, such as acquisition-related income tax benefits,
acquisition-related transaction costs, acquisition-related income
tax benefit, and amortization of intangible assets. Non-GAAP
weighted-average diluted shares include the effect of potentially
dilutive securities from the company’s stock-based benefit
plans.
These non-GAAP financial measures are presented to provide
investors with additional information regarding our financial
results and core business operations. Ooma considers these non-GAAP
financial measures to be useful measures of the operating
performance of the company, because they contain adjustments for
unusual events or factors that do not directly affect what
management considers to be Ooma's core operating performance and
are used by the company's management for that purpose. Management
also believes that these non-GAAP financial measures allow for a
better evaluation of the company's performance by facilitating a
meaningful comparison of the company's core operating results in a
given period to those in prior and future periods. In addition,
investors often use similar measures to evaluate the operating
performance of a company.
Non-GAAP financial measures are presented for supplemental
informational purposes only to aid an understanding of the
company's operating results. The non-GAAP financial measures should
not be considered a substitute for financial information presented
in accordance with GAAP and may be different from non-GAAP
financial measures presented by other companies. A limitation of
the non-GAAP financial measures presented is that the adjustments
relate to items that the company generally expects to continue to
recognize. The adjustment of these items should not be construed as
an inference that the adjusted gains or expenses are unusual,
infrequent or non-recurring. Therefore, both GAAP financial
measures of Ooma's financial performance and the respective
non-GAAP measures should be considered together. Please see the
reconciliation of non-GAAP financial measures to the most directly
comparable GAAP measure in the tables below.
Disclosure Information
Ooma uses the investor relations section on its website as a
means of complying with its disclosure obligations under Regulation
FD. Accordingly, investors should monitor Ooma's investor relations
website in addition to following Ooma's press releases, Securities
and Exchange Commission (“SEC”) filings, and public conference
calls and webcasts.
Legal Notice Regarding Forward-Looking Statements
This press release contains forward-looking statements under the
Private Securities Litigation Reform Act of 1995. In particular,
the financial projections under “Business Outlook” and the
statements contained in the quotations of our Chief Executive
Officer with respect to expectations regarding the Company’s growth
initiatives and cash management efforts may constitute
forward-looking statements. Forward-looking statements can be
identified by the fact that they do not relate strictly to
historical facts and generally contain words such as "believes”,
"expects”, "may”, "will”, "should”, "seeks”, "approximately”,
"intends”, "plans”, "estimates”, "anticipates”, and other
expressions that are predictions of or indicate future events.
Although the forward-looking statements contained in this press
release are based upon information available at the time the
statements are made and reflect management's good faith beliefs,
forward-looking statements inherently involve known and unknown
risks, uncertainties and other factors, which may cause the actual
results, performance or achievements to differ materially from
anticipated future results. Important factors that could cause
actual results to differ materially from expectations include,
among others: our inability to attract new customers on a
cost-effective basis; our inability to retain customers; our
inability to realize expected returns from our investments made in
connection with our international expansion efforts and development
of new product features; our ability to successfully integrate
2600Hz and to achieve expected benefits from the acquisition;
failure to retain former employees and customers of 2600Hz; failure
to realize AirDial opportunities; intense competition; loss of key
retailers and reseller partnerships; our reliance on vendors to
manufacture the on-premise appliances and end-point devices we
sell; our reliance on third parties for our network connectivity
and co-location facilities; our reliance on third parties for some
of our software development, quality assurance and operations; our
reliance on third parties to provide the majority of our customer
service and support representatives; and interruptions to our
service. You should not place undue reliance on these
forward-looking statements, which speak only as of the date hereof.
We do not undertake to update or revise any forward-looking
statements after they are made, whether as a result of new
information, future events, or otherwise, except as required by
applicable law.
The forward-looking statements contained in this press release
are also subject to other risks and uncertainties, including those
more fully described in our filings which we make with the SEC from
time to time, including the risk factors contained in our Quarterly
Report on Form 10-Q for the quarter ended July 31, 2023, filed with
the SEC on September 8, 2023. The forward-looking statements in
this press release are based on information available to Ooma as of
the date hereof, and Ooma disclaims any obligation to update any
forward-looking statements, except as required by law.
About Ooma, Inc.
Ooma (NYSE: OOMA) creates powerful connected experiences for
businesses, consumers and service providers, delivered through
smart cloud-based communications platforms and services. For
businesses of all sizes, Ooma offers advanced voice and
collaboration features including messaging, intelligent virtual
attendants and video meetings. Ooma’s all-in-one replacement for
analog phone lines helps businesses maintain mission-critical
systems by moving connectivity to the cloud. For consumers, Ooma’s
residential phone service provides PureVoice HD voice quality,
advanced features and integration with mobile devices. Learn more
at www.ooma.com or www.ooma.ca in Canada.
OOMA, INC CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, amounts in thousands) October
31, January 31,
2023
2023
Assets Current assets: Cash and cash equivalents
$
18,872
$
24,137
Short-term investments
—
2,723
Accounts receivable, net
9,224
7,131
Inventories
21,343
26,246
Other current assets
16,377
14,368
Total current assets
65,816
74,605
Property and equipment, net
9,754
7,996
Operating lease right-of-use assets
17,106
12,702
Intangible assets, net
29,637
10,463
Goodwill
22,917
8,655
Other assets
17,678
16,584
Total assets
$
162,908
$
131,005
Liabilities and stockholders' equity Current
liabilities: Accounts payable
$
6,992
$
13,462
Accrued expenses and other current liabilities
29,359
26,726
Deferred revenue
17,303
17,216
Total current liabilities
53,654
57,404
Long-term operating lease liabilities
13,691
10,426
Debt, net of current portion
18,000
—
Other liabilities
14
31
Total liabilities
85,359
67,861
Stockholders' equity: Common stock
5
5
Additional paid-in capital
207,758
195,605
Accumulated other comprehensive loss
(1
)
(23
)
Accumulated deficit
(130,213
)
(132,443
)
Total stockholders' equity
77,549
63,144
Total liabilities and stockholders' equity
$
162,908
$
131,005
OOMA, INC. CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (Unaudited, amounts in thousands, except share
and per share data) Three Months Ended Nine
Months Ended
October 31,
2023
October 31,
2022
October 31,
2023
October 31,
2022
Revenue: Subscription and services
$
55,886
$
51,749
$
163,661
$
146,467
Product and other
3,970
4,930
11,400
13,202
Total revenue
59,856
56,679
175,061
159,669
Cost of revenue: Subscription and services
15,993
14,070
46,174
39,954
Product and other
6,924
6,689
19,408
18,026
Total cost of revenue
22,917
20,759
65,582
57,980
Gross profit
36,939
35,920
109,479
101,689
Operating expenses: Sales and marketing
17,912
18,019
54,744
51,602
Research and development
12,540
12,498
36,261
34,115
General and administrative
7,505
8,258
20,094
21,232
Total operating expenses
37,957
38,775
111,099
106,949
Loss from operations
(1,018
)
(2,855
)
(1,620
)
(5,260
)
Interest and other income, net
267
94
1,214
144
Loss before income taxes
(751
)
(2,761
)
(406
)
(5,116
)
Income tax benefit (provision)
3,036
(49
)
2,636
1,878
Net income (loss)
$
2,285
$
(2,810
)
$
2,230
$
(3,238
)
Net income (loss) per share of common stock: Basic and
diluted
$
0.09
$
(0.11
)
$
0.09
$
(0.13
)
Weighted-average shares of common stock outstanding: Basic
25,469,997
24,608,685
25,458,063
24,373,836
Diluted
25,990,264
24,608,685
26,052,180
24,373,836
OOMA, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS (Unaudited, amounts in thousands) Three
Months Ended Nine Months Ended
October 31,
2023
October 31,
2022
October 31,
2023
October 31,
2022
Cash flows from operating activities: Net income (loss)
$
2,285
$
(2,810
)
$
2,230
$
(3,238
)
Adjustments to reconcile net income (loss) to net cash provided by
operating activities: Stock-based compensation expense
3,714
3,541
10,838
10,383
Depreciation and amortization of capital expenditures
1,042
998
3,230
2,737
Amortization of intangible assets
793
794
2,226
1,492
Amortization of operating lease right-of-use assets
757
799
2,217
2,248
Facilities consolidation charge (gain)
—
1,402
(956
)
1,402
Deferred income tax benefit
(3,234
)
(90
)
(3,234
)
(2,133
)
Other
(1
)
8
(5
)
34
Changes in operating assets and liabilities: Accounts receivable,
net
(422
)
(533
)
(1,903
)
440
Inventories and deferred inventory costs
1,324
(977
)
4,671
(8,135
)
Prepaid expenses and other assets
(746
)
1,022
(2,231
)
(1,304
)
Accounts payable, accrued expenses and other liabilities
(3,161
)
(1,446
)
(10,057
)
1,244
Deferred revenue
(422
)
(219
)
(261
)
301
Net cash provided by operating activities
1,929
2,489
6,765
5,471
Cash flows from investing activities: Proceeds from
maturities and sales of short-term investments
500
1,775
2,750
10,900
Purchases of short-term investments
—
—
—
(3,869
)
Capital expenditures
(1,366
)
(1,095
)
(4,884
)
(3,907
)
Business acquisition, net of cash acquired
(29,210
)
—
(28,910
)
(9,771
)
Net cash (used in) provided by investing activities
(30,076
)
680
(31,044
)
(6,647
)
Cash flows from financing activities: Proceeds from
issuance of common stock
837
1,123
2,725
2,677
Shares repurchased for tax withholdings on vesting of restricted
stock units
(496
)
(447
)
(1,410
)
(1,131
)
Proceeds from issuance of long-term debt
18,000
—
18,000
—
Credit facility issuance costs
(301
)
—
(301
)
—
Net cash provided by financing activities
18,040
676
19,014
1,546
Net (decrease) increase in cash and cash equivalents
(10,107
)
3,845
(5,265
)
370
Cash and cash equivalents at beginning of period
28,979
16,192
24,137
19,667
Cash and cash equivalents at end of period
$
18,872
$
20,037
$
18,872
$
20,037
Reconciliation of Non-GAAP Financial Measures (Unaudited,
amounts in thousands, except percentages, shares and per share
data) Three Months Ended Nine Months Ended
October 31,
2023
October 31,
2022
October 31,
2023
October 31,
2022
Revenue
$
59,856
$
56,679
$
175,061
$
159,669
GAAP gross profit
$
36,939
$
35,920
$
109,479
$
101,689
Stock-based compensation and related taxes
260
242
780
738
Amortization of intangible assets
173
139
365
291
Non-GAAP gross profit
$
37,372
$
36,301
$
110,624
$
102,718
Gross margin on a GAAP basis
62
%
63
%
63
%
64
%
Gross margin on a Non-GAAP basis
62
%
64
%
63
%
64
%
GAAP operating loss
$
(1,018
)
$
(2,855
)
$
(1,620
)
$
(5,260
)
Stock-based compensation and related taxes
3,766
3,585
11,056
10,592
Amortization of intangible assets
793
794
2,226
1,492
Acquisition-related costs
408
580
408
1,381
Facilities consolidation charge (gain)
—
1,402
(956
)
1,402
Legal settlement costs
—
—
300
—
Non-GAAP operating income
$
3,949
$
3,506
$
11,414
$
9,607
GAAP net income (loss)
$
2,285
$
(2,810
)
$
2,230
$
(3,238
)
Stock-based compensation and related taxes
3,766
3,585
11,056
10,592
Amortization of intangible assets
793
794
2,226
1,492
Acquisition-related costs
408
580
217
1,381
Facilities consolidation charge (gain)
—
1,402
(956
)
1,402
Legal settlement costs
—
—
300
—
Acquisition-related income tax benefit
(3,234
)
(90
)
(3,234
)
(2,133
)
Non-GAAP net income
$
4,018
$
3,461
$
11,839
$
9,496
GAAP diluted net income (loss) per share
$
0.09
$
(0.11
)
$
0.09
$
(0.13
)
Stock-based compensation and related taxes
0.14
0.14
0.42
0.43
Amortization of intangible assets
0.03
0.03
0.08
0.06
Acquisition-related costs
0.02
0.02
0.01
0.06
Facilities consolidation charge (gain)
—
0.06
(0.04
)
0.06
Legal settlement costs
—
—
0.01
—
Acquisition-related income tax benefit
(0.12
)
—
(0.12
)
(0.09
)
Non-GAAP net income per diluted share
$
0.15
$
0.14
$
0.45
$
0.38
GAAP weighted-average basic shares
25,469,997
24,608,685
25,458,063
24,373,836
GAAP weighted-average diluted shares
25,990,264
24,608,685
26,052,180
24,373,836
Non-GAAP weighted-average diluted shares
25,990,264
25,181,210
26,052,180
25,035,092
GAAP net income (loss)
$
2,285
$
(2,810
)
$
2,230
$
(3,238
)
Reconciling items:
Interest and other income, net
(267
)
(94
)
(1,214
)
(144
)
Income taxes
(3,036
)
49
(2,636
)
(1,878
)
Depreciation and amortization of capital expenditures
1,042
998
3,231
2,737
Facilities consolidation charge (gain)
—
1,402
(956
)
1,402
Legal settlement costs
—
—
300
—
Amortization of intangible assets
793
1,374
2,226
2,873
Acquisition-related costs
408
—
408
—
Stock-based compensation and related taxes
3,766
3,585
11,056
10,592
Adjusted EBITDA
$
4,991
$
4,504
$
14,645
$
12,344
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231205470075/en/
INVESTOR CONTACT: Matthew S. Robison Director of IR and
Corporate Development Ooma, Inc. ir@ooma.com (650) 300-1480
MEDIA CONTACT: Mike Langberg Director of Corporate
Communications Ooma, Inc. press@ooma.com (650) 566-6693
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