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Ooma Reports Fourth Quarter and Fiscal Year 2023 Financial Results

Ooma, Inc. (NYSE: OOMA), a smart communications platform for businesses and consumers, today released financial results for the fiscal fourth quarter and year ended January 31, 2023.

Fourth Quarter Fiscal 2023 Financial Highlights:

  • Revenue: Total revenue was $56.5 million, up 12% year-over-year. Subscription and services revenue increased to $52.6 million from $45.8 million in the fourth quarter of fiscal 2022, and was 93% of total revenue, primarily driven by the growth of Ooma Business and the acquisition of OnSIP.
  • Net Income/Loss: GAAP net loss was $0.4 million, or $0.02 per basic and diluted share, compared to GAAP net loss of $0.1 million, or $0.00 per basic and diluted share, in the fourth quarter of fiscal 2022. Non-GAAP net income was $4.1 million, or $0.16 per diluted share, compared to non-GAAP net income of $3.2 million, or $0.13 per diluted share in the prior year period.
  • Adjusted EBITDA: Adjusted EBITDA was $5.1 million, compared to $4.0 million in the fourth quarter of fiscal 2022.

Full Year Fiscal 2023 Financial Highlights:

  • Revenue: Total revenue was $216.2 million, up 12% year-over-year. Subscription and services revenue increased to $199.1 million from $175.9 million in fiscal 2022, and was 92% of total revenue, primarily driven by the growth of Ooma Business and the acquisition of OnSIP.
  • Net Income/Loss: GAAP net loss was $3.7 million, or $0.15 per basic and diluted share, compared to GAAP net loss of $1.8 million, or $0.07 per basic and diluted share, in fiscal 2022. GAAP net loss for fiscal 2023 includes a $1.4 million charge for consolidation of facilities, $1.5 million in acquisition-related transaction costs and a tax benefit for the release of a $2.1 million valuation allowance resulting from the recording of certain intangible assets associated with the acquisition of OnSIP in late July 2022. Non-GAAP net income was $13.6 million, or $0.54 per diluted share, compared to non-GAAP net income of $12.6 million, or $0.51 per diluted share in the prior fiscal year.
  • Adjusted EBITDA: Adjusted EBITDA was $17.4 million, compared to $15.6 million in fiscal 2022.

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.

“Ooma achieved solid fourth quarter results, with 12% revenue growth year-over-year and record non-GAAP net income, adjusted EBITDA and cash flow from operations,” said Eric Stang, chief executive officer of Ooma. “For the full fiscal 2023 year, Ooma also delivered 12% revenue growth, with business subscription and services revenue growing 24% year-over-year and residential subscription and services revenue growing 3% year-over-year. We enter our fiscal 2024 year with good cash flow, no debt, and multiple growth initiatives under way designed to drive profitable growth. These initiatives include continued investment in Ooma Office to serve small and medium sized customers, in Ooma Enterprise targeted at select verticals and customers who have custom requirements, in international expansion, and in our new AirDial solution targeted at replacing ageing and expensive copper POTS lines. Despite challenging economic conditions, we are excited about our outlook for fiscal 2024.”

Business Outlook:

For the first quarter of fiscal 2024, Ooma expects:

  • Total revenue in the range of $56.4 million to $56.9 million.
  • GAAP net loss in the range of $0.6 million to $0.9 million and GAAP net loss per share in the range of $0.03 to $0.04.
  • Non-GAAP net income in the range of $3.4 million to $3.7 million and non-GAAP net income per share in the range of $0.13 to $0.14.

For the full fiscal year 2024, Ooma expects:

  • Total revenue in the range of $235.5 million to $238.5 million.
  • GAAP net loss in the range of $0.9 million to $2.9 million, and GAAP net loss per share in the range of $0.04 to $0.12.
  • Non-GAAP net income in the range of $14.5 million to $16.5 million, and non-GAAP net income per share in the range of $0.55 to $0.63.

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 first fiscal quarter ending April 30, 2023 and the fiscal year ending January 31, 2024 (in millions, except per share data):

Projected range
Three Months Ending Fiscal Year Ending
April 30, 2023 January 31, 2024
(unaudited)
GAAP net loss

($0.6)-($0.9)

($0.9)-($2.9)

Stock-based compensation and related taxes

3.6

14.6

Amortization of intangible assets

0.7

2.8

Non-GAAP net income

$3.4-$3.7

$14.5-$16.5

 
GAAP net loss per share

($0.03)-($0.04)

($0.04)-($0.12)

Stock-based compensation and related taxes

0.14

0.56

Amortization of intangible assets

0.03

0.11

Non-GAAP net income per share

$0.13-$0.14

$0.55-$0.63

 
Weighted-average number of shares used in per share amounts:
Basic

25.2

25.6

Diluted

25.7

26.3

Conference Call Information:

Ooma 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.

Parties in the United States and Canada can access the call by dialing +1 (888) 550-5744, using conference ID 4726540. International parties can access the call by dialing +1 (646) 960-0223, using conference ID 4726540.

The webcast will be accessible on the Events and Presentations page of Ooma’s investor relations website, https://investors.ooma.com, for a period of at least one year. A telephonic replay of the conference call will be available from approximately two hours after the call is completed or about 8:00 p.m. Eastern time on March 2, 2023 until 11:59 p.m. Eastern time Thursday, March 9, 2023. To access the replay, parties in the United States and Canada should call +1 (800) 770-2030 and use conference code 4726540. International parties should call +1 (647) 362-9199 and use conference code 4726540.

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 tax benefit, depreciation and amortization of capital expenditures, amortization of intangible assets, acquisition-related transaction costs, facilities consolidation charges, and stock-based compensation expense and related taxes.

Other non-GAAP financial measures exclude stock-based compensation expense and related taxes, amortization of intangible assets, acquisition-related transaction costs, facilities consolidation charges and acquisition-related income tax benefit. For fiscal year 2023, facilities consolidation charges included asset write-downs related to leased office space assumed in connection with Ooma’s acquisition of OnSIP in July 2022 that the company determined were not needed to support the future growth of its business. 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 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; 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 October 31, 2022, filed with the SEC on December 9, 2022. 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 and consumers, delivered from its smart cloud-based SaaS platform. For businesses of all sizes, Ooma provides advanced voice and collaboration features including messaging, intelligent virtual attendants, and video conferencing to help them run more efficiently. For consumers, Ooma’s residential phone service provides PureVoice HD voice quality, advanced functionality 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)
 
 
January 31, January 31,

2023

2022

Assets
Current assets:
Cash and cash equivalents

$

24,137

 

$

19,667

 

Short-term investments

 

2,723

 

 

11,613

 

Accounts receivable, net

 

7,131

 

 

7,310

 

Inventories

 

26,246

 

 

13,841

 

Other current assets

 

14,368

 

 

13,598

 

Total current assets

 

74,605

 

 

66,029

 

Property and equipment, net

 

7,996

 

 

6,481

 

Operating lease right-of-use assets

 

12,702

 

 

14,396

 

Intangible assets, net

 

10,463

 

 

4,208

 

Goodwill

 

8,655

 

 

4,264

 

Other assets

 

16,584

 

 

13,875

 

Total assets

$

131,005

 

$

109,253

 

 
Liabilities and stockholders' equity
Current liabilities:
Accounts payable

$

13,462

 

$

7,507

 

Accrued expenses and other current liabilities

 

26,726

 

 

22,823

 

Deferred revenue

 

17,216

 

 

16,600

 

Total current liabilities

 

57,404

 

 

46,930

 

Long-term operating lease liabilities

 

10,426

 

 

11,194

 

Other liabilities

 

31

 

 

73

 

Total liabilities

 

67,861

 

 

58,197

 

 
Stockholders' equity:
Common stock

 

5

 

 

4

 

Additional paid-in capital

 

195,605

 

 

179,860

 

Accumulated other comprehensive loss

 

(23

)

 

(20

)

Accumulated deficit

 

(132,443

)

 

(128,788

)

Total stockholders' equity

 

63,144

 

 

51,056

 

Total liabilities and stockholders' equity

$

131,005

 

$

109,253

 

OOMA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, amounts in thousands, except share and per share data)
 
Three Months Ended Fiscal Year Ended
January 31,

2023
January 31,

2022
January 31,

2023
January 31,

2022
Revenue:
Subscription and services

$

52,638

 

$

45,781

 

$

199,105

 

$

175,942

 

Product and other

 

3,858

 

 

4,708

 

 

17,060

 

 

16,348

 

Total revenue

 

56,496

 

 

50,489

 

 

216,165

 

 

192,290

 

 
Cost of revenue:
Subscription and services

 

14,545

 

 

12,624

 

 

54,499

 

 

49,563

 

Product and other

 

5,992

 

 

7,058

 

 

24,018

 

 

24,289

 

Total cost of revenue

 

20,537

 

 

19,682

 

 

78,517

 

 

73,852

 

Gross profit

 

35,959

 

 

30,807

 

 

137,648

 

 

118,438

 

 
Operating expenses:
Sales and marketing

 

18,069

 

 

15,206

 

 

69,671

 

 

58,631

 

Research and development

 

11,824

 

 

10,003

 

 

45,939

 

 

38,193

 

General and administrative

 

6,563

 

 

5,725

 

 

27,795

 

 

23,544

 

Total operating expenses

 

36,456

 

 

30,934

 

 

143,405

 

 

120,368

 

Loss from operations

 

(497

)

 

(127

)

 

(5,757

)

 

(1,930

)

Interest and other income, net

 

188

 

 

28

 

 

332

 

 

179

 

Loss before income taxes

 

(309

)

 

(99

)

 

(5,425

)

 

(1,751

)

Income tax (provision) benefit

 

(108

)

 

 

 

1,770

 

 

 

Net loss

$

(417

)

$

(99

)

$

(3,655

)

$

(1,751

)

 
Net loss per share of common stock:
Basic and diluted

$

(0.02

)

$

(0.00

)

$

(0.15

)

$

(0.07

)

 
Weighted-average shares of common stock outstanding:
Basic and diluted

 

24,900,265

 

 

23,845,659

 

 

24,506,525

 

 

23,473,849

 

OOMA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, amounts in thousands)
 
Three Months Ended Fiscal Year Ended
January 31,

2023
January 31,

2022
January 31,

2023
January 31,

2022
Cash flows from operating activities:
Net loss

$

(417

)

$

(99

)

$

(3,655

)

$

(1,751

)

Adjustments to reconcile net loss to net cash provided by operating activities:
Stock-based compensation expense

 

3,521

 

 

2,934

 

 

13,904

 

 

12,682

 

Depreciation and amortization of capital expenditures

 

1,034

 

 

789

 

 

3,771

 

 

3,117

 

Amortization of intangible assets

 

794

 

 

326

 

 

2,286

 

 

1,304

 

Amortization of operating lease right-of-use assets

 

730

 

 

709

 

 

2,978

 

 

2,939

 

Facilities consolidation charges

 

 

 

 

 

1,402

 

 

 

Deferred income tax benefit

 

 

 

 

 

(2,133

)

 

 

Other

 

3

 

 

14

 

 

37

 

 

53

 

Changes in operating assets and liabilities:
Accounts receivable, net

 

(6

)

 

(1,025

)

 

434

 

 

(2,082

)

Inventories and deferred inventory costs

 

(4,198

)

 

398

 

 

(12,333

)

 

(1,571

)

Prepaid expenses and other assets

 

(1,156

)

 

(247

)

 

(2,460

)

 

(4,609

)

Accounts payable, accrued expenses and other liabilities

 

3,265

 

 

(1,861

)

 

4,509

 

 

(3,599

)

Deferred revenue

 

(268

)

 

(155

)

 

33

 

 

172

 

Net cash provided by operating activities

 

3,302

 

 

1,783

 

 

8,773

 

 

6,655

 

 
Cash flows from investing activities:
Proceeds from maturities and sales of short-term investments

 

1,805

 

 

2,575

 

 

12,705

 

 

16,805

 

Purchases of short-term investments

 

 

 

(2,622

)

 

(3,869

)

 

(17,488

)

Capital expenditures

 

(1,304

)

 

(1,154

)

 

(5,211

)

 

(4,204

)

Business acquisition

 

 

 

 

 

(9,771

)

 

 

Net cash provided by (used in) investing activities

 

501

 

 

(1,201

)

 

(6,146

)

 

(4,887

)

 
Cash flows from financing activities:
Proceeds from issuance of common stock

 

720

 

 

126

 

 

3,397

 

 

2,706

 

Shares repurchased for tax withholdings on vesting of restricted stock units

 

(423

)

 

(481

)

 

(1,554

)

 

(2,105

)

Net cash provided by (used in) financing activities

 

297

 

 

(355

)

 

1,843

 

 

601

 

Net increase in cash and cash equivalents

 

4,100

 

 

227

 

 

4,470

 

 

2,369

 

Cash and cash equivalents at beginning of period

 

20,037

 

 

19,440

 

 

19,667

 

 

17,298

 

Cash and cash equivalents at end of period

$

24,137

 

$

19,667

 

$

24,137

 

$

19,667

 

OOMA, INC.
Reconciliation of Non-GAAP Financial Measures
(Unaudited, amounts in thousands, except percentages, shares and per share data)
 
Three Months Ended Fiscal Year Ended
January 31,

2023
January 31,

2022
January 31,

2023
January 31,

2022
Revenue

$

56,496

 

$

50,489

 

$

216,165

 

$

192,290

 

 
GAAP gross profit

$

35,959

 

$

30,807

 

$

137,648

 

$

118,438

 

Stock-based compensation and related taxes

 

248

 

 

231

 

 

986

 

 

1,026

 

Amortization of intangible assets

 

139

 

 

73

 

 

430

 

 

292

 

Non-GAAP gross profit

$

36,346

 

$

31,111

 

$

139,064

 

$

119,756

 

 
Gross margin on a GAAP basis

 

64

%

 

61

%

 

64

%

 

62

%

Gross margin on a Non-GAAP basis

 

64

%

 

62

%

 

64

%

 

62

%

 
GAAP operating loss

$

(497

)

$

(127

)

$

(5,757

)

$

(1,930

)

Stock-based compensation and related taxes

 

3,563

 

 

3,004

 

 

14,155

 

 

13,077

 

Amortization of intangible assets and acquisition-related costs

 

951

 

 

326

 

 

3,824

 

 

1,304

 

Facilities consolidation charges

 

 

 

 

 

1,402

 

 

 

Non-GAAP operating income

$

4,017

 

$

3,203

 

$

13,624

 

$

12,451

 

 
GAAP net loss

$

(417

)

$

(99

)

$

(3,655

)

$

(1,751

)

Stock-based compensation and related taxes

 

3,563

 

 

3,004

 

 

14,155

 

 

13,077

 

Amortization of intangible assets and acquisition-related costs

 

951

 

 

326

 

 

3,824

 

 

1,304

 

Facilities consolidation charges

 

 

 

 

 

1,402

 

 

 

Acquisition-related income tax benefit

 

 

 

 

 

(2,133

)

 

 

Non-GAAP net income

$

4,097

 

$

3,231

 

$

13,593

 

$

12,630

 

 
GAAP basic and diluted net loss per share

$

(0.02

)

$

(0.00

)

$

(0.15

)

$

(0.07

)

Stock-based compensation and related taxes

 

0.14

 

 

0.13

 

 

0.57

 

 

0.55

 

Amortization of intangible assets and acquisition-related costs

 

0.04

 

 

0.01

 

 

0.15

 

 

0.06

 

Facilities consolidation charges

 

 

 

 

 

0.06

 

 

 

Acquisition-related income tax benefit

 

 

 

 

 

(0.08

)

 

 

Non-GAAP net income per basic share

$

0.16

 

$

0.14

 

$

0.55

 

$

0.54

 

Non-GAAP net income per diluted share

$

0.16

 

$

0.13

 

$

0.54

 

$

0.51

 

 
GAAP weighted-average basic and diluted shares

 

24,900,265

 

 

23,845,659

 

 

24,506,525

 

 

23,473,849

 

Non-GAAP weighted-average diluted shares

 

25,552,378

 

 

25,120,348

 

 

25,233,985

 

 

24,910,303

 

 
GAAP net loss

$

(417

)

$

(99

)

$

(3,655

)

$

(1,751

)

Reconciling items:
Interest and other income, net

 

(188

)

 

(28

)

 

(332

)

 

(179

)

Income taxes

 

108

 

 

 

 

(1,770

)

 

 

Depreciation and amortization of capital expenditures

 

1,034

 

 

789

 

 

3,771

 

 

3,117

 

Facilities consolidation charges

 

 

 

 

 

1,402

 

 

 

Amortization of intangible assets and acquisition-related costs

 

951

 

 

326

 

 

3,824

 

 

1,304

 

Stock-based compensation and related taxes

 

3,563

 

 

3,004

 

 

14,155

 

 

13,077

 

Adjusted EBITDA

$

5,051

 

$

3,992

 

$

17,395

 

$

15,568

 

 

Contacts

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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