OOMA - Earnings call transcript Q3 2018

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Operator

Good afternoon, my name is Chris, and I will be your conference operator today. At this time, I would like to welcome everyone to the Ooma Third Quarter Fiscal 2018 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session [Operator Instructions] Matt Robison, you may begin your conference.

Matt Robison

Good day, everyone and welcome to the fiscal third quarter earnings call of Ooma Inc. Robison, of Matt Development. and is name Ooma's IR Director Corporate My me CEO, Narula. Ooma's today Stang With are Ravi Eric here and CFO, After Ooma NASDAQ the today, press market through release issued Globe a Newswire. closed also available Company's ooma.com. The release on is website the at webcast be This will Investor Relations' website, for a period on page call live the the of is Ooma year. being available and of one

the course meaning executives statements will the make our of Laws. presentation, the of within today's Federal Securities During forward-looking

or future statements or relate generally future events Forward-looking performance. financial to operating

presentation date Please financial call Our statements otherwise disclosed Commission. is measures beliefs and these a call mostly to today, we more or with of earlier our financial forward-looking a may in actual release include with could in differ matters of our other X-K measures comparable filings, results accordance to uncertainties information the as website. financial the risks to of financial our update key present law. and as well fully to earnings an set this The statements, basis. there or non-GAAP revenue this subject why than year described Securities be as our in available These discussion to cause that those and and this press press a included addition press forward-looking in expectations that are materially forth presentation regarding on we measures measures XXXX to and projected. prepared site metrics our the the this stated filings Also, of measures page as non-GAAP to those in GAAP will not any ooma.com results directly except basis. and from are actual available results on required guidance be quarter Exchange hereof, that a non-GAAP for in third reconciliation subscription on any are substitute GAAP. non-GAAP to release for based obligation our by businesses. us the in and intended events issued financial on full that in materialize the note, non-GAAP financial in in considered we'll risks those the that non-GAAP disclaim as periods in as are not the and The and of discussed be on A release call, isolation core give includes Section reconciliation On fiscal a is Investors link we to

Additionally, our investor metrics. presentation slides non-GAAP that include excluded non-GAAP are resolution reconciliation that GAAP expenses further from GAAP to provides of

our Suisse In addition Telecomm announced to it Eastern chat X:XX of Annual our Technology, & P.M. the with and fireside in a XXst tomorrow webcast on we our be at the participation of session website. There our Time. earnings to will report, link Credit Presentations page Conference Media a Events

Eric. Okay,

Eric Stang

momentum I you our Hi going QX everyone, performance into to and FYXX with am call. Thanks our talk pleased QX about earnings Matt. and today Ooma's strong QX. to welcome

look We expect towards overview an our will I'm subscription believe for services revenue our services services core key year-over-year; revenue on Combined subscription once making XX% recurring exceeded QX again, of our now residential is I revenue and $XX.X than this overall revenue revenue be we services another subscription $XXX year. revenue strategic our million our grew priorities are and will Subscription growing of the in Ooma Ooma subscription year. we our segments offers core than long-term in of million. and year-over-year. annual fiscal for our by key competitors our for Once QX small Later guidance customers, I year-over-year. share my achieving approximately as strong exit end great executing revenue, XX% QX business as customers by goals revenue progress XX% we in remarks, to with again in excited was outlook. we services grew next us about faster revenue of Telo, quarter XX% more growing ahead total approximately total

we With forward. excited well these I results, strategy I as believe on are our look growth executing and I'm

growth, cash positive again In addition we generated to executing from operations. on once flow also

stands margin XX% services gross now for and again revenue. at increased subscription Our

residential now a are No increased unique we serve. great allows well segments different value believe source as the know rate serving platform stronger can marginally are segments working, bring at forward allows strategy to Our as also subscription special we to small the this only features because continue us we us our match strategy. to needs focused our better our us do we others as hybrid net we competitor We of than going of advantage dollar execute great and target. our our In to business great businesses, build in quality customers. Clearly, SaaS XX%. stands as on services and but is fundamental retention well believe business I the competitive we can as industry we not

other segments, cloud the only also are We in versus disruptor traditional competitors. solutions these not but versus

QX and and major and focus than to winning this on for lay is growth spending our to is revenue we There are our reason, a XX% underway our solid spending the spending investing especially this today believe several I while For a expect R&D significantly on execution strategy are year initiatives significantly, foundation growth. of R&D. we and In have higher this amounted target, for long-term approximately growth.

primary start driving to are year. initiatives the R&D spending spending three-fold. The on next leverage achieving our intend also We

of businesses market. of we are Ooma to the to to features addressable Office goal investing in we complete set First, the small expanding our want offer with

year. middle improvements strategy, future set been by always next will the our us be While improvements of will heavily we've investing expect of behind of core we part in be the

internationally with WeWork global five internationally, the countries for scale fast we do the Ooma excited see of users featured in to in security significant members to value timelines WeWork's WeWork Ooma serve presents continue we'll expect going features initial for Telo forward. potential We're On fast with in launch for invest to to We line are countries customers. us. is to security more most to residential and done bring add effort market fund behind we continue a members we serve expand partner. R&D fully now service. growing similar superior Ooma a about now to and large the have the international a what solution opportunity course in investing residential we so to Second, third, of to long-term more WeWork And growing combination provide Office locations. home to on and investment business enable home in

features be to where this in new While announce of area in several about of we features first will we're are about introduce other ongoing for investment the January us, an year. to we key next intend we excited CES Show the and half excited want

areas of marketing most to in investing focus these Office. are of R&D we in drive Ooma Beyond significantly growth sales and

employees investing opportunity team channel. the our in of Here have of this or Office. untapped we XX less estimate for our huge We in are development a the businesses and represents XX% Ooma growing reseller America and sales primarily

new for business on and sales new markets; significant for drive opportunities to and for we customer internationally to this customer three, Office emphasis residential drive growth; competitive security positioned Telo WeWork up market and establishing Ooma customer our continue the on I two, success continuing residential strongly current we marketing year in home five, growth; R&D growth; to Ooma of expanding and our our a and and will marketing making increasing our open to we focus growth driving are for growth our next spending. spending drive With into include; year gross are and as for small course, four, going to expanding sales and in limit expand our with year. strong opportunities given Now G&A Ooma well for priorities execution of one, next believe strategy revenue, growth recurring solution investments margins

more turn return and Now the we take detail. let with over our results your and final then will the discuss I will to me Ravi questions. comment, outlook to in call

Ravi Narula

afternoon, Thank everyone. you, and good Eric

non-GAAP As related top Ooma the Subscription and $XX.X year-over-year total full million issued third today of quarter to The on 'XX non-GAAP strong of our in expenses, or was million, quarter the review taxes quarter third previously exclude performance press our the the XX% on going revenue financial to fiscal Total in year This an end to income was GAAP prior of a I'm of of the total guidance was year $X.XX quarter our by year. fiscal provide revenue, and Relations found last a compared our similar data Office. website. Net revenue services for revenue above $X.X can and release fiscal of reminder, earlier fiscal Investor the the per year to except a intangibles. then range. reconciliation 'XX provided of XX% X% growth subscription our loss core of the Today, share basis, quarter. all of on of as 'XX. were revenue compensation, services statement stock-based including are the quarter 'XX revenue driven third in of and increase of in third fiscal quarter the fourth third and outlook amortization such for items, basis be XXXX for results

quarter For subscription the Talkatone a fiscal grew again of 'XX, excluding third on revenue services and year-over-year. XX%

in and our due are we users quarter. year-over-year subscription growth extent our develop a pricing Ooma minor due third new they growth continue Ooma made on revenue We lesser the sales subscription with XX% services a of channels. how grew year-over-year Office changes residential to as and and to and services XX% structure pleased revenue to to in

a of million, business from As Talkatone basis flat basis. sequential our metrics. has data been couple key excluded declined on year-over-year promoter $X.X to a from on Consistent was and last XX% with previously expected, a revenue quarters,

fiscal fiscal sold third business of revenue in XX% of approximately $X.X million, in decline the product revenues quarter Telo, mentioned year-over-year for were this call, was quarter revenue As on however, promoter lower sequential Product third $X given million. we of last a at basis. the of was quarter the of from a 'XX sales the flat however, XXXX the business third earnings promoter fiscal year; start

year last around the quarter XXX,XXX at third Our at core the of users user from base of core XX% end XXX,XXX year. quarter to this end the third the increased

same last year. Our grew during XX% from XX% users period premium to the

compared Our perspective, of Ooma total XX% our are to last quarter prior of revenue revenue compared Office in users the end is of a From Office year now at XX% now year. the XX% XX% total users same to core core quarter. the

'XX from compared Office growth user and third per ARPU to million users. quarter primarily up Ooma both, by Our for period. increased driven $X.XX revenue third recurring or fiscal the AERR to increased in in average $X.XX quarter residential monthly services the fiscal for was revenue subscription to Ooma quarter Ooma ARPU This for of $XX.X for year XX% the prior million growth third or Office Annual $XX.X year-over-year of 'XX. exit and

quarter for XX% XX% retention year. quarter subscription rate for dollar the net Our to third same the increased last to compared

Now from is 'XX, up margin and of in moving now the our onto Office margins; got we margins as last which to the quarter grew period gross the users increased services XX% scale. our in fiscal This and by continued same gross benefit XX% was third improvements driven in year. XX% overall subscription of

services expected This and quarter. for higher prior were and personnel gross to gross fixed subscription margins for not compared primarily due increase fourth margins repeat margins due certain are other negative was to the negative that costs, quarter. In credits the particularly year benefited costs. addition, quarter the Product overhead expenses our to other in and XX% XX% to in negative against

our to and year-over-year marketing on an the $X.X basis operating expenses development of marketing $X expenses business support a or Research WeWork in million, investments and or were million basis This as and supported and services XX% of were approximately personnel due the as on continued to in an year-over-year to UK, costs. an a $X.X small $X.X continued growth X% on home XX% an increase residential platform. features expenses $X.X our business. $XXX,XXX efforts Third expansion G&A development period of increase were were of investment the increase basis. launching development our million, in well in of million, year in million year-over-year prior quarter increased the XX% million, a Sales solutions. of security of due sales or the including Office R&D the other increase $XX from support our on expenses of platform,

a to was versus $XXX,XXX quarter $XX,XXX was quarter third of last third quarter share of loss loss per third per the of loss quarter loss fiscal fiscal for in Adjusted year. or of EBITDA loss same $XX,XXX in in net $X.XX 'XX. share $XXX,XXX Our compared a gain the $X.XX the or the 'XX

had operations In QX, of Now, debt cash and turning investments the core million to while at equivalents approximately the of end balance of where $XXX,XXX the year from in cash cash, and continue compared prior third sheet. to quarter. $XX.X We subscription with business we positive quarter. grow short-term we was have cash from to revenue. the operations the quarter sixth our $XXX,XXX consecutive generated no This services generated

end the the in have of full-time months used cash first the from from the of of in as 'XX. generated We quarter million fiscal with the quarter the the compared $X.X through nine contractors period nine and to revenue quarter. prior users. same employees prior $XXX,XXX for period was organizations, We year ended 'XX in third core of operations fiscal partner up at months from Deferred cash X% up of million, our year a XXX various our growth XXX result third for $XX.X

following not in related sold any Promoter of intangibles. stock-based does impact August, and have also it guidance material Now from exclude outlook. Again, was our expense, amortization Business for financial compensation and taxes as the

'XX, of for Non-GAAP loss January. For the million. net CES of revenue fourth be incur assumed will be to have in $XXX,XXX range to be expected is $XX is average expenses QX. expected $XX.X in $XXX,XXX in outstanding shares additional to loss per fiscal expected the 'XX of share of $X.XX; of million $X approximately to fiscal range $XX.X weighted total $X.XX we million to quarter range Non-GAAP we in million quarter fourth the to net as for is for

average in $XXX.X million to expect For share total range assumed is in expected loss for the that, weighted be we me $X.X of to have outstanding to Eric? fiscal pass fiscal million. $XXX be net $X.X approximately Non-GAAP $X.XX back to for shares some to range it non-GAAP $X.XX; Eric expected closing revenue million be per full net in range we the 'XX, to remarks. million With of is year to loss 'XX. let million; the XX.X of

Eric Stang

Thanks, Ravi.

strong platform thank for next beyond. briefly in you, now very of of we excited strategy want and summary, execution; our the the I'm I Just take given uniqueness and scale and about and our And markets serve, say happy we're outlook your our the to year to questions. Operator?

Operator

line question [Operator your Bhavan Blair. Suri comes Instructions] Your from first from William open. is Bhavan,

Bhavan Suri

as residential the dive I from adopting some the residential of think growth just years? growth bit And wanted little first their then the drive into growth to customers few over for next that just few over the your the next in sense solutions a this you years, sustainability about there? of the are business. What business

Eric Stang

extra premier things of an of very you get off up platform whole good at service. just a basic telemarketers calling of at that we'll a things. and phone our and elsewhere great experience including today home $XX can't can a additional We range several to Well, step People value. get have services fees a to month to people lot taxes course to block our they have in from unique the residential and other buy service a solution start

-- million exactly the the Ooma, the we spending to is level a set we a growth, residential I grow. America residential drive and that growth It there as can today, Office. to out our the we know, number it drives market Ooma that's get you word what at think for North want investing to let's beyond very we've we want to are and side but of as how today, we in spend on of kind down much we where say about that's one really big XX So don't in single-digit know rates; where lines for comes continue and growth heavily

putting that can market and look but nascent five our at and market think segment we've of a forward, very forward. still seen some have and very lot unique way work opportunity estimates certainly we solutions big over years residential launched it's next bring a home growing features look that we we We capabilities of phone and that's they a year for see we will the additional home security we've which security and are with into service. As an some to are double we just the combination securities capabilities and for driver we this additional have value we

see we of for happen. in I make more that's it service how hands, So to kind have residential, we'll coming -- longer our it, that our but from execute growth it's just also we think term see to of

Bhavan Suri

then, channel to And I it. nascent know how vis-à-vis I just Got but relatively has you. love Thank the contribution expectation it's performing little growth? to bit VAR channel, on listen guess the and a VAR the been

Eric Stang

Yes, the always you've about least. us, say of of it's are for investing quarters area we said it that we for term us that And couple we've are VARs upto hundreds consistent and and at them a be we're it's going longer that now, productive in for now to you a heard a you. not talk basis, still are development and a all adding to but and still on VARs great channel VARs, get performers have train we're

announced we business needs go business in made I XX we that. that couple was a of but bit; significant it to contribution in to its still it's it when investment an helped I think certain more so making become advances, build and us go or will quarters long-term quarter users has for overtime a it's continue forward. we've the It and area we little beyond ago a believe of a it's a So opportunity as last can

of for some are little these VAR things channel might that rather size a larger find customers. And a bit fundamental

that we key features Ooma one hope other have that of for to want right now to of be middle areas our we next things we So have we of you to do is which on the the heard want investment year. completing through for Office of set front, focus largely by

think of kind we look with so in coming channel build timeframe. all the of as we together the increasing help it at VAR that that productivity it's it; will I also as

Ravi Narula

a see to our tried some has The do material VAR at but We the upside channel not. is yet produce but not longer in from financials it term level. to contributing but results that an

been Given Ooma many we Office so it at adding but a is years, have focusing the not there for on in it as material level is yet.

Bhavan Suri

quick certainly that other one in may, markets one quarters few of guess, become does if out, helps, help improved that business churn higher the but business not over Obviously, think I over as residential your Moving of small is part part bigger Ooma quarter of churn; contributor. but the a business? but churn I up on churn. a through than just Ravi, Thank the us the a becomes you. couple plays how next years bigger

Ravi Narula

could increase see as on able I there becomes side. a we also more of there robust, the think as be as given overall and help can churn we is be and business churn get churn a of small churn term now to to overall might And because partners bigger the see who our in longer process. our user. Churn; businesses stable it's down the VAR churn for more benefit more lower in inter-players channel, expand be platform the in involved may should the going are actually more business, more We number we small right. you but the gets business

churn, done and happened; worried the significantly there we think up far number I the a longer we not good initiatives do these see of not various be the So on we think I various have which with have a so about small term going to business. we are churn too job are in things

Operator

America Chong Lynch. from comes Bank Jacqueline question from Merrill next of Your

Jacqueline Chong

you. on questions Jacqueline for for [ph]. is This I a have Nikolai few

limited Google and their two first Apple, home now. buzz are the around So Amazon, actually more have calling generating and functionality soon, products

your you do solution? have home also Telo So your what angle, the generate these security also, interest do can around And to buzz in solutions? how solutions you security reinvigorate home

Eric Stang

our we've we're those have So seen impact far maintained about that. from not results, on an steady excited products own growth and we

those cases the for call from that a do solutions calls can't also or in platform XXX other calling don't even some can't instance, them, thing. get We observed home; offer full for you inbound and you

it's we're too hands So if them, our directly, to worried the grow think not about more you on I business. residential will;

we Now, degree of platforms, we advantage some to those take do today. already will

You Telo to we platform instance Amazon operate control for will voice -- things solutions the be of features doing. there to will, as to of your a place certain advantage can things and in of future speak more on we Echo do get if your you and we're those as take

phone to office for home when and so really even see in does room to think with of Amazon we're those they the if to solve convenience even home the and isn't you than wanting XXX provide children it and are our Most customers it. a kitchen in to ways ability today. complementary more the a in -- your and in the terms, that's it the and going number the -- So phones Echo needs did start ability and us, have maybe with we second families way every or call

Jacqueline Chong

security are you home the solutions? about your around going home how generate to security And buzz angle,

Eric Stang

going those to on several market moment more solution features over some at need a did I working and to with complete to base far more can and them letting we're months several will announcements work that have next sensors we have that that the addressing primarily the call on with customer today be now talk they bringing need existing get very step at be what CES. we've security focused their So ago be up and them, and and I to starting a have we'll functionality monitoring our -- we is we our home -- experience. what basic Telo home To quarter more know plus give done some that

is we start to more and it, have the as marketing And think opportunity capability more of relationships and have the But we lot for invest had other online a so of into word retailers out. or all frankly, types very we recognition to advertising do the lot tell a solution, word the and just around normal our a I there mouth channels that, of we great lot their -- the with other give Ooma we our we of people to might and get in drive of put customers get will of mouth, and directly beyond the word retailer and a sales good experience with friends.

as on exposing this about a So solution customer they we're about of I for what and the we're the base we mainly but to when far more focused it. our utilize to so think and for it turn and what said, be that doing security, have existing on excited gas we've year that and to think we'll on home feedback we'll more getting tools ready lot

Ravi Narula

point, market, we there other market, is mentioned think I the excitement is very big happening more of players; One as in by there market space. of buzz very lot growing this a a is lot

we just some in bring the products, we happening I new -- because will will traction. more see we these all see of as in think activities So marketplace

Jacqueline Chong

and accelerate possibly distribution your talk for on how direct momentum? can more one sustain And about and the and a Office. indirect bit Can you you channels strategy

Eric Stang

way don't office. single with We one to market that go have we Sure.

to team. our are instance but have retail done is of events our marketing their interest through most of what prospects phone as inside to or we out focuses some our owner our do and for to inside also as them sales in business a we because help And about want astounding compelling business can we talk once have solution. the in seen big small heard buy through the things about step them lot way terms because that get phone system can us. get We save have small sales usually team business and get much with of sales businesses If and a being their can with operates half a business up talking but do that to them. can is to to a reach small our up, on to more conversation a perhaps being small way on us Ooma You to we there stack lot reasons bring bill of

to just do things so we're generate follow-up And build interest team we do and on our inside marketing to that sales the continuing it. to

that. building are channel, that we're customers a is their what that investing resell we and on service our own resellers Ooma; call third-party of We find will VAR a in

today We the of the new we internationally are opportunities then And things for want investing with we some WeWork the as from part and it's that, expanding system, which it up us. creates finish market. of expands addressable

had us. something to wanted ago customer we've use XX analog than with more we quite we we serve to couldn't have need. quarters phone ago who they serve I'll is couple users, of have quarter have IP a we who phone, to had now already a of their give We say don't no, customers we addressed; everything today who no. love say customer but examples A a don't they solution an our couldn't

can in the fax -- you use fact, analog offer use online industry, greatest IP standard faxing your into your phone, we can plugged in flexibility Now, our use mobile market offer as things you well We your the or also business now expands on that this capability these knocking small can contribute really and addressable and complete you range to phone, the like base our phone, our your of down front will for our station. that solutions a machine momentum.

States XX with say small creating many are how the in have there owner-operator, accounts the still to United converting businesses more you how offer. to like a solution of the are think better kind business competitors for that about small So think X cloud cloud use arguably if the the have vast million you majority are we in just and maybe that and and they I or many the size, market is million small or amongst more another employees; open

So we just we're it. think and opportunity pursuing keep a to going big market it's

Jacqueline Chong

more growth you. you we can margin could think And if about thank grow Okay, one versus what How help fiscal do us have think the rate trade-off? -- to model I question; do 'XX. Telo think at? you what qualitatively, should And

Eric Stang

Telo that and it. our today choose invest be to set at the for we're start consistent it, today. that's can spending that's Ravi it really the modest to we're where speak. it next today, handling grow not rate with here for we're we let give in conference then we're amount relatively grow call growth at expectations next will that to how that I'll for year, but and We've guidance

driving to emphasis add little for Do of year we course, to Ravi? growth thinking the want to that want revenue our improve anything, our growth goals is remarks in continue to to margins speaks for you how forward. are that in our G&A. bit limit look of we my to increase spending we next mentioned and We R&D in opening the Company, on a so do that, things we're as one about gross And I as

Ravi Narula

single-digit previously call quarterly mentioned which call 'XX. high have to more full will ago, year-over-year in color well. mid Eric or residential but in -- we year we one The a that of growth that provide six the earnings a our months think earnings basis; next has revenue services was on fiscal he guidance Eric given we point captured previous anticipate subscription data I has other only

Operator

Capital question Mike, Latimore next is line Mike Markets. your Northland from comes from open. Your

Mike Latimore

that serving should margin, we think can here? On -- qtrs.; baseline a from you in the the very service gross think build that should about as strong we new

Ravi Narula

positively XX%, impacted got. mentioned, this by was gross As margin revenue was expense a service credit the we small I

I progress we start. So around I future would made investments probably is along I would obviously, good grow side. the have services as data say XX% on a where some good say and indication we'll XX% is good the places, think are centers other in with in make probably we and we a

Mike Latimore

days average -- size of or it you the of in And Office, still that in customer launched of the the of higher. on announcement increased product seen service mid-August then, new terms early kind the the that bit a since is scaled here? Office you Have little -- kind

Ravi Narula

have been a based on -- big as is numbers it's overall upto they the impact limit based employee of the quickly. number Overall, no to coming signed business XX-XX years a have to but since make thinking -- previously, on because we they was selling Office XX; Eric growing yes, if user won't for emphasis, of we us were of XX said, it there not may up have

significantly, start -- average seeing the customer large just time time have of in positive so have process -- it's So seen which early but now of hurdle it the where we that the same at some is trends gone, coming the seeing time there. XX will very our the of positive were some we but because we up seen base early go there. signs today some will are in be benefit improvements very by it take direction on the is we But some

Mike Latimore

quarter growing then should fourth product given revenue the think And sequentially last, in of there? of seasonality we sort the just the

Ravi Narula

you're so on product little been a possible higher There might it I material right side bit. holiday it grow is that seasonality, do expect will Yes, Black Friday may but but be up way. given period, generally that; consumer go trending growth, do has bit it I to slightly revenue believe some for little not it's

Eric Stang

yes, our little the can with the -- go if is higher, residential our It's channel, fourth quarter a point would fact of mitigated see see VARs; as by that be I the because on But fourth you from more traction from pricing should of And so that. more quarter the we biggest a little get little as in higher build bump Mike, channel quarter. becomes we a continue count XX well bit a VAR to aggressive -- specials. back think comment than generally bit about user your might we to meaningful, users, [ph] VAR more earlier some I view,

Operator

JMP from line Walravens comes your open. Your Pat Pat, is Securities. next question from

Mathew Spencer

my this Pat thanks Hi, Congratulations for question. a good Spencer for is Matt Walravens. quarter on on taking and

you just what plan extend bit WeWork, more to roll more countries a out it do and us As -- specifically can is Thanks. that relates to how to give WeWork? it beyond your partnership, detail together hope you many to expand little geographically on

Eric Stang

to at we're will them decisions look take we the said, in think in I best at five what these and and I what help we as a we lot out near don't and Well, it today with them we be more, and If countries least more. decision-by-decision. to do roll them can expect not with term. needs along their are

are after done. be but that another we go we as will this sit working on roll here after today, country get we out And where we decided so one

little specific that. work give cast bit So hard to it's [ph] for you a a

talk a next America our specific opportunity North we'll hard. going to talked footprint We and in see international that about WeWork -- soon drive it's answer we have to do that things countries we with you focus market How have know steps on investment in as about strategy. bit quarter, we'll we'll can forward and little in we also the next return America the aspirations we're be as we the are think primary is that's where look we part little trying we've you the we here year's investment in for that that and expand our at we past, term expand of But come beyond though speaking, generally excited longer get question. WeWork we when those of a do to don't expense best a to think doing And North or is as of internationally, to I function at going better and bit but get that make more goals. our and going with on gaining large

Operator

Nichols FBR. question your is from from Josh, your And B. next comes Riley Josh open. line

Josh Nichols

to Just since able or to in quick a bit you've WeWork question; talked you America? North that the rollout the a you've you've regarding doing little been with as marketing this international been investing last have follow-up more far preoccupied about been do much domestically

Eric Stang

relationship some relationship up been is put two of an for connecting to countries with of the I the marketing, done for issue more the of mean make our beauties R&D have We one online effort are these being WeWork turn but the [ph] into team our and exclusive. members members do to those solution their to don't marketing, way. WeWork to straight expose lot can get a that WeWork we us have them by that just Ooma through they their It's

wish. and is fast do things members, add they grows WeWork's live A I phone to because that's -- So how cell the or big be do just don't but members of new themselves one we from front is anything member lot no service. that; we're and will WeWork there phone well for they need both something to for more just service upfront also can they all simple no are bring Ooma's easy we cost said, that through as WeWork, obligation significant team. team, support buy if support us as some drivers going their who WeWork with WeWork -- than great in as solution with WeWork's think of support, do But off with

to option least do we their do make maximize and hear So members in opportunity for sure the can known it's needs. us we whatever an we're to in that at a about countries

Josh Nichols

low; and front Office the but seeing good as admirably both you've churn also Telo side? acquisition growing then, on far to around you're remains comment anything costs the as Ooma customer And what hear faster that

Eric Stang

they add generally anything view I'll my if speaking, of those has steady. Ravi let but he are is that

Ravi Narula

investing that and channels in look those at things example, upon us do overall, to things if for if into the different but channel core the things business, further try invest pretty speaking, period for significantly our channels and the Obviously, future. moved. are are channels payback some growth have on have obviously, as but depends into for VAR that on not channels, steady you which focus been SEM like for largely flexibility it We they and some time, but you consistent obviously, other gives side -- new more robust. And we

Josh Nichols

view And just regarding generally news the that's net potential sacrificing any degradation some given been of bandwidth just on, your on then given front? going last on question or for any neutrality you quality out how things me; concerns voice do about end that recently

Eric Stang

really a That's question. interesting

legally. we whether not neutrality the bring is think obviously the legally small scheme neutrality have Ooma great healthy personally feel which in we a team is things, that my and believe some place net I of We very of internet don't going to it's some to what of to place much to members internally level us extremely in Ooma. traffic harmful I net debate and is the affect it's feel where do or in for helpful

I'm a not as for us time. this matter So it at key giving

Ravi Narula

gives and they Telo is were router; flexibility between they our it And if the -- giving put modem it a customers Josh, to like router. put the the can

a because those not we we [ph]. always think I have there where positive, negatively impacted, So think certain things should of be I that's is debate

Operator

questions [Operator conference time. at Thank and Instructions] participating disconnect. more And there are concludes no call. you today's This may now this you for

Eric Stang

Bye, everyone.

Ooma (OOMA) 28 Nov 172018 Q3 Earnings call transcript