OOMA - Earnings call transcript Q4 2021

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Ooma, Inc. Fiscal Fourth Quarter and Year 2021 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. would today, hand Mr. now to conference I speaker your Instructions] like the to over [Operator Matt Robison. ahead. go Please

Matthew Robison

Thank you, of Gabriel. Fourth Good Development. Ooma's day, everyone, and and IR Fiscal name Matt Corporate XXXX Director My of Quarter welcome Year Earnings Inc. Call Ooma, is Robison, and to the

of X available Business On for press and on replay it market call of The Eric Ooma for about close is website, Wire. and section the included Investor be replay issued Relations website. today year. release will today's fiscal Ravi Eastern call also available starting CFO, release. its company's be for week the from X:XX Presentations live Dialing of at CEO, with link Ooma's for me quarter a A year PM is and active Events today, earnings Time. XXXX press Narula. this via page call fourth telephonic also the least the is evening this are This Stang; & After webcast a release accessible being our link the is in on will This Ooma.com. information

make federal During executives within our will of the statements today's meaning securities presentation, the laws. forward-looking

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

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

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

I CEO, Now, the to over will call Ooma's hand Stang. over Eric

Eric Stang

million EBITDA. coming report our that you again, in for QX today. quarter to fiscal $X.X outpaced you XXXX and $X.X for was delivering strong plans QX Call. guidance net Ooma's reviewing our Ooma. Thank million $XX.X QX income to accomplishments I look in for strong this revenue, in to Year by We Earnings capped and XXXX with off Welcome everyone. Hi, I'm Matt. you, a pleased in and us year. year our and forward million another joining non-GAAP outlook Thank Fiscal

to per expand partners fiscal deeper of For reach. enhancements the desktop help Developing we to a full by can revenues Office our QX, up highest attract channel in Ooma recurring service as intend the Pro performance customers drive I All-in, and generating customers. XX% for XX% in of XXXX. resellers and growth XXXX million million the of achieved I'm Strategically, percentage represented driven fiscal I and marketing also who in believe future that of primarily in adoption. of driver also excited capabilities sales. year user. continue QX progress be we $XXX our customers QX, our subscription In through and of channel tier a continue our from resellers have apps Moreover, into Office a increasing our Pro services $XX that strategy of and This new planned was service. to again revenue, launch share including our business priority mobile and to our meetings XX% forward business revenue in year, will strategic yet look increased office a Office I in fiscal ahead. while million We us share new to million in this to proud enhancements year, during sales annual video we EBITDA. is adopt expand $XXX.X exited we larger ago, our Pro. little a and growing long-term additions can Office XXXX. for selected our QX sales revenue, $XXX.X a Adoption customers the our new Diving of year-over-year we with year the from higher and of is the to

small our and intend reach, to channel the business market where grow are with customers. in our share leader today, customers, larger services increasingly we our we we believe with As strategies market to pursue but I'm also we only not XXX to expand pleased in large our Enterprise industry enable that business business healthcare users. it in is well manage chose over customer a number fit with more them QX will across productively and of locations. customer won a to we needs solution, because their This business their that

use we valued Office, the Ooma auto customer locations. won customer simplicity, over in afforded and XX is in ease that value For a XXX spread by This QX Ooma across users Office. the of industry

demonstrate solution be for a Office XX larger typical it of is more Ooma larger our Already customer for today, Office strong specifically Ooma This environment, is approximately As with or needs for business that companies. better. can small are solution in businesses designed than Office, a but employees. helps their simple fit users office XX% Ooma

our enabled important our our to QX That the represents services more as you'll we foundation largest we and the of customer, growth QX, more expanded This lays customer customer European expansion with in now course regarding with to than trunking new our overall recall, America. for services customer. than that entails over also countries. have I'm to to with and of this activities future largest this Internationally, Now, also XXX XX,XXX X grew them. which users, share direct pleased North locations

core can by Teams With through reliable solutions of new X the Routing more. going Microsoft from to forward. the into residential one Research, Currently, phone our great service QX, they million to we advantage in and the get larger right. we November and market us deploy reliably Direct Reports switching model. efficiently. consumers for than America. we runs customer to Direct more significant Teams own complement deploying Direct lines, in offering UCaaS home support, both in Teams vast data our Routing phones quality, our a that surveys In the were remains to represents Teams Ooma. market, Teams. believe network, we by This in X on opportunity major business, Consumer side ranked more XX% for we majority to to we the business phone we number And performed X phone be or platform, Reports, Teams million is a front, Routing. operation residential external the According businesses our phone news we North the our some XX connect than a in won of Consumer reliability, global transform demand service highly offer this We less which allowing see better have On services Teams home users announcement Through QX value. hybrid Xth with X Ribbon opportunity of primarily for cases, in namely us that XXX proud. user time businesses we expensive or on Routing its will in result once Ooma use call out made more ranked users finally, service believe of indicate honor significant functionality can phone for couldn't this a phone metrics, regarding and now a of unlike and service scale a users, and comes do system. on America, This Direct the And received in all again X With

service X% of the residential also is, on year-over-year in fiscal business residential today on building base. customer focus front corporate revenues. in course, achieving delivered by we subscription But Our our XXXX growth

IDC firm trends recently we Looking their reported work-from-home increased continue surveys favorable The that research will trends. see indicate post-COVID. ahead, market

that part Specifically, or at from time their full-time organizations they work indicated XX% respondent company. report practices pre-COVID, of home

businesses, indicates respondent year Similarly, less this, expect more reported this of also IP-based investing they such IP-based they will services. invest communications with and They of Research organizations post-COVID. that universal a versus say, and communication Ribbon report respondent communications on XX% IDC have solutions. to collaboration XXX ago. year by yet that not interest spending XX% as but their by practices, increase of solutions in survey defined in a small report employees, to say, times small than continue organizations, X.X also coming Now, Along only them XX% businesses

market to we the ahead sizeable year, of about are trends opportunities As optimistic coming look and us. the front in we the

attract to with support provide a which countries to by more anticipate having marketing unique partners, us XXXX discuss XXXX, well marketing efforts some them, serve our includes of and fiscal execution focus with By for year seeing in excited X, to our and through intend fiscal and digital direct features several new geographically Ravi to will market Connect increase over X, the users results our and increase solutions businesses capitalize larger our individual serve our to Ooma resellers; more expand for market both more investments and throughout customer. X, X, more and year. businesses turn expansion with to complete effort strategy with fiscal further small offer new for routing Europe. plans driven and our evolve core specifically we make our with the Ooma serving In to Enterprise; on grow now our channel the largest a This for user; largest our is and strategies as we to of continue detail satisfy of and continued marketing and a grow than are and businesses; and businesses our at our initiatives better remarks. to X, outlook success the call managed to on our the then per with larger in and demand customizable designed to direct the closing in customer. solutions additional grow part users internationally to business, the the in needs, sales number coming our Wi-Fi we for their ongoing strong dozen strategy average return sales, solutions, continue serve I to XXXX, solutions longer-term Office small channel end environment Our Overall, as revenue are momentum of serving solution and countries. our the to: sales countries, adding inside new Ooma be through expanded activities year to teams and other significantly will Ooma of

Ravi Narula

and XX% full I'll previously revenue Eric, our fourth I'll quarter and start full grew good by once services Thank $XX.X user Ooma quarter With then fiscal for $XXX.X and on our for of range our increased revenue fiscal On of for services was Business million revenues was a a X% fourth you, of In revenues record basis, driven million, provide year-over-year Ooma subscription fiscal management. and from QX performance, grew subscription gross the grew and grew to total $XX.X and basis, XXXX. and fiscal improved business, XXXX afternoon, million which XX%. the total metrics. grew fiscal compared above which with reflecting range we offer subscription income financial the full first full expense some year revenues a revenues, by year Business. and quarter driven driven end and by Ooma year largely XX% Ooma sequentially million $XXX.X a XXXX and above million. We that, $X.X strength provide to X% previously both Residential of of of Business customers. a including record we of of issued XXXX Fourth for services to XXXX a compared strong QX. delivered million with margins high spite growth revenue XXXX details net year-over-year, On Business, $X our of And year-over-year, year guidance $XXX,XXX $XX achieving and about year-over-year, year-over-year growth everyone. full for value was our and growth. loss fiscal residential review XXXX, the subscription net demonstrates XXXX now net $XX.X to for million quarter outlook our and year basis pandemic, issued XX% of a are fiscal X% again million resiliency pleased guidance results, customer from fiscal for services income our in proposition $X.X XX% million. revenue Ooma the

other to revenues Subscription XX% $X.X a of the quarter. invest majority of generates year services total year Product within of grow the this the increased quarter. revenue in us revenue of Even to accounts Business next cash now total X% XX% months. generating as we total Ooma percentage million, cash Business. XX growth, compared XX and for $X.X prior to to business and a enables Ooma which good compared to prior quarter. our back up in residential for Our to amount as fourth be was quarter Business to year the prior believe flow, of million revenue XX% compared that to the in revenue, Ooma revenue XX%

users quarter, our Our core end at of at the end our XX% $X,XXX,XXX, up the users from the XX% from last business users are XXXX of $X,XXX,XXX fiscal the core fiscal of year. and up last

subscription sequentially, the and to monthly due per Pro. in rate users as was X% average increase this $XX.XX take year year-over-year, blended well increased services Our business or the revenue X% Office growth fourth from $XX.XX users and prior ARPU of as in quarter of quarter higher to

percentage to We as Ooma increasing of this expect total trends continue grows as Business a ARPU revenue.

QX of users rate for of $XXX.X up higher ARPU, Given increase net revenue, subscription XX% grew sequentially. the retention XX% was stabilization core AERR and our exit by increase annual year-over-year. in dollar the strong at million our XX%, performance Business and from Driven churn recurring our rate, the or and customer Ooma

and debt. year. due other XXXX higher margin, increase gross from Product margin the year. were activities holiday fourth the This the management. the as gross as This on margins [fence] the the growth to fiscal XXXX XX% quarter shipment period margins last was Business XX%, same [ph] product vendor negative of well now of me same and gross Ooma margins period for to XX% provide was season up fourth as gross some quarter services in last subscription promotional improvement Let were of as by compared driven XX% and color gross of for over costs in negative well primarily decline increase

has as margins. components to building revenue, as well the times Given growth in period we driven services been and last times, inventory shipping growing from fourth and which in longer up XX% to have lead margins for increase our XX% of customers same meet subscription of gross procurement by gross needs increased partners. some in year in Overall, the higher quarter

of Now, and $XX.X up X% revenue, operating programs This for marketing total up $XX.X or were fiscal was support quarter, driven X% XXXX to Ooma quarter marketing Sales on increase expenses by to additional million, were fourth Business. expenses operating million, XX% year-over-year. expenses year-over-year, the

of total of effectiveness were Research some or investing and development continue basis. these up X% in million, and further the these Given XX% to revenue, revenue channels a year-over-year intend growth. expenses programs, $X.X enables we of on

net EBITDA $X.X profitability Going million quarter forward, customer. million compared income were for for was XXXX million, the quarter full to compared adjusted largest compared significantly total same we earnings and year. fourth the the locations will for to deploying add and resources $XX per Adjusted fourth $X.X $XX basis. million, year number profit share, increased of quarter. in fiscal with X% or profits This diluted last to $X.XX scale, a expenses And revenue, $X period travel the G&A other to down as international to subscription services million, gross $X.X year XXXX, fiscal $X.X EBITDA prior due and continue to improved and features develop a in new for was by driven plan margin, our an $XXX,XXX revenue, economies especially products to per share in year-over-year increase of of was services increased lower that, With or expenses. on $X.XX million million. of and income towards

that Now, for the Cash generated $XXX,XXX million compared same fourth some Cash of $X.X the free used the flow period cash $X.X was year. an to last provide was will generated XXXX I fiscal and $X.X full quarter million, adjusted in our XXXX. intangibles. now quarter from of also total financial with the investments has $X.X operations at operations fiscal million and full for With year debt. guidance cash Again, for year. we investment. from increase year. operations the fiscal cash all-time some compensation million color no and is on amortization stock-based with million reflects and We cash for cash $XX.X and our for in first year ended expenses year fiscal This guidance at that, of and generated as of been of high XXXX such of non-GAAP of

be XXXX and we range XXXX $XX fiscal first million. fiscal quarter quarter of total for the expect to million of revenue $XX.X First guidance, the in

$X.XX. million. net $X.XX non-GAAP to and to between expect $X.X million $X.X EPS We is and be diluted income expected range between Non-GAAP

shares have We diluted weighted XX.X average assumed million for outstanding QX.

For revenue range to million the the of $XXX.X XXXX of fiscal fiscal Business, in for total $XXX.X and and and full is XX% subscription X% includes This Ooma growth for residential for between X% expected year-over-year be year rate XXXX, million. guidance business. services and

for year, should to the XXXX net in We expansion is locations, some expected the full though launch, and enable user realized our meaningful international international throughout is us and the help services costs range guidance million. Non-GAAP beyond. from but expansion be range be expansion rolling expected of in fiscal income the international launched EPS $X.XX service achieve this fiscal XXXX from to $X.XX. After will to diluted in expect term, XXXX to since in be Longer revenues this and incorporating benefit $X.X million non-GAAP of $X.X locations. this from revenue significant fiscal includes of be

higher XXXX. flows to our subject weighted This to timing for year, quarter from can in operations million we perspective, shares resulting cause with the In higher $XX expect expect Accordingly, the approximately of to cash multiple capital fluctuate fiscal seasonality of flow capital throughout fiscal Further, was certain metrics, annual usage. continue cash driven by Ooma, seasonality. $X for between assumed positive From outstanding million range typically have cash generating year to planned a average cash records closing, solid first We outstanding fiscal diluted we payments expansion all-time while $X in AERR. expenditures and is XXXX million. expected achieved number XXXX gross driven revenue, to international year. including an our by a the we execution, and expenditures for result margins, on

With strong XXXX Eric? for I'll that, performance, fiscal at XXXX EBITDA pass fiscal back well least some closing our midterm remain our of are for Given believe to X%. remarks. committed Eric a it I to and target we positioned

Eric Stang

all Ravi. entire quickly take want doing you, to this Thank year to had this the Like hard to companies moment their start compliment we the by pandemic. Ooma the of success adapt I work team to caused the for so. and at changes

to our wait believe questions. Our international position well strategy take marketplace enduring strong in to a of exciting drive execute company XXXX we we and the and XXXX. to solutions results for all our We differentiate for all. our fiscal expansion Thank can't along fiscal us outlook and have with on year our stakeholders. Operator, growth stronger build you, can for this plans further an

Operator

the Please first Your question line of Northland. Latimore come will Instructions] of from [Operator ahead. Mike Absolutely. go

Michael Latimore

great. there. on the Yes, Congratulations strong year

Eric Stang

you. Thank

Michael Latimore

I in that year - think guess, only? guidance hardware was rate I business growth terms of Did that or for of gave the include XX%. you subscription

Ravi Narula

It's subscription only, Mike.

Michael Latimore

trying you Could got highlighted how Great. Okay, that some a be. of it. be? meaningful like bookings, Just Teams direct sense as Microsoft how And if you're could point? as that could also, meaningful of guess, I get there, it successful be an opportunity. to at XX%

Eric Stang

it's getting doing a value solution. that marketplace. I'll well. separate extra question. in bring maybe But with And perspective. approach can well Teams a companies routing the through some a direct let find Ravi process from features most is numbers in Teams larger We it organizations good as to So

opportunity a We're for see it. So we to new lot it. of

- course, want launched some we advantages we gives of getting Of users just real you scale But in we're with do over do sense Ravi, some Teams? a give trying X on meaningful. this. the total, to it companies we're can have scope, other versus at, to going. million did us some we we QX, the - And think also be at it

Ravi Narula

Eric opportunity meaningful a It's for it. I us. think covered

smaller enterprises, is businesses Microsoft larger goal to not but too. focus on only Our or Teams also

Teams. as work I potential both Ooma but, So along this Ooma as a with we'll Microsoft Office growing has obviously, think on well Enterprise

Michael Latimore

relative at the yeah. your opportunity to had customer, highlighted customer, just And large of Great. international you're thinking And, is size what how that about think with I you same sort an or prior guess, that that then, the the - I effort. double it point horizon of still on kind of to Yeah, one XX-month think comp? last we here? is maybe still should

Eric Stang

achieve we has we by we them, dozen potential what we double that serve at believe Yes, users we're where a believe year, we Sure. today, this have where the more internationally can or to this countries the adding with customer. to from

think And we happen. we rollout I it's the exactly lot little it'll that got do. year to see yes, more, early we've to know, even if through potential a the take a of for longer to for and look the But, growth out certainly term.

Michael Latimore

Thanks lot. a luck. Great. Good

Eric Stang

Thank you.

Operator

Your line go Benchmark. next Harrigan of of question comes from Please Matthew ahead. the

Matthew Harrigan

Thank you.

for you've a in think you the characteristics When there have guess, schemed I Europe out really that. over would terms right Bureau any I Europe, tacked endeavor major cost to don't based Statistics are Germany, period of the or issues, you famously, in side other issues in relative opportunity on residential of that domestically, look of TAM at be Mittelstand I if on you. over information you do is, how the mean, economy got make niche. a at a a analytics Thank and when of You have it pretty the your Labor mean, there? you looking business, time? do the all within And on scale achieving the

Eric Stang

Yeah.

And we can well. a leveraged that. those do go needs successfully. do to serve that feel the going can to large we do that we more. very this do us focused even to need to we There is customer on investment this we be year we're expanding to gives Having customer be comfortable. So And the investments through have. believe of the year, opportunity scale But primarily this

We in are it'll doable. right, that drive network design in, what network build and you're we it's even we the And farther. or of in we scale a even we the we'll way, to bigger, lot for beachhead X this countries go can a feel our But But further. scale. do of to in can in a very we give X of already have our us from, small And as get to Europe. bring economies

Matthew Harrigan

much at you real at guess, worked or when perceive economy where the I you already customer verticals, the And, areas, opportunities the look change there been it's some look when a has maybe COVID in has product changed how terms in any follow-on for or our you over excited tell, that weren't you're very quick of mean, think not the there side, bar maybe just it's your time? from in I growth of market, I badly the hurt all, a verticals are constituency. almost, any period I'd at But restaurant that's in just overall about? you obviously, the apart particularly

Eric Stang

the them, of There competitors don't for designed And not be successful. size those much have to our larger to have. businesses. small some on we there. in excited too And company it, today, more out sized think applicable solutions our to vertically verticals And just we on focus would because that most we find more smaller to most are focus too call general I really business solutions tend by larger business and solutions much about are I are implementations that about. But with want don't smaller businesses are well to need every served solutions

one our and in I was healthcare, So, customers did quarter that mention last space. one was the other automotive of large this in

many our solution, as well because needs generally. tremendous it's every and with do business small that things just found professional in services those others, of so day certainly us, So opportunity designed are restaurants are formed for we getting for new businesses the and well even that areas segment. do But that

we and to small have sales caused market to yeah, change business us marketing level - of at the from So, much the pursuing. hasn't were COVID really efforts the that

Matthew Harrigan

Thanks, Eric.

Eric Stang

Sure.

Operator

come line of the next Please go of from will ahead. Your Kinstlinger Alliance. Brian question

Brian Kinstlinger

Great, thanks so much.

of couple a large wins, the and clearly, mentioned automotive You customer healthcare clients.

average of smaller there is long different can quantify a customers the versus you how of And per if terms cycle sales can they users number that so, And in are today? is take deals? you talk for First, about the this customer larger? length like

Eric Stang

and that let Ravi Sure, I'll too. bit little jump of say a in

might you not desktop - move an for IVRs, issue-oriented a to small an apps customers So users. sound a - other conferencing definitely a technical educated and users, our to a big - often one selling a business, would small XXs customer price, that an a e-fax enterprise it what more these are There's business great with bundle of in-house we like advantage mobile and is we to call price. more if when making selling And sale. solution, apps, small haven't and you're Ooma mean, all what tagline in and which customer, we of often cycle, you the you're customers to those XXX and are sales and a IT we business up - is the with more department. probably solution When things more value do that some at the in haven't of I our business over had

is And do a quickly purchase lot so customers, us. make it with for of - decision those those customers their

side, little are larger. is have users per you customers bit overall. X. XXs in - go it cross users small of how on to So customer average a up on And count. between much, our you for the much the if it business different it the depends enterprise, we We're But

lot a solution. in small single-digit our larger a have say, per have guess, but per that users of entity, locations location are of I'll sometimes the we location business We we're - smaller with I part business

Brian Kinstlinger

Sure… Right.

Ravi Narula

one thing Eric's Brian, thing - I'll one then, And point. to add

businesses. X very, If we ago, more than you or literally few very X years add at XX user look

users. Eric we users on earlier of XX% around Now mentioned our than are have XX more that

or going our they businesses obviously, up, size it's or been XX-employee with them. have small businesses, businesses, of on pretty whether So happy are all but X-employee any focus of we users

Brian Kinstlinger

clearly, going much you've year Great. we're first upfront what a open marketing? this on making this average, about geographical additional and least you looks it investments location? cost that specifically the does to is company will And year? like mentioned investments Can sales maybe been be profits about in versus Eric Can then it and down at quantify you it talk new the how purposely. Is

Ravi Narula

Brian. is This Yeah. Ravi,

and have faster. Then And more employee incorporated, adding also into to investing the we there up, for incorporated be a into locations. expenses. our there as our marketing picks are new and economy the keep is, obviously, couple will guidance things to obviously, related sales more there which other So year, will we've geographic be things we of grow aspect the some then travel, want

of So for travel assuming, million onetime expenses not those all be which million on for dollars think, a one. or factors, probably large then project-related of amount. we some to XXXX opportunities meaningful will our will open those, are X also all major quantify XXXX, of - how them initially. could a of I everything million customer day in included The be fiscal expenses. that up cost expenses have guidance, into And $X $X fiscal have and couple could much And

So I as think large it's marketing, the of the expenses sales combination some side. employee and launch, customer well on as

Brian Kinstlinger

Great. Last numbers question. questions are quick

quarter that? were were - you quantify quantify from Are You in added many largest X,XXX this how customer? jobs. from your Can of able to that business you

Ravi Narula

Brian, I you in believe, mentioned I think, QX. XX,XXX,

Brian Kinstlinger

I mean, XX,XXX. XX,XXX. mean, I

difference. the Sorry, that's zero. Yeah, Of yeah. - big how many I a XX,XXX, XX,XXX, the skipped sorry,

Ravi Narula

XX,XXX is the is organic majority coming from not business, new Large is customer customers. to - launch throughout churn, of net put, significant from of regular And large right, expected that year. users. happen significant net almost

in more a small [ph] but number, in you'll from coming mentioned, that XXXX there QX numbers and in one] small. XX,XXX the as see So was Eric [direct QX, very the XXX growth fiscal around the was user

Brian Kinstlinger

you misunderstood much. that. so I it. Got Thank

Operator

from comes Josh go Riley. Nichols Please B. question next ahead. Your of

Josh Nichols

Eric, Yeah, mentioned and that on little be the going to the reseller well how dive bit more seems you're more a for partnerships company's company's thanks little my about but a spend what could channel, the strategy expanding little bit maybe on you and digital you a bit? into if are ramped taking that plans question. the marketing,

Eric Stang

say I can words. a few Yeah,

areas operating, on I in nicely you just grow. all the try we growing executing, fronts think, we're marketing and if to and very will sales well which up now. about our And right

more we aggressive. - what channel more there's and it. that's some do you online our other trying your would change of grow like And invest to in want marketing your year of QX and a partners, be in step it's some of on revenue on personnel But channel low stair of is we're activities. of we and industry. and - with it that and bring fiscal We through of commensurately for marketing, methods kind major spent you is process doing do more support as sales it we more no just and We to XXXX. dial-up about just to for just in growth And, and it's direct, those what do of XX% some well,

the front And The big the so that to go that largest has year with I impacts And effort that. this with in R&D the thing for sales marketing also customer. the put front our capabilities well. executing on internationally already is additional the expanding we excited, and that year into think,

hope that your So answers I question.

Josh Nichols

spike what's Yeah, historically, a pandemic. see did if the to for subsiding thanks net seems the good achieve front, subscription to kind And that quarter-over-quarter, be that, have XXX% back improving even want about the improvement And know also a help little for able be for for revenue And you churn go front been growth? few than dollar the of I company's to on little have better bit a left that XXXX? with what's support that company done quarters, left then to to I or potential on could that. original talk retention potential bit improvement after you

Eric Stang

I'm sorry, which one?

Josh Nichols

The retention net subscription dollar revenue.

Eric Stang

- components We to that's it. got X Yeah.

existing it users for know, with has As churn. to in do you rate growth

talked we there remarks, we office, Office focus see to With to the more Ooma Pro, I about we as - we potential elements continue talked my launch drive with headway. will services we help more on metric. Office additional this do we forward, think and which we've go to what see prepared about also you'll and great that features that still. can I as of add But made And

it move to my contract opposed just on of peak and and bit do as more you we tend our But business of to really little I dimension as of but that's customer as a contract As serve always churn seen doesn't down think way it a or it although, well, have might this, well, have customers, on you impact isn't where is, to whether the the come have view to to all back not. a matter stabilize have sell larger we a bit we the the little just month-to-month. some that from pandemic, really, pre-pandemic. And was

bit our I maybe is a of little of control, which there a there's but just think with little somewhat bit more the So potential out through too, time year.

frankly, for core that PC customer. all at number and ranked right and additional the key. that Wi-Fi got So to side part sell Consumer or solution I that up ranks the residential X us can what base, augment good and in the And That's services, going trying it direction. it, X drives a Reports mean, really further. us come But, of is the that you've of see Connect the including you customer your the existing to metric, business, Ooma that for is look Ooma with how and that's we potentially Magazine doing of number when, readers job go number of back

Josh Nichols

know, done healthy question company like Thanks. for year, job record cash revolving company a of generating just line flow. a good this just has the flow transitioning, The I out took the cash But me, it's last credit.

a of caution capital bolt-on strong that on little I Just the allocation you out M&A given opportunities? the thoughts some is company want before. few your like additional has high potential bit a balance done pandemic sheet or know, after level to ask a that already pretty strategy, have just

Ravi Narula

Ravi. is Hey, Josh. This

this pretty housekeeping. were needs opportunity was if cash to free in want comes reminded flow we if us that. how positive But, case also was You able up, any reason not the flow, purpose revolver able prepared. to if business, something happen, we during day-to-day from we $XX revolver flow of pretty we get are of cash XXXX obviously, to the a got flow to at prepared, we need But solid of your and operations. this although, revolver. was look an had do our how There It perspective, specific we right. We M&A cash initially are well fiscal cash are pandemic, generation, something be million is

I'm and good what's It So was about, housekeeping that. actually added generally worried well. happening we have not speaking as hey,

Josh Nichols

Thanks, guys.

Eric Stang

Thank Josh. you,

Operator

ahead. from next line the Matt [Operator of go will Blair. Please question Stotler Instructions] Your come of William

Matt Stotler

Eric, Matt. for the Thanks Hey, taking question. Ravi,

point. front. the XX% an go-to-market, mentioned, And portion increasingly the couple you here. this overall channel of of partner part then, partnership there. Just a is one ones on Obviously, of quick I guess, north becoming bookings of at meaningful increasing

new You solid master about an how love like, you're terms carriers, whether obviously looks on sub most update think integrators, you I on in would partner agents, building expanding focused resellers, the what that just to you're those guys that? pipeline that's channel. and where representation of of out forward, the a about relationships, how have system pretty get partnerships do go-to-market agent, retail thinking going side

Eric Stang

Sure.

front community reseller large this focused that You're We much until on there. couple hasn't And potential a in out lot kind community of Ooma up last One see on right. a of there's X the generally, is respects. that years.

very And penetrated not it yet. into so, we're

of, partners in agents with, master work majority We well we others but haven't with we industry, gotten say, have very the them that some really involved very vast close yet. or

So continue it's a And potential longer-term that a going see I direction forward in just for expanding lot regard. us for us that. for to of

do marry who being though, finds But they in today. a does value also intended something respect, space, company with onboard that solutions be second we to in a they And over with partners they really us. of could our vertical reseller be are particularly The for overall we in don't there's do with. someone and talk area time, revenues up in we the they And, the or important might is an a what are. we handful able do investment and just up are show these about work they're up who show to that efforts we be a work have what drive. - But otherwise. And partners might growth do should those conjunction

an what that. the year, with that's keep some opportunity space. all untapped and business fits solution that us. well second found our the small And This is to are we doing dimension pursuing others small longer for through business us So for than in frankly, just a

Matt Stotler

Would you're point] would [ph]? then, you update more standalone early Pro, helpful? on Office And around or Meetings, product little an product about offering just bit follow-up relatively be there [fact-check] this [live in early any still quick there, that on thinking just how collaboration absolutely. Just forward of or to Ooma traction. to one plan love get and how Yeah, that Obviously, make do commentary [ph] a embedding offer interest but sense? going Great. Meetings we'd to

Eric Stang

some feedback works are Sure. And of Ooma had the also adoption tier those positive great. and have drive it. the first customers of all, from we've very Meetings our say, having things Well, to helped Office that of Ooma Meetings Pro Office other of our Pro. using in And

we're using premium at it direction moment. that's We're the I services Ooma up level Ooma Meetings But the base. we But Ooma consider step be tier our offer we've the working might And is we That's So to over to time. not today with that for taking our look to as service customers. don't a we Meetings standalone. plans far, bring we great. drive help will have features Meetings done customer great higher even what working level think out in of a enhanced that

Matt Stotler

Great, thanks again.

Operator

presenters. questions. we to And back call turn have the over the further I'll no

Eric Stang

It's Great. on an a look you the lot more to we even got we develop. you, happening through And us things XXXX. for look XXXX. as year of year everyone to today. Well, forward Thank and thank joining excited been updating you. We've forward exciting things good how fiscal we're

Operator

Thank conference call. joining. today's for concludes This you

disconnect. now may You

Ooma (OOMA) 2 Mar 212021 Q4 Earnings call transcript