Earnings call transcript Q4 2023

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Operator

Good day, everyone. My name is Kylian, I’ll be the conference operator for today. At this time, I’d like to welcome everyone to the Ooma’s Fourth Quarter and Fiscal 2023 Results Conference Call. Today's call is being recorded. [Operator Instructions]

like things I’d to time, this to over turn Mr. At Robison. Matthew ahead, Please go sir.

Matthew Robison

Good welcome Ooma everyone, quarter you, Director day, Thank Kylian. Corporate and and is Robison, year Development. earnings of IR name and XXXX to call My of Inc. Matt Ooma's fiscal fourth the

Stang; call with Eric are Hamamatsu. Shig Ooma's today the CFO, On CEO, me and

replay the This This After year XXXX fiscal is the website. quarter release. release also call live accessible fourth information available is and for and will market ooma.com. Relations Investor our This and press section closed evening on this will from a week replay its for today, page company's starting be of XX:XX Dialing available one active webcast being a on Time. in press of this PM the call the Ooma release. least Eastern included website, today's of telephonic also for at Presentations issued is about earnings Events link for be link A is it year.

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

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

as we law. on obligation statements the to risks not release of could materially available those our Our by regarding update as beliefs these filings disclaim are this matters to press described we in projected. Securities and based These statements, forward uncertainties Exchange and cause those from issued looking to today date set The and more the information and expectations in actual those hereof, any the results except may subject forth actual results any in fully required and differ and earlier risks that materialize Commission. to include presentation risks are with forward-looking us

be why of intended revenue financial this this present available basis. disclosed non-GAAP are and to for as prepared not substitute our earnings on that, financial otherwise reconciliation accordance as or to is will a note than in other call measures of in non-GAAP isolation The financial the is considered financial a the discussed on we non-GAAP to measures results website. Please most stated, be or GAAP be release, in measures press financial non-GAAP our in which call included with discussion on GAAP. the directly comparable measures A measures a

page addition we give and will On filing, and full a for as on X-K release Presentations page press of as and and These call, and quarter key the the and include Financial are Overview of XXXX X. and Supplemental the this website Investors financial in in costs Disclosure expenses metrics core section section our of year Events included first to about subscription guidance non-GAAP links in basis. our website, fiscal results non-GAAP our Also page not the X titled Supplemental to Disclosure our information well Financial businesses. values info of our

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

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

Eric Stang

Ooma’s It's many to Ooma. was and results FYXX and XXXX Thank outlook joining earnings to have for you another Welcome FYXX my our QX everyone. Hi, fiscal for for QX FYXX us. QX initiatives you strong Matt. to you, Thank including our about talk the underway. we year today pleasure call. growth quarter

adjusted after from Overall In cash EBITDA million Ooma $XX XX% for cash EBITDA fiscal position adjusted growth new million net year in OnSIP over our income, fact, of underway, year in several We $X.X late million operations from the QX ‘XX. FYXX, in million overall our $XX and ended no plans Business with were and well exciting in of ahead to all records in nearly cash flow debt, for positive cash million acquisition With operations, for initiatives $X.X was last in Services Ooma. year. achieved a flow successful our feel cash and million. from $X.X our operations quarter I to growth growth in it close revenue, flow record positioned of XX% are $X revenue, rebuild we

progress Turning now to well we on execute our growth in continue QX, key initiatives. to our

each to Zoho including service. to we Office, targeted to our year, Ooma and part tells We meetings, users say These advanced Office new tier improvement new a Pro that screening, exciting features In to which are in over Pro of of capabilities Office other strategy solution Office added tier our QX, with a features customer to analytics. businesses. opportunity add of Ooma plan our us quarter Plus customer capabilities, center included For small further either is features. strategy pleased and ARPU. Plus little FYXX, expand Office the CRM, at more call integrations, our longer to additional I'm adopted call our throughout term working. medium center the the increase Pro Plus, our advances Office to call These sized more integration service Pro or for to XX% premium functionality,

Ooma compared Regarding Enterprise and focus hospitality quarters. in new increased to of again on wins the prior Enterprise, customer development, continued select Ooma in feature once verticals channel number our we growth QX expansion.

Hyatt, owners operator hotel including of and Sheraton customers brands, New Hilton Marriott, independent spanned IHG. hotel several

Ooma in to verticals provides We with We continue in marketing believe approximately vertical. other efforts differentiation different integration Enterprise. targeted this to our a sales year this hotel platforms this strong XX and our toward intend increase key management hybrid for solution and

develop to new new up opportunities. market We Enterprise opening and vertical of Ooma means also as for a partners possibly more expect one

be QX, pace executed in adding expansion, service expected given the provide about but bringing new year to with a we not users making more did our in we quarter for this in in on XX customer. Turning our holidays our bring as additional countries, Currently, if QX largest to QX. will to close to nine that and users we anticipate on international strongest we of XX slower users in countries users at total, are than ever

before of of with spring, services additional enable broaden the new geographic and in users we America expansion of We a Ooma this to to customer FYXX outside the North in regions year to continue International to in and in enable the anticipate position balance late base region year. a the this through more end us And services ahead. markets Europe. be will new years to expect geographic Starting expect for add year. milestone our customer will We

end to now say Enterprise, But seasonality. making were progress. good well. February year All-in, pleased January QX efforts In sales we our and general hampered I'm performed and Ooma and for during marketing Ooma little Office by a are of

lines before most businesses, lines XX FYXX. integrated more see these will to and to in is we are and economic the POTS we need just awaken the So may customers million down lines aging forward business. with lines XX,XXX are to will currently you to navigate Switching given see our trying in I'm serving just of replace times current to replace. many need the to to the awareness suddenly Their It's even there becoming organizations for POTS are put we next some certainly large be already work the solution have increasingly in point that shut to to customers. it some that messages of we make opportunity for decisions, launched USA, when these these not if see not to talking now they the we are increasing buying, engage fact lines market to analog lines. one with across who at needs situation over their be enterprises need turned XXXXs We large are case a strong hundreds just several across. last costs and, to year we over growing. that off start to replace costly faced pleased egregiously longer us path customer take are is estimate To that interest. cases, all more copper harder or get approximately uncommon But that line. company in lines this to sometimes AirDial, XXX out with in We solution. our for or have POTS And expensive their significant or smaller economy, customers particular Market careful years. continue And perspective, find a parallels Fortune that commitments. replace say starting copper do

companies Of multiyear past This We're again And today are sunset pipeline POTS will more be process. path determining surprisingly, delay requirements many evaluating of quarter, in earnest. occasion, price report on for copper forward to lines copper provide before pleased opportunity for POTS of the the these providers the seeing increased increases the the lines proceeding AirDial. also best and course, customers time. not replacing particularly customers lines delay I'm our of larger we or a

More importantly, company customer I in was us largest contracted share perhaps our a win AirDial can that lines. that over quarter the for X,XXX AirDial with

are Ooma the year. selling in of increasingly share to and lines organizations AirDial. out this to the have of installation as begun place re have reaching that by these to We or about all expect buying well inquire them I'm middle to proud

especially Our one AirDial to the amongst and goal replacement substantially, increase this number awareness AirDial to POTS customers. establish for solution year is as of larger

report that enabler great T-Mobile Ooma to T-Mobile's is featured now executing with to our in strategy. partnership AirDial in Our Innovation pleased a new I'm is Atlanta, Georgia. Center prominently

strongest increasing the solution USA. lines believe market, develop for the in Particularly today, will ability AirDial. monitor, for development from encompasses a desktop gives is outside apart analog application the who as advantage. us that our designed and device in over the to increasing for AirDial further AirDial is which all competitive channel sets strategy from use it line enterprises particular, capability, solution remote partners also for and and of plans equipment AirDial is market solutions We number bar and term Our AirDial operate the market agent our to anticipate see this the one manager an control essential. the for selling year our the which speed AirDial all longer that representation such other resell together the difficult their In we our at to will AirDial,

Ooma to exciting to year quickly for act their will AirDial for are this come. how is and But this years we confident an opportunity of install addition across needs. customers In range

Now in with Telo, achieve the to choose on investment we residential Ooma of sell we we continue make. level modest to the front where line growth

will we During new term. Telo lower FYXX, longer incorporating features a introduce could Telo which new a processor make possible also redesigned cost

level will We T-Mobile our expand sales, our Telo our continue of to engagement for efforts also T-Mobile. with and continue partnership with

advantage taking rollouts, XG fiber for on market new both internet wireless of are Telo opportunities. opportunities we Internet these are and adoption, As we the in believe created new keen

is this to flow an debt, targeted arises, Unlike made we for altogether, So strong zero the have competitors, reductions flexibility the layoffs all make acquisitions. Ooma. force. invest we Rather have not with in our any opportunity to also nearly cash exciting time if and or growth for our and

the to of to also difficulty the one We're served sunsetting. small And steadfast communications for many that face by forward provider to in number medium mindful we with FYXX, lines growth are custom applications POTS select and challenging verticals in the necessarily operating segment, look be economic market larger business lines requirements, we strategy the to replacement. situation. predicting to As are in and or the copper we copper enterprises of the our

to over to and discuss more call turn Hamamatsu, with remarks. Shig I CFO some our results closing return the in detail and our will then outlook now

Shig Hamamatsu

million to fiscal Eric. basis, year-over-year for revenue Thank prior subscription addition subscription We fourth results for or XX% review the as total to the accounted services delivered revenue XXXX. our going of fourth our as well a $XX.X near business million another services year the quarter, the first financial quarter end provide revenue total a good business X% outlook $XX.X Ooma and I'm And as of grew of guidance with quarter, strength $XX.X range in quarter afternoon, and the in then high full and everyone. our total onset. driven of you, On million. solid the and quarter. compared XX% year revenue the fourth to quarter, by of In

total including on revenue On product our compared last revenue. call. basis prior earnings not in to million QX year did included million prior quarter. in other $X.X came that as sales prior the full business we QX a compared accessory product year, $X.X XX% XX% year million in subscription representing as mentioned $XXX.X growth this the at million revenue in The recur was and revenue growth certain to services and $XXX.X year-over-year

to the record front, range of million company. net guidance non-GAAP another $X.X and our profitability the for $X.X quarter On $X.X above the was was fourth million income million

year done the compared execution On million, fourth job The quarter. our non-GAAP a $XX.X year. an $XX.X the was basis, in prior managing excellent balancing and net growth initiatives four to million income of expenses team has during

details services and with Now OnSIP in growth retention. QX on revenue some while solid our Ooma grew customer addition QX, driven user of to perform year-over-year the continues and subscription XX% revenue. business by which

Excluding revenue onset business the XX% services of contribution effect revenue subscription and Ooma grew and year-over-year.

side, and the X% On year-over-year. residential grew subscription revenue services

services For or XX% the XX% the prior total subscription fourth in million, revenue was revenue quarter. of and compared $XX.X quarter, total the to

of of end end XXX,XXX our with third customer of core on XX,XXX details fourth total users, increase QX. business users from users some Now XX% an fourth had we our At users quarter core key quarter. or X,XXX,XXX from X,XXX,XXX core the the the We ended up quarter, at the the metrics. of

and revenue including users. year-over-year $XX.XX blended average increased per ARPU driven Pro Office business core to and higher or of Our Pro monthly in subscription services mix users ARPU an user Plus increase X% by

higher to to with Overall, in XX% users quarter, the take XX% a Pro these see Plus of of new Office up Office tier was from fourth Pro continue we opting Pro the healthy and During XX% Office Pro users subscribed which quarter. prior rate services, Ooma or have now tier. a Plus for

year-over-year. was recurring $XXX.X exit revenue up to annual million Our grew XX% and

XX% to third A the quarter. was dollar net ARPU the year-over-year about a net dollar is quarter compared which rate for churn. as rate, few retention words function in Our and our of XX% retention subscription growth

customers pricing them. of ARPU As in the second largest we saw with slowed that quarter specific back structure in growth a our the growth fourth rate quarter, continuing the from given

base quarter. While across user remains our the the all during our stable churn

believe revised previously, this calculation we make better a XXXX. a reflection of for a metric operational to retention dollar methodology it plan quarter rate fiscal As in mentioned We first transition effective to net the our others are estimate well as the of net rate with how as dollar reporting. in in performance, our fourth been quarter, would more methodology approximately the new we use that have retention line XX%. in Had our we industry will

Now margin. some gross our details on

year. Our subscription gross and was with the XX%, consistent services fourth the quarter which for was margin in prior XX%

gross same fiscal impact for OnSIP Ooma the quarter subscription the to of running a XX% margin as excluded. Product reminder, and to other for gross margin, lower gross margin and for the is which services margin subscription year-over-year gross fourth quarter relative margin. As included There is negative fourth drivers was negative of this year the gross of compared in OnSIP when product primary were XX% year. decline the last period two XX% for

recur that product accessory prior benefited sales did year. this gross certain in not margin First, the year

ahead procured see the cost of stay fiscal higher started of we earlier that to pandemic we supply year to issues. chain Second, impact certain had components driven in

to XX% the was XX%, margin product higher details gross margin overall due $X.X limits as in year now compared total basis, in Total QX were on was low primarily year quarter. for of $XX.X The year. gross this period million, the to same some the an XX% QX total On for million, And from expenses. operating the expenses fourth last operating or revenue. up prior quarter

for $XX.X Sales the increased delayed from activity, driven the onset, XX% marketing which or well total operating revenue, Excluding additional and and as million quarter XX% the includes same higher expenses. development business AirDial, expenses period fourth year. of by of the the impact $X Ooma for as expenses last up million channel or total OnSIP XX% marketing year-over-year were

increase a both Ooma was development total Enterprise, revenue, portion by the as well million, key investments G&A the such members. of million, attributable year-over-year A OnSIP as of of were year-over-year or in new primarily costs $X.X the personnel earnings million products expenses expense for increase , for in net for quarter. of AirDial. addition from the driven prior to $X.X per XX% was share as quarter basis, to and up fourth features to on The Non-GAAP $X.XX million and $X.X compared G&A increase X%, quarter. prior Office or $X.XX XX% for with the new was million diluted year and the quarter, in a expenses revenue and as due an R&D addition Ooma total year-over-year to in of also fourth $X.X OnSIP. for compared $XX.X income the Research expenses were

quarter for record $X.X the was intangible and the total for to operations for In $X in or have connection Adjusted the transaction. another a approximately the income quarter the prior net $XX.X last to million, cash EBITDA excludes generated the quarter was year expenses, generated period $X.X year. ended million $X.X double company total revenue Cash of achieved amortization to million fourth million was stock-based for $X.X strong and the investments as X% in for quarter. We quarter and same compared we with million. addition for fourth acquisition costs nearly compensation from and OnSIP related with of million non-GAAP the incurred most

front, quarter and headcount ended with the we X,XXX the On employees contractors.

Now will quarter and for guidance year for the I fiscal XXXX. provide first

expenses intangibles. and is Our non-GAAP compensation, adjusted has amortization of stock-based guidance a been for such basis and as on

to million of to first total $XX.X which of the XXXX $X.X fiscal revenue million, of the expect quarter to range be product million for $XX.X includes We in revenue. million $X.X

onetime transition this relationship includes is continue to their to been which as related Ooma revenue approximately for Ooma have quarter for negative customer uses. residential This users centers offerings using guidance we strong event, expected expand other revenue services for a residential X,XXX and of to some years, the has in quarter impact with specific the a with first relationship Meanwhile, The is who solution call business time. customer. the their customer another returning our our remains to anticipating Telo for for we been many impact

be range million. million We to be to Non-GAAP $X.X in expect first $X.X diluted of to between quarter net income is $X.XX to expected the EPS $X.XX.

weighted for assumed quarter. have shares outstanding the diluted $XX.X first We million average

XXXX, fiscal year assumes rate be revenue subscription revenue full XX% to services XXXX the and range for Business residential. For for to growth year full X% fiscal and in and to XX% services subscription $XXX.X Ooma The and expect revenue guidance total we growth subscription of of million. million revenue $XXX.X

of and we XX% and year, mix services In the products subscription remainder from the total to revenue, other XX% terms revenue. of and revenue from come revenue for to expect

fiscal non-GAAP million in range of expect or We net approximately this we million. at $XX.X income for Based on be range, fiscal to $XX.X the XXXX $XX.X million to of our of XXXX upper range. EBITDA be end to to X% the million adjusted guidance for $XX.X the estimate revenue

Let some a adjusted income guidance EBITDA you me non-GAAP color additional give on fiscal for net XXXX. and range

to expect P&L higher negatively margin onetime million. be manage driven fiscal We gross cost through and estimate We fiscal in XXXX by other product component have be issues. impact access components running continue procured million the in to was $X fiscal pandemic chain impacted XXXX will we costs to for ’XX to such certain supply order $X

one Excluding fiscal our amount, a our higher cost, similar believe we the range. net adjusted in adjusted margin non-GAAP range have income have XX% would to could of put EBITDA and X% which EBITDA been the impact this time XXXX by

XXXX to of diluted $X.XX. be $X.XX expect range the to EPS for fiscal We in non-GAAP

million approximately outstanding average $XX.X fiscal for diluted the were We have XXXX. assumed shares

I front to strategy our generation finished a our We're solid growth fiscal about XXXX a achieve out term with focused quarter. of remain us now it remarks. cash with with on opportunities Eric to profitable record for strong to pass the pleased Along fourth will some non-GAAP executing excited we're Eric? and profitability. in long closing in quality to summary, growth. In

Eric Stang

independent have that say to week mags is deeply to pleased to Award always learned once won because this additional share. Ooma earlier We Choice PC has customer VoIP it win Best I'm Shig. honored again some Magazine's on based good award system. business surveys. Thanks news I We're for this PC

Ooma revenue For a of of growth. during outstanding makes up ahead in in business was total a course Business is Services remarkable revenue our primary services Business, now driven row number our year other XX% of focus Ooma FYXX. growth revenue XX% for in part users providers. Ooma XXth voted by one

and for one customer verticals lines, excited position for As expanding now FYXX, targeting for in of pursue and larger continue POTS to further for number our initiatives growth requirements those growth, markets. establishing and to customer the in serving largest we head as solution including leadership enterprises. into to further small copper several markets, our replacement serve we're internationally aging extending business, ourselves future ourselves select new

As we you tremendous see to look everyone. we opportunity for growth. ahead FYXX, profitable Thank

and your We questions. will take now pause

Operator

Instructions] [Operator

Matthew We'll Stotler Blair. hear first from with today William

Matthew Stotler

Maybe we're to there acquire maybe about Hey updated click further color how And for just the integration progress taking the question. double that appreciate any terms think on there, thanks that re-platform just at of OnSIP, one, on in business. ahead. customers first or should plans then on the of we forward where going

Eric Stang

I where Hi, that excited is made But functionally is business. folded Matt. about to We've have in on the go. gross the at. great the that also farther and we're Progress team Ooma very good, efficient in margins do a strides team resources I'm We are business. little the improving think some into

OnSIP customers beyond we very it good a platform with a good making over OnSIP that If the And of a our And taking have don't lot it's cases, the those would moving longer is actually, lot doesn't we of we're have faster does. platform it customers a wants because customer to we cases, in need it little of want platform, this a offer. make feel that an a move in move terms year more plans have does actually quickly. it. don't us. investments measured in what we platform initiatives even happy very we a we underway Ooma transition, to -- on looking growth customer that to many But pace to good the those significant Ooma platform initiative things a terms that In of that because so today, at OnSIP for strong in something and do term select

with is to stable where on expect well line churn and in we that Our it business. be

So it's as in, part we from in folded Ooma now. taking go been kind we're we it here. of are, of And just stages it's

Matthew Stotler

used one you capabilities Got mentioned opportunity the center have, capabilities a that more that what call maybe point into like maybe build it. the functionality. are kind you. center looks Thank commentary That's we you this functionality the And is or over you're on couple looks very just being right? then And times, How for on call that Office. helpful. could after. call what those center seated broader using And for call looking like, of at uplift forward. for going to of opportunity market Ooma of or going Ooma, some Maybe dig that what within center ARPU then out base many that customers are

Eric Stang

the two perspectives. Sure. from about me let speak by this And way,

Ooma Ooma just use on traditionally are center who and center not capability. time. offered capability. that Enterprise call some call pretty solutions Enterprise call capability Ooma on center for on customers any those call extensive center has some our using Enterprise have We offered of are customers Ooma Office We've

capability America little at range. center Office that's X but the there in that on the more which be call starts the And already for and functionality. it size with $XX.XX. plus $X these things. call in other Pro their agents pricing to basic in and Ooma the Pro, Pro there's that's Plus helpful have is after businesses Office this way different we and use, sells more basic most of not kind X,XX up environment. XXX way. Office. taking call But we're to in by the businesses power significant it's professional And well Ooma call center, Remember, Office. Office particularly is with us to easy for would targeted less. an small log key pretty to medium bit it direct Ooma allows the we're a with center Office moves we're the approaching from that Ooma and really application, X businesses $XX.XX, integrated one from Obviously, to it. size turn powering a If do and without even a simple us up Ooma calls, employees company a that's larger and Enterprise. XX of up a call needing million with is center And listen up be we is recall rounded queuing, dynamically things buying that would Office hallmarks does higher and which employees, And Ooma to go on for call do calls, building out. have Now that Ooma North and more that employees. application. be in calls in to you'll set going what to it capabilities And call can will the able of That can other call Pro But Plus, a calls, businesses, center do log in in business a Office up solution I ability IT XXX be And X,X,X, you that's barge to Plus, has persons center businesses, in significant opportunity, to

Operator

will We Northland next hear Latimore from Capital with Markets. Mike

Mike Latimore

kind know some just given expect Congrats whether deployed, take this you've little built And and strong just we what many of of give growth but you've wondering there, be how I kind year. I'm many kind the more a little, or of great. little how units you it's a now a if can detail would more profitability thanks. have been on info Yes, give there. on AirDial

Eric Stang

AirDial for built it's because develop. a driven we're because to with that to outlook at last predict fast particularly very to large these be for us lines how specific this what it's first, an to time. here And the support buy We're as going the little in that we least on first some the boxes in And obviously of a overall units make XX,XXX each difficult customers and careful not today. us, We've customers are market will material Yes. not to our XX,XXX can degree what to to it's very, consuming we disclosing numbers sign Those for boxes sit outlook. AirDial first happens year. up four year. can built those difference still We with at

So half year. those up to have this resell for that we now, take if will who in also announce opportunities AirDial forecasts partners looking we the to hope close first bit those are And right to the little promising might us year. additional a of our

hope that you color. gives what ready So that's more to a about But today. I little disclose we're

Mike Latimore

talked we, And the Thanks. environment, you softer longer little they transpired how's Are a little playing sounds little January Or cycle, maybe bit here? the things environment like how said over on you last you bit just say now? Are they months? in maybe third out were sounds macro soft getting it for let's good. but sales way of last just quarter, now? kind the six still stay like that things mean bit months, a then little are six can about about a I a pretty seem then, macro talk Great. also better

Eric Stang

top I specifically, with tell we're on because work with a we our internationally, When we're and Enterprise to Enterprise. Office messages. Yes, harder Office AirDial, fortunately, do growing doing that's of well, at little going what as we're know and you have overall, to and look we and

up I December and versus January. I full more But them half give customers would positive. for we're And compelling, would and capability a very a we tick starting second Now that's say November, in what prior are previously. tick can that will a can they've that. all us to say lot we more our I And than had save down were, money, say messages

outcome experienced of So I something different. about we think that want But a think actually is similar of year, a every a ago. kind to it do just time bit. say that's don't little because little a I case the year seasonality, I year

with a and even these on customers to playing some larger our that to can with these we're bit customers and deals. continue On us, And saving them side, them the grace and deals rather larger we, But times. in decided once. forward that before economic in market broke little drive customers Enterprise to had a that seeing we're rely where large, than times. solutions go particular, And save selling apart We the for that's growth. in phases, take at where money. We by

Operator

will to just next Kinstlinger Partners. with I Brian Global Alliance move

Brian Kinstlinger

so much for questions. my thanks taking Great,

to necessary, first my it a quarter, moreover, quarter, well, And to customer as got forward prepared. customers planning Can prospective longer give announced. outside changes any you and You and plan us result, discussion, are one for weren't nice resources of AirDial curious is last it expected with in customers you taking time last planning. the preparation was that on update was said and is about I'm to one moving taking you customers these than that that

Eric Stang

help get in color going They're lot gave QX, opening so landed that's Yes, I we a X,XXX that than a in lines. remarks a with that big my XX, and when little much of them this as bit ,more of move to thinking about to you've that customer And win that, want half to, fast to is year. they all that to customer as we think they I first installed that's got a do. in going expect the

I get a But even longer it's extend that. on they all us bit than to might a that think good get with it want out little them to sign it done. and

at support want doing in resources to We resources, party or customer's the a do It other installs. slower do third to to they customers depends move had on team strong whether contract with a that got have them. place have themselves for process. pace. installs us do the We've We internal the

area think by customer time. in hiring does but specific, it we're, are bit a little large, well. it's as I take and But We that

customers uses they, But X,XXXs more they've largest manager our got talked feeling particularly got still what ours situation remote they're in ways, like out certain lines, not better stands want act right ones that solution, it really of a and device the tests the that they've to in and that, my to solution And to is way, because there. remarks. The something. do about need be I out that in we much opening are how customer a realizing necessarily likely a act, to the With do. Testing evaluating the to they away. when

field that we our the very And from enterprise built. we're putting are manageable It's grade in a out very powerful it's boxes all solution. a these And remotely solution that cloud.

it behooves that explain customer, the we I think really think bring. benefits we the with us when work I So what and of can

if with and now well. have to wireless internet. and primary T-Mobile, a our build we in provider, continue with evolve with capability that we with a do, are others add to we can strong customer wireless their we Now the what has But is as work AirDial service with another relationship able able surface work now partners we to

out We extra have outdoors system. remote customers for brought be that the can need antennas may who for even antennas boost mounted

marketing calling of remote I generations starting the own exciting. well, heard this that this this see months that saying press whatever is. on And all name, one key to pieces want read market. three, almost of known is or have much ago, it say outreach. you'd I we our with to of were device refinements increasingly, going or from year. And me you your analyst T-Mobile customers And what four think months getting with five year to think more our three. is there's saw that evolve release growth about if bringing But are I manager now on our So our to ago, I it we're us as to generation getting the on you better in about all even I it's three We're asked or kinds would customer wins we

go far that's I I on know too there. perspective. don't didn't I little But So hope

Brian Kinstlinger

win am into nice T-Mobile's you segue AirDial, talked direct was commission. for second then that nature a discussed I win Is about it that actually. was perfect via it sale, my paying the of question curious that they And quarter, last With a it, you. you call T-Mobile,

more in sales? are Meaning unlike last spoke? out the reps are pieces going be since reps engaged that curious, is So am Telo engaged. playing we I likely building to AirDial and pipeline

Eric Stang

And an imagine. for they’ve be in plays a look more direct a the Really second is The been the into party -- basis optimistic your take we of then you deal but we're forward. agent, large the the effort that to couldn't I'll question, pleased So and get size. partner. working as that T-Mobile's one question. turned partner with key also involved part through agent, a months. – And because us agent role, reception deal AirDial. great It of were can first and several for came our making. an but we we That be we They are they've

Operator

on move Matthew to We'll Harrigan Benchmark. with

Matthew Harrigan

Thank you.

largest how as numbers with a taken a you. in very carefully going always the into risk internationally, your much like Can well? sounds especially you’re ambitious. you're guidance. approach macro I now in your You've the Thank working environment talk about seemingly this modulated think, customer, you mainly congratulations and containing new And on more concert continent

Eric Stang

way, of talk of other because data work investment Yes, our services, by we that's you. for we many world, can And regions fair and what that. own America. North with. think, center when regions working matter. that with our been machines done I investment, But we've you us. in And important and talk physical might built we've Thank done as a bit well for Europe is think greater in about done has talk we the more larger kinds communication than and what in the regions, of And scale latency with we locations about

So from your far your are. machines, where to located you data want centers customers have too don't

if becomes we cutter we're our environment. you that as capability, It and provider. lower don't little too up and worldwide that cookie of then in done run working the expenses how ensure resources off bit NOC work up, little US you per unit you we're from that's doing spending scale manage the we move lower when makes higher. other And to on turn turn here can we will opening you're and we've Europe. that a on And basis, internally bit, it also and to geographies, cost processing regions these need hosting a with this a world So much to system have can But our And it our it, in other a it. as your managing we're end these much. going the

So to we're add in of regions. other resources not physical a having people lot

capability and be the place how So in I know to know each them. many before how we're To going we're roughly put We pretty some fast feel going to users so on can we margin, going happen. the have this conversions little then we region. get We gross our we honest, but And in get that there comfortable. to is of model a as be. users it's to to a speak, the we cost what drag and place, put convert in of bit over know

large, we be this our be and how By that's to we'll be to be If also want I beyond, them to that see so year other Europe, first But And we we're serving it. look these would it wouldn't going and out with honestly, regions customer. in. expand years would one next large that focus working so. in beyond say

we're we're versus sure to other in expense what revenue. these what had regions to we've reasonable that doing in is going make So drive

Matthew Harrigan

-- before at to Europe AirDial anything in more commented an trying in even this issue, hopper over with that at Are things issue many replacement are you you've US. that too this the do think of things other line and doing or is the copper point. I got issue was you in the Europe, to and point in that you

Eric Stang

this partnerships, We establish little or it'll countries properly. do not partnerships, with our outside change the in anything a of the such United product of right that to year take plans said, to the are have operate in to But do we our If if that AirDial outlook. reconfigure did States. other partners these we some time though, to could right develop able

engineering to take It’s hard bands there. the time. will need It's some of lot. not we work modem but and a kind With not

next seen but this So selling AirDial year. talking be lines. years have some towards the year we in sunsetting they're We've in other would In some future markets, like it about cases, or just starting markets. that markets copper transition other started markets, to already to looked building in we've at like

that. for timing to perfect start it's us And working behind. not we're So towards

Operator

Nichols B. We'll Riley. hear from Josh with

Josh Nichols

Thanks.

Sorry.

to over disconnected. back easier to just table. get know, the We I unmute But was and just dial bumped into wanted yes. me that to Okay. guess in. enough for line the

reaffirm Great customer key hear into very to in. to going expanding you markets. a further want to that quarter with XQ So is just check your be strong

year. or I to expected added think company year bit had a through far. past you has XX,XXX adds higher Anything right given thus be comparable on lower year this additional is to you seat of the seats comment expectancy this that the based plan about to the little XQ cadence you the last

Eric Stang

bit on onboarding for year in a we little first you'll out thinking say we'll of I year. to last quarter did And QX, best of think farther we some, but the little growth. quarter we're can and to heavier year QX, number similar me this then have to a be see would bit onboard last it's for users the order and second year plan in the I think planning the a

Josh Nichols

Have huge coming lines. market even you rumblings if today? competitors have are odd a they're large AirDial, lead this. for question we're that some or last these been then that out closer very I market find alternatives for on potential such hearing a guys any not opportunity it's to viable But of it and and to there's for about opportunity. copper a Perfect you Obviously, me. sunsets and closer getting

Eric Stang

in of to bought can from up the not most rumblings bought we're somewhere we to buy in tell Granite solutions, a against hardware when a from any it, have they of heard have new the they do you and believe market. you kind you're solution going that try space. not on integrate both remote. imagine And and designed data clear AT&T, from taking who in I you resells be of those can up. larger we're put top bring box be they that a We hardware up a And probably advantages. we've have of solution likely the who service then ground Epik. that I that's to against solution that deal, And the competitors going against

as as nearly we we there. to with But it's feel the And have market. So do not competition good yes, we're extensive you product bringing out might think.

Operator

Joe will Securities. JMP from question Goodwin next with And our come

Joe Goodwin

my Great, to question. the It's has in current the subscriber thanks taking the remained stable great base churn that hear across for environment.

churn subscriber trends plans? those commentary Office on for on you of materially curious and the of Pro it or Is great. and Just about your would side business standard who the sort office Pro can any talk kind just any higher are Office than that be

Eric Stang

It's not.

lower are probably I suggest customers business. and that they're larger Pro our because Pro Plus fact, a In would more little to tier likely be bit

-- churn Our

Joe Goodwin

bursts. Yes, and I excited

about Sorry that.

Eric Stang

Yes.

little higher overall in It's, is to tends apply customers with Plus general, Pro to stable. tends be customers the churn customer. larger the run bit more Office to Our smallest but bigger it get In we very a less. have. as churn since likely a going are And to little

the for questions other no to I'd with time, back company this remarks. to things turn closing And like at

Eric Stang

for Well, everyone, always, thank our call. it. time to us really as join appreciate taking We the you, for

forward hard about to drive our Thank bigger next look valuable obviously excited working doing. are And Bye-bye. here and time We the progress you, we more everybody. business. can speak. and things a the We're we're

Operator

thank you conference. today's for Again, us. joining does And conclude it

You disconnect. may now

Ooma (OOMA) 2 Mar 232023 Q4 Earnings call transcript