OOMA - Earnings call 4 2024

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Operator

Hello and thank you for standing by. Welcome to Ooma Fourth Quarter and Fiscal Year 2024 Financial Results. [Operator Instructions]I would now like to hand the conference over to Matt Robison.

You may begin.

Matthew Robison

Thank you, [ Tiana ]. welcome earnings fiscal call and full quarter everyone, XXXX year of day, to fourth the and Good Ooma, Inc. Matt is Corporate name Robison, of Director My IR Development. Ooma's and the CEO, Eric and case during I I Hamamatsu. Stang; me apologize Ooma's my CFO, in comments.On are today call cough Shig with After release. fourth and the Ooma year full fiscal closed its today, XXXX market issued quarter earnings press on is company's website, also available the release This ooma.com. and of This Events is Investor being call live accessible the our page webcast link of and a section Presentations the from Relations on is website. year.During of This presentation, link for forward-looking of active will will meaning statements laws. securities executives be this the replay call within federal the for X our make today's

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

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

of presentation call GAAP CEO, Ooma's to that reconciliation from over non-GAAP I investor resolution include Stang. slides metrics.Now, expenses also the our hand provides Additionally, Non-GAAP to Eric will excluded GAAP that are

Eric Stang

and flow million grew upcoming jumped and look you potential XXXX growth fiscal achieved Ooma's excited results financially, non-GAAP XX% 'XX, today. Hi, net of us. year.Overall, to net net to Matt. opportunities of QX, adjusted $XXX.X $X.X of to forward everyone. fiscal significant FY business adjusted for and $XX.X in new And EBITDA by Ooma to new XX%, investing Adjusted $XX.X million growth FY cash feature XX%. for our Welcome and XXXXhz, business solutions Ooma Thank and revenue, achievements increased in 'XX customer by our expansion. EBITDA. the On made income. million also of and Enterprise, from with FY significantly significantly in in Ooma non-GAAP also Ooma business all development we Year-over-year, product We fortunate well quarter in In expansion, position you, by believe XXXX performed believe Office, you revenue you to and income $X.X international earnings profitable in to and in our I'm Thank we strategy I we operations million.For made enter from reviewing with market on and partnerships. side, to 'XX year flow QX. QX, million to of fiscal leading XX%, income strategy achieved resale fourth million a I with growth.On invest $XX.X drive joining expand we important year Ooma EBITDA cash and XXXX is fronts, talk the significant delivering in continued for strong plans revenue QX $X.X about expansion. million, non-GAAP by progress our we we this call. operations our all while AirDial and

largest Clio being for Office, expanded These quarter medium-sized efforts taking in legal going deal. businesses, practice we XX-user solution well Ooma vertical, a legal small win our of the announced advantage on the customer with our to integration are management For sales our our efforts with software.

have highest of and them. premium new increased date. I'm to a work also pleased service a enable that Ooma agreement report signed started our we XX%, proportion also tariff Office the with will the customers Ooma who who signed level for new to partner an to Office, to We we up resell

across modest, partners made partner spread users we the QX. significant locations. other a great large we for businesses, XXX step customer year but signed, engaging resale Office.Regarding serve it this One we in larger-sized our new a several first potential we be contribution toward was Enterprise, achievements also from to for this consider where expect We Ooma Ooma thousand solution will

new users integrated calling our Teams be in full We over a solution for of combination their rest. the the our vertical, quarter. we hotels for hospitality momentum, again many our targeted XX will providing of In and our winning solution continued UCaaS

We also helped and AirDial, over progress we aging who brought this company being our as in new some POTS sell wins. new replace to opportunity. XXX us a in innovative new QX space.Ooma this lines, into QX, make customer closed invest technology expensive solution continued with notable large partner deals to we In on

now. I subset is unique refine X usually is uninterrupted line months of by UCaaS, or a their believe applications platform Award reselling start them AirDial driven enhancing In since POTS though, our remote forward our added which What shut very they pricing TMC needs of Internet increased immediate patented the we just full serve exciting available that across. to finally, ago. adjusted also deals on resale rollout CCaaS track us, and progress planned dozen We have the device XXXX expect won the by in the came and QX, a move general, for particularly for Product over only a substantially Year customers accretive acquiring of of customer will we I'm AirDial backup partners being delivers system and which report expected. and I many to management we then want believe locations off to now across small wholesale build we achieve and product new we happening of seeing. the their lines Telephony We year. year. QX through replacement.Turning to locations.In out find solution, QX, rolling XXXXhz for we replacement, enabling It tremendous including We in of we new the to of line solution, is the interest for to than partners on plan new the copper CPaaS X happy are AirDial these are multipath make continued to Ooma synergies AirDial to number made AirDial AirDial And its business before AirDial EBITDA faster technology, this level XXXXhz, expands

being Kazoo won currently to We X customer is to lack platform, applications have far end directly customer customers. customer base being alternative new on to are prebuilt we along their and agile opportunities.XXXXhz replace at is convert already by aging will hosted also as looked and and other at less be controlled UCaaS CPaaS which an solutions, the looked cannot and standard who It XXXXhz new platforms.

level Of amount are extended of us our acquisition course, seeing also means wholesale to the confidence investments accomplishments more our XXXXhz.We're business. in making we QX, much proud the high nature of strategy have the we do of on interest time we it and we solution and an business thesis the but in to this capitalize new realize are for in of Nonetheless, gives will unexpectedly the customers implement produce revenue. to take

in low-cost yet significant we position we target, placed we advanced move leader solution. businesses As is, key believe smaller-sized A do differentiated to opportunity many provide to the we so X reason reasons. to so reason more segments market a particular, well we for look is, services. to key very we and are untapped main segments communications second in product see cloud since in a believe have with the we serve forward, solutions a are we One

open several to strategic trends breadth and others Ooma of that we extend investments The forward, UCaaS, up directions Ooma reason our XXXXhz our meaningful us CPaaS years. give will in paths of and AirDial making are that see confidence have over for partner replacement new and market look reach.As and opportunity we with and give couple pay wholesale third us last support applications is we we off. invested direction CCaaS greater the the POTS the for

opportunity that is quite X and communications of are alone, the to these shutting is which down We a in be traditional have A X.X sizable. the to transition parts U.S.A. there significant underway, is of these small late. in businesses the Ooma fact solution. network, One is believe million here accelerating the estimate of phone to businesses employees cloud-based already a XX and modern amount both America of in with market trend Europe, second as we North yet that the seems copper for Office to of and simply

forced own we smaller-sized solution, XG is of to generally, leading only connection.A copper what their as words, new their third communications easily when double-play its business customers a our as reconsider provider. availability the Internet which these to provider. solution More move cause the well, businesses from a line. is believe The rise of equipment to is favorable are solutions believe Ooma that copper to small on Ooma, not trend, residential to of businesses their have for can they and Many lose Internet. for off look benefit AirDial opportunity both phone double-play we We with It doesn't a Internet also a solutions future solution. Internet rely also but XG wireless and cable XG today solution, in other presents offer serve

our for businesses center fact has applications calls, And adoption generally To AI you that Ooma businesses.A strong to businesses. AI is of yet help significant As as by XG-based solution contact smaller-sized not fourth all form sometimes have AI. activities has of or performance. optimize much their our seen texts newness offer to the small-sized date, businesses as for and Connect backup chats. role created the in the part a this is we In area very been of limited, Internet primary know, trend due and communications, in Internet AI data play advent in to market and across currently, the

our that and finally, as by make and these to our more highlight anticipate our making customers.And customers we the last with applications solutions However, by look industry in is they trend the bespoke want greater AI solutions launching valuable will to to individual applications their applications needs. solutions that in do demand use we communications more their forward, I desire by more the believe

For this solutions with integrations their entail can in customers, smaller used other businesses.

industry CPaaS leading positioned trends, mean opportunities, larger our and continued solutions with results. of include platform. key is in using take plans custom improvement on a with opportunities.Building 'XX for For way, or this line these investment FY to customers, customer can flexible applications Either Ooma building these in advantage bottom balanced innovative wholesale either API-based

to us seven, FY to online Shig, one, our partners further and our reach to of Some turn a with sales; I sales performance into and of expand our partner complete capability each the be quarter and and Ooma.I'll to market closing and 'XX inside solutions help place by sales, Ooma internationally, largest to as for new agent six, business, to customer, to the platforms; contact some front strategy having XXXXhz expand and call remarks. CFO, our value enhance an across our ahead and our us grow. in IWG; other and over we Ooma believe two, direct exciting more made to from resale progress put community of things wireless and technology results our solution; in and our grow platform channel who have four, more now plan including finally, opportunity we three, call to accomplish wholesale the us.I'm to integrations solution; 'XX integrating of excited see XG Internet with in center to looks I by discuss detail sales our and activities outlook into vast with then return center year more other by sales, the to omni-channel five, are: marketing applications; the increase to Connect to incorporate our in FY extend current introduce we

Shigeyuki Hamamatsu

exceeded the a non-GAAP for million growth net you, revenue in growth services prior Thank delivered X% XX% full as year in XX% of prior $XX.X prior our year.Now, and and and $XX.X our everyone. revenue of the representing subscription revenue.On outlook the as going quarter.On of the by XX% front, and was and well basis, solid to quarter in was XX% range. in prior the $X.X was details including at profitability the to total compared non-GAAP which quarter other as our driven income $XXX.X near QX On year revenue. in basis, On income net total million, a user revenue of services $X.X XXXXhz. year-over-year QX to the year-over-year Business growth I'm million first million the the Ooma another and quarter product a services subscription quarter. and of $X.X addition to year in million as year grew financial compared driven XXXXhz. good revenue full in subscription fourth Ooma high for our basis, fourth of provide guidance million, with grew as services full fourth the then revenue Eric, In compared by quarter, afternoon, our review fiscal the quarter XXXX.We came accounted end $XXX.X a in the QX, guidance year-over-year, and $XX.X total addition year revenue million revenue to and subscription business business year, business some range. million XX% total quarter, growth on compared fourth business, results the

X.X% the inorganic services year-over-year. grew services Excluding was residential business On down of and subscription effect XX% revenue and revenue Ooma subscription year-over-year. revenue side, contribution,

year-over-year unusual particular during we continued event XXXX reminder, a onetime an of impact As the first churn a with had quarter fiscal customer with application, a which in our QX. to comparison

year services and quarter, the customer or to prior our metrics. the some compared quarter.Now, revenue million, revenue subscription in was total XX% total on of key XX% fourth For $XX details

of At X,XXX at the end an do the users these XXX,XXX or include business. up recurring of the the the core wholesale from our except we quarter a annual revenue, quarter. users, exit total As of users, fourth X,XXX,XXX end had not of quarter, fourth the metrics We reminder, core XXXXhz XX% ended X,XXX,XXX business increase QX. from users, with core for third

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

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

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

for rate retention XX% quarter.Now, details quarter our XX% subscription the gross dollar as net in third compared margin. Our the some was on to

as XX% fourth the year. margin subscription the services quarter gross in XX% Our for to and was prior compared

and relative fiscal to subscription was gross of lower year running quarter a for XX% negative for margin, As as and of gross fourth compared XX% subscription Ooma's year. gross full is to period same services margin XXXXhz the margin the margin. fourth the Product for quarter gross last a this other which quarter reminder, impact included negative

as a gross that this prior million product compared XX% supply decline pandemic-driven in product year prior be comparable by driven development as and in basis, up million, calls, fourth or driven activity the for the of $X.XX estimate range diluted fourth starting up the currently and versus for net G&A for now, this fiscal to mainly due X% of expenses for AirDial. expenses. quarter were period margin members. expenses revenue Sales quarter, expenses fourth operating the from personnel the total G&A margin last and excess total Overall, of primarily The increase issues. million share the quarter component half by quarter. QX chain the million first due year-over-year, an quarter quarter.And the through work or operating certain development As in an year $X.X for year.Non-GAAP the to in the in total margin addition On last mentioned total in XX% to were to for $XX.X $XX.X increase was basis, XX% or diluted for compared procured the gross overall to on half gross team compared the were were in the and fiscal primarily year was of X% expenses due negative on other million, of second the revenue, X% earnings as XX% XXXX same to per the in year-over-year year of million, earnings of of fiscal normalizing we to QX last of then had of XX% million, $X.X higher-cost Research fourth per a for that We XXXX. year $XX.X in prior will year share components XXXXhz continue costs or increases was or revenue, quarter income fourth sell-through $X.XX expenses impact primarily total XXXX to $X.X we and fiscal in was prior quarter. XX% the marketing some up year-over-year costs. of channel personnel costs details $X.X

million. total stock-based and compared Cash ended amortization a net company. excluded for the non-GAAP as from quarter record for to million addition or of with total and quarter the connection expenses, operations intangible and was the It company, million, was the for XXXXhz of generated $X.X revenue, acquisition compensation million $X.X the $XX.X to strong incurred a related up the was the In cash income year in $X.X for quarter.We for record quarter quarterly investments of with the and transaction.Adjusted million. EBITDA approximately fourth costs prior new X% quarter $X.X for fourth other

$XX as headcount guidance have we contractors.Now, QX. front, the a of the the full million the debt year.Given quarter shortly flow million.On additional cash quarter, we free QX. million we and our provide X,XXX cash balance prior the fiscal outstanding the flow began operating at we the will cash the after and end XX% fourth And and XXXX, of million $X.X reduced with fiscal the down increase, represented of ended For by $X and record end of and in I balance quarter for already an XXXX. year employees over $XX.X the first million reduced We paid down generated flow, debt today, $X to paying XX% respectively, strong of which outstanding

$X.X stock-based on and for to basis of as expect million million been amortization for guidance 'XX a to compensation $X.X is be quarter of range has $XX.X and product expenses Our adjusted million of of to intangibles.We revenue. first million, fiscal the $XX.X revenue in which total non-GAAP includes such the

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

for have be assumed XXXX, expect fiscal weighted average $XXX XX.X revenue we the full to quarter.For outstanding the million of first diluted services subscription rate over range business year We $XXX million. XXXX to to guidance year in The total of residential shares X% XXXX, while assumes fiscal growth to revenue and revenue XX% fiscal subscription revenue decline million X%. to XX% full

We about fiscal also to assumes For revenue fiscal from revenue the seat XXXX of be infrequent event count as quarter. by deployment the expected churn XXXX IWG, fiscal larger-than-normal first we is guidance this seat in additional is XXXX XX% -- by where impact guidance portion expansion the in and during substantial with be reduced continue offset international the can nature of it believe IWG.

year, additional remainder be the subscription terms total revenue revenue range for revenue to million and net guidance for expect you EBITDA guidance. mix our revenue.We the services million XXXX this come of XX% $XX 'XX fiscal and fiscal to XX% range, $XX Based of $XX.X In for adjusted net million. in we from some our non-GAAP non-GAAP income to million.Let from and give on products me income expect estimate to to XXXX fiscal be we color to of on other the $XX.X

non-GAAP factors. due income to represents the to slight year-over-year operating decline our the expect year-over-year, non-GAAP we net a following guidance and adjusted increase range margin EBITDA While

interest impact the full $X.X revolver new due million expense debt. expect year increase million we to First, to to $X.X by of a

year Second, on approximately fiscal as lower by we to paydown will million interest expect XXXX. debt $X be in year-over-year income focus we continue

fiscal $X.XX. 'XX tax EPS estimate $X.XX to by currently expect in to diluted will increase we Lastly, be million.We fiscal range approximately the expense non-GAAP for XXXX $X.X for of

our to weighted quarter. fourth with have along record XX.X 'XX approximately pleased in EBITDA, for million assumed quarterly our are we diluted summary, adjusted solid cash strong average with a shares fiscal generation with fiscal We outstanding finish XXXX.In the

to achieve growth front remain to opportunities executing and to Eric focused profitable remarks. in of are long-term it closing on strategy back will pass growth.I for We our us Eric? about excited some now

Eric Stang

Shig. you, Thank

year XXXX with potential in position entered significant outset, business expansion. product the at mentioned solutions I leading a believe fiscal I for strong and we As

We medium-sized significant trends. We take advantage the resale to in and our several partnerships. of focus us to CPaaS take now UCaaS, investments well feature future CCaaS and working our replacement opportunities that in for growth POTS strategy questions. businesses your larger are includes platform exciting success.Thank small believe We'll Operator? customer on new businesses, strategic verticals, and of select are wholesale And expansion, industry positions development you.

Operator

[Operator of from first the with question Blair. Instructions] line Our Arjun comes William Bhatia

Arjun Bhatia

Clio verticals or you vertical. viewing how exist a can the to players I an partnerships, thought have or it partnership Can business? especially some of legal And as expand into of some might the the expand with that already interesting, entry pretty other the other potential maybe when was verticals just are how you to those think point you as presence? relates on about a little impactful you bit be software these opportunity where with vertical to other that

Eric Stang

in an I bring vertical. position to. we us marketing to their some integrated opportunity more these, and do some the do those a on to us what additional get on doing. own us the we're and of to partner to will that help also it support of some happy solution what promote one And partner we ourselves depending or each the good marketing well a solution, from gives And don't customers. to sales with it time as reach out can is, sales frankly, well, who momentum customers and perspective, also Yes, allows think -- there's for a degree,

seen better for of around, just you'll Clio. in way well. as the the a with a out expect to we roll see And exciting build done we've done in forward. we it's the look solution couple that year So We've an customer. with cadence these as legal things vertical we've to And of definitely what think verticals through I -- other already a all just

Arjun Bhatia

quite has as competition with it. space, maybe, called out think you That's give just And is Eric, of the us helpful. sticking CCaaS from us of CCaaS What a priority But differentiating to help bit sense Got to take market, capabilities. in there how there that you about of you know market? we then there? understand to already. on that's share the when timing fiscal a Maybe maybe I offering going an into then some that that 'XX. a you the Ooma is competitors the can above might see start able Okay. inflection be And of when your

Eric Stang

X,XXX middle our talk critical it. really have of extensive the took It's contact does, CCaaS excited. a customers on to what need will their XXXXhz into agents you frankly, That about build Office greater expensive. worked want to this market We of with business us to, they a and something of something ] can rest anywhere market. fits acquisition number solution we'll Ooma the center of approach solution has They too that in that that a big that it for to [ it extend solution. door contact it for of quite that our us in intent We design, that a And little, -- as years think Enterprise. on think the because may they not forward apply lot a that we that a step implementation. be of the opposed Yes. way, and as a lot have perspective. employees on front. more we'll building CCaaS the from Happy or the multimodal have I be API-based leverage, Enterprise, nonetheless, the really And works the will do longer they center But number. of of or core possible where with to they've by a functionality, applications we'll handful a platform before think and Ooma call what in to year, solution want we it that be do fruition, of the to say, it Office come use flexibility able this from It's is work well will isn't we're bit and do. And a in to Ooma a that way, things, business bespoke X a XXXXhz and that's opens flexible. part a in be or a anyone and most to strategically of It'll Ooma extension little going capabilities fit valuable put and to complete and, for any to solution. a part take big who But will big a And side forward they wants of to jump see to mega center place. what what into and

companies the it's out to some also larger get solution. what want foundation for a of ways, So in just they

that question. middle Timing And you covered answers of I Ooma hope Office this the the your this and Enterprise. I year and we're Ooma market year it. -- can with later is So think and way for I then of kind targeting

Operator

the comes question Josh next line of with Riley. Nicholas Our B. from

Josh Nichols

Two of has. is, the kind quarter, it's the little guess. still the like of growth kind early kind what I first business, stage. just One of and you in for then quantify bit that talked the given -- that, for piece you some talked front, And on about of the you're ramp assuming I about curious, elaborate expecting help a could given all you churn, AirDial that that think, backlog things, I'm that IWG impact the with two,

Eric Stang

churn, serve of -- for to much of every think so they've churn all so speak. tend I measure so with in as Josh, customers. had because their IWG, some it working to years Sure. of we don't

when full numbers other that don't churn and when IWG their both view finer ones who with with worked business comes They've get of one next from been in. need and reported they their helped side, lines reductions leave come we've in, a -- net. is have across been them say, it, But And done the analysis a and a to and maybe the that, as obviously catch-up. need. talked quarter. you then And over is reassignment and this level centers working leaves one time some But all quarterly Now, numbers almost. basically, had tend their bigger net those turnover This user new as can is all maybe run they of it few have through thousand and a the a and customers them. adjustment. Shig our and to what worldwide of what we've call side at some a a we've you And certain about sides, our

doing than being see normal I little larger we're less quarter. talked more order churn here a every of... or catch-up essentially so, we onetime Shig And And bit about think the it a the that's adjustment on

Shigeyuki Hamamatsu

Yes.

the In count. terms with numbers, of what have seat seat of we XX% about

and considered it, think heard then we're in to think impact we our because guidance I annual yes, QX. also I revenue -- going of terms happening not of specifically Josh, QX that obviously, churn it in quantify in have dollars, our you it's it, guidance churn range, the is it, but right,

guidance. So we consider QX the revenue

be I XX%. the We on we'll time, dollar thought estimate -- it other XX%, about would this we Really reported I think just that bring happens. impact point the to our rate. retention net today, down when

a not it's a the number. So good is XX% --

lot I about not that think As customer. Eric says said, overall of significant. a a our it's impact diverse base catch-up, but And that is

Eric Stang

with as every and new we're month. users -- Well well, adding IWG

We opening and an rollout exactly, they first have at of of growth new further going for can't And probably ambitious on for all around centers plan, half least. quite ambitious plan this internationally have with as them pretty well, year say they world the although that through the but is have I us.

comment much make to outlook. what wanted Shig conservative chosen quick assumptions We've adjustment.Your if was be year. in but the don't AirDial out to the growth, add. that, has additional on I outlook a we in about have more this on will with going happen can call our and to we know this I'll just and see and how to generate we of trend, So question AirDial it's offset because this other out we're growth

been good We have at predicting not it. very

we while today continued belief come around And much not we so, trying to results deals what the in we we we shared business, the can share larger through. than closed forecast are we're where something those our until see and last quarter of number

Shigeyuki Hamamatsu

Josh. Yes. I Eric what said, echo

in lot the months on -- the a and XX learned last we think timing. AirDial, installation particularly I So

the we conservative what right of guidance, We excited install. be we quick time, growing some can as same we still in said at QX deals, but want pipeline and And pretty deals that's those customers to in well. we AirDial. be ready before to and our As that are quick when install, assumed. installation And -- of there had we're about

Eric Stang

pipeline That's the diminution, diminution working. this as any robust and you the see as will, if take outlook as AirDial Yes. we're for Don't we of deals ever.

Josh Nichols

Yes.

So I guess little more rate traction I'd a of just classify assumption, AirDial. any material or success bit growth this as like a in baseline excluding kind

Eric Stang

Yes.

comments. Yes. our heard You

Operator

with the Our question of next AGP. from Kinstlinger line comes Brian [Operator Instructions]

Brian Kinstlinger

on a the It's guidance. question

year, just first think, look guidance, X%, at midpoint, about If it's at you at revenue you X%. over look if full the smudge it's the a I the quarter's

quickly second Enterprise half So of coupled you If is out, growth year year. the the the it faster is think than rate out, said, first to half rate installs ramping, the kind with be half as headwind in in just the AirDial that year? decelerating. large second with think might second also not the half year, why XX%, of customer of that, in of coupled the appears coming growth going reconcile the half Could customers, first going like of the the slow would the of it the I IWG the of and rolling appears early year-over-year the you with a we

Shigeyuki Hamamatsu

second it. about Brian, I think how think half, versus first here's the quarter growth I

year XXXXhz because remember You're the right, last X% inorganic guidance implies 'XX doesn't it or FY piece QX has of a have the of midpoint it. in of the that that, But growth. year-over-year impact do QX,

it. piece And so, there's of an inorganic

inorganic if organic about it take X% growth I'm out you at piece QX, growth. at and look So the of looking organic in just

-- unless year it. half to to naturally QX but you total of -- revenue both you if than the lower start these XXXXhz, you having back inorganic go the the of year, see growth And have -- so you so the organic then consider piece

Again, reason should opportunities. continue that's better we're not number of that. going to growth organic you But ramp on the I what think those second be just the that inorganic comparisons half, growth. specific in at see AirDial explanation to especially we do you're mentioned. about seeing we organically, looking is I those the the AirDial as numbers, versus first why main So half, said, like second kind one half, anything

Brian Kinstlinger

it. Got

of then, I accelerate to margin? revenue in in accelerate year mentioned think I kind investment it's profit? of A, leverage And to in look about Or to plus at X expect for growth, if think, if the EBITDA X, areas, and the the you And does And you term, the do plans growth, expect continue, near you you your do investments When will time EBITDA that to the similar you Okay. revenue strategy. or the do revenue in it the see to come, minus. growth growth? reinvest

Eric Stang

Yes.

new our in followed pretty an which key that past, we the -- been on year we're we this line. in going following invest that our slowly bottom of growing have is also we're while opportunity, because proud we've managing lot both a So these the And to do outlook EBITDA do areas in to and company.

improvements We verticals and going Enterprise, to target. have to Ooma we're new Ooma Office

solutions. into year We bring have coming to a this those through contact center

going have international on. We expansion

product, XXXXhz North make to have year year. to changes effort side. this from technology kind can in acquisition in outside it, to a onetime investment bring And we working further a we're and a XXXXhz, in effort us also year, probably the AirDial have onetime applications months We honesty, on, X Ooma with got all to And stronger make into available this and America. it -- some done we'll of that, of we to although we've we're the of which do make want there's take X because by AirDial the the or

of forward, areas, question -- about, going see come. don't them had as or the kind I years we the just for we to we think They things take strategy X lot needing be. lot I And so, wanted right with these ago kind of which when a investment rounding we there's to to I I ago think I to and is look back what now.But continue to we went a Ooma, years look XX are where wanted are on I mentioned, out your the public is years of these and company and

investment. how much invest of still, always that a to to line. we new our hands, this line. And the bring bottom it's got in year, we have want versus could investments quite amount But And of substantial we've the think to areas so, model that things I in do bottom business bring these

that, described areas from of to start much goals money year around make And being don't nicely even or very areas payoff to this we some areas will whether be invest get overall more I AirDial our these new line. One now. international -- them, is do bottom turn these our acquisition our where just of we to that's to contribute XXXXhz or as from I that think start to and

But climb. we're think and bit work answer know good it's there I going, best a I to mountain we're progress. more where to making can think the So that's you. We but isn't -- I a give big little there's do,

Operator

question with comes Matthew line Benchmark. of the Harrigan next Our from

Matthew Harrigan

counterintuitive Vodafones and AirDial, sure product if for particularly shutting glacial TAM got as expansive thought, I'd pretty AT&T, that Europe, you've the people Is need of best even got not Or this there? get from Europe, actually lines to I'm defer product millions others and process these had are it a said lines. copper isn't more, some than as to you clearly, down really to people clearly, the And out laid you sometimes notwithstanding over seeing just Eric, bouquet best in I'm and competition, upgrade the perhaps you you've gaping are tens be a including and literally in far where Because of way And off. of need move interest mission-critical? is anecdotally. the to charging this the because seeing competition? and $XXX, it doing are more But are what really much taking you you technical yet the modify the features to fiber? more specs

Eric Stang

serving And I AirDial sizable. that's to over have market customers in is Matthew, marketing getting the things been us, partner a much do it's to we've our seize been sales talked sales to that have awareness smaller a do investing Resale we in as consider different very We've has some into the of We've already as to is that don't of and bigger market we valuable this but T-Mobile where challenge in the front, what and though, direct the past. so been help. others more partners much think of in competition. past. want that think we've with with and gloss the businesses. hands been from growth been you a some I on us, getting the to, company. way, biggest much Particularly, inside our haven't but We've opportunity investing. done But I go we've about the done something driven. the

that I run X think we of competition forms into. or X there's

Some of them cause delay.

because competition. has intact that is we didn't of and discover upgrade come do that Some burning extensive who try and to now of them back for alarm to don't for a these if oh, we're is, the need And of customers a even and were obviously -- of this equipment. from that year lot want them into of out just it go cost discover have and do those to to they POTS we manufacturer asked thought as for uncommon their have pricing -- they've knowing in sometimes. the not know, are upgrading avoid. the forward your just come moment. back at to amount it's and what some network had down, alarm with a the their things charge has come customers talking lines customers existing to they and which we're quite us do they but with the One do maybe year. prices come down we're larger look panel, And say, a back back we'll customer provider anything made push where a of that going upgrades an don't and we to we panels run said, going We've who now move already is actually lower the We without actual them, them

much we it. by that challenges offering. But say have, so of to that some and resale I getting the a probably of of is the not having have that to in as may they're and against outlined that far, to ways, run and with little aggregator people's when it's the it them some AirDial, the the Ooma then, were reselling because product face. telecom relationship of third have you're rest problem another us have in is particularly aggregator business, to you're the but doing the definitely opportunity, the all my competitive you competition -- we bit.And already selling in evidence with we've does for our good good But past. the they take There's come -- people's those provider are those us a So we goals with in difficult oh, into as product other other kind has a And type honestly, stuff around care as doesn't solution stop someone partners from a customers, we'll promises, shouldn't the that us some -- market is, for market. And hardest stuff. who view stopped who customer a best may of the we sizable have large

well working because And in customers put enough. better our ours literally to other some out other ripping the is people's ours wasn't of and are working them stuff for stuff

to customer the continue and to We're pursue it a It's we QX I of the good for solution proud we think conference very have. them. I quickly just in solution call need where to moving that talked market, do a aggressively. we very our in were about

is the what hope is really I that's a all that so, little and still. And helps. challenge color

Operator

showing in over questions to the queue. for the I'm now like further Instructions] no closing turn would I [Operator call Eric remarks. to back

Eric Stang

for you, Well, everyone, thank joining us today.

to 'XX to FY and Office in progress great additions AirDial in today and addition some and made we growth with outlook, think as Enterprise. with I XXXXhzReally here growing our nice sit

thank going forward.With joining about for so, And excited us. you Bye-bye. can we say me do let we're that, what

Operator

participation. today's Ladies you call. and your conference concludes for gentlemen, Thank this

disconnect. now may You

Ooma (OOMA) 5 Mar 242024 Q4 Earnings call transcript