Smart Connected Services

Transcription

1 Smart Connected Services Investor Presentation A s o f S e p t e m b e r 2,

2 Safe Harbor Statement This presentation contains forward-looking statements. In particular, statements regarding future economic performance, finances, and expectations and objectives of management constitute forward-looking statements. Forward-looking statements can be identified by the fact that they do not relate strictly to historical facts and generally contain words such as "believes," "expects," "may," "will," "should," "seeks," "approximately," "intends," "plans," "estimates," "anticipates," and other expressions that are predictions of or indicate future events and trends and that do not relate to historical matters. Although the forward-looking statements contained in this presentation are based upon information available at the time the statements are made and reflect management's good faith beliefs, forwardlooking statements inherently involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements to differ materially from anticipated future results. Important factors that could cause actual results to differ materially from expectations include, among others: inability to attract new customers on a cost-effective basis; our inability to retain customers; intense competition; our reliance on retailers and reseller partnerships to sell our products; our reliance on vendors to manufacture the on-premise appliances and end-point devices we sell; our reliance on third parties for our network connectivity and co-location facilities; our reliance on third parties for some of our software development, quality assurance and operations; our reliance on third parties to provide the majority of our customer service and support representatives; our limited operating history; and interruptions to our service. You should not place undue reliance on these forward-looking statements, which speak only as of the date hereof. We do not undertake to update or revise any forward-looking statements after they are made, whether as a result of new information, future events, or otherwise, except as required by applicable law. The forward-looking statements contained in this presentation are also subject to other risks and uncertainties, including those more fully described in our filings with the Securities and Exchange Commission, including the risk factors contained in our form 10-Q filed with the SEC on September 11, The forward-looking statements in this presentation are based on information available to Ooma as of the date hereof, and Ooma disclaims any obligation to update any forward-looking statements, except as required by law. 2

3 Business Productivity Home Automation Network Communications Portal Appliance App Networking Infrastructure Providing Connected Services to Small Business, Home and Mobile Users On a Unique Hybrid SaaS Platform (Cloud and On-Premise) 3

4 Business Highlights Massive Connected Services Opportunity Unique Hybrid SaaS Platform Solution Revenue $39M $54M $72M Disruptive Cloud Communications and Other Connected Services FY13 FY14 FY15 Ends January 31st Core Users Efficient Integrated Go to Market Strategy 556K 717K Predictable SaaS Subscription Business/Financial Model FY 2Q14 FY 2Q15 1: Annual Net Dollar Subscription Retention Rate is the product of our core user annual retention rate and year-over-year change in subscription revenue per core user 2: Core users include home user accounts, office user extensions, and standalone Business Promoter accounts 4

5 Mega Trends Drive Our Opportunity Cloud Communications Traditional methods for voice are ripe for replacement. - Macquarie SMB SaaS IoT SMBs are expanding the SaaS market opportunity for vendors. - JPMorgan The Internet of Things represents huge potential need for more systems to deploy, manage and make use of devices. - IDC 5

6 Massive Market Opportunity Communications Mobile 2.1B Users Worldwide $35B 1 $6 Additional Connected Services Opportunity Home 82.8M Home Lines in North America $14 Infrastructure Business 31.5M Businesses in North America (Up to 20 Employees) $15 Productivity Automation 1: At Ooma s Pricing Source: U.S. Census, 2012 Non-employer Statistics; 2011 County Business Patterns Industry Canada, Key Small Business Statistics; Statistics Canada Self Employment Historical Summary; IDC, U.S. Consumer Landline Voice Services Forecast; Infonetics Research, VoLTE and OTT Mobile VoIP Services and Subscribers 6/23/14 6

7 Unique Hybrid SaaS Connected Services Platform Multi-Tenant SaaS Platform Network Linux Based Appliance, Router, USB, DECT Radio Mobile Alerts and Control User Configurable Services Portal Appliance App Connected to Many Endpoint Devices Integrated, Managed Platform Enabling Both Communications and Other Connected Services 7

8 Disruptive Cloud Communications Opportunity Business 64M Business Lines in North America Home 83M Home Lines in North America 17% Internet/ Cloud 83% Traditional 29% CAGR 1 50% Traditional 50% Internet/ Cloud 11% CAGR 1 We Target Communications to Drive Adoption of the Ooma Platform 1: Source: FCC Wireline Retail Local Telephone Service Connections 12/31/2013, CRTC Communications Monitoring Report 2014, IDC; U.S. Consumer Landline Voice Services Forecast 8

9 Ooma Services for Business and Home Virtual Receptionist Music-on-Hold Voic efax Business Services Extension Dialing Conferencing Call Forwarding Ring Groups And More! Unlimited US Calling Voic Multi-ring Ring Groups Home Services Blacklisting 911 Alerts And More! Instant 2 nd Line Google Voice Extensions Ooma Office Ooma Telo Analog Phones IP Phones* Mobile Phones Ranked #1 for 2 years in a row Wireless/ Bluetooth Consumer Research Leading Publication DECT Headset Ranked #1 for 5 years in a row *Coming in 2015 Home services ranking by the readers of a leading consumer research publication. 9

10 Leading Mobile Solutions Mobile for Office/Home Mobile for Everyone Ooma (Home) Ooma (Business) Talkatone Free Calling and Texting By Ooma >1.5M Users and Growing Quickly Full Featured, Integrated User Experience Pure Voice HD Call Quality Powerful Advertising Based Business Model Extends Ooma s Customer Reach 10

11 PureVoice TM Voice Quality Overcoming Internet Congestion Ooma PureVoice TM % Packet Loss 40% Clear and Intelligible Despite Internet Congestion Full Router/QoS Advanced Codec Adaptive Redundancy HD Voice Encryption 10% 3-5% Unintelligible Artifacts in Voice Adaptive Redundancy Up to 4x Deep Competitors Smaller Packet Size 10x More Complex Codec 11

12 Compelling Customer Value Business Home Starts as Low as $19.98/mo 2 Sample Savings vs. $200 Typical Monthly Bill 1 Free for Basic Service 2 Sample Savings vs. $40 Typical Monthly Bill 1 Year $1,066 1 Year $298 2 Years $2,483 2 Years $725 3 Years $3,900 3 Years $1,152 1: For 5 extensions, minimum 3 lines, 1 phone number 2: After one-time purchase and monthly taxes/fees >$750m Saved for Ooma Customers! 12

13 Why We Win Ooma Traditional Providers Cloud Providers Unique New Services Powerful Hybrid SaaS Platform Integrated Mobile Solutions Breakthrough Voice Quality Compelling Customer Value 13

14 Connected Services - Productivity Customer Relationship Management Contact Center and more Business Marketing & Promotion Communications Home Automation Business Promoter: Lead Generation Services for Small Businesses Driving New Customer Calls to Small Businesses Core Technology Increases Web Presence So Local Businesses Get Noticed Pay per Lead Model Integrated in Ooma Office and also Serving Standalone Businesses Networking Infrastructure 14

15 Connected Services - Automation Security & Monitoring Today Partnerships Nest (More) Business Productivity Communications Home Control Connected Home / IoT Next Motion Sensor Home Monitoring Window Sensor Door Sensor Water Sensor (More) and more Future Connected Home/IoT Networking Infrastructure 15

16 Driving Adoption and Monetization of the Platform Strengthen Ooma Brand Awareness + Differentiate with Unique Features Increase Ooma Retail Presence and Customer Adoption Security and Peace of Mind Never Before Possible Monetize via Increased Premier Take Rate More IoT Partnerships in Development 16

17 Integrated Growth Strategy Efficient Marketing TV / Traditional Media Cost-Effective Sales Leading Retailers Broad Reach Low Cost Builds Brand Image Online Targeted Campaigns Directly Through Retailers Direct Sales Word of Mouth Resellers 85% Net Promoter Score 1 Digital Agencies 1: PC Magazine, 2014, for Ooma s Small Business Solution 17

18 Business Highlights Massive Connected Services Opportunity Unique Hybrid SaaS Platform Solution Disruptive Cloud Communications and Other Connected Services Efficient Integrated Go to Market Strategy Predictable SaaS Subscription Business/Financial Model 18

19 Financial Overview

20 Strong Revenue Growth Revenue $ Millions $72.2 $53.7 $39.2 $9.1 $12.7 $16.7 $21.1 Fiscal 2013 Fiscal 2014 Fiscal 2015 Q2'13 Q2'14 Q2'15 Q2'16 Note: Fiscal Year Ends January 31 20

21 Expanding Subscription & Services Revenue Total Revenue $ Millions Subscription/Services Product/Other $54 $72 37% Year over Year Growth in Subscription and Services Revenue $39 74% 61% 66% $17 $21 39% 34% 26% 76% 83% 24% 17% FY13 FY14 FY15 Q2'15 Q2'16 21

22 Increasing Gross Margin Gross Margin % Revenue Subscription/Services Total 42% +24 pts 41% 55% 49% 66% 66% 51% 54% 64% Long-Term Target 80% 75% 70% 65% Growth Drivers Scale Efficiencies Upselling Premium Services Introduction of New Services 35% FY13 FY14 FY15 Q2'15 Q2'16 Low High 22

23 Strong Growth Core Users Premium Users Subscription/ Services Revenue $ Per Core User/Month Basic Users 717,000 Growth Drivers 556,000 44% $7.56 $7.78 Continued Growth in Core Users 40% Growth of SMB Upselling Premium Services 60% 56% International Expansion Q2'15 Q2'16 Q2'15 Q2'16 Note: Core users include home user accounts, office user extensions, and standalone Business Promoter accounts 23

24 Long-Term Target Model (Non-GAAP) % REVENUE FY13 FY14 FY15 Subscription/Services Gross Margin TARGET RANGE 42% 55% 66% 75% - 80% Total Gross Margin 35% 41% 49% 65% - 70% S&M 19% 25% 31% 20% - 25% R&D 18% 15% 17% 12% - 15% G&A 6% 4% 8% 6% - 8% Adjusted EBITDA (6%) (1%) (5%) 20% - 25% Note: Non-GAAP Excludes Amortization of Intangibles and FASB Topic 718 Charges Related to Stock Options and Preferred Stock Warrants 24

25 Thank you

26 GAAP to Non-GAAP Reconciliation Annually Quarterly $ Thousands FY2013 FY2014 FY2015 Q2-15 Q2-16 GAAP Gross Profit Add: Adjustments Non-GAAP Gross Profit $ 13, $ 13,755 $ 22,198 7 $ 22,205 $ 35, $ 35,635 $ 8, $ 8,555 $ 11, $ 11,349 GAAP Sales and Marketing Less: Adjustments Non-GAAP Sales and Marketing $ 7,471 (1) $ 7,470 $ 13,192 (6) $ 13,186 $ 22,276 (41) $ 22,235 $ 5,830 (7) $ 5,823 $ 6,813 (73) $ 6,740 GAAP Research and Development Less: Adjustments Non-GAAP Research and Development $ 7,023 (50) $ 6,973 $ 7,888 (31) $ 7,857 $ 12,290 (174) $ 12,116 $ 2,930 (24) $ 2,906 $ 4,284 (240) $ 4,044 GAAP General and Administrative Less: Adjustments Non-GAAP General and Administrative $ 2,508 (255) $ 2,253 $ 2,573 (179) $ 2,394 $ 6,650 (1,015) $ 5,635 $ 1,288 (172) $ 1,116 $ 3,206 (460) $ 2,746 GAAP Operating (loss) Add: Adjustments Non-GAAP Operating Loss $ (3,258) 317 $ (2,941) $ (1,455) 223 $ (1,232) $ (5,739) 1,388 $ (4,351) $ (1,522) 232 $ (1,290) $ (3,060) 879 $ (2,181) 26