Ooma : 8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): March 5, 2020

Ooma, Inc.

	(Exact Name of Registrant as Specified in its Charter)
Delaware	001-37493		06-1713274
(State or other jurisdiction		(Commission	(I.R.S. Employer
of incorporation or organization)		File Number)	Identification No.)
	525 Almanor Avenue, Suite 200, Sunnyvale, California 94085
	(Address of principal executive offices)
	[phone]
	(Registrant's telephone number, including area code)
		Not applicable
	(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

• Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
• Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
• Pre-commencementcommunications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
• Pre-commencementcommunications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	OOMA	The New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

Item 2.02. Results of Operations and Financial Condition

On March 5, 2020, Ooma, Inc. (the "Company") issued a press release announcing its financial results for the fourth quarter and fiscal year ended January 31, 2020. The full text of the press release issued in connection with the announcement is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

The information set forth in this Item 2.02 (including Exhibit 99.1) shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.

Item 9.01. Financial Statements and Exhibits

1. Exhibits

The following exhibit relating to Item 2.02 shall be deemed to be furnished, and not filed:

Exhibit No.	Description
99.1	Press release dated March 5, 2020 titled "Ooma Reports Fourth Quarter and Fiscal Year 2020 Financial Results"

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	OOMA, INC.
Date: March 5, 2020	By: /s/ Ravi Narula
		Ravi Narula
		Chief Financial Officer and Treasurer

Exhibit 99.1

Ooma Reports Fourth Quarter and Fiscal Year 2020 Financial Results

Business Subscription and Services Revenue up 61% year-over-year

Named Winner of PCMag's Business Choice Award for VoIP

Sunnyvale, Calif., March 5, 2020 -- Ooma, Inc. (NYSE: OOMA), a smart communications platform for businesses and consumers, today released financial results for the fourth quarter and fiscal year ended January 31, 2020.

Fourth Quarter Fiscal 2020 Financial Highlights:

• Revenue: Total revenue was $40.6 million, up 17% year-over-year. Subscription and services revenue increased to $37.4 million and was 92% of total revenue, driven by 22% year-over-year growth in combined Ooma Business and Ooma Residential services.
• Net Income/Loss: GAAP net loss was $2.3 million, or $0.11 per basic and diluted share, compared to GAAP net loss of $3.5 million, or $0.17 per basic and diluted share, in the fourth quarter fiscal 2019. Non-GAAP net income was $1.0 million, or $0.04 per diluted share, compared to a non-GAAP net loss of $0.7 million, or $0.03 per basic and diluted share in the prior year period.
• Adjusted EBITDA: Adjusted EBITDA was $1.4 million, compared to negative $0.5 million in fourth quarter fiscal 2019.

Full Year Fiscal 2020 Financial Highlights:

• Revenue: Total revenue was $151.6 million, up 17% year-over-year. Subscription and services revenue increased to $139.5 million and was 92% of total revenue, driven by 21% year-over-year growth in combined Ooma Business and Ooma Residential services.
• Net Income/Loss: GAAP net loss was $18.8 million, or $0.89 per basic and diluted share, compared to GAAP net loss of $14.6 million, or $0.74 per basic and diluted share, in fiscal 2019. Non-GAAP net loss was $0.7 million, or $0.03 per diluted share, compared to a non-GAAP net loss of $3.0 million, or $0.15 per basic and diluted share in the prior fiscal year.
• Adjusted EBITDA: Adjusted EBITDA was $1.0 million, compared to negative $1.9 million in fiscal 2019.

For more information about non-GAAP net income (loss) and Adjusted EBITDA, see the section below titled "Non-GAAP Financial Measures" and the reconciliation provided in this release.

"The fourth quarter of our 2020 fiscal year was outstanding for Ooma, with significant growth in recurring revenues and continued execution of our strategy to expand Ooma Business," said Eric Stang, chief executive officer of Ooma. "Revenues grew 17% year-over-year, driven by 61% growth in Ooma Business subscription and services revenue. With our business solutions today serving customers from one user to more than 20,000 users, we are well positioned to grow Ooma Business with our award-winning offering for small businesses and custom solutions for larger enterprises."

Business Outlook:

For the first quarter of fiscal 2021, Ooma expects:

• Total revenue in the range of $40.0 million to $40.5 million.
• GAAP net loss in the range of $2.5 million to $3.0 million and GAAP net loss per share in the range of $0.12 to $0.14.
• Non-GAAPnet income in the range of $0.5 million to $1.0 million and non-GAAP net income per share in the range of $0.02 to $0.04.

For the full fiscal year 2021, Ooma expects:

• Total revenue in the range of $167.0 million to $170.0 million.
• GAAP net loss in the range of $10.5 million to $12.5 million, and GAAP net loss per share in the range of $0.48 to $0.56
• Non-GAAPnet income in the range of $2.0 million to $4.0 million, and non-GAAP earnings per share in the range of $0.09 to $0.17.

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The following is a reconciliation of GAAP net loss to non-GAAP net income and GAAP basic and diluted net loss per share to non-GAAP basic and diluted net income per share guidance for the first fiscal quarter ending April 30, 2020 and the fiscal year ending January 31, 2021 (in millions, except per share data):

		Projected range
		Three Months Ending	Fiscal Year Ending
		April 30, 2020	January 31, 2021
		(unaudited)
GAAP net loss		($2.5)-($3.0)			($10.5)-($12.5)
Stock-based compensation and related taxes		3.2			13.2
Amortization of intangible assets		0.3			1.3
Non-GAAP net income		$0.5-$1.0			$2.0-$4.0
GAAP net loss per share		($0.12)-($0.14)			($0.48)-($0.56)
Stock-based compensation and related taxes		0.15			0.59
Amortization of intangible assets		0.01			0.06
Non-GAAP net income per share		$0.02-$0.04			$0.09-$0.17
Weighted-average number of shares used in per share amounts:
Basic		21.9			22.5
Diluted		22.9			23.5

Conference Call Information:

Ooma will host a conference call and live webcast for analysts and investors at 5:00 p.m. Eastern time today, March 5, 2020. The news release with the financial results will be accessible from the company's website prior to the conference call. Parties in the United States and Canada can access the call by dialing [phone], using conference ID "Ooma Fourth Quarter". International parties can access the call by dialing [phone], using conference ID "Ooma Fourth Quarter". The webcast will be accessible on Ooma's investor relations website at http://investors.ooma.comfor a period of one year. A telephonic replay of the conference call will be available through 11:59 p.m. ET on Thursday, March 12, 2020. To access the replay, parties in the United States and Canada should call [phone] and use conference ID 8582563. International parties should call [phone] and enter conference ID 8582563.

Non-GAAP Financial Measures

In addition to disclosing financial measures prepared in accordance with U.S. generally accepted accounting principles (GAAP), this press release and the accompanying tables contain certain non-GAAP financial measures, including: non-GAAP net income (loss), non-GAAP net income (loss) per share, non-GAAP gross profit and gross margin, non-GAAP operating income (loss) and Adjusted EBITDA. Adjusted EBITDA represents the net income (loss) before interest and other income, income tax benefit, depreciation and amortization and other non-GAAP expenses.

These non-GAAP financial measures exclude non-cashstock-based compensation expense and related taxes, acquisition-related costs, amortization of intangible assets, restructuring charges and certain litigation costs outside the ordinary course of our business. For fiscal 2020, restructuring charges primarily included write-downs for Smart Cam inventory and certain assets including the related intangibles and severance expenses for the affected employees.

These non-GAAP financial measures are presented to provide investors with additional information regarding our financial results and core business operations. Ooma considers these non-GAAP financial measures to be useful measures of the operating performance of the company, because they contain adjustments for unusual events or factors that do not directly affect what management considers to be Ooma's core operating performance and are used by the company's management for that purpose. Management also believes that these non-GAAP financial measures allow for a better evaluation of the company's performance by facilitating a meaningful comparison of the company's core operating results in a given period to those in prior and future periods. In addition, investors often use similar measures to evaluate the operating performance of a company.

Non-GAAP financial measures are presented for supplemental informational purposes only to aid an understanding of the company's operating results. The non-GAAP financial measures should not be considered a substitute for financial information presented in accordance with GAAP and may be different from non-GAAP financial measures presented by other companies. A limitation of the non-GAAP financial measures presented is that the adjustments relate to items that the company generally expects to continue to recognize. The adjustment of these items should not be construed as an inference that the adjusted gains or expenses are unusual, infrequent or non-recurring. Therefore, both GAAP financial measures of Ooma's financial performance and the respective non-GAAP measures should be considered

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together. Please see the reconciliation of non-GAAP financial measures to the most directly comparable GAAP measure in the tables below.

Disclosure Information

Ooma uses the investor relations section on its website as a means of complying with its disclosure obligations under Regulation FD. Accordingly, investors should monitor Ooma's investor relations website in addition to following Ooma's press releases, Securities and Exchange Commission ("SEC") filings, and public conference calls and webcasts.

Legal Notice Regarding Forward-Looking Statements

This press release contains forward-looking statements under the Private Securities Litigation Reform Act of 1995. In particular, statements regarding future economic performance and financial positions, 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. This press release includes forward-looking statements regarding the company's business outlook, its opportunity to continue the growth of Ooma Business and its execution of other initiatives to drive long-term shareholder value. Although the forward- looking statements contained in this press release are based upon information available at the time the statements are made and reflect management's good faith beliefs, forward-looking 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: our 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 inability to achieve the intended results from our acquisition of Broadsmart; 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 press release are also subject to other risks and uncertainties, including those more fully described in our filings with the SEC, including the risk factors contained in our quarterly filing on Form 10-Q for the quarter ended October 31, 2019, filed with the SEC on December 6, 2019. The forward-looking statements in this press release 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.

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About Ooma

Ooma (NYSE: OOMA) creates powerful connected experiences for businesses and consumers, delivered from its smart cloud-based SaaS platform. For businesses of all sizes, Ooma provides advanced voice and collaboration features that are flexible and scalable. For consumers, Ooma's residential phone service provides PureVoice HD voice quality, advanced functionality and integration with their mobile devices. Ooma's innovative smart security solution delivers a range of wireless security sensors that make it easy for anyone to protect their home or business. Learn more at www.ooma.comor www.ooma.cain Canada.

CONTACT:

Investors

Matthew S. Robison

Director of IR and Corporate Development

Ooma, Inc.

[e-mail]

[phone]

Media

Mike Langberg

Director of Corporate Communications

Ooma, Inc.

[e-mail][phone]

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OOMA, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited, amounts in thousands)

			January 31,		January 31,
			2020			2019
Assets
Current assets:
Cash and cash equivalents		$	11,680		$	15,370
Short-term investments			14,384			27,253
Accounts receivable, net			4,591			3,723
Inventories			8,369			10,117
Other current assets			8,992			5,450
Total current assets			48,016			61,913
Property and equipment, net			5,270			4,563
Operating lease right-of-use assets			7,897			-
Intangible assets, net			6,818			2,635
Goodwill			4,264			3,898
Other assets			8,186			5,379
Total assets		$	80,451		$	78,388
Liabilities and stockholders' equity
Current liabilities:
Accounts payable		$	8,499		$	10,231
Accrued expenses and other current liabilities			22,576			19,048
Deferred revenue			15,797			15,443
Total current liabilities			46,872			44,722
Long-term operating lease liabilities			4,990			-
Other liabilities			174			619
Total liabilities			52,036			45,341
Stockholders' equity:
Common stock			4			4
Additional paid-in capital			152,993			138,848
Accumulated other comprehensive gain (loss)			14			(10)
Accumulated deficit			(124,596	)		(105,795	)
Total stockholders' equity			28,415			33,047
Total liabilities and stockholders' equity		$	80,451		$	78,388
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OOMA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited, amounts in thousands, except share and per share data)

Three Months Ended

Fiscal Year Ended

Revenue:

Subscription and services

Product and other

Total revenue

Cost of revenue:

Subscription and services

Product and other

Total cost of revenue

Gross profit

Operating expenses:

Sales and marketing

Research and development

General and administrative

Total operating expenses

Loss from operations

Interest and other income, net

Loss before income taxes

Income tax benefit

Net loss

Net loss per share of common stock:

Basic and diluted

Weighted-average shares of common stock outstanding: Basic and diluted

	January 31,		January 31,		January 31,		January 31,
	2020		2019		2020		2019
$	37,429	$	30,897	$	139,499	$	116,429
	3,219		3,823		12,094		12,802
	40,648		34,720		151,593		129,231
	11,631		9,720		43,748		36,108
	4,429		5,293		18,464		16,632
	16,060		15,013		62,212		52,740
	24,588		19,707		89,381		76,491
	12,999		10,612		50,497		40,761
	8,652		8,345		37,770		33,903
	5,409		4,577		20,825		17,613
	27,060		23,534		109,092		92,277
	(2,472)		(3,827)		(19,711)		(15,786)
	114		231		780		830
	(2,358)		(3,596)		(18,931)		(14,956)
	64		107		130		384
$	(2,294)	$	(3,489)	$	(18,801)	$	(14,572)
$	(0.11)	$	(0.17)	$	(0.89)	$	(0.74)
	21,581,568		20,227,252		21,051,039		19,799,781

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OOMA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, amounts in thousands)

Three Months Ended

Fiscal Year Ended

Cash flows from operating activities:

Net loss

Adjustments to reconcile net loss to net cash used in operating activities: Stock-based compensation expense

Depreciation and amortization of capital expenditures

Amortization of intangible assets and non-cashacquisition-related costs Non-cash restructuring charges

Non-cash operating lease expense

Deferred income taxes

Other

Changes in operating assets and liabilities:

Accounts receivable, net

Inventories

Other assets

Accounts payable and other liabilities

Restructuring liability

Deferred revenue

Net cash used in operating activities

Cash flows from investing activities:

Purchases of short-term investments

Proceeds from maturities and sales of short-term investments Capital expenditures

Business acquisitions, net of cash assumed

Payment for purchase of convertible note

Net cash provided by investing activities

Cash flows from financing activities:

Proceeds from issuance of common stock

Shares repurchased for tax withholdings on vesting of restricted stock units Payment of acquisition-related holdback

Net cash provided by (used in) financing activities

Net (decrease) increase in cash and cash equivalents

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

	January 31,		January 31,		January 31,		January 31,
	2020		2019		2020		2019
$	(2,294)	$	(3,489)	$	(18,801)	$	(14,572)
	3,114		2,636		12,761		10,370
	572		552		2,548		2,269
	127		(14)		1,027		398
	-		-		1,603		-
	632		-		1,997		-
	(78)		(105)		(144)		(382)
	(68)		(124)		(147)		(332)
	424		(843)		135		(1,050)
	1,051		(2,520)		407		(4,213)
	(1,320)		(2,513)		(4,965)		(5,335)
	(1,213)		3,985		(4,089)		8,149
	(1,504)		-		-		-
	(225)		314		104		772
	(782)		(2,121)		(7,564)		(3,926)
	-		(11,776)		(31,234)		(38,485)
	1,452		18,199		44,446		58,961
	(889)		(483)		(3,273)		(1,921)
	-		-		(7,073)		(2,402)
	-		(1,300)		-		(1,300)
	563		4,640		2,866		14,853
	211		123		2,951		2,886
	-		(628)		(1,523)		(2,926)
	-		-		(420)		-
	211		(505)		1,008		(40)
	(8)		2,014		(3,690)		10,887
	11,688		13,356		15,370		4,483
$	11,680	$	15,370	$	11,680	$	15,370

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OOMA, INC.

Reconciliation of Non-GAAP Financial Measures

(Unaudited, amounts in thousands, except percentages, share and per share data)

Three Months Ended

Fiscal Year Ended

Revenue

GAAP gross profit

Stock-based compensation and related taxes

Amortization of intangible assets

Restructuring charges

Non-GAAP gross profit

Gross margin on a GAAP basis

Gross margin on a Non-GAAP basis

GAAP operating loss

Stock-based compensation and related taxes

Amortization of intangible assets and acquisition-related costs Restructuring charges

Litigation costs

Non-GAAP operating income (loss)

GAAP net loss

Stock-based compensation and related taxes

Amortization of intangible assets and acquisition-related costs Restructuring charges

Litigation costs

Non-GAAP net income (loss)

GAAP basic and diluted net loss per share Stock-basedcompensation and related taxes Amortization of intangible assets and acquisition-relatedcosts Restructuring charges

Litigation costs

Non-GAAP net income (loss) per basic share Non-GAAP net income (loss) per diluted share

GAAP weighted-average basic and diluted shares Non-GAAPweighted-average diluted shares

GAAP net loss

Reconciling items:

Interest and other income, net

Income tax benefit

Depreciation and amortization of capital expenditures Stock-based compensation and related taxes Amortization of intangible assets and acquisition-related costs Restructuring charges

Litigation costs

Adjusted EBITDA

	January 31,		January 31,		January 31,		January 31,
	2020		2019		2020		2019
$	40,648	$	34,720	$	151,593	$	129,231
$	24,588	$	19,707	$	89,381	$	76,491
	305		249		1,311		957
	73		149		480		549
	-		-		2,289		-
$	24,966	$	20,105	$	93,461	$	77,997
	60%		57%		59%		59%
	61%		58%		62%		60%
$	(2,472)	$	(3,827)	$	(19,711)	$	(15,786)
	3,145		2,692		13,149		10,695
	127		(14)		1,289		821
	-		-		3,085		-
	-		142		606		142
$	800	$	(1,007)	$	(1,582)	$	(4,128)
$	(2,294)	$	(3,489)	$	(18,801)	$	(14,572)
	3,145		2,692		13,149		10,695
	127		(14)		1,289		752
	-		-		3,085		-
	-		142		606		142
$	978	$	(669)	$	(672)	$	(2,983)
$	(0.11)	$	(0.17)	$	(0.89)	$	(0.74)
	0.15		0.13		0.62		0.54
	0.01		-		0.06		0.04
	-		-		0.15		-
	-		0.01		0.03		0.01
$	0.05	$	(0.03)	$	(0.03)	$	(0.15)
$	0.04	$	(0.03)	$	(0.03)	$	(0.15)
	21,581,568		20,227,252		21,051,039		19,799,781
	22,545,678		20,227,252		21,051,039		19,799,781
$	(2,294)	$	(3,489)	$	(18,801)	$	(14,572)
	(114)		(231)		(780)		(830)
	(64)		(107)		(130)		(315)
	572		552		2,548		2,269
	3,145		2,692		13,149		10,695
	127		(14)		1,289		752
	-		-		3,085		-
	-		142		606		142
$	1,372	$	(455)	$	966	$	(1,859)
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