Smart Connected Servicess2.q4cdn.com/233611324/files/doc_presentations/Ooma... · 2016-06-10 ·...
Transcript of Smart Connected Servicess2.q4cdn.com/233611324/files/doc_presentations/Ooma... · 2016-06-10 ·...
Smart Connected Services
Investor Presentation
M a y 3 1 , 2 0 1 6
2CONFIDENTIAL AND PROPRIETARY |
Safe Harbor StatementThis 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, 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: 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 Annual report on form 10-K for the year ended January 31, 2016 filed with the SEC on April 13, 2016. 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.
3CONFIDENTIAL AND PROPRIETARY |
Investment Highlights
Massive Connected Services Opportunity
Unique Hybrid SaaS Platform Solution
Disruptive Cloud Communications and Other Connected Services
Predictable SaaS Subscription
Business/Financial Model
Efficient Integrated Go to Market Strategy
$54M
$72M
$89M
$19.5M $24.5M
FY14 FY15 FY16 Q1 '16 Q1 '17
Revenue
Annual
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 user2: Core users include home user accounts, office user extensions, and standalone Business Promoter accounts
678K
835K
Core Users
1Q’16 1Q’17
Quarterly
4CONFIDENTIAL AND PROPRIETARY |
Mega Trends Drive Our Opportunity
“Traditional methods for voice are ripe for replacement.” - Macquarie
Cloud Communications
“SMBs are expanding the SaaS market opportunity for vendors.” - JPMorgan
SMB SaaS
“The Internet of Things represents huge potential … need for more … systems to deploy, manage
and make use of … devices.” - IDC
IoT
5CONFIDENTIAL AND PROPRIETARY |
Massive Market Opportunity
2.1B Users Worldwide
Home
Business31.5M Businessesin North America
(Up to 20 Employees)
82.8M Home Lines in North
America
Mobile
$15
$14
$6
$35B1
Communications
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 2014-2018 Forecast; Infonetics Research, VoLTE and OTT Mobile VoIP Services and Subscribers 6/23/14
Productivity
Automation
Infrastructure
AdditionalConnected
ServicesOpportunity
1: At Ooma’s Pricing
6CONFIDENTIAL AND PROPRIETARY |
Unique Hybrid SaaS Connected Services Platform
Portal
Network
AppAppliance
Multi-Tenant SaaS Platform
Linux Based Appliance, Router, USB,DECT Radio
Mobile Alerts and Control
Connected to Many Endpoint Devices
User Configurable Services
Integrated, Managed Platform Enabling Both
Communications and Other Connected Services
7CONFIDENTIAL AND PROPRIETARY |
Disruptive CloudCommunications Opportunity
Source: FCC Wireline Retail Local Telephone Service Connections 12/31/2013, CRTC Communications Monitoring Report 2014, IDC; U.S. Consumer Landline
Voice Services 2014-2018 Forecast
64M Business Lines in
North America
83%Traditional
17%Internet/
Cloud
Business
29%CAGR1
50%Traditional
50%Internet/
Cloud
83M Home Lines in
North America
Home
11%CAGR1
We Target Communications to Drive
Adoption of the Ooma Platform
1: 2010-2013
8CONFIDENTIAL AND PROPRIETARY |
Ooma Services for Business and Home
*Coming in 2016
Home services ranking by the readers of a leading consumer research publication.
Ranked #1 for 3 years in a row
• Virtual Receptionist
• Music-on-Hold
• Voicemail
• eFax
• Extension Dialing
• Conferencing
• Call Forwarding
• Ring Groups
Business Services
And More!
Analog Phones IP Phones* Mobile Phones
OomaOffice
Ranked #1 for 5 years in a row
OomaTelo
HomeServices
• Unlimited US Calling
• Voicemail
• Multi-ring
• Ring Groups
• Blacklisting
• 911 Alerts
• Instant 2nd Line
• Google Voice Extensions
And More!
Wireless/ Bluetooth
DECT Headset
Consumer Research Leading Publication
9CONFIDENTIAL AND PROPRIETARY |
Leading Mobile Solutions
Ooma(Home)
Ooma(Business)
• Full Featured, Integrated User
Experience
• Pure Voice HD Call Quality
Mobile for Office/HomeTalkatone
• Powerful Advertising Based
Business Model
• Extends Ooma’s Customer Reach
Mobile for Everyone• Free Calling and
Texting
• >1.6M Users and Growing Quickly
10CONFIDENTIAL AND PROPRIETARY |
PureVoiceTM Voice Quality
Ooma
PureVoiceTM
• Full Router/QoS
• Advanced Codec
• Adaptive Redundancy
• HD Voice
• Encryption
“Clear and Intelligible Despite Internet
Congestion”
Adaptive Redundancy
Up to 4x Deep
• Smaller
Packet Size
• 10x More
Complex
Codec
40%
10%
3-5%
% Packet Loss
“Unintelligible”
“Artifacts inVoice”
Competitors
✗
✓
Overcoming Internet Congestion
11CONFIDENTIAL AND PROPRIETARY |
Compelling Customer Value
1: For 5 extensions, minimum 3 lines, 1 phone number
2: After one-time purchase and monthly taxes/fees
Starts as Low as $19.98/mo2
Sample Savings vs. $200 Typical Monthly Bill1
Business
$4,323
$2,882
$1,191
3 Years
2 Years
1 Year
$1,146
$714
$282
3 Years
2 Years
1 Year
Free for Basic Service2
Sample Savings vs. $40 Typical Monthly Bill
Home
>$1 Billion Saved for Ooma Customers!
12CONFIDENTIAL AND PROPRIETARY |
Why We Win
Powerful Hybrid SaaS
Platform
IntegratedMobile Solutions
Unique New Services
Breakthrough Voice Quality
Compelling Customer Value
OomaTraditional Providers
CloudProviders
13CONFIDENTIAL AND PROPRIETARY |
Communications
Business Marketing & Promotion
CustomerRelationship
Management
ContactCenter
…and more
Connected Services - Productivity
• 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
HomeAutomation
NetworkingInfrastructure
Business Promoter: Lead Generation Services for Small Businesses
14CONFIDENTIAL AND PROPRIETARY |
Communications
NetworkingInfrastructure
Connected Services - Automation
BusinessProductivity
Security & Monitoring
HomeControl
Connected Home / IoT
…and more Connected Home/IoT
Partnerships
Nest
Today
Home Monitoring
Future
Door
Sensor
Water
Sensor
Motion
Sensor
Window
Sensor
Next
…(More)
Amazon Echo Philips Hue (More)
…
15CONFIDENTIAL AND PROPRIETARY |
Driving Adoption and Monetization of the Platform
More IoT Partnerships in Development
Strengthen Ooma Brand
Awareness
Differentiate with Unique
Features
Increase Ooma Retail
Presence and Customer
Adoption
Monetize via Increased
Premier Take Rate
Security and Peace of Mind
Never Before Possible
+
16CONFIDENTIAL AND PROPRIETARY |
Integrated Growth Strategy
TV / Traditional Media
• Broad Reach
• Low Cost
• Builds Brand Image
Efficient Marketing
Word of Mouth
68% Net PromoterScore1
Online
Targeted Campaigns
• Directly
• Through Retailers
1: PC Magazine, 2016, for Ooma’s Small Business Solution
Cost-Effective Sales
Leading Retailers
Direct Sales
Resellers
Digital Agencies
OEM
17CONFIDENTIAL AND PROPRIETARY |
Investment Highlights
Massive Connected Services Opportunity
Unique Hybrid SaaS Platform Solution
Disruptive Cloud Communications and Other Connected Services
Predictable SaaS Subscription Business/Financial Model
Efficient Integrated Go to Market Strategy
Financial Overview
19CONFIDENTIAL AND PROPRIETARY |
$16.3
$19.9$24.5
FY 2014 FY 2015 FY 2016 Q1 '15 Q1 '16 Q1 '17
Strong Revenue Growth
$54
$72
$89
Note: $ Millions, Fiscal Year Ends January 31
Annual Revenue Quarterly Revenue
20CONFIDENTIAL AND PROPRIETARY |
Expanding Subscription & Services Revenue
Subscription/Services
Product/Other
FY14 FY15 FY16 Q1'16 Q1'17
66%
25%
82%
34%
75%
18%
22%
78%
12%
88%
Annual Quarterly
21CONFIDENTIAL AND PROPRIETARY |
Increasing Gross Margin
41%
49%
54%51%
57%55%
66% 66%64%
67%
FY14 FY15 FY16 Q1 '16 Q1 '17
Gross Margin% Revenue
• Scale Efficiencies
• Upselling Premium
Services
• Introduction of New
Services
• Mix of SMB increases
Growth Drivers
Subscription/Services
Total
Long-Term Target
65%
70%
75%
80%
Low High
+13 pts
22CONFIDENTIAL AND PROPRIETARY |
Strong Customer Metrics
Q1 '16 Q1 '17
678,000
835,000
Core Users
Note: Industry leading low churn rate of 6% annually. Core users include home user accounts, office user extensions, and standalone Business Promoter accounts
43%
57%
46%
54%
46%
54%
Premium Users
Basic Users
$7.47
$8.12
Q1'16 Q1'17
Average Monthly Subscription
Revenue Per Core User (ARPU)
23CONFIDENTIAL AND PROPRIETARY |
Long-Term Target Model (Non-GAAP)
% REVENUE FY15 FY16 1Q’16 1Q’17TARGETRANGE
Subscription/Services
Gross Margin66% 66% 64% 67% 75% - 80%
Total
Gross Margin49% 54% 51% 57% 65% - 70%
S&M 31% 31% 29% 32% 20% - 25%
R&D 17% 19% 20% 20% 12% - 15%
G&A 8% 12% 13% 12% 6% - 8%
Adjusted EBITDA (5%) (7%) (9%) (4%) 20% - 25%
Note: Non-GAAP Excludes Amortization of Intangibles and FASB Topic 718 Charges Related to Stock Options and Preferred Stock Warrants
Thank you
25CONFIDENTIAL AND PROPRIETARY |
GAAP to Non GAAP Reconciliation
$ Thousands FY2014 FY2015 FY 2016 Q1-16 Q1-17
GAAP Gross Profit 22,198 $35,477 $46,910 $10,021 $13,649
Add : Stock-based compensation
expense 7 36 $437 58 235
Amortization of Intangibles - 122 $163 41 40
Non-GAAP Gross Profit $22,205 $35,635 $47,510 $10,120 $13,924
GAAP Sales and Marketing $13,192 $22,276 $28,534 $5,895 $8,095
Less : Stock-based compensation
expense (6) (41) (611) (56) (326)
Non-GAAP Sales and Marketing $13,186 $22,235 27,923 5,839 7,769
GAAP Research and Development 7,888 12,290 18,502 4,097 5,741
Less : Stock-based compensation
expense (26) (169) (1,683) (217) (944)
Amortization of Intangibles (5) (5) (6) (2) (1)
Non-GAAP Research and Development $7,857 $12,116 16,813 3,878 4,796
GAAP General and Administrative $2,573 $6,650 12,561 2,961 3,855
Less : Stock-based compensation
expense (33) (180) (1,922) (220) (969)
Amortization of Intangibles (146) (179) (224) (56) (56)
Change in fair value of acquisition-
related contingent consideration - (656) 281 (81) (294)
Non-GAAP General and Administrative $2,394 $5,635 10,696 2,602 2,536
GAAP Operating (loss) (1,455) (5,739) (12,687) (2,932) (4,042)
Add: Stock-based com pensation
expense 72 426 4,653 551 2,474
Amortization of Intangibles 151 306 393 99 97
Change in fair value of acquisition-
related contingent consideration - 656 (281) 81 -
Non-GAAP Operating Loss ($1,232) ($4,351) (7,922) (2,201) (1,471)