Smart Connected Services
Investor Presentation
I n f o r m a t i o n a s o f M a y 2 3 , 2 0 1 7
Smart Connected Services Investor Presentation I n f o r m a t i o - - PowerPoint PPT Presentation
Smart Connected Services Investor Presentation I n f o r m a t i o n a s o f M a y 2 3 , 2 0 1 7 Safe Harbor Statement This presentation contains forward-looking statements. In particular, statements regarding future economic performance,
Investor Presentation
I n f o r m a t i o n a s o f M a y 2 3 , 2 0 1 7
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This presentation contains forward-looking statements. In particular, statements regarding future economic performance, finances, and expectations and objectives of management constitute forward-looking
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
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, 2017. 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.
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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
$72 $89 $105 $25 $28 FY15 FY16 FY17 Q1 '17 Q1 '18
Revenue
(in millions)
Annual
1: Core users include home user accounts and office user extensions.
776 879
Core Users
(in thousands)
1Q’17 1Q’18
Quarterly
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“Traditional methods for voice are ripe for replacement.” - Macquarie
“SMBs are expanding the SaaS market
“The Internet of Things represents huge potential … need for more … systems to deploy, manage and make use of … devices.” - IDC
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2.1B Users Worldwide
Home Business
32.8M Businesses in North America (Up to 20 Employees) 77.9M Home Lines in North America
Mobile
$19 $13 $6
Source: U.S. Census, 2014 Non-employer Statistics; U.S. Census, 2014 County Business Patterns; 2016 County Business Patterns Industry Canada, Key Small Business Statistics; Statistics Canada – Self Employment Historical Summary 2016; Infonetics Research, VoLTE and OTT Mobile VoIP Services and Subscribers 6/23/14
Productivity Automation Infrastructure
Additional Connected Services Opportunity
1: At Ooma’s Pricing
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Portal Network App Appliance 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
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Source: FCC Voice Telephone Services: Status as of December 31, 2015, CRTC Communications Monitoring Report 2016, IDC; U.S. Consumer Landline Voice Services 2014-2018 Forecast
61M Business Lines in North America
67% Traditional
33%
Internet/ Cloud
33%
CAGR1
43% Traditional
57%
Internet/ Cloud
78M Home Lines in North America
4%
CAGR1
We Target Communications to Drive Adoption of the Ooma Platform
1: 2012 - 2015
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Home services ranking by the readers of a leading consumer research publication.
Ranked #1 for 4 years in a row
Business Services And More!
Analog Phones IP Phones Mobile Phones
Ooma Office
Ranked #1 for 5 years in a row
Ooma Telo
Home Services
Calling
Extensions
And More!
Wireless/ Bluetooth DECT Headset
Consumer Research Leading Publication
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Ooma
(Home)
Ooma
(Business)
Experience
Talkatone
Business Model
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“Clear and Intelligible Despite Internet Congestion”
Adaptive Redundancy Up to 4x Deep
Packet Size
Complex Codec
40% 10% 3-5%
% Packet Loss
“Unintelligible ” “Artifacts in Voice”
Competitors
✗ ✓
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1: For 3 user extensions or 3 lines 2: After one-time purchase and monthly taxes/fees
Starts as Low as $19.95/mo2
Sample Savings vs. $200 Typical Monthly Bill1
$4,438 $2,892 $1,346
3 Years 2 Years 1 Year
$1,205 $771 $336
3 Years 2 Years 1 Year
Free for Basic Service2
Sample Savings vs. $40 Typical Monthly Bill
>$1 Billion Saved for Ooma Customers!
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Powerful Hybrid SaaS Platform Integrated Mobile Solutions Unique New Services Breakthrough Voice Quality Compelling Customer Value
Ooma Traditional Providers Cloud Providers
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Communications
Business Marketing & Promotion
Customer Relationship Management Contact Center …and more
internet threats
100,000 times a day in real time from the cloud
Home Automation Networking Infrastructure
Ooma Internet Security Powered by ZScaler
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Communications Networking Infrastructure
Business Productivity
Home Security & Monitoring Home Control Connected Home / IoT …and more
Connected Home/IoT Partnerships
Nest
Today
Home Monitoring
Future
Door Sensor Water Sensor Motion Sensor Window Sensor
New
(More)
Amazon Echo Philips Hue Internet Security
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More IoT Partnerships in Development
ü Strengthen Ooma Brand Awareness ü Differentiate with Unique Features ü Increase Ooma Retail Presence and Customer Adoption ü Monetize via Increased Premier Take Rate Security and Peace of Mind Never Before Possible
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TV / Traditional Media
Image
Word of Mouth
Net Promoter Score1
Online
Targeted Campaigns
1: PC Magazine, 2016, for Ooma’s Small Business Solution
Leading Retailers Direct Sales Resellers
Digital Agencies OEM
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$72.2 $88.8 $104.5 $19.9 $24.5 $27.6 FY 2015 FY 2016 FY 2017 Q1 '16 Q1 '17 Q1 '18
Note: $ Millions, Fiscal Year Ends January 31
($ in millions)
Ooma Office revenue growing ~63% on a year-over-year basis.
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Subscription/Services Product/Other 25% 18% 13% 12% 13% 75% 82% 87% 88% 87% FY15 FY16 FY17 Q1 '17 Q1 '18
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FY16 FY17 746,000 858,000
42% 58% 44% 56% 46% 54% Premium Users Basic Users
1: Average revenue per core user around $8.38 per month. 2: Core users include home user accounts and office user extensions
Q1 '17 Q1 '18 776,000 879,000 42% 44% 58% 56%
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49% 54% 58% 57% 59% 66% 66% 69% 67% 69%
FY15 FY16 FY17 Q1 '17 Q1 '18
% Revenue
Services
Services
Subscription/Services Total
Long-Term Target
65% 70% 75% 80%
Low High
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Adjusted EBITDA (in $'000)
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% REVENUE FY16 FY17 1Q’17 4Q’17 1Q’18 TARGET RANGE
Subscription/Services Gross Margin
66% 69% 67% 70% 69% 75% - 80%
Total Gross Margin
54% 58% 57% 58% 59% 65% - 70%
S&M
31% 31% 32% 30% 31% 20% - 25%
R&D
19% 20% 20% 20% 20% 12% - 15%
G&A
12% 10% 12% 9% 10% 6% - 8% Adjusted EBITDA (7%) (1%) (5%) 1% 0% 20% - 25%
Note: Non-GAAP Excludes Amortization of Intangibles and FASB Topic 718 Charges Related to Stock Options and Preferred Stock Warrants
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