Smart Connected Services Investor Presentation I n f o r m a t i o - - PowerPoint PPT Presentation

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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,


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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

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2 CONFIDENTIAL AND PROPRIETARY |

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, 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

  • f 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, 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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3 CONFIDENTIAL 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

$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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4 CONFIDENTIAL AND PROPRIETARY |

Mega Trends Drive Our Opportunity

“Traditional methods for voice are ripe for replacement.” - Macquarie

Cloud Communications

“SMBs are expanding the SaaS market

  • pportunity 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

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5 CONFIDENTIAL AND PROPRIETARY |

Massive Market Opportunity

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

$38B1 Communications

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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6 CONFIDENTIAL AND PROPRIETARY |

Unique Hybrid SaaS Connected Services Platform

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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7 CONFIDENTIAL AND PROPRIETARY |

Disruptive Cloud Communications Opportunity

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

Business

33%

CAGR1

43% Traditional

57%

Internet/ Cloud

78M Home Lines in North America

Home

4%

CAGR1

We Target Communications to Drive Adoption of the Ooma Platform

1: 2012 - 2015

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8 CONFIDENTIAL AND PROPRIETARY |

Ooma Services for Business and Home

Home services ranking by the readers of a leading consumer research publication.

Ranked #1 for 4 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

Ooma Office

Ranked #1 for 5 years in a row

Ooma Telo

Home Services

  • 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

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9 CONFIDENTIAL AND PROPRIETARY |

Leading Mobile Solutions

Ooma

(Home)

Ooma

(Business)

  • Full Featured, Integrated User

Experience

  • Pure Voice HD Call Quality

Mobile for Office/Home

Talkatone

  • Powerful Advertising Based

Business Model

  • Extends Ooma’s Customer Reach

Mobile for Everyone

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10 CONFIDENTIAL 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 in Voice”

Competitors

✗ ✓

Overcoming Internet Congestion

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Compelling Customer Value

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

Business

$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

Home

>$1 Billion Saved for Ooma Customers!

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Why We Win

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

Connected Services - Infrastructure

  • Protect all home devices from

internet threats

  • Filter unwanted websites
  • Threat database updated up to

100,000 times a day in real time from the cloud

  • Monthly subscription Model

Home Automation Networking Infrastructure

Ooma Internet Security Powered by ZScaler

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Communications Networking Infrastructure

Connected Services - Automation

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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Driving Adoption and Monetization of the Platform

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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Integrated Growth Strategy

TV / Traditional Media

  • Broad Reach
  • Low Cost
  • Builds Brand

Image

Efficient Marketing

Word of Mouth

68%

Net Promoter Score1

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

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17 CONFIDENTIAL 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

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Financial Overview

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19 CONFIDENTIAL AND PROPRIETARY |

$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

Annual Revenue Quarterly Revenue

Strong Revenue Growth

($ 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

Annual Quarterly

Expanding Subscription & Services Revenue

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FY16 FY17 746,000 858,000

Core Users

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%

Strong Customer Growth

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Increasing Gross Margin

49% 54% 58% 57% 59% 66% 66% 69% 67% 69%

FY15 FY16 FY17 Q1 '17 Q1 '18

Gross Margin

% Revenue

  • Mix of SMB Increases
  • Upselling Premium

Services

  • Introduction of New

Services

  • Scale Efficiencies

Growth Drivers

Subscription/Services Total

Long-Term Target

65% 70% 75% 80%

Low High

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Improving Adjusted EBITDA

Adjusted EBITDA (in $'000)

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Long-Term Target Model (Non-GAAP)

% 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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Thank you

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26 CONFIDENTIAL AND PROPRIETARY |

GAAP to Non GAAP Reconciliation