Ooma, Inc.

Good afternoon. My name is Chris, and I'll be your conference operator today. At this time, I would like to welcome everyone to the UMA, Inc. first quarter fiscal 2020 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, then the number one on your telephone keypad. If you'd like to withdraw your question, press the pound key. Thank you. Matt Robison, you may begin the conference.

Thank you, Chris. Good day, everyone, and welcome to the first quarter fiscal year 2020 earnings call of UMA, Inc. My name is Matt Robison, UMA's Director of IR and Corporate Development. With me here today are UMA's CEO, Eric Stang, and CFO, Ravi Nalula. After the market closed today, UMA issued a press release via Globe Newswire. The release is also available on the company's website, UMA.com. This call is being webcast live and is accessible from a link on the events page of the investor relations section of our website. This link will be active for the replay of this call for at least one year. During today's presentation, our executives will make forward-looking statements within the meaning of the federal securities laws. Forward-looking statements generally relate to future events or future financial or operating performance. Our expectations and beliefs regarding these matters may not materialize, and actual results in financial periods are subject to risk. and Uncertainties that could cause actual results to differ materially from those projected. These risks include those set forth in the press release we issued earlier today, as well as those more fully described in our filings for the Securities and Exchange Commission. The forward-looking statements in this presentation are based on information available to us as of the date hereof, and we disclaim any obligation to update any forward-looking statements except as required by law. Please note that, other than revenue, or as otherwise stated, the financial measures to be disclosed in this call will be on a non-GAAP basis, The non-GAAP financial measures are not intended to be considered in isolation or to substitute for results prepared in accordance with GAAP. A discussion of why we present non-GAAP financial measures and a reconciliation of the non-GAAP financial measures discussed in this call to the most directly comparable GAAP financial measures are included in our earnings press release that is available on our website. On this call, we'll give guidance for second quarter and full year fiscal 2020 on the non-GAAP basis. Also, in addition to our press release and 8K filing, The events and presentations page in the investor section as well as the quarterly results page of the financial information section of our website includes links to costs and expenses not included in our non-GAAP values and key metrics of our core subscription business. These are titled Supplemental Financial Disclosure 1 and Supplemental Financial Disclosure 2. Additionally, our investor presentation slides include GAAPs and non-GAAP reconciliation. It also provides resolution of GAAP expenses that are excluded from non-GAAP metrics. Before I hand it over to Eric, let me say we are pleased to be presenting at the 20th annual D. Reilly FBR Institutional Investor Conference this Thursday, May 23rd in Beverly Hills, California, the 21st annual Credit Suisse Communications Conference in New York on June 4th, and the Williamsburg 39th Annual Growth Stock Conference June 5th in Chicago. We plan to hold webcasts from each of these conferences and the details for them are on our investor relations site. In addition, we will be at the Bank of America Merrill Lynch 2019 Global Technology Conference in San Francisco on June 6th. Okay, Eric.

Thank you, Matt. Hi, everyone. Welcome to UMA's Q1 FY20 earnings call. I'm pleased to report Q1 was another strong quarter for UMA, both in terms of our financial results and our progress on key initiatives. I'm also excited to talk with you today about our announcement that we plan to acquire BroadSmart, which is a seller of UCAS solutions to medium and large enterprises. I'll say more about BroadSmart in a moment, but first, I'd like to update you on our Q1 results and key initiatives for this year. In Q1, we achieved revenue of $34 million, representing 13% growth year-over-year, high-margin subscription services revenues of $31.1 million with a vast majority of our revenue, and with a net dollar revenue retention of 99%, we feel we continue to build a strong business with significant long-term profit potential. In the quarter, subscription services revenues from business customers grew 45% year-over-year, a rate of growth we continue to believe outperforms others in our industry. Subscription services revenues from residential customers grew 4% year-over-year, in line with our expectations. All in, I'm proud of our continued momentum and excited about our outlook based on the initiatives we have planned for the balance of this year. For FY20, our strategy, as we've discussed previously, is to be the undisputed leader in each of the segments we target by capitalizing on our unique end-to-end platform. Starting first with UMA Office, which is our solution specifically designed for the needs of a small business, our product goals this year include rounding out the core feature set and then pivoting our development onto new office services for which we can charge additional revenue. I'm pleased to report that since the start of this fiscal year, we have launched eight new features on UMA Office, including SMS, intercom, call blocking, and enhancements to virtual receptionist. With this progress, we are now actively working on new features, which we believe will drive additional revenue, including new solutions applicable to the business market that will leverage our key strategic partnership with Sprint. On the sales front for UMA Office and Q1, We increased our sales team, and so our goal now is to leverage this investment through increased sales productivity and marketing outreach. Moving to UMA Enterprise, which is our more complete UCAS solution designed for larger businesses, we continued in Q1 to develop the systems and processes to serve white-label partners, and we added several new channel partners in the quarter. We also harnessed our unique ability to customize for individual customer needs. by creating a unique solution for a customer opportunity which could be quite significant for us over time. Our efforts for this customer also align with our strategy to target selected vertical market segment opportunities. Finally, in Q1, we expanded our sales and marketing team as part of our primary goal this year of driving more customer engagement. Our announcement to acquire BroadSmart fits directly with our goal to expand in the enterprise segment with a differentiated strategy. Headquartered in West Palm Beach, Florida, Frostmart provides mid-sized and large enterprises with hosted voice service, audio and video conferencing, web collaboration, fiber connectivity, and SIP trunking, along with network design and security solutions. The company is adept at solving complex customer deployments with complete managed solutions, and the team is very strong and experienced in UCAS. These capabilities align well with our strategy to differentiate in the enterprise segment versus competition. With this acquisition, we expect to gain scale in the enterprise segment, bring on board an excellent team that understands selling to larger sized customers with custom solutions, gain access to a solid set of channel partner relationships that BroadSmart has maintained for a number of years, and create the opportunity with our low cost structure to substantially improve the economics of this business. We believe this acquisition presents us a great opportunity to take the next step in our enterprise growth strategy. I look forward to welcoming the BroadSmart team to UMA. Ravi will provide more color on the financial aspects of this acquisition in a moment. Strategically, our near-term plans will be to integrate the BroadSmart team of about 30 professionals into our enterprise business activities, to tie BroadSmart operationally into our low-cost calling platform, will leverage BroadSmart's East Coast location for business expansion, maintain BroadSmart's existing customers on BroadSmart's customized BroadSoft-based calling platform, and to introduce Ooma Enterprise and even Ooma Office to BroadSmart's channel partners as a way to maximize sales opportunities and serve a broader range of customers with more tailored solutions. Switching now to the residential market, We made good progress in Q1 on our key initiatives for this year, and I'm pleased to report that, as of today, we have begun shipping UMA SmartCam to end customers and select retail partners. This is a big milestone for us, and our goal now is to build customer recognition of the outstanding features and value of this camera, which will take time and be an ongoing process through the balance of this year. I'm also pleased to report that we recently launched our first application of wireless connectivity combined with home phone service. So far, we have launched an integrated product solution utilizing 4G for internet service. And in the future, we will bring out the 4G module as a standalone accessory to work with other solutions of ours. As I mentioned last quarter, we believe we have a sound strategy and our focus this year is most of all on execution. Once the acquisition is completed, integration of BroadSmart will keep us extra busy, and I'm confident this will be a powerful move by us in the enterprise segment. As we look forward, we believe we can continue to increase the proportion of revenue we obtain from business customers, increase our gross margins, and gain leverage on R&D and G&A spending. And with these developments, we can drive growth and ultimately improve our bottom line. I'll now turn the call over to Ravi to discuss our results and outlook in more detail and then return with a final comment before we take your questions. Thank you, Eric.