Ooma, Inc.

Good afternoon. My name is Chris and I will be your conference operator today. At this time, I would like to welcome everyone to the UMA second quarter fiscal 2020 financial results. 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 and then one on your telephone keypad. If you'd like to withdraw your question, press the pound key. Thank you. I will now turn the call over to UMA.

Thanks, Chris. Good day, everyone, and welcome to the second 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 Narula. 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 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 risks 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 with 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 on this call will be on a non-GAAP basis. The non-GAAP financial measures are not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP. A discussion of why we present non-GAAP financial measures and our 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 third quarter and full year fiscal 2020 on a 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 for 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 businesses. These are titled Supplemental Financial Disclosure 1 and Supplemental Financial Disclosure 2. Additionally, our investor presentation slides include GAAP and non-GAAP reconciliation that 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 Midwest Ideas Conference this Thursday, August 29th in Chicago, the eighth annual Gateway Conference in San Francisco on September 4th, and the Doherty & Company 2019 Institutional Investor Conference, which does not include a presentation, September 5th in Minneapolis. Further details about these conferences, including the webcast from the Midwest Ideas Conference and the Gateway Conference, We're on our investor relations side. Okay, Eric.

Thanks, Matt. Hi, everyone. Welcome to UMA's Q2 FY20 earnings call. Q2 was an excellent quarter for UMA. We delivered strong results compared to our plan. We executed particularly well on our strategy to grow UMA business, and we once again achieved our residential growth target. All in, I believe our strategy is working, and we have a good momentum going into the back half of this fiscal year. Financially, revenues were $37.3 million for Q2. We ended the quarter with $135 million of annualized exit recurring revenue and a 103% net dollar subscription retention rate. Q2 business subscription services revenues, including BroadSmart, grew 68% year-over-year, and business revenue now represents 38% of our total revenue. We believe we are executing well on our strategy to create a solid business with significant long-term profit potential. Operationally, I'm quite pleased by the progress we made in UMA business during Q2. I say this for multiple reasons. First, you may recall that last quarter I mentioned we were creating a unique solution for a large customer opportunity which could be quite significant for us over time. I'm pleased to report this customer embraced our solution, deployed it to thousands of users in Q2, and is expected to deploy it to many more users through the balance of this year. Winning this opportunity highlights our unique strategy versus competition as our solution for this customer is a synergistic combination of UMA Office and UMA Enterprise working together. We provide this customer easy onboarding and a just right curated feature set via UMA Office in combination with unique features customized to the customer's specific needs enabled by UMA Enterprise. Second, I can share that in late Q2, Sprint launched a new SMB cloud voice over IP service sold through Sprint's sales organization. This service is powered by UMA Office and represents an exciting expansion of our strategic relationship with Sprint. We are thrilled to be powering Sprint's new offering. In addition, we are collaborating with Sprint to develop additional services together that our organizations can sell. We believe this expansion of our partnership creates significant opportunity for both UMA and Sprint, and we are committed to working with Sprint closely to maximize this opportunity. Third, while it is only a short time since we closed our BroadSmart acquisition, we are already seeing synergy benefits, including some we considered upside. During Q2, we integrated BroadSmart into our functional business organization and began looking at the new opportunities they provide. In one case, we are now demonstrating an integrated solution that combines features from UMA BroadSmart and UMA Enterprise for a large customer in the retail vertical. This could, if all goes well, roll us out on a large scale. In another case, we identified channel sales opportunities not just for UMA Enterprise, which we expected, but also for UMA Office. and are now working to roll out UMA Office to these channel partners. Overall, we remain optimistic about our potential to capitalize on the BroadSmart acquisition, and in general, we are finding UMA Office can be highly attractive to larger businesses that have telephony-centric needs, either standalone or in combination with our broader UCAS solution. Finally, as regards UMA business, I also want to mention briefly that we continue to make good progress on rounding out the feature set for UMA Office. In Q2, we launched approximately a half dozen new UMA Office features. As we've planned, we are increasingly shifting our engineering development onto new types of capabilities for which we'll be able to generate additional service revenue. Now, on the residential side of our business, we delivered according to our plan in Q2 with 4% year-over-year growth on the back of relatively low marketing spending. Our TELO plus wireless internet solution incorporating our 4G adapter powered by Sprint is performing well and we expect it to roll out to more retailers in Q3. Our camera and smart security solutions are in the marketplace but are not yet widely marketed by us while we continue to refine these solutions. Overall, we remain excited about the opportunity to grow our residential services. In Q2, We announced we exceeded 1 million core users. Including Talkatone, we have in total more than 2 million users. Geographically, we now serve business users in 12 countries, including China and Japan. Luma started in the residential market more than a dozen years ago, but today we are large in scale with significant momentum in the business market. I think UUMA stands out competitively by our ability to provide ideal solutions to customers. We distinguish ourselves by our ability to serve customers of all sizes, from small to very large, our mix of offerings, each designed to best serve a distinct segment of the market, but also combinable into overall customer solutions, our platform that delivers unique quality and unique feature flexibility, Our disruptive cost structure, our sales and marketing scope that affords synergy across all parts of our business, and our platform's extensibility into new areas of opportunity. These are some of the ways in which we believe UMA achieves competitive advantage. I'll now turn the call over to Ravi to discuss our results and outlook in detail, and then return with a final comment before we take your questions.