Ooma, Inc.

Ladies and gentlemen, thank you for standing by, and welcome to the UMA Fourth Quarter and Fiscal 2020 Financial Results Conference Call. At this time, all participants' lines are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you'll need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, press star 0. I would now like to hand the conference over to your speaker, Mr. Matt Robison. Please go ahead, sir.

Good day, everyone, and welcome to the fourth quarter and fiscal year 2020 earnings call of UMA, Inc. As Holly mentioned, 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. A telephonic replay will also be available for a week starting this evening about 8 p.m. Eastern time. Voting information for it is included in today's earnings press release. 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 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 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, which is available on our website. On this call, we'll give guidance for first quarter and full year fiscal 2021 on a non-GAAP basis. Also, in addition to our press release and 8K filing, the events and presentations page in the investors 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 businesses. These are titled Supplemental Financial Disclosure 1 and Supplemental Financial Disclosure 2. Additionally, our investor presentation slides include GAAP to non-GAAP reconciliation, but also provides resolution of GAAP expenses that are excluded from non-GAAP metrics. Now, I will hand the call over to UMA's CEO, Eric Stang.

Thanks, Matt. Hello, everyone, and welcome to UMA's Q4 FY20 earnings call. I'm very pleased to talk with you today. Since this is our fiscal year-end, I'd like both to recap our overall progress in FY20 and to provide a strategic look at the new year ahead. But before I do so, I'd like to review briefly our strong Q4 results. For our Q4 quarter just ended, UMA generated revenue of $40.6 million and net income of $1 million, both above our guidance ranges. Q4 revenue grew 17% year over year. We believe we exit FY20 in a strong position with $143 million of annual recurring revenue and a 100% net dollar subscription revenue retention rate. I'm particularly pleased to announce that during Q4, our largest customer for Ooma business grew to be now over 20,000 users. I'm also pleased to announce that our Sprint partnership, Deepin, and the backlog of opportunities we see from this partnership expanded several fold. And I also want to announce that with the Q4 launch of an expanded feature set for Ooma Office, which is a new service tier we call UMA Office Pro. Our solution is attractive to more businesses and larger businesses than ever before. Overall, we are excited because we believe our success in Q4 positions us well for FY21. We have winning solutions for the market and we see tremendous opportunity ahead. It's interesting to look back just one year to the start of FY20 and observe the progress UMA has made. In just the last 12 months, UMA has partnered with Sprint and enabled Sprint to resell UMA Office through their sales teams, branded Sprint Omni. We have demonstrated the superiority of our business solution versus others at a very large multinational corporation and scaled it to over 20,000 users with this customer. We've introduced the UMA Office Pro feature set to expand the market opportunity of UMA Office and increase revenue per user. We've integrated UMA Office and UMA Enterprise into one solution for businesses that need a best-in-class solution for small business environments, combined with the power of a full UCAS offering. We've built a strong enterprise go-to-market team and expanded sales through reseller partners, including by acquiring the BroadSmart business team and their reseller relationships. We've brought to market important new features for our residential customers, including our 4G backup internet solution. We've taken internal actions to enhance our ability to drive the growth of UMA business and improve overall profitability. And, perhaps most importantly, we've achieved growth rates for both our business revenues and our residential revenues that we believe exceed others. I'm proud of the UMA team for executing well in FY20, and I believe these accomplishments give us important momentum as we go into FY21. Some of that momentum can be seen by the kinds of customers who are adopting UMA. One example is a new UMA customer in Florida where we will ultimately enable more than 200 users. This company performs marketing for other businesses and chose UMA Enterprise in part because we enabled them to mine data from their use of our solution through some custom APIs. You'll recall that the flexibility and ease of customization of UMA Enterprise is our core strength and differentiator. This customer also runs a call center, and UMA Enterprise was the perfect choice for them to power it. Another example is a new customer of ours for UMA Office who is switching away from an in-house PBX. This customer is a law firm with two locations, totaling about 30 users. You'll recall that simplicity, ease of use, and great value are the core strengths of UMA Office. As lawyers who are focused on serving their clients, UMA's attributes are very attractive. But prior to the launch of UMA Office Pro, we could not have served this customer because they require call recording and voicemail transcriptions for record keeping. Now with UMA Office Pro available, we can fully meet their needs and capture this opportunity. These are just two simple examples of how UMA is winning in the marketplace. I think at the core, they demonstrate UMA's uniqueness in the market. They also demonstrate our strategic view that small business and enterprise are two different market segments with different needs. Today, we believe UMA is the clear industry leader in serving small businesses. And we believe that when it comes to enterprise UCAS, UMA can satisfy larger customers that value customization to meet their special needs. Now, looking forward to the FY21 year ahead, we have many drivers creating opportunity for growth. First and foremost is that we have great solutions out in the market today, and it's up to us more than ever before to enable growth through sales and marketing execution. To this end, we will continue to strengthen and expand our sales and marketing activities. This will happen on all fronts, but we will emphasize expanding our sales through reseller partners and targeting our marketing to vertical segments. From a product and feature perspective, we will implement three major advances this year. The first is we will add a desktop app and other functionality to UMA Office Pro to further expand the market reach of this solution. The second is we will complete our modernization of the UMA Enterprise user experience. This effort will encompass user portals, mobile apps, and collaboration capabilities. And thirdly, we will launch a groundbreaking new product we call UMA Connect. UMA Connect will consist of a new, more powerful UMA office space station combined with a separate adapter housing an LTE advanced radio and eight integrated antennas. This solution is already in beta at some UMA customers and we couldn't be more excited about the feedback we are hearing. Many customers tell us they want backup internet into their businesses. And some customers, particularly those limited to DSL or even satellite internet access, tell us they want to switch to a faster and more reliable solution. We intend to launch UMA Connect by the end of this fiscal quarter. Regarding our largest customer opportunities and key partnerships, we will capitalize further on the momentum we initiated in FY20. With our largest business customer, we are currently engaged in a proof of concept, which we hope will lead to significant further growth in a new market area in the back half of this year. Meanwhile, we also expect to drive moderate expansion of our users with this customer in the regions we already serve them. With Sprint, we see an abundance of opportunities to capitalize on the partnership we've established. One simple goal is to continue to train the Sprint sales teams and enable more and more Sprint salespeople to sell Sprint Omni. Beyond that, Sprint is our partner to enable the wireless connectivity in UMA Connect, and we expect Sprint will also sell our new Connect solution under the Omni brand. Finally, We are mindful that the merger with T-Mobile is now likely to occur, and we are waiting to see how this merger can open up further opportunity for us. In this regard, we are particularly looking forward to UMA Connect taking advantage of the expanded network coverage between Sprint and T-Mobile. Altogether, as we look to FY21 and the year ahead, we see the core drivers of our business being Strong sales and marketing execution on all fronts. Successful launch of UMA Connect both by us and by Sprint. Expansion into a new market area with our largest business customer. Serving larger customers with UMA Office at a higher revenue per user driven by leveraging UMA Office Pro. Adding new reseller and bar relationships and enabling them to succeed. and securing new large customers, possibly even very large customers who value the unique customization we can bring with UMA Enterprise. As you can see, we have significant, exciting opportunities ahead. Now, before I turn the call over to Ravi, I'd like to make two special comments. The first concerns the worldwide health crisis and how it affects UMA. We currently expect the impact on UMA to be minor, and our residential sales to be more affected than our business sales. To date, lack of supply availability of some accessories on the residential side of our business has caused us to delay some retail promotions and to incur some added costs by expediting product to us. On the business front, we have not been impacted thus far other than the crisis is causing The second comment I'd like to make is to announce some wonderful news. The vote is in, and UMA is once again the number one ranked solution for Business VoIP, according to the readers of PC Magazine. This represents the seventh year in a row that UMA has won PC Magazine's VoIP Business Choice Award. Needless to say, we couldn't be more pleased to hear from customers that we are their top choice. This is another validation that our strategy is working and we bring fundamental differentiation to the market. I will now turn the call over to Ravi to discuss our results and outlook in more detail and then return with some closing remarks.