Ooma, Inc.

Ladies and gentlemen, thank you for standing by and welcome to the UMA, Inc. First Quarter Fiscal 2021 Financial Results Conference Call. At this time, all participants 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 will need to press star 1 on your telephone. If you require any further assistance, please press star 0. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speakers today, Mr. Robison. Thank you. Please go ahead.

Thanks, Cheryl. Good day, everyone, and welcome to the first quarter fiscal year 2021 earnings call at UMA Inc. My name is Matt Robison, UMA's Director of IR and Corporate Development. On the call with me 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 for this call for at least one year. The telephonic replay will also be available for a week starting this evening about 8 p.m. Eastern time. Dialing 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, risks related to the impact of the COVID-19 pandemic and those risks 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 on this call will be on a non-GAAP basis. The non-GAAP financial measures are not intended to be considered in isolation or the 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 second quarter and full year fiscal 2021 on a non-GAAP basis. Also, in addition to our press release and 8 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 businesses. These are titled Supplemental Financial Disclosure 1 and Supplemental Financial Disclosure 2. Additionally, our investor presentation slides include GAAP to non-GAAP reconciliation that also provides resolution of GAAP expenses that are excluded from non-GAAP metrics. Now, I will hand the call over to UMA CEO Eric Stang.

Thank you, Matt. Hi, everyone. Welcome to UMA's Q1 fiscal year 2021 earnings call. I'm pleased to talk with you today. Q1 was a strong and busy quarter for UMA. During Q1, we remained focused on executing our strategy while also adapting to the changes in our market environment and business activities driven by the global pandemic. I'm proud of all UMA employees for stepping up to meet the new challenges we faced, and I'm extremely pleased to report that all UMA employees and their families remain safe today. To all UMA employees, thank you. Our Q1 revenues were $40.3 million, up 19% year-over-year. Subscription revenues from business users grew 54% year-over-year. Our Q1 non-GAAP net income was $2.4 million, up substantially both year-over-year and versus our guidance as we optimized our activities in response to the pandemic. I believe our solid growth coupled with increasing profitability speaks to the resiliency of our business model and our ability to adapt to changing market conditions. Given that our Q1 ended on April 30, we experienced the effects of the pandemic for much of our quarter. As you would expect, except for a few essential functions, all UMA employees shifted to working from home. Inside sales and online sales were largely unaffected, but sales through face-to-face channels and through retailers became more difficult. We adapted our marketing programs to emphasize to a greater extent the flexibility and savings afforded by our solutions. Feature-wise, We moved quickly to introduce a modernized video collaboration user experience for UMA Enterprise customers, to enable use of UMA Office IP phones concurrently at both work and home, and to launch the UMA Office desktop app. We accommodated an approximately 50% increase in call volume in our network, and we managed supply chain challenges effectively. Overall, it's clear our services are even more vital in these times and we can adapt to changing market conditions. While Q1 was a very dynamic quarter for UMA, we nonetheless made substantial progress on implementing our strategy and plan for this year. In April, we made two exciting product announcements. The first was the launch of UMA Connect, our new fixed wireless internet service. UMA Connect utilizes advanced LTE to deliver both internet connectivity and UMA office phone service for as low as $50 per month combined. It is designed both for businesses that want backup internet to ensure vital functions such as phone service and for businesses that want to replace unreliable or expensive DSL or satellite internet. Strategically, UMA Connect affords us a double-play solution in the market and a distinctive new service. We also have plans to enable more new services in conjunction with UMA Connect later this year. UMA Connect represents the next step in our longer-term strategy to provide a complete managed infrastructure solution for small and mid-sized businesses. We're pleased that since the April launch, we now have over 100 customers running on UMA Connect. We're also thrilled that UMA Connect recently won TMC Labs 2020 Internet Telephony Innovation Award, which honors products that display innovation, unique features, and significant contributions toward improving communications technology. Our second major product announcement in April was the expansion of our Office Pro service tier to include the new Office desktop app. This app expands the work-from-anywhere capabilities of Rooma Office by turning Windows PCs and Macs into full-featured business phones. Customers can access call controls, start conferences, review voicemails and call recordings, search the company directory, send and receive faxes, and more using the app. This launch bolsters our strategy to make Ooma Office Pro an attractive step up for more of our customers. In this regard, we are planning further feature additions to Ooma Office Pro later this year. We also made progress during Q1 on our strategy and plan this year to expand into a new region of the world outside of North America. You'll recall that at the end of Q4, we served over 20,000 users in North America with a large multinational corporation, and that our plan calls for us to expand further with this customer in a new region after completing a proof of concept.