Ooma, Inc.

Ladies and gentlemen, thank you for standing by and welcome to the UMA second 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. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Matt Robison. Thank you. Please go ahead, sir.

Thanks, David. Good day, everyone, and welcome to the second quarter fiscal year 2021 earnings call of 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 its second quarter earnings press release via Business Wire. 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. 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 law. 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 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. The 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 their website. On this call, we'll give guidance for third 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 investors section as well as the quarterly results page of the financial information section of our website include 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. It 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 Q2 fiscal year 2021 earnings call. I'm pleased to talk with you today. Q2 was an outstanding quarter for UMA financially as we exceeded our expectations on both the top and bottom line. Q2 revenues grew to $41.4 million, and non-GAAP net income was $3.1 million, or 8% of revenue. We also generated approximately $2.5 million of cash flow from operations in the quarter. I appreciate the hard work put in by all members of the UMA team to achieve these results. Looking at Q2, I'm particularly excited by our progress winning larger customers and solving increasingly complex customer deployments. One such example is the chain of hearing loss clinics with 13 locations in Maryland. Previously, this company had different phone providers in different locations and was struggling to stay in touch with its customers because of COVID-driven office closures. UMA was able to step in and provide one unified solution across all locations. In the words of the administrator at the company, who can now control phone services easily across all locations, UMA Office has been a lifesaver. A second example is a large enterprise customer where we currently serve over 2,000 of their home-based call center agents in North America. Historically, this customer has used UMA in conjunction with PSTN routing in a hybrid VoIP PSTN deployment. We are now engaged with this customer to peer directly to them, eliminate the PSTN element, and improve both cost and quality. Our ability to provide seamless work-from-home solutions also helped drive larger new customer wins in Q2. One new customer of ours, who is an insurance and benefits company with over 100 employees, was faced with the challenge of some employees working from home while others are spending part of their work week in the office. This company switched to Ooma because of our ability to operate across their work environments, and they particularly valued use of our powerful mobile app and our online portals for easy setup and call flow administration. Our responsive customer support was an important differentiator in this win as well. Last quarter, I mentioned that we have secured many locations representing a large national brand, with much of this opportunity coming to us through referrals. I'm pleased to report that we expanded further in Q2 and we now serve over 1,000 independent locations of this national brand. More broadly, we believe our strengths in serving small businesses translate well to serving larger businesses who operate many small, distributed locations. At the enterprise level, one of our more significant wins was a customer with over 100 users who wanted to convert away from an on-premise solution that was, among other things, serving their call center needs. In this case, it only took us about one week to bring the customer up on UMA Enterprise, including implementation of our call center functionality. In Q2, we also announced a new UMA Enterprise private label reseller, MTA Solutions in Alaska. One leg of our differentiated enterprise strategy is to engage private label resellers who want to maintain fully their end customer relationships. With UMA Enterprise, private label resellers can have full control over naming, and the rest. In general, a key element of our strategy and plan this year is our focus on sales and marketing execution, and I believe we are seeing good progress. Some of our sales efforts remain hampered by restrictions still in place to fight COVID, but we see this lessening with time. Overall, we believe we have We believe we have strong solutions today for the needs of both smaller and larger businesses and that our strategy is working. In addition to sales and marketing execution, a second key element of our strategy and plan this year is to introduce new breakout features that provide customers a broader solution and increase our revenue per customer. Last quarter, we announced a major advance in this regard with the launch of UMA Connect, which you'll recall is our wireless internet solution for both backup and primary internet use. I'm pleased to report that we now have hundreds of customer accounts using UMA Connect. More than half of these accounts have selected a $99 per month or greater service plan to support primary internet use. The top reasons these accounts cite for purchasing Connect are poor DSL performance, persistent cable outages, and insurance to ensure communications are always operational. Our newest feature announcement is UMA Wi-Fi, which we are very excited to have launched just last week to select customers. In general, small businesses have been left behind when it comes to the most advanced technology solutions, usually because of excessive cost and complexity. With UMA Wi-Fi, we can bring enterprise-grade Wi-Fi as a service to even the smallest businesses, Security, performance management, enforced quality of service, and customizable guest networks can all be enabled in an easy-to-use turnkey solution and for a modest charge per month. Wi-Fi-based IP phones become easily supported as well. We are extremely pleased to have partnered with Xtreme Networks to make this possible. Strategically, UMA Wi-Fi fits perfectly into our long-term vision to enable small business to sound and operate like big businesses at an affordable price. With UMA Wi-Fi, we can now offer small businesses a winning combination of communications, internet, and Wi-Fi networking, all managed in the cloud by UMA. And while the launch of UMA Wi-Fi is a major advance, our vision is to provide an even broader infrastructure solution in the future for businesses. I'm also pleased to introduce to you here an enhancement that will be available soon for our UMA Office Pro Tier of service. You'll recall that our Pro Tier costs customers an additional $5 per month per user and provides a number of advanced features today, including use of our desktop app, advanced call blocking, and call recording. Currently, about 25% of our new customers step up to take up the Pro Tier. As part of our strategy to continue to enhance the ProTier and increase its adoption, we are now in beta tests with select customers and will soon be launching video collaboration and screen sharing. We believe this will be a valuable addition to the ProTier which will help spur adoption, and it will be an exceptional value in comparison to many other providers. Turning now to our Sprint and now T-Mobile partnership, You'll recall that T-Mobile powers our UMA Connect, and we enabled T-Mobile to resell UMA Office as Sprint Omni. We announced last quarter that with the Sprint T-Mobile merger, it was unclear what the new organization's strategy will be, and we adopted a cautious outlook. Our understanding now is that T-Mobile intends to focus on a more narrow portfolio and does not plan to continue selling Sprint Omni. Nonetheless, our relationship remains in place and T-Mobile will continue to power UMA Connect. We are also jointly exploring other possibilities between our two organizations. And finally, regarding our largest customer for whom we provide service to more than 20,000 users today, I can report that our proof of concept trials in a new geographic region of the world outside of North America have progressed well. We don't yet have clarity on when the customer will want to roll out on a larger scale, but we believe we are well placed to do so when a decision is reached. Beyond this, I'm pleased to report that we secured an additional North American opportunity with this customer. This is a new revenue opportunity, but more importantly, we believe it will position us favorably post-COVID for when the customer chooses to expand further. 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.