Ooma, Inc.

Good afternoon. My name is Emma and I will be your conference operator today. At this time, I would like to welcome everyone to UMA's fiscal second quarter 2024 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 followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press the star 1. Thank you. Matt Robison, you may begin your conference.

Thank you, Emma. Good day, everyone, and welcome to this fiscal second quarter 2024 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, Shig Hamamatsu. After the market closed today, UMA issued its fiscal second quarter 2024 earnings press release. This 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 and presentations 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 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 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 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 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. 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 is included in our earnings press release, which is available on our website. On this call, we will give guidance for third quarter and full year fiscal 2024 on a non-GAAP basis. Also, in addition to our press release and 8K filing, the overview page and events and presentations page and investors section of our website, as well as the results page, of the Financial Influence section of our website include links to information about 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 MSCEO Eric Stang. Thank you, Matt.

Hi, everyone. Welcome to UMA's second quarter fiscal year 2024 earnings call. Thanks for joining us. I'm pleased to report UMA performed well in Q2. I'm looking forward to reviewing our accomplishments and the progress we've made on the several growth initiatives we have underway this year. Financially, UMA achieved 58.4 million in revenue, 3.8 million in non-GAAP net income, 4.9 million of EBITDA, and $3.6 million in cash flow from operations in Q2. We also managed OPEX spending well in the quarter and reduced our inventory. Regarding growth, our important business subscription services revenue grew 27% year over year. Overall, we ended the quarter with $215 million of annualized exit recurring revenue, up 15% versus a year ago. I believe we executed well in Q2 to drive these results, and that UMA is in a strong position today to pursue its strategy and growth initiatives. During Q2, we continued to invest in UMA Office, which of course is our award-winning solution specifically designed for small to medium-sized businesses which seek a combination of advanced features, ease of use, and affordability. We added to ProPlus our top service tier, several new features to facilitate collaboration and customer interaction, including online bookings, one-to-many messaging, team chat, and new CRM integrations with Zoho and Freshdesk. We also improved our Office desktop app by introducing an updated user interface and faster performance for a more cohesive user experience that simplifies interactions. These feature enhancements continue our strategy to build out the capabilities available in our ProPlus service tier, which along with our Pro service tier allow us to target slightly larger customers and drive higher revenue per user. We feel our UMA office strategy is working by allowing us to serve increasingly larger customers while maintaining our long-standing focus on making communications approachable for businesses of any size. As in past quarters, more than half of our new office users in Q2 selected one of these two premium tiers as we continue our journey to democratize advanced technology and make it accessible to small and medium-sized businesses. While UMA Office is targeted at businesses 1 to 20 users in size, I'm pleased to report our largest office customer win in Q2 with a 286 user account, which valued the flexibility and affordability of our solution. We're also seeing interest in Office from potential partners who see Office as a good fit with their products and services. Last quarter, you may recall we announced a partnership with Next Health, which focuses on the dental space, and we have additional Office partnerships in progress. For the rest of this year, our plans for UMA Office are to continue to build out the ProPlus tier feature set and to enable more partners to integrate with and, in some cases, resell UMA Office. We also continue to invest in UMA Enterprise, our solution targeted at larger-sized businesses in select verticals or in need of customization. One focus for us is hospitality customers, where we continued in Q2 to secure wins with major brand hotels. They also began working recently with a new partner to enable our core telephony and SMS capabilities in their platform in support of an artificial intelligence use case. UMA Enterprise will be incorporated into the partner solution via a CPaaS-like business model. Our partner already has several alpha customers deployed and is targeting launch this year. While we don't specifically promote UMA Enterprise as a CPaaS solution, I believe this one-off use case demonstrates the ultimate power of our platform to adapt to bespoke needs. For the rest of this year, our plans for UMA Enterprise are to continue our industry-focused strategy while also growing our network of telecom agents and resellers. We're also making investments to expand internationally. As planned, we made a major step forward in Q2 with our largest customer, by putting in place the capability to serve them in a new region of the world. Over the coming weeks, we will begin rollout in earnest in this new region. I'm also pleased to report that during Q2, we were able to add more users than we anticipated and we gained visibility for increasing to 100,000 users or more with this customer. For the balance of this year, we will focus on implementing our service for this customer in the new region plus at least one additional region, as well as on continuing to onboard their users. Our largest area of investment at this time is UMA Airdial, our integrated solution to replace aging and expensive copper lines that serve critical infrastructure and other specialized applications. As you know, we see a massive market opportunity for Airdial, both in the USA and in other countries. Our feature enhancements to AirDial continued in Q2 as we brought out version 2.0 of our remote device manager, implemented network side auto dial features to support older emergency phones, and implemented modem support to make remote programming of door access systems more reliable. There is a long tail of specialized and older equipment relying on copper lines today. and we feel our ability to control the total end-to-end solution is an advantage as we evolve Airdial to meet all the needs of the market. Owning all aspects of our platform end-to-end has allowed us to adapt the Airdial platform to serve the needs of customers with challenging use cases, including in circumstances where those customers have had another provider fail previously. Commercially, We announced earlier this month that U.S. Cellular completed its launch planning and began offering Airdial through its sales organization. In fact, I'm pleased to report that U.S. Cellular's first customer win with a customer requiring 136 lines occurred in Q2 even before the formal launch date. In this case, Airdial displaced a competitor whose products were not working well And we helped U.S. Cellular deliver a solution in a situation where the customer needed to maintain compliance in a very short timeframe. As in past quarters, our sales funnel for Airedial continued to build in Q2, and we had some notable wins in the quarter. Our largest Q2 win was a restaurant group which will deploy over 750 lines. Just days after the end of Q2, we also won a large retailer opportunity representing approximately 800 lines. Both of these opportunities came through partners of ours who are reselling Airdial. Just this week, we made a further exciting announcement regarding Airdial. I'm pleased to report that the largest REIT in the world, Prologis, will offer both UMA Airdial and UMA Office through their Essentials platform. This platform provides building and other services to Prologis' large base of customers. We're thrilled they have chosen UMA as their featured and only solution for POTS replacement and business communications. Bringing on partners is one of our key strategies to drive Airdial growth. Most typically, our partners resell Airdial, but in some cases, they refer customers to us. This last quarter, in addition to U.S. Cellular and Prologis, We also established new partnerships with two SELECs, two aggregators, and two other resellers. Our plans for the rest of this year for Airedial are to grow our sales and go-to-market resources significantly, establish more resale partnerships, and further enhance the differentiation of our solution. As I've outlined, we have a lot of initiatives underway, and it's an exciting time for us. I will now turn the call over to Shig, our CFO, to discuss our results and outlook in more detail and then return with some closing remarks.