Ooma, Inc.

Hello, and thank you for standing by. Welcome to UMA fourth quarter and fiscal year 2024 financial results. 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 the question during the session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. I would now like to hand the conference over to Matt Robison. You may begin.

Thank you, Tawanda. Good day, everyone, and welcome to the fiscal fourth quarter and full year 2024 earnings call of UMA, Inc. My name is Matt Robison, and I'm the director of IR and corporate development. I apologize in case I cough during my comments. 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 fourth quarter and full year 2024 earnings press releases. 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 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 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. 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 is included in our earnings press release, which is available on our website. On this call, we will give guidance for the first quarter and full year fiscal 2025 on a non-GAAP basis. Also, in addition to our press release and 8K filing, the overview page and events and presentations page in the investor section of our website, as well as the quarterly results page, the financial information 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 reconciliations, but also provides resolution of GAAP expenses that are excluded from non-GAAP metrics. Now, I will hand the call over to UMA CEO, Eric Stay.

Thank you, Matt. Hi, everyone. Welcome to UMA's fourth quarter fiscal year 2024 earnings call. Thank you for joining us. I look forward to reviewing our Q4 and fiscal year 2024 results with you today. I'm also excited to talk with you about our strategy and plans for our upcoming 2025 fiscal year. Overall, I believe UMA is fortunate to enter FY25 in a strong position with leading product solutions and significant potential for business expansion. In Q4, UMA performed well financially, delivering $61.7 million in revenue, and 3.5 million of non-GAAP net income. Adjusted EBITDA jumped to 5.2 million, and cash flow from operations increased significantly to 5.5 million. For all of FY24, we achieved 236.7 million in revenue, 15.4 million of non-GAAP net income, and 19.8 million of adjusted EBITDA. Year over year, we grew revenue by 10%, non-GAAP net income by 13%, adjusted EBITDA by 14%, and cash flow from operations by 40%. We achieved this growth while also investing significantly in new market opportunities and international expansion, and we believe we've made important progress in FY24 on our strategy to expand our business and drive profitable growth. On the business side in Q4, we continue to invest in feature expansion, customer growth, and the development of new resale partnerships. On all fronts, UMA Office, UMA Enterprise, UMA Airdial, and 2600Hz, we made significant achievements in Q4. For UMA Office, our solution for small to medium-sized businesses, We expanded our sales efforts on the legal vertical, taking advantage of our announced integration with Clio legal practice management software. These efforts are going well, with our largest customer win in the quarter being a 90-user deal. We also increased the proportion of new UMA office customers who signed up for a premium tier of service to 59%, our highest level to date. I'm also pleased to report that we signed an agreement with a new partner who will resell UMA Office, and we have started the work to enable them. We expect the contribution from this partner this year to be modest, but we consider it a great first step toward engaging other potential resell partners for UMA Office. Regarding UMA Enterprise, our solution for larger-sized businesses, we also made significant achievements in Q4. One was a large new customer we signed where we will serve several thousand users spread across 400 locations. We will be providing a combination of our full UCAS solution for many of their users and our Teams integrated calling solution for the rest. In our targeted hospitality vertical, we continued our momentum, again winning over 50 new hotels in the quarter. We also brought on a new technology partner who will help us sell into this space. UMA Airdial, our innovative solution to replace aging and expensive POTS lines, continue to make progress in Q4 as we invest in this new opportunity. In Q4, we closed over 500 new customer deals, with some being notable large company wins. We expect many of these deals will start by rolling out only to a small subset of the available locations and then build through the year. In general, we find customers want to move forward on their immediate needs for copper line replacement, usually driven by lines being shut off or substantially increased line pricing before they plan a full rollout of air dial across their business locations. In Q4, we also continued to refine our Airdial product solution, including enhancing the Airdial remote device management system and enabling Airdial to serve new applications we came across. We added five new Airdial resale partners in Q4, which expands the number of partners reselling Airdial to over a dozen now. And finally, I'm very happy to report that UMA Airdial, won the 2024 TMC Internet Telephony Product of the Year Award for its multipath technology, which delivers unique and patented uninterrupted backup for POTS replacement. Turning now to 2600 Hertz, our wholesale UCaaS, CCaaS, and CPaaS platform solution, I believe we have made tremendous progress since acquiring them just four months ago. We believe we are on track to achieve the synergies we planned and make 2600 Hertz adjusted EBITDA creative in Q1 of this year. What is particularly exciting for us though is the level of new customer interest we are seeing. It is happening faster than I expected. We have already won one new customer who will convert their customer base to the 2600 Hertz Kazoo platform, and we are currently far along on other new customer opportunities. 2,600 hertz is being looked at to replace aging and less agile UCaaS platforms. It is also being looked at as an alternative to standard CPaaS solutions, which lack pre-built applications and cannot be directly controlled and hosted by end customers. Of course, the wholesale nature of this business means it will take new customers an extended amount of time to implement the solution and produce revenue. Nonetheless, the unexpectedly high-level interest we are seeing gives us confidence in our acquisition thesis and strategy for 2600 Hertz. We're proud of our accomplishments in Q4, but we also realize we have much more to do to capitalize on the investments we are making in the business. As we look forward, we believe we are well-placed to do so for three main reasons. One reason is we believe we are a leader in the key segments we serve. with differentiated product solutions and a very low cost position to provide services. A second reason is we see significant untapped market opportunity in the key segments we target. In particular, since so many smaller sized businesses have yet to move to a more advanced cloud communications solution. The third reason is the new directions we have invested in over the last couple of years. UMA Airdial for POTS replacement Enuma 2600 Hertz for wholesale UCAS, CCAS, and TPAS applications give us greater breadth of opportunity and open up paths to partner with others and extend our market reach. As we look forward, we see several meaningful trends that support our strategic direction and give us confidence that the investments we are making will pay off. One of these is simply the fact that in North America alone, we estimate there are 6.4 million small businesses with 1 to 20 employees, and that a significant amount of these businesses have yet to transition to a modern cloud-based communications solution. We believe the market opportunity for UMA Office is quite sizable. A second trend is the shutting down of the traditional copper phone network, which is already underway both here in the USA and in parts of Europe, and seems to be accelerating as of late. We have what we believe is the leading solution with Airdial to serve equipment that doesn't easily move off of a copper line. More generally, our small business and residential solutions both benefit as well, as customers are forced to look for new solutions when they lose their copper connection. A third trend, which we believe is favorable to UMA, is the rise of 5G internet. many smaller sized businesses rely today on a double play solution in other words internet and phone from a cable provider the availability of 5g wireless internet can cause these businesses to reconsider not only their internet solution but also their communications provider it also presents a future opportunity for uma to offer its own 5g double play solution as you know currently we offer our 4G-based UMA Connect solution as backup internet for businesses, or sometimes as primary internet for very small-sized businesses. A fourth market trend is the advent of AI. In contact center applications, and generally across all communications, significant data is created in the form of calls, texts, and chats. And AI has a strong role to play to help businesses optimize their performance. Today, our activities in this area have been limited, in part due to the newness of AI and the fact that AI has not yet seen much adoption by smaller-sized businesses. However, as we look forward, we anticipate launching AI applications in our solutions. We believe that these applications will make our solutions more valuable and in greater demand by our customers. And finally, the last industry trend that I want to highlight is the desire by customers to do more with their communication solutions by making the applications they use more bespoke to their individual needs. For smaller customers, this can entail integrations with other solutions used in their businesses. For larger customers, this can mean building custom applications using either CPaaS or a flexible API-based wholesale platform. Either way, UMA is positioned with innovative and leading solutions to take advantage of these customer opportunities. Building on these industry trends, our plans for FY25 include continued investment in key opportunities balanced with improvement in bottom line results. Some of the things we plan to accomplish in FY25 are, one, to introduce new integrations with other platforms. Two, to extend our current call center capability into a more complete and omni-channel contact center solution. Three, to incorporate 5G performance into our UMA Connect wireless internet solution. Four, to expand further internationally, including with our largest customer, IWG. Five, to enhance our 2600 hertz wholesale platform by integrating other UMA technology and applications. Six, to increase our sales and marketing activities across our business from direct sales to online and inside sales to channel and agent sales to partner sales. And finally, seven, to grow our community of resale partners who value our solutions and help us reach more of the vast market opportunity in front of us. I'm excited by the strategy we have put in place and by the progress I see us having made each quarter as we expand and grow. I believe FY25 looks to be an exciting year ahead for UMA. I'll 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.