Company Quick10K Filing
Ooma
Price10.96 EPS-1
Shares21 P/E-14
MCap235 P/FCF-35
Net Debt-12 EBIT-17
TEV223 TEV/EBIT-13
TTM 2019-10-31, in MM, except price, ratios
10-Q 2020-04-30 Filed 2020-06-09
10-K 2020-01-31 Filed 2020-04-14
10-Q 2019-10-31 Filed 2019-12-06
10-Q 2019-07-31 Filed 2019-09-09
10-Q 2019-04-30 Filed 2019-06-07
10-K 2019-01-31 Filed 2019-04-03
10-Q 2018-10-31 Filed 2018-12-07
10-Q 2018-07-31 Filed 2018-09-06
10-Q 2018-04-30 Filed 2018-06-08
10-K 2018-01-31 Filed 2018-04-02
10-Q 2017-10-31 Filed 2017-12-08
10-Q 2017-07-31 Filed 2017-09-07
10-Q 2017-04-30 Filed 2017-06-06
10-K 2017-01-31 Filed 2017-04-11
10-Q 2016-10-31 Filed 2016-12-09
10-Q 2016-07-31 Filed 2016-09-09
10-Q 2016-04-30 Filed 2016-06-10
10-K 2016-01-31 Filed 2016-04-13
10-Q 2015-10-31 Filed 2015-12-10
10-Q 2015-07-31 Filed 2015-09-11
8-K 2020-06-03
8-K 2020-05-26
8-K 2020-03-05
8-K 2019-11-21
8-K 2019-08-27
8-K 2019-06-10
8-K 2019-05-21
8-K 2019-05-15
8-K 2019-03-05
8-K 2018-11-27
8-K 2018-08-28
8-K 2018-06-06
8-K 2018-05-22
8-K 2018-03-06

OOMA 10Q Quarterly Report

Part I - Financial Information
Item 1. Financial Statements
Note 1: Overview and Basis of Presentation
Note 2: Revenue and Deferred Revenue
Note 3: Fair Value Measurements
Note 4: Balance Sheet Components
Note 5: Operating Leases
Note 6: Stockholders' Equity
Note 7: Stock - Based Compensation
Note 8: Income Taxes
Note 9: Basic and Diluted Net Loss per Share
Note 10: Commitments and Contingencies
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A")
Item 3: Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II - Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Item 6. Exhibits.
EX-31.1 ooma-ex311_8.htm
EX-31.2 ooma-ex312_9.htm
EX-32.1 ooma-ex321_6.htm
EX-32.2 ooma-ex322_7.htm

Ooma Earnings 2020-04-30

Balance SheetIncome StatementCash Flow
856851341702013201520172020
Assets, Equity
403020100-102013201520172020
Rev, G Profit, Net Income
10.02.0-6.0-14.0-22.0-30.02013201520172020
Ops, Inv, Fin

10-Q 1 ooma-10q_20200430.htm 10-Q ooma-10q_20200430.htm

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended April 30, 2020

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                   to                  

Commission File Number: 001-37493

 

 

Ooma, Inc.

(Exact Name of Registrant as Specified in its Charter)

 

 

Delaware

06-1713274

(State or other jurisdiction

of incorporation or organization)

(I.R.S. Employer

Identification No.)

525 Almanor Avenue, Suite 200, Sunnyvale, California 94085

(Address of principal executive offices)

(650) 566-6600

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Common Stock, par value $0.0001

OOMA

The New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

  

Accelerated filer

 

 

 

 

 

Non-accelerated filer

 

  

  

Smaller reporting company

 

 

 

 

 

 

 

 

Emerging growth company

 

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    Yes      No  

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  

As of May 31, 2020, there were 22.1 million shares of the registrant’s common stock outstanding.

 

 

 


 

TABLE OF CONTENTS

 

 

  

 

  

Page

 

PART I. FINANCIAL INFORMATION

Item 1.

  

Financial Statements (unaudited):

  

3

 

  

Condensed Consolidated Balance Sheets

  

3

 

  

Condensed Consolidated Statements of Operations

  

4

 

  

Condensed Consolidated Statements of Cash Flows

  

5

 

 

Condensed Consolidated Statements of Stockholders’ Equity

 

6

 

  

Notes to Condensed Consolidated Financial Statements

  

7

Item 2.

  

Management’s Discussion and Analysis of Financial Condition and Results of Operations

  

18

Item 3.

  

Quantitative and Qualitative Disclosures About Market Risk

  

27

Item 4.

  

Controls and Procedures

  

27

 

PART II. OTHER INFORMATION

Item 1.

  

Legal Proceedings

  

28

Item 1A.

  

Risk Factors

  

28

Item 2.

  

Unregistered Sales of Equity Securities and Use of Proceeds

  

56

Item 6.

  

Exhibits

  

56

Signatures

  

58

 

 

 

 

Ooma | FY2021 Form 10-Q | 2

 


 

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

OOMA, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited, amounts in thousands, except share and per share data)

 

 

 

April 30,

2020

 

 

January 31,

2020

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

Cash and cash equivalents

 

$

9,036

 

 

$

11,680

 

Short-term investments

 

 

14,251

 

 

 

14,384

 

Accounts receivable, net

 

 

5,421

 

 

 

4,591

 

Inventories

 

 

10,293

 

 

 

8,369

 

Other current assets

 

 

9,059

 

 

 

8,992

 

Total current assets

 

 

48,060

 

 

 

48,016

 

Property and equipment, net

 

 

5,006

 

 

 

5,270

 

Operating lease right-of-use assets

 

 

7,557

 

 

 

8,057

 

Intangible assets, net

 

 

6,491

 

 

 

6,818

 

Goodwill

 

 

4,264

 

 

 

4,264

 

Other assets

 

 

8,712

 

 

 

8,186

 

Total assets

 

$

80,090

 

 

$

80,611

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

11,355

 

 

$

8,499

 

Accrued expenses and other current liabilities

 

 

17,439

 

 

 

22,576

 

Deferred revenue

 

 

15,374

 

 

 

15,797

 

Total current liabilities

 

 

44,168

 

 

 

46,872

 

Long-term operating lease liabilities

 

 

4,566

 

 

 

5,150

 

Other liabilities

 

 

148

 

 

 

174

 

Total liabilities

 

 

48,882

 

 

 

52,196

 

Commitments and contingencies (Note 10)

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

Common stock $0.0001 par value: 100 million shares authorized; 22.1 million and 21.7 million shares issued and outstanding, respectively

 

 

4

 

 

 

4

 

Additional paid-in capital

 

 

156,840

 

 

 

152,993

 

Accumulated other comprehensive income

 

 

26

 

 

 

14

 

Accumulated deficit

 

 

(125,662

)

 

 

(124,596

)

Total stockholders’ equity

 

 

31,208

 

 

 

28,415

 

Total liabilities and stockholders’ equity

 

$

80,090

 

 

$

80,611

 

 

See notes to condensed consolidated financial statements

 

 

 

 

 

 

 

 

 

 

 

Ooma | FY2021 Form 10-Q | 3

 


 

OOMA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited, amounts in thousands, except share and per share data)

 

 

 

 

Three Months Ended

 

 

 

 

April 30,

2020

 

 

April 30,

2019

 

Revenue:

 

 

 

 

 

 

 

 

 

Subscription and services

 

 

$

37,616

 

 

$

31,112

 

Product and other

 

 

 

2,690

 

 

 

2,895

 

Total revenue

 

 

 

40,306

 

 

 

34,007

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue:

 

 

 

 

 

 

 

 

 

Subscription and services

 

 

 

11,341

 

 

 

9,811

 

Product and other

 

 

 

3,790

 

 

 

3,763

 

Total cost of revenue

 

 

 

15,131

 

 

 

13,574

 

Gross profit

 

 

 

25,175

 

 

 

20,433

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Sales and marketing

 

 

 

12,446

 

 

 

11,459

 

Research and development

 

 

 

8,846

 

 

 

8,882

 

General and administrative

 

 

 

5,028

 

 

 

5,112

 

Total operating expenses

 

 

 

26,320

 

 

 

25,453

 

Loss from operations

 

 

 

(1,145

)

 

 

(5,020

)

Interest and other income, net

 

 

 

79

 

 

 

258

 

Loss before income taxes

 

 

 

(1,066

)

 

 

(4,762

)

Income tax benefit

 

 

 

 

 

 

22

 

Net loss

 

 

$

(1,066

)

 

$

(4,740

)

 

 

 

 

 

 

 

 

 

 

Net loss per share of common stock:

 

 

 

 

 

 

 

 

 

Basic and diluted

 

 

$

(0.05

)

 

$

(0.23

)

Weighted-average shares of common stock outstanding:

 

 

 

 

 

 

 

 

 

Basic and diluted

 

 

 

21,897,694

 

 

 

20,479,739

 

 

See notes to condensed consolidated financial statements

 

 

 

Ooma | FY2021 Form 10-Q | 4

 


 

OOMA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, amounts in thousands)

 

 

 

Three Months Ended

 

 

 

April 30,

2020

 

 

April 30,

2019

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net loss

 

$

(1,066

)

 

$

(4,740

)

Adjustments to reconcile net loss to net cash used in by operating activities:

 

 

 

 

 

 

 

 

Stock-based compensation expense

 

 

3,008

 

 

 

2,982

 

Depreciation and amortization of capital expenditures

 

 

713

 

 

 

652

 

Amortization of intangible assets

 

 

326

 

 

 

207

 

Non-cash operating lease expense

 

 

794

 

 

 

446

 

Other

 

 

30

 

 

 

(126

)

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable, net

 

 

(830

)

 

 

62

 

Inventories and deferred inventory costs

 

 

(1,698

)

 

 

(651

)

Prepaid expenses and other assets

 

 

(670

)

 

 

(1,005

)

Accounts payable and other liabilities

 

 

(3,006

)

 

 

(3,141

)

Deferred revenue

 

 

(449

)

 

 

(430

)

Net cash used in operating activities

 

 

(2,848

)

 

 

(5,744

)

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Purchases of short-term investments

 

 

(9,015

)

 

 

(15,345

)

Proceeds from maturities and sales of short-term investments

 

 

9,186

 

 

 

16,969

 

Capital expenditures

 

 

(762

)

 

 

(602

)

Net cash (used in) provided by investing activities

 

 

(591

)

 

 

1,022

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Proceeds from issuance of common stock

 

 

1,267

 

 

 

1,454

 

Shares repurchased for tax withholdings on vesting of restricted stock units ("RSU")

 

 

(472

)

 

 

(730

)

Net cash provided by financing activities

 

 

795

 

 

 

724

 

Net decrease in cash and cash equivalents

 

 

(2,644

)

 

 

(3,998

)

Cash and cash equivalents at beginning of period

 

 

11,680

 

 

 

15,370

 

Cash and cash equivalents at end of period

 

$

9,036

 

 

$

11,372

 

 

 

See notes to condensed consolidated financial statements

 

 

Ooma | FY2021 Form 10-Q | 5

 


 

OOMA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited, amounts in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock

 

 

 

 

 

 

Accumulated

 

 

Stockholders'

 

 

 

and APIC (1)

 

 

AOCI (2)

 

 

Deficit

 

 

Equity

 

BALANCE - February 1, 2020

 

$

152,997

 

 

$

14

 

 

$

(124,596

)

 

$

28,415

 

Issuance of common stock under equity-based plans

 

 

1,311

 

 

 

 

 

 

 

 

 

1,311

 

Shares repurchased for tax withholdings on RSU vesting

 

 

(472

)

 

 

 

 

 

 

 

 

(472

)

Stock-based compensation

 

 

3,008

 

 

 

 

 

 

 

 

 

3,008

 

Changes in comprehensive income

 

 

 

 

 

12

 

 

 

 

 

 

12

 

Net loss

 

 

 

 

 

 

 

 

(1,066

)

 

 

(1,066

)

BALANCE - April 30, 2020

 

$

156,844

 

 

$

26

 

 

$

(125,662

)

 

$

31,208

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BALANCE - February 1, 2019

 

$

138,852

 

 

$

(10

)

 

$

(105,795

)

 

$

33,047

 

Issuance of common stock under equity-based plans

 

 

1,454

 

 

 

 

 

 

 

 

 

1,454

 

Shares repurchased for tax withholdings on RSU vesting

 

 

(730

)

 

 

 

 

 

 

 

 

(730

)

Stock-based compensation

 

 

2,982

 

 

 

 

 

 

 

 

 

2,982

 

Changes in comprehensive income

 

 

 

 

 

11

 

 

 

 

 

 

11

 

Net loss

 

 

 

 

 

 

 

 

(4,740

)

 

 

(4,740

)

BALANCE - April 30, 2019

 

$

142,558

 

 

$

1

 

 

$

(110,535

)

 

$

32,024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Additional paid-in capital

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2) Accumulated other comprehensive income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See notes to condensed consolidated financial statements

 


 

Ooma | FY2021 Form 10-Q | 6

 


Ooma, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

 

 

Note 1: Overview and Basis of Presentation

Ooma, Inc. and its wholly-owned subsidiaries (collectively, “Ooma” or the “Company”) create new communications experiences for businesses and consumers, delivered from its smart cloud-based software-as-a-service (“SaaS”) and unified-communications-as-a-service (“UCaaS”) platforms. The Company is headquartered in Sunnyvale, California.

Fiscal Year.  The Company’s fiscal year ends on January 31. References to fiscal 2021 and fiscal 2020 refer to the fiscal year ending January 31, 2021 and the fiscal year ended January 31, 2020, respectively.

Principles of Presentation and Consolidation

These unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (the “SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Therefore, the information included in this Quarterly Report on Form 10-Q should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended January 31, 2020 (“Annual Report”).

These financial statements have been prepared on the same basis as the Company’s annual financial statements and, in the opinion of management, reflect all normal recurring adjustments necessary to present fairly the Company’s financial position, its results of operations, and cash flows for the interim periods presented, but are not necessarily indicative of the results of operations to be anticipated for the full fiscal year ending January 31, 2021. The condensed consolidated balance sheet as of January 31, 2020 included herein was derived from the audited financial statements as of that date.

The condensed consolidated financial statements include accounts of the Company and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated upon consolidation.

Use of Estimates.  The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the Company’s condensed consolidated financial statements and notes thereto. Significant estimates include, but are not limited to, those related to revenue recognition, inventory valuation, deferred commissions, valuation of goodwill and intangible assets, operating lease assets and liabilities, regulatory fees and indirect tax accruals, loss contingencies, stock-based compensation, income taxes (including valuation allowances) and fair value measurements. The Company bases its estimates and assumptions on historical experience, where applicable, and other factors that it believes to be reasonable under the circumstances, including but not limited to the potential impacts arising from the COVID-19 pandemic. These estimates are based on information available as of the date of the condensed consolidated financial statements, and assumptions are inherently subjective in nature. Therefore, actual results could differ from management’s estimates.

Significant Accounting Policies.  The Company’s significant accounting policies are disclosed in its Annual Report.

Comprehensive Loss.  For all periods presented, comprehensive loss approximated net loss in the condensed consolidated statements of operations and differences were not material. Therefore, the condensed consolidated statements of comprehensive loss have been omitted.


 

Ooma | FY2021 Form 10-Q | 7

 


Ooma, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

 

Adopted Accounting Standards

Financial Instruments-Credit Losses. On February 1, 2020, the Company adopted Accounting Standard Update (“ASU”) 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which replaced the legacy incurred loss impairment model with an expected credit loss model. The Company’s accounts receivable, convertible note receivable and available-for-sale debt securities are subject to this standard. The standard was adopted using the modified retrospective transition method, with no adjustment to accumulated deficit. Adoption did not have a material impact on the Company’s condensed consolidated financial statements and related disclosures. The Company will continue to actively monitor the impact of the COVID-19 pandemic on its estimate of expected credit losses.

Fair Value Measurement.  On February 1, 2020, the Company adopted ASU 2018-13, Changes to Disclosure Requirements for Fair Value Measurements (Topic 820), which improved the effectiveness of disclosure requirements for recurring and nonrecurring fair value measurements. The standard removes, modifies, and adds certain disclosure requirements. Adoption did not have an impact on the Company’s condensed consolidated financial statements and related disclosures.

Accounting Standards Not Yet Adopted

Income Taxes.  In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which simplifies certain aspects of the accounting for income taxes as well as clarifies and amends existing guidance to improve consistent application. The amendment is effective for the Company beginning fiscal 2022. The Company is evaluating the impact of the new guidance on its consolidated financial statements.

 


 

Ooma | FY2021 Form 10-Q | 8

 


Ooma, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

 

Note 2:  Revenue and Deferred Revenue

The Company’s revenue for the three months ended April 30, 2020 and 2019 are presented in accordance with the provisions under Topic 606. The Company derives its revenue from two sources:

Subscription and Services Revenue is derived primarily from recurring subscription fees related to service plans such as Ooma Business, Ooma Residential and other communications services. Subscription revenue is generally recognized ratably over the contractual service term. Service plans are generally sold as monthly subscriptions; however, certain plans are also offered as annual or multi-year subscriptions.

Product and Other Revenue is generated from the sale of on-premise appliances and end-point devices, including shipping and handling fees for direct customers, and to a lesser extent from porting fees that enable customers to transfer their existing phone numbers. The Company recognizes revenue from sales to direct end-customers and channel partners at the point-in-time that control transfers, which is typically when it delivers the product or when all customer contractual provisions have been met, if any.

Refer to the Company’s Annual Report for additional information regarding its revenue recognition policy.

Revenue disaggregated by revenue source consisted of the following (in thousands):

 

 

 

Three Months Ended

 

 

 

 

April 30,

2020

 

 

April 30,

2019

 

Subscription and services revenue

 

 

$

37,616

 

 

$

31,112

 

Product and other revenue

 

 

 

2,690

 

 

 

2,895

 

Total revenue

 

 

$

40,306

 

 

$

34,007

 

The Company derived approximately 55% and 64% of its total revenue from Ooma Residential and approximately 43% and 33% from Ooma Business for the three months ended April 30, 2020 and 2019, respectively. No individual country outside of the United States represented 10% or more of total revenue for the periods presented. No single customer accounted for 10% or more of total revenue for the periods presented.

As of April 30, 2020, one customer accounted for 22% of the Company’s net accounts receivable balance. As of January 31, 2020, no single customer accounted for 10% or more of net accounts receivable. 

Deferred Revenue.  Deferred revenue primarily consists of billings or payments received in advance of meeting revenue recognition criteria. Deferred services revenue is recognized on a ratable basis over the term of the contract as the services are provided. For all arrangements, any revenue that has been deferred and is expected to be recognized beyond one year is classified in long term liabilities on the condensed consolidated balance sheets.

Deferred revenue consisted of the following (in thousands):

 

 

 

 

As of

 

 

 

 

 

April 30,

2020

 

 

January 31,

2020

 

Subscription and services

 

 

 

$

15,430

 

 

$

15,892

 

Product and other

 

 

 

 

92

 

 

 

79

 

Total deferred revenue

 

 

 

$

15,522

 

 

 

15,971

 

Less: current deferred revenue

 

 

 

 

15,374

 

 

 

15,797

 

Non-current deferred revenue included in other long-term liabilities

 

 

 

$

148

 

 

$

174

 

During the three months ended April 30, 2020, the Company recognized revenue of approximately $9.3 million pertaining to amounts deferred as of January 31, 2020. As of April 30, 2020, the Company’s deferred revenue balance was primarily composed of subscription contracts that were invoiced during the first quarter of fiscal 2021, as well as amounts recorded during fiscal 2020 for annual contracts.

Remaining Performance Obligations. As of April 30, 2020, contract revenue that has not yet been recognized for open contracts with an original expected length of greater than one year was approximately $6.0 million. The Company expects to recognize revenue on approximately 55% of this amount over the next 12 months, with the balance to be recognized thereafter.

 

Ooma | FY2021 Form 10-Q | 9

 


Ooma, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

 

Note 3:  Fair Value Measurements

The Company records its financial assets and liabilities at fair value. The Company estimates and categorizes fair value by applying the following hierarchy:

Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2:

Observable prices based on inputs not quoted in active markets, but are corroborated by market data.

Level 3:

Unobservable inputs that are supported by little or no market activity.

The Company’s financial assets that are measured at fair value on a recurring basis by level within the fair value hierarchy were as follows (in thousands):

 

 

Balance as of April 30, 2020

 

 

Balance as of January 31, 2020

 

 

 

Level 1

 

 

Level 2

 

 

Total

 

 

Level 1

 

 

Level 2

 

 

Total

 

Cash and cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

5,038

 

 

$

 

 

$

5,038

 

 

$

4,822

 

 

$

 

 

$

4,822

 

Total cash equivalents

 

$

5,038

 

 

$

 

 

$

5,038

 

 

$

4,822

 

 

$

 

 

$

4,822

 

Cash

 

 

 

 

 

 

 

 

 

 

3,998

 

 

 

 

 

 

 

 

 

 

 

6,858

 

Total cash and cash equivalents

 

 

 

 

 

 

$

9,036

 

 

 

 

 

 

 

 

 

 

$

11,680

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Short-term investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. treasury securities

 

$

9,995

 

 

$

 

 

$

9,995

 

 

$

4,492

 

 

$

 

 

$

4,492

 

Corporate debt securities

 

 

 

 

 

2,127

 

 

 

2,127

 

 

 

 

 

 

3,504

 

 

 

3,504

 

Commercial paper

 

 

 

 

 

1,522

 

 

 

1,522

 

 

 

 

 

 

5,482

 

 

 

5,482

 

Asset-backed securities

 

 

 

 

 

607

 

 

 

607

 

 

 

 

 

 

906

 

 

 

906

 

Total short-term investments

 

$

9,995

 

 

$

4,256

 

 

$

14,251

 

 

$

4,492

 

 

$

9,892

 

 

$

14,384

 

 

The Company classifies its cash equivalents and short-term investments within Level 1 or Level 2 because it uses quoted market prices or alternative pricing sources and models utilizing market observable inputs to determine their fair value. At April 30, 2020 and January 31, 2020, cash equivalents and short-term investments approximated their fair value and there were no material realized or unrealized gains or losses, either individually or in the aggregate. The Company had no Level 3 assets or liabilities for the periods presented.

 

The following table classifies the Company’s short-term investments by contractual maturities (in thousands):

 

 

 

 

 

 

As of

 

 

 

 

 

 

 

April 30,

2020

 

 

January 31,

2020

 

Due in one year or less

 

 

 

 

 

$

13,922

 

 

$

13,145

 

Due after one year to two years

 

 

 

 

 

 

329

 

 

 

1,239

 

Total

 

 

 

 

 

$

14,251

 

 

$

14,384

 

 

 

 


 

Ooma | FY2021 Form 10-Q | 10

 


Ooma, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

 

Note 4: Balance Sheet Components

The following sections and tables provide details of selected balance sheet items (in thousands):

Inventories

 

 

 

 

As of

 

 

 

 

 

April 30,

2020

 

 

January 31,

2020

 

Finished goods

 

 

 

$

8,714

 

 

$

6,988

 

Raw materials

 

 

 

 

1,579

 

 

 

1,381

 

Total inventory

 

 

 

$

10,293

 

 

$

8,369

 

Acquired intangible assets

 

 

 

 

As of

 

 

 

 

 

April 30,

2020

 

 

January 31,

2020

 

Customer relationships

 

 

 

$

5,587

 

 

$

5,841

 

Developed technology

 

 

 

 

571

 

 

 

622

 

Trade names

 

 

 

 

333

 

 

 

355

 

Total intangible assets

 

 

 

$

6,491

 

 

$

6,818

 

Amortization expense for acquired intangible assets was $0.3 million and $0.2 million for the three months ended April 30, 2020 and 2019, respectively.

Other assets

 

 

 

 

As of

 

 

 

 

 

April 30,

2020

 

 

January 31,

2020

 

Prepaid expenses

 

 

 

$

3,039

 

 

$

2,739

 

Deferred sales commissions, current

 

 

 

 

3,060

 

 

 

2,525

 

Convertible note receivable, including accrued interest

 

 

 

 

1,489

 

 

 

1,453

 

Deferred inventory costs

 

 

 

 

641

 

 

 

867

 

Other current assets

 

 

 

 

830

 

 

 

1,408

 

Total other current assets

 

 

 

$

9,059

 

 

$

8,992

 

 

 

 

 

 

 

 

 

 

 

 

Deferred sales commissions, non-current

 

 

 

$

8,005

 

 

$

7,412

 

Other non-current assets

 

 

 

 

707

 

 

 

774

 

Total other non-current assets

 

 

 

$

8,712

 

 

$

8,186

 

 

Deferred Sales Commissions.   Amortization expense for deferred sales commissions was $0.8 million and $0.4 million for the three months ended April 30, 2020 and 2019, respectively. To date, there have been no material impairment losses related to the costs capitalized.

Global Telecomm Corporation.   In December 2018, the Company invested $1.3 million in cash to Global Telecomm Corporation, a small privately-held technology company, in exchange for an 18-month convertible promissory note, bearing interest at 10% annually, that will convert to shares of GTC common or preferred stock upon the occurrence of certain future events. The Company has partnered with GTC on certain research and development and inventory procurement activities. GTC is considered a variable interest entity (“VIE”) for accounting purposes. However, the Company is not required to consolidate GTC into its financial statements because the Company is not the primary beneficiary. As of April 30, 2020 and January 31, 2020, the Company’s maximum exposure to loss was equal to the carrying value of its convertible note receivable and associated interest receivable. For all periods presented, the Company had no other variable interests in VIEs.

 

Ooma | FY2021 Form 10-Q | 11

 


Ooma, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

 

GTC is a related party of Ooma as a result of the convertible note. As of April 30, 2020 and January 31, 2020, the Company recorded inventory prepayments to GTC of $0.8 million and $0.5 million, respectively, included in other current assets on the consolidated balance sheet. As of April 30, 2020 and January 31, 2020, the Company’s non-cancelable purchase commitments with GTC were $1.9 million and $2.2 million, respectively.

Accrued expenses and other current liabilities

 

 

 

 

As of

 

 

 

 

 

April 30,

2020

 

 

January 31,

2020

 

Regulatory fees and taxes

 

 

 

$

4,804

 

 

$

4,777

 

Payroll and related expenses

 

 

 

 

4,443

 

 

 

8,942

 

Short-term operating lease liabilities

 

 

 

 

3,819

 

 

 

3,263

 

Customer sales incentives

 

 

 

 

1,079

 

 

 

1,293

 

Other

 

 

 

 

3,294

 

 

 

4,301

 

Total accrued expenses

 

 

 

$

17,439

 

 

$

22,576

 

 

 

 

 

 

 


 

Ooma | FY2021 Form 10-Q | 12

 


Ooma, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

 

Note 5:  Operating Leases

The Company leases its headquarters located in Sunnyvale, California, as well as office and data center space in various locations under non-cancelable operating lease agreements.  

Supplemental balance sheet information related to leases was as follows (in thousands):

 

 

 

 

As of

 

 

 

 

 

April 30,

2020

 

 

January 31,

2020

 

Assets

 

 

 

 

 

 

 

 

 

 

Operating lease right-of-use assets

 

 

 

$

7,557

 

 

$

8,057

 

   Total leased assets

 

 

 

$

7,557

 

 

$

8,057

 

Liabilities

 

 

 

 

 

 

 

 

 

 

Short-term operating lease liabilities

 

 

 

$

3,819

 

 

$

3,263

 

Long-term operating lease liabilities

 

 

 

 

4,566

 

 

 

5,150

 

   Total lease liabilities

 

 

 

$

8,385

 

 

$

8,413

 

 

Operating lease right-of-use assets and long-term operating lease liabilities are included on the face of the condensed consolidated balance sheet. Short-term operating lease liabilities are included in other current liabilities.

During the three months ended April 30, 2020 and 2019, the Company incurred total lease costs of $1.2 million and $0.8 million, respectively, in its consolidated statements of operations.

Supplemental cash flow information related to leases was as follows (in thousands):

 

 

 

 

Three Months Ended

 

 

 

 

 

April 30,

2020

 

 

April 30,

2019

 

Cash paid for amounts included in the measurement of lease liabilities:

 

 

 

 

 

    Operating cash flows from operating leases

 

 

 

$

431

 

 

$

526

 

Right-of-use assets recognized in exchange for new operating lease obligations

 

 

 

$

303

 

 

$

120

 

 

As of April 30, 2020, maturities of lease liabilities under non-cancelable operating leases were as follows (in thousands):

 

Fiscal Years Ending January 31,

 

 

 

 

 

April 30, 2020

 

2021 - remainder of fiscal year

 

 

 

 

 

$

2,917

 

2022