Hello, everyone, and thank you for attending the last day of the Needham Virtual Growth Conference. I am Jeff Hobson. I work with Ryan Koontz on the Networking and Communications team. Today we have management from Ooma, the CFO, Shig Hamamatsu, and he's going to take us through a presentation, and time remaining, we will have some Q&A at the end, which you can type in any questions to the chat, and we'll do our best to get to them. Shig, if you want to take it away. Thank you, Jeff. Thanks, everyone, for joining today's presentation. So just a housekeeping item here. Let me take a moment to go over the Safe Harbor Statement. We're going to discuss some forward-looking statements as well as non-GAAP financial measures. We encourage you to review the most recent 10-K and 10-Q filed with the SEC in conjunction with today's presentation. So who is Ooma? We believe we are a leading cloud-based communication service provider with simple and elegant solutions that are accessible for everyone. And in that regard, small businesses are key focus for us as a company, as well as residential customers. In addition to small businesses and residential customers who are our core customers today, I'm going to discuss a couple of other new key markets we entered recently, which we believe could contribute to our growth in the coming years. So here's a quick snapshot of Ooma today. We have an annual revenue run rate in excess of $250 million, 92%-93% of which is on a recurring basis, which makes our revenue highly predictable. We also have a high recurring revenue retention rate at 99%, which has been steady in that range. Our recurring revenue base also has a healthy gross margin, which is at 72% today on a non-GAAP basis, and our adjusted EBITDA margin today is about 9%. We believe we have a path to improve both non-GAAP gross margin and adjusted EBITDA meaningfully in the coming years, which I will discuss later on in this presentation. We have about 1,100 employees and contractors, and they're headquartered in Sunnyvale, California, and additional offices located in Florida, as well as in Vancouver, British Columbia. Today, we serve users in over 30 countries. On the UCaaS side, we have these three areas to the business. The middle one, Ooma Office, is a primary focus today, geared towards small businesses with one to 20 employees. We put together a turnkey solution with rich features that can be deployed by those small businesses without assistance from IT professionals. Some of the features available for Ooma Office include mobile app, desktop app, call recording and transcription, video meeting, messaging, as well as CRM integration. With these types of features, we're enabling small businesses operating like big businesses at a small business price. On the left is Ooma Telo, which is a residential solution that remains solid today, generating roughly $100 million of revenue annually. The residential business is relatively flat for the past few years, but we started to see new opportunities. Our telecom carriers are turning off traditional copper lines and looking for a replacement solution for their customers. Lastly, Ooma Enterprise on the right, which is a relatively small part of our business today, as we primarily focus on the hospitality vertical, hotels, where we believe we can provide a unique solution. We have hundreds of hotels on our platform today, with more hotels added each quarter. So here's a page we're very proud of on Ooma Office and Telo. In the third-party survey of users, we have been ranked number one for both of these solutions consistently over the years. PC Magazine, in particular, has ranked Ooma number one for the past 11 years for business VoIP solution over the other vendors that you see in this chart, and Consumer Reports at the bottom is for the Ooma Telo residential solution. Here is a quick overview of the business UCaaS market in North America, as well as the size of the global UCaaS market, which is growing nicely at 7% CAGR, as you can see on the right-hand side chart. In North America alone, we estimate 4 million - 5 million small businesses with one to 20 employees are yet to convert to a UCaaS solution. And we believe there is a long runway for growth for Ooma Office. As I mentioned earlier, we had two new areas we believe will contribute to our growth in the coming years. Today, they are relatively small compared to our traditional UCaaS offerings, but growing more quickly, as you would expect. The first is AirDial on the left, and it is used to replace copper lines that are connected to industrial equipment that can't easily be served by fiber or other standard internet connection. There are millions of copper lines in the U.S. today, and we have seen estimates of 10 million or more copper lines that could be going away over the next several years. In fact, AT&T has said in its investor day recently that they plan to sunset the vast majority of their copper lines over the next five years. The second new growth opportunity is a wholesale platform called 2600Hz on the right of this page. 2600Hz is our core platform offering, which we use in our own UCaaS solutions. It is also available standalone for other companies that want to wholesale or white-label it and then build their own solutions on top of it to resell to their own users. 2600Hz gives us an entry into many other providers of UCaaS and other types of services with a wholesale platform that they can build off of. We believe there's a vast market opportunity here of carriers and others that are using other platforms, which they need to move off of, and they are looking for a new platform like 2600Hz to replace with. Now, let me dive a little bit deeper into these two new growth opportunities. So for AirDial, here are common applications we serve. As you can see on the right half of this page, we got an elevator phone, alarm panel, gate phone, or door entry phones, to name a few. As mentioned earlier, millions of copper lines are connected to these endpoint devices today. Imagine a retailer or REIT with hundreds or thousands of locations around this country, and they have some of these equipment at every location. With the copper lines going away, they need a cost-effective alternative like AirDial to replace the copper lines without replacing their endpoint devices. Those are good examples of customers we are targeting and winning as we continue to engage with new reseller partners each quarter, in addition to selling through our direct sales team. We have over 20 resellers over AirDial today, including T-Mobile and USc ellular. We also announced in the last earnings call back in December that we had signed a tier-one cable company to resell AirDial, which we are very excited about. Overall, we estimate that installing 300,000 lines over AirDial could generate approximately $100 million of recurring revenue, which is part of our objective to double revenue over the next four to five years. As for 2600Hz, we are very proud of the fact that it is a very modern API-driven platform. The platform offers roughly 300 APIs, which speaks to its flexibility and customizability. We announced in our last earnings call that ServiceTitan is using the 2600Hz platform for their Contact Center Pro solution, and we're very excited to engage with them as they continue to grow nicely. In terms of our broader opportunities for 2600Hz, we're very excited about that there is a large number of carriers out there who built the UCaaS solutions of either BroadSoft, which is sold by Cisco, or Metaswitch, which Microsoft just sold to Alianza. We believe these carriers represent significant conversion opportunities as Cisco pushes its customers towards a more expensive Webex solution, which is not ideal, and the Metaswitch customers face uncertainty as Alianza, a small private company, takes over Metaswitch, so after covering our core offerings today, along with these two new exciting growth areas, let me summarize our growth drivers. First, there are still hundred millions of small businesses in North America with one to 20 employees that are yet to convert to a UCaaS solution. Ooma Office provides them with a feature-rich, easy-to-implement solution and will continue to contribute to our growth. Second, we have a capability to serve large businesses with unique customization requirements. We believe we can do this in two ways. With Ooma Enterprise, we take a focused approach on helping hospitality customers achieve their unique needs. With the 2600Hz wholesale platform, we can also help large enterprises like ServiceTitan to easily customize the features using over 300 APIs available and deploy solutions to end users cost-effectively. Third, we believe AirDial is well-positioned to capture the large parts line replacement market, which we expect will pick up over the next few years as more and more copper lines are turned off by the large carriers like AT&T. Fourth, we believe the 2600Hz platform represents a significant conversion opportunity for carriers who own either BroadSoft or Metaswitch today. Lastly, we have opportunities to expand further in international markets. Today, we are in over 30 countries, mostly serving our largest customer, IWG, for their UCaaS needs. We believe we can expand further internationally with AirDial, as many other countries will need similar parts line replacement solutions. Additionally, the 2600Hz wholesale platform can provide carriers around the world with an alternative platform to migrate off of Metaswitch or BroadSoft. So now let me just get to the last half of the presentation with a financial summary here. As I mentioned at the beginning, we have an annual revenue run rate of over $250 million. For the most recent quarter, back in October, we generated about $65 million in revenue. You can see in the chart on the left that we have delivered consistent revenue growth over the years, as more than 90% of our revenue is on a recurring basis. In terms of our recurring revenue base, we have approximately 1.25 million users on our residential and business offerings, which we collectively call core users. At the end of the quarter, third quarter, excuse me, we have over 500,000 business users, which comprise users of Ooma Office, Ooma Enterprise, and AirDial. As you can see in the chart on the right, we're seeing an increasing trend in the business users based on the growth drivers I mentioned a few minutes ago. The business users accounted for over 60% of recurring revenue in the third quarter, and we believe this increasing trend will not only drive our revenue growth, but also gross margin and adjusted EBITDA margin expansion, as the average revenue per user or output is higher for the business users as compared to the residential users. Here are a couple of key metrics we report on a quarterly basis. The chart on the left shows our output, which is a blend of residential and business users. As you can see, our output has been increasing consistently over the years, primarily due to an increasing mix of business users. Along with the growth in business users and output, our annual exit recurring revenue, or AERR, has increased steadily over the years as well. So this chart shows a trend for our adjusted EBITDA on a trailing 12-month basis in the bars, and the trailing 12-month free cash flow trend in the green lines. For the most recent October quarter, we reported a 9% adjusted EBITDA margin, and the record $6.5 million free cash flow for the quarter. The increasing profitability and cash flow trend in this chart aligns well with our long-term target, which I will get into in a minute. But as you can see the accelerating trend for, particularly for the green lines, which is the trailing 12-month free cash flow on this chart. Here's a quick snapshot of our balance sheet and cash flow. We show a little bit of debt at the end of Q3 to the far right column, which is $3 million, but we have subsequently paid off and are debt-free as of today. We have also CapEx-light company, and as you can see, last quarter, we spent about $1.6 million in that quarter, which is about an average for the quarterly trend. And we don't believe we need to incur significant CapEx to drive revenue growth, which is great because as we continue to grow cash flow operations, not growing CapEx spend will yield to the growing free cash flow trend. So this is the last page of our presentation, and I'd like to cover our near-term and long-term model really quick. As I mentioned earlier, we believe we could achieve adjusted EBITDA margin in the low teens in the next one to two years, which is mostly driven by operating leverage from R&D spend. As we exit the heavy upfront investment phase for AirDial and other offerings, we can better manage R&D expense while still delivering revenue growth going forward, so historically, we are hovering around 19% revenue, as you can see in the first three columns. This is R&D as a percentage of revenue. In the short term, we can get down to mid-teens and further down for the long term into low teens to mid-teens, and by the way, for the long-term model, we are targeting it for the next four- to five-year time horizon, with revenue doubling from where we are today. So $250 million next four to five years, we're aiming to double revenue to about $500 million. So how do we double our revenue in that time frame? We see three main drivers to it. One is our core UCaaS offerings of Ooma Office and Ooma Enterprise driving another $100 million of growth. As I said earlier, particularly for Ooma Office, there's a long runway for millions of small businesses to go after. Second is AirDial, which on its own could be a $100 million recurring revenue business. And lastly, we think that the 2600Hz wholesale platform can contribute meaningfully to the remainder of anticipated growth as we go after the conversion opportunity from the customer base of Metaswitch and BroadSoft that I described earlier. When we double our revenue through these growth drivers, we believe a mix of business users can continue to grow from 61% today to, say, 75%-80% range, which in turn would improve both of our subscription margin, gross margin, and the overall gross margin by, we think it's going to be three percentage points to five percentage points from where we are today. Additionally, we see further operating leverage, as I said earlier, from R&D, but in addition to that, sales and marketing that would further contribute to the adjusted EBITDA margin expansion over time. Overall, in this time frame, long term, four to five years, we believe we could achieve the long-term adjusted EBITDA margin in the range of over 20%, as you can see in this model. That is the prepared portion of my presentation. So, Jeff, I'm not sure if I opened up the questions or you're going to ask some questions or please go ahead. Absolutely. If anyone has any questions, please drop them in the chat and we will get to them. I can start off with a couple myself. Three really good opportunities that you laid out between the different segments. How is the go-to-market strategy similar or different when you're going after those three different segments or opportunities? Sure. So when it comes to traditional core UCaaS small business areas, we mostly do direct sales using the search engine marketing. We have an internal sales force that takes calls from the customers to try to convert them to the customers. We also have some leads that we obtain and try to convert. So it's mostly direct on the Ooma Office side. The Ooma Enterprise, we typically go through the traditional telecom agent channels to engage with the customers. AirDial is quite different. We do have a direct sales force who obviously engages directly with some opportunities, but as I said earlier, a bigger part of AirDial prospectively would be through reseller partners, so as I mentioned earlier, T-Mobile is one of them. You have seller, Tier 1 cable company, which we are very excited about that we announced recently. We also work with some telecom aggregators, so those are the companies that aggregate the various telecommunication services, and we sell it to their customers, so we work with them, and they also resell AirDial as well, so AirDial itself is a very different sales motion in that aspect. 2600Hz is also different where it requires our internal sales team and some engineers to engage with prospective customers and discuss their customization needs because those carriers are trying to white label, customize to their own needs to resell the platform. So we go through that direct engagement process, and that typically means also that for 2600Hz, a little longer customer engagement cycle before we start to generate revenue for the new customer engagements. So these are different types of go-to-market strategy that we have. Perfect. We had a question come in while you're answering that. Not sure if you have this question on hand, but what will the adjusted EBITDA margin be, including stock-based comp and depreciation over the long term? Yeah. So typically, beyond these typical EBITDA adjustment items, historically and prospectively, what we see is we are also acquisitive in the sense that we like to target small business UCaaS providers, $10 million-$20 million in revenue. We target them as a customer acquisition strategy, and that's part of our growth strategy as well, in addition to organic strategy. So when we do these transactions, in addition to intangible amortization that was already mentioned in the question, we typically incur legal costs and other things associated with this one-off transaction. So we typically exclude those. And so these are probably common other items that come into play in adjusted areas. And I think that's a good segue to your acquisitions have given you some good opportunities. And we saw that chart of cash flow is on a very impressive streak of growth. Yep, up and to the right. So how are you kind of thinking capital allocation today? And maybe if there was another acquisition opportunity, what kind of segments or verticals are you looking for? Sure. So now, as I said, we're a debt-free company. Not that we carry that big of debt anyway, but we're debt-free today. As we think about the capital allocation, there's a few areas. One is what you were saying earlier, which is to pursue appropriate M&A opportunity to organically grow. Just to reiterate, our target would be small business UCaaS providers, $10 million-$20 million revenue, let's say. We are very disciplined to acquire these companies at a reasonable price, meaning we historically targeted 1x revenue or less type of valuation. One example that I can tell you is we acquired a company called OnSIP at this point, well, two and a half years ago. They were a $10 million revenue company. We paid $10 million, so that's a nice valuation, 1x. And they had 50,000 users. So high-level math is we basically acquired 50,000 users at $200 per user, which from my perspective, it's a very cost-effective way to acquire a customer in relation to organic customer acquisition cost in this particular case. So if we can find opportunities like that, which we believe there are more and more in the future to do something like that, we'd like to do more of those. And also, we target those types of companies where we can show operating leverage as we acquire them. We typically are able to take advantage of our cost structure by moving their infrastructure to ours. A lot of these companies we buy may be breaking even, but post-acquisition, we make sure that we take actions to make them very equitable. I mean, accretive. Excuse me, accretive to our profitability. So long story short, that remains our blueprint, let's say, for M&A strategy as we find the right opportunity. Second area that we could spend cash on is last year or so, we spent about $5 million of cash to buy back our stock, mostly to offset our employee share issuances from the employee stock plan. But as we generate excess cash, we'll continue to be opportunistic about offsetting some of that dilution prospectively. Lastly, I can see that in the near term, we may need to replenish some inventory, particularly AirDial and some other areas as we continue to grow. Some of those free cash flow benefits that we got in the last few quarters. We worked hard to reduce the inventory levels, which the team did a great job of, and perhaps the Q3 inventory level was the low point in the short term, but as we grow prospectively, especially with AirDial, we may need to spend some cash on inventory to meet the demand, so I see those three areas being the primary areas of capital allocation in the short term. A couple more questions coming in. Kind of a three-parter here. Is organic investment based on break-even in two years? What are the acquisitions, multiples? What is the ROC measured across these two? Yeah, so we typically look at customer acquisition metrics that we talked about. And so if we were to do something along the line of OnSIP, I described at $200 per cap, we think that the return on investment on that is much faster than 24 months. And we typically measure that on a gross margin basis, by the way. But more importantly, in addition to looking at the customer acquisition return on investment, but we also look at the return on investment from the EBITDA generation perspective. And again, we typically target to ensure that we have a path to get to accretive adjusted EBITDA within, I would say, a year to year and a half, certainly less than two years. That's how we typically target to make sure we're getting a good return on our money in the case of M&A. And you kind of touched on earlier with your 2600Hz winning ServiceTitan as a large customer. How do you kind of think about the competitive environment in that specific segment and any pricing dynamics that come with winning new customers? Sure. So one thing that is important to get reminded of as we think about the market, so this is really going after the large market that we're going after with 2600Hz is this conversion opportunity that I spoke about of the customers who are today on either BroadSoft or Metaswitch. And there are different numbers out there. There are like 1,000 carriers globally with underlying users, underlying their end users into millions, 40 million, 50 million users on these two platforms. So it's a large market. And there are a couple of other competitive solutions, but we think that the market is large enough where we can offer a good alternative solution to migrate off of versus a competitor solution. And also, we believe that we're investing a little bit more into the features and R&D to continuously improve the platform as opposed to a competitor that I'm thinking about. But also, it's important to know that this is a wholesale market. So the ARPU on a per-user basis, so revenue model is to license it on a per-user basis. And maybe there's some usage component, but mainly the per-user type of revenue stream is recurring. And this is a wholesale platform, so ARPU level for the wholesale is going to be lower. I would say single digit, low single digit is a good way to think about it. As opposed to our Ooma Office, for example, we're selling to the end user, but that's not the wholesale model, right? And so that is about $20 per user, but this is a wholesale model. But so this is a low ARPU, but it is a volume play because, as I said, if we win one, two, three, and multiple carriers, the number of users that we're going to gain from that relationship is quite a bit of users. So that's where things get made up with lower ARPU versus with a higher user count. By the way, as I say, this platform, the wholesale platform offerings, it's not part of the core metrics that we're disclosing every quarter. So this is outside because obviously, with a different ARPU pricing point, it doesn't mix well with the disclosure we normally do. So just FYI. So to wrap up, to answer your question, we think it's a huge market, and it's got a long runway for us to go after for these opportunities globally. Then there was another set of your long-term targets with some impressive margin expansion, which you had noted it would come from operating leverage in sales and marketing or R&D. How are you kind of balancing that operating leverage, but also making sure you're investing in innovation or new products to make sure customers are getting that experience still? With respect to R&D, we're very comfortable with the lower percentage revenue that you see in this target compared to historical 19%. The reason for that is, as I said earlier, a couple of years ago, we introduced, as an example, AirDial. As we introduced a new product leading up to that, as you can imagine, there's a heavy investment phase. As you put that product in the field, you refine it, improve it. So, a lot of that went on the last two to three years, let's say, for AirDial. So, as I said, most of that is behind us, and we're trying to ramp up commercially. And so, part of the reason for R&D being diluted down and we have a confidence for it is that that heavy investment phase by AirDial is behind us. Similarly, we spent a lot of effort in R&D to develop new features for Ooma Office, as an example, where we introduced the third highest tier, Ooma Office Pro Plus. And we have more to go, but the heaviest development phase for that as well is behind us. So, there are a lot of specifics around why we spent as much as we did in the last few years. Now we know that most of these are complete, that we have a pretty good visibility as to how much we should invest, need to invest to maintain the appropriate level of investment, be competitive, feature updates, and all that. We truly believe this is where things are for R&D prospectively. In terms of sales and marketing, I think there's a leverage that's going to be out there, especially for, again, for AirDial, to the extent that larger wins will come through these reseller partners like T-Mobile or cable company that I mentioned. Because to the extent that they resell, that means that we don't have to carry our own direct sales force, which will be a fixed cost for us. And to the extent that reseller would win the big accounts for us and grow the top line, the burden of us carrying that direct sales force is less. And so that gives us to leverage as a percentage of revenue here for the long term. So as we look at this model, as we scale the revenue double in the next four to five years, as I said, we feel pretty good about operating leverage that we can deliver in the same timeframe. Looks like we just have one more, which was kind of already answered when you were talking about the 2600Hz segment and a little more overall, but competitive position is still likely the lowest cost provider. Any thoughts on how this position is sustainable over the long term, maybe even getting these gross margin targets as well? I know you kind of talked about that, but if you had any collective thoughts on the sustainability of that? Right. I think it's very sustainable in many areas that we have, actually all the areas we have. So if you take a traditional area, we have been the low-cost solution, and it's still delivering the healthy gross margin. And as we scale revenue, even for Ooma Office and AirDial, we believe we can continue to maintain the healthy gross margin, even reselling into resellers for AirDial. You might think that, well, does that mean that your ARPU is low going selling into reseller who needs a margin on their side? But the fact is, our cost for that is lower too because to the extent that reseller is taking care of certain things on their end, we don't have to incur the cost on our side. So, our margin at the gross margin and adjusted EBITDA level, we think, is pretty intact and nicely fit into this long-term model. So, long story short, we feel good about our cost structure. And as we scale the revenue up, like I said, we are also a CapEx-like company as well. So, we believe we can improve on gross margin with a scale, bigger scale. And the leverage that we have in OpEx I talked about, we're feeling pretty good about the long-term model. Looks like we have about a minute left. Shig, any concluding remarks that you want investors to take away? No, appreciate all of you joining this presentation today. We are very excited about the future ahead of us. Obviously, core business growing steadily, and we got two new opportunities I described, both of which are very large market that we are going after. So we look forward to catching up with you. We should be releasing Q4 earnings. We are January year-end, by the way, so we should be releasing earnings early March and talk about how we're doing for next year. So we look forward to catching up again then. So thanks for your time today. And thank you, Nita and team, to let us present as well. Thank you, Shig, and thank you for everyone that tuned in. Please enjoy the rest of the conference and your long weekend.