On December 5, 2023, Ooma Inc (OOMA, Financial) released its 8-K filing, detailing the financial results for the fiscal third quarter ended October 31, 2023. The company, known for its smart communications platform for businesses and consumers, reported a total revenue of $59.9 million, marking a 6% increase compared to the same period last year. This growth was primarily attributed to the expansion of Ooma Business, which contributed to the rise in subscription and services revenue to $55.9 million, representing 93% of the total revenue.
Fiscal Performance Highlights
Ooma Inc (OOMA, Financial) experienced a notable turnaround in profitability, with GAAP net income reported at $2.3 million, or $0.09 per basic and diluted share. This is a stark contrast to the GAAP net loss of $2.8 million, or $0.11 per basic and diluted share, in the third quarter of fiscal 2023. The improvement in GAAP net income includes a tax benefit of $3.2 million due to the release of a valuation allowance related to the acquisition of 2600Hz Inc. Adjusted EBITDA also saw an increase to $5.0 million from $4.5 million in the prior year's quarter.
Non-GAAP net income for the quarter stood at $4.0 million, or $0.15 per diluted share, compared to $3.5 million, or $0.14 per diluted share, in the third quarter of fiscal 2023. The company's CEO, Eric Stang, commented on the performance, stating:
“Q3 was another strong quarter for Ooma, with 8% year-over-year subscription and services revenue growth driven by 14% year-over-year growth in core business services revenue. We continued in the quarter to invest in premium product features and international expansion for Ooma Office and Ooma Enterprise and to increase sales resources and reseller partnerships for AirDial. In addition, we acquired the company 2600Hz to expand our technological resources and capitalize on the opportunity we see in the wholesale and CPaaS marketplace. We believe we are pursuing exciting opportunities for growth in conjunction with sensible expense management.”
Forward-Looking Projections
Looking ahead, Ooma Inc (OOMA, Financial) provided guidance for the fourth quarter of fiscal 2024, expecting total revenue to be between $61.2 million and $61.8 million, with a GAAP net loss per share in the range of $0.13 to $0.14. Non-GAAP net income is projected to be between $3.1 million and $3.4 million, with a non-GAAP net income per share in the range of $0.12 to $0.13. For the full fiscal year 2024, the company anticipates total revenue to be in the range of $236.3 million to $236.9 million, with a GAAP net loss per share between $0.04 and $0.05, and non-GAAP net income per share between $0.57 and $0.58.
Financial Statements Overview
The balance sheet reflects an increase in total assets to $162.9 million, up from $131.0 million at the end of the previous fiscal year. This increase is largely due to the acquisition of 2600Hz Inc., which contributed to the growth in intangible assets and goodwill. The company's cash and cash equivalents stood at $18.9 million as of October 31, 2023.
The condensed consolidated statements of operations show a gross profit of $36.9 million for the quarter, with operating expenses totaling $37.9 million, resulting in a loss from operations of $1.0 million. However, the income tax benefit and other adjustments led to the reported GAAP net income of $2.3 million.
Ooma Inc (OOMA, Financial)'s financial performance this quarter demonstrates the company's ability to grow its core business services and manage expenses effectively. The positive shift from a net loss to net income, alongside the strategic acquisition of 2600Hz, positions Ooma for potential growth in the evolving communications platform as a service (CPaaS) market.
Investors and analysts are encouraged to review the full financial details and listen to the webcast of the earnings call for a deeper understanding of Ooma Inc (OOMA, Financial)'s financial performance and future outlook.
Explore the complete 8-K earnings release (here) from Ooma Inc for further details.
