Ooma Prices Initial Public Offering

The underwriters for the offering are Credit Suisse, Merrill Lynch, JMP Securities, William Blair, and Wunderlich.

The company is a provider of communications solutions and other connected services to small business, home and mobile users. It operates a unique hybrid software as a service (SaaS) platform consisting of proprietary cloud, on-premise appliances, mobile applications and end-point devices.

The platform helps create smart workplaces and homes by providing value-added communications and other connected services and by integrating end-point devices to enable the Internet of Things.

Core users grew to roughly 678,000 as of April 30, 2015 from 174,000 as of January 31, 2011, representing a compound annual growth rate (CAGR) of 38%. Note that the company defines core users as the number of home user accounts, office user extensions, and standalone Business Promoter accounts, which means Business Promoter users who do not subscribe to any other services from Ooma.

In terms of its finances, Ooma detailed in the filing:

We have a predictable revenue model with growth in recurring revenue, with total revenue of $39.2 million, $53.7 million and $72.2 million in fiscal 2013, fiscal 2014 and fiscal 2015, respectively. Our total revenue for the three months ended April 30, 2014 and 2015 was $16.3 million and $19.9 million, respectively. Subscription and services revenue, which includes the recurring portion of our total revenue, has increased as a percentage of our total revenue over the last four years, from approximately 30% in fiscal 2011 to 75% in fiscal 2015. It has also increased as a percentage of our total revenue from 67% for the three months ended April 30, 2014 to 78% for the three months ended April 30, 2015. We have continued to make significant investments in research and development, brand marketing and channel development, incurring net losses of $(3.7) million, $(2.0) million and $(6.4) million in fiscal 2013, fiscal 2014 and fiscal 2015, respectively, and a net loss of $(3.9) million for the three months ended April 30, 2015. In addition, we had net income of $0.5 million for the three months ended April 30, 2014.

In terms of the proceeds from this offering Ooma expects to use them primarily for general corporate purposes, including working capital, sales and marketing activities, general and administrative matters, capital expenditures and further development of our solutions.

FULL FILING