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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, 2024

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, 2024, there were 26.4 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

17

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

25

Item 4.

Controls and Procedures

25

PART II. OTHER INFORMATION

 

Item 1.

Legal Proceedings

26

Item 1A.

Risk Factors

26

Item 2.

Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities

58

Item 5.

Other Information

58

Item 6.

Exhibits

58

Signatures

 

60

 

Ooma | FY2025 Form 10-Q | 2


 

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

OOMA, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited, amounts in thousands)

 

 

April 30,
2024

 

January 31,
2024

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

15,585

 

$

17,536

Accounts receivable, net

 

 

10,833

 

 

9,864

Inventories

 

 

17,263

 

 

19,782

Other current assets

 

 

13,701

 

 

16,497

Total current assets

 

 

57,382

 

 

63,679

Property and equipment, net

 

 

10,648

 

 

9,897

Operating lease right-of-use assets

 

 

16,596

 

 

17,041

Intangible assets, net

 

 

26,468

 

 

27,952

Goodwill

 

 

23,069

 

 

23,069

Other assets

 

 

21,072

 

 

17,615

Total assets

 

$

155,235

 

$

159,253

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

10,803

 

$

7,848

Accrued expenses and other current liabilities

 

 

22,136

 

 

26,586

Deferred revenue

 

 

16,474

 

 

17,041

Total current liabilities

 

 

49,413

 

 

51,475

Long-term operating lease liabilities

 

 

13,317

 

 

13,676

Debt, net of current portion

 

 

11,500

 

 

16,000

Deferred revenue, non-current

 

 

17

 

 

15

Total liabilities

 

 

74,247

 

 

81,166

Commitments and contingencies (Note 11)

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

Common stock

 

 

5

 

 

5

Additional paid-in capital

 

 

216,401

 

 

211,361

Accumulated other comprehensive loss

 

 

(1)

 

 

(1)

Accumulated deficit

 

 

(135,417)

 

 

(133,278)

Total stockholders’ equity

 

 

80,988

 

 

78,087

Total liabilities and stockholders’ equity

 

$

155,235

 

$

159,253

 

See notes to condensed consolidated financial statements

 

Ooma | FY2025 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,
2024

 

April 30,
2023

Revenue:

 

 

 

 

 

 

Subscription and services

 

$

58,389

 

$

53,049

Product and other

 

 

4,110

 

 

3,803

Total revenue

 

 

62,499

 

 

56,852

 

 

 

 

 

 

Cost of revenue:

 

 

 

 

 

 

Subscription and services

 

 

17,460

 

 

14,725

Product and other

 

 

6,924

 

 

6,175

Total cost of revenue

 

 

24,384

 

 

20,900

Gross profit

 

 

38,115

 

 

35,952

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

Sales and marketing

 

 

19,481

 

 

17,990

Research and development

 

 

13,793

 

 

11,953

General and administrative

 

 

7,578

 

 

6,617

Total operating expenses

 

 

40,852

 

 

36,560

Loss from operations

 

 

(2,737)

 

 

(608)

Interest and other income, net

 

 

923

 

 

415

Loss before income taxes

 

 

(1,814)

 

 

(193)

Income tax provision

 

 

(325)

 

 

(133)

Net loss

 

$

(2,139)

 

$

(326)

 

 

 

 

 

 

Net loss per share of common stock:

 

 

 

 

 

 

Basic and diluted

 

$

(0.08)

 

$

(0.01)

 

 

 

 

 

 

Weighted-average shares of common stock outstanding:

 

 

 

 

 

 

Basic and diluted

 

 

26,224,396

 

 

25,178,008

 

See notes to condensed consolidated financial statements

Ooma | FY2025 Form 10-Q | 4


 

OOMA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, amounts in thousands)

 

 

 

Three Months Ended

 

 

 

April 30,
2024

 

 

April 30,
2023

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net loss

 

$

 

(2,139

)

 

$

 

(326

)

Adjustments to reconcile net loss to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Stock-based compensation expense

 

 

 

4,363

 

 

 

 

3,500

 

Depreciation and amortization of capital expenditures

 

 

 

1,035

 

 

 

 

1,063

 

Amortization of intangible assets

 

 

 

1,484

 

 

 

 

741

 

Amortization of operating lease right-of-use assets

 

 

 

783

 

 

 

 

647

 

Gain on note conversion

 

 

 

(980

)

 

 

 

 

Other

 

 

 

38

 

 

 

 

(2

)

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable, net

 

 

 

(969

)

 

 

 

(1,603

)

Inventories and deferred inventory costs

 

 

 

2,581

 

 

 

 

965

 

Prepaid expenses and other assets

 

 

 

482

 

 

 

 

(755

)

Accounts payable, accrued expenses and other liabilities

 

 

 

(2,528

)

 

 

 

(2,352

)

Deferred revenue

 

 

 

(565

)

 

 

 

(594

)

Net cash provided by operating activities

 

 

 

3,585

 

 

 

 

1,284

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Proceeds from maturities of short-term investments

 

 

 

 

 

 

 

1,750

 

Capital expenditures

 

 

 

(1,450

)

 

 

 

(1,374

)

Business acquisition, working capital adjustments

 

 

 

 

 

 

 

300

 

Net cash (used in) provided by investing activities

 

 

 

(1,450

)

 

 

 

676

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Proceeds from issuance of common stock

 

 

 

1,417

 

 

 

 

1,724

 

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

 

 

 

(740

)

 

 

 

(431

)

Repayments of long-term debt

 

 

 

(4,500

)

 

 

 

 

Net cash (used in) provided by financing activities

 

 

 

(3,823

)

 

 

 

1,293

 

Net (decrease) increase in cash, cash equivalents and restricted cash

 

 

 

(1,688

)

 

 

 

3,253

 

Cash and cash equivalents, at beginning of period

 

 

 

17,536

 

 

 

 

24,137

 

Cash, cash equivalents and restricted cash, at end of period

 

$

 

15,848

 

 

$

 

27,390

 

Reconciliation of cash, cash equivalents and restricted cash within the consolidated balance sheets to the amounts shown in the statements of cash flows above:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

 

15,585

 

 

$

 

27,390

 

Restricted cash, current included in other current assets

 

 

 

263

 

 

 

 

 

Total cash, cash equivalents and restricted cash

 

$

 

15,848

 

 

$

 

27,390

 

See notes to condensed consolidated financial statements

Ooma | FY2025 Form 10-Q | 5


 

OOMA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited, amounts in thousands)

 

 

Common stock

 

 

 

 

 

 

Accumulated

 

 

Stockholders'

 

Fiscal 2025

 

and APIC (1)

 

 

AOCL (2)

 

 

Deficit

 

 

Equity

 

BALANCE - February 1, 2024

 

$

 

211,366

 

 

$

 

(1

)

 

$

 

(133,278

)

 

$

 

78,087

 

Issuance of common stock under equity-based plans

 

 

 

1,417

 

 

 

 

 

 

 

 

 

 

1,417

 

Shares repurchased for tax withholdings on RSU vesting

 

 

 

(740

)

 

 

 

 

 

 

 

 

 

(740

)

Stock-based compensation

 

 

 

4,363

 

 

 

 

 

 

 

 

 

 

4,363

 

Net loss

 

 

 

 

 

 

 

 

 

(2,139

)

 

 

 

(2,139

)

BALANCE - April 30, 2024

 

$

 

216,406

 

 

$

 

(1

)

 

$

 

(135,417

)

 

$

 

80,988

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock

 

 

 

 

 

 

Accumulated

 

 

Stockholders'

 

Fiscal 2024

 

and APIC

 

 

AOCL

 

 

Deficit

 

 

Equity

 

BALANCE - February 1, 2023

 

$

 

195,610

 

 

$

 

(23

)

 

$

 

(132,443

)

 

$

 

63,144

 

Issuance of common stock under equity-based plans

 

 

 

1,724

 

 

 

 

 

 

 

 

 

 

1,724

 

Shares repurchased for tax withholdings on RSU vesting

 

 

 

(431

)

 

 

 

 

 

 

 

 

 

(431

)

Stock-based compensation

 

 

 

3,500

 

 

 

 

 

 

 

 

 

 

3,500

 

Changes in other comprehensive loss

 

 

 

 

 

 

12

 

 

 

 

 

 

 

12

 

Net loss

 

 

 

 

 

 

 

 

 

(326

)

 

 

 

(326

)

BALANCE - April 30, 2023

 

$

 

200,403

 

 

$

 

(11

)

 

$

 

(132,769

)

 

$

 

67,623

 

(1) Additional paid-in capital

(2) Accumulated other comprehensive loss

See notes to condensed consolidated financial statements

Ooma | FY2025 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”) provides leading communications services and related technologies for businesses and consumers, delivered from its smart SaaS and unified communications platforms. The Company is headquartered in Sunnyvale, California.

Fiscal Year. The Company’s fiscal year ends on January 31. References to fiscal 2025 and fiscal 2024 refer to the fiscal years ended January 31, 2025 and January 31, 2024, respectively.

Basis of Presentation. The accompanying 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 (“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. The condensed consolidated balance sheet as of January 31, 2024 included herein was derived from the audited financial statements as of that date, but does not include all the disclosures required by GAAP. Therefore, the information included in this Quarterly Report on Form 10-Q should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended January 31, 2024 filed with the SEC on April 2, 2024 (“Annual Report”).

The accompanying condensed consolidated financial statements reflect all normal recurring adjustments that management believes are necessary for a fair presentation of the interim periods presented. The results for the three months ended April 30, 2024 are not necessarily indicative of the results to be expected for any subsequent quarter or for the fiscal year ending January 31, 2025.

Principles of Consolidation. The condensed consolidated financial statements include the accounts of Ooma, Inc. and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation.

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.

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

Significant Accounting Policies. There have been no material changes to the Company’s significant accounting policies from those disclosed in the Annual Report.

Recent Accounting Pronouncements Not Yet Adopted. In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-07, which is intended to improve reportable segment disclosure requirements, primarily through additional disclosures about significant segment expenses. The standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The amendments should be applied retrospectively to all prior periods presented in the financial statements. The Company is evaluating the new standard.

In December 2023, the FASB issued ASU 2023-09, which focuses on income tax disclosures by requiring public business entities, on an annual basis, to disclose specific categories in the rate reconciliation, provide information for reconciling items that meet a quantitative threshold, and certain information about income taxes paid. The standard is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The amendments should be applied on a prospective basis. Retrospective application is permitted. The Company is evaluating the new standard.

Ooma | FY2025 Form 10-Q | 7


Ooma, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

 

Note 2: Revenue and Deferred Revenue

The Company derives its revenue from two sources:

Subscription and Services Revenue is derived from recurring subscription fees related to service plans such as Ooma Business, Ooma Residential and other communications services. Service plans are generally sold as monthly subscriptions; however, certain plans are also offered as annual or multi-year subscriptions. Subscription revenue is generally recognized ratably over the contractual service term. A small portion of revenue is recognized on a point-in-time basis from services such as: prepaid international calls, and advertisements displayed through the Talkatone mobile application.

Product and Other Revenue is generated primarily from the sale of on-premise devices and end-point devices, including Ooma AirDial, and to a lesser extent from porting fees that enable customers to transfer their existing phone numbers. The Company recognizes product and other revenue from sales to direct end-customers and channel partners at the point-in-time that control is transferred.

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

 

 

Three Months Ended

 

 

April 30,
2024

 

 

April 30,
2023

Subscription and services revenue

 

$

58,389

 

$

53,049

Product and other revenue

 

 

4,110

 

 

3,803

Total revenue

 

$

62,499

 

$

56,852

The Company derived approximately 61% and 56% of its total revenue from Ooma Business and approximately 37% and 42% from Ooma Residential for the three months ended April 30, 2024 and 2023, respectively. No individual country outside of the United States, and no single customer, represented 10% or more of total revenue for the periods presented.

Customers who represented 10% or more of net accounts receivable were as follows:

 

 

 

 

 

As of

 

 

 

 

 

April 30,
2024

 

 

January 31,
2024

Customer A

 

 

 

 

25%

 

 

33%

 

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.

 

 

 

 

As of

 

 

 

 

April 30,
2024

 

January 31,
2024

Subscription and services

 

 

 

$

16,485

 

$

17,034

Product and other

 

 

 

 

6

 

 

22

Total deferred revenue

 

 

 

$

16,491

 

 

17,056

Less: current deferred revenue

 

 

 

 

16,474

 

 

17,041

Deferred revenue, non-current

 

 

 

$

17

 

$

15

During the three months ended April 30, 2024, the Company recognized revenue of approximately $10.9 million, respectively pertaining to amounts deferred as of January 31, 2024. As of April 30, 2024, deferred revenue was primarily composed of subscription contracts invoiced during the first quarter of fiscal 2025, as well as amounts recorded during fiscal 2024 for annual contracts.

Remaining Performance Obligations. As of April 30, 2024, contract revenue that had not yet been recognized for open contracts with an original expected length of greater than one year was approximately $32.5 million. The Company expects to recognize revenue on approximately 39% of this amount over the next 12 months, with the balance to be recognized thereafter.

Ooma | FY2025 Form 10-Q | 8


Ooma, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

 

Note 3: Fair Value Measurements

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 had $15.6 million and $17.5 million in cash and cash equivalents as of April 30, 2024 and January 31, 2024, respectively.

Non-Marketable Equity Investments. As of April 30, 2024, the total amount of non-marketable equity investments in privately held companies included in other assets in the Company's condensed consolidated balance sheets was $3.3 million. This balance represents investments in preferred shares of Global Telecom Corporation (“GTC”).

The Company’s non-marketable equity investments do not have readily determinable fair values. Under the measurement alternative election, the Company accounts for these non-marketable equity securities at cost and remeasures to fair value upon observable price changes in orderly transactions for the identical or similar investment of the same issuer or upon impairment. These investments are not eligible for the net-asset-value practical expedient from fair value measurement. The measurement alternative election is reassessed each reporting period to determine whether the non-marketable equity investments continue to be eligible for this election. The Company classifies these non-marketable equity investments as Level 3 within the fair value hierarchy.

 

 

Ooma | FY2025 Form 10-Q | 9


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,
2024

 

January 31,
2024

Finished goods

 

 

 

$

10,673

 

$

12,024

Raw materials

 

 

 

 

6,590

 

 

7,758

Total inventory

 

 

 

$

17,263

 

$

19,782

Other current and non-current assets

 

 

 

 

As of

 

 

 

 

April 30,
2024

 

January 31,
2024

Deferred sales commissions, current

 

 

 

$

8,841

 

$

8,579

Prepaid expenses and other

 

 

 

 

3,079

 

 

4,177

Convertible note receivable (see "GTC" below)

 

 

 

 

 

 

2,257

Other current assets

 

 

 

 

1,781

 

 

1,484

Total other current assets

 

 

 

$

13,701

 

$

16,497

 

 

 

 

 

 

 

 

 

Deferred sales commissions, non-current

 

 

 

$

15,272

 

$

15,257

Other assets

 

 

 

 

5,800

 

 

2,358

Total other non-current assets

 

 

 

$

21,072

 

$

17,615

 

Customer Acquisition Costs. Amortization of deferred sales commissions was $2.4 million and $2.2 million for the three months ended April 30, 2024 and 2023, respectively.

Global Telecom Corporation. In December 2018, the Company invested $1.3 million in cash in GTC, a privately-held technology company, in exchange for a convertible promissory note that will convert to shares of GTC stock upon the occurrence of certain future events. As amended, the promissory note and accrued interest is due and payable upon the Company’s demand at any time after June 30, 2023. GTC is a variable interest entity for accounting purposes and the Company does not consolidate GTC into its financial statements because the Company is not the primary beneficiary. As of April 30, 2024, the Company had $0.8 million in non-cancelable inventory purchase commitments to GTC.

On March 8, 2024 ("Financing Date"), GTC completed an equity financing which qualified as a conversion event under the convertible promissory note. Per the terms of the note, in the event of an equity financing all of the outstanding principal and accrued but unpaid interests would be converted to a number of shares of standard preferred stock equal to the Conversion Amount divided by the Conversion Price. "Conversion Amount" is defined as outstanding principal plus unpaid accrued interest. "Conversion Price" is 70% of the per share price for the preferred stock. As of the Financing Date, the carrying value of the convertible promissory note of $2.3 million, including accrued interest, was converted to 8.2 million shares of preferred stock of GTC. Upon the conversion event, the Company recorded a gain on note conversion of $1.0 million to other income in the condensed consolidated statements of operations. The Company recorded the fair value of GTC preferred stock of $3.3 million to other assets in the condensed consolidated balance sheets.

Accrued expenses and other current liabilities

 

 

 

 

As of

 

 

 

 

April 30,
2024

 

January 31,
2024

Payroll and related expenses

 

 

 

$

8,337

 

$

12,301

Regulatory fees and taxes

 

 

 

 

4,969

 

 

4,598

Short-term operating lease liabilities

 

 

 

 

3,725

 

 

3,742

Customer-related liabilities

 

 

 

 

1,448

 

 

1,118

Other

 

 

 

 

3,657

 

 

4,827

Total accrued expenses and other current liabilities

 

 

 

$

22,136

 

$

26,586

 

Ooma | FY2025 Form 10-Q | 10


Ooma, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

 

Note 5: Acquired Intangible Assets

The gross value, accumulated amortization and carrying values of acquired intangible assets were as follows (in thousands):

 

 

 

 

 

As of April 30, 2024

 

As of January 31, 2024

 

 

Estimated life
(in years)

 

Gross
Value

 

Accumulated Amortization

 

Carrying
Value

 

Gross
Value

 

Accumulated Amortization

 

Carrying
Value

Developed technology

 

 

2-7

 

$

20,618

 

$

(3,572)

 

$

17,046

 

$

20,618

 

$

(2,865)

 

$

17,753

Customer relationships

 

 

5-7

 

 

16,545

 

 

(8,035)

 

 

8,510

 

 

16,545

 

 

(7,336)

 

 

9,209

Trade names

 

 

2-5

 

 

1,685

 

 

(773)

 

 

912

 

 

1,685

 

 

(695)

 

 

990

Total intangible assets

 

 

 

 

$

38,848

 

$

(12,380)

 

$

26,468

 

$

38,848

 

$

(10,896)

 

$

27,952

Amortization expense was $1.5 million and $0.7 million for each of the three months ended April 30, 2024 and 2023, respectively.

At April 30, 2024, the estimated future amortization expense for intangible assets is as follows (in thousands):

Fiscal Years Ending January 31,

 

 

 

 

Total

2025 remainder

 

 

 

 

$

4,282

2026

 

 

 

 

 

5,624

2027

 

 

 

 

 

5,068

2028

 

 

 

 

 

3,950

2029

 

 

 

 

 

3,030

Thereafter

 

 

 

 

 

4,514

Total

 

 

 

 

$

26,468

 

Note 6: Operating Leases

The Company leases its headquarters located in Sunnyvale, California, as well as office space and data center facilities in several locations under non-cancelable operating lease agreements, with expiration dates through fiscal 2033.

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

 

 

 

 

 

 

 

 

 

As of

 

 

 

 

 

 

 

 

April 30,
2024

 

January 31,
2024

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Operating lease right-of-use assets

 

 

 

 

 

 

 

$

16,596

 

$

17,041

   Total leased assets

 

 

 

 

 

 

 

$

16,596

 

$

17,041

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Short-term operating lease liabilities

 

 

 

 

 

 

 

$

3,725

 

$

3,742

Long-term operating lease liabilities

 

 

 

 

 

 

 

 

13,317

 

 

13,676

   Total lease liabilities

 

 

 

 

 

 

 

$

17,042

 

$

17,418

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average remaining lease term

 

 

 

 

 

 

 

 

5.8 years

 

 

6.0 years

Weighted-average discount rate

 

 

 

 

 

 

 

 

6.3%

 

 

6.2%

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

The Company incurred total lease costs in its condensed consolidated statements of operations of $1.6 million and $1.3 million for the three months ended April 30, 2024 and 2023, respectively.

Ooma | FY2025 Form 10-Q | 11


Ooma, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

 

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

 

 

 

 

 

Three Months Ended

 

 

 

 

 

 

April 30,
2024

 

 

April 30,
2023

 

Cash payments for operating leases

 

 

 

 

$

 

983

 

 

$

 

897

 

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

 

 

 

 

$

 

310

 

 

$

 

4,902

 

 

As of April 30, 2024, maturities of operating lease liabilities were as follows (in thousands):

Fiscal Years Ending January 31,

 

 

 

 

 

 

 

 

 

 

April 30, 2024

2025 remainder

 

 

 

 

 

 

 

 

 

 

$

2,943

2026

 

 

 

 

 

 

 

 

 

 

 

3,810

2027

 

 

 

 

 

 

 

 

 

 

 

3,969

2028

 

 

 

 

 

 

 

 

 

 

 

2,720

2029

 

 

 

 

 

 

 

 

 

 

 

2,742

Thereafter

 

 

 

 

 

 

 

 

 

 

 

4,630

Total future minimum lease payments

 

 

 

 

 

 

 

 

 

 

 

20,814

Less: imputed interest

 

 

 

 

 

 

 

 

 

 

 

(3,772)

      Present value of lease liabilities

 

 

 

 

 

 

 

 

 

 

$

17,042

 

Ooma | FY2025 Form 10-Q | 12


Ooma, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

 

Note 7: Stockholders’ Equity

The Company has a stock-based compensation plan, the 2015 Equity Incentive Plan, pursuant to which it has granted incentive and nonstatutory stock options and restricted stock units. Additionally, the Company's 2015 Employee Stock Purchase Plan (“ESPP”) allows eligible employees to purchase shares of common stock at a discounted price through payroll deductions.

Stock Options. Stock option activity for the three months ended April 30, 2024 was as follows:

 

 

 

 

 

Weighted-Average

 

Aggregate

 

 

Shares

 

Exercise Price

 

Intrinsic Value

 

 

(in thousands)

 

Per Share

 

(in thousands)

Balance as of January 31, 2024

 

 

1,161

 

$

10.14

 

$

2,522

Granted

 

 

 

$

 

 

 

Exercised

 

 

(10)

 

$

6.04

 

 

 

Canceled

 

 

(1)

 

$

1.94

 

 

 

Balance as of April 30, 2024

 

 

1,150

 

$

10.18

 

$

488

Vested and exercisable as of April 30, 2024

 

 

1,076

 

$

9.75

 

$

488

The aggregate intrinsic value of vested options exercised during the three months ended April 30, 2024 and 2023 was $27 thousand and $0.2 million, respectively. There were no stock options granted during the three months ended April 30, 2024 and 2023.

Restricted Stock Units. RSU activity for the three months ended April 30, 2024 was as follows:

 

 

Shares
(in thousands)

 

Weighted-Average
Grant Date Fair
Value Per Share

Balance as of January 31, 2024

 

 

2,075

 

$

13.74

Granted

 

 

986

 

$

8.65

Vested

 

 

(336)

 

$

12.66

Canceled

 

 

(13)

 

$

13.39

Balance as of April 30, 2024

 

 

2,712

 

$

12.03

Employee Stock Purchase Plan. During each of the three months ended April 30, 2024 and 2023, employees purchased 0.2 million and 0.1 million shares at a weighted-average price of $7.35 and $10.60 per share, respectively.

Note 8: Stock-Based Compensation

Total stock-based compensation expense recognized in the condensed consolidated statements of operations was as follows (in thousands):

 

Three Months Ended

 

April 30,
2024

 

April 30,
2023

Cost of revenue

$

260

 

$

249

Sales and marketing

 

979

 

 

499

Research and development

 

1,337

 

 

1,146

General and administrative

 

1,787

 

 

1,606

Total stock-based compensation expense

$

4,363

 

$

3,500

 

As of April 30, 2024, there was $32.6 million of unrecognized compensation expense related to unvested RSUs, stock options and stock purchase rights under the ESPP, which is expected to be recognized over a weighted-average vesting period of approximately 2.5 years.

Ooma | FY2025 Form 10-Q | 13


Ooma, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

 

Note 9: Income Taxes

The Company recorded an income tax provision of $0.3 million and $0.1 million during the three months ended April 30, 2024 and 2023, respectively. The income tax provision recorded in the first quarter of fiscal 2025 and the first quarter of fiscal 2024 were primarily attributable to state income taxes. As of April 30, 2024, the Company continued to maintain a full valuation allowance against its remaining deferred tax assets.

As of April 30, 2024, the Company had unrecognized tax benefits of approximately $11.4 million, none of which would currently affect the Company's effective tax rate if recognized due to the Company's deferred tax assets being fully offset by a valuation allowance. The Company does not anticipate that the amount of unrecognized tax benefits relating to tax positions existing at April 30, 2024 will significantly increase or decrease within the next twelve months. There were no interest expense or penalties related to unrecognized tax benefits recorded through April 30, 2024.

A number of years may elapse before an uncertain tax position is audited and finally resolved. While it is often difficult to predict the final outcome or the timing of resolution of any particular uncertain tax position, the Company believes that its reserves for income taxes reflect the most likely outcome. The Company adjusts these reserves, as well as the related interest, in light of changing facts and circumstances. Settlement of any particular position could require the use of cash.

Note 10: Basic and Diluted Net Loss Per Share

The following table sets forth the computation of basic and diluted net loss per share of common stock (in thousands, except share and per share data):

 

 

 

Three Months Ended

 

 

April 30,
2024

 

April 30,
2023

Numerator

 

 

 

 

 

 

Net loss

 

$

(2,139)

 

$

(326)

Denominator

 

 

 

 

 

 

Weighted average common shares

 

 

26,224,396

 

 

25,178,008

Basic and diluted loss per share

 

$

(0.08)

 

$

(0.01)

 

Potentially dilutive securities of approximately 0.3 million and 0.5 million for the three months ended April 30, 2024 and 2023, respectively, were excluded from the computation of diluted net loss per share as their inclusion would have been anti-dilutive. These shares included the Company’s outstanding RSUs, outstanding stock options and stock purchase rights under the ESPP at the end of the respective period.

Note 11: Commitments and Contingencies

Purchase Commitments

As of April 30, 2024 and January 31, 2024, non-cancelable inventory purchase commitments to contract manufacturers and other parties were approximately $1.4 million and $1.1 million, respectively. Additionally, the Company has a non-cancelable service agreement with a telecommunications provider that contains total minimum purchase commitments the Company is obligated to of $11.9 million between March 2024 and February 2029 and a non-cancelable service agreement with a cloud service provider that contains total annual minimum purchase commitments the Company is obligated to of $1.1 million between March 2024 and February 2025.

Legal Proceedings

In addition to the litigation matters described below, from time to time, the Company may be involved in a variety of other claims, lawsuits, investigations, and proceedings relating to contractual disputes, intellectual property rights, employment matters, regulatory compliance matters, and other litigation matters relating to various claims that arise in the normal course of business. Defending such proceedings is costly and can impose a significant burden on management and employees, the Company may receive unfavorable preliminary or interim rulings in the course of litigation, and there can be no assurances that favorable final outcomes will be obtained.

The Company determines whether an estimated loss from a contingency should be accrued by assessing whether a loss is deemed probable and can be reasonably estimated. The Company assesses its potential liability by analyzing specific litigation and regulatory matters using reasonably available information. The Company develops its views on estimated losses in consultation with inside and outside counsel, which involves a subjective analysis of potential results and

Ooma | FY2025 Form 10-Q | 14


Ooma, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

 

outcomes, assuming various combinations of appropriate litigation and settlement strategies. Legal fees are expensed in the period in which they are incurred. As of April 30, 2024, the Company did not have any accrued liabilities recorded for loss contingencies in its consolidated financial statements.

Canadian Litigation

On February 3, 2021, plaintiff Fiona Chiu filed a class action complaint against the Company and Ooma Canada Inc. in the Federal Court of Canada, alleging violations of Canada’s Trademarks Act and Competition Act. The complaint seeks monetary and other damages and/or injunctive relief enjoining the Company from describing and marketing its Basic Home Phone using the word “free” or otherwise representing that it is free. On November 9, 2021, the Federal Court of Canada removed Ms. Chiu and substituted John Zanin as the new plaintiff in the proceeding. In connection with the substitution of Mr. Zanin as the new plaintiff, the Federal Court of Canada deemed the proceeding as having commenced on November 8, 2021 instead of February 3, 2021. In January 2022, the Federal Court of Canada heard arguments from counsel representing each of the Company and Mr. Zanin regarding jurisdiction and class action certification issues, and the parties are awaiting the Court's ruling. The Company intends to continue to defend itself vigorously against this complaint. Based on the Company’s current knowledge, the Company has determined that the amount of any reasonably possible loss resulting from the Canadian Litigation is not estimable.

Indemnification

The Company enters into standard indemnification arrangements in the ordinary course of business. Pursuant to these arrangements, the Company indemnifies, holds harmless and agrees to reimburse the indemnified parties for certain losses suffered or incurred by the indemnified party. In some cases, the term of these indemnification agreements is perpetual. The maximum potential amount of future payments the Company could be required to make under these agreements is not determinable because it involves claims that may be made against the Company in the future but have not yet been made.

The Company has entered into indemnification agreements with its directors and officers that may require the Company to indemnify its directors and officers against liabilities that may arise by reason of their status or service as directors or officers, other than liabilities arising from willful misconduct of the individual. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is unlimited; however, the Company has director and officer insurance coverage that reduces the Company’s exposure and enables the Company to recover a portion of any future amounts paid. To date the Company has not incurred costs to defend lawsuits or settle claims related to these indemnification agreements. No liability associated with such indemnifications has been recorded to date.

Note 12: Financing Arrangements

Revolving Credit Facility

On October 20, 2023, the Company, as borrower, entered into a three-year credit and security agreement (“Credit Agreement”) with Citizens Bank N.A., as Administrative Agent (“Agent”) and lender. The Credit Agreement provides for a secured revolving credit facility (“Credit Facility”) under which the Company may borrow up to an aggregate amount of $30.0 million, which includes a $10.0 million sub-facility for letters of credit. The Company and its lenders may increase the total commitments under the Credit Facility to up to an aggregate amount of $50.0 million, subject to certain conditions. Funds borrowed under the Credit Agreement may be used for acquisition, working capital and other general corporate purposes.

Loans under the Credit Agreement will bear interest, at the Company’s option, at either a rate equal to the Alternate Base Rate plus the Applicable Margin (as defined in the Credit Agreement) or Term Secure Overnight Financing Rate ("SOFR") plus the Applicable Margin (as defined in the Credit Agreement). The Alternate Base Rate is the highest of (i) the Agent’s prime rate, (ii) the federal funds effective rate plus 0.50% per annum, and (iii) the Daily SOFR rate plus 1.00% per annum. The SOFR Rate is a rate equal to the secured overnight financing rate as published by the SOFR Administrator and displayed on CME Group Benchmark Administration Limited’s Market Data Platform. The Applicable Margin for Alternative Base Rate Loans is 1.25% and the Applicable Margin for the SOFR Loans is 2.00%. Upon the occurrence of any event of default, the interest rate on the borrowings increases by 5.00%. The Company is required to pay a commitment fee on the unused portion of the Credit Facility of 0.25% per annum.

The Credit Agreement contains customary representations, warranties, affirmative and negative covenants, events of default and indemnification provisions in favor of the Agent, lenders and their affiliates. Among other covenants, the Credit Agreement includes restrictive financial covenants that require the Company to meet minimum recurring revenue levels and maintain specified amounts of available liquidity on a quarterly basis.

Ooma | FY2025 Form 10-Q | 15


Ooma, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

 

As of April 30, 2024, the Company had $11.5 million in outstanding borrowings, which are recorded as debt, net of current portion in the condensed consolidated balance sheets. The funds were used for the acquisition of 2600Hz, Inc. at the Term SOFR interest rate of 7.4%. The Company is in compliance with the covenants contained in the Credit Agreement as of April 30, 2024. Accordingly, $18.5 million of borrowing capacity was available for the purposes permitted by the Credit Agreement.

Note 13: Business Acquisition

On October 20, 2023, the Company acquired all outstanding stock of 2600Hz, Inc. ("2600Hz"), a provider of business communications applications targeted at resellers and carriers. The Company acquired 2600Hz for total cash consideration of approximately $32.2 million (net of $1.8 million in cash acquired), subject to certain working capital adjustments. The acquisition did not have any contingency related payments.

The following table summarizes the final purchase price allocation, as adjusted (in thousands):

 

 

Fair Value

 

Cash and cash equivalents

 

$

 

1,829

 

Accounts receivable

 

 

 

440

 

Other current and non-current assets

 

 

 

588

 

Property plant and equipment, net

 

 

 

195

 

Intangible assets

 

 

 

21,200

 

Goodwill

 

 

 

14,414

 

Accounts payable and other liabilities

 

 

 

(1,487

)

Deferred tax liability

 

 

 

(3,131

)

Total purchase consideration

 

$

 

34,048

 

Intangible assets acquired primarily consisted of developed technology of $18.4 million, which represented the fair values of the acquired 2600Hz developed platform technology and have an estimated useful life of seven years as of the date of acquisition. The goodwill recognized was primarily attributable to the assembled workforce and is not expected to be deductible for income tax purposes.

In connection with the acquisition, the Company agreed to issue approximately 423,000 restricted stock units that are subject to on-going service conditions and vest over an 18-month period. The fair value of these awards of $4.3 million will be recorded as stock compensation expense over the service period.

During the second fiscal quarter of 2023, the Company acquired Junction Networks, Inc. which does business as OnSIP for $9.5 million. During the three months ended April 30, 2023, the Company received $0.3 million from the seller for certain working capital adjustments, which is recorded in investing activities in the Company's condensed consolidated statement of cash flows.

Ooma | FY2025 Form 10-Q | 16


Ooma, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with our condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and with our audited financial statements included in our Annual Report on Form 10-K for the year ended January 31, 2024 filed with the SEC on April 2, 2024. In addition to historical financial information, the following discussion contains “forward-looking statements” within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and other legal authority. These forward-looking statements concern our operations, economic performance, financial condition, goals, beliefs, future growth strategies, objectives, plans and current expectations. The words “believe,” “will,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “expect,” “predict,” “could,” “potentially” and variations of such words and similar expressions are intended to identify such forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. Such statements are based on management’s expectations as of the date of this filing and involve many risks and uncertainties that could cause our actual results, events or circumstances to differ materially from those expressed or implied in our forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in this Item 2. MD&A, as well as the section titled “Risk Factors” included under Part II, Item 1A below. We undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make.

Executive Overview

Ooma provides leading communications services and related technologies that bring unique features, ease of use, and affordability to businesses and residential customers through our smart SaaS and unified communications platforms. For businesses of all sizes, we deliver advanced voice and collaboration features including messaging, intelligent virtual attendants, and video conferencing to help them run more efficiently. For consumers, our residential phone service provides PureVoice high-definition voice quality, advanced functionality and integration with mobile devices.

We generate revenues primarily from the sale of subscriptions and other services for our business and residential communications solutions. We generate our product and other revenue from the sale of our on-premise devices and end-point devices. We primarily offer our solutions in the United States and Canada, with limited offerings in certain other countries.

We refer to Ooma Office, Ooma Enterprise, Ooma AirDial, 2600Hz, and OnSIP collectively as Ooma Business. Ooma Residential includes Ooma Telo basic and premier services, as well as Ooma Telo LTE services.

First Quarter Fiscal 2025 Financial Performance

Total revenue was $62.5 million, up 10% year-over-year, primarily driven by the growth of Ooma Business.
Subscription and services revenue from Ooma Business grew 18% year-over-year, driven by user growth.
Total gross margin was 61%, comparable to 63% in the prior year quarter.
GAAP net loss was $2.1 million, compared to $0.3 million in the prior year quarter reflecting continued investments in our operations.
Adjusted EBITDA was $5.0 million, compared to $4.8 million in the prior year quarter.
As of April 30, 2024, we had total cash and cash equivalents of $15.6 million, compared to $17.5 million as of January 31, 2024. Cash usage reflected the repayments of borrowings outstanding under our Credit Agreement.
As of April 30, 2024, we had total debt of $11.5 million, compared to $16.0 million as of January 31, 2024.

Reconciliations of non-GAAP adjusted measures to the most directly comparable GAAP measures are presented below under Adjusted EBITDA and Non-GAAP Financial Measures.

Ooma | FY2025 Form 10-Q | 17


Ooma, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

 

Key Business Metrics

We review the key metrics below to evaluate our business, measure our performance, identify trends affecting our business, formulate financial projections and make strategic decisions (in thousands, except percentages):

 

 

 

 

As of

 

 

April 30,
2024

 

April 30,
2023

Core users

 

 

1,239

 

 

1,225

Annualized exit recurring revenue (AERR)

 

$

227,596

 

$

209,818

Net dollar subscription retention rate

 

 

99%

 

 

99%

Adjusted EBITDA

 

$

5,000

 

$

4,791

 

 

 

 

 

 

 

 

Core Users increased year-over-year, which was primarily driven by growth in business users. As of April 30, 2024, Ooma Business users comprised approximately 39% of our total core users, up from 37% as of April 30, 2023. We believe that the number of our core users is an indicator of our market penetration, the growth of our business and our anticipated future subscription and services revenue. We define our core users as the number of active residential user accounts and business user extensions (excluding Talkatone and 2600Hz users). We believe that the relationship that we establish with our core users positions us to sell additional premium communications services and other new connected services to them.‌

Annualized Exit Recurring Revenue grew year-over-year due to an increase in the average revenue per core user, which was largely driven by an increasing mix of business users. We believe that AERR is an indicator of recurring subscription and services revenue for near-term future periods. We estimate our AERR by dividing our recurring quarterly subscription revenue from our Core Users by the average number of core users each quarter and annualize by multiplying by four. We then multiply that result by the number of core users at the end of the period to calculate AERR. Beginning in the third quarter of fiscal 2024, we have added $7.9 million annual recurring revenue from 2600Hz to AERR.

Net Dollar Subscription Retention Rate (“NDRR”) was flat year-over-year due to a relatively consistent level of user churn and increase in Average Monthly Recurring Subscription Revenue. We believe that our net dollar subscription retention rate provides insight into our ability to retain and grow our subscription and services revenue and is an indicator of the long-term value of our customer relationships and the stability of our revenue base.

We define our NDRR as (i) one plus (ii) the quotient of Net Dollar Change divided by Average Monthly Recurring Subscription Revenue. We define Net Dollar Change as the quotient of (i) the difference of our Monthly Recurring Subscription Revenue at the end of a period minus our Monthly Recurring Subscription Revenue at the beginning of a period minus our Monthly Recurring Subscription Revenue at the end of the period from new customers we added during the period, all divided by (ii) the number of months in the period. We define our Average Monthly Recurring Subscription Revenue as the average of the Monthly Recurring Subscription Revenue at the beginning and end of the measurement period.

 

Ooma | FY2025 Form 10-Q | 18


Ooma, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

 

Adjusted EBITDA

In addition, we use Adjusted EBITDA (Earnings Before Interest Tax and Depreciation and Amortization) to manage our business, evaluate our performance and make planning decisions. We consider this metric to be a useful measure of our operating performance, because it contains adjustments for unusual events or factors that do not directly affect what management considers being the core operating performance, and are used by our management for that purpose. We also believe this measure enables us to better evaluate our performance by facilitating a meaningful comparison of our core operating results in a given period to those in prior and future periods. Investors often use similar measures to evaluate the operating performance with competitors. Adjusted EBITDA represents net income before interest and other income, income taxes, depreciation and amortization of capital expenditures, amortization of intangible assets, restructuring costs, gain on note conversion and stock-based compensation and related taxes.

Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:

Adjusted EBITDA does not consider any expenses for assets being depreciated and amortized that are necessary to our business;
Adjusted EBITDA does not consider the impact of interest and other income/expense, income taxes, stock-based compensation and related taxes, amortization of intangible assets, restructuring costs and gain on note conversion; and
Other companies, including companies in our industry, may calculate Adjusted EBITDA differently, which reduces its usefulness as a comparative measure.

Because of these limitations, Adjusted EBITDA should be considered alongside other financial performance measures, including net loss and our other GAAP results.

The following table provides a reconciliation of GAAP net loss to Adjusted EBITDA, for each the periods indicated (in thousands):

 

 

 

Three Months Ended

 

 

 

April 30,
2024

 

 

April 30,
2023

 

GAAP net loss

 

$

 

(2,139

)