Ooma, Inc. (NYSE:OOMA) Q2 2024 Earnings Call Transcript

Eric Stang: So, I can frame it a little for you, Josh. As you know, we haven’t given those specifics yet. When we get a large customer, it can take six months to do rollout. In fact, our large customer from last fall that we announced two quarters ago, I think we’re mopping up now, the stragglers, but there’s a handful of installations still to go, but they’re pretty much getting done after six months of effort. Frankly, a month or two of planning and then six months of effort. So, rollout does take time. I think we’ve gotten a lot better at rollout. We work with multiple third-parties for when a customer wants to have a third-party do installation and pay for it, by the way, it’s something we charge for. And with some of those new third-parties are relatively new compared to where we started, we’ve revamped our team internally.

We have discovered that we need to dedicate more resources to this. We are actively hiring in the sales and sales engineerings side of our company to try to support the growth of AirDial. I don’t feel like we’re keeping up with the opportunities we’re seeing in the market. And I know it’s a shame to say that, but it’s kind of a new area for us, this kind of direct strategic sales capability. And, we’re — we’ve got significant ambitions to add to the team through the balance of this year. On the partner front, I mean, we’ve had some big wins. I mean, T-Mobile, now UScellular, frankly, Prologis because of what they represent in the industry, and we’re achieving new partners every quarter on AirDial. And it takes a little while to train them, takes a while to get out in the market, but I can tell you that, we routinely get surprised when a partner — we expect some of these partners to deliver opportunities that are a few lines here, a few lines there, but it’s amazing how some can bring in a larger-sized opportunity.

So, it’s an exciting time for us, but it’s — I don’t feel like we have enough presence in the market and I worry about the deals we’re not seeing. I think if you look at our — well, I know if you look at our pipeline, our pipeline, which is to say, opportunities in our sale funnel, which are not yet closed, there are tens of thousands of lines and that’s the kind of opportunity we aspire to achieve. But, in any case, I hope that frames a little bit. I know it — is maybe a little frustrating not to know it more specifically than that, but you do have our overall guidance, and you know what we’re trying to do and — yes, the largest wins that we achieve, I have been announcing those, and it gives you a sense that that there is bigger potential here, I hope, as we go forward.

Josh Nichols: Thanks for providing a little bit of clarity there. And then last question for me, you mentioned it just now in your comments, but haven’t talked about it too much. I know you have some partnerships with T-Mobile on AirDial, but also some residential solutions. Just any updates on progress that’s going on with that partnership?

Eric Stang: Sure. That partnership has been in place for over a year now and it’s been pretty steady in the greater sense over the last several quarters. We get some customers out of that relationship that mainly are our customers there to saw, our presence on T-Mobile’s website and feel they want to get phone service with their internet. What T-Mobile has not done is enabled marketing, if you will — marketing sales through their inside teams and some other things do mainly to systems, challenges, and other things. So, it’s not been a big driver of our residential business today, but it’s a nice adder. We do see other opportunities similar in some respects to this to go after. And I don’t know how far we’ll get with those, but we are working other opportunities as well to try to use partners as well as our own sales activities on the residential side of our business.

Josh Nichols: Great. Thank you.

Eric Stang: Thanks.

Operator: Your next question comes from the line of Brian Kinstlinger with Alliance Global Partners. Your line is open.

Brian Kinstlinger: Great. Thanks for taking my questions. First, can you comment on how active T-Mobile and UScellular have been as partners to AirDial and have either closed deals?

Eric Stang: Oh, goodness. Both of close deals. I talked about the very first deal from UScellular that happened even before they announced the program formally to their sales teams. Yes, they are two largest deals from last quarter, both came through partners and so, it takes time to ramp-up. There’s no question, it takes time for salespeople to get comfortable with things. And to be honest with you, there’s a lot to know about AirDial, it’s not the typical kind of thing that that some of these entities would normally sell. But we have staff to work with them in deals and to — and support the process. And I think it’s a really important part of our strategy because we also sell AirDial through our channel partners that also sell, in particular, Ooma Enterprise, and they’re finding us a lot of deals, but a lot of they find us are a few lines or a dozen lines.

And I think what will really make AirDial the breakout success that we all aspire it for it to be is winning the 500, 1,000 or even bigger line opportunities. And our partners have good relationships for that and we’re excited about what we’re seeing with them.

Brian Kinstlinger: Great. And then what is it that takes about six months for a large implementation? Is it that the process needs to be changed for customers? Does technology have to be changed to prepare? And then once the actual — once the customer’s ready, how long does it actually take for Ooma for their process to actually install?

Eric Stang: So, you need to wrap your head around a little bit, the scope of a large customer. Let’s say that last — that large customer I’ve talked about from last fall, more than 2,500 lines, more than 700 locations. If you’re going to do this in six months, you’re doing, what, 115 locations a month, 30 locations a week. It starts to — in every location, you don’t really know maybe where your lines even terminate in your building. And once you, find them and get the AirDial put in and, test its reception, which usually works fine, but we can switch as we’ve talked in the past to a variety of cellular providers if needed to get better reception. But once you get the analysis and test it, then you got to plug the equipment into it and test the equipment.