OOMA INC
For the period ended Jan 31, 2025. Filed Apr 1, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Apr 1, 2025
OOMA$18.00+2.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-01-31; filed 2024-04-02.
0000950170-24-040394
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-01-31; filed 2025-04-01.
0000950170-25-048692
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 106 previous paragraphs and 105 current paragraphs.
58 unchanged; 34 reworded; 12 added; 14 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 10 previous and 10 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (12)
Current report
Non-GAAP net income was $18.0 million, compared to $15.4 million in fiscal 2024.
Current report
Cash flow provided by operating activities was $26.6 million, compared to $12.3 million in fiscal 2024.
Current report
As of January 31, 2025, we had total cash and cash equivalents of $17.9 million, up $0.4 million from $17.5 million as of January 31, 2024.
Current report
As of January 31, 2025, we had no outstanding debt, compared to $16.0 million as of January 31, 2024.
Current report
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:
Current report
Adjusted EBITDA does not consider the impact of income tax provisions or benefits, other income/expense, stock-based compensation and related taxes, amortization of intangible assets and acquisition-related costs, restructuring costs and costs that are not recurring in nature; and
Current report
Other companies, including companies in our industry, may calculate Adjusted EBITDA differently, which reduces its usefulness as a comparative measure.
Current report
Because of these limitations, you should consider Adjusted EBITDA alongside other financial performance measures, including net loss and our other GAAP results.
Current report
Product and other revenue increased $3.1 million or 20% year-over-year, primarily attributable to the increase of AirDial units shipped, sale of accessories to Ooma Enterprise customers, and professional service revenue from 2600Hz.
Current report
General and administrative expenses increased $3.6 million or 13% year-over-year, primarily due to a $2.9 million increase in personnel-related costs, driven by higher headcount, an absence of a $1.0 million facility consolidation gain which did not recur in fiscal year 2025, a $0.3 million increase in restructuring costs, and a $0.3 million increase in allocated overhead costs, partially offset by a $0.9 million decrease in acquisition-related costs.
Current report
Other Non-GAAP Financial Measures
Current report
a decrease of $0.4 million in deferred revenue.
Removed paragraphs (14)
Previous report
On October 20, 2023, we completed the acquisition of 2600hz, Inc. (“2600Hz”) a provider of cloud-based business applications targeted at resellers and carriers, for a base purchase price of approximately $33.0 million in cash. The final aggregate purchase price was approximately $32.2 million, reflecting reduction for customary working capital adjustments, and was funded in part by the incurrence of $18.0 million of borrowings under our Credit Agreement. We believe the acquisition of 2600Hz will accelerate overall growth of Ooma Business.
Previous report
Non-GAAP net income was $15.4 million, compared to $13.6 million in fiscal 2023.
Previous report
As of January 31, 2024, we had total cash, cash equivalents and short-term investments of $17.5 million, down $9.4 million from $26.9 million as of January 31, 2023. Cash usage reflected our acquisition of 2600Hz, including the repayment of borrowings under our Credit Agreement.
Previous report
Product and other revenue decreased $1.9 million or 11% year-over-year, primarily attributable to the sale of certain legacy inventories and accessories in fiscal 2023. These sales did not recur in fiscal 2024.
Previous report
General and administrative expenses remained the same year-over-year with key movements including a $2.5 million increase in personnel and contractor related costs to scale with the overall growth of our business, offset by a $2.4 million change in facility consolidation gain.
Previous report
Non-GAAP Financial Measures
Previous report
These non-GAAP financial measures have limitations as an analytical tool, in that they do not reflect all of the amounts associated with our results of operations as determined in accordance with GAAP. Some of these limitations are:
Previous report
Adjusted EBITDA does not consider the impact of interest and other income/expense and does not reflect income tax payments that may represent a reduction in cash available to us;
Previous report
Adjusted EBITDA and non-GAAP net income exclude stock-based compensation expense and related payroll taxes because we believe these adjustments provide better comparability to peer company results and because these charges are not viewed by management as part of our core operating performance;
Previous report
Adjusted EBITDA and non-GAAP net income exclude acquisition-related costs, including the amortization of acquired intangible assets and restructuring costs, as well as third-party transaction costs incurred for legal and other professional services, and an acquisition-related income tax benefit. These items are not factored into our evaluation of potential acquisitions, or of our performance after completion of the acquisitions, because they are not related to our core operating performance or reflective of ongoing operating results in the period, and their frequency and amount vary significantly based on the timing and magnitude of our acquisition transactions and the maturities of the businesses being acquired. Although we exclude the amortization of acquired intangible assets from these non-GAAP measures, management believes that it is important for investors to understand that such intangible assets were recorded as part of purchase accounting and contribute to revenue generation;
Previous report
Adjusted EBITDA and non-GAAP net income exclude facilities consolidation gain or charges recorded in connection with vacated office facilities assumed in the OnSIP acquisition. These charges do not reflect expected future operating expenses and do not contribute to a meaningful evaluation of current operating performance or comparisons to the operating performance in other periods;
Previous report
Adjusted EBITDA and non-GAAP net income exclude certain legal settlement costs. These charges do not reflect expected future operating expenses and do not contribute to a meaningful evaluation of current operating performance or comparisons to the operating performance in other periods;
Previous report
other companies may calculate these non-GAAP financial measures differently than we do, limiting their usefulness as comparative measures.
Previous report
On June 7, 2023, we terminated our credit and security agreement with KeyBank National Association.
Reworded paragraphs (34)
Previous wording
Total revenue was $236.7 million, up 10% year-over-year, primarily driven by the continued growth of Ooma Business and the acquisition of 2600Hz.
Current wording
Total revenue was $256.9 million, up 8% year-over-year, primarily driven by the continued growth of Ooma Business and the acquisition of 2600Hz in late October 2023.
Previous wording
Subscription and services revenue from Ooma Business grew 22% year-over-year, driven by user growth.
Current wording
Subscription and services revenue from Ooma Business grew 13% year-over-year, driven by user growth.
Previous wording
Total gross margin was 62%, down from 64% in fiscal 2023.
Current wording
Total gross margin was 61%, down from 62% in fiscal 2024.
Previous wording
GAAP net loss was $0.8 million, compared to a net loss of $3.7 million in fiscal 2023. GAAP net loss for fiscal 2024 includes tax benefit for the release of a $3.1 million valuation allowance resulting from the recording of certain intangible assets associated with the acquisition of 2600Hz in late October 2023, as well as a $1.0 million gain on consolidation of facility costs, partially offset by $0.7 million in acquisition related costs and $0.5 million in certain restructuring costs.
Current wording
GAAP net loss for fiscal 2024 includes tax benefit for the release of a $3.1 million valuation allowance resulting from the recording of certain intangible assets associated with the acquisition of 2600Hz, as well as a $1.0 million gain on consolidation of facility costs, partially offset by $0.7 million in acquisition related costs and $0.5 million of certain restructuring costs, which did not recur in fiscal 2025.
Previous wording
Adjusted EBITDA was $19.8 million, or 8% of revenue, compared to $17.4 million in fiscal 2023.
Current wording
Adjusted EBITDA was $23.3 million, or 9% of revenue, compared to $19.8 million in fiscal 2024.
Previous wording
(1) Revised January 31, 2023 and January 31, 2022 due to new methodology as described below
Current wording
(1) Revised January 31, 2023 due to new methodology as described below
Previous wording
Core Users increased year-over-year, which was primarily driven by growth in business users. As of January 31, 2024, Ooma Business users comprised approximately 39% of our total core users, up from 35% as of January 31, 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.
Current wording
Core Users decreased year-over-year, which was primarily driven by a decline in Ooma Residential users, partially offset by an increase in Ooma Business users. As of January 31, 2025, Ooma Business users comprised approximately 41% of our total core users, up from 39% as of January 31, 2024. 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.
Previous wording
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 $7.8 million annual recurring revenue from 2600Hz to AERR.
Current wording
Annualized Exit Recurring Revenue ("AERR")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, AERR includes annual recurring revenue from 2600Hz.
Previous wording
Effective in the first quarter of fiscal 2024, we transitioned to a new calculation methodology for our net dollar subscription retention rate (“NDRR”). Since the majority of our subscription revenue is now generated from Ooma Business customers, we believe the new methodology better reflects our operational performance during the reporting period and is more in alignment with the reporting of our industry peers. 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.
Current wording
Effective in the first quarter of fiscal 2024, we transitioned to a new calculation methodology for our net dollar subscription retention rate (“NDRR”) as discussed below. Since the majority of our subscription revenue is now generated from Ooma Business customers, we believe the new methodology better reflects our operational performance during the reporting period and is more in alignment with the reporting of our industry peers. 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.
Previous wording
Prior to the current fiscal year, we calculated the NDRR as a function of the year-over-year growth in average revenue per user and churn as further discussed in the FY2023 Form 10-K. Under the new methodology, we define our NDRR as (i) one plus (ii) the quotient of Net Dollar Change (as defined below) divided by Average Monthly Recurring Subscription Revenue (as defined below). We define “Net Dollar Change” as the quotient of (i) the difference of our Monthly Recurring Subscription Revenue (as defined below) 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. “Monthly Recurring Subscription Revenue” is defined as recurring subscription amounts from Ooma Residential and Ooma Business customers at the end of the most recent month, excluding recurring revenue from 2600Hz.
Current wording
Prior to fiscal 2024, we calculated NDRR as a function of the year-over-year growth in average revenue per user and churn as further discussed in the FY2023 Form 10-K. Under the new methodology, we define our NDRR as (i) one plus (ii) the quotient of Net Dollar Change (as defined below) divided by Average Monthly Recurring Subscription Revenue (as defined below). We define “Net Dollar Change” as the quotient of (i) the difference of our Monthly Recurring Subscription Revenue (as defined below) 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. “Monthly Recurring Subscription Revenue” is defined as recurring subscription amounts from Ooma Residential and Ooma Business customers at the end of the most recent month, excluding recurring revenue from 2600Hz.
Previous wording
NDRR was flat year-over-year due to relatively consistent level of user churn and increase in Average Monthly Recurring Subscription Revenue.
Current wording
NDRR declined slightly year-over-year due to user churn offset by an increase in Average Monthly Recurring Subscription Revenue.
Previous wording
Adjusted EBITDA increased year-over-year in line with our revenue growth, representing approximately 8% of our total revenues for fiscal 2024 and fiscal 2023. We use Adjusted EBITDA (Earnings Before Interest, Taxes, 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, acquisition-related costs, certain litigation settlement costs, restructuring costs, non-recurring gains, and stock-based compensation expense and related taxes. See "Non-GAAP Financial Measures" below for additional information.
Current wording
Adjusted EBITDA increased year-over-year in line with our revenue growth, representing approximately 9% and 8% of our total revenues for fiscal 2025 and fiscal 2024, respectively. We use Adjusted EBITDA (Earnings Before Interest, Taxes, 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 and acquisition related costs, stock-based compensation and related taxes, litigation costs, restructuring costs, gain on note conversion, and facilities consolidation (gain) charges.
Previous wording
Product and other gross margin may fluctuate from period-to-period based on a number of factors, including total units shipped as compared to the direct costs of production and relatively fixed personnel costs incurred. We sell our on-premise devices at aggressive price points to facilitate the adoption of our platforms and services. Additionally, some product costs have become subject to significantly higher pricing we experienced due to supply chain constraints in the global macroeconomic environment as well as certain components becoming subject to end-of-life and we may not be able to fully offset such higher costs through price increases. Another factor is the high AirDial installation costs due to ramp up efforts. Accordingly, we expect our product and other gross margin will continue to be negatively impacted by these higher component costs and AirDial installation costs. We expect our product and other gross margin to continue to be negative for the foreseeable future.
Current wording
Product and other gross margin may fluctuate from period-to-period based on a number of factors, including total units shipped as compared to the direct costs of production and relatively fixed personnel costs incurred. We sell our on-premise devices at aggressive price points to facilitate the adoption of our platforms and services. Additionally, some product costs have become subject to significantly higher pricing due to supply chain constraints in the global macroeconomic environment and increasing tariffs, as well as certain components becoming subject to end-of-life, and we may not be able to fully offset such higher costs through price increases. Another factor is the high AirDial installation costs due to ramp up efforts. Accordingly, we expect our product and other gross margin will continue to be negatively impacted by these higher component costs and AirDial installation costs. We expect our product and other gross margin to continue to be negative for the foreseeable future.
Previous wording
We derived approximately 58% and 53% of our total revenue from Ooma Business and approximately 40% and 45% from Ooma Residential in fiscal 2024 and 2023, respectively.
Current wording
We derived approximately 61% and 58% of our total revenue from Ooma Business and approximately 36% and 40% from Ooma Residential in fiscal 2025 and 2024, respectively.
Previous wording
Subscription and services revenue increased $22.5 million or 11% year-over-year, primarily attributable to an increase in our core users and an increase in the average revenue per core user. Revenue increase year-over-year is also attributable to inclusion of revenue from 2600Hz, which we acquired at the end of third quarter of fiscal 2024 and revenue for the entire fiscal year from OnSIP, which we acquired in the second quarter of fiscal 2023.
Current wording
Subscription and services revenue increased $17.0 million or 8% year-over-year, primarily attributable to an increase in the average revenue per core user, driven by organic growth, which was in part due to higher sales to our Office and Enterprise customers, revenue contributed from 2600Hz, which we acquired at the end of third quarter of fiscal 2024, and an increase in AirDial lines.
Previous wording
Subscription and services gross margin of 71% decreased year-over-year from 73%. Cost of subscription and services revenue increased $9.2 million or 17% year-over-year, primarily due to a $4.1 million increase in personnel and contractor related costs, a $2.2 million increase in infrastructure costs, a $1.7 million increase in regulatory fees, a $0.7 million increase in intangible amortization expense and a $0.5 million increase in credit card processing fees. Overall, the year-over-year increase in the cost of subscription and services reflects both organic growth and growth related to our acquisitions of 2600Hz and OnSIP in fiscal 2024 and 2023, respectively.
Current wording
Subscription and services gross margin of 70% decreased year-over-year from 71%. Cost of subscription and services revenue increased $7.5 million or 12% year-over-year, primarily due to a $2.7 million increase in infrastructure costs, a $1.6 million increase in personnel and contractor related costs, a $1.6 million increase in regulatory fees, a $1.8 million increase in intangible amortization expense and a $0.5 million increase in credit card processing fees, partially offset by a $0.5 million decrease in software and license costs and a $0.2 million decrease in travel costs. Overall, the year-over-year increase in the cost of subscription and services reflects both organic growth and growth related to our acquisition of 2600Hz in fiscal 2025.
Previous wording
Product and other revenue gross margin changed to negative 71% from negative 41% in the prior year. This change was primarily due to the usage of certain higher cost components that we had procured in the prior fiscal year to stay ahead of pandemic driven supply chain issues. Product and other gross margin for fiscal 2023 benefited from certain accessory sales that did not recur in fiscal year 2024.
Current wording
Product and other revenue gross margin improved to negative 63% from negative 71% in the prior year period, primarily due to the depletion of certain higher cost components that we procured in prior fiscal years to stay ahead of pandemic driven supply chain issues.
Previous wording
Sales and marketing expenses increased $3.8 million or 6% year-over-year, primarily due to a $4.1 million increase in personnel and contractor related costs, a $0.4 million increase in commission costs, and a $0.7 million increase in intangible asset amortization, offset in part by a $1.6 million decrease in advertising and marketing expense.
Current wording
Sales and marketing expenses increased $3.8 million or 5% year-over-year, primarily due to a $4.7 million increase in personnel and contractor related costs, and a $0.6 million increase in commission costs, partially offset by a $1.5 million decrease in advertising and marketing expense.
Previous wording
Research and development expenses increased $4.0 million or 9% year-over-year, primarily due to a $3.5 million increase in personnel and contractor related costs, driven by higher headcount, and a $0.5 million increase in restructuring costs.
Current wording
Research and development expenses increased $4.4 million or 9% year-over-year, primarily due to a $3.8 million increase in personnel and contractor related costs, driven by higher headcount, a $0.7 million increase in restructuring costs, and a $0.1 million increase in allocated overhead costs, partially offset by a $0.2 million decrease in hosting costs.
Previous wording
A significant portion of the year-over-year increase in personnel and contractor related costs for operating expenses was due to increases in headcount attributable to the 2600Hz and OnSIP acquisition in fiscal 2024 and 2023, respectively.
Current wording
A significant portion of the year-over-year increase in personnel-related costs and amortization of intangible assets for operating expenses was due to the 2600Hz acquisition near the end of the third quarter of fiscal 2024.
Previous wording
We recorded an income tax benefit of $3.1 million and $2.1 million in fiscal 2024 and 2023, respectively, offset by $1.1 million and $0.3 million of income tax expense in the respective fiscal years. The income tax benefits were related to certain preexisting deferred tax assets realized because of deferred tax liabilities assumed in our acquisitions of 2600Hz and OnSIP in fiscal 2024 and 2023, respectively.
Current wording
We recorded an income tax benefit of $3.1 million in fiscal 2024, offset by $1.1 million of income tax expense in fiscal 2024. The income tax benefits were related to certain preexisting deferred tax assets realized because of deferred tax liabilities assumed in our acquisition of 2600Hz in fiscal 2024, which did not recur in fiscal 2025.
Previous wording
This Form 10-K contains certain non-GAAP financial measures, including non-GAAP net income and Adjusted EBITDA. These non-GAAP financial measures are presented to provide investors with additional information regarding our financial results and core business operations. Non-GAAP financial measures are presented for supplemental informational purposes only to aid an understanding of our operating results and should not be considered a substitute for financial information presented in accordance with GAAP and may be different from non-GAAP financial measures presented by other companies. A limitation of the non-GAAP financial measures presented is that the adjustments relate to items that the Company generally expects to continue to recognize. The adjustment of these items should not be construed as an inference that the adjusted expenses or gains are unusual, infrequent or non-recurring. Therefore, both GAAP financial measures of Ooma’s financial performance and the respective non-GAAP measures should be considered together.
Current wording
This Form 10-K contains certain non-GAAP financial measures, including non-GAAP net income and Adjusted EBITDA. These non-GAAP financial measures are presented to provide investors with additional information regarding our financial results and core business operations. Non-GAAP financial measures are presented for supplemental informational purposes only to aid an understanding of our operating results and should not be considered a substitute for financial information presented in accordance with GAAP and may be different from non-GAAP financial measures presented by other companies. A limitation of the non-GAAP financial measures presented is that the adjustments relate to items that the Company generally expects to continue to recognize. The adjustment of these items should not be construed as an inference that the adjusted expenses or gains are unusual, infrequent or non-recurring. Therefore, both GAAP financial measures of Ooma’s financial performance and the respective non-GAAP measures should be considered together. See page 57 for a discussion of Adjusted EBITDA.
Previous wording
Our material cash requirements are discussed below under “Contractual Obligations and Commitments.” As of January 31, 2024, we had $17.5 million of total cash, cash equivalents and investments and borrowing capacity of $14.0 million under our Credit Agreement, which we believe will be sufficient to meet our cash needs for at least the next 12 months. Our future capital requirements will depend on many factors, including our growth rate, the introduction of new and enhanced offerings, the timing and extent of our sales and marketing activities and research and development expenditures, the expansion of our business internationally and other factors. We may in the future make investments in or acquisitions of businesses or technologies, which may require the use of cash.
Current wording
Our material cash requirements are discussed below under “Contractual Obligations and Commitments.” As of January 31, 2025, we had $17.9 million of total cash and cash equivalents and borrowing capacity of $30.0 million under our Credit Agreement, which we believe will be sufficient to meet our cash needs for at least the next 12 months. Our future capital requirements will depend on many factors, including our growth rate, the introduction of new and enhanced offerings, the timing and extent of our sales and marketing activities and research and development expenditures, the expansion of our business internationally and other factors. We may in the future make investments in or acquisitions of businesses or technologies, which may require the use of cash.
Previous wording
For fiscal 2024, our net loss of $0.8 million included non-cash charges primarily related to stock-based compensation expense, operating lease expense, depreciation and amortization expense, facilities consolidation gain and an income tax benefit related to our business acquisition. Operating asset and liability changes for fiscal 2024 included:
Current wording
For fiscal 2025, our net loss of $6.9 million included non-cash items of $30.3 million primarily related to stock-based compensation, operating lease expense, depreciation and amortization expense and gain on note conversion. Operating asset and liability changes for fiscal 2025 included:
Previous wording
an increase of $2.6 million in accounts receivable due to the timing of cash collections;
Current wording
a decrease of $1.8 million in accounts receivable due to the timing of cash collections;
Previous wording
a decrease of $6.3 million in inventories and deferred inventory costs;
Current wording
a decrease of $6.6 million in inventories and deferred inventory costs;
Previous wording
an increase of $2.3 million in prepaid expenses and other current and non-current assets primarily due to the capitalization of sales commissions and the timing of prepayments; and
Current wording
an increase of $2.7 million in prepaid expenses and other current and non-current assets primarily due to the capitalization of sales commissions and the timing of prepayments; and
Previous wording
a decrease of $9.6 million in accounts payable, accrued expenses and other liabilities due to the timing of payments
Current wording
a net decrease of $2.2 million in accounts payable, accrued expenses and other liabilities due to the timing of payments
Previous wording
Cash provided by operating activities for fiscal 2024 increased $3.5 million year-over-year, which primarily reflected working capital impacts resulting from the timing of payments. Although we have generated cash from operations in recent periods, our operating cash flow may not remain positive in the future as we continue to invest in efforts to scale our business and paydown borrowings under our Credit Agreement.
Current wording
Cash provided by operating activities for fiscal 2025 increased $14.3 million year-over-year, which primarily reflected working capital impacts resulting from the timing of payments. Although we have generated cash from operations in recent periods, our operating cash flow may not remain positive in the future as we continue to invest in efforts to scale our business.
Previous wording
Cash used in investing activities was $35.3 million for fiscal 2024, which consisted of cash consideration paid for the 2600Hz business acquisition of $32.2 million, and capital expenditures of $6.2 million, partly offset by proceeds of $2.8 million from maturities of short-term investments and $0.3 million of cash received for working capital adjustments from the seller related to the acquisition of OnSIP in the second fiscal quarter of 2023. Cash used in investing activities increased $29.2 million year-over-year primarily due to the 2600Hz acquisition.
Current wording
Cash used in investing activities was $6.4 million for fiscal 2025, which consisted of capital expenditures of $6.4 million. Cash used in investing activities was $35.3 million for fiscal 2024, which consisted of cash consideration paid for the 2600Hz business acquisition of $32.2 million, and capital expenditures of $6.2 million, partly offset by proceeds of $2.8 million from maturities of short-term investments. We did not have any acquisitions in fiscal 2025.
Previous wording
Cash provided by financing activities was $16.5 million for fiscal 2024, which consisted of proceeds from the issuance of long-term debt of $18.0 million to provide funding for the 2600Hz acquisition, proceeds of $2.7 million from the issuance of common stock from our Employee Stock Purchase Plan (“ESPP”) and stock option exercises, partly offset by payments of $1.7 million related to shares repurchased for tax withholdings on vesting of restricted stock units (“RSUs”), $2.0 million repayment of long-term debt, and $0.5 million debt issuance costs. Cash provided by financing activities increased $14.6 million year-over-year, which primarily reflected cash proceeds from borrowings under our Credit Agreement.
Current wording
Cash used in financing activities was $19.8 million for fiscal 2025, which consisted of $16.0 million in debt repayments, payments of $4.4 million related to shares repurchased for tax withholdings on vesting of RSUs, and payments of $4.5 million under our stock repurchase plan, offset by proceeds of $5.1 million from the issuance of common stock from our ESPP and stock option exercises. Cash used in financing activities increased $36.3 million year-over-year, which primarily reflected a borrowing of $18.0 million under our Credit Agreement for the 2600Hz acquisition in fiscal 2024, which did not recur in fiscal 2025, and repayments of borrowings outstanding under our Credit Agreement in fiscal 2025.
Previous wording
In October 2023, we entered into the Credit Agreement with certain lenders that provided for a secured revolving credit facility under which we may borrow up to an aggregate of $30.0 million and, subject to certain conditions, may be increased to up to $50.0 million. As of January 31, 2024, we have $16.0 million of outstanding borrowings and were in compliance with all loan covenants, including having liquidity of $10 million and trailing four-quarter recurring revenue of $180 million at that date.
Current wording
In October 2023, we entered into a credit and security agreement with certain banks that provides for a secured revolving credit facility under which we may borrow up to an aggregate of $30.0 million and, subject to certain conditions, may be increased to up to $50.0 million. As of January 31, 2025, we had zero outstanding borrowings and were in compliance with all loan covenants.
Previous wording
Our principal commitments consist of obligations under operating leases for our headquarters located in Sunnyvale, California, as well as office space and co-location data center facilities in several locations. As of January 31, 2024, our total future expected payment obligations under non-cancelable operating leases with initial terms longer than one year were approximately $21.3 million, with payments of $3.8 million due in the next 12 months and $17.5 million due thereafter. See Note 7: Operating Leases in the notes to our consolidated financial statements.
Current wording
Our principal commitments consist of obligations under operating leases for our headquarters located in Sunnyvale, California, as well as office space and co-location data center facilities in several locations. As of January 31, 2025, our total future expected payment obligations under non-cancelable operating leases with initial terms longer than one year were approximately $19.1 million, with payments of $3.8 million due in the next 12 months and $15.3 million due thereafter. See Note 7: Operating Leases in the notes to our consolidated financial statements.
Previous wording
As of January 31, 2024 and 2023, non-cancelable inventory purchase commitments to our contract manufacturers and other suppliers totaled approximately $1.1 million and $7.8 million, respectively. Additionally, we have a non-cancelable service agreement with a telecommunications provider that contains total annual minimum purchase commitments of $1.5 million between August 2022 and February 2024 and $2.5 million between March 2024 and February 2025.
Current wording
As of January 31, 2025 and 2024, non-cancelable inventory purchase commitments to our contract manufacturers and other suppliers totaled approximately $6.2 million and $1.1 million, respectively. Additionally, we have a non-cancelable service agreement with a telecommunications provider pursuant to which we are obligated to total minimum purchase commitments of $11.9 million between March 2024 and February 2029, of which $10.2 million was outstanding as of January 31, 2025, and a non-cancelable service agreement with a cloud service provider pursuant to which we are obligated to total annual minimum purchase commitments of $1.1 million between March 2024 and February 2025, of which $0.1 million was outstanding as of January 31, 2025.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
GAAP net loss was $6.9 million, compared to a net loss of $0.8 million in fiscal 2024,