Ooma has acquired the UC service provider ‘OnSIP’ which is expected to increase the company’s annual revenue by more than $10 million.
The acquisition will boost Ooma’s adjusted EBITDA from the fourth quarter of this financial year and expand Ooma’s SMB (small and medium-sized business) customer base.
The US VoIP operator, Ooma, completed the acquisition of OnSIP on July 22nd, 2022, for roughly $9.75 million in cash.
Eric Stang, Chief Executive Officer of Ooma, said: “We’re delighted to welcome OnSIP into the Ooma portfolio of business solutions.
“OnSIP serves a marquee collection of approximately 50,000 primarily small business users and is well-respected for the ease of use and flexibility of its services and strong customer support.
“We believe the acquisition of OnSIP is complementary to our strategy to extend our leadership in serving SMB customers and will accelerate overall growth of Ooma Business.
“We are also thrilled to expand our Ooma team with the addition of OnSIP’s highly experienced employees.”
Ooma compares OnSIP’s UCaaS solutions for SMBs to its own ‘Ooma Office’, a business phone system that includes video meeting functionality on its pro edition.
OnSIP provides its customers with communications tools to improve business, deployment, and management. Customers of OnSIP can either register on monthly or pay-as-you-go plans.
Ooma’s Q2 2023 Financial Results
Ooma recently released its Q2 2023 financial results, in which Stang revealed that the acquisition of OnSIP would add nearly $300,000 in revenue to the quarter.
The company reported that its Q2 results were strong “across the board”, with a revenue of $52.7 million, EBITDA of $4 million, and non-GAAP net income of $3 million.
Furthermore, Ooma believes it can drive OnSIP’s gross margin to over 70% of revenue, and it does not anticipate any unusually high expenses to operate the business, as it has a proven model.
Stang spoke about his plans for OnSIP on its quarterly earnings call: “Our go-forward plan for OnSIP is to improve the experience for OnSIP users by upgrading them at some point in the future to a more feature rich solution that takes advantage of capabilities now available in Ooma Office.
“This will take time to implement to ensure a seamless upgrade process for OnSIP users.
“In addition to accomplish this, we first need to incorporate into Ooma Office certain features now only provided by OnSIP, including basic call center functionality and a wider range of support for IP phone models.”
Ooma already has most of the features it needs on its roadmap to enable OnSIP’s capabilities, but it is planning to increase R&D spending over the next year to develop these features further.
Also known as Junction Networks, OnSIP was founded in 2004 and its platform is used by roughly 5,000 customers with around 50,000 users.
The company was previously purchased by Intrado, which was announced in August 2020.
The OnSIP teams comprises of around 40 employees who will continue their work under Ooma’s leadership.
OnSIP won the Excellence in Customer Serivce Award from Business Intelligent Group for the fourth year in a row in 2022.
The acquisition of OnSIP adds to a string of Ooma acquisitions, such as Voxter, Talkatone, and Butterfleye.
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