Core Insights - Ooma (OOMA) is expected to report quarterly earnings of $0.18 per share, reflecting a 28.6% increase year-over-year [1] - Analysts forecast revenues of $64.82 million, indicating a 3.7% year-over-year growth [1] - The consensus EPS estimate has remained unchanged over the last 30 days, suggesting stability in analyst projections [1] Revenue Projections - Analysts estimate 'Revenue- Product and other' to reach $4.56 million, representing an 11.1% increase from the previous year [4] - 'Revenue- Subscription and services' is projected to be $60.92 million, showing a year-over-year change of 4.3% [4] Gross Margin Insights - The consensus for 'Gross Margin- Subscription and services' is expected to be 70.7%, an improvement from the year-ago figure of 70% [4] Stock Performance - Ooma shares have increased by 8.7% in the past month, outperforming the Zacks S&P 500 composite's 8.2% increase [5] - Ooma holds a Zacks Rank 3 (Hold), indicating it is expected to closely follow overall market performance in the near term [5]

Financial Performance - Total revenue for fiscal 2025 was $256.9 million, representing an increase from $236.7 million in fiscal 2024 and $216.2 million in fiscal 2023, indicating strong revenue growth[17]. - For fiscal 2025, approximately 61% of revenue was derived from Ooma Business and 36% from Ooma Residential, indicating a strong reliance on these segments for future growth[92]. - The company incurred a net loss of approximately $6.9 million in fiscal 2025, despite generating cash from operations of $26.6 million[139]. - The company has significant fixed operating expenses, which may lead to increased net losses if revenue falls short of expectations[141]. - The company has experienced fluctuations in demand and pricing for its products, which may impact revenue and profitability[142]. User Base and Customer Service - As of January 31, 2025, Ooma had a total of 1,234,000 core users across Ooma Business and Ooma Residential[17]. - Ooma maintains two customer contact centers to support business and residential customers, utilizing various communication media for customer service[47]. - The company’s customer service is primarily provided by third parties, and any failure in service quality could harm the company's reputation and lead to significant liability[132]. - The company relies on third-party carriers for number portability, which is critical for customer acquisition and retention[138]. Product and Service Offerings - Ooma Office offers three service plans sold as monthly subscriptions, providing essential business phone features and advanced functionalities[21]. - Ooma Enterprise provides a highly customizable UCaaS solution, enabling organizations to utilize mobile and softphone telephony, multiparty conferencing, and call center capabilities[26]. - Ooma AirDial serves as a replacement for legacy analog phone services, supporting up to four safety devices per base station[29]. - Ooma's residential phone service includes PureVoice HD voice quality and advanced functionalities, enhancing user experience and integration with mobile devices[32]. - The introduction of new products, such as Ooma Office Pro Plus and AirDial, is essential for maintaining competitive advantage and driving revenue growth[93]. Market and Competitive Landscape - The competitive landscape includes established providers like Comcast and Verizon, as well as emerging CPaaS and CCaaS companies such as Twilio and RingCentral, indicating a highly fragmented market[53][56]. - The company faces significant competition in the CPaaS and CCaaS markets, with competitors having greater resources and established customer relationships, which may lead to price reductions to remain competitive[118]. - Increased competition in the cloud-based communications industry may lead to pricing pressures and reduced profit margins, impacting the company's ability to grow sales[115]. Risks and Challenges - The company faces risks related to customer turnover, reliance on small and medium-sized businesses, and potential tariffs on imported goods[76]. - The company faces significant risks related to customer churn, as customers can terminate subscriptions without penalty, potentially impacting revenue stability[82]. - The company may face penalties if it fails to comply with number porting timeframes set by regulatory bodies[138]. - The company is exposed to potential tariffs and trade restrictions that could materially harm revenue and gross margins, particularly due to sourcing from China[104]. - The company may incur substantial costs due to fraudulent activities, which could negatively impact its revenue and customer base[176]. Regulatory and Compliance Issues - Regulatory obligations include contributions to the Federal Universal Service Fund and compliance with E-911 service requirements, impacting operational costs[69]. - The company is currently in compliance with PCI standards, but non-compliance by subsidiaries could result in fines or restrictions on credit card acceptance[175]. - The FCC is considering increased regulation of interconnected VoIP services, which may negatively impact the company's business[198]. - The company is subject to various data privacy laws, which may increase operational costs and affect product adoption rates[201]. Strategic Partnerships and Marketing - The company has strategic partnerships with third parties, such as T-Mobile, to expand its service offerings to a broader customer base[44]. - The company employs a multi-channel marketing approach, utilizing online marketing, traditional advertising, and word-of-mouth strategies to grow its customer base[39]. - The company relies significantly on retailers and reseller partnerships for product sales, with a notable portion of Ooma Residential and Ooma Business sales made through major retailers like Amazon and Walmart[98]. Research and Development - The company has invested significantly in its engineering and R&D team, enhancing capabilities in various areas including digital hardware design and mobile app development[50]. - The company holds 51 issued patents and has one patent application pending in the United States, with patents expiring between 2031 and 2040[66]. Operational Infrastructure - The company operates three data center facilities in Northern California, Texas, and Virginia, with additional leased space in Europe, South Africa, and Asia Pacific[51]. - Manufacturing of on-premise and end-point devices is primarily contracted out to manufacturers in Vietnam and other Asian countries, with logistics managed from Newark, California[52]. Growth and Future Outlook - Future growth may involve acquisitions, which could divert management attention and increase operational risks[76]. - Future success depends on the ability to develop and enhance products in a rapidly changing technological landscape, with potential delays affecting market competitiveness[92]. - The company anticipates ongoing costs related to security measures against breaches, which could impact profitability[12].

Smart Connected Services Investor Presentation M a r c h 4 , 2 0 2 5 Safe Harbor Statement This presentation contains forward-looking statements. In particular, statements regarding future economic performance, finances, and expectations and objectives of management constitute forward-looking statements. Forward-looking statements can be identified by the fact that they do not relate strictly to historical facts and generally contain words such as "believes", "expects", "may", "will", "should", "seeks", "ap ...

Financial Data and Key Metrics Changes - For Q4 FY'25, the company achieved revenue of $65.1 million and non-GAAP net income of $5.8 million, marking a solid growth compared to previous quarters [10][11] - For the full fiscal year 2025, revenue grew 8% year-over-year to $256.9 million, with non-GAAP net income increasing 17% year-over-year to $18 million [28][29] - The company generated over $20 million in free cash flow and repurchased approximately $9 million of its stock [11][39] Business Line Data and Key Metrics Changes - Business subscription and services revenue accounted for 61% of total revenue in Q4, up from 60% in the prior quarter, with a year-over-year growth of 13% [27][28] - Residential subscription and services revenue decreased by 1% year-over-year [29] - The blended average monthly subscription revenue per core user increased by 4% year-over-year to $15.26, driven by a higher mix of business users [32] Market Data and Key Metrics Changes - The company ended Q4 with 1,234,000 core users, a decrease from 1,242,000 in the previous quarter, primarily due to seat reductions with IWG [31] - The annual exit recurring revenue was $234 million, up 3% year-over-year, with a net dollar subscription retention rate of 98% [33] Company Strategy and Development Direction - The company focuses on four market segments: cloud communications for small businesses, POTS replacement, wholesale platform services, and residential telephony [12][47] - Plans for FY'26 include expanding features for small businesses, enhancing POTS replacement solutions, and strengthening the 2600Hz platform [15][22][47] - The company aims to add new resale partners quarterly and enhance sales activities across all routes to market [21][55] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the SMB environment, noting that business activity has remained strong post-holidays [51] - The outlook for FY'26 is cautious due to expected churn from IWG and the timing of new partner revenue ramps [44][45] - Management believes the POTS replacement market opportunity is significant, with many businesses yet to transition from traditional lines [21][102] Other Important Information - The company reported a total operating expense of $35.1 million for Q4, with sales and marketing expenses increasing due to higher marketing activities [36] - Non-GAAP diluted EPS for Q4 was $0.21, compared to $0.13 in the prior quarter [38] Q&A Session Summary Question: What are you seeing in the SMB environment? - Management indicated that the SMB environment remains strong, with activity picking up in January after the holiday season [51] Question: Can you provide more details on assisting resale partners? - Management noted that they have over 20 partners for Ooma AirDial and aim to add a couple of resellers each quarter [54][55] Question: How many POTS lines does Marriott have? - Marriott has over 5,000 properties in the U.S., and the brand certification for AirDial is expected to facilitate sales [58][60] Question: What is the visibility on the large cable partner for POTS replacement? - Management expressed cautious optimism about the partner launching in March and the potential for sales growth [62][63] Question: Will there be continued churn from IWG after Q1? - Management expects stabilization after Q1, with potential growth opportunities arising from new initiatives with IWG [68][70] Question: What is the outlook for the SMB market excluding AirDial? - Management sees good opportunities in the SMB segment, with millions of small businesses yet to transition to cloud solutions [75] Question: How is the growth expected to be distributed throughout FY'26? - Management anticipates faster growth in the second half of FY'26 compared to the first half [87] Question: What is the strategy for monetizing the 2600Hz platform? - Management indicated that growth will primarily come from new customer acquisitions and monetizing existing services [94] Question: How does the company view competition in the POTS replacement market? - Management believes they have a competitive advantage with their solution and are focused on partnerships to enhance market reach [104][106]

Financial Data and Key Metrics Changes - For Q4 FY'25, the company achieved revenue of $65.1 million and non-GAAP net income of $5.8 million, marking a solid growth compared to previous quarters [10][11] - For the full fiscal year 2025, revenue grew 8% year-over-year to $256.9 million, with non-GAAP net income increasing 17% to $18 million [28][29] - The company generated over $20 million in free cash flow and repurchased approximately $9 million of its stock [11][39] Business Line Data and Key Metrics Changes - Business subscription and services revenue accounted for 61% of total revenue in Q4, up from 60% in the prior quarter, with a year-over-year growth of 13% [26][28] - Residential subscription and services revenue decreased by 1% year-over-year in Q4 [29] - The blended average monthly subscription and services revenue per core user increased by 4% year-over-year to $15.26, driven by a higher mix of business users [32] Market Data and Key Metrics Changes - The company ended Q4 with 1,234,000 core users, a slight decline from 1,242,000 in the previous quarter, primarily due to seat reductions with IWG [31] - The annual exit recurring revenue was $234 million, up 3% year-over-year, with a net dollar subscription retention rate of 98% [33] Company Strategy and Development Direction - The company focuses on four market segments: cloud communications for small businesses, POTS replacement, wholesale platform services, and residential telephony [12][47] - Plans for FY'26 include expanding features for small to medium-sized businesses, enhancing POTS replacement solutions, and strengthening the 2600Hz platform [21][22][47] - The company aims to add new resale partners quarterly and enhance sales activities across all routes to market [16][55] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the SMB environment, noting that business activity has remained strong post-holidays [51] - The company is cautious about its outlook due to expected churn from IWG and the timing of new partner revenue ramps [44][68] - Management believes the POTS replacement market opportunity is significant, with many businesses yet to transition from traditional lines [12][102] Other Important Information - The company reported a total gross margin of 63% for Q4, consistent with the prior year, despite a heavier mix of product revenue [35] - Operating expenses for Q4 were $35.1 million, with sales and marketing expenses increasing due to higher marketing activities for AirDial and 2600Hz [36] Q&A Session Summary Question: What are you seeing in the SMB environment? - Management indicated that the SMB environment remains strong, with activity picking up in January after the holiday season [51] Question: Can you provide more details on assisting resale partners? - Management highlighted that they have over 20 partners for AirDial and are focused on adding a couple of resellers each quarter [55] Question: How many POTS lines does Marriott have? - Marriott has over 5,000 properties in the U.S., and the brand certification for AirDial is expected to facilitate sales [58][60] Question: What is the visibility on the large cable partner for POTS replacement? - Management noted limited visibility on the partner's launch and sales generation but expressed optimism about the market's movement towards POTS replacement [62][64] Question: Will there be continued churn from IWG after Q1? - Management expects stabilization after Q1, with potential growth opportunities arising from new initiatives with IWG [68] Question: What is the outlook for the SMB market excluding AirDial? - Management emphasized a balanced approach across all segments, with significant opportunities remaining in the SMB market [75] Question: What is the growth expectation for the business segment in FY'26? - Management anticipates faster growth in the second half of FY'26, driven by AirDial installations [87] Question: How is the growth from the 2600Hz deal progressing? - Management indicated that growth from 2600Hz will take time, focusing on new customer acquisition and monetizing existing services [92][94] Question: What are the competitive dynamics in the POTS replacement market? - Management acknowledged competition from aggregators but believes they have a superior product solution [103][104]

Financial Performance - For the quarter ended January 2025, Ooma reported revenue of $65.1 million, reflecting a 5.5% increase year-over-year [1] - EPS for the quarter was $0.21, up from $0.13 in the same period last year, indicating a significant improvement [1] - The reported revenue exceeded the Zacks Consensus Estimate of $64.7 million by 0.61%, while the EPS surpassed the consensus estimate of $0.16 by 31.25% [1] Key Metrics - Ooma's core users totaled 1.23 million, slightly below the three-analyst average estimate of 1.24 million [4] - Premium core users were reported at 808 thousand, compared to the average estimate of 823.9 thousand [4] - Annualized exit recurring revenue (AERR) was $234 million, slightly below the average estimate of $236.65 million [4] - Revenue from products and other was $4.55 million, marginally below the average estimate of $4.56 million, but showed a year-over-year increase of 22.4% [4] - Subscription and services revenue reached $60.55 million, exceeding the average estimate of $60.16 million, with a year-over-year growth of 4.5% [4] Stock Performance - Ooma's shares have returned -3.7% over the past month, compared to a -2.3% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Core Viewpoint - Ooma reported quarterly earnings of $0.21 per share, exceeding the Zacks Consensus Estimate of $0.16 per share, and showing an increase from $0.13 per share a year ago, indicating a 31.25% earnings surprise [1][2] Financial Performance - Ooma's revenues for the quarter ended January 2025 were $65.1 million, surpassing the Zacks Consensus Estimate by 0.61% and up from $61.68 million year-over-year [2] - The company has consistently surpassed consensus EPS estimates over the last four quarters [2] Stock Performance - Ooma shares have declined approximately 1.3% since the beginning of the year, while the S&P 500 has decreased by 0.5% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.16 on revenues of $65.55 million, and for the current fiscal year, it is $0.70 on revenues of $272.06 million [7] - The trend of estimate revisions for Ooma is mixed, which may change following the recent earnings report [6] Industry Context - The Communication - Components industry, to which Ooma belongs, is currently ranked in the top 26% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Ooma's stock performance [5]

Revenue Performance - Ooma reported Q4 fiscal 2025 revenue of $65.1 million, a 6% increase year-over-year, with subscription and services revenue at $60.6 million, representing 93% of total revenue[5][6]. - For the full fiscal year 2025, Ooma achieved total revenue of $256.9 million, an 8% year-over-year growth, with subscription and services revenue increasing to $238.6 million[5][6]. - Total revenue for the three months ended January 31, 2025, was $65.097 million, a 6.9% increase from $61.676 million for the same period in 2024[27]. Profitability Metrics - Non-GAAP net income for Q4 fiscal 2025 was $5.8 million, or $0.21 per diluted share, compared to $3.5 million, or $0.13 per diluted share in Q4 fiscal 2024[5][6]. - Ooma's GAAP net loss for fiscal 2025 was $6.9 million, or $0.26 per share, compared to a loss of $0.8 million, or $0.03 per share in fiscal 2024[6][7]. - Non-GAAP net income for the fiscal year ended January 31, 2025, was $18.022 million, compared to $15.368 million in 2024, indicating a growth of 10.8%[31]. - Non-GAAP operating income for the fiscal year ended January 31, 2025, was $18.963 million, up from $15.524 million in 2024, marking a 22.4% increase[31]. Cash Flow and Assets - Cash flow from operations increased by 117% year-over-year for fiscal 2025[5]. - Cash flows from operating activities for the three months ended January 31, 2025, were $7.842 million, an increase from $5.508 million in the same period last year[30]. - The company reported total assets of $149.2 million as of January 31, 2025, down from $159.3 million a year earlier[24]. - Cash and cash equivalents at the end of the period on January 31, 2025, were $17.871 million, compared to $17.536 million at the end of the previous year[30]. Operating Expenses and Margins - Operating expenses for the three months ended January 31, 2025, totaled $40.254 million, slightly up from $40.134 million in the prior year[27]. - The company reported a GAAP gross margin of 61% for both the three months ended January 31, 2025, and 2024[31]. - Gross profit for the fiscal year ended January 31, 2025, was $156.018 million, compared to $147.232 million in 2024, reflecting a 6.0% increase[27]. Future Outlook - The company expects total revenue for fiscal 2026 to be in the range of $267 million to $270 million[6][7]. - The company plans to continue investing in new products and market expansion, entering FY26 with strong solutions across four targeted segments[5]. - Ooma's acquisition of 2600Hz contributed to the growth in subscription and services revenue for the fiscal year[6]. Quarterly Performance - Subscription and services revenue increased to $60.551 million, up from $57.963 million, representing a growth of 2.7% year-over-year[27]. - The net loss for the three months ended January 31, 2025, was $261 thousand, significantly improved from a net loss of $3.065 million in the same quarter of 2024[27]. - Adjusted EBITDA for Q4 fiscal 2025 was $6.9 million, up from $5.2 million in Q4 fiscal 2024[6].

Group 1 - Ooma (OOMA) is expected to report quarterly earnings of $0.16 per share, reflecting a year-over-year increase of 23.1% [1] - Revenue projections for Ooma are anticipated to reach $64.7 million, which is a 4.9% increase from the same quarter last year [1] - The consensus EPS estimate has remained unchanged over the past 30 days, indicating analysts' reassessment of their initial projections [1] Group 2 - Analysts predict 'Revenue- Product and other' to be $4.56 million, showing a year-over-year change of +22.9% [4] - 'Revenue- Subscription and services' is projected to reach $60.16 million, indicating a change of +3.8% from the previous year [4] - The forecast for 'Gross Margin- Subscription and services' is 70.6%, down from 72% reported in the same quarter last year [4] Group 3 - Ooma shares have returned -1.8% over the past month, compared to a -2.2% change in the Zacks S&P 500 composite [5] - Ooma holds a Zacks Rank 3 (Hold), suggesting it is expected to perform in line with the overall market in the near future [5]

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