Ooma (OOMA) 2025 Conference Summary Company Overview - Ooma provides cloud-based communication services primarily targeting small businesses and legacy residential offerings [2][4] - The company has a strong focus on transforming sophisticated technology into simple communication solutions [2] Financial Performance - Last four quarters revenue reached approximately $262 million, reflecting a 5% year-over-year growth [3] - Adjusted EBITDA for the last quarter was $25 million, representing an 11% margin, with a strong upward trend [3] - Approximately 93% of revenue is recurring, with a gross margin of 72% [3][9] - The company has over 1.2 million core users, with a significant portion being business users [4][28] Business Segments - Ooma's revenue is increasingly derived from business solutions, with 62% coming from business users in the most recent quarter [28] - The flagship product, Ooma Office, serves small businesses with 1 to 20 employees, driving growth and profitability [5] - Ooma Enterprise caters to larger businesses, with a focus on specific verticals like hospitality [6] Growth Opportunities - The company is targeting the transition from traditional copper lines to its new product, Airdial, which serves as a drop-in replacement for outdated systems [13][15] - Airdial presents a significant market opportunity, with an estimated 10 million lines in the U.S. needing replacement, potentially generating $100 million in recurring revenue if 300,000 lines are captured [17] - The 2,600 Hertz platform is another growth avenue, offering a flexible, API-driven solution for wholesale customers [19][20] Market Position and Strategy - Ooma has been recognized for high customer satisfaction, ranking number one in user surveys by PC Magazine and Consumer Reports [11] - The company is focused on marketing outreach to the approximately 6.5 million small businesses in North America, with many yet to adopt cloud solutions [12] - Ooma's strategy includes leveraging partnerships and expanding its channel agent network to enhance market penetration [22] Financial Outlook - The company aims to achieve a higher adjusted EBITDA margin in the coming years, targeting a long-term goal of over 20% [41] - Future revenue growth is expected to come from Ooma Office, Airdial, and the 2,600 Hertz platform, with a goal to double revenue in the next four to five years [41][44] - Ooma has a strong cash position with $20 million in cash and no debt, allowing for flexibility in capital allocation [38] Key Metrics - Average Revenue Per User (ARPU) is reported at $15.68, with a growing trend due to the increasing mix of higher ARPU business users [31] - The company generated $20 million in free cash flow over the last four quarters, with plans for stock repurchase and potential acquisitions [35][36] Conclusion - Ooma is well-positioned in the cloud communication market with a strong focus on small businesses and innovative solutions like Airdial and 2,600 Hertz, aiming for significant growth in the coming years [24][25]

Financial Data and Key Metrics Changes - Revenue for Q2 reached $66.4 million, a 3.5% increase year-over-year, exceeding guidance [18] - Non-GAAP net income was $6.5 million, up 59% year-over-year, surpassing guidance [19] - Adjusted EBITDA reached a record $7.2 million, representing 11% of total revenue, a 27% increase from the prior year [24][28] Business Line Data and Key Metrics Changes - Business subscription and services revenue grew 6% year-over-year, accounting for 62% of total subscription services revenue [18][20] - Residential subscription and services revenue decreased by 2% year-over-year, but showed slight sequential improvement [14][20] - The average revenue per user (ARPU) increased by 4% year-over-year to $15.68, driven by a higher mix of business users [21] Market Data and Key Metrics Changes - The company ended Q2 with 1.23 million core users, including 508,000 business users, reflecting a net increase of 9,000 business users from Q1 [20] - The annual exit recurring revenue was $240 million, up 3% year-over-year [21] - The net data subscription retention rate improved to 100%, compared to 99% in the previous quarter [20][70] Company Strategy and Development Direction - The company plans to enhance its offerings with the introduction of the Connect 5,000, a 5G internet solution aimed at small businesses [10] - Continued development of AI-driven features is a priority, focusing on ease of use and low cost for small businesses [11] - The company aims to expand its Airdial partner network and enhance Ooma Office to drive higher ARPU [15][29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth momentum and the strength of its solutions [29] - The company anticipates continued sales momentum and is focused on executing its long-term strategy for profitable growth [29] - Management highlighted the importance of maintaining operational efficiency and leveraging R&D investments to improve profitability [76] Other Important Information - The company has been public for ten years, during which it has tripled its revenue and improved its bottom line significantly [17] - The company generated $6.4 million in operating cash flow and $5 million in free cash flow during Q2 [25] Q&A Session Summary Question: Contribution of Airdial to ARR - Management confirmed that Airdial is contributing meaningfully to ARR growth, with a significant portion of new business users coming from Airdial [32] Question: Updates on Airdial partnerships - Management reported nearly 35 partners reselling Airdial, with positive momentum from key partners like Comcast and T-Mobile [35][36] Question: Use of incremental cash flow - Management indicated that share buybacks are sensible at current prices, but they are also exploring M&A opportunities that fit their strategic criteria [42][43] Question: Business subscription growth outlook - Management noted that the guidance for business subscription growth is conservative, primarily due to installation timing rather than expected churn [44][45] Question: Details on the new largest retail customer - Management shared that the new customer is a large national retailer, with installations expected to ramp up in the second half of the year [50][51] Question: Organic growth rate of 2600 Hertz - Management explained that 2600 Hertz is a wholesale platform with lower ARPU, but they are working to enhance its capabilities and expect growth opportunities in the future [58][60] Question: NRR expectations going forward - Management indicated that NRR is expected to remain steady between 99% and 100% [70][72] Question: Efficiencies driving net income guidance - Management highlighted R&D efficiency, disciplined sales and marketing expenses, and a favorable tax environment as key drivers for improved net income guidance [75][76]

Financial Data and Key Metrics Changes - Revenue for Q2 reached $66.4 million, a 3.5% increase year over year, exceeding guidance [17][19] - Non-GAAP net income was $6.5 million, up 59% year over year, surpassing guidance [19][24] - Adjusted EBITDA reached a record $7.2 million, representing 11% of total revenue, a 27% increase year over year [24][28] - Cash flow from operations was $6.4 million, with free cash flow of $5 million [25] Business Line Data and Key Metrics Changes - Business subscription and services revenue grew 6% year over year, accounting for 62% of total subscription services revenue [18][20] - Residential subscription and services revenue decreased by 2% year over year [20] - The average revenue per user (ARPU) increased by 4% year over year to $15.68, driven by a higher mix of business users [21] Market Data and Key Metrics Changes - The company ended Q2 with 1.23 million core users, including 508,000 business users, an increase of 9,000 from Q1 [20] - The annual exit recurring revenue was $240 million, up 3% year over year [21] - The net data subscription retention rate improved to 100% from 99% in the previous quarter [20][71] Company Strategy and Development Direction - The company plans to enhance its offerings with the introduction of the Connect 5,000, a 5G internet solution for small businesses [9] - Continued development of AI-driven features is a priority, aimed at serving slightly larger businesses [10] - The focus remains on capitalizing on AirDial, enhancing Ooma Office, and positioning 2600 Hertz as a leading wholesale platform [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory, particularly with AirDial and the overall market opportunity [29][84] - The company anticipates continued sales momentum and is focused on executing its long-term strategy for profitable growth [28][84] Other Important Information - The company celebrated its ten-year anniversary since going public, highlighting significant revenue growth and improved profitability [15] - The guidance for Q3 revenue is projected between $67.2 million and $67.9 million, with full-year revenue guidance unchanged at $267 million to $270 million [26][27] Q&A Session Summary Question: Contribution of AirDial to ARR - Management confirmed that AirDial is contributing meaningfully to ARR growth, with a significant portion of new business user growth attributed to AirDial [32][33] Question: Updates on AirDial partnerships - Management reported nearly 35 partners reselling AirDial, with notable progress from partners like Comcast and T-Mobile [36][37] Question: Use of incremental cash flow - Management clarified that share buybacks are sensible at current prices, while still exploring M&A opportunities that fit their strategic criteria [43][44] Question: Business subscription growth outlook - Management indicated that the guidance reflects conservatism due to installation timing rather than expected churn [46] Question: Details on the new largest retail customer - Management shared that the new customer is a large national retailer, with installations expected to ramp up in the second half of the year [51][52] Question: Organic growth rate of 2600 Hertz - Management noted that 2600 Hertz is a wholesale platform with low ARPU, but they are working to enhance its capabilities and expect growth opportunities in the future [59][62]

Financial Performance - Ooma's multi-tenant SaaS platform generated $262 million in revenue with $25 million in adjusted EBITDA[7] - The company boasts an annual exit recurring revenue (AERR) of $240 million[7] - Recurring gross profit margin stands at 72%[7] - Ooma business subscription and services revenue accounted for 62% of overall subscription and services revenue in 2QF26[45] User Base and Growth - Ooma has over 1.2 million core users[7] - The net dollar subscription retention rate (NDR) is 100%[7] - The company serves customers in 32 countries[42] Market and Strategy - The worldwide hosted voice/UC public cloud (UCaaS) market is projected to reach $32 billion by 2028[26] - Ooma is targeting a >10 million line U S market opportunity in POTS (copper line) replacement[39] - Ooma's integrated growth strategy includes advertising, customer referrals, direct sales, resellers/partners, geographic expansion, and retailers, with a Net Promoter Score of 73%[41]

[Executive Summary & Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Highlights) [Fiscal Second Quarter 2026 Financial Highlights](index=1&type=section&id=Fiscal%20Second%20Quarter%202026%20Financial%20Highlights) Ooma reported strong Q2 FY2026 financial results, with revenue increasing 3% year-over-year to $66.4 million, achieving a significant turnaround in GAAP net income and substantial growth in non-GAAP net income and Adjusted EBITDA, primarily driven by subscription and services revenue Q2 FY2026 Key Financial Highlights (in millions, except EPS) | Metric | Value | YoY Change | | :-------------------------------- | :-------------------- | :--------- | | Total Revenue | $66.4 million | +3% | | Subscription and Services Revenue | $61.1 million | +2.5% (from $59.6M) | | GAAP Net Income | $1.3 million | Swing from $(2.1) million loss | | GAAP EPS (Diluted) | $0.04 | Swing from $(0.08) loss | | Non-GAAP Net Income | $6.5 million | +58.5% (from $4.1M) | | Non-GAAP EPS (Diluted) | $0.23 | +53.3% (from $0.15) | | Adjusted EBITDA | $7.2 million | +28.6% (from $5.6M) | - Subscription and services revenue increased to **$61.1 million** from **$59.6 million** in the second quarter of fiscal 2025, representing **92% of total revenue**, primarily driven by the growth of Ooma Business[5](index=5&type=chunk) - Ooma remains focused on achieving growth across its small business UCaaS, AirDial POTS replacement, and 2600Hz wholesale solutions while also improving non-GAAP net income and adjusted EBITDA year over year[4](index=4&type=chunk) [Business Outlook](index=1&type=section&id=Business%20Outlook) Ooma provided positive guidance for the third quarter of fiscal 2026 and raised its full fiscal year 2026 guidance for GAAP and non-GAAP net income and EPS, while reaffirming total revenue guidance, indicating expected continued financial improvement Q3 Fiscal 2026 Business Outlook (in millions, except per share data) | Metric | Projected Range | | :-------------------------------- | :-------------------------- | | Total Revenue | $67.2 million to $67.9 million | | GAAP Net Income | $0.9 million to $1.3 million | | GAAP Net Income per Diluted Share | $0.04 to $0.05 | | Non-GAAP Net Income | $6.0 million to $6.4 million | | Non-GAAP Net Income per Diluted Share | $0.22 to $0.23 | Full Fiscal Year 2026 Business Outlook (in millions, except per share data) | Metric | New Guidance Range | Prior Guidance Range | Change | | :-------------------------------- | :-------------------------- | :-------------------------- | :----- | | Total Revenue | $267 million to $270 million | $267 million to $270 million | Unchanged | | GAAP Net Income | $3.5 million to $4.0 million | $0.6 million to $1.6 million | Raised | | GAAP Net Income per Diluted Share | $0.13 to $0.15 | $0.02 to $0.06 | Raised | | Non-GAAP Net Income | $24.5 million to $25.0 million | $22.5 million to $23.5 million | Raised | | Non-GAAP Net Income per Diluted Share | $0.87 to $0.89 | $0.79 to $0.83 | Raised | [Financial Statements](index=5&type=section&id=Financial%20Statements) [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of July 31, 2025, Ooma's balance sheet shows a slight increase in total assets, primarily driven by higher cash and cash equivalents, while total liabilities decreased, contributing to an increase in total stockholders' equity Condensed Consolidated Balance Sheets (Amounts in thousands) | Metric | July 31, 2025 | January 31, 2025 | | :-------------------------------- | :-------------- | :--------------- | | Cash and cash equivalents | $19,558 | $17,871 | | Total current assets | $59,753 | $56,177 | | Total assets | $150,095 | $149,195 | | Total current liabilities | $50,356 | $51,660 | | Total liabilities | $61,974 | $63,917 | | Total stockholders' equity | $88,121 | $85,278 | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the second quarter of fiscal 2026, Ooma reported a 3.5% year-over-year increase in total revenue and a significant improvement in GAAP net income, moving from a loss to a profit, with gross profit also increasing by 4.0% year-over-year Q2 FY2026 Condensed Consolidated Statements of Operations (Three Months Ended July 31, amounts in thousands) | Metric | FY2026 | FY2025 | YoY Change | | :-------------------------- | :----- | :----- | :--------- | | Total Revenue | $66,364 | $64,129 | +3.5% | | Subscription and services | $61,139 | $59,566 | +2.6% | | Product and other | $5,225 | $4,563 | +14.5% | | Gross profit | $40,230 | $38,700 | +4.0% | | Income (loss) from operations | $916 | $(1,596) | N/A (swing to profit) | | Net income (loss) | $1,255 | $(2,137) | N/A (swing to profit) | | Diluted EPS | $0.04 | $(0.08) | N/A (swing to profit) | YTD FY2026 Condensed Consolidated Statements of Operations (Six Months Ended July 31, amounts in thousands) | Metric | FY2026 | FY2025 | YoY Change | | :-------------------------- | :----- | :----- | :--------- | | Total Revenue | $131,393 | $126,628 | +3.8% | | Net income (loss) | $1,114 | $(4,276) | N/A (swing to profit) | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Ooma generated positive cash flow from operating activities in Q2 FY2026, though slightly less than the prior year, with decreased cash used in investing activities and significant cash used in financing activities due to stock repurchases Q2 FY2026 Condensed Consolidated Statements of Cash Flows (Three Months Ended July 31, amounts in thousands) | Metric | FY2026 | FY2025 | YoY Change | | :-------------------------------- | :----- | :----- | :--------- | | Net cash provided by operating activities | $6,361 | $7,087 | -10.2% | | Net cash used in investing activities | $(1,312) | $(1,742) | +24.7% (less cash used) | | Net cash used in financing activities | $(4,479) | $(4,608) | +2.8% (less cash used) | | Net increase in cash and cash equivalents | $570 | $737 | -22.7% | | Cash and cash equivalents, at end of period | $19,558 | $16,585 | +17.9% | YTD FY2026 Condensed Consolidated Statements of Cash Flows (Six Months Ended July 31, amounts in thousands) | Metric | FY2026 | FY2025 | YoY Change | | :-------------------------------- | :----- | :----- | :--------- | | Net cash provided by operating activities | $10,064 | $10,672 | -5.7% | | Net cash used in financing activities | $(5,842) | $(8,431) | +30.7% (less cash used) | [Non-GAAP Financial Measures](index=2&type=section&id=Non-GAAP%20Financial%20Measures) [Definition and Purpose of Non-GAAP Measures](index=2&type=section&id=Definition%20and%20Purpose%20of%20Non-GAAP%20Measures) Ooma utilizes non-GAAP financial measures, including non-GAAP net income, EPS, gross profit, operating income, and Adjusted EBITDA, to offer investors a clearer view of its core operating performance by excluding certain non-cash or non-recurring items, serving as supplementary information not a substitute for GAAP results - Non-GAAP financial measures include non-GAAP net income, non-GAAP net income per share, non-GAAP gross profit and gross margin, non-GAAP operating income, and Adjusted EBITDA[11](index=11&type=chunk) - Adjusted EBITDA represents net income before interest and other income, income taxes, depreciation and amortization of capital expenditures, amortization of intangible assets, stock-based compensation and related taxes, litigation costs, restructuring costs and gain on note conversion[11](index=11&type=chunk) - These non-GAAP measures are presented to provide investors with additional information regarding financial results and core business operations, facilitating a meaningful comparison of the company's core operating results across periods, but should not be considered a substitute for GAAP financial information[13](index=13&type=chunk)[15](index=15&type=chunk) [Reconciliation of Non-GAAP Financial Measures (Guidance)](index=2&type=section&id=Reconciliation%20of%20Non-GAAP%20Financial%20Measures%20(Guidance)) Ooma provides a reconciliation of its GAAP net income and EPS guidance to non-GAAP figures for the third fiscal quarter and the full fiscal year 2026, primarily adjusting for stock-based compensation, amortization of intangible assets, and litigation costs Q3 FY2026 Guidance Reconciliation (Three Months Ending October 31, 2025, in millions, except per share data) | Metric | GAAP | Stock-based comp. & related taxes | Amortization of intangible assets | Litigation costs | Non-GAAP | | :-------------------------- | :--------- | :-------------------------------- | :-------------------------------- | :--------------- | :--------- | | Net Income | $0.9-$1.3 | $3.7 | $1.4 | — | $6.0-$6.4 | | Net Income per Share | $0.04-$0.05 | $0.13 | $0.05 | — | $0.22-$0.23 | Full FY2026 Guidance Reconciliation (Fiscal Year Ending January 31, 2026, in millions, except per share data) | Metric | GAAP | Stock-based comp. & related taxes | Amortization of intangible assets | Litigation costs | Non-GAAP | | :-------------------------- | :--------- | :-------------------------------- | :-------------------------------- | :--------------- | :--------- | | Net Income | $3.5-$4.0 | $15.0 | $5.6 | $0.4 | $24.5-$25.0 | | Net Income per Share | $0.13-$0.15 | $0.53 | $0.20 | $0.01 | $0.87-$0.89 | [Reconciliation of Non-GAAP Financial Measures (Actuals)](index=8&type=section&id=Reconciliation%20of%20Non-GAAP%20Financial%20Measures%20(Actuals)) Ooma provides detailed reconciliations of GAAP to non-GAAP gross profit, operating income, net income, diluted EPS, and Adjusted EBITDA for the three and six months ended July 31, 2025 and 2024, illustrating the impact of adjustments such as stock-based compensation and amortization of intangible assets Q2 FY2026 Non-GAAP Reconciliation (Three Months Ended July 31, 2025, amounts in thousands) | Metric | GAAP | Stock-based comp. & related taxes | Amortization of intangible assets | Litigation costs | Non-GAAP | | :-------------------------- | :----- | :-------------------------------- | :-------------------------------- | :--------------- | :------- | | Gross profit | $40,230 | $228 | $708 | — | $41,166 | | Operating income | $916 | $3,708 | $1,406 | $83 | $6,113 | | Net income | $1,255 | $3,708 | $1,406 | $83 | $6,452 | | Diluted EPS | $0.04 | $0.13 | $0.05 | $0.01 | $0.23 | | Adjusted EBITDA | $7,161 | (reconciled from GAAP Net Income with multiple adjustments) | | | | Q2 FY2025 Non-GAAP Net Income & EPS (Three Months Ended July 31, 2024, amounts in thousands) | Metric | GAAP | Stock-based comp. & related taxes | Amortization of intangible assets | Litigation costs | Non-GAAP | | :-------------------------- | :----- | :-------------------------------- | :-------------------------------- | :--------------- | :------- | | Net income | $(2,137) | $4,627 | $1,471 | $95 | $4,056 | | Diluted EPS | $(0.08) | $0.17 | $0.05 | $0.01 | $0.15 | | Adjusted EBITDA | $5,635 | (reconciled from GAAP Net Income with multiple adjustments) | | | | [Additional Information](index=2&type=section&id=Additional%20Information) [Conference Call Information](index=2&type=section&id=Conference%20Call%20Information) Ooma hosted a conference call and live webcast on August 26, 2025, to discuss its financial results, with details provided for accessing the call and an archived webcast available online for 12 months - A conference call and live webcast for analysts and investors was held at 5:00 p.m., Eastern time on August 26, 2025[8](index=8&type=chunk) - Access details for the phone call required registration, and the webcast was available on Ooma's Events & Presentations page[9](index=9&type=chunk) - An archived version of the webcast will be available on the Ooma investor relations site for 12 months following the call[10](index=10&type=chunk) [Disclosure Information](index=3&type=section&id=Disclosure%20Information) Ooma uses the investor relations section of its website to fulfill its disclosure obligations under Regulation FD, advising investors to monitor this channel in addition to other public communications - Ooma uses the investor relations section on its website as a means of complying with its disclosure obligations under Regulation FD[16](index=16&type=chunk) - Investors should monitor Ooma's investor relations website in addition to following press releases, SEC filings, and public conference calls and webcasts[16](index=16&type=chunk) [Legal Notice Regarding Forward-Looking Statements](index=3&type=section&id=Legal%20Notice%20Regarding%20Forward-Looking%20Statements) This press release contains forward-looking statements, particularly in the 'Business Outlook' and CEO's quotes, which are subject to inherent risks and uncertainties that could cause actual results to differ materially, and the company disclaims any obligation to update these statements, except as required by law - The press release contains forward-looking statements under the Private Securities Litigation Reform Act of 1995, identifiable by words such as 'believes', 'expects', 'may', 'will', 'should', etc[17](index=17&type=chunk) - Forward-looking statements inherently involve known and unknown risks, uncertainties, and other factors which may cause actual results, performance, or achievements to differ materially from anticipated future results[17](index=17&type=chunk) - Ooma disclaims any obligation to update or revise any forward-looking statements after they are made, whether as a result of new information, future events, or otherwise, except as required by applicable law[17](index=17&type=chunk)[18](index=18&type=chunk) [About Ooma, Inc.](index=4&type=section&id=About%20Ooma%2C%20Inc.) Ooma, founded in 2003, is a provider of advanced communications services for businesses and consumers, offering solutions like Ooma Office, AirDial, 2600Hz, and Ooma Telo, and currently serves over 1.2 million users - Ooma (NYSE: OOMA) delivers phone, messaging, video, and advanced communications services for businesses and consumers, founded in 2003[19](index=19&type=chunk) - Key offerings include Ooma Office for small to medium-sized businesses, Ooma AirDial for POTS replacement, Ooma 2600Hz for wholesale solutions, and Ooma Telo for residential consumers[19](index=19&type=chunk) - Ooma's solutions currently power more than **1.2 million users**[19](index=19&type=chunk) [Investor and Media Contacts](index=4&type=section&id=Investor%20and%20Media%20Contacts) Contact information for Ooma's Investor Relations and Corporate Communications departments is provided for inquiries - Investor Contact: Matthew S. Robison, Director of IR and Corporate Development, ir@ooma.com, (650) 300-1480[20](index=20&type=chunk) - Media Contact: Mike Langberg, Director of Corporate Communications, press@ooma.com, (650) 566-6693[20](index=20&type=chunk)

Core Viewpoint - Ooma, Inc. is set to release its second-quarter earnings results, with analysts expecting an increase in earnings per share and revenue compared to the previous year [1]. Financial Performance - Analysts anticipate Ooma will report quarterly earnings of 20 cents per share, up from 15 cents per share in the same period last year [1]. - The projected quarterly revenue is $65.72 million, compared to $64.13 million a year earlier [1]. Stock Performance - Ooma shares experienced a decline of 0.5%, closing at $11.98 on Monday [2]. Analyst Ratings - Citizens Capital Markets analyst Patrick Walravens reiterated a Market Perform rating on March 5, 2025, with an accuracy rate of 60% [4]. - Northland Capital Markets analyst Michael Latimore maintained an Outperform rating and raised the price target from $16 to $18 on December 5, 2024, with an accuracy rate of 63% [4].

Group 1 - Ooma (OOMA) is expected to report quarterly earnings of $0.20 per share, reflecting a year-over-year increase of 33.3% [1] - Revenues are anticipated to be $65.73 million, which is a 2.5% increase from the same quarter last year [1] - There have been no revisions in the consensus EPS estimate over the past 30 days, indicating stability in analysts' projections [1] Group 2 - The consensus estimate for 'Revenue- Product and other' is $4.73 million, showing a change of +3.7% from the prior-year quarter [4] - 'Revenue- Subscription and services' is projected to reach $60.99 million, indicating a change of +2.4% from the previous year [4] - The estimate for 'Core users' is 1.23 million, slightly down from 1.24 million a year ago [4] Group 3 - The 'Net dollar subscription retention rate' is projected to be 99.0%, down from 100.0% in the same quarter last year [5] - Analysts predict 'Annualized exit recurring revenue (AERR)' will reach $242.91 million, compared to $233.00 million in the same quarter of the previous year [5] - Over the past month, Ooma shares have decreased by 6.7%, while the Zacks S&P 500 composite has increased by 1.7% [5]

Industry Overview - The Zacks Communication - Components industry is facing challenges due to raw material price volatility, high capital expenditure for infrastructure upgrades, and geopolitical conflicts, which have negatively impacted profitability [1][4][5] - The industry primarily includes companies providing telecom products and services for scalable network architecture, video solutions, and broadband access equipment [3] Current Challenges - High operating costs are driven by a shortage of chips, increased raw material prices, and technological obsolescence, which have escalated operational expenses [7] - Demand erosion is occurring as customers shift to lower-priced alternatives due to increased fees for network upgrades, compounded by trade tensions affecting business credibility [5][6] Future Prospects - Despite current challenges, companies like Corning, Viavi Solutions, and Ooma are expected to benefit from rising demand for scalable infrastructure driven by IoT, fiber densification, and 5G rollout [2][16][20] - The industry is adapting to a software-driven, data-centric approach, enhancing cloud architecture and user experience, positioning itself for growth in cloud networking [6] Performance Metrics - The Zacks Communication - Components industry has outperformed the S&P 500 and the broader Zacks Computer and Technology sector, with a 66.1% increase over the past year compared to 20% and 28.9% for the S&P 500 and sector, respectively [11] - The industry currently trades at a trailing 12-month price-to-book (P/B) ratio of 4.13X, lower than the S&P 500's 7.37X and the sector's 10.68X [14] Company Highlights - **Corning**: Experienced a 69.1% stock surge over the past year, with a long-term earnings growth expectation of 18.2% and a focus on innovative optical connectivity products [16][17] - **Viavi Solutions**: Gained 35% in the past year, with a 27.8% upward revision in current earnings estimates, benefiting from the transition to 5G networks [20][21] - **Ooma**: Achieved a 31.5% stock increase, focusing on small business customers and delivering an earnings surprise of 18% on average in the trailing four quarters [25][26]

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Revenue Performance - Total revenue for the first quarter of fiscal 2026 was $65.0 million, representing a 4% year-over-year increase, primarily driven by growth in Ooma Business[78]. - Total revenue for the three months ended April 30, 2025, was $65.029 million, a 4% increase from $62.499 million in the same period of 2024[99]. - Subscription and services revenue from Ooma Business grew 6% year-over-year, mainly due to user growth[78]. - Subscription and services revenue increased by $1.9 million or 3% year-over-year, driven by an increase in AirDial lines and average revenue per core user[100]. - Product and other revenue rose by $0.7 million or 16% year-over-year, primarily due to increased AirDial shipments[101]. Financial Metrics - Adjusted EBITDA for the first quarter was $6.7 million, compared to $5.0 million in the prior year quarter[78]. - The net dollar subscription retention rate remained stable at 99% year-over-year, indicating strong customer retention[81]. - Total gross margin improved to 62%, up from 61% in the prior year quarter[78]. - Gross profit for total revenue was $40.209 million, reflecting a 5% increase from $38.115 million in the prior year[102]. - The gross margin for subscription and services remained consistent at 70% year-over-year[103]. Operating Expenses - Operating expenses for the first quarter totaled $40.3 million, slightly down from $40.9 million in the prior year quarter[98]. - Operating expenses decreased by 1% year-over-year to $40.266 million, with research and development expenses down by 10%[105]. Cash Position - As of April 30, 2025, total cash and cash equivalents were $19.0 million, up from $17.9 million as of January 31, 2025[78]. - As of April 30, 2025, the company had $19.0 million in cash and cash equivalents, sufficient to meet cash needs for at least the next 12 months[109]. - Net cash provided by operating activities was $3.703 million, an increase of $0.1 million year-over-year[110]. - Cash used in investing activities was $1.223 million, a decrease of $0.2 million compared to the previous year[113]. User Metrics - Core users decreased to 1,225 as of April 30, 2025, down from 1,239 a year earlier, with Ooma Business users now comprising approximately 41% of total core users[79]. - Annualized exit recurring revenue (AERR) grew to $234.0 million, up from $227.6 million year-over-year, driven by an increase in average revenue per core user[79][80]. Debt and Financing - The company entered into a secured revolving credit facility allowing borrowing up to $30.0 million, potentially increased to $50.0 million[115]. Net Loss - GAAP net loss narrowed to $0.1 million, compared to a net loss of $2.1 million in the prior year quarter, reflecting operational improvements[78].