Core Viewpoint - Ooma (OOMA) has received a Zacks Rank 1 (Strong Buy) upgrade, indicating a positive earnings outlook that may lead to increased stock price [1][3]. Earnings Estimates and Stock Price Correlation - The Zacks rating system is based on changes in earnings estimates, which are strongly correlated with stock price movements, particularly influenced by institutional investors [4][6]. - Rising earnings estimates for Ooma suggest an improvement in the company's underlying business, likely resulting in upward stock price pressure [5][10]. Earnings Estimate Revisions - Ooma is projected to earn $0.61 per share for the fiscal year ending January 2025, reflecting a year-over-year increase of 3.4% [8]. - Over the past three months, the Zacks Consensus Estimate for Ooma has risen by 35.3%, indicating a significant upward revision trend [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [7]. - Ooma's upgrade to Zacks Rank 1 places it in the top 5% of Zacks-covered stocks, suggesting strong potential for market-beating returns in the near term [10].

Core Viewpoint - Ooma (OOMA) has shown a recent price increase and analysts suggest there is potential for further upside, with a mean price target indicating a 27.4% increase from the current price [1]. Price Targets - The mean price target for OOMA is $17.90, with a standard deviation of $0.55, indicating a consensus among analysts [2]. - The lowest estimate is $17, suggesting a 21% increase, while the highest estimate is $18.50, indicating a potential surge of 31.7% [2]. - A low standard deviation signifies a high degree of agreement among analysts regarding the stock's price movement [7]. Analyst Sentiment - Analysts are optimistic about OOMA's earnings prospects, as indicated by a positive trend in earnings estimate revisions, which historically correlate with stock price movements [9]. - Over the last 30 days, six earnings estimates for OOMA have increased, leading to a 35.3% rise in the Zacks Consensus Estimate [10]. Zacks Rank - OOMA holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate factors, suggesting strong potential for upside [11]. Caution on Price Targets - While price targets are a common metric, they should not be the sole basis for investment decisions due to historical inaccuracies in predicting actual stock movements [5][8]. - Analysts may set overly optimistic price targets influenced by business relationships, which can lead to inflated expectations [6].

Core Viewpoint - Momentum investing focuses on following a stock's recent price trends, aiming to buy high and sell higher, with the expectation that established trends will continue [1][2]. Company Overview: Ooma (OOMA) - Ooma currently holds a Momentum Style Score of A, indicating strong potential for momentum investing [3]. - The company has a Zacks Rank of 2 (Buy), suggesting it is positioned for outperformance in the market [4]. Performance Metrics - Ooma's shares have increased by 0.74% over the past week, outperforming the Zacks Communication - Components industry, which rose by 0.68% [7]. - Over the last month, Ooma's stock price has risen by 12.68%, significantly higher than the industry's 4.22% [7]. - In the last three months, Ooma's shares have surged by 38.72%, and over the past year, they have increased by 55.88%, compared to the S&P 500's gains of 9.93% and 33.15%, respectively [8]. Trading Volume - Ooma's average 20-day trading volume is 161,622 shares, which serves as a bullish indicator when combined with rising stock prices [9]. Earnings Outlook - Recent earnings estimate revisions for Ooma show a positive trend, with 3 estimates moving higher and only 1 lower for the current fiscal year, raising the consensus estimate from $0.58 to $0.59 [11]. - For the next fiscal year, 4 estimates have increased with no downward revisions, indicating strong earnings potential [11]. Conclusion - Given the strong performance metrics and positive earnings outlook, Ooma is positioned as a solid momentum pick for investors [12][13].

Financial Performance - Total revenue for Q3 Fiscal 2025 was $65.1 million, representing a 9% year-over-year increase, primarily driven by growth in Ooma Business[60] - Total revenue for the three months ended October 31, 2024, was $65,127,000, representing a 9% increase from $59,856,000 in the same period last year[69] - For the nine months ended October 31, 2024, total revenue was $191,755,000, a 10% increase from $175,061,000 in the prior year[71] - Subscription and services revenue from Ooma Business grew 7% year-over-year, attributed to user growth[60] - Subscription and services revenue increased by $4.2 million or 8% year-over-year, driven by an increase in core users and AirDial lines[70] - Subscription and services revenue for the nine months increased by $14.4 million or 9%, attributed to organic growth and contributions from the acquisition of 2600Hz[71] - Product and other revenue rose by $1.0 million or 26% year-over-year, primarily due to increased AirDial units shipped and sales of accessories[70] Profitability and Margins - Total gross margin was 60%, compared to 62% in the prior year quarter[60] - Adjusted EBITDA increased to $5.7 million from $5.0 million in the prior year quarter[60] - Gross profit for the three months ended October 31, 2024, was $39,270,000, up from $36,939,000, reflecting a 6% increase[72] - The gross margin for subscription and services decreased to 70% from 71% year-over-year, while product and other revenue gross margin improved to negative 57% from negative 74%[73] Expenses - Operating expenses for the three months ended October 31, 2024, totaled $41,556,000, compared to $37,957,000 in the prior year, marking a 9% increase[72] - Sales and marketing expenses increased by $3.2 million or 6% year-over-year, primarily due to a $4.4 million increase in personnel-related costs[76] - Research and development expenses rose by $5.4 million or 15% year-over-year, mainly driven by a $4.2 million increase in personnel-related costs[76] - General and administrative expenses increased by $3.0 million or 15% year-over-year, largely due to a $1.9 million rise in personnel-related costs[76] - Total operating expenses for the nine months ended October 31, 2024, were $122.7 million, up from $111.1 million, reflecting a year-over-year increase of $11.6 million or 10%[76] Cash Flow and Liquidity - As of October 31, 2024, total cash and cash equivalents were $17.1 million, down from $17.5 million as of January 31, 2024[60] - Net cash provided by operating activities for the nine months ended October 31, 2024, was $18.8 million, an increase of $12.0 million year-over-year[79] - Cash used in investing activities was $4.8 million, a decrease of $26.3 million year-over-year, primarily due to the absence of cash outflow for the 2600Hz acquisition[81] - Cash used in financing activities was $14.4 million, reflecting an increase of $33.4 million year-over-year, mainly due to repayments of borrowings under the Credit Agreement[82] - As of October 31, 2024, the company had $17.1 million in cash and cash equivalents, sufficient to meet cash needs for at least the next 12 months[78] Debt and Credit Facilities - Total debt decreased to $3.0 million from $16.0 million as of January 31, 2024[60] - The company entered into a secured revolving credit facility allowing borrowing up to $30.0 million, with $3.0 million outstanding as of October 31, 2024[83] User Metrics - Core users remained stable at 1,242 as of October 31, 2024, with Ooma Business users increasing to approximately 41% of total core users[62] - Annualized exit recurring revenue (AERR) grew to $234.0 million from $224.9 million year-over-year, driven by an increase in average revenue per core user[62] - Net dollar subscription retention rate remained strong at 99%, indicating effective user retention and growth[62] Net Loss - GAAP net loss was $2.4 million, a decline from net income of $2.3 million in the prior year quarter due to continued investments and a non-recurring tax benefit[60]

Financial Data and Key Metrics Changes - Ooma achieved record revenue of $65.1 million in Q3 2025, a 9% increase year-over-year, exceeding guidance [11][24] - Non-GAAP net income for Q3 was $4.6 million, surpassing the guidance range of $4.1 million to $4.3 million [34] - Adjusted EBITDA reached $5.7 million, another record for the company, representing 9% of total revenue [34] - Cash flow from operations was $8.1 million, marking a record quarterly performance [35] - The company is now debt-free after paying off the remaining $3 million of debt following a total debt reduction of $18 million over the past year [11][36] Business Line Data and Key Metrics Changes - Ooma Business contributed 62% of total revenue in Q3, up from 58% a year ago, driven by strong performance in Ooma Office [12] - Business subscription and services revenue grew 13% year-over-year, while residential subscription services revenue declined by 1% [27] - The percentage of new users opting for premium tiers in Ooma Office increased to 60% in Q3, up from 56% in the prior year [29] Market Data and Key Metrics Changes - The market for AirDial, a solution for POTS replacement, is heating up, contributing to significant sales growth in Q3 [14] - Ooma signed several larger customers for AirDial, including a top-tier national cable company and an aggregator/CLEC [16][19] - The company ended Q3 with 1,242,000 core users, slightly down from the previous quarter, primarily due to seat reductions with IWG [28] Company Strategy and Development Direction - Ooma is focused on improving operating expense leverage and executing its growth strategy while driving further bottom-line improvements [12] - The company aims to add new AirDial resale partners each quarter and is actively pursuing significant discussions [21] - Ooma is also leaning into the 2600Hz platform to capitalize on market needs for replacing older solutions [22] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the market dynamics, particularly for AirDial and residential POTS replacement, despite potential churn from IWG [43][72] - The macro environment appears stable, with no significant negative impacts observed post-election [99] - Management anticipates continued growth in business subscription and services revenue, with a projected 13% growth rate for fiscal 2025 [40] Other Important Information - Total operating expenses for Q3 were $35.6 million, a 7% increase year-over-year, driven by higher sales and marketing expenses [33] - The company ended the quarter with total cash and investments of $17.1 million [35] - Ooma's annual exit recurring revenue grew to $234 million, up 4% year-over-year [30] Q&A Session Summary Question: Comments on 2600Hz acquisition and market dynamics - Management noted that the acquisition has revealed tremendous opportunities, especially with the sunset of older platforms like Metaswitch [48][50] Question: Expectations for EBITDA margins - Management indicated a potential for double-digit EBITDA margins next year, with current projections showing a 9.2% margin for Q4 [59][61] Question: Clarification on AirDial bookings - Management confirmed that Q3 bookings for AirDial were higher than in Q2 [66] Question: Impact of IWG churn on revenue guidance - Management stated that the impact of IWG churn would not be significant, as it was already accounted for in Q3 [78][82] Question: Future capital allocation strategies - Management plans to be opportunistic with stock buybacks and is also looking to build inventory for AirDial [104][106] Question: Outlook for net retention rate - Management expects net retention rates to stabilize in the 98%-99% range in the short term, with potential improvements as churn from IWG subsides [113]

Company Performance - Ooma reported quarterly earnings of $0.17 per share, exceeding the Zacks Consensus Estimate of $0.16 per share, and up from $0.15 per share a year ago, representing an earnings surprise of 6.25% [1] - The company achieved revenues of $65.13 million for the quarter ended October 2024, surpassing the Zacks Consensus Estimate by 1.32% and increasing from $59.86 million year-over-year [2] - Ooma has consistently surpassed consensus EPS estimates for the last four quarters [2] Stock Performance - Ooma shares have increased approximately 39.1% since the beginning of the year, outperforming the S&P 500's gain of 26.8% [4] - The current Zacks Rank for Ooma is 3 (Hold), indicating that the shares are expected to perform in line with the market in the near future [7] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.14 on revenues of $64.04 million, and for the current fiscal year, it is $0.58 on revenues of $254.95 million [8] - The estimate revisions trend for Ooma is mixed, and changes in earnings expectations may occur following the recent earnings report [7] - The outlook for the Communication - Components industry, where Ooma operates, is currently in the top 34% of Zacks industries, suggesting a favorable environment for stock performance [9]

Smart Connected Services Investor Presentation D e c e m b e r 4 , 2 0 2 4 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 ...

Financial Performance - Total revenue for Q3 2025 was $65.1 million, representing a 9% year-over-year increase[3] - Subscription and services revenue increased to $60.1 million, accounting for 92% of total revenue, driven by growth in Ooma Business and contributions from 2600hz[3] - GAAP net loss was $2.4 million, compared to a GAAP net income of $2.3 million in Q3 2024, which included a tax benefit of $3.2 million[3] - Non-GAAP net income was $4.6 million, or $0.17 per diluted share, up from $4.0 million, or $0.15 per diluted share in the prior year[3] - Adjusted EBITDA for Q3 2025 was $5.7 million, an increase from $5.0 million in Q3 2024[3] - For Q4 2025, total revenue is expected to be between $64.6 million and $65.1 million, with a GAAP net loss projected between $1.2 million and $1.5 million[5] - For the full fiscal year 2025, total revenue is expected to be between $256.3 million and $256.8 million, with a GAAP net loss projected between $7.8 million and $8.1 million[6] Business Growth - Business subscription and services revenue grew by 13% year-over-year in Q3 2025[4] - The company signed two large new resale partners for AirDial and launched a major new customer for 2600hz in Q3 2025[4] - Ooma's solutions currently power over 1.2 million users, indicating a strong market presence[16] Historical Comparison - Total revenue for the three months ended October 31, 2024, was $65,127,000, representing a 10.3% increase from $59,856,000 for the same period in 2023[21] - Subscription and services revenue increased to $60,135,000 for the three months ended October 31, 2024, up from $55,886,000 in the prior year, marking a growth of 4.5%[21] - Revenue for the three months ended October 31, 2024, was $65,127,000, representing a 8.5% increase from $59,856,000 for the same period in 2023[26] Assets and Liabilities - Total current assets decreased to $55,089,000 as of October 31, 2024, down from $63,679,000 at the end of January 31, 2024, a decline of 13.5%[19] - Total liabilities decreased to $66,098,000 as of October 31, 2024, from $81,166,000 at the end of January 31, 2024, a reduction of 18.5%[19] Operating Performance - Operating expenses for the three months ended October 31, 2024, were $41,556,000, up from $37,957,000 in the same period last year, an increase of 9.5%[21] - The company reported a net loss of $2,364,000 for the three months ended October 31, 2024, compared to a net income of $2,285,000 for the same period in 2023[21] - Cash and cash equivalents at the end of the period were $17,131,000, a decrease from $18,872,000 at the end of the previous year[24] - The company’s accumulated deficit increased to $(139,918,000) as of October 31, 2024, compared to $(133,278,000) at the end of January 31, 2024[19] Research and Development - The company plans to continue investing in research and development, with R&D expenses rising to $14,234,000 for the three months ended October 31, 2024, compared to $12,540,000 in the prior year, an increase of 13.5%[21] Profitability Metrics - Non-GAAP gross profit for the three months ended October 31, 2024, was $40,265,000, compared to $37,372,000 for the same period in 2023, reflecting a 5.1% increase[26] - Non-GAAP net income for the three months ended October 31, 2024, was $4,561,000, up from $4,018,000 in the same period of 2023, indicating a 13.5% increase[26] - Adjusted EBITDA for the three months ended October 31, 2024, was $5,709,000, compared to $4,990,000 for the same period in 2023, showing a 14.4% increase[26] - GAAP gross margin for the three months ended October 31, 2024, was 60%, while the Non-GAAP gross margin was 62%[26] - Non-GAAP operating income for the three months ended October 31, 2024, was $4,639,000, compared to $3,949,000 for the same period in 2023, reflecting a 17.5% increase[26] - Stock-based compensation and related taxes for the three months ended October 31, 2024, amounted to $4,575,000, compared to $3,766,000 for the same period in 2023[26] - GAAP operating loss for the three months ended October 31, 2024, was $(2,286,000), compared to $(1,018,000) for the same period in 2023[26] - The weighted-average diluted shares for the three months ended October 31, 2024, were 26,837,594, compared to 25,990,264 for the same period in 2023[26]

Group 1 - Ooma (OOMA) is expected to report quarterly earnings of $0.16 per share, reflecting a year-over-year increase of 6.7% [1] - Revenue projections for Ooma are estimated at $64.28 million, which represents a 7.4% 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 estimate 'Revenue- Product and other' to be $4.36 million, showing a year-over-year change of +9.8% [4] - The average prediction for 'Revenue- Subscription and services' is $59.94 million, indicating a year-over-year change of +7.3% [4] - The consensus estimate for 'Gross Margin- Subscription and services' is 71.0%, consistent with the year-ago value of 71% [4] Group 3 - Ooma shares have returned +16.3% over the past month, outperforming the Zacks S&P 500 composite's +3.8% change [5] - Ooma holds a Zacks Rank 3 (Hold), suggesting it is expected to mirror overall market performance in the near future [5]

Ooma (OOMA) could be a solid choice for investors given its recent upgrade to a Zacks Rank #2 (Buy). This upgrade is essentially a reflection of an upward trend in earnings estimates -- one of the most powerful forces impacting stock prices. The Zacks rating relies solely on a company's changing earnings picture. It tracks EPS estimates for the current and following years from the sell-side analysts covering the stock through a consensus measure -- the Zacks Consensus Estimate. Individual investors often fi ...