Financial Data and Key Metrics Changes - For Q1 FY 2026, the company achieved revenue of $65 million, a 4% year-over-year growth, and non-GAAP net income of $5.6 million, which is a 56% increase compared to the prior year [9][17][22] - Adjusted EBITDA for the quarter was $6.7 million, representing a 33% growth over the prior year [22] - The annual exit recurring revenue was $234 million, up 33% year over year [19] Business Line Data and Key Metrics Changes - Business subscription and services revenue grew 6% year over year, accounting for 62% of total subscription and services revenue [16][17] - Residential subscription and services revenue declined by 2% year over year [17] - Ooma Office expanded its new account wins and users, with 61% of new Office users opting for a premium service tier, the highest ever [10][19] Market Data and Key Metrics Changes - The company serves over 500 hotels across North America, indicating strong traction in the hospitality sector [11][60] - The number of Airdial reseller partners increased to over 30, with significant new customer wins in Q1 [13][52] 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 [9][10] - The company is optimistic about the growth of Airdial, especially with the partnership with Comcast, which launched Airdial on schedule [12][38] - The company aims to enhance its product offerings and expand its market reach, particularly in the hospitality and larger business segments [11][46] Management's Comments on Operating Environment and Future Outlook - Management noted a steady demand environment for UCaaS solutions, while demand for Airdial is accelerating [32][33] - The company expects to maintain a net dollar subscription retention rate of around 99% going forward [29] - Management expressed confidence in achieving higher profitability and adjusted EBITDA margins in the future [93] Other Important Information - The company generated $3.7 million of operating cash flow and $2.5 million of free cash flow in Q1 [22][23] - Total operating expenses for Q1 were $35.4 million, up 1% year over year, with a focus on sales and marketing for Airdial [21][22] Q&A Session Summary Question: What contributed to the 1% increase in NRR this quarter? - The retention rate improvement was largely due to the improvement in non-Regis subscription revenue, offsetting the anticipated decline from Regis [28][29] Question: What are you seeing in the demand environment? - The demand environment for UCaaS solutions has remained steady, while Airdial demand is accelerating [32][33] Question: Is there any change to visibility on Airdial adoption? - Early opportunities with larger accounts are promising, but it takes time to move through the sales cycle [38] Question: What impact have tariffs had on your subscriber base? - There has been no significant impact from tariffs on the customer base or sales opportunities [40] Question: What areas will you be investing in moving forward? - The company is reallocating sales and marketing spend towards Airdial and 2600 Hertz, while maintaining significant R&D investment [44][46] Question: How productive are your Airdial partners? - The company is pleased with the traction of its largest partners and is seeing good success across its reseller network [51][52] Question: What is the outlook for the hospitality sector? - The company targets winning 50 to 100 hotels per quarter and sees significant opportunity in this segment [60] Question: Are there any significant changes in the competitive environment? - The company continues to focus on its four segments to maintain a competitive advantage, with no specific changes noted [68] Question: Are you talking with other cable companies? - The company is actively engaging with new reseller partners and aims to add partners consistently [74] Question: What is the timeline for integrating Ooma apps into 2600 Hertz? - The integration is expected to be completed by the end of the year [80] Question: Have you seen any change in sales cycles for 2600 Hertz? - There is good momentum in customer wins, but it is unclear if this is due to the market or the company's efforts [82]

Financial Data and Key Metrics Changes - For Q1 FY 2026, the company achieved revenue of $65 million, a 4% year-over-year growth, and non-GAAP net income of $5.6 million, which is a 56% increase compared to the prior year [8][16][22] - Adjusted EBITDA for the quarter was $6.7 million, representing a 33% growth year-over-year [22] - The annual exit recurring revenue was $234 million, up 33% year-over-year [19] Business Line Data and Key Metrics Changes - Business subscription and services revenue grew 6% year-over-year, accounting for 62% of total subscription and services revenue [16][17] - Residential subscription and services revenue declined by 2% year-over-year [17] - Ooma Office saw an increase in new account wins, with 61% of new Office users opting for a premium service tier, the highest ever [11][19] Market Data and Key Metrics Changes - The company serves over 500 hotels across North America, indicating strong traction in the hospitality sector [10][60] - The number of Airdial reseller partners increased to over 30, with significant new customer wins in Q1 [13][52] 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 [8][9] - The company is optimistic about Airdial growth and has made significant investments in developing solutions for its target segments [26] - The company aims to maintain a strong gross margin of 72% for subscription and services while investing in infrastructure to support growth [20][49] Management's Comments on Operating Environment and Future Outlook - Management noted a steady demand environment for UCaaS solutions, while demand for Airdial is accelerating [32][33] - The company expects to see continued growth in adjusted EBITDA and free cash flow, reaffirming its revenue guidance for FY 2026 [24][25] Other Important Information - The company ended Q1 with total cash and investments of $19 million and generated $3.7 million of operating cash flow [22][23] - The company is raising the low end of its non-GAAP net income guidance for FY 2026 to a range of $22.5 million to $23.5 million [25] Q&A Session Summary Question: What contributed to the 1% increase in NRR this quarter? - The retention rate improvement was largely due to the improvement in non-Regis subscription revenue, offsetting the anticipated decline from Regis [28][29] Question: What are you seeing in the demand environment? - The demand environment for UCaaS solutions has remained steady, while Airdial demand is accelerating [32][33] Question: Is there any change to visibility on when adoption will begin to ramp? - The company is optimistic about early opportunities with Comcast and expects continued growth through the year [37][38] Question: What impact have tariffs had on your subscriber base? - There has been no significant impact from tariffs on the customer base or sales opportunities [39] Question: What areas will you be investing in moving forward? - The company is reallocating sales and marketing spend towards Airdial and 2600 Hertz, while maintaining significant R&D investment [44][46] Question: Can you quantify the number of lines that churned at Regis? - Approximately $12,000 to $13,000 in churn occurred over the last two quarters at Regis [90][92] Question: What is a reasonable goal for adjusted EBITDA margin in the future? - The company believes there is potential for significantly higher adjusted EBITDA margins in the future [96]

Financial Performance - Ooma's revenue reached $259 million, with a 7% year-over-year growth[7] - Adjusted EBITDA was $25 million, showing a 24% year-over-year increase[7] - Annual Exit Recurring Revenue (AERR) amounted to $234 million[7] - Recurring Gross Profit Margin stood at 72%[7] Customer Base and Retention - The company has over 12 million core users[7] - Net dollar subscription retention rate (NDR) is 99%[7] Market and Growth Opportunities - The North American Business Market is experiencing a -4% CAGR[27] - The Worldwide hosted voice/UC public cloud (UCaaS) market is experiencing a 17% CAGR[27] - All other VoIP is experiencing a 36% CAGR[27] - Ooma is targeting the POTS (copper line) replacement market, estimated at >10 million lines in the U S [31]

Financial Performance - Ooma reported total revenue of $65.0 million for Q1 fiscal 2026, representing a 4% year-over-year increase[5]. - Non-GAAP net income for the quarter was $5.6 million, or $0.20 per diluted share, compared to $3.6 million, or $0.14 per diluted share in the prior year[5]. - Adjusted EBITDA increased to $6.7 million, up from $5.0 million in Q1 fiscal 2025, reflecting a 33% year-over-year growth[5]. - Subscription and services revenue accounted for 93% of total revenue, increasing to $60.3 million from $58.4 million in the same quarter last year[5]. - Revenue for the three months ended April 30, 2025, was $65,029,000, an increase of 4.9% compared to $62,499,000 for the same period in 2024[27]. - GAAP gross profit for the same period was $40,209,000, up from $38,115,000, resulting in a GAAP gross margin of 62%[27]. - Non-GAAP gross profit increased to $41,161,000 from $39,175,000, maintaining a Non-GAAP gross margin of 63%[27]. - The company reported a GAAP net loss of $141,000 for the three months ended April 30, 2025, significantly improved from a net loss of $2,139,000 in the same period of 2024[27]. - Non-GAAP net income for the period was $5,640,000, compared to $3,583,000 for the same period in 2024[27]. - Adjusted EBITDA for the three months ended April 30, 2025, was $6,668,000, an increase from $5,000,000 in the prior year[27]. Future Projections - Ooma expects total revenue for Q2 fiscal 2026 to be in the range of $65.5 million to $66.1 million[6]. - For the full fiscal year 2026, Ooma anticipates total revenue between $267 million and $270 million[6]. Asset Management - Total current assets as of April 30, 2025, were $57.3 million, compared to $56.2 million as of January 31, 2025[22]. - Ooma's total assets decreased slightly to $148.8 million from $149.2 million at the end of the previous quarter[22]. - Cash and cash equivalents at the end of the period were $18,988,000, up from $15,848,000 at the end of the same period in 2024[26]. - Net cash provided by operating activities was $3,703,000, compared to $3,585,000 for the same period in 2024[26]. Stock and Compensation - The company issued common stock, generating proceeds of $2,288,000, compared to $1,417,000 in the prior year[26]. - The company incurred stock-based compensation expense of $3,936,000, slightly down from $4,363,000 in the same period of 2024[26]. Customer Acquisition - The company added over 30 AirDial resellers and secured four new customers for its 2600Hz solution during the quarter[4]. Loss Improvement - GAAP net loss for Q1 fiscal 2026 was $0.1 million, or $0.01 per share, an improvement from a loss of $2.1 million, or $0.08 per share, in Q1 fiscal 2025[5].

Industry Overview - The Zacks Communication - Components industry is facing challenges due to raw material price volatility, high capital expenditure for 5G infrastructure, and supply chain issues, which have negatively impacted profitability [1][4][6] - 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, elevated raw material prices due to geopolitical tensions, and technological obsolescence [4][6] - Demand erosion is occurring as customers shift to lower-priced alternatives in response to increased fees for network upgrades, compounded by trade restrictions affecting credibility [7] Future Prospects - Companies like Harmonic Inc., Ooma, Inc., and AudioCodes Ltd. are expected to benefit from rising demand for scalable infrastructure driven by IoT, fiber densification, and accelerated 5G rollout [2] - The industry is positioned for growth through a software-driven, data-centric approach that enhances cloud architecture and user experience [5] Performance Metrics - The Zacks Communication - Components industry has outperformed the S&P 500 and the broader Zacks Computer and Technology sector, with a 34.1% increase over the past year compared to 9.2% and 7.2% 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 3.11X, below the S&P 500's 7.81X and the sector's 8.63X [14] Key Companies - **Harmonic Inc.**: Specializes in video delivery solutions and has a strong earnings outlook with a 67.9% earnings surprise on average over the last four quarters [17][18] - **Ooma, Inc.**: Offers cloud-based communication solutions and has shown an 18% earnings surprise on average, focusing on small business customers [21][23] - **AudioCodes Ltd.**: Provides advanced communication solutions and aims to leverage partnerships to strengthen its market position, with a 0.4% earnings surprise on average [26][27]

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]