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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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]