Ooma(US:OOMA)2025-12-09 22:20Financial Performance - Total revenue for the third quarter of fiscal 2026 was $67.6 million, representing a 4% year-over-year increase, primarily driven by growth in Ooma Business[94] - GAAP net income for the quarter was $1.4 million, compared to a net loss of $2.4 million in the prior year quarter, indicating operational improvement[94] - Adjusted EBITDA for the third quarter was $8.6 million, an increase from $5.7 million in the prior year quarter[94] - Total revenue for the three months ended October 31, 2025, was $67,625,000, representing a 4% increase from $65,127,000 in the same period of 2024[116] - Net income for the three months ended October 31, 2025, was $1,393,000, compared to a net loss of $2,364,000 in the same period of 2024[115] - For the nine months ended October 31, 2025, the company reported a net income of $2.5 million, a significant improvement from a net loss of $6.6 million in the same period of 2024[135] Revenue Breakdown - Subscription and services revenue from Ooma Business grew 6% year-over-year, mainly due to user growth[94] - Subscription and services revenue increased by $1,818,000 or 3% year-over-year, primarily due to an increase in AirDial lines and average revenue per core user[117] - Product and other revenue rose by $680,000 or 14% year-over-year, mainly driven by an increase in AirDial shipments[118] - Annualized exit recurring revenue (AERR) increased to $242.7 million, up from $234.0 million year-over-year, driven by a higher average revenue per core user[95] - The gross margin for subscription and services remained consistent at 70% year-over-year[122] Cash and Liquidity - As of October 31, 2025, total cash and cash equivalents were $21.7 million, up from $17.9 million as of January 31, 2025[94] - Cash provided by operating activities decreased by $1.8 million year-over-year to $16.99 million, primarily due to working capital impacts from the timing of payments[135] - Cash used in investing activities was $4.0 million, a decrease of $0.7 million year-over-year, mainly due to reduced fixed asset additions[137] - Cash used in financing activities was $9.1 million, down $5.8 million year-over-year, reflecting no repayments of borrowings under the 2023 Credit Agreement in the current period[138] - As of October 31, 2025, the company had zero outstanding borrowings under the 2023 Credit Agreement, which allows for borrowing up to $30.0 million, potentially increasing to $50.0 million[139] Expenses and Cost Management - Total operating expenses decreased by 5% to $39,437,000 for the three months ended October 31, 2025, compared to $41,556,000 in 2024[126] - Research and development expenses decreased by $2,133,000 or 15% year-over-year, primarily due to a reduction in personnel and contractor-related costs[128] Acquisitions and Growth Strategy - Ooma completed the acquisition of FluentStream for approximately $45.0 million in cash, expected to accelerate growth in Ooma Business[91] - The company anticipates subscription and services revenue growth as it expands its user base, particularly through the FluentStream acquisition[104] - The initial term loan of $45.0 million was used to finance the FluentStream acquisition, with future borrowings intended for other acquisitions and working capital[139] Customer Metrics - Core users decreased to 1,233 as of October 31, 2025, down from 1,242 a year earlier, primarily due to a decline in Ooma Residential users[95] - The net dollar subscription retention rate remained stable at 99% year-over-year, reflecting strong customer retention[95] Non-Cash Charges and Working Capital - Non-cash charges for the nine months ended October 31, 2025, totaled $21.1 million, primarily related to stock-based compensation and depreciation[135] - The company experienced an increase of $0.8 million in accounts receivable and $2.3 million in inventories due to the timing of cash collections and inventory costs[136] - Deferred revenue increased by $0.4 million, indicating growth in future revenue recognition[136]