Forward-Looking Statements Non-GAAP Financial Measures In addition to disclosing estimates of financial measures prepared in accordance with U.S. generally accepted accounting principles ("GAAP†), this press release contains estimates of Adjusted EBITDA in future periods. As explained in Ooma's filings with the Securities and Exchange Commission, Adjusted EBITDA represents net income before interest and otherincome, income taxes, depreciation and amortization of capital expenditures, amortization of intan ...

Financial Data and Key Metrics Changes - Revenue for Q3 2026 reached $67.6 million, a 4% year-over-year increase, with annual exit recurring revenue at $242.7 million, also up 4% year-over-year [8][17] - Non-GAAP net income increased to $7.7 million, a 68% year-over-year growth, and adjusted EBITDA rose to $8.6 million, representing 13% of total revenue, up from 11% in Q2 and 10% in Q1 [8][22] - Total operating expenses decreased to $34.2 million, down $1.4 million year-over-year, with sales and marketing expenses at 26% of total revenue [20][21] Business Line Data and Key Metrics Changes - Business subscription and services revenue accounted for 63% of total subscription and services revenue, up from 61% in the prior year quarter, with a 6% year-over-year growth [17][18] - Residential subscription and services revenue declined by 1% year-over-year [18] - The company added nine new resale partners in Q3, marking the strongest quarter to date for partner additions [10] Market Data and Key Metrics Changes - The company ended Q3 with 1,233,000 core users, a slight increase from 1,230,000 in Q2, with business users making up 42% of total core users [19] - The average revenue per user (ARPU) increased by 4% year-over-year to $15.82, driven by a higher mix of business users [19] Company Strategy and Development Direction - The company is focused on growth through acquisitions, having recently closed the acquisition of FluentStream and expecting to close on Phone.com soon, which will add over 165,000 users and $45 million in revenue annually [12][17] - The strategy includes leveraging synergies from acquisitions to enhance profitability and expand market reach, particularly in the small and medium-sized business segment [12][13] - The company plans to launch AI solutions early next year, enhancing its service offerings and targeting larger businesses [9][50] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth potential, citing strong customer engagement and a healthy pipeline for future installations despite some delays [40][66] - The company does not foresee economic sensitivity impacting its SMB business, indicating a stable operating environment [66] Other Important Information - The company generated $6.9 million in operating cash flow and $5.4 million in free cash flow during Q3, with total cash and investments at $21.7 million [22][23] - The company plans to use free cash flow to pay down acquisition-related debt more quickly [24] Q&A Session Summary Question: What drives the expected increase in profitability for fiscal Q4? - Management highlighted operating leverage, optimized sales and marketing spend, and lower-than-expected tariff impacts as key factors contributing to improved profitability [32] Question: What are the synergy expectations from the FluentStream and Phone.com acquisitions? - Management expects modest cost-side synergies from FluentStream and anticipates more significant overlaps and synergies with Phone.com post-acquisition [35][36] Question: What caused the guidance adjustment for the legacy business? - The adjustment was primarily due to delays in AirDial installations, reflecting the engagement with larger opportunities that require longer deployment times [40][41] Question: How does the company plan to integrate FluentStream? - The company intends to leverage FluentStream's existing strengths while optimizing operations and exploring vendor relationship opportunities [45][46] Question: What are the competitive dynamics in the hospitality sector? - The company is replacing legacy on-site PBX systems with its cloud solutions, maintaining a stable competitive landscape [73]

Financial Data and Key Metrics Changes - Revenue for Q3 increased to $67.6 million, up 4% year over year, with annual exit recurring revenue reaching $242.7 million, also up 4% year over year [6][16][18] - Non-GAAP net income rose to $7.7 million, a 68% increase year over year, and adjusted EBITDA reached a record $8.6 million, growing 50% year over year [6][17][20] - Adjusted EBITDA as a percentage of revenue improved to 13%, up from 11% in Q2 and 10% in Q1 [6][20] Business Line Data and Key Metrics Changes - Business subscription and services revenue accounted for 63% of total subscription and services revenue, up from 61% in the prior year quarter [16] - Ooma Office and Ooma Enterprise added new customers, with a healthy take rate for higher-tier services [7][18] - Residential subscription and services revenue decreased by 1% year over year [17] Market Data and Key Metrics Changes - The company ended Q3 with 1,233,000 core users, a slight increase from 1,230,000 in Q2, with business users making up 42% of total core users [18] - The average revenue per user (ARPU) increased by 4% year over year to $15.82, driven by a higher mix of business users [18] Company Strategy and Development Direction - The company is focused on growth through investments in Ooma Office, Ooma Enterprise, Ooma AirDial, and 2600Hz, with plans to launch AI solutions early next year [7][8] - Recent acquisitions of FluentStream and Phone.com are expected to enhance Ooma's capabilities and customer base, adding over 165,000 users and $45 million in revenue annually [11][12] - The strategy includes leveraging synergies from acquisitions to optimize spending and achieve greater scale [12][13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth potential and the positive impact of recent acquisitions on revenue and profitability [6][26] - The company anticipates a strong Q4, with guidance for total revenue between $71.3 million and $71.9 million, including contributions from FluentStream [23][25] - Management noted that customer engagement remains strong, despite some delays in AirDial installations due to customer timing [32] Other Important Information - Total operating expenses for Q3 were $34.2 million, down $1.4 million year over year, with a focus on optimizing sales and marketing spend [20] - The company ended the quarter with total cash and investments of $21.7 million and generated $6.9 million of operating cash flow [21][22] Q&A Session Summary Question: What drives the expected increase in profitability for fiscal Q4? - Management highlighted operating leverage, optimized sales and marketing spend, and lower-than-expected tariff impacts as key factors [27][28][29] Question: What are the synergy expectations from the FluentStream and Phone.com acquisitions? - Management expects modest cost-side synergies from FluentStream and more significant opportunities with Phone.com due to overlapping operations [30][31] Question: What caused the guidance adjustment for the legacy business? - The adjustment was primarily due to AirDial pushouts, with customer deployment timing being delayed [32][33] Question: How will the company integrate FluentStream and Phone.com? - Management plans to integrate both businesses without disrupting existing operations, leveraging their strengths for future growth [46][47] Question: What is the competitive landscape in the hospitality sector? - The company is primarily replacing legacy on-site PBX systems, with no significant changes in competitive dynamics noted [48]

Company Overview - Ooma is a multi-tenant SaaS platform for telephony, messaging, video, and more, serving over 1.2 million core users[8] - The company's annual exit recurring revenue (AERR) is $243 million, with a recurring gross profit margin of 72%[8] - Ooma boasts a 99% net dollar subscription retention rate (NDR)[8] Financial Performance - Ooma's revenue is $264 million, with adjusted EBITDA of $29 million[8] - The company targets a long-term subscription & services gross margin of 75%-78%[62] - Ooma's target model includes a long-term adjusted EBITDA margin of 20%-25% of revenue[62] Market Opportunity - The worldwide hosted voice/UC public cloud (UCaaS) market is projected to grow at a CAGR of 7% from $23 billion in 2023 to $32 billion in 2028[28] - The North American business market has 57 million business lines[28] - Ooma addresses a >10 million line U S market opportunity in POTS (copper line) replacement[40]

Core Insights - Ooma, Inc. reported strong financial results for the fiscal third quarter ended October 31, 2025, with revenue of $67.6 million and non-GAAP net income of $7.7 million, reflecting a year-over-year growth of 64% in non-GAAP diluted EPS and a record adjusted EBITDA of $8.6 million, which grew 50% year-over-year [4][7]. Financial Performance - Total revenue for the third quarter was $67.6 million, representing a 4% increase year-over-year. Subscription and services revenue rose to $62.0 million from $60.1 million in the same quarter of the previous fiscal year, accounting for 92% of total revenue, primarily driven by growth in Ooma Business [7]. - GAAP net income was $1.4 million, or $0.05 per diluted share, compared to a GAAP net loss of $2.4 million, or $0.09 per basic and diluted share, in the third quarter of fiscal 2025. Non-GAAP net income was $7.7 million, or $0.27 per diluted share, compared to $4.6 million, or $0.17 per diluted share in the prior year [7][24]. - Adjusted EBITDA for the quarter was $8.6 million, up from $5.7 million in the third quarter of fiscal 2025 [7]. Business Outlook - For the fourth quarter of fiscal 2026, Ooma expects total revenue in the range of $71.3 million to $71.9 million, including an expected contribution from FluentStream of $4.0 million to $4.1 million. Non-GAAP net income is projected to be between $8.4 million and $8.9 million, with non-GAAP net income per diluted share expected to be in the range of $0.30 to $0.32 [8]. - For the full fiscal year 2026, total revenue is anticipated to be between $270.3 million and $270.9 million, including the contribution from FluentStream, compared to prior guidance of $267.0 million to $270.0 million. Non-GAAP net income is expected to be between $28.2 million and $28.7 million, with non-GAAP net income per diluted share projected to be between $1.00 and $1.02 [8]. Strategic Initiatives - The company has recently completed the acquisition of FluentStream and is on track to complete the acquisition of Phone.com in late December. These acquisitions are viewed as significant opportunities to enhance shareholder value and are expected to contribute positively to Ooma's adjusted EBITDA, cash flow, and revenue growth [4].

Core Viewpoint - Ooma, Inc. has signed a definitive agreement to acquire Phone.com for approximately $23.2 million in cash, aiming to enhance its position in the small and medium-sized business (SMB) communications market [1][3][7] Acquisition Details - The acquisition is expected to close in the fourth quarter of Ooma's fiscal year 2026, pending regulatory approvals and customary closing conditions [3][4] - Phone.com is projected to generate annual revenues of $22-$23 million and adjusted EBITDA of $1.0-$1.5 million based on current run rates [4][7] - The cash purchase price reflects an approximate 1.0x revenue multiple based on Phone.com's current run rate [7] Strategic Implications - This acquisition is part of Ooma's strategy to extend its leadership in serving SMB customers and is expected to add approximately 87,000 business users [6][7] - Ooma plans to finance the acquisition through a combination of cash on hand and bank debt [4][7] - The integration of Phone.com is anticipated to create synergies and enhance Ooma's overall business value [6][7] Company Background - Phone.com, founded in 2006, serves approximately 36,000 customers and 87,000 users across North America, focusing on cloud communications for SMBs [5][6] - Ooma provides a range of communication services, including Ooma Office, which is designed for small to medium-sized businesses [11]

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 [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]

Ooma (OOMA) FY Conference Summary Company Overview - Ooma is a provider of communication services, specifically cloud telephone service and Unified Communications as a Service (UCaaS) [3][4] - The company operates in four segments: residential phone service, small business phone service, enterprise solutions, and wholesale platforms [17][26] Financial Performance - Ooma reported total revenue of $259 million for the last four quarters, with a year-over-year growth of 7% [5] - Adjusted EBITDA for the same period was $25 million, reflecting a 24% increase [5] - Annual exit recurring revenue (ARR) stands at $234 million, with a retention rate of 72% [6] - The company has a high gross margin of 72% on subscription revenue and a total gross margin of 63% [35] User Metrics - Ooma has over 1.2 million core users, with a monthly average revenue per user (ARPU) of approximately $15 [6][13] - Business ARPU is reported at over $23, while residential ARPU is around $19 [34] Market Opportunities - There are an estimated 6 million businesses in North America with 1 to 20 employees, with about half yet to transition to cloud solutions, presenting a significant market opportunity [16] - The company is targeting the replacement of copper lines, with an estimated 10 million lines in the U.S. being phased out [17][18] Product Segments - **Residential Product Line**: Ranked number one by Consumer Reports, offering affordable phone services [9][15] - **Small Business Solutions**: Ooma Office allows small businesses to access powerful communication features at a low cost, catering to their unique needs [10][12] - **Enterprise Solutions**: Focused on verticals like hospitality, with over 500 hotels in North America using Ooma's services [11] - **AirDial**: A solution for replacing copper lines, designed to maintain existing equipment while providing advanced features [19][22] Strategic Partnerships - Ooma has signed over 30 resellers for AirDial, including major partners like T-Mobile and Comcast, enhancing market reach [22] - The company has a significant partnership with Marriott, certifying Ooma AirDial for all their properties, which includes over 5,000 locations in North America [51] Growth Strategy - Ooma aims to reach 300,000 lines for AirDial, which could generate an additional $100 million in recurring revenue annually [23] - The company is focused on acquiring small business user bases through strategic acquisitions, typically targeting businesses with $10 million to $25 million in revenue [38] Financial Outlook - Ooma expects to improve adjusted EBITDA margins to 11% by Q4 of the current year, with a long-term goal of reaching 20% to 25% in the next four to five years [43] - The company plans to continue using free cash flow for stock buybacks, having spent $12 million in the last twelve months [39][40] Conclusion - Ooma is positioned in a growing market with a strong financial foundation, focusing on differentiated solutions in the cloud communications space, particularly through its unique offerings like AirDial and the 2,600 Hertz platform [59]

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]