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the transition from traditional copper lines to its new product, Airdial, which serves as a drop-in replacement for outdated systems [13][15] - Airdial presents a significant market opportunity, with an estimated 10 million lines in the U.S. needing replacement, potentially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]

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 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]