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 ...

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) 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 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]