Ooma Inc. ((OOMA)) has held its Q2 earnings call. Read on for the main highlights of the call.
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Ooma Inc. recently held its earnings call, showcasing a strong financial performance that set new records in revenue and profitability. The company highlighted significant growth in its Airdial segment, with major customer acquisitions and expanded reseller partnerships contributing to a positive outlook. Despite minor setbacks in residential subscription revenue and stagnant gross margins, the overall sentiment remained optimistic, driven by robust business segment growth and financial health.
Record Financial Performance
Ooma reported impressive Q2 financial results, with revenue reaching $66.4 million. The company achieved a record non-GAAP net income of $500,000 and a record adjusted EBITDA of $7.2 million, which represents 11% of revenue. These figures underscore Ooma’s strong financial footing and its ability to deliver consistent growth.
Airdial Progress and Expansion
Airdial bookings more than doubled compared to the previous year, marking a significant milestone for Ooma. The company secured its largest customer win to date with a major national retailer, planning to serve over 3,000 locations. Additionally, Ooma expanded its Airdial partner resellers to 35, further strengthening its market presence.
Business User Growth
Ooma experienced a 66% year-over-year increase in business subscription and services revenue during Q2. The company saw a higher take rate for its Pro and Pro Plus offerings, adding 9,000 business users compared to the previous quarter. This growth highlights Ooma’s successful strategy in expanding its business user base.
Strong Cash Flow and Share Buyback
The company generated $6.4 million in operating cash flow and $5 million in free cash flow for Q2. Ooma also invested $4.5 million in share buybacks, demonstrating confidence in its financial stability and commitment to returning value to shareholders.
Decline in Residential Subscription Revenue
Residential subscription and services revenue saw a slight decline of 2% year over year. Despite this decrease, Ooma’s overall financial performance remained strong, supported by growth in other segments.
Flat Overall Gross Margin
Ooma’s total gross margin for Q2 was 62%, unchanged from the previous year. This stability was due to a heavier mix of product revenue, which offset improvements in product gross margin.
Forward-Looking Guidance
Ooma provided guidance for the third quarter and full fiscal year 2026, projecting total revenue between $67.2 million and $67.9 million for Q3, with non-GAAP net income ranging from $6 million to $6.4 million. For fiscal year 2026, the company forecasts revenue between $267 million and $270 million, with business subscription revenue growth of 5% to 6% and a slight decline in residential subscription revenue. Non-GAAP net income is expected to be between $24.5 million and $25 million, with an adjusted EBITDA of $28.5 million to $29 million.
In summary, Ooma Inc.’s earnings call painted a positive picture of the company’s financial health and growth trajectory. With record-setting revenue and profitability, significant progress in the Airdial segment, and strong business user growth, Ooma is well-positioned for continued success. While challenges remain in residential subscriptions and gross margins, the company’s forward-looking guidance suggests a promising future.