Ooma, Inc. Kicks Off Fiscal 2026 with Strong Earnings

Ooma Inc. ((OOMA)) has held its Q1 earnings call. Read on for the main highlights of the call.

Ooma, Inc. Reports Strong Start to Fiscal 2026 Despite Challenges

The recent earnings call for Ooma, Inc. painted a generally positive picture as the company kicked off fiscal year 2026 with impressive revenue growth and profitability. While there were some challenges, such as a decline in core users and a decrease in residential subscription revenue, the overall sentiment was upbeat due to significant achievements and growth potential.

Strong Start to Fiscal Year 2026

Ooma, Inc. reported a robust start to fiscal year 2026, with $65 million in revenue, $5.6 million in non-GAAP net income, and $6.7 million in adjusted EBITDA. These figures not only represent a strong performance but also exceed the top end of the company’s guidance range, highlighting a promising trajectory for the year.

Revenue Growth and Profitability

The company experienced a 4% year-over-year revenue growth, driven by substantial contributions from Ooma Office and Ooma Enterprise. Notably, Ooma achieved a 56% increase in non-GAAP net income compared to the previous year’s quarter, underscoring its enhanced profitability.

Ooma Airdial Expansion

Ooma’s Airdial segment saw significant expansion, marked by a successful partnership launch with Comcast and the addition of several new reseller partners, now totaling over 30. This expansion is a testament to the growing demand and potential of the Airdial service.

2600 Hertz Platform Success

The 2600 Hertz platform demonstrated its capability by closing four new customers in the first quarter. This success validates the platform’s potential to capture CPaaS type opportunities, contributing positively to Ooma’s growth strategy.

Improved Product Gross Margin

Ooma reported an improvement in product and other gross margins, which rose from negative 67% to negative 41% year over year. This improvement reflects the company’s efforts to enhance operational efficiency and cost management.

Decline in Core Users

Despite positive growth metrics, Ooma faced a decline in core users, dropping from 1,234,000 to 1,225,000. This decline was primarily attributed to seat reductions with IWG, highlighting a challenge that the company needs to address moving forward.

Residential Subscription Revenue Decline

The earnings call also noted a 2% year-over-year decline in residential subscription and services revenue. This decrease signals a potential area of concern that may require strategic adjustments to reverse the trend.

Continued Tariff Impact

Ooma anticipates that tariffs will continue to impact fiscal 2026, with an estimated cost of approximately $500,000. This ongoing challenge underscores the external pressures that the company must navigate.

Forward-Looking Guidance

Looking ahead, Ooma provided guidance for the upcoming periods, projecting second-quarter revenue to range between $65.5 million and $66.1 million, with non-GAAP net income between $5.6 million and $5.9 million. For the full fiscal year 2026, the company reaffirmed its revenue guidance of $267 million to $270 million, with non-GAAP net income expected to be between $22.5 million and $23.5 million.

In conclusion, Ooma, Inc.’s earnings call highlighted a strong start to fiscal 2026, with impressive revenue growth and profitability. Despite challenges such as a decline in core users and residential subscription revenue, the overall sentiment remains positive, driven by significant achievements and growth potential. Investors and stakeholders will be keenly watching how Ooma navigates these challenges while capitalizing on its growth opportunities.