Ooma — Fiscal Second Quarter 2027 Earnings Summary

Financial Performance

• Total revenue reached $83.2 million, a 25% increase year-over-year from $66.4 million in the second quarter of fiscal 2026.
• Subscription and services revenue grew to $75.6 million from $61.1 million in the prior year period, representing 91% of total revenue.
• GAAP net income was $3.0 million ($0.10 per diluted share), compared to $1.3 million ($0.04 per diluted share) in the prior year.
• Non-GAAP net income was $10.2 million ($0.35 per diluted share), up 58% year-over-year from $6.5 million ($0.23 per diluted share).
• Adjusted EBITDA was $12.4 million, compared to $7.2 million in the second quarter of fiscal 2026.
• Gross profit was $51.0 million on a GAAP basis and $52.3 million on a Non-GAAP basis; GAAP gross margin was 61% and Non-GAAP gross margin was 63%.
• Operating expenses totaled $47.0 million, with Sales and marketing at $22.4 million, Research and development at $15.5 million, and General and administrative at $9.1 million.
• Cash and cash equivalents were $17.5 million as of July 31, 2026, down from $20.1 million at the beginning of the period.
• Net cash provided by operating activities was $13.1 million for the quarter.
• Total debt was $47.0 million at the end of Q2, down from $57.9 million (current portion of $6.4 million + long-term portion of $51.5 million) at the beginning of the fiscal year.
• Deferred revenue increased to $18.1 million from $17.8 million at the start of the fiscal year.

Guidance and Future Outlook

• For Q3 fiscal 2027, Ooma expects total revenue between $83.7 million and $84.5 million.
• Q3 fiscal 2027 GAAP net income is projected between $3.1 million and $3.5 million ($0.11–$0.12 per share).
• Q3 fiscal 2027 Non-GAAP net income is projected between $9.8 million and $10.2 million ($0.34–$0.35 per share).
• For full fiscal 2027, total revenue is expected to be between $332.0 million and $333.5 million.
• Full fiscal 2027 GAAP net income is expected to range from $11.9 million to $12.7 million ($0.42–$0.45 per share).
• Full fiscal 2027 Non-GAAP net income is expected to range from $39.5 million to $40.3 million ($1.35–$1.38 per share).
• Management cites increasing POTS replacement market demand, new AI features, parental concerns regarding children's cell phone use, and contributions from FluentStream and Phone.com acquisitions as key growth drivers.

Business Segments and Product Lines

• Ooma Business growth was a primary driver of subscription revenue, bolstered by the December 2025 acquisitions of FluentStream and Phone.com.
• Ooma AirDial services revenue grew 75% year-over-year in the second quarter.
• New AI-driven services launched for Ooma Office customers include AI Insights, AI Answering Service, and AI Receptionist.
• Ooma MyPhone, a modern landline product designed to give parents control over children's calling, was launched for residential customers.

Market and Competitive Landscape

• Management identifies increasing demand for POTS (Plain Old Telephone Service) replacement as a key market trend.
• The press release notes intense competition as a risk factor in the forward-looking statements.

Risks and Challenges

• Potential inability to attract new customers cost-effectively or retain existing customers.
• Failure to realize AirDial opportunities or integrate acquisitions successfully.
• Reliance on third parties for manufacturing, network connectivity, software development, and customer service.
• Market acceptance of new products and services.
• Loss of key retailers and reseller partnerships.

Management Commentary and Tone

• CEO Eric Stang described the quarter as a strong execution with "good momentum across all major areas of our business."
• Management highlighted record Adjusted EBITDA and significant debt reduction as key operational achievements.
• The tone is confident, emphasizing the strategic value of recent acquisitions and new product launches in driving future growth.

Other Key Points

• Ooma reduced outstanding debt to $47 million by the end of Q2.
• The company completed acquisitions of FluentStream and Phone.com in December 2025.
• Shares repurchased for tax withholdings on vesting of restricted stock units totaled $1.9 million in the quarter.
• Payments for repurchases of common stock totaled $2.5 million in the quarter.
• The company hosts a conference call and live webcast on August 26, 2026, at 5:00 p.m. Eastern time.
• Ooma's solutions currently power more than 2 million users.