OOMA

Image source: The Motley Fool. Wednesday, Aug. 26, 2026 at 5:00 p.m. ET Director of IR and Corporate Development - Matthew Robison Chief Executive Officer - Eric Stang Chief Financial Officer - Shigeyuki Hamamatsu Operator: Thank you for standing by, and welcome to Ooma's Second Quarter Fiscal Year 2027 Earnings Conference Call. [Operator Instructions] I would now like to hand the call over to Matthew Robison, Director of Investor Relations. Please go ahead. Matthew Robison: Thanks, Latif. Good day, everyone, and welcome to the Second Quarter Fiscal 2027 Earnings Call of Ooma, Inc. My name is Matt Robison, Ooma's Director of IR and Corporate Development. On the call with me today are Ooma's CEO, Eric Stang; and CFO, Shig Hamamatsu. After the market closed today, Ooma issued its second quarter fiscal 2027 earnings press release. This release is also available on the company's website, ooma.com. This call is being webcast live and is accessible from a link on the Events and Presentations page of the Investor Relations section of our website. This link will be active for replay of this call for 1 year. During today's presentation, our executives will make forward-looking statements within the meaning of the federal securities laws. Forward-looking statements generally relate to future events or future financial or operating performance. Our expectations and beliefs regarding these matters may not materialize, and actual results are subject to risks and uncertainties that could cause actual results to differ materially from those projected. These risks include those set forth in the press release we issued earlier today and those risks more fully described in our filings with the Securities and Exchange Commission. The forward-looking statements in this presentation are based on information available to us as of the date hereof, and we disclaim any obligation to update any forward-looking statements, except as required by law. Please note that other than revenue or as otherwise stated, the financial measures to be disclosed on this call will be on a non-GAAP basis. The non-GAAP financial measures are not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP. A discussion of why we present non-GAAP financial measures and a reconciliation of the non-GAAP financial measures described in this call to the most directly comparable GAAP financial measures is included in our earnings press release, which is available on our website. On this call, we will give guidance for third quarter and full year fiscal 2027 on a non-GAAP basis. Also, in addition to our press release and 8-K filing, the Overview page and Events and Presentations page in the Investors section of our website as well as the Quarterly Results page of the Financial Information section of our website include links to information about costs and expenses not included in our non-GAAP values and key metrics of our core subscription businesses. These are titled Supplemental Financial Disclosure 1 and Supplemental Financial Disclosure 2. Additionally, our investor presentation slides include GAAP to non-GAAP reconciliation that also provides resolution of GAAP expenses that are excluded from non-GAAP metrics. Now I will hand the call over to Ooma's CEO, Eric Stang. Eric Stang: Thank you, Matt. Hi, everyone. Welcome to Ooma's Second Quarter Fiscal Year 2027 Earnings Call. Thank you for joining us. Q2 was another strong quarter for Ooma. We are now halfway through our fiscal 2027, and I'm pleased to report that on both the top line and the bottom line, we are ahead of our original plan. I believe we have good momentum across our business, and I'm excited to talk with you today about our outlook. On the top line, we achieved $83.2 million in Q2 revenue, up from $66.4 million in Q2 a year ago. This represents 25% revenue growth year-over-year, driven mainly from business customers, including AirDial and our 2 acquisitions late last year. Our key business subscription and services revenue grew faster and was up 38% year-over-year. And within this, our Q2 AirDial services revenue grew 75% year-over-year. Looking forward, we believe we have good momentum across all major areas of our business, which we believe will be driven most of all by accelerating POTS replacement, new AI features and our residential product, MyPhone. I will cover each of these later in my remarks. But first, regarding our bottom line performance in Q2, we delivered non-GAAP net income of $10.2 million and adjusted EBITDA of $12.4 million. These results are up year-over-year by 58% and 74%, respectively. Adjusted EBITDA is now a solid 15% of revenue, up from 10% of revenue just 6 quarters ago. We are proud to have achieved steadily improving profitability over these last 6 quarters and longer. And looking forward, we're not done. We believe our business model can generate further increases in profitability. We outlined 4 key initiatives at the start of this year: AirDial expansion, new AI solutions, the launch of MyPhone and capitalizing on our recent acquisitions. I'd like to update you on each, starting with AirDial. AirDial is, of course, our POTS replacement solution and currently the fastest-growing part of Ooma. We have created what we believe is the leading solution in the market, incorporating unique features such as multipath connectivity, extensive remote device management and customer alerts. We are seeing the market for POTS replacement expand this year. In Q2, we added 2 new AirDial resale partners and are now well over 40 resale partners in total. One of the partners we added is a Verizon Platinum partner and supports our strategy to engage more closely with Verizon. On the customer front, I would like to highlight one highly competitive win that demonstrates Ooma's growing strength in the market. In Q2, we won a large hospital system, which purchased close to 200 AirDial lines, over 1,000 UCaaS seats and Ooma Connect for Internet backup. We believe we were chosen for our differentiated POTS replacement features, the flexibility of our solution and our implementation expertise. Looking forward, it is our goal to add 1 to 2 new AirDial resale partners every quarter. Some resellers, especially if they are a carrier maintaining existing POTS lines can make a big impact on AirDial growth. Our second initiative centers on introducing AI features on our UCaaS platforms to drive increased customer and ARPU growth. I'm pleased to report we made significant progress in Q2 by introducing AI Transcriptions and AI Insights as part of our Pro Plus service tier and by introducing 2 stand-alone AI services, our AI Answering Service and our AI Receptionist. Our stand-alone services have a low monthly fee that includes a set amount of usage and offer increased usage for an additional charge. Whether a customer is stepping up to Pro Plus for an additional $5 or $10 per month per user or whether they are also paying us $15 to $50 a month or more for our stand-alone services, we have the potential to significantly increase our revenue per account and per user. Our new AI services were launched at the end of Q2, so we do not yet have reliable data on customer adoption. That said, our sales teams tell us the customer reaction has been strong. As is our intention, we believe AI is driving increased interest by customers in our top Pro Plus service tier and that our stand-alone AI services, namely AI Answering and AI Receptionist, are receiving a lot of customer attention. Looking forward, we are now busy creating our next AI solution, which we are quite excited about and expect to release this quarter in Q3. This solution will encompass a large number of business productivity applications, which I believe almost all customers will find valuable to their business. As regards to UCaaS and specifically Ooma Office, I'm also pleased to report we established a partnership with Thryv, which will allow Ooma and Thryv to introduce each of our solutions to one another's customers. Thryv provides innovative small business marketing and CRM solutions and excels in verticals such as healthcare, beauty and wellness, legal and finance, auto services and many more. These are prime verticals for Ooma. We intend to launch our joint marketing activities in September. And as part of this, Ooma will also provide an integration between Office and Thryv's CRM, called Keap. Lastly, regarding UCaaS, I want to mention that Ooma Office was recently named the top VoIP provider in the 2026 Spiceworks Voice of IT survey based on feedback from 236 IT professionals, evaluating leading stand-alone VoIP providers. We are heartened to once again receive this recognition, especially since it is the result of voting by users themselves. Regarding our third initiative, we launched MyPhone by Ooma in Q2 as planned and began the process of building brand awareness and retail presence to drive its success. You'll recall this is a residential landline solution targeted at giving younger children an alternative to a cell phone and giving parents the control they need to keep their kids safe. MyPhone offers unique features such as Trusted Circle to limit what phone calls can occur and Quiet Hours to limit when calls can occur. Some organizations have been formed to help warn parents of the dangers of early child cell phone use, and many of them are now supporting MyPhone. And our retailers have shown great excitement, too. We are sold online now at 5 major retailers, namely Costco, Amazon, Best Buy, Walmart and Target. We expect to be offered in store at one retailer this fall, and we expect to launch in Canada before the end of Q3. Already for Q2, we were able to increase our residential user base by over 3,000 users, a reversal of the slow user decline we have historically experienced. Taking a page from the MyPhone playbook, I'm pleased to announce we will be launching another custom residential solution in Q3, branded StarDial. StarDial is designed to complement Starlink and provide an ideal phone service experience with Starlink. StarDial connects to Starlink over WiFi and most importantly, takes advantage of Ooma's proprietary adaptive redundancy to maintain high-quality calls over sometimes high latency satellite Internet. Like MyPhone, we are optimistic that major retailers will carry StarDial, and I'm pleased to share that one major retailer has already told us they plan to sell StarDial in store starting late this fall. We are hopeful that MyPhone and StarDial together will boost our residential revenue. And in addition, we believe that the shutting down of residential copper lines that is now underway will also boost our residential sales. Finally, as we've reported in previous quarters, we believe we are making good progress integrating our 2 acquisitions FluentStream and Phone.com. We took some actions late in Q2 to capture additional synergies between Ooma and Phone.com, and we expect those actions will contribute positively to our bottom line results starting in Q3 of this year. We're actively working to leverage Ooma's AI developments for the benefit of FluentStream and Phone.com, and we continue to utilize Ooma's more extensive marketing capabilities to strengthen the Phone.com brand. All in, we believe we have done well with the acquisitions we have made over the last several years, and we remain committed to executing on more acquisitions if and when we can find suitable opportunities at the right valuation. As we've stated previously, our ideal acquisition targets are smaller-sized UCaaS players that allow us to grow our SMB user base and capture scale economies cost effectively. As I hope is clear, we have a lot going on at Ooma and significant opportunity in front of us. In order to give investors a more complete picture of Ooma's strategy and outlook, I want to let you know we are planning to hold an Investor Day at the New York Stock Exchange in the morning on September 29. Our meeting will be webcast as well. In attendance from Ooma will be several of Ooma's senior management team, and we will present our plans in more depth than we can here today and also take Q&A. Please keep an eye out for a press release next week for more information about this. I will now turn the call over to Shig, our CFO, to discuss our results and outlook in more detail and then return with some closing remarks. Shigeyuki Hamamatsu: Thank you, Eric, and good afternoon, everyone. I'm going to review our second quarter financial results and then provide our outlook for the third quarter and full year fiscal 2027. In the second quarter, we maintained strong momentum with revenue of $83.2 million, up 25% year-over-year, driven by the growth of Ooma Business, including AirDial and the additions of FluentStream and Phone.com. Excluding the impact of these acquisitions, total revenue in Q2 grew 8% year-over-year. In Q2, business subscription and services revenue accounted for 70% of total subscription and services revenue as compared to 62% in the prior year quarter. Q2 product and other revenue came in at $7.6 million and was up 46% year-over-year, driven by the growth of AirDial installations, which increased 50% over the prior year quarter. Product revenue in Q2 also included initial shipments of MyPhone, which contributed to the growth of residential product revenue, both sequentially and year-over-year. On the profitability front, Q2 non-GAAP net income was $10.2 million and grew 58% year-over-year as we continue to focus on operating leverage in R&D and optimizing our sales and marketing spend as well as realizing synergies from our recent acquisitions. Now some details on our Q2 revenue. Business subscription and services revenue grew 38% year-over-year in Q2, driven by user growth and ARPU growth for Ooma Business and the additions of FluentStream and Phone.com. Excluding the impact of the acquisitions, business subscription and services revenue in Q2 grew 8% year-over-year. On the residential side, subscription services -- subscription and services revenue was relatively flat year-over-year as we saw 2 consecutive quarters of residential user growth in the first half of fiscal 2027. For the second quarter, total subscription and services revenue was $75.6 million or 91% of total revenue as compared to $61.1 million or 92% of total revenue in the prior year quarter. Now some details on our key customer metrics. Our blended average monthly subscription and services revenue per core user, or ARPU, increased 8% year-over-year to $16.95 driven by an increase in mix of business users. During the second quarter, we continue to see a healthy Office Pro and Pro Plus take rate with 58% of new Office users opting for these higher-tier services. Overall, 40% of Ooma Office users have now subscribed to those higher-tier services. Our net dollar subscription retention rate for the quarter was 99% as compared to 99% in the first quarter. We ended the second quarter with 1,427,000 core users, up from 1,420,000 core users at the end of the first quarter. At the end of the second quarter, we had 703,000 Business users or 49% of our total core users, an increase of 4,000 from Q1. Q2 Business users growth was negatively impacted by 4,000 user churn from IWG and a small onetime user count correction in other areas. Excluding the impact of these items, business user grew 11,000 from Q2. Our annual exit recurring revenue was $299 million, up 25% year-over-year. Now some details on our gross margin. Our subscription and service gross margin for the second quarter was 72% as compared to 71% in the prior year. Product and other gross margin for the second quarter was negative 25% as compared to negative 47% for the same period last year. The year-over-year improvement in product and other gross margin reflects an increasing mix of AirDial hardware and installation revenue within the product and other revenue. Q2 product and other gross margin also benefited from a recovery of previously paid tariffs. Excluding the benefit of tariff recovery, Q2 product and other gross margin was around negative 30%. On an overall basis, total gross margin for Q2 was 63% as compared to 62% in the prior year quarter. And now some details on operating expenses. Total operating expenses for the second quarter were $41.1 million, an increase of $6.1 million year-over-year, mainly due to the additions of FluentStream and Phone.com. Excluding the impact of the acquisitions, the total operating expenses increased $1.3 million or 4% from the same period last year. Sales and marketing expenses for the second quarter were $20.1 million or 24% of total revenue, up 12% year-over-year due to the addition of FluentStream and Phone.com expenses. R&D expenses were $14.1 million or 17% of total revenue, up 23% year-over-year due to the addition of FluentStream and Phone.com team members. G&A expenses were $7 million or 8% of total revenue for the second quarter compared to $5.6 million for the prior year quarter. Non-GAAP net income for the second quarter was $10.2 million or diluted earnings per share of $0.35 as compared to $0.23 in the prior year quarter. Adjusted EBITDA for the quarter was a record $12.4 million or 15% of total revenue and grew 74% over the prior year quarter. We ended the quarter with total cash and investments of $17.5 million. In Q2, we generated a record $13.1 million of operating cash flow and $10.8 million of free cash flow. On a trailing 12-month basis, we generated $37.1 million of operating cash flow and $30.2 million of free cash flow. We spent a total of $17.6 million over the last 4 quarters, including $4.4 million in Q2 to buy back stock through a combination of open market repurchase and RSU net share settlement. In addition, we paid down the term loan by $6.5 million in Q2 and reduced the outstanding debt balance to $47 million at the end of Q2. On the headcount front, we ended the quarter with 1,444 employees and contractors. Now I'll provide guidance for the third quarter and full fiscal year 2027. Our guidance is on a non-GAAP basis and has been adjusted for expenses such as stock-based compensation, amortization of intangibles and other expenses. We expect total revenue for the third quarter of fiscal '27 to be in the range of $83.7 million to $84.5 million, which includes $7 million to $7.5 million of product and other revenue. We expect the third quarter non-GAAP net income to be in the range of $9.8 million to $10.2 million. Non-GAAP diluted EPS is expected to be between $0.34 and $0.35. We have assumed 29.1 million weighted average diluted shares outstanding for the third quarter. For full year fiscal '27, we expect total revenue to be in the range of $332 million to $333.5 million. The full year fiscal '27 revenue guidance assumes business subscription and services revenue growth rate of approximately 32% over fiscal '26, while residential subscription revenue is now expected to be flat to an increase of 1% over last fiscal year. In terms of revenue mix for the year, we expect 91% to 92% of total revenue to come from subscription and services revenue and the remainder from the products and other revenue. We expect non-GAAP net income for fiscal '27 to be in the range of $39.5 million to $40.3 million. Based on this guidance range, we estimate our adjusted EBITDA for fiscal '27 to be $47.5 million to $48.3 million. We expect non-GAAP diluted EPS for fiscal '27 to be in the range of $1.35 to $1.38. We have assumed approximately 29.2 million weighted average diluted shares outstanding for fiscal 2027. In summary, we're pleased with our continuing momentum with a record adjusted EBITDA of $12.4 million in Q2, which grew 74% year-over-year, along with a record free cash flow of $30 million for the trailing 12 months. We're excited about both organic and inorganic growth opportunities in front of us and remain focused on achieving another meaningful progress towards our long-term financial targets. I'll now pass it back to Eric for some closing remarks. Eric? Eric Stang: Thank you, Shig. We're obviously now halfway through our fiscal 2027 and what can be a very strong year for Ooma. While we have exciting initiatives across our business, we're most focused on capturing what we see as accelerating market demand for AirDial, driving added growth through Ooma AI, MyPhone and now StarDial as well, driving further contributions from our acquisitions of FluentStream and Phone.com and working to pursue new acquisitions in the future. We hope you'll join us at our upcoming Investor Day on September 29 at the New York Stock Exchange. Thank you. We'll now take your questions. Operator: [Operator Instructions] Our first question comes from the line of Alinda Li of William Blair. Alinda Li: MyPhone has now been in the market for several months. Can you discuss the early adoption trends, customer feedback and any lessons learned so far? And more broadly, Eric, how do you think about the long-term market opportunity here? Eric Stang: Sure, Alinda, it's been in the market since June-ish time frame. And it's off to a great start. We were declining each year in residential users. This past quarter, we grew 3,000 users, and the bulk of that swing is driven by MyPhone. But we think it has a lot further to go. There's 20 million households in the U.S. with young children and several organizations talking a lot about the importance of keeping kids off of social media and cell phone use until they reach a certain age. In fact, huge news today about Meta's settlement even on addressing some of those fears. We need to promote it. We've dialed up our efforts there, but it's going to take a little time. We hope to get it in store at a major retailer late this fall as well. But we think it's got significant opportunity. You can see it when you talk to people who have young children, they get it very quickly. And it's a bit of a buzz. This whole idea of giving a child a landline a parent can control when they're young is a bit of a buzz in the schools, too, amongst PTA groups and such. So we're optimistic about it. Alinda Li: That's helpful. And you've been adding on a lot of AI products, both as stand-alones, but also additional capabilities onto the Pro Plus SKU there. How should we think about AI as a driver to the Pro Plus attach rate and ARPU over time? And can you just give us a little bit more color in terms of the newer stand-alone AI opportunities products here as well? Eric Stang: Sure. So what we're starting to do with AI, it's an inflection point for us in our market. We can bring some pretty exciting features to our small business customers, in particular, that they've never had or seen before. And it gives us a whole new way to monetize those customers and drive more value for them and value for us. We're off to a great start with some features in Pro Plus that people can trade up a tier to get and then a couple of stand-alone features that we think we've designed really well for a small business to kind of adopt them, customize them, make them work for them, but in a straightforward kind of paint by numbers, non-IT professional user way. And I think that's a great start for us. And what we have coming in Q3, we're super excited about. We're calling it our -- we're going to call it our Ooma AI Productivity Pack. And it's going to come in 2 phases. Phase 1, which will come out in Q3, will have about 10 individual features in it. And these are things that can help a small business track their customers, see what's going on, draft an SMS or a customer response, help with payments, things like that, things people do every day that are, in a way, kind of busy work that AI could do for them. And we want to get that launched and see how it's going this quarter and then obviously get to Phase 2 later this year. It's hard to give you real -- anything specific, but we think -- I mean, we expect -- it's hard to know. A double-digit percentage of our new customers adopting AI this quarter and building from there. Let me just leave it at that. Operator: Our next question comes from the line of Brian Kinstlinger of Alliance Global Partners. Brian Kinstlinger: Congrats. It's what seems to be the strongest quarter and outlook that I've seen in 5 to 6 years covering the company. So congrats. I'm curious how business development environment for AirDial has changed over the last few months as AT&T is clearly working to aggressively sunset POTS lines. Are the sales cycles narrowing as a result? Eric Stang: Brian, thank you for those comments. Just a lot more activity, a lot more interest. Customers still want to do a POC. When they sign, they still go through a rollout schedule that's dictated really by their needs. It depends, too, whether the customer says, we'll install this ourselves over time or they say, Ooma, why don't you handle it, and we'll bring in third-party installers and move it along faster. But no, we're seeing sizable opportunities. We're even seeing some opportunities where a customer wants to replace a different solution that they've gone with, a competitor solution and put Ooma in place. And we haven't done a lot of those, but it's pretty exciting to hear customers coming to us that way as well. Winning these next couple of resale partners this last quarter was a great step forward. And we're quite excited as well about the pipeline of potential partner resellers that we might be able to bring on in the back half of this year. So it's what we expected for AirDial. We're putting a lot of effort into this, but I do think the market is developing and going to keep developing over the next years. I mean there's still a long way to go in POTS reduction. So probably 8 million lines out there or some number of that level to be replaced. So we're just trying to be everywhere we can be with it. Brian Kinstlinger: Great. A follow-up. You're focused on adding, obviously, resellers for AirDial. Maybe you can highlight which ones you've had the most success with maybe particularly, I'm curious how the performance with T-Mobile is working and even Comcast. I know Comcast had gone a little bit slower than you thought, but has huge potential. So maybe you can give us some updates on the reseller profile. Eric Stang: Yes. Well, resellers are a very important channel for us to market for AirDial. And one of the reasons is these resellers have great relationships with some very large entities across the market. And those aren't necessarily relationships Ooma would have if you look at our history. T-Mobile is a very valuable partner for us and doing great. And Comcast is bringing more deals now, but still has a lot of potential to get bigger with us. Where we've done the best is also with some of our partners who are carriers themselves and have their own POTS lines they need to replace. And we continue to work those. We have a couple in particular where we're actively involved helping them get through the transition. So it's going well. And as I said, we're excited that we think we can sign some important additional resellers here in the next coming quarter or 2. Operator: Our next question comes from the line of Eric Martinuzzi of Lake Street Capital. Eric Martinuzzi: My congrats as well on the quarter and the outlook. I wanted to get a better feel for where the outperformance and the upward guidance revision is coming from just because, as you mentioned, you've got so many things going on. I'm sure kind of entering the year with the outlook with the 2 acquisitions, there might have been an element of conservatism in what those could contribute. You've got the rising business ARPU. You've got the rising business subscribers. You've got AirDial, you have residential falloffs less than we thought. What -- if we kind of stack rank those things, what's driving the guidance up in the big scheme? Eric Stang: Well, let me start, and I'll let Shig really address that directly. We entered the year not really knowing what we could achieve with some of these things. So we were, obviously, and we stated we were cautious in some areas. But as we see results, we're able to bring those to you and get a better perspective on where we're going. And let me let Shig take it further. Shigeyuki Hamamatsu: Yes. Thanks, Eric, and both Eric, I guess. But yes, to add to what Eric said just now, the AirDial is certainly a contributor. As we said at the beginning of the year, we wanted to remain conservative on our outlook as we started the year and realize the upside as we realize those upside. And that's exactly what's happening. I think so far, first couple of quarters of this year, in Q1, we grew the subscription on AirDial by 80% year-over-year. Q2, we just grew 75% year-over-year. So I think that momentum is carrying through to the second half as well. So that's number one. Number two, we didn't really build in the upside on MyPhone revenue much at all as we started the year and also even last quarter coming out of Q1. Again, just for the sake of conservatism, and we are very pleased to see the first couple of months of sales related to MyPhone. We still remain conservative, as you heard in my guidance statement that we're now expecting the residential subscription to grow either flat to 1% growth and as opposed to my original statement at the beginning of the year of down 1% to 3%. So knowing that the residential subscription still accounts for around 30% of subscription revenue, that's turning from decline year-over-year to growth. That makes the difference, too. And so -- and I would say those are 2 largest areas of the guidance contributor, Eric. Eric Martinuzzi: Okay. That's helpful. And then I wanted to talk a little bit more about the product that you mentioned, Eric, the branded StarDial, definitely something that was not on my radar. It sounds like a really interesting concept. Is this something that rings the register in fiscal '27? Or is it really you're planting seeds now, maybe it contributes in FY '28. What can you tell us about StarDial? Eric Stang: Sure. You would have to know Ooma well to know about our unique technology in the Ooma Telo. But adaptive redundancy is really pretty amazing. We automatically send redundant packets when we observe latency over the connection. And we will dial up to 1 redundant, 2 redundant, 3 redundant and then back down. And that can happen throughout the day as needed to maintain a great voice call. We think that's a real powerful feature for communicating over Starlink Internet. And so to highlight that, and to really position ourselves as the right choice for someone getting Starlink, we wanted to bring out a branded version called StarDial. We think it will make an impact this year. And I can tell you, a lot of people in rural areas are adopting Starlink, and we've seen particularly high attach rates of phone service in those areas, partially because people are isolated. They don't have that good a cell phone coverage. And so a home phone is a very valuable tool in that situation. So StarDial is going to be a great way for us to really focus there with unique named product and a brand that we can promote right alongside Starlink. Operator: Our next question comes from the line of Patrick Walravens of Citizens. Patrick Walravens: This is Nick on for Pat. Congratulations on the quarter. Eric, one for you. So customers have a lot of AI products competing for their attention and budgets. Specifically with Ooma AI, how do you cut through the noise? And how do you eventually get them to adopt the product? Eric Stang: Well, actually, we don't know that we have to cut through that much noise. We are handling our customers' phone calls and messages. And if they want to leverage that to be more productive using AI, we're the logical folks to turn to for that. We see it even in the last month since we went GA with our existing AI features. Lots of customers want to talk to us about it, and they're very intrigued and interested in it. So in that sense, I think that it's a natural fit for our type of solution and one that is going to be straightforward for us to sell because it's part of a bundled package. Some of our stand-alone services and particularly some of the other stand-alone services to come, which I haven't even talked about what they might be. They might face a little bit more independent competition from others. But again, we're right -- we're integrated into the customers' workflow with our desktop app and mobile app and IP phones that the customer is using them, connected up into their CRM and their contact center. It's a natural way to ingest AI. And so we're pretty excited that we can get pretty good attach with it. And currently, we are not offering free trials of it. We may do that, but we do, at least for new customers, offer a 30-day money back guarantee and people can get it and try it that way. But ultimately, we're going to have to focus too on our installed base and how we really market it well to our entire installed base. And there, we're working on some strategies, and we'll be launching some of those this quarter. Patrick Walravens: Great. And then just as a quick follow-up, assuming that you guys are reiterating the midterm and long-term targets given that there's a slide in it in the earnings deck. So what's giving you confidence on those numbers? Eric Stang: Well, I think the simple answer is, there's a couple of ways to look at that. But we said a year or 2 years ago, we were going to drive more profitability. And we've done that, and we feel like we can continue to do that. So I think we have a good track record of where we've come over the last years. If you look at where we're going, we're serving markets at inflection points or with unique new things happening. And maybe there's a little bit of fortuitousness in all that, but POTS replacement over the next 3 or 4 years is a big deal. And we believe we've leaned in to be the leader in that space. AI is an inflection point on our types of solutions, UCaaS. And there's a lot of creative things we can do with it to bring real value to the way our customers operate and to make their jobs easier. And then the MyPhone trend and keeping kids away from cell phones until they, for instance, wait until eighth grade, who knew you would have several nonprofit organizations promoting that? I even read where one was giving solutions away on an island in Washington State to help kids not have a cell phone. I mean -- so we're perfect for that segment because we've built the most trusted solution in the market, honestly, for residential phone use. So I think we just have good opportunities in front of us, and we're going to go capitalize them. Operator: Our next question comes from the line of Matthew Harrigan of Benchmark StoneX. Matthew Harrigan: There are some interesting commonalities with what you're talking about and what Zoom talked about yesterday and certainly for a while now. The communications layer clearly is a natural entry point for adding a lot of UCaaS features, AI and all that. And there's certainly some parallels there. On the -- and I know you don't have a lot of compute costs and all that yet, but Zoom has made a point talking about federated AI and really taking the optimal model from the large LLMs and then doing things in-house with SLMs and really keeping the cost down that way. And you can even look at some of the performance and transcription. You can look at the humanity's last exam benchmark where their federated approach actually performs very well relative to OpenAI, Anthropic even. And when you're going down that route, I mean, it's a huge opportunity. You may be bumping into some large, facile competitors as well, although clearly, they're more focused on the enterprise side than you are. But am I exaggerating here? And kind of what's your -- I mean, if you really do graft on a lot of AI, are you certain you've done things appropriately on the cost structure side so that you don't have a blow up there? I know it's probably a pretty small building block right now. I'm sure it's something you have to be thinking about. And I guess I should also congratulate you on the quarter, but you're probably a little tired of hearing that at this point, and it's well deserved. Eric Stang: I'm never tired of hearing that, believe me. So we are running most of our AI in-house on our own machines, custom tailored for what we need to do. That's the only way to get the cost structure as low as we'd like to have it. We have looked at outside entities we can turn to for some of what we're doing. And in almost all cases, it's more -- well, in all cases, we've seen it's more expensive than what we run internally. So we focused internally. That's scalable, and I feel pretty good about what we're doing. And I don't -- right now, I don't see a cost challenge at all on the AI side for us. I see more -- our biggest challenge is how fast can we execute on our road map for the new AI features we want to bring out. And we are using a usage-based model essentially. It's a low upfront fee for the initial base of usage and then you can pay as you go. And I think that's a nice way to handle it so that we can always be sure that we're making the margins we want to make. Matthew Harrigan: So I guess you should be even more congratulated on being able to do that without miraculously, without blowing up your R&D budget or I'm sure you're not buying a lot of advanced NVIDIA chips, but it's almost counterintuitive that you would be able to do that on a cost-effective basis, but you're confident that you've done that? Eric Stang: Yes, I am. I mean, not everything takes a large language model, as you know. And we -- yes, we feel comfortable. We've worked through the economics of what we're doing today. We can also see how we can get at lower cost as we go forward, particularly with more scale. But we're -- we don't see an issue on that side. Matthew Harrigan: So would you say you're taking much more of a software-based approach on AI, and that's how you've managed to really optimize costs and have the performance at the level that you want? Eric Stang: Yes. I would more say that by producing a solution tailored to what we need to do, and by purchasing hardware and running it ourselves, between those 2 things, we're able to drive maximum value and lowest cost position that we can get. So yes, I mean, there's obviously software work, too. But we're trying -- our solutions don't need to be everything to everybody. They just need to do what we need them to do really, really well. And we'll use transformer models or other models alongside our main models to offload and keep the processing costs as low as possible. Matthew Harrigan: And then if you don't mind, just kind of at the tail end of the call here, one more question. If MyPhone really takes off, are you going to see a blow up in your equipment revenues at a lower margin? Eric Stang: Well, to some degree, that's a yes because we are not intending to raise prices on Ooma Telo and memory costs have gotten more expensive. And so there is going to be a little bit of an impact to our business from that. But that's factored into our guidance. And I would also say that given we're 92% recurring revenue and some of that 8% is AirDial, which has frankly got a pretty good margin structure, whatever happens here isn't going to be that big to us as a company overall. Shigeyuki Hamamatsu: And also MyPhone users -- and Matt, just one more thing. Of the MyPhone users, there may be upfront negative margin associated with the product, but it's followed by the MyPhone user subscription, which is on a premium tier. So it does help the subscription margin in that sense after we sell. Eric Stang: That's a very good point. Every MyPhone user is a paying user. They're not a free just pay taxes and fees user. Operator: [Operator Instructions] As there appear to be no further questions, I would now like to turn the conference back to Eric Stang for closing remarks. Sir? Eric Stang: Well, thank you, everyone, for your time today. We're pretty excited about getting together on September 29. We're going to try and go deeper in each of these areas and really talk to you more about our AI road map, talk to you more about the partners we're bringing on for AirDial and what they can do for us, talk to you more about what success rate we're seeing with MyPhone and StarDial and how it's going and hopefully, some new things, too. So hopefully, you'll all be able to attend that, and we look forward to it. Thank you, everyone. Bye-bye. Operator: This concludes today's conference call. Thank you for participating. You may now disconnect. Before you buy stock in Ooma, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Ooma wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $435,803!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,334,577!* Now, it’s worth noting Stock Advisor’s total average return is 966% — a market-crushing outperformance compared to 211% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of September 2, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Ooma (OOMA) Q2 2027 Earnings Call Transcript was originally published by The Motley Fool

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Revenue growth of 25% was primarily driven by business customers, specifically AirDial expansion and the integration of FluentStream and Phone.com acquisitions. Management attributed the 74% year-over-year adjusted EBITDA growth to operating leverage in R&D, optimized sales and marketing spend, and realized acquisition synergies. AirDial services revenue grew 75% year-over-year, benefiting from a market shift as carriers aggressively sunset legacy copper POTS lines. The residential segment achieved a strategic reversal from historical user declines to growth, adding 3,000 users due to the launch of the MyPhone solution for children. Strategic positioning in the UCaaS market was reinforced by the introduction of AI Transcriptions and AI Insights to drive migration toward higher-margin Pro Plus service tiers. Operational efficiency improved as adjusted EBITDA reached 15% of revenue, up from 10% just six quarters ago, reflecting a more scalable business model. Fiscal 2027 guidance assumes business subscription revenue growth of approximately 32%, supported by a target of adding 1 to 2 new AirDial resale partners per quarter. Residential subscription revenue expectations were upgraded to flat-to-1% growth, a significant improvement from the previous assumption of a 1% to 3% decline. Management plans to release an 'Ooma AI Productivity Pack' in Q3, encompassing 10 features designed to automate daily business tasks and drive double-digit new customer adoption. The upcoming launch of StarDial in Q3 aims to capitalize on rural Starlink adoption by utilizing proprietary adaptive redundancy to mitigate satellite latency issues. Profitability projections for Q3 and beyond include anticipated synergies from late-Q2 actions taken to further integrate the Phone.com acquisition. Q2 product gross margins benefited from a recovery of previously paid tariffs; excluding this benefit, product margins were approximately negative 30%. Business user growth was tempered by a 4,000 user churn event from IWG and a small one-time user count correction in other areas. Management noted that while MyPhone hardware may carry upfront negative margins, the impact is offset by the requirement for users to subscribe to premium service tiers. The company remains committed to a strategy of acquiring smaller UCaaS players to capture scale economies, provided valuations remain suitable. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management reported that MyPhone drove the swing from residential decline to growth, targeting 20 million U.S. households with young children. The strategy involves The company is building brand awareness through five major online retailers, including Costco and Walmart, and expects to launch in-store at one retailer this fall. AI is viewed as an inflection point for monetization, with customers paying $5 to $10 more for Pro Plus or $15 to $50 for stand-alone AI services. Management expects a double-digit percentage of new customers to adopt AI features starting this quarter. While sales cycles still require proof-of-concept and rollout schedules, there is significantly more market activity and interest from large entities. Ooma is seeing new opportunities to replace competitor solutions as the market for the remaining 8 million legacy lines develops. Ooma runs most AI in-house on custom-tailored hardware to maintain lower costs than third-party providers. The company uses a usage-based model (low upfront fee plus pay-as-you-go) to ensure AI features maintain desired margin profiles.

This article first appeared on GuruFocus. Revenue: $83.2 million in Q2, up 25% year-over-year. Business Subscription and Services Revenue: Grew 38% year-over-year. AirDial Services Revenue: Grew 75% year-over-year in Q2. Product and Other Revenue: $7.6 million, up 46% year-over-year. Total Subscription and Services Revenue: $75.6 million, or 91% of total revenue. Non-GAAP Net Income: $10.2 million, up 58% year-over-year. Adjusted EBITDA: Record $12.4 million, or 15% of total revenue, up 74% year-over-year. Gross Margin: Total gross margin was 63%, compared to 62% in the prior year quarter. Subscription and Service Gross Margin: 72%, compared to 71% in the prior year. Product and Other Gross Margin: Negative 25%, improved from negative 47% in the prior year. Operating Cash Flow: Record $13.1 million in Q2. Free Cash Flow: $10.8 million in Q2; $30.2 million on a trailing 12-month basis. Core Users: 1,427,000 at end of Q2, up from 1,420,000 at end of Q1. Business Users: 703,000, or 49% of total core users. Blended Average Monthly Subscription and Services Revenue per Core User (ARPU): $16.95, up 8% year-over-year. Net Dollar Subscription Retention Rate: 99% for the quarter. Annual Exit Recurring Revenue: $299 million, up 25% year-over-year. Operating Expenses: $41.1 million in Q2, up $6.1 million year-over-year. Sales and Marketing Expenses: $20.1 million, or 24% of total revenue. R&D Expenses: $14.1 million, or 17% of total revenue. G&A Expenses: $7 million, or 8% of total revenue. Diluted EPS (Non-GAAP): $0.35, compared to $0.23 in the prior year quarter. Cash and Investments: $17.5 million at end of Q2. Debt: Reduced term loan by $6.5 million in Q2, outstanding balance of $47 million. Warning! GuruFocus has detected 6 Warning Sign with OOMA. Is OOMA fairly valued? Test your thesis with our free DCF calculator. Release Date: August 26, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Ooma Inc (NYSE:OOMA) reported strong Q2 fiscal 2027 results with revenue of $83.2 million, up 25% year-over-year, and non-GAAP net income of $10.2 million, up 58%. Adjusted EBITDA reached a record $12.4 million, representing 15% of revenue, up from 10% six quarters ago, and free cash flow hit a record $30.2 million on a trailing twelve-month basis. AirDial, the POTS replacement solution, continues to be a major growth driver, with services revenue up 75% year-over-year and the addition of two new resale partners, including a Verizon Platinum partner. The launch of MyPhone, a residential solution for children, has reversed the historical decline in residential users, adding over 3,000 users in Q2, and is now sold at five major retailers. New AI features, including AI transcription, AI insights, and standalone services like AI answering and AI receptionist, are expected to drive ARPU growth, with a new AI productivity pack planned for Q3. The company raised its full-year fiscal 2027 guidance, expecting revenue of $332-$333.5 million and non-GAAP EPS of $1.35-$1.38, reflecting confidence in continued momentum. Business user growth in Q2 was negatively impacted by 4,000 user churn from IWG and a small one-time user count correction, reducing net additions to 4,000. Product and other gross margin remained negative at -25% in Q2, even after benefiting from a tariff recovery, indicating ongoing losses in hardware and installation. The company's cash position is relatively low at $17.5 million, with $47 million in debt, though it generated strong operating cash flow of $13.1 million in Q2. Residential subscription revenue is expected to be only flat to up 1% for fiscal 2027, reflecting limited growth in this segment despite the MyPhone launch. The company faces execution risks with multiple new initiatives, including AI adoption, MyPhone and Stardial retail expansion, and integration of recent acquisitions, which may not all succeed as planned. The guidance for Q3 revenue of $83.7-$84.5 million implies a sequential slowdown from Q2's $83.2 million, suggesting potential seasonality or market challenges. Q: Can you discuss the early adoption trends, customer feedback, and lessons learned for MyPhone, and how do you think about the long-term market opportunity? A: Eric Stang (CEO): MyPhone is off to a great start since its June launch. We grew our residential user base by 3,000 users in Q2, reversing the historical slow decline, with the bulk of that swing driven by MyPhone. We see significant long-term opportunity given the 20 million US households with young children and the growing movement to keep kids off cell phones. We are dialing up promotional efforts and hope to get it in stores at a major retailer late this fall. Q: How should we think about AI as a driver to the Pro Plus attach rate and ARPU over time, and can you provide more color on the newer stand-alone AI products? A: Eric Stang (CEO): AI represents an inflection point for us. We are off to a great start with features in Pro+ that encourage users to trade up a tier, plus stand-alone services like AI answering and AI receptionist. We are excited about our upcoming "Ooma AI productivity pack" launching in Q3, which will have about 10 individual features to help small businesses with daily tasks. We expect a double-digit percentage of new customers to adopt AI this quarter and build from there. Q: How has the business development environment for AirDial changed recently as AT&T aggressively sunsets POTS lines, and are sales cycles narrowing? A: Eric Stang (CEO): There is a lot more activity and interest. Customers still want to do a POC and follow their own rollout schedules, but we are seeing sizable opportunities, including customers looking to replace competitor solutions. We added two new AirDial resale partners in Q2, including a Verizon Platinum partner, and are excited about the pipeline of potential partners for the back half of the year. With roughly 8 million POTS lines still to be replaced, the market has a long way to go. Q: Can you highlight which AirDial resellers you've had the most success with, particularly T-Mobile and Comcast? A: Eric Stang (CEO): Resellers are a very important channel because they have relationships with large entities we wouldn't otherwise have. T-Mobile is a very valuable partner and doing great. Comcast is bringing more deals now but still has significant potential to grow. We've also done best with partners who are carriers themselves and need to replace their own POTS lines, and we are actively helping a couple of them through the transition. Q: What is driving the outperformance and upward guidance revision, and how would you stack rank the contributors? A: Shigeyuki Hamamatsu (CFO): AirDial is certainly a major contributor, with subscription revenue growing 75% year-over-year in Q2. We didn't build in much upside for MyPhone revenue at the start of the year, and we are pleased with early sales. We now expect residential subscription revenue to be flat to up 1% for the year, versus our original expectation of a 1% to 2% decline. These are the two largest areas of guidance contribution. Q: Can you tell us more about the new Stardial product? Is it a fiscal '27 contributor or are you planting seeds for FY28? A: Eric Stang (CEO): Stardial leverages our proprietary adaptive redundancy technology to maintain high-quality calls over high-latency satellite internet like Starlink. We believe it will make an impact this year. Many people in rural areas are adopting Starlink, and we see high attach rates of phone service in those areas because cell coverage is often poor. Stardial allows us to focus on this market with a unique branded product. One major retailer has already told us they plan to sell it in store starting late this fall. Q: With many AI products competing for attention, how does Ooma cut through the noise and get customers to adopt? A: Eric Stang (CEO): We don't have to cut through much noise because we already handle our customers' phone calls and messages. We are the logical folks to turn to for AI productivity. Since going GA with our AI features, many customers want to talk to us about them. We are integrated into the customer's workflow through our desktop app, mobile app, and IP phones, making it a natural way to ingest AI. We currently don't offer free trials but have a 30-day money-back guarantee for new customers. Q: Are you confident in your cost structure for AI, and are you taking a software-based approach to optimize costs? A: Eric Stang (CEO): We are running most of our AI in-house on our own machines, custom-tailored for our needs. This is the only way to achieve the low cost structure we want. We've looked at outside entities, but in all cases, it's more expensive than running internally. Our biggest challenge is execution speed on our AI roadmap. We use a usage-based model with a low upfront fee and pay-as-you-go, ensuring we maintain desired margins. We don't see a cost challenge on the AI side. Q: If MyPhone takes off, will you see a blow-up in equipment revenues at lower margins? A: Eric Stang (CEO) & Shigeyuki Hamamatsu (CFO): There will be some impact as memory costs have risen, but it's factored into our guidance. Given we are 92% recurring revenue, this won't be significant overall. Additionally, every MyPhone user is a paying subscriber on a premium tier, which helps subscription margins after the initial product sale. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

(Bloomberg) -- Wall Street is eagerly anticipating Nvidia Corp.'s (NVDA) earnings on Wednesday afternoon, not so much for what the numbers will say about the chip giant, but for what they mean to artificial intelligence investors and the market itself. Most Read from Bloomberg Lutnick's Intervention in Canada Talks Draws Praise, Blame Apple Gears Up to Launch Its First New Mac Mini in Two Years Xi Signals Defiance as US Threatens Sanctions Over Iran Help US Weighs More Trade Measures Against Canada After Retaliation Bessent's Mentor Druckenmiller Calls Bond Buying a Mistake "Nvidia is the best barometer for AI spending," said Rob Conzo, chief executive officer of the Wealth Alliance, which owns Nvidia shares in several portfolios. "It will help determine if hyperscalers are still accelerating, from an infrastructure perspective, or if they're becoming more disciplined." The company's shares have been on a wild ride this year, sinking through the winter, then soaring through the spring, and bouncing around all summer. They're coming off a seven-day losing streak, matching the longest since 2019, in which they lost 7.5%. And that follows a 19% leap from late July through mid-August. All told, Nvidia is up 14% in 2026, a decent showing but still a far cry from its past performance. At this time last year, the stock had gained 34%, and in 2024 it was soaring more than 150%. The reason is hardly a secret, with investors increasingly cautious about the durability of the AI trade with inflation remaining high, interest rates rising and geopolitical risks all over the place, whether it's the US's military and economic war with Iran or its trade war with Canada. The tech-heavy Nasdaq 100 Index suffered its worst month in more than a year in July, falling 6.6% as investors dumped the shares of companies exposed to the AI buildout amid concerns about how much longer the heavy spending would last. But since its July 29 trough, the index has regained much of that lost ground, led by memory and storage companies like Sandisk Corp. and chipmakers such as Marvell Technology Inc. Wall Street expects Nvidia to deliver stellar results for the fiscal second quarter, which ended July 31. Analysts project that revenue nearly doubled from a year ago, which would be the fastest pace in two years, as did net income, according to data compiled by Bloomberg. That, however, isn't what the market is focused on. Rather, investors want to hear what Chief Executive Officer Jensen Huang has to say about capital spending by its biggest customers, future demand and a spate of new financing deals that involve Nvidia. Price increases will also be top of mind after some of the company's customers were told that the cost of servers with its AI chips will rise more than 15% in some cases, due to surging memory costs. "This will be a very interesting report, but it isn't so much about the numbers," Conzo said. "The forward guidance discussions will be far more in view." Earlier this month, Nvidia said it's partnering with Wall Street firms including Goldman Sachs Group Inc., BlackRock Inc. and Apollo Global Management Inc. to provide $500 billion in financing for AI infrastructure. Nvidia also agreed to spend as much as $105 billion to back a data center campus in Ohio that will be leased by OpenAI. "They're going to need to discuss those two big partnerships or agreements in good detail and sort of calm the market's fears around the circularity of financing," said Shaon Baqui, a senior equity analyst at Janus Henderson, which holds a substantial position in Nvidia. The big questions from investors are how much of Nvidia's revenue is being driven by its own financing and if it's creating or bringing forward demand. Huang's comments alone likely won't be enough to resolve some of the issues the market is having with AI investments at the moment, according to Daniel Pilling, portfolio manager at Sands Capital Management, which owns the stock. "It's going to be a really important quarter for them, not because of what they're doing on the balance sheet, but what they're doing off the balance sheet," said Brian Mulberry, chief market strategist at Zacks Investment Management, which holds Nvidia shares. "It effectively makes Jensen Huang kind of like the pope of AI. He gets to bless any of these deals." Even with a market capitalization of more than $5 trillion, the biggest in the world, Nvidia's equity valuation has been steadily eroding this year. At roughly 19 times earnings expected over the next 12 months, the stock is close to the cheapest it has been since late 2018, before AI exploded and when the chipmaker's market value was less than $100 billion. "Nvidia isn't the most exciting part of the market, or even the AI trade, anymore," said Randy Hare director of equity research at Huntington National Bank, which owns the stock. "Right now the tightness is in the memory space, the optical area, energy. Momentum is shifting from semis to other parts of infrastructure, and from there it could shift to hyperscalers again." In terms of trading into the earnings, Nvidia shares haven't performed well after its results over the last few quarters, falling the day after five of its last six reports, according to data compiled by Bloomberg. The options market is pricing in a roughly 5% swing in either direction. Of course, the shares could get a boost from a strong report and forecasts that calm investors' nerves, potentially reinvigorating the broader AI trade. Wall Street will be listening for updates on Nvidia's Vera Rubin and Blackwell chip sales as well as its outlook for gross margins. "Their stock in my view is at a bit of a nexus, like a bit of a turning point," said Melissa Otto, head of technology, media and telecommunications research at Visible Alpha. "We're going to get a lot more visibility, hopefully, and commentary around Rubin and the performance of Blackwell." Tech Chart of the Day Top Tech Stories Meta Platforms Inc. and state attorneys general have discussed a possible mid-trial settlement of a blockbuster case accusing the company of deliberately designing Facebook and Instagram to addict teens, people familiar with the matter said. OpenAI said that its new Jalapeno chips performed better than Nvidia's current lineup during testing, underscoring the company's progress developing AI processors in-house. SoftBank Group Corp. is talking with investment banks about a potential $10 billion to $20 billion bond offering to help refinance a loan for its investment in US tech giant OpenAI, according to people familiar with the matter. Apple announced upgraded Mac mini and Mac Studio desktop computers, giving the in-demand machines major processor upgrades. Earnings Due Earnings Postmarket: --With assistance from Subrat Patnaik and David Watkins. Most Read from Bloomberg Businessweek The Diamond Industry's Old Guard Wants You to Buy 'Natural' Plus-Size Clothes Are Disappearing at Retailers in GLP-1 Era Drones, Balloons and Sound Waves: New Ways to Fight the World's Fires Moldy Peanuts Can Be Deadly. The Solution Is More Mold New York's Israeli Restaurants Are Doing Better Than You Might Think ©2026 Bloomberg L.P.

Ooma (OOMA) came out with quarterly earnings of $0.35 per share, beating the Zacks Consensus Estimate of $0.33 per share. This compares to earnings of $0.23 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +6.06%. A quarter ago, it was expected that this internet phone service provider would post earnings of $0.32 per share when it actually produced earnings of $0.35, delivering a surprise of +9.38%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Ooma, which belongs to the Zacks Communication - Components industry, posted revenues of $83.23 million for the quarter ended July 2026, surpassing the Zacks Consensus Estimate by 1.90%. This compares to year-ago revenues of $66.36 million. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Ooma shares have added about 75.5% since the beginning of the year versus the S&P 500's gain of 12.2%. While Ooma has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Ooma was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.31 on $81.68 million in revenues for the coming quarter and $1.30 on $326.76 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Communication - Components is currently in the top 17% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the same industry, Ciena (CIEN), has yet to report results for the quarter ended July 2026. The results are expected to be released on September 3. This developer of high-speed networking technology is expected to post quarterly earnings of $1.73 per share in its upcoming report, which represents a year-over-year change of +158.2%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Ciena's revenues are expected to be $1.64 billion, up 34.6% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Ooma, Inc. (OOMA) : Free Stock Analysis Report Ciena Corporation (CIEN) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Interested in Ooma, Inc.? Here are five stocks we like better. Ooma’s fiscal Q2 2027 results exceeded expectations: Revenue rose 25% year over year to $83.2 million, while non-GAAP earnings increased to $0.35 per share and adjusted EBITDA climbed 74% to a record $12.4 million. AirDial remained the key growth driver, with revenue up 75% and more than 40 resale partners. Ooma also won a major hospital-system customer and continues to benefit from demand to replace legacy POTS lines. Management raised its growth profile through AI and residential products while forecasting fiscal 2027 revenue of $332 million to $333.5 million. New initiatives include AI productivity tools, MyPhone and the upcoming Star Dial satellite-compatible service. Ooma (NYSE:OOMA) reported second-quarter fiscal 2027 revenue of $83.2 million, up 25% from $66.4 million a year earlier, as growth in its business communications operations, AirDial POTS-replacement service and recently acquired businesses lifted results. Chief Executive Officer Eric Stang said the company was ahead of its original plan on both revenue and profitability at the midpoint of its fiscal year. Business subscription and services revenue increased 38% year over year, while AirDial services revenue rose 75%. → What Rising Delivery Forecasts Say About Rivian's Stock Prospects “We believe we have good momentum across all major areas of our business,” Stang said, citing accelerating replacement of traditional POTS lines, new artificial-intelligence features and residential offerings including MyPhone. Ooma posted non-GAAP net income of $10.2 million, or $0.35 per diluted share, compared with $0.23 per diluted share in the prior-year period. Adjusted EBITDA reached a record $12.4 million, representing 15% of revenue and an increase of 74% year over year. → NVIDIA Reveals $21 Billion SpaceX Stake: Signal of Confidence or Circular Financing? Chief Financial Officer Shig Hamamatsu said the company benefited from operating leverage in research and development, optimization of sales and marketing spending, and synergies from the FluentStream and Phone.com acquisitions. Subscription and services revenue was $75.6 million, or 91% of total revenue. Product and other revenue increased 46% to $7.6 million, driven by a 50% rise in AirDial installations and initial MyPhone shipments. Total gross margin was 63%, compared with 62% a year earlier. Operating cash flow was a record $13.1 million, while free cash flow was $10.8 million. Trailing-12-month operating cash flow totaled $37.1 million and free cash flow totaled $30.2 million. The company ended the quarter with $17.5 million in cash and investments. Ooma spent $4.4 million during the quarter on stock repurchases and net share settlement, and it paid down $6.5 million of its term loan, reducing debt to $47 million. → Berkshire Boosts Its Bet: This AI Hyperscaler Is Now a Top-3 Holding AirDial, Ooma’s solution for replacing legacy plain old telephone service, or POTS, remains its fastest-growing business. During the quarter, Ooma added two resale partners, bringing its total to more than 40. One of the additions is a Verizon platinum partner, Stang said. The company also won a hospital-system customer that purchased nearly 200 AirDial lines, more than 1,000 unified communications-as-a-service seats and Ooma Connect internet backup. Stang said Ooma believes it was selected because of AirDial’s POTS-replacement capabilities, implementation expertise and flexibility. Management’s goal is to add one to two new AirDial resale partners per quarter. On the call, Stang said the company is seeing more activity and interest in POTS replacement, though customers continue to conduct proof-of-concept work and may follow rollout schedules based on their own installation needs. Hamamatsu said AirDial subscription revenue grew 80% year over year in the first quarter and 75% in the second quarter. He identified AirDial as one of the two largest contributors to the company’s improved outlook. Ooma introduced AI transcription and AI insights in its Pro Plus service tier during the second quarter, alongside standalone AI Answering Service and AI Receptionist products. The new standalone services launched near the end of the quarter, and Stang said the company did not yet have reliable adoption data but had received strong feedback from sales teams and customers. The company plans to introduce its Ooma AI Productivity Pack in the third quarter. Stang said the first phase will include about 10 business-productivity features intended to help customers track customer activity, draft text messages and customer responses, and assist with payments. He said Ooma expects a double-digit percentage of new customers to adopt AI offerings during the quarter. Stang said Ooma is running most of its AI internally on company-owned hardware and uses solutions tailored to specific functions to manage costs. The company expects its usage-based pricing model to support desired margins. Ooma also established a partnership with small-business marketing and CRM provider Thryv. The companies plan to begin joint marketing in September, while Ooma intends to provide an integration between Ooma Office and Thryv’s Keap CRM. Ooma launched MyPhone in the second quarter, a residential landline offering aimed at younger children and parents seeking more control over calling. The product is available online through Costco, Amazon, Best Buy, Walmart and Target. Ooma expects MyPhone to be available in-store at one retailer this fall and plans a Canadian launch before the end of the third quarter. Residential users increased by more than 3,000 during the quarter, reversing the company’s historical gradual user decline. Hamamatsu said residential subscription revenue is now expected to range from flat to up 1% for the full year, compared with the company’s earlier expectation for a 1% to 2% decline. In the third quarter, Ooma also plans to launch Star Dial, a residential product designed to work with Starlink internet service. Stang said Star Dial uses Ooma’s adaptive redundancy technology to support call quality over higher-latency satellite connections. One major retailer has said it plans to sell the product in stores beginning late this fall, according to management. The company said it continues to integrate FluentStream and Phone.com and took actions late in the second quarter intended to generate additional Phone.com-related synergies beginning in the third quarter. Ooma remains open to future acquisitions of smaller UCaaS providers that could expand its small- and medium-sized business user base. For the third quarter, Ooma forecast revenue of $83.7 million to $84.5 million and non-GAAP net income of $9.8 million to $10.2 million, or $0.34 to $0.35 per diluted share. For fiscal 2027, the company projected revenue of $332 million to $333.5 million, non-GAAP net income of $39.5 million to $40.3 million, and adjusted EBITDA of $47.5 million to $48.3 million. Ooma expects full-year business subscription and services revenue to grow about 32% from fiscal 2026. Ooma plans to hold an investor day at the New York Stock Exchange on Sept. 29, where management said it expects to provide additional detail on its AI roadmap, AirDial partner strategy, MyPhone and Star Dial initiatives. Ooma, Inc, headquartered in Sunnyvale, California, is a leading provider of communication services for residential and business customers. Since its founding in 2004, Ooma has built a cloud-based platform that leverages Voice over Internet Protocol (VoIP) technology to deliver voice, video and data services over broadband networks. The company went public on the New York Stock Exchange in 2015 under the ticker OOMA and has continued to expand its service portfolio to meet evolving customer demands. For residential users, Ooma offers an all-in-one home phone service that includes its flagship Telo device, mobile and web applications, and optional smart home security features. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Ooma Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

SUNNYVALE, Calif., August 26, 2026--(BUSINESS WIRE)--Ooma, Inc. (NYSE: OOMA), a provider of advanced communications services for businesses and consumers, today released financial results for the fiscal second quarter ended July 31, 2026. Second Quarter Fiscal 2027 Financial Highlights: Revenue: Total revenue was $83.2 million, up 25% year-over-year. Subscription and services revenue increased to $75.6 million from $61.1 million in the second quarter of fiscal 2026, and was 91% of total revenue, primarily driven by the growth of Ooma Business, including the December 2025 acquisitions of FluentStream and Phone.com. Net Income: GAAP net income was $3.0 million, or $0.10 per diluted share, compared to GAAP net income of $1.3 million, or $0.04 per diluted share, in the second quarter of fiscal 2026. Non-GAAP net income was $10.2 million, or $0.35 per diluted share, compared to non-GAAP net income of $6.5 million, or $0.23 per diluted share, in the prior year period. Adjusted EBITDA: Adjusted EBITDA was $12.4 million, compared to $7.2 million in the second quarter of fiscal 2026. For more information about non-GAAP net income and Adjusted EBITDA, see the section below titled "Non-GAAP Financial Measures" and the reconciliation provided in this release. "Ooma executed well in Q2 and delivered strong results, with revenue up 25% year over year to $83.2 million and non-GAAP net income up 58% year over year to $10.2 million," said Eric Stang, chief executive officer of Ooma. "We also achieved record adjusted EBITDA of $12.4 million in Q2 and reduced outstanding debt to $47 million at the end of Q2. Operationally, we launched new AI-driven services, including our AI Insights, AI Answering Service and AI Receptionist, for our Ooma Office business customers. We also launched Ooma MyPhone, a modern landline that gives parents control over their kids’ calling and forestalls cell phone use, for our residential customers. Our significant growth of Ooma AirDial continued in Q2, with AirDial services revenue growing 75% over the same quarter a year ago. Looking forward, we believe we have good momentum across all major areas of our business, driven by increasing POTS replacement market demand, the availability of our new AI features, parents’ increasing concern over kids’ cell phone use, and the contributions from our acquisitions of FluentStream and Phone.com." Business Outlook: For the third quarter of fiscal 2027, Ooma expects: Total revenue in the range of $83.7 million to $84.5 million. GAAP net income in the range of $3.1 million to $3.5 million and GAAP net income per share in the range of $0.11 to $0.12. Non-GAAP net income in the range of $9.8 million to $10.2 million and non-GAAP net income per share in the range of $0.34 to $0.35. For the full fiscal year 2027, Ooma expects: Total revenue in the range of $332.0 million to $333.5 million. GAAP net income in the range of $11.9 million to $12.7 million, and GAAP net income per share in the range of $0.42 to $0.45. Non-GAAP net income in the range of $39.5 million to $40.3 million, and non-GAAP net income per share in the range of $1.35 to $1.38. The following is a reconciliation of GAAP net income to non-GAAP net income and GAAP diluted net income per share to non-GAAP diluted net income per share guidance for the third fiscal quarter ending October 31, 2026 and the fiscal year ending January 31, 2027 (in millions, except per share data): Conference Call Information: The company will host a conference call and live webcast for analysts and investors at 5:00 p.m., Eastern time on August 26, 2026. The news release with the financial results will be accessible from the company's website prior to the conference call. To access the call by phone, please visit https://register-conf.media-server.com/register/BI9a252eb992634fa88bdb3ab648b4402e to register and receive the dial-in details. To avoid delays, Ooma encourages participants to dial into the conference call ten minutes ahead of the scheduled start time. For webcast listening, please visit Ooma’s Events & Presentations page https://investors.ooma.com/news-events/events-presentation for a link. Following the call, an archived version of the webcast will be available on the Ooma investor relations site at https://investors.ooma.com for 12 months. Non-GAAP Financial Measures In addition to disclosing financial measures prepared in accordance with U.S. generally accepted accounting principles ("GAAP"), this press release and the accompanying tables contain certain non-GAAP financial measures, including: non-GAAP net income, non-GAAP net income per share, non-GAAP gross profit and gross margin, non-GAAP operating income, and Adjusted EBITDA. Adjusted EBITDA represents net income before interest and other expense (income), income taxes, depreciation and amortization of capital expenditures, amortization of intangible assets, stock-based compensation and related taxes, litigation costs and restructuring costs. Other non-GAAP financial measures exclude stock-based compensation expense and related taxes, amortization of intangible assets, certain non-recurring gains and charges, such as litigation costs and restructuring costs. Non-GAAP weighted-average diluted shares include the effect of potentially dilutive securities from the company’s stock-based benefit plans. These non-GAAP financial measures are presented to provide investors with additional information regarding our financial results and core business operations. Ooma considers these non-GAAP financial measures to be useful measures of the operating performance of the company, because they contain adjustments for unusual events or factors that do not directly affect what management considers to be Ooma's core operating performance and are used by the company's management for that purpose. Management also believes that these non-GAAP financial measures allow for a better evaluation of the company's performance by facilitating a meaningful comparison of the company's core operating results in a given period to those in prior and future periods. In addition, investors often use similar measures to evaluate the operating performance of a company. Non-GAAP financial measures are presented for supplemental informational purposes only to aid an understanding of the company's operating results. The non-GAAP financial measures should not be considered a substitute for financial information presented in accordance with GAAP and may be different from non-GAAP financial measures presented by other companies. A limitation of the non-GAAP financial measures presented is that the adjustments relate to items that the company generally expects to continue to recognize. The adjustment of these items should not be construed as an inference that the adjusted gains or expenses are unusual, infrequent or non-recurring. Therefore, both GAAP financial measures of Ooma's financial performance and the respective non-GAAP measures should be considered together. Please see the reconciliation of non-GAAP financial measures to the most directly comparable GAAP measure in the tables below. Disclosure Information Ooma uses the investor relations section on its website as a means of complying with its disclosure obligations under Regulation FD. Accordingly, investors should monitor Ooma's investor relations website in addition to following Ooma's press releases, Securities and Exchange Commission ("SEC") filings, and public conference calls and webcasts. Legal Notice Regarding Forward-Looking Statements This press release contains forward-looking statements under the Private Securities Litigation Reform Act of 1995. In particular, the financial projections under "Business Outlook" and the statements contained in the quotations of our Chief Executive Officer may constitute forward-looking statements. Forward-looking statements can be identified by the fact that they do not relate strictly to historical facts and generally contain words such as "believes", "expects", "may", "will", "should", "seeks", "approximately", "intends", "plans", "estimates", "anticipates", and other expressions that are predictions of or indicate future events. Although the forward-looking statements contained in this press release are based upon information available at the time the statements are made and reflect management's good faith beliefs, forward-looking statements inherently involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements to differ materially from anticipated future results. Important factors that could cause actual results to differ materially from expectations include, among others: our inability to attract new customers on a cost-effective basis; our inability to retain customers; failure to realize AirDial opportunities; intense competition; loss of key retailers and reseller partnerships; market acceptance of new products and services; our inability to realize expected returns from our investments made in connection with our international operations and development of new product features; our inability to successfully integrate and achieve expected benefits from acquisitions; our reliance on vendors to manufacture the on-premise appliances and end-point devices we sell; our reliance on third parties for our network connectivity and co-location facilities; our reliance on third parties for some of our software development, quality assurance and operations; our reliance on third parties to provide the majority of our customer service and support representatives; and interruptions to our service. You should not place undue reliance on these forward-looking statements, which speak only as of the date hereof. We do not undertake to update or revise any forward-looking statements after they are made, whether as a result of new information, future events, or otherwise, except as required by applicable law. The forward-looking statements contained in this press release are also subject to other risks and uncertainties, including those more fully described in our filings which we make with the SEC from time to time, including the risk factors contained in our Quarterly Report on Form 10-Q for the quarter ended April 30, 2026, filed with the SEC on June 5, 2026. The forward-looking statements in this press release are based on information available to Ooma as of the date hereof, and Ooma disclaims any obligation to update any forward-looking statements, except as required by law. About Ooma, Inc. Ooma (NYSE: OOMA) delivers phone, messaging, video and advanced communications services that are easy to implement and provide great value. Founded in 2003, the company offers Ooma Office for small to medium-sized businesses seeking enterprise-grade features designed for their needs; Ooma AirDial for any business looking to replace aging and increasingly expensive copper phone lines; Ooma 2600Hz for businesses that provide their own communications solutions built on an outsourced underlying platform; and Ooma Telo for residential consumers who value a landline experience at a more affordable price point. Ooma’s award-winning solutions power more than 2 million users today. Learn more at www.ooma.com in the United States or www.ooma.ca in Canada. View source version on businesswire.com: https://www.businesswire.com/news/home/20260826510873/en/ Contacts INVESTOR CONTACT:Matthew S. RobisonDirector of IR and Corporate DevelopmentOoma, [email protected] (650) 300-1480 MEDIA CONTACT:Jim GustkeSenior Vice President, MarketingOoma, [email protected]

NETGEAR, Inc. (NTGR) came out with quarterly earnings of $0.16 per share, beating the Zacks Consensus Estimate of $0.02 per share. This compares to earnings of $0.06 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +700.00%. A quarter ago, it was expected that this company would post a loss of $0.08 per share when it actually produced earnings of $0.06, delivering a surprise of +175%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. NETGEAR, which belongs to the Zacks Communication - Components industry, posted revenues of $168.56 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 6.79%. This compares to year-ago revenues of $170.53 million. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. NETGEAR shares have lost about 0.6% since the beginning of the year versus the S&P 500's gain of 12.8%. While NETGEAR has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for NETGEAR was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.04 on $170.29 million in revenues for the coming quarter and $0.22 on $670.96 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Communication - Components is currently in the top 28% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the same industry, Ooma (OOMA), has yet to report results for the quarter ended July 2026. This internet phone service provider is expected to post quarterly earnings of $0.32 per share in its upcoming report, which represents a year-over-year change of +39.1%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Ooma's revenues are expected to be $81.68 million, up 23.1% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report NETGEAR, Inc. (NTGR) : Free Stock Analysis Report Ooma, Inc. (OOMA) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research