Ooma Inc. Reports Record Earnings and Strategic Growth

Ooma Inc. ((OOMA)) has held its Q3 earnings call. Read on for the main highlights of the call.TipRanks Cyber Monday Sale Claim 60% off TipRanks Premium for data-backed insights and research tools you need to invest with confidence. Subscribe to TipRanks' Smart Investor Picks and see our data in action through our high-performing model portfolio - now also 60% off Ooma Inc. recently held its earnings call, revealing a generally positive sentiment driven by strong financial performance. The company reported record non-GAAP net income and adjusted EBITDA, alongside successful acquisitions and growth in its business segment. Despite facing challenges such as delayed AirDial installations and a decline in residential subscriptions, the positive aspects significantly outweighed the negatives, particularly with strategic acquisitions set to drive future growth. Record Non-GAAP Net Income and Adjusted EBITDA Ooma Inc. achieved remarkable financial milestones in the recent quarter, setting new records for non-GAAP net income, which rose to $7.7 million, and adjusted EBITDA, which increased to $8.6 million. This achievement highlights the company’s robust financial health and operational efficiency. Revenue Growth The company’s revenue for the third quarter grew to $67.6 million, marking a 4% year-over-year increase. This growth was primarily driven by the expansion of Ooma Business, including the AirDial product line, showcasing the company’s ability to generate consistent revenue streams. Successful Acquisitions Ooma successfully closed the acquisition of FluentStream and announced the anticipated closure of phone.com. These acquisitions are expected to add over 165,000 users, contribute $45 million in revenue, and $10 million in adjusted EBITDA annually before synergies, positioning Ooma for substantial future growth. Increase in Business Segment The business subscription and services revenue saw a 6% year-over-year growth in the third quarter, driven by an increase in user numbers and average revenue per user (ARPU). This indicates a strong demand for Ooma’s business solutions and a successful strategy in expanding its business customer base. Strong AirDial Interest Ooma launched an updated version of AirDial and added nine new resale partners, marking its strongest quarter to date. Bookings for AirDial grew by 50% year over year in the third quarter, reflecting strong market interest and potential for future revenue growth. AirDial Installations Delay Despite the strong interest in AirDial, the expected revenue from installations was deferred to the next fiscal year. This delay was attributed to customer order timing and the normal seasonality associated with the holiday schedule. Residential Subscription Decline The residential subscription and service revenue experienced a slight decline of 1% year over year. This indicates a challenge in maintaining growth in the residential segment, which the company will need to address moving forward. Forward-Looking Guidance Looking ahead, Ooma provided guidance for the upcoming fourth quarter and the full fiscal year. The company expects Q4 revenue to range between $71.3 million and $71.9 million, including contributions from the recent FluentStream acquisition. Non-GAAP net income for Q4 is projected between $8.4 million and $8.9 million, with diluted EPS expected to be between $0.30 and $0.32. For the full fiscal year 2026, Ooma raised its revenue guidance to between $270.3 million and $270.9 million, with non-GAAP net income forecasted between $28.2 million and $28.7 million. In summary, Ooma Inc.’s earnings call painted a picture of a company on a strong growth trajectory, with record financial achievements and strategic acquisitions setting the stage for future success. While challenges such as delayed AirDial installations and declining residential subscriptions were noted, the overall sentiment remains positive, with forward-looking guidance suggesting continued growth and profitability.