OOMA INC Q1 FY2026 earnings call

• Ooma reported $65 million of revenue, $5.6 million of non-GAAP net income, and $6.7 million of adjusted EBITDA for Q1 FY 2026, with revenue growth of 4% year over year, exceeding the top end of guidance range.
• Cloud communications: Ooma Office and Enterprise performed well, with 61% of new Office users in Q1 choosing premium tiers; Regus rightsizing is fully behind us.
• Airdial: Comcast launched Airdial as scheduled, signed new reseller partners, and had over 100 Marriott properties in the sales pipeline.
• Wholesale platform services: Closed 4 new customers in Q1, a record for one quarter.
• Profitability: Non-GAAP net income grew 56% year over year, and adjusted EBITDA grew 33% year over year.

For the first quarter of FY 2026, Ooma achieved $65 million of revenue. The company focuses on four market segments: cloud communications, POTS replacement, wholesale platform services, and residential telephony. Cloud communications solutions performed well, though dampened by Regus rightsizing, but Regus rightsizing is now behind us. Ooma Office and Enterprise saw growth, with 61% of new Office users in Q1 opting for a premium service tier. Airdial, the business POTS replacement solution, had Comcast launch Airdial on schedule, signed new reseller partners, and had over 100 Marriott properties in the sales pipeline. Wholesale platform services (2600 Hertz) closed 4 new customers in Q1. Residential subscription and services revenue was down 2% year over year. Business subscription and services revenue accounted for 62% of total subscription and services revenue, while product and other revenue was $4.8 million in Q1.

• Second quarter 2026: Expected total revenue in the range of $65.5 million to $66.1 million, including product revenue of $4.8 to $5.2 million; net income expected to be $5.6 million to $5.9 million; non-GAAP diluted EPS between $0.20 to $0.21.
• Full fiscal year 2026: Reaffirmed revenue guidance of $267 million to $270 million; raised non-GAAP net income guidance to $22.5 million to $23.5 million; adjusted EBITDA expected to be $28 million to $29 million; non-GAAP diluted EPS expected to be between $0.79 to $0.83.

Q: What contributed to the 1% increase in NRR this quarter? And can we expect NRR to stay at around 99% or above going forward with IWG fully realized with their seat churn?

A: Shig Hamamatsu said the retention rate improvement was largely due to the improvement in non-Regus subscription revenue, and expected NRR to remain at 99% going forward.

Q: What are you seeing in the demand environment in Q1? And what are you seeing in the recent months as well?

A: Shig Hamamatsu said demand was steady for UCaaS, but the demand environment for Airdial was accelerating.

Q: Is there any change to visibility on when you think adoption will begin to ramp for Airdial in terms of revenue dollars and larger scale implementations?

A: Eric Stang said there were larger opportunities, Comcast relationship was early, and was optimistic about growth.

Q: What is the impact of tariffs on your subscriber base and sales cycle for new logos in your business?

A: Eric Stang said there was no evidence of tariffs affecting the customer base or sales cycle.

Q: Any anticipated investments in sales, R&D, G&A in future quarters?

A: Eric Stang discussed shifts in sales/marketing towards Airdial, R&D investments in Ooma Office, Airdial, and 2600 Hertz.

Q: Thoughts on Airdial partners, productivity of existing partners?

A: Eric Stang said partners were contributing, and a medium-sized CLEC was rolling out Airdial.

Q: Traction in hospitality space with 500 hotels, how quickly ramping?

A: Eric Stang said they targeted 50-100 hotels per quarter and were leveraging Marriott certification.

Q: Plans for segment reporting on 2600 Hertz and Airdial?

A: Eric Stang and Shig Hamamatsu said it was a low percentage of revenue now, and may report more when it reached higher percentages.

Q: Changes in competitive environment?

A: Eric Stang said the competitive environment was normal, and focus was on execution.

Q: Timeline for integrating Ooma apps into 2600 Hertz?

A: Eric Stang said end of this year.

Q: Change in sales cycles for 2600 Hertz post-Metaswitch acquisition?

A: Eric Stang said there was good momentum but it was hard to tell if due to market or execution.

Q: Quantify Regus seat churn?

A: Shig Hamamatsu said about 12-13k in the last two quarters, total 19-20k over the last fiscal year.

Q: Reasonable goal for adjusted EBITDA margin in future?

A: Eric Stang said it would be a lot higher than current levels