Ooma, Inc. Q2 FY2026 earnings call

• Strong Q2 financial results: Record non-GAAP net income of $500,000, record adjusted EBITDA of $7.2 million, GAAP net income $1.3 million, and cash flow from operations $6.4 million. Adjusted EBITDA was 11% of revenue, highest to date and in the midterm target range of 11%-14%.
• Business users metrics: User growth net of churn, ARPU, annual exit recurring revenue, and take rate of Pro and Pro Plus offerings were up. Introduction of Connect 5,000 for small businesses to offer a double-play solution.
• Airdial progress: Ramped well in Q2, new bookings more than doubled, secured largest customer win, expanded number of partner resellers to nearly 35.
• 2,600 Hertz: Launched new mobile and desktop applications, introduced video meetings and team chat, signed new customers and expanded with existing ones, focus on bringing Ooma IP onto the platform.
• Residential: Stronger new customer acquisition, slightly reduced churn, signed seven new ISPs in Q2, seeing opportunity in ISP sales.

In Q2, Ooma's revenue was $66.4 million. Business subscription and services revenue accounted for 62% of total subscription services revenue, growing 66% year over year. Product and other revenue was $5.2 million, up 15% year over year due to growth in Airdial installations. Residential subscription and services revenue was down 2% year over year. The blended average monthly and services revenue per core user (ARPU) increased 4% year over year to $15.68, driven by the mix of business users including higher ARPU Office Pro and Pro Plus users.

• Third quarter revenue expected to be in the range of $67.2 million to $67.9 million, including $5.7 to $6.2 million of product revenue. Non-GAAP net income expected $6 million to $6.4 million, non-GAAP diluted EPS $0.22 to $0.23.
• Full year 2026 revenue expected $267 million to $270 million. Non-GAAP net income raised to $24.5 million to $25 million. Adjusted EBITDA expected $28.5 million to $29 million. Non-GAAP diluted EPS expected $0.87 to $0.89.

Q: Josh Nichols asks about Airdial contributing to ARR and when granularity on breakout will be given.

A: Eric Stang says Airdial is contributing to ARR growth, with a good chunk of business user growth from Airdial, and more to come in Q3 with adding partners.

Q: Eric Martinuzzi asks about share repurchase and M&A.

A: Eric Stang says share buybacks are sensible at current share price, and they are always looking for M&A opportunities that fit criteria.

Q: Kincaid asks about largest retail customer deal.

A: Eric Stang says it's a large national retailer, installations anticipated in back half of year, with Airdial ARPU around $25 a line per month.

Q: Matthew Harrigan asks about 2,600 Hertz growth.

A: Eric Stang says 2,600 Hertz is a wholesale platform, working to bring Ooma IP onto it, added a few customers this year, with focus on making it a turnkey solution for smaller customers.

Q: Alinda Li asks about NRR, net income guidance, and efficiencies.

A: Shig Hamamatsu says NRR has been steady 99-100%, net income guidance raised due to tax benefit and R&D efficiency, with sales and marketing discipline.

Q: Kevin asks about largest UCaaS customer trends.

A: Eric Stang says for IWG Regis, they expect stability as they've rolled out to planned countries.