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OI

OOMA INC (OOMA)·Q4 2025 Earnings Summary

Executive Summary

  • Q4 FY2025 revenue was $65.1M (+6% YoY) and non-GAAP EPS was $0.21, with adjusted EBITDA at $6.9M; non-GAAP net income materially beat company guidance, driven by R&D operating leverage and lower-than-expected tax expense .
  • FY2025 revenue was $256.9M (+8% YoY) and non-GAAP EPS was $0.66; adjusted EBITDA reached $23.3M, ahead of prior FY2025 guidance ranges .
  • FY2026 guidance: revenue $267–$270M; non-GAAP EPS $0.77–$0.82; adjusted EBITDA $27.5–$29.0M with margin ~11% as operating leverage improves .
  • Catalysts: Marriott brand certification for AirDial, large national cable reseller launch, SONIFI partnership in hospitality; management remains cautious on near-term installation ramp timing and residual IWG churn in Q1 FY2026 .

What Went Well and What Went Wrong

What Went Well

  • Non-GAAP profitability inflected: “our non-GAAP net income took a significant step up versus prior quarters,” with Q4 non-GAAP NI $5.8M vs guidance $4.5–$4.8M, aided by R&D leverage and lower tax .
  • Strategic wins and partnerships: Marriott certified AirDial as the preferred POTS replacement; a top-tier national cable company chose to resell AirDial; SONIFI selected Ooma to expand into voice across 5,000 properties .
  • Cash generation and de-leveraging: record operating cash flow ($26.6M FY25) and FCF ($20.2M FY25), full debt repayment, and buybacks ($8.9M) .

What Went Wrong

  • Core users declined sequentially due to anticipated IWG seat reductions; total core users fell to 1,234,000 (from 1,242,000 in Q3), with net dollar retention at 98% (vs 99% in Q3) .
  • Product gross margin remained negative (−55%), with overall GAAP gross margin flat YoY due to heavier product mix; improvements stem from consuming high-cost components procured during the pandemic .
  • Near-term AirDial ramp visibility remains limited: launch timing and sales pace at new partners are uncertain; Q1 FY26 assumes additional churn from IWG .

Financial Results

Results vs Prior Periods and Guidance/Estimates

MetricQ2 FY2025 (Jul 31, 2024)Q3 FY2025 (Oct 31, 2024)Q4 FY2025 (Jan 31, 2025)
Revenue ($USD Millions)$64.129 $65.127 $65.097
GAAP EPS ($)$(0.08) $(0.09) $(0.01)
Non-GAAP EPS ($)$0.15 $0.17 $0.21
GAAP Gross Margin (%)60% 60% 61%
Non-GAAP Gross Margin (%)62% 62% 63%
Adjusted EBITDA ($USD Millions)$5.635 $5.709 $6.913

Q4 FY2025 Actuals vs Wall Street Consensus

MetricQ4 FY2025 ActualQ4 FY2025 Consensus (S&P Global)
Revenue ($USD Millions)$65.097 Unavailable (S&P Global consensus not accessible at time of analysis)
Primary EPS ($)$0.21 (Non-GAAP) Unavailable (S&P Global consensus not accessible at time of analysis)

Note: S&P Global Wall Street consensus data was unavailable during retrieval; comparisons to consensus cannot be provided at this time.

Segment Breakdown

MetricQ2 FY2025Q3 FY2025Q4 FY2025
Subscription & Services Revenue ($M)$59.566 $60.135 $60.551
Product & Other Revenue ($M)$4.563 $4.992 $4.546
Subscription & Services as % of Total93% 92% 93%

KPIs

KPIQ2 FY2025Q3 FY2025Q4 FY2025
Core Users (000s)1,244 1,242 1,234
Business Users (000s)500 504 503
Blended ARPU ($/month)$15.07 $15.14 $15.26
New Office Pro/Pro Plus Take Rate (%)58% 60% 60%
Office Premium Penetration (%)31% 33% 34%
Annual Exit Recurring Revenue ($M)$233 $234 $234
Net Dollar Subscription Retention (%)100% 99% 98%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent/ActualChange
Revenue ($M)Q4 FY2025$64.6–$65.1 $65.097 (Actual) Above high-end
Non-GAAP NI ($M)Q4 FY2025$4.5–$4.8 $5.822 (Actual) Raised (beat)
Non-GAAP EPS ($)Q4 FY2025$0.16–$0.17 $0.21 (Actual) Raised (beat)
Adjusted EBITDA ($M)FY2025$22.1–$22.4 $23.257 (Actual) Raised (beat)
Revenue ($M)FY2025$256.3–$256.8 $256.852 (Actual) Above midpoint
Non-GAAP NI ($M)FY2025$16.7–$17.0 $18.022 (Actual) Raised (beat)
Non-GAAP EPS ($)FY2025$0.61–$0.62 $0.66 (Actual) Raised (beat)
Revenue ($M)Q1 FY2026N/A$64.7–$65.1 New
Non-GAAP NI ($M)Q1 FY2026N/A$5.1–$5.4 New
Non-GAAP EPS ($)Q1 FY2026N/A$0.18–$0.19 New
Revenue ($M)FY2026N/A$267–$270 New
Non-GAAP NI ($M)FY2026N/A$22.0–$23.5 New
Non-GAAP EPS ($)FY2026N/A$0.77–$0.82 New
Adjusted EBITDA ($M)FY2026N/A$27.5–$29.0; ~11% margin New

Earnings Call Themes & Trends

TopicQ2 FY2025 (Previous-2)Q3 FY2025 (Previous-1)Q4 FY2025 (Current)Trend
AirDial momentum & partnersRecord bookings; ILEC planned to resell AirDial; T-Mobile/UScellular active Top-tier cable reseller win; aggregator/CLEC signing; accelerating copper sunset Marriott brand certification; cable launch still expected; SONIFI partnership Up, with cautious near-term ramp
2600Hz platformLarge marquee customer expanding scope; fall rollout ServiceTitan named as major customer; multiple wins incl. Europe Pipeline building; impact expected more in FY2027 than FY2026; focus on new wins Up longer-term; gradual monetization
SMB UCaaS (Ooma Office)Feature launches; integrations (Square/QuickBooks); premium tier adoption 60% take rate; larger-sized customers; premium penetration up ARPU up to $15.26; 60% take rate; 34% premium penetration Improving mix/ARPU
Residential POTS replacement (Telo)ILEC to pilot residential conversion; TAM ~40M lines (context) Frontier disclosed; Verizon deal delays Frontier timing Frontier starting limited Telo sales; residential part stable; partners needed for scale Building via partners
R&D leverage & profitabilityAdjusted EBITDA record; operating leverage emerging Mid-term EBITDA target “double-digit next year,” leverage improving FY2026 EBITDA margin ~11% target; non-GAAP NI growth 26% YoY midpoint Up
IWG churnDeferred from Q2 to H2 FY25 Additional reductions in Q4 Extra churn in Q1 FY26 expected; stabilization afterward Near-term headwind; stabilizing

Management Commentary

  • “For Q4 FY ’25… we achieved $65.1 million of revenue and $5.8 million of non-GAAP net income. Our growth was solid, and our non-GAAP net income took a significant step up versus prior quarters.” — Eric Stang, CEO .
  • “Q4 non-GAAP net income was $5.8 million, meaningfully above our guidance… as we saw the benefit of the R&D operating leverage… [and] lower-than-expected tax expenses.” — Shig Hamamatsu, CFO .
  • “Marriott… extended brand certification to AirDial… making AirDial the only current de facto POTS replacement solution recommended and supported by Marriott.” — Eric Stang, CEO .
  • “With strong free cash flow generation, we fully paid off the debt in Q4 and spent a total of $8.9 million during fiscal ’25 to buy back stock.” — Shig Hamamatsu, CFO .
  • “We intend to add resale partners every quarter… [and] believe the POTS replacement market opportunity is quite sizable in the millions of lines.” — Eric Stang, CEO .

Q&A Highlights

  • AirDial ramp visibility: Management expects the large cable partner to launch, but sales pace is uncertain; cable partner relationships open enterprise and public sector doors .
  • IWG churn trajectory: Additional churn expected in Q1 FY2026, then stabilization; potential upside from new initiatives with IWG beyond current use cases .
  • Business subscription growth cadence: Expect faster growth in H2 FY2026 given installation timing; business subscription growth guided at 5–6% for FY2026 .
  • AirDial and competition: Less than ~10% of POTS lines converted; Ooma sees aggregators as main competitors but views AirDial as superior turnkey solution .
  • 2600Hz monetization: Growth to come largely from new customer wins; impact more pronounced next fiscal year and beyond as migrations take time .

Estimates Context

  • Wall Street consensus (S&P Global) for Q4 FY2025 revenue and EPS was unavailable at the time of analysis; therefore, results are compared to company guidance rather than consensus. Q4 non-GAAP EPS ($0.21) and non-GAAP net income ($5.8M) exceeded company guidance ranges, and FY2025 adjusted EBITDA and non-GAAP EPS surpassed the prior guidance midpoint .

Key Takeaways for Investors

  • Profitability momentum: Non-GAAP EPS and adjusted EBITDA beat in Q4, with FY2026 guidance implying ~11% EBITDA margin and 26% YoY non-GAAP NI growth at midpoint — supporting a margin-expansion thesis .
  • AirDial leverage via channel: Marriott certification, top-tier cable reseller, and SONIFI partnership expand access to hospitality/public sector; installation pace is the swing factor near term .
  • Mix-driven ARPU uplift: Continued premium tier adoption (60% of new Office users) and rising ARPU ($15.26) underpin resilient subscription economics despite modest core user declines .
  • Cash discipline: Strong cash generation enabled debt payoff and buybacks; reinvestment remains focused, particularly inventory builds and selective channel investment .
  • Watch IWG stabilization: Expect residual churn in Q1 FY2026; management indicates stabilization thereafter and potential upside from new initiatives .
  • 2600Hz optionality: Modern API-rich platform gaining marquee customers; revenue impact ramps with migration cycles — a medium-term growth driver .
  • Execution focus: Near-term stock reactions likely hinge on partner launch updates (cable/Frontier), Marriott-driven hospitality wins, and confirmation of FY2026 profit trajectory .

Sources

  • Q4 FY2025 8-K earnings press release and financial tables .
  • Q4 FY2025 earnings call transcript .
  • Q3 FY2025 8-K and transcript .
  • Q2 FY2025 8-K and transcript .
  • Related press releases: SONIFI partnership (Mar 6, 2025) , Frost & Sullivan award (Feb 27, 2025) .