GICS Sector : Communication Services
Ooma, Inc.provides communications services and related technologies for businesses and consumers in the United States and Canada.The company's products and services include Ooma Office, a cloud-based multi-user communications system for small and medium-sized businesses; Ooma Office Pro that offers services, including HD video meetings, call recording, enhanced call blocking, and voicemail transcription; Ooma Connect, which delivers fixed wireless internet connectivity; Ooma Managed Wi-Fi, a plug-and-play enterprise-grade Wi-Fi solution; and Ooma Enterprise, a unified-communications-as-a-service solution.
Ooma, Inc. reported solid financial performance in Q1 FY2026, with revenue reaching $65 million, a 4% year-over-year increase. Non-GAAP net income came in at $5.6 million, beating expectations, while adjusted EBITDA was $6.7 million, reflecting strong operational efficiency. The company maintained stable gross margins at 72%, supported by infrastructure investments, and delivered positive cash flow. EPS for the quarter was $0.2, slightly above analyst estimates of $0.18, signaling improved profitability.
Publication Date: May -28
Ooma's Airdial solution emerged as a key growth driver, with the announcement of Comcast as a major reseller partner. This partnership, coupled with over 30 reseller partners and significant customer wins, including over 100 Marriott properties, underscores Airdial's accelerating momentum. According to CFO Shig Hamamatsu, "Airdial demand is accelerating, and we're seeing strong interest from new partners each quarter." The solution's multi-year contracts are creating barriers to entry, further enhancing its competitive position.
The company reported annual exit recurring revenue of $234 million, a 33% year-over-year increase, with net dollar retention at 99%. Core users totaled 1.225 million, with ARPU rising to $15.37. Business subscriptions grew 6%, partially offset by a 2% decline in residential subscriptions. Operating expenses showed modest increases, with R&D focused on enhancing Ooma Office, Airdial, and the 2600 Hertz platform.
Ooma reaffirmed its full-year revenue guidance of $267-270 million, with non-GAAP net income expected between $22.5-23.5 million. The stock currently trades at a forward P/E ratio of -52.58 and an EV/EBITDA of 59.6, reflecting the market's expectation of continued growth. The company's free cash flow yield of 5.46% highlights its ability to generate cash, supporting its growth initiatives.
The integration of Ooma IP and apps onto the 2600 Hertz platform is progressing, with completion expected by year-end. The hospitality sector remains a key growth area, with over 500 hotels across North America and plans to add 50-100 new hotels quarterly. While Europe remains a slower-moving market, ongoing engagements with additional cable companies for Airdial present future opportunities. The company aims to significantly increase its adjusted EBITDA margin over the next three years, potentially reaching levels as high as 72%, reflecting confidence in its maturing core solutions.
Ooma Completes Acquisition of FluentStream
Dec -01
Ooma, Inc. (OOMA) M&A Call Transcript
Nov -24
Ooma Announces Definitive Agreement to Acquire Phone.com
Nov -24
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Nov -04
Ooma, Inc. (OOMA) M&A Call Transcript
Nov -04
Ooma Announces Definitive Agreement to Acquire FluentStream
Nov -03
Ooma Business Phone Service Now Integrates with Zapier, Helping Users Automate Repetitive Tasks Without Needing Code
Oct -29
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Oct -21
Ooma's 9% growth in Subscription and Services is driven by increasing adoption of its VoIP phone services, expansion into new markets, and growing demand for smart home security solutions. Additionally, the company's focus on innovation, customer retention, and strategic partnerships contribute to its sustained growth.
Ooma's 7% growth in Product and Other segments is driven by increasing adoption of its smart home security solutions, expansion into new markets, and strategic partnerships. Additionally, the company's focus on innovation, such as the introduction of new devices and features, has contributed to the growth. Furthermore, the shift towards subscription-based services has provided a stable revenue stream, supporting the company's overall growth.
A business phone system designed for small businesses, offering advanced features such as video conferencing, call recording, and virtual receptionist.
A VoIP phone system for home users, providing crystal-clear voice quality, low-cost international calling, and advanced features like 911 text alerts.
A wireless phone system that connects to the internet via Wi-Fi or Ethernet, offering a reliable and portable phone solution.
A comprehensive home security system that integrates with Ooma's phone service, offering features like motion detection, video recording, and alerts.
A 911 emergency response system that provides location-specific emergency services, ensuring timely and accurate emergency responses.
Ooma, Inc. faces moderate threat from substitutes due to the presence of traditional phone services and other VoIP providers. However, Ooma's unique features and competitive pricing help to mitigate this threat.
Ooma, Inc. has a low bargaining power of customers due to its strong brand reputation and customer loyalty. Customers have limited bargaining power, and Ooma's pricing strategy is competitive.
Ooma, Inc. has a low bargaining power of suppliers due to its diversified supply chain and lack of dependence on a single supplier. This reduces the risk of supplier negotiations and price increases.
Ooma, Inc. faces a high threat of new entrants due to the relatively low barriers to entry in the VoIP industry. New entrants can easily enter the market, posing a threat to Ooma's market share.
Ooma, Inc. operates in a moderately competitive industry, with several established players. While there is some rivalry, Ooma's unique features and competitive pricing help to differentiate it from competitors.
| Value | |
|---|---|
| Debt Weight | 20.18% |
| Debt Cost | 8.19% |
| Equity Weight | 79.82% |
| Equity Cost | 8.19% |
| WACC | 8.19% |
| Leverage | 25.28% |
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