Revenue Growth Exceeds Expectations
Total revenue for Q1 grew 25% year-over-year to approximately $81.8 million, above guidance; full-year fiscal 2027 revenue guidance raised to $326.0M–$328.5M.
May 26th, 2026
Summary
- Earnings Call Date:
- 2026-05-26
- Change Since:
- -4.05%
- Next Earnings Date:
- 2026-08-27
Earnings Call Sentiment
PositiveThe call communicated a strong quarter with meaningful revenue and profitability upside driven by AirDial momentum, improved ARPU and retention, successful integration and contribution from acquisitions, strong cash generation, and strategic product launches (Ooma AI, MyPhone). Key operational risks include negative product gross margins (expected to worsen due to component inflation and early MyPhone costs), uncertainty in the timing of AirDial installations, and dependence on carrier POTS shutdown timing. Overall, positives (robust growth, record EBITDA, cash flow, ARPU gains, and promising product initiatives) outweigh the lowlights, though some execution and macro cost risks remain.
Company Guidance
Ooma issued non‑GAAP guidance for Q2 FY27 and full‑year FY27: for Q2 they expect total revenue of $81.6–$82.3M (including $6.3–$6.7M of product & other), non‑GAAP net income of $9.4–$9.8M and non‑GAAP diluted EPS of $0.33–$0.34 (assuming ~28.9M diluted shares); for FY27 they now expect total revenue of $326.0–$328.5M (business subscription & services growth of ~31% YoY, residential subscription revenue flat to down 1%), about 92% of revenue from subscription & services, non‑GAAP net income of $37.5–$39.0M, adjusted EBITDA of $45.0–$46.5M, and non‑GAAP diluted EPS of $1.29–$1.34 (assuming ~29.1M diluted shares). Management emphasized the guidance is on a non‑GAAP basis (excluding stock‑based comp, amortization of intangibles and acquisition‑related items), said it is being conservative on AirDial installation timing, and noted product & other gross margin pressure in H2 (they modeled roughly –40% product margin for the year).
Strong Profitability and Record EBITDA
Non-GAAP net income grew 73% year-over-year to $9.7 million (Q1); adjusted EBITDA was a record $11.8 million, up 78% year-over-year (15% of revenue).
AirDial Momentum and Commercial Traction
AirDial installs more than doubled year-over-year and AirDial services revenue rose ~80% year-over-year; bookings grew ~75% year-over-year, driving much of Q1 upside.
Business Revenue Mix and Organic Growth
Business subscription and services revenue grew 38% year-over-year and represented 69% of total subscription & services revenue; excluding acquisitions, business subscription & services revenue grew 9% YoY.
ARPU, Retention, and Customer Metrics Improving
Blended ARPU increased 9% year-over-year to $16.77; net dollar subscription retention rate remained healthy at 99%; core users ended Q1 at 1.42 million (up from 1.40M), with business users at 699K (49% of core users, +15K from Q4).
Acquisitions Contributing to Growth and Profit
FluentStream and phone.com added $11.5 million in revenue in Q1 (first full quarter) and contributed approximately $2.7 million of non-GAAP net income combined; both acquisitions accretive in first quarter as noted.
Strong Cash Generation and Capital Actions
Q1 generated $6.4M operating cash flow and $4.9M free cash flow; trailing 12-month operating cash flow $30.3M and free cash flow $24.5M. Company repurchased $17.7M stock over last 4 quarters and paid down term loan by $5M to $53.5M outstanding.
New Product Initiatives: Ooma AI and MyPhone
Launched Ooma AI suite (AI transcription, AI answering service, AI receptionist, AI insights, OpenAI integration) with several features released and monetized tiers; introduced MyPhone aimed at families, receiving strong retailer interest and rollout at walmart.com with in-store plans for fall.
Operator
Hello, and welcome to Ooma First Quarter Fiscal Year 27 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. You would then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. I would now like to hand the conference over to Matthew Sewell Robison, You may begin.
Matthew Sewell Robison
Thank you, Towanda. Good day, everyone, and welcome to the first quarter of fiscal 27 earnings call of Ooma, Inc. My name is Matthew Sewell Robison. I am the director of IR and Corporate Development. On the call with me today are Ooma's CEO, Eric Stang, and CFO, Shigeyuki Hamamatsu. After the market closed today, Ooma issued its first quarter fiscal 27 earnings press release. This release is also available on the company's website, ooma.com. This call is being webcast live and is accessible from a link on the events and presentations page of the Investor Relations section of our website.
This link will be active A replay of this call for 1 year. During today's presentation, our executives will make forward looking statements within the meaning of the federal securities laws. Forward looking statements generally relate to future events or future financial or operating performance. Our expectations and beliefs regarding these matters may not materialize, and actual results are subject to risks and uncertainties that could cause actual results to differ ma...
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