Ooma (NYSE:OOMA) reported fourth-quarter and full-year fiscal 2026 results highlighted by higher profitability, contributions from two newly acquired businesses, and what management described as growing momentum for its AirDial POTS replacement offering heading into fiscal 2027.
Fourth-quarter results set new profitability and cash flow records
CEO Eric Stang said the company delivered “strong Q4 financial results,” including new records for net income, adjusted EBITDA, and operating cash flow. Adjusted EBITDA in the quarter reached $11.5 million, or 15% of revenue, up from 11% of revenue a year earlier. For the full fiscal year 2026, adjusted EBITDA was $33.9 million, compared with $23.2 million in fiscal 2025 and $19.8 million the year before that.
Non-GAAP net income for Q4 was $9.4 million, up 62% year over year, with non-GAAP diluted EPS of $0.34 versus $0.21 in the prior-year quarter. Hamamatsu attributed the profitability improvement to operating leverage in R&D and optimizing sales and marketing spending.
Cash generation also improved. Ooma ended the quarter with $20.1 million in total cash investments. In Q4, the company generated $10.7 million of operating cash flow and $9.1 million of free cash flow. Over the trailing 12 months, operating cash flow was $27.7 million and free cash flow was $22.0 million.
Acquisitions add scale as integration begins
Management provided additional detail on the FluentStream and Phone.com deals completed late in the quarter. Hamamatsu said Ooma acquired FluentStream on Dec. 1, 2025 for approximately $45 million in cash, and acquired Phone.com on Dec. 26, 2025 for approximately $23.2 million in cash. He said there are no contingency payments for either acquisition.
The aggregate purchase price was “mostly funded” by a $65 million term loan with a 6.4% interest rate, Hamamatsu said. The company paid down $6.5 million of the term loan in Q4, reducing outstanding debt to $58.5 million at quarter end.
Stang characterized FluentStream as a “solid business generating high EBITDA” that strengthens Ooma’s channel and provides another outlet to sell AirDial. He said Phone.com has low EBITDA currently, but management believes margins can improve through scale economies and operational changes over fiscal 2027.
On the Q&A, management said fiscal 2027 profitability guidance does not assume cost synergies from Phone.com yet. The company described potential synergy realization as an upside opportunity, with more meaningful benefits targeted for the second half of the year.
AirDial growth supported by channel partners and POTS tailwinds
AirDial continued to be a key growth driver in Q4. Hamamatsu said product and other revenue rose 30% year over year to $5.9 million, driven by AirDial installations. Despite the quarter including the holiday period, the company recorded a “record number” of AirDial line installations, which more than doubled from the prior-year quarter. New AirDial bookings grew approximately 80% year over year in Q4, he said.
Stang cited rising POTS prices and accelerating shutdown activity as favorable market dynamics. He pointed to AT&T’s prior price increase announcements and said the company expects additional price hikes this spring. He also said Ooma added four AirDial reseller partners in Q4, bringing the total to 41, with some partners switching from competing solutions. Ooma’s goal remains to add at least two reseller partners per quarter and grow the partner count to over 50, according to Stang.
In response to analyst questions about demand and implementation timing, management described AirDial as a mix of steady channel-driven business plus “lumpy” larger deals that are harder to forecast. Stang said some installations pushed out from earlier periods came in during Q4 and “particularly January,” and he added that momentum carried into February. In the hospitality segment, he said the company’s prior goal was to add 50 hospitality customers per quarter, and that Ooma added “a little over 80” in Q4, which he suggested may be a record. He also said Ooma’s relationship with Marriott was beginning to contribute to those results.
AI features, residential initiatives, and key metrics
Looking to fiscal 2027, Stang outlined four initiatives: adding AI capabilities to Ooma Office, expanding AirDial, integrating the two acquisitions while pursuing additional M&A, and building on better-than-expected residential performance.
For AI, Stang said Ooma plans to introduce new AI solutions on the Ooma Office platform, including call transcription and summarization, the ability to drive insights from call data using third-party AI platforms such as ChatGPT, an AI-powered answering service, and a full AI receptionist solution. He said the first two features will be included in the company’s Pro Plus tier to help trade customers up to higher ARPU, while the other two will be priced independently on top of current services. In Q&A, he said Pro Plus is priced at $29.95 per month, Pro at $24.95, and Essentials at $19.95, while pricing for the standalone AI services has not yet been announced.
On residential, Stang said Ooma Telo added more users than anticipated in both Q3 and Q4, leaving the total residential user base “essentially flat.” He cited POTS lines going away in the residential market, the spread of 5G home internet enabling unbundling, and parents seeking a phone for children without increasing screen time. He said Ooma plans to launch a new product called MyPhone in the first half of fiscal 2027 and has previewed it with retail partners.
Hamamatsu also highlighted several operating metrics exiting Q4, including:
- 1,404,000 core users at quarter end, including 164,000 business core users from the acquisitions
- 684,000 business users, representing 49% of total core users
- Annual exit recurring revenue of $291 million, up 24% year over year (5% excluding acquisitions)
- Blended ARPU of $15.99, up 5% year over year (excluding acquisitions for the quarter)
- Net dollar subscription retention rate of 99%
Fiscal 2027 guidance and capital allocation
Ooma issued non-GAAP guidance for Q1 and full-year fiscal 2027. For Q1, the company expects revenue of $79.6 million to $80.4 million, including $5.7 million to $6.1 million in product and other revenue. Non-GAAP net income is expected to be $8.8 million to $9.2 million, with non-GAAP diluted EPS of $0.31 to $0.33 based on an estimated 28.0 million weighted average diluted shares.
For full-year fiscal 2027, Ooma guided to revenue of $321 million to $325 million. The outlook assumes business subscription and services revenue growth of approximately 30% over fiscal 2026 and residential subscription revenue declining 1% to 2%. The company expects non-GAAP net income of $35.5 million to $37.0 million, adjusted EBITDA of $43.0 million to $44.5 million, and non-GAAP diluted EPS of $1.26 to $1.31 on about 28.2 million weighted average diluted shares.
Hamamatsu said the company believes it can continue stock repurchases while paying down debt, supported by free cash flow. Over the last four quarters, Ooma spent $16.8 million on share repurchases and net share settlements, including $4.6 million in Q4.
In closing remarks, Stang said the company was entering fiscal 2027 in its strongest position, while also noting disappointment that operating improvements have not yet translated into a “meaningfully higher market capitalization.” Management reiterated confidence in its growth strategy and said it remains interested in additional acquisitions, though timing remains uncertain.
About Ooma (NYSE:OOMA)
Ooma, Inc, headquartered in Sunnyvale, California, is a leading provider of communication services for residential and business customers. Since its founding in 2004, Ooma has built a cloud-based platform that leverages Voice over Internet Protocol (VoIP) technology to deliver voice, video and data services over broadband networks. The company went public on the New York Stock Exchange in 2015 under the ticker OOMA and has continued to expand its service portfolio to meet evolving customer demands.
For residential users, Ooma offers an all-in-one home phone service that includes its flagship Telo device, mobile and web applications, and optional smart home security features.
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