Q2 2027 Ooma, Inc. Earnings Call Transcript
Key Points
- Ooma Inc (OOMA) reported strong Q2 fiscal 2027 results with revenue of $83.2 million, up 25% year-over-year, and non-GAAP net income of $10.2 million, up 58%.
- Adjusted EBITDA reached a record $12.4 million, representing 15% of revenue, up from 10% six quarters ago, and free cash flow hit a record $30.2 million on a trailing twelve-month basis.
- AirDial, the POTS replacement solution, continues to be a major growth driver, with services revenue up 75% year-over-year and the addition of two new resale partners, including a Verizon Platinum partner.
- The launch of MyPhone, a residential solution for children, has reversed the historical decline in residential users, adding over 3,000 users in Q2, and is now sold at five major retailers.
- New AI features, including AI transcription, AI insights, and standalone services like AI answering and AI receptionist, are expected to drive ARPU growth, with a new AI productivity pack planned for Q3.
- The company raised its full-year fiscal 2027 guidance, expecting revenue of $332-$333.5 million and non-GAAP EPS of $1.35-$1.38, reflecting confidence in continued momentum.
- Business user growth in Q2 was negatively impacted by 4,000 user churn from IWG and a small one-time user count correction, reducing net additions to 4,000.
- Product and other gross margin remained negative at -25% in Q2, even after benefiting from a tariff recovery, indicating ongoing losses in hardware and installation.
- The company's cash position is relatively low at $17.5 million, with $47 million in debt, though it generated strong operating cash flow of $13.1 million in Q2.
- Residential subscription revenue is expected to be only flat to up 1% for fiscal 2027, reflecting limited growth in this segment despite the MyPhone launch.
- The company faces execution risks with multiple new initiatives, including AI adoption, MyPhone and Stardial retail expansion, and integration of recent acquisitions, which may not all succeed as planned.
- The guidance for Q3 revenue of $83.7-$84.5 million implies a sequential slowdown from Q2's $83.2 million, suggesting potential seasonality or market challenges.
Thank you for standing by and welcome to Ooma's second-quarter fiscal year 2027 earnings conference call.
Currently, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session.
(Operator instructions)
I would now like to hand the call over to Matthew Robison, Director of Investor Relations. Please go ahead.
Thanks, Latif. Good day, everyone, and welcome to the second-quarter fiscal 2027 earnings compell of Ooma, Inc. My name is Matt Robison. Ooma's Director of IR and Corporate Development.
On the call with me today are Ooma's CEO Eric Stang and CFO Shige Hamamatsu. After the market closed today, Ooma issued its second-quarter fiscal 2027 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
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