Q4 2026 OOMA Inc Earnings Call

March 4, 2026

Operator: Good day. Thank you for standing by. Welcome to the Ooma, Inc. Q4 and fiscal year 2026 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question at that time, please press star one one on your telephone, and you will hear an automated message advising you your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Matthew Robison. Please go ahead, sir.

Operator: Good day. Thank you for standing by. Welcome to the Ooma, Inc. Q4 and fiscal year 2026 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question at that time, please press star one one on your telephone, and you will hear an automated message advising you your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Matthew Robison. Please go ahead, sir.

Good day, and thank you for standing by. Welcome to the Ooma Inc. Fourth quarter in fiscal year 2026 Financial results conference call at this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session to ask a question at this time. At that time. Please press star 1, 1 on your telephone and you will hear an automated message advising you. Your hand is raised to withdraw your question. Please press star 1 1 again.

Matt Robison: Thank you, Michelle. Good day, everyone, and welcome to the Fourth Quarter and Fiscal Year 2026 Earnings Call 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, Shig Hamamatsu. After the market closed today, Ooma issued its Q4 and fiscal 2026 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 for replay of this call for one 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.

Matthew Robison: Thank you, Michelle. Good day, everyone, and welcome to the Fourth Quarter and Fiscal Year 2026 Earnings Call 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, Shig Hamamatsu. After the market closed today, Ooma issued its Q4 and fiscal 2026 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 for replay of this call for one 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.

Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today. Matthew Robinson, please go ahead, sir. Thank you, Michelle. Good day, everyone and welcome to the fourth quarter and fiscal year. 2026 earnings call is Ooma Inc. My name is Matt Robinson who is director of VR and corporate development.

On the call with me today at uma's CEO, Eric? Stang and CFO should

After the market closed today, issued its fourth quarter and fiscal 2026 earnings press release.

This releases also available on the company's website, uma.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 for replay of this call for one year.

Matt Robison: 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 materially from those projected. These risks include those set forth in the press release we issued earlier today and those risks more fully described in our filings with the Securities and Exchange Commission. The forward-looking statements in this presentation are based on information available to us as of the date hereof, and we disclaim any obligation to update any forward-looking statements except as required by law. Please note that other than revenue or as otherwise stated, the financial measures to be disclosed on this call will be on a non-GAAP basis. The non-GAAP financial measures are not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP.

Matthew Robison: 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 materially from those projected. These risks include those set forth in the press release we issued earlier today and those risks more fully described in our filings with the Securities and Exchange Commission. The forward-looking statements in this presentation are based on information available to us as of the date hereof, and we disclaim any obligation to update any forward-looking statements except as required by law. Please note that other than revenue or as otherwise stated, the financial measures to be disclosed on this call will be on a non-GAAP basis. The non-GAAP financial measures are not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP.

During today's presentation, our Executives will make forward-looking statements within the meeting of the federal Securities laws. We're looking statements, generally relate to future events or future Financial or operating performance.

Our expectations and beliefs regarding these matters may not materialize in actual results or subject to risks and uncertainties that could cause actual results to differ materially from those projected.

These risks include those set forth in the press release. We issued earlier today and those risks more fully described in our filings for the Securities and Exchange Commission.

Before looking statements, in this presentation are based on information available to us as of the date here of and we disclaim many obligation to update, any forward-looking statements except those required by law.

Matt Robison: A discussion of why we present non-GAAP financial measures and a reconciliation of the non-GAAP financial measures discussed in this call to the most directly comparable GAAP financial measures is included in our earnings press release, which is available on our website. On this call, we will give guidance for Q1 and full year fiscal 2027 on a non-GAAP basis. Also, in addition to our press release and 8-K filing, the Overview page and Events and Presentations page in the Investor section of our website, as well as the Quarterly Results page of the Financial Information section of our website, include links to information about costs and expenses not included in our non-GAAP values and key metrics of our core subscription businesses. These are titled Supplemental Financial Disclosure 1 and Supplemental Financial Disclosure 2.

Matthew Robison: A discussion of why we present non-GAAP financial measures and a reconciliation of the non-GAAP financial measures discussed in this call to the most directly comparable GAAP financial measures is included in our earnings press release, which is available on our website. On this call, we will give guidance for Q1 and full year fiscal 2027 on a non-GAAP basis. Also, in addition to our press release and 8-K filing, the Overview page and Events and Presentations page in the Investor section of our website, as well as the Quarterly Results page of the Financial Information section of our website, include links to information about costs and expenses not included in our non-GAAP values and key metrics of our core subscription businesses. These are titled Supplemental Financial Disclosure 1 and Supplemental Financial Disclosure 2.

For results prepared in accordance with GAAP.

A discussion of why we present non-gaap Financial measures and a Reconciliation of the non-gaap financial measures discussed in this call, to the most directly comparable. Gaap Financial measures is included in our press earnings, press release which is available on our website.

On this call, we will give guidance for the first quarter and full year fiscal 2027 on a non-GAAP basis.

Also, in addition to our press release and 8K filing the overview page and events and presentations page in the investor section of our website. As well as the quarterly results page of the financial information section of our website, include links to information about cost and expenses, not included in our non-gaap values and key metrics of our course, subscription businesses,

Matt Robison: Additionally, our investor presentation slides include GAAP and non-GAAP reconciliation and also provides resolution of GAAP expenses that are excluded from non-GAAP metrics. Before I turn this over to Eric, I'd like you to know that we will participate in the 38th annual ROTH Conference at Dana Point on 23 March and 24 March. Now I will hand the call over to Ooma CEO, Eric Stang.

Matthew Robison: Additionally, our investor presentation slides include GAAP and non-GAAP reconciliation and also provides resolution of GAAP expenses that are excluded from non-GAAP metrics. Before I turn this over to Eric, I'd like you to know that we will participate in the 38th annual ROTH Conference at Dana Point on 23 March and 24 March. Now I will hand the call over to Ooma CEO, Eric Stang.

And these are titled supplemental. Financial disclosure 1 and supplemental Financial disclosure too. Additionally our investor presentation slides include gaap to non-gaap reconciliation and also provides resolution of Gap expenses.

That are excluded from non-GET metrics.

Before I turn this over to Eric.

I'd like you to know that we will participate in a 38th annual Roth conference at Dana Point on March 23rd and 24th.

And I will hand the call over to Ooma CEO, Eric Stang.

Eric Stang: Thank you, Matt. Hi, everyone. Welcome to Ooma's Q4 and fiscal 2026 year-end earnings call. Thanks for joining us. We're pleased to report strong Q4 financial results, to update you on our progress integrating our two Q4 acquisitions, FluentStream and Phone.com, and to discuss our strategy and the positive momentum we see for fiscal 2027. Financially, we're pleased with our Q4 results, which included solid revenue growth and new records for net income, for Adjusted EBITDA, and for cash flow from operations. Our Adjusted EBITDA in Q4 reached $11.5 million, which equates to 15% of revenue. This result compares favorably to Adjusted EBITDA of 11% of revenue just a year ago. Total Adjusted EBITDA for fiscal 2026 was $33.9 million, up from $23.2 million the prior year, and $19.8 million the year before that.

Thank you, Matt.

Hi everyone. Welcome to Ooma's fourth quarter fiscal 2026 earnings call. Thanks for joining us.

We're pleased to report strong Q4 financial results.

To update you on our progress, integrating our two Q4 acquisitions, FluentStream and Phone.com, and to discuss our strategy and the positive momentum we see for fiscal 2027.

Financial aid. We're pleased with our Q4 results, which included. Solid Revenue growth and new records for net income for adjusted Eva and for cash flow from operations.

Our adjusted ebit da and Q4 reached 11.5 million, which equates to 15% of Revenue.

This result compares favorably to adjusted ebit da of 11% of Revenue just a year ago.

Total adjusted EBITDA for fiscal 2026 was $33.9 million.

Eric Stang: Looking forward, we expect our fiscal 2027 adjusted EBITDA to be comfortably above $40 million. As we continue to grow and expand our business, we expect our adjusted EBITDA to go even higher, which is strategic to our outlook, as higher adjusted EBITDA affords us greater opportunity to make acquisitions, repurchase stock, and invest in business growth. On the business front, we achieved solid growth in Q4, particularly due to our 2 acquisitions and a record quarter for AirDial. The additions of FluentStream and Phone.com provide us new avenues for growth, as well as the potential to capture significant synergies. To date, we have only just started the process of integrating these acquisitions and making the most of the opportunity they present. In Q4, I'm pleased to report that AirDial added more lines than ever before.

up from 23.2 million the prior year in 19.8 million year before that

Looking forward, we expect our fiscal 2027 adjusted EBITDA to be a comfortable $40 million.

And as we continue to grow and expand our business, we expect our adjusted EBITDA to go even higher.

Which is strategic to our Outlook as higher adjusted ibida, affords, us greater opportunity to make Acquisitions. We purchase stock and invest in business growth.

On the business front. We achieved solid growth in Q4, particularly due to our 2 acres and a record quarter for are dial.

The additions of FluentStream and Phone.com provide us new avenues for growth, as well as the potential to capture significant synergies.

Eric Stang: The number of Q4 AirDial lines installed was more than double the number that we installed in the same quarter a year ago. I'm pleased to say too, that other parts of Ooma also performed well in Q4, particularly our residential solution, Ooma Telo. As was also the case for Q3, Ooma Telo in Q4 added more users than anticipated, such that our total residential user base remained essentially flat in number. All in Q4 was a strong quarter that positions us well for fiscal year 2027. Looking ahead now to fiscal 2027, I'd like to highlight a handful of our most exciting initiatives. The first is the introduction of AI solutions on our Ooma Office platform. This quarter, we intend to introduce several new AI solutions for our customers.

Today we have only just started the process of integrating these Acquisitions and making the most of the opportunity. They present also. In Q4, I'm pleased to report that are dial added more lines than ever before.

The number of Q4 are dial lines. Installed was more than double the number that we installed in the same quarter a year ago.

I'm pleased to say too that other parts of Uma also performed. Well in Q4, particularly our residential solution, um, matella,

as well as as was also, the case for Q3 umatul in Q4 added more users than anticipated, such that our total residential user base remained, essentially flat in number

all in Q4 was a strong quarter that positions us, well, for fiscal year 2027,

And looking ahead now to fiscal 2027, I'd like to highlight a handful of our most exciting initiatives.

The first is the introduction of AI solutions on our Ooma Office platform.

Eric Stang: These include transcription and summarization of calls, the ability to drive insights from call data using third-party AI platforms, such as ChatGPT or others, an AI-powered answering service, and a full AI receptionist solution. The first two of these will be part of our top Pro+ tier of service, helping us to trade up customers to higher ARPU. The second two will be priced independently, in addition to the cost of our current service offerings. Communications is a fertile ground for the use of AI, and we believe AI can bring new business opportunity for Ooma. The second initiative I would like to highlight is our plans for AirDial. We are seeing increased market interest as POTS prices continue to rise and the pace of POTS line shutdowns accelerates.

This quarter. We intention introduced several new AI solutions for our customers. These include transcription and summarization of calls.

The ability to drive insights from call data using, third-party AI platforms, such as chat, GPT or others.

An AI powered answering service.

And a full AI receptionist solution.

the first of these,

the first 2 of these will be part of our top Pro Plus tier of service helping us to trade up customers to hire arpu. The second 2 will be priced independently, in addition to the cost of our current service offerings.

Opportunity for Ooma.

The second initiative, I would like to highlight is our plans for are dial.

Eric Stang: AT&T announced POTS line price increases last fall and has signaled there will be further price increases this spring. We're also seeing an increasing number of shutdown announcements, with many forecasts for late this year. We believe these are quite positive trends that will expand the opportunity for AirDial. In part, due to these trends, we added 4 more AirDial reseller partners in Q4, bringing the total number of partners we have to 41. Some of these partners are switching to Ooma from competitive solutions, which we believe also validates the competitive strength of Ooma AirDial. In select cases, our resellers are being driven to act as the cost they pay for the POTS lines they have purchased and resold can even sometimes exceed the revenue they're receiving from their end customers.

We are seeing increased market interest as POTS prices continue to rise and the pace of POTS line shutdowns accelerates.

AT&T announced pots line price increases last fall.

and a signal, there will be further price increases this spring

Number of shutdown announcements, with many forecasts for late this year.

We believe these are quite positive trends that will expand the opportunity for are dial.

In part due to these trends, we added 4 more AireDial reseller partners in Q4, bringing the total number of partners we have to 41.

Some of these partners are switching to Uma from competitive Solutions, which we believe also validates the competitive strength of Uma are dial.

Eric Stang: We are working more closely with our reseller partners than ever before and are seeing them increase their sales and marketing efforts and expand their sales pipelines. It remains our goal to add at least two new reseller partners each quarter, and in total, our goal remains to grow our number of AirDial reseller partners to over 50. As far as we have already come with AirDial, we still believe it is early days. Most of the POTS line shutdowns we have seen announced so far have come from AT&T. We don't see Verizon active yet. We also believe AT&T has years of shutdowns to go. AirDial remains a key investment area for Ooma in fiscal 2027, and we expect to continue our fast expansion.

And in select cases, our resellers are being driven to act as the costs. They pay for the pots lines. They have purchased and resold can even sometimes exceed the revenue. They are receiving from their end customers.

We are working more closely with our reseller Partners than ever before. And are seeing them increase their sales and marketing efforts and expand their sales Pipelines.

But it means our goal to add at least 2, new reseller Partners each quarter.

And in total our goal remains to grow. Our number of are dial, reseller Partners to over 50.

As far as we have already come with are dial. We still believe it is early days.

Most of the pots line shutdowns we have seen and out. So far, have come from AT&T

We don't see Verizon active yet.

We also believe AT&T has years of shutdowns to go. Aerial remains a key investment area for Ooma and fiscal 2027, and we expect to continue our fast expansion.

Eric Stang: The third initiative I'd like to mention is our plans for our recent acquisitions, FluentStream and Phone.com, along with this, our desire to make further acquisitions in the future. In a nutshell, our plans haven't changed from the announcements we made last fall. FluentStream is a solid business generating high EBITDA that brings us increased channel strength and another outlet to sell AirDial. Phone.com has low EBITDA today, we expect it can be dramatically improved through scale economies. Phone.com also affords us a second small business brand in the market with a name and URL that can be highly leveraged. While it's difficult to forecast the timing and impact, we'll be working through fiscal 2027 to bring Ooma's marketing and sales expertise, lean operations, and product strengths to Phone.com.

The third initiative, I'd like to mention is our plans for our recent acquisitions fluent stream, and phone.com. And along with this, our desire to make further Acquisitions in the future.

In a nutshell, our plans haven't changed from the announcements we made last fall.

Fluent stream is a solid business generating High ebit da, that brings us increased Channel strength, and another outlet to sell are dye.

phone.com has low ebit dot today, but we expect it can be dramatically improved through scale, economies

And phone.com also affords us, a second small business brand in the market with a name and URL that can be highly leveraged.

Well, it's difficult to forecast, the timing and impact we'll be working through fiscal 2027 to bring uma's marketing and sales, expertise lean operations and product strengths to phone.com.

Eric Stang: As a reminder, we were able to acquire both FluentStream and Phone.com at prices that made their acquisitions accretive just one quarter forward. We believe acquisitions such as these provide highly cost-effective business expansion. It is a goal of ours for fiscal 2027 to move quickly to pay down the debt we assumed for our recent acquisitions and to make further acquisitions. At this time in our industry, we believe Ooma is well-positioned to do so, and there are many targets to consider. For fiscal 2027, I would like also to comment on our residential business. As I mentioned above, Telo sales the last two quarters have been remarkably robust. We believe there are three main drivers for this. One is POTS lines are also going away in the residential space. A second is wireless 5G home internet, which allows more consumers to unbundle internet from telephony.

As a reminder, we were able to acquire both FluentStream and Phone.com at prices that made their acquisitions accretive just one quarter forward.

We Believe Acquisitions such as these provide, highly cost-effective business expansion.

It is a goal of ours for fiscal 2027 to move quickly, to pay down the debt, we assumed for our recent acquisitions and to make further acquisitions.

At this time in our industry we believe um, is well positioned to do so and there are many targets to consider.

for fiscal 2027, I would like

Also to comment on our residential business.

As I mentioned about sales, the last two quarters have been remarkably robust.

We believe there are 3 main drivers for this.

1 is pots. Lines are also going away in the residential space.

Eric Stang: A third is the desire of parents to give their younger kids a phone but avoid screen time. There's a movement happening among parents to wait until 8th grade before letting a child receive a smartphone. Ooma's family bundle, consisting of the Ooma Telo and a family-friendly phone, is one way families use our solutions. In fiscal 2027, we intend to launch a new product called My Phone, which we hope parents will find particularly attractive for use by younger people in the home. We'll have more to say on this as our strategy unfolds. We believe fiscal 2027 is shaping up nicely for us, with upside opportunities in each of the four areas I've just mentioned and more. We also believe we are going into fiscal 2027 in our strongest position ever.

A second is Wireless 5G home internet which allows more consumers to under unbundle internet from telephony and a third is the desire of parents to give their younger kids a phone but avoid screen time.

There's a movement happening among parents to wait until 8th grade before letting a child receive a smartphone.

Uma's family bundle. Consisting of the umatul and a family-friendly phone is 1 way families, use our Solutions.

In fiscal 2027, we intend to launch a new product called My Phone, which we hope parents will find particularly attractive for use by younger people in the home.

We'll have more to say on this as our strategy unfolds.

We Believe fiscal 2027 is shaping up nicely for us with upside opportunities in each of the 4 areas. I've just mentioned and more

Eric Stang: Ooma now serves over $1.4 million core users, is growing solidly, has over $290 million in annual exit recurring revenue, is achieving approximately 99% net dollar retention, and is driving meaningful double-digit adjusted EBITDA as a percent of revenues. With our growth and significantly improved adjusted EBITDA, we have built a more valuable company. We're dismayed that our advances have not yet translated into a meaningfully higher market capitalization, we're also confident that that will come in time.

We also believe we are going into fiscal 2027 in our strongest position ever.

Um, and now serves over 1.4 million core users,

Is growing solidly has over 290 million in annual exit, recurring Revenue.

Is achieving approximately 99% net dollar retention and is driving meaningful, double digit. Adjusted ebit da, as a percent of revenues.

Growth and significantly improved adjusted IBA. Do we have built a more valuable company?

Eric Stang: Our strong position in each of our four business areas, the market momentum we see in our favor, especially for AirDial, the great strategic partners we have secured who are helping propel our growth, our potential for further accretive acquisitions to layer on additional inorganic growth, and our estimation that Ooma can continue to increase Adjusted EBITDA and become more profitable in the future all have us excited about the road ahead. I'll now turn the call over to Shig, our CFO, to discuss our results and outlook in more detail and then return with some closing remarks.

We're dismayed that our advances have not yet, translated into a meaningfully higher market capitalization. But we are also confident that with that, that that will come in time.

Our strong position in each of our 4 business areas.

The market momentum we see is in our favor, especially for our dial.

The great strategic Partners we have secured who are helping Propel our growth.

Our potential for further, accretive acquisitions to layer on additional inorganic growth.

And our estimation that Ooma can continue to increase adjusted EBITDA and become more profitable in the future all have us excited about the road ahead.

Shig Hamamatsu: Thank you, Eric. Good afternoon, everyone. Before I dive into our Q4 financial results, I'd like to quickly recap the financial terms of the two acquisitions we completed during Q4. We completed the acquisition of FluentStream on 1 December 2025, for approximately $45 million in cash. We also completed the acquisition of Phone.com on 26 December 2025, for approximately $23.2 million in cash. The financial results of these acquired businesses are included in Ooma's financial results starting from their respective acquisition completion date in Q4. There are no other contingency payments for either of these acquisitions, and the aggregate cash acquisition price was mostly funded by a $65 million term loan with an interest rate of 6.4%.

I'll now turn the call over to Sig our CFO to discuss our results and outlook for more detail and then return with some closing remarks.

Thank you, Eric and good afternoon everyone. Before I dive into our fourth quarter Financial results, I'd like to quickly recap the financial terms of the 2 acquisition. We completed during the fourth quarter,

We completed the acquisition of FluentStream on December 1st, 2025, for approximately $45 million in cash.

We also completed the acquisition of phone.com on December, 26th 2025 for approximately 23.2 million in cash.

The financial results of these are acquired businesses included in uma's financial results starting from their respective acquisition, completion date in Q4.

Shig Hamamatsu: Now I'm going to review our Q4 financial results and then provide our outlook for the Q1 and full-year fiscal 2027. We had a solid finish to fiscal 2026, with the Q4 revenue of $74.6 million, up 15% year-over-year, driven by the growth of Ooma Business, including AirDial, and the additions of FluentStream and Phone.com. On a combined basis, FluentStream and Phone.com added approximately $6.1 million of revenue in Q4, of which $6 million was in Business subscription revenue. Excluding the impact of these acquisitions, total revenue in Q4 grew 5% year-over-year. In Q4, Business subscription and services revenue accounted for 67% of total subscription and services revenue as compared to 61% in the prior-year quarter.

There are no other contingency payments for either of these Acquisitions and the aggregate cash. Acquisition price was mostly funded by a 65 million dollar Term Loan with an interest rate of 66.4%.

Now, I'm going to review our fourth quarter Financial results and then provide our outlook for the first quarter and the full year fiscal 2027.

We had a solid finish to fiscal ’26 with fourth quarter revenue of $74.6 million, up 15% year-over-year, driven by the growth of Ooma business including Ooma Dial.

And the additions of pool and stream and phone.com. I want to combine basis, fluent stream, and phone.com, added approximately 6.1 million dollars of Revenue in Q4 of which 6 million dollars was in business, subscription Revenue,

Excluding the impact of these acquisitions, total revenue in Q4 grew 5% year-over-year. In Q4, business subscription and services revenue accounted for 67%.

Or total subscription and services Revenue as compared to 61% in the prior quarter.

Shig Hamamatsu: Q4 product and other revenue came in at $5.9 million and was up 30% year-over-year, driven by the growth of Air Dial installations. Despite Q4 being a holiday quarter, we had a record number of Air Dial line installations, which more than doubled over the prior year quarter. New bookings for Air Dial was also robust and grew approximately 80% year-over-year in Q4. On the full year basis, total revenue was $273.6 million for fiscal 2026, as compared to $256.9 million in the prior year, representing 7% growth year-over-year, including 10% growth in business subscription and services revenue. Excluding the impact of the acquisitions, total revenue and the business subscription revenue for fiscal 2026 grew 4% and 6% year-over-year respectively.

Q4 product and other Revenue came in at 5.9 million and was up 30% year-over-year driven by the growth of are Dynamic Solutions. Despite Q4 being a holiday quarter. We had a record number of line installations which more than doubled over the prior year quarter.

New bookings for are dial, was also robust and grew Approximately 80% year-over-year in Q4.

Uh, for your on the 4 year basis, total revenue was 273.6 Million for fiscal 26 as compared to 256.9 million dollars. In the prior year, representing 7% growth year-over-year, including 10% growth in business subscription and services Revenue.

Excluding the impact of the Acquisitions total revenue in the business. Subscription revenue for fiscal, 26, grew 4% and 6% year-over-year respectively

Shig Hamamatsu: On the profitability front, Q4 non-GAAP net income was $9.4 million and grew 62% year-over-year as we continue to focus on operating leverage in R&D and optimizing our sales and marketing spend. On a full year basis, non-GAAP net income was $29.2 million compared to $18 million in the prior year, and also grew 62% year-over-year. Some details on our Q4 revenue. Business subscription and services revenue grew 23% year-over-year in Q4, driven by user growth and output growth for Ooma business and the additions of FluentStream and Phone.com. Excluding the impact of the acquisitions, business subscription and services revenue in Q4 grew 7% year-over-year. On the residential side, subscription and services revenue was down 1% year-over-year.

On the productivity front, Q4 non-GAAP net income was $9.4 million, and grew 62% year-over-year. As we continue to focus on operating leverage in R&D and optimizing our sales and marketing spend,

On a four-year basis, non-GAAP net income was $29.2 million compared to $18 million in the prior year, and also grew 62% year-over-year.

Now, some details on our Q4 Revenue.

Business subscription and services Revenue. Grew 23% year-over-year in Q4 driven by user growth and our food growth for Ooma business in the additions of a fluent stream and form.com.

Excluding excluding the impact of the Acquisitions business subscription and services Revenue in Q4 grew 7%, year-over-year.

Shig Hamamatsu: For Q4, total subscription and services revenue was $68.7 million or 92% of the total revenue as compared to $60.6 million or 93% of total revenue in the prior year Q4. Some details on our key customer metrics. Please note that Q4 ARPU as well as net dollar retention rate excludes the impact of the Q4 acquisitions as these businesses only had a partial quarter starting from their respective acquisition date. We plan to incorporate them into these metrics starting in Q1 of fiscal 2027 when they have a full quarter with us, which is consistent with our past practice. As for the number of core users and annual annualized recurring revenue at the end of Q4, they do incorporate the impact of the acquisitions.

For the fourth quarter, total subscription and services revenue was $68.7 million, or 92% of total revenue, as compared to 60.6% of total revenue in the prior year quarter.

Now, some details on a key customer metrics.

Please note that Q4 awe, as well as a net diary retention rate, exclude the impact of the Q4 Acquisitions. As these businesses, only had a partial quarter starting from their respective acquisition date.

We plan to incorporate them into these metrics, starting in the first quarter of fiscal 27, when they have a full quarter with us which is consistent with our past practice.

As for the number of core users and the annual exit recurring Revenue at the end of Q4, they do incorporate the impact of the acquisitions.

Shig Hamamatsu: Our blended average monthly subscription and services revenue per core user or ARPU increased 5% year-over-year to $15.99, driven by an increasing mix of business users, including AirDial, as well as higher ARPU Office Pro and Pro+ users. During Q4, we continued to see a healthy Office Pro and Pro+ take rate with 57% of new Office users opting for these higher tier services. Overall, 39% of Ooma Office users have now subscribed to these higher tier services. Our net dollar subscription retention rate for the quarter was 99% as compared to 99% in Q3.

Blended average monthly subscription and services revenue per core user, or ARPU, increased 5% year-over-year to $15,099.

Driven by an increase in mixture of business users, including are dial, as well as higher upper office pro and pro plus users.

During the fourth quarter, we continue to see a healthy Office Pro and Pro Plus take rate, with 57%.

Of new office users opting for these higher-tier services, overall 39% of Ooma Office users have now subscribed to these higher-tier services.

Shig Hamamatsu: We ended Q4 with 1,404,000 core users, including 164,000 business core users from the acquisitions, up from 1,233,000 core users at the end of Q3. At the end of Q4, we had 684,000 business users or 49% of our total core users, an increase of 171,000 from Q3. Our annual exit recurring revenue was $291 million, up 24% year-over-year. Excluding the impact of the acquisitions in Q4, our annual exit recurring revenue grew 5% year-over-year. Now some details on our gross margin. Our subscription and services gross margin for Q4 was 72% as compared to 72% in the prior year.

Uh, net do subscription retention rate for the quarter was 99% as compared to 99% in the third quarter.

We ended a fourth quarter with 1,404,000 core users including 164,000 business, core users from the acquisitions.

Up from 1,233,000 core users at the end of the third quarter.

at the end of the fourth quarter, we had 684 business users or 49%, over over about protocol, users and increase of 171,000 from Q3

our annual exit recurring Revenue was 291 million up 24% year-over-year excluding the impact of that of the Acquisitions in Q4 our annual exit, recurring Revenue, grew 5% year-over-year

Now, some details on our gross margin.

Shig Hamamatsu: Product and other gross margin for Q4 was negative 42% as compared to negative 55% for the same period last year. The year-over-year improvement in product and other gross margin was primarily due to fully consuming higher cost components we had procured a few years ago. On an overall basis, the total gross margin for Q4 was 63% as compared to 63% in the prior year quarter. The flat overall gross margin in Q4 this year reflects the heavier mix of product revenue versus prior year due to an increase in AirDial installations, which offset the improvement in product gross margin. Now some details on operating expenses. Total operating expenses for Q4 were $37 million, an increase of $1.9 million year-over-year due to the additions of FluentStream and Phone.com.

Our subscription and services, gross margin for the fourth quarter was 72% as compared to 72% in the prior year.

Product and other gross margin for the fourth quarter was negative 42% as compared to negative 55% for the same period last year.

The year-over-year improvement in product and other gross margin was primarily due to fully consuming higher-cost components we had procured a few years ago.

On an overall basis, the total gross margin for Q4 was 63%.

As compared to 63% in the prior quarter, the fat overall gross margin in Q4 this year reflects the heavier mix of paragraph revenue versus prior year due to an increase in airline installations, which are upset the improvement in product gross margin.

And now some details on Allpoint expenses.

Shig Hamamatsu: Excluding the impact of the acquisitions, total operating expenses decreased $0.7 million from the same period last year. Sales and marketing expenses for Q4 were $18.4 million or 25% of total revenue, up 4% year-over-year due to the addition of FluentStream and Phone.com expenses. R&D expenses were $12.2 million or 16% of total revenue, up 9% on a year-over-year basis due to the addition of FluentStream and Phone.com team members. G&A expenses were $6.4 million or 9% of total revenue for Q4, compared to $6.2 million for the prior year quarter. Non-GAAP net income for Q4 was $9.4 million or diluted earnings per share of $0.34 as compared to $0.21 in the prior year quarter.

Total up and expenses for the fourth quarter, worth 37 million, and the increase of 1.9 million year-over-year due to the additions of fluent stream and form.com.

Excluding the impact of the Acquisitions total up and expenses decreased.

0.7 million from the same period last year.

Sales and marketing expenses for the fourth quarter, were 18.4 million or 25%, or total revenue. Up 4%, year-over-year due to the addition of fluent stream and phone.com expenses.

R&D expenses were 12.2 million or 16% of total revenue up 9% year old on a yearly year basis, due to the additional flow and stream and phone.com, team members.

GNA expenses, were 6, 6.4 million or 9% on total revenue for the fourth quarter, compared to 6.2 million dollars for the prior year quarter.

Shig Hamamatsu: Adjusted EBITDA for the quarter was a record $11.5 million, or 15% of total revenue, and grew 67% over the prior year quarter. On a full year basis, Adjusted EBITDA was $33.9 million, or 12.4% of total revenue, compared to $23.3 million, or 9% of total revenue in the prior year. We are pleased with the meaningful step up in Adjusted EBITDA margin realized in fiscal 2026 as we continue to focus on growing profitability towards our long-term financial goals. We ended a quarter with total cash investments of $20.1 million. In Q4, we generated $10.7 million of operating cash flow and $9.1 million of free cash flow.

No, gaap net income for the fourth. Quarter was 9.4 million or diluted earnings per share of 34 cents as compared to 21 cents in the prior quarter.

Over the probably a quarter.

On a 4 year basis. Adjusted ibida was 33.9 million or 12.4% or total revenue compared to 23.3 million or 9% of total revenue in the prior year.

We are pleased with the meaningful Step Up in adjusted, every the margin realized in fiscal 26 as we continue to focus on growing profitability towards our long-term financial goals.

Shig Hamamatsu: On a trailing twelve months basis, we generated $27.7 million of operating cash flow and $22 million of free cash flow. We spent a total of $16.8 million over the last four quarters, including $4.6 million in Q4, to buy back stock through a combination of open market purchase and our issue net share settlement. In addition, we already paid down the term loan by $6.5 million in Q4 and reduced the outstanding debt balance from $65 million to $58.5 million at the end of Q4. With strong free cash flow generation, we believe we can continue to maintain a reasonable level of stock repurchase while paying down a debt at a healthy pace. On the headcount front, we ended the quarter with 1,420 employees and contractors.

We ended the quarter with total cash and investments of $20.1 million. In Q4, we generated $10.7 million of operating cash flow and $9.1 million of free cash flow.

On a 12 122 and 12 months basis. We generated 27.7 million of operating cash flow in 22 million of free cash flow.

We spent a total of $16.8 million over the last four quarters, including $4.6 million in Q4 to buy back stock through a combination of open market repurchase and our issue net share settlement.

In addition we already paid down the term loan by 6.5 million in Q4 and reduced the outstanding debt balance from 65 million to 58.5 million at the end of Q4.

With strong free, cash flow generation. We believe we can continue to maintain a reasonable level of stock repurchase while paying down a debt at the healthy pace.

On the health front, we ended a quarter with 1,420 employees and contractors.

Shig Hamamatsu: Now I will provide a guidance for Q1 and full fiscal year 2027. Our guidance is on a non-GAAP basis and has been adjusted for expenses such as stock-based compensation, amortization of intangibles, and acquisition related and other expenses. We expect total revenue for Q1 of fiscal 2027 to be in the range of $79.6 to 80.4 million, which includes $5.7 to 6.1 million of product and other revenue. We expect the Q1 non-GAAP net income to be in the range of $8.8 to 9.2 million. Non-GAAP diluted EPS is expected to be between $0.31 and $0.33. We estimate 28 million weighted average diluted shares outstanding for Q1.

Now, I will provide a guidance for the first quarter and full fiscal year 2027.

A guidance is on a non-gaap basis and has been adjusted for expenses, such as stock, based compensation, optimization of intangibles, and application related and other expenses.

We expect total revenue for the first quarter of fiscal 27, to be in the range of 79.6 million to 80.4 million, which includes 5.7 to 6.1 million dollars of product in other Revenue.

We expect the first quarter of non-GAAP net income to be in the range of $8.8 to $9.2 million. Non-GAAP diluted EPS is expected to be between $0.31 and $0.33. We estimate 28 million, uh, weighted average shares outstanding for the first quarter.

Shig Hamamatsu: For full year fiscal 27, we expect total revenue to be in the range of $321 million to $325 million. The full year fiscal 27 revenue guidance assumes business subscription and services revenue growth rate of approximately 30% over fiscal 26, while residential subscription revenue to decline 1% to 2%. In terms of revenue mix for the year, we expect 92% to 93% of total revenue to come from subscription and services revenue and the remainder from products and other revenue. We expect non-GAAP net income for fiscal 27 to be in the range of $35.5 million to $37 million. Based on this guidance range, we estimate our Adjusted EBITDA for fiscal 27 to be $43 million to $44.5 million.

for 4 years, fiscal 27, we expect total revenue to be in the range of 321 million

to 325 million.

The full-year fiscal '27 revenue guidance assumes business subscription and services revenue growth rate of approximately 30% over fiscal '26, while residential subscription revenue is expected to decline 1 to 2%.

In terms of Revenue mix for the year, we expect 92 to 93% with total revenue to come from subscription and services revenue, and the remainder from products and other Revenue. We expect non-gaap net income, for fiscal 27, to be in the range of 35.5 million.

To 37 million.

Shig Hamamatsu: We expect non-GAAP diluted EPS for fiscal 2027 to be in the range of $1.26 to 1.31. We have assumed approximately 28.2 million weighted average diluted shares outstanding for fiscal 2027. In summary, we are pleased with a solid finish to our fiscal 2026 with a record Adjusted EBITDA of $33.9 million for the year, which grew 46% year-over-year, along with a record free cash flow of $22 million. As we start our new fiscal year, we are excited about both organic and inorganic growth opportunities in front of us and remain focused on achieving another meaningful progress towards our long-term financial targets. I'll now pass it back to Eric for some closing remarks. Eric?

Based on this guidance range, we estimate our adjusted, evida for fiscal 27, to be 43 million, to 444.5 million.

We expect non-GAAP diluted EPS for fiscal '27 to be in the range of $1.26 to $1.31.

We have assumed approximately 28.2 million where a damaged diluted shares outstanding for fiscal 27.

In summary, we are pleased with a solid finish to our fiscal '26, with a record adjusted IITA of $33.9 million for the year, which grew 46% year-over-year, along with a record free cash flow of $22 million.

As we start our new fiscal year, we're excited about both organic and inorganic growth opportunities in front of us and remain focused on achieving another meaningful progress towards a long-term Financial targets.

Eric Stang: Thank you, Shig. On nearly every metric, Ooma's a stronger company today than ever before. We now enter fiscal 2027, we're encouraged by our past execution, the positive market tailwinds we see, particularly for AirDial, our expanding number of strategic partners, and the addition of our 2 acquisitions last quarter. Our team is committed to making fiscal 2027 a great year for Ooma. Thank you for joining our call today. We'll now take your questions.

I'll now pass it back to Eric for some closing remarks Eric.

Thank you, shake.

On nearly every metric. Um, is a stronger company today than ever before.

As we now enter fiscal 2027, we're encouraged by our past execution. The positive Market Tailwinds, we see particularly for are dial

expanding number of strategic partners in the addition of our two acres last quarter,

7, a great year for Ooma.

Operator: Thank you. As a reminder to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. One moment while we compile our Q&A roster. Our first question is gonna come from the line of Josh Nichols with B. Riley Securities. Your line is open. Please go ahead.

Thank you for joining our call today. We'll now take your questions.

Reminder to ask a.

To be announced to which all your questions. Please press star-1-1—again, star-1-1. One moment while we compile our Q&A roster.

Our first question is going to come from the line of Josh Nichols with B. Riley Securities. Your line is open. Please go ahead.

Shig Hamamatsu: Yeah, thanks for taking my question. Always good to see record EBITDA margins and free cash flow profitability for the company. I just was curious, you mentioned it on the call that, you know.

Josh Nichols: Yeah, thanks for taking my question. Always good to see record EBITDA margins and free cash flow profitability for the company. I just was curious, you mentioned it on the call that, you know.

Josh Nichols: FluentStream is already, you know, doing quite well from a EBITDA margin perspective, but you mentioned that you think that there's room for pretty significant increases for Phone.com. Does the fiscal year 2027 guidance you lay out include very much in the way of potential cost synergies on that front? Would that potentially be some upside to the 2027 outlook that you laid out?

Yeah, thanks for taking my question. Always good to see record, even on margins, and free cash flow profitability for the company. I just was curious—you mentioned it on the call that, you know, um,

Eric Stang: Yeah. Thanks for that question, Josh. You know, profitability guidance, we don't assume the synergy yet. You know, we wanna start the year conservatively on that note. As we said before, we have a pretty good, you know, track record going back to prior acquisitions to achieve the cost synergies ultimately on SIP as an example again. You know, as we start the year, we wanted to take that as an upside as we realize then probably second half of the year, that's what we're targeting to see more meaningful cost synergies. Long story short, the guidance does not assume the synergy benefit yet.

Shig Hamamatsu: Yeah. Thanks for that question, Josh. You know, profitability guidance, we don't assume the synergy yet. You know, we wanna start the year conservatively on that note. As we said before, we have a pretty good, you know, track record going back to prior acquisitions to achieve the cost synergies ultimately on SIP as an example again. You know, as we start the year, we wanted to take that as an upside as we realize then probably second half of the year, that's what we're targeting to see more meaningful cost synergies. Long story short, the guidance does not assume the synergy benefit yet.

Fluent stream is already, you know doing doing quite well from a bit of margin perspective, but you mentioned that you think that there's room for pretty significant increases for phone.com, does the fiscal year 27 guidance you layout. Uh, include very much in the way uh of potential cost synergies on that front or would that potentially be some upside to to the 2027 Outlook that you laid out.

Yeah, thanks for the question Josh. And you know uh profitability guidance, uh we don't assume the uh, Synergy yet. Uh you know, we want to start the year conservatively on that note. And as we said before, we have a pretty good, you know. Track record going back to uh, Pride Acquisitions to uh, achieve the uh cost synergies. Ultimately uh

Concept as an example again and so. But, you know, as we start the year, uh, we wanted to, uh, take that as an upside, as we realize them, probably second half of the year.

That's what we're targeting to see, uh, more meaningful, uh, cost synergies. So, uh, long story short, the, uh, guidance has not assumed, um, the synergy benefit yet.

Josh Nichols: Great. Well, that's good to hear. Just in terms of the AirDial catch up, I know you said you thought there was like some customers because of weather and seasonality was gonna be a little bit slower, but the numbers for Q4 that you kind of mentioned for AirDial seem quite strong. When you look at some of those, like, larger reseller partners, do you expect, like, the pace of deployments to increase pretty significantly this year relative to last year? Or what's the expectation there?

Great. Well, that's good to hear. Um,

And then just in terms of the are dials catch up. I know you said you thought there was like, some customers because of weather, and seasonality was, was going to be a little bit slower. But the numbers for 4 q that you kind of mentioned for are dial seem

Quite strong. And when you look at some of those larger reseller partners, do you expect the pace of deployments to increase pretty significantly this year relative to last year? What's the expectation there?

Eric Stang: Hi, Josh. Yeah, in short, we do. It's difficult to forecast and, you know, we don't wanna get out in front of committed agreements that aren't in place yet. If you look at, you know, funnels, backlogs of opportunity, and the, you know, customer response we're seeing out in the market and just the momentum which AT&T is moving at to increasingly raise prices and retire more POTS lines, we think we have the potential for a very good year ahead. You know, we put some of that into our guidance, but we think there's definitely upside there as things unfold.

Hey Josh. Um, yeah, in short, we do. It's difficult to forecast and, you know, we don't want to get out in front of, um,

uh, committed agreements that aren't in place yet, but, um,

Uh, if you look at, um, you know, funnels and backlogs of opportunity and, and the, you know, customer response we're seeing out in the market, in just the momentum, which AT&T is moving at to uh, increasingly raise prices and and retire more pots lines. We think we had the potential for a very good year ahead. Um, but you know, we put some of that in

Into our guidance. But, um, we think there's definitely upside there, um, as things unfold.

Josh Nichols: Great. I guess last question for me. I mean, you really have a pretty well-rounded capital allocation strategy here. You're buying back stock, you're generating cash flow, improving the margins, and you're also looking at M&A. Is the expectation right now with what's been going on in the market that you'd probably close at least like one additional acquisition this year based on the pipeline? Or what's the expectation there?

That's great. I guess the last question for me—I mean, you really have a pretty well-rounded capital allocation strategy. You're buying back stock, you're generating cash flow, improving the margins, and you're also looking at M&A. Is the expectation right now, with what's been going on in the market, that you'll probably close at least one additional acquisition this year based on the pipeline? Or what's the expectation there?

Eric Stang: Well, as I said in my remarks, we think acquisitions like FluentStream and Phone.com are another great avenue for growth for the company, and it's part of our strategy today. You can never handicap when something's gonna happen. There are targets out there. But, yeah, I'm hopeful that every year we'll be doing some acquisition or acquisitions to augment what we're doing ourselves just 'cause of the opportunity we see.

Um, well, as I said, in my remarks, uh, we think Acquisitions like fluid stream and phone.com are are another great Avenue for growth for the company and and it's part of our strategy today. Uh, you can never handicap when something's going to happen. Um, there are targets out there, um, but uh, yeah, I I I'm hopeful that every year we'll be we'll be um uh doing some acquisition or Acquisitions to augment, what we're doing ourselves, just because of the opportunity, we see

Josh Nichols: Thanks, Art. Hop back in the queue.

Eric Stang: Thank you, Josh.

Thanks our topic of the Q.

Operator: Thank you. One moment for our next question. Our next question comes from the line of Patrick Walravens with Citizens. Your line is open. Please go ahead.

Thank you, Josh. Thank you, and one moment for our next question.

Our next question comes from the line of Patrick W. Ravens with Citizens. Your line is open. Please go ahead.

Kincaid LaCorte: Oh, great. This is Kincaid on for Patrick Walravens. Thanks for taking the question. Eric, just wanted to follow up on 2 comments that you've made last quarter. Number one, you said that there was some of the AirDial installations had been pushed out. You mentioned January, so I'd love to get a follow-up on that. I understand that you may not wanna give this every quarter, but you mentioned 50 hotels per quarter was your goal. Love to hear how that's going.

Oh great. This is Kincaid on for Patrick Wall Ravens. Thanks for taking the question.

Eric Stang: You bet. Yeah, some of what was pushed out last fall did come in in Q4 or, you know, particularly January. We had a very strong January for AirDial. You know, that momentum's actually carried into February as well. I think we're off to a great start for the year on AirDial. You know, on the hotel hospitality front, you know, our goal was to add 50 new hospitality customers every quarter. I think we did a little over 80 in Q4, which is a nice step for us. That might be a record in terms of the number in any particular quarter. I will say our Marriott relationship is also finally starting to pay off some in contributing to that number. You know, continued good momentum there too.

Eric, just wanted to follow up on two comments that you made last quarter. Number one, you said that there were some of the AirDial installations that had been pushed out—you mentioned January. So, I'd love to get a follow-up on that. And then I understand that you may not want to give this every quarter, but you mentioned 50 hotels per quarter was your goal. I'd love to hear how that's going.

January for our dial, and you know that momentum has actually carried into February as well. So we think we're off to a great start for the year on our dial. Um,

And then, you know, on the hotel Hospitality front, um, you know, our goal is to add 50 new uh, Hospitality customers every quarter. I think we did a little over 80 uh, in Q4 which is a nice step for us. That might be a record in the terms of the number in any particular quarter. And uh I will say, our Mar Marriott relationship is also finally starting to, uh, pay off some in contributing to that number. So um, you know, continued good momentum there too.

Kincaid LaCorte: Spectacular. Just one last one from me, on the family phone bundle, do you have a sense of what the TAM on that would look like?

Spectacular. And then just 1 last 1 for me on the family phone. Bundle, do you have a sense of what the Tam on that would look like?

Eric Stang: That's a good question. The family phone bundle is one of three or four bundles we have in the market today. More focused around giving something easy for families to use and have 911 capability for, you know, real landline 911 and things like that. MyPhone, when we announce it, will be specifically targeted towards, you know, that market opportunity we see where parents want to have something in their home for the kids to use that, you know, isn't putting, you know, the internet and screen time in front of them. We think it's a very, very real segment there, and I think that's partly what's been buoying our, our last two quarters' success on the residential front.

Um, that's a good question. Um, the family phone bundle is 1 of 3 or 4 bundles. We have in the market today more focused around um uh uh giving something easy for families to use and have 911 capability for, you know, real landline 911 and things like that. But my phone when we announced it will be, uh, specifically targeted towards, um, you know, that market opportunity, we see where parents want to have something in their home, for the kids to use that. Um, you know, isn't putting a, you know, the internet and screen time in front of them, uh, we think these are very, very real segment there. And I think

Eric Stang: I think MyPhone is gonna take us to the next step, and we should have it out in the market in the first half of this year. We have previewed it with a couple of our retail partners, and they love it. You know, we really believe every family with kids at home, you know, eighth grade or less, is a potential customer for that, so in US and Canada. It's a real opportunity.

That's partly what's been booing our um, our our last 2 quarters success on the residential front. Um, so I think my phone is going to take us the next step. Uh and um uh we should have it out in the market, in the first half of this year. Um, we have previewed it with a couple of uh of our Retail Partners and they loved it and uh we're you know, we really believe every family with kids at home.

You know, 8th grade or less is a potential customer for that, so in the US and Canada. So it's a real opportunity.

Kincaid LaCorte: That's great. I love it from a values perspective as well. Spectacular. Thanks for the time.

Eric Stang: Thank you.

That's great. I love it from a values perspective as well. Spectacular, thanks for the time.

Operator: Thank you. One moment for our next question. Our next question will come from the line of Matthew Harrigan with The Benchmark Company. Your line is open. Please go ahead.

Thank you.

Thank you. One moment for our next question.

Our next question will come from the line of Matthew Her again with Benchmark Stonex. Your line is open. Please go ahead.

Matthew Harrigan: Thank you. Given the awareness of the copper line replacement quandary is increasing, what are the? It really feels like you're making accelerations in the approval process and all that, and you've kinda reached an inflection point. The guys who aren't running with you yet, what are the kind of the ad hoc solutions that they're adapting? I know adopting. I know that I've asked you this question before, but are you seeing anything in terms of competition from other, you know, providers where there's any innovation? 'Cause it feels like as we've also talked about before, this has been going on for a long time. You've made a, I think, a fairly conscious decision not to push the sales and marketing, you know, that heavily right now.

Oh, thank you. Uh, given the awareness of the copper line. Uh, replacement, uh, quandry is, is increasing. What are the and it really feels like you're making, uh, accelerations and the approval process and all that. And you've kind of reached an inflection point. But the guys who aren't running with you yet, what are the kind of the ad hoc solutions that they're adapting? And I, I know, uh, adopting. I I know that I've asked you this question before, but are you seeing anything in terms of, uh,

Matthew Harrigan: I know R&D is coming down a lot, you know, hence the improvement in margins. Are you just generating a tremendous amount of pull demand, and you feel vindicated by not pushing sales and marketing, you know, harder? Do you think you could still grow even faster if you push the sales and marketing? Thank you.

Eric Stang: Yeah. Hi. We are growing sales and marketing in our outlook this year. We have something buoying our efforts, which is all our partners, 41 now who have signed up to resell AirDial. They're driving a lot of our success too. Yes, our pricing's lower with them 'cause they're reselling, but they're taking the sales and marketing lift on their shoulders. It's part of our business model to leverage ourselves with the strength of others to go faster than we could go just ourselves. I will say that I think we ended Q4 with sales and marketing at about 25% of revenue. I certainly wouldn't wanna see that go lower, we may see it go higher a little bit as we go through this year.

Competition from other, you know, providers where there, where there's any Innovation because it feels like, uh, as we Al also talked about before, this has been going on for a long time and, and you've made a, I think a fairly conscious decision not to push the sales and marketing, you know, that that heavily right now I know R&D is coming down a lot, you know, hence the Improvement in margins but are you just generating tremendous amount of pull demand and and you feel Vindicated, but not pushing sales and marketing, you know, harder or or do you think you could still grow even faster if you, uh, if you push the sales and marketing, thank you.

Yeah. Hi. Um, we are growing sales and marketing in our Outlook this year, um, but we have something booing, our efforts, which is all our partners, um, 41 now who, um, have signed up to to resell are dial. Um, they're they're driving a lot of our success too. Uh, and yes, our pricing is lower with them, because they're reselling, but, but they're taking the sales and marketing lift on their shoulders. So, um, I it's part of our, our, our business model to leverage ourselves with the strengths of others to go faster than we could go just ourselves. Um, but I will say that I think we ended Q4 with sales and marketing at about 25% of Revenue. Um, I certainly wouldn't want to see that go lower and we may see it go higher a little

Eric Stang: We're definitely getting out ahead right now of additional growth opportunities that we think are coming our way on AirDial, and we are hiring in key areas.

A little bit as we go through this year. Um, but, uh, we're, um, we're definitely getting out ahead right now of additional growth opportunities that we think are coming our way on our dial, and we are hiring in key areas.

Matthew Harrigan: Are you seeing anything in the way of other people presenting alternative solutions?

Eric Stang: Well, we do have a handful of competitors out there. Depending on the nature of the deal and who the customer is and all, they might be stronger or weaker you know, in terms of relationship with that customer or opportunity. I will say that I still believe I believe strongly that the features and capabilities in our solution are ahead of others in the market. That allows us to really bring it all together for a customer. I think that's why we're winning so many of these you know, partner resellers, because they recognize the strength of our solution. I think last fall, we took some additional steps to make our remote device management even more robust for our partners to use.

Eric Stang: We have other improvements planned on AirDial this year, or really, I'd say feature additions. I think we're gonna stay ahead. It's, we You know, I think that, you know, the AirDial market today or the POTS replacement market, somebody's gonna break through as the winning solution in the market.

Well, we do have uh, a handful of competitors out there and, and depending on the nature of the deal and and who the customer is and all, um, they might be stronger or weaker, you know, in terms of relationship with that customer or opportunity. But I will say that I still believe I believe strongly that the features and capabilities in our solution are ahead of of others in the market and, uh, that allows us to, um, uh, really bring it all together for a customer. And, and that's I think that's why we're, we're winning so many of these, you know, partner resellers. Uh, because they recognize, uh, the the strength of our solution. I think last fall we took some additional steps to make our Remote device management even more robust, uh, for our partners to use. And, uh, we have other improvements planned on are dial this year. Or really, I'd say feature additions.

Uh, so I think we're going to stay ahead. Uh, but, uh, um, it's uh, we we, you know, I I think that, you know, the air dial market today or the pots replacement Market. Uh,

Matthew Harrigan: Right.

Eric Stang: I think it's ours to go get. We're executing to try to do that.

Somebody's going to break through as the winning solution in the market. And, uh, I I I think our, I think it's ours to go get

And uh, we're executing to try to do that.

Matthew Harrigan: Great. Thanks, Eric.

Eric Stang: Thank you.

Great. Thanks. Eric.

Operator: Thank you. One moment for our next question. Our next question will come from the line of Arjun Bhatia with William Blair. Your line is open. Please go ahead.

Thank you. Thank you. One moment for our next question.

Our next question will come from the line of Arjun Bhatia with William Blair. Your line is open, please go ahead.

Arjun Bhatia: Eric, thank you. Can you guys just touch a little bit on the AirDial strength and you know, I know in the past you've talked about implementation hurdles. Just help us understand where we are on that. Is this like a permanent sort of, or more durable tailwind going into 2026? Could there still be some kind of bumps just as we're thinking about the outlook?

Correct. Um, thank you. Uh, can you guys just touch a little bit on the the air dial strength and um, you know, I know in the past, we've talked about implementation hurdles, just help us understand where we are on that. Is this like a permanent sort of um, or more durable Tailwind going into 2026? Um, or could there still be some kind of bumps just as we're thinking about the Outlook?

Eric Stang: Yeah. Our AirDial grows in a couple of ways. There is a steady stream of business we know or can reasonably forecast we're gonna drive every quarter through our channel agents, through our own direct sales, through what we know some of our partners have been doing and will keep doing. There's also big deals out there, larger size deals, and they're lumpy, and you don't know when a customer's gonna pull the trigger. I think that there's been a lot of budgeting to address this segment by larger customers this year that wasn't in place last year.

Yeah. Um, so our are dial, grows in a couple of ways. There is a steady stream of of business. We we know or or can reasonably forecast. We're going to drive every quarter through our our Channel agents through our own direct sales through. Um, what we know, some of our partners have been doing and we'll keep doing. But there's also big deals out there larger size deals and they're lumpy and you don't know when a customer is going to pull the trigger. Uh, I think that there's been

Eric Stang: I know that some of our key reseller partners are putting more emphasis today than they were a year or 2 ago on this segment. I'm hopeful we'll keep winning multiple partners every quarter to bring on board. It's not all perfect but, you know, there is certainly an increased momentum. Because it's lumpy and because one customer can be 5 or 10,000 lines ultimately if it's a very large customer, you just don't know when you're gonna win those and who's gonna win those. So we're a little more conservative on how we forecast Aerotel today. The business is certainly out there, and we feel like things are going well for us for all these opportunities.

Been a lot of budgeting to address this segment by larger customers. This year that wasn't in place last year. Um, I I know that some of our key reseller partners are are putting more emphasis today than they were a year or 2 ago on this segment. And uh, I I'm hopeful, we'll keep winning multiple partners every every quarter to to bring on board. Um, it it's not all, it's not all perfect but um, uh, you know, there there is, um, uh, there's certainly an increased momentum and but because it's lumpy and because 1 customer can be 5 or ten thousand lines. Ultimately, if, if it's a very large customer you just don't know when you're going to win those and and and who's going to win those but um uh

So, so we're a little more conservative on how we forecast aerosol today, but, but uh, the business is currently out there and we feel like things are going well for us, uh, for all these opportunities.

Arjun Bhatia: Okay. Perfect. Got it. Thank you. Just, you know, when we're thinking of the sort of residential business, you know, you had a better Q4. You're kind of talking about MyPhone might come in this year. Can that be a growth? Can that grow in 2026? Or how do you, how are you thinking about the sort of range of outcomes?

Okay. Uh, perfect, got it. Thank you. And then, um, just, you know, when we're thinking of the, the sort of residential business,

Eric Stang: I do think it can grow, but I can tell you in our guidance, we have not modeled it that way. You know, we don't expect it to decline either. You know, residential is close to $100 million of revenue for us and a very nice segment for us to be in. These, these, you know, we've had a little bit of decline over last year and all. Not a lot, but a little, like 1% year-over-year. I think with MyPhone and some of the trends we're seeing, I mean, we essentially end users did not decline in Q3 and did not decline in Q4. When MyPhone comes in, maybe we'll see the users grow a little bit.

Um, you know, you had a better Q4. You're kind of talking about my phone. Um, might come in, um, this year. What like, how can that be a growth? Can that grow in 26? Um, or how do you, how are you thinking about the sort of range of outcomes?

Uh, I do think it can grow, but I can tell you in our guidance, we have not modeled it that way. Um, but, uh, uh, you know, it's

Eric Stang: I think that's all I wanna predict at this time. Once we get MyPhone in the market, depending on what retail placement it has, you know, we'll be updating you. Certainly it's great to see that the residential phone is not dead, and there's some very good, powerful reasons to have one in the home. 911 being one, something for the kids to use, having a home office with better voice quality, having a parent or mother or father-in-law in the home. There's all kinds of reasons why it's a nice convenience. It may not be a nice convenience at, you know, $30, $40 a month, but with Ooma, it can be as little as just, you know, a few dollars of taxes and fees a month. That's powerful.

Eric Stang: Yeah, we see real market opportunity there, and we're not, you know. We're investing in it today.

My phone comes in, maybe we'll, we'll see the users grow a little bit. Um, I I think that's all I want to predict at this time once we get my phone in the market um depending on what retail placement, it has um you know, we'll be updating you. Uh but certainly it's great to see that the residential phone is not dead. And there's some very good powerful reasons to have 1 in the home, 911, being 1, something for the kids to use having a home office with better voice quality having a a a a parent or or mother, or father-in-law in the home. Um, there's all kinds of reasons why it's a nice convenience and if maybe you're not not be a nice convenience that, you know, 30 40 a month. But but um, it can be as little as just, you know, a few dollars of taxes and fees a month and that, that that's powerful. Um, so, uh, yeah, we see real Market opportunity there and we're, we're not, you know, we're investing in it today.

Arjun Bhatia: Great. Appreciate the color. Thank you.

All right, great. Great. Appreciate the call. Thank you.

Eric Stang: You bet.

Operator: Thank you. As a reminder, if you would like to ask a question, please press star one one on your telephone. Our next question will come from the line of Max Michaelis with Lake Street Capital Markets. Your line is open. Please go ahead.

You bet.

Thank you. And as a reminder, if you would like to ask a question, please press star, one, one, one on your telephone.

And our next question will come from the line of Maxwell Michaels with Lakes Street Capital markets. Your line is open, please go ahead.

Max Michaelis: Hey, guys. Thanks for taking my questions. First one, just kinda wanna focus on ARPU. You noted FluentStream and Phone.com weren't included in this year or this quarter's numbers, but can you give us a sense of what that looks like in Q1? Just give us a sense on what their ARPU looks like compared to Ooma. If we look at sort of the AI offerings you guys mentioned earlier in the call, can you give us a sense of what ARPU looks like for a customer who's using the highest tier of all the AI offerings?

Hey guys, thanks for taking my questions. First 1 just kind of want to focus on our Pooh. Uh you noted fluent stream and phone.com weren't included in this year or this quarter's numbers. But can you give us a sense of what that looks like in q1 and then, or just give us a sense of what there are. Poo looks like compared to Uma and then if we look at sort of the AI offerings, you guys mentioned earlier in the call, can you give us a sense of what our pool looks like? For a customer who is using the highest tier of all the AI offerings?

Eric Stang: The, in terms of, you know, what we could expect once we incorporate those two acquisitions, you know, they're relatively comparable to Ooma Office ARPU. I would say slightly lower than Ooma Office, but not too much. You might see a little bit of pull down on ARPU just because of that, but they're not too far off from Ooma Office is. In a higher tier services, I think your second question was the higher tier services on Ooma Office.

so the, um,

In terms of you know while we could expect once we incorporate those 2 Acquisitions you know. Um the relatively comparable to Ooma office, ow uh I would say a slightly lower than Luma office but not too much so you might see a little bit of pull down on opu just because of that. But then not too far off from uh um Ooma office. Uh is and a higher. Tier service is, um,

Max Michaelis: Well, it was AI.

Eric Stang: AI. With AI. Okay. Yeah. Well, okay. The first two services I talked about will be part of Ooma Office Pro Plus, which sells for $29.95 a month. A single-digit percentage of our customers today take the Ooma Office Pro Plus tier. We think with AI included in it, we can move that up, and that will bring our ARPU up. Our Ooma Office Pro tier is $24.95. Our Ooma Office Essentials tier is $19.95. Most of our customers take our Ooma Office Pro tier. You know, the other two services I mentioned will be priced separately, and they'll be both. We haven't announced pricing on them. I can't give you a specific answer here today. I apologize.

Uh, I think your second question was the higher. Tier services on Ooma office? Well, it was ai, ai with AI, okay. Yeah.

Eric Stang: They'll most likely be a fixed price per month and a usage charge as well, basically if you go over a certain level of usage. I think you can look at these solutions in the market today and see they're priced above... Generally, those solutions on their own are priced above where our current Ooma Office ARPU is at. I think that they have the potential to bring things, bring our overall average up as well.

Well, okay. Um, so the first 2 Services, I talked about will be part of Pro Plus, which sells for 29.95 a month, um, a single digit percentage of our customers today. Take the Pro Plus tier, um, but uh, we think with AI included in it, we can move that up and that will bring our our poo up. Our Pro tier is 24.95 our Essentials tier is 1995. Most of our customers take our Pro tier, um, and then, you know, the other 2 Services, I mentioned will be priced separately. Um, and uh, they'll be both a, a, um, we have an announced pricing on them so I, I, I can't give you a, a specific answer here today. I apologize. But, um, they'll they'll most likely be a, um, a fixed fixed price per month and a usage charge as well. Basically, if you go over a certain level of usage, I think you can look at these Solutions in the market today and see their priced above generally those

Solutions on their own are priced above where our current Ooma office are poo is at. So, um, I I think I think that uh, um, they can they have the potential to bring things? Bring our overall average up as well.

Max Michaelis: Last one for me, just around acquisitions. I think the combined revenue multiple you guys paid for both the companies were around 1.4x sales. I mean, is there a criteria you guys are following or a multiple you guys are willing to pay for higher growth that you guys can share with us?

And then last one for me, just on Rona Acquisitions. I think the combined revenue multiple you guys paid for both the companies was around 1.4 times sales. I mean, is there a criteria you guys are following or a multiple you guys are willing to pay for higher growth that you can share with us?

Eric Stang: Yeah. You know, it's interesting. If you look at the acquisitions we've done, we've bought 2 businesses for less than 1 times revenue, 1 for about 1 times revenue. FluentStream for more than 1 times revenue, but with very strong EBITDA coming from the company. It's, it's a balance and a trade-off. A business that has low EBITDA, but we think, with our synergies, we can improve, you know, that's work on our side, and we're not gonna pay as up as much for that. When we see a business with higher EBITDA that we think is stable and that we can leverage for the future, we're gonna pay a little more. You know, either way, I think our biggest metric is it accretive?

Yeah, you know, it's interesting. If you look at the acquisitions we've done, we've

We've bought 2 businesses for less than 1 times Revenue 1 for about 1 times Revenue.

Eric Stang: Do we think putting our dollars there is gonna have more impact than putting them into sales and marketing? I, you know, I think that, you know, we're kind of a unique company in this whole UCaaS space as well because these businesses in the kind of the $10 to 30 million revenue range, they're meaningful for us, but they, you know, there aren't a lot of other players out there who would want to buy something that size or, you know, have the financial position to do so. I think we've got good opportunities and, it's, you know. Always it's a, it's a case-by-case discussion for us over what's appropriate for that business and what it's doing.

Putting them in the sales and marketing and, uh, uh, I, you know, I I think that, uh, um, you know, we're kind of a unique company in this whole UK space as well because these businesses in the kind of the 10 to 30 million dollar Revenue range, they're meaningful for us. Um, but they, you know, they're there aren't a lot of other players out there who would want to buy something that size or or, um, you know, have have the, the financial position, uh, to do so. So I think we've got good opportunities and, uh, uh, it's uh, you know,

But always, it's it's a it's a case, by case discussion for us over what what's appropriate for that business and what it's doing.

Arjun Bhatia: All right. Thanks, guys.

All right. Thanks guys.

Operator: Thank you. I'm showing no further questions at this time, and I would like to hand the conference back over to management for any further remarks.

Thank you. I have no further questions at this time, and I would like to hand the conference back over to management for any further remarks.

Eric Stang: Well, thank you, everyone. You know, we're up to around... I think we got it around $320 million, $325 million in revenue for this year. If we can do more acquisitions this year, we'll be moving that up. I think that part of what we're doing here is becoming a bigger company, with more reach and more breadth, and I think also appealing to a larger investor base, which is also something we're trying to do as we look forward. We're excited about these initiatives we went over with you. Four clear initiatives, one around AI, one around AirDial, one around capitalizing the acquisitions we've done, and one around our better than expected performance on residential.

Well, well, thank you, everyone. Um, you know, we're up to around.

I think we got it around 323,257 this year. We'll be moving that up. And, um, I think that part of what we're doing here is becoming a bigger company, um, with more reach and more breadth. And, uh, I think also appealing to a larger investor base, which is also something we're trying to do as we look forward. Um, we're excited about these.

Eric Stang: I think those are great trends for us as we go into fiscal 2027. Thank you for your time today, and I'll stop there. Thank you, everyone. Bye-bye.

Initiatives, we went over with you. Um, for Clear initiatives, 1 around AI 1 around are dial, 1 about 1 around capitalizing, the Acquisitions, we've done and 1 around, um, um, our, um, better than expected performance on residential. And I think those are are great trends for us as we go into fiscal 2027. So thank you for your time today. And uh,

Operator: This concludes today's conference call. Thank you for participating. You may now disconnect. Everyone, have a great day.

um,

And I'll stop there. Thank you, everyone. Bye bye.

This concludes today's conference call. Thank you for participating, and you may now disconnect. Everyone have a great day.

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