Ooma (OOMA) Q1 2026 earnings summary

Executive summary

• Q1 FY26 revenue was $65 million, up 4% year-over-year, driven by business services and Ooma Business growth, with non-GAAP net income of $5.6 million and adjusted EBITDA of $6.7 million, both exceeding guidance.

• AirDial momentum accelerated with Comcast as a major reseller, over 30 reseller partners, and expansion into the POTS replacement market; 2600Hz closed four new customers.

• Ooma Office and Enterprise saw expanded new account wins, especially in targeted verticals like dental, medical, insurance, legal, and hospitality, now serving over 500 hotels.

• Core user base at Q1 end was over 1.2 million, with 99% net dollar retention rate and 61% of new Office users choosing premium tiers.

• Recognized as the #1 VoIP service by PCMag readers for 12 consecutive years and top-rated by Consumer Reports.

Financial highlights

• Q1 FY26 revenue: $65 million (+4% YoY); business subscription/services revenue grew 6% YoY, now 62% of total subscription/services revenue.

• Q1 non-GAAP net income: $5.6 million (+56% YoY); adjusted EBITDA: $6.7 million (+33% YoY); GAAP net loss narrowed to $0.1 million.

• Subscription/services gross margin: 72%; product/other gross margin improved to -41% from -67% YoY; total gross margin: 62–63%.

• Operating expenses: $35.4 million, up 1% YoY; sales/marketing up 3%, R&D down 6%, G&A up due to personnel costs.

• Ended Q1 with $19 million in cash/investments; generated $3.7 million operating cash flow and $2.5 million free cash flow in Q1.

Outlook and guidance

• Q2 FY26 revenue expected at $65.5–$66.1 million; non-GAAP net income $5.6–$5.9 million; non-GAAP diluted EPS $0.20–$0.21.

• FY26 revenue guidance reaffirmed at $267–$270 million; business subscription/services revenue to grow 5–6%, residential to decline 1–2%.

• FY26 non-GAAP net income guidance raised to $22.5–$23.5 million; adjusted EBITDA $28–$29 million; non-GAAP diluted EPS $0.79–$0.83.

• Long-term gross margin targets: 75–78% for subscription/services, 65–70% overall; adjusted EBITDA margin target: 20–25% long-term.

• Sales & marketing and R&D expenses expected to decline as a percentage of revenue over time.