Ooma (OOMA) Q2 2025 earnings summary

Executive summary

• Q2 FY2025 revenue reached $64.1 million, up 10% year-over-year, driven by Ooma Business and 2600Hz contributions, with non-GAAP net income of $4.1 million and record Adjusted EBITDA of $5.6 million.

• Subscription and services revenue grew 15% year-over-year, reaching $59.6 million and accounting for 93% of total revenue, while residential subscription revenue declined 1%.

• Over 1.2 million core users and annualized exit recurring revenue of $233 million as of Q2 FY2025, with a 100% net dollar subscription retention rate.

• Major new partnerships include a top 10 ILEC planning to resell AirDial and Ooma Telo, and the acquisition of 2600Hz expanded wholesale and CPaaS offerings.

• GAAP net loss was $2.1 million, compared to net income of $0.3 million in the prior year, reflecting increased investments.

Financial highlights

• Non-GAAP net income for Q2 FY2025 was $4.1 million ($0.15 per diluted share), matching or exceeding the prior year.

• Adjusted EBITDA reached a record $5.6 million, or 9% of revenue, up from $4.9 million last year.

• Cash and investments totaled $16.6 million at quarter end, with $7.1 million in operating cash flow.

• Debt was $8.5 million at quarter end, with $3 million repaid during the quarter.

• Product and other revenue increased 26% year-over-year to $4.6 million, mainly from AirDial and accessories.

Outlook and guidance

• Q3 FY2025 revenue expected between $64.2 million and $64.6 million, with non-GAAP net income of $4.1–$4.3 million and diluted EPS of $0.15–$0.16.

• Full-year FY2025 revenue guidance is $254–$255.5 million, with non-GAAP net income of $15.7–$16.2 million and Adjusted EBITDA of $21.5–$22 million.

• GAAP net loss for FY2025 expected at $7.7–$8.2 million due to non-recurring items and ongoing investments.

• Long-term targets include subscription/services gross margin of 75–80% and Adjusted EBITDA margin of 20–25%.

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