Ooma (OOMA) Q3 2025 earnings summary

Executive summary

• Achieved record Q3 results with $65.1M revenue, 9% year-over-year growth, and $5.7M adjusted EBITDA, driven by Ooma Business and 2600Hz contributions.

• Non-GAAP net income was $4.6M, while GAAP net loss was $2.4M due to higher investments and absence of prior year tax benefit.

• Cash flow from operations reached $8.1M, and cash and equivalents stood at $17.1M at quarter end.

• Paid off all outstanding debt post-Q3, now operating debt-free, and repurchased $5.2M in stock over the past year.

• Secured two significant new customer wins and expanded partnerships, including a top-tier national cable company and a major 2600Hz customer.

Financial highlights

• Q3 revenue was $65.1M, up from $59.9M year-over-year; subscription and services revenue reached $60.1M, up 8%.

• Business subscription and services revenue up 13% year-over-year; excluding 2600Hz, up 7%.

• Non-GAAP net income was $4.6M, above guidance; adjusted EBITDA reached $5.7M (9% of revenue).

• Gross margin for subscription/services was 70%–72%; total gross margin was 60%–62%.

• Cash flow from operations hit a record $8.1M in Q3; trailing 12-month operating cash flow was $24M.

Outlook and guidance

• Q4 revenue expected at $64.6–$65.1M; non-GAAP net income $4.5–$4.8M; EPS $0.16–$0.17.

• Full-year fiscal 2025 revenue guidance raised to $256.3–$256.8M; non-GAAP net income $16.7–$17M; adjusted EBITDA $22.1–$22.4M; EPS $0.61–$0.62.

• Business subscription/services revenue projected to grow 13% for the year; residential to decline 1%.

• Long-term gross margin target for subscription/services is 75%–80%, with adjusted EBITDA margin targeted at 20%–25%.

• Guidance cautions that actual results may differ due to business, economic, and competitive uncertainties.