OOMA INC
For the period ended Oct 31, 2025. Filed Dec 9, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Oct 31, 2025 · Filed Dec 9, 2025
OOMA$18.00+2.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-07-31; filed 2025-09-05.
0001327688-25-000008
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-10-31; filed 2025-12-09.
0001193125-25-312961
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 88 previous paragraphs and 89 current paragraphs.
48 unchanged; 37 reworded; 4 added; 3 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 9 previous and 9 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (4)
Current report
On December 1, 2025, we completed the acquisition of FluentStream Corp. (“FluentStream”) a provider of enterprise-grade business phone services for small and medium-sized organizations, for approximately $45.0 million in cash, subject to certain working capital adjustments. We believe the acquisition of FluentStream will accelerate overall growth of Ooma Business. We financed the acquisition through a combination of cash on hand and term loan borrowings of $45.0 million under our credit agreement, as amended, with Citizens Bank, NA, as administrative agent and lender (the “Credit Agreement”). FluentStream was not material to our financial statements for the periods presented because the acquisition occurred after the end of our third fiscal quarter.
Current report
General and administrative expenses were consistent year-over-year, primarily due to a $0.6 million increase in acquisition-related expenses, partially offset a $0.3 million decrease in personnel-related costs and a $0.3 million net decrease in facility and other operational expenses.
Current report
Sales and marketing expenses were consistent year-over-year, primarily due to a $1.4 million increase in commission expense partially offset by a $1.5 million decrease in personnel-related costs, driven in part by a reduction in acquisition-related stock-based compensation expense.
Current report
Term Loan and Revolving Credit Facility
Removed paragraphs (3)
Previous report
Sales and marketing expenses increased $0.1 million year-over-year, primarily due to a $0.4 million increase in commissions expense, a $0.4 million increase in advertising and marketing expense, and a $0.1 million increase in travel related costs, partially offset by a $0.8 million decrease in personnel costs driven in part by a reduction in acquisition related stock-based compensation expense.
Previous report
General and administrative expenses increased $0.8 million or 5% year-over-year, primarily due to a $0.5 million increase in personnel-related costs, a $0.3 million increase in supplies and equipment costs, and a $0.3 million increase in litigation costs, partially offset by a $0.3 million decrease in restructuring costs.
Previous report
Revolving Credit Facility
Reworded paragraphs (37)
Previous wording
Second Quarter Fiscal 2026 Financial Performance
Current wording
Third Quarter Fiscal 2026 Financial Performance
Previous wording
Total revenue was $66.4 million, up 3% year-over-year, primarily driven by the growth of Ooma Business.
Current wording
Total revenue was $67.6 million, up 4% year-over-year, primarily driven by the growth of Ooma Business.
Previous wording
Total gross margin was 61%, up from 60% in the prior year quarter.
Current wording
Total gross margin was 60%, consistent with the prior year quarter.
Previous wording
GAAP net income was $1.3 million, compared to net loss of $2.1 million in the prior year quarter reflecting continued improvement in our operations.
Current wording
GAAP net income was $1.4 million, compared to net loss of $2.4 million in the prior year quarter reflecting continued improvement in our operations.
Previous wording
Adjusted EBITDA was $7.2 million, compared to $5.6 million in the prior year quarter.
Current wording
Adjusted EBITDA was $8.6 million, compared to $5.7 million in the prior year quarter.
Previous wording
As of July 31, 2025, we had total cash and cash equivalents of $19.6 million, compared to $17.9 million as of January 31, 2025.
Current wording
As of October 31, 2025, we had total cash and cash equivalents of $21.7 million, compared to $17.9 million as of January 31, 2025.
Previous wording
Core Users decreased year-over-year, which was primarily driven by a decline in Ooma Residential users, partially offset by an increase in Ooma Business users. As of July 31, 2025, Ooma Business users comprised approximately 41% of our total core users, up from 40% as of July 31, 2024. We define our core users as the number of active residential user accounts and business user extensions (excluding Talkatone and 2600Hz users). We believe that the relationship that we establish with our core users positions us to sell additional premium communications services and other new connected services to them.
Current wording
Core Users decreased year-over-year, which was primarily driven by a decline in Ooma Residential users, partially offset by an increase in Ooma Business users. As of October 31, 2025, Ooma Business users comprised approximately 42% of our total core users, up from 41% as of October 31, 2024. We define our core users as the number of active residential user accounts and business user extensions (excluding Talkatone and 2600Hz users). We believe that the relationship that we establish with our core users positions us to sell additional premium communications services and other new connected services to them.
Previous wording
In addition, we use Adjusted EBITDA (Earnings Before Interest Tax and Depreciation and Amortization) to manage our business, evaluate our performance and make planning decisions. We consider this metric to be a useful measure of our operating performance, because it contains adjustments for unusual events or factors that do not directly affect what management considers the core operating performance, and are used by our management for that purpose. We also believe this measure enables us to better evaluate our performance by facilitating a meaningful comparison of our core operating results in a given period to those in prior and future periods. Investors often use similar measures to evaluate the operating performance with those of competitors. Adjusted EBITDA represents net income before interest and other income, income taxes, depreciation and amortization of capital expenditures, amortization of intangible assets, stock-based compensation and related taxes, litigation costs, restructuring costs and gain on note conversion.
Current wording
In addition, we use Adjusted EBITDA (Earnings Before Interest Tax and Depreciation and Amortization) to manage our business, evaluate our performance and make planning decisions. We consider this metric to be a useful measure of our operating performance, because it contains adjustments for unusual events or factors that do not directly affect what management considers the core operating performance, and are used by our management for that purpose. We also believe this measure enables us to better evaluate our performance by facilitating a meaningful comparison of our core operating results in a given period to those in prior and future periods. Investors often use similar measures to evaluate the operating performance with those of competitors. Adjusted EBITDA represents net income before interest and other income, income taxes, depreciation and amortization of capital expenditures, amortization of intangible assets, stock-based compensation and related taxes, acquisition-related costs, restructuring costs, litigation costs and gain on note conversion.
Previous wording
Adjusted EBITDA does not consider the impact of interest and other income/expense, income taxes, stock-based compensation and related taxes, amortization of intangible assets, litigation costs, restructuring costs and gain on note conversion; and
Current wording
Adjusted EBITDA does not consider the impact of interest and other income/expense, income taxes, stock-based compensation and related taxes, amortization of intangible assets, litigation costs, acquisition-related costs, restructuring costs and gain on note conversion; and
Previous wording
Subscription and services revenue is derived primarily from recurring subscription fees related to service plans such as Ooma Business, Ooma Residential and other communications services, and to a lesser extent from payments associated with our Talkatone mobile application and prepaid international calls. We expect our subscription and services revenue to grow as we expand our core user base, driven primarily by growth in Ooma Business.
Current wording
Subscription and services revenue is derived primarily from recurring subscription fees related to service plans such as Ooma Business, Ooma Residential and other communications services, and to a lesser extent from payments associated with our Talkatone mobile application and prepaid international calls. We expect our subscription and services revenue to grow as we expand our user base, driven primarily by growth in Ooma Business, including through the FluentStream acquisition.
Previous wording
Comparison of the three and six months ended July 31, 2025 and 2024(dollars in tables are in thousands):
Current wording
Comparison of the three and nine months ended October 31, 2025 and 2024(dollars in tables are in thousands):
Previous wording
We derived approximately 63% and 61% of our total revenue from Ooma Business and approximately 35% and 36% from Ooma Residential for the three months ended July 31, 2025 and 2024, respectively.
Current wording
We derived approximately 63% and 62% of our total revenue from Ooma Business and approximately 35% and 36% from Ooma Residential for the three months ended October 31, 2025 and 2024, respectively.
Previous wording
Subscription and services revenue increased $1.6 million or 3% year-over-year, primarily attributable to an increase in AirDial lines, and an increase in the average revenue per core user.
Current wording
Subscription and services revenue increased $1.8 million or 3% year-over-year, primarily attributable to an increase in AirDial lines, and an increase in the average revenue per core user.
Previous wording
Product and other revenue increased $0.7 million or 15% year-over-year, primarily attributable to an increase in AirDial shipments.
Current wording
Product and other revenue increased $0.7 million or 14% year-over-year, primarily attributable to an increase in AirDial shipments.
Previous wording
We derived approximately 63% and 61% of our total revenue from Ooma Business and approximately 35% and 37% from Ooma Residential for the six months ended July 31, 2025 and 2024, respectively.
Current wording
We derived approximately 63% and 61% of our total revenue from Ooma Business and approximately 35% and 36% from Ooma Residential for the nine months ended October 31, 2025 and 2024, respectively.
Previous wording
Subscription and services revenue increased $3.4 million or 3% year-over-year, primarily attributable to an increase in AirDial lines, and an increase in the average revenue per core user, driven by organic growth, which was in part due to increased sales of Ooma Office and Ooma Enterprise services.
Current wording
Subscription and services revenue increased $5.3 million or 3% year-over-year, primarily attributable to an increase in AirDial lines, and an increase in the average revenue per core user, driven by organic growth, which was in part due to increased sales of Ooma Office and Ooma Enterprise services.
Previous wording
Product and other revenue increased $1.3 million or 15% year-over-year, primarily attributable to an increase in AirDial and Telo shipments.
Current wording
Product and other revenue increased $2.0 million or 15% year-over-year, primarily attributable to an increase in AirDial and Telo shipments.
Previous wording
Subscription and services gross margin of 70% remained consistent year-over-year. Cost of subscription and services revenue increased $0.8 million or 4% year-over-year, primarily due to a $0.5 million increase in personnel-related costs, $0.2 million increase in infrastructure costs, and a $0.1 million increase in regulatory fees. Overall, the increase in the cost of subscription and services in part reflects the growth of Ooma Business.
Current wording
Subscription and services gross margin of 70% remained consistent year-over-year. Cost of subscription and services revenue increased $0.7 million or 4% year-over-year, primarily due to a $0.5 million increase in personnel-related costs and a $0.3 million increase in infrastructure costs, partially offset by a $0.1 million decrease in regulatory fees. Overall, the increase in the cost of subscription and services in part reflects the growth of Ooma Business.
Previous wording
Product and other revenue gross margin improved to negative 45% from negative 69% in the prior year period. The improvement in product margin was primarily due to the depletion of certain higher cost components that we procured in prior fiscal years to stay ahead of pandemic driven supply chain issues.
Current wording
Product and other revenue gross margin improved to negative 45% from negative 57% in the prior year period. The improvement in product margin was primarily due to the depletion of certain higher cost components that we procured in prior fiscal years to stay ahead of pandemic driven supply chain issues.
Previous wording
Subscription and services gross margin of 70% remained consistent year-over-year. Cost of subscription and services revenue increased $1.4 million year-over-year, primarily due to a $0.9 million increase in infrastructure costs, and a $0.8 million increase in personnel-related costs, partially offset by a $0.2 million decrease in depreciation and amortization expense, and a $0.1 million decrease in banking fees.
Current wording
Subscription and services gross margin of 70% remained consistent year-over-year. Cost of subscription and services revenue increased $2.0 million year-over-year, primarily due to a $1.2 million increase in personnel-related costs and a $1.1 million increase in infrastructure costs, partially offset by a $0.3 million net decrease in depreciation and amortization expense, and other operational expenses.
Previous wording
Product and other revenue gross margin improved to negative 47% from negative 70% in the prior year period. The improvement in product margin was primarily due to the depletion of certain higher cost components that we procured in prior fiscal years to stay ahead of pandemic driven supply chain issues.
Current wording
Product and other revenue gross margin improved to negative 45% from negative 65% in the prior year period. The improvement in product margin was primarily due to the depletion of certain higher cost components that we procured in prior fiscal years to stay ahead of pandemic driven supply chain issues.
Previous wording
Sales and marketing expenses decreased $0.1 million or 1% year-over-year, primarily due to a $0.5 million decrease in personnel-related costs driven in part by a reduction in acquisition related stock-based compensation expense, partially offset by a $0.2 million increase in commissions expense, and a $0.2 million decrease in advertising and marketing expense.
Current wording
Sales and marketing expenses were consistent year-over-year, primarily due to a $0.7 million decrease in personnel-related costs, driven in part by a reduction in acquisition-related stock-based compensation expense, partially offset by a $0.6 million increase in commissions expense.
Previous wording
Research and development expenses decreased $1.1 million or 8% year-over-year, primarily due to a $1.1 million decrease in personnel and contractor related costs, driven in part by a reduction in acquisition related stock-based compensation expense.
Current wording
Research and development expenses decreased $2.1 million or 15% year-over-year, primarily due to a $1.6 million decrease in personnel and contractor-related costs, driven in part by a reduction in acquisition-related stock-based compensation expense, and a $0.5 million decrease in restructuring costs.
Previous wording
Research and development expenses decreased $2.5 million or 9% year-over-year, primarily due to a $1.9 million decrease in personnel-related costs, driven in part by a reduction in acquisition related stock-based compensation expense, a $0.2 million decrease in marketing expense, and a $0.4 million decrease in restructuring costs.
Current wording
Research and development expenses decreased $4.6 million or 11% year-over-year, primarily due to a $3.5 million decrease in personnel-related costs, driven in part by a reduction in acquisition-related stock-based compensation expense, a $0.9 million decrease in restructuring costs and a $0.4 million decrease in marketing expenses.
Previous wording
General and administrative expenses increased $0.3 million or 4% year-over-year, primarily due to a $0.2 million increase in personnel-related costs, and a $0.2 million increase in supplies and equipment costs, partially offset by a $0.1 million decrease in litigation costs.
Current wording
General and administrative expenses increased $0.9 million or 4% year-over-year, primarily due to a $0.2 million increase in personnel-related costs and a $0.6 million increase in acquisition-related expenses.
Previous wording
As of July 31, 2025, we had $19.6 million of total cash and cash equivalents, which we believe will be sufficient to meet our cash needs for at least the next 12 months. Our future capital requirements will depend on many factors, including our growth rate, the introduction of new and enhanced offerings, the timing and extent of our sales and marketing activities, and research and development expenditures, and other factors. We may in the future make investments in or acquisitions of businesses or technologies, which may require the use of cash.
Current wording
As of October 31, 2025, we had $21.7 million of total cash and cash equivalents. In December 2025, we completed the acquisition of FluentStream for approximately $45.0 million in cash, subject to certain working capital adjustments, the payment of which we funded primarily through term loan borrowings of $45.0 million under the Credit Agreement. We believe our total cash and cash equivalents, together with our remaining borrowing capacity under the Credit Agreement, will be sufficient to meet our cash needs for at least the next 12 months. Our future capital requirements will depend on many factors, including our growth rate, the introduction of new and enhanced offerings, the timing and extent of our sales and marketing activities, and research and development expenditures, and other factors. We may in the future make investments in or acquisitions of businesses or technologies, which may require the use of cash.
Previous wording
For the six months ended July 31, 2025, our net income of $1.1 million included non-cash items of $14.0 million primarily related to stock-based compensation, operating lease expense, and depreciation and amortization expense. Operating asset and liability changes for the six months ended July 31, 2025 included:
Current wording
For the nine months ended October 31, 2025, our net income of $2.5 million included non-cash items of $21.1 million primarily related to stock-based compensation, operating lease expense, and depreciation and amortization expense. Operating asset and liability changes for the nine months ended October 31, 2025 included:
Previous wording
an increase of $0.6 million in accounts receivable due to the timing of customer cash collections;
Current wording
an increase of $0.8 million in accounts receivable due to the timing of customer cash collections;
Previous wording
an increase of $1.7 million in inventories and deferred inventory costs;
Current wording
an increase of $2.3 million in inventories and deferred inventory costs;
Previous wording
a decrease of $0.2 million in prepaid expenses and other current and non-current assets;
Current wording
an increase of $1.2 million in prepaid expenses and other current and non-current assets;
Previous wording
a net decrease of $3.8 million in accounts payable, accrued expenses and other liabilities due to the timing of payments; and
Current wording
a net decrease of $2.7 million in accounts payable, accrued expenses and other liabilities due to the timing of payments; and
Previous wording
an increase of $0.7 million in deferred revenue.
Current wording
an increase of $0.4 million in deferred revenue.
Previous wording
Cash provided by operating activities for the six months ended July 31, 2025 decreased $0.6 million year-over-year, which primarily reflected working capital impacts resulting from the timing of payments. Although we have generated cash from operations in recent periods, our operating cash flow may not remain positive in the future as we continue to invest in efforts to scale our business.
Current wording
Cash provided by operating activities for the nine months ended October 31, 2025 decreased $1.8 million year-over-year, which primarily reflected working capital impacts resulting from the timing of payments. Although we have generated cash from operations in recent periods, our operating cash flow may not remain positive in the future as we continue to invest in efforts to scale our business.
Previous wording
For the six months ended July 31, 2025, cash used in investing activities was $2.5 million, which consisted of capital expenditures of $2.5 million. Cash used in investing activities decreased $0.7 million year-over-year primarily due to a decrease in fixed assets additions in the first half of fiscal 2026.
Current wording
For the nine months ended October 31, 2025, cash used in investing activities was $4.0 million, which consisted primarily of capital expenditures. Cash used in investing activities decreased $0.7 million year-over-year primarily due to a decrease in fixed assets additions for the nine months ended October 31, 2025.
Previous wording
For the six months ended July 31, 2025, cash used in financing activities was $5.8 million, which consisted of payments of $2.7 million related to shares repurchased for tax withholdings on vesting of RSUs, and payments of $5.4 million under our stock repurchase plan, offset by proceeds of $2.3 million from the issuance of common stock from our ESPP and stock option exercises. Cash used in financing activities decreased $2.6 million year-over-year, which primarily reflected repayments of borrowings under our Credit Agreement during the first half of fiscal 2025, which did not recur in the first half of fiscal 2026.
Current wording
For the nine months ended October 31, 2025, cash used in financing activities was $9.1 million, which consisted of payments of $4.0 million related to shares repurchased for tax withholdings on vesting of RSUs, and payments of $8.2 million under our stock repurchase plan, partially offset by proceeds of $3.0 million from the issuance of common stock from our ESPP and stock option exercises. Cash used in financing activities decreased $5.8 million year-over-year, which primarily reflected repayments of borrowings under our 2023 Credit Agreement (as defined below) during the nine months ended October 31,2024, which did not recur in the nine months ended October 31,2025.
Previous wording
In October 2023, we entered into a credit and security agreement with certain banks that provides for a secured revolving credit facility under which we may borrow up to an aggregate of $30.0 million and, subject to certain conditions, may be increased to up to $50.0 million. As of July 31, 2025, we had zero outstanding borrowings and were in compliance with all loan covenants.
Current wording
In October 2023, we entered into the 2023 Credit Agreement, which provides for a secured revolving credit facility under which we may borrow up to an aggregate of $30.0 million and, subject to certain conditions, may be increased to up to $50.0 million. As of October 31, 2025, we had zero outstanding borrowings and were in compliance with all loan covenants. On December 1, 2025, the Company entered into the Credit Agreement, the terms of which replace and supersede the terms of the 2023 Credit Agreement. The Credit Agreement has a term of five years and provides for a term loan facility of up to $65.0 million and a revolving credit facility of up to $10.0 million. In connection with entering into the Credit Agreement, we borrowed $45.0 million as a term loan maturing on the December 1, 2030 (the “Maturity Date”). The remaining $20.0 million of the term loan facility under the Credit Agreement may, subject to the satisfaction of certain conditions precedent, be borrowed by the Company no later than 90 days after the amendment closing date as an additional term loan maturing on the Maturity Date. We used the proceeds of initial term loan to finance the FluentStream acquisition and intend to use the proceeds from future borrowings thereunder to fund other potential acquisitions working capital, and other general corporate purposes.
Previous wording
Refer to Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended January 31, 2025 for a discussion of our critical accounting policies and estimates. There have been no changes to the Company’s significant accounting policies and estimates as outlined in our fiscal 2025 Annual Report in the first half of fiscal 2026.
Current wording
Refer to Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended January 31, 2025 for a discussion of our critical accounting policies and estimates. There have been no changes to the Company’s significant accounting policies and estimates as outlined in our fiscal 2025 Annual Report in the first three quarters of fiscal 2026.