OOMA INC

Note 1: Overview and Basis of Presentation

Ooma, Inc. and its wholly-owned subsidiaries (collectively, “Ooma” or the “Company”) provides leading communications services and related technologies for businesses and consumers, delivered from its smart SaaS and unified communications platforms. The Company is headquartered in Sunnyvale, California.

Fiscal Year. The Company’s fiscal year ends on January 31. References to fiscal 2027 and fiscal 2026 refer to the fiscal years ended January 31, 2027 and January 31, 2026, respectively.

Basis of Presentation. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. The condensed consolidated balance sheet as of January 31, 2026 included herein was derived from the audited financial statements as of that date, but does not include all the disclosures required by GAAP. Therefore, the information included in this Quarterly Report on Form 10-Q should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended January 31, 2026 filed with the SEC on April 3, 2026 (“Annual Report”).

The accompanying condensed consolidated financial statements reflect all normal recurring adjustments that management believes are necessary for a fair presentation of the interim periods presented. The results for the three months ended April 30, 2026 are not necessarily indicative of the results to be expected for any subsequent quarter or for the fiscal year ending January 31, 2027.

Principles of Consolidation. The condensed consolidated financial statements include the accounts of Ooma, Inc. and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation.

Comprehensive Income (Loss). For all periods presented, comprehensive income (loss) approximated net income (loss) in the condensed consolidated statements of operations and differences were not material. Therefore, the condensed consolidated statements of comprehensive income (loss) have been omitted.

Segment Reporting. The chief operating decision maker ("CODM") for the Company is thechief executive officer, who reviews the Company’s financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance. Accordingly, management has determined that the Company operates in asingle reportable segment.

Revenue was principally derived from customers located in the United States for all periods presented, with a small portion attributable to customers located in Canada and other countries. Long-lived assets located outside of the United States were not significant.

Use of Estimates. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the Company’s consolidated financial statements and accompanying notes. Significant estimates include, but are not limited to, those related to revenue recognition, inventory valuation, deferred sales commissions, valuation of goodwill and intangible assets, operating lease assets and liabilities, regulatory fees and indirect tax accruals, loss contingencies, stock-based compensation and income taxes (including valuation allowances). The Company bases its estimates and assumptions on historical experience, where applicable, and other factors that it believes to be reasonable under the circumstances. These estimates are based on information available as of the date of the consolidated financial statements, and assumptions are inherently subjective in nature. Therefore, actual results could differ from management’s estimates.

Significant Accounting Policies. There have been no material changes to the Company’s significant accounting policies from those disclosed in the Annual Report.

Recent Accounting Pronouncements Not Yet Adopted. In November 2024, the FASB issued ASU 2024-03: Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires disaggregation of certain costs in a separate note to the financial statements, such as the amounts of employee compensation, depreciation and intangible asset amortization, included in each relevant expense caption in annual and interim consolidated financial statements. The ASU also requires disclosure of the total amount of selling expenses and our definition of selling expenses. The standard is effective for annual periods beginning after December 15, 2026 and for interim periods beginning after December 15, 2027 on a retrospective or prospective basis, with early adoption permitted. The Company is evaluating the new standard.

In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which simplifies the capitalization guidance by removing all references to software development project stages so that the guidance is neutral to different software development methods. The amendments in this ASU are effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods, with early adoption permitted. The amendments in this update permit an entity to apply the new guidance using a prospective, retrospective or modified transition approach. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements and disclosures.

Recently Adopted Accounting Pronouncements. In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, providing a practical expedient to calculating current expected credit losses for current accounts receivable and contract assets by assuming that the current conditions as of the balance sheet date will not change for the remaining life of the asset. This update is effective for annual reporting periods beginning after December 15, 2025 and for interim periods within those annual periods, and is applied prospectively. The Company adopted ASU 2025-05 effective February 1, 2026 and applied the guidance prospectively. In connection with this adoption, the Company elected to apply the practical expedient permitted by the standard, which assumes that current conditions as of the balance sheet date do not change for the remaining life of the assets. The adoption of ASU 2025-05 did not have a material impact on the Company’s condensed consolidated financial statements and related disclosures.

Note 2: Revenue and Deferred Revenue

The Company derives its revenue fromtwo sources:

Subscription and Services Revenue is derived from recurring subscription fees related to service plans such as Ooma Business, Ooma Residential and other communications services. Service plans are generally sold as monthly subscriptions; however, certain plans are also offered as annual or multi-year subscriptions. Subscription revenue is generally recognized ratably over the contractual service term. A small portion of revenue is recognized on a point-in-time basis from services such as: prepaid international calls, and advertisements displayed through the Talkatone mobile application.

Product and Other Revenue is generated primarily from the sale of on-premise devices and end-point devices, including Ooma AirDial, and from installation services, equipment rentals, and professional services. To a lesser extent, revenue is also generated from porting fees that enable customers to transfer their existing phone numbers. The Company recognizes revenue from product sales to direct end-customers and channel partners at the point-in-time that control is transferred. Revenue from installation services and professional services is recognized as the services are performed, while rental revenue is recognized ratably over the rental period.

Revenue disaggregated by revenue source consisted of the following (in thousands):

The Company derived approximately 70% and 62% of its total revenue from Ooma Business, and approximately 28% and 35% from Ooma Residential, for the three months ended April 30, 2026 and 2025, respectively. No individual country outside of the United States, andno single customer, represented 10% or more of total revenue for the periods presented.

Customers who represented 10% or more of net accounts receivable were as follows:

Deferred Revenue primarily consists of billings or payments received in advance of meeting revenue recognition criteria. Deferred services revenue is recognized on a ratable basis over the term of the contract as the services are provided.

During the three months ended April 30, 2026, the Company recognized revenue of approximately $11.9 million pertaining to amounts deferred as of January 31, 2026. As of April 30, 2026, deferred revenue was primarily composed of subscription contracts invoiced during the first quarter of fiscal 2027, as well as amounts recorded during fiscal 2026 for annual contracts.

Remaining Performance Obligations. As of April 30, 2026, contract revenue that had not yet been recognized for open contracts with an original expected length of greater than one year was approximately $68.3 million. The Company expects to recognize revenue on approximately 45% of this amount over the next 12 months, with the balance to be recognized thereafter.

Note 3: Fair Value Measurements

The Company estimates and categorizes fair value by applying the following hierarchy:

Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2: Observable prices based on inputs not quoted in active markets but are corroborated by market data.

Level 3: Unobservable inputs that are supported by little or no market activity.

The Company had$17.2 million and$20.1 million in cash and cash equivalents as of April 30, 2026 and January 31, 2026, respectively.

Non-Marketable Equity Investments. As of April 30, 2026, the total amount of non-marketable equity investments in privately held companies included in other assets in the Company's condensed consolidated balance sheets was $3.3 million. This balance represents investments in preferred shares of Global Telecom Corporation (“GTC”), a privately-held technology company.

The Company’s non-marketable equity investments do not have readily determinable fair values. Under the measurement alternative election, the Company accounts for these non-marketable equity securities at cost and remeasures to fair value upon observable price changes in orderly transactions for the identical or similar investment of the same issuer or upon impairment. These investments are not eligible for the net-asset-value practical expedient from fair value measurement. The measurement alternative election is reassessed each reporting period to determine whether the non-marketable equity investments continue to be eligible for this election. The Company classifies these non-marketable equity investments as Level 3 within the fair value hierarchy.

Note 4: Balance Sheet Components

The following sections and tables provide details of selected balance sheet items (in thousands):

Inventories

Other current and non-current assets

Customer Acquisition Costs. Amortization of deferred sales commissions was $2.8 million and $2.6 million for the three months ended April 30, 2026 and 2025, respectively.

Global Telecom Corporation. In December 2018, the Company invested $1.3 million in cash in GTC in exchange for a convertible promissory note that will convert to shares of GTC stock upon the occurrence of certain future events. On March 8, 2024, GTC completed an equity financing that triggered conversion of the note; the carrying value of $2.3 million (including accrued interest) converted into 8.2 million shares of GTC preferred stock, at which point GTC ceased to be a variable interest entity. As of April 30, 2026, the Company hadno prepaid inventory deposit and no non-cancelable inventory purchase commitments to GTC. The Company recorded the fair value of GTC preferred stock of $3.3 million as of both April 30, 2026 and January 31, 2026 to other assets in the condensed consolidated balance sheets.

Accrued expenses and other current liabilities

Note 5: Acquired Intangible Assets

The gross value, accumulated amortization and carrying values of acquired intangible assets were as follows (in thousands):

Amortization expense was $3.2 million and $1.4 million for the three months ended April 30, 2026 and 2025, respectively.

At April 30, 2026, the estimated future amortization expense for intangible assets is as follows (in thousands):

Note 6: Operating Leases

The Company leases its headquarters located in Sunnyvale, California, as well as office space and data center facilities in several locations under non-cancelable operating lease agreements, with expiration dates through fiscal 2033.

Supplemental balance sheet information related to leases was as follows (in thousands):

Operating lease right-of-use assets and long-term operating lease liabilities are included on the face of the consolidated balance sheet. Short-term operating lease liabilities are presented within accrued expenses and other current liabilities.

The Company incurred total lease costs in its condensed consolidated statements of operations of $1.9 million and $1.7 million for the three months ended April 30, 2026 and 2025, respectively.

Supplemental cash flow information related to leases was as follows (in thousands):

As of April 30, 2026, maturities of operating lease liabilities were as follows (in thousands):

Note 7: Stockholders’ Equity

The Company has a stock-based compensation plan, the Amended and Restated 2015 Equity Incentive Plan (the “EIP”), pursuant to which it has granted incentive and nonstatutory stock options and restricted stock units. Additionally, the Company's Amended and Restated 2015 Employee Stock Purchase Plan (the “ESPP”) allows eligible employees to purchase shares of common stock at a discounted price through payroll deductions.

Stock Options. Stock option activity for the three months ended April 30, 2026 was as follows:

The aggregate intrinsic value of vested options exercised during the three months ended April 30, 2026 and 2025 was $0.1 million and $0.4 million, respectively. During the three months ended April 30, 2026, the Company granted 40,500 stock options with a $5.89 per share weighted average fair value. During the three months ended April 30, 2025, no stock options were granted.

Restricted Stock Units. RSU activity for thethree months ended April 30, 2026 was as follows:

Vested RSUs included shares of common stock that the Company withheld on behalf of certain employees to satisfy the minimum statutory tax withholding requirements, as defined by the Company. The Company canceled and returned these shares to the Amended and Restated 2015 Plan, which became available under the plan terms for future issuance.

Employee Stock Purchase Plan. During each of the three months ended April 30, 2026 and 2025, employees purchased 0.1 million and 0.2 million shares at a weighted-average price of $10.82 per share and $7.46 per share, respectively.

Stock Repurchase Plan. In June 2024, our board of directors authorized a common stock repurchase plan. As of April 30, 2026, our board of directors had authorized an aggregate repurchase of up to $24.0 million of common stock under this plan with no termination date. The Company repurchased in the open market 0.2 million shares and 0.2 million shares of common stock for an aggregate amount of $3.3 million and $2.2 million for the three months ended April 30, 2026 and 2025, respectively. As of April 30, 2026, the remaining authorized amount for repurchases under this plan was approximately $4.7 million.

The purchase price for shares of common stock repurchased is reflected as a reduction to common stock and additional paid-in capital.

Note 8: Stock-Based Compensation

Total stock-based compensation expense recognized in the condensed consolidated statements of operations was as follows (in thousands):

As of April 30, 2026, there was $32.7 million of unrecognized compensation expense related to unvested RSUs, stock options and stock purchase rights under the ESPP, which is expected to be recognized over a weighted-average vesting period of approximately 3.0 years.

Note 9: Income Taxes

The Company recorded an income tax provision of $0.2 million and $0.2 million during the three months ended April 30, 2026 and 2025, respectively. The income tax provision recorded in the first quarter of fiscal 2027 was primarily attributable to state income taxes that occurred during the quarter. As of April 30, 2026, the Company continued to maintain a full valuation allowance against its remaining deferred tax assets.

As of April 30, 2026, the Company had unrecognized tax benefits of approximately $11.5 million, none of which would currently affect the Company's effective tax rate if recognized due to the Company's deferred tax assets being fully offset by a valuation allowance. There wereno interest expense or penalties related to unrecognized tax benefits recorded through April 30, 2026.

A number of years may elapse before an uncertain tax position is audited and finally resolved. While it is often difficult to predict the final outcome or the timing of resolution of any particular uncertain tax position, the Company believes that its reserves for income taxes reflect the most likely outcome. The Company adjusts these reserves, as well as the related interest, in light of changing facts and circumstances. Settlement of any particular position could require the use of cash.

Note 10: Basic and Diluted Net Income (Loss) Per Share

The following table sets forth the computation of basic and diluted net income (loss) per share of common stock (in thousands, except share and per share data):

Potentially dilutive securities of approximately 0.8 million for the three months ended April 30, 2025 were excluded from the computation of diluted net loss per share as their inclusion would have been anti-dilutive. These shares included the Company’s outstanding RSUs, outstanding stock options and stock purchase rights under the ESPP at the end of the respective period.

Note 11: Commitments and Contingencies

Purchase Commitments

As of April 30, 2026 and January 31, 2026, non-cancelable inventory purchase commitments to contract manufacturers and other parties were approximately $14.9 million and $15.1 million, respectively. Additionally, the Company has a non-cancelable service agreement with a telecommunications provider pursuant to which the Company is obligated to total minimum purchase commitments of $8.0 million between March 2026 and February 2029, of which $7.5 million was outstanding as of April 30, 2026.

Legal Proceedings

In addition to the litigation matters described below, from time to time, the Company may be involved in a variety of other claims, lawsuits, investigations, and proceedings relating to contractual disputes, intellectual property rights, employment matters, regulatory compliance matters, and other litigation matters relating to various claims that arise in the normal course of business. Defending such proceedings is costly and can impose a significant burden on management and employees. The Company may receive unfavorable preliminary or interim rulings in the course of litigation, and there can be no assurances that favorable final outcomes will be obtained.

The Company determines whether an estimated loss from a contingency should be accrued by assessing whether a loss is deemed probable and can be reasonably estimated. The Company assesses its potential liability by analyzing specific litigation and regulatory matters using reasonably available information. The Company develops its views on estimated losses in consultation with inside and outside counsel, which involves a subjective analysis of potential results and outcomes, assuming various combinations of appropriate litigation and settlement strategies. Legal fees are expensed in the period in which they are incurred. As of April 30, 2026, the Company had immaterial liabilities recorded for loss contingencies in its consolidated financial statements.

Canadian Litigation

On February 3, 2021, plaintiff Fiona Chiu filed a class action complaint against the Company and Ooma Canada Inc. in the Federal Court of Canada, alleging violations of Canada’s Trademarks Act and Competition Act. The complaint seeks monetary and other damages and/or injunctive relief enjoining the Company from describing and marketing its Basic Home Phone using the word “free” or otherwise representing that it is free. On November 9, 2021, the Federal Court of Canada removed Ms. Chiu and substituted John Zanin as the new plaintiff in the proceeding. In connection with the substitution of Mr. Zanin as the new plaintiff, the Federal Court of Canada deemed the proceeding as having commenced on November 8, 2021 instead of February 3, 2021. In January 2022, the Federal Court of Canada heard arguments from counsel representing each of the Company and Mr. Zanin regarding jurisdiction and class action certification issues. In January 2025, the Federal Court of Canada ruled in favor of the Company by denying class action certification and compelling individual arbitration in California and on May 19, 2026, the Federal Court of Appeal of Canada upheld the Federal Court of Canada’s ruling in favor of the Company. Plaintiff’s counsel had filed a related complaint in California seeking a declaratory judgment that the arbitration agreement in the Company’s terms of services is invalid and unenforceable and such complaint was stayed on June 5, 2025 pending the resolution of the Canadian appeal (the “Stay”). Plaintiff’s counsel may appeal the Federal Court of Appeal of Canada’s ruling and/or file a motion to lift the Stay in California court. The Company intends to continue to defend itself vigorously against these complaints. Based on the Company’s current knowledge, the Company has determined that the amount of any reasonably possible loss resulting from these matters is not estimable.

Bachhuber Litigation

On September 3, 2025, plaintiff Kevin Bachhuber filed a putative class action complaint against the Company in the U.S. District Court for the Northern District of California, alleging violations of the Telephone Consumer Protection Act of 1991 or (“TCPA"). On February 6, 2026, the Company and plaintiff settled the complaint for an immaterial amount, and the complaint was voluntarily dismissed with prejudice on February 12, 2026.

Indemnification

The Company enters into standard indemnification arrangements in the ordinary course of business. Pursuant to these arrangements, the Company indemnifies, holds harmless and agrees to reimburse the indemnified parties for certain losses suffered or incurred by the indemnified party. In some cases, the term of these indemnification agreements is perpetual. The maximum potential amount of future payments the Company could be required to make under these agreements is not determinable because it involves claims that may be made against the Company in the future but have not yet been made.

The Company has entered into indemnification agreements with its directors and officers that may require the Company to indemnify its directors and officers against liabilities that may arise by reason of their status or service as directors or officers, other than liabilities arising from willful misconduct of the individual. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is unlimited; however, the Company has director and officer insurance coverage that reduces the Company’s exposure and enables the Company to recover a portion of any future amounts paid. To date the Company has not incurred costs to defend lawsuits or settle claims related to these indemnification agreements. No liability associated with such indemnifications has been recorded to date.

Note 12: Financing Arrangements

Revolving Credit Facility

The Company maintains a credit agreement with Citizens Bank, N.A., as amended through December 2025 (the "Credit Agreement"). The Credit Agreement has a five-year term 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 December 2025, the Company borrowed $65.0 million under the Credit Agreement as a term loan maturing on December 1, 2030 and used the proceeds to finance the Company’s acquisitions of FluentStream and Phone.com (see Note 13: Business Acquisitions). During the three months ended April 30, 2026, the Company prepaid $5.0 million of its term loan borrowings, reducing the outstanding term loan balance to $53.5 million as of April 30, 2026.

Borrowings under the Credit Agreement would bear interest, at the Company’s option for revolving loans, at either (i) the Alternate Base Rate plus the Applicable Margin (as defined in the Credit Agreement), or (ii) Term Secured Overnight Financing Rate ("SOFR") plus the Applicable Margin (as defined in the Credit Agreement). The applicable margin under the Credit Agreement is 1.25% for Alternate Base Rate loans and 2.00% for SOFR loans under the Revolving Facility, and 2.50% for Term Loans. The Alternate Base Rate is the highest of (a) the Agent’s prime rate, (b) the federal funds effective rate plus 0.50% per annum, and (c) the Daily SOFR rate plus 1.00% per annum, with a minimum floor of zero. “Term SOFR” is a forward-looking rate published by CME Group Benchmark Administration Limited plus a 0.10% adjustment, subject to a floor of zero. Upon the occurrence of an event of default, the interest rate on outstanding borrowings increases by 5.00% per annum. The Company is required to pay a commitment fee on the unused portion of the secured revolving credit facility of 0.35% per annum.

The Credit Agreement includes customary covenants, including financial covenants requiring the Company to maintain specified leverage and fixed-charge coverage ratios, as well as minimum liquidity levels. The Credit Agreement also contains customary events of default.

In connection with the Credit Agreement, the Company incurred debt issuance costs and lender fees associated with the Credit Agreement of $0.6 million which was recorded as a debt discount. The debt discount is amortized in interest expense using the straight-line method over the amended term of the Credit Agreement.

As of April 30, 2026, the carrying value of the Term Loan, net of unamortized debt discount and issuance costs, was $52.9 million, at the effective interest rate of 6.3%. Accordingly, $10.0 million of borrowing capacity is available for the purposes permitted by the Credit Agreement. As of April 30, 2026, the Company was in compliance with the covenants contained in the Credit Agreement.

The contractual future principal payments for all borrowings as of April 30, 2026 were as follows (in thousands):

Note 13: Business Acquisition

FluentStream Corp.

On December 1, 2025, the Company acquired all outstanding stock of FluentStream, a provider of cloud communications/ unified-communications-as-a-service (“UCaaS”) solutions for small and medium-sized organizations, for total gross cash consideration of approximately $50.5 million, subject to cash acquired and customary working capital adjustments. The Company’s payment of the purchase price was not subject to any contingency requirements.

During first fiscal quarter of fiscal 2027, the Company received $0.4 million from the seller which is recorded in investing activities in the Company’s condensed consolidated statements of cash flows.

The following table summarizes the final purchase price allocation, as adjusted (in thousands):

The following table sets forth the components of identifiable intangible assets acquired and their estimated useful lives as of the date of acquisition (in thousands):

Customer relationships represent the estimated fair values of the underlying relationships with FluentStream’s customer base.

Phone.Com, Inc.

On December 29, 2025, the Company acquired all outstanding stock of Phone.com, a provider of UCaaS solutions for small and medium-sized organizations, for total gross cash consideration of approximately $22.7 million, subject to cash acquired and customary working capital adjustments. The Company’s payment of the purchase price was not subject to any contingency requirements. The Company is required to withhold $1.0 million of the purchase price to fund holdback amounts for the purposes of providing security for any indemnification and other obligations and any purchase price adjustment in accordance with the acquisition agreement. The holdback amounts are not held in escrow, and as of January 31, 2026, $0.6 million were recorded as accrued expenses and other current liabilities and $0.4 million were recorded as other liabilities in the condensed consolidated balance sheets.

The following table summarizes the final purchase price allocation, as adjusted (in thousands):

The following table sets forth the components of identifiable intangible assets acquired and their estimated useful lives as of the date of acquisition (in thousands):

Customer relationships represent the estimated fair values of the underlying relationships with Phone.com’s customer base.

Note 14: Segment Information

The Company has asingle reportable segment. The CODM uses consolidated net income (loss) for purposes of allocating resources and evaluating financial performance, including monitoring actual results versus historical periods. Adjusted cost of revenue, adjusted sales and marketing, adjusted research and development and adjusted general and administrative expenses are considered significant segment expenses that are regularly provided to the CODM and included within consolidated net income (loss). The measure of segment assets is the total assets on the Company’s consolidated balance sheets. Capital expenditures are reported on a consolidated basis on the Company’s consolidated statements of cash flows. The following tables include the Company's segment revenue, significant segment expenses, and other segment items to reconcile to net income (loss) (in thousands):

(1) Amounts exclude other segment expenses as follows: