OOMA INC
For the period ended Jul 31, 2026. Filed Sep 4, 2026.
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.
Jul 31, 2026 · Filed Sep 4, 2026
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 2026-04-30; filed 2026-06-05.
0001327688-26-000014
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-07-31; filed 2026-09-04.
0001327688-26-000020
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 81 previous paragraphs and 89 current paragraphs.
46 unchanged; 35 reworded; 6 added; 0 removed; 0 previous and 2 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 (6)
Current report
Subscription and services revenue increased $28.8 million or 24% year-over-year,primarily attributable to the contributions of FluentStream and Phone.com, continued expansion in AirDial revenue, and organic growth, including increased sales of Ooma Office and Ooma Enterprise services.
Current report
Product and other revenue increased $4.2 million or 42% year-over-year, primarily attributable to an increase in AirDial and Telo shipments.
Current report
Subscription and services gross margin was 70% as of July 31, 2026, consistent year-over-year. Cost of subscription and services revenue increased $8.0 million year-over-year, primarily due to a $4.2 million increase in personnel-related costs, a $2.3 million increase in infrastructure costs, a $0.7 million increase in intangible amortization, and a $0.6 million increase in banking fees.
Current report
Sales and marketing expenses increased $3.3 million or 17% year-over-year, primarily due to a $1.2 million increase in commissions due to growth in Ooma Office users and AirDial revenue, a $1.3 million increase in amortization of intangible assets and a $1.0 million increase in personnel-related costs attributable to our acquisitions of FluentStream and Phone.com, and a $0.2 million increase in license fees, partially offset by a $0.4 million decrease in advertising and marketing expense.
Current report
Research and development expenses increased $5.6 million or 22% year-over-year, primarily due to a $4.6 million increase in personnel-related costs, a $0.6 million increase in license fees relating to our AI innovation activities, and a $0.4 million increase in restructuring costs.
Current report
General and administrative expenses increased $3.2 million or 20% year-over-year, primarily due to a $2.6 million increase in personnel-related costs, a $0.2 million increase in license fees, and a $0.2 million increase in restructuring costs.
Reworded paragraphs (35)
Previous wording
We refer to Ooma Office, Ooma Enterprise, Ooma AirDial, 2600Hz, FluentStream, Phone.com, and OnSIP collectively as Ooma Business. Ooma Residential includes Ooma Telo basic and premier services, as well as Ooma Telo LTE services.
Current wording
We refer to Ooma Office, Ooma Enterprise, Ooma AirDial, 2600Hz, FluentStream, Phone.com, and OnSIP collectively as Ooma Business. Ooma Residential includes Ooma Telo basic and premier services, MyPhone, StarDial as well as Ooma Telo LTE services.
Previous wording
First Quarter Fiscal 2026 Financial Performance
Current wording
Second Quarter Fiscal 2027 Financial Performance
Previous wording
Total revenue was $81.1 million, up 25% year-over-year, primarily driven by the growth of Ooma Business and contributions of FluentStream and Phone.com. In December 2025, we completed the acquisitions of FluentStream and Phone.com, which contributed $11.2 million in revenue in the aggregate for the first quarter of fiscal 2027.
Current wording
Total revenue was $83.2 million, up 25% year-over-year, primarily driven by the growth of Ooma Business and contributions of FluentStream and Phone.com, which were both acquired in December 2025. FluentStream and Phone.com contributed $22.4 million in revenue in the aggregate for the first half of fiscal 2027.
Previous wording
Total gross margin was 62%, consistent with the prior year quarter.
Current wording
Total gross margin was 61%, consistent with the prior year quarter.
Previous wording
GAAP net income was $2.6 million, compared to net loss of $0.1 million in the prior year quarter reflecting continued improvement in our operations.
Current wording
GAAP net income was $3.0 million, compared to net income of $1.3 million in the prior year quarter reflecting continued improvement in our operations.
Previous wording
Adjusted EBITDA was $11.8 million, compared to $6.7 million in the prior year quarter.
Current wording
Adjusted EBITDA was $12.4 million, compared to $7.2 million in the prior year quarter.
Previous wording
As of April 30, 2026, we had total cash and cash equivalents of $17.2 million, compared to $20.1 million as of January 31, 2026, decrease primarily driven by prepayments of term loan borrowings.
Current wording
As of July 31, 2026, we had total cash and cash equivalents of $17.5 million, compared to $20.1 million as of January 31, 2026, with the change primarily attributable to prepayments of term loan borrowings.
Previous wording
As of April 30, 2026, we had $52.9 million outstanding debt, net of unamortized issuance costs. We had no outstanding debt as of April 30, 2025.
Current wording
As of July 31, 2026, we had $46.5 million outstanding debt, net of unamortized issuance costs. We had no outstanding debt as of July 31, 2025.
Previous wording
Core Users increased year-over-year, which was primarily driven by growth in Ooma Business users, including the addition of 165,000 core users associated with our FluentStream and Phone.com offerings. As of April 30, 2026, Ooma Business users comprised approximately 49% of our total core users, up from 41% as of April 30, 2025. 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 increased year-over-year, which was primarily driven by growth in Ooma Business users, including core users from FluentStream and Phone.com. As of July 31, 2026, Ooma Business users comprised approximately 49% of our total core users, up from 41% as of July 31, 2025. 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
Net Dollar Subscription Retention Rate (“NDRR”) was flat year-over-year. We believe that our net dollar subscription retention rate provides insight into our ability to retain and grow our subscription and services revenue and is an indicator of the long-term value of our customer relationships and the stability of our revenue base.
Current wording
Net Dollar Subscription Retention Rate (“NDRR”) decreased year-over-year. We believe that our net dollar subscription retention rate provides insight into our ability to retain and grow our subscription and services revenue and is an indicator of the long-term value of our customer relationships and the stability of our revenue base.
Previous wording
Because of these limitations, Adjusted EBITDA should be considered alongside other financial performance measures, including net income (loss) and our other GAAP results.
Current wording
Because of these limitations, Adjusted EBITDA should be considered alongside other financial performance measures, including net income and our other GAAP results.
Previous wording
The following table provides a reconciliation of GAAP net income (loss) to Adjusted EBITDA, for each of the periods indicated below (in thousands):
Current wording
The following table provides a reconciliation of GAAP net income to Adjusted EBITDA, for each of the periods indicated below (in thousands):
Previous wording
Product and other revenue consists primarily of sales sale of our on-premise devices and end-point devices, including Ooma AirDial, and from installation services, equipment rentals, and professional services.
Current wording
Product and other revenue consists primarily of sales of our on-premise devices and end-point devices, including Ooma AirDial, and from installation services, equipment rentals, and professional services.
Previous wording
In February 2026, the U.S. Supreme Court issued a ruling invalidating certain tariffs previously imposed under the International Emergency Economic Powers Act (“IEEPA”). As a result of this ruling, we may be eligible for a refund of tariffs previously paid on imported goods. As the recoverability and timing of any such refund remains uncertain, we have not recorded a benefit for any potential refund and will not until such amounts are realizable. We will continue to monitor these developments and their potential impact on our results of operations.
Current wording
In February 2026, the U.S. Supreme Court issued a ruling invalidating certain tariffs previously imposed under the International Emergency Economic Powers Act ("IEEPA"). As a result of this ruling, we are eligible for a refund of tariffs previously paid on imported goods. During the three months ended July 31, 2026, we received refunds of $0.3 million of previously paid tariffs, which were recorded as a reduction of product costs. As the recoverability and timing of any further refunds remain uncertain, we have not recorded a benefit for any additional potential refunds and will not do so until such amounts are realizable. We will continue to monitor these developments and their potential impact on our results of operations.
Previous wording
Comparison of the three months ended April 30, 2026 and 2025(dollars in tables are in thousands):
Current wording
Comparison of the three and six months ended July 31, 2026 and 2025(dollars in tables are in thousands):
Previous wording
We derived approximately 70% and 62% of our total revenue from Ooma Business and approximately 28% and 35% from Ooma Residential for the three months ended April 30, 2026 and 2025, respectively.
Current wording
We derived approximately 70% and 63% of our total revenue from Ooma Business and approximately 28% and 35% from Ooma Residential for the three months ended July 31, 2026 and 2025, respectively.
Previous wording
Subscription and services revenue increased $14.3 million or 24% year-over-year, primarily attributable to the contribution of FluentStream and Phone.com offerings, continued growth in AirDial lines, and organic growth, including increased sales of Ooma Office services, which resulted in an increase in our average revenue per core user.
Current wording
Subscription and services revenue increased $14.4 million or 24% year-over-year, primarily attributable to the contributions of FluentStream and Phone.com, continued expansion of AirDial revenue, and organic growth, including increased sales of Ooma Office services, which resulted in an increase in our average revenue per core user.
Previous wording
Product and other revenue increased $1.8 million or 37% year-over-year, primarily attributable to an increase in AirDial shipments.
Current wording
Product and other revenue increased $2.4 million or 46% year-over-year, primarily attributable to an increase in AirDial and Telo shipments.
Previous wording
Subscription and services gross margin of 71% increased year-over-year from 70%. Cost of subscription and services revenue increased $3.8 million or 21% year-over-year, primarily due to a $2.1 million increase in personnel-related costs, a $0.8 million increase in infrastructure costs, a $0.3 million increase in banking fees, and a $0.3 million increase in intangible amortization, partially offset by a $0.2 million decrease in regulatory fees. Overall, the increase in the cost of subscription and services in part reflects the growth of Ooma Business and the additional costs resulting from sales of FluentStream and Phone.com offerings.
Current wording
Subscription and services gross margin was 70% as of July 31, 2026, consistent with the prior year quarter. Cost of subscription and services revenue increased $4.2 million or 23% year-over-year, primarily due to a $2.1 million increase in personnel-related costs, a $1.4 million increase in infrastructure costs, a $0.3 million increase in banking fees, and a $0.3 million increase in amortization of intangible assets. Overall, the increase in the cost of subscription and services in part reflects the growth of Ooma Business and the additional costs resulting from sales of FluentStream and Phone.com offerings.
Previous wording
Product and other revenue gross margin improved to negative 32% from negative 42% in the prior year period. The improvement in product margin was primarily due to a more favorable sales mix toward higher margin products such as AirDial.
Current wording
Product and other revenue gross margin improved to negative 28% from negative 45% in the prior year period. The improvement in product margin was primarily due to the tariff refunds related to IEEPA ruling received in fiscal 2027.
Previous wording
Research and development expenses increased $2.6 million or 21% year-over-year, primarily due to a $2.2 million increase in personnel and contractor-related costs, a $0.3 million increase in license fees, and a $0.1 million increase in restructuring costs.
Current wording
Research and development expenses increased $3.0 million or 24% year-over-year, primarily due to a $2.4 million increase in personnel and contractor-related costs, a $0.4 million increase in license fees relating to our AI innovation activities, and a $0.4 million increase in restructuring costs, partially offset by a $0.3 million decrease in software costs.
Previous wording
General and administrative expenses increased $1.8 million or 22% year-over-year, primarily due to a $1.3 million increase in personnel-related costs related to increased headcount from recent acquisitions and a $0.2 million increase in restructuring costs.
Current wording
General and administrative expenses increased $1.4 million or 18% year-over-year, primarily due to a $1.1 million increase in personnel-related costs related to increased headcount from our FluentStream and Phone.com acquisitions, and a $0.3 million increase in supplies and equipment costs.
Previous wording
Sales and marketing expenses increased $2.5 million or 13% year-over-year, primarily due to a $1.1 million increase in commissions due to growth in AirDial lines and sales of FluentStream and Phone.com offerings, a $1.4 million increase in amortization of intangible assets attributable to recent acquisitions, and a $0.4 million increase in personnel-related costs, partially offset by a $0.8 million decrease in advertising and marketing expense.
Current wording
Sales and marketing expenses increased $5.8 million or 15% year-over-year, primarily due to a $2.7 million increase in amortization of intangible assets and a $1.4 million increase in personnel-related costs attributable to our acquisitions of FluentStream and Phone.com, a $2.3 million increase in commissions expense, and a $0.3 million increase in license fees, partially offset by a $1.1 million decrease in advertising and marketing expense.
Previous wording
As of April 30, 2026, we had $17.2 million of total cash and cash equivalents and borrowing capacity of $10.0 million under our Credit Agreement, 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, the repayment of outstanding indebtedness, and other factors. We may in the future make investments in or acquisitions of businesses or technologies, which may require the use of cash. We may seek to raise additional funds at any time through equity or debt financings. If we are unable to raise additional capital when desired and at reasonable rates, our business, results of operations, and financial condition would be adversely affected.
Current wording
As of July 31, 2026, we had $17.5 million of total cash and cash equivalents and borrowing capacity of $10.0 million under our Credit Agreement, 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, the repayment of outstanding indebtedness, and other factors. We may in the future make investments in or acquisitions of businesses or technologies, which may require the use of cash. We may seek to raise additional funds at any time through equity or debt financings. If we are unable to raise additional capital when desired and at reasonable rates, our business, results of operations, and financial condition would be adversely affected.
Previous wording
For the three months ended April 30, 2026, our net income of $2.6 million included non-cash items of $8.7 million primarily related to stock-based compensation, operating lease expense, and depreciation and amortization expense. Operating asset and liability changes for the three months ended April 30, 2026 included:
Current wording
For the six months ended July 31, 2026, our net income of $5.6 million included non-cash items of $17.6 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, 2026 included:
Previous wording
an increase of $0.5 million in accounts receivable due to the timing of customer cash collections;
Current wording
a decrease of $0.5 million in accounts receivable due to the timing of customer cash collections;
Previous wording
an increase of $1.8 million in inventories and deferred inventory costs, driven by the timing of inventory receipts;
Current wording
an increase of $5.2 million in inventories and deferred inventory costs, driven by the timing of inventory receipts as sales of Telo and Airdial increase;
Previous wording
an increase of $2.2 million in prepaid expenses and other current and non-current assets, driven by the timing of payments for prepaid expenses;
Current wording
an increase of $2.5 million in prepaid expenses and other current and non-current assets, driven by the timing of payments for prepaid expenses;
Previous wording
a net increase of $0.3 million in accounts payable, accrued expenses and other liabilities due to the timing of payments; and
Current wording
a net increase of $3.2 million in accounts payable, accrued expenses and other liabilities due to the timing of payments and our acquisitions of FluentStream and Phone.com; and
Previous wording
a decrease of $0.7 million in deferred revenue.
Current wording
a decrease of $0.3 million in deferred revenue.
Previous wording
Cash provided by operating activities for the three months ended April 30, 2026 increased $2.7 million year-over-year, which primarily reflected working capital impacts resulting from the timing of payments. Although we have generated cash from operations, 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 six months ended July 31, 2026 increased $9.4 million year-over-year, which primarily reflected working capital impacts resulting from the timing of payments. Although we have generated cash from operations, 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 three months ended April 30, 2026, cash used in investing activities was $1.1 million, which consisted primarily of capital expenditures of $1.5 million, offset by $0.4 million cash received from working capital adjustment related to the FluentStream acquisition. Cash used in investing activities decreased $0.1 million compared to the prior year period, driven by the $0.4 million working capital adjustment received, partially offset by higher capital expenditures.
Current wording
For the six months ended July 31, 2026, cash used in investing activities was $3.3 million, which consisted primarily of capital expenditures of $3.7 million, offset by $0.4 million cash received from a working capital adjustment related to the FluentStream acquisition. Cash used in investing activities increased $0.8 million compared to the prior year period, driven by higher capital expenditures.
Previous wording
For the three months ended April 30, 2026, cash used in financing activities was $8.3 million, which consisted of payments of $1.4 million related to shares repurchased for tax withholdings on vesting of RSUs, and payments of $3.3 million under our stock repurchase plan, and debt prepayments of $5.0 million, partially offset by proceeds of $1.4 million from the issuance of common stock from our ESPP and stock option exercises. Cash used in financing activities increased $6.9 million year-over-year, which primarily reflected prepayments of term loan borrowings under our Credit Agreement (as defined below) during the three months ended April 30, 2026, which did not occur in the three months ended April 30, 2025.
Current wording
For the six months ended July 31, 2026, cash used in financing activities was $18.8 million, which consisted of payments of $3.3 million related to shares repurchased for tax withholdings upon vesting of RSUs, payments of $5.7 million under our stock repurchase plan, and debt prepayments of $11.5 million, partially offset by proceeds of $1.7 million from the issuance of common stock from our ESPP and stock option exercises. Cash used in financing activities increased $12.9 million year-over-year, which primarily reflected prepayments of term loan borrowings under our Credit Agreement (as defined below) during the six months ended July 31, 2026, which did not occur in the six months ended July 31, 2025.
Previous wording
We maintain 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, we borrowed $65.0 million as a term loan maturing on December 1, 2030. We used the proceeds of the term loan to finance the FluentStream and Phone.com acquisitions (see Note 13: Business Acquisition). As of April 30, 2026, we had a $52.9 million term loan balance, net of unamortized debt discount and issuance costs, no borrowings under the revolving credit facility under the Credit Agreement, and were in compliance with all loan covenants.
Current wording
We maintain 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, we borrowed $65.0 million as a term loan maturing on December 1, 2030. We used the proceeds of the term loan to finance the FluentStream and Phone.com acquisitions (see Note 13: Business Acquisition). As of July 31, 2026, we had a $46.5 million term loan balance, net of unamortized debt discount and issuance costs, no borrowings under the revolving credit facility under the Credit Agreement, and were in compliance with all loan covenants.
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, 2026 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 2026 Annual Report in the first quarter of fiscal 2027.
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, 2026 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 2026 Annual Report in the first half of fiscal 2027.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
We derived approximately 70% and 63% of our total revenue from Ooma Business and approximately 28% and 35% from Ooma Residential for the six months ended July 31, 2026 and 2025, respectively.
Current report — wording carried from elsewhere
Product and other revenue gross margin improved to negative 25% from negative 47% in the prior year period. The improvement in product margin was primarily due to $0.3 million in tariff refunds related to IEEPA ruling received in three months ended July 31, 2026.