Ooma reported Q1 FY2026 revenue of $65.0 million, up 4% year over year, with non-GAAP net income of $5.6 million and adjusted EBITDA of $6.7 million, surpassing the high end of guidance. The quarterly performance reflects solid progress across Ooma’s four market segments, highlighted by Airdial momentum and expanding Enterprise and Office deployments, even as a scheduled rightsizing episode with Regus moderated near-term growth. Management emphasized that the Airdial resale program with Comcast launched on schedule and that Marriott properties are now in a sales pipeline exceeding 100 properties, signaling meaningful ramp potential in hospitality and POTS replacement offerings.
Key profitability dynamics improved modestly versus the prior year: total gross margin remained 63% with subscription gross margin at 72%, while product and other gross margins improved to negative 41% from negative 67% a year earlier — a reflection of previously embedded pandemic-related cost components that have since been largely absorbed. Operating expenses were contained, with R&D at 17% of revenue, and S&M at 28% of revenue. Net income declined on a GAAP basis but the company remains focused on high-ROI investments in Airdial, 2600 Hertz, and ongoing Office/Enterprise enhancements to accelerate profitable growth.
The management outlook balances continued near-term profitability with growth investments. For Q2, revenue is guided to $65.5–$66.1 million, with non-GAAP net income of $5.6–$5.9 million and non-GAAP diluted EPS of $0.20–$0.21. Full-year FY2026 targets imply roughly $267–270 million in revenue, low-to-mid single-digit subscription revenue growth alongside a modest decline in residential revenue, and annual non-GAAP net income of $22.5–$23.5 million, with adjusted EBITDA of $28–$29 million and EPS of roughly $0.79–$0.83. Tariff impact is expected to be about $0.5 million in FY2026. Investors should monitor Airdial adoption cadence (especially large carrier engagements), Marriott hospitality momentum, and the integration trajectory of 2600 Hertz as potential accelerants to revenue and margin expansion.