Executive Summary
Ooma delivered a solid QQ4 2025 performance with revenue of $65.1 million and non-GAAP net income of $5.8 million, marking a meaningful step up in profitability vs prior quarters. For FY2025, the company posted revenue of $256.9 million (up 8% YoY) and non-GAAP net income of $18.0 million (up 17% YoY), accompanied by over $20 million of free cash flow and $8.9 million spent on stock repurchases. Management highlighted momentum across four growth pillars: cloud communications for SMBs, POTS replacement (business and residential), wholesale platform services via 2600Hz, and residential telephony. The Q4 results reflected ongoing mix shifts toward higher-value Office Pro/ProPlus offerings (60% of new Office users), a 4% YoY increase in blended ARPU to $15.26, and a 98% net dollar subscription retention rate, underscoring recurring revenue durability despite seasonality and an expected churn headwind from a large customer (IWG).
Key Performance Indicators
QoQ: -106.00% | YoY:92.00%
Key Insights
Revenue and profitability metrics (Q4 2025): Revenue $65.1m; Gross profit $39.93m; gross margin 61.34%; Operating income -$0.32m; EBITDA $2.98m; Non-GAAP net income $5.8m; Non-GAAP EPS -$0.0096. YoY comparisons (full year FY2025): Revenue +8%; Gross margin stable at 63% with a higher product mix; Non-GAAP net income +17%; Free cash flow $20.2m; Operating cash flow $26.6m; Free cash flow yield improved. Balance sheet: cash $17.87m; total assets $149.20m; total liabilities $63.92m; total stockhold...
Financial Highlights
Revenue and profitability metrics (Q4 2025): Revenue $65.1m; Gross profit $39.93m; gross margin 61.34%; Operating income -$0.32m; EBITDA $2.98m; Non-GAAP net income $5.8m; Non-GAAP EPS -$0.0096. YoY comparisons (full year FY2025): Revenue +8%; Gross margin stable at 63% with a higher product mix; Non-GAAP net income +17%; Free cash flow $20.2m; Operating cash flow $26.6m; Free cash flow yield improved. Balance sheet: cash $17.87m; total assets $149.20m; total liabilities $63.92m; total stockholders’ equity $85.28m; net debt negative $1.92m. Cash flow: Net cash provided by operating activities Q4 $7.84m; capital expenditures $1.70m; free cash flow $6.15m. Guidance (FY2026): Q1 revenue $64.7–$65.1m; Q1 non-GAAP net income $5.1–$5.4m; Q1 non-GAAP diluted EPS $0.18–$0.19; Full year revenue $267–$270m; non-GAAP net income $22–$23.5m; Adjusted EBITDA $27.5–$29m; non-GAAP diluted EPS $0.77–$0.82; mix: 91–92% subscription and services; Residential revenue decline 1–2%.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
65.10M |
5.55% |
-0.05% |
| Gross Profit |
39.93M |
10.11% |
1.69% |
| Operating Income |
-321.00K |
83.15% |
85.96% |
| Net Income |
-261.00K |
91.48% |
88.96% |
| EPS |
-0.01 |
92.00% |
-106.00% |
Key Financial Ratios
operatingProfitMargin
-0.49%
operatingCashFlowPerShare
$0.29
freeCashFlowPerShare
$0.23
priceEarningsRatio
-372.98
Management Commentary
Management themes from the QQ4 2025 earnings call: Growth is being pursued across four segments (SMB cloud communications, POTS replacement, wholesale via 2600Hz, and residential telephony). Eric Stang emphasized ongoing expansion through channel agents and resale partners, including AirDial in partnerships with Marriott and a planned quarterly onboarding of resellers in FY2026. Shig Hamamatsu highlighted that Q4 revenue was at the high end of guidance and that FY25 demonstrated strong operating cash flow and record quarterly adjusted EBITDA, with R&D operating leverage contributing to non-GAAP profitability. He also framed FY26 guidance around margin expansion and leverage, noting churn from IWG as a caveat to near-term visibility, and the gradual ramp of AirDial with new partners. Representative quotes: – Eric Stang: “For Q4 FY'25, we achieved $65.1 million of revenue and $5.8 million of non-GAAP net income.” – Eric Stang: “Our plan for FY'26 is to continue to execute our POTS replacement growth strategy by introducing improved and lower cost product solutions for both business and residential, and by expanding sales activities across all three routes to market.” – Shig Hamamatsu: “We expect total revenue for the first quarter of fiscal 2026 to be in the range of $64.7 million to $65.1 million, which includes $4.4 million to $4.6 million of product revenue.”
For Q4 FY'25, we achieved $65.1 million of revenue and $5.8 million of non-GAAP net income.
— Eric Stang
Our plan for FY'26 is to continue to execute our POTS replacement growth strategy by introducing improved and lower cost product solutions for both business and residential, and by expanding sales activities across all three routes to market.
— Eric Stang
Forward Guidance
Outlook and factors to watch: Ooma projects 5–6% growth in business subscription and services revenue in FY2026 with residential subscription revenue down 1–2%, implying continued focus on high-growth SMB and wholesale channels. Revenue mix remains heavily skewed toward subscriptions (91–92%), supporting visibility and cash conversion. Management expects non-GAAP net income to rise to $22–$23.5 million and adjusted EBITDA to $27.5–$29 million, implying an EBITDA margin approaching 11% for FY2026 vs 9% in FY2025. Key confidence drivers include a durable SMB cloud opportunity, acceleration potential from AirDial with large partners (Marriott, a major cable provider, and others), and monetization opportunities from the 2600Hz platform. Risks include churn pressure from IWG in Q1, the pace and timing of AirDial revenue ramp with new partners, and execution risk in onboarding and scaling resale channels. Investors should monitor: partner signings and ramp velocity, AirDial uptake across hospitality and enterprise segments, 2600Hz monetization trajectories (new customers and platform add-ons), and macro softness that could impact SMB spend. Overall, the outlook remains constructive with a clear path to higher profitability as operating leverage in R&D and go-to-market investments materialize.