OOMA - Earnings call transcript Q2 2025

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Operator

Thank you for standing by, and welcome to Ooma's Second Quarter Fiscal Year 2025 Financial Results Conference Call. [Operator Instructions] I would now like to hand the call over to Matt Robison in Investor Relations. Please go ahead.

Matthew Robison

Thank you, Latif. Good day, everyone, and welcome to the Fiscal Second Quarter 2025 Earnings Call of Ooma, Inc. Robison, of Matt Development. and is name Ooma's IR Director Corporate My

be Ooma second the are This website, Hamamatsu. After CFO, today, today with release the its CEO, closed On on me ooma.com. and is link is Investor and will Ooma's Events of the for also on call the Relations press XXXX This being of quarter active Presentations earnings live website. is Eric available and this X webcast call Stang; market of the This issued release. fiscal company's accessible a our section call from replay year. Shig page link for

will of today's securities laws. our executives within statements the make During federal meaning the presentation, forward-looking

operating Forward-looking performance. statements relate financial future generally to events or or future

stated, non-GAAP Events financial accordance risks today, basis. matters actual be results the press in our financial substitute disclosed of date press financial non-GAAP included Exchange risks call financial a forward-looking by as otherwise website. On statements our except revenue measures and and law. Please non-GAAP directly and earnings than are on financial give non-GAAP A results differ a available discussed a a isolation intended for non-GAAP in projected. measures to the forth presentation page as call page GAAP. is Quarterly of The and beliefs considered any the section for third on and this Supplemental we with X year materialize are filing, in of to Also, our to include expenses These X-K statements Securities as Disclosure the Results or on non-GAAP be discussion will release, metrics will to in information information and we our in expectations GAAP not as measures release not to about note disclaim our those subject basis. Financial are measures filings of guidance in as X. measures Overview addition titled the this are which Information present to our on links those regarding is Presentations us the be in website, to this call, prepared the Commission. as reconciliation included and to or those in release the values Financial cause and our required and key we and website most update described hereof, results obligation Our to any and The forward-looking that full in available uncertainties other could Investors this XXXX of set These risks core the issued Financial and earlier section these in of may cost subscription of materially why from our the comparable quarter that well Supplemental Disclosure includes on fiscal press with not based page and actual more we businesses. and fully

that also reconciliation resolution metrics. that excluded non-GAAP presentation Additionally, are provides from non-GAAP our GAAP include slides investor of to GAAP expenses

Now I over to will hand Ooma's Stang. CEO, the Eric call

Eric Stang

Ooma's Thank call. us. fiscal Hi, earnings Thanks quarter Welcome you, for XXXX second everyone. year Matt. joining to

strong double QX which QX and is results ago. both close guidance outlook Both $X.X major forward were on million. year in our of $X.X year outperformed we was above was of and of We was present results we from $XX.X up achieved operations versus to with million, a new look ahead. have look QX QX goals. quarter QX to I our great income revenue net nicely you. Financially, we reviewing what and year. QX in as cash non-GAAP QX a to this QX and to as for developments and was report financial progress flow all this million,

With $X.X debt end the quarter at by our million $X of were the in to to the cash improved million flow, able QX. reduce we

stock We ahead dilution at where would also great spent of offset approximately point to It's $X.X year. this million in we grants. of our QX to we stock thought to be be fiscal vesting from repurchase financially in help

and launch acquisition other with AirDial, call customers center AirDial calls previous year. Ooma POTS marketing replacement for value customers to in are also more As comprises feature of We momentum. versus QX, offer informs Ooma higher was one our In expand more Office, to feature. Likewise, with reach XXXXhz we can engagement to to these we features POTS and customers this and solutions wholesale solution, releases, features the other UCaaS Square is our their later X the sales this which capabilities customer well safety which opportunities Ooma Office in helps replacement several service as good about small of trade vein, critical quarter. again, a Business, our any generating new a Once launch development including with of when appeal progress effectively business solutions, our in by in to and replacement the features QX our enhanced POTS customers, closed applications. to such which Ooma life our enable in made to of sales new provider performed our QX, size. customers UCaaS, We solution, tier and in more QX. Ooma Ooma sophisticated excited Alerts, differentiation integrations, than the AirDial expands our placed for and connect with of more we're the QX. roadmap investment are Office, to enable priced our Intuit Office believe larger and be this of leveraging includes up businesses release QuickBooks. The also new further Call only buoyed

AirDial prior in in added we As resellers QX. quarters, new also

Here, have news. I special some

and who XX is largest of of providers of by told exchange resell believe exciting incumbent size scope the this been new that is carrier in plan top the to partner later service AirDial have local This one they We an America. beginning this year. because we

will a large need ultimately number incumbent they of a be lines As replaced. serve POTS to vast carrier, they that today customers have with

expect to about We launch, both for and call. detail We timing on wholesale CPaaS and this including saw conference breakout expanded domestically this, able AirDial. XXXXhz, our to our for solution, is the interest win internationally. QX, developing provide believe third a more quarter in customer be

we announcement in We believe and are in by Metaswitch effect strong select we in scope platform the of platform, of the taking by of the enhancements integrating into level the and is having broaden and due and technology serve the the market the interest increasingly XXXXhz to excited are applications to customer part interest. are marketplace. We the steps the making end-of-life the all are capabilities CPaaS applications this to Ooma the XXXXhz platform leading platform opportunity, driving

As well, aging nature the competitive platforms of driving is market opportunity.

will large customers launch for to a efforts and this to this platform customer able future. of fall. Ooma upsell the recall, of XXXXhz were on that and our applications track relationship originally integrate we to the this adopt this customer than XXXXhz QX, thanks capabilities customer the to our more to more customer our announced into win largest very expand quarter, You'll envisaged. We and to we one in scope this XXXXhz chose platform. with the in solution, technology turnkey to to that are report customer last believe pleased become of a I'm I'm pleased report also

of of While of and opportunity. they It's a pipeline new fall, of this I'm are customer we expansion, significant to lot this customer drive see year positive is, pleased not also with this will but only course, we revenue difficult we anticipate back growing half to attention, and receiving out the expect our we a the report XXXXhz momentum. foresee XXXXhz the roll from to in

can sunset. cost market also are excited carrier solution replace that so. they to we Ooma selected and their launch to will about refine their Telo this replace ideal front, QX. with mentioned with residential solution local test performed one copper residential as has regard, I'm plan earlier POTS the I in opportunity, exchange increasing and resell remain be engaged this We over residential residential especially the told a starting lines Telo carrier lines. In the residential the convert to also deployment fall us this to report extremely process. We Telo, Ooma anticipate copper Telo large incumbent the local lines are Together, believe that residential actively us have to pleased time. doing start now and also the an well they On market that to business copper We in across base to

first call. and our in late to to information on rollout expect We this more expect be to we begin able our next earnings market provide QX,

that this residential is indeed potential the meaningful the to predict this don't we relative business, clear While by visibility of we is business. say the on very of our yet current our can afforded size carrier impact and large to have market

I'd it turn Ooma's more over to comment about one I strategic Before direction. Shig, to make like

We fortunate to tremendous on spent these creating solutions solutions current so, several In strategic potential. market developing invested premier in heavily have are position. with in we have doing our

results the to markets. I endeavor will as we drive also Shig, CFO, anticipate made our on increasingly reaching they remarks. are closing over to capitalize investments discuss target forward, market can our look turning more some bottom our competitive and our a and then we afford. this such, and outlook and in detail return opportunity we as we've regard, that the we advantage can to In results succeed the on As we turn capitalize in point line feel now call increased with we where we

Shigeyuki Hamamatsu

our Eric, quarter for year our you, fiscal review results full Thank second the and good going financial and provide XXXX. I'm to and quarter everyone. afternoon, then third outlook

total services the up this was by originally range above been the of million XX% of Ooma driven second end in many revenue we compared as the compared subscription and well as to XX% revenue $XX.X million solidly material and we half revenue and quarter, Also, the did the including was high of quarter. reductions at prior Business our and reductions came $X.X revenue product quarter as second in quarter. in from as anticipated during services the from offerings, to In year and guidance not we to other addition business now any of year. In subscription strength year-over-year, see prior million, QX in the have for year $X.X the Our XXXXhz. revenue QX contributions we XXXXhz. the our saw quarter, deferred second quarter, seat XX% accounted although the believe had IWG second AirDial of of fiscal better-than-expected

above On to the quarter $X.X guidance million, of our million. second income net range profitability $X.X was non-GAAP front, $X.X the million

grew the addition and and growth by details our XX% some user year-over-year in QX Business of on Now subscription services revenue. QX, XXXXhz. driven revenue

revenue XXXXhz Excluding contribution, and grew revenue X% services subscription business year-over-year.

year-over-year. X% down the residential was side, and On subscription services revenue

quarter, was the revenue subscription or XX% as compared total total in revenue of For total and $XX.X million second year revenue of services to the or million $XX.X quarter. XX% prior

our ended of or end users our increase on the business XX% of which key users from users, from quarter. users, we We Ooma end QX, had and with core details at driven quarter first the for core some an user second the X,XXX,XXX Office, XXX,XXX X,XXX,XXX of metrics. Ooma Now the the XX,XXX second is At core additions customer quarter, up total Enterprise AirDial. by of

of average users. year-over-year Pro including per in Office core blended ARPU, and ARPU Plus higher driven mix revenue increase users, monthly by subscription $XX.XX increased an Our to user, services and Pro or X% business

rate Pro users Ooma Office these higher take the to During these from have services. new Office to healthy second was higher quarter. XX% a we the services, up and which tier Pro for XX% tier office Overall, users prior subscribed now Plus quarter, in XX% continued year opting with of see of

Our recurring and X% annual was grew million exit $XXX up revenue to year-over-year.

Our the the XXX% subscription first XX% retention quarter to direct for rate as compared was quarter. net in

on some margin. Now details gross our

quarter margin compared second gross XX% in was as services and XX% year. to subscription the Our for prior the

quarter fiscal for Ooma's running a gross same last reminder, as XX% gross to quarter subscription second margin As negative the year XXXXhz is lower and the other gross the an for which to negative margin and for margin. Product subscription compared included of was gross second services year. XX% relative margin, this impact period

anticipated, X% second year. negative in As XX% other half cost range of On have we for to we an higher year start product overall we the Accordingly, was QX were second margin on in and had of to consumption operating the procured compared total gross year. margin components expect from will basis, quarter substantially as for $XX.X last pandemic gross quarter. And our or in some details XX% period in same fiscal prior the Total during quarter. up second million the the XX% normalize the million, this completed operating expenses. $X now expenses the

as the earnings The audit same the personnel of or second quarter. share quarter profitability. Research quarter period the total and quarter. We G&A X% $X.X second ended the the for were operating increases addition ago. We period compared was and $X.X of expenses team $XX.X the controlled or costs. Non-GAAP over prior to and $X.X million. and of was cash from basis, and the the record of a a quarter $XX up compared members. Cash $X.X expenses million $XX.X increased generated diluted X% total million flow was and it million. for outstanding million, XX% income year-over-year from per prior in we represented new $X.X EBITDA increase total as for due the by million second the total Sales the of last with year XX% XXXXhz respectively, down by trailing revenue the cash operating a million quarter a million XX% impact free second quarter G&A primarily $X.XX compared XX-month year at reduced $XX were of year-over-year total prior mainly a quarterly of was debt the operations year. $X.XX Adjusted expenses revenue XX% total $X.X million in expenses quarter for the $X.X $XX.X record and year-over-year in $X.X million to second quarter the a investments and in million X% driven same year the $X strong the increase quarter. net or year for we balance for to was development million, was for Excluding or for as revenue record of on related XXXXhz, to to the were our increase, company, On paid which company. expenses million of flow, for down or revenue, XXX% generated marketing basis, the debt cash spending of million to

On we X,XXX ended and the the with contractors. employees front, headcount quarter

second third quarter will XXXX. for full I provide -- guidance Now the and fiscal year

and a on such and expenses. of is nonrecurring basis has expenses guidance adjusted Our non-GAAP intangibles amortization stock-based been as compensation, for and certain gains

million, the million of of $XX.X total to revenue million be million the fiscal which to for quarter $X.X includes expect We product revenue. $X.X 'XX of third in range to $XX.X

between quarter $X.X Non-GAAP expect range income be We third to is net the EPS to in diluted of million. $X.XX. and be million to expected $X.XX $X.X

weighted XX.X quarter. for assumed have We diluted shares million outstanding average the third

services decline $XXX.X For The both XXXX, million XX% profitability fiscal expect while rate and total revenue to assumes $XXX revenue year subscription of guidance subscription XXXX of are full revenue we We XXXX, outlook. revenue raising business fiscal to growth X%. million. fiscal and revenue now over full residential approximately

from revenue. and revenue the remainder subscription XX% In products come to other for terms expect services total XX% and and year, of from to revenue we mix the of revenue

we non-GAAP Based EBITDA guidance to the on our now in fiscal $XX.X $XX million million in net $XX.X 'XX adjusted this $XX.X expect it to be income, million. As to range for be to we range, for million. of estimate

expect diluted range non-GAAP $X.XX be in for We 'XX EPS fiscal of to to $X.XX. the

back cash solid shares summary, it strategy adjusted approximately XXXX. In profitable for and Eric? on average executing We growth. I'll QX remarks. flow and our we some are achieve pass Eric closing diluted pleased EBITDA our focused to million XX.X have assumed outstanding to record with with to for now fiscal weighted remain results long-term free

Eric Stang

you business. results next customer our The been to attempt out unfold. Thank we to we forward Ooma QX with these great you be a more and X to as should as and share for to Thank interesting very talk new to our relationships, being progress It's about you, grow quarters today able our you. roll and opportunities with pleasure Shig. look expand

We will take questions. now

Operator

of Brian comes the question Partners. from of Our Global Alliance first Instructions] line [Operator Kinstlinger

Brian Kinstlinger

Just a couple.

any for install AirDial the sales one The on first enterprise updates cycle are or ones? the there pace is, customers,

Eric Stang

the Nothing about concepts and customers full they proof with talked and the the of special rollout. to their even a more portion the developing the We've needs before sometimes as of about become in how and we'd to pace market pressures and cycle more past sales sunset. But there expect, lines and But report. are all see start a larger expensive as POTS do market, we still it's the in even with no, customers. process move

of few pretty A have With it just needs most the move smaller lot often, you can month. within when quickly. a we'll customers, got we customer a lines, installed a -- that

Brian Kinstlinger

XX the you service Is them? its expect then U.S. see the sales early of residential it. impact in do next we to increase residential customers results execution will AirDial the Great. think change selling talked side? begin of on the to in Do the on customers. top might -- and you the users you to or let half provider the see me residential the And second your And about this year? How -- the sale year

Eric Stang

Yes. have carrier, their about go will they which AirDial, go have Telo, this X their incumbent lot; clarify, I a reselling us: which business talked with local Ooma which Well, with residential lot. to reselling customers, to to and all, customers, a exchange which first they're will their of things also they doing

roll can whatever pace customers to or business they they to they out of customer to year. choose ability own opportunities we're company, the move. direct move I have copper to think they And lines, trucks what mean next provider residential for But with. are they ready are working new have and these for the us manage they on over, not yet have but quite both Ooma. We at believe these will since access, I'm give guidance terrific significant they're as all switch only a for

so to market. will residential the And get as go AirDial we product mentioned, us expect for they into exciting through -- the be which X next X or it's unfold, a they particularly very side, as launched it months and that on the over trial opportunity the I

Brian Kinstlinger

follow to want up on I that.

You mentioned as they they move can as fast want.

So user opt to side on the have a the residential in? won't consumer,

Eric Stang

have give are per think, line, But do have XX-day going a your that maybe shut you decision notice, give, laws POTS These I as exist this. around make. residential some have They if they're your to and they to customer, that XX-day residential guess they a notice consumers a today. line, residential off you to that I

You come yes, can how and out don't. believe. you Telo it can say, say, they have switch in with they I handle a But over customers or their control them, and

Brian Kinstlinger

Last That's Great. for helpful. question Shig.

why wondering and by or adjusted the I reported quarter quarter quarter mix quarter to looking I I I'm XX fourth makes third that what to last this hardware looks But asked gross income of revenue more, a reported quarter was fourth Hope think net similar points down sense. coming and with the in quarter. too. with similar in margin just guess compared third the the was the guidance second and in similar what

Shigeyuki Hamamatsu

Yes, I understand.

talked part of now So it has of I anticipated QX to half say, from guidance impact with let's first IWG, is, churn about. obviously, revenue, second the the for slipped includes

is in that QX. also, $X.X million second little So the in, of there's in revenue, a the I half. And million guided I to $X.X think to product impact factored

way, AirDial. not than -- by AirDial, say in some the unrelated to QX is Some There's expect product other installations in going what that may QX. onetime we that so something revenue recur those I'm of to

also those revenue so recur in some that's versus main revenue is the Regus yes, onetime QX plus drivers. And are impacting there's not So pace this QX. impact QX QX. And

range me, excuse to at closely into in think We we we it spend, marketing, I and opportunity that invest to dollars controlled well. made we'll But channel. and marketing -- QX the the instead extent sure of sales right that in XX%. maybe the to want invest QX the the some XX% more sales look

second we're that's whole EBITDA which half, said guidance puts margin takes that, year. should there's us on at for margin for to looking some still and EBITDA EBITDA based So X% the number. But X% the put guidance to leading the having the

versus the out So coming that's to we X%, what guided of year.

better the to I going more to some So year. where improve, there we to profitability into improve was at the but we we're think work beginning do much the second guided than what to are half see we happy of can

in up of year. that the finish a think the G&A just into thing, thought, as the in half of set bit get the a heavier kind fees. seasonality other cycle audit there's so of to expense, audit get We I to little Brian, more namely we the second my build

factor impacting the other half. the OpEx higher the bit that's second a G&A So for little in

Brian Kinstlinger

you're more hardware same because Okay. That going sounds it makes sense the $X revenue. million save to on margin like exact a with split little gross of

$X it me, million, a it's explained than that other But to little by bit... So maybe that, G&A.

Shigeyuki Hamamatsu

in maybe that how that's should quarters. but probably you about model thinking I said of the one Yes, first, X factors next bigger that

Operator

the Capital Latimore Markets. from of of [indiscernible] Northland line Mike

Mike Latimore

you're Great here. a interesting big as towards look pipeline, more you pipeline launching. skewed a is the at some customer? updates on customer sort CPaaS results guess the I a or of and you XXXXhz. I wholesale nice Obviously, first model guess have

Eric Stang

towards I the it's skewed Well, more wholesale model today. think

trying for process CPaaS advances I that going into do did to of evolving type very particular on We figure get that in service to CPaaS, big strengthening today delivery. But though largely what that where provider. mind we have opportunities. And the they're start that One in chasing in is even wholesale my us. the the we're didn't talking comes we'd QX another opportunities that replacing to next. no, CPaaS out are be of some to script us for have many model what who do front with make something and that's customers Metaswitch are We is

a of we that's how both, but little bit it's it. So see

Mike Latimore

vendor? very interesting. channel that vendor guess, the business are say I into did the announcement the And Good. you you ILEC Okay. the Or it preferred is there? exclusive is

Eric Stang

take it's I it's We own to themselves. the replacement shouldn't residential for think that a -- is the And -- believe they're replacement only because solution, it's signed we're is said and this is working -- lines we vendor line new very we've we're a we POTS copper us partner believe -- also a though. a consumer we've first market replace first think it's has us. out breakout think their solution partner at time reports in up a XX who surprising, with time. in rated signed those for for residential vendor the the has going to ILEC up service go products quite been to be I who solution big us, XX solution. years. But significant country, -- #X the I in we're only Both And stand this that we turn solutions Ooma and is residential a the are AirDial I big, the similarly, doesn't top above for residential a, mean, our residential look yes, be if mean the marketplace. fact that wins capabilities phone and is the our only believe, of the like features by others. for we for And today, the could our of America into What you over

Mike Latimore

And date and will away where a their they catalyst they for of these both segments drop-dead do have a pipelines go sort have be -- here?

Eric Stang

eager to I answer think I by forward. bit saying they that differently will are move a little

Operator

from line of B. Nichols Our next question Riley. of comes Josh the

Josh Nichols

kind you for being AirDial core I'm quarter, about XXXXhz? would How the how kind half but that the curious guys think but were you the sounds bifurcate irons got in of revenue like few if fire, the you if and Good have, business top back offering on not upside to were that and between to for year. see It to the you of some a that just the upside is you the attribute driven? guidance, it line,

Eric Stang

mean of businesses Well, they're larger offering small residential whether little delivered solutions. growing. And to are is and is in dynamics it's Enterprise which business and focus different solution, a way diversified now competitive our different with across competitors aren't -- traditional X. I that's is POTS we it's of nice as in all respects, company given across our different the industry. UCaaS apart even the delivered wholesale rest And wholesale But all or our XXXXhz sets a of with our to them, position Ooma our it's and solutions And on businesses and whether replacement for of POTS solution, X and or a small our have we I hospitality Ooma core the be the all our some with are of grow face particularly X and all UCaaS. business, areas. focus Office intent hotels more well. business -- most we a market X all the on across akin those to grow X. -- the And growing think or us them replacement, It's to

smaller a off growing base. is AirDial obviously, Now

the be of customer win I just it'd today. But expect one very And this fastest now, said, we the a them front. on segments I old So almost think out fair And wholesale be ago. to rolling It's quarter funny largest, over that's fall. that's the if not largest, X one as a news be say growing we of to get not announced huge but time. they'll surprisingly, our win customers to how

to opportunities all We So combined. synergy our we've drive lot and of got great as X across are all it look A across today. those areas. kind try of teams X, business Ooma we of at

Josh Nichols

now of sequentially in for think room largely least from that margin for current expand levels there's piece that the margins Shig, the XXXXhz quarters. that do has half? piece Or actually margin again continue business, lower, complete? for you services subscription the increase gross what back seen curious, is I'm company last at to the and a is just the thoughts to the the the look know that back margin integration in little are subscription start of but to the I at couple bit profile half when you

Shigeyuki Hamamatsu

Yes. do We is the room opportunity on working -- certainly to And to the there's team think on that. XXXXhz. improve and more constantly that

around XX% of projecting margin, remainder we of AirDial margin to into gross more it the support, XXXXhz while we're is that will probably we for still think of nature. bit to little continue that the increase specific round I a number. things Part the continue invest the year,

So there's a revenue. we're little another to of step continue additional we to gross next improvement subscription start business grow bit see of not But on year, offsetting guiding obviously, going into the should we certainly, to margin subscription on. year, but next as going

Josh Nichols

And then me. last I for guess question

like this at AirDial guys growth laid looks providing subscription some not fire new come based have rate ]? guys be while terms Fair for of as year have formal in for when lot in year of talked [ if kind seems XXXXhz. the opportunities look you assume from this that the boost next benefiting you starting how well that online of as any It at would that's on to as stuff you've at news. timing, a irons guidance least the the least decent you're expect guidance that out have on you acceleration In that it in a the today to year, well to half like Metaswitch recently second of you about the you

Eric Stang

or this either our gave, be these or to think what the towards. North, potential the faster certainly drive that which say more to we're at rate. a that's I to both. Well, adder of growth And We the we large money to grow do make is said start have customer wins wanted driving real guidance we year

the I be at quarters and you we've And to large to to next X announced not guidance for be think both just last that we're have us. year able X -- this the give have potential of get end are be wins the we'll to know able And and massive to done. so we'll time. But the we obviously, year. customer do

further year. here We wins have to are hopeful this even

So yes, can blocks build a we're the faster next be trying what hope will looked up be to estimate building we to that rate growth very at clearly year.

Operator

Martinuzzi line Lake Capital from comes question of next Markets. Our Street of the Eric

Eric Martinuzzi

maybe writing gave of win. on up the is down pretty Yes, business ILEC RFP Was I get a side the slowed kind the follow the your there competitor caused to and awarding of the residential wanted or to what money RFP? you're much either the or Or versus on that side it you for thought? run it winning other you any

Eric Stang

were a been I with residential have can tell I'm in that and -- companies much this QX, rollout of that mean homework. that did the And with for a new working for no competitors. doubt. been we Well, competitive talked in about. you QX their conjunction them through most we're while them market. sure we've There's to I ready doing have be we customer development

our and getting that, year start something the thing process to with replacement I to our and and think And customers talked [indiscernible] need. to where POTS we the about even decision the need just like point AirDial but think, the do was a think so too important heard do for it. value the the ago, make market, can they think mean to hadn't that great is it's Ooma I don't residential it at be -- have solution competitive out. I stand many advantages such I I hard solution, So offered a

that converted have have heard how mean, don't lot -- of analyst think I and where about us in they people know I they going that I kind point this the quite turns see have can potentially we where far. the we're they to get tell we're about most only in you the to X we've to partners what talked lines think, told building to one haven't do point other and the that's like all there. last honesty. but convert market, really this, they're large get going been the and Now, on where considering need a That's need do. to they're for U.S. One they to hit something, that us so of And won but inflection us. need great that something, sub-X% do we the we customer, with customers of number. But conversations I what large years have to getting for starting know

So us it's got excited.

Eric Martinuzzi

here convert potentially pipeline 'XX? So could FY in that's a that

Eric Stang

will should a in starts FY the year. get sales of FY go we to this which And Yes, is next back we 'XX, February 'XX, year which half momentum. lot of into say with

Eric Martinuzzi

business based residential rate, for at guidance XX% And growth your minus X%. business then on Okay. and the a is for

question that a substantiates and at is the we side guide? actually lumpiness the a XX% the either going that at XX%? got of quarter-by-quarter, or QX X% on versus Is the Just business the a looking other just way, QX the that trend pipeline of quarter-by-quarter QX. in year versus we've full had behind backlog that the What's

Shigeyuki Hamamatsu

growth mainly year-over-year rate growth is due That Yes. IWG. the largest for -- to customer, our

Regus at QX, last recall quarters, last to, you if the compared additions been new low let's couple QX seat that has QX, year. say, relatively of So

having if -- XX benefit in additions QX, the user had of prior months. you So the about we more think

last in you a we now, of Now talked quarters, had and didn't because QX, the a as have benefit many the about. churn to in plus half we add go churn couple of we QX we less

So driver year-over-year the the Regus growth quarter-over-quarter. really, is been there lower has

Operator

of comes next William question Bhatia from Arjun Our of the line Blair.

Christopher Madison

on Arjun. a add I'll on great my congrats Chris for This is quarter. And

retention So to drivers main IWG some of to that until XXX. next not we sense this for Is the will see quarters? consistent the Or it's nice a be few this over were you get the the net there up start us implied full to feature? to see Could trending a trend? give and you of what how

Shigeyuki Hamamatsu

of a past business a Sure. The I is for XXX%, main think, driver better particular, had in little we user, improving this churn quarter.

of in us of last to tick XXX% point, going that pull back to the but forward, the from So dip up large I QX, QX, down XX% term, it it happens. Right maybe terms bit to looking we're that like To do happen most to now, us churn expecting that the in your in down that certainly it helped could to -- quarter. when a some when XX%-ish think from back XX%. could in looks IWG second half short

So now in future. my is the between going and XX% foreseeable sense XXX% right hover to

Christopher Madison

the wondering and how early Got And had any if a it. launch about in in feedback market. from we're AirDial customers color. that helpful since of was I in you quarter then Canada. That's things going are

Eric Stang

party we've worked Yes. I'm we've great, wins, that is a which a more but Canada I and think into development off lot to starting We into have start. put tapped we've honestly, had opportunity we've what up some asked don't a good AirDial, I about market think do enough there yet. you It's glad that. But is to with that than yet. there's resell market

So it's just to on. something executing need keep we

Operator

Alliance have a from We Brian of Instructions] follow-up [Operator Global Kinstlinger Partners. question

Brian Kinstlinger

I have follow-ups. X

-- The you add first that next believe, to mentioned had see playing committed large I I the first over rollout to potential on one seats, quarter. next customer? months? last X out over that XX is, X you a do XXXXhz XXX,XXX How guess You the it number quarters? provide communicated an the lines that over the is update of has there can they've

Eric Stang

past. months, very say. could what it because market So And the a my beta -- months versus to lasts bringing How in form to I that couple the their solution will elaborate will that step for beta long great see launch hard they they've they're X, in X be is in product expectation lasting them. it's in market September. is a that new had

do way XXX,XXX more not And be to guidance a don't means out. to they year-end, the towards their I'm above how most will they user roll at base I I that with them fast customer but see next sure think customer I And to us that out we'll base, that it. across through by and give it rolling go really of they're year. could time. long roll that, it But if know, out number, if GA ready closer they

yes, really is for APIs solution to think them, clearly custom the platform a in what on the side, and market. platform they I XXXXhz they a put work want future to using just their of it's lot that of the the So the bring for build to market

to So the can move think step going of once as get as the beta they they fast it process. they're over with I

Brian Kinstlinger

That's you helpful. already, you it question Can enterprise on terms missed as you discussed and -- did both -- if carrier to it. the relates of residential then you opportunity And my in lines? local other this maybe can that size you call, I

Eric Stang

No.

they're we That I a and at business think have means for point, hundreds of think rather hundreds this And But just believe I the would country. top that big it's I of to XX clearly leave serve of I'll in of a at lines going it ILEC that they copper now. that residential today. say thousands lines number. thousands they're

Operator

line Company. the comes Matthew of The question next Harrigan of Our Benchmark from

Matthew Harrigan

it complement as Telo talk you Europe, the more -- internationally, gotten I attention. Telo sizing in the And I what Can because on much AirDial as about the It's bit questions nice to given it would after a see that to carrier regulatory also is have X taking TAM hasn't differences? be especially little a and more nearly about that. guess,

Eric Stang

We Yes. Well, we the but do don't in have today. customized marketplace. certainly sell Telo Europe it, that product could for not we

you estimate Here residential today -- million we delay, in out numbers guess POTS in America, North lines gosh, around but I puts America. XX in use FCC could North the with

-- statistic a to you me know me. they sense be with that rural it is working see is this an roll out to gives to XX% locations. meaningful homes base, we -- change to get XXX, phones. works to might the cellular what's that's able of XX% their want call entity across So home interesting of want that more there rate over. I something gives tells that a in more they And going to have us to When have me challenged who well home to people have Telo They that take from maybe out pass. be

a directly is that to because customers with think having real customers I is getting yes, great step. to a who can going those partner residential do and have So be they already the challenge just the

Matthew Harrigan

end in Venn we're table can diagrams, say. probably that say with fair? that to one a of interface company league would of And Is the the you high so relationships, we that that you I this infer has is if number did the that top relation ILEC consumer at on that of XX one

Eric Stang

I really not I'm they're more said can't a what just exactly, say that you XX top sure we believe ILEC. but than

Matthew Harrigan

top also misunderstand? relationships? you terms they that say Didn't of Or did in I one XX were U.S. companies the consumer of

Eric Stang

that. No. said I'm I sure not

Matthew Harrigan

Congratulations. while. a quite in results Best Great. that. misheard I Okay.

Operator

Citizens Walravens Our of next the line from comes question JMP. Patrick of

Oliver Crookenden

the how This how Could Pat. to you contributed throughout is T-Mobile and an update they quarter of UScellular the year? expect provide for and on partnerships, the on half Oliver you this ramp back reseller those

Eric Stang

a very relationships us of because on large that have strong AirDial. kind T-Mobile have. and company very Sure. of partner have they for Ooma customer -- -- they wouldn't some embraced the are, fully is AirDial, certainly we They

T-Mobile. wireless also, product have I although lot -- will for fiber alongside home just and customer a -- more a Internet. it's needs those And And is T-Mobile think well, asks announced rollout continue. U.S. selling but of great. I've is who don't T-Mobile. UScellular we a -- referral their their don't So going or those alongside going sale past, in I too, on with residential at AirDial activity it, that some there that's direct tend going solution. by emphasize for be They opportunities us than to the

selling to them are only we start of We And Office. selling have begin strong they're are for to along, look -- that's last X relationships AirDial, grow still us, and we expect mentioned quarter, we And a But they forward. both there. although that not going as that's great these relationship we nascent. too, Ooma to but coming

Operator

Thank to like turn Sir? now conference for back the to Eric Stang you. would closing I remarks.

Eric Stang

us. for more Well, QX importantly, is strong feel and forward. look the new We're as we position really busy us today. developments a thank you, a everyone, some for in company strategic to joining have that It we excited was

That good exit XXX-or-so gross I opportunity we've business was annual $XXX us got million based ] dollars feel gross position. services our at margin. and Our -- financial QX profit execute [ like business residential XX% on balance about from sheet strong recurring our revenue services. and for to puts of with a million

giving forward keep you, we'll to call. on Thank you updates more next and So at look our working that everyone.

Operator

This call. participating. Thank concludes for today's conference you

You may now disconnect.

Ooma (OOMA) 27 Aug 242025 Q2 Earnings call transcript