# OOMA INC (OOMA)

Informational only - not investment advice.

CIK: 0001327688
SIC: 7374 Services-Computer Processing & Data Preparation
SIC breadcrumb: [Services](/division/I/) > [Business Services](/major-group/73/) > [SIC 7374 Services-Computer Processing & Data Preparation](/industry/7374/)
Latest 10-K filed: 2026-04-03
SEC page: https://www.sec.gov/edgar/browse/?CIK=1327688
Filing source: https://www.sec.gov/Archives/edgar/data/1327688/000132768826000009/ooma-20260131.htm

## Selected Fundamentals
| Metric | Value | Unit | FY | Filed |
| --- | ---: | --- | ---: | --- |
| Revenue | 273602000 | USD | 2026 | 2026-04-03 |
| Net income | 6459000 | USD | 2026 | 2026-04-03 |
| Assets | 227537000 | USD | 2026 | 2026-04-03 |

## Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-04-03. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001327688.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

| Metric | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Revenue | 104,524,000 | 114,490,000 | 129,231,000 | 151,593,000 | 168,947,000 | 192,290,000 | 216,165,000 | 236,737,000 | 256,852,000 | 273,602,000 |
| Net income | -12,949,000 | -13,121,000 | -14,572,000 | -18,801,000 | -2,441,000 | -1,751,000 | -3,655,000 | -835,000 | -6,901,000 | 6,459,000 |
| Operating income | -13,276,000 | -13,724,000 | -15,786,000 | -19,711,000 | -2,775,000 | -1,930,000 | -5,757,000 | -4,001,000 | -6,940,000 | 4,256,000 |
| Gross profit | 59,329,000 | 68,092,000 | 76,491,000 | 89,381,000 | 104,804,000 | 118,438,000 | 137,648,000 | 147,232,000 | 156,018,000 | 167,240,000 |
| Diluted EPS |  |  |  |  | -0.11 | -0.07 | -0.15 | -0.03 | -0.26 | 0.23 |
| Operating cash flow | 385,000 | 3,173,000 | -3,926,000 | -7,564,000 | 4,367,000 | 6,655,000 | 8,773,000 | 12,273,000 | 26,606,000 | 27,690,000 |
| Capital expenditures | 1,558,000 | 2,478,000 | 1,921,000 | 3,273,000 | 3,160,000 | 4,204,000 | 5,211,000 | 6,159,000 | 6,447,000 | 5,592,000 |
| Share buybacks |  |  |  |  |  |  |  |  | 4,470,000 | 11,627,000 |
| Assets | 73,338,000 | 73,431,000 | 78,388,000 | 80,611,000 | 89,097,000 | 109,253,000 | 131,005,000 | 159,253,000 | 149,195,000 | 227,537,000 |
| Liabilities | 33,518,000 | 36,363,000 | 45,341,000 | 52,196,000 | 49,546,000 | 58,197,000 | 67,861,000 | 81,166,000 | 63,917,000 | 134,621,000 |
| Stockholders' equity | 39,820,000 | 37,068,000 | 33,047,000 | 28,415,000 | 39,551,000 | 51,056,000 | 63,144,000 | 78,087,000 | 85,278,000 | 92,916,000 |
| Cash and cash equivalents | 3,990,000 | 4,483,000 | 15,370,000 | 11,680,000 | 17,298,000 | 19,667,000 | 24,137,000 | 17,536,000 | 17,871,000 | 20,144,000 |
| Free cash flow | -1,173,000 | 695,000 | -5,847,000 | -10,837,000 | 1,207,000 | 2,451,000 | 3,562,000 | 6,114,000 | 20,159,000 | 22,098,000 |

### Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

| Metric | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Net margin | -12.39% | -11.46% | -11.28% | -12.40% | -1.44% | -0.91% | -1.69% | -0.35% | -2.69% | 2.36% |
| Operating margin | -12.70% | -11.99% | -12.22% | -13.00% | -1.64% | -1.00% | -2.66% | -1.69% | -2.70% | 1.56% |
| Return on equity | -32.52% | -35.40% | -44.09% | -66.17% | -6.17% | -3.43% | -5.79% | -1.07% | -8.09% | 6.95% |
| Return on assets | -17.66% | -17.87% | -18.59% | -23.32% | -2.74% | -1.60% | -2.79% | -0.52% | -4.63% | 2.84% |
| Liabilities / equity | 0.84 | 0.98 | 1.37 | 1.84 | 1.25 | 1.14 | 1.07 | 1.04 | 0.75 | 1.45 |
| Current ratio | 2.04 | 1.82 | 1.38 | 1.02 | 1.20 | 1.41 | 1.30 | 1.24 | 1.09 | 0.93 |

## Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-06-05. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001327688.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

| Quarter | End date | Revenue | Net income | Diluted EPS | Method |
| --- | --- | ---: | ---: | ---: | --- |
| 2022-Q2 | 2022-07-31 |  |  | 0.01 | reported discrete quarter |
| 2022-Q3 | 2022-10-31 |  |  | -0.11 | reported discrete quarter |
| 2024-Q1 | 2023-04-30 |  |  | -0.01 | reported discrete quarter |
| 2024-Q2 | 2023-04-30 |  | -326,000 |  | reported discrete quarter |
| 2024-Q2 | 2023-07-31 | 58,353,000 |  | 0.01 | reported discrete quarter |
| 2024-Q3 | 2023-07-31 |  | 271,000 |  | reported discrete quarter |
| 2024-Q3 | 2023-10-31 | 59,856,000 |  | 0.09 | reported discrete quarter |
| 2024-Q4 | 2024-01-31 | 61,676,000 | -3,065,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2025-Q1 | 2024-04-30 | 62,499,000 | -2,139,000 | -0.08 | reported discrete quarter |
| 2025-Q2 | 2024-04-30 |  | -2,139,000 |  | reported discrete quarter |
| 2025-Q2 | 2024-07-31 | 64,129,000 |  | -0.08 | reported discrete quarter |
| 2025-Q3 | 2024-07-31 |  | -2,137,000 |  | reported discrete quarter |
| 2025-Q3 | 2024-10-31 | 65,127,000 |  | -0.09 | reported discrete quarter |
| 2025-Q4 | 2025-01-31 | 65,097,000 | -261,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2026-Q1 | 2025-04-30 | 65,029,000 | -141,000 | -0.01 | reported discrete quarter |
| 2026-Q2 | 2025-04-30 |  | -141,000 |  | reported discrete quarter |
| 2026-Q2 | 2025-07-31 | 66,364,000 |  | 0.04 | reported discrete quarter |
| 2026-Q3 | 2025-07-31 |  | 1,255,000 |  | reported discrete quarter |
| 2026-Q3 | 2025-10-31 | 67,625,000 |  | 0.05 | reported discrete quarter |
| 2026-Q4 | 2026-01-31 | 74,584,000 | 3,952,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2027-Q1 | 2026-04-30 | 81,149,000 | 2,582,000 | 0.09 | reported discrete quarter |

## Macro Cross-References
- [CPIAUCSL](/indicator/CPIAUCSL/): Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
- [UNRATE](/indicator/UNRATE/): Unemployment Rate
- [FEDFUNDS](/indicator/FEDFUNDS/): Federal Funds Effective Rate
- [CES0500000003](/indicator/CES0500000003/): Average Hourly Earnings of All Employees, Total Private
- [DFEDTARU](/indicator/DFEDTARU/): Federal Funds Target Range - Upper Limit
- [DFEDTARL](/indicator/DFEDTARL/): Federal Funds Target Range - Lower Limit
- [DGS3MO](/indicator/DGS3MO/): Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
- [DGS2](/indicator/DGS2/): Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
- [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
- [DGS30](/indicator/DGS30/): Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
- [T10Y2Y](/indicator/T10Y2Y/): 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
- [CPILFESL](/indicator/CPILFESL/): Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
- [CPIUFDSL](/indicator/CPIUFDSL/): Consumer Price Index for All Urban Consumers: Food
- [CPIENGSL](/indicator/CPIENGSL/): Consumer Price Index for All Urban Consumers: Energy
- [CUSR0000SAH1](/indicator/CUSR0000SAH1/): Consumer Price Index for All Urban Consumers: Shelter
- [PCEPI](/indicator/PCEPI/): Personal Consumption Expenditures: Chain-type Price Index
- [PCEPILFE](/indicator/PCEPILFE/): Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
- [PPIACO](/indicator/PPIACO/): Producer Price Index by Commodity: All Commodities
- [T10YIE](/indicator/T10YIE/): 10-Year Breakeven Inflation Rate
- [U6RATE](/indicator/U6RATE/): Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
- [PAYEMS](/indicator/PAYEMS/): All Employees, Total Nonfarm
- [CIVPART](/indicator/CIVPART/): Labor Force Participation Rate
- [EMRATIO](/indicator/EMRATIO/): Employment-Population Ratio
- [UNEMPLOY](/indicator/UNEMPLOY/): Unemployed
- [CE16OV](/indicator/CE16OV/): Employment Level
- [ICSA](/indicator/ICSA/): Initial Claims
- [JTSJOL](/indicator/JTSJOL/): Job Openings: Total Nonfarm
- [JTSQUR](/indicator/JTSQUR/): Quits: Total Nonfarm
- [GDPC1](/indicator/GDPC1/): Real Gross Domestic Product
- [A191RL1Q225SBEA](/indicator/A191RL1Q225SBEA/): Real Gross Domestic Product: Percent Change from Preceding Period
- [INDPRO](/indicator/INDPRO/): Industrial Production: Total Index
- [TCU](/indicator/TCU/): Capacity Utilization: Total Index
- [HOUST](/indicator/HOUST/): New Privately-Owned Housing Units Started: Total Units
- [PERMIT](/indicator/PERMIT/): New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
- [RSAFS](/indicator/RSAFS/): Advance Retail Sales: Retail Trade
- [PCE](/indicator/PCE/): Personal Consumption Expenditures
- [DSPIC96](/indicator/DSPIC96/): Real Disposable Personal Income
- [PSAVERT](/indicator/PSAVERT/): Personal Saving Rate
- [M2SL](/indicator/M2SL/): M2
- [BOPGSTB](/indicator/BOPGSTB/): U.S. International Trade in Goods and Services: Balance
- [MSPUS](/indicator/MSPUS/): Median Sales Price of Houses Sold for the United States
- [HSN1F](/indicator/HSN1F/): New One Family Houses Sold: United States
- [RHORUSQ156N](/indicator/RHORUSQ156N/): Homeownership Rate in the United States
- [TTLCONS](/indicator/TTLCONS/): Total Construction Spending: Total Construction in the United States
- [RRVRUSQ156N](/indicator/RRVRUSQ156N/): Rental Vacancy Rate in the United States
- [TOTALSL](/indicator/TOTALSL/): Total Consumer Credit Owned and Securitized
- [REVOLSL](/indicator/REVOLSL/): Revolving Consumer Credit Owned and Securitized
- [DRCCLACBS](/indicator/DRCCLACBS/): Delinquency Rate on Credit Card Loans, All Commercial Banks
- [GDP](/indicator/GDP/): Gross Domestic Product
- [GPDI](/indicator/GPDI/): Gross Private Domestic Investment
- [GCE](/indicator/GCE/): Government Consumption Expenditures and Gross Investment
- [PCEC](/indicator/PCEC/): Personal Consumption Expenditures
- [NETEXP](/indicator/NETEXP/): Net Exports of Goods and Services
- [GFDEBTN](/indicator/GFDEBTN/): Federal Debt: Total Public Debt
- [GFDEGDQ188S](/indicator/GFDEGDQ188S/): Federal Debt: Total Public Debt as Percent of Gross Domestic Product
- [FYFSD](/indicator/FYFSD/): Federal Surplus or Deficit
- [FGRECPT](/indicator/FGRECPT/): Federal Government Current Receipts
- [FGEXPND](/indicator/FGEXPND/): Federal Government: Current Expenditures
- [MANEMP](/indicator/MANEMP/): All Employees, Manufacturing
- [USCONS](/indicator/USCONS/): All Employees, Construction
- [USTRADE](/indicator/USTRADE/): All Employees, Retail Trade
- [USFIRE](/indicator/USFIRE/): All Employees, Financial Activities
- [USGOVT](/indicator/USGOVT/): All Employees, Government
- [AWHAETP](/indicator/AWHAETP/): Average Weekly Hours of All Employees, Total Private
- [DGORDER](/indicator/DGORDER/): Manufacturers' New Orders: Durable Goods
- [NEWORDER](/indicator/NEWORDER/): Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
- [BUSINV](/indicator/BUSINV/): Total Business Inventories
- [EXPGS](/indicator/EXPGS/): Exports of Goods and Services
- [IMPGS](/indicator/IMPGS/): Imports of Goods and Services
- [IR](/indicator/IR/): Import Price Index (End Use): All Commodities
- [PPIFIS](/indicator/PPIFIS/): Producer Price Index by Commodity: Final Demand

## Latest quarter (10-Q)

Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/1327688/000132768826000014/ooma-20260430.htm

Extracted structurally from real Item 2 body heading to real Item 3/4 boundary.
Confidence: high
Filing date: 2026-06-05
Report date: 2026-04-30

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with our condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and with our audited financial statements included in our Annual Report on Form 10-K for the year ended January 31, 2026 filed with the SEC on April 3, 2026. In addition to historical financial information, the following discussion contains “forward-looking statements” within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and other legal authority. These forward-looking statements concern our operations, economic performance, financial condition, goals, beliefs, future growth strategies, objectives, plans and current expectations. The words “believe,” “will,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “expect,” “predict,” “could,” “potentially” and variations of such words and similar expressions are intended to identify such forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. Such statements are based on management’s expectations as of the date of this filing and involve many risks and uncertainties that could cause our actual results, events or circumstances to differ materially from those expressed or implied in our forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in this Item 2. MD&A, as well as the section titled “Risk Factors” included under Part II, Item 1A below. We undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make.

Executive Overview

Ooma provides leading communications services and related technologies that bring unique features, ease of use, and affordability to businesses and residential customers through our smart SaaS and unified communications platforms. For businesses of all sizes, we deliver advanced voice and collaboration features including messaging, intelligent virtual attendants, and video conferencing to help them run more efficiently. Ooma’s all-in-one replacement solution for analog phone lines helps businesses maintain mission-critical systems by moving connectivity to the cloud. For consumers, our residential phone service provides PureVoice high-definition voice quality, advanced functionality and integration with mobile devices.

We generate revenues primarily from the sale of subscriptions and other services for our business and residential communications solutions. We generate our product and other revenue from the sale of on-premise devices and end-point devices, including Ooma AirDial, and from installation services, equipment rentals, and professional services. We primarily offer our solutions in the United States and Canada, with limited offerings in certain other countries.

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.

First Quarter Fiscal 2026 Financial Performance

•
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.

•
Subscription and services revenue from Ooma Business grew 38% year-over-year, primarily driven by user growth and subscription and the contributions of FluentStream and Phone.com.

•
Total gross margin was 62%, consistent with the prior year quarter.

•
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.

•
Adjusted EBITDA was $11.8 million, compared to $6.7 million in the prior year quarter.

•
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.

•
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.

Reconciliations of non-GAAP adjusted measures to the most directly comparable GAAP measures are presented below under Adjusted EBITDA and Non-GAAP Financial Measures.

Ooma | FY2027 Form 10-Q | 23

Key Business Metrics

We review the key metrics below to evaluate our business, measure our performance, identify trends affecting our business, formulate financial projections and make strategic decisions (in thousands, except percentages):

As of

April 30,

2026

April 30,

2025

Core users

1,420

1,225

Annualized exit recurring revenue (AERR)

$

294,555

$

234,027

Net dollar subscription retention rate

99%

99%

Adjusted EBITDA

$

11,842

$

6,668

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.‌

Annualized Exit Recurring Revenue ("AERR") grew year-over-year due to an increase in the average revenue per core user, which was largely driven by an increasing mix of Business users. We believe that AERR is an indicator of recurring subscription and services revenue for near-term future periods. We estimate our AERR by dividing our recurring quarterly subscription revenue from our Core Users by the average number of core users each quarter and annualize by multiplying by four. We then multiply that result by the number of core users at the end of the period to calculate AERR. AERR includes the annual recurring revenue from 2600Hz. Since the fourth quarter of fiscal 2026, AERR includes annual recurring revenue generated from our FluentStream and Phone.com offerings.

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.

We define our NDRR as (i) one plus (ii) the quotient of Net Dollar Change divided by Average Monthly Recurring Subscription Revenue. We define Net Dollar Change as the quotient of (i) the difference of our Monthly Recurring Subscription Revenue at the end of a period minus our Monthly Recurring Subscription Revenue at the beginning of a period minus our Monthly Recurring Subscription Revenue at the end of the period from new customers we added during the period, all divided by (ii) the number of months in the period. We define our Average Monthly Recurring Subscription Revenue as the average of the Monthly Recurring Subscription Revenue at the beginning and end of the measurement period.

Ooma | FY2027 Form 10-Q | 24

Adjusted EBITDA

In addition, we use Adjusted EBITDA (Earnings Before Interest Tax and Depreciation and Amortization) to manage our business, evaluate our performance and make planning decisions. We consider this metric to be a useful measure of our operating performance, because it contains adjustments for unusual events or factors that do not directly affect what management considers the core operating performance, and are used by our management for that purpose. We also believe this measure enables us to better evaluate our performance by facilitating a meaningful comparison of our core operating results in a given period to those in prior and future periods. Investors often use similar measures to evaluate the operating performance with those of competitors. Adjusted EBITDA represents net income before interest and other income, income taxes, depreciation and amortization of capital expenditures, amortization of intangible assets, stock-based compensation and related taxes, restructuring costs and litigation costs.

Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:

•
Adjusted EBITDA does not consider any expenses for assets being depreciated and amortized that are necessary to our business;

•
Adjusted EBITDA does not consider the impact of interest and other income/expense, income taxes, stock-based compensation and related taxes, amortization of intangible assets, litigation costs and restructuring costs; and

•
Other companies, including companies in our industry, may calculate Adjusted EBITDA differently, which reduces its usefulness as a comparative measure.

Because of these limitations, Adjusted EBITDA should be considered alongside other financial performance measures, including net income (loss) and our other GAAP results.

The following table provides a reconciliation of GAAP net income (loss) to Adjusted EBITDA, for each of the periods indicated below (in thousands):

Three Months Ended

April 30,

2026

April 30,

2025

GAAP net income (loss)

$

2,582

$

(141

)

Reconciling items:

Interest and other expense (income), net

770

(163

)

Income tax provision

156

247

Depreciation and amortization of capital expenditures

1,177

944

Amortization of intangible assets

3,162

1,406

Stock-based compensation and related taxes

3,618

4,068

Restructuring costs

377

—

Litigation costs

—

307

Adjusted EBITDA

$

11,842

$

6,668

Components of Results of Operations

Revenue

Subscription and services revenue is derived primarily from recurring subscription fees related to service plans such as Ooma Business, Ooma Residential and other communications services, and to a lesser extent from payments associated with our Talkatone mobile application and prepaid international calls. We expect our subscription and services revenue to grow as we expand our user base, driven primarily by growth in Ooma Business. We expect revenues from Ooma Business will continue to account for most of our revenue for foreseeable future.

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.

Cost of revenue and gross margin

Cost of subscription and services revenue includes payments made for third-party network operations and telecommunications services, license fees, certain telecom taxes and fees, including Federal Universal Service Fund (“USF”) contributions, credit card processing fees, costs to build out and maintain data centers, depreciation and maintenance of servers and equipment, personnel costs associated with customer care and network operations support, amortization of certain acquired intangible assets, and allocated overhead costs.

Ooma | FY2027 Form 10-Q | 25

Cost of product and oth

[Excerpt truncated for page length; source filing is linked above.]

## Latest 10-K MD&A

Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary.
Confidence: high

ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with our consolidated financial statements and the related notes to those statements included elsewhere in this Form 10-K. In addition to historical financial information, the following discussion contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of many factors, including those discussed under “Risk Factors” and elsewhere in this Form 10-K. The last day of our fiscal year is January 31, and we refer to our fiscal year ended January 31, 2026 as fiscal 2026, our fiscal year ended January 31, 2025 as fiscal 2025 and our fiscal year ended January 31, 2024 as fiscal 2024. All other references to years are references to calendar years.

This section of this Form 10-K generally discusses fiscal 2026 and 2025 items and year-to-year comparisons between fiscal 2026 and 2025. Discussion regarding our financial condition and results of operations for fiscal 2025 as compared to 2024 is included in Item 7 of our Annual Report on Form 10-K for the year ended January 31, 2025, filed with the SEC on April 1, 2025 (the "FY2025 Form 10-K").

Executive Overview

Ooma provides leading communications services and related technologies that bring unique features, ease of use, and affordability to businesses and residential customers through our smart SaaS and unified communications platforms. For businesses of all sizes, we deliver advanced voice and collaboration features including messaging, intelligent virtual attendants, and video conferencing to help them run more efficiently. Ooma’s all-in-one replacement solution for analog phone lines helps businesses maintain mission-critical systems by moving connectivity to the cloud. For consumers, our residential phone service provides PureVoice high-definition voice quality, advanced functionality and integration with mobile devices.

We generate revenues primarily from the sale of subscriptions and other services for our business and residential communications solutions. We generate our product and other revenue from the sale of our on-premise devices and end-point devices, including Ooma AirDial. We primarily offer our solutions in the United States and Canada, with limited offerings in certain other countries.

On December 1, 2025, we completed the acquisition of FluentStream Corp. and its wholly-owned subsidiaries (“FluentStream”) a provider of enterprise-grade business phone services 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. We believe the acquisition of FluentStream will accelerate overall growth of Ooma Business. We financed the acquisition through term loan borrowings of $45.0 million under our credit agreement, as amended, with Citizens Bank, N.A., as administrative agent and lender (the “Credit Agreement”).

On December 26, 2025, we completed the acquisition of Phone.Com, Inc. (“Phone.com”) a provider of cloud-based business communications for small and medium-sized organizations, for total gross cash consideration of approximately $22.6 million, subject to cash acquired and customary working capital adjustments. We believe the acquisition of Phone.com will accelerate overall growth of Ooma Business. We financed the acquisition through a combination of cash on hand and term loan borrowings of $20.0 million under our Credit Agreement.

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. See Item 1. Business above for additional information regarding our business, including products and services offered, competitive market and regulatory matters.

Fiscal 2026 Financial Performance

•
Total revenue was $273.6 million, up 7% year-over-year, primarily driven by the continued growth of Ooma Business and the $6.1 million revenue contributed from the acquisition of FluentStream and Phone.com in December 2025.

•
Subscription and services revenue from Ooma Business grew 10% year-over-year, driven by user growth.

•
Total gross margin was 61%, consistent with 61% in fiscal 2025.

•
GAAP net income was $6.5 million, compared to a net loss of $6.9 million in fiscal 2025.

•
GAAP net income for fiscal 2026 includes tax benefit for the release of a $2.5 million valuation allowance resulting from the recording of certain intangible assets associated with the acquisition of Phone.com Inc. in December 2025, which more than offset by $1.6 million in acquisition-related costs and $1.5 million of litigation costs.

Ooma | FY2026 Form 10-K | 51

•
Non-GAAP net income was $29.2 million, compared to $18.0 million in fiscal 2025.

•
Adjusted EBITDA was $33.9 million, or 12% of revenue, compared to $23.3 million in fiscal 2025.

•
Cash flow provided by operating activities was $27.7 million, compared to $26.6 million in fiscal 2025.

•
As of January 31, 2026, we had total cash and cash equivalents of $20.1 million, up $2.2 million from $17.9 million as of January 31, 2025.

•
As of January 31, 2026, we had $57.9 million outstanding debt, net of unamortized issuance costs. We had no outstanding debt as of January 31, 2025.

Reconciliations of non-GAAP adjusted measures to the most directly comparable GAAP measures are presented below under Adjusted EBITDA and Non-GAAP Financial Measures.

Key Factors Affecting Our Performance

Our historical financial performance and key business metrics have been, and we expect that our financial performance and key business metrics in the future will be, primarily driven by the following factors:

Core user growth. Our growth in the number of core users, a key business metric defined below, is a key indicator of our market penetration, the growth of our business and our anticipated future subscription and services revenue, especially Ooma Business.

Low core user churn. We believe that maintaining our current low core user churn for Ooma Business and Ooma Residential is an important factor in our ability to continue to improve our financial performance and is a distinguishing advantage over many of our competitors. We focus on providing high-quality services and support to our users so they remain with us.

Growth in additional services and products. We believe that there is significant opportunity for us to increase the additional subscription and services that our customers purchase from us in both the business and residential markets, which generates more value to Ooma over the life of our customer relationship. We are investing in Ooma Business to develop additional features to continue our momentum serving businesses of all sizes and further increase our average revenue per user. We continue to see a large market opportunity to capitalize on Ooma AirDial as an integrated solution for businesses to replace legacy copper-wire analog phone service.

Investing in long-term revenue growth. We believe that our total addressable market opportunity is large and we intend to continue significantly investing in sales and marketing to grow our user base in multiple verticals and channels. We expect the domestic and international markets in which we conduct our business will remain highly competitive. We plan to work together with our strategic partners to explore and pursue potential growth opportunities related to the market transition to 5G internet. We expect to continue investing in research and development to enhance our platforms and develop additional connected services and products, as well as launch our Ooma Business services in a number of international countries. We may evaluate additional possible acquisitions of businesses, products and technologies that are complementary to our business.

Key Business Metrics

We review the key metrics below to evaluate our business, measure our performance, identify trends affecting our business, formulate financial projections and make strategic decisions (in thousands, except percentages):

As of January 31,

2026

2025

2024

Core users

1,404

1,234

1,243

Annualized exit recurring revenue (AERR)

$

245,908

$

234,086

$

227,500

Net dollar subscription retention rate

99

%

98

%

99

%

Adjusted EBITDA

$

33,947

$

23,257

$

19,842

Ooma | FY2026 Form 10-K | 52

Core Users increased year-over-year, primarily driven by an increase in Ooma Business users and the addition of 164,000 core users from our recent acquisitions of FluentStream and Phone.com. As of January 31, 2026, Ooma Business users comprised approximately 49% of our total core users, up from 41% as of January 31, 2025. We believe that the number of our core users is an indicator of our market penetration, the growth of our business and our anticipated future subscription and services revenue. 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.‌

Annualized Exit Recurring Revenue ("AERR") grew year-over-year due to an increase in the average revenue per core user, which was largely driven by an increasing mix of business users. We believe that AERR is an indicator of recurring subscription and services revenue for near-term future periods. We estimate our AERR by dividing our recurring quarterly subscription revenue from our core users by the average number of core users each quarter and annualize by multiplying by four. We then multiply that result by the number of core users at the end of the period to calculate AERR. Since the third quarter of fiscal 2024, AERR includes annual recurring revenue from 2600Hz. Since the fourth quarter of fiscal 2026, AERR includes annual recurring revenue from FluentStream and Phone.com.

Net Dollar Subscription Retention Rate

We believe that our net dollar subscription retention rate ("NDRR") 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.

We define our NDRR as (i) one plus (ii) the quotient of Net Dollar Change (as defined below) divided by Average Monthly Recurring Subscription Revenue (as defined below). We define “Net Dollar Change” as the quotient of (i) the difference of our Monthly Recurring Subscription Revenue (as defined below) at the end of a period minus our Monthly Recurring Subscription Revenue at the beginning of a period minus our Monthly Recurring Subscription Revenue at the end of the period from new customers we added during the period, all divided by (ii) the number of months in the period. We define our Average Monthly Recurring Subscription Revenue as the average of the Monthly Recurring Subscription Revenue at the beginning and end of the measurement period. “Monthly Recurring Subscription Revenue” is defined as recurring subscription amounts from Ooma Residential and Ooma Business customers at the end of the most recent month, excluding recurring revenue from 2600Hz, FluentStream and Phone.com.

For example, if our Monthly Recurring Subscription Revenue was $115 at the end of a quarterly period and $100 at the beginning of the period, and $18 at the end of the period from new customers we added during the period, then the Net Dollar Change would be equal to ($1.00), or the amount equal to the difference of $115 minus $100 minus $18, all divided by three months. Our Average Monthly Recurring Subscription Revenue would equal $107.5, or the sum of $115 plus $100, divided by two. Our NDRR would then equal 99.1%, or approximately 99%, or one plus the quotient of the Net Dollar Change divided by the Average Monthly Recurring Subscriptions.

NDRR increased year-over-year due to relatively consistent user churn and an increase in Average Monthly Recurring Subscription Revenue.

Adjusted EBITDA increased year-over-year in line with our revenue growth, representing approximately 12% and 9% of our total revenues for fiscal 2026 and fiscal 2025, respectively. We use Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) to manage our business, evaluate our performance and make planning decisions. We consider this metric to be a useful measure of our operating performance, because it contains adjustments for unusual events or factors that do not directly affect what management considers being the core operating performance, and are used by our management for that purpose. We also believe this measure enables us to better evaluate our performance by facilitating a meaningful comparison of our core operating results in a given period to those in prior and future periods. Investors often use similar measures to evaluate the operating performance with competitors. Adjusted EBITDA represents net income before interest and other expense (income), income taxes, depreciation and amortization of capital expenditures, amortization of intangible assets, stock-based compensation and related taxes, acquisition-related costs, litigation costs, restructuring costs, gain on note conversion, and facilities consolidation gain.

Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:

•
Adjusted EBITDA does not consider the impact of income tax provisions or benefits, other income/expense, stock-based compensation and related taxes, amortization of intangible assets, acquisition-related costs, restructuring costs and costs that are not recurring in nature; and

Ooma | FY2026 Form 10-K | 53

•
Adjusted EBITDA does not consider any expenses for assets being depreciated and amortized that are necessary to our business; although these are non-cash charges, the property and equipment being depreciated and amortized often will have to be replaced in the future, and Adjusted EBITDA does not reflect any cash capital expenditure requirements for such replacements;

•
Other companies, including companies in our industry, may calculate Adjusted EBITDA differently, which reduces its usefulness as a comparative measure.

Because of these limitations, you should consider Adjusted EBITDA alongside other financial performance measures, including net income (loss) and our other GAAP results.

The following table provides a reconciliation of GAAP net income (loss) to Adjusted EBITDA for the periods indicated (in thousands):

Fiscal Year Ended January 31,

2026

2025

2024

GAAP net income (loss)

$

6,459

$

(6,901

)

$

(835

)

Reconciling items:

Interest and other (income) expense, net

(117

)

181

(1,188

)

Income tax (benefit) provision

(2,086

)

760

(1,978

)

Depreciation and amortization of capital expenditures

4,395

4,294

4,318

Amortization of acquired intangible assets

6,606

5,767

3,711

Stock-based compensation and related taxes

15,217

18,217

15,110

Litigation costs

1,474

340

300

Restructuring costs

373

1,579

477

Acquisition-related costs

1,626

—

883

Gain on note conversion

—

(980

)

—

Facilities consolidation gain

—

—

(956

)

Adjusted EBITDA

$

33,947

$

23,257

$

19,842

Components of Results of Operations

Revenue

Subscription and services revenue is derived primarily from recurring subscription fees related to service plans such as Ooma Business, Ooma Residential and other communications services and, to a lesser extent, from payments associated with our Talkatone mobile application and prepaid international calls. We expect our subscription and services revenue to grow as we expand our core user base, driven primarily by growth in Ooma Business. We expect revenues from Ooma Business will continue to account for most of our revenue for the foreseeable future.

Product and other revenue consists primarily of sales of our on-premise devices and end-point devices used in connection with our services, including shipping and handling fees for our direct customers.

Cost of revenue and gross margin

Cost of subscription and services revenue includes payments made for third-party network operations and telecommunications services; certain telecom taxes and fees, including Federal Universal Service Fund (“USF”) contributions; credit card processing fees; costs to build out and maintain data centers; depreciation and maintenance of servers and equipment; personnel costs associated with customer care and network operations support; amortization of certain acquired intangible assets, and allocated overhead costs.

Cost of product and other revenue includes the costs associated with the manufacturing of our on-premise devices and end-point devices, including Ooma AirDial, as well as personnel costs for employees and contractors, costs related to porting our customers’ phone numbers to our service, shipping and handling costs, tariffs imposed on imported product and allocated overhead costs.

Subscription and services gross margin may fluctuate from period-to-period based on the interplay of a number of factors, including revenue mix and fluctuations in the costs described above. We expect our subscription and services gross margin to increase over the long-term, primarily as we achieve scale efficiencies and as Ooma Business revenue becomes a larger majority of total subscription revenue and we realize expected synergies from our acquisitions.

Ooma | FY2026 Form 10-K | 54

Product and other gross margin may fluctuate from period-to-period based on a number of factors, including total units shipped as compared to the direct costs of production and relatively fixed personnel costs incurred. We sell our on-premise devices at aggressive price points to facilitate the adoption of our platforms and services. Additionally, some product costs have become subject to significantly higher pricing due to supply chain constraints in the global macroeconomic environment and increasing tariffs, as well as certain components becoming subject to end-of-life, and we may not be able to fully offset such higher costs through price increases. Another factor is the high AirDial installation costs due to ramp up efforts. Accordingly, we expect our product and other gross margin will continue to be negatively impacted by these higher component costs and AirDial installation costs. We expect our product and other gross margin to continue to be negative for the foreseeable future.

Our subscription and services gross margin is significantly higher than product and other gross margin. As a result, any significant change in revenue mix will cause our total gross margin to change. For example, in periods where we sell significantly more on-premise devices or other products, we would expect our total gross margin to be impacted.

Operating expenses

Sales and marketing expenses consist primarily of personnel costs for employees and contractors, advertising and marketing costs, sales commissions paid to internal sales personnel and third parties, amortization of capitalized sales commissions, amortization of acquired customer relationship intangible assets, travel expenses and allocated overhead costs. We expect our sales and marketing expenses to increase in absolute dollars as we continue to grow our business.

Research and development expenses are focused on developing new and expanded features for our solutions and improvements to our platforms and backend architecture. Research and development expenses consist primarily of personnel costs for employees and contractors, including third-party development, and allocated overhead costs. We expect our research and development expenses to increase in absolute dollars as we continue to grow our business.

General and administrative expenses consist of personnel costs for our finance, legal, human resources and other administrative employees and contractors, as well as professional service fees, certain acquisition-related costs, and allocated overhead costs. We expect our general and administrative expenses to increase in absolute dollars as we continue to grow our business.

Consolidated Results of Operations

The following table sets forth selected consolidated statements of operations data for each of the periods indicated (in thousands):

Fiscal Year Ended January 31,

2026

2025

2024

Revenue:

Subscription and services

$

252,015

$

238,641

$

221,624

Product and other

21,587

18,211

15,113

Total revenue

273,602

256,852

236,737

Cost of revenue:

Subscription and services

75,256

71,199

63,667

Product and other

31,106

29,635

25,838

Total cost of revenue

106,362

100,834

89,505

Gross profit

167,240

156,018

147,232

Operating expenses:

Sales and marketing

78,341

77,325

73,503

Research and development

50,259

54,287

49,935

General and administrative

34,384

31,346

27,795

Total operating expenses

162,984

162,958

151,233

Income (loss) from operations

4,256

(6,940

)

(4,001

)

Interest and other income, net

117

799

1,188

Income (loss) before income taxes

4,373

(6,141

)

(2,813

)

Income tax benefit (provision)

2,086

(760

)

1,978

Net income (loss)

$

6,459

$

(6,901

)

$

(835

)

Ooma | FY2026 Form 10-K | 55

Cost of revenue and operating expenses included stock-based compensation expense and related payroll taxes as follows (in thousands):

Fiscal Year Ended January 31,

2026

2025

2024

Cost of revenue

$

940

$

1,049

$

1,026

Sales and marketing

2,149

3,969

2,276

Research and development

4,201

5,589

4,876

General and administrative

7,927

7,610

6,932

Total stock-based compensation expense

$

15,217

$

18,217

$

15,110

Comparison of fiscal years 2026, 2025 and 2024 (dollars in tables are in thousands):

Revenue

Fiscal Year Ended January 31,

Change

2026

2025

2024

2026 vs. 2025

Revenue:

Subscription and services

$

252,015

$

238,641

$

221,624

$

13,374

6

 %

Product and other

21,587

18,211

15,113

3,376

19

 %

Total revenue

$

273,602

$

256,852

$

236,737

$

16,750

7

 %

Percentage of revenue:

Subscription and services

92

%

93

%

94

%

Product and other

8

%

7

%

6

%

Total

100

%

100

%

100

%

Fiscal 2026 Compared to Fiscal 2025

We derived approximately 64% and 61% of our total revenue from Ooma Business and approximately 34% and 36% from Ooma Residential in fiscal 2026 and 2025, respectively.

Subscription and services revenue increased $13.4 million or 6% year-over-year, primarily attributable to an increase in revenue generated from AirDial; an increase in the average revenue per core user, driven by organic growth, which was in part due to increased sales of Ooma Office and Ooma Enterprise services; and revenue contribution from FluentStream and Phone.com, which we acquired at the end of the fourth quarter of fiscal 2026.

Product and other revenue increased $3.4 million or 19% year-over-year, primarily attributable to an increase in AirDial and Telo shipments.

Cost of Revenue and Gross Margin

Fiscal Year Ended January 31,

Change

2026

2025

2024

2026 vs. 2025

Cost of revenue:

Subscription and services

$

75,256

$

71,199

$

63,667

$

4,057

6

 %

Product and other

31,106

29,635

25,838

1,471

5

 %

Total cost of revenue

$

106,362

$

100,834

$

89,505

$

5,528

5

 %

Gross margin:

Subscription and services

70

 %

70

 %

71

 %

Product and other

(44

)%

(63

)%

(71

)%

Total

61

 %

61

 %

62

 %

Ooma | FY2026 Form 10-K | 56

Fiscal 2026 Compared to Fiscal 2025

Subscription and services gross margin of 70% remained consistent year-over-year. Cost of subscription and services revenue increased $4.1 million or 6% year-over-year, primarily due to a $2.3 million increase in personnel and contractor related costs, a $2.1 million increase in infrastructure costs, partially offset by a $0.2 million decrease in regulatory fees and a $0.1 million decrease in credit card processing fees. Overall, the increase in the cost of subscription and services in part reflects the growth of Ooma Business.

Product and other revenue gross margin improved to negative 44% from negative 63% in the prior year period, primarily due to the depletion of certain higher cost components that we procured in prior fiscal years to stay ahead of pandemic driven supply chain issues.

Operating Expenses

Fiscal Year Ended January 31,

Change

2026

2025

2024

2026 vs. 2025

Sales and marketing

$

78,341

$

77,325

$

73,503

$

1,016

1

 %

Research and development

50,259

54,287

49,935

(4,028

)

(7

)%

General and administrative

34,384

31,346

27,795

3,038

10

 %

Total operating expenses

$

162,984

$

162,958

$

151,233

$

26

0

 %

Fiscal 2026 Compared to Fiscal 2025

Sales and marketing expenses increased $1.0 million or 1% year-over-year, primarily due to a $2.4 million increase in commissions, partially offset by a $1.2 million decrease in advertising and marketing expense.

Research and development expenses decreased $4.0 million or 7% year-over-year, primarily due to a $3.3 million decrease in personnel-related costs, driven in part by a reduction in acquisition-related stock-based compensation expense, and a $0.9 million decrease in restructuring costs.

General and administrative expenses increased $3.0 million or 10% year-over-year, primarily due to a $1.6 million increase in acquisition-related expenses related to the FluentStream and Phone.com acquisitions in December 2025, a $1.0 million increase in litigation costs, mainly attributable to non-recurring legal settlement costs, a $0.5 million increase in personnel-related costs, partially offset by a $0.3 million decrease in restructuring costs.

Income Taxes

We recorded an income tax benefit of $2.5 million, offset by $0.5 million of income tax provision in fiscal 2026. The income tax benefit is related to certain preexisting deferred tax assets realized because of deferred tax liabilities assumed in our acquisition of Phone.com in fiscal 2026.

Other Non-GAAP Financial Measures

This Form 10-K contains certain non-GAAP financial measures, including non-GAAP net income and Adjusted EBITDA. These non-GAAP financial measures are presented to provide investors with additional information regarding our financial results and core business operations. Non-GAAP financial measures are presented for supplemental informational purposes only to aid an understanding of our operating results and should not be considered a substitute for financial information presented in accordance with GAAP and may be different from non-GAAP financial measures presented by other companies. A limitation of the non-GAAP financial measures presented is that the adjustments relate to items that the Company generally expects to continue to recognize. The adjustment of these items should not be construed as an inference that the adjusted expenses or gains are unusual, infrequent or non-recurring. Therefore, both GAAP financial measures of Ooma’s financial performance and the respective non-GAAP measures should be considered together. See page 53 for a discussion of Adjusted EBITDA.

Ooma | FY2026 Form 10-K | 57

The following table presents a reconciliation of GAAP net income (loss) to non-GAAP net income for the periods indicated (in thousands):

Fiscal Year Ended January 31,

2026

2025

2024

GAAP net income (loss)

$

6,459

$

(6,901

)

$

(835

)

Stock-based compensation and related taxes

15,217

18,217

15,110

Amortization of acquired intangible assets

6,606

5,767

3,711

Litigation costs

1,474

340

300

Restructuring costs

373

1,579

477

Acquisition-related costs

1,626

—

692

Acquisition-related income tax benefit

(2,548

)

—

(3,131

)

Gain on note conversion

—

(980

)

—

Facilities consolidation gain

—

—

(956

)

Non-GAAP net income

$

29,207

$

18,022

$

15,368

Liquidity and Capital Resources

Our material cash requirements are discussed below under “Contractual Obligations and Commitments.” As of January 31, 2026, we had $20.1 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 expansion of our business internationally and other factors. We may in the future make investments in or acquisitions of businesses or technologies, which may require the use of cash.

The following table summarizes cash flow information for the periods indicated (in thousands):

Fiscal Year Ended

January 31,

2026

January 31,

2025

January 31,

2024

Net cash provided by operating activities

$

27,690

$

26,606

$

12,273

Net cash used in investing activities

(69,682

)

(6,447

)

(35,328

)

Net cash provided by (used in) financing activities

44,265

(19,824

)

16,454

Net increase (decrease) in cash and cash equivalents

$

2,273

$

335

$

(6,601

)

Operating Activities

The following table provides selected cash flow information for the periods indicated (in thousands):

Fiscal Year Ended

January 31,

2026

January 31,

2025

January 31,

2024

Net income (loss)

$

6,459

$

(6,901

)

$

(835

)

Non-cash charges

26,846

30,313

21,735

Changes in operating assets and liabilities:

(Increase) decrease in accounts receivable

(2,577

)

1,824

(2,587

)

(Increase) decrease in inventories and deferred inventory costs

(3,150

)

6,639

6,341

Increase in prepaid expenses and other assets

(1,153

)

(2,659

)

(2,280

)

Increase (decrease) in accounts payable, accrued expenses and other liabilities

1,421

(2,163

)

(9,579

)

Decrease in deferred revenue

(156

)

(447

)

(522

)

Net cash provided by operating activities

$

27,690

$

26,606

$

12,273

Ooma | FY2026 Form 10-K | 58

For fiscal 2026, our net income of $6.5 million included non-cash items of $26.8 million primarily related to stock-based compensation, operating lease expense, depreciation and amortization expense, and an income tax benefit related to our acquisition of Phone.com. Operating asset and liability changes for fiscal 2026 included:

•
an increase of $2.6 million in accounts receivable due to the timing of cash collections;

•
an increase of $3.2 million in inventories and deferred inventory costs;

•
an increase of $1.2 million in prepaid expenses and other current and non-current assets primarily due to the capitalization of sales commissions and the timing of prepayments; and

•
a net increase of $1.4 million in accounts payable, accrued expenses and other liabilities due to the timing of payments

•
a decrease of $0.2 million in deferred revenue.

Cash provided by operating activities for fiscal 2026 increased $1.1 million year-over-year, which primarily reflected working capital impacts resulting from the timing of payments. Although we have generated cash from operations in recent periods, our operating cash flow may not remain positive in the future as we continue to invest in efforts to scale our business.

Investing Activities

Cash used in investing activities was $69.7 million for fiscal 2026, which consisted of cash consideration paid for the FluentStream and Phone.com acquisitions of $64.1 million and capital expenditures of $5.6 million. We did not have any acquisitions in fiscal 2025.

Financing Activities

Cash provided by financing activities was $44.3 million for fiscal 2026, which consisted of $65.0 million proceeds from issuance of debt, proceeds of $3.0 million from the issuance of common stock from our ESPP and stock option exercises, offset by $6.5 million of debt repayments, $0.5 million of credit facility issuance costs, payments of $5.1 million for shares repurchased for tax withholdings on vesting of RSUs, and payments of $11.6 million under our stock repurchase plan. Cash provided by financing activities increased $64.1 million year-over-year, which primarily reflected a borrowing of $65.0 million under our Credit Agreement to fund the FluentStream and Phone.com acquisitions in fiscal 2026.

Term Loan and Revolving Credit Facility

In October 2023, we entered into a credit and security agreement (the “2023 Credit Agreement”) with certain banks that provided for a secured revolving credit facility under which we may borrow up to an aggregate of $30.0 million and, subject to certain conditions, may be increased to up to $50.0 million. On December 1, 2025, the Company entered into the Credit Agreement, the terms of which replace and supersede the terms of the 2023 Credit Agreement. The Credit Agreement has a term of five years 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 as a term loan maturing on December 1, 2030. The Company used the proceeds of the term loan to finance the FluentStream and Phone.com acquisitions (see Note 13: Business Acquisition). As of January 31, 2026, we had a $58.5 million outstanding term loan balance and were in compliance with all loan covenants.

Contractual Obligations and Commitments

Our principal commitments consist of obligations under operating leases for our headquarters located in Sunnyvale, California, as well as office space and co-location data center facilities in several locations. As of January 31, 2026, our total future expected payment obligations under non-cancelable operating leases with initial terms longer than one year were approximately $17.9 million, with payments of $4.4 million due in the next 12 months and $13.5 million due thereafter. See Note 7: Operating Leases in the notes to our consolidated financial statements.

As of January 31, 2026 and 2025, non-cancelable inventory purchase commitments to our contract manufacturers and other suppliers totaled approximately $15.1 million and $6.2 million, respectively. Additionally, we have a non-cancelable service agreement with a telecommunications provider pursuant to which we are obligated to total minimum purchase commitments of $10.2 million between March 2025 and February 2029, of which $8.1 million was outstanding as of January 31, 2026. See Note 11: Commitments and Contingencies in the notes to our consolidated financial statements.

Ooma | FY2026 Form 10-K | 59

Critical Accounting Policies and Estimates

We prepare our consolidated financial statements in accordance with U.S. GAAP, which requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, cash flows and the related disclosures. We base our estimates on historical experience and on other assumptions we believe to be reasonable under the circumstances. Actual results could differ materially from these estimates. Note 2 to the notes to consolidated financial statements of this Form 10-K describes the significant accounting policies and methods used in the preparation of the consolidated financial statements. We believe that the accounting policies discussed below are critical to understanding our historical and future performance as these policies involve a greater degree of judgment and complexity.

Revenue Recognition

Subscription and services revenue is derived primarily from recurring subscription fees related to service plans such as Ooma Business, Ooma Residential and other communications services. Subscription revenue is generally recognized ratably over the contractual service term. Product and other revenue is primarily generated from the sale of on-premise devices and end-point devices, including shipping and handling fees for our direct customers. We recognize product and other revenue from sales to direct end-customers and channel partners at the point in time that control transfers.

Our contracts with customers typically contain multiple performance obligations that consist of communications services and related products. Judgment is required to properly identify the accounting units of multiple performance obligations and to determine the manner in which revenue should be allocated among the obligations. Individual performance obligations are accounted for separately if they are distinct. The contract transaction price is then allocated to the separate performance obligations on a relative stand-alone selling price (“SSP”) basis. We determine the SSP for our communications services based on observable historical stand-alone sales to customers, for which we require that a substantial majority of selling prices fall within a reasonably narrow pricing range. We determine the SSP for our on-premise devices and end-point devices based upon our best estimates and judgments, considering company-specific factors such as pricing strategies, discounting practices, and estimated product and other costs. The determination of SSP is made through consultation with and approval by our management. As our business offerings evolve over time, we may be required to modify our estimated selling prices in subsequent periods, and the timing of our revenue recognition could be affected.

Our distribution agreements with channel partners typically contain clauses for price protection and right of return. We record reductions to revenue for estimated product returns from end users and customer sales incentives at the time the related revenue is recognized. Product returns and customer sales incentives are estimated based on our historical experience, current trends and expectations regarding future experience. Trends are influenced by product life cycles, new product introductions, market acceptance of products, the type of customer, seasonality and other factors. Product return and sales incentive rates may fluctuate over time but are sufficiently predictable to allow our management to estimate expected future amounts. If actual future returns and sales incentives differ from past experience, additional reserves may be required. To date, actual results have not been materially different from our estimates.

Ooma | FY2026 Form 10-K | 60