Ooma (OOMA) investor relations material

Strategic priorities and business overview

• Focused on targeted segments: POTS replacement (AirDial), small business UCaaS, wholesale (2600Hz), and residential, each with tailored solutions and growth strategies.

• Leveraging AI to enhance small business offerings, drive ARPU growth, and extend SMB leadership, with new AI productivity bundles and voice agents launched.

• Recent acquisitions (FluentStream, Phone.com) have expanded the user base, broadened reach, and are expected to be accretive within a few quarters.

• M&A strategy targets North American UCaaS providers with $10M-$50M revenue, aiming for 1-2 acquisitions per year and driving profitable growth in under-penetrated SMB and enterprise verticals.

• 2600Hz established as a modern, scalable platform for wholesale and vertical SaaS partners.

Financial performance and guidance

• FY revenue guidance is $332M–$333.5M, with 25% YoY growth in annual recurring revenue and 38% YoY growth in business subscription revenue.

• Adjusted EBITDA reached $44M (+68% YoY), guided to $48M for the year; free cash flow conversion is about 70%, with $30M in free cash flow (+50% YoY).

• Over 90% of revenue is recurring, with non-GAAP recurring gross margins above 70%.

• Long-term targets: double revenue in 3-4 years to $500M+, expand EBITDA margin from 15% to 20–25%, and achieve 75–78% subscription gross margin.

• Premium user mix and ARPU are rising, with business ARPU above $24 and residential near $10; business users comprise 70% of the base.

AirDial and POTS replacement market

• AirDial addresses urgent POTS line replacement due to deregulation and rising costs, serving mission-critical analog applications with integrated hardware, connectivity, and AI-driven management.

• Differentiated by full-stack ownership, patented multi-path redundancy, advanced notifications, and remote device management.

• Major partnership with TELUS (Canada), targeting up to 300,000 lines, with go-live in H2 fiscal year.

• AirDial recurring revenue grew 70% YoY; intermediate goal is 300,000+ lines and $100M recurring revenue, with significant runway remaining.

• Over 8 million business and government-grade switched access lines remain in the US, with forced shutdowns accelerating POTS replacement demand.