A maker of cloud-based phone and communications services for homes and businesses. Its products span the Ooma Telo home phone system, the ad-supported Talkatone mobile app, and business platforms like Ooma Office and AirDial that replace old copper phone lines. Founded in 2003, the company's early team built its devices in an outbuilding dubbed "Studio C" at a co-founder's home in Alamo, California.
Ooma Q1 FY2027 revenue rose 24.8% to $81.1M and GAAP net income was $2.6M
Ooma Business reached 70% of for the first time this quarter. Revenue rose 24.8% to $81.1M and held at 62.4% as FluentStream and Phone.com added $11.2M, with of $2.6M versus a $0.1M loss a year earlier. The company is growing on acquisitions but carries $52.9M of debt after a year of zero borrowings.
Key takeaways
Ooma Business contributed 70% of Q1 FY2027 , up from 63% in Q3 FY2026, as FluentStream and Phone.com added $11.2M in the quarter.
Total rose 24.8% to $81.1M and subscription and services revenue increased 24% on user growth, higher average revenue per core user, and acquisitions.
was $2.6M compared to a $0.1M loss a year earlier; rose to $11.8M from $6.7M.
Section summaries
Management's Discussion and Analysis
Revenue rose 25% to $81.1M driven by Ooma Business and acquisitions; GAAP net income reached $2.6M vs. a $0.1M loss.
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Total grew 25% to $81.1M, with Ooma Business contributing 70% of revenue and FluentStream/Phone.com adding $11.2M in the quarter.
Subscription and services increased 24% , driven by user growth, higher average revenue per core user, and contributions from recent acquisitions.
Product margin improved to negative 32% from negative 42% a year earlier due to a more favorable sales mix toward higher-margin products like AirDial.
Cash and equivalents fell to $17.2M from $20.1M, primarily due to $5.0M in prepayments; outstanding debt stood at $52.9M.
Operating expenses grew 17% with increases in R&D and G&A from acquisition personnel and restructuring charges.
What changed
Ooma Business subscription growth: flagged to watch after holding at 6% for two quarters and 3% in Q3 FY2026; this quarter Ooma Business reached 70% of with subscription and services up 24% including $11.2M from acquisitions.
Product : flagged to watch after negative 44% in FY2026 and negative 45% in Q3 FY2026; it improved to negative 32% on favorable AirDial mix.
impact: FY2026 ended with $57.9M net debt after zero borrowings at FY2025 end; this quarter debt was $52.9M after $5.0M prepayment, cash $17.2M.
Customer and tariffs: risk factors newly emphasize tariffs on China and Vietnam imports and FCC Covered List restrictions on foreign-made routers like Ooma Telo, carried from prior flags.
growth accelerated to 24.8% from 4% in Q1 FY2026 and 6.5% in FY2026, the fastest since the FluentStream/Phone.com acquisitions closed.
What to watch
Ooma Business subscription and services growth next quarter after the 24% figure including acquisition contributions.
Product trajectory after it reached negative 32%, whether it turns positive as mix shifts.
Impact of $52.9M debt on liquidity and covenants after $5.0M prepayment this quarter.
Customer under FTC Click-to-Cancel and tariff cost pressure on gross margins in FY2027.
Total held steady at 62%, while product margin improved to negative 32% from negative 42% due to a more favorable sales mix toward higher-margin products like AirDial.
was $2.6M compared to a net loss of $0.1M a year ago; rose to $11.8M from $6.7M.
Cash and equivalents fell to $17.2M from $20.1M, primarily due to $5.0M in term loan prepayments; outstanding debt stood at $52.9M.
Operating expenses grew 17% , with increases in R&D and G&A reflecting higher personnel costs from acquisitions and restructuring charges.
Quantitative and Qualitative Disclosures About Market Risk
There have been no material changes to the Company’s market risk during the first quarter of fiscal 2027. Refer to our market risk disclosures set forth in Part II, Item 7A, “Quantitative and Qualitative Disclosures About Market Risk” of our fiscal 2026 Annual Report.
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There have been no material changes to the Company’s market risk during the first quarter of fiscal 2027. Refer to our market risk disclosures set forth in Part II, Item 7A, “Quantitative and Qualitative Disclosures About Market Risk” of our fiscal 2026 Annual Report.
For a discussion of legal proceedings, see “Note 11: Commitments and Contingencies” of the notes to the condensed consolidated financial statements in this Form 10-Q, which information is incorporated herein by reference.
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For a discussion of legal proceedings, see “Note 11: Commitments and Contingencies” of the notes to the condensed consolidated financial statements in this Form 10-Q, which information is incorporated herein by reference.
Ooma faces material risks from tariffs on imported goods, customer churn, AI integration challenges, and evolving FCC regulations that could increase costs and disrupt operations.
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Newly emphasized tariff risks from IEEPA and other trade actions on goods from China and Vietnam could raise costs, disrupt supply, and harm gross margins.
Customer , especially among Ooma Business subscribers, could significantly impact given subscriptions are cancellable without penalty.
The FCC's March 2026 update to the 'Covered List' restricting foreign-made routers may prevent software updates for products like Ooma Telo, risking functionality and security.
Integration of AI into products and operations exposes the company to flawed outputs, regulatory scrutiny, and potential liability.
A significant portion of depends on small and medium-sized businesses, which are more vulnerable to economic downturns and inflation.
Reliance on sole suppliers and a small number of manufacturers for on-premise devices creates supply chain vulnerability.