Executive Summary
Ooma delivered a solid QQ2 2025 performance marked by growth in core business and the incremental contribution from 2600Hz. Revenue totaled $64.1 million, up 10% year-over-year, and non-GAAP net income reached $4.1 million, underscoring a profitable expansion of Ooma Business and the integration of 2600Hz. Strong operating cash flow of $7.1 million generated a fresh quarterly high, enabling a debt repayment of $3 million and a reduction of total debt to $8.5 million. Management highlighted progress across key initiatives including Ooma Office feature enhancements, AirDial’s upcoming reseller partner in a top-10 US ILEC, and the expansion of 2600Hz as a CPaaS wholesale platform. While profitability on a GAAP basis remained negative in Q2, the company emphasized gross margin expansion in subscription services (72%) and ongoing normalization in product gross margins as pandemic-era cost inputs are exhausted. Management raised full-year revenue and profitability guidance, signaling confidence in the multi-pronged growth engine around UCaaS, POTS replacement, and CPaaS opportunities. The combination of a durable ARR base (annual exit recurring revenue of $233 million), strong net retention (100%), and a diversified opportunity set (AirDial, 2600Hz, Ooma Office) frames an actionable longer-term upside, albeit with execution risk around large customers and transition costs intrinsic to the CPaaS ecosystem.
Key Performance Indicators
QoQ: 21.26% | YoY:-26 700.00%
QoQ: 0.09% | YoY:-888.56%
QoQ: 1.35% | YoY:-852.34%
Key Insights
Revenue and profitability overview: QQ2 2025 revenue of $64.1 million, +10% YoY; non-GAAP net income of $4.1 million; Adjusted EBITDA of $5.6 million (record for the company) and trailing-12-month OCF of $18 million. GAAP net income declined to -$2.14 million with a GAAP EPS of -$0.08, reflecting mix and non-cash items. Gross margins remained solid at 62% overall, with subscription and services gross margin at 72% (benefiting from 2600Hz integration but offset by lower 2600Hz margin contribution...
Financial Highlights
Revenue and profitability overview: QQ2 2025 revenue of $64.1 million, +10% YoY; non-GAAP net income of $4.1 million; Adjusted EBITDA of $5.6 million (record for the company) and trailing-12-month OCF of $18 million. GAAP net income declined to -$2.14 million with a GAAP EPS of -$0.08, reflecting mix and non-cash items. Gross margins remained solid at 62% overall, with subscription and services gross margin at 72% (benefiting from 2600Hz integration but offset by lower 2600Hz margin contribution). Total subscription and services revenue was $59.6 million (93% of total revenue). ARPU rose 4% YoY to $15.07, driven by a higher mix of Office Pro/Pro Plus users (58% of new Office users) and a higher proportion of business users. Core user metrics showed 1.244 million core users and 500k business users, supporting a robust ARPU and continued expansion of Ooma Office, Ooma Enterprise, and AirDial. ARR growth remained a positive structural signal, with annualized exit recurring revenue at $233 million, up 8% YoY. Cash conversion remained strong, with free cash flow of $5.345 million in the quarter and a net cash position of $16.6 million in total cash and investments.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
64.13M |
9.90% |
2.61% |
| Gross Profit |
38.70M |
5.77% |
5.65% |
| Operating Income |
-1.60M |
-26 700.00% |
21.26% |
| Net Income |
-2.14M |
-888.56% |
0.09% |
| EPS |
-0.08 |
-852.34% |
1.35% |
Key Financial Ratios
operatingProfitMargin
-2.49%
operatingCashFlowPerShare
$0.27
freeCashFlowPerShare
$0.2
priceEarningsRatio
-32.31
Management Commentary
Key thematic takeaways from management discussions: (Strategy and growth) Ooma highlighted a multi-pronged growth engine spanning UCaaS (Ooma Office), POTS replacement (AirDial), and CPaaS (2600Hz) as catalysts for both near-term revenue and longer-term profitability. The company signaled a major ILEC partner planning to resell AirDial for business customers and Ooma Telo for residential customers, representing a meaningful uplift in addressable market and deployment velocity. (Operations and product) 2600Hz demand is expanding domestically and internationally, aided by Metaswitch EOS dynamics and ongoing integration of Ooma applications into the platform; Ooma Office features and new Square/QuickBooks integrations are designed to drive higher-tier adoption. Management underscored the pipeline of CPaaS opportunities beyond the current large deal and expects to launch with the large 2600Hz customer this fall, with subsequent ramp in 2025. (Market conditions and risk) The POTS sunset cycle continues to create a sizeable market opportunity for AirDial and Telo, while churn from key customers (notably IWG) remains a near-term headwind with some expected deferral into H2. The company plans to capitalize on the operating leverage from higher-value seats and a stabilizing gross margin trajectory as pandemic-cost inputs normalize.
We have been told by an incumbent local exchange carrier that they plan to resell AirDial beginning later this year. This is exciting because of the size and scope of this new partner, who we believe is one of the Top 10 largest service providers in America.
— Eric Stang
2600Hz, our wholesale and developing CPaaS solution, saw expanded customer interest in Q2, both domestically and internationally. We are increasingly excited by the level of interest in the 2600Hz platform and scope of market opportunity.
— Eric Stang
Forward Guidance
Management provided non-GAAP guidance for Q3 and the full year 2025, signaling continued growth and profitability improvement: Q3 revenue guidance of $64.2–$64.6 million with product revenue of $4.3–$4.5 million; Q3 non-GAAP net income of $4.1–$4.3 million and non-GAAP diluted EPS of $0.15–$0.16. Full-year 2025 revenue guidance raised to $254–$255.5 million; non-GAAP net income guidance of $15.7–$16.2 million; Adjusted EBITDA guidance of $21.5–$22.0 million; non-GAAP diluted EPS guidance of $0.57–$0.59. The guidance assumes roughly 27.5 million weighted-average diluted shares. The back-half growth may be supported by AirDial–reseller ramp, Ooma Office upsell, and the 2600Hz CPaaS expansion; however, execution risk includes churn from large customers (IWG) and the pace of CPaaS deployment, as well as potential one-time revenue items in Q3. Overall, the company projected a trajectory toward higher profitability with a mid-teens revenue growth profile in 2025 and meaningful free cash flow generation, supported by a stronger ARR base and prudent cost control.