Ooma's Q2 2026 Earnings Call: Contradictions Emerge on AIRDAU's ARR Contribution, 2,600 Hertz's Growth, Cable Partner Launch, and 2600Hz Acquisition's Market Potential

The above is the analysis of the conflicting points in this earnings call

Date of Call: None provided

Financials Results

• Revenue: $66.4M, up 3.5% YOY
• EPS: $0.23 per diluted share (non-GAAP), up from $0.15 in the prior year quarter
• Gross Margin: 62%, compared to 62% in the prior year quarter

Guidance:

- Q3 revenue expected at $67.2M–$67.9M; product revenue $5.7M–$6.2M.- Q3 non-GAAP net income $6.0M–$6.4M; EPS $0.22–$0.23 on 27.9M diluted shares.- FY26 revenue $267M–$270M (unchanged).- FY26 business subscription/services +5%–6% YOY; residential −1% to −2%.- FY26 revenue mix: 91%–92% subscription/services.- FY26 non-GAAP net income raised to $24.5M–$25.0M (includes ~$0.5M tariffs).- FY26 adjusted EBITDA $28.5M–$29.0M; EPS $0.87–$0.89 on 28.2M diluted shares.

Business Commentary:

Strong Financial Performance:* - Ooma reported record non-GAAP net income of $6,500,000 and record adjusted EBITDA of $7,200,000 for Q2, with adjusted EBITDA margin reaching 11%. - The growth was driven by increased revenue, improved operating leverage, and efficient use of resources.

• Ooma Business Growth:
• Business subscription and services revenue accounted for 62% of total subscription services revenue in Q2, representing a 6% year-over-year increase.

• This was attributed to user growth, higher ARPU, and increased take rate of higher-tier offerings in the business segment.

• Airdial Expansion:

• Airdial more than doubled new bookings year-over-year and secured a major national retailer as the largest customer, with plans to serve over 3,000 locations.

• The expansion was driven by the market's recognition of Airdial as a leading solution in the POS replacement market and strategic partnerships with the likes of T-Mobile.

• Product Revenue Growth:

• Product and other revenue reached $5,200,000, up 15% year-over-year due to growth in Airdial installations.
• The increase was due to strong demand for Airdial solutions and increased sales through partners, including Comcast and T-Mobile.

  

  Sentiment Analysis:

  • Management reported record non-GAAP net income ($6.5M) and record adjusted EBITDA ($7.2M, 11% margin), with revenue up 3.5% YOY. They raised full-year non-GAAP net income guidance and highlighted robust free cash flow. AirDial bookings more than doubled YOY and a large national retailer win with a planned rollout was announced. Business metrics improved (ARPU up 4% YOY; business users +9k Q/Q).

  Q&A:

  • Question from Josh Nichols (B. Riley): Is AirDial contributing meaningfully to ARR, and when might you provide more granularity?
  • Response: AirDial is now meaningfully contributing to ARR and business user adds; bookings more than doubled YOY, supporting acceleration into H2.
  • Question from Josh Nichols (B. Riley): Update on AirDial partner ramp, including Comcast, T-Mobile, and others?
  • Response: Approximately 35 resellers; two switched from a competitor. Comcast is progressing slowly but should accelerate in H2; T-Mobile is strong; Select is ramping; adding more partners in Q3.
  • Question from Eric Montanuzzi (Lake Street Capital Markets): Does buyback activity mean no M&A, or are shares simply a better bargain?
  • Response: Pursuing both: buybacks make sense at current price, while continuing to evaluate selective, user-acquisition-focused tuck-in M&A without overpaying.
  • Question from Eric Montanuzzi (Lake Street Capital Markets): Why guide business subscription/services growth at 5%–6% for the year after two quarters of 6%?
  • Response: Conservatism reflects timing variability of AirDial installations, not higher churn; customer timing can shift installs into later periods.
  • Question from Kincaid (Citizens): What drove the large national retail win for AirDial and when will it impact results?
  • Response: Won after extensive trials with T-Mobile partnership; rollout has begun and is expected through H2, pace uncertain; targeting ~3,000 locations.
  • Question from Kincaid (Citizens): Expected revenue per AirDial location for the 3,000-site retailer?
  • Response: No customer-specific disclosure; use ~$25 per line per month ARPU as a modeling proxy.
  • Question from Matthew Harrigan (The Benchmark Company): Update on 2600Hz growth and monetization path?
  • Response: Focus is integrating Ooma IP to strengthen turnkey apps; a handful of wins including ServiceTitan; broader upside expected next year after feature build-out.
  • Question from Matthew Harrigan (The Benchmark Company): Any plans to expand AirDial beyond North America?
  • Response: Currently US/Canada; would expand with a lead carrier. Ooma already operates in 32 countries, but near-term focus remains North America.
  • Question from Alinda Lee (William Blair): What drove NRR to 100% and what should we expect going forward?
  • Response: Improved churn and absence of prior IWG churn effects; expect NRR to remain around 99%–100%.
  • Question from Alinda Lee (William Blair): Why raise full-year non-GAAP net income while revenue stays unchanged?
  • Response: R&D leverage and disciplined sales/marketing spend, plus a modest benefit from U.S. tax law changes; guidance also reflects ~$0.5M tariffs.