Ooma's Q3 2026: Contradictions Emerge on AirDial Timelines, Global Expansion, Acquisition Integration, and Economic Caution

Business Commentary:

• Revenue and Financial Performance:
• Ooma Inc. reported revenue of $67.6 million for the third quarter of fiscal year 2026, up 4% year over year.

• The growth was driven by an increase in Ooma business, including AirDial, and a strong non-GAAP net income of $7.7 million, which grew 68% year over year.

• Acquisition Impact and Strategic Growth:

• Ooma announced the acquisitions of FluentStream and Phone.com, which are expected to add over 165,000 users, $45 million in revenue, and $10 million in Adjusted EBITDA to Ooma annually.

• These acquisitions are expected to be accretive to Ooma's Adjusted EBITDA and non-GAAP earnings per share, optimizing spending and scaling the business.

• Operating Leverage and Cost Management:

• Ooma's operating expenses for the third quarter were $34.2 million, a $1.4 million decrease year over year, with research and development expenses down 10%.

• This was achieved through operating leverage, headcount management, and reduced sales and marketing expenses due to efficient customer acquisition strategies.

• Product and Services Growth:

• Ooma's business subscription and services revenue grew 6% year over year, with product and other revenue up 14%.
• The growth was driven by increased user adoption, particularly in Ooma Office, Ooma Enterprise, and AirDial, along with successful sales and marketing efforts.

Contradiction Point 1

AirDial Installation Timing and Impact on Revenue Growth

It involves the timing of AirDial installations and their impact on revenue growth, which affects investor expectations and the company's ability to meet financial targets.

Is Q4 guidance reduction mainly due to AirDial delays? - [Eric Martinuzzi](Lake Street Capital Markets)

2026Q3: Yes, the decrease in guidance is primarily due to AirDial pushouts, with customer engagements and bookings remaining strong but installation timelines being pushed into next year. - [Shigeyuki Hamamatsu](CFO)

Was the 6% Q2 Business side growth conservative due to potential churn or AirDial timing? - [Eric Martinuzzi](Lake Street Capital Markets)

2026Q2: It's not about increased churn, but rather the timing of AirDial installations. The wide range on revenue guidance reflects the variability in installation timing. We're doubling AirDial bookings, and installations may vary due to customer timing. - [Shigeyuki Hamamatsu](CFO)

Contradiction Point 2

International Expansion of AirDial

It relates to the company's international expansion plans for AirDial, which could impact future growth and market opportunities.

Can you provide details on the Phone.com acquisition and its AI developments? - [Patrick Wahlravens](Citizens)

2026Q3: AirDial is currently focused on North America. We'd explore other regions with a lead customer that could drive demand. We have some infrastructure established worldwide. - [Eric Stang](CEO)

Are international markets showing increased interest in AirDial, especially in Europe? - [Matthew Joseph Harrigan](The Benchmark Company)

2026Q2: Are you seeing increased interest in AirDial from international markets, particularly Europe? It's not a priority for us now, but we're certainly aware of the opportunities that exist. As we get more traction here at home and we're looking for more markets to go to, that is certainly on the radar. - [Eric Stang](CEO)

Contradiction Point 3

Acquisition Strategy and Integration Timeline

It involves the company's strategy and timeline for integrating acquisitions, which are significant for growth and operational efficiency.

Can Ooma integrate both FluentStream and Phone.com acquisitions simultaneously? - [Arjun Bhatia](William Blair)

2026Q3: Ooma plans to integrate both acquisitions simultaneously, leveraging the strengths of each and focusing on scaling operations without disrupting current activities. - [Eric Stang](CEO)

Given customer churn headwinds and a conservative approach to new AirDial rollout opportunities, do you hope to see meaningful acceleration in recurring revenue growth next year and expect to continue increasing profitability and EBITDA margin expansion beyond this year? - [Josh Nichols](B. Riley)

2025Q4: We have expanded our business scope to include an incredible POTS replacement market opportunity and also a longer-term wholesale services market opportunity. We have shifted some of our sales and marketing activities into those areas without growing substantially our sales and marketing spend. - [Eric Stang](CEO)

Contradiction Point 4

Economic Caution and Growth Expectations

It highlights differing perspectives on the economic environment and its impact on the company's growth projections.

What is driving growth post-2600Hz acquisition: new customer acquisition, service expansion, or monetizing previously open-source offerings? Is the incremental growth of your top new product higher this year than last, and does that suggest a slowdown or plateau in Ooma Office’s SMB growth due to economic caution? - [Matthew Harrigan](The Benchmark Company)

2026Q3: We're going to be cautious until those things materialize. But we haven't reduced our outlook in any part of what we're doing. - [Eric Stang](CEO)

Will revenue growth, especially recurring revenue, accelerate meaningfully next year, and do you expect continued EBITDA margin expansion beyond this year? - [Josh Nichols](B. Riley)

2025Q4: We're always balancing across our business. We see good opportunities in the small business segment. We're going after them, and we'll grow this year nicely, but it's in the context of the overall growth we're trying to do for the company. - [Eric Stang](CEO)