Ooma achieves record adjusted EBITDA of $8.6 million, driven by strong business solutions and successful acquisitions, expects continued revenue growth and profitability.

Millions of annual exit recurring revenue. We achieved new records in the quarter for non-GAAP net income which increased to 7.7 million, and adjusted EBITDA, which increased to 8.6 million. Our adjusted EBITDA, for Q3 as a percentage of revenue was 13%, up from 11% of revenue in Q2 of this year and 10% of revenue in Q1 of this year. We are proud of our increased bottom line results and believe our business has significant potential not only for revenue growth but also for further bottom line expansion. Our business solutions performed well in Q3. We continue to invest in growth across Ooma Office, Ooma Enterprise, Air Dial and 2600Hz Ooma Office and Ooma Enterprise added new customers in line with our expectations and we maintained our development efforts focused on AI Contact center, vertical integrations and other features which will boost our Pro and Pro plus service tiers and appeal to larger sized businesses. We expect to launch our AI Solutions early next year. I'm pleased to note too that Ooma Enterprise secured its largest hospitality win today, a hotel in Las Vegas with nearly 1,000 rooms. Regarding Air Dial, we made solid progress in Q3 as we continued our efforts to expand sales and increase awareness of our solution. I'm pleased to report that we continue to add new resale partners every quarter. In fact, in Q3 we added nine new resale partners, our strongest quarter to date. In general, we are seeing an influx of interest in reselling Air Dial from entities wanting to take advantage of the POTS replacement market opportunity, including from some wanting to move away from competitive solutions. I'm also pleased to report that in Q3 we launched an updated version of Air Dial, which incorporates a new processor and is designed to provide improved cellular band support and longer battery life. It is also less costly to manufacture. Along with this, we launched new remote device management features for use by partners reselling Air Dial Overall, we remain committed to our long term goal to secure 300,000 Air Dial lines generating 100 million of Air Dial annual recurring revenue. Regarding 2600Hz, we made further progress in. Q3 adding Ooma's IP and applications onto the platform and were able to upsell a significant number of existing 2600 Hz customers. We also continued our sales and marketing to new customers focused mainly on carriers and other UCAAS providers. On the residential front, a combination of. Good user additions and slightly lower churn allowed us to hold our user count close to flat with Q2 and so far we are off to a good start this quarter as well. Turning now to the two acquisitions we recently announced, this is an exciting time for Ooma. As a reminder, we announced that we recently closed on the acquisition of FluentStream and are expected to close on the acquisition of phone.com around the end of this month. Combined, these two businesses are expected to add more than 165,000 users, $45 million of revenue and $10 million of adjusted. EBITDA to Ooma annually. Before synergies, each acquisition is expected to be accretive to Ooma's adjusted EBITDA and non GAAP earnings per share starting on the closing date of the transaction. Approximately 155 employees and contractors will be joining OOMA as a result of these two transactions. Strategically, we believe that FluentStream and phone.com fit well with Ooma's focus on serving small and medium sized businesses. We believe each company is well regarded by its customers, performing well, and presents an opportunity to leverage Ooma's scale and investment spending over a larger base. Furthermore, we believe we have been able. To acquire each business at a price which allows us to achieve cost effective growth. Overall, these acquisitions allow us to optimize how we spend, to grow our business, to achieve greater scale and to bring new capabilities to Ooma. In the case of FluentStream, our focus will primarily be to continue FluentStream's business success and high level of profitability. There are, however, a few select areas where we believe synergies are possible. These include bringing Ooma's scale to FluentStream's vendor relationships, combining certain initiatives involving new feature development, and leveraging FluentStream's channel relationships to sell other UMA products, most notably Air Dial. In the case of phone.com our focus will be to strengthen the phone.com brand in the market. We believe phone.com's memorable URL and website and their focus on providing a streamlined and relevant e commerce experience represents an attractive opportunity for uma. We also believe significant synergies are possible once the acquisition closes. We intend to leverage our vendor relationships, R and D activities, customer support systems and GNA processes to make phone.com both stronger and more profitable. In sum, we believe these two acquisitions present a tremendous opportunity for OOMA to build shareholder value. It is our intent to capitalize on them to increase UMA's adjusted EBITDA and cash flow and growth, and we are. Excited as we look out toward the years ahead. I will now turn the call over to Shig, our CFO to discuss our results and outlook in more detail and then return with some closing remarks.

Thank you Eric and good Afternoon everyone. Before I dive into our third quarter financial results, I'd like to recap the status and financial aspects of the 2 acquisitions we announced last month. Please note that these 2 acquisitions did not impact the fiscal third quarter results. I'm going to discuss in a minute as each of these acquisitions either completed or expected to be completed in our fourth fiscal quarter. We completed the acquisition of fluent stream on December 1, 2025 for approximately $45 million in cash, which was funded by a $45 million term loan. FluentStream is expected to add 24 to $25 million of revenue and 9.5 to $10.5 million of adjusted EBITDA to Ooma annually based on current run rates. As for the acquisition of phone.com it is expected to be completed later in the fourth fiscal quarter. The cash purchase price for approximately 23.2 million is expected to be funded by a combination of cash on hand and a bank loan. Phone.com is expected to add 22 to $23 million revenue and 0.5 to $1.5 million of adjusted EBITDA to Ooma annually based on current run rates and before synergies. There are no other contingency payments for either of these acquisitions. Now I'm going to review our third quarter financial results and then provide our guidance for the fourth quarter and full year. Fiscal 26 our third quarter revenue was. $67.6 million, up 4% year over year, driven by the growth of our OOMA business including air dial in Q3 business. Subscription and services revenue accounted for 63% of total subscription services revenue as compared to 61% in the prior year quarter. Q3 product and other revenue came in at $5.7 million and was up 14% year over year due to growth in airdal installations. On the profitability front, Q3 non GAAP net income was $7.7 million, meaningfully above our guidance range and grew 68% year over year, higher than expected. Non GAAP net income was mainly driven by an additional operating leverage realized in R and D, continuing effort to optimize sales and marketing spend and lower than expected impact of tariffs. Now some details on our Q3 revenue. Business subscription and services revenue grew 6% year over year in Q3 driven by user growth and output growth. On the residential side, subscription and services revenue was down 1% year over year. For the third quarter, total subscription and services revenue was $61.9 million, or 91.6% of total revenue as compared to $60.1 million or 92.3% of total revenue in the prior quarter. Now some details on our key customer metrics. We ended our third quarter with 1,233,000 core users, up from 1,230,000 core users at the end of the second quarter. At the end of the third quarter we had 513,000 business users or 42% of our total core users, an increase from 5,000 from Q2. Our blended average monthly subscription and services revenue per core user or ARPU increased 4% year over year to $15.82 driven by an increase in mix of business users including higher ARPU, Office Pro and Pro plus users. During the third quarter we continue to see a healthy Office Pro and Pro Plus take rate with 57% of new office users opting for these higher tier services. Overall 38% of OomaOffice users and are now subscribed to these higher tier services. Our annual exit recurring revenue was $242.7 million up 4% year over year. Our net direct subscription retention rate for the quarter was 99%. Now some details on our gross margin. Our subscription and services gross margin for the third quarter was 71.5% as compared to 71.6% in the prior year. Product and other gross margin for the third quarter was negative 45% as compared to negative 56% for the same period last year. On an overall basis, the total gross margin for Q3 was 62% as compared to 62% in the prior year quarter. The flat overall Gross margin in Q3 this year reflects a heavier mix of product revenue versus prior year due to an increase in air down installations which offset the improvement in product gross margin and now some details on operating expenses. Total operating expenses for the third quarter were $34.2 million and down $1.4 million year over year. Sales and marketing expenses for the third quarter were $17.9 million or 26% of total revenue, up 2% year over year primarily driven by higher channel development activity for airdial research and development expenses were $10.8 million or 16% of total revenue, down 10% on a year over year basis, primarily driven by headcount management. As we continue to focus on R and D efficiency and operating leverage. G and A expenses were $5.5 million or 8% of total revenue compared to $6.1 million for the prior year. Non GAAP net income for the third quarter was $7.7 million or diluted earnings per share of $0.27 as compared to $0.17 in the prior year quarter. Adjusted EBITDA for the quarter was a record $8.6 million or 13% of total revenue and grew 50% year over year. We ended a quarter with total cash and investments of $21.7 million. In Q3 we generated $6.9 million of operating cash flow and $5.4 million of free cash flow. On a trailing twelve month basis, we generated cash, $25 million operating cash flow and $19 million of free cash flow. With strong free cash flow generation, we spent a total of $16.2 million over the last four quarters including $4 million in Q3 to buy back stock through a combination of open market repurchase and RSU net share settlement. As mentioned earlier, we completed the acquisition of FluentStream with a $45 million term loan with an interest rate of approximately 6.4% on December 1, 2025. Although the new term loan has a five year amortization schedule, we expect to use a portion of free cash flow in the future to pay it down faster. We also expect to draw an additional $20 million in term loan with a similar interest rate when we complete Form.com acquisition later in the fourth quarter. The additional details on the term loans are available in our Form 8K filed on December 2, 2025 as well as in our Q3 Form 10Q to be filed later this week. On the headcount front, we ended our quarter with 1,223 employees and contractors. Now I'll provide guidance for the fourth quarter and full fiscal year 26. Please note that the guidance does include the impact of Fluent Stream acquisition completed on December 1, 2025 but does not include the impact of phone.com acquisition as it is expected to close later in the fourth quarter. Our guidance is on a non GAAP basis and has been adjusted for expenses such as stock based compensation, amortizational intangibles and acquisition related expenses. We expect total revenue for the fourth quarter of fiscal 26 to be in the range of 71.3 million to $71.9 million which includes 4 to $4.1 million of revenue contribution from Fluent Stream. Within this total revenue guidance, we expect 5 to $5.3 million of product revenue. We expect the fourth quarter. Non GAAP net income to be in the range of 8.4 million to $8.9 million, which includes approximately 1.5 to $1.6 million of non GAAP net income contribution from fluent stream Q4. Non GAAP net income guidance also includes an impact of interest expense related to the $45 million term loan which is estimated to be approximately $0.5 million. Non GAAP diluted EPS is expected to be between $0.30 to $0.32. We have assumed 28 million weighted average diluted shares for the fourth quarter. For full year fiscal 26, we're raising the guidance and expect total revenue to be in the range of 270.3 million 270.9 million dollars which includes approximately 4 million to 4.1 million dollars of revenue contribution from Fluent Stream. The updated revenue guidance also reflects our current expectation for the timing of Air Dial installations, some of which have been pushed out to the next fiscal year due to the timing of customer orders and the impact of normal seasonality associated with the holiday schedule in Q4 which limits customers availability for installations the full year. Fiscal 26 revenue guidance assumes business subscription and services revenue growth rate of approximately 9% over fiscal 25 while residential subscription revenue to decline 1 to 2%. In terms of revenue mix for the year, we expect approximately 92% of total revenue to come from subscription and services revenue and the remainder from products and other revenue. As for the full year fiscal 26 non GAAP net income, we are also raising the guidance and now expected to be in the range of 28.2 million to $28.7 million which includes approximately 1.5 to $1.6 million contribution from Fluent Stream and $0.5 million of term loan interest expense I mentioned earlier. Based on this guidance range, we estimate our adjusted EBITDA for fiscal 26 to be 32.4 to $32.9 million. We expect non GAAP diluted EPS for fiscal 26 to be in the range of $1 to $1.02. We have assumed approximately 28.2 million weighted average diluted shares for fiscal 26. In summary, we are pleased with our solid results for the third quarter with a record adjusted EBITDA of $8.6 million which grew 50% year over year and improved our adjusted ebitda margin to 13%. We are also very excited about the prospect of adding fluent stream and phone.com to the UMA family and continuing to grow revenue, profitability and free cash flow in the fourth quarter and the next fiscal year. I'll now pass it back to Eric for some closing remarks.

Eric, thank you Shig. Our focus remains on executing well, capturing the opportunities before us and driving improved top and bottom line results. We see growth opportunities across our business and believe our recent acquisitions will propel us faster towards becoming a bigger, stronger and more profitable business. Thank you. We'll now take your questions.

Thank you. Ladies and gentlemen, as a reminder to ask the question, please press star 11 on your telephone, then wait for your name to be announced. To withdraw your question, please press Start one one again, please stand by while we compile the Q and A roster. Our first question comes from the line of Josh Nichols with B. Riley. Your line is open.

Yeah, thanks for taking my question. Great to see the company hitting another record EBITDA margin during the quarter here. It looks like there's a healthy step up in profitability in fiscal 4Q as well with the Fluent Stream acquisition closing. Is that because is there a significantly higher subscription and services gross margin component or I'm just kind of curious like below the revenue line, what gets you to that big jump up in EPS, EBITDA for fiscal 4Q? Yeah.

So I can point to a few things there. Josh, thanks for the question. And you know, first of all. The. Certainly we're seeing more operating leverage and we made some, you know, we took some actions in late Q3 on R&D And D side of spend and that we're going to see a full quarter impact of that in Q4. So that's number one. And you know, we continue to manage sales and marketing spend as well. I think we started the year with 28% and we continue to monitor the customer acquisition cost both organically but also inorganically, to balance things out, optimize them. And lastly, I think the tariff impact that we were estimating going to the Second half, we didn't see that in. Q3 and as of today we're not. Seeing that in Q4. So I guess that's good news for us, obviously. And I think all those things combined we're seeing a better, more flow through. To the bottom line for Q4.

Appreciate the context. And then I know obviously Fluent Stream is closed, but you're still waiting on phone.com which is in the guidance obviously for the fourth quarter. Eric, you mentioned that there's like those numbers that you kind of laid out in terms of full year run rate numbers for those two acquisitions don't include any synergies. Is there any way for you to. Maybe kind of quantify any expectations that you may be able to see around those or is it something that you think you may start to see some synergy benefits in the second half of next fiscal year or a little bit longer?

Hi Josh. So with flow and stream, we expect. The synergy benefits, at least on the. Cost side to be really relatively modest. There are some benefits on the revenue. Side with. Air Dial and also. Just. Being able to bring some of our developments over onto their platform with phone.com. We'Re going to have to see once we get it closed. But we do think there's more overlap. In what we're doing and what they're doing and we can work together to. Drive both scale economies and also just rationalize the things we're doing so that. We share the work over a larger base. It's hard to say, but I'm sure we'll see some early successes right away, particularly with vendor relationships and then we'll assess from there.

Appreciate it. I'll hop back in the queue. Thank you.

Our next question comes from the line of Eric Martinezzi with Lake Street Capital Markets. Your line is open.

Yeah, I wanted to understand on the legacy business, given the Q4 guide was a little bit below where we were expecting shig. I think you mentioned that there was some air dial pushouts. I've got a, you know, basically between what I was looking for and what you guys guided to on the legacy business, I'm off by about a million five. Is that all attributable to airdrop pushouts? Yes, most of that pretty much air dial pushouts, you know. The earlier in. The quarter. I would say, you know, during the Q3 and obviously so far Q4, you know, customer engagement continues to be strong, I would say. And by the way, the air dial bookings actually in Q3 grew 50% year over year. But in terms of customer deployment. Timing. And also the new order timing that we were expecting originally to be much earlier. So both installation order timing being pushed out to next year, which is also disappointing. But it's all on the customer side. We are obviously ready to deliver install. And some of those customers. Have been. Engaged with us for some time doing proof of concept installations, but for one reason or another they decided to install. Next year versus this year. So. Most of that difference you talked about in guidance prior versus now is related to that. Okay, and is this something you know, I know you've been at this for a couple of years now with the Air dial. Is this a different behavior than 12 months ago. Just a kind of a one off or do you think there's something a read through on the macro? Well, I would say this again, I don't know if it's necessarily new but also it's a reflection of, in a good way, I guess one can say it's a reflection of the fact that we are now engaged with larger, more larger opportunities. And larger opportunity means that sometimes it takes time to. Get through the proof. Of concept installation and get into orders and actually get into the installation. And so part of it is the growth we see and the type of larger accounts that we engage with today with opportunity. So I don't know if Eric, you would add anything to that, but.

No, I think that says it well. I mean, I suppose we've known this. In the past, but you know, we're. Seeing customers say, you know what, the holiday's coming, we'll just start in January and with rollout. And that's a little bit of what. All this is about too. Gotcha. And Eric, post close. I realize we've only technically owned Fluent Stream for a week now, but what are your intentions or what kind of out of the gate actions are you taking as far as embracing that Fluent Stream customer base? Well, you know, we've said on our previous calls we think FluentStream is. A very well managed business. And the CEO of FluentStream, Karen Parker, someone we've known for a long time, have great respect for her. We're thrilled she's now. Part of UMA. They are. They are driving approximately 10 million of EBITDA on their approximate 23 or 24 million of revenue. That's pretty good performance. We do think there's opportunities on the vendor relationship side. There's opportunities to leverage their channels with Air dial because they are almost 100%. Go to market through channel relationships. They are on the R and D side. They're doing some investment in areas that. We'Re also investing in. And so we can get together and either go faster on those developments or. Work on more things faster because we have a bigger team to do stuff. And we don't need to do duplicate the work. So there's obviously a whole bunch of areas to kind of come together. But one of our operating principles with acquisitions, and particularly in this case, is. To not try to go too fast. And certainly to not assume we know what is right for their business. We need to learn and understand each other and offer more than drive. And we have a lot of confidence that Karen will, you know, make the smart decisions with us to, you know, make the opportunities come together. So yeah, it's a good performing business. We don't want to mess it up. We want to optimize it and make it better. And that's what we're going to do kind of over an extended time period. Yeah. Thanks for taking my questions.

Thank you. Please stand by for our next question.

Our next question comes from the line of Patrick Walravens with Citizens. Your line is open. Oh, great. This is Kincaid on for Patrick. Congratulations on the quarter, guys. Eric, I just had a question. On the phone.com acquisition call, you had mentioned that you had very significant AI developments in the works. Could you give us any color on what that looks like?

Yeah, a little bit. You know. Being a company that handles a customer, a business's phone calls and messages means we have a lot of data and a lot of opportunity to leverage that data with AI type services. Now. What you see in the AI space today and the kinds of things. You'Ll certainly see from UMA have to. Do with being able to parse all that data and get understanding from it, to evaluate it, things like sentiment analysis and then also to use AI in other ways with the business to help. The business gain productivity. It will be an area where we. Roll out features through the year, next year. But we're excited about what we have coming just the first quarter of next year. And. It'Ll go into our. Most of this will go into our Pro plus tier, which we think will help drive a little bit higher adoption of our highest tier service, which also helps our ARPU growth, which has been steadily growing on the business side, as you know. So, yeah. That'S how we look at it. And I guess I can't really say too much that's too specific at this. Point, but it's certainly an area where we've been, we've done development in this area for over a year and we're already using some of these capabilities internally. At ooma and, and we've learned a lot through that. And I think that's also important because. When it comes to small businesses and you know, our secret sauce is our ability to understand the environment of a small business, you need to offer very. Clear. Value and make it very simple and easy to set up and use. And I think we're going to come. Out with a solution that ticks all those boxes well for our customers. Spectacular. And then a quick follow up.

This is your eighth acquisition in 11 years. I'm just curious if there's any learnings going from the first one till now that you could highlight for us. Yeah, there are. I hadn't counted eight actually, but I. Appreciate your doing so. You know, I think the first observation. Is. An obvious one that everyone would talk about with acquisitions, which is the closer the acquisition is to what you. Already know how to do, the easier. It is for you to understand it. And the easier it is for you. To leverage it and make it a success. And so if you look at perhaps our worst acquisition, it was one where we were branching out into the camera space with a small acquisition we made. And we never really did get that right. And the acquisitions we've made, the last several, we're very happy with the Onsip acquisition going back three or more years now. That business continues to perform very well. In fact better than our expectations. When we acquired them, 2600 hertz we really bought them mainly for technology. Control and synergy. But then the market opened up with. Opportunity for wholesale platforms in general. We've been able to also. Drive a revenue story there. And now with these two acquisitions, I. Think we're very well placed to. Leverage. Them as part of having a greater scale and therefore better economics overall as a company. We do look at our cost of. Acquiring customers through sales and marketing and our cost of acquiring customers through acquisition. And we are balancing both of those. And it's one reason why you saw our sales and marketing down at 26%. Of revenue for Q3, because with these. Acquisitions we're able to drive very strong. Growth for the company and we can. Really. Optimize across all areas with that. So that's a little bit. I probably went on a little bit. But that's how we're seeing things and. That'S a little bit of what we've learned. I love it. Thank you for the time. You bet.

Please stand by for our next question.

Our next question comes from the line of Matthew Harrigan with the Benchmark Company. Your line is open. This is just a nit that you're. So careful on guidance. Do you have any feel for what the non GAAP charges on the acquisition fluent stream would be? The non cash comp and the. Sorry, the stock compensation and the acquisition expenses. I assume it might be high, high six figures. And then secondly, the Vegas hotel, you know, more than 1,000 rooms. Is that presumably. A gaming company with material other assets outside Las Vegas where you could get further penetration. Thank you.

I'll answer the first one. I guess I'll let Eric answer the second one. But the. So with respect to flow and stream, we're not able to give you the range of estimate around non GAAP charges in terms of intangibles. There'll be some tax related entries for the. The intangible is going to book. So we can't give you that because that process, you know, takes. Some time to figure out after the close which. Just occurred a week ago. And. There'S almost no minimal, no stock comp charge associated with the. There's no stock issued, by the way. In closing of a transaction. But prospectively too, there's a very minimal stock comp. So we expect the stock comp to. Be stay at a similar level even post close.

Yeah. Regarding the hotel win in Las Vegas, it was nearly 1,000 rooms. It wasn't over, but yeah, really excited. To win this customer. Our goal internally is to add more than 50 hotels every quarter on our OOMA Enterprise platform. We did that again in Q3. And this hotel. I actually don't know if they're part of a larger train or not. I just don't know. But they're certainly a major hotel in Las Vegas. And are you seeing anything on the SMB side that gives you pause on the economy to the extent that that business is economically sensitive? We are not, no. Okay, great. Thank you.

Thank you. Ladies and gentlemen. As a reminder to ask a question, please press star 11 on your telephone. Please stand by for our next question. Our next question comes from the line of Arjun Batia with Willem Blair. Your line is open. Perfect. Thank you. Eric. I'm just curious. You're kind of acquiring fluent stream and phone.com. presumably you'll be integrating those and working through the acquisitions at the same time. They're decent sized deals and you've obviously done MA in the past, but you're going to have to deal with these two together. Can you just give us kind of your capacity to absorb both businesses at the same time throughout fiscal 27? Yeah, happy to. It's obviously something we thought a lot about. One of our key goals is not to derail in any way the things OOMA is already doing. As we bring these businesses into the family. We feel pretty comfortable. Partly because Fluent Stream is already operating at a very. High level and phone.com is as well. But phone.com is more of an opportunity for the future. Given the strength of the phone.com brand and URL and the high level of E Commerce business the company does. E Commerce is a very cost effective means for growth as well. So we really want to bring our sales and marketing strength to that business. Our team is probably, I wouldn't be. Surprised if it's 10 times the size. Of theirs in terms of just the marketing side of what we do. And we're going to see how that unfolds over time. But there's nothing that neither one of these businesses has something that has to get done tomorrow with the exception of one or two very small things. So it gives us the luxury to take them at the pace. That works for us. And so I think we'll be able to bring them aboard very straightforwardly. And. At some point we would like. To do more acquisitions because this is. Proving to be a very. Cost effective and good method of growth for us. And if we can find more opportunities. We'Re open to that. Understood, that's very helpful. And then just on the business segment, you obviously had the nice win with the hotel in Vegas. When you're looking at the competitive dynamics there, just curious, where are you seeing the most incremental share gains from? Who are the incumbents you're booting out there? And how has that competitive landscape changed. Over the last year or so? So in hospitality hotels, you're almost always. Replacing a legacy on site, PBX or, you know, something that's really quite old. And so. That's the trend of moving to the cloud. That's been going on for quite a number of years now. But hotels and hospitality have some unique requirements and we've been able to customize our room and enterprise solution to fit the needs there very well. Competitively, we haven't seen much change. Okay, got it. Thank you. Thank you. Sure. Ladies and gentlemen, I'm showing no further questions in the queue. I would now like to turn the call back over to Eric for closing remarks.

Thank you everyone for joining our call. Today and we look forward to. Well, please do have a happy holidays. As well coming up. Thanks everyone. Goodbye.

Ladies and gentlemen, that concludes today's conference call. Thank you for your participation. You may now disconnect.