Key Highlights

● Revenue was $83.2 million, up 25%, in the fiscal second quarter.

● Subscription and services gross margin was 72%, while product margin was negative.

● Adjusted EBITDA was a record $12.4 million, about 15% of revenue.

● Ooma repaid $6.5 million of its term loan, reducing debt to about $47 million.

Ooma, Inc. (NYSE:OOMA) is often discussed through its acquisitions and guidance, but its gross margin structure offers a different lens. In the quarter ended 31 July 2026, management said subscription and services gross margin was 72% while product and other gross margin was negative. That split suggests overall profitability may depend on how revenue mix evolves, and how much of the business is recurring service versus lower-margin hardware.

Latest Company Context

Ooma reported fiscal second-quarter 2027 results on 26 August 2026. Revenue was $83.2 million, up 25%, with subscription and services revenue of $75.6 million, or 91% of the total. GAAP net income was $3.0 million, or $0.10 per diluted share, and adjusted EBITDA was a record $12.4 million, about 15% of revenue. According to the earnings call transcript, total gross margin was 63%, up from 62% in the prior quarter, while product and other gross margin was about negative 25%, or roughly negative 30% excluding a tariff recovery. The company repaid $6.5 million of its term loan, reducing debt to about $47 million.

Ooma also bought back $2.5 million of stock in the quarter, or $5.7 million year to date, according to the release. The company said its solutions power more than 2 million users but did not disclose a subscriber count.

Key Business Drivers

Management said it took actions late in the quarter to capture synergies between Ooma and phone.com, which it expects to contribute positively starting in the third quarter. That is a management expectation. Third-quarter guidance calls for revenue of $83.7 million to $84.5 million, including $7 million to $7.5 million of product and other revenue, and full-year fiscal 2027 revenue of $332.0 million to $333.5 million. Full-year GAAP net income guidance is $11.9 million to $12.7 million. Cash and equivalents were $17.5 million, and operating cash flow in the quarter was $13.1 million.

What Investors Should Watch

In the third-quarter report, investors may check whether the product margin deficit narrows, whether the 72% subscription margin holds as acquired customers are integrated, and whether synergy savings appear in operating expenses. Tariff effects on hardware costs could also matter, given the company referenced a tariff recovery. Management also said it remains open to further acquisitions of smaller UCaaS players, which could change both margin and debt profiles. Differences between GAAP and non-GAAP earnings are also worth following: non-GAAP net income was $10.2 million against $3.0 million GAAP.

Trailing twelve-month free cash flow was $30.2 million according to management, a useful cross-check on earnings quality.

Recurring Services Carry the Ooma Earnings Story

The numbers suggest Ooma's earnings quality may rest mainly on its recurring services, with hardware acting as a drag rather than a profit engine. Reported margins and record adjusted EBITDA are encouraging company-reported data. Upcoming quarters could show whether synergies and mix improve consolidated margins without relying on further deals.