Ooma, Inc.

Good day, and thank you for standing by. Welcome to the UMA, Inc. fourth quarter and fiscal year 2026 financial results conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question at this time, at that time, please press star 1-1 on your telephone, and you will hear an automated message advising you your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Matthew Robinson. Please go ahead, sir.

Thank you, Michelle. Good day, everyone, and welcome to the fourth quarter and fiscal year 2026 earnings call of UMA, Inc. My name is Matt Robinson, UMA's Director of IR and Corporate Development. On the call with me today are UMA's CEO, Eric Stang, and CFO, Shig Hamamatsu. After the market closed today, UMA issued its fourth quarter and fiscal 2026 earnings press release. This release is also available on the company's website, UMA.com. This call is being webcast live and is accessible from a link on the events and presentations page of the investor relations section of our website. This link will be active for replay of this call for one year. During today's presentation, our executives will make forward-looking statements within the meaning of the federal securities laws. Forward-looking statements generally relate to future events or future financial or operating performance. Our expectations and beliefs regarding these matters may not materialize in actual results or subject to risks and uncertainties that could cause actual results to differ materially from those projected. These risks include those set forth in the press release we issued earlier today and those risks more fully described in our filings for the Securities and Exchange Commission. The four looking statements in this presentation are based on information available to us as of the date hereof. and we disclaim any obligation to update any forward-looking statements except as required by law. Please note that other than revenue or as otherwise stated, the financial measures to be disclosed on this call will be on a non-GAAP basis. The non-GAAP financial measures are not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP. A discussion of why we present non-GAAP financial measures and a reconciliation of the non-GAAP financial measures discussed in this call to the most directly comparable GAAP financial measures is included in our earnings press release, which is available on our website. On this call, we will give guidance for first quarter and full year fiscal 2027 on a non-GAAP basis. Also, in addition to our press release and 8K filing, the overview page and events and presentations page in the investor section of our website, as well as the quarterly results page of the financial information section of our website, include links to information about cost and expenses not included in our non-GAAP values and key metrics of our core subscription businesses. These are titled Supplemental Financial Disclosure 1 and Supplemental Financial Disclosure 2. Additionally, our investor presentation slides include GAAP and non-GAAP reconciliation and also provides resolution of GAAP expenses that are excluded from non-GAAP metrics. Before I turn this over to Eric, I'd like you to know that we will participate in the 38th annual Roth Conference at Dana Point on March 23rd and 24th. Now I will hand the call over to UMA CEO Eric Stang.

Thank you, Matt. Hi, everyone. Welcome to UMA's fourth quarter and fiscal 2026 year-end earnings call. Thanks for joining us. We're pleased to report strong Q4 financial results. To update you on our progress integrating our two Q4 acquisitions, FluentStream, and Phone.com, and to discuss our strategy and the positive momentum we see for fiscal 2027. Financially, we're pleased with our Q4 results, which included solid revenue growth and new records for net income, for adjusted EBITDA, and for cash flow from operations. Our adjusted EBITDA in Q4 reached $11.5 million, which equates to 15% of revenue. This result compares favorably to adjusted EBITDA of 11% of revenue just a year ago. Total adjusted EBITDA for fiscal 2026 was 33.9 million, up from 23.2 million the prior year and 19.8 million the year before that. Looking forward, we expect our fiscal 2027 adjusted EBITDA to be comfortably above 40 million. And as we continue to grow and expand our business, we expect our adjusted EBITDA to go even higher, which is strategic to our outlook as higher adjusted EBITDA affords us greater opportunity to make acquisitions, repurchase stock, and invest in business growth. On the business front, we achieved solid growth in Q4, particularly due to our two acquisitions and a record quarter for Airdial. The additions of FluentStream and Phone.com provide us new avenues for growth, as well as the potential to capture significant synergies. Today, we have only just started the process of integrating these acquisitions and making the most of the opportunity they present. Also in Q4, I'm pleased to report that Airdial added more lines than ever before. The number of Q4 Airdial lines installed was more than double the number that we installed in the same quarter a year ago. I'm pleased to say, too, that other parts of UMA also performed well in Q4, particularly our residential solution, Umatello. As was also the case for Q3, Umatello in Q4 added more users than anticipated, such that our total residential user base remained essentially flat in number. All in, Q4 was a strong quarter that positions us well for fiscal year 2027. And looking ahead now to fiscal 2027, I'd like to highlight a handful of our most exciting initiatives. The first is the introduction of AI solutions on our UMA office platform. This quarter, we intend to introduce several new AI solutions for our customers. These include transcription and summarization of calls, the ability to drive insights from call data using third-party AI platforms, such as ChatGPT or others, an AI-powered answering service, and a full AI receptionist solution. The first two of these will be part of our top ProPlus tier of service, helping us to trade up customers to hire ARPU. The second two will be priced independently, in addition to the cost of our current service offerings. Communications is a fertile ground for the use of AI, and we believe AI can bring new business opportunity for UMA. The second initiative I would like to highlight is our plans for Airdial. We are seeing increased market interest as POTS prices continue to rise and the pace of POTS line shutdowns accelerates. AT&T announced POTS line price increases last fall and it signaled there will be further price increases this spring. We're also seeing an increasing number of shutdown announcements with many forecast for late this year. We believe these are quite positive trends that will expand the opportunity for Airdial. In part due to these trends, we added four more Airdial reseller partners in Q4, bringing the total number of partners we have to 41. Some of these partners are switching to UMA from competitive solutions, which we believe also validates the competitive strength of UMA Airdial. And in select cases, our resellers are being driven to act as the cost they pay for the POTS lines they have purchased and resold can even sometimes exceed the revenue they are receiving from their end customers. We are working more closely with our reseller partners than ever before and are seeing them increase their sales and marketing efforts and expand their sales pipelines. It remains our goal to add at least two new reseller partners each quarter, and in total, our goal remains to grow our number of Airdial reseller partners to over 50. As far as we have already come with Airdial, we still believe it is early days. Most of the POTS line shutdowns we have seen and out so far have come from AT&T. We don't see Verizon active yet. We also believe AT&T has years of shutdowns to go. Airdial remains a key investment area for UMA in fiscal 2027, and we expect to continue our fast expansion. The third initiative I'd like to mention is our plans for our recent acquisitions, Fluent Stream and Phone.com, and along with this, our desire to make further acquisitions in the future. In a nutshell, our plans haven't changed from the announcements we made last fall. Fluent Stream is a solid business generating high EBITDA that brings us increased channel strength and another outlet to sell Airdial. Phone.com has low EBITDA today, but we expect it can be dramatically improved through scale economies. And Phone.com also affords us a second small business brand in the market with a name and URL that can be highly leveraged. While it's difficult to forecast the timing and impact, we'll be working through fiscal 2027 to bring UMA's marketing and sales expertise, lean operations, and product strengths to Phone.com. As a reminder, we were able to acquire both Fluent Stream and Phone.com at prices that made their acquisitions accretive just one quarter forward. We believe acquisitions such as these provide highly cost-effective business expansion. It is a goal of ours for fiscal 2027 to move quickly to pay down the debt we assumed for our recent acquisitions and to make further acquisitions. At this time in our industry, we believe UMA is well positioned to do so, and there are many targets to consider. For fiscal 2027, I would like also to comment on our residential business. As I mentioned above, tele-sales the last two quarters have been remarkably robust. We believe there are three main drivers for this. One is POTS lines are also going away in the residential space. A second is wireless 5G home internet, which allows more consumers to unbundle internet from telephony. And a third is the desire of parents to give their younger kids a phone but avoid screen time. There's a movement happening among parents to wait until eighth grade before letting a child receive a smartphone. UMA's family bundle, consisting of the UMA Tello and a family-friendly phone, is one way families use our solutions. In fiscal 2027, we intend to launch a new product called My Phone, which we hope parents will find particularly attractive for use by younger people in the home. We'll have more to say on this as our strategy unfolds. We believe fiscal 2027 is shaping up nicely for us with upside opportunities in each of the four areas I've just mentioned and more. We also believe we are going into fiscal 2027 in our strongest position ever. UMA now serves over 1.4 million core users, is growing solidly, has over $290 million in annual exit recurring revenue, is achieving approximately 99% net dollar retention, and is driving meaningful double-digit adjusted EBITDA as a percent of revenues. With our growth and significantly improved adjusted EBITDA, we have built a more valuable company. We're dismayed that our advances have not yet translated into a meaningfully higher market capitalization, but we're also confident that that will come in time. Our strong position in each of our four business areas, the market momentum we see in our favor, especially for Airdial, the great strategic partners we have secured who are helping propel our growth, our potential for further accretive acquisitions to layer on additional inorganic growth, In our estimation that UMA can continue to increase adjusted EBITDA and become more profitable in the future, all have us excited about the road ahead. I'll 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 fourth quarter financial results, I'd like to quickly recap the financial terms of the two acquisitions we completed during the fourth quarter. We completed the acquisition of FluentStream on December 1st, 2025 for approximately $45 million in cash. We also completed the acquisition of Foam.com on December 26th, 2025 for approximately $23.2 million in cash. The financial results of these acquired businesses are included in UMA's financial results starting from their respective acquisition completion date in Q4. There are no other contingency payments for either of these acquisitions, and the aggregate cash acquisition price was mostly funded by a $65 million term loan with an interest rate of 6.4%. Now I'm going to review our fourth quarter financial results and then provide our outlook for the first quarter and full year fiscal 2027. We had a solid finish to fiscal 26 with the fourth quarter revenue of $74.6 million, up 15% year-over-year, driven by the growth of UMA business, including Airdial, and the additions of FluentStream and Form.com. On a combined basis, FluentStream and Form.com added approximately $6.1 million of revenue in Q4, of which $6 million was in business subscription revenue. Excluding the impact of these acquisitions, total revenue in Q4 grew 5% year over year. In Q4, business subscription and services revenue accounted for 67% of total subscription and services revenue as compared to 61% in the prior year quarter. Q4 product and other revenue came in at $5.9 million and was up 30% year over year driven by the growth of Airdial installations. Despite Q4 being a holiday quarter, we had a record number of Airdial line installations, which more than doubled over the prior year quarter. New bookings for Airdial was also robust and grew approximately 80% year over year in Q4. On the four-year basis, total revenue was $273.6 million, for fiscal 26 as compared to $256.9 million in the prior year, representing 7% growth year-over-year, including 10% growth in business subscription and services revenue. Excluding the impact of the acquisitions, total revenue and the business subscription revenue for fiscal 26 grew 4% and 6% year-over-year, respectively. On the profitability front, Q4 non-GAAP net income was $9.4 million and grew 62% year-over-year as we continue to focus on operating leverage in R&D and optimizing our sales and marketing spend. On a four-year basis, non-GAAP net income was $29.2 million compared to $18 million in the prior year and also grew 62% year-over-year. Now some details on our Q4 revenue. Business subscription and services revenue grew 23% year-over-year in Q4, driven by user growth and output growth for UMA business and the additions of FluentStream and Form.com. Excluding the impact of the acquisitions, business subscription and services revenue in Q4 grew 7% year-over-year. On the residential side, subscription and services revenue was down 1% year over year. For the fourth quarter, total subscription and services revenue was $68.7 million or 92% of total revenue as compared to $60.6 million or 93% of total revenue in the prior year quarter. Now some details on our key customer metrics. Please note that Q4 output as well as net dollar retention rate exclude the impact of the Q4 acquisitions as these businesses only had a partial quarter starting from their respective acquisition date. We plan to incorporate them into these metrics starting in the first quarter of fiscal 27 when they have a full quarter with us, which is consistent with our past practice. As for the number of core users and annual exit recurring revenue at the end of Q4, they do incorporate the impact of the acquisitions. Our blended average monthly subscription and services revenue per core user, or ARPU, increased 5% year-over-year to $15.99, driven by an increasing mix of business users, including Airdial, as well as higher ARPU Office Pro and ProPlus users. During the fourth quarter, we continued to see a healthy Office Pro and Pro Plus take rate with 57% of new Office users opting for these higher tier services. Overall, 39% of new Office users have now subscribed to these higher tier services. NetDoc subscription retention rate for the quarter was 99% as compared to 99% in the third quarter. We ended the fourth quarter with $1 million 404,000 core users, including 164,000 business core users from the acquisitions, up from 1,233,000 core users at the end of the third quarter. At the end of the fourth quarter, we had 684,000 business users, or 49% of our total core users, an increase of 171,000 from Q3. Our annual exit recurring revenue was $291 million, up 24% year-over-year. Excluding the impact of the acquisitions in Q4, our annual exit recurring revenue grew 5% year-over-year. Now some details on our gross margin. Our subscription and services gross margin for the fourth quarter was 72% as compared to 72% in the prior year. product and other gross margin for the fourth quarter was negative 42% as compared to negative 55% for the same period last year. The year-over-year improvement in product and other gross margin was primarily due to fully consuming higher cost components we had procured a few years ago. On an overall basis, the total gross margin for Q4 was 63% as compared to 63% in the prior quarter. The flat overall gross margin in Q4 this year reflects the heavier mix of product revenue versus prior year due to an increase in airdial installations, which offset the improvement in product gross margin. And now some details on operating expenses. Total operating expenses for the fourth quarter were $37 million, an increase of $1.9 million year-over-year due to the additions of FluentStream and Form.com. Excluding the impact of the acquisitions, total operating expenses decreased $0.7 million from the same period last year. Sales and marketing expenses for the fourth quarter were $18.4 million, or 25% of total revenue, up 4% year-over-year due to the addition of Fluent Stream and Fund.com expenses. R&D expenses were $12.2 million, or 16% of total revenue, up 9% on a year-to-year basis due to the addition of Fluent Stream and Fund.com team members. G&A expenses were $6.4 million, or 9% of total revenue for the fourth quarter, compared to $6.2 million for the prior year quarter. Non-GAAP net income for the fourth quarter was $9.4 million or diluted earnings per share of 34 cents as compared to 21 cents in the prior quarter. Adjusted EBITDA for the quarter was a record $11.5 million or 15% of total revenue and grew 67% over the prior quarter. On a four-year basis, adjusted EBITDA was $33.9 million or 12.4% of total revenue compared to $23.3 million or 9% of total revenue in the prior year. We are pleased with the meaningful step up in adjusted EBITDA margin realized in fiscal 26 as we continue to focus on growing profitability towards our long-term financial goals. We ended a quarter with total cash investments of $20.1 million. In Q4, we generated $10.7 million of operating cash flow and $9.1 million of free cash flow. On a trailing 12-month basis, we generated $27.7 million of operating cash flow and $22 million of free cash flow. We spent a total of $16.8 million over the last four quarters, including $4.6 million in Q4, to buy back stock through a combination of open market repurchase and auto-issue net share settlement. In addition, we already paid down the term loan by $6.5 million in Q4 and reduced the outstanding debt balance from $65 million to $58.5 million at the end of Q4. With strong free cash flow generation, we believe we can continue to maintain a reasonable level of stock repurchase while paying down a debt at a healthy pace. On the headcount front, we ended a quarter with 1,420 employees and contractors. Now I will provide a guidance for the first quarter and full fiscal year 2027. Our guidance is on a non-GAAP basis and has been adjusted for expenses such as stock-based compensation, amortization of intangibles, and acquisition-related and other expenses. We expect total revenue for the first quarter of fiscal 27 to be in the range of $79.6 million to $80.4 million, which includes $5.7 to $6.1 million of product and other revenue. We expect the first quarter non-GAAP net income to be in the range of $8.8 to $9.2 million. Non-GAAP diluted EPS is expected to be between $0.31 and $0.33. We estimate $28 million where the average diluted shares outstanding for the first quarter. For four-year fiscal 27, we expect total revenue to be in the range of $321 million to $325 million. The four-year fiscal 27 revenue guidance assumes business subscription and services revenue growth rate of approximately 30% over fiscal 26, while residential subscription revenue to decline 1 to 2%. In terms of revenue mix for the year, we expect 92 to 93% of total revenue to come from subscription and services revenue and the remainder from products and other revenue. We expect non-GAAP net income for fiscal 27 to be in the range of $35.5 million to $37 million. Based on this guidance range, we estimate adjusted EBITDA for fiscal 27 to be $43 million to $44.5 million. We expect non-GAAP diluted EPS for fiscal 27 to be in the range of $1.26 to $1.31. we have assumed approximately $28.2 million, where the average diluted shares are standing for fiscal 27. In summary, we are pleased with a solid finish to our fiscal 26 with a record adjusted EBITDA of $33.9 million for the year, which grew 46% year-over-year, along with a record free cash flow of $22 million. As we start our new fiscal year, We are excited about both organic and inorganic growth opportunities in front of us and remain focused on achieving another meaningful progress towards our long-term financial targets. I'll now pass it back to Eric for some closing remarks. Eric?

Thank you, Shig. On nearly every metric, UMA is a stronger company today than ever before. As we now enter fiscal 2027, we're encouraged by our past execution and The positive market tailwinds we see, particularly for Airdial, are expanding number of strategic partners in the addition of our two acquisitions last quarter. Our team is committed to making fiscal 2027 a great year for UMA. Thank you for joining our call today. We'll now take your questions.

Thank you. As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. One moment while we compile our Q&A roster. Our first question is going to come from the line of Josh Nichols with B. Reilly Securities. Your line is open. Please go ahead.

Yeah, thanks for taking my question. Always good to see record EBITDA margins and free cash flow profitability for the company. I just was curious. You mentioned it on the call that, you know, Fluent Stream is already doing quite well from an EBITDA margin perspective, but you mentioned that you think that there's room for pretty significant increases for phone.com. Does the fiscal year 27 guidance you lay out include very much in the way of potential cost synergies on that front, or would that potentially be some upside to the 2027 outlook that you laid out?

Yeah, thanks for the question, Josh. And, you know, profitability guidance – we don't assume the synergy yet. We want to start the year conservatively on that note. And as we said before, we have a pretty good track record going back to prior acquisitions to achieve the cost synergies ultimately on SIP as an example again. And so as we start the year, we wanted to take that as an upside. As we realized then, probably second half of the year, that's what we're targeting to see a more meaningful cost synergy. So long story short, the guidance does not assume the synergy benefit yet.

Great. Well, that's good to hear. And then just in terms of the Airdouse catch-up, I know You said you thought there was like some customers because of weather and seasonality was going to be a little bit slower, but the numbers for 4Q that you kind of mentioned for Airdial seem quite strong. And when you look at some of those like larger reseller partners, do you expect like the pace of deployments to increase pretty significantly this year relative to last year? What's the expectation there?

Hi, Josh. Yeah, in short, we do. It's, Difficult to forecast and we don't want to get out in front of committed agreements that aren't in place yet. But if you look at funnels and backlogs of opportunity and the customer response we're seeing out in the market and just the momentum which AT&T is moving at to increasingly raise prices and retire more POTS lines, we think we have the potential for a very good year ahead. But, you know, we put some of that into our guidance, but we think there's definitely upside there as things unfold.

Great. I guess last question for me. I mean, you really have a pretty well-rounded capital allocation strategy. You're buying back stock, you're generating cash flow, improving the margins, and you're also looking at M&A. Is the expectation right now with what's been going on in the market that You'd probably close at least like one additional acquisition this year based on the pipeline, or what's the expectation now?

Well, as I said in my remarks, we think acquisitions like FluentStream and Phone.com are another great avenue for growth for the company, and it's part of our strategy today. You can never handicap when something's going to happen. There are targets out there. But, yeah, I'm hopeful that every year we'll be doing some acquisition or acquisitions to augment what we're doing ourselves just because of the opportunity we see.

Thanks. I'll hop back in the queue.

Thank you, Josh.

Thank you. And one moment for our next question. Our next question comes from the line of Patrick Walravens with Citizens. Your line is open. Please go ahead.

Oh, great. This is Kincaid on for Patrick Walravens. Thanks for taking the question. Eric, just wanted to follow up on two comments that you've made last quarter. Number one, you said that there was some of the air dial installations that had been pushed out. You mentioned January, so I'd love to get a follow up on that. And then I understand that you may not want to give this every quarter, but you mentioned 50 hotels per quarter was your goal. Love to hear how that's going.

You bet. So yeah, some of what was pushed out last fall did come in in Q4, particularly January. We had a very strong January for Airdial. And that momentum's actually carried into February as well. So I think we're off to a great start for the year on Airdial. And then on the hotel hospitality front, our goal is to add 50 new hospitality customers every quarter. I think we did a little over 80. in Q4, which is a nice step for us. That might be a record in the terms of the number in any particular quarter. And I will say our Marriott relationship is also finally starting to pay off some in contributing to that number. So, you know, continued good momentum there too.

Spectacular. And then just one last one for me. On the family phone bundle, do you have a sense of what the TAM on that would look like?

That's a good question. The family phone bundle is one of three or four bundles we have in the market today, more focused around giving something easy for families to use and have 911 capability for real landline 911 and things like that. But my phone, when we announce it, will be specifically targeted for towards that market opportunity we see where parents want to have something in their home for the kids to use that isn't putting the internet and screen time in front of them. We think it's a very, very real segment there. And I think that's partly what's been buoying our last two quarters success on the residential front. So I think my phone is going to take us the next step and we should have it out in the market in the first half of this year. We have previewed it with a couple of our retail partners, and they love it. And we really believe every family with kids at home, eighth grade or less, is a potential customer for that in U.S. and Canada. So it's a real opportunity.

That's great. I love it from a values perspective as well. Spectacular. Thanks for the time.

Thank you.

Thank you. One moment for our next question. Our next question will come from the line of Matthew Harrigan with Benchmark StoneX. Your line is open. Please go ahead.

Thank you. Given the awareness of the copper line replacement quandary is increasing, What are the – it really feels like you're making accelerations in the approval process and all that, and you've kind of reached an inflection point. But the guys who aren't running with you yet, what are the kind of the ad hoc solutions that they're adapting? And I know that I've asked you this question before, but are you seeing anything in terms of – competition from other providers where there's any innovation? Because it feels like, as we've also talked about before, this has been going on for a long time. And you've made, I think, a fairly conscious decision not to push the sales and marketing that heavily right now. I know R&D is coming down a lot, hence the improvement in margins. But are you just generating a but not pushing sales and marketing harder? Or do you think you could still grow even faster if you push the sales and marketing? Thank you.

Yeah, hi. We are growing sales and marketing in our outlook this year. But we have something buoying our efforts, which is all our partners, 41 now, who have signed up to resell Airdial. They're driving a lot of our success too. And yes, our pricing's lower with them because they're reselling, but they're taking the sales and marketing lift on their shoulders. So it's part of our business model to leverage ourselves with the strength of others to go faster than we can go just ourselves. But I will say that I think we ended Q4 with sales and marketing at about 25% of revenue. I certainly wouldn't want to see that go lower, and we may see it go higher a little bit as we go through this year. But we're definitely getting out ahead right now of additional growth opportunities that we think are coming our way on Airdial, and we are hiring in key areas.

Are you seeing anything in the way of other people presenting alternative solutions?

Well, we do have a handful of competitors out there, and depending on the nature of the deal and who the customer is and all, they might be stronger or weaker in terms of relationship with that customer or opportunity. But I will say that I still believe, I believe strongly that the features and capabilities in our solution are ahead of others in the market. And that allows us to... really bring it all together for a customer. And I think that's why we're winning so many of these partner resellers, because they recognize the strength of our solution. I think last fall, we took some additional steps to make our remote device management even more robust for our partners to use. And we have other improvements planned on Airdial this year, or really I'd say feature additions. So I think we're going to stay ahead. But it's, you know, I think that, you know, the Airdial market today or the POTS replacement market, somebody's going to break through as the winning solution in the market. And I think it's ours to go get. And we're executing to try to do that.

Great. Thanks, Eric.

Thank you.

Thank you. One moment for our next question. Our next question will come from the line of Arjun Bhatia with William Blair. Your line is open. Please go ahead.

Eric, thank you. Can you guys just touch a little bit on the Airdial strength and You know, I know in the past we've talked about implementation hurdles. Just help us understand where we are on that. Is this like a permanent sort of or more durable tailwind going into 2026? Or could there still be some kind of bumps just as we're thinking about the outlook?

Yeah. So our airdial grows in a couple of ways. There is a steady stream of business we know or can reasonably forecast we're going to drive every quarter through our channel agents, through our own direct sales, through what we know some of our partners have been doing and will keep doing. But there's also big deals out there, larger size deals, and they're lumpy and you don't know when a customer is going to pull the trigger. I think that there's been a lot of budgeting to address this segment by larger customers this year that wasn't in place last year. I know that some of our key reseller partners are putting more emphasis today than they were a year or two ago on this segment. And I'm hopeful we'll keep winning multiple partners every quarter to bring on board. It's not all perfect, but... You know, there is certainly an increased momentum. But because it's lumpy and because one customer can be 5,000 or 10,000 lines, ultimately, if it's a very large customer, you just don't know when you're going to win those and who's going to win those. So we're a little more conservative on how we forecast aerosol today. But the business is certainly out there, and we feel like things are going well for us. for all these opportunities.

Okay, perfect. Got it. Thank you. And then just, you know, when we're thinking of the sort of residential business, you know, you had a better Q4. You're kind of talking about my phone might come in this year. Can that be a growth? Can that grow in 26? Or how are you thinking about the sort of range of outcomes?

I do think it can grow, but I can tell you in our guidance, we have not modeled it that way. But, you know, we don't expect it to decline either. And, you know, residential is close to $100 million of revenue for us and a very nice segment for us to be in. And these... We've had a little bit of decline over the last year and all. Not a lot, but a little, like 1% year over year. But I think with my phone and some of the trends we're seeing, I mean, essentially users did not decline in Q3 and did not decline in Q4. And when my phone comes in, maybe we'll see the users grow a little bit. I think that's all I want to predict at this time. Once we get my phone in the market, depending on what retail placement it has, we'll be updating you. But certainly, it's great to see that the residential phone is not dead. There's some very good, powerful reasons to have one in the home. 911 being one, something for the kids to use, having a home office with better voice quality, having a parent or mother or father-in-law in the home. There's all kinds of reasons why it's a nice convenience. And it may not be a nice convenience that you know, $30, $40 a month. But with UMA, it can be as little as just, you know, a few dollars of taxes and fees a month. And that's powerful. So, yeah, we see real market opportunity there. And we're not, you know, we're investing in it today.

All right. Great. Appreciate the call. Thank you. You bet.

Thank you. And as a reminder, if you would like to ask a question, please press star 11 on your telephone. And our next question will come from the line of Maxwell Michaels with Lake Street Capital Markets. Your line is open. Please go ahead.

Hey, guys. Thanks for taking my questions. First one, just kind of want to focus on ARPU. You noted FluentStream and Phone.com weren't included in this quarter's numbers, but can you give us a sense of what that looks like in Q1, or just give us a sense of what the ARPU looks like compared to UMA, and then If we look at sort of the AI offerings you guys mentioned earlier in the call, can you give us a sense of what ARPU looks like for a customer who's using the highest tier of all the AI offerings?

So in terms of what we could expect once we incorporate those two acquisitions, they're relatively comparable to UMA Office ARPU. I would say slightly lower than UMA Office, but not too much. So you might see a little bit of pull down on output just because of that, but they're not too far from UMA Office is. And higher tier services, I think your second question was the higher tier services on UMA Office. Well, it was AI. AI, okay, yeah.

Well, okay. So the first two services I talked about will be part of ProPlus, which sells for $29.95 a month. A single digit percentage of our customers today take the ProPlus tier. But we think with AI included in it, we can move that up and that will bring our ARPU up. Our Pro tier is $24.95, our Essentials tier is $19.95. Most of our customers take our Pro tier. And then, you know, the other two services I mentioned will be priced separately. And they'll be both a, we haven't announced pricing on them, so I can't give you a specific answer here today. I apologize. But they'll most likely be a fixed price per month and a usage charge as well. Basically, if you go over a certain level of usage. I think you can look at these solutions in the market today and see they're priced generally those solutions on their own are priced above where our current UMA office ARPU is at. So I think that they have the potential to bring our overall average up as well.

And then last one for me, just around acquisitions. I think the combined revenue multiple you guys paid for both the companies were around 1.4 times sales. I mean, is there a criteria you guys are following or a multiple you guys are willing to pay for higher growth that you guys can share with us?

Yeah, you know, it's interesting. If you look at the acquisitions we've done, we've bought two businesses for less than one times revenue, one for about one times revenue, and FluentStream for more than one times revenue, but with very strong EBITDA coming from the company. it's a balance and a trade-off. A business that has low EBITDA, but we think with our synergies we can improve, that's work on our side, and we're not going to pay us up as much for that. But when we see a business with higher EBITDA that we think is stable and that we can leverage for the future, we're going to pay a little more. Either way, I think our biggest metric is, is it accretive? And do we think putting our dollars there is going to have more impact than putting them into sales and marketing? And I think that we're kind of a unique company in this whole UCAS space as well, because these businesses in the kind of the $10 to $30 million revenue range, they're meaningful for us. But there aren't a lot of other players out there who would want to buy something that size or or have the financial position to do so. So I think we've got good opportunities, but always it's a case-by-case discussion for us over what's appropriate for that business and what it's doing.

All right. Thanks, guys.

Thank you. And I'm showing no further questions at this time. And I would like to hand the conference back over to management for any further remarks.

Well, thank you, everyone. You know, we're up to around, I think we got it around 320, 325 million in revenue for this year. If we can do more acquisitions this year, we'll be moving that up. And I think that part of what we're doing here is becoming a bigger company and with more reach and more breadth, and I think also appealing to a larger investor base, which is also something we're trying to do as we look forward. We're excited about these initiatives we went over with you. Four clear initiatives, one around AI, one around Airdial, one around capitalizing the acquisitions we've done, and one around our better-than-expected performance on residential projects. And I think those are great trends for us as we go into fiscal 2027. So thank you for your time today, and I'll stop there. Thank you, everyone. Bye-bye.

This concludes today's conference call. Thank you for participating, and you may now disconnect. Everyone have a great day.