Ooma, Inc.

Hello, and welcome to UMA first quarter fiscal year 2027 financial results conference call. At this time, all participants are on a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask the question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. I would now like to hand the conference over to Matthew Robinson. You may begin.

Thank you, Tawanda. Good day, everyone, and welcome to the first quarter fiscal 2027 earnings call of UMA, Inc. My name is Matt Robison. I'm the 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 first quarter fiscal 2027 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 operating performance. Our expectations and beliefs regarding these matters do 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 with the Securities and Exchange Commission. The forward-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. The 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 second quarter and full year fiscal of 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 costs 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 to non-GAAP reconciliation. It also provides a resolution of GAAP expenses that are excluded from non-GAAP metrics. Now I will hand the call over to UMA's CEO, Eric Stang.

Thank you, Matt. Hi, everyone. Welcome to UMA's first quarter fiscal year 2027 earnings call. Thank you for joining us. We're pleased to report strong Q1 financial results and a good start to our fiscal 2027 year. I believe we are making good progress on our key initiatives for this year, and I look forward to reviewing them with you today. Financially, for Q1, I'm pleased to report that we exceeded expectations with revenue growing 25% year over year to $81.1 million, non-GAAP net income growing 73% year over year to $9.7 million, and adjusted EBITDA growing 78% year over year to $11.8 million. Subscription and services revenue from business customers grew 38% year over year, and reached 69% of total subscription and services revenue. Excluding the impact of two acquisitions that we made late last year, we stepped up our organic growth rate of business subscription and services revenue by a couple of percentage points to 9% year over year. As expected, a key driver of our stronger business services growth was Airdial. Airdial services revenue in Q1 was up by 80% versus a year ago. And on the residential side of our business, I'm happy to mention that for the first time in many quarters, we grew our base of residential users in Q1. All in, we believe we were off to a strong start for fiscal 2027, and so we'll be providing improved guidance for the balance of this year later in our remarks. As we discussed on our last conference call, We are focused on several key initiatives for this fiscal year. The first that we'd like to address is our commitment to expanding Airdial. We believe the market opportunity for POTS replacement is accelerating as more companies incur higher POTS charges or have their lines turned off by AT&T or others. And as you know, we have built Airdial from the ground up to provide a fully integrated solution incorporating unique features to best serve this market. In Q1, we were proud to announce new features including equipment disconnect detection where we identify if the equipment that is connected to Airdial goes down. We also announced off-hook alerts to identify equipment connected to Airdial that goes off-hook for an extended time. These features were added in response to a customer of ours in the healthcare space who must ensure working connections are always in place. We believe that both of these new features are unique to Airdial and bring added differentiation to Airdial's remote device management suite of services. Commercially, Q1 was a record quarter for Airdial. New lines installed were more than double the number of a year ago. In general, we are seeing increased market interest in POTS replacement by many industry sectors. And in Q1, we achieved particular success serving healthcare customers, REITs, and state and local government bodies, including schools. In Q1, we also met our goal of securing two additional Airdial resellers in the quarter. One of these new resellers will be switching away from a competitor's product to exclusively sell Airdial. We are excited to be working with them and all of our 40-plus Airdial resellers. The second initiative for this year that I would like to discuss is our plans to introduce AI solutions on our UMA office platform. I'm pleased to report that earlier this month, we announced UMA AI, which is a suite of new AI-powered capabilities, including AI transcriptions, AI answering service, AI receptionist, AI insights, and an open AI integration. Together, these features enable UMA customers to capture, summarize, and analyze call information automatically while improving responsiveness and overall call handling efficiency. To date, three of these features, namely AI transcription, AI answering service, and the open AI integration, have been released to customers, and the two others are in beta and will be released soon. The AI answering service and the AI receptionist service carry a separate monthly charge, and the other features have been made available in Ooma's top tier of service called ProPlus. As such, we expect adoption of Ooma AI to bring increased revenue for Ooma. In general, we believe AI can be a valuable tool for small businesses to help them automate routine tasks, deliver real-time insights, move faster, and work smarter. One statistic we have heard is that over 50% of calls to small businesses go unanswered by a live person, and close to 25% go unanswered at all. A key goal in our development of UMA AI has been to create the right set of features that will be most useful to small businesses, while also making the features very easy to enable and use. While it is early days and too soon to evaluate customers' response to UMA AI, we are excited about its potential. The third initiative for this year that I would like to update is our plans for our residential business. Last quarter, I mentioned that UMA Telo sales were remarkably robust, and I'm pleased to report that strong sales of Telo continued in Q1. In fact, as I mentioned earlier, for the first time in many quarters, we grew our base of residential users in Q1. We see several market drivers for residential phones. One in particular, is parents desire to give their kids a phone but avoid the screen time associated with mobile phone use. We estimate there are approximately 20 million households in the United States with children aged 5 to 14 years old. According to the Pew Research Center, 86% of parents say managing children's screen time is a day-to-day priority. That's not surprising given studies have shown that smartphone use in children can lead to sleep disruption, negative mental health outcomes, and increased inattention symptoms. Organizations like Wait Until Eighth, Unplugged, Smartphone Free Childhood, ScreenStrong, ScreenSense, and many others have emerged to help parents with screen time concerns. To address this and give parents a solution, we recently launched MyPhone, a modern landline designed specifically for families with kids. My Phone contains several features aimed at allowing parents to monitor and control their kids' phone usage. One is trusted circle calling, which allows calls only between approved contacts, and another is quiet hours, which blocks all calls during homework, bedtime, or family time. Online call logs also allow parents to monitor incoming and outgoing calls. I'm pleased to report that we have received a strong retailer response to our announcement of MyPhone. MyPhone is now available at walmart.com and will soon roll out to other online retailers. We also expect that MyPhone will become available on the shelf in Walmart stores starting this fall. The last initiative I'd like to touch upon is our plans to make the most of our two acquisitions from late last year and to pursue further acquisitions in the future. We believe the integration of each of our recent acquisitions is going well, and our rationale and plans for each acquisition continue to hold true. As a reminder, Fluent Stream is a solvent business generating high EBITDA that brings us increased channel strength and another outlet to sell Airdial. Phone.com has low EBITDA, but we can take and are taking steps to improve its financial performance through scale economies And phone.com also affords us a second small business brand in the market with a powerful name and URL. We anticipate driving further improvements over the next three quarters as we increasingly leverage UMA's marketing and sales expertise, lean operations, product strengths, and vendor relationships. As Shig will note in his comments, we have now paid down our debt to about $53 million, and intend to continue to pay it down further each quarter to strengthen our ability to make more acquisitions in the future. 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.