The cloud communications company topped both revenue and earnings estimates in its fiscal second quarter, and investors responded with one of the larger single-day moves of the earnings season so far.
Ooma reported fiscal second-quarter revenue of $83.2 million, up 25% from the same period last year, and earnings of $0.35 per share, ahead of the $0.33 analysts had expected, according to the company's earnings release. Shares rose 16.2% after the report.
The size of the reaction stands out against the size of the beat. Two cents per share above consensus is a modest surprise on its own. What appears to have moved the stock is the growth rate underneath it: a 25% revenue increase is a meaningfully faster pace than a mature communications provider typically posts, and it arrived in the same quarter as the profit beat rather than at the expense of it.
Ooma provides cloud-based phone and communications services to small businesses and residential customers, a market that has consolidated around a small number of providers in recent years. The company's release did not break out segment performance, updated guidance, or subscriber counts alongside the headline figures, so the available detail is limited to the two numbers that moved: revenue and earnings per share.
Both lines of the income statement moved in the same direction this quarter, and by a wide enough margin that the market treated it as more than a routine beat.
The size of the reaction is itself a data point: a 16% single-day move on a two-cent earnings surprise says investors had priced in meaningfully slower growth than the 25% Ooma actually delivered.