Continued strength in Services revenue at
$50.70 million or 81.42% of total revenue in Q2
Sangoma Technologies Corporation (TSX: STC; Nasdaq: SANG)
(“Sangoma” or the “Company”), a trusted leader in delivering
cloud-based Communications as a Service solutions for companies of
all sizes, today announced its second quarter financial results and
unaudited condensed consolidated interim financial statements for
the fiscal second quarter ended December 31, 2023.
US $000
Q2 FY2024
Q2 FY2023
Change
Q1 FY2024
Change
Revenue
$62,276
$62,035
—%
$63,028
(1)%
Gross profit
$43,986
$42,789
3%
$44,028
—%
Operating expenses1
$44,537
$44,258
1%
$45,001
(1)%
Net loss
$(3,239)
$(2,735)
$(2,444)
Net loss per share (fully diluted)
$(0.10)
$(0.08)
$(0.07)
Adjusted EBITDA2
$10,448
$10,566
(1)%
$9,882
6%
Net cash provided by operating
activities
$9,188
$4,982
84%
$7,849
17%
Sangoma's Services revenue rose to $50.70 million, representing
81% of total revenue in the second quarter of fiscal 2024. Products
revenue was down, resulting in total Revenue for the second quarter
of $62.28 million, slightly higher from the same period in the
prior year, and a 1% decrease from the immediately preceding
quarter.
The Company continues to maintain a healthy balance sheet,
finishing the quarter with net cash provided by operating
activities of $9.19 million and a cash balance of $10.56 million on
December 31, 2023, reflecting a strong quarterly progression of
cash flow. Cash conversion of cash flow from operations to Adjusted
EBITDA2 during the second quarter reached 88%, almost two times the
rate compared to 47% conversion a year ago and 79% from the
immediately preceding quarter. Sangoma continues to remain
comfortably within its debt covenants.
"We are currently immersed in the transformative journey
outlined in the 100-day plan, a strategic initiative I initiated
upon assuming the role of Sangoma’s CEO. The entire Sangoma team
has rallied together, aligning our efforts in unison across all
facets of the business. Whether supporting our new enterprise
architecture (EA) plan, including ERP, driving cost-saving
measures, executing go-to-market strategies, or optimizing
day-to-day operations, I am exceptionally pleased and proud of the
collective dedication within the Sangoma family," stated Charles
Salameh, Chief Executive Officer.
"In the realm of building organizations or skyscrapers, a solid
foundation is paramount for sustained growth and stability. Our
robust, transparent, and well-maintained Balance Sheet serves as a
crucial pillar in this foundation. Our unwavering focus on
maintaining this financial bedrock is critical as we construct our
new organizational structure atop it. We recognize the importance
of financial strength in fostering investor confidence and ensuring
the success of Sangoma's ventures."
Operating expenses1 were $44.54 million for the quarter,
slightly up from $44.26 million for the same period last year by
about 1%, but have decreased by about 1% compared to the
immediately preceding quarter.
Net loss for the second quarter was $3.24 million, while
Adjusted EBITDA remained strong at $10.45 million, reflecting a 6%
increase compared to Q1 of fiscal year 2024.
Conference call
Sangoma will host a conference call on Wednesday, February 8,
2024, at 5:30 pm ET to discuss these results. The dial-in number
for the call is 1-800-319-4610 (International 1-604-638-5340).
Participants are requested to dial in 5 minutes before the
scheduled start time and ask to join the Sangoma call.
1 Operating Expenses consist of sales and marketing, research
and development, general and administration and amortization of
intangible assets. 2 Adjusted EBITDA is a non-IFRS financial
measure used by the Company to monitor its performance and
definitions of these terms along with reconciliation to the closest
IFRS measure may be found in the accompanying MD&A on page 17
posted today at www.sedarplus.ca and www.sec.gov.
About Sangoma Technologies Corporation
Sangoma is a leading provider of managed cloud-based
communications and technology solutions for businesses worldwide.
With a deep commitment to simplifying and enhancing communications,
Sangoma offers a comprehensive suite of cloud-native communication
solutions, including software, endpoints and connectivity services.
With a focus on value-based offerings, Sangoma empowers businesses
of all sizes to streamline their processes, reduce operational
complexity, and increase efficiency. Whether it's cloud software
solutions, reliable endpoints, or seamless connectivity, Sangoma's
expert team is dedicated to delivering trusted and innovative
services.
Sangoma is your one-stop solution for managed cloud
communications services, making vendor management more
straightforward and saving you valuable time. To learn more about
how Sangoma can transform your communication infrastructure, visit
our website at www.sangoma.com.
Cautionary Statement Regarding Forward Looking
Statements
This press release contains forward-looking statements,
including statements regarding the future success of our business,
development strategies and future opportunities.
Forward-looking statements are provided for the purpose of
presenting information about management’s current expectations and
plans relating to the future and readers are cautioned that such
statements may not be appropriate for other purposes.
Forward-looking statements include, but are not limited to,
statements which are not historical facts. When used in this
document, the words such as "could", "plan", "estimate", "expect",
"intend", "may", "potential", "should" and similar expressions
indicate forward-looking statements.
Although Sangoma believes that its expectations reflected in
these forward-looking statements are reasonable, such statements
involve risks and uncertainties and no assurance can be given that
actual results will be consistent with these forward-looking
statements. Forward-looking statements are based on the opinions
and estimates of management at the date that the statements are
made, and are subject to a variety of risks and uncertainties and
other factors that could cause actual events or results to differ
materially from those projected in forward-looking statements.
Readers are cautioned not to place undue reliance on
forward-looking statements, as there can be no assurance that the
plans, intentions or expectations upon which they are based will
occur. By their nature, forward-looking statements involve numerous
assumptions, known and unknown risks and uncertainties, both
general and specific, that contribute to the possibility that the
predictions, forecasts, projections and other events contemplated
by the forward-looking statements will not occur. Although Sangoma
believes that the expectations represented by such forward-looking
statements are reasonable, there can be no assurance that such
expectations will prove to be correct as these expectations are
inherently subject to business, economic and competitive
uncertainties and contingencies. Some of the risks and other
factors which could cause results to differ materially from those
expressed in the forward-looking statements contained herein
include, but are not limited to, risks and uncertainties associated
with changes in exchange rate between the Canadian dollar and other
currencies (in particular the United States’ (“US”) dollar),
changes in technology, changes in the business climate, changes to
macroeconomic conditions, including (i) inflationary pressures and
potential recessionary conditions, as well as actions taken by
central banks and regulators across the world in an attempt to
reduce, curtail and address such pressures and conditions,
including any increases in interest rates, and (ii) the effects of
adverse developments at financial institutions, including bank
failures, that impact general sentiment regarding the stability and
liquidity of banks, and the resulting impact on the stability of
the global financial markets at large, risks related to the
COVID-19 (coronavirus) pandemic and any resurgence thereof, our
ability to identify and remediate material weaknesses and
significant deficiencies in our internal controls, changes in the
regulatory environment, the imposition of tariffs, the decline in
the importance of the PSTN (as hereinafter defined), impairment of
goodwill and new competitive pressures, and acts of terrorism and
war, hostilities and conflicts, including, but not limited to,
Russia’s invasion of Ukraine in February 2022 (and associated
changes in global trade policies and economic sanctions), and the
other risk factors described in our most recently filed Annual
Information Form for the fiscal year ended June 30, 2023.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240208616442/en/
Sangoma Technologies Corporation Larry Stock Chief Financial
Officer investorrelations@sangoma.com
Sangaoma Technologies (NASDAQ:SANG)
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