Sangoma Technologies Corp (SANG) (Q4 2024) Earnings Call Transcript Highlights: Strong FY ...

GuruFocus Research
4 min read

In This Article:

  • Revenue: $247.3 million for FY 2024, within the guided range of $246.5 million to $248.5 million.

  • Adjusted EBITDA: $42.6 million, above the midpoint of the guided range of $41.5 million to $43.5 million.

  • Adjusted EBITDA Margin: 17%.

  • Net Cash from Operating Activities: $44.2 million, representing a cash conversion from adjusted EBITDA of 104%.

  • Q4 Revenue: $60.9 million, a decline of 4% year-over-year.

  • Q4 Services Revenue: $49.9 million, a decline of 0.6% year-over-year, representing 82% of total revenue.

  • Q4 Product Revenue: $11 million, a decline of 18% year-over-year.

  • Q4 Gross Margin: 69%, up 3% compared to the prior-year period.

  • Q4 Adjusted EBITDA: $11.1 million, representing 18% of revenue.

  • Net Loss for Q4: $1.7 million, or $0.05 per fully diluted share.

  • Total Debt Repayments for FY 2024: $23 million.

  • Cash Balances at End of Q4: $16.2 million.

  • FY 2025 Revenue Guidance: $250 million to $260 million.

  • FY 2025 Adjusted EBITDA Guidance: $42 million to $46 million.

  • Q1 FY 2025 Revenue Guidance: $61 million to $62 million.

  • Q1 FY 2025 Adjusted EBITDA Guidance: $9 million to $10 million.

Release Date: September 18, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Sangoma Technologies Corp (NASDAQ:SANG) reported revenues of $247.3 million for FY24, within their guided range.

  • Adjusted EBITDA of $42.6 million exceeded the midpoint of their guided range, with a margin of 17%.

  • Net cash generated by operating activities was $44.2 million, representing a cash conversion from adjusted EBITDA of 104%.

  • The company has maintained churn rates below 1%, indicating strong customer retention.

  • Sangoma Technologies Corp (NASDAQ:SANG) has a robust pipeline of initiatives for FY25, positioning them for sequential growth.

Negative Points

  • Product revenue declined by 18% year-over-year in Q4, indicating challenges in this segment.

  • Overall revenue for Q4 was $60.9 million, a decline of 4% from the prior-year period.

  • The company is facing increased ERP implementation costs, impacting short-term profitability.

  • Economic conditions have impacted CapEx spend across the industry, affecting product revenue.

  • Despite improvements, there are still internal projects like ERP and automation that need completion.

Q & A Highlights

Q: Can you provide a sneak preview of the pipeline, including overall size, deal sizes, and win rates? A: We are seeing larger deals in our pipeline, although the sales cycle for MRR business remains long. We will provide more detailed metrics in Q2 to show how we plan to grow quarter over quarter and meet our guidance. (Charles Salameh, CEO)

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