Fiscal year revenue surpasses $250 million
for the first time
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 fourth quarter financial results and
audited consolidated financial statements for the fiscal year ended
June 30, 2023.
US $000
Q4 FY2023
Q4 FY2022
Change
FY2023
FY2022
Change
Revenue
$63,680
$66,301
(4)%
$252,530
$224,352
13%
Gross profit
$42,241
$44,461
(5)%
$172,791
$156,888
10%
Operating expenses1
$43,708
$45,714
(4)%
$175,740
$162,772
8%
Net loss
$(23,630)
$(99,247)
$(29,026)
$(110,780)
Net loss per share (fully diluted)
$(0.72)
$(2.99)
$(0.88)
$(3.52)
Adjusted EBITDA2
$10,860
$11,129
(2)%
$44,394
$42,124
5%
Net cash provided by operating
activities
$10,855
$9,547
$26,487
$21,057
Revenue for the fourth quarter of fiscal 2023 was $63.68
million, a decrease from the prior year of 4%. Annual revenue for
fiscal 2023 eclipsed the $250 million mark coming in at $252.53
million, a 13% increase over the prior fiscal year.
Sangoma continues to maintain a healthy balance sheet, finishing
the quarter and the fiscal year with net cash provided by operating
activities of $10,855 and $26,487, respectively on June 30, 2023,
reflecting a strong quarterly progression of cash flow throughout
fiscal 2023. Sangoma continues to remain comfortably within its
debt covenants.
“Our fourth quarter brings to a close both a successful and
transitional year for Sangoma and I remain proud of our team for
delivering record revenue results for our customers and
shareholders during fiscal year 2023,” said Norm Worthington,
Sangoma Board Chairman. “We crossed the $250 million revenue mark,
which is a milestone for the Company, as we continue to grow and
transform from a pure Product to a cloud-based Services company.
Services represented 79% of our total sales this quarter, up from
74% in the same quarter of last year and we remain committed to
delivering strong organic growth going forward. Adjusted EBITDA2
for the quarter of $10.86 million, representing about 17% of
revenue, again demonstrating our dedication to deliver results with
profitability. While analyzing the past to understand our
challenges and reflect on opportunities, the end of our fiscal year
is also a time to look forward. To achieve that future, I am happy
to turn the strategic and operational reigns over to Charles
Salameh, our new CEO, and Jeremy Wubs, our first COO. We look
forward with great optimism to a Sangoma under their strong and
enthusiastic leadership.”
Operating expenses1 were $175.74 million for the fiscal year, up
from $162.77 million last year by about 8%, and $43.71 million for
the quarter, down from $45.71 million in the same quarter last year
by about 4%. The year over year increase reflects the addition of
the NetFortris team while the quarter over quarter decrease
reflects the realization of various cost initiatives.
Net loss for the fourth quarter was $23.63 million, and for the
year was $29.03 million, both significantly affected by a one-time,
non-cash goodwill impairment charge of $22.51 million. This
goodwill impairment resulted primarily from, among other factors, a
significant increase in the discount rate as a result of
macroeconomic factors, which other companies in our industry sector
have also experienced, during the latter months of fiscal 2023.
Outlook for fiscal year 2024
The Company will be suspending the issuance of forward-looking
earnings guidance for fiscal 2024. This decision comes as part of a
strategic transformation led by the Company's new CEO, Charles
Salameh to position Sangoma for long-term success and sustainable
growth.
“While maintaining profitable growth in fiscal 2024, we will
embark on a transformative journey, to focus on executing a set of
strategic initiatives that deliver value to our customers and
shareholders. This will provide a strong foundation for expanding
our addressable markets and optimizing our product portfolio and
operations, in order to enable the Company to respond to and
capitalize on evolving market dynamics,” said Charles Salameh,
Sangoma CEO.
Conference call Sangoma will host a conference call on
Wednesday, September 27, 2023, 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 foreign exchange
(gain) loss. 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 18 posted today at
www.sedar.com and www.sec.gov.
About Sangoma Technologies Corporation Sangoma is a
trusted leader in delivering value-based Communications as a
Service (CaaS) solutions for businesses of all sizes. Sangoma
simplifies communications by providing businesses with the
industry’s most comprehensive suite of cloud-native communications
solutions, which work together seamlessly to streamline business
processes. Sangoma provides businesses with a complete solution,
including cloud software, endpoints, and connectivity – all
delivered and supported by Sangoma’s expert team. One provider and
one contact ease vendor management and save time. For more
information, visit 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 relating to management’s guidance on revenue and
Adjusted EBITDA, and other 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/20230927692032/en/
Sangoma Technologies Corporation Larry Stock Chief Financial
Officer investorrelations@sangoma.com
Sangaoma Technologies (NASDAQ:SANG)
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