Company Performance - Sangoma Technologies Corporation reported a quarterly loss of $0.03 per share, matching the Zacks Consensus Estimate, compared to a loss of $0.04 per share a year ago [1] - The company posted revenues of $58.07 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 0.72%, and down from $61.05 million year-over-year [2] - Over the last four quarters, Sangoma has not surpassed consensus EPS estimates and has topped revenue estimates only once [2][3] Stock Movement and Outlook - Sangoma shares have declined approximately 19.1% since the beginning of the year, while the S&P 500 has decreased by 4.3% [3] - The company's earnings outlook is mixed, with current consensus EPS estimates at -$0.03 for the coming quarter and -$0.18 for the current fiscal year, with revenues expected to be $58.11 million and $235.88 million respectively [7] Industry Context - The Internet - Software industry, to which Sangoma belongs, is currently ranked in the top 37% of over 250 Zacks industries, indicating a favorable position compared to the bottom 50% [8] - The performance of Sangoma's stock may be influenced by the overall industry outlook, as top-ranked industries tend to outperform lower-ranked ones significantly [8]

Group 1 - Sangoma Technologies (NASDAQ: SANG) shares have increased slightly since the original Buy recommendation in October, with a notable rise of over 20% prior to the release of Q2 FY25 results, although the market reacted negatively afterwards [1] - The focus of the analysis is on undercovered companies, particularly in sectors such as technology, software, electronics, and energy transition, indicating a strategic investment approach [1] - The analyst has over 7 years of personal investment experience and a background in Electrical Engineering, currently working in automotive battery R&D, which adds credibility to the analysis of small to mid-cap companies [1]

Financial Data and Key Metrics Changes - Revenue for Q2 FY 2025 was $59.1 million, a decline of $1 million from Q1, primarily due to a $1.2 million decrease in third-party product resales, while the remainder of the business showed sequential growth [41][44] - Adjusted EBITDA improved by 3% to $10.1 million, with the adjusted EBITDA margin increasing from 16% to 17% of revenue despite the decline in top line [42][44] - Net cash from operating activities reached $11.9 million, a 30% increase year-over-year, with fiscal year-to-date net cash at $24 million, representing a 41% increase [37][38] Business Line Data and Key Metrics Changes - The company has consolidated its 11 product lines into six main lines, focusing on high-margin MRR-driven communications platforms, including UCaaS, CCaaS, and CPaaS technologies [24][25] - The infrastructure platform, which includes services like SIP trunking, has seen revenue growth of more than 10% in the first half of fiscal 2025 compared to the prior year [28] - The churn rate improved to below 0.95%, reflecting stronger client relationships and validating the focus on securing long-term recurring revenue streams [17][27] Market Data and Key Metrics Changes - The third-party hardware resale segment declined by $1.2 million compared to Q1, indicating limited potential for this segment to contribute to FY 2025 growth objectives [14][19] - The company is experiencing increased interest from partners in the premise PBX business following NEC's exit from the market, with partners seeking specialization in industry verticals [66][70] Company Strategy and Development Direction - The company is shifting its focus away from low-margin hardware sales to prioritize high-margin recurring revenue opportunities, particularly in key verticals such as healthcare and education [19][20] - Strategic priorities include expanding the portfolio through acquisitions, driving organic growth within existing partner ecosystems, and optimizing operations for efficiency and client satisfaction [21][22] - The company aims to achieve a model with over 85% recurring revenue, gross margins near 80%, and adjusted EBITDA margins approaching 20% [45][132] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's financial strength and the ability to accelerate growth through strategic realignment and divestiture of non-core assets [18][19] - The uncertainty in government spending has impacted the third-party hardware resale segment, leading to a strategic decision to focus on core business areas [13][14] - Management believes that the ongoing transformation and focus on high-margin recurring revenue will position the company for long-term success and value creation [9][20] Other Important Information - The company has achieved its fiscal year-end debt target of $55 million to $60 million two quarters ahead of schedule, with net debt decreasing to $43.3 million [39][44] - The company is on track for an April go-live of its new ERP system, which is expected to enhance operational efficiencies [74] Q&A Session Summary Question: Can you discuss the new Pinnacle Partner Program and its impact on sales? - The program is designed to build intimacy and trust with key partners, focusing on high-margin product lines and driving customer events, showing good momentum [50][51][55] Question: Can you reconcile the drop in churn with the sequential decline in services? - Management noted that while churn has improved, the company is still two to three quarters behind in organic growth, which is expected to pick up [57][60] Question: What is the outlook for the premise PBX business following NEC's exit? - The company is seeing increased interest from partners looking for specialization in industry verticals, which is expected to lead to growth in this area [66][70] Question: What is the strategy regarding low-margin hardware resale? - The company is sustaining the business but not investing further in it, focusing instead on core high-margin areas due to uncertainty in government spending [84][86] Question: How is the company mitigating potential tariff impacts? - Management believes the impact of proposed tariffs will be minimal, with sufficient inventory and options to optimize manufacturing locations [93][95] Question: What is the company's approach to geographic expansion? - The company is seeing performance improvements in international markets and plans to continue focusing on geographic expansion as a growth strategy [99][102]

Company Performance - Sangoma Technologies Corporation reported a quarterly loss of $0.06 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.03, marking an earnings surprise of -100% [1] - The company posted revenues of $59.11 million for the quarter ended December 2024, missing the Zacks Consensus Estimate by 5.55%, and down from $62.28 million a year ago [2] - Over the last four quarters, Sangoma has surpassed consensus EPS estimates only once and has topped revenue estimates just once [2] Future Outlook - The sustainability of Sangoma's stock price movement will depend on management's commentary during the earnings call and future earnings expectations [3] - The current consensus EPS estimate for the upcoming quarter is $0.01 on revenues of $63.72 million, while for the current fiscal year, the estimate is -$0.07 on revenues of $251.25 million [7] - The estimate revisions trend for Sangoma is mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market [6] Industry Context - The Internet - Software industry, to which Sangoma belongs, is currently ranked in the top 28% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Company Overview - Sangoma Technologies Corporation (SANG) shares increased by 5.8% to close at $7.80, supported by strong trading volume, which was significantly higher than usual [1] - The stock has gained 5.3% over the past four weeks, indicating a positive trend [1] - Sangoma's growth strategy focuses on expanding its customer base, increasing revenue through strategic deals, and enhancing financial flexibility via strong cash flow and debt reduction [1] Earnings Expectations - The company is projected to report a quarterly loss of $0.03 per share, reflecting a year-over-year improvement of +70% [2] - Expected revenues for the upcoming quarter are $62.59 million, which is a 0.5% increase compared to the same quarter last year [2] - The consensus EPS estimate for Sangoma has remained unchanged over the last 30 days, suggesting stability in earnings expectations [3] Industry Context - Sangoma is part of the Zacks Internet - Software industry, which includes other companies like Udemy, Inc. (UDMY) [3] - Udemy's consensus EPS estimate has also remained unchanged at $0.07, representing a significant year-over-year change of +250% [4] - Both Sangoma and Udemy currently hold a Zacks Rank of 3 (Hold), indicating a neutral outlook for these stocks [3][4]

Company Overview - Sangoma Technologies Corporation (SANG) shares increased by 5.8% to close at $6.05, following a period of 4.8% loss over the past four weeks, indicating a strong recovery supported by high trading volume [1] - The company is focusing on enhancing customer experience, which has resulted in low churn rates and increased demand for its IT communication solutions in the SMB market [1] Financial Performance - The upcoming quarterly report is expected to show a loss of $0.05 per share, reflecting a year-over-year change of +28.6%, while revenues are projected to be $61.45 million, down 2.5% from the previous year [2] - The consensus EPS estimate for Sangoma has been revised 40% higher in the last 30 days, suggesting a positive trend that may lead to price appreciation [3] Industry Context - Sangoma is part of the Zacks Internet - Software industry, where another company, Docebo Inc. (DCBO), saw a 1.4% increase in its stock price, closing at $45.49, with a 4.2% return over the past month [3] - Docebo's consensus EPS estimate remains unchanged at $0.25, representing a +66.7% change from the previous year [4]

Core Viewpoint - Sangoma Technologies Corporation (SANG) has seen a 4.6% increase in share price over the past four weeks, closing at $5.71, with a potential upside indicated by Wall Street analysts' mean price target of $7.25, suggesting a 27% increase [1] Price Targets and Analyst Estimates - The mean price target is based on five short-term estimates with a standard deviation of $1.62, indicating variability among analysts; the lowest estimate is $5.63 (1.4% decline), while the highest is $9.50 (66.4% increase) [2] - A low standard deviation among price targets suggests a high degree of agreement among analysts regarding the stock's price movement direction, which can serve as a starting point for further research [7] Earnings Estimates and Market Sentiment - Analysts have shown increasing optimism about SANG's earnings prospects, with a strong consensus in revising EPS estimates higher, which correlates with potential stock price increases [9] - Over the last 30 days, the Zacks Consensus Estimate for the current year has risen by 66.7%, with two estimates moving higher and no negative revisions [10] - SANG holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate factors, indicating strong potential for near-term upside [11]

Sangoma Technologies Corporation (SANG) came out with a quarterly loss of $0.05 per share versus the Zacks Consensus Estimate of a loss of $0.04. This compares to loss of $0.04 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of -25%. A quarter ago, it was expected that this company would post a loss of $0.05 per share when it actually produced a loss of $0.04, delivering a surprise of 20%. Over the last four quarters, the compan ...

NEWS RELEASE SANGOMA ANNOUNCES FOURTH QUARTER AND FISCAL YEAR 2024 RESULTS Achieves Fiscal Year Guidance and a 67% year-over-year increase in Net Cash provided by operating activities, Demonstrating Continued Profitability and Operational Excellence amid Transformation MARKHAM, ONTARIO, September 18, 2024 – 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 ...

Group 1 - Momentum investing is characterized by the strategy of "buying high and selling higher," contrasting with the traditional "buy low and sell high" approach [1] - Identifying the right entry point for momentum stocks can be challenging, as they may lose momentum if their valuations exceed future growth potential [1] - Investing in bargain stocks that have recently shown price momentum can be a safer strategy, with tools like the Zacks Momentum Style Score aiding in identifying such stocks [2] Group 2 - Sangoma Technologies Corporation (SANG) has shown a price increase of 14.6% over the past four weeks, indicating growing investor interest [3] - SANG has gained 11.6% over the past 12 weeks, demonstrating its ability to deliver positive returns over a longer timeframe [4] - The stock has a beta of 1.47, suggesting it moves 47% higher than the market in either direction, indicating fast-paced momentum [4] Group 3 - SANG has a Momentum Score of A, suggesting it is an opportune time to invest in the stock to capitalize on its momentum [5] - The stock has a Zacks Rank 2 (Buy) due to upward trends in earnings estimate revisions, which typically attract more investor interest [6] - SANG is trading at a Price-to-Sales ratio of 0.56, indicating it is reasonably valued at 56 cents for each dollar of sales [6] Group 4 - SANG appears to have significant potential for further price appreciation, supported by its fast-paced momentum characteristics [7] - There are additional stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, suggesting further investment opportunities [7] - Zacks offers over 45 Premium Screens to assist in identifying winning stock picks based on various investing styles [8]