Core Insights - Sangoma Technologies reported strong fiscal Q2 2026 results, with management indicating that performance was "right to plan" supported by robust bookings and sequential revenue growth [5] Financial Performance - Total revenue for the quarter was $51.5 million, reflecting a 1.2% sequential increase, with services accounting for 92% of total revenue [3][7] - Adjusted EBITDA was $8.3 million, representing 16% of revenue, consistent with the previous quarter [2][7] - Gross profit reached $38.2 million, with gross margin improving to 74%, up from 72% in Q1 and 68% year-over-year [2][7] - The company generated $10.1 million in net cash from operating activities, achieving a 122% conversion rate from adjusted EBITDA [1][7] - Free cash flow was reported at $8.0 million, or $0.24 per diluted share, showing sequential improvement [1][7] Strategic Initiatives - CEO Charles Salameh highlighted the early traction from the company's go-to-market strategy and investments aimed at growth, emphasizing improving bookings momentum and a focus on larger mid-market opportunities [4] - Management noted a significant increase in monthly recurring revenue (MRR) bookings, which grew 67% sequentially and 60% year-over-year [9] - The starting backlog for Q3 was up approximately 125% compared to the start of Q2, indicating stronger visibility into the second half of the year [10] Capital Management - Sangoma continued its capital return strategy, repurchasing approximately 196,000 shares in Q2 and retiring over 700,000 shares in total, while reducing total debt to $37.6 million [6][17] - The company ended Q2 with cash of $17.1 million, a 27% increase from June 30 [17] Guidance and Outlook - Sangoma tightened its fiscal 2026 guidance, now expecting revenue between $205 million and $208 million, with an adjusted EBITDA margin of 17% to 18% [21][18] - Management anticipates returning to year-over-year organic growth after adjusting for the divestiture of VoIP Supply, which contributed $6.4 million in revenue [18] Market Opportunities - The company is exploring M&A opportunities across various sizes and categories, focusing on adding value to its platform while maintaining discipline and balance sheet flexibility [19]
Sangoma Technologies Q2 Earnings Call Highlights