Sangoma Technologies Corporation

Thank you for standing by. This is the conference operator. Welcome to the Sangoma Technologies Investor Conference Call. As a reminder, all participants are in listen-only mode and the conference is being recorded. I would now like to turn the conference over to David Moore, Chief Financial Officer. Please go ahead, Mr. Moore.

Thank you, operator, and good morning, everybody. Appreciate you joining us and welcome to Sangoma's fourth quarter fiscal 2021 investor call. We're recording the call and we'll make it available on our website later for anybody who's unable to join us live. I'm here today with Bill Wignall, President and Chief Executive Officer, John Tobiah, EVP of Corporate Development, and Larry Stock, Chief Corporate Officer, to take you through the results of our fourth quarter of fiscal 2021, which ended on June 30th, 2021, as well as those of the full fiscal year. We will also discuss the press release that was distributed yesterday afternoon, together with the company's audited financial statements and MD&A, both of which are available on CEDA and our website. As a reminder, Sangoma reports under International Financial Reporting Standards, IFRS. During this call, we may also refer to a couple of terms, such as adjusted operating income, adjusted EBITDA, and adjusted cash flow that are not IFRS measures, but which are defined in our MD&A. Also, please note that an effort is stated or referenced to dollars to the Canadian dollar. Before we start, I'd like to remind you that statements made during the course of this call that are not purely historical are forward-looking statements regarding the company or management's intentions, hopes, beliefs, expectations, and strategies for the future. Because those statements deal with future events, they're subject to various risks and uncertainties, and actual results might differ materially from those in the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements are discussed in the accompanying MD&A, our annual information form, and in the company's annual audited financial statements posted on CEDA. With that, I'll hand the call over to Bill.

Thank you, David. Good morning, everyone, and thanks for joining us today. I have structured my prepared remarks in five sections for this call. I will first discuss our fourth quarter and then move on to cover our full fiscal year results. In my third section, I will share with you an update of the Star to Star transaction and integration. Fourth, I will offer my typical year-end look back on your company and our progress this year. And finally, I will review forward guidance for fiscal 22 as provided for the first time in yesterday's press release. As always, I'll then wrap up with a brief summary and then turn the call back to David for our typical open Q&A. With that, let's move on to Q4 results, where I will begin with our P&L. Before I start, just two quick reminders. Since we closed the acquisition of Star2Star on March 31st, this is the first quarter in which we see the impact of the acquisition on our income statement. And on our last call, you may remember that I spoke quite a lot about the exchange rate impact on Q3, given the significant movement in the U.S.-Canadian dollar rates at that time. Because the FX rate did not have the same kind of material effect on Q4, I've chosen to simply cover our Q4 results in Canadian dollars for this one last time, given we'll be moving to U.S. dollar reporting in fiscal 22 anyway. More on that later. Okay, let's get started. Sales for $61.5 million for the quarter, up 77% from the fourth quarter of fiscal 20, with the star-to-star acquisition contributing significantly, of course, our existing services and business continuing to grow and compound, and all partially offset by some continuing softness in our product sales. As a result, our services revenue expanded to 71% of total sales this quarter, up from 55% in the same quarter of the prior year, helped significantly by the addition of Star to Star. Meanwhile, sales in our more mature product category continued the trend we'd seen over the past quarters, driven by the decline of the PSTN, the trend towards more cloud solutions, and the impact of the COVID-19 pandemic which has placed tighter constraints on capital purchases in some companies and made it difficult to get on site for installs. Despite all the supply chain pressures around the globe, gross profit for the fourth quarter was $44 million, 95% higher than for the same quarter last year. And gross margin was therefore 72% of sales, up 7% from last year's 65%. Our cost of goods experienced some slight upwards pressure this quarter, impacted by the higher supply chain costs that many of you will have heard about in the electronics business specifically, but also in many other industries more generally. These supply chain pressures affected not only costs, but also availability of components. And those same pressures have affected the rates we pay for shipping, a situation that was then magnified by having to ship more products by air than normal, We typically do that the less expensive way by seat. But to ensure we had inventory when and where it was needed to deliver on customer orders, this was necessary. Nevertheless, Sangoma was able to fill most all customer orders in the fourth quarter and still deliver on our 70% plus expected gross margin. I'm very pleased with the Sangoma teams in this area who have been working tirelessly to keep abreast of demand under challenging circumstances. Operating expenses for the fourth quarter this year were $46.4 million, more than double that of last year following the incorporation of the OPEX from Star to Star. Given this is the first quarter with Star to Star in our P&L, I would also like to offer a few comments on the three individual OPEX buckets under IFRS, namely Sales and Marketing, R&D, and G&A. Regarding sales and marketing, you will notice that the portion of our OPEX that is in the sales and marketing category has increased in Q4 in absolute dollars and as a percentage of sales. That's because Star to Star has typically relied on an indirect sales strategy, acquiring customers primarily via channel partners, and a big part of the increase in sales and marketing costs are the trailer commissions paid out to those partners each month on an ongoing basis as a standard practice in our industry. With respect to R&D, almost all the increase in spending from Q3 to Q4 was due to the addition of the Star to Star engineering teams and expenses. And finally, the G&A bucket also shows a significant increase from the prior quarter, driven in large part by the intangible amortization associated with the Star to Star acquisition. This increased to about $9.5 million this quarter, up significantly from last year, and is a non-cash expense. So this might affect our adjusted EBITDA or cash flow, but of course does appear as an expense in our income statement. Okay, now leaving operating expenses and turning to EBITDA. Adjusted EBITDA was $12.1 million for the quarter, almost twice that from the same quarter last year, and that 19% of sales was just slightly higher than we expected. For those of you who join these calls regularly, you will know that I don't typically spend much time on the costs below adjusted EBITDA and above net income. However, just for this one quarter, I've decided to cover a few selected items from this part of our income statement, simply because there are a few material changes in this area for Q4 that result from the Star to Star acquisition. First, on interest expense. Part of the funding for Star to Star involves Sangoma borrowing an additional $66 million, and so our Q4 results include the additional interest that is now about $1 million per quarter. Sangoma is repaying about $4.5 million in principal per quarter now. Next, on transaction expenses, as you may recall, Sangoma accrued for the majority of costs related to the Star to Star acquisition in Q3, an amount that was just over $4.7 million. During Q4, we only added slightly to those transaction costs, plus that the total incurred is now 4.9 million. Please note that it is expected that there will be some integration costs recorded in Q1 as that activity comes to a close, and they will, of course, update you on that in November when we discuss first quarter results for fiscal 22. I now want to explain briefly a new entry on our P&L that some of you might have noticed for Q4, also related to the Star to Star acquisition, a line item called Consideration Payable. As part of the Star to Star deal, Sangoma expects to obtain periodic tax deductions for some payroll costs associated with handling stock options held by Star to Star employees. If and when we do get those deductions, we agree to pay the benefit of them to the Star to Star sellers with no cash flow impact to Sangoma whatsoever. However, the IFRS accounting rules require us to record this on a new line item called consideration payable. There's an offsetting deferred tax access. And for the most part, these will move in parallel to one another and thus have minimal impact on our P&L in any one quarter. This will continue to show until after the installment shares are issued. During this time, these two entries need to be recalculated each quarter, so we'll see this line called gain loss on consideration payable in the next few years. It will not materially change the net income of the company in any period, as the deferred asset will move by approximately the same amount as the consideration payable. Confusing, I realize, but those are the IFRS rules and the impact on net income is minimal. Okay, now back to our normal cadence for these calls. Net income for the fourth quarter was negative $1.6 million, primarily the result of the non-cash intangible asset amortization following the acquisition. That concludes my comments on the P&L for Q4, and I'll save the balance sheet and cash flow for the next section on full-year results. So let's turn our attention there now. Sales for the fiscal year 21 were $167.3 million, up about 27% from the $131.4 million in fiscal 20. This increase was due to a number of factors, including the addition of Star to Star in Q4, the continued growth and compounding of the company's services business, the inclusion of VoIP innovations for the full year in fiscal 21, all partly offset by some softening in demand for one-time product sales. Let's unpack that a little to examine the trends in our services revenue versus product sales. Our services revenue is now running above 70% of sales, as you just heard about for Q4. And for the full year, this figure was 62% for fiscal 21, up from 50% in fiscal 20. The drivers of this growth are, unsurprisingly, the same factors I just covered to explain overall growth. and product sales were 64.1 million for the year, down 4% from fiscal 20, again, for all the same reasons discussed in my few core comments. Close profit for the year was 114 million, 34% higher than the 84.9 million realized last year. Close margin was 68% of sales for the year, 3% higher than the same period a year ago when it was 65%. The primary drivers of this movement include the steady increase in the percentage of revenue coming from services, the inclusion of Star to Star for Q4, all partly offset by the supply chain costs discussed in some detail for the fourth quarter. Operating expense for fiscal 21 was $105.9 million compared to $74.4 million last year. Vending was higher due to the addition of the Star to Star costs. investments and growth, and the associated intangible amortization from the acquisition. Adjusted EBITDA was $32.3 million for the year and is 50% higher than last year. This is equivalent to about 19% of sales for the year compared to approximately 16% for fiscal 20. I have already covered the new items from this start-to-start acquisition that appear on our income statement. in my Q4 comments, so I won't touch on them again here. Net income for fiscal 21 was $0.8 million, down from last year's $3.9 million, and this is entirely the impact of the acquisition-related expenses and the amortization of the intangible asset. That brings my comments on our income statement to a close, and I'd now like to cover a few highlights from our balance sheet and cash flow, as I promised earlier. Our cash balance finished at $27.3 million, which by pure chance almost exactly matches where we ended last year. I'm sure you'd agree that this is indeed quite a coincidence if one considers that in fiscal 21, we raised $75 million of equity, secured $66 million in new debt, used $133 million in cash for Star to Star, and paid back almost $19 million of loan principal, ending up exactly where we started last year. Inventory is up slightly from $13.9 million at the end of Q3 to $14.6 million on June 30. As we shared during our last call, we had anticipated the need to increase inventory levels to help minimize the impact of supply chain disruptions. This slight increase of about three quarters of a million dollars reflects that. And we do expect inventory to increase slightly more in Q1 and Q2 of this new fiscal 22 year as we continue to navigate the supply chain challenges around the world. Trade receivables finished the year at $18.3 million, significantly higher than where we finished fiscal 20 at $11.2 million, mostly as a result of the Star to Star acquisition. Overall, we are quite pleased with the level of receivables given the COVID-19 related disruptions to so many businesses and indeed all economies during fiscal 21. And now a comment on cashflow. During the fourth quarter, we generated adjusted cashflow from operations of $9.6 million, well up from the 8.2 million for the same period in the prior year. And for the full year, our adjusted cashflow was almost $25 million very materially above the 15 million in fiscal 20. Finally, we are, of course, comfortably within the debt covenants, and our overall balance sheet remains very strong. That brings my comments on financial results to a close, and I'd now like to turn to my third section of structured remarks on the Star-to-Star integration. As many of you know, Star to Star represents Sangoma's 10th acquisition and is transformational, placing us clearly into the top tier of the growing cloud communications industry and fully cementing our transition to a SaaS business. I remain very pleased with how the companies are coming together as we continue to achieve our integration plan. As I shared with you last quarter, we identified a series of integration projects each covering a key part of bringing the companies together. These integration projects included people, product, customers and channels, back office systems, customer-facing cloud networks, et cetera. And I am pleased to provide you today with a significant update on these so you can see how far we've come in a short time. Let's start with people, the lifeblood of a tech company. The cultures of Sangoma and Star to Star were quite similar, which is one of the things that attracted the two companies to each other, and it was apparent very early on that people were coming together and gelling. Even though we are pretty good at this, given our track record in acquisitions, it was even more impressive with Star to Star, since many of the people had never been in the same room together during fiscal 21. You may recall from our prior call that we split the people integration project into two stages. First, almost immediately after closing the transaction, we integrated the staff functions. So here, think finance or legal or HR, to quickly leverage a common way of working in these key corporate functions. Second, we intentionally took our time with the line functions, and here think sales or engineering or marketing or operations, as it is always more difficult to integrate those functions immediately. It was vital to take our time, get to know each other for a while during the integration phase, and then combine those teams. The integration of our line functions is now nearly complete, taking place throughout Q4 and into Q1 of this new fiscal 22 year. And via this process, we've sought to build a foundation for a scalable, growth-oriented approach to people and talent, including strengthening our capabilities with a new senior executive in HR. I'll now share an update on progress with customers and channel integration. Like the people initiatives I just spoke about, the integration of customers and channel activities progressed throughout Q4 and is now nearly complete. Throughout this integration process, our team remained focused on clients and delivering excellent customer service. I would like to say a big thank you to everyone at Sangoma, including the new Star to Star employees, for continuing to take excellent care of our customers without which there is no business. We are now completing the work on channel integration. We started by holding initial meetings and webinars with the channel partners from each company to explain that we need them all and that the complementary mix of channels was indeed one of the key benefits of the deal. We have merged the channel programs together including a unified deal registration, one set of pricing levels, one process for them to take orders and place orders, along with one set of IT systems to handle this configuration price quote sequence. And this uses the star-to-star built system called RocketQuote, one process for partners to get information and support in which partners get loaded into our new CRM unified platform. one amalgamated product portfolio that all partners have access to, and one set of discounts and commission structures across the entire channel. I have now met many Star to Star customers and partners over the past few months as we've restarted live events. And in fact, I'm actually joining you today on this quarterly investor call, not from my office where I would normally do this, but from a three-day channel partner event that we are holding primarily for the Star to Star partners. This one follows a similar event we did two weeks ago for the key channel partners that come from the traditional Sangoma side of the combined company. These types of events are critical to maintaining momentum with our channel, removing any anxiety associated with the change an acquisition implies, explaining the merged product portfolio and channel program, fighting for mindshare in the channel, and providing one-of-a-kind forums to interact with our partners. The most common feedback I've heard is that they see Sangoma as one of the key cloud communication companies to work with and the one that has made enormous progress now cemented by the start of Star Deal. So that's the update on the channel part of customers and channel integration. What about the customers? In order to integrate our customer base, one needs to integrate our sales team so we can present one face to those clients. We have now cross-trained the sales team on the full suite of products and services with more to come, and all sales staff throughout the combined company can now sell the entire product portfolio. We have restructured the sales organization to allow our sales professionals to focus on specific customer segments. Specifically, that means separate sales teams dedicated to each of small and medium-sized clients, large customers, enterprise clients, wholesale, international, product overlay people focused on each of our newer products, a customer success team selling into our installed base, and a new dedicated team recruiting new partners. I'm very pleased with this revamped sales structure, one that we believe will allow our customer and channel-facing teams to continue growing revenue and provide an exceptional customer experience. Next, I'll touch on product integration. With the combination of Star2Star plus Sangoma, we now have the industry's most complete internally developed portfolio of products and cloud communication services, bar none. This includes UCaaS, Funking as a service, Video Meetings as a service, Contact Center as a service, CPaaS, Collaboration as a service, Desktop as a service, Access Control as a service, et cetera. together with all the capital P product line that you see as our second revenue category in addition to services. These products cover on-premise UC, connectivity lines such as SBCs and gateways, and endpoints such as phones and headsets, all available from a single supplier, all part of One Throat to Choke, unlike the partial solutions offered by our competitors. So it will make sense to you that our first priority in the product integration work was to decide on which products to keep for any categories where both Sangoma and Star to Star had a similar offering. I'm pleased to tell you that where we had product overlap, we have now made clean, decisive calls regarding which product we will go forward with, and somewhat surprisingly to me, presently so, such decisions were uncontentious and unanimous. We've now aligned the company around these decisions. For instance, we've chosen Sangoma's video meeting product called Sangoma Meet. We're standardizing on Starterstar's CPaaS product, and we're keeping both UCaaS lines, Sangoma's SwissFox, as well as Starterstar's Business Voice. As I've mentioned before, another high priority in product integration is to tightly integrate our various cloud services into one cohesive suite so they all share a common look and feel for customers. This is quite involved, interface design, UX or user experience as they navigate through our tools, single sign-on so customers register with us once via product or identify themselves and don't have to do it for each product in our suite. We have created one unified look and feel for all our as-a-service products so that customers have a consistent experience whether that product initially came from Star to Star or from Sangoma. We've also created one identity platform for customers, which includes single sign-on, entitlements, licensing, et cetera, once for all our cloud services. And as new versions of each product or service get released, they're getting upgraded to this new look and feel. While there remains more work to be done on products, as there always is, we have made solid progress in this area, and I'm pleased with how our product teams are working together. We now have a robust product roadmap for each of our 12 product lines, a dedicated product manager for each, something that neither company could afford previously prior to the merger, and a dedicated engineering development team on each product line with a senior leader and a significant size team on each, a team which is now approaching 200 engineers across the company. Next, I'd like to touch on the integration of our cloud networks. Let's start with a very simplified explanation of what I mean when I refer to customer-facing cloud networks. By customer-facing, we just mean the networks that our customers use as opposed to our internal IT infrastructure. And by a cloud network, I mean the complex software, infrastructure, data centers, public cloud services such as AWS, all the switches and routers that underpin the cloud services that our customers use. as well as all the information that feeds our own internal billing systems and taxation systems. Both Sangoma and Star2Star had their own versions of these, of course. There is now an opportunity to rationalize and consolidate all this architecture, data centers, service providers, to standardize the hardware and software for our cloud networks, all to make it more efficient and reliable to operate, as well as cheaper to run. This is done in a two-phase approach, with phase one being the design stage, followed by a longer phase two, which is the implementation. Phase one has been progressing throughout Q4 and is expected to complete in the near future. Phase two will take a bit longer, and I look forward to providing updates on our cloud network integration during future calls. Another integration project that I'd like to tell you about briefly is our back office. This is the set of internal systems we use and our customs and partners access to do things like quoting, ordering, licensing and enabling software, billing, etc. This was in the initial stages when we last spoke. We've made significant progress in this time, including selecting and standardizing on our go-forward CRM system, our CPQ systems, our learning management systems, all as part of the first phase of back-office integrations. Still to come, phase two will be more of the Sangoma internal systems mentioned above, and I plan to give you updates on those as we progress. And finally, the last integration topic I wanted to touch on is cost synergies. As you know, we did not expect large cost reductions as part of the Star-to-Star acquisition. That was not why we did this deal. This transaction was all about positioning the combined company in the top tier of the industry with the full suite of cloud services and supporting products and completing our transition to a SaaS company. However, I do expect to uncover some cost savings opportunities, of course, as we bring the teams together, the network, our marketing programs, and the back office success. As I mentioned on our Q3 call, we have decided that most such savings that get realized are expected to be reinvested back into R&D and marketing and sales to help drive Sangoma's growth. This exercise was not a part of the Q4 work, so it's not something I can comment much further on today, given it's still a bit too early to have a view on the final amount, but I expect we'll be able to give you more detail on our next earnings call. And with that, I'll bring my update on Star to Star integration to a close. I hope it was a fulsome one. And I'll turn to my fiscal 21 year in review. My quarterly investor call at the end of each year, I try to offer this idea of a year in review, a section where we step out of the financials and discuss what has been happening operationally and strategically in your company over the past year. It can actually be quite challenging to do so for a company in which so much is happening and changing all the time. So this year, in attempt to put some structure to this section, I'm going to touch on three aspects of fiscal 21 that I felt really highlight some of the most important themes from this past year. Strategy, resilience, and results. Let's start with strategy. I've often characterized Tangoma's expansion strategy by describing this combination of organic growth augmented with prudent M&A activity, all while demanding healthy profitability. This is a conscious decision from the Board of Directors, one that most of you also support, and we continue on that path today. Many of you are now familiar with the history behind this strategy. The turnaround phase when management came in to take over the reins and recognized that sales of telephony cards were unavoidably going to decline as networks gravitated away from the PSTN and towards the Internet. Over the next few years, we evolved from a single product line company to one with a much broader product portfolio of multiple product lines. We managed to transition from a hardware company to a software business, an extremely difficult leap, which took us on the path to becoming a full solution UC provider. Once we had that full solution, we began the metamorphosis from one times revenue to a SaaS and recurring revenue company by building up our valuable cloud business, another very tough step to make. especially one without missing a beat on revenue along the way. We built up some of these components ourselves and added others via acquisition, and that's why we say Sangoma employs these two approaches to scaling, one is organic growth and the other the prudent acquisitions to complement and accelerate that growth. In fiscal 21, this transition to a full SaaS company was capped off with the acquisition of Star2Star, positioning Sangoma in the top tier of the exciting cloud communications industry, an entrant into the big leagues that absolutely nobody could have predicted five or ten years ago. And we are well positioned to continue leading that consolidation taking place in the industry with our proven track record of M&As. To further that aim, we're in the process of working towards an uplisting to the TSX and a cross-listing to NASDAQ, a process that our shareholders overwhelmingly support, as evidenced by the special meeting held last week, at which over 99% of shares voted in favor of the consolidation. Thank you. We are optimistic that such steps should further help trading volumes and unlock multiple appreciations with our share prices. Next, I'd like to speak for a few minutes about the resilience of your company, a company that endured a lot this past year, some of which would have been visible to you and some would not, and by failure we proved our mettle and came out all the stronger for it. Indeed, fiscal 21 threw a lot at Sangoma. The year started in the depths of the COVID pandemic and the restrictions put in place by governments around the world, and we've still not fully emerged from the shadow of the pandemic with travel only now just really restarting. And then we had that ransomware attack, an all too common event these days, but one that nevertheless took an incredible amount of management time and energy to respond to. Next, we had what we understand to be a routine continuous disclosure review by the OSC, a process that is now closed off. And then in Q4, if you can believe it, one of the contract manufacturers we use in China, a critical one for us, had their factory totally destroyed in a fire. You can't make this stuff up. And again, a lot of work here by a lot of talented, committed employees to work around that without most people in our company even noticing. And last but not least, the global supply chain problems that I described earlier and that most of you will have heard about that is so pervasive. My point here, of course, is not to whine and complain. It's totally our job to deal with such things as they arise, of course. But I feel like being able to look back on a year like that, one that would have tested many lesser companies, is a testament to the strength we've built throughout the company over the past few years as Sangoma has been scaling. There is more work to do there, admittedly, as dealing with spikes like those just described can still take some heroics at Sangoma. The next stage will be institutionalizing that resilience by further developing our ability to scale and continuing adding bench strength. And the third part of my year in review for fiscal 21 is to couple together the strategy comment and resilience issue just covered, along with the execution of that strategy, culminating in what we know you guys ultimately care about, which is results. Everything else is supposed to be a means to that end. Given the context just described, I feel like the results Sangoma has produced look even better. This combination of organic growth and acquisitions has moved the revenue needle from around $10 million to what is now a quarter billion dollar revenue company. Looking back on the past five years, Sangoma has a compound annual growth rate of over 50%. And if you look back 10 years, it's still over a 35% CAGR, a very solid long-term record. During that time, we've taken EBITDA from break-even to over what is forecasted to be $40 million in fiscal 22, all of which has led to our enterprise value going from under $10 million to over $800 million, up by about 88 times or almost 9,000%. Not bad in the face of these crazy times. That concludes my year-end review section, and I'll finish my prepared remarks with fiscal 22 guidance. I'll begin this section with a reminder of the starting point to provide you context for this guidance. First, Sangoma is going to report all future results in U.S. dollars, which is the primary currency of our sales and now much of our costs. At this point in the call, I need to take you through this transition so that you are comfortable with what the comparative figures for fiscal 21 are, if stated in U.S. dollars, because that's what we'll be quoting in fiscal 22. For fiscal 21, we reported revenue of $167 million Canadian dollars and adjusted EBITDA of $32 million, so Canadian, and those results include Star to Star for the fourth fiscal quarter only. Given that, we felt it would be useful to point out what our fiscal 21 revenue would have been if Sangoma and Star to Star had been together for all of fiscal 21. On a U.S. dollar basis, revenue for the combined companies for all of fiscal 21 would have been about 193 million U.S. Again, U.S. dollars since we're going to be reporting in U.S. for fiscal 22. And as you may have now seen from our press release, we expect solid top-line growth but while demanding healthy levels of profitability still. And that's our guidance for fiscal 22 revenue is between 209 and 213 million U.S. dollars. with our recurring revenue expected to be in the 70 to 75% of sales range, a very positive sign of sustainability. And our guidance for EBITDA is 41 to 43 million, again U.S., delivering leading EBITDA margins now expected to reach 20% of sales for fiscal 22. Since this is the first time we're providing guidance in U.S. dollars, I thought I would simply point out that this range of EBITDA would be well over 50 million Canadian dollars, depending upon prevailing exchange rates, for those of you who may wish to compare the fiscal 21 Canadian dollar EBITDA. In determining this range of growth projections, we considered several factors, such as the expected growth in our services business, likely GDP growth, trends in Europe, Asia, North America, and Cala, the COVID-19 pandemic, the supply chain pressures around the world, and the expected gradual decline of our product sales, with the full set of such factors listed in the MD&A release yesterday and available on CEDAR or Sangoma's website. Okay, with that, I'll bring my prepared remarks to a close with a very brief summary. Overall, I remain very pleased with another really solid year for Sangoma, with what we accomplished for your company during a challenging period and with the super exciting end to fiscal 21 in the acquisition and integration of Star to Star. We delivered 27% growth in revenue during these COVID impacted times, continued to expand our cloud and MRR business, posed a transformative acquisition, and delivered over $30 million in EBITDA for the first time. As you heard when we explained the acquisition of Star to Star, We planned from the beginning for the integration process to be substantially complete in about six months. And that meant we expected to be mostly finished by the end of September. And I'm pleased to report that we're on track for that milestone. We've come a long way from a $10 million company several years back with a CAGR of 35% to 50% and an enterprise value that has grown by an impressive 9,000% over these past many years. We are now well positioned to take advantage of an extremely large total addressable market, one that most analysts think is well over $100 billion, and some think it's much more, in a space that's growing well. The macro trend of moving to the cloud is still relatively new in communications, and we expect to benefit from this for many years to come, both in North America and internationally as well, where cloud communications is more in its infancy. We continue to look for ways to drive your company to become one of the preeminent players in the industry. And we will do that by continuing on our dual-pronged growth strategy, one that most investors in SDC have become familiar with over the past several years. First, we will seek attractive organic growth by investing in sales and marketing, R&D, and customer acquisition. And second, we will keep augmenting that organic growth with deliberate, disciplined M&A. That concludes my prepared remarks, and we appreciate you all joining us today. I'd like to close by thanking our investors for your confidence and support. And with that, I'll turn the call back over to David for questions.