Sangoma Technologies Corporation

Thank you for standing by. This is the conference operator. Welcome to the Sangoma Investor Conference Call. As a reminder, all participants are in listen-only mode, and the conference is being recorded. After the presentation, there will be an opportunity for analysts to ask questions. To join the question queue, you may press star then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star then zero. I would now like to turn the conference over to Samantha Rebern, Chief Legal Officer. Please go ahead, Ms. Reburn.

Thank you, Operator. Hello, everyone, and welcome to Sangoma's third quarter fiscal 2024 investor call. We are recording the call and will make it available on our website for anyone who is unable to join us live. I'm here today with Charles Salameh, Sangoma's Chief Executive Officer, Jeremy Wubbs, Chief Operating and Marketing Officer, and Larry Stocks, Chief Financial Officer. to take you through the results of the third quarter of fiscal year 2024, which ended on March 31st, 2024. We will discuss the press release that was distributed earlier today, together with the company's financial statements and MD&A, which are available on CDAR+, EDGAR, and our website. As a reminder, Sangoma reports under International Financial Reporting Standards, IFRS, and during the call, we may refer to terms such as adjusted EBITDA, which is a non-IFRS measure, but is defined in our MD&A. Before we start, I'd like to remind you that the statements made during the course of this call that are not purely historical are forward-looking statements regarding the company or management's intentions, estimates, plans, expectations, and strategies for the future. Because such statements deal with future events, they are subject to various risks and uncertainties, and actual results may differ materially from those projected 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 the company's annual audited financial statements posted on CDAR+, EDGAR, and our website. With that, I'll hand the call over to Charles.

Thank you, Sam, and good afternoon to everyone listening in. We really appreciate you taking the time to join us and for your support and interest in Sangoma. On the call with me today are Jeremy Wubbs, Sangoma's Chief Operating Officer, and Larry Stock, our Chief Financial Officer. During the fiscal third quarter, we maintained strong momentum in all major areas of our transformation efforts, consistent with the updates that I provided in our Q2 earnings call. We remained confident in our transformation strategy to unlock value through integration, strong fiscal management, and pivoting the company to scalable growth, setting the stage for the next phase of our evolution. Underpinning this has been a laser focus on maintaining a robust balance sheet with effective cost management, which keeps us on track for the financial targets we've set for this fiscal year and provides optionality in how we manage our capital allocation and our growth initiatives. Our third quarter financial highlights include Q3 revenues of $61 million, adjusted EBITDA of $11 million, adjusted EBITDA margins of 18%, and $15.5 million in net cash generated from operating activities. I'm incredibly proud of how the Sangoma team is driving our transformation forward while maintaining excellent service for our core customers and bolstering our financial health. This strategic positioning allows us to capitalize on a significant opportunity. The SMB market, which accounts for about 44% of global IT spending and invests over $30 billion annually in IT communications, is where I see great potential. The mid-market, in particular, has been underserved and is in need of a single-vendor solution that provides enterprise-quality support at affordable prices. Sangoma is a company that simplifies essential IT communication services for both the small business and the increasingly sophisticated mid-market. Our comprehensive product offerings and unique service model sets us apart, positioning us to meet these growing demands effectively. For our agenda today, I'm going to provide a high-level update on the key initiatives that helped us to attain that, while Jeremy and Larry will go into much further detail on the progress of each. First, We've undertaken a major redesign of our go-to-market approach. This is to support our strategy to do a couple of things. First, more effectively prioritize and harness our existing channels and expand to new routes to market, including new channels, new categories, and new geographies. Part of our go-to-market transformation includes the imminent appointment of a new chief revenue officer who has spent their career building and leading sales and channel management programs for this very market. and has an ideal skill set to help us execute our go-to-market transformation. We are in the process of implementing a new sales model, something that I did discuss with all of you at the Q2 session that prioritizes more programmatic demand generation activities with our strategic partners. We've also flattened our entire organization to allow account sales executives to work with our partners much more collaboratively to close opportunities. Last quarter, we talked about the development of Bundle, industry-relevant solutions aimed at more sophisticated clients, solutions that combine both hardware, software, and managed services. Coupled with our volumetric business, our bundle strategy provides for expansion of our business into adjacent markets. This is already yielding new opportunities in our pipeline, and I'm optimistic about the next few quarters. These changes are enhancing our revenue predictability and aligning with our strategic focus on building a more secure MRR base. Secondly, we've embarked on a brand revitalization campaign, starting with our web properties, aiming at strengthening our position within the partner ecosystem while creating broader awareness of Sangoma's capabilities. Increasingly, we're seeing more buying patterns changing as clients are much more apt to purchase based on brand awareness. Promoting our brand to the end client delivered to our vast partner ecosystem is a major tenet of our go-to-market transformation. We've also ramped up our channel marketing team to support the more programmatic demand generation activities that I mentioned earlier. Third, we have made significant investments as part of our enterprise architecture plan to improve productivity, quality of our service, and customer support, including the appointment of Joel Kappas, our new chief customer officer, focused on improving and prioritizing the customer experiences, or as we like to call it, the safe pair of hands. We continue also to modernize and automate all aspects of our business and are making progress across all the initiatives we started six months ago. Our anchor project, the ERP program, is well underway. This program supports a more efficient way of operating the company, but equally so, establishes a modern and flexible architecture that dramatically simplifies how we support our market expansion opportunities, whether new channels, new offerings, or into new geographies. Now on the product front, our innovation engine is firing on all cylinders with several new product launches and AI, UCAS, and industry specific bundles set to redefine the market standards. The introduction of AI driven services has significantly improved our own internal operation efficiencies as evidenced by the reduced wait times and support calls that we are seeing. We have launched a new voice of the client scoring program to better keep tabs on the pulse of our clients and our partners. Now, as you think about the remainder of the fiscal year and going into next year, we remain focused on the foundational elements that will enable us to pivot to growth. First, we'll continue to generate cash flow from operations, which gives us the optionality in how we manage our capital structure and invest in our three pillars of growth, organic, inorganic, and geographic expansion. We want to complete the fundamental transformation of our go-to-market strategy. which sets the foundation to scale our business efficiently through account expansion and through new channels. Finally, we want to innovate and streamline our marketing offerings under one single, enhancing our brand and positions us as a safe pair of hands within the industry. Now look, transformation can be challenging, but we have an experienced team at the helm. This is why I'm pleased to report that two quarters into this process, we are on track with all the initiatives that we have set forth to create and have managed to do so while bolstering our financial stability and enhancing our strategic options to increase value in the business. With that, we're going to turn it over to Jeremy to dive deeper into our operating activities this quarter. Jeremy, over to you.