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. Following the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then 1 on your telephone keypad. Should you need assistance during the conference call, you may reach an operator by pressing star then 0. I would now like to turn the conference over to Samantha Redburn, Chief Legal Officer. Please go ahead, Ms. Redburn.

Thank you, Operator. Hello, everyone, and welcome to Sangoma's first quarter of fiscal year 2026 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 Salome, Sangoma's Chief Executive Officer, Jeremy Wubbs, Chief Operating and Marketing Officer, and Larry Stock, Chief Financial Officer. Charles will provide a high-level overview of the quarter. Jeremy and Larry will take you through the operating results for the first quarter of fiscal year 2026, which ended on September 30, 2025. Following their presentation, we will open the floor for Q&A with analysts. 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 and free cash flow, which are non-IFRS measures, but 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, unaudited condensed consolidated interim financial statements, 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.

Good afternoon, everyone, and thanks for joining us. I'm pleased to report that fiscal 2026 is off to a strong start. Q1 tracked the plan, exceeding consensus analyst expectations. As outlined last quarter, following the sale of our third-party hardware resale business, Q1 serves as a bridge to our higher margin recurring revenue model, which now represents 90% plus of our total revenue. With that foundation in place, we are positioned for sequential growth in Q2 and continued improvement through the second half as we convert our growing bookings into revenue. In Q1, we delivered $50.8 million, $8.3 million in adjusted EBITDA with 16% margins, and $3.2 million in free cash flow. The margin profile reflects normal seasonality, while free cash flow was temporarily impacted by a $3.2 million negative change in working capital that has since been largely reversed. Larry will provide more detail in this section. This quarter, I want to anchor on a few of the KPIs that guide how we run the business, pipeline, bookings, conversion, and churn. Jeremy will provide additional detail and examples of recent bookings that reflect the strategy I've outlined in previous calls. Thanks to the transformation completed in May, including the successful ERP and CRM implementations, we now operate with far greater precision, visibility, and speed. This gives us data-driven foundation as we enter our new phase of growth. The overall size of our pipeline remains steady, but new pipeline creation increased 39% quarter over quarter. Importantly, we saw a pickup in our higher velocity volumetric business, which now represents 62% of our 90-day forward pipeline, compared with 55% in Q4, providing a better balance between short-term visibility and long-term growth. On the booking side, larger strategic opportunities continue to accelerate. MRR bookings grew 2.4% sequentially and 6.4% year-over-year, while deals over $10,000 of MRR increased 39% sequentially and are 72% above our FY25 quarterly average. We're now seeing the bundled mid-market wins envisioned during our transformation materializing in the field. These deals span multiple verticals, including wholesale, carrier, education, healthcare, and are emblematic of the new Sangoma go-to-market motion actually taking hold. Meanwhile, retention remains excellent, with blended churn holding near 1%, highlighting the stability and the quality of our recurring base. Sangoma today is in a much stronger position with tremendous optionality in how we pursue growth. Our balance sheet provides flexibility to both invest and adapt quickly to shifting market dynamics. For example, our prem business grew over 60% year-over-year, benefiting from capacity created by larger players exiting this segment. At the same time, we continue to generate strong cash, even as we strategically reinvest in growth initiatives, expanding our partner ecosystems, launching new routes to market, and forming high-value partnerships. One recent example is our wholesale channel, just launched six months ago, where we've already signed our first $10,000 MRR deal and have multiple opportunities in the active pipeline. These are solid leading indicators of the growth we expected and expect over the next several quarters. We're also exploring selective AI-driven software acquisitions to strengthen our vertical focus in healthcare, hospitality, retail, and education. These initiatives are generating tangible pipeline, early bookings, and a clear momentum. Now, beginning this quarter, we are introducing a clear review of our performance through two segments, core and adjacent. Now, core represents SAS-led communications platform services, UCaaS, CCaaS, MSP services, and access. the primary growth drivers of the company. Adjacent includes cash-generative technologies such as trunking and open-source platforms that complement our core offerings and strengthen the company's financial foundation. This structure provides greater transparency into where we are investing and how our revenue mix continues to evolve towards recurring software-centric streams. Larry will provide additional color on those numbers shortly. Now, with the systems, leadership, and programs and partners now fully in place, we are confidently scaling our go-to-market engine. We plan to invest approximately $2 million in incremental SG&A over the coming quarters to accelerate customer acquisition and partner enablement, supported now by higher NPS scores and customer satisfaction. On the capital allocation side, our approach remains disciplined. We continue to pay down debt, reduce leverage, and return value to our shareholders through our normal course issue or bid. At the same time, we are maintaining flexibility for selective accretive M&A to complement our organic growth. Looking ahead, we remain on track to meet our fiscal FY26 guidance. We expect sequential growth in Q2 and year-over-year growth in Q3 and Q4 as our bookings convert a new program scale. While the broader SMB market conditions can influence deal timing, early Q2 activity is encouraging and consistent with our growth expectations. I want to thank the entire Sangoma team for their continued focus and execution. The progress we're making, seeing larger deal sizes, growing recurring revenue, and expanding routes to market gives me great confidence that Sangoma is entering a new phase of sustainable, profitable growth. I'll now turn it over to Jeremy to walk through our operating metrics in more detail, followed by Larry with the financials and the capital allocation update.