Sangoma Technologies Corporation

Thank you for standing by. This is the conference operator. Welcome to Sangoma's second quarter fiscal 2026 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 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 reach an operator by pressing star then zero. 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 San Goma's second quarter of fiscal year 2026 investor call. We are recording the call, and we will make it available on our website for anyone who is unable to join us live. I'm here today with Charles Salameh, San Goma's Chief Executive Officer, Jeremy Webb, Chief Operating Officer, and Larry Stock, Chief Financial Officer. Charles will provide a high-level overview of the quarter. Jeremy and Larry will then take you through the operating results for the second quarter of fiscal year 2026, which ended on December 31, 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, ISRS. and during the call, we may refer to terms such as adjusted EBITDA and free cash flow, which are non-IFRS measures that are 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 CDR Plus, 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 Q2 tracked right to plan, including one of our strongest booking quarters in recent history. This is a clear indication that our go-to-market strategy is gaining traction, and that the investments we've made in positioning Sangoma for growth are starting to show tangible results. At the outline last quarter, Q2 would show sequential revenue growth, and we delivered on that expectation. Revenue for the quarter was $51.5 million, up 1.2% sequentially, and importantly, service revenue grew 1%. This is an important signal as it reflects the early impact of improving bookings momentum beginning to translate into recurring revenue growth. We delivered $8.3 million in adjusted EBITDA with 16% margins and conversion of adjusted EBITDA to operating cash flow was very strong at more than 120%. This continues to reinforce quality, consistency, and discipline of our earnings model. And as a result, free cash flow improved sequentially to $8 million, or 24 cents per fully diluted share. Building on the KPIs we introduced last quarter, we're starting to see sustained progress in our mid-market strategy. Pipeline conversions remain solid, our bookings profile continues to improve, and we're seeing growing traction across our verticals and our wholesale motions. Collectively, these trends highlight the increasing effectiveness of our platform approach and our ability to execute at larger scales. With regard to pipeline, our pipeline remains steady in Q2, reflecting a healthy balance between new opportunity creation and deal conversion. Importantly, we continue to see improvements in our close rates, which reinforces both the quality of the pipeline and the effectiveness of our go-to-market execution. On bookings, MRR bookings grew significantly, up 67% sequentially and 60% year over year. As we increasingly engage with these larger, more complex mid-market opportunities, we expect some quarterly volatility, but with a higher long-term value and stronger recurring revenue. This is exactly the type of shift we want to see as we scale this business. On churn, also very proud of this, we also saw sequential improvement in that churn rate. Retention remains excellent, with blended churn holding just under 1%. This reflects the stability of our recurring revenue base and the progress we've made in our customer experience, service delivery, and platform stability. Now, as we continue to execute on our FY26 priorities, we are seeing momentum across all the business. Our essential communications platform, combined with more focused solution bundles, deeper vertical alignment, and a strengthening partner ecosystem is enabling us to compete more effectively for larger multi-site and more strategic mid-market opportunities. And more broadly, this reflects a shift in how customers are buying. And we're seeing that dynamic increasingly show up in the structure and the quality of opportunities we're pursuing. The progress we are seeing is not isolated to individual wins, but it's visible in the overall size of the opportunities, the quality of those bookings, and the breadth of the customer segments engaging with us on our platform. With our leadership team, our operating systems, our partner programs now firmly in place, we are investing to scale our go-to-market engines. As outlined last quarter, we committed approximately $2 million in incremental SG&A to accelerate pipeline development, customer acquisitions, and execute on partner enablement. In Q2, we began deploying these investments in a measured way, focused on building momentum while maintaining strong financial discipline. Our approach to capital allocation remains balanced and pragmatic. We continue to reduce debt and return value to our shareholders through our normal course issuer bids. At the same time, we maintain the flexibility to pursue strategic and selective accretive M&A aligned with our strategy should that right opportunity show up. Before I hand it over to Jeremy, I want to take a moment just to step back and frame how we see the next phase of our business. What we are seeing in the market today, particularly in the mid-market, continues to reinforce the direction that we've been intentionally pursuing over the past several years. Customer expectations are evolving towards fewer vendors, more integrated solutions, and partners that can deliver dependable service in industry-specific contexts. In this environment, scale becomes a strategic priority, not as an objective on its own, but because it supports stronger economics, consistent execution, and deeper long-term customer relationships. The key point here is that our ability to pursue scale is now an enabler for Sangoma rather than a constraint. The foundational work we completed has positioned Sangoma extremely well. We have the balance sheet, the operating discipline, platform breadth, and the partner ecosystem required to grow organically while also being able to pursue opportunities that expand our scale and momentum as industry dynamics continue to evolve. As a result, we have real flexibility in how we move forward. That includes continuing to execute organically, selectively expanding the platform where it makes sense, and maintaining the ability to evaluate broader opportunities as the market continues to mature. Any path we pursue will be grounded in discipline and clear focus on long-term value creation, as we have been doing for the past two years. And importantly, you've already seen the impact of the foundation show up in the fundamentals, stronger bookings, growing recurring revenue base, improving churn, and consistent cash generation. I want to thank this entire Sangoma team for their continued focus and execution, as well as the key stakeholders who have been with us through this entire transformation. The progress we're seeing is the direct result of the work being done across the whole company, and it's what positions us well for the next phase of our growth. Jeremy's now going to walk you through how the momentum is translating into our go-to-market execution and our booking performance. Over to you, Jeremy.