Sangoma Technologies Corp Q1 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Gavin Fairweather - Cormark Securities Inc. - Analyst : Maybe just to kick it off, you referenced the NEC kind of exit from the prem business. Can you just remind us like how big were they? How does the competitive landscape look now? Were you already dealing with a lot of their partners? And how meaningful could this be for Sangoma?

Question: Gavin Fairweather - Cormark Securities Inc. - Analyst : That's very helpful. Maybe just checking in on the macro environment. I mean some kind of other players have called out election uncertainty in the September and December quarters. I'm curious if you saw anything like that down in the U.S. And also curious whether you think the shift in political landscape going forward could drive an improved business environment and demand environment.

Question: Gavin Fairweather - Cormark Securities Inc. - Analyst : Okay. And then just lastly for me on the Pinnacle Partner program. A big part of this effort, I'm sure, is changing partners' behaviors and working on kind of larger, more complex deals. So, maybe you can just provide us with a bit of an update on how that partner behavior is shifting, what you're seeing there and also how perceptions of Sangoma are changing as a result?

Question: Vijay Devar - Northland Capital Markets - Analyst : This is Vijay Devar for Mike Latimore. So yes, a couple of questions quickly. And the first one would be on -- do you see the mix of product versus service changing in the second half? And what could be the likely mix for the full year?

Question: Vijay Devar - Northland Capital Markets - Analyst : Got it. And another question would be Charles, do you expect the sequential growth each quarter or some ups and downs in maybe the third or second quarter? How do you look at it in terms of reaching out towards the end of the year?

Question: Robert Young - Canaccord Genuity - Analyst : First question around the working capital benefits. I assume that's one-time. And I guess that probably influenced the decision to pay the extra debt down. So, I was just curious about that and then maybe if you could remind us on your plans after you get to those debt targets, how the behavior will change.

Question: Robert Young - Canaccord Genuity - Analyst : Yes. I'm just curious what the -- how you expect your behavior to change once you get to that target?

Question: Robert Young - Canaccord Genuity - Analyst : Okay. And then part of the question was about the abnormally high cash flow conversion from EBITDA. I understand the cash flow is going to remain strong, but do you have additional levers? Like is there additional benefit in inventory efficiency? I think you said it was trade payables. Like is there more to pull out of that? Or was this very high conversion? Is that a one-time item?

Question: Robert Young - Canaccord Genuity - Analyst : Okay. That's great. Second question, on the NEC, just continuing Gavin's -- sorry if I'm retracing part of his question, I missed part of what he said. But that's ending, I think, the end of life, but I mean, its support goes to 2030 and they're shipping through 2025. And so it seems as though that's a long drawn-out process. I mean, is this a large opportunity for you over a long period of time? Or is this like I guess, a point-in-time opportunity? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 06, 2024 / 10:30PM, STC.TO - Q1 2025 Sangoma Technologies Corp Earnings Call

Question: Robert Young - Canaccord Genuity - Analyst : And are there others of that size out there that you think could possibly end of life or just walk away from the business, anything you see out there in the market that maybe we might not see?

Question: Robert Young - Canaccord Genuity - Analyst : Okay. That's a lot of good data. In the disclosure, you named a number of channel relationships, I think 1, 2, 3, 4, 5, 6 of them, I think, in the MD&A, Telarus, Avant, App Direct, Intelisys, Jenne, and ScanSource. Like are there anything specific about those ones that are relatively important? Are they just the largest, most important ones in the...

Question: Robert Young - Canaccord Genuity - Analyst : Okay. And maybe last question. You highlighted that you're seeing a higher level of new leads per week after the go-to-market shift or changes. But how is that changing the pipeline? Maybe you can just remind us or remind me on the sales cycle and how these leads move through the pipe and where this new lead activity is likely to benefit revenue and I'll pass on.