Sangoma Technologies Corp Q2 2025 Earnings Call Transcript

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

Question: Gavin Fairweather - Cormark Securities Inc - Analyst : Oh, hey, good afternoon.

Question: Gavin Fairweather - Cormark Securities Inc - Analyst : I wanted to start out on your partner program and the launch of the new Pinnacle Partner program, I think that was officially launched in November. Maybe you can just discuss, how you've designed that program to ultimately drive more sales into you. And then also what, what you're hearing in terms of feedback, and what you're seeing on acceptance of that new program and your partner network.

Question: Gavin Fairweather - Cormark Securities Inc - Analyst : That's very helpful. And next for me, on the services line. You referenced a drop in churn, but we did see a bit of a decline sequentially this quarter, so maybe you can help me reconcile those statements, curious if the dip was tied to maybe some earlier churn and stability has improved.

Question: Gavin Fairweather - Cormark Securities Inc - Analyst : That's helpful [color]. And then on the premise PBX business, what are you seeing after the NEC kind of announcement they're exiting the business seeing additional partners coming to Sangoma. Any share gains in that space? What are you seeing on that side?

Question: Gavin Fairweather - Cormark Securities Inc - Analyst : Helpful. And then maybe lastly for Larry, with the new, ERP going live, are you anticipating any kind of impact to working capital where we notice it at all on the financials and, maybe discuss kind of how we should think about the one time expenses, trailing off.

Question: Gavin Fairweather - Cormark Securities Inc - Analyst : Great. I'll pass it on. Thank you.

Question: David Kwan - TD securities - Analyst : Hey, guys. I just want to get a better understanding of the decision on the low margin hardware resell. So I assume you're talking about voice supply. Are, are you looking to wind it down or you may be looking to try to sell it? And what are the other low margin, non core product lines that you're looking to deemphasize?

Question: David Kwan - TD securities - Analyst : No, that makes sense, guys, I appreciate the color there. Obviously a lot of talk about tariffs right now. Even if they're put on hold at least for Canada in particular, for at least a month here. Can you talk about maybe what you guys are doing to mitigate the potential impact if the tariffs do get implemented or potentially increased?

Question: David Kwan - TD securities - Analyst : That's helpful. So are you guys looking to maybe try to accelerate getting more inventory into the US while there's, I guess less tariffs coming out of Asia in particular? And can you talk about where your contract manufacturers are based?

Question: David Kwan - TD securities - Analyst : That's great, One last question. Obviously, one way I think you can help mitigate that impact of the tariffs is, is expanding geographically and talked about it on in the past as well as this call. So maybe if you talk about how that work has gone so far in terms to grow your business outside of the US, in particular, which is obviously the vast majority of business and where you see international revenue hope potentially getting over the next call it 3 to 5 years. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 05, 2025 / 10:30PM, STC.TO - Q2 2025 Sangoma Technologies Corp Earnings Call

Question: David Kwan - TD securities - Analyst : That's Great. Thanks guys.

Question: Robert Young - Canaccord Genuity - Analyst : Hi, good evening. Just a question the shift in the guidance. I want to understand the difference I guess is about 17.5 million at the midpoint, is that entirely the third party? And then I'm a little confused why the guidance for EBITDA margins isn't moving higher. That strikes me as it would be a meaningful shift in the margin structure, the mix shift and maybe just help me understand that and bridge the to that other statement that 85% services and 20% EBITDA margins is the path. Maybe if we could just try to flush out those pieces. So I understand better.

Question: Robert Young - Canaccord Genuity - Analyst : All right, thanks. That's very helpful. But, and when you say path to 20% EBITDA margin, is that something that you're thinking of, aligned with all of those pieces, like something that's near term like within one year? Or is that more of a longer term aspirational.

Question: Robert Young - Canaccord Genuity - Analyst : And then, congrats on getting down to that debt range. That's nice to see. I think you said more M&A continue to pay down debt. Is there any more you can give us around that? Are you already building a pipeline of M&A is that something you can move quickly on or should we think about debt just, dropping down here in the near term? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 05, 2025 / 10:30PM, STC.TO - Q2 2025 Sangoma Technologies Corp Earnings Call

Question: Robert Young - Canaccord Genuity - Analyst : All right. And maybe one last little one. There was a comment from Cisco that they saw their collaboration segment where they saw a jump in orders, double digits orders they said it was driven by more focused on return to the office. And I think they had some AI product tied to the Webex Suite. And I noticed you had an AI release. Are you, are you seeing maybe a little more interest in the market that, that same sort of bookings activity and then I'll pass by.

Question: Robert Young - Canaccord Genuity - Analyst : All right. Thanks. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 05, 2025 / 10:30PM, STC.TO - Q2 2025 Sangoma Technologies Corp Earnings Call