Sangoma Technologies Corp Q4 2024 Earnings Call Transcript

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

Question: Gavin Fairweather - Cormark Securities - Analyst : Oh, hey, good afternoon. Great to hear all the progress on the turnaround. Maybe just to start on the pipeline, it sounds like we're due to get some increased disclosure, maybe alongside your Q2, but hoping you can maybe provide a bit of a sneak preview, maybe even from a high level, just in terms of the overall size of the pipeline, what you're seeing on deal sizes and win rates, et cetera.

Question: Gavin Fairweather - Cormark Securities - Analyst : That's helpful. And then just on the channel side, you've obviously done a lot of work to redesign the partner program and done a lot of work to integrate your various products and come up with bundles. Can you just discuss what kind of feedback you're getting from those target partners in terms of the new approach?

Question: Gavin Fairweather - Cormark Securities - Analyst : Yeah. And you touched on -- oh, yeah, keep going.

Question: Gavin Fairweather - Cormark Securities - Analyst : That's helpful. And then lastly, for me, maybe just for Larry, zeroing in on the Q1 guide, if I look at it sequentially, it looks like revenue is up modestly, EBITDA down modestly on a sequential basis. I'm curious what's driving that. Is that kind of product mix and gross margin? Are you starting to see some of the ERP costs ramping up? Or there other kind of growth investment areas that we should be aware of?

Question: Gavin Fairweather - Cormark Securities - Analyst : Okay. That's it for me. Thanks so much.

Question: Mike Latimore - Northland Capital Markets - Analyst : Hi. Thanks very much. Hey, good afternoon. Congrats on the big year, big cash flow year during the transformation. Looks great. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 18, 2024 / 9:30PM, STC.TO - Q4 2024 Sangoma Technologies Corp Earnings Call

Question: Mike Latimore - Northland Capital Markets - Analyst : I guess just back on the pipeline, can you give a little more color there? It sounds like deal sizes are getting bigger, but I don't know if you can quantify the pipeline growth at this point. Maybe give some color on small business versus the mid-market within the pipeline there. And then also just what's in demand? Are you seeing a lot of demand for certain services?

Question: Mike Latimore - Northland Capital Markets - Analyst : Okay, great. And then on the ERP system, you highlighted how you can more easily integrate acquisitions. I guess, should having that upgraded ERP system also help just with sales cycles sort of reacting more quickly?

Question: Mike Latimore - Northland Capital Markets - Analyst : Okay, awesome. Thanks very much. Good luck this year.

Question: David Kwan - TD Cowen - Analyst : Hi, good afternoon. Hi, Charles. Curious, the comment on the larger deal sizes. It sounds like it's mostly due to these industry-specific bundles, but is it also reflective of maybe going after some larger customers?

Question: David Kwan - TD Cowen - Analyst : That's helpful color that you provided, because I know historically that the company hasn't focused on the enterprise market. I think part of that was product related. So it sounds like you feel that the platform is in a much stronger place that you can go after those deals.

Question: David Kwan - TD Cowen - Analyst : That's very helpful color, guys. Just on the guidance, I think if you adjust for the one-time ERP cost of just over $2 million, it seems to imply margins at the midpoint, around 18%, which is kind of like what we've seen in the second half of the past year. Is this where we should expect to see margins over the next couple of years, particularly as you look to drive stronger growth? Or maybe is there more cost optimization work that you could still do?

Question: David Kwan - TD Cowen - Analyst : So it sounds like, Larry, that there's probably some modest upside here, I'm guessing at fiscal '26 as it relates to the ERP implementation, but probably not too much more beyond that as you look to drive stronger growth. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 18, 2024 / 9:30PM, STC.TO - Q4 2024 Sangoma Technologies Corp Earnings Call

Question: David Kwan - TD Cowen - Analyst : It does. Thanks. Thanks again.