Sangoma Technologies Stock Earnings Reports

Sangoma reported a Q1 FY2026 that tracked to plan and beat analyst expectations. Revenue was $50.8M with $8.3M adjusted EBITDA (16% margin) and $3.2M free cash flow; the company completed its pivot away from third-party hardware resale and now derives over 90% of revenue from higher-margin recurring sources. Key operational highlights include a 39% quarter-over-quarter increase in new pipeline creation, a pickup in higher-velocity volumetric business (62% of the 90-day forward pipeline), MRR bookings up 6% year-over-year, and average revenue per customer up 19% year-over-year driven by bundling and larger deals (including a recently closed $150k MRR distributed-enterprise bundle and a wholesale CLEC deal). Churn remains low (~1% blended). Transformation initiatives (ERP/CRM, partner program, sales re-hire) are delivering greater sales precision and pipeline quality. Financially, gross margin improved to 72%, services represent ~92% of revenue, the company converted 60% of adjusted EBITDA to operating cash in Q1 (impacted by a one-time $3.2M working capital issue that is resolved), retired $5.2M of debt in the quarter (total debt $42.8M), repurchased ~710k shares (2.1% outstanding), and plans ~$2M of incremental SG&A investment to accelerate go-to-market and partners. Management reaffirmed FY2026 guidance: revenue $200M–$210M and adjusted EBITDA margin of 17%–19%, expecting sequential growth beginning in Q2 and improved cash conversion (90%–100% of adjusted EBITDA) for the rest of the year. Management is targeting selective AI-driven and vertical-focused M&A while continuing debt reduction and share buybacks.