MARKHAM, ONTARIO, November 10, 2020 – Sangoma Technologies Corporation (TSX VENTURE:STC), a trusted leader in delivering cloud-based Communications as a Service (“CaaS”) solutions for companies of all sizes, today announced highlights of its first quarter financial results and unaudited condensed interim consolidated financial statements for the first quarter of its fiscal year 2021 ended September 30, 2020.
For the first quarter of fiscal 2021, sales were $35.03 million, 25% higher than in the same quarter last year, and EBITDA was a record $6.73 million, up 83% year over year.
1 Operating Income and EBITDA are metrics used by the Company to monitor its performance and the definitions may be found in the accompanying MD&A posted today at www.sedar.com.
“Our fiscal first quarter has historically been our weakest quarter and is typically down sequentially from the immediately preceding fourth quarter”, said Bill Wignall, President and CEO of Sangoma. “So it’s encouraging to see revenue and EBITDA ahead of our fourth quarter this year, countering the seasonality we’ve often seen. And our Services revenue continues to grow, both in absolute terms and as a percentage of revenue, hitting 56% of sales in Q1 and again demonstrating the strength of our cloud offerings.”
Gross profit was $23.18 million in the first quarter of fiscal 2021, with gross margin at 66% of revenue, about 4 percentage points better than same quarter of fiscal 2020.
Operating expenses were $19.64 million in the first quarter of fiscal 2021, up from the first quarter of fiscal 2020, as a result of additional investment in growth and the VoIP Innovations acquisition.
EBITDA was a record $6.73 million in the first quarter, and continues to benefit from the expense controls we undertook earlier this calendar year, as the first wave of the Covid pandemic hit. EBITDA at 19% of sales this quarter is slightly higher than our expectation, and as the crisis begins to subside, we will begin to prudently open up spending slightly again, which should bring EBITDA back closer to the range expected in our fiscal 2021 guidance, of around 17%.
Net income for the first quarter ended September 30, 2020 was $2.24 million, more than double that of the same quarter in fiscal 2020.
Sangoma continues to maintain a strong balance sheet and finished the quarter with a cash balance of $93.72 million, following the equity raise in July and debt repayments undertaken during the first quarter. Working capital closed at $84.11 million as of September 30, 2020 and Adjusted Cash Flow from operations at $3.91 million for the quarter, up by almost one million dollars from the same quarter last year.
Outlook for fiscal year 2021
As we indicated in our fiscal results release during October Sangoma expects between $143 and $147 million of revenue for fiscal 2021, and EBITDA of between $24 and $26 million.
President and CEO, Bill Wignall, Executive Vice President Corporate Development, John Tobia and CFO, David Moore will host a conference call on Tuesday November 10, 2020 at 5.30p.m. Eastern Standard Time to discuss the quarterly results. The dial-in number for the call is 1-800-319-4610 (International 1-604-638-5340). Investors are requested to dial in 5 to 10 minutes before the scheduled start time and ask to join the Sangoma call.