MARKHAM, ONTARIO, November 12, 2021 – Sangoma Technologies Corporation (TSX:STC), a trusted leader in delivering cloud-based Communications as a Service solutions for companies of all sizes, today announced highlights of its unaudited results for the first quarter of fiscal year 2022 ended September 30, 2021.
Sales for the first quarter of fiscal 2022 were a record $52.48 million, twice that of the same quarter last year and 5% higher than in the last quarter of fiscal 2021. Please note that these results are being presented in United States dollars for the first time, and so all comparable numbers have been converted to US dollars.
The Company undertook a seven for one share consolidation on November 2, 2021, so please
this press release, as well as the accompanying interim financial statements and MD&A (all of
been filed on SEDAR), the share count, option count, exercise prices, and earnings per share reflect this share consolidation for all periods reported.
“I am very pleased with our performance in the first quarter,” said Bill Wignall, President and CEO of Sangoma. “Financially, both revenue and adjusted EBITDA were double that of the first quarter in fiscal 21, a testament to the ongoing growth and compounding of our services business. And from a strategic perspective, this was also the quarter in which we completed much of the integration of the Sangoma and Star2Star teams, along with the product portfolios, so that customers can choose from the combined suite of Sangoma offerings. As we have previously indicated, we expect spending as a percentage of revenue, to remain relatively consistent, as we reinvest the synergistic savings from the acquisition to help drive growth. Overall, I see this quarter as a very sound start to the year, one capped off by our up-listing from the Venture exchange to the TSX after quarter-end.”
Gross profit for the first quarter of fiscal 2022 was $37.85 million, delivering gross margin of 72% of sales, up by 6 points over the 66% in the same quarter last year.
Operating expenses were $38.71 million for the first fiscal quarter of 2022, up 2% sequentially over the most recent fourth quarter of fiscal 2021. When compared to last year, operating expenses are materially higher primarily because of the addition of the Star2Star teams and the non-cash intangible asset amortization arising from the acquisition.
Adjusted EBITDA1 was $10.09 million in the first quarter, more than twice that of last year, and at about 19% of revenue, is consistent with expectations for this point in the fiscal year.
Net loss for the first quarter ended September 30, 2021 was $2.30 million, which includes the additional non-cash intangible asset amortization, together with $0.84 million of one-time integration expense which is expected to cover all such costs associated with the Star2Star acquisition.
Sangoma continues to maintain a healthy balance sheet, finishing the quarter with a cash balance of $19.13 million on September 30, 2021 and remains comfortably within its debt covenants. Adjusted Cash Flow from operations during the first quarter was $5.16 million, compared to $3.01 million in the same quarter of fiscal 2021.
Outlook for fiscal year 2022
Based upon these results for the first quarter, Sangoma continues to expect revenue of between $209 and $213 million, and Adjusted EBITDA in a range of $41 to $43 million, for fiscal 22. The company is not changing its fiscal 2022 guidance.
The above outlook is based on the Company’s assessment of many material assumptions, including:
- The continuing recovery of the global economy from the effects of COVID-19
- The successful integration of the Star2Star business
- There is continuing growth in the global UCaaS and cloud communications markets more generally
- Demand and subscriber growth continues for the Company’s cloud offerings
- Changes in global exchange rates do not disrupt demand for the Company’s Products and Services
- The ability of the Company’s customers to continue their business operations without any material
impact on their requirements for the Company’s Products and Services - The Company’s forecasted revenue from its internal sales teams and via channel partners meets
expectations - There is no material further increase to the Company’s cost of goods sold
- The Company’s manufacturers and supply chain deliver ongoing quantities of finished products on
schedule - That the Company can continue to secure electronic components and parts to support a largely
uninterrupted supply chain - That the Company is able to attract and keep the employees needed to maintain the current momentum
- The continued ability for the Company’s operations employees to work at the Company’s internal and
outsourced facilities - Other employees are able to work from home as required without any material impact on productivity
Full first quarter results and conference call
Sangoma will host a conference call on Friday, November 12, 2021 at 7.45 am EST to discuss these 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.
1 Adjusted Operating Income, Adjusted EBITDA and Adjusted Cash Flow from Operations are metrics used by the Company to monitor its performance and definitions of these terms, as well as other important information on these results, may be found in the accompanying MD&A posted today at www.sedar.com.