Sangoma Technologies Corporation

Third-quarter fiscal 2026 revenue was $51 million. Adjusted EBITDA was $7.5 million, or 15% of revenue. Gross margin was 71% versus 74% in the second quarter. Net cash from operating activities was $6 million, representing 80% conversion from adjusted EBITDA, and free cash flow was $3.6 million, or $0.11 per diluted share. The company repaid about $15.5 million of term debt in the first three quarters, ended the quarter with $32.5 million of debt and $15.2 million of cash, and repurchased about 196,000 shares in the quarter. For fiscal 2026, Sangoma now expects revenue of $204 million-$205 million and adjusted EBITDA margin of 15%-16%.

Charles Salameh said Sangoma is transitioning from a blended, consolidated view into a business with clearly different growth profiles, with infrastructure outperforming while applications face commoditization and pricing pressure. He stressed that the company is moving upmarket into larger integrated, multi-product deployments, and that AI is making infrastructure more strategic because agents and automated workflows increase network usage. His tone was candid and somewhat cautious: he repeatedly said the company is still learning how to time revenue recognition on these larger deals and that management is being direct about near-term headwinds.

Larry Stock said the portfolio is generating strong cash across the board, with $6 million of operating cash flow in Q3, 87% year-to-date conversion from adjusted EBITDA to net cash from operations, and $3.6 million of free cash flow in the quarter. He noted disciplined capital allocation through $15.5 million of term debt repayment, quarter-end debt of $32.5 million, cash of $15.2 million, and repurchases of about 196,000 shares in the quarter. On the P&L, he highlighted $51 million of revenue, 71% gross margin, and $7.5 million of adjusted EBITDA, then said the updated guidance reflects a larger near-term mix of infrastructure revenue, timing of larger deployments, and international headwinds.

Analysts focused on the strategic review, international weakness, services shortfalls, and margin pressure. Management said the strategic process is broad, board-led, and driven by inbound interest plus a desire to unlock value, not by a single outside offer, and they said selling parts of the business is not their preferred logic though the Board will consider value-maximizing options. On the revenue miss, they said the shortfall was mainly timing: larger bundled deals are taking 6-8 months or longer to deploy, with some customers not yet fully implemented, while international markets were slowed by shipping, transportation, and macro uncertainty. On margins, management said the near-term outlook remains similar because the guidance already includes the current mix and timing pressure, but they expect margin expansion over time as infrastructure scales.