SANG · Sangoma Technologies Corporation

Sangoma's third quarter fiscal 2026 results reflect a company navigating a dynamic market while executing a strategic pivot toward higher-margin recurring services. Revenue of $51.0 million was essentially flat sequentially and declined 12% year-over-year, though the prior-year period included $6.3 million from the divested VoIP Supply resale business. Excluding that, like-for-like revenue declined less than 2%. Gross profit margin improved to 71% from 69% in the prior-year quarter, driven by favorable mix shift toward services. Operating expenses decreased 4% sequentially to $38.5 million, reflecting cost discipline. However, net loss widened to $2.3 million from $1.4 million a year ago, partly due to lower revenue and higher restructuring costs. Adjusted EBITDA of $7.5 million (15% margin) fell short of the company's prior guidance of 17-18%, prompting a downward revision to full-year guidance: revenue now expected at $204-205 million (from $205-208 million) and Adjusted EBITDA margin at 15-16% (from 17-18%). Management cited shifts in revenue timing, product mix, and macroeconomic conditions. Positively, the MSP and Voice Infrastructure segments grew 9% and 17% year-over-year, respectively, indicating strength in core communications infrastructure. The company also announced a strategic review process, engaging ATB Cormark Capital Markets to evaluate alternatives including partnerships, business combinations, or other transactions. This review, prompted by inbound interest, aims to unlock shareholder value. Total debt was reduced to $32.5 million, down 39% from the prior year, and cash stood at $15.2 million after debt repayments and share repurchases. The strategic review introduces uncertainty but also potential upside if a transaction materializes.