Sangoma Delivers Solid Q1 FY2026 Results: Strong Recurring Revenue Model Powers Through Transformation

Sangoma Technologies (TSX: STC; Nasdaq: SANG) has posted its first quarter financial results for fiscal 2026, signaling confidence in its software and services transformation. The company’s investor relations team highlighted results that demonstrate operational discipline and the resilience of its recurring revenue-focused business model.

Financial Performance: On Track With Strategic Plan

The communications platform provider recorded Q1 revenue of $50.8 million, setting expectations for sequential growth ahead. After accounting for the strategic divestiture of VoIP Supply (VS) — a move designed to exit lower-margin resale operations — like-for-like revenue showed a 3% year-over-year decline. However, this masks a more encouraging underlying trend.

Average revenue per customer jumped 19% year-over-year, while bookings climbed 6%, suggesting expanding wallet share among existing clients. Gross profit improved to 72% of revenue, up from 67% in the prior quarter, directly reflecting the company’s shift away from commodity resale toward higher-margin recurring services.

Operating expenses fell 9% year-over-year to $38.5 million, demonstrating the efficiency gains from Sangoma’s fiscal 2025 transformation activities. The company reported a net loss of $2.3 million ($0.07 per share fully diluted), compared to $1.9 million in the year-ago period.

Cash Generation and Profitability Metrics

Adjusted EBITDA reached $8.3 million, representing 16% of revenue and tracking in line with historical seasonal patterns. Management expects margin improvement as the year progresses. The company generated $4.9 million in operating cash flow during the quarter, translating to 60% of Adjusted EBITDA — a healthy conversion rate.

Free cash flow came in at $3.2 million ($0.10 per share fully diluted), providing strategic flexibility. Customer retention remained strong with quarterly churn hovering near 1%, underscoring the stickiness of Sangoma’s unified communications platform.

Share Buyback and Investor Returns

Sangoma has repurchased over 700,000 shares for cancellation under its Normal Course Issuer Bid since March 2025, including 195,949 shares post-quarter close. This capital allocation reflects management confidence in long-term value creation.

Full-Year Outlook Reaffirmed

For fiscal 2026, Sangoma maintained its guidance issued on September 17, 2025:

• Total Revenue: Expected between $200–$210 million, compared to $209 million in FY2025 (excluding VS contribution), with Q2 sequential growth anticipated
• Adjusted EBITDA Margin: Projected at 17%–19%, inclusive of incremental go-to-market investments designed to fuel organic expansion

CEO Charles Salameh emphasized that the company is leveraging its strong balance sheet and completed transformation to capture emerging opportunities. Growth in average booking sizes reflects customer adoption of integrated bundles and recognition of Sangoma’s platform value proposition.

Strategic Position Strengthened

With its transformation complete, Sangoma is executing from a position of agility and focus. The company has expanded its software and services portfolio while deepening relationships across its global customer and partner base. As a leading unified communications provider with 2.7 million UC seats across 100,000+ customers, Sangoma continues to navigate evolving market dynamics.

The company will host a conference call on November 10, 2025, at 5:30 pm ET for investor relations inquiries. For those seeking deeper analysis of these results and their implications for Sangoma’s trajectory, the detailed financial statements and non-IFRS reconciliations provide comprehensive documentation of the company’s operational performance and strategic execution.