Thank you for your patience. This is the conference operator. Welcome to the Sangoma Investor Conference Call. Please note that all participants are in listen-only mode, and the conference is being recorded. After the presentation, analysts will have the opportunity to ask questions. I will now hand the call over to Samantha Reburn, Chief Legal Officer. Please proceed, Ms. Reburn.

Thank you, Operator. Hello, everyone. And welcome to Sangoma’s Third Quarter of Fiscal Year 2025 Investor Call. We are recording the call, and we will make it available on our website for anyone who is unable to join us live. I’m here today with Charles Salameh, Sangoma’s Chief Executive Officer; Jeremy Wubs, Chief Operating and Marketing Officer; and Larry Stock, Chief Financial Officer. Charles will provide a high-level overview of the quarter. Jeremy and Larry will take you through the operating results for the third quarter of fiscal year 2025, which ended on March 31, 2025. Following their presentation, we will open the floor for Q&A with analysts. We will discuss the press release that was distributed earlier today, together with the company’s financial statements and MD&A, which are available on SEDAR+, EDGAR, and our website. As a reminder, Sangoma reports under International Financial Reporting Standards, IFRS. And during the call, we may refer to terms such as adjusted EBITDA and free cash flow, which are non-IFRS measures, but are defined in our MD&A. Before we start, I’d like to remind you that the statements made during the course of this call that are not purely historical are forward-looking statements regarding the company or management’s intentions, estimates, plans, expectations, and strategies for the future. Because such statements deal with future events, they are subject to various risks and uncertainties, and actual results may differ materially from those projected in the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements are discussed in the accompanying MD&A, unaudited condensed consolidated interim financial statements, our annual information form, and the company’s annual audited financial statements posted on SEDAR+, EDGAR and our website. With that, I’ll hand the call over to Charles.

Good afternoon, everyone, and thanks for joining us today. Let’s just start with the quarter. Sangoma delivered really strong financial performance in Q3 with revenue of $58.1 million, adjusted EBITDA margins of 17%, and operating cash flow conversion from adjusted EBITDA of over 100%. Once again, generating strong free cash flow per share, and while Larry will walk you through the full numbers shortly, I’m proud to say that we’re seeing some consistent, meaningful improvements in our cash generation. This underpins both the value of and the strategic potential for our company. We’re also continuing to pay down debt well ahead of schedule, further strengthening our balance sheet and creating greater flexibility for our capital allocation priorities. Now, as I emphasized last quarter, financial strength creates optionality, and today that optionality is real, supporting the execution of our growth strategies with confidence. After 15 months of focused execution, I’m excited to say that the major transformation we committed to through project diamond is now complete. Of course, continuous improvement is part of any great company, but the heavy lifting we set out to accomplish is finally behind us. Today, Sangoma has the financial foundation, the operational structures, processes, and competencies to fully move into our next phase, a multipronged growth strategy. Simply put, Sangoma has never been stronger or in a better position to tackle this growth. First, I want to spend a few moments talking about the operational readiness for that growth. I’m thrilled to share that our new ERP system is on track and online, and we’re finalizing the user acceptance testing in April as promised. This was a major milestone and critical component of our transformation that sets the stage for both organic and inorganic growth, as well as providing enhanced visibility across the entire business. I’ve been speaking a lot about the ERP systems, and I’m very proud of what the team has done here. The efficiency gains we expect to realize from our modern ERP system will be a source of operating leverage with expected savings of approximately $5 million over the next three years. We self-funded the entire ERP system implementation since the beginning of this transformation. We’ve also streamlined our processes, upgraded team competencies, and sharpened our value proposition to better position Sangoma as a communications partner of choice for small and medium enterprises globally. Last quarter, I told you we’d start moving away from the lower-margin hardware reselling to focus on Sangoma as a pure-play communications software company, delivering significantly higher margins and predictability. We’ve done exactly that. We have accelerated the divestiture of our non-core assets, improving profitability and sharpening our focus. And these assets have been classified as held-for-sale on the balance sheet, and we’ve seen strong interest from potential buyers. As expected, this shift resulted in a slight revenue dip in Q3, but it also led to a sequential improvement in gross margins as we reduced our reliance on lower-margin NRR resale offerings. At this time, we have been actively pursuing acquisitions that can expand our footprint in both North America and internationally. And importantly, with our debt lower than planned, we were able to launch and begin executing a normal course issuer bid, reinforcing our strong belief in Sangoma’s intrinsic value. This deliberate shift is already delivering benefits, freeing up resources for strategic investments that are creating momentum for our core MRR business, where the measurable benefits are clear. Client satisfaction and NPS scores have improved significantly year-over-year, with NPS scores up nearly 300% and client satisfaction scores up 23%. Customer churn remains industry-leading at below 1%, 0.9% to be exact. I’m most proud that we were able to maintain churn levels at this low level during a very significant transformation. Our large deal pipeline is up considerably compared to last quarter. We are seeing accelerated signs of growth across our entire pipeline, new partner engagements, and in deal closings. Free cash flow per share is $0.25 in Q3 and $0.84 in the first three quarters, a double-digit increase over the past two years. These results are the direct outcome of the strategy we outlined in the previous quarters. We committed to enhancing customer success, focusing our investments on core communication platforms, and driving disciplined operational execution, and we are seeing progress on all those fronts. This gives me great confidence that Sangoma is poised for the opportunities that lie ahead. I just want to step back for a moment to speak on the industry trends. First, on tariffs and geopolitical risk. I get asked that question all the time. We have not seen a material impact on our business today. For areas in our supply chain that were of concern, we got ahead of it and derisked the company. Because we own the IP and our own hardware, we have the flexibility now to adjust our processes and supply chain to mitigate any impact. And like all of you, we’re just simply hoping for peace and common sense to prevail on the global stage. Closer to home, we’re witnessing a major shift in our industry landscape, one that plays directly into Sangoma’s strength. Mitel’s recent Chapter 11 filing highlights the struggles of legacy on-premises providers. NEC and Avaya are pulling back from the premise-based business, reinforcing the industry shift to cloud and hybrid models. Single solution vendors continue to face commoditization pressures and margin erosion. Against this backdrop, Sangoma is now positioned to win. With our integrated platforms, integrating both security and AI components, spanning premises, hybrid and cloud solutions, modernized systems in both back and front offices, and an energized channel ecosystem, coupled with financial flexibility, we are uniquely positioned to fill the void left by legacy players, and we are already seeing the pipeline and market demand growing in this particular sector. We offer voice, data, video security, and proprietary hardware – the essential communication elements, and we’re now bundling them into industry-tailored solutions, delivering exactly what mid-sized enterprises need as they modernize their communication infrastructure. We are now a full one-stop shop for our customers, and a single product competitor cannot match that. The last six quarters have been challenging and accelerating. The men and women of Sangoma have risen to the occasion, embracing change, strengthening our culture and pushing the company to new heights. We are a very different company than we were one year ago. That transformation is now complete. Sangoma now has the financial, operational, and cultural readiness to execute our three-pronged growth strategy: organic expansion, strategic acquisitions, and geographic growth. The changes we’re seeing in the market validate the strategy we pursued, offering integrated essential communication services to a single trusted partner is working. We anticipated this shift, and now we are ahead of the curve. We are confident Sangoma will continue to deliver increased value to customers and shareholders alike. Finally, I want to sincerely thank the entire Sangoma team for achieving this remarkable transformation. And I want to thank our investors for the trust you placed in us throughout this journey. I am more energized than ever to see what can be achieved with the transformed Sangoma that we’ve created. I’ll now hand it over to Jeremy and Larry to walk you through the detailed financial and operational results. Jeremy, over to you.

Thank you, Charles. I’m very pleased and excited to share a meaningful update on both our company-wide transformation and the progress on our go-to-market programs this quarter. Since Charles and I joined Sangoma in late 2023, we have been deeply focused on transforming the company into a simpler and more unified organization for our customers, partners, and employees. As I shared last quarter, fiscal 2025 has been about reinforcing this transformation, and I am pleased to report that this work is now largely complete and firmly embedded across the organization, giving us a solid foundation from which to accelerate our growth strategy. To achieve this, we have implemented cost savings programs, streamlined processes, and made substantial systems improvements. We’ve also instituted this philosophy of ongoing financial discipline and process improvement within the company. Some of the notable highlights of our transformation efforts year-over-year include the following: Company-wide Net Promoter Score has improved dramatically by more than 300%, both onboarding and support customer satisfaction have risen by more than 20% to the 90% level. Support average time to answer has been reduced by 33%. In our IT business systems, our new ERP system is online, as Charles noted earlier, supporting streamlining and consolidating our finance systems and billers. As part of our broader IT programs, we have also introduced standardized tools and processes across sales, invoicing, and commissions, laying the groundwork for a more scalable, unified, and efficient organization. Our CTO office, in collaboration with the product team, has taken major steps to enhance and unify the customer experience across our platforms. We introduced TeamHub, our unified desktop application. And alongside, we enhanced our contact center offerings by bringing together a more integrated contact center as a service experience with our unified communications offerings. In addition, we launched a new control panel with more releases to come that simplifies administration and offers a unified monitoring dashboard that delivers greater visibility and control. Together, these innovations are strengthening our platform differentiation, improving customer satisfaction, and positioning us to drive greater adoption and expand our share of wallet in key markets. In marketing, we have taken important steps to sharpen our brand and improve market engagement. This includes unifying our messaging and branding, refreshing our collateral and content, launching consistent social and email campaigns, and updating key digital touchpoints such as our website, help center, and social ads. These efforts ensure that Sangoma presents a clear, consistent, and compelling story to our customers and partners across every channel. As Charles highlighted, we have a financial foundation, operational structure, and competencies to drive a multipronged growth strategy with strength and focus. Last quarter, I highlighted the progression in our large deal pipeline and the revitalization of our infrastructure business, an area once stagnant. I’m very encouraged to report that this positive trajectory has continued. Our large deal pipeline, defined as opportunities with 10,000 or more MRR, has seen a 90% quarter-over-quarter increase. In addition, our infrastructure business continues to show strength and is up 15% from the same quarter last year. Moreover, our forward-looking indicators remain very strong with a 24% increase in our 90-day forward-looking pipeline and a 2x increase in our prem UCaaS pipeline, driven by competitive displacement efforts targeting providers like Mitel and Avaya, as Charles had mentioned earlier. These results reinforce our confidence that our go-to-market model is gaining traction. I’ve said before that these large MRR sales cycles are longer at six months to 12 months and therefore take time to flow through to our P&L. However, the increasing size and sophistication of the opportunities in our pipeline are clear indicators that our strategy is working. We are seeing tangible momentum from our market share takeout programs and competitive initiatives, which are creating new paths for growth and positioning Sangoma for long-term success. I hope this gives you a sense of just how much we’ve accomplished in our transformation journey and that the foundation is firmly in place to scale the business and accelerate profitable growth. With that, I’ll now turn it over to Larry to provide an update on the financial results for the quarter. Over to you, Larry.

Thank you, Jeremy, and welcome, everyone. We appreciate you joining us for today’s call. In Q3, we built on the momentum of prior quarters, delivering strong performance across the key metrics that drive the company’s strategic and financial health. A key highlight continues to be the efficiency with which we converted adjusted EBITDA into net cash from operating activities, and ultimately, free cash flow. This strong cash generation supports our ability to reduce debt, execute share repurchases and reinvest in our core business offerings to drive long-term growth. In the third quarter, we generated $10.6 million in net cash from operating activities, achieving a cash conversion rate of 109% from adjusted EBITDA, our fifth consecutive quarter surpassing 100%. Fiscal year-to-date, net cash from operating activities reached $34.7 million, representing a 7% increase over the prior year. In Q3, we also generated an additional $1.1 million in net positive changes to working capital, building on the $1.1 million generated in the second quarter. This was driven by positive $2.3 million from collected trade and other receivables, plus $1 million from inventory. This quarter, we added free cash flow as a key financial performance indicator for investors. While it can be historically derived by subtracting capital expenditures and development costs from net cash from operating activities, highlighting it emphasizes the power of Sangoma’s value creation engine. Free cash flow for the third quarter was $8.4 million or $0.25 per diluted share, and $28.2 million or $0.84 per diluted share for the first three quarters ended March 31, 2025. On an annualized basis, we are tracking above $1 in free cash flow per share, underscoring the value we see in Sangoma. This strong cash flow performance supported our decision to launch a normal course issuer bid or NCIB at the end of March. Similar to prior quarters, we have continued on our accelerated debt reduction schedule, retiring another $7.3 million in total debt during the third quarter. This enabled us to not only achieve but exceed our target timeline and debt position of $55 million to $60 million, as we ended Q3 at $53 million of gross debt. By the end of the third quarter, our net debt decreased to $35.8 million from $43.3 million at the end of the second quarter, resulting in a trailing 12-month net debt to adjusted EBITDA ratio of about 0.88 times from 1.03 times in the second quarter. With our FY 2025 debt reduction targets achieved well ahead of schedule and our Term Loan 1 fully repaid, we’ll still allocate a portion of our cash flow toward further debt reduction. That said, given the meaningful value of our long-term return potential we see in our share price, we introduced the NCIB at the end of March as an additional way to return value to our shareholders. We put in place an automatic share purchase plan, which allows us to continue repurchasing shares even during blackout periods. And since launching the NCIB, we’ve instructed our broker to purchase the maximum amount available subject to our daily limit, and we’ve already retired more than 155,000 shares. Overall, these actions reflect our disciplined approach to capital allocation and underscore the confidence our management and Board have in Sangoma’s long-term growth and value creation potential. Now on to the P&L. Revenue for the third quarter of fiscal year 2025 was $58.1 million, representing a decline of $1 million from the second quarter. The sequential decline was primarily due to the decrease in our non-core products, including third-party resale, while in total, core platform products and services revenue increased sequentially for the second consecutive quarter. We are now in the process of formally divesting our third-party resale assets, as shown by the classification of assets held-for-sale and liabilities directly associated with assets held-for-sale in the financial statements. Revenue from core on-premises solutions and foam product lines increased quarter-over-quarter, reflecting the effectiveness of targeted go-to-market campaigns and strategic share gains following competitor exits from the on-premise market, which Charles and Jeremy spoke to earlier. Gross profit reached $40 million in the third quarter. Our focus on higher-margin services contributed to an improvement in gross margin to 69% of revenue, up from 68% in the second quarter. Adjusted EBITDA for the third quarter was $9.8 million or 17% of revenue and included $0.4 million in expense related to our ERP implementation. Excluding these costs, adjusted EBITDA would have been $10.2 million or 18% of revenue, consistent with 18% in the second quarter. Overall, we’re pleased that despite the broader macroeconomic uncertainties, our third quarter results came in largely as expected. Now on to our guidance. For fiscal 2025, we are reaffirming and narrowing our revenue guidance range to $235 million to $238 million from $235 million to $240 million and reaffirming our adjusted EBITDA of $40 million to $42 million at approximately 17% of revenue given the results for the first three quarters of fiscal 2025. As you can see from these numbers, the net effect of lower revenue for the second half of the fiscal year has had a relatively small impact on adjusted EBITDA and adjusted EBITDA margin is expected to improve as we remain focused on our higher-margin core offerings and advance our core platform strategy by accelerating strategic alternatives with respect to lower-margin non-core product lines, including our third-party hardware resale operations. As always, we extend our sincere thanks to the talented team at Sangoma, whose dedication and daily contributions continue to drive our success. That concludes our prepared remarks. Operator, let’s open the call up for some Q&A.

First question comes from Gavin Fairweather with Cormark. Please go ahead.

Oh! Hey, guys. Congrats on the quarter. Good afternoon.

Thank you, Gavin.

Hi, Gavin.

How are you, Gavin?

Hey. Good. Good. I wanted to start out with the output of project diamond, maybe from a high-level. I mean, there’s certainly been a lot of sales and partner transformation that’s been underway here, and you’ve also refocused on the core platforms as well. So really encouraging to hear the sales KPIs that Jeremy was bringing out there in the prepared remarks. So I guess I’m curious, do you think that Sangoma has fully hit its stride here under the new program or do you suspect that there’s further gains in sales momentum that you can achieve as the team and the new structure gel?

Yeah. So great question. One thing about these transformations and I’ve been trying to educate as much as I can on the complexity of companies like Sangoma that have 11 acquisitions, trying to solidify process systems, tools. There’s a lot that goes into that. In fact, in our Board meeting today, we had a great chat about it. We are building the stride up. It’s almost like a 1,500-meter race. We’re in probably the third lap now, on the 400-meter track, and we’re beginning to accelerate because everything is much more efficient now. We have efficient systems. We have efficient tools. We have the right competency structure and processes by which to execute. The momentum will continue to build over FY 2026. The real hard part is the first two laps, right? What pace do you want to go at? And all of the effort that has gone on through the transformation over the last 15 months since we started this back in January of 2024, it’s gotten us to the point now where we can begin to accelerate. The balance sheet is in the right place, cash flow is in the right place, and structured processes and tools are in the right place. The company went from 20 different legal entities down to 13. It went from 6,000 regulatory filings down to only 1,500. The amount of efficiency that we are now able to leverage to quarter-over-quarter begin to increase momentum has really just begun over the last quarter, making the decision to move away from the non-core products and focus all of our attention on the core business just accelerates that even further. So we’re in the seventh or eighth inning of acceleration. I think there’s more to come because we’ve got much more efficient capabilities by which to speed up the process.

Yeah. That’s great to hear. And then maybe just specifically on the partner program, you obviously redesigned your partner program as part of the transformation, and there’s also been some disruption in kind of the on-prem channel as well of late. So curious for your perspective on how many partners you’re adding, what kind of level of partner engagement that you’re seeing from kind of the existing crop. Any color would be helpful.

Yeah. So we’ve added about 56 new partners just in the last, since the beginning of January. We’re actually much more specific about our partners because our focus for the company, as you know, and have been hearing from me over the last four or five quarters, in particular, is to put these components of the company together so that we can begin to be much more bundled. And those bundles are only really valuable when you can make them contextual to the discontinuity within a particular industry, healthcare, hospitality, government business or retail. These are areas where we’re focusing our efforts. And therefore, we’re being particular about partners who have very strong niches in those areas. So we’re not just adding partners for the sake of trying to sell voice data, video security, or commodities. We certainly revitalize all of those through our traditional partner routes and rebuild all of those, TSDs, VARs, and selling partners. We’ve also onboarded several new partners, the number I just gave you, who have got much more industry-focused, much more specific knowledge and awareness of these various industry verticals where we want to capitalize on. Healthcare right now has become a real niche area for us. We’ve got great partners in that area. Hospitality, another one, where our offerings really go well with partners who really understand those verticals much better. That Pinnacle partner program that we launched about three quarters ago is really starting to get a lot of traction with partners of not only the traditional style, but also ones that are much more aligned to our, I think, unique value proposition of integrated solution bundles that represent industry vertical solutions.

That’s great. And then lastly, for me, maybe you can just help us with thinking and framing the opportunity for the on-prem business. Obviously, there’s been a lot of news there recently. Curious how you size up that opportunity and who you’re bumping into now in terms of the competition for the prem business in the mid-market?

It's a great question. I don’t have all the precise data because things have changed rapidly over the past two quarters. However, I can share a few key points. Firstly, we’ve seen a notable rise in the number of resellers who previously worked with other legacy competitors reaching out to us for assistance, as they no longer have that option. The overall market size is approximately $3.3 billion. Although the general prem markets are somewhat declining for a company our size, even capturing 1%, 2%, or 3% of that $3.3 billion would significantly boost our revenue. We are witnessing increased interest from our major distributors who have resellers selling these products, as well as from traditional legacy players approaching us more frequently. Our pipeline is expanding rapidly. I believe this will be a key area for us heading into fiscal year 2026, given our product offerings and expertise that position us well to leverage the challenges faced by some of the legacy competitors. We plan to invest in this area. We see a real opportunity here and intend to dedicate substantial effort to capitalize on the market situation.

Thanks a lot. I will pass the line.

I am sorry.

The next question comes from Mike Latimore with Northland Securities. Please go ahead.

Hey, Mike.

Hey, Mike.

Hi. This is…

Hi, Mike.

This is Keaton on for Mike.

Okay.

Thank you for taking the question. And I was just wondering if you’re seeing any longer sales cycles recently, given macro considerations such as tariff tensions?

In terms of our MRR business, sales cycles remain consistent, typically ranging from six to twelve months. As Jeremy mentioned, we are beginning to see larger deal sizes as we bundle our offerings effectively, and this hasn't affected the standard sales cycles. On the hardware side, we did experience some slowdowns. Customers were hesitant, especially in March, following the initial tariff announcements, which created a lot of market confusion regarding the impacts of those tariffs. This confusion affected our hardware resale business, which is why we are considering classifying that segment as held for sale. As I noted in Q2, the situation became quite volatile, leading to longer sales cycles. We were uncertain whether this volatility was a temporary or a more persistent issue, and the overall business environment became too unpredictable for us. We observed significant week-to-week changes in sales cycles based on the news cycle. However, with respect to our core business, we have not seen significant changes.

Okay. Thank you for that additional color. And then another question here is, how important are acquisitions as part of your strategy over the next 12 months and what are you…?

Mike mentioned that over the past three quarters, since the start of Q1, we have identified three primary avenues for growth. As we reduced our debt, the possibility of pursuing growth through acquisitions became very feasible. Organic growth also remained a strong option, which includes the integration of the company and transformational activities, along with geographic expansion. Inorganic growth constitutes roughly one-third of our overall growth strategy. We needed to complete the integration of the company, which is now finished. The transformation is complete, and we've managed to halve our debt, achieving the lowest levels we've seen in quite some time, ahead of schedule. This allows us to pursue inorganic growth, which will play a significant role in our growth strategy for 2026 starting in July. It was essential to finalize the integration, transformation, and balance sheet improvements, as well as enhance our cash position. The market conditions are favorable for us, with a decrease in the cost of capital and valuations. Many companies don't have the strong balance sheets we possess, placing us in a very advantageous position to start our inorganic acquisition activities, which we have already begun.

Do you have an estimate on the valuation expectations of those acquisition candidates?

We are not looking to be dilutive. Back in January, our share price was $11.55, reflecting valuations of 7 to 8 times EBITDA, while most of the market is around 6 to 8 times EBITDA. This is why I believe Sangoma presents a fantastic opportunity at this moment. That’s the reason behind our NCIB. Given Sangoma's trading position along with our balance sheet and cash situation, the most beneficial move for shareholders is to invest in the NCIB and repurchase stock. In February, after removing lower-margin revenue and refocusing on the company, I had to revise our guidance, and the market responded with an approximate 11% to 12% drop in stock value. The rest of the fluctuations have been influenced by tariffs and geopolitical circumstances. Since reaching an April low, we have nearly rebounded by 40% in value. I expect our stock will keep progressing, and as valuations align with where they currently stand, which is slightly improved, it will provide further opportunities for us to target companies valued similarly to ourselves. I am committed to not diluting the company, so we must remain patient, investing in our own growth, SG&A, and organic development. We will continue on this path, and when the right opportunities arise, we will pursue acquisitions. We have the capability to integrate these acquisitions effectively, utilizing the synergies available through our integrated model. We have initiated this process because acquisitions require time. We are not rushing; instead, we are in a position to be deliberate, strategic, and thoughtful about our acquisitions due to the strength of our balance sheet.

Okay. Thank you for taking my questions, and I can return to the queue.

No problem.

The next question comes from David Kwan with TD Cowen. Please go ahead.

Hey.

Hi, David.

Good afternoon.

Yeah.

I guess maybe tagging on to the last question, talking about capital allocation. Just given how optimistic you guys are in terms of the outlook and where the stock is trading, you talked about the NCIB. Would you consider an SIB?

Larry, do you want to address that? I’ve got my opinions on it too, but.

I think at this time, we’re good with where we are. We want to see how the NCIB goes and where else we might want to place that capital. I’d like to give that a little more time before really launching into something different, David.

Thanks, Larry. Charles…

Yes.

.. you had an opinion?

We launched the NCIB about a month ago and have been buying the maximum allowed every day since then. We've implemented an automatic program to continue buying even during the blackout period. Currently, we believe that the best use of our capital, alongside our ongoing debt repayment, is to invest in Sangoma. We recognize the company's value and are backing it up with share buybacks. For now, I'm cautious about making further moves; as we approach the fourth quarter, we're focused on disciplined planning. We're planning ahead for fiscal 2026, which begins in July. During this call, the management team will assess last year's capital allocation, which prioritized debt repayment. That objective has been accomplished, with our debt now two quarters ahead of schedule thanks to Larry and his team's efforts. Looking forward, we will evaluate the NCIB's performance over the next three months to inform future capital decisions. Potential options include acquisitions, assessing NCIB, managing remaining debt, and considering R&D investments. Your input is valuable and will factor into our considerations for enhancing shareholder value and strengthening the company's position following our recent transformations. We now have more insights into the company's past performance, which will inform our capital allocation strategies moving forward. We will add the SIB to our considerations for fiscal 2026 investment plans and keep you updated as we have throughout the transformation. As we transition to the next growth phase, capital allocation will be crucial in demonstrating to our investors how we plan to utilize funds to continue building on the foundation we created in the first phase of the company, now focusing on organic growth, acquisitions, and geographic expansion.

That’s very helpful, Charles. That insight definitely helps us better understand how you guys are looking at capital allocation. I guess on the margin front, so guidance is for roughly about 17% margins on the year. So I think that’s roughly in line with where the consensus is. Like, how should we be looking at it? I know you’re not going to be giving guidance for kind of 2026, but just trying to understand how to kind of juggle some of the various aspects of you focusing on investing in organic growth. Obviously, we want to try to get the services revenue, in particular, starting to grow again. But then you’ve also got the cost savings coming out of the ERP, which should obviously help boost margins. So like, how should we be looking at the margins kind of looking out over the next year?

Yes. So I think, David, I would look at it a couple of ways. We’ll certainly see savings as we get into 2026 for ERP as that starts to take hold. No doubt there. But really, as we look to move away from the non-core, particularly that third-party retail kind of stuff, we do expect, as we said before, that we’ll start to see our growth margins get closer to the 75%, 80% range and adjusted to even 19% to 20% range. And we would expect to see that as we move away from that moving into the latter part of 2026 as those things take hold. And that’s the way I would think about it for sure as we move more towards the services sort of part of our business and the higher margins that they bring us.

One thing I would add…

Okay.

One thing that Larry, Sam, Jeremy, and I committed to when we first started Project Diamond in January 2024 was that we would self-fund the transformation. For the most part, we have fully self-funded the entire transformation. All the investments and changes were covered by our own funds, allowing us to invest in areas like ERP. Margins didn’t really change much; in fact, I believe they actually improved, even though we had to shift our revenue mix from 78% products and 22% services to 84% products and 16% services, which impacts things. As we look ahead to growth, the idea of self-funding our growth is ideal. Our mission is to find ways to invest in SG&A or R&D or to add staff to seize growth opportunities while trying to maintain EBITDA margins, which may fluctuate slightly. Generally, you can be confident that operating leverage will increase within the EBITDA range over the next few years. There will be times when market opportunities will arise, and when they do, we will act and inform you about what we're doing, when, and how. We will aim to draw from the company as we now have a clearer understanding of its operations after the transformation. The key takeaway from this 15-month transformation is that we are now better positioned to maneuver and capitalize on market opportunities more efficiently. Rather than moving at the company’s pace, we can adapt quicker to market demands. EBITDA will fluctuate within a limited range, enabling us to take advantage of marketplace opportunities. I hope this provides some context regarding the dynamic and adaptable nature of our current company structure.

No. That’s great. Thanks, Charles. And just one last question for me. So you guys, I guess, put VoIP supply up for sale. Are there other parts of your business that you’re looking at selling?

No. Not at this point. I mean, we had some vigorous debates as we went through our thought process around divestitures, what’s core, what’s non-core. There are not any other. At this point, we’ve narrowed it down to this particular area, the sort of hardware resale environment that we just couldn’t figure out how to integrate that into the core of the company. And it was just too volatile, and especially with the macro issues that were going on the political arena. But other than that, no, the answer is we’re pretty comfortable with the assets we have. We know how they go together, like a jigsaw puzzle, which makes our acquisition strategy much clearer now in terms of adding to that puzzle new pieces that enhance value or expand on that.

That’s great. That’s great. Thanks. Thanks, guys.

You’re welcome. Thank you, David.

Thanks, David.

The next question comes from Robert Young with Canaccord Genuity. Please go ahead.

Hi. Maybe just a couple of channel-related questions. Just given all of this legacy player disengagement, I think you were suggesting that there’s a lot of channel players looking for a place to go. So, is that changing any of the dynamics, the power dynamic in the channel? I know this is a very large fragmented channel, but is it changing in any way to your benefit?

Yes, it is. Specifically, I’ve mentioned two major legacy players that previously had a substantial number of resellers connected to a wide range of distributors. In this channel, distributors work with resellers who purchase and sell products from these legacy vendors. There are many resellers, potentially thousands, now facing challenges since they built their business around this specific platform. With some of these companies completely leaving the market, such as NAC going through Chapter 11, and Mitel also exiting Chapter 11, the confidence of these resellers, which number in the tens of thousands, is waning as they search for alternatives, and few options remain. We are one of those alternatives. Sangoma, before I joined three to four years ago, was a respected provider of a platform called Switchvox. However, there was a misunderstanding over the years that Sangoma had exited that business. As we clarified that we are very much in that market, these partners have started returning in large numbers. What we can achieve with these partners and their offerings will become clear over the next three to four quarters. Sometimes, market conditions like tariffs can be frustrating, especially post-transformation, but other factors can present opportunities. This situation is one of those opportunities for us. Our adaptability and flexibility allow us to invest in optimizing market gaps, enabling us to move quickly. We anticipate significant progress in just three months, and I believe this is going to be an exciting area for us. I don’t expect many competitors to jump back in because, over the next five years, a large portion of mid-sized customers with on-premise solutions will begin migrating to the cloud. This presents a dual opportunity for us—first, to expand our base of on-premise customers, and second, since we offer cloud and hybrid solutions, we can gradually transition them, which greatly enhances our growth potential.

That’s it. Maybe just to dig deeper on that last point, it seems to me, I may be wrong, you can correct me if I am, but it seems to me that these disengagements are faster than you would normally see. I think the glide path to disengagement or end of life, you give support for years, sometimes these things seem to be happening in months. And so, because you’ve got a lot of hybrid environments out there and you’re supporting a lot of different scenarios, maybe just digging deeper on that. That puts you in a pretty good position, I imagine, to pull that on-prem and then grow with them. Maybe just dig a little deeper there. Am I pulling on a good thread there or is that misguided?

No, I believe that's what I was referring to. The opportunity to capitalize on on-prem markets right now, especially as there are fewer major competitors, lays a strong foundation for our growth alongside customers as they undergo digital transformation. As customers look to leverage cloud capabilities while remaining with us on-prem, our ability to maintain high service level agreements and ensure excellent customer satisfaction is crucial, which is why we dedicate so much effort to this. Jeremy has put significant focus on enhancing back-office operations to boost customer satisfaction and net promoter scores. It's essential to have high customer satisfaction ratings and exceptional service to successfully migrate and grow with customers transitioning from on-prem to hybrid or cloud solutions. That’s been our focus recently, and now with the exit of certain players from the market, we see the chance to capture those customers still interested in on-prem solutions. We can then expand with them as they gradually move to the cloud at their own pace. Once they transition to the cloud, we have ample opportunities to upsell a variety of new services, including security and networking, beyond traditional on-prem communication. The cloud brings numerous value-added features that cater to specific industries like healthcare, education, and retail. So, you are indeed tapping into the right concept. This aligns perfectly with our strategy, and we're quite excited about the recent opportunities in the on-prem business. Sangoma just happened to have a ready-to-go solution available.

Okay. And lastly, just one final question. It was good to hear the margin ranges a few minutes ago. This seems like an opportunity to potentially improve margins with some of these customers and channel partners who might not have many other options. Is there a possibility for margin improvement from that? And then I’ll hand the line back to you.

I don’t know yet. It’s too early to know. I think that’s a great question, one that I’ve actually challenged the team on, especially given we’re a little bit more efficient now with the way we operate the company. The cost adjustments have been made relative to the number of people that we had versus what we needed. All of those things are going to improve our margin position. And do we have an opportunity to leverage price here? Because as fewer players, I think that’s way too early to decide right now. But it’s something obviously we would consider. Right now, I want to woo these partners back to us in droves and pick up that customer base. To me, it’s more important to build the customer base because of the potential migration in the future to create a going concern for the company than it is to try and get a short-term hit to increase profits by driving up price because there’s a supply-demand inequality in the marketplace. And so, I’d be a bit more cautious in terms of using price as a lever or mechanism to drive short-term profits up.

Okay. Thank you very much. I’ll pass the line.

Thank you.

Thanks.

This concludes the question-and-answer session and today’s conference call. You may disconnect your lines. Thank you for participating…

Thank you very much.

…and have a…

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