Sangoma Technologies Corporation · TSX:STC
Sangoma Technologies — Investor Presentation (May 2024)
24 slides from Sangoma Technologies's investor presentation, May 2024
Slide 1: May 2024 Investor Slides
Sangoma May 2024 Investor Slides
Slide 2: Disclaimer
Disclaimer General This presentation is property of Sangoma Technologies Corporation (the “Company”, “Sangoma”, “us” or “we”). It cannot be circulated or forwarded without our consent. Any graphs, tables or other information demonstrating our historical performance or that of any other entity contai
Slide 3: We Simplify Essential IT Communications for Small & Mid-market Business
We Simplify Essential IT Communications for Small & Mid-market Business Security & Voice Video Data Connectivity Tailored Solutions with a Single-Vendor Approach 3
Slide 4: Sangoma at a Glance
Sangoma at a Glance 2.6M 100K 650+ 9 Years UC Seats Customers Employees Gartner® Magic Quadrant™ $250M 82% 0.9% $43M TTM Revenue1 Recurring Customer Churn2 TTM Net Cash Revenue1 Generated from Operating Activities1 1. As of March 31, 2024 2. See the definition of “Churn” under “Non-IFRS Measures and
Slide 5: We Provide the Widest Set of Solutions In the Industry
We Provide the Widest Set of Solutions In the Industry Culture of Innovation & Support Cloud-Based SaaS Equipment Services Bundles À la carte Wholesale + Sophisticated Support + Deep Engineering Skills +Proprietary Technology System Lower Total Cost of More Choice Increased Innovation Ownership 5
Slide 6: Aligned to Meet the Needs of the Small & Mid-Market
Aligned to Meet the Needs of the Small & Mid-Market The SMB market accounts for 44% of all IT spending SMB IT spend on Unified Communications was expected to be US$33B in 2023 Small Market Mid-Market Less Than 500 Employees 500 to 5,000 Employees • Component Buying • Single Vendor Requirement • Mini
Slide 7: Diverse Customer Base Across Private & Public Sectors
Diverse Customer Base Across Private & Public Sectors 100,000+ Customers today Differentiated Service Model: Differentiated Service Model:Uniquely positioned to serve both the increasingly sophisticated mid-market and single component buying small market with industry relevant solutions. 7
Slide 8: Customer Profile: A Story of Growth & Efficiency
Customer Profile: A Story of Growth & Efficiency As a major U.S. restaurant chain expanded to over 150 locations, it faced the challenge of $55K+ MRR requiring robust communication and network solutions despite having limited IT resources. Lorem 1 Initial Success Lorem 2 Growth Lorem Ongoing 3 Innov
Slide 9: Industry-low Churn Rates Validate Customer Value Proposition
Industry-low Churn Rates Validate Customer Value Proposition Churn as a % of Gross Margin1 Revenue Mix1 Services Rev1 2.6M 0.9% 18% UC seats Churn 100K+ 82% Customers 70% 99.1% Service Rev Sticky Customers & Steady Recurring Revenue Mix with Sustained Strong Gross Margins 1. For the three months end
Slide 10: Deep Partner Ecosystem Provides Global Reach
Deep Partner Ecosystem Provides Global Reach Best for Sangoma • Highly flexible toolbox of solutions • Broad coverage services multi-site, multi-country businesses • Enhanced reach and larger deal creation Best for Partners Industry-leading Partner Program • Best-in-class support • Continued innovat
Slide 11: Inward Focus: Strengthening Our Operations [Project Diamond]
Inward Focus: Strengthening Our Operations [Project Diamond] Focus on digital transformation, consolidation, and modernization: • Refine CRM to add efficiency, transparency and collaboration • Enhance RevOps / Marketing automation platform • Move to comprehensive ERP to support market expansion and
Slide 12: Outward Focus: Strengthening Our Operations [Project Diamond]
Outward Focus: Strengthening Our Operations [Project Diamond] Focus On Continued Innovation Identifying High Quality Partners & New • Investing in AI, Cyber, & NetOps Communications Routes to Market Solutions • Drive pull-strategy to end-clients to increase inward demand 17% • Ensure a seamless cust
Slide 13: A Clear Path to Growth Vectors
A Clear Path to Growth 3 Vectors 13
Slide 14: Pivoting to Growth – Focus Areas
Pivoting to Growth – Focus Areas Organic Expansion Inorganic • Leveraging Industry Bundles • New offerings – Sangoma • Ability to leverage cash flow • Innovation and R&D Security position to acquire key Investments focused on • New models – MDU, others capabilities that align with Strategic GTM Offe
Slide 15: Inorganic Growth: Mergers, Acquisitions, & Strategic Partnerships
Inorganic Growth: Mergers, Acquisitions, & Strategic Partnerships • Consistent track record of sustained profitability through M&A integration • Inorganic growth through mergers, acquisitions, and strategic partnerships will accelerate our expansion and diversification efforts Our Targets • New tech
Slide 16: Highly Experienced Management Team Delivers Results
Highly Experienced Management Team Delivers Results Charles Salameh Larry Stock Jeremy Wubs Sam Reburn Chief Executive Officer Chief Financial Officer Chief Operating Officer Chief Legal Officer ● Previously Global Head of ● Previously CFO at Star2Star ● Previously SVP of Product, ● Previously Gener
Slide 17: Fiscal Foundational Strength
Fiscal Foundational Strength Cash Flow Total Debt On track for FY24 savings of $6.2M Annualized cost savings of $9.1M Steady Cash Flow Generation & Debt Reduction Provides Optionality to Drive Value Creation 17
Slide 18: Stable Recurring Revenue Base
Stable Recurring Revenue Base Revenue • Top line driven by industry-best product breadth serving the evolving needs of the SMB market • Significant opportunity to leverage large SIs, carriers, hyperscalers, and national partners • Improve Services revenue marketability through more effective bundlin
Slide 19: Strong Profitability
Strong Profitability Gross Profit Adj. EBITDA1 Consistent Track Record of Sustained Profitability Through M&A Integration 1. Adj. EBITDA is a non-IFRS Measure. See "Non-IFRS Measures and Industry Metrics" in the disclaimer and to the Appendix of this presentation for a reconciliation to an IFRS meas
Slide 20: Financial Highlights
Financial Highlights 33.3M $6.11 $4.53 Shares Outstanding Share Price CAD1 Share Price USD1 US$220M Enterprise Value (EV) 5.2X 1.63X 0.60X 0.69X EV to TTM AEBITDA1,2 Net Debt to TTM AEBITDA2 Price to TTM Sales Ratio1,2 Price to EV Ratio1,2 1. Price at close of 05/09/24 2. As of March 31, 2024 20
Slide 21: We simplify essential IT communications for small and mid-market business
We simplify essential IT communications Steady cash flow generation provides for small and mid-market business optionality to drive value creation We have a clear path to growth We embody optionality 21
Slide 22: Appendix
Appendix 22
Slide 23: Non-IFRS Measures and Industry Metrics
Non-IFRS Measures and Industry Metrics “Adjusted EBITDA” means earnings before income taxes, interest expense (net), share-based compensation, depreciation (including for right-of-use assets), amortization, restructuring and business integration costs, goodwill impairment and change in fair value of
Slide 24: Adjusted EBITDA Reconciliations
Adjusted EBITDA Reconciliations The IFRS measure most directly comparable to Adjusted EBITDA presented in our financial statements is net loss. F2019 F2020 F2021 F2022 F2023 F2024 YTD Net Loss 1,740 2,631 (1,566) (110,780) (29,026) (6,951) Tax (479) (298) 3,177 6,390 (2,932) (1,186) Interest expense
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