Sangoma Technologies (STC) Q4 2024 earnings summary

Executive summary

• Fiscal 2024 revenue reached $247.3 million, within guidance, and adjusted EBITDA was $42.6 million, above the midpoint of guidance.

• Net cash from operating activities grew 67% year-over-year to $44.2 million, reflecting strong operational execution.

• Net loss narrowed to $8.7 million for the year, with Q4 net loss at $1.7 million, and net loss per share improving to $(0.26) from $(0.88) year-over-year.

• Transformation strategy focused on higher-margin services, cost savings, and debt reduction supported profitability.

• Leadership changes and new executive appointments aimed at driving customer success and go-to-market execution.

Financial highlights

• FY 2024 revenue: $247.3 million; Q4 revenue: $60.9 million, down 4% year-over-year and 0.2% sequentially.

• Adjusted EBITDA for FY 2024: $42.6 million; Q4 adjusted EBITDA: $11.1 million, up 2% year-over-year.

• Gross margin improved to 70% from 68% last year, driven by a shift to 82% services revenue mix.

• Net cash from operating activities: $44.2 million for FY 2024, up 67% year-over-year.

• Operating expenses decreased 1% year-over-year to $173.9 million for fiscal 2024.

Outlook and guidance

• FY 2025 revenue guidance: $250 million–$260 million; adjusted EBITDA: $42 million–$46 million (including $2 million in one-time ERP costs).

• Q1 FY 2025 guidance: revenue $61 million–$62 million; adjusted EBITDA $9 million–$10 million.

• Gradual sequential revenue growth expected, with stabilization in product revenue and a growing pipeline of MRR opportunities.

• Adjusted EBITDA margins expected at 17%–18% excluding ERP costs.