Sangoma Technologies (TSE:STC)
TSX:STC
Top Page
Sangoma Technologies
(TSX:STC)
Select Model
Select Model
Rating:59Neutral
Price Target:
C$5.50
▼(-20.75% Downside)
Action:ReiteratedDate:02/07/26
The score is driven primarily by solid financial resilience (strong margins, low leverage, and meaningful free cash flow despite accounting losses) and a positive earnings-call setup (tightened guidance, strong bookings/backlog, and continued deleveraging). These are tempered by weak technicals (price below major moving averages with negative MACD) and limited valuation support due to a negative P/E and no dividend yield provided.
Positive Factors
High gross margins
Sustained gross margins near mid-70s reflect favorable product and services mix and pricing power in communications software. High gross margin is a durable competitive advantage that supports strong EBITDA conversion, funds reinvestment in product and channels, and cushions margin pressure from cyclical headwinds.
Negative Factors
Organic revenue weakness
Underlying organic top-line contraction indicates the core business has yet to re-accelerate without one-time portfolio changes. Persistent organic weakness can limit sustainable ARR growth, reduce leverage from scale, and make profitability gains contingent on successful conversion of large bookings and new customer retention.
Read all positive and negative factors
Positive Factors
Negative Factors
High gross margins
Sustained gross margins near mid-70s reflect favorable product and services mix and pricing power in communications software. High gross margin is a durable competitive advantage that supports strong EBITDA conversion, funds reinvestment in product and channels, and cushions margin pressure from cyclical headwinds.
Read all positive factors
Sangoma Technologies (STC) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$179.70M
Dividend YieldN/A
Average Volume (3M)36.66K
Price to Earnings (P/E)―
Beta (1Y)0.95
Revenue Growth-4.34%
EPS Growth31.52%
CountryCA
Employees671
SectorTechnology
Sector Strength88
IndustrySoftware - Infrastructure
Share Statistics
EPS (TTM)-0.08
Shares Outstanding33,216,980
10 Day Avg. Volume51,941
30 Day Avg. Volume36,660
Financial Highlights & Ratios
PEG Ratio1.33
Price to Book (P/B)1.11
Price to Sales (P/S)1.19
P/FCF Ratio8.58
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$11.00Price Target Upside58.50% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
EPS Forecast (FY)-0.18
Revenue Forecast (FY)C$207.13M
Sangoma Technologies Business Overview & Revenue Model
Company Description
Sangoma Technologies Corporation (STC) is a leading provider of telecommunications and unified communication solutions, specializing in software and hardware that enhance communication capabilities for businesses. The company operates primarily in...
How the Company Makes Money
Sangoma makes money primarily by selling communications software and services to business customers through a mix of recurring subscriptions and product/licensing revenue. Key revenue streams include: (1) recurring subscription and service revenue...
Sangoma Technologies Earnings Call Summary
Earnings Call Date:Feb 04, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:May 07, 2026
Earnings Call Sentiment Positive
The call conveyed predominantly positive operational and financial momentum: sequential revenue growth, strong adjusted EBITDA and cash conversion, significant MRR bookings growth (67% QoQ, 60% YoY), improved gross margin (74%), a much larger Q3 starting backlog (+125%), deleveraging (debt down to $37.6M) and active share repurchases. Management acknowledged near‑term challenges including a 2% year‑over‑year organic revenue decline excluding the VoIP Supply divestiture, timing/execution risk as large multi‑site deals roll out, and higher near‑term commissions and targeted investments. On balance, the improvements in bookings, cash generation, margins, and balance sheet flexibility outweigh the headwinds, while management provided tightened guidance and clear actions to monetize the growth pipeline.Positive Updates
Sequential Revenue Growth Delivered
Total revenue for Q2 was $51.5 million, up 1.2% sequentially, with services (92% of revenue) growing 1% sequentially, indicating early translation of bookings momentum into recurring revenue.
Negative Updates
Year‑over‑Year Organic Revenue Decline
On a like‑for‑like basis excluding $6.4 million of revenue from the strategic sale of VoIP Supply, revenue was 2% lower year‑over‑year, indicating that organic top-line growth remains a work in progress.
Read all updates
Q2-2026 Updates
Positive
Negative
Sequential Revenue Growth Delivered
Total revenue for Q2 was $51.5 million, up 1.2% sequentially, with services (92% of revenue) growing 1% sequentially, indicating early translation of bookings momentum into recurring revenue.
Read all positive updates
Company Guidance
Sangoma tightened FY‑26 guidance to revenue of $205–$208 million and adjusted EBITDA margins of 17–18%, assuming a sequential revenue increase in Q3 and a return to year‑over‑year organic growth once the $6.4 million VoIP Supply divestiture is excluded; management also expects adjusted EBITDA margins to improve in H2 as revenue builds. That outlook follows Q2 results of $51.5 million revenue (up 1.2% sequentially; services ~92% of revenue and up 1% sequentially), $8.3 million adjusted EBITDA (16% margin), >120% conversion of adjusted EBITDA to operating cash flow (122% in Q2; 91% YTD), free cash flow of $8.0 million or $0.24 per diluted share, starting Q3 backlog ~125% higher than the start of Q2, MRR bookings +67% QoQ (+60% YoY) and $10.8 million of large strategic TCV bookings in H1 (including $7.5M closed of $14.8M identified), while balance‑sheet metrics include quarter‑end cash of $17.1M (+27% since June 30), total debt of $37.6M (down from $60.4M YoY with $5.2M retired in Q2), and share repurchases of ~196,000 in Q2 (over 700,000 or 2.1% retired since April).Sangoma Technologies Financial Statement Overview
Summary
Income Statement
47
Neutral
Balance Sheet
72
Positive
Cash Flow
63
Positive
| Breakdown | TTM | Jun 2025 | Jun 2023 | Jun 2022 | Jun 2021 | Sep 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 227.74M | 236.69M | 252.53M | 224.35M | 131.38M | 131.42M |
| Gross Profit | 159.26M | 161.75M | 172.79M | 156.89M | 96.05M | 62.17M |
| EBITDA | 40.33M | 42.95M | 19.95M | -77.43M | 29.77M | 20.12M |
| Net Income | -7.19M | -5.01M | -29.03M | -110.78M | 227.51K | 2.11M |
Balance Sheet | ||||||
| Total Assets | 325.43M | 346.55M | 442.75M | 498.53M | 540.12M | 128.67M |
| Cash, Cash Equivalents and Short-Term Investments | 17.11M | 13.49M | 11.16M | 12.70M | 22.09M | 19.95M |
| Total Debt | 45.21M | 56.11M | 115.16M | 122.61M | 89.17M | 49.14M |
| Total Liabilities | 75.39M | 92.35M | 176.63M | 204.72M | 164.12M | 73.91M |
| Stockholders Equity | 250.04M | 254.19M | 266.12M | 293.81M | 375.99M | 74.78M |
Cash Flow | ||||||
| Free Cash Flow | 35.97M | 32.95M | 15.22M | 15.95M | 12.87M | 6.82M |
| Operating Cash Flow | 44.58M | 41.79M | 26.49M | 21.06M | 15.70M | 8.72M |
| Investing Cash Flow | -8.61M | -8.84M | -11.27M | -55.82M | -109.89M | -30.67M |
| Financing Cash Flow | -33.67M | -35.68M | -16.77M | 25.37M | 96.41M | 33.08M |
Sangoma Technologies Technical Analysis
Negative
6.94
Price Trends
6.21
Negative
6.66
Negative
7.18
Negative
Market Momentum
-0.23
Positive
26.15
Positive
21.83
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:STC, the sentiment is Negative. The current price of 6.94 is above the 20-day moving average (MA) of 5.94, above the 50-day MA of 6.21, and below the 200-day MA of 7.18, indicating a bearish trend. The MACD of -0.23 indicates Positive momentum. The RSI at 26.15 is Positive, neither overbought nor oversold. The STOCH value of 21.83 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:STC.
Sangoma Technologies Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
62 Neutral | C$208.98M | -322.84 | 1.08% | ― | -5.56% | -124.69% | |
62 Neutral | C$38.34M | -15.92 | ― | ― | 79.84% | 70.95% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
59 Neutral | C$179.70M | -28.58 | -2.82% | ― | -4.34% | 31.52% | |
48 Neutral | C$261.41M | -3.21 | -43.96% | 1.80% | 2.47% | 19.37% | |
46 Neutral | C$265.66M | -8.03 | -26.68% | ― | -23.85% | 35.05% | |
43 Neutral | C$47.53M | -10.77 | 148.75% | ― | ― | ― |
* Technology Sector Average
TSE:STC
Sangoma Technologies
5.41
-0.70
-11.46%
TSE:DGX
Digi Power X
3.79
2.24
144.52%
TSE:DND
Dye & Durham
3.89
-6.12
-61.14%
TSE:HAI
Haivision Systems
7.60
3.33
77.99%
TSE:EONX
Eonx Technologies
0.96
0.81
540.00%
TSE:ICS
Integrated Cyber Solutions, Inc.
0.64
0.40
166.67%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.