Gavin Fairweather

Gavin Fairweather asked about Sangoma's incremental go-to-market investments, specifically if they prioritize existing partners or new channels, and if pipeline data supports a strong return on these investments. He also inquired if macro or competitive landscape changes contributed to growth taking longer than anticipated, the proportion of Sangoma's proprietary product sold through VoIP Supply, and the company's M&A appetite given its strong balance sheet and active funnel.

Answer

Charles Salameh, CEO, explained that investments focus on increasing field coverage in the U.S. and Canada, recruiting new partners, and enhancing marketing coverage through brand awareness and industry events, driven by improved unit economics and clear line of sight to pipeline conversion. Jeremy Wubs, COO, clarified that longer sales and implementation cycles for larger, up-market opportunities, rather than macro or competitive pressures, caused the slower growth acceleration. He also stated that over 90% of VoIP Supply's sales were third-party products, with Sangoma remaining a distributor. Charles Salameh, CEO, expressed a strong appetite for M&A, noting that the completed ERP transformation enables quicker integration and that the company is actively pursuing targets in SD-WAN, security, and zero-trust networks to enrich its portfolio. Jeremy Wubs, COO, added that a robust funnel exists, and the ERP completion facilitates bundling acquired capabilities.

Gavin Fairweather inquired about Sangoma's incremental go-to-market investments, specifically if they prioritize existing partner depth or new distribution channels, and the data supporting expected returns. He also asked about factors delaying growth acceleration, the composition of VoIP Supply's sales, and the company's M&A appetite and funnel activity.

Answer

CEO Charles Salameh explained investments focus on field and marketing coverage, driven by improved unit economics and a progressive strategy. COO Jeremy Wubs attributed slower growth acceleration to longer sales and implementation cycles for larger opportunities, not macro or competitive pressures. He clarified VoIP Supply primarily sold third-party products. Salameh expressed a strong appetite for M&A, focusing on SD-WAN, security, and zero-trust networks, with Wubs adding that the robust funnel aims to create more comprehensive essential communications bundles.

Gavin Fairweather inquired about Sangoma's incremental go-to-market investments, specifically if they prioritize existing partners or new channels, and the data supporting expected returns. He also asked if macro or competitive factors contributed to growth acceleration delays, the product mix within the divested VoIP Supply business, and the company's M&A appetite given its strong balance sheet and active funnel.

Answer

CEO Charles Salameh explained that investments focus on field coverage (more staff, new partner recruitment) and marketing coverage (brand awareness, industry events), with better unit economics guiding a progressive investment strategy. COO Jeremy Wubs clarified that growth delays were due to longer sales and implementation cycles for larger opportunities, not major competitive pressures or macro factors. He also stated that VoIP Supply primarily sold third-party products (90%+) and continues to distribute Sangoma's offerings. Charles Salameh expressed a strong appetite for M&A, noting the completion of ERP integration enables quicker integration of acquisitions, with a focus on SD-WAN, security, and zero-trust networks to enrich the portfolio. Jeremy Wubs added that a robust funnel exists, and integration capabilities are key for compelling bundles.

Gavin Fairweather of Canaccord Genuity inquired about the outcomes of Project Diamond, asking if Sangoma has reached its full potential in sales momentum, the progress of its redesigned partner program, and the scale of the on-premise business opportunity following recent competitor disruptions.

Answer

CEO Charles Salameh explained that the company is just beginning to accelerate its momentum post-transformation, likening it to the third lap of a race. He noted the addition of 56 new, specialized partners since January, focusing on key industry verticals. Salameh highlighted the on-premise market as a $3.3 billion opportunity where even minor market share gains would be significant for Sangoma, confirming a growing pipeline and plans to invest heavily in this "shining light" portfolio for fiscal 2026.

Gavin Fairweather of Canaccord Genuity asked about the outcomes of "Project Diamond," inquiring if Sangoma has reached its full potential in sales momentum and partner engagement, and sought details on the opportunity within the on-premise business following recent competitor disruptions.

Answer

CEO Charles Salameh explained that the company's major transformation is complete but momentum is still building, comparing it to being in the third lap of a 1,500-meter race. He noted the addition of 56 new, industry-focused partners since January. Salameh also highlighted the significant opportunity in the $3.3 billion on-premise market, where Sangoma is seeing a growing pipeline as legacy players like Mitel and Avaya exit or reduce their presence.

Gavin Fairweather asked about the design and early results of the new Pinnacle Partner Program, the reason for the sequential decline in services revenue despite lower churn, the impact of NEC's market exit on Sangoma's Premise PBX business, and any anticipated working capital effects from the new ERP system.

Answer

COO Jeremy Wubs and CEO Charles Salameh explained the partner program is designed to build intimacy and co-develop vertical-specific solutions, driving higher-value MRR. They clarified that while churn has improved, the services revenue dip reflects the long (6-12 month) sales cycles for larger MRR deals, which are in the pipeline but not yet recognized as revenue. They confirmed seeing interest from former NEC partners, though it takes time to convert this into sales. CFO Larry Stock stated the ERP rollout is on time and budget, with efficiencies expected post-go-live in April.

Gavin Fairweather inquired about the sales pipeline's composition, including deal sizes and win rates, ahead of the formal Q2 disclosure. He also asked for feedback from channel partners on the redesigned program and sought clarification on the drivers behind the Q1 guidance, specifically the sequential decline in EBITDA despite revenue growth.

Answer

CEO Charles Salameh confirmed that larger deals are entering the pipeline, though sales cycles for MRR remain long, and promised more detailed metrics in Q2. He and COO Jeremy Wubs described partner feedback as "very positive," attributing it to clearer offerings and a focused strategy on the top 400 partners, leading to joint go-to-market initiatives. CFO Lawrence Stock explained the Q1 EBITDA guidance reflects a higher product mix impacting gross margin, increased one-time ERP costs, and other seasonal expenses typical for Q1.

Gavin Fairweather inquired about the visibility and potential green shoots for growth acceleration, early feedback from partners on the new channel program, the strategic plan for the product business, and the drivers behind the strong working capital inflow.

Answer

COO Jeremy Wubs noted that the sales pipeline is growing with larger deals and improved close rates. CEO Charles Salameh added that more quantitative channel metrics will be shared in Q4 and that feedback from strategic partners on the new go-to-market approach has been overwhelmingly positive. Regarding the product business, Salameh explained the focus is on services for long-term MRR, but products remain crucial for creating hybrid bundles. CFO Lawrence Stock attributed the strong cash flow to internal efficiencies in working capital management and a one-time tax refund.

Gavin Fairweather of Cormark Securities inquired about the company's visibility into the federal sector, asking about expected RFP levels for 2026 and feedback from partners on upcoming activity.

Answer

CFO Brandon Farber responded that Docebo is proactively building its federal pipeline through direct outreach, not just relying on RFPs. He noted that because the government's fiscal year-end rush is in Q3, it is too tight to expect major revenue this year. Therefore, management remains measured, guiding for more meaningful revenue from the federal sector in 2026, though one or two deals could potentially land this year.

Gavin Fairweather asked about the government business, inquiring if the pace of sales was accelerating after achieving ATO status and about expectations for RFP flow. He also asked how CAC payback periods are trending and what the company's target CAC is for a normal environment.

Answer

CFO Brandon Farber reported a surprising increase in the government pipeline since receiving ATO status ahead of schedule, bolstered by a White House directive favoring SaaS solutions. Regarding customer acquisition cost (CAC), Farber acknowledged it is not at desired levels. He stated the target is a middle ground between current levels and the hyper-efficient COVID era, with improvements expected from investments in the enterprise and gov teams and a focus on pipeline conversion.

Gavin Fairweather asked about the sustainability of the strong bookings from the banking and insurance sectors, the future trajectory of gross margins, competitive pricing pressures in the government sector, and initial impressions of the recent XRM Vision acquisition.

Answer

Chief Operating Officer Bernard Dockrill confirmed a rebound in banking with a strong pipeline but noted market uncertainty warrants caution. President and CEO Paul Raymond reiterated the company's three-year strategic plan goal of reaching a 33% to 35% gross margin. Bernard Dockrill added that Alithya remains disciplined in the public sector, avoiding low-margin deals despite rate pressure. Regarding XRM Vision, Paul Raymond stated the integration is proceeding as planned with no surprises.