Sangoma Q4 Results: Missed Guidance, Then a C$7.40 Takeover
Sangoma Technologies posted its fiscal 2026 fourth-quarter results after the close on Monday, September 28, 2026, showing revenue of US$49.8 million and a full year that landed under the company’s own guidance. The same evening it published a second release: a definitive agreement to be acquired by BRC Group Holdings, Inc. (NASDAQ: RILY) for cash and stock the company values at C$7.40 a share. Sangoma’s annual report on Form 40-F was accepted by the SEC’s EDGAR system at 17:10 ET the same day. Both releases landed after the close on both of Sangoma’s listings, so the market has not yet had a session to respond.
One housekeeping point that matters throughout. Sangoma reports in US dollars, while the shares trade in Canadian dollars on the TSX under STC and in US dollars on Nasdaq under SANG. Every company financial below is in US dollars and every share price is marked with its own currency.
The terms BRC agreed to pay
| Term | Detail |
|---|---|
| Consideration per Sangoma share | US$4.925 in cash plus 0.04767 of a BRC share |
| Value the company puts on it | US$5.225, or C$7.40 at the 1.417 FX rate used in the release |
| Stock component | US$0.302 of the US$5.225, valued on BRC’s 20-day Nasdaq VWAP |
| Premium | About 47% to the September 28, 2026 TSX close, about 51% to Sangoma’s own 10-day VWAP on the TSX |
| Enterprise value | About US$204 million, or C$289 million |
| Aggregate consideration | US$170 million of cash plus US$10 million of BRC shares |
| What Sangoma holders end up owning | About 4% of pro forma BRC |
| Structure | Plan of arrangement under the Business Corporations Act (Ontario) |
| Termination fee | US$5,397,000 |
| Expected closing | No later than early 2027 |
Terms from the Sangoma transaction release of September 28, 2026.
Sangoma would operate as part of BRC Telecom after closing. The deal is the resolution of the comprehensive strategic review run by a Special Committee of independent directors and announced in May 2026. The release says the Committee and Board “assessed the relative benefits and risks of various alternatives reasonably available to Sangoma, including the other transaction proposals received in the process and continued execution of Sangoma’s strategic plan as a public company.” ATB Cormark Capital Markets acted as exclusive financial advisor and gave a verbal fairness opinion to the Special Committee and the Board, which unanimously approved the transaction and recommends holders vote in favour. Chief executive Charles Salameh called it “a compelling outcome for Sangoma and our shareholders, delivering immediate liquidity and certainty of value at a premium price.”
The release describes the buyer as “a diversified holding company with a scaled business communications portfolio”, with operations across financial services, communications and retail. BRC shares closed at US$5.49 on September 28, down from US$5.71 the session before, against a 52-week range of US$3.64 to US$11.24 (Yahoo Finance). The arrangement carries no financing condition.
C$7.40 is a 47% premium, and it is under the 52-week high
By our arithmetic, 94.3% of the consideration is fixed cash: US$4.925 of US$5.225. That matters for how much of the payout is exposed to BRC’s own share price. The 0.04767 exchange ratio against the company’s US$0.302 stock component implies a BRC reference price near US$6.33, so the 20-day average sits roughly 15% above where BRC actually closed that day. Marking the stub at that US$5.49 close instead gives consideration of US$5.19, or C$7.35 at the company’s 1.417 rate, and a premium closer to 45.5%. That is our calculation, not the company’s, and the size of the gap is the point: about C$0.05 a share, because the stock stub is too small for BRC’s price to move the payout much.
The premium is also measured against a depressed base. Sangoma closed at C$5.05 on the TSX on Monday, up 1.81% from C$4.96, against a 52-week range of C$4.71 to C$7.62 (Yahoo Finance). Volume was 34,186 shares, in line with the 32,900 and 31,200 of the sessions on September 23 and September 24 after an unusually thin 4,900 on September 25. On our arithmetic that close sat 7.2% above the 52-week low, and put the market capitalisation near C$168 million on the 33,338,932 shares outstanding at June 30, 2026. The takeout price of C$7.40 is below the 52-week high, and 1.7% below the highest close of the past year, C$7.53 on November 12, 2025, against a highest intraday print of C$7.62 on November 27, 2025 (Yahoo Finance). On the company’s stated US$204 million enterprise value, our arithmetic gives 1.02x fiscal 2026 revenue, 7.1x fiscal 2026 adjusted EBITDA and 5.0x the fiscal 2025 figure.
There is one more marker in the filings. Total shareholders’ equity at June 30, 2026 was US$174.654 million, which on those 33,338,932 shares is US$5.24 a share by our arithmetic, against the US$5.225 a share the company puts on the consideration. BRC is paying almost exactly book value.
The quarter landed under the company’s own guide
| Line, US$ thousands | Q4 FY2026 | Q4 FY2025 | Q4 FY2025 excluding VoIP Supply |
|---|---|---|---|
| Total revenue | 49,816 | 59,362 | 51,869 |
| Service revenue | 45,727 | 48,057 | 47,337 |
| Product revenue | 4,089 | 11,305 | 4,532 |
| Gross profit | 32,265 (65%) | 40,041 (67%) | 38,728 (75%) |
| Adjusted EBITDA | 6,534 (13%) | 11,361 (19%) | |
| Net (loss) income | (72,516) | 209 | |
| Free cash flow | 2,737 | 4,794 |
Figures from the MD&A for the three months and year ended June 30, 2026, pp.13, 14 and 18, and the Q4 fiscal 2026 press release, pp.6 and 7.
The headline revenue decline of 16% overstates the underlying move, and the company says so itself. Sangoma sold VoIP Supply LLC on June 30, 2025, the last day of fiscal 2025, so the prior-year quarter carries US$7.5 million of VoIP Supply revenue and this one carries none. On the company’s own like-for-like base of US$51,869, revenue fell 4%. The same distortion runs through the year: fiscal 2026 revenue of US$200.065 million is down 15% from the US$236.692 million headline, against a fiscal 2025 base excluding VoIP Supply that the company put at US$209 million in last year’s MD&A.
Adjusted EBITDA is where the year actually went. It came in at US$28.731 million, or 14% of revenue, down 30% from US$41.035 million and 17% a year earlier, which the MD&A describes as “coming in slightly below the Company’s expectation.” Against the guide as revised on May 13, 2026, which called for revenue of US$204 million to US$205 million and an adjusted EBITDA margin of 15% to 16%, both lines fell short. Yahoo Finance consensus for the quarter was US$51.27 million from five analysts on a range of US$50.80 million to US$51.53 million, so the actual revenue is 2.8% below consensus and below the lowest of the five estimates. The full-year consensus was US$204.54 million.
Five fiscal years of adjusted EBITDA: US$42.1M, US$44.4M, US$42.6M, US$41.0M and US$28.7M, at margins of 18.8%, 17.6%, 17.2%, 17.3% and 14.4%. Built from the MD&As for the fiscal years ended June 30, 2023 (pp.14, 19), 2024 (pp.14, 18), 2025 (pp.11, 16) and 2026 (pp.13, 19). The margin line is our arithmetic on the two reported lines.
Not every line moved the same way. Operating expenses came down US$8.7 million, or 5%, to US$154.3 million. Total debt finished at US$27.3 million, a 43% reduction, after paying down US$20.6 million during the year, with US$10.4 million of cash and US$1.0 million of share repurchases. Churn stayed under 1% for both the quarter and the year. Operating cash flow of US$23.702 million converted 82% of adjusted EBITDA, though it was down 43% year over year, and free cash flow of US$15.672 million (US$0.47 per share) was down 52%.
A revenue revision, and a guide set on the pre-revision base
The fourth quarter also carried a correction, which Sangoma sets out under the heading “Revision of Previously Reported Quarterly Financial Information”. It identified and fixed an error in service revenue recognised on cancelled contracts after the cancellation date, caused by “incomplete data migration between the Company’s Salesforce and NetSuite systems (the ‘ERP Revenue Matter’), as a result of the Company’s ERP implementation on July 1, 2025.” Nothing before that date is affected, there is no impact on reported cash flow from operating activities in any period, and management concluded the impact “was not material to any period” individually or in aggregate. The first three quarters of fiscal 2026 have been re-presented rather than reissued, with the corrected figures landing in the fiscal 2027 comparatives. A related reduction in the performance-based bonus accrual was allocated back over the same three quarters, which partly offsets the revenue correction in adjusted EBITDA and net loss.
| Quarter, US$ thousands | Revenue reported | Adjustment | Revenue adjusted | Adj. EBITDA reported | Adj. EBITDA adjusted |
|---|---|---|---|---|---|
| Q1 FY2026 | 50,818 | (486) | 50,332 | 8,297 | 7,987 |
| Q2 FY2026 | 51,450 | (1,246) | 50,204 | 8,335 | 7,545 |
| Q3 FY2026 | 50,995 | (1,282) | 49,713 | 7,475 | 6,665 |
Q4 fiscal 2026 press release, pp.3 and 4.
The company does not add those rows up. We do: revenue across the nine months came down US$3,014 thousand and adjusted EBITDA US$1,910 thousand, taking nine-month revenue from US$153.263 million as first reported to US$150.249 million. The order of events matters here. The correction did not cause the shortfall against the guide. It removed revenue that had never been earned, and the guide revised on May 13, 2026 was itself set on the inflated nine-month base. Fiscal 2026 revenue missed the low end of that guide by US$3.9 million on our arithmetic, and US$3.0 million of the gap is revenue the correction took out. Had the first nine months stood as originally reported, the year would have footed to about US$203.1 million, roughly US$0.9 million short.
The same test runs on the margin. Adding back the US$1,910 thousand of adjusted EBITDA the correction removed gives US$30,641 thousand on US$203,079 thousand of revenue, a margin of 15.1% by our arithmetic, inside the guided 15% to 16%. On that pre-correction basis the margin sits within the range and revenue lands about US$0.9 million short of the low end.
The consensus comparison needs the same care. On our arithmetic, the US$51.27 million estimate sat 0.5% above Q3 as it was then reported. The other half of the comparison is the company’s own: the release (p.2) says “Revenue at $49.8 million was 0.21% higher compared to last quarter”, and the MD&A (p.13) prints the +103 sequential delta against Q3 as revised. On a consistent base the quarter was flat either way, and the estimates were struck on figures the company has since revised.
What the margin series shows is a slide from 15.9% to 13.1% across the year, with the last step much the smallest. Sangoma publishes its own row for exactly this, “AEBITDA as a % Revenue quarterly change” (MD&A p.20), and for fiscal 2026 it reads (3)%, (1)%, (2)% and then a dash: on the company’s rounding the fourth quarter was unchanged against the third, at 13% in both. Our unrounded figures put that final step at 0.29 of a percentage point.
Sangoma fiscal 2026: revenue revised, and a margin that slid from 15.9% to 13.1%. Quarterly revenue as originally reported against revenue as revised, with the legend reading “Revenue as revised, and Q4 as reported”, and the adjusted EBITDA margin at 15.9%, 15.0%, 13.4% and 13.1%. From the Q4 fiscal 2026 press release pp.4 and 6 and the MD&A p.13. The margin line is our arithmetic, computed on the revised revenue and the revised adjusted EBITDA.
What made the loss, and why most of it never left the building
The quarterly net loss of US$72.516 million, US$(2.19) per diluted share, and the annual US$81.094 million, US$(2.44) per share, are dominated by charges taken in the fourth quarter. A US$68.394 million non-cash goodwill impairment is the bulk of it. Sangoma tested its single cash generating unit and found the recoverable amount below carrying value at June 30, 2026, which the MD&A attributes to “a significant increase in the discount rate as a result of macroeconomic factors, which other companies in our industry sector have also experienced, during the latter months of fiscal 2026.” Fiscal 2025 carried no impairment. On the 33,244,861 weighted average shares, our arithmetic puts that charge at about US$2.06 of the US$2.44 annual loss per share.
Note 12 to the financial statements (p.33) gives the mechanics behind that sentence. The recoverable amount was set on a fair value less costs to sell model, using five years of management cash flow projections, an after-tax discount rate of 14.5% to 16.3% (pre-tax 17.6% to 19.8%), and a terminal value based on a peer group EV/EBITDA exit multiple. The company also discloses how much those inputs move the answer: half a percentage point on the discount rate changes the estimated fair value by US$3.4 million, and 0.25x on the exit multiple changes it by US$6.5 million.
Goodwill did not disappear with the charge. The same note shows it falling from US$186.840 million to US$118.446 million, against total assets of US$235.511 million at June 30, 2026. On our arithmetic, what remains is still just over half the balance sheet.
After the impairment, the largest charge in the quarter is amortization of intangible assets at US$7.974 million (press release p.6). Next comes a US$3.0 million non-cash inventory write-down, also taken in the fourth quarter, after Sangoma decided to exit its Legacy Connectivity Hardware product line and wrote the related inventory, primarily raw materials and components, down to net realizable value under IAS 2. That is about US$0.09 per share on our arithmetic, and it is why the same quarter carries two gross margins: 65% as reported and 71% excluding the write-down.
What has not been paid for yet is the restructuring that follows the exit. The MD&A says that “in connection with this exit, during the first quarter of 2027, the Company has approved a detailed plan to restructure the associated operations, including headcount reductions and facility rationalization, to be implemented over the next two fiscal quarters.” No costs for that plan were incurred in fiscal 2026, so it sits ahead of the numbers above rather than inside them. The company expects the restructuring “to be Adjusted EBITDA accretive on a run-rate basis once completed, as it eliminates a lower-margin product line and the associated fixed cost base.”
Adjusted EBITDA and the net loss sit about US$109.8 million apart for the year on our arithmetic, and the two headline charges do not close that gap: the goodwill impairment and the inventory write-down come to US$71.4 million of it. Sangoma’s definition (press release, p.6) adds back income taxes, net interest, share-based compensation, depreciation, restructuring and amortization of intangible assets as well, and that last item alone was US$32.112 million in fiscal 2026 against US$32.768 million in fiscal 2025. Fiscal 2025 is the proof that this is not a story about one-off charges: Sangoma reported US$41.035 million of adjusted EBITDA and a US$5.010 million net loss that year with no impairment at all, and amortization of intangibles was the largest single reason the two numbers differed. Adjusted EBITDA is not an IFRS measure, and Sangoma defines it and reconciles it to net loss itself, which is exactly the sort of distinction our guide to financial ratios and non-IFRS measures is there to untangle.
Two gross margin comparatives, both of them Sangoma’s own
The press release (p.2) says gross profit for the full year “was $140.7 million. Gross margin at 70% improved 2% from the same period a year ago.” That improvement is measured against the fiscal 2025 headline margin of 68%, which included the low-margin VoIP Supply resale business.
The MD&A (p.14) states the like-for-like version: gross profit and margin “were $140,663 and 70%, compared to $156,700 and 75% in the same period a year ago without VS”. Measured that way the margin fell 5 points, or 3 points excluding the inventory write-down, at 72% against 75%. The quarter splits the same way, with 65% reported and 71% excluding the write-down against a headline 67% and 75% excluding VoIP Supply a year earlier. The MD&A attributes the quarter’s compression to “an increase in the Company’s lower margin TaaS revenue” alongside the write-down. Both figures are the company’s own. They simply answer different questions.
What our preview said, and how the arithmetic held up
Our Sangoma Q4 earnings preview of September 19 argued that margin, not revenue, was the story, and published a band computed from the guide and the filings: implied Q4 revenue of US$50.7 million to US$51.7 million and adjusted EBITDA of US$6.5 million to US$8.7 million. Revenue came in at US$49.816 million, below the band, and adjusted EBITDA at US$6.534 million, at the bottom of it. The nine-month base that arithmetic rested on, US$153.263 million of revenue and US$24.107 million of adjusted EBITDA, is part of what has now been revised.
The preview also told readers that silence on the strategic review was the base case, because Sangoma had committed that it “does not intend to provide further updates regarding the process unless and until the Board has approved a definitive agreement or disclosure is otherwise required.” The Board approved a definitive agreement, which is the trigger that sentence named. Readers following the other Canadian process we have tracked can set it beside our coverage of the Cineplex strategic review and sale.
One further consequence of the deal is that there is no fiscal 2027 guidance and no conference call. The release states that “in light of the Transaction, the Company is not providing guidance for Fiscal 2027 and will not be hosting a conference call to discuss Fiscal 2026 results.” Sangoma issued its fiscal 2026 guidance on September 17, 2025 with the fiscal 2025 annual release, so this is a change, and the reason the company gives is the transaction. The results release does carry a forward sentence from the chief executive (p.1): “We’re entering fiscal 2027 with a clear strategy focused on accelerating our growth areas, strengthening our core recurring-revenue base, and optimizing the rest of the portfolio.” It was published the same evening the Board agreed to sell the company.
What has to happen before the deal closes
Two shareholder thresholds have to be cleared at a special meeting: two-thirds of the votes cast, plus a simple majority of the votes cast excluding votes required to be excluded under Multilateral Instrument 61-101, the minority-protection rule. Officers and directors holding roughly 27% of the shares have signed voting support agreements. Court and regulatory approvals and customary closing conditions also apply, and the arrangement is not subject to any financing condition. If Sangoma exercises its fiduciary out to accept an unsolicited superior proposal that BRC does not match, a US$5,397,000 termination fee is payable. Closing is expected no later than early 2027.
The fairness opinion is worth reading precisely. ATB Cormark’s opinion to the Special Committee and the Board was verbal, which means there is no written opinion and no valuation summary for a holder to read at this stage. On a transaction carrying a majority-of-minority requirement, the written opinion arrives with the meeting circular.
The last mechanical point is the currency. The cash portion is denominated in US dollars, and at the 1.417 rate in the release the US$4.925 accounts for about C$6.98 of the C$7.40. So the Canadian-dollar value of the payout moves with the exchange rate between now and closing. By our arithmetic, the US$5.225 consideration would be worth about C$7.05 at USD/CAD 1.35 and about C$7.58 at 1.45. USD/CAD was 1.4176 on Yahoo Finance at the time of writing, essentially the rate the company used.
What a Sangoma holder is weighing now
On one side is an offer that is 94.3% fixed cash on our arithmetic and has unanimous Board support, and arrives after a year in which adjusted EBITDA fell 30% to the lowest of the five fiscal years in the chart above, the margin slid from 15.9% to 13.1%, gross margin fell 5 points on the company’s own like-for-like basis, and the reporting system produced a correction to three quarters of revenue.
On the other side is a price below the 52-week high and 1.7% under the highest close of the past twelve months, agreed for a business that still converted 82% of adjusted EBITDA into operating cash flow, cut its debt 43% in the year, holds churn under 1%, and has an approved restructuring the company expects to be adjusted EBITDA accretive on a run-rate basis once complete, with none of that benefit yet in the reported numbers. The fourth quarter also carries the one operating turn in the company’s favour: the MD&A (p.20) says “sequential growth was delayed and started in the fourth quarter of fiscal 2026”, and attributes the quarter’s 1% sequential rise in service revenue “primarily from cloud services revenue” (p.13). Whoever votes gets no fiscal 2027 guide to measure the alternative against.
Both releases came out after Monday’s close, when STC finished at C$5.05 in Toronto and SANG at US$3.59 on Nasdaq, up from a US$3.40 previous close (Yahoo Finance). The market’s first read on all of it comes Tuesday.
Data as of the September 28, 2026 close. Prices and analyst consensus from Yahoo Finance; all company financials from Sangoma’s Q4 fiscal 2026 press release, the MD&A for the three months and year ended June 30, 2026, the financial statements for the year ended June 30, 2026, and the transaction release of September 28, 2026, cited by page above.
Disclaimer: The content on bestcanadianstocks.ca is for informational and entertainment purposes only and does not constitute financial advice. Past performance is not indicative of future results. Always consult a qualified financial advisor before making investment decisions. Company financials are Sangoma’s own, from its fourth-quarter and fiscal 2026 press release, its MD&A for the three months and year ended June 30, 2026, and its consolidated financial statements, all filed September 28, 2026, with the document and page named beside each figure. Sangoma reports in US dollars; the shares trade in Canadian dollars on the TSX and US dollars on Nasdaq. Transaction terms come from the separate arrangement release of the same date. Share prices, the exchange rate and the analyst consensus are Yahoo Finance at the September 28, 2026 close, with the consensus from five analysts. The five-fiscal-year series is drawn from the company’s annual MD&As for the years ended June 30, 2023, 2024, 2025 and 2026. Figures identified in the text as our arithmetic are ours: the cash share of the consideration, the implied BRC reference price and the consideration remarked at BRC’s closing price, the market capitalisation, the enterprise value multiples, the per-share effect of the goodwill impairment and the inventory write-down, the nine-month revision totals, the pro forma full-year revenue on the pre-revision base, the quarterly adjusted EBITDA margins, and the exchange-rate illustrations. The first three quarters of fiscal 2026 were revised by the company in this release, so any comparison against an estimate struck earlier rests on a base that has since changed. Balance sheet figures, the remaining goodwill and the impairment model, including the discount rate and the sensitivities, come from the consolidated financial statements for the year ended June 30, 2026 and note 12 on page 33. Book value per share is our arithmetic on total shareholders’ equity and the shares outstanding at that date.
