Thank you for standing by. This is the conference operator. Welcome to Sangoma Technologies fourth quarter fiscal year 2022 investor conference call. As a reminder, all participants are in listen-only mode, and the conference is being recorded. I would now like to turn the conference over to David Moore, Chief Financial Officer. Please go ahead. Thank you, operator. Hello, everyone, and welcome to Sangoma's fourth quarter and year-end fiscal 2022 investor call. We're recording the call, and we'll make it available on our website for anyone who is unable to join us live. I'm here today with Bill Wignall, Sangoma's President and Chief Executive Officer, Larry Stock, Chief Corporate Officer, and Samantha Reburn, General Counsel, to take you through the results of the fourth quarter, which ended on June 30, 2022, as well as the full fiscal year. We will discuss the press release that was distributed yesterday, together with the company's audited financial statements and MD&A, which are available on SEDAR, EDGAR, and on our website. As a reminder, Sangoma reports under International Financial Reporting Standards, IFRS, and during the call we may refer to terms such as adjusted operating income, Adjusted EBITDA, and adjusted cash flow that are not IFRS measures but which are defined in our MD&A. Please note that unless otherwise stated, all references to dollars are to the U.S. dollar, as we started reporting U.S. dollars at the beginning of fiscal 2022 and will continue to do so. This includes all prior period comparisons which have been converted to U.S. dollars as described in note two of our financial statements. Before we start, I'd like to remind you that the statements made during the course of this call that are not purely historical are forward-looking statements regarding the company's or management's intentions, hopes, beliefs, expectations and strategies for the future. Because such statements deal with future events, they are subject to various risks and uncertainties, and actual results might differ materially from those projected in the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements are discussed in the accompanying MD&A, our annual information form, and in the company's annual audited financial statements posted on SEDAR. With that, I'll hand the call over to Bill. Thanks, David. Good morning, everyone, and thank you for joining us today. I have structured my prepared remarks for this call into five sections. I will first discuss our fourth quarter and then move on to cover our full year results. In my third section, I will share with you an update on the recent NetFortris acquisition. On that topic, just a quick reminder that since the acquisition closed on March twenty-eighth, this is the first full quarter in which we see the impact of the acquisition on our income statement. Fourth, I will provide a year-end look back on your company and our progress this year. Finally, I will review forward guidance for fiscal 2023. As always, we'll then wrap up with a brief summary and turn the call back over to David for our typical open Q&A session. Just before I begin today, I simply wanted to start with an acknowledgement. The team here at Sangoma has worked really hard over many years to build a relationship with the street, a relationship that I hope you'd agree involves credibility, transparency and a clean company. I just wanted to acknowledge that this is the first quarter in many years where there is admittedly a bit of messiness with the goodwill impairment and accounting reclassification. Two points that I'll address head on in my comments today to ensure you understand them and are not unduly concerned. I guess I just wanted to declare that up front and face it straight on, as I think many of you would have come to expect from us. Let's get started with our Q4 results. Sales for the fourth quarter were a record $66.3 million or $62.5 million following the accounting reclassification from the first three quarters that many of you will have noted in our press release. As always, we attempted to be quite clear in our MD&A when describing this accounting reclassification, but it is indeed a little confusing. While this reclassification has no impact on Adjusted EBITDA, no impact on prior year's results, and reflects no change in the underlying operation of our business, I'd like to just take a moment now to explain it to ensure everyone was able to follow. Please bear with me for a minute as I walk you through it. During the first three quarters of fiscal 2022, we classified certain amounts from legacy Star2Star customer contracts as revenue in accordance with the company's accounting policies. During the fourth quarter, we determined that due to contractual differences in the former Star2Star contracts, certain amounts relating to such contracts should be reclassified from gross to net revenue. This resulted in a total reduction in revenue of approximately $3.79 million when summed across the first three quarters of fiscal 2022. Because this reclassification did not have a material impact on revenue in our first three quarters of the year, we recorded the entire reclassification in the fourth quarter. Here's where it can get a little bit confusing. If you notice the use of both the $3.79 million figure and the $5.5 million figure. The $3.79 million is the amount of the reclassification from Q1 to Q3, and the $5.5 million is the amount the reclassification would have been for all four quarters. That is the $3.79 plus $1.8 million for Q4. That's why we explained that Q4 revenue was $66.3 million without the reclassification from Q1 to Q2, which is the $62.5 million plus the $3.79. It's also why, without the reclassification at all, our Q4 revenue would have come in at about $68 million, which is the $62.5 million plus the $5.5 million. Finally, that's why we explained that the effect of the reclassification was to reduce our expected fourth quarter revenue of $68 million by approximately $5.5 million. Where that expected value came from our guidance on May 12th, which contained full year guidance and our Q3 year to date results. As we report fiscal 2023 results and compare back to fiscal 2022, we will use these reclassified revenue numbers, which are in a simple table for you in our MD&A. Finally, before we move on and return to results, just a reminder that this reclassification has no impact on EBITDA or earnings because of the offsetting expense that we also removed from marketing and sales, which I'll touch on shortly in the OpEx section of my comments. Okay, so with that rather long explanation, now back to the Q4 results themselves. Using the $62.5 million in reported sales, our revenue was up 25% from the fourth quarter of fiscal 2021. Looked at another way, referring you to the table we provided in the MD&A, Q4 revenue without the impact of the reclassification was $66.3 million, a 32% increase year-over-year. The increase in sales was primarily driven by the acquisition of NetFortris, the continued growth and compounding in our existing services business, and by an uptick in our product sales. Our recurring revenue through our services business continues to be our strategic focus, and we've seen significant growth year-over-year. In Q4, our services revenue came in at approximately $45 million this year, a 29% increase from the $35 million from the same quarter last year. This $45 million represents 72% of total sales for the quarter. As discussed on previous calls, our long-term trend of strengthening services revenue from under $5 million per quarter in fiscal 2018 to about $45 million this past quarter has truly been a milestone achievement in your company. Analogous to going from what would be $20 million annually up to $180 million per year in services. Gross profit for the fourth quarter was $40.7 million, up 13% from the $35.8 million in Q4 of last year. Gross margin for the quarter was approximately 65% of revenue as reported, or using the figures from the table in the MD&A updated for the reclassification would have been 67%. This gross margin is slightly lower than the same quarter last year due to the impact of the revenue reclassification, the global supply chain pressures, and the slightly lower average margin from the managed services part of the NetFortris portfolio. Operating expenses for the fourth quarter this year were $41.9 million versus $37.8 million in the same period last year. The higher operating expenses were primarily driven by the cost that came with the addition of NetFortris. As I've done in recent quarters, I will offer some additional insight on the three individual OpEx buckets, namely sales and marketing, R&D, and G&A. Let's start with sales and marketing. You'll notice that sales and marketing actually shows lower than the prior year, but that's solely due to the OpEx that came out of our expenses as the offset to the revenue reclassification I covered earlier. Adding that back for comparative purposes, sales and marketing was $15.6 million, representing a $3.5 million increase, primarily the result of the addition of the NetFortris sales and marketing staff, the channel partner commissions, and the accompanying marketing program spend. With respect to R&D, the increase in the fourth quarter of fiscal 2022 from the same quarter in the prior year is largely due to the addition of the NetFortris engineering teams and their continued investment in innovation. This follows our general approach to OpEx spending. As measured in absolute dollars, Sangoma continues to invest more money every year into R&D for product development than we spent in the prior year, but we closely control that spending as a percentage of revenue. Finally, the G&A expense also shows an increase year over year, which as in recent quarters, was driven primarily by the addition of the NetFortris admin groups, the non-cash amortization of the intangible assets, and the increased cost of compliance associated with the TSX uplisting and the Nasdaq cross-listing. Adjusted EBITDA was a record in the fourth quarter at $11.1 million, an increase from the $9.8 million from the fourth quarter of the previous fiscal year and exceeding $10 million for the fourth consecutive quarter. This level of Adjusted EBITDA is equivalent to about 18% of sales. Our continued attention to generating meaningful and leading EBITDA margins as our business continues to grow, combined with the NetFortris cost restructuring, were important factors. Net loss for the fourth quarter was $99.3 million, obviously up a lot from the prior year due to the significant goodwill impairment, which I'm sure you will have noticed. This impairment resulted primarily from the substantial and rapid decline in our share price and market cap during the latter months of fiscal 2022. While virtually all other companies in our industry sector have experienced similar and in most cases, even sharper declines, that is of no consolation. We are extremely disappointed to see our stock price where it is today, and believe me, you have all 750+ staff as well as our board of directors, focusing intensely on the tasks at hand to reverse the recent share price trends. Trends that are not immune to the factors I'm sure you all see, such as economic uncertainty, inflation, higher interest rates, risk of recession, et cetera. Without getting too technical here in explaining the impairment, IFRS requires that we undertake an annual assessment of potential impairment to goodwill. That assessment is a prescriptive process which considers the recoverable amount to be the higher of the fair value, less costs to sell and value and use. When we perform the valuation of the recoverable amount, it was less than the carrying value as of June 30 by $91.7 million, again, driven mostly by the decline in share price. Accordingly, we recorded a non-cash write-down of goodwill by that amount, bringing the carrying value down to the recoverable amount, and that's why the net loss was so unusual for Q4. That brings my commentary on our Q4 income statement to a close. Let's turn our attention to the full year results, and I'll then touch on some balance sheet and cash flow items. Sales for the fiscal year 2022 were a record $224.4 million, up 71% from the $131.4 million in fiscal 2021. Please allow me a moment to explain our fiscal 2022 sales versus guidance, realizing that such guidance was provided prior to the accounting reclassification, which I described in detail earlier. As you may recall, our guidance for annual revenue was $230 million-$232 million for fiscal 2022. If one considers that revenue as reported was $224.4 million and adds back the effect of the reclassification at $5.5 million for the year, given our guidance was provided on that basis, you see that our comparative revenue for fiscal 2022 would have been almost exactly $230 million on guidance, albeit at the low end of that range. The 71% increase year-over-year was due to a number of factors, including the continued growth and compounding of the company's services business, the inclusion of Star2Star for the full year, the NetFortris acquisition, and an uptick in the product business. As a percentage of total sales, our services revenue is 71% for the year, a solid increase from 62% in the same period last year, and 50% in fiscal 2020. A trend we are proud of as a team and in line with our overall strategy. Gross profit for the year was $156.9 million, much higher than the $89.5 million realized last year. Gross margin was approximately 70% of sales, up from the 68% in the same period of 2021, especially gratifying, given the global supply chain has been so strained throughout the year as we've discussed on prior calls. Operating expense for the year was $162.8 million compared to $83.4 million last year. The increase was mainly due to the incremental expense associated with having Star2Star for the full year in fiscal 2022, the addition of NetFortris, and the increased amortization outlined earlier. EBITDA is $42.1 million for the year, up 67% from the $25.2 million last year, and 162% higher than the $16 million in fiscal 2020. This is equivalent to about 19% of sales for the year and is in line with our EBITDA guidance from May. That brings my commentary on our income statement to a close. I'd now like to cover just a few highlights from our balance sheet and cash flow, as I promised. Our cash balance at the year-end was $12.7 million, down from the prior year as we funded a portion of the NetFortris acquisition with cash, made prudent purchases of inventory to manage the supply chain issues, and continued repaying debt. Both trade receivables and inventory have increased somewhat over the prior year, with AR expanding from just under $15 million last year to just under $17 million this year, and inventory growing from just under $12 million to just under $17 million, all for the reasons we've discussed previously. Excuse me. For fiscal 2022, we've generated adjusted cash flow of $25.7 million. This represents an increase from the prior year of over $3 million. In thinking about the adjusted cash flow from operations, it's important to look at some of the major components. For example, we've needed to use working capital to respond to the global supply chain pressures, to fund receivables as our sales have grown, to draw down deferred revenue somewhat as we move more and more from a product company to a SaaS model, such that on-premise maintenance gradually declines and gets replaced with cloud MRR. We've increased modestly our development cost investments and had to pay higher taxes. As you've heard me say earlier, we expect the supply chain pressures to continue for some time, but we fully expect to manage through them as successfully as we've been doing in order to continue meeting our customers' expectations. Finally, as was the case with prior quarters, our overall balance sheet remains strong and we are, of course, comfortably within all debt covenants. That brings my comments on our full year financial results to a close. Let's now move to our third section today, a quick update on the NetFortris acquisition. As most of you on this call will know, NetFortris represents Sangoma's eleventh acquisition in eleven years. As we noted when we announced the acquisition, it's an exciting transaction for us because it further accelerates Sangoma into the upper echelon of SaaS communication providers. It extends our industry-leading suite of cloud services with new MSP capabilities, thereby delivering even more one-stop shopping for our customers and providing larger share of wallet for Sangoma, all at a time when we're hearing more clients seeking more of the communications they need from fewer trusted vendors. I remain very pleased with how the companies are coming together as we continue to integrate the two businesses. In some ways, I feel like a broken record in that most all our acquisitions follow a similar pattern, revealing a successful integration. Much like with Star2Star that I spoke about last year around this time, the Sangoma and NetFortris teams are working well to bring the two companies together. As I shared with you last quarter, we focused our integration efforts on four main areas, customers and channel, product, the integration of the organization, and synergies. I'm pleased to provide you with an update on each of those four today, so you can see how far we've come in a short time. The integration of customers has progressed nicely through our fourth quarter and is nearing completion with a relentless focus on delivering excellent service and taking great care of our customers. I've now personally spoken to many of the larger NetFortris customers myself, who are excited by the broader product suite and by the financial stability that Sangoma brings to the combined company. Senior leadership in both sales teams are now getting exposure to the other's customers, and at our recent sales kickoff, one of the main themes was getting the entire sales organization to cross-sell so that everyone is capable of selling the full portfolio. We are also nearing completion on channel integration as well, so that both sets of channel partners can also access the full suite of combined products. Next, regarding product integration, as I highlighted last quarter, one of the first steps in the process was for us to explain the complementary products now available to each prior customer base, channel, and internal sales team. As you've just heard me say, that is nearing completion. We've now begun work on the core part of integrating the product portfolios themselves. For example, NetFortris did not have a video meetings-as-a-service product, and instead, they resold Zoom. In the first quarter or so after closing the acquisition, we have already successfully integrated our video meetings product, called Sangoma Meet, into the NetFortris suite and replaced Zoom. We are also already partly through replacing their soft clients for both mobile and desktop with Sangoma's versions, so we are all using the same end-user facing applications. Finally, within the next few months, we will have integrated our collaboration-as-a-service product as well. The other key early product work is on network planning as we start thinking about how to best bring the Sangoma network and NetFortris network more together. This is all the data centers where the SaaS software is hosted, all the switching and routing, all of the databases, all the security, all the traffic handling. I mentioned on our Q3 call that at that last point, we had begun the work on traffic engineering, and I'm pleased to confirm that we've now already begun saving traffic costs as we've started integrating the networks and traffic handling with more to come. Now for organization alignment and integrating the NetFortris team into Sangoma. We have already made significant progress on bringing the people together. As mentioned last quarter, our general approach at Sangoma has always been to gradually integrate the acquired businesses into our broader company rather than have it continue as a standalone operating entity, and that's exactly how this is happening this time as well. We've already integrated most of the functional groups from NetFortris into their respective departments at Sangoma, all in just a few short months. That includes finance, legal, HR, marketing, product management, engineering, our network group, operations, et cetera. The sales team will integrate during our fiscal Q2. Finally, in the last part of my NetFortris update, I want to touch on synergies. Some of you may recall that when we announced the acquisition, we explained that we expected about $4 million in annualized cost savings. These savings are coming from the areas we outlined when we announced that acquisition, namely efficiencies, removing duplication in staffing, consolidating traffic and data centers, eliminating redundant spending on things like marketing programs, audits, insurance, et cetera. That integration is sufficiently far along with the restructuring of duplicate costs well underway that I'm pleased to confirm we now know with certainty that we will at least hit our $4 million target for synergies and likely exceed it, probably getting to $5 million in annual savings by the time the integration is completed in the next few months. That brings my NetFortris update to a close for today, and I'll now turn to my fiscal 2022 year in review. Each year at this time, I provide a section where we step back a bit from financial results and discuss what's been happening operationally and strategically in your company over the past year. To do so, today I'm going to touch on your company's competitive differentiation in the market, then on a set of the top five highlights from fiscal 2022, and finally, the one biggest disappointment, being candid as we have always sought to be. Okay, let's start with Sangoma's strategy and positioning in the market for competitive differentiation. As I've highlighted on previous calls, the cloud communication space is competitive and is seeing consolidation. For a company to remain a top player in this sector, one needs to have clear competitive distinction and know what you stand for. At Sangoma, we are very deliberate about what makes Sangoma stand out, and we work hard to ensure our customer-facing teams communicate this consistently to customers, prospects, and channel partners. We describe our competitive differentiation in three clear, concise points. First, we have the widest set of cloud communication services in the industry, from UCaaS to trunking as a service to contact center as a service to video meetings as a service, collaboration as a service to CPaaS, DaaS, access control as a service, and now including MSP services such as managed security, managed access, and managed SD-WAN. Nobody else even comes close. Sangoma increasingly believes that customers want an integrated buying experience for one-stop shopping. Most customers do not want to buy five different cloud services from five different vendors, likely requiring them to evaluate at least ten different products or suppliers, negotiate five different contracts, have five different tech support processes to follow, receive five different invoices each month, and then have to figure out how to make those five different products talk to each other. Second, our ability to offer multiple deployment options from pure cloud to on-premise to hybrid solutions. Sangoma is arguably the only significant communications company that can say this. There are no large on-prem companies that have truly navigated this transition successfully, and there are literally no large cloud communications companies that offer an on-prem solution. At Sangoma, we just want the customer, and if they're ready for full cloud now, that's great. But if not, we still want them, and we'll be there for them when they're ready for cloud in the near future. Third, we make the entire product portfolio, complementing our cloud services with our own set of products such as desk phones, session border controllers, headsets, and their own soft switches. Doing so allows us to make these products do things our competitors cannot when they simply buy parts of their solution from other third parties. It enables us to offer a true one throat to choke commitment, or stated more pleasantly these days, one hand to shake. Contributes to network uptime performance. After all, who knows the technology better than the company that developed it? Helps us navigate challenging supply chains, especially important during the last year or two, and delivers better margins. Because if you make the desk phone, you can do so at much lower costs than our competitors buy their phones from a third-party supplier, especially important if giving it away with a three-year subscription contract. Next, I said I'd cover a top five highlights list from fiscal 2022. Here we go. The first highlight is one that's not glamorous, I realize, but it remains as important now as it was five years ago, consistency. Sangoma continued its trend of growth with profitability growing 71% from $131 million to $224 million, while delivering over $40 million in Adjusted EBITDA for the first time. Number two is the acquisition of NetFortris. The idea of combining traditional MSP capabilities with over-the-top cloud services is a fairly new concept, one that few UCaaS companies have embraced, and one that we believe will be a lucrative model for us, securing a larger share of wallet and ARPU while being much appreciated by our customers and channel partners. It is our existing strategy that included the widest set of cloud communication services that made the acquisition of NetFortris such a good fit specifically for Sangoma as we further expanded that approach with our new MSP offerings. The next highlight on my list is the uplisting to the TSX big board and the cross-listing to Nasdaq, where we admittedly have more work to do to increase trading volumes in the U.S. Number four on my list may not be as obvious to you, but at Sangoma, we're continuing to gradually strengthen our senior management ranks, positioning us even better for future growth, a trend that continued in fiscal 2022. My final fiscal 2022 highlight is the progress on NetFortris integration, a process which is going to deliver more synergies than we originally anticipated and is even slightly ahead of schedule. For my final point in this year in review section, I promise to touch on my number one disappointment, which has to be our share price, a low light that should surprise no one on this call. It really is extremely disappointing indeed to see Sangoma's share price today. It's the one big item from fiscal 2022 that is so upsetting to the team here and to your board of directors. At CAD 8 per share, we are trading at less than 1x run rate revenue and something like 5x-6x Adjusted EBITDA, depending upon whether one looks at trailing 12 months or future 12 months. Multiples that are very hard to understand and make our stock seem like an incredibly good buy at these prices. I just want to say emphatically and definitively that everyone at your company is completely focused on the tasks in their area of responsibility, the one that we believe will contribute to addressing this number one disappointment. That concludes my year in review commentary, and with that, I'll move on to my fifth and final section today of guidance for fiscal 2023. I'll begin this section with a brief reminder. Our fiscal 2023 guidance factors in many considerations, as outlined more fully in our press release and MD&A. These considerations include items such as inflation levels, not seen for many years in most parts of the world, government monetary policy in response to such inflation, ongoing supply chain challenges and their ability to manage them as in the past, our ability to attract talent in what remains a very hot job market, revenue and demand trends continuing, as well as the risk of a global recession. This is a significant list this year and is indeed one that we factored into our forecasts for the fiscal 2023 year. Our guidance reflects our expectation for solid top-line revenue growth and strong Adjusted EBITDA to continue. Fiscal 2023 revenue guidance is between $275 million and $285 million, which would deliver growth of 23%-27% over fiscal 2022. We are also including in our revenue guidance this year an estimated range for services revenue, which we expect to be in the 70%-75% of sales range, true signs of sustainability and what should be value creation for shareholders. Finally, our guidance for Adjusted EBITDA is for $48 million-$52 million this year, demonstrating that we expect to continue generating really substantial EBITDA margins in the range of approximately 18% for fiscal 2023, despite the economic headwinds I just mentioned. With that, I'd like to bring my prepared remarks to a close with a quick summary. Overall, I'm very pleased with another year of solid financial results for Sangoma and with what we've accomplished. We continue to take steps to drive your company to become one of the preeminent players in the industry. We are well-positioned to take advantage of an extremely large total addressable market. We have a well-defined, competitively differentiated strategy, and we continue to penetrate the market through our total growth approach. As most of our investors know, we seek attractive organic growth by investing in sales and marketing, R&D, and customer expansion. We remain uniquely positioned to augment that organic growth with deliberate, prudent M&A using a disciplined approach that reflects an astute awareness of current share price, all while maintaining strong Adjusted EBITDA and cash flow. You have a team here at Sangoma that works hard for you every day and that is determined to dramatically improve stock price and create shareholder value. With that, I'll turn the call back over to David for questions. Thank you, Bill. To make sure everyone knows how to ask questions, I will ask the operator to go over the instructions for you. Operator, we're ready to take questions now, please. Certainly. We will now begin the question and answer session. To join the question queue, you may press star then one on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star then two. We will pause for a moment as callers join the queue. The first question is from Eric Martinuzzi with Lake Street. Please go ahead. Yes. I'd like to dive into the economic headwinds and challenging global environment that you noted, and specifically with regard to the results. Even after we adjust for the revenue reclassification in Q4, you did come in at the low end. I'm guessing you didn't anticipate that heading into Q4. What was it that caused the low end? Yeah, I don't think it was any one of those individual things, Eric. It's that combination, both of the factors you just asked about. You know, a little bit of supply chain pressure, having products and inventory. There were one or two projects that were scheduled to complete late in the quarter, which seemed very predictable and on schedule, and then, you know, just with the chaos of what's going on in the world, got pushed out until early the next quarter. I don't think it's any one thing. It's not the fear of a recession or inflation being high or the interest rates being up. It's just the combination, maybe a little bit of slowness in decision-making at customers, project implementation going a little bit slower than expected. There was no single event that caused it. Okay. In the slowness, is this, are we kicking it up to, you know, higher level reviews, multiple reviews, the budget's there, then the budget isn't? Any insight there? Yeah. I think that depends whether we talk about it from the point of view of the services or the product business, Eric. On the services side, I would say that's less a concern. Of course, it's true for large enterprise customers, and we certainly have some of those. You know, if you're spending $100,000 a month, that certainly gets scrutiny. If you're spending $3,000 a month, it tends not to. You know, it's an OpEx decision, not too problematic for most companies. On the product side, your question's right on. You know, if you're buying something that's lumpy and tens of thousands of dollars or a couple of hundred thousand dollars, you might go a little bit slower. That's right. It might need an extra level of approval. We've seen some customers with some financial challenges inside their business that have, you know, absolutely nothing to do with us, just going a little bit slower with decision-making, because of that. You know, again, it really depends upon whether it's services or product. Okay. As we look out to the guidance, you know, it seems pretty solid there, around $280 million at the midpoint for FY 2023. This incorporates the new treatment or the reclassification of the gross versus net. That compares pretty favorably with where the street was at $286 million. I was interested to note that you're only looking at about 18% EBITDA margin, which is where you had finished out Q4, was about 18%. Why are we not, you know, given this increased revenue growth, why are we not anticipating some margin expansion? Yeah. I think that's just two things. It's the falling down through or cascading down through the income statement with gross margins in the high 60s% rather than 70%. You know, that's very much supply chain-driven. Then just maybe a little bit of being slightly more conservative with spending. We want to invest in growth, and so we've got some initiatives in there that we think will drive it. You heard me say we're not at all happy with share price, where share price is. You know, we've got extra money in there for things like directly targeting our relationships with what historically was called master agents, or now sometimes telecom service brokers or technology distribution. You know, there's many names for it. That's why. You know, it could certainly be a little bit better than that. From a guidance point of view, given what, you know, what we see out there on the horizon, I think 18% is a good number to be at for now. I understand. Last question from me. You've had a couple of pretty substantial acquisitions here over the last, you know, 18 months. I'm just curious to know your headcount retention. It's a war for talent out there every day. Have you been able to hang on to the talent that you brought on board? Yeah. Good question, actually. I would say generally yes, but not in a way where I'd want to, you know, pretend everything's a hundred percent perfect. We fight that same battle you asked about that everybody else is fighting. We've certainly lost people. So there's no difference here compared to other companies who are having to really think through this in a renewed way. You know, that includes what can you do with compensation, and we've certainly given larger increases this year than in prior years. It includes flexibility with working conditions and how much of the time we ask employees to spend at an office versus working from home. You know, I don't think Sangoma has any magic or silver bullet on this, Eric. We're doing just fine. It's not causing us any big, huge grief. You know, it is an issue for everyone, especially in the tech sector, and it's one for us too that we have to fight and think about every day. Great. Thanks for taking my questions. Sure. Good to talk to you. The next question is from James Breen with William Blair. Please go ahead. Thanks. Thanks for taking the question. Wondering if you just give some commentary just around the NetFortris acquisition. You've had it closed for a quarter now, and I think you've talked about, you know, very minimal customer overlap, when you initially bought that company. Maybe talk about some of the cross-selling you may be seeing and some of the interest you're seeing from both sides. First of all, I wanna know who's this guy, James Breen? I only know Jim Breen. Is this the same fellow? It is. Jim, yeah, no kidding. Hey, man. I would say that NetFortris is unfolding just as expected. You know, we talked about that briefly in our reports. You know, there's a bunch of ways I could take this question. One is, you know, how is the product stuff going? How are the customers going? How is the team integrating? In almost all respects, that feels really good. I would confess to you that I think we've learned something from the Star2Star acquisition that's informed a little bit more about how we've handled the NetFortris integration, and that has indeed influenced the outcomes you're asking about. You know, I think when we did Star2Star, because it was a larger one, we probably went slower than looking back with the benefit of hindsight we should have. It's not right or wrong or good or bad, we made the best decisions we could at the time. That means with NetFortris, we've gone faster integrating the teams, faster talking to the customer bases, faster talking to the channels. Even in situations, Jim, where, you know, we would be telling them about something that was not 100% buttoned down, so I don't know, that's too abstract. You know, the channel partners wanted to know what's the plan with Zoom. You know, we resell Zoom as the video meetings product, and we were much clearer about that earlier on. You know, as opposed to saying, "Oh, we're working on it, we don't wanna tell you until it's done." We said, "Zoom will be going away. We have our own video meetings product. We're gonna integrate it fully. We're gonna do that fast." It was done within a quarter. All of those kinds of actions have influenced the way NetFortris is performing. The sales teams are coming together. The big sales kickoff that I just mentioned to you was a combined one with both parts of the company. Just in general, whether it's product or whether it's organization or whether it's, you know, the way we face to the customers in the channel, that feels very good. It's gone faster than in past situations and kind of on plan. Great. Thanks. Yeah, just a more broader look at where your growth is coming from, and sort of what you've seen as sort of organic growth here, probably, you know, mid-single digits. You know, you talked about some supply chain impacts. Is there any sort of specific products across what you guys are selling where those hit more than others, you know, whether it's UCaaS, CCaaS or some of the MSP products? Just, in terms of customers, just any thoughts on where you're seeing traction, mid-sized companies, small enterprise, just, you know, where you're seeing the most growth? Yeah. Okay, let's talk product first, and then I'll talk about, you know, customer segments. On the product side, what I would say is it sure feels like the industry has moved more and more to bundled suites, Jim. As opposed to, you know, a customer buying video meetings from us versus UCaaS or UCaaS versus contact center or contact center versus collaboration, our positioning to the market of this broader set of cloud services is typically explained as a bundled suite. We don't really have the ability to separate, you know, how much of the $20 or $30 a seat did someone attribute to the collaboration piece of it or the video meetings part or the UCaaS. It's really that combination that sets us apart. I don't think, you know, we would say it's because we have, you know, a UCaaS product that's blowing the doors off or a video meetings product that's blowing the door. It's the combination of them, the way they integrate together, the way you move between them elegantly, the single soft client that works across all of the different cloud services. I would certainly say, you know, with the more credible CCaaS product that we got through the Star2Star acquisition, we're getting more CCaaS business. As we've started to launch our collaboration product, so you can think, you know, Slack-like or Microsoft Teams-like, we're getting lots of uptake there. Customers really like that. It's being used in a way that allows us to promote other products from that cloud suite inside the user interface of the collaboration client, which is quite unique in the space. If I think about your question on, you know, the size of the customer base or the segments and which ones are, you know, driving more growth, there isn't really any big change in the SMB category. You know, that's still where both Sangoma and, NetFortris, and even Star2Star to a large extent, began their histories. The majority of the installed base is SMB. The SMB business is a little bit less subject to these seismic shifts. If something goes on with, you know, any interest rate or a concern about recession, you're only making a decision for a few thousand dollars a month, so it's not such a big deal. In general, Sangoma has been moving more upmarket. More of our customers are in that mid-market, and we're starting to get some penetration in the enterprise side. We now have many customers spending, you know, $100,000 + a month. I think we probably had zero of that three years ago. It's those kinds of customers where the decision-making can just slow down a bit, you know, given what's going on out there. That's how I would describe it, Jim. Okay. Just one final question on the guidance. I think you said 70% of revenue was services this quarter. Is that sort of the same ratio you'd expect for your fiscal 2023? Just, you know, of that, the guidance you gave, the $280 sort of midpoint, is there any M&A in that, unannounced M&A in that, or is that basically based on your run rate numbers coming out of this most recent quarter? Yeah. Thank you. To answer the first part, I would say the range that we're comfortable forecasting as part of our guidance, we've never done this before, is 70%-75% of the revenue in services. Not just 70%. On the second part of your question, does the fiscal 2023 revenue guidance include any M&A? The answer is no. Great. Thanks. Okay, Jim. The next question is from Deepak Kaushal with BMO. Please go ahead. Oh, hi. Good morning, guys. Thanks for taking my questions. Bill, just wondering if I know it's hard to do once you're well underway in integrating, but parsing out a bit of NetFortris. I think when you acquired the business, you said it had a $45 million recurring revenue base. Can you give any sense of churn since you guys acquired it? You know, what's the underlying growth rate for the managed service part of the business is, and how that's contributing to your guidance in the coming year? Yeah. Yeah. Let's talk about churn and then growth rate. On churn, we typically, you know, haven't disclosed that publicly yet. We're getting some questions about that from more analysts. I think we're gonna have to do that in fiscal 2023. All I would say at this stage, Deepak, is that the churn inside NetFortris, and this applies both to the cloud services piece as well as the MSP part, you know, tends to be in and around the 1% a month, kind of industry norms. You know, some months it's up a little bit above, some months it's down a little bit below. The month we're in happens to be a really good one for churn. But that's a number you can use in your models. It's pretty safe. I think we'll actually do a little bit better than that. Maybe we'll come in just under 1%. NetFortris doesn't have this large deviation from the churn rates inside the rest of Sangoma. The growth rates, right, inside NetFortris? Yeah. Yeah. I would say that NetFortris has kind of rekindled the growth that was missing from the past prior years. There was a lot of change happening inside that organization as we were doing due diligence and that's been kind of solidified under Sangoma's ownership. That's starting to show really good, encouraging signs. Not something that I think we would be able to break out in terms of a growth rate in NetFortris versus a growth rate inside the rest of Sangoma because actually, I'm not sure if you ever heard me say this because you're a little bit newer to the story, Deepak. You know, just this idea that we really do not separate out revenue between the revenue from the part of Sangoma that existed prior to the last acquisition versus the revenue inside a company that we acquired, right? As you said in your question, once we start integrating it really doesn't exist separately like that. If you take the example I used when answering prior questions, if we put video meetings as a service inside the NetFortris suite, and then NetFortris sells that suite to a customer, does the video meetings revenue count as NetFortris or Sangoma? We don't care. We don't think of it that way. Or vice versa, you know. We're having good success attaching MSP services to Sangoma quotes. We just sat through what we call a pre-submission meeting or a quote review for a large chain of automotive dealerships maybe two weeks ago. You know, that's a $40,000 a month quote for pure cloud services that jumps to $57,000 a month when you add MSP services to it. If we get that order, we won't separate or try to figure out how much of that revenue should count towards NetFortris because they had the MSP services versus how much should count to Sangoma, you know, because Sangoma had the other services or the customer relationship. We just don't do that. It's all one integrated company. It's really hard for me to try and tell you the growth of one individual piece. You just have to look at it on the blended basis. Got it. That makes sense. Very helpful. Just my one follow-up to that. On the gross margin side, you know, the mid-60s%, you were looking for 70s%. How much of that delta is from the accounting change, how much of it supply chain? Kind of what's the path to get back to that 70%? You mentioned some infrastructure integration as well. How should we think about that? Yeah. -that, um- Yeah. Perfectly fair question, Deepak. So it was 65% last quarter, but it was really 67% if you factor out the reclassification. That's how we feel about the fiscal 2023 year going forward. We don't do guidance at the gross profit level, but, you know, it's okay to talk about it, right? The factors that have influenced it are, as you said, mostly the global supply chain issues which are continuing and which Sangoma, you know, I think rightfully now looking back, it was really a good decision that served us well, made very conscious decisions about using a little bit of our capital to manage that supply chain differently. We chose to invest in inventory that might be buying product earlier and having on the shelf or pre-buying raw material that go into the, I don't know, manufacturing of a phone or buying it earlier, so we have it, et cetera. That's pulled it down a couple of points for sure. The other big factor is not NetFortris generally, but the managed services part of NetFortris comes with slightly lower margins, and we knew that going into the deal. It's those two things together that suggest, you know, maybe 67%-68% for the fiscal 2023 year. Over time, that will again ratchet back up towards 70% as the fraction of revenue that comes from services grows, and that just needs a little bit of time to unfold. It would also improve if the supply chain pressures abate, but, you know, it's just, it's kind of a fool's game to try and forecast that right now. No one thought it would last this long, Deepak. Okay. No, that's very helpful color. I appreciate that, and I will pass the line. Thanks again. Okay, thanks. The next question is from David Kwan with TD Securities. Please go ahead. Hey, guys. Bill, you mentioned, I think in the MD&A but also in your commentary about a few projects getting slightly delayed that hit the Q4 revenue, I think pushing a few of them into Q1. It seems like those are mostly isolated instances and that maybe you're seeing a little bit more in terms of kind of, you know, sales cycle lengthening. Is that a fair statement? Yes, I think it is fair. It really does feel like isolated incidents, using your terminology, David. They were for very unique specific reasons. You know, that I cited that differently than just the general impact on decision-making from just nervousness about the economy. You know, those are two quite different things. We see a little bit of, you know, customers being slightly more nervous given what's going on in the world, and you know, I think that's understandable. That's totally distinct from a couple of projects that were slated for the quarter that slipped into the beginning of the next quarter. You know, that's why in the write-ups as well as my comments, I talked about them separately. That's helpful, Bill. As it relates to capital allocation, can you talk about how you look at it now? Like, how much of a focus is building up cash for future acquisitions? How does that rank versus, say, share buybacks, particularly given where the share price is right now? Yeah. You know, I think the whole question about acquisitions is a tough one under these circumstances because, you know, it is legitimately difficult to find accretive acquisitions when our share price is where it is. We're just gonna have to be super careful about that. We gotta be really selective, look for just the right kind of companies if there is a way to do it. They probably wouldn't be big, large ones. We're not gonna go and, you know, raise hundreds of millions of dollars of capital when the share price is under CAD 10 a share. You know, whether whatever capital we might need for that comes from cash generated from the business or, you know, a little bit of extra leverage. Yeah, interest rates are up a little bit, but they're still at pretty low levels, and we're delevering quickly as we pay down debt. You know, it's just hard to answer in a super abstract hypothetical way. On the other part of your question about share buybacks, we are buying back shares. We've continued to buy back through the entire blackout period. You know, the timing of when we launched the NCIB was pretty weird, David. I don't know if you guys noticed that. As we were launching it was coming up towards the end of June, so we had a few days to buy towards the end of the month and the end of the fiscal year. Then we were in blackout and had to go into the automated share purchase plan, ASPP, you know, which has these preset parameters in it, so you're not even, you know, able to make, you know, decisions, day by day. It's preset. We'll be back out of that on Thursday. We'll be able to buy again in a normal way, but that's only gonna last for a few days again before we're back into blackout at the end of September. You know, we are using it. We've been buying shares, you know, under the parameters of that ASPP as permitted and approved by our board every single day it was possible. You know, the shares are a screaming buy, so we're gonna continue to do that, but we just have the quirkiness of that timing that we just have to contend with, David. That's helpful, Bill. Maybe one question for David, or maybe you. Just on the balance sheet, it looks like the short-term portion of the consideration payable was essentially unchanged from last quarter. Is it fair to say that NetFortris, it looks like they may be on track to hit their net booking target, which I think was a key driver for that number? Do I start? You want me to start? Please. Yeah. You know, it's a little bit too early to know that, David. We're only one quarter in. I've shared with you that the sales team is performing well, and there is certainly the possibility that they'll be hitting some of the earn-out. We think it's clear that they are gonna get some. How much of that remains to be seen and not something that I would choose to comment on quantitatively on this call after only three months into a 12-month earn-out. Having said that, you know, like, earn-outs are structured that way for a reason, right? You know? Sure, everybody who buys companies would like to end up paying less for the company they buy, but we also want the companies we buy to perform well. If they make their targets and we pay out the full earn-out, that's just fine. You know, in some ways that's what you want, right? But I don't think we wanna be too specific about how that's likely to unfold. If I had to guess, I would say it's not likely to be all or nothing. It's going to be some in some quarters and maybe not some or not all in others. Let us keep you posted as the year unfolds. David, do you wanna add any color to that? No, I think that's spot on, Bill. We've got a little more than half put into the numbers, David, which, you know, gives you some indication. As you say, we don't control all those matters at this point, and so it's a forecast and may change as the year progresses. Oh, sure. Thanks, guys. Okay, David. Thank you. The next question is from Mike Latimore with Northland Capital Markets. Please go ahead. Great. Yeah, good morning. Hi, Mike. Hey, morning, Bill. On the NetFortris managed service, you know, opportunity, you know, you've had it for a quarter now. I guess, can you give us just an update on what you're seeing in the pipeline? You know, how many customers or what percent of customers are really interested in having kind of the managed service provider and the UCaaS together? Any kind of new info there? Yeah. Well, I would say, Mike, you know, in full candor, it's still a small minority, right? It's new enough that- Mm-hmm. Mm-hmm you know, certainly it's much less than half still, but it's up from zero, right? For sure, it's interesting. Mm-hmm. I just gave an example of the one we went through, you know, that thing that I told you we call a pre-submission meeting, where, you know, it starts as one and then adds on the other. That's what I would say we can comment on more definitively rather than what percent is it? See, the trend that seems to be emerging is it starts with one, the customer often not realizing we have the other, and then it's partway through a sales cycle where the sales team's doing their normal job and telling the customer about the full suite, and, "Oh, I see." And by the way, it can start in the other direction, too. We have lots of customers now who start as MSP customers, right? They came to us for whatever, managed security or managed access or something, and then find out, "Oh, you know, you guys also do UCaaS," but not just UCaaS. We do, you know, CCaaS and CPaaS and video meetings and collaboration. You know, then what we'll hear is, "Oh, that's interesting. We can't do that now, but our UCaaS contract with our current provider is up in, you know, whatever, right, Mike? March of next year. Which has been a very common comment for us to hear in the other direction. I'm quite encouraged by this. I would say it's too early to be quantitative, but for sure, this looks like it's playing out as we hoped it would as the thesis for the acquisition, you know? Some of them- Yeah. have been quite large, you know. You know, not $3,000 a month going to $5,000, but $30,000 a month going to $50,000 or $100,000 a month going to $150,000. It's too early to be specific, but this looks pretty encouraging early on. Got it. Okay. Bill, earlier you talked a little bit about churn in the NetFortris business. How about just the overall company? Have you seen any change in customer revenue retention rates the last three or four months here? Nope, not in any significant way, Mike. Mm-hmm. You know, we have differing levels of churn in slightly different parts of the business, you know, the wholesale trunking business versus the UCaaS business versus the CCaaS business versus the MSP business. It all kind of averages out to the, you know, just under 1% a month number. None of them have moved up or down materially. I will say. Mm-hmm. that when one of your colleagues at one of the other banks asked, I think it was Eric, "Why is the 18% not going up to 19% EBITDA margin or a 19% going up to 20%?" I said, "You know, we're gonna invest in a couple of initiatives this year." The thing you just asked about is one of them, Mike. We've- Mm-hmm. Yeah. Hired a new executive to run this kind of a group. We're gonna build it and focus a whole team on it that does nothing but that and get better at this rather than have it as part of something. More to come on that. As that builds out, I'll talk to you guys more about it. But I do think there's an opportunity there, even though the literal answer to your literal question is it's not moved very much at all in the last three or four or five months. Okay. Makes sense. You talked a little bit about a couple delays of projects in this quarter. Were those on the product side, I assume, as opposed to the services side? Well, it was a services customer that needed some product installed at their site, which is very common with a cloud service, right? You know that, of course. Getting that stuff installed at the customer site was going slower than we anticipated and they thought, and that, of course, then means that the services part is not activated as soon. I got it. Makes sense. Great. All right. Thank you. This concludes the question and answer session. I would like to turn the conference back over to David Moore for any closing remarks. Ladies and gentlemen, thank you very much for joining us today. This concludes today's conference call, a recording of which will be available on our website shortly. Thank you for participating today, and have a very pleasant rest of your day. Thank you, everyone. Goodbye. This concludes today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.