Sangoma Technologies Corp T.STC

Acquisition Amortization

[GARP17]

It seems the companies cash flow is great and is just being dragged down by amortization. Does anyone understand what is the amortization and when will it end?

[Torontojay]

  why would you want it to end? It's a tax write off. When it ends they would have to pay taxes on this amount. Keep more for the company and less to the government is good for shareholders. 

[Zarzar]

Tax accounting is different then GAAP accounting. Doubt any of it is deductible. Gov isn't interested in made up accounting expenses lol. It will last for many years, there is $600m to burn through

[Zarzar]

Sorry, I was remembering goodwill and intangibles combined - intangibles are only $260m CAD, not $600m. I also don't mean to be flippant about the amortization - there is a legitimate basis for recording it. I just think the intersection of strict capitalization rules which prevent you from capitalizing the majority of your S&M and R&D spend, combined with inherently forced

[gwimmer]

Investors in STC need to focus less on Net Income, Amortization etc. and look a STC's Free Cash flow (FCF) yield for fiscal 2023 which begins July 1. As such, TD is estimating FCF > 10%  that is > US$30 million over the this period. Conclusion: STC is very good business operation plain and simple.  

[Capharnaum]

The amortization is a non-cash charge that the company puts on its earnings to devalue the capitalized assets on the balance sheet. Ie: You develop a new platform and capitalize $20M in development costs. The development costs won't show up on the earnings report, they will be capitalized on the balance sheet. When the platform is developed and ready to roll out, then that $20M will be