Vonage (VG) Tops Q3 EPS by 4c, Revenues Beat; Offers 4Q & FY20 Revenue Guidance Above Consensus

Vonage (NASDAQ: VG) reported Q3 EPS of $0.07, $0.04 better than the analyst estimate of $0.03. Revenue for the quarter came in at $317 million versus the consensus estimate of $308.26 million.

“We executed well in the third quarter and delivered solid results,” said Rory Read, Chief Executive Officer. “The Vonage Communications Platform, our single global cloud technology platform, delivers our wide range of powerful services and solutions that enable our customers to transform the way they communicate and operate as the world undergoes a secular shift in how business gets done.”

Read continued, “Vonage Communications Platform service revenues grew 19% year over year. Within this, API revenues grew 35%, highlighted by a 143% increase in high-value API revenues, driven by our leadership in video and another record quarter of new customer additions. Unified Communications and Contact Center Applications service revenue grew 7%, and we signed 17 seven-figure total contract value deals in the quarter, with a 28% increase in average deal size. Our Platform’s flexibility, scalability, security and ease of use were consistent areas of strength in our ability to win.”

“We are taking decisive action to improve the operational effectiveness of our business while making strategic investments where we can win a disproportionate share of the market, and where our communications platform solutions best fit the needs of our customers,” Read commented. “We are also investing in our Sales and Marketing to strengthen our channel presence, effectively reach all customer segments, and increase our cross-sell and upsell opportunities. The management team and our Board are focused on delivering on these strategic initiatives, and we expect to accelerate growth and profitability in 2021 and 2022.”

GUIDANCE:

Vonage sees Q4 2020 revenue of $314-317 million, versus the consensus of $309.36 million.

Vonage sees FY2020 revenue of $1.239-1.242 billion, versus the consensus of $1.23 billion.

The Company is increasing its 2020 revenue and adjusted EBITDA guidance to reflect its solid third quarter and a fourth-quarter above its prior outlook.

For the full year, Vonage now expects the following (based on constant currency as of November 2020):

• Consolidated revenues in the range of $1.239 billion to $1.242 billion
• Total Vonage Communications Platform Revenues in the range of $906 million to $909 million (which includes approximately $22 million of USF revenues)
• Total Consumer Segment Revenues in the $332 million area (which includes approximately $41 million of USF revenues)
• Consolidated Adjusted EBITDA in the $167 million area
• Capex in the $53 million area

For the fourth quarter of 2020, Vonage expects the following:

• Consolidated Revenues in the range of $314 million to $317 million
• Total Vonage Communications Platform Revenues in the range of $236 million to $239 million (which includes approximately $6 million of USF revenues)
• Total Consumer Revenues in the $78 million area (which includes approximately $11 million of USF revenues)
• Consolidated Adjusted EBITDA in the $45 million area

For earnings history and earnings-related data on Vonage (VG) click here.

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